ARC Document Solutions Reports Results for First Quarter 2017

Architectural, engineering, construction and building owner/operators (AEC/O) customers comprised approximately 78% of our total net sales, while customers outside of construction made up approximately 22% of our total net sales.

Total number of MPS locations at the end of the first quarter has grown to approximately 9,680, a net gain of approximately 630 locations over Q1 2016.

Adjusted EBITDA excludes loss on extinguishment of debt, stock-based compensation expense, and restructuring expense.

Sales from Services and Product Lines as a Percentage of Net Sales

	Three Months Ended
	March 31,
Services and Product Line	2017		2016
CDIM	51.9	%	51.8	%
MPS	32.9	%	32.1	%
AIM	3.3	%	3.6	%
Equipment and supplies sales	11.9	%	12.5	%

Outlook

ARC Document Solutions maintained is annual forecast for 2017, anticipating fully-diluted annual adjusted earnings per share to be in the range of $0.24 to $0.29; annual adjusted cash provided by operating activities is projected to be in the range of $49 to $54 million; and annual adjusted EBITDA is forecast to be in the range of $58 million to $63 million.

Teleconference and Webcast

ARC Document Solutions will will hold a conference call with investors and analysts on Tuesday, May 2, 2017, at 2 P.M. Pacific Time (5 P.M. Eastern Time) to discuss results for the company's 2017 first quarter. To access the live audio call, dial 888-239-5359. International callers may join the conference by dialing 913-312-1500. The conference ID number is 2465181. A live webcast will also be made available on the investor relations page of ARC Document Solution's website at http://ir.e-arc.com. The webcast of the call will be available at www.e-arc.com for approximately 90 days following the call's conclusion.

About ARC Document Solutions (NYSE: ARC)

ARC Document Solutions distributes documents and information to facilitate communication for design, engineering and construction professionals, real estate managers and developers, facilities owners, and a variety of similar disciplines. The Company provides cloud and mobile solutions, professional services, and hardware to help its customers around the world reduce costs and increase efficiency, improve information access and control, and communicate faster, easier, and better. Follow ARC at www.e-arc.com.

Forward-Looking Statements

This press release contains forward-looking statements that are based on current opinions, estimates and assumptions of management regarding future events and the future financial performance of the Company. Words and phrases such as "we are confident," "forecast," "expect," "believe," "anticipate," "outlook," and similar expressions identify forward-looking statements and all statements other than statements of historical fact, including, but not limited to, any projections regarding earnings, revenues and financial performance of the Company, could be deemed forward-looking statements. We caution you that such statements are only predictions and are subject to certain risks and uncertainties that could cause actual results to differ materially from those contained in the forward-looking statements. In addition to matters affecting the construction, managed print services, document management or reprographics industries, or the economy generally, factors that could cause actual results to differ from expectations stated in forward-looking statements include, among others, the factors described in the caption entitled "Risk Factors" in Item 1A in ARC Document Solution's Annual Report on Form 10-K for the fiscal year ended December 31, 2016, Quarterly Reports on Form 10-Q, and other periodic filings and prospectuses. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

ARC Document Solutions, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
(Unaudited)

	March 31,		December 31,
Current assets:	2017		2016
Cash and cash equivalents	$	19,669	$	25,239
Accounts receivable, net of allowances for accounts receivable of $2,207 and $2,060	59,659		59,735
Inventories, net	19,755		18,184
Prepaid expenses	4,630		3,861
Other current assets	4,269		4,785
Total current assets	107,982		111,804
Property and equipment, net of accumulated depreciation of $204,724 and $201,192	62,595		60,735
Goodwill	138,688		138,688
Other intangible assets, net	12,102		13,202
Deferred income taxes	41,727		42,667
Other assets	2,220		2,185
Total assets	$	365,314	$	369,281
Current liabilities:
Accounts payable	$	23,514	$	24,782
Accrued payroll and payroll-related expenses	8,838		12,219
Accrued expenses	16,284		16,138
Current portion of long-term debt and capital leases	14,680		13,773
Total current liabilities	63,316		66,912
Long-term debt and capital leases	139,660		143,400
Other long-term liabilities	2,214		2,148
Total liabilities	205,190		212,460
Commitments and contingencies
Stockholders' equity:
ARC Document Solutions, Inc. stockholders' equity:
Preferred stock, $0.001 par value, 25,000 shares authorized; 0 shares issued and outstanding	—		—
Common stock, $0.001 par value, 150,000 shares authorized; 47,771 and 47,428 shares issued and 46,331 and 45,988 shares outstanding	47		47
Additional paid-in capital	118,619		117,749
Retained earnings	43,819		41,822
Accumulated other comprehensive loss	(3,375)		(3,793)
	159,110		155,825
Less cost of common stock in treasury, 1,440 shares	5,909		5,909
Total ARC Document Solutions, Inc. stockholders' equity	153,201		149,916
Noncontrolling interest	6,923		6,905
Total equity	160,124		156,821
Total liabilities and equity	$	365,314	$	369,281

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