##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 Form 10-K
  þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Fiscal Year Ended December 31, 2009
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 Commission File Number: 001-32407
 AMERICAN REPROGRAPHICS COMPANY
 (Exact name of Registrant as specified in its Charter)
 Delaware(State or other jurisdiction of 
incorporation or organization)
    
    20-1700361(I.R.S. Employer
Identification No.)
 1981 N. Broadway, Suite 385
Walnut Creek, California 94596
(925) 949-5100  (Address, including zip code, and telephone number,
including area code, of Registrants principal executive offices)   Securities registered pursuant to Section 12(b) of the Act:
 Title of Each Class
    
    Name of Each Exchange on Which RegisteredCommon Stock, par value $0.001 per share
    
    New York Stock Exchange
 Securities registered pursuant to Section 12(g) of the Act:
NONE
 Yes o No þ
 Yes o No þ
 Yes þ
No o
 Yes o No o
 o
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    
    Smaller reporting company o(Do not check if a smaller reporting company)
 Yes o No þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



AMERICAN REPROGRAPHICS COMPANY
ANNUAL REPORT ON FORM 10-K
for the fiscal year ended December 31, 2009
 Table of Contents
 PagePART I
    
    
    4Item 1. Business
    
    
    4Item 1A. Risk Factors
    
    
    11Item 1B. Unresolved Staff Comments
    
    
    15Item 2. Properties
    
    
    16Item 3. Legal Proceedings
    
    
    16Item 4. Submission of Matters to a Vote of Security Holders
    
    
    16PART II
    
    
    17Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    17Item 6. Selected Financial Data
    
    
    19Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    21Item 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    43Item 8. Financial Statements and Supplementary Data
    
    
    44Item 9. Changes in and Disagreements with Accountants On Accounting And Financial Disclosure
    
    
    44Item 9A. Controls and Procedures
    
    
    44Item 9B. Other Information
    
    
    45PART III
    
    
    46Item 10. Directors, Executive Officers and Corporate Governance
    
    
    46Item 11. Executive Compensation
    
    
    46Item 12. Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    46Item 13. Certain Relationships and Related Transactions, and Director Independence
    
    
    46Item 14. Principal Accountant Fees and Services
    
    
    46PART IV
    
    
    47Item 15. Exhibits and Financial Statement Schedules
    
    
    47SIGNATURES
    
    
    55Exhibit 10.79Exhibit 10.80Exhibit 10.81Exhibit 10.82Exhibit 21.1Exhibit 23.1Exhibit 23.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY
2009 ANNUAL REPORT ON FORM 10-K
  FORWARD-LOOKING STATEMENTS
   TRADEMARKS AND TRADE NAMES
 ® ® ® SM
  3




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##### Table of Contents



PART I
 
 Item 1.
    
    Business
 Our Company
          Available Information
 www.sec.gov.
  4




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##### Table of Contents



www.e-arc.com www.e-arc.com,
 Corporate Background and Reorganization
   Acquisitions
    Industry Overview
    5




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##### Table of Contents



Our Competitive Strengths
  
    
    Leading Market Position in Fragmented Industry. Our size
and national footprint provide us with significant
purchasing power, economies of scale, the ability to invest
in industry-leading technologies, and the resources to
service large, national customers.
    
    Leader in Technology and Innovation. We believe several of
our technology products are well positioned to become
industry standards for managing and procuring reprographics
services within the AEC industry, as well as managing
reprographics businesses themselves. We have developed
other proprietary software applications that complement
these applications, which enabled us to improve the
efficiency of our services, add services, and increase our
revenue.
    
    Extensive National Footprint with Regional Expertise. Our
national network of service centers maintains local
customer relationships while benefiting from centralized
corporate functions and national scale. Our service
facilities are organized as hub and satellite structures
within individual markets, allowing us to balance
production capacity and minimize capital expenditures
through technology-sharing and the consolidation of
administrative and accounting functions among our service
centers within each market or region. In addition, we serve
our national and regional customers under a single contract
through our Global Services (formerly Premier Accounts)
program, while offering centralized access to project
specific services, billing, and tracking information.
    
    Flexible Operating Model. Information from our local
businesses heavily influence our decision making for
marketing, pricing, and selling practices. It allows us to
remain responsive to our customers while benefiting from
the cost structure advantages of our centralized
administrative functions. Our flexible operating model also
allows us to capitalize on any business environment,
quickly scaling up or down as needed within a given
marketplace.
    
    Consistent, Strong Cash Flow. Through management of our
inventory and receivables and our low capital expenditure
requirements, we have consistently generated strong cash
flows from operations in a variety of industry and economic
conditions.
    
    Low Cost Operator. We believe we are one of the lowest cost
operators in the reprographics industry. We have achieved
this status by minimizing branch level expenses and
capitalizing on our significant scale for purchasing
efficiencies.
    
    Experienced Management Team and Highly Trained Workforce.
Members of our executive and divisional senior management
teams have an average of more than 20 years of industry
experience. It is also our preferred practice to maintain
the senior management of the companies we acquire.
 Our Services
  Document Management.
  6




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##### Table of Contents



Document Distribution and Logistics.
 Print-on-demand.
    
    
    Offering PlanWell Enterprise (PlanWell), our proprietary,
internet-based planroom software application launched in
June 2000, and our suite of other reprographics technology
products that enable online purchase and fulfillment of
document management services.
    
    Production services, including print-on-demand, document
assembly, document finishing, mounting, laminating,
binding, and kitting.
    
    Document distribution and logistics, including the physical
pick-up, delivery, and shipping of time-sensitive, critical
documents. Documents can be digitally transferred from one
service facility to another to balance production capacity
or take advantage of a distribute and print production
model.
    
    Highly customized large and small format reprographics in
color and black and white. This includes digital
reproduction of posters, tradeshow displays, plans,
banners, signage, and maps.
    
    Facilities management services, including recurring on-site
document management services and staffing at our customers
locations.
    
    Sales of reprographics equipment and supplies and licensing
of software to other reprographics companies and end-users
in the AEC industry.
  
    
    Electronic Work Order (EWO), which offers our customers
access to the services of all of our service centers
through the internet.
    
    MetaPrint Abacus, which provides a suite of software
modules for reprographers and their customers to track
documents produced from equipment installed as a part of a
facilities management program.
    
    BidCaster Invitation-to-Bid, a data management internet
application inside PlanWell that issues customizable
invitations to bid from a customers desktop using email
and a hosted fax server.
    
    MetaPrint Print Automation and Device Manager, a universal
print driver that facilitates the printing of documents
with output devices manufactured by multiple vendors, and
allows the reprographer to print multiple documents in
various formats as a single print submission.
  7




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##### Table of Contents




    
    OneView Document Access and Customer Administration System,
an internet-based application that leverages the security
attributes of PlanWell to provide a single point of access
to all of a customers project documents inside PlanWell
planrooms, regardless of which of our local production
facilities stores the relevant documents.
    
    Sub-Hub, an internet-based application that notifies
subscribers of upcoming construction jobs in their markets
and allows them to view plans online and order paper copies
from a reprographer.
    
    PlanWell Databridge, which allows construction project
management software users to share common data between
applications, synchronize project information, bid packages
and contacts, eliminate redundant data entry, and easily
start projects in project management applications by
leveraging indexed data in PlanWell Enterprise.
    
    ishipdocs, a web-based software application that allows
users to upload documents to a local reprographics business
for local production and printing.
  
    
    License our suite of reprographics technology products,
including our flagship online planroom, PlanWell, to
independent reprographers.
    
    Operate Profit and Education in Reprographics (PEiR)
Group, a trade organization wholly-owned by us, through
which we charge membership fees and provide purchasing,
technology, and educational benefits to other
reprographers. PEiR members are required to license
PlanWell and may purchase equipment and supplies at a lower
cost than they could obtain independently. We also
distribute our educational programs to PEiR members to help
establish and promote best practices within the
reprographics industry.
 Customers
   Operations
 Geographic Presence.
 Hub and Satellite Configuration.
 Management Systems and Controls.
   8




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##### Table of Contents



Suppliers and Vendors
   Sales and Marketing
 Divisional Sales Force.
 Global Services (formerly Premier Accounts).
 PEiR Group.
 Competition
  Research and Development
   9




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Proprietary Rights
     Information Technology
    Employees
  Executive Officers of the Registrant
  Name
    
    Age
    
    PositionKumarakulasingam Suriyakumar
    
    
    56
    
    
    Chairman, President and Chief Executive
OfficerJonathan R. Mather
    
    
    59
    
    
    Chief Financial Officer and SecretaryRahul K. Roy
    
    
    50
    
    
    Chief Technology OfficerDilantha Wijesuriya
    
    
    47
    
    
    Senior Vice President-National Operations
 Kumarakulasingam (Suri) Suriyakumar
  10




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##### Table of Contents



Jonathan R. Mather
 Rahul K. Roy
 Dilantha Wijesuriya
 
 Item 1A.
    
    Risk Factors
  Adverse domestic and global economic conditions and disruption of financial markets could have a
material adverse impact on our business and results of operations.
  The residential and non-residential architectural, engineering and construction (AEC) industry
is in the midst of a severe downturn. A continuing decline in the residential AEC industry, and
a downturn in the non-residential AEC industry, could adversely affect our future revenue and
profitability.
   11




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Covenants in our credit and guaranty agreement could adversely affect our financial condition.
Although we have adjusted certain financial ratio covenants in our amended credit agreement, we
may not be able to comply with the adjusted covenants in the future.
  Impairment of goodwill may adversely impact future results of operations.
   Competition in our industry and innovation by our competitors may hinder our ability to execute
our business strategy and maintain our profitability.
    12




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##### Table of Contents



The reprographics industry has undergone vast changes in recent years and will continue to
evolve. Our failure to anticipate and adapt to future changes in the reprographics industry
could harm our competitive position.
   If we fail to continue to develop and introduce new services and technologies successfully, our
competitive positioning and our ability to grow our business could be harmed.
   If we are unable to charge for our value-added services to offset potential declines in print
volumes, our long term revenue could decline.
  We derive a significant percentage of net sales from within the State of California and our
business could be disproportionately harmed by an economic downturn or natural disaster
affecting California.
   13




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##### Table of Contents



Our growth strategy depends, in part, on our ability to successfully complete and manage our
acquisitions and branch openings. Failure to do so could impede our future growth and adversely
affect our competitive position.
    If we are unable to successfully monitor and manage operations of our subsidiaries and segments,
our business and profitability could suffer.
  We depend on certain key vendors for reprographics equipment, maintenance services and supplies,
making us vulnerable to supply shortages and price fluctuations.
   14




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##### Table of Contents



Our failure to adequately protect the proprietary aspects of our technology, including PlanWell,
may cause us to lose market share.
  Damage or disruption to our facilities, our technology centers, our vendors or a majority of our
customers could impair our ability to effectively provide our services and may have a
significant impact on our revenues, expenses and financial condition.
   If we lose key personnel or qualified technical staff, our ability to manage the day-to-day
aspects of our business will be adversely affected.
  Downgrades in our credit rating may adversely affect our business, financial condition and
results of operations.
  
 Item 1B.
    
    Unresolved Staff Comments
   15




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Item 2.
    
    Properties
    
 Item 3.
    
    Legal Proceedings
  
 Item 4.
    
    Submission of Matters to a Vote of Security Holders
   16




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##### Table of Contents



PART II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities
  High
    
    
    LowFiscal Year 2008First Quarter
    
    $
    17.06
    
    
    $
    13.49Second Quarter
    
    
    19.96
    
    
    
    14.65Third Quarter
    
    
    21.83
    
    
    
    14.93Fourth Quarter
    
    
    17.15
    
    
    
    5.36Fiscal Year 2009First Quarter
    
    $
    7.11
    
    
    $
    2.55Second Quarter
    
    
    10.26
    
    
    
    3.26Third Quarter
    
    
    10.21
    
    
    
    7.20Fourth Quarter
    
    
    9.74
    
    
    
    5.43
 Performance Graph
   
  17




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##### Table of Contents



2/05
    
    
    2/05
    
    
    3/05
    
    
    4/05
    
    
    5/05
    
    
    6/05
    
    
    7/05
    
    
    8/05
    
    
    9/05
    
    
    10/05American Reprographics Company
    
    
    100.00
    
    
    
    105.09
    
    
    
    104.36
    
    
    
    102.18
    
    
    
    108.36
    
    
    
    117.02
    
    
    
    129.45
    
    
    
    123.56
    
    
    
    124.36
    
    
    
    122.55Russell 2000
    
    
    100.00
    
    
    
    99.54
    
    
    
    96.69
    
    
    
    91.15
    
    
    
    97.12
    
    
    
    100.86
    
    
    
    107.25
    
    
    
    105.26
    
    
    
    105.59
    
    
    
    102.31Diversified Commercial & Professional Services
    
    
    100.00
    
    
    
    102.58
    
    
    
    98.35
    
    
    
    91.36
    
    
    
    98.07
    
    
    
    103.73
    
    
    
    109.99
    
    
    
    112.20
    
    
    
    112.57
    
    
    
    103.34
 11/05
    
    12/05
    
    
    1/06
    
    
    2/06
    
    
    3/06
    
    
    4/06
    
    
    5/06
    
    
    6/06
    
    
    7/06
    
    
    8/06
    
    
    9/06
    
    
    10/06
    
    
    11/06
    
    
    12/06
    
    
    1/07156.44
    
    
    184.80
    
    
    
    198.55
    
    
    
    208.73
    
    
    
    252.29
    
    
    
    257.96
    
    
    
    252.15
    
    
    
    263.64
    
    
    
    232.58
    
    
    
    221.96
    
    
    
    233.16
    
    
    
    258.18
    
    
    
    227.35
    
    
    
    242.25
    
    
    
    227.78107.28
    
    
    106.79
    
    
    
    116.37
    
    
    
    116.05
    
    
    
    121.68
    
    
    
    121.66
    
    
    
    114.82
    
    
    
    115.56
    
    
    
    111.80
    
    
    
    115.11
    
    
    
    116.07
    
    
    
    122.75
    
    
    
    125.98
    
    
    
    126.41
    
    
    
    128.52109.24
    
    
    107.66
    
    
    
    109.53
    
    
    
    112.34
    
    
    
    121.37
    
    
    
    122.89
    
    
    
    115.98
    
    
    
    110.84
    
    
    
    110.58
    
    
    
    112.18
    
    
    
    117.52
    
    
    
    126.66
    
    
    
    121.23
    
    
    
    124.73
    
    
    
    124.862/07
    
    3/07
    
    
    4/07
    
    
    5/07
    
    
    6/07
    
    
    7/07
    
    
    8/07
    
    
    9/07
    
    
    10/07
    
    
    11/07
    
    
    12/07
    
    
    1/08
    
    
    2/08
    
    
    3/08
    
    
    4/08240.80
    
    
    223.93
    
    
    
    241.45
    
    
    
    224.00
    
    
    
    223.93
    
    
    
    181.24
    
    
    
    177.67
    
    
    
    136.15
    
    
    
    147.49
    
    
    
    112.58
    
    
    
    119.85
    
    
    
    113.82
    
    
    
    117.67
    
    
    
    107.93
    
    
    
    115.42127.50
    
    
    128.87
    
    
    
    131.18
    
    
    
    136.55
    
    
    
    134.56
    
    
    
    125.35
    
    
    
    128.19
    
    
    
    130.39
    
    
    
    134.14
    
    
    
    124.50
    
    
    
    124.43
    
    
    
    115.94
    
    
    
    111.64
    
    
    
    112.11
    
    
    
    116.80121.46
    
    
    122.85
    
    
    
    126.48
    
    
    
    132.66
    
    
    
    132.06
    
    
    
    125.03
    
    
    
    125.43
    
    
    
    124.89
    
    
    
    123.89
    
    
    
    120.17
    
    
    
    118.14
    
    
    
    114.23
    
    
    
    113.21
    
    
    
    115.26
    
    
    
    108.785/08
    
    6/08
    
    
    7/08
    
    
    8/08
    
    
    9/08
    
    
    10/08
    
    
    11/08
    
    
    12/08
    
    
    1/09
    
    
    2/09
    
    
    3/09
    
    
    4/09
    
    
    5/09
    
    
    6/09
    
    
    7/09133.02
    
    
    121.09
    
    
    
    116.44
    
    
    
    128.80
    
    
    
    125.45
    
    
    
    77.38
    
    
    
    56.95
    
    
    
    50.18
    
    
    
    44.22
    
    
    
    28.36
    
    
    
    25.75
    
    
    
    46.91
    
    
    
    63.35
    
    
    
    60.51
    
    
    
    62.91122.17
    
    
    112.77
    
    
    
    116.94
    
    
    
    121.16
    
    
    
    111.51
    
    
    
    88.31
    
    
    
    77.87
    
    
    
    82.39
    
    
    
    73.22
    
    
    
    64.32
    
    
    
    70.07
    
    
    
    80.90
    
    
    
    83.33
    
    
    
    84.56
    
    
    
    92.70124.63
    
    
    106.64
    
    
    
    122.73
    
    
    
    126.00
    
    
    
    114.88
    
    
    
    95.03
    
    
    
    88.83
    
    
    
    95.08
    
    
    
    88.27
    
    
    
    79.26
    
    
    
    79.58
    
    
    
    96.67
    
    
    
    93.27
    
    
    
    101.63
    
    
    
    108.08
 8/09
    
    9/09
    
    
    10/09
    
    
    11/09
    
    
    12/0966.47
    
    
    69.24
    
    
    
    43.64
    
    
    
    40.44
    
    
    
    50.9895.36
    
    
    100.86
    
    
    
    94.02
    
    
    
    96.97
    
    
    
    104.77108.27
    
    
    105.01
    
    
    
    101.13
    
    
    
    103.31
    
    
    
    108.25
 Holders
  Dividends
  Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities
   18




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##### Table of Contents



Item 6.
    
    Selected Financial Data
  Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Statement of Operations Data:Reprographics services
    
    $
    350,491
    
    
    $
    518,062
    
    
    $
    513,630
    
    
    $
    438,375
    
    
    $
    369,123Facilities management
    
    
    97,401
    
    
    
    120,983
    
    
    
    113,848
    
    
    
    100,158
    
    
    
    83,125Equipment and supplies sales
    
    
    53,657
    
    
    
    61,942
    
    
    
    60,876
    
    
    
    53,305
    
    
    
    41,956Total net sales
    
    
    501,549
    
    
    
    700,987
    
    
    
    688,354
    
    
    
    591,838
    
    
    
    494,204Cost of sales
    
    
    323,360
    
    
    
    415,715
    
    
    
    401,317
    
    
    
    337,509
    
    
    
    289,580Gross profit
    
    
    178,189
    
    
    
    285,272
    
    
    
    287,037
    
    
    
    254,329
    
    
    
    204,624Selling, general and administrative expenses
    
    
    115,020
    
    
    
    154,728
    
    
    
    143,811
    
    
    
    131,743
    
    
    
    112,679Litigation (gain) reserve
    
    
    
    
    
    
    
    
    
    
    (2,897
    )
    
    
    11,262
    
    
    
    Amortization of intangibles
    
    
    11,367
    
    
    
    12,004
    
    
    
    9,083
    
    
    
    5,055
    
    
    
    2,120Goodwill impairment
    
    
    37,382
    
    
    
    35,154
    
    
    
    
    
    
    
    
    
    
    
    Impairment of long-lived assets
    
    
    781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Income from operations
    
    
    13,639
    
    
    
    83,386
    
    
    
    137,040
    
    
    
    106,269
    
    
    
    89,825Other income, net
    
    
    (171
    )
    
    
    (517
    )
    
    
    
    
    
    
    (299
    )
    
    
    (381
    )Interest expense, net
    
    
    25,781
    
    
    
    25,890
    
    
    
    24,373
    
    
    
    23,192
    
    
    
    26,722Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,327
    
    
    
    
    
    
    
    9,344(Loss) income before income tax (benefit)
provision
    
    
    (11,971
    )
    
    
    58,013
    
    
    
    111,340
    
    
    
    83,376
    
    
    
    54,140Income tax provision (benefit) (1)
    
    
    3,018
    
    
    
    21,200
    
    
    
    42,203
    
    
    
    31,982
    
    
    
    (6,336
    )Net (loss) income
    
    
    (14,989
    )
    
    
    36,813
    
    
    
    69,137
    
    
    
    51,394
    
    
    
    60,476Loss (income) attributable to noncontrolling interest
    
    
    104
    
    
    
    (59
    )
    
    
    
    
    
    
    
    
    
    
    Net (loss) income attributable to American Reprographics Company
    
    $
    (14,885
    )
    
    $
    36,754
    
    
    $
    69,137
    
    
    $
    51,394
    
    
    $
    60,476
 Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(In thousands, except per share amounts)(Loss) earnings per share attributable to
ARC shareholders:Basic
    
    $
    (0.33
    )
    
    $
    0.82
    
    
    $
    1.52
    
    
    $
    1.14
    
    
    $
    1.43Diluted
    
    $
    (0.33
    )
    
    $
    0.81
    
    
    $
    1.51
    
    
    $
    1.13
    
    
    $
    1.40Weighted average common shares
outstanding:Basic
    
    
    45,123
    
    
    
    45,060
    
    
    
    45,421
    
    
    
    45,015
    
    
    
    42,264Diluted
    
    
    45,123
    
    
    
    45,398
    
    
    
    45,829
    
    
    
    45,595
    
    
    
    43,178
  19




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##### Table of Contents



Fiscal Year Ended December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Other Financial Data:Depreciation and
amortization
    
    $
    49,543
    
    
    $
    50,121
    
    
    $
    39,445
    
    
    $
    27,749
    
    
    $
    19,165Capital expenditures
    
    $
    7,506
    
    
    $
    9,033
    
    
    $
    8,303
    
    
    $
    7,391
    
    
    $
    5,237Interest expense, net
    
    $
    25,781
    
    
    $
    25,890
    
    
    $
    24,373
    
    
    $
    23,192
    
    
    $
    26,722
 As of December 31,2009
    
    
    2008
    
    
    2007
    
    
    2006
    
    
    2005(Dollars in thousands)Balance Sheet Data:Cash and cash equivalents
    
    $
    29,377
    
    
    $
    46,542
    
    
    $
    24,802
    
    
    $
    11,642
    
    
    $
    22,643Total assets
    
    $
    620,954
    
    
    $
    725,931
    
    
    $
    722,611
    
    
    $
    547,581
    
    
    $
    442,362Long term obligations
    
    $
    228,711
    
    
    $
    315,165
    
    
    $
    324,724
    
    
    $
    253,419
    
    
    $
    253,371Total ARC stockholders
equity
    
    $
    282,024
    
    
    $
    287,902
    
    
    $
    251,651
    
    
    $
    184,244
    
    
    $
    113,569Working capital
    
    $
    (3,739
    )
    
    $
    29,798
    
    
    $
    4,695
    
    
    $
    21,150
    
    
    $
    35,797
 (1)
    
    The Company was reorganized from a California limited
liability company to a Delaware corporation immediately
prior to the consummation of its initial public
offering on February 9, 2005. As a result of that
reorganization, a deferred tax benefit of $27.7 million
was booked concurrent with the consummation of the
initial public offering.  20




---



##### Table of Contents



Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion should be read in conjunction with our consolidated financial
statements and the related notes and other financial information appearing elsewhere in this
Annual Report. This Annual Report contains forward-looking statements that involve risks and
uncertainties. Our actual results may differ materially from those indicated in forward-looking
statements. See Forward-Looking Statements and Risk Factors.
 Executive Summary
    
    
    Document management;
    
    Document distribution and logistics;
    
    Print-on-demand; and
    
    On-site services, frequently referred to as facilities
management (FMs), which is any combination of the above
services supplied at a customers location.
   Business
Combinations Business Combinations
    21




---



##### Table of Contents



Evaluating our Performance.
 
    
    Creating consistent, profitable growth, or in the absence
of growth due to market conditions beyond our control,
stable margins superior to commonly understood industry
benchmarks;
    
    Maintaining our industry leadership as measured by our
geographical footprint, market share and revenue
generation;
    
    Continuing to develop and invest in our products, services,
and technology to meet the changing needs of our customers;
    
    Maintaining a low cost structure; and
    
    Maintaining a flexible capital structure that provides for
both responsible debt service and pursuit of acquisitions
and other high-return investments.
 Primary Financial Measures.
 Net Sales.
          22




---



##### Table of Contents



Costs and Expenses.
     Operating Cash.
 Other Common Financial Measures.
 
    
    Net income and earnings per share;
    
    Material costs as a percentage of net sales; and
    
    Days Sales Outstanding/Days Sales Inventory/Days Payable Outstanding.
    Acquisitions.
  23




---



##### Table of Contents



1.
    
    Standalone Acquisitions. Post-acquisition, these businesses
maintain their existing local brand and act as strategic
platforms for the Company to acquire market share in and
around the specific geographical location.2.
    
    Branch/Fold-in Acquisitions. These acquisitions are
equivalent to opening a new or greenfield branch. They
support an outlying portion of a larger market and rely on
a larger centralized production facility nearby for
strategic management, load balancing, providing specialized
services, and for administrative and other back office
support. We maintain the staff and equipment of these
businesses to a minimum to serve a small market or a single
large customer, or we may physically integrate (fold-in)
staff and equipment into a larger nearby production
facility.
  Economic Factors Affecting Financial Performance.
 Non-GAAP Measures
     24




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##### Table of Contents




    
    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.
    25




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##### Table of Contents



Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007Cash flows provided by operating activities
    
    $
    97,425
    
    
    $
    127,266
    
    
    $
    101,386Changes in operating assets and liabilities
    
    
    (19,919
    )
    
    
    (4,829
    )
    
    
    13,856Non-cash (expenses) income, including
depreciation and amortization
    
    
    (92,495
    )
    
    
    (85,624
    )
    
    
    (46,105
    )Income tax provision
    
    
    3,018
    
    
    
    21,200
    
    
    
    42,203Interest expense, net
    
    
    25,781
    
    
    
    25,890
    
    
    
    24,373Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,327Net loss (income) attributable to the noncontrolling interest
    
    
    104
    
    
    
    (59
    )
    
    
    EBIT
    
    
    13,914
    
    
    
    83,844
    
    
    
    137,040Depreciation and amortization
    
    
    49,543
    
    
    
    50,121
    
    
    
    39,445EBITDA
    
    
    63,457
    
    
    
    133,965
    
    
    
    176,485Interest expense
    
    
    (25,781
    )
    
    
    (25,890
    )
    
    
    (24,373
    )Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    (1,327
    )Income tax provision
    
    
    (3,018
    )
    
    
    (21,200
    )
    
    
    (42,203
    )Depreciation and amortization
    
    
    (49,543
    )
    
    
    (50,121
    )
    
    
    (39,445
    )Net (loss) income attributable to American Reprographics Company
    
    $
    (14,885
    )
    
    $
    36,754
    
    
    $
    69,137
  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007Net (loss) income attributable to
American Reprographics Company
    
    $
    (14,885
    )
    
    $
    36,754
    
    
    $
    69,137Interest expense, net
    
    
    25,781
    
    
    
    25,890
    
    
    
    24,373Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,327Income tax provision
    
    
    3,018
    
    
    
    21,200
    
    
    
    42,203EBIT
    
    
    13,914
    
    
    
    83,844
    
    
    
    137,040Depreciation and amortization
    
    
    49,543
    
    
    
    50,121
    
    
    
    39,445EBITDA
    
    
    63,457
    
    
    
    133,965
    
    
    
    176,485Special items:Goodwill impairment
    
    
    37,382
    
    
    
    35,154
    
    
    
    Impairment of long-lived assets
    
    
    781
    
    
    
    
    
    
    
    Adjusted EBITDA
    
    $
    101,620
    
    
    $
    169,119
    
    
    $
    176,485
  26




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##### Table of Contents



Fiscal Year EndedDecember 31,2009 (1)
    
    
    2008 (1)
    
    
    2007 (1)Net (loss) income margin
    
    
    (3.0
    )%
    
    
    5.2
    %
    
    
    10.0
    %Interest expense, net
    
    
    5.1
    %
    
    
    3.7
    %
    
    
    3.5
    %Loss on early extinguishment
of debt
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.2
    %Income tax provision
    
    
    0.6
    %
    
    
    3.0
    %
    
    
    6.1
    %EBIT margin
    
    
    2.8
    %
    
    
    12.0
    %
    
    
    19.9
    %Depreciation and amortization
    
    
    9.9
    %
    
    
    7.2
    %
    
    
    5.7
    %EBITDA margin
    
    
    12.7
    %
    
    
    19.1
    %
    
    
    25.6
    %Special items:Goodwill impairment
    
    
    7.5
    %
    
    
    5.0
    %
    
    
    0.0
    %Impairment of long-lived assets
    
    
    0.2
    %
    
    
    0.0
    %
    
    
    0.0
    %Adjusted EBITDA margin
    
    
    20.3
    %
    
    
    24.1
    %
    
    
    25.6
    %
 (1)
    
    column does not foot due to rounding  Fiscal Year EndedDecember 31,2009
    
    
    2008
    
    
    2007Net (loss) income attributable to American
Reprographics Company
    
    $
    (14,885
    )
    
    $
    36,754
    
    
    $
    69,137Litigation gain
    
    
    
    
    
    
    
    
    
    
    (2,897
    )Interest income due to litigation gain
    
    
    
    
    
    
    
    
    
    
    (418
    )Goodwill impairment
    
    
    37,382
    
    
    
    35,154
    
    
    
    Impairment of long-lived assets
    
    
    781
    
    
    
    
    
    
    
    Amended Credit Agreement and Swap Transaction costs
    
    
    2,632
    
    
    
    
    
    
    
    Income tax (benefit) provision, related to items above
    
    
    (8,748
    )
    
    
    (12,932
    )
    
    
    1,260Adjusted net
income attributable to ARC
    
    $
    17,162
    
    
    $
    58,976
    
    
    $
    67,082(Loss) Earnings Per Share (Actual):Basic
    
    $
    (0.33
    )
    
    $
    0.82
    
    
    $
    1.52Diluted
    
    $
    (0.33
    )
    
    $
    0.81
    
    
    $
    1.51Earnings Per Share (Adjusted):Basic
    
    $
    0.38
    
    
    $
    1.31
    
    
    $
    1.48Diluted
    
    $
    0.38
    
    
    $
    1.30
    
    
    $
    1.46Weighted
average common shares Outstanding (Adjusted):Basic
    
    
    45,123,110
    
    
    
    45,060,482
    
    
    
    45,421,498Diluted
    
    
    45,266,310
    
    
    
    45,398,086
    
    
    
    45,829,010
  27




---



##### Table of Contents



Results of Operations
  As a Percentage of Net SalesFiscal Year Ended December 31,2009 (1)
    
    
    2008 (1)
    
    
    2007 (1)Net sales
    
    
    100.0
    %
    
    
    100.0
    %
    
    
    100.0
    %Cost of sales
    
    
    64.5
    
    
    
    59.3
    
    
    
    58.3Gross profit
    
    
    35.5
    
    
    
    40.7
    
    
    
    41.7Selling, general and administrative expenses
    
    
    22.9
    
    
    
    22.1
    
    
    
    20.9Litigation gain
    
    
    0.0
    
    
    
    0.0
    
    
    
    (0.4
    )Amortization of intangibles
    
    
    2.3
    
    
    
    1.7
    
    
    
    1.3Goodwill impairment
    
    
    7.5
    
    
    
    5.0
    
    
    
    0.0Impairment of long-lived assets
    
    
    0.2
    
    
    
    0.0
    
    
    
    0.0Income from operations
    
    
    2.7
    
    
    
    11.9
    
    
    
    19.9Other income, net
    
    
    (0.0
    )
    
    
    (0.1
    )
    
    
    0.0Interest expense, net
    
    
    5.1
    
    
    
    3.7
    
    
    
    3.5Loss on early extinguishment of debt
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.2(Loss) income before income tax provision
    
    
    (2.4
    )
    
    
    8.3
    
    
    
    16.2Income tax provision
    
    
    0.6
    
    
    
    3.0
    
    
    
    6.1Net (loss) income
    
    
    (3.0
    )
    
    
    5.3
    
    
    
    10.0
    %Loss attributable to the noncontrolling
interest
    
    
    0.0
    
    
    
    0.0
    
    
    
    0.0Net (loss) income attributable to ARC
    
    
    (3.0
    )%
    
    
    5.2
    %
    
    
    10.0
    %
 (1)
    
    column does not foot due to rounding Year Ended December 31, 2009 Compared to Year Ended December 31, 2008
 Fiscal Year EndedDecember 31,
    
    
    Increase (decrease)2009 (1)
    
    
    2008
    
    
    (In dollars)
    
    
    (Percent)(In millions)Reprographics services
    
    $
    350.5
    
    
    $
    518.1
    
    
    $
    (167.6
    )
    
    
    -32.3
    %Facilities management
    
    
    97.4
    
    
    
    121.0
    
    
    
    (23.6
    )
    
    
    -19.5
    %Equipment and supplies sales
    
    
    53.7
    
    
    
    61.9
    
    
    
    (8.2
    )
    
    
    -13.2
    %Total net sales
    
    $
    501.5
    
    
    $
    701.0
    
    
    $
    (199.5
    )
    
    
    -28.5
    %Gross profit
    
    $
    178.2
    
    
    $
    285.3
    
    
    $
    (107.1
    )
    
    
    (37.5
    )%Selling, general and administrative
expenses
    
    $
    115.0
    
    
    $
    154.7
    
    
    $
    (39.7
    )
    
    
    (25.7
    )%Amortization of intangible assets
    
    $
    11.4
    
    
    $
    12.0
    
    
    $
    (0.6
    )
    
    
    (5.0
    )%Goodwill impairment
    
    $
    37.4
    
    
    $
    35.2
    
    
    $
    2.2
    
    
    
    6.3
    %Impairment of long-lived assets
    
    $
    0.8
    
    
    $
    
    
    
    $
    0.8
    
    
    
    100.0
    %Interest expense, net
    
    $
    25.8
    
    
    $
    25.9
    
    
    $
    (0.1
    )
    
    
    (0.4
    )%Income taxes provision
    
    $
    3.0
    
    
    $
    21.2
    
    
    $
    (18.2
    )
    
    
    (85.8
    )%Net (loss) income attributable to ARC
    
    $
    (14.9
    )
    
    $
    36.8
    
    
    $
    (51.7
    )
    
    
    (140.5
    )%EBITDA
    
    $
    63.5
    
    
    $
    134.0
    
    
    $
    (70.5
    )
    
    
    (52.6
    )%
 (1)
    
    column does not foot due to rounding  28




---



##### Table of Contents



Net Sales
  Reprographics services .
   Facilities management .
 Equipment and supplies sales.
 Gross Profit
    29




---



##### Table of Contents



Selling, General and Administrative Expenses
    Amortization of Intangibles
  Goodwill Impairment
     30




---



##### Table of Contents



Impairment of Long-Lived Assets
  Other Income
  Interest Expense, Net
  Income Taxes
   Noncontrolling Interest
  Net (Loss) Income Attributable to ARC
  EBITDA
   31




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##### Table of Contents



Year Ended December 31, 2008 Compared to Year Ended December 31, 2007
 Fiscal Year EndedDecember 31,
    
    
    Increase (decrease)2008
    
    
    2007
    
    
    (In dollars)
    
    
    (Percent)(In millions)Reprographics services
    
    $
    518.1
    
    
    $
    513.6
    
    
    $
    4.5
    
    
    
    0.9
    %Facilities management
    
    
    121.0
    
    
    
    113.8
    
    
    
    7.2
    
    
    
    6.3
    %Equipment and supplies sales
    
    
    61.9
    
    
    
    60.9
    
    
    
    1.0
    
    
    
    1.6
    %Total net sales
    
    $
    701.0
    
    
    $
    688.3
    
    
    $
    12.7
    
    
    
    1.8
    %Gross profit
    
    $
    285.3
    
    
    $
    287.0
    
    
    $
    (1.7
    )
    
    
    (0.6
    )%Selling, general and administrative expenses
    
    $
    154.7
    
    
    $
    143.8
    
    
    $
    10.9
    
    
    
    7.6
    %Litigation gain
    
    $
    
    
    
    $
    (2.9
    )
    
    $
    2.9
    
    
    
    (100.0
    )%Amortization of intangibles
    
    $
    12.0
    
    
    $
    9.1
    
    
    $
    2.9
    
    
    
    31.9
    %Goodwill impairment
    
    $
    35.2
    
    
    $
    
    
    
    $
    35.2
    
    
    
    100.0
    %Interest expense, net
    
    $
    25.9
    
    
    $
    24.4
    
    
    $
    1.5
    
    
    
    6.1
    %Income taxes provision
    
    $
    21.2
    
    
    $
    42.2
    
    
    $
    (21.0
    )
    
    
    (49.8
    )%Net income attributable to ARC
    
    $
    36.8
    
    
    $
    69.1
    
    
    $
    (32.3
    )
    
    
    (46.7
    )%EBITDA
    
    $
    134.0
    
    
    $
    176.5
    
    
    $
    (42.5
    )
    
    
    (24.1
    )%
 Net Sales
  Reprographics services .
   Facilities management .
  32




---



##### Table of Contents



Equipment and supplies sales .
 Gross Profit
   Selling, General and Administrative Expenses
     Litigation Gain
  Amortization of Intangibles
   33




---



##### Table of Contents



Goodwill Impairment
  Other Income
  Interest Expense
  Loss on the extinguishment of debt
  Noncontrolling Interest
  Income Taxes
  Net Income Attributable to ARC
  EBITDA
  Quarterly Results of Operations
   34




---



##### Table of Contents



Quarter EndedMar. 31,
    
    
    June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,
    
    
    Mar. 31,
    
    

June
30,
    
    
    Sept. 30,
    
    
    Dec. 31,2009
    
    

2008Reprographics
services
    
    $
    99,769
    
    
    $
    92,905
    
    
    $
    81,989
    
    
    $
    75,828
    
    
    $
    142,496
    
    
    $
    139,211
    
    
    $
    127,455
    
    
    $
    108,900Facilities
management
    
    
    26,865
    
    
    
    24,898
    
    
    
    23,395
    
    
    
    22,243
    
    
    
    29,551
    
    
    
    31,209
    
    
    
    30,977
    
    
    
    29,246Equipment and
supplies sales
    
    
    12,849
    
    
    
    13,251
    
    
    
    13,966
    
    
    
    13,591
    
    
    
    15,396
    
    
    
    14,521
    
    
    
    16,153
    
    
    
    15,872Total net sales
    
    $
    139,483
    
    
    $
    131,054
    
    
    $
    119,350
    
    
    $
    111,662
    
    
    $
    187,443
    
    
    $
    184,941
    
    
    $
    174,585
    
    
    $
    154,018Quarterly sales as a
% of annual sales
    
    
    27.8
    %
    
    
    26.1
    %
    
    
    23.8
    %
    
    
    22.3
    %
    
    
    26.7
    %
    
    
    26.4
    %
    
    
    24.9
    %
    
    
    22.0
    %Gross profit
    
    $
    51,979
    
    
    $
    49,155
    
    
    $
    41,131
    
    
    $
    35,924
    
    
    $
    79,603
    
    
    $
    79,088
    
    
    $
    70,015
    
    
    $
    56,566Income (loss) from
operations
    
    $
    18,030
    
    
    $
    16,202
    
    
    $
    (27,139
    )
    
    $
    6,546
    
    
    $
    36,894
    
    
    $
    36,776
    
    
    $
    28,228
    
    
    $
    (18,512
    )EBITDA
    
    $
    30,816
    
    
    $
    28,990
    
    
    $
    (14,885
    )
    
    $
    18,536
    
    
    $
    49,213
    
    
    $
    49,035
    
    
    $
    41,136
    
    
    $
    (5,419
    )Net income (loss)
attributable to
ARC
    
    $
    7,547
    
    
    $
    6,307
    
    
    $
    (28,164
    )
    
    $
    (575
    )
    
    $
    18,498
    
    
    $
    18,876
    
    
    $
    15,067
    
    
    $
    (15,687
    )
  Quarter EndedMar. 31,
    
    
    June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,
    
    
    Mar. 31,
    
    

June 30,
    
    
    Sept. 30,
    
    
    Dec. 31,2009
    
    

2008EBITDA
    
    $
    30,816
    
    
    $
    28,990
    
    
    $
    (14,885
    )
    
    $
    18,536
    
    
    $
    49,213
    
    
    $
    49,035
    
    
    $
    41,136
    
    
    $
    (5,419
    )Interest expense, net
    
    
    (5,796
    )
    
    
    (5,836
    )
    
    
    (6,428
    )
    
    
    (7,721
    )
    
    
    (7,146
    )
    
    
    (6,559
    )
    
    
    (6,180
    )
    
    
    (6,005
    )Income tax (provision)
benefit
    
    
    (4,758
    )
    
    
    (4,096
    )
    
    
    5,334
    
    
    
    502
    
    
    
    (11,452
    )
    
    
    (11,384
    )
    
    
    (7,041
    )
    
    
    8,677Depreciation and
amortization
    
    
    (12,715
    )
    
    
    (12,751
    )
    
    
    (12,185
    )
    
    
    (11,892
    )
    
    
    (12,117
    )
    
    
    (12,216
    )
    
    
    (12,848
    )
    
    
    (12,940
    )Net income (loss)
attributable to ARC
    
    $
    7,547
    
    
    $
    6,307
    
    
    $
    (28,164
    )
    
    $
    (575
    )
    
    $
    18,498
    
    
    $
    18,876
    
    
    $
    15,067
    
    
    $
    (15,687
    )
  Impact of Inflation
  Liquidity and Capital Resources
   35




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##### Table of Contents



Year Ended December 31,2009
    
    
    2008
    
    
    2007Net cash provided by operating activities
    
    $
    97,425
    
    
    $
    127,266
    
    
    $
    101,386Net cash used in investing activities
    
    $
    (9,349
    )
    
    $
    (30,807
    )
    
    $
    (132,688
    )Net cash (used in) provided by financing
activities
    
    $
    (105,332
    )
    
    $
    (74,334
    )
    
    $
    44,353
 Operating Activities
    Investing Activities
  Financing Activities
   36




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##### Table of Contents



December 31,2009
    
    
    2008
    
    
    2007Cash and cash equivalents
    
    $
    29,377
    
    
    $
    46,542
    
    
    $
    24,802Working capital
    
    $
    (3,739
    )
    
    $
    29,798
    
    
    $
    4,695Borrowings from senior secured
credit facilities
    
    $
    205,625
    
    
    $
    261,250
    
    
    $
    297,000Other debt obligations
    
    
    68,606
    
    
    
    99,790
    
    
    
    93,267Total debt obligations
    
    $
    274,231
    
    
    $
    361,040
    
    
    $
    390,267
      37




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##### Table of Contents



Debt Obligations
 Credit Facilities .
    
    
    Add a new definition of Creditable Excess Cash and amend the definition of Fixed Charge Coverage Ratio to allow for an adjustment of Creditable
Excess Cash;
    
    Defer to December 6, 2012 the $36.1 million in amortization payments that would have been due in 2011
to consenting lenders that have agreed to provide new Class B term loan commitments under the Amended
Credit Agreement;
    
    Increase the applicable rate by 200 basis points for initial term loans and 300 basis points for
Class B term loans for purposes of calculating interest on loans outstanding under the Amended Credit
Agreement;
    
    Reduce the total revolving commitments under the Credit Agreement from $74.5 million to $49.5 million;
  38




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##### Table of Contents




    
    Provide for a $35.0 million prepayment to be applied on the business day following the effective date
of the Amended Credit Agreement to reduce initial term loan installments due on March 31, 2010,
June 30, 2010 and September 30, 2010 on a pro rata basis;
    
    Amend the interest coverage ratio under the Credit Agreement as follows:
 
    
    2.00:1.00 for fiscal quarter ending December 31, 2009
    
    1.75:1.00 for quarters ending March 31, 2010 through September 30, 2010
    
    2.00:1.00 for quarters ending December 31, 2010 through September 30, 2011
    
    2.50:1.00 for quarter ending December 31, 2011
    
    3.00:1.00 for quarters ending March 31, 2012 through maturity;
 
    
    Amend the fixed charge coverage ratio under the Credit Agreement to be 1.00:1.00 for the fiscal
quarter ending December 31, 2009 through maturity;
    
    Amend the maximum leverage ratio under the Credit Agreement as follows:
 
    
    3.25:1.00 for fiscal quarter ending December 31, 2009
    
    3.50:1.00 for fiscal quarter ending March 31, 2010
    
    3.85:1.00 for fiscal quarters ending June 30, 2010 through September 30, 2010
    
    3.25:1.00 for fiscal quarter ending December 31, 2010
    
    3.00:1.00 for fiscal quarters ending March 31, 2011 through maturity;
 
    
    Amend the maximum senior secured leverage ratio under the Credit Agreement as follows:
 
    
    3.00:1.00 for fiscal quarter ending December 31, 2009
    
    3.25:1.00 for fiscal quarter ending March 31, 2010
    
    3.65:1.00 for fiscal quarters ending June 30, 2010 through September 30, 2010
    
    3.00:1.00 for fiscal quarters ending December 31, 2010 through March 31, 2011
    
    2.50:1.00 for fiscal quarters ending June 30, 2011 through maturity.
       39




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##### Table of Contents



As of December 31, 2009
    
    
    As of December 31, 2008Available
    
    
    
    
    
    
    
    
    
    
    AvailableBorrowing
    
    
    Interest
    
    
    
    
    
    
    Borrowing
    
    
    InterestBalance
    
    
    Capacity
    
    
    Rate
    
    
    Balance
    
    
    Capacity
    
    
    Rate(Dollars in thousands)Term facility
    
    $
    205,625
    
    
    $
    
    
    
    
    8.10
    %
    
    $
    261,250
    
    
    $
    
    
    
    
    5.39
    %Revolving facilities
    
    
    1,523
    
    
    
    46,073
    
    
    
    6.00
    %
    
    
    
    
    
    
    70,996$
    207,148
    
    
    $
    46,073
    
    
    
    
    
    
    $
    261,250
    
    
    $
    70,996
   Seller Notes.
 Off-Balance Sheet Arrangements
  Contractual Obligations and Other Commitments
  Less than
    
    
    
    
    
    
    
    
    
    
    More thanTotal
    
    
    1 year
    
    
    1 to 3 years
    
    
    3 to 5 years
    
    
    5 years(Dollars in thousands)Debt obligations
    
    $
    228,903
    
    
    $
    34,603
    
    
    $
    194,300
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    
    45,328
    
    
    
    18,917
    
    
    
    21,725
    
    
    
    4,679
    
    
    
    7Interest on long-term
debt and
capital leases (1)
    
    
    46,168
    
    
    
    20,793
    
    
    
    25,092
    
    
    
    283
    
    
    
    Operating lease
    
    
    88,867
    
    
    
    28,449
    
    
    
    35,245
    
    
    
    14,958
    
    
    
    10,215ASC 740 liability (2)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    409,266
    
    
    $
    102,762
    
    
    $
    276,362
    
    
    $
    19,920
    
    
    $
    10,222
 
 (1)
    
    Interest on long-term debt is inclusive of our interest rate Swap Transaction.(2)
    
    ASC 740,formerly FIN 48, Accounting for Uncertainty in Income Taxes,
Liability.As a result of the adoption of ASC 740, we have a $1.8 million
contingent liability for uncertain tax positions. We are not updating the
disclosures in our long-term contractual obligations table presented above
because of the difficulty in making reasonably reliable estimates of the
timing of cash settlements with the respective taxing authorities (see Note 8
Income Taxes to our Consolidated Financial Statements included in this
report for additional discussion).  40




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##### Table of Contents



Operating Leases.
 Contingent Transaction Consideration.
 Critical Accounting Policies
  Impairment of Long-Lived Assets
   Goodwill and Other Intangible Assets
   41




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##### Table of Contents



Revenue Recognition
 Revenue Recognition in Financial Statements
  42




---



##### Table of Contents



Allowance for Doubtful Accounts
  Commitments and Contingencies
  Stock-Based Compensation
 Shared-Based Payment, Accounting for Stock-Based
Compensation Transition Election
Related to Accounting for the Tax Effects of Share-Based Payment Awards
  Recent Accounting Pronouncements
  
 Item 7A.
    
    Quantitative and Qualitative Disclosures about Market Risk
   43




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##### Table of Contents



Item 8.
    
    Financial Statements and Supplementary Data
  
 Item 9.
    
    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A.
    
    Controls and Procedures
 Disclosure Controls and Procedures
   Managements Report on Internal Control Over Financial Reporting
 Internal Control  Integrated Framework
   44




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##### Table of Contents



Changes in Internal Control Over Financial Reporting
   REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
       
 
 Item 9B.
    
    Other Information
   45




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##### Table of Contents



PART III
 
 Item 10.
    
    Directors, Executive Officers and Corporate Governance
  Certain Executive Officer Certifications
  
 Item 11.
    
    Executive Compensation
   
 Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 Item 13.
    
    Certain Relationships and Related Transactions, and Director Independence
  
 Item 14.
    
    Principal Accountant Fees and Services
   46




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##### Table of Contents



PART IV
 
 Item 15. Exhibits and Financial Statement Schedules.
  Financial Statements
 Report of Independent Registered Public Accounting FirmDeloitte & Touche LLPPricewaterhouseCoopers LLPConsolidated Balance Sheets as of December 31, 2009 and 2008Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the years
ended December 31, 2009, 2008 and 2007Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007Notes to Consolidated Financial Statements
 Financial Statement Schedules
   Exhibits
     47




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##### Table of Contents



Index to Exhibits
 Number
    
    Description3.1
    
    
    Amended and Restated Certificate of Incorporation, filed February 2, 2005
(incorporated by reference to Exhibit 3.1 to the Registrants Form 10-K filed on
March 31, 2005).3.2
    
    
    Second Amended and Restated Bylaws, (incorporated by reference to Exhibit 3.1 to the
Registrants Form 8-K filed on October 6, 2009).4.1
    
    
    Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the
Registrants Registration Statement on Form S-1 A (Reg. No. 333-119788), as amended
on January 13, 2005).10.1
    
    
    Second Amended and Restated Credit and Guaranty Agreement dated as of December 21,
2005 by and among American Reprographics Company; American Reprographics Company,
L.L.C., American Reprographics Holdings, L.L.C., certain subsidiaries of American
Reprographics Company, L.L.C., or guarantors, and the lenders named therein
(incorporated by reference to Exhibit 10.1 of the Registrants Form 8-K filed on
December 21, 2005).10.2
    
    
    First Amendment to Second Amended and Restated Credit and Guaranty Agreement dated
effective as of July 17, 2006, by and among American Reprographics Company L.L.C., a
California limited liability company, American Reprographics Company, a Delaware
corporation, certain financial institutions listed in the signature pages thereto,
Goldman Sachs Credit Partners L.P., as Sole Lead Arranger and Joint Bookrunner,
JPMorgan Securities, Inc., as Joint Bookrunner, General Electric Capital Corporation,
as Administrative Agent and as Collateral Agent and the Credit Support Parties listed
on the signature pages thereto (incorporated by reference to Exhibit 10.1 of the
Registrants Form 10-Q filed on August 14, 2006).10.3
    
    
    Second Amendment to Second Amended and Restated Credit and Guaranty Agreement dated
as of April 27, 2007 by and among American Reprographics Company; American
Reprographics Company, L.L.C.; American Reprographics Holdings, L.L.C.; certain
subsidiaries of American Reprographics Company, L.L.C., or guarantors, the lenders
named therein, Goldman Sachs Credit Partners L.P., as sole lead arranger, sole
bookrunner and sole syndication agent, and General Electric Capital Corporation, as
administrative agent (incorporated by reference to Exhibit 10.1 to the Registrants
Form 8-K filed on May 2, 2007).10.4
    
    
    American Reprographics Company 2005 Stock Plan (incorporated by reference to
Exhibit 10.7 to the Registrants Registration Statement on Form S-1 A (Reg.
No. 333-119788), as amended on January 13, 2005).10.5
    
    
    Forms of Stock Option Agreements under the 2005 Stock Plan (incorporated by reference
to Exhibit 10.8 to the Registrants Registration Statement on Form S-1 (Reg.
No. 333-119788), as filed on October 15, 2004).10.6
    
    
    Amendment No. 1 to American Reprographics Company 2005 Stock Plan dated May 22, 2007
(incorporated by reference to Exhibit 10.63 to the Registrants Form 10-Q filed on
August 9, 2007).10.7
    
    
    Amendment No. 2 to American Reprographics Company 2005 Stock Plan dated May 2, 2008
(incorporated by reference to Exhibit 10.3 to the Registrants Form 10-Q filed
August 8, 2008). 10.8
    
    
    Amendment No. 3 to American Reprographics Company 2005 Stock Plan (incorporated by
reference to Exhibit 10.1 to the Registrants Form 10-Q filed August 7, 2009). 10.9
    
    
    Form of American Reprographics Company Stock Option Grant Notice  Non-employee
Directors (Discretionary Non-statutory Stock Options) (incorporated by reference to
Exhibit 10.1 to the Registrants Form 8-K filed on December 16, 2005).10.10
    
    
    Form of American Reprographics Company Non-employee Directors  Stock Option
Agreement (Discretionary Grants) (incorporated by reference to Exhibit 10.2 to the
Registrants Form 8-K filed on December 16, 2005).
  48




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##### Table of Contents



Number
    
    Description10.11
    
    
    Amended and Restated American Reprographics Company 2005 Employee Stock Purchase Plan
amended and restated as of July 30, 2009 (incorporated by reference to Exhibit 10.1
to the Registrants Form 10-Q filed on November 9, 2009).10.12
    
    
    Lease Agreement, dated November 19, 1997, between American Reprographics Company,
L.L.C. (formerly Ford Graphics Group, L.L.C.) and Sumo Holdings LA, LLC (incorporated
by reference to Exhibit 10.10 to the Registrants Registration Statement on Form S-1
(Reg. No. 333-119788), as filed on October 15, 2004).10.13
    
    
    Amendment to Lease for the premises commonly known as 934 and 940 Venice Boulevard,
Los Angeles, CA, effective as of August 2, 2005, by and between Sumo Holdings LA,
LLC, Landlord and American Reprographics Company, L.L.C. (formerly known as FORD
GRAPHICS GROUP, L.L.C.) Tenant (incorporated by reference to Exhibit 10.2 to the
Registrants Form 10-Q filed on November 14, 2005).10.14
    
    
    Lease Agreement between American Reprographics Company, L.L.C. and Sumo Holdings San
Jose, LLC (incorporated by reference to Exhibit 10.11 to the Registrants
Registration Statement on Form S-1 (Reg. No. 333-119788), as filed on October 15,
2004).10.15
    
    
    Amendment to Lease for the premises commonly known as 835 West Julian Street, San
Jose, CA by and between Sumo Holdings San Jose, LLC, Landlord, and American
Reprographics Company, L.L.C. Tenant (incorporated by reference to Exhibit 10.1 to
the Registrants Form 10-Q filed on May 8, 2009).10.16
    
    
    Lease Agreement between American Reprographics Company, L.L.C. and Sumo Holdings
Irvine, LLC (incorporated by reference to Exhibit 10.12 to the Registrants
Registration Statement on Form S-1 (Reg. No. 333-119788), as filed on October 15,
2004).10.17
    
    
    Amendment to Lease for the premises commonly known as 17721 Mitchell North, Irvine,
CA, effective as of August 2, 2005, by and between Sumo Holdings Irvine, LLC, Lessor
and American Reprographics Company, L.L.C., Lessee (incorporated by reference to
Exhibit 10.1 to the Registrants Form 10-Q filed on November 14, 2005).10.18
    
    
    Assignment of Lease and Consent for the premises commonly known as 17721 Mitchell
North, Irvine, CA by and between OCB, LLC, American Reprographics Company, L.L.C.
and Sumo Holdings Irvine LLC (incorporated by reference to Exhibit 10.2 to the
Registrants Form 10-Q filed on May 8, 2009).10.19
    
    
    Second Amendment to Lease for the premises commonly known as 17721 Mitchell North,
Irvine, CA by and between Sumo Holdings Irvine LLC, Lessor, and OCB, LLC, Lessee,
(incorporated by reference to Exhibit 10.3 to the Registrants Form 10-Q filed on May
8, 2009).10.20
    
    
    Lease Agreement, dated December 1, 1997, between American Reprographics Company,
L.L.C. and Sumo Holdings Sacramento, LLC (Oakland Property) (incorporated by
reference to Exhibit 10.13 to the Registrants Registration Statement on Form S-1
(Reg. No. 333-119788), as filed on October 15, 2004).10.21
    
    
    Lease Agreement between American Reprographics Company, L.L.C. (formerly Ford
Graphics Group, L.L.C.) and Sumo Holdings Sacramento, LLC (Sacramento Property)
(incorporated by reference to Exhibit 10.14 to the Registrants Registration
Statement on Form S-1 (Reg. No. 333-119788), as filed on October 15, 2004).10.22
    
    
    Amendment to Lease for the premises commonly known as 1322 V Street, Sacramento, CA,
effective as of August 2, 2005, by and between Sumo Holdings Sacramento, LLC,
Landlord and American Reprographics Company, L.L.C. (formerly known as Ford Graphics
Group, L.L.C.) Tenant (incorporated by reference to Exhibit 10.4 to the Registrants
Form 10-Q filed on November 14, 2005).
  49




---



##### Table of Contents



Number
    
    Description10.23
    
    
    Lease Agreement, dated December 7, 1995, between Leet-Melbrook, Inc. and Sumo
Holdings Maryland, LLC (as successor lessor) (incorporated by reference to
Exhibit 10.15 to the Registrants Registration Statement on Form S-1 (Reg.
No. 333-119788), as filed on October 15, 2004).10.24
    
    
    Amendment to Lease for the premises commonly known as 18810 Woodfield Road,
Gaithersburg, MD, effective as of August 2, 2005, by and between Sumo Holdings
Maryland, LLC, Landlord and Leet-Melbrook, Inc., Tenant (incorporated by reference to
Exhibit 10.3 to the Registrants Form 10-Q filed on November 14, 2005).10.25
    
    
    Second Amendment to Lease for the premises commonly known as 18810 Woodfield Road,
Gaithersburg, MD, effective as of August 1, 2006 by and between Sumo Holdings
Maryland, LLC, Landlord and Leet-Melbrook Inc., Tenant (incorporated by reference to
Exhibit 10.24 to the Registrants Form 10-K filed on March 1, 2007).10.26
    
    
    Lease Agreement, dated September 23, 2003, between American Reprographics Company
(dba Consolidated Reprographics) and Sumo Holdings Costa Mesa, LLC (incorporated by
reference to Exhibit 10.16 to the Registrants Registration Statement on Form S-1
(Reg. No. 333-119788), as filed on October 15, 2004).10.27
    
    
    Lease agreement dated November 19, 1997, between Dieterich-Post Company and Ford
Graphics Group, L.L.C. (incorporated by reference to Exhibit 10.26 to the
Registrants Form 10-K filed on March 1, 2007).10.28
    
    
    Indemnification Agreement, dated April 10, 2000, among American Reprographics
Company, L.L.C., American Reprographics Holdings, L.L.C., ARC Acquisition Co.,
L.L.C., Mr. Chandramohan, Mr. Suriyakumar, Micro Device, Inc., Dieterich-Post
Company, ZS Ford L.P., and ZS Ford L.L.C. (incorporated by reference to Exhibit 10.19
to the Registrants Registration Statement on Form S-1 (Reg. No. 333-119788), as
filed on October 15, 2004).10.29
    
    
    Investor Registration Rights Agreement, dated April 10, 2000, among American
Reprographics Holdings, L.L.C., ARC Acquisition Co., L.L.C., Mr. Chandramohan,
Mr. Suriyakumar, GS Mezzanine Partners II, L.P. and GS Mezzanine Partners II
Offshore, L.P. (incorporated by reference to Exhibit 10.20 to the Registrants
Registration Statement on Form S-1 (Reg. No. 333-119788), as filed on October 15,
2004).10.30
    
    
    First Amendment to Investor Registration Rights Agreement, among American
Reprographics Holdings, L.L.C., American Reprographics Company, ARC Acquisition Co.,
L.L.C., CHS Associates IV, Ms. Paige Walsh, Mr. Chandramohan, Mr. Suriyakumar, GS
Mezzanine Partners II, L.P., GS Mezzanine Partners II Offshore, L.P., Stone Street
Fund 2000, L.P. and Bridge Street Special Opportunities Fund, 2000, L.P.
(incorporated by reference to Exhibit 10.21 to the Registrants Registration
Statement on Form S-1 A (Reg. No. 333-119788), as amended on January 13, 2005).10.31
    
    
    Forms of Restricted Stock Award Agreements under 2005 Stock Plan (incorporated by
reference to Exhibit 10.27 to the Registrants Registration Statement on Form S-1 A
(Reg. No. 333-119788), as amended on December 6, 2004).10.32
    
    
    Form of Restricted Stock Unit Award Agreement under 2005 Stock Plan (incorporated by
reference to Exhibit 10.28 to the Registrants Registration Statement on Form S-1 A
(Reg. No. 333-119788), as amended on December 6, 2004).10.33
    
    
    Form of Stock Appreciation Right Agreement under 2005 Stock Plan (incorporated by
reference to Exhibit 10.29 to the Registrants Registration Statement on Form S-1 A
(Reg. No. 333-119788), as amended on January 13, 2005).10.34
    
    
    Employment Agreement, dated January 7, 2005, between American Reprographics Company
and Mr. Sathiyamurthy Chandramohan (incorporated by reference to Exhibit 10.30 to the
Registrants Registration Statement on Form S-1 A (Reg. No. 333-119788), as amended
on January 13, 2005).
  50




---



##### Table of Contents



Number
    
    Description10.35
    
    
    First Amendment to Employment Agreement between American Reprographics Company and
Mr. Sathiyamurthy Chandramohan, effective November 18, 2005 (incorporated by
reference to Exhibit 10.36 to the Registrants Form 10-K filed on March 16, 2006).10.36
    
    
    Second Amendment to Employment Agreement between American Reprographics Company and
Mr. Sathiyamurthy Chandramohan, effective March 17, 2006 (incorporated by reference
to Exhibit 99.1 to the Registrants Form 8-K filed on March 23, 2006).10.37
    
    
    Restricted Stock Award Grant Notice between American Reprographics Company and
Mr. Sathiyamurthy Chandramohan dated March 27, 2007 (incorporated by reference to
Exhibit 99.1 to the Registrants Form 8-K filed on March 30, 2007).10.38
    
    
    Employment Agreement, dated January 7, 2005, between American Reprographics Company
and Mr. Kumarakulasingam Suriyakumar (incorporated by reference to Exhibit 10.31 to
the Registrants Registration Statement on Form S-1 A (Reg. No. 333-119788), as
amended on January 13, 2005).10.39
    
    
    First Amendment to Employment Agreement between American Reprographics Company and
Mr. Kumarakulasingam Suriyakumar, effective November 18, 2005 (incorporated by
reference to Exhibit 10.38 to the Registrants Form 10-K filed on March 16, 2006).10.40
    
    
    Second Amendment to Employment Agreement between American Reprographics Company and
Mr. Kumarakulasingam Suriyakumar, effective March 17, 2006 (incorporated by reference
to Exhibit 99.2 to the Registrants Form 8-K filed on March 23, 2006).10.41
    
    
    Third Amendment to Employment Agreement between American Reprographics Company and
Mr. Kumarakulasingam Suriyakumar, dated July 27, 2007 (incorporated by reference to
Exhibit 99.1 to the Registrants Form 8-K filed on August 1, 2007).10.42
    
    
    Fourth Amendment to Executive Employment Agreement, dated March 11, 2009 by and
between American Reprographics Company and Mr. Kumarakulasingam Suriyakumar
(incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on
March 11, 2009).10.43
    
    
    Restricted Stock Award Grant Notice between American Reprographics Company and
Mr. Kumarakulasingam Suriyakumar dated March 27, 2007 (incorporated by reference to
Exhibit 99.2 to the Registrants Form 8-K filed on March 30, 2007).10.44
    
    
    Employment Agreement, dated January 7, 2005, between American Reprographics Company
and Mr. Mark W. Legg (incorporated by reference to Exhibit 10.32 to the Registrants
Registration Statement on Form S-1 A (Reg. No. 333-119788), as amended on January 13,
2005).10.45
    
    
    Employment Agreement, dated January 7, 2005, between American Reprographics Company
and Mr. Rahul K. Roy (incorporated by reference to Exhibit 10.33 to the Registrants
Registration Statement on Form S-1 A (Reg. No. 333-119788), as amended on January 13,
2005).10.46
    
    
    First Amendment to Executive Employment Agreement between American Reprographics
Company and Mr. Rahul K. Roy, effective April 17, 2008 (incorporated by reference to
Exhibit 10.2 to the Registrants Form 10-Q filed on August 8, 2008).10.47
    
    
    Second Amendment to Executive Employment Agreement between American Reprographics
Company and Mr. Rahul K. Roy, effective December 22, 2008 (incorporated by reference
to Exhibit 10.69 to the Registrants Form 10-K filed on February 27, 2009)10.48
    
    
    Third Amendment to Executive Employment Agreement, dated March 11, 2009, by and
between American Reprographics Company and Mr. Rahul K. Roy (incorporated by
reference to Exhibit 10.3 to the Registrants Form 8-K filed on March 11, 2009). 
  51




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##### Table of Contents



Number
    
    Description10.49
    
    
    Agreement to Grant Stock dated effective December 7, 2004, between American
Reprographics Company and Mr. Rahul K. Roy (incorporated by reference to
Exhibit 10.36 to the Registrants Form 10-K filed on March 31, 2005).10.50
    
    
    First Amendment to Agreement to Grant Stock dated May 17, 2006 between American
Reprographics Company and Mr. Rahul K. Roy (incorporated by reference to
Exhibit 10.48 to the Registrants Form 10-K filed on March 1, 2007).10.51
    
    
    Executive Employment Agreement between American Reprographics Company and Mr.
Jonathan R. Mather dated November 29, 2006 (incorporated by reference to Exhibit 99.2
to the Registrants Form 8-K filed on November 30, 2006).10.52
    
    
    First Amendment to Executive Employment Agreement between American Reprographics
Company and Mr. Jonathan R. Mather, effective April 17, 2008 (incorporated by
reference to Exhibit 10.1 to the Registrants Form 10-Q filed on August 8, 2008).10.53
    
    
    Second Amendment to Executive Employment Agreement, dated March 11, 2009, by and
between American Reprographics Company and Mr. Jonathan R. Mather (incorporated by
reference to Exhibit 10.2 to the Registrants Form 8-K filed on March 11, 2009). 10.54
    
    
    Restricted Stock Award Grant Notice between American Reprographics Company and Mr.
Jonathan R. Mather dated April 17, 2008 (incorporated by reference to Exhibit 99.3 to
the Registrants Form 8-K filed on April 22, 2008). 10.55
    
    
    2007 Bonus Plan, dated February 20, 2007, between American Reprographics Company and
Mr. Jonathan R. Mather (incorporated by reference to Exhibit 10.60 to the
Registrants Form 10-K filed on February 27, 2008).10.56
    
    
    Executive Employment Agreement between American Reprographics Company and Dilantha
Wijesuriya dated February 23, 2009 (incorporated by reference to Exhibit 10.2 to the
Registrants Form 8-K filed on February 25, 2009). 10.57
    
    
    First Amendment to Executive Employment Agreement, dated March 11, 2009, by and
between American Reprographics Company and Mr. Dilantha Wijesuriya (incorporated by
reference to Exhibit 10.4 to the Registrants Form 8-K filed on March 11, 2009). 10.58
    
    
    Indemnification Agreement dated February 23, 2009 between American Reprographics
Company and Dilantha Wijesuriya (incorporated by reference to Exhibit 10.1 to the
Registrants Form 8-K filed on February 25, 2009).10.59
    
    
    Indemnification Agreement made as of December 4, 2006 between American Reprographics
Company and Jonathan Mather (incorporated by reference to Exhibit 10.50 to the
Registrants Form 10-K filed on March 1, 2007).10.60
    
    
    Indemnification Agreement made as of September 30, 2004 between American
Reprographics Company and Sathiyamurthy Chandramohan (incorporated by reference to
Exhibit 10.37 to the Registrants Form 10-K filed on March 31, 2005).10.61
    
    
    Indemnification Agreement made as of September 30, 2004 between American
Reprographics Company and Andrew W. Code (incorporated by reference to Exhibit 10.38
to the Registrants Form 10-K filed on March 31, 2005).10.62
    
    
    Indemnification Agreement made as of September 30, 2004 between American
Reprographics Company and Thomas J. Formolo (incorporated by reference to
Exhibit 10.39 to the Registrants Form 10-K filed on March 31, 2005).
  52




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##### Table of Contents



Number
    
    Description10.63
    
    
    Indemnification Agreement made as of October 7, 2004 between American Reprographics
Company and Mark W. Legg (incorporated by reference to Exhibit 10.40 to the
Registrants Form 10-K filed on March 31, 2005).10.64
    
    
    Indemnification Agreement made as of September 30, 2004 between American
Reprographics Company and Manuel Perez de la Mesa (incorporated by reference to
Exhibit 10.41 to the Registrants Form 10-K filed on March 31, 2005).10.65
    
    
    Indemnification Agreement made as of January 11, 2005 between American Reprographics
Company and Edward D. Horowitz (incorporated by reference to Exhibit 10.42 to the
Registrants Form 10-K filed on March 31, 2005).10.66
    
    
    Indemnification Agreement made as of March 3, 2005 between American Reprographics
Company and Mark W. Mealy (incorporated by reference to Exhibit 10.43 to the
Registrants Form 10-K filed on March 31, 2005).10.67
    
    
    Indemnification Agreement made as of September 30, 2004 between American
Reprographics Company and Kumarakulasingam Suriyakumar (incorporated by reference to
Exhibit 10.44 to the Registrants Form 10-K filed on March 31, 2005).10.68
    
    
    Indemnification Agreement made as of October 7, 2004 between American Reprographics
Company and Rahul K. Roy (incorporated by reference to Exhibit 10.45 to the
Registrants Form 10-K filed on March 31, 2005).10.69
    
    
    Indemnification Agreement made as of February 2, 2006 between American Reprographics
Company and Dewitt Kerry McCluggage (incorporated by reference to Exhibit 10.51 to
the Registrants Form 10-K filed on March 16, 2006).10.70
    
    
    Indemnification Agreement made as of May 22, 2006, between American Reprographics
Company and Eriberto R. Scocimara (incorporated by reference to Exhibit 10.61 to the
Registrants Form 10-K filed on March 1, 2007).10.71
    
    
    Indemnification Agreement made as of March 11, 2009, between American Reprographics
Company and James F. McNulty (incorporated by reference to Exhibit 10.1 to the
Registrants Form 8-K filed on June 25, 2009).10.72
    
    
    Consulting Agreement dated February 28, 2007 between American Reprographics Company,
L.L.C. and Legg Consulting L.L.C. (incorporated by reference to Exhibit 10.62 to the
Registrants Form 10-K filed on March 1, 2007).10.73
    
    
    Consulting Agreement between Sathiyamurthy Chandramohan and American Reprographics
Company, dated July 24, 2008 (incorporated by reference to Exhibit 10.4 to the
Registrants Form 10-Q filed on August 8, 2008). 10.74
    
    
    Credit and Guaranty Agreement dated as of December 6, 2007 by and among American
Reprographics Company, American Reprographics Company, L.L.C., certain subsidiaries
of American Reprographics Company, L.L.C., as guarantor, JPMorgan Chase Bank, N.A.,
as administrative agent and collateral agents, J.P. Morgan Securities, Inc. and
Wachovia Capital Markets, LLC, as joint bookrunners and joint lead arrangers, and
Wachovia Bank, National Association, as syndication agent (incorporated by reference
to Exhibit 10.1 to the Registrants Form 8-K filed on December 7, 2007).10.75
    
    
    Second Amendment to Credit and Guaranty Agreement dated as of October 5, 2009 by and
among American Reprographics Company, American Reprographics Company, L.L.C.,
JPMorgan Chase Bank, N.A., as administrative and collateral agent, and the other
lenders named therein (incorporated by reference to Exhibit 10.1 to the Registrants
Form 8-K filed on October 6, 2009).
  53




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##### Table of Contents



Number
    
    Description10.76
    
    
    Security Agreement dated as of December 6, 2007 by and among American Reprographics
Company, American Reprographics Company, L.L.C., the other Grantors party thereto and
JPMorgan Chase Bank, N.A. as collateral agent (incorporated by reference to
Exhibit 10.58 to the Registrants Form 10-K filed on February 27, 2008).10.77
    
    
    ISDA Master Agreement dated as of December 19, 2007 by and among American
Reprographics Company, American Reprographics Company, L.L.C., and Wells Fargo Bank
N.A. (incorporated by reference to Exhibit 10.1 to the Registrants Form 8-K filed on
December 26, 2007).10.78
    
    
    First Amended and Restated ISDA Confirmation dated October 2, 2009 by and among
American Reprographics Company, American Reprographics Company, L.L.C., and Wells
Fargo Bank N.A. (incorporated by reference to Exhibit 10.2 to the Registrants
Form 8-K filed on October 6, 2009).10.79
    
    
    Restricted Stock Award Grant Notice between American Reprographics Company and
Dilantha Wijesuriya dated October 28, 2009. * 10.80
    
    
    Consent dated as of December 11, 2009, for the premises commonly known as 17721
Mitchell North, Irvine, CA by and between Sumo Holdings Irvine, LLC, OCB, LLC and
American Reprographics Company, L.L.C.*10.81
    
    
    First Amendment and Waiver to Credit and Guaranty Agreement dated as of February 13,
2009 by and between American Reprographics Company, American Reprographics Company,
L.L.C., JPMorgan Chase Bank, N.A., Wachovia Bank, National Association, Bank of
America, N.A., and Wells Fargo Bank, N.A. *10.82
    
    
    Third Amendment to Credit and Guaranty Agreement dated as of December 16, 2009 by and
among American Reprographics Company, American Reprographics Company, L.L.C.,
JPMorgan Chase Bank, N.A., as administrative and collateral agent, and the other
lenders named therein.*16.1
    
    
    Letter from PricewaterhouseCoopers LLP addressed to the United States Securities and
Exchange Commission,dated March 31, 2009 (incorporated by reference to Exhibit 16 to
the Registrants Form 8-K filed on April 2, 2009).21.1
    
    
    List of Subsidiaries.*23.1
    
    
    Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.*23.2
    
    
    Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.*31.1
    
    
    Certification of Principal Executive Officer pursuant to Rules 13a-14(a)/15d-14(a) of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*31.2
    
    
    Certification of Principal Financial Officer pursuant to Rules 13a-14(a)/15d-14(a) of
the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.*32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
 *
    
    Filed herewith
    
    Indicates management contract or compensatory plan or agreement  54




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##### Table of Contents



SIGNATURES
  AMERICAN REPROGRAPHICS COMPANYBy:
    /s/ KUMARAKULASINGAM SURIYAKUMARChairman, President and Chief Executive Officer   Signature
    
    Title
    
    Date/s/ KUMARAKULASINGAM SURIYAKUMAR

Kumarakulasingam Suriyakumar
    
    Chairman, President
and Chief Executive
Officer and
Director 
(Principal
Executive Officer)
    
    February 26, 2010/s/ JONATHAN R. MATHER

Jonathan R. Mather
    
    Chief Financial
Officer and
Secretary
(Principal
Financial Officer
and 
Principal
Accounting Officer)
    
    February 26, 2010/s/ THOMAS J. FORMOLO

Thomas J. Formolo
    
    Director
    
    February 26, 2010/s/ ERIBERTO SCOCIMARA

Eriberto Scocimara
    
    Director
    
    February 26, 2010/s/ DEWITT KERRY MCCLUGGAGE

Dewitt Kerry McCluggage
    
    Director
    
    February 26, 2010/s/ JAMES F. MCNULTY

James F. McNulty
    
    Director
    
    February 26, 2010/s/ MARK W. MEALY

Mark W. Mealy
    
    Director
    
    February 26, 2010/s/ MANUEL PEREZ DE LA MESA

Manuel Perez de la Mesa
    
    Director
    
    February 26, 2010
  55




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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
 Report of Independent Registered Public Accounting FirmDeloitte & Touche LLP
    
    
    F-2PricewaterhouseCoopers LLP
    
    
    F-3Consolidated Balance Sheets as of December 31, 2009 and 2008
    
    
    F-4Consolidated Statements of Operations for the years ended December 31, 2009, 2008 and 2007
    
    
    F-5Consolidated Statements of Stockholders Equity and Comprehensive Income (Loss) for the
years ended December 31, 2009, 2008 and 2007
    
    
    F-6Consolidated Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007
    
    
    F-7Notes to Consolidated Financial Statements
    
    
    F-8Financial Statement Schedule:Schedule II  Valuation and Qualifying Accounts
    
    
    F-31
  F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
      
   F-2




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
   
   F-3




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED BALANCE SHEETS
 (Dollars in thousands, except per share data)
 December 31,
    
    
    December 31,2009
    
    
    2008AssetsCurrent assets:Cash and cash equivalents
    
    $
    29,377
    
    
    $
    46,542Accounts receivable, net of allowances for accounts receivable of $4,685 and $5,424 at December 31, 2009 and December 31, 2008, respectively
    
    
    53,919
    
    
    
    77,216Inventories, net
    
    
    10,605
    
    
    
    11,097Deferred income taxes
    
    
    5,568
    
    
    
    5,831Prepaid expenses and other current assets
    
    
    7,011
    
    
    
    11,976Total current assets
    
    
    106,480
    
    
    
    152,662Property and equipment, net
    
    
    74,568
    
    
    
    89,712Goodwill
    
    
    332,518
    
    
    
    366,513Other intangible assets, net
    
    
    74,208
    
    
    
    85,967Deferred financing costs, net
    
    
    4,082
    
    
    
    3,537Deferred income taxes
    
    
    26,987
    
    
    
    25,404Other assets
    
    
    2,111
    
    
    
    2,136Total assets
    
    $
    620,954
    
    
    $
    725,931Liabilities and Stockholders EquityCurrent liabilities:Accounts payable
    
    $
    23,355
    
    
    $
    25,171Accrued payroll and payroll-related expenses
    
    
    8,804
    
    
    
    13,587Accrued expenses
    
    
    24,540
    
    
    
    24,913Current portion of long-term debt and capital leases
    
    
    53,520
    
    
    
    59,193Total current liabilities
    
    
    110,219
    
    
    
    122,864Long-term debt and capital leases
    
    
    220,711
    
    
    
    301,847Other long-term liabilities
    
    
    8,000
    
    
    
    13,318Total liabilities
    
    
    338,930
    
    
    
    438,029Commitments and contingencies (Note 9)Stockholders equity:Preferred stock, $0.001 par value, 25,000,000 shares authorized;
zero and zero shares issued and outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value, 150,000,000 shares authorized;
46,112,653 and 45,674,810 shares issued and 45,664,999 and
45,227,156 shares outstanding in 2009 and 2008, respectively
    
    
    46
    
    
    
    46Additional paid-in capital
    
    
    89,982
    
    
    
    85,207Deferred stock-based compensation
    
    
    
    
    
    
    (195
    )Retained earnings
    
    
    200,961
    
    
    
    215,846Accumulated other comprehensive loss
    
    
    (7,273
    )
    
    
    (11,414
    )283,716
    
    
    
    289,490Less cost of common stock in treasury, 447,654 shares in 2009 and 2008
    
    
    7,709
    
    
    
    7,709Total American Reprographics Company stockholders equity
    
    
    276,007
    
    
    
    281,781Noncontrolling interest
    
    
    6,017
    
    
    
    6,121Total stockholders equity
    
    
    282,024
    
    
    
    287,902Total liabilities and stockholders equity
    
    $
    620,954
    
    
    $
    725,931
   F-4




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Dollars in thousands, except per share data)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007Reprographics services
    
    $
    350,491
    
    
    $
    518,062
    
    
    $
    513,630Facilities management
    
    
    97,401
    
    
    
    120,983
    
    
    
    113,848Equipment and supplies sales
    
    
    53,657
    
    
    
    61,942
    
    
    
    60,876Total net sales
    
    
    501,549
    
    
    
    700,987
    
    
    
    688,354Cost of sales
    
    
    323,360
    
    
    
    415,715
    
    
    
    401,317Gross profit
    
    
    178,189
    
    
    
    285,272
    
    
    
    287,037Selling, general and administrative expenses
    
    
    115,020
    
    
    
    154,728
    
    
    
    143,811Litigation gain
    
    
    
    
    
    
    
    
    
    
    (2,897
    )Amortization of intangible assets
    
    
    11,367
    
    
    
    12,004
    
    
    
    9,083Goodwill impairment
    
    
    37,382
    
    
    
    35,154
    
    
    
    Impairment of long-lived assets
    
    
    781
    
    
    
    
    
    
    
    Income from operations
    
    
    13,639
    
    
    
    83,386
    
    
    
    137,040Other income, net
    
    
    (171
    )
    
    
    (517
    )
    
    
    Interest expense, net
    
    
    25,781
    
    
    
    25,890
    
    
    
    24,373Loss on early extinguishment of debt
    
    
    
    
    
    
    
    
    
    
    1,327(Loss) income before income tax provision
    
    
    (11,971
    )
    
    
    58,013
    
    
    
    111,340Income tax provision
    
    
    3,018
    
    
    
    21,200
    
    
    
    42,203Net (loss) income
    
    
    (14,989
    )
    
    
    36,813
    
    
    
    69,137Loss (income) attributable to noncontrolling interest
    
    
    104
    
    
    
    (59
    )
    
    
    Net (loss) income attributable to American
Reprographics Company
    
    $
    (14,885
    )
    
    $
    36,754
    
    
    $
    69,137(Loss) earnings per share attributable to American Reprographics Company shareholders:Basic
    
    $
    (0.33
    )
    
    $
    0.82
    
    
    $
    1.52Diluted
    
    $
    (0.33
    )
    
    $
    0.81
    
    
    $
    1.51Weighted average common shares outstanding:Basic
    
    
    45,123,110
    
    
    
    45,060,482
    
    
    
    45,421,498Diluted
    
    
    45,123,110
    
    
    
    45,398,086
    
    
    
    45,829,010
   F-5




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED
STATEMENTS OF STOCKHOLDERS EQUITY AND COMPREHENSIVE INCOME (LOSS)
 (Dollars in thousands, except per share data)
 American Reprographics Company ShareholdersAccumulatedCommon Stock
    
    
    Additional
    
    
    
    
    
    
    
    
    
    
    Other
    
    
    Common
    
    
    
    
    
    
    TotalPar
    
    
    Paid-In
    
    
    Deferred
    
    
    Retained
    
    
    Comprehensive
    
    
    Stock in
    
    
    Noncontrolling
    
    
    StockholdersShares
    
    
    Value
    
    
    Capital
    
    
    Compensation
    
    
    Earnings
    
    
    Loss
    
    
    Treasury
    
    
    Interest
    
    
    EquityBalance at December 31, 2006
    
    
    45,346,099
    
    
    $
    45
    
    
    $
    75,465
    
    
    $
    (1,224
    )
    
    $
    109,955
    
    
    $
    3
    
    
    $
    
    
    
    $
    
    
    
    $
    184,244Stock-based compensation
    
    
    41,524
    
    
    
    
    
    
    
    2,917
    
    
    
    551
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,468Issuance of common stock under Employee Stock
Purchase Plan
    
    
    4,600
    
    
    
    
    
    
    
    100
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100Stock options exercised
    
    
    169,550
    
    
    
    1
    
    
    
    1,108
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,109Net tax benefit from stock-based compensation
    
    
    
    
    
    
    
    
    
    
    1,563
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,563Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,137
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,137Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    676
    
    
    
    
    
    
    
    
    
    
    
    676Gain (loss) on derivative, net of
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (937
    )
    
    
    
    
    
    
    
    
    
    
    (937
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    68,876Purchase of treasury shares
    
    
    (447,654
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (7,709
    )
    
    
    
    
    
    
    (7,709
    )Balance at December 31, 2007
    
    
    45,114,119
    
    
    $
    46
    
    
    $
    81,153
    
    
    $
    (673
    )
    
    $
    179,092
    
    
    $
    (258
    )
    
    $
    (7,709
    )
    
    $
    
    
    
    $
    251,651Stock-based compensation
    
    
    78,250
    
    
    
    
    
    
    
    3,812
    
    
    
    478
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,290Issuance of common stock under Employee Stock
Purchase Plan
    
    
    3,087
    
    
    
    
    
    
    
    35
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    35Stock options exercised
    
    
    31,700
    
    
    
    
    
    
    
    177
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    177Net Tax benefit from stock-based compensation
    
    
    
    
    
    
    
    
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    30Noncontrolling interest resulting from
business combinations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,062
    
    
    
    6,062Comprehensive incomeNet income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    36,754
    
    
    
    
    
    
    
    
    
    
    
    59
    
    
    
    36,813Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,989
    )
    
    
    
    
    
    
    
    
    
    
    (1,989
    )Gain (loss) on derivative, net of
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,167
    )
    
    
    
    
    
    
    
    
    
    
    (9,167
    )Comprehensive income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    25,657Balance at December 31, 2008
    
    
    45,227,156
    
    
    $
    46
    
    
    $
    85,207
    
    
    $
    (195
    )
    
    $
    215,846
    
    
    $
    (11,414
    )
    
    $
    (7,709
    )
    
    $
    6,121
    
    
    $
    287,902Stock-based compensation
    
    
    396,012
    
    
    
    
    
    
    
    4,697
    
    
    
    195
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,892Issuance of common stock under Employee Stock
Purchase Plan
    
    
    30,031
    
    
    
    
    
    
    
    164
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    164Stock options exercised
    
    
    11,800
    
    
    
    
    
    
    
    63
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    63Tax deficiency from stock-based compensation, net of
tax benefit
    
    
    
    
    
    
    
    
    
    
    (149
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (149
    )Comprehensive lossNet loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (14,885
    )
    
    
    
    
    
    
    
    
    
    
    (104
    )
    
    
    (14,989
    )Foreign currency translation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    823
    
    
    
    
    
    
    
    
    
    
    
    823Gain (loss) on derivative, net of
tax effect
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,318
    
    
    
    
    
    
    
    
    
    
    
    3,318Comprehensive loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (10,848
    )Balance at December 31, 2009
    
    
    45,664,999
    
    
    $
    46
    
    
    $
    89,982
    
    
    $
    
    
    
    $
    200,961
    
    
    $
    (7,273
    )
    
    $
    (7,709
    )
    
    $
    6,017
    
    
    $
    282,024
   F-6




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Dollars in thousands, except per share data)
 Year Ended December 31,2009
    
    
    2008
    
    
    2007Cash flows from operating activitiesNet (loss) income
    
    $
    (14,989
    )
    
    $
    36,813
    
    
    $
    69,137Adjustments to reconcile net (loss) income to net cash provided by operating activities:Allowance for accounts receivable
    
    
    3,044
    
    
    
    4,966
    
    
    
    1,315Depreciation
    
    
    38,176
    
    
    
    38,117
    
    
    
    30,362Amortization of intangible assets
    
    
    11,367
    
    
    
    12,004
    
    
    
    9,083Amortization of deferred financing costs
    
    
    1,357
    
    
    
    1,267
    
    
    
    515Goodwill impairment
    
    
    37,382
    
    
    
    35,154
    
    
    
    Impairment of long-lived assets
    
    
    781
    
    
    
    
    
    
    
    Stock-based compensation
    
    
    4,892
    
    
    
    4,289
    
    
    
    3,469Excess tax benefit related to stock-based compensation
    
    
    (18
    )
    
    
    (30
    )
    
    
    (1,563
    )Deferred income taxes
    
    
    (4,477
    )
    
    
    (10,172
    )
    
    
    5,318Write-off of deferred financing costs
    
    
    190
    
    
    
    313
    
    
    
    1,327Litigation charge (gain)
    
    
    
    
    
    
    
    
    
    
    (3,315
    )Other noncash items, net
    
    
    (199
    )
    
    
    (284
    )
    
    
    (406
    )Changes in operating assets and liabilities, net of effect of business acquisitions:Accounts receivable
    
    
    21,099
    
    
    
    21,556
    
    
    
    (446
    )Inventory
    
    
    1,344
    
    
    
    3,134
    
    
    
    694Prepaid expenses and other assets
    
    
    6,302
    
    
    
    (1,101
    )
    
    
    44Litigation settlement payment
    
    
    
    
    
    
    
    
    
    
    (10,500
    )Accounts payable and accrued expenses
    
    
    (8,826
    )
    
    
    (18,760
    )
    
    
    (3,648
    )Net cash provided by operating activities
    
    
    97,425
    
    
    
    127,266
    
    
    
    101,386Cash flows from investing activitiesCapital expenditures
    
    
    (7,506
    )
    
    
    (9,033
    )
    
    
    (8,303
    )Payments for businesses acquired, net of cash acquired
and including other cash payments associated with
the acquisitions
    
    
    (3,527
    )
    
    
    (23,916
    )
    
    
    (132,739
    )Restricted cash
    
    
    
    
    
    
    937
    
    
    
    7,911Other
    
    
    1,684
    
    
    
    1,205
    
    
    
    443Net cash used in investing activities
    
    
    (9,349
    )
    
    
    (30,807
    )
    
    
    (132,688
    )Cash flows from financing activitiesProceeds from stock option exercises
    
    
    63
    
    
    
    177
    
    
    
    1,108Proceeds from issuance of common stock under Employee Stock Purchase Plan
    
    
    164
    
    
    
    35
    
    
    
    100Treasury stock repurchase
    
    
    
    
    
    
    
    
    
    
    (7,709
    )Excess tax benefit related to stock-based compensation
    
    
    18
    
    
    
    30
    
    
    
    1,563Proceeds from borrowings under long-term debt agreements
    
    
    
    
    
    
    
    
    
    
    325,000Payments on long-term debt agreements and capital leases
    
    
    (105,008
    )
    
    
    (51,850
    )
    
    
    (292,685
    )Net borrowings (repayments) under revolving credit facility
    
    
    1,523
    
    
    
    (22,000
    )
    
    
    22,000Payment of loan fees
    
    
    (2,092
    )
    
    
    (726
    )
    
    
    (5,024
    )Net cash (used in) provided by financing activities
    
    
    (105,332
    )
    
    
    (74,334
    )
    
    
    44,353Effect of foreign currency translation on cash balances
    
    
    91
    
    
    
    (385
    )
    
    
    109Net change in cash and cash equivalents
    
    
    (17,165
    )
    
    
    21,740
    
    
    
    13,160Cash and cash equivalents at beginning of period
    
    
    46,542
    
    
    
    24,802
    
    
    
    11,642Cash and cash equivalents at end of period
    
    $
    29,377
    
    
    $
    46,542
    
    
    $
    24,802Supplemental disclosure of cash flow informationCash paid for:Interest
    
    $
    24,733
    
    
    $
    26,111
    
    
    $
    27,728Income taxes
    
    $
    2,507
    
    
    $
    33,939
    
    
    $
    41,840Noncash investing and financing activities:Capital lease obligations incurred
    
    $
    16,181
    
    
    $
    34,561
    
    
    $
    35,263Issuance of subordinated notes in connection with the
acquisition of businesses
    
    $
    466
    
    
    $
    10,414
    
    
    $
    23,758Accrued liabilities in connection with the acquisition of businesses
    
    $
    
    
    
    $
    100
    
    
    $
    570Accrued liabilities in connection with deferred financing fees
    
    $
    
    
    
    $
    
    
    
    $
    663Gain (loss) on derivative, net of tax effect
    
    $
    3,318
    
    
    $
    (9,167
    )
    
    $
    (937
    )Contribution from noncontrolling interest
    
    $
    
    
    
    $
    6,062
    
    
    $
    
   F-7




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##### Table of Contents



AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (Dollars in thousands, except per share data)
 1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
  Basis of Presentation
    Risk and Uncertainties
  2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Cash Equivalents
   Concentrations of Credit Risk and Significant Vendors
    F-8




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##### Table of Contents



Allowance for Doubtful Accounts
  Inventories
  Property and Equipment
  Buildings
    
    10-20 yearsLeasehold improvements
    
    10-20 years or lease term, if shorterMachinery and equipment
    
    3-7 yearsFurniture and fixtures
    
    3-7 years
  Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use
 Impairment of Long-Lived Assets
 Accounting for the Impairment or Disposal of Long-lived Assets
  F-9




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##### Table of Contents



Goodwill and Other Intangible Assets
 Business Combinations
     F-10




---



##### Table of Contents



Business Combinations
  Accumulated
    
    
    Net CarryingGross Goodwill
    
    
    Impairment Loss
    
    
    AmountJanuary 1, 2008
    
    $
    382,519
    
    
    $
    
    
    
    $
    382,519Additions
    
    
    20,004
    
    
    
    
    
    
    
    20,004Goodwill impairment
    
    
    
    
    
    
    35,154
    
    
    
    (35,154
    )Translation adjustment
    
    
    (856
    )
    
    
    
    
    
    
    (856
    )December 31, 2008
    
    
    401,667
    
    
    
    35,154
    
    
    
    366,513Additions
    
    
    3,136
    
    
    
    
    
    
    
    3,136Goodwill impairment
    
    
    
    
    
    
    37,382
    
    
    
    (37,382
    )Translation adjustment
    
    
    251
    
    
    
    
    
    
    
    251December 31, 2009
    
    $
    405,054
    
    
    $
    72,536
    
    
    $
    332,518
    December 31, 2009
    
    
    December 31, 2008Gross
    
    
    
    
    
    
    Net
    
    
    Gross
    
    
    
    
    
    
    NetCarrying
    
    
    Accumulated
    
    
    Carrying
    
    
    Carrying
    
    
    Accumulated
    
    
    CarryingAmount
    
    
    Amortization
    
    
    Amount
    
    
    Amount
    
    
    Amortization
    
    
    Amount(Dollars in thousands)
    
    
    (Dollars in thousands)Amortizable other intangible assets:Customer relationships
    
    $
    96,219
    
    
    $
    39,243
    
    
    $
    56,976
    
    
    $
    96,574
    
    
    $
    29,233
    
    
    $
    67,341Trade names and trademarks
    
    
    20,294
    
    
    
    3,139
    
    
    
    17,155
    
    
    
    20,359
    
    
    
    2,126
    
    
    
    18,233Non-Compete Agreements
    
    
    303
    
    
    
    226
    
    
    
    77
    
    
    
    1,278
    
    
    
    885
    
    
    
    393$
    116,816
    
    
    $
    42,608
    
    
    $
    74,208
    
    
    $
    118,211
    
    
    $
    32,244
    
    
    $
    85,967
  2010
    
    $
    10,0712011
    
    
    9,1222012
    
    
    8,2272013
    
    
    7,3232014
    
    
    6,514Thereafter
    
    
    32,951$
    74,208
  F-11




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##### Table of Contents



Deferred Financing Costs
   Derivative Financial Instruments
 Accounting for Derivative
Instruments and Hedging Activities
 Fair Values of Financial Instruments
  Cash and cash equivalents:
 Short- and long-term debt:
 Interest rate hedge agreements:
 Insurance Liability
   F-12




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##### Table of Contents



Commitments and Contingencies
  Revenue Recognition
 Revenue Recognition in Financial Statements
      Comprehensive Loss
   Segment and Geographic Reporting
 Disclosures about Segments of an Enterprise
and Related Information
  2009
    
    
    2008
    
    
    2007U.S.
    
    
    Foreign
    
    
    Total
    
    
    U.S.
    
    
    Foreign
    
    
    Total
    
    
    U.S.
    
    
    Foreign
    
    
    TotalRevenues from external
customers
    
    $
    473,355
    
    
    $
    28,194
    
    
    $
    501,549
    
    
    $
    676,742
    
    
    $
    24,245
    
    
    $
    700,987
    
    
    $
    675,108
    
    
    $
    13,246
    
    
    $
    688,354Long-lived assets, net
    
    $
    478,489
    
    
    $
    8,998
    
    
    $
    487,487
    
    
    $
    538,056
    
    
    $
    9,809
    
    
    $
    547,865
    
    
    $
    552,434
    
    
    $
    8,536
    
    
    $
    560,970
 Advertising and Shipping and Handling Costs
   F-13




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##### Table of Contents



Income Taxes
    Stock-Based Compensation
 Shared-Based Payment, Accounting for Stock-Based Compensation Transition Election Related to Accounting for the Tax
Effects of Share-Based Payment Awards
   Year EndedDecember 31,2009
    
    
    2008Weighted average assumptions used:Risk free interest rate
    
    
    0.95
    %
    
    
    2.79
    %Expected volatility
    
    
    43.1
    %
    
    
    32.70
    %Expected dividend yield
    
    
    0.00
    %
    
    
    0.00
    %
   F-14




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##### Table of Contents



Research and Development Expenses
  Sales Taxes
  Earnings Per Share
 Earnings per Share
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Weighted average common shares
outstanding during the period 
basic
    
    
    45,123,110
    
    
    
    45,060,482
    
    
    
    45,421,498Effect of dilutive stock options
    
    
    
    
    
    
    337,604
    
    
    
    407,512Weighted average common
shares outstanding during the
period  diluted
    
    
    45,123,110
    
    
    
    45,398,086
    
    
    
    45,829,010
  Recent Accounting Pronouncements
 Fair Value
Measurements and Disclosures, improving disclosures about Fair Value Measurements Fair Value Measurements and
Disclosures
 Multiple-Deliverable Revenue Arrangements a consensus of the FASB Emerging Issues Task Force Revenue Recognition,
  F-15




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##### Table of Contents



The FASB Accounting Standards
Codification and the Hierarchy of Generally Accepted Accounting Principles The Hierarchy of Generally Accepted Accounting Principles
 Subsequent Events
  Accounting for
Assets Acquired and Liabilities Assumed in a Business Combination That Arise from Contingencies
 Interim Disclosures about Fair Value of Financial Instruments
 Determining Whether Instruments Granted in Share-Based Payment Transactions Are
Participating Securities
 Determination of the
Useful Life of Intangible Asset
  F-16




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##### Table of Contents



Disclosures about Derivative
Instruments and Hedging Activities  an amendment of FASB Statement No.133
 Noncontrolling
Interests in Consolidated Financial Statements  an Amendment of ARB No. 51
 3. ACQUISITIONS
         F-17




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##### Table of Contents



December 31,2008Purchase price
    
    $
    31,929Cash and cash equivalents
    
    
    431Accounts receivable
    
    
    6,186Property and equipment
    
    
    2,749Inventories
    
    
    2,889Other assets
    
    
    601Total assets
    
    
    12,856Accounts payable and other liabilities
    
    
    3,757Capital Leases
    
    
    580Minority Interest
    
    
    6,062Net assets acquired
    
    
    2,457Excess purchase price over net tangible assets acquired
    
    $
    29,472Intangible assets:Customer relationships
    
    $
    10,208Trade names
    
    
    2,016Non-compete agreements
    
    
    Goodwill
    
    
    17,248$
    29,472
   Year ended December 31,2008
    
    
    2007(Dollars in thousands, except per share data)Net sales
    
    $
    725,202
    
    
    $
    804,979Net income
    
    $
    37,482
    
    
    $
    71,993Earnings per share  basic
    
    $
    0.83
    
    
    $
    1.59Earnings per share  diluted
    
    $
    0.83
    
    
    $
    1.57
     F-18




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##### Table of Contents



4. PROPERTY AND EQUIPMENT
  December 31,2009
    
    
    2008Machinery and equipment
    
    $
    233,292
    
    
    $
    225,020Buildings and leasehold improvements
    
    
    20,768
    
    
    
    23,504Furniture and fixtures
    
    
    4,850
    
    
    
    5,839258,910
    
    
    
    254,363Less accumulated depreciation
    
    
    (184,342
    )
    
    
    (164,651
    )$
    74,568
    
    
    $
    89,712
   5. LONG-TERM DEBT
  December 31,
    
    
    December 31,2009
    
    
    2008(Dollars in thousands)Borrowings from foreign Revolving Credit Facilities; 6.0% interest rate at
December 31, 2009; principal payable through January 2010
    
    $
    1,523
    
    
    $
    Borrowings from senior secured First Priority  Term Loan Credit Facility;
interest payable quarterly (weighted average 8.1% and 5.4% interest rate
at December 31, 2009 and December 31, 2008, respectively, inclusive of
interest rate Swap Transaction); principal payable in varying quarterly
installments; any unpaid principal and interest due December 6, 2012
    
    
    205,625
    
    
    
    261,250Various subordinated notes payable; weighted average 6.2% and 6.2%
interest rate at December 31, 2009 and December 31, 2008, respectively;
principal and interest payable monthly through June 2012
    
    
    21,755
    
    
    
    35,376Various capital leases; weighted average 9.2% and 9.1% interest rate
at December 31, 2009 and December 31, 2008, respectively;
principal and interest payable monthly through January 2015
    
    
    45,328
    
    
    
    64,414274,231
    
    
    
    361,040Less current portion
    
    
    (53,520
    )
    
    
    (59,193
    )$
    220,711
    
    
    $
    301,847
 Credit and Guaranty Agreement
    F-19




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##### Table of Contents




    
    Add a new definition of Creditable Excess Cash and amend the definition of Fixed Charge Coverage
Ratio to allow for an adjustment of Creditable Excess Cash;
    
    Defer to December 6, 2012 the $36.1 million in amortization payments that would have been due in 2011
to consenting lenders that have agreed to provide new Class B term loan commitments under the Amended
Credit Agreement;
    
    Increase the applicable rate by 200 basis points for initial term loans and 300 basis points for
Class B term loans for purposes of calculating interest on loans outstanding under the Amended Credit
Agreement;
    
    Reduce the total revolving commitments under the Credit Agreement from $74.5 million to $49.5 million;
    
    Provide for a $35.0 million prepayment to be applied on the business day following the effective date
of the Amended Credit Agreement to reduce initial term loan installments due on March 31, 2010,
June 30, 2010 and September 30, 2010 on a pro rata basis;
    
    Amend the interest coverage ratio under the Credit Agreement as follows:
 
    
    2.00:1.00 for fiscal quarter ending December 31, 2009
    
    1.75:1.00 for quarters ending March 31, 2010 through September 30, 2010
    
    2.00:1.00 for quarters ending December 31, 2010 through September 30, 2011
    
    2.50:1.00 for quarter ending December 31, 2011
    
    3.00:1.00 for quarters ending March 31, 2012 through maturity;
 
    
    Amend the fixed charge coverage ratio under the Credit Agreement to be 1.00:1.00 for the fiscal
quarter ending December 31, 2009 through maturity;
    
    Amend the maximum leverage ratio under the Credit Agreement as follows:
 
    
    3.25:1.00 for fiscal quarter ending December 31, 2009
    
    3.50:1.00 for fiscal quarter ending March 31, 2010
    
    3.85:1.00 for fiscal quarters ending June 30, 2010 through September 30, 2010
    
    3.25:1.00 for fiscal quarter ending December 31, 2010
    
    3.00:1.00 for fiscal quarters ending March 31, 2011 through maturity;
 
    
    Amend the maximum senior secured leverage ratio under the Credit Agreement as follows:
 
    
    3.00:1.00 for fiscal quarter ending December 31, 2009
    
    3.25:1.00 for fiscal quarter ending March 31, 2010
    
    3.65:1.00 for fiscal quarters ending June 30, 2010 through September 30, 2010
    
    3.00:1.00 for fiscal quarters ending December 31, 2010 through March 31, 2011
    
    2.50:1.00 for fiscal quarters ending June 30, 2011 through maturity.
  F-20




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##### Table of Contents



Long-Term Debt
    
    
    Capital Lease ObligationsYear ending December 31:2010
    
    $
    34,603
    
    
    $
    18,9172011
    
    
    40,658
    
    
    
    13,6092012
    
    
    153,642
    
    
    
    8,1162013
    
    
    
    
    
    
    3,7312014
    
    
    
    
    
    
    948Thereafter
    
    
    
    
    
    
    7$
    228,903
    
    
    $
    45,328
  F-21




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##### Table of Contents



Interest Rate Swap Transaction
     6. DERIVATIVES AND HEDGING TRANSACTIONS
    Fair ValueBalance Sheet
    
    December 31,Classification
    
    2009
    
    
    2008Derivative designated as hedging instrument
under ASC 815Swap Transaction  current portion
    
    Accrued expenses
    
    $
    6,908
    
    
    $
    5,953Swap Transaction  long term portion
    
    Other long-term liabilities
    
    
    4,010
    
    
    
    10,531Total derivatives designated as hedging
    
    
    
    $
    10,918
    
    
    $
    16,484
  F-22




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##### Table of Contents



Amount of Gain or (Loss) Recognized  in AOCL onDerivativeYear Ended December 31,2009
    
    
    2008Derivative in ASC 815 Cash Flow Hedging
RelationshipSwap Transaction
    
    $
    5,590
    
    
    $
    (14,877
    )Tax effect
    
    
    (2,272
    )
    
    
    5,710Swap Transaction, net of tax effect
    
    $
    3,318
    
    
    $
    (9,167
    )
  Amount of Gain or (Loss)
    
    
    Amount of Gain or (Loss)Reclassified from AOCL into Income
    
    
    Recognized in Income(effective portion)
    
    
    (ineffective portion)Year Ended December 31,
    
    
    Year Ended December 31,2009
    
    
    2008
    
    
    2009
    
    
    2008Location of Gain or (Loss)
Reclassified from AOCL into IncomeInterest expense
    
    $
    (8,247
    )
    
    $
    (2,080
    )
    
    $
    (24
    )
    
    $
    
 7. FAIR VALUE MEASUREMENTS
 Fair Value Measurements
     Level 2December 31,2009
    
    
    2008Recurring Fair Value
MeasureInterest rate swap
    
    $
    10,918
    
    
    $
    16,484
  F-23




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##### Table of Contents



8. INCOME TAXES
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Current:Federal
    
    $
    5,767
    
    
    $
    25,644
    
    
    $
    30,362State
    
    
    1,442
    
    
    
    5,052
    
    
    
    6,156Foreign
    
    
    286
    
    
    
    676
    
    
    
    3677,495
    
    
    
    31,372
    
    
    
    36,885Deferred:Federal
    
    
    (2,854
    )
    
    
    (6,510
    )
    
    
    3,910State
    
    
    (302
    )
    
    
    (2,783
    )
    
    
    1,376Foreign
    
    
    (1,321
    )
    
    
    (879
    )
    
    
    32(4,477
    )
    
    
    (10,172
    )
    
    
    5,318Income tax provision
    
    $
    3,018
    
    
    $
    21,200
    
    
    $
    42,203
  F-24




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##### Table of Contents



December 31,2009
    
    
    2008Current portion of deferred tax assets (liabilities):Financial statement accruals not currently deductible
    
    $
    5,187
    
    
    $
    4,306State taxes
    
    
    268
    
    
    
    1,265Tax credit carryforward
    
    
    113
    
    
    
    260Net current deferred tax assets
    
    
    5,568
    
    
    
    5,831Non-current portion of deferred tax assets and (liabilities):Excess of income tax basis over net book value of intangible assets
    
    
    18,420
    
    
    
    21,403Excess of income tax basis over net book value of property, plant and equipment
    
    
    10,800
    
    
    
    9,855Stock-based compensation
    
    
    4,225
    
    
    
    2,781Tax credit carryforward
    
    
    761
    
    
    
    823Foreign tax net operating loss carryforward
    
    
    1,392
    
    
    
    133Accumulated other comprehensive loss
    
    
    4,074
    
    
    
    6,227Excess of net book value over income tax basis of intangible assets
    
    
    (12,685
    )
    
    
    (15,818
    )Net non-current deferred tax assets
    
    
    26,987
    
    
    
    25,404Net deferred tax assets
    
    $
    32,555
    
    
    $
    31,235
  Year Ended December 31,2009
    
    
    2008
    
    
    2007Statutory federal income tax rate
    
    
    35
    %
    
    
    35
    %
    
    
    35
    %State taxes, net of federal benefit
    
    
    (5
    )
    
    
    5
    
    
    
    5Foreign taxes
    
    
    4
    
    
    
    
    
    
    
    Goodwill impairment
    
    
    (56
    )
    
    
    1
    
    
    
    Non-deductible expenses and other
    
    
    (6
    )
    
    
    2
    
    
    
    1Domestic Production Activities Deduction tax benefit
    
    
    3
    
    
    
    (3
    )
    
    
    (2
    )Discrete item
    
    
    
    
    
    
    (3
    )
    
    
    (1
    )Effective income tax rate
    
    
    (25
    )%
    
    
    37
    %
    
    
    38
    %
    2009
    
    
    2008
    
    
    2007Beginning balance at January 1,
    
    $
    1,133
    
    
    $
    1,100
    
    
    $
    897Additions based on tax positions related to the current
year
    
    
    424
    
    
    
    379
    
    
    
    379Reductions for tax positions due to effective settlement
with taxing authorities
    
    
    
    
    
    
    (346
    )
    
    
    Reductions for tax positions due to expiration of
statute of limitations
    
    
    
    
    
    
    
    
    
    
    (176
    )Ending balance at December 31,
    
    $
    1,557
    
    
    $
    1,133
    
    
    $
    1,100
  F-25




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##### Table of Contents



Accounting for Uncertainty in Income Taxes,
 9. COMMITMENTS AND CONTINGENCIES
  Third Party
    
    
    Related Party
    
    
    TotalYear ending December 31:2010
    
    $
    26,940
    
    
    $
    1,509
    
    
    $
    28,4492011
    
    
    19,370
    
    
    
    1,244
    
    
    
    20,6142012
    
    
    13,549
    
    
    
    1,082
    
    
    
    14,6312013
    
    
    8,188
    
    
    
    852
    
    
    
    9,0402014
    
    
    5,885
    
    
    
    33
    
    
    
    5,918Thereafter
    
    
    10,215
    
    
    
    
    
    
    
    10,215$
    84,147
    
    
    $
    4,720
    
    
    $
    88,867
         F-26




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##### Table of Contents



10. RELATED PARTY TRANSACTIONS
  11. RETIREMENT PLANS
  12. EMPLOYEE STOCK PURCHASE PLAN AND STOCK OPTION PLAN
 Employee Stock Purchase Plan
    2005 Stock Plan
     F-27




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##### Table of Contents



Stock Option Exchange Program.
     Year Ended Decemer 31, 2009WeightedWeighted
    
    
    Average
    
    
    AggregateAverage
    
    
    Contractual
    
    
    IntrinsicExercise
    
    
    Life
    
    
    ValueShares
    
    
    Price
    
    
    (In years)
    
    
    (In thousands)Oustanding at December 31, 2007
    
    
    2,057,796
    
    
    $
    20.26Granted
    
    
    350,000
    
    
    $
    15.56Exercised
    
    
    (31,700
    )
    
    $
    5.57Forfeited
    
    
    (94,950
    )
    
    $
    26.23Outstanding at December 31, 2008
    
    
    2,281,146
    
    
    $
    19.49Granted
    
    
    1,541,576
    
    
    $
    8.12Exercised
    
    
    (11,800
    )
    
    $
    5.34Forfeited/Cancelled
    
    
    (1,559,250
    )
    
    $
    24.50Outstanding at December 31, 2009
    
    
    2,251,672
    
    
    $
    7.76
    
    
    
    7.22
    
    
    $
    1,128Vested or expected to vest at December 31, 2009
    
    
    2,143,829
    
    
    $
    7.74
    
    
    
    7.23
    
    
    $
    1,128Exercisable at December 31, 2009
    
    
    722,096
    
    
    $
    7.00
    
    
    
    2.97
    
    
    $
    1,075
   F-28




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##### Table of Contents



WeightedAverage Grant DateNon-vested Options
    
    Shares
    
    
    Fair Market ValueNon-vested at December 31, 2008
    
    
    1,128,686
    
    
    $
    9.68Granted
    
    
    1,541,576
    
    
    $
    3.34Vested
    
    
    (35,929
    )
    
    $
    10.09Forfeited/Cancelled
    
    
    (1,104,757
    )
    
    $
    9.60Non-vested at December 31, 2009
    
    
    1,529,576
    
    
    $
    3.34
   Range of Exercise
    
    Options OutstandingPrice
    
    at December 31, 2009$4.88 - $5.85
    
    
    638,000$6.11 - $8.20
    
    
    1,564,125$23.85 - $35.42
    
    
    49,547$4.88 - $35.42
    
    
    2,251,672
 Restricted Stock
        F-29




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##### Table of Contents



13. QUARTERLY FINANCIAL DATA (Unaudited)
  Quarter EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2008
    
    
    2008
    
    
    2008
    
    
    2008Net sales
    
    $
    187,443
    
    
    $
    184,941
    
    
    $
    174,585
    
    
    $
    154,018Gross profit
    
    $
    79,603
    
    
    $
    79,088
    
    
    $
    70,015
    
    
    $
    56,566Net income (loss)attributable to ARC
    
    $
    18,498
    
    
    $
    18,876
    
    
    $
    15,067
    
    
    $
    (15,687
    )Earnings (loss) per share:attributable to ARC:Basic
    
    $
    0.41
    
    
    $
    0.42
    
    
    $
    0.33
    
    
    $
    (0.35
    )Diluted
    
    $
    0.41
    
    
    $
    0.42
    
    
    $
    0.33
    
    
    $
    (0.35
    )
 Quarter EndedMarch 31,
    
    
    June 30,
    
    
    September 30,
    
    
    December 31,2009
    
    
    2009
    
    
    2009
    
    
    2009Net sales
    
    $
    139,483
    
    
    $
    131,054
    
    
    $
    119,350
    
    
    $
    111,662Gross profit
    
    $
    51,979
    
    
    $
    49,155
    
    
    $
    41,131
    
    
    $
    35,924Net income (loss)attributable to ARC
    
    $
    7,547
    
    
    $
    6,307
    
    
    $
    (28,164
    )
    
    $
    (575
    )Earnings (loss) per share:attributable to ARC:Basic
    
    $
    0.17
    
    
    $
    0.14
    
    
    $
    (0.62
    )
    
    $
    (0.01
    )Diluted
    
    $
    0.17
    
    
    $
    0.14
    
    
    $
    (0.62
    )
    
    $
    (0.01
    )
  F-30




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##### Table of Contents



Schedule II
AMERICAN REPROGRAPHICS COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS
 Balance at
    
    
    Charges to
    
    
    Charged to
    
    
    
    
    
    
    Balance atBeginning
    
    
    Cost and
    
    
    Other
    
    
    Deductions
    
    
    End ofof Period
    
    
    Expenses
    
    
    Accounts (1)
    
    
    (2)
    
    
    PeriodYear ended December 31, 2007Allowance for accounts receivable
    
    $
    4,344
    
    
    $
    1,315
    
    
    $
    708
    
    
    $
    (1,275
    )
    
    $
    5,092Allowance for inventory
obsolescence
    
    
    527
    
    
    
    104
    
    
    
    282
    
    
    
    (156
    )
    
    
    757$
    4,871
    
    
    $
    1,419
    
    
    $
    990
    
    
    $
    (1,431
    )
    
    $
    5,849Year ended December 31, 2008Allowance for accounts receivable
    
    $
    5,092
    
    
    $
    4,966
    
    
    $
    362
    
    
    $
    (4,996
    )
    
    $
    5,424Allowance for inventory
obsolescence
    
    
    757
    
    
    
    47
    
    
    
    99
    
    
    
    (348
    )
    
    
    555$
    5,849
    
    
    $
    5,013
    
    
    $
    461
    
    
    $
    (5,344
    )
    
    $
    5,979Year ended December 31, 2009Allowance for accounts receivable
    
    $
    5,424
    
    
    $
    3,044
    
    
    $
    
    
    
    $
    (3,783
    )
    
    $
    4,685Allowance for inventory
obsolescence
    
    
    555
    
    
    
    52
    
    
    
    
    
    
    
    (12
    )
    
    
    595$
    5,979
    
    
    $
    3,096
    
    
    $
    
    
    
    $
    (3,795
    )
    
    $
    5,280
 
 (1)
    
    Acquisition of businesses and sales returns and discounts.(2)
    
    Deductions represent uncollectible accounts written-off net of recoveries and inventory adjustments.  F-31




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##### Table of Contents



EXHIBIT INDEX
 Number
    
    Description10.79
    
    
    Restricted Stock Award Grant Notice between American Reprographics Company and
Dilantha Wijesuriya dated October 28, 2009. * 10.80
    
    
    Consent dated as of December 11, 2009, for the premises commonly known as 17721
Mitchell North, Irvine, CA by and between Sumo Holdings Irvine, LLC, OCB, LLC and
American Reprographics Company, L.L.C.*10.81
    
    
    First Amendment and Waiver to Credit and Guaranty Agreement dated as of February 13,
2009 by and between American Reprographics Company, American Reprographics Company,
L.L.C., JPMorgan Chase Bank, N.A., Wachovia Bank, National Association, Bank of
America, N.A., and Wells Fargo Bank, N.A. *10.82
    
    
    Third Amendment to Credit and Guaranty Agreement dated as of December 16, 2009 by and
among American Reprographics Company, American Reprographics Company, L.L.C.,
JPMorgan Chase Bank, N.A., as administrative and collateral agent, and the other
lenders named therein.*21.1
    
    
    List of Subsidiaries.*23.1
    
    
    Consent of Deloitte & Touche LLP, Independent Registered Public Accounting Firm.*23.2
    
    
    Consent of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm.*31.1
    
    
    Certification of Principal Executive Officer pursuant to Rule 13a-14(a) and Rule
15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. *31.2
    
    
    Certification of Principal Financial Officer pursuant to Rule 13a-14(a) and
Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002. *32.1
    
    
    Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *32.2
    
    
    Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. *
 
 *
    
    Filed herewith
    
    Indicates management contract or compensatory plan or agreement