ARC Document Solutions Reports Results for Fourth Quarter and Full Year 2013

ARC Document Solutions Reports Results for Fourth Quarter and Full Year 2013  WALNUT CREEK, CA -- (Marketwired) -- 02/25/14 --  ARC Document Solutions, Inc. (NYSE: ARC), the nation's leading document solutions provider for the architecture, engineering, and construction (AEC) industry, today reported its financial results for the fourth quarter and full year ended December 31, 2013.  Business Highlights:      --  Annual revenue grew year-over-year for first time in five years --  Annual adjusted earnings per share was $0.09 vs. ($0.04) in 2012 --  Annual gross margin was 33.0% vs. 30.4% in 2012 --  Annual adjusted EBITDA margin of 16.8% vs. 14.9% in 2012 --  Full year cash flow from operations of $46.8 million vs. $37.6 million     in 2012 --  2014 fully-diluted annual adjusted earnings per share outlook     projected to be in the range $0.19 to $0.23; outlook for 2014 annual     cash provided by operating activities projected to be in the range of     $51-$56 million                                                                                           Financial Highlights:                                                                                            Three Months Ended  Twelve Months Ended                                         December 31,         December 31,                                        -------------------  -------------------  (All dollar amounts in millions,                                              except EPS)                         2013       2012      2013       2012                                       --------   --------  --------   --------  Net Revenue                        $  101.3   $   96.9  $  407.2   $  406.1  Gross Margin                           33.0%      29.6%     33.0%      30.4% Net loss attributable to ARC       $  (16.0)  $   (5.9) $  (15.3)  $  (32.0) Adjusted Net Income (loss)                                                    attributable to ARC               $    1.1   $   (0.8) $    4.1   $   (1.7) Earnings (loss) per share          $  (0.35)  $  (0.13) $  (0.33)  $  (0.70) Adjusted earnings (loss) per share $   0.02   $  (0.02) $   0.09   $  (0.04) Cash provided by operating                                                    activities                        $    6.8   $    6.7  $   46.8   $   37.6  Capital Expenditures               $   (3.3)  $   (6.2) $  (18.2)  $  (20.3) Debt & Capital Leases (including                                              current)                                               $  219.7   $  222.5     Management Commentary  "Our performance in 2013 was gratifying and exceeded our initial expectations, especially in our sales, cash generation, and margin performance," said K. "Suri" Suriyakumar, Chairman, President and CEO of ARC Document Solutions. "As we noted in January, the third and fourth quarters produced year-over-year sales increases, and for the first time in the company's public history, fourth quarter revenue matched third quarter revenue. Fourth quarter gross margin also improved sequentially over third quarter gross margin. These are all indications of the fundamental changes in the business drivers of our company. As a result of the effects of the restructuring we began in 2012, we also saw gross margin expand dramatically year-over-year, and we delivered a strong uptick in our adjusted EBITDA. We've achieved real momentum with organic margin improvement programs as well, and I expect that we will continue to reap the benefit of our efforts throughout the coming year."  John Toth, ARC's CFO, said, "While our business has adapted to embrace new customer workflows, new business lines, and new technologies, one thing that hasn't changed is our ability to produce cash. Not only did we exceed our forecast for cash flow from operations, but we ended the year with a cash balance equal to 2012 despite the cash outlays associated with our restructuring, open market bond repurchases, and our refinancing at the end of the year. We are well positioned to deleverage the company and I think our performance in 2013 provides an excellent springboard for more success in 2014."  2013 Fourth Quarter Supplemental Information:  Net sales were $101 million, a 5% increase compared to the fourth quarter of 2012.   Days sales outstanding in Q4 2013 were 50 compared to 48 days in Q4 2012.   AEC customers comprised approximately 76% of our total net sales, while non-AEC customers made up 24% of our total net sales.  Total number of Onsite Services contracts was approximately 7,700, a gain of approximately 700 contracts over Q4 2012.                                                                                   Sales from Services and Product Lines as a Percentage of Net Sales                                                                                                                          Three Months Ended    Twelve Months Ended                                       December 31,          December 31,                                       --------------------  --------------------  Services and Product Line           2013       2012       2013       2012    -------------------------------  ---------  ---------  ---------  ---------  Onsite Services                       30.6%      28.4%      29.9%      26.8% Traditional Reprographics             27.3%      29.3%      28.7%      31.2% Color Services                        20.0%      19.9%      20.5%      19.5% Equipment and Supplies Sales          14.0%      14.4%      12.7%      13.8% Digital                                8.1%       8.1%       8.2%       8.8%    Sales Reporting Format  In February 2013, ARC Document Solutions announced that in its statement of operations the Company would begin reporting net sales under "Service sales" and "Equipment and supplies sales" to better identify and report its individual services and product lines. The two new categories replace the three categories previously used to report net sales of "Reprographics services," "Facilities management," and "Equipment and supplies sales."  "Service sales" includes traditional reprographics services, onsite services, color printing services, and digital services. "Equipment and supplies sales" is self-explanatory. Net sales for the individual services and product lines that comprise each category are reported and reconciled in the Company's "Net Sales by Services and Product Line" table included herein. For historical comparisons, please consult the Company's 2012 annual report on Form 10-K.  Outlook:  ARC Document Solutions anticipates annual adjusted earnings per share in 2014 to be in the range of $0.19 to $0.23 on a fully diluted basis, and annual cash flow from operations to be in the range of $51 million to $56 million.  Teleconference and Webcast:  ARC Document Solutions will host a conference call and audio webcast today at 2:00 P.M. Pacific Time (5:00 P.M. Eastern Time) to discuss results for the Company's 2013 fourth quarter and full year. To access the live audio call, dial 800-390-5202. International callers may join the conference by dialing 719-325-2470. The conference ID number is 7088960. A live webcast will also be made available on the investor relations page of ARC Document Solution's website at www.e-arc.com.  A replay of the call will be available for five days after the call's conclusion. To access the replay, dial 888-203-1112. International callers may access the replay by dialing 719-457-0820. The conference ID number is 7088960. The webcast will also be made available at www.e-arc.com for approximately 90 days following the call's conclusion.  About ARC Document Solutions (NYSE: ARC)  ARC Document Solutions is a leading document solutions company serving businesses of all types, with an emphasis on the non-residential segment of the architecture, engineering and construction industries. The Company helps more than 90,000 customers reduce costs and increase efficiency in the use of their documents, improve document access and control, and offers a wide variety of ways to print, produce, and store documents. ARC provides its solutions onsite in more than 7,700 of its customers' offices, offsite in service centers around the world, and digitally in the form of proprietary software and web applications. For more information please visit 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 such as "expected," "consider" "intended," 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, 2012, 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                                                  (Dollars in thousands, except per share data)                                (Unaudited)                                                                                                                                                                                              -------------   -------------                                                 December 31,    December 31,                                                -------------   ------------- Current assets:                                     2013            2012                                                    -------------   -------------   Cash and cash equivalents                    $      27,362   $      28,021   Accounts receivable, net of allowances for                                    accounts receivable of $2,517 and $2,634           56,328          51,855   Inventories, net                                    14,047          14,251   Deferred income taxes                                  356              --   Prepaid expenses                                     4,324           3,277   Other current assets                                 4,013           6,819                                                -------------   -------------       Total current assets                           106,430         104,223 Property and equipment, net of accumulated                                    depreciation of $206,636 and $197,830                56,181          56,471 Goodwill                                             212,608         212,608 Other intangible assets, net                          27,856          34,498 Deferred financing fees, net                           3,242           4,219 Deferred income taxes                                  1,186           1,246 Other assets                                           2,419           2,574                                                -------------   -------------       Total assets                             $     409,922   $     415,839                                                =============   ============= Current liabilities:                                                           Accounts payable                             $      23,363   $      21,215   Accrued payroll and payroll-related                                           expenses                                           11,497           6,774   Accrued expenses                                    21,365          22,321   Current portion of long-term debt and                                         capital leases                                     21,500          13,263                                                -------------   -------------       Total current liabilities                       77,725          63,573 Long-term debt and capital leases                    198,228         209,262 Deferred income taxes                                 31,667          28,936 Other long-term liabilities                            3,163           3,231                                                -------------   -------------       Total liabilities                              310,783         305,002                                                -------------   ------------- 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; 46,365 and 46,274                                         shares issued and 46,320 and 46,262                                          shares outstanding                                   46              46   Additional paid-in capital                         105,806         102,510   Retained (deficit) earnings                        (14,628)            695   Accumulated other comprehensive income                 634             689                                                -------------   -------------                                                       91,858         103,940     Less cost of common stock in treasury, 45                                     and 12 shares                                       168              44                                                -------------   -------------       Total ARC Documen t Solutions, Inc.                                            stockholders' equity                           91,690         103,896 Noncontrolling interest                                7,449           6,941                                                -------------   -------------       Total equity                                    99,139         110,837                                                -------------   -------------       Total liabilities and equity             $     409,922   $     415,839                                                =============   =============                                                                                                                                                                                                                                        ARC Document Solutions, Inc.                                                 Consolidated Statements of Operations                                        (Dollars in thousands, except per share data)                                (Unaudited)                                                                                                    Three Months Ended    Twelve Months Ended                                       December 31,          December 31,                                       --------------------  --------------------                                      2013       2012       2013       2012                                     ---------  ---------  ---------  ---------  Service sales                    $  87,100  $  82,969  $ 355,358  $ 350,260  Equipment and supplies sales        14,185     13,922     51,837     55,858                                   ---------  ---------  ---------  ---------    Total net sales                  101,285     96,891    407,195    406,118  Cost of sales                       67,818     68,251    272,858    282,599                                   ---------  ---------  ---------  ---------    Gross profit                      33,467     28,640    134,337    123,519  Selling, general and                                                          administrative expenses            24,117     21,727     96,800     93,073  Amortization of intangible                                                    assets                              1,556      1,791      6,612     11,035  Goodwill impairment                     --         --         --     16,707  Restructuring expense                  779      3,320      2,544      3,320                                   ---------  ---------  ---------  ---------    Income (loss) from operations      7,015      1,802     28,381       (616) Other income                           (20)       (21)      (106)      (100) Loss on extinguishment of debt      16,077         --     16,339         --  Interest expense, net                5,725      6,490     23,737     28,165                                   ---------  ---------  ---------  ---------    Loss before income tax                                                        provision                       (14,767)    (4,667)   (11,589)   (28,681) Income tax provision                 1,040        939      2,986      2,784                                   ---------  ---------  ---------  ---------    Net loss                         (15,807)    (5,606)   (14,575)   (31,465) Income attributable to                                                        noncontrolling interest              (203)      (290)      (748)      (503)                                  ---------  ---------  ---------  ---------    Net loss attributable to ARC                                                  Document Solutions, Inc.                                                     shareholders                  $ (16,010) $  (5,896) $ (15,323) $ (31,968)                                  =========  =========  =========  =========  Loss per share attributable to                                                ARC Document Solutions, Inc.                                                 shareholders:                                                                 Basic                          $   (0.35) $   (0.13) $   (0.33) $   (0.70)                                  =========  =========  =========  =========    Diluted                        $   (0.35) $   (0.13) $   (0.33) $   (0.70)                                  =========  =========  =========  =========  Weighted average common shares                                                outstanding:                                                                  Basic                             45,928     45,749     45,856     45,668    Diluted                           45,928     45,749     45,856     45,668                                                                                                                                                                                                                                         ARC Document Solutions, Inc.                                                 Non-GAAP Measures Reconciliation of cash flows provided by operating          activities to EBIT, EBITDA and Adjusted EBITDA (Dollars in thousands)        (Unaudited)                                                                                                                                                                                 Three Months Ended   Twelve Months Ended                                        December 31,          December 31,                                       -------------------   -------------------                                      2013       2012       2013       2012                                      --------   --------   --------   --------  Cash flows provided by operating                                              activities (1)                   $  6,788   $  6,673   $ 46,798   $ 37,552    Changes in operating assets                                                   and liabilities, net of                                                      effect of business                                                           acquisitions                      4,629      1,647     (2,388)      (463)   Non-cash expenses, including                                                  depreciation, amortization                                                   and restructuring               (27,224)   (13,926)   (58,985)   (68,554)   Income tax provision               1,040        939      2,986      2,784    Interest expense, net              5,725      6,490     23,737     28,165    Income attributable to                                                        noncontrolling interest            (203)      (290)      (748)      (503)                                   --------   --------   --------   --------  EBIT                                (9,245)     1,533     11,400     (1,019)   Depreciation and amortization      8,655      9,012     34,745     39,522                                    --------   --------   --------   --------  EBITDA                                (590)    10,545     46,145     38,503    Loss on extinguishment of debt    16,077         --     16,339         --    Goodwill impairment                   --         --         --     16,707    Restructuring expense                779      3,320      2,544      3,320    Stock-based compensation           1,158        542      3,207      1,999                                    --------   --------   --------   --------  Adjusted EBITDA                   $ 17,424   $ 14,407   $ 68,235   $ 60,529                                    ========   ========   ========   ========     (1) For the three and twelve months ended months ended December 31, 2013 cash flows provided by operating activities includes $1.0 million and $4.3 million, respectively, in cash payments related to restructuring.                                                                                                                                                                                                                                              ARC Document Solutions, Inc.                                                 Non-GAAP Measures Reconciliation of net loss attributable to ARC to          unaudited adjusted net income (loss) attributable to ARC (Dollars in         thousands, except per share data) (Unaudited)                                                                                                                                                Three Months Ended   Twelve Months Ended                                        December 31,          December 31,                                       -------------------   -------------------                                      2013       2012       2013       2012                                      --------   --------   --------   --------  Net loss attributable to ARC                                                  Document Solutions, Inc.         $(16,010)  $ (5,896)  $(15,323)  $(31,968)   Loss on extinguishment of debt    16,077         --     16,339         --    Goodwill impairment                   --         --         --     16,707    Restructuring expense                779      3,320      2,544      3,320    Change in trade name impact to                                                amortization                         --         --         --      3,158    Interest rate swap related                                                    costs                                --        393         --      3,440    Income tax benefit related to                                                 above items                      (6,877)    (1,397)    (7,667)    (7,676)   Deferred tax valuation                                                        allowance and other discrete                                                 tax items                         7,172      2,736      8,245     11,311                                    --------   --------   --------   --------  Unaudited adjusted net income                                                 (loss) attributable to ARC                                                   Document Solutions, Inc.         $  1,141   $   (844)  $  4,138   $ (1,708)                                   ========   ========   ========   ========                                                                               Actual:                                                                      Loss per share attributable to                                                ARC Document Solutions, Inc.                                                 shareholders:                                                                 Basic                           $  (0.35)  $  (0.13)  $  (0.33)  $  (0.70)                                   ========   ========   ========   ========    Diluted                         $  (0.35)  $  (0.13)  $  (0.33)  $  (0.70)                                   ========   ========   ========   ========  Weighted average common shares                                                outstanding:                                                                  Basic                             45,927     45,749     45,856     45,668    Diluted                           45,927     45,749     45,856     45,668                                                                               Adjusted:                                                                    Earnings (loss) per share                                                     attributable to ARC Document                                                 Solutions, Inc. shareholders:                                                 Basic                           $   0.02   $  (0.02)  $   0.09   $  (0.04)                                   ========   ========   ========   ========    Diluted                         $   0.02   $  (0.02)  $   0.09   $  (0.04)                                   ========   ========   ========   ========  Weighted average common shares                                                outstanding:                                                                  Basic                             45,927     45,749     45,856     45,668    Diluted                           46,682     45,749     46,157     45,668                                                                                                                                                                                                                                                                                                                      ARC Document Solutions, Inc. Non-GAAP Measures Reconciliation of net loss     attributable to ARC to EBIT, EBITDA and Adjusted EBITDA (Dollars in          thousands) (Unaudited)                                                                                                                                                                   Three Months Ended     Twelve Months Ended                                      December 31,            December 31,                                    ---------------------   ---------------------                                   2013        2012        2013        2012                                  ---------   ---------   ---------   ---------  Net loss attributable to ARC                                                  Document Solutions, Inc.     $ (16,010)  $  (5,896)  $ (15,323)  $ (31,968)   Interest expense, net           5,725       6,490      23,737      28,165    Income tax provision            1,040         939       2,986       2,784                                ---------   ---------   ---------   ---------  EBIT                             (9,245)      1,533      11,400      (1,019)   Depreciation and                                                              amortization                   8,655       9,012      34,745      39,522                                ---------   ---------   ---------   ---------  EBITDA                             (590)     10,545      46,145      38,503    Loss on extinguishment of                                                     debt                          16,077          --      16,339          --    Goodwill impairment                --          --          --      16,707    Restructuring expense             779       3,320       2,544       3,320    Stock-based compensation        1,158         542       3,207       1,999                                ---------   ---------   ---------   ---------  Adjusted EBITDA               $  17,424   $  14,407   $  68,235   $  60,529                                =========   =========   =========   =========                                                                                                                                                                                                                                            ARC Document Solutions, Inc.                                                 Net Sales by Product Line (Dollars in thousands) (Unaudited)                                                                                                                                 Three Months Ended    Twelve Months Ended                                       December 31,          December 31,                                       --------------------  --------------------                                      2013       2012       2013       2012                                     ---------  ---------  ---------  --------- Service Sales                                                                Traditional reprographics         $  27,693  $  28,357  $ 116,673  $ 126,785 Color                                20,212     19,241     83,601     79,080 Digital                               8,187      7,816     33,534     35,578                                   ---------  ---------  ---------  ---------   Subtotal                           56,092     55,414    233,808    241,443 Onsite services(1)                   31,008     27,555    121,550    108,817                                    ---------  ---------  ---------  ---------   Total services sales               87,100     82,969    355,358    350,260 Equipment and supplies sales         14,185     13,922     51,837     55,858                                   ---------  ---------  ---------  ---------   Total net sales                 $ 101,285  $  96,891  $ 407,195  $ 406,118                                   =========  =========  =========  =========    (1) Represents work done at our customer sites, which includes Facilities Management ("FM") and Managed Print Services ("MPS").  Non-GAAP Financial Measures.   EBIT, EBITDA and related ratios presented in this report are supplemental measures of our performance that are not required by or presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"). These measures are not measurements of our financial performance under GAAP and should not be considered as alternatives to net income, income from operations, or any other performance measures derived in accordance with GAAP or as an alternative to cash flows from operating, investing or financing activities as a measure of our liquidity.  EBIT represents net income before interest and taxes. EBITDA represents net income before interest, taxes, depreciation and amortization. EBIT margin is a non-GAAP measure calculated by dividing EBIT by net sales. EBITDA margin is a non-GAAP measure calculated by dividing EBITDA by net sales.  We present EBIT, EBITDA and related ratios because we consider them important supplemental measures of our performance and liquidity. We believe investors may also find these measures meaningful, given how our management makes use of them. The following is a discussion of our use of these measures.  We use EBIT and EBITDA to measure and compare the performance of our operating segments. Our operating segments' financial performance includes all of the operating activities except debt and taxation which are managed at the corporate level for U.S. operating segments. As a result, we believe EBIT is the best measure of operating segment profitability and the most useful metric by which to measure and compare the performance of our operating segments. We also use EBIT to measure performance for determining operating segment-level compensation and we use EBITDA to measure performance for determining consolidated-level compensation. In addition, we use EBIT and EBITDA to evaluate potential acquisitions and potential capital expenditures.  EBIT, EBITDA and related ratios have limitations as analytical tools, and should not be considered in isolation, or as a substitute for analysis of our results as reported under GAAP. Some of these limitations are as follows:      --  They do not reflect our cash expenditures, or future requirements for     capital expenditures and contractual commitments;           --  They do not reflect changes in, or cash requirements for, our working     capital needs;           --  They do not reflect the significant interest expense, or the cash     requirements necessary, to service interest or principal payments on     our debt;           --  Although depreciation and amortization are non-cash charges, the     assets being depreciated and amortized will often have to be replaced     in the future, and EBITDA does not reflect any cash requirements for     such replacements; and           --  Other companies, including companies in our industry, may calculate     these measures differently than we do, limiting their usefulness as     comparative measures.     Because of these limitations, EBIT, EBITDA, and related ratios should not be considered as measures of discretionary cash available to us to invest in business growth or to reduce our indebtedness. We compensate for these limitations by relying primarily on our GAAP results and using EBIT, EBITDA and related ratios only as supplements.  Our presentation of adjusted net income and adjusted EBITDA over certain periods is an attempt to provide meaningful comparisons to our historical performance for our existing and future investors. The unprecedented changes in our end markets over the past several years have required us to take measures that are unique in our history and specific to individual circumstances. Comparisons inclusive of these actions make normal financial and other performance patterns difficult to discern under a strict GAAP presentation. Each non-GAAP presentation, however, is explained in detail in the reconciliation tables above. For more information, see our 2012 Annual Report on Form 10-K.  Specifically, we have presented adjusted net income (loss) attributable to ARC and adjusted earnings (loss) per share attributable to ARC for the three and twelve months ended December 31, 2013 and 2012 to reflect the exclusion of amortization impact related specifically to the change in useful lives of trade names, loss on extinguishment of debt, goodwill impairment, restructuring expense, interest rate swap related costs, and changes in the valuation allowances related to certain deferred tax assets and other discrete tax items. This presentation facilitates a meaningful comparison of our operating results for the three and twelve months ended December 31, 2013 and 2012. We believe these charges were the result of the current macroeconomic environment, our capital restructuring, or other items which are not indicative of our actual operating performance.  We presented adjusted EBITDA in three and twelve months ended December 31, 2013 and 2012 to exclude stock-based compensation expense, restructuring expense, goodwill impairment and loss on extinguishment of debt. The adjustment of EBITDA for non-cash adjustments is consistent with the definition of adjusted EBITDA in our credit agreement; therefore, we believe this information is useful to investors in assessing our financial performance.                                                                                   ARC Document Solutions                                                       Consolidated Statements of Cash Flows (Dollars in                             thousands) (Unaudited)                                                                                                                                                                   Three Months Ended     Twelve Months Ended                                      December 31,            December 31,                                    ---------------------   ---------------------                                   2013        2012        2013        2012                                  ---------   ---------   ---------   ---------  Cash flows from operating                                                     activities                                                                  Net loss                      $ (15,807)  $  (5,606)  $ (14,575)  $ (31,465) Adjustments to reconcile net                                                  loss to net cash provided                                                    by operating activities:                                                      Allowance for accounts                                                        receivable                        85         (76)        636         456    Depreciation                    7,099       7,221      28,133      28,487    Amortization of intangible                                                    assets                         1,556       1,791       6,612      11,035    Amortization of deferred                                                      financing costs                  267         276       1,098       1,088    Amortization of bond                                                          discount                         171         158         671         611    Goodwill impairment                --          --          --      16,707    S tock-based compensation        1,158         542       3,207       1,999    Deferred income taxes          (5,827)     (2,132)     (4,909)     (6,433)   Deferred tax valuation                                                        allowance                      6,717       2,984       7,277       9,750    Restructuring expense,                                                        non-cash portion                (119)      2,379         244       2,379    Amortization of                                                               derivative, net of tax                                                       effect                            --         246          --       2,154    Loss on early                                                                 extinguishment of debt        16,077          --      16,339          --    Other non-cash items, net          40         537        (323)        321    Changes in operating                                                          assets and liabilities,                                                      net of effect of business                                                    acquisitions:                                                                 Accounts receivable           2,225       5,864      (5,133)      2,533      Inventory                      (345)       (339)        376      (3,005)     Prepaid expenses and                                                          other assets                   (22)      2,233       1,966       1,032      Accounts payable and                                                          accrued expenses            (6,487)     (9,405)      5,179         (97)                               ---------   ---------   ---------   ---------  Net cash provided by                                                          operating activities             6,788       6,673      46,798      37,552                                ---------   ---------   ---------   ---------  Cash flows from investing                                                     activities                                                                  Capital expenditures             (3,335)     (6,154)    (18,191)    (20,348) Other                               119         190         741         323                                ---------   ---------   ---------   ---------  Net cash used in investing                                                    activities                      (3,216)     (5,964)    (17,450)    (20,025)                               ---------   ---------   ---------   ---------  Cash flows from financing                                                     activities                                                                  Proceeds from stock option                                                    exercises                           59          --          59          79  Proceeds from issuance of                                                     common stock under Employee                                                  Stock Purchase Plan                 17          --          30          28  Share repurchases, including                                                  shares surrendered for tax                                                   withholding                        (34)         --        (124)         --  Proceeds from borrowings on                                                   long-term debt agreements      196,000          --     196,402          --  Payments of debt                                                              extinguishment costs           (11,264)                (11,330)         --  Early extinguishment of                                                       long-term debt                (193,000)               (200,000)         --  Payments on long-term debt                                                    agreements and capital                                                       leases                          (2,984)     (3,560)    (12,379)    (15,601) Net (repayments) borrowings                                                   under revolving credit                                                       facilities                         201         225        (237)      1,266  Payment of deferred                                                           financing costs                 (2,220)         --      (2,220)       (839) Dividends paid to                                                             noncontrolling interest             --                    (485)         --                                ---------   ---------   ---------   ---------  Net cash used in financing                                                    activities                     (13,225)     (3,335)    (30,284)    (15,067)                               ---------   ---------   ---------   ---------  Effect of foreign currency                                                    translation on cash                                                          balances                           (39)        113         277         124                                ---------   ---------   ---------   ---------  Net change in cash and cash                                                   equivalents                     (9,692)     (2,513)       (659)      2,584  Cash and cash equivalents at                                                  beginning of period             37,054      30,534      28,021      25,437                                ---------   ---------   ---------   ---------  Cash and cash equivalents at                                                  end of period                $  27,362   $  28,021   $  27,362   $  28,021                                =========   =========   =========   =========  Supplemental disclosure of                                                    cash flow information:                                                      Noncash financing                                                             activities:                                                                   Capital lease obligations                                                     incurred                   $   3,662   $   1,536   $  10,399   $  10,047    Liabilities in connection                                                     with deferred financing                                                      costs                      $     433   $      --   $     433   $      --      Contact Information: David Stickney VP Corporate Communications 925-949-5114