##### Table of Contents









UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549





Form 10-K


|           |  |                                                                                             
|---------- |  | --------------------------------------------------------------------------------------------
|(Mark One) |  |                                                                                             
|þ          |  | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934    
|          
|           |  | For The Fiscal Year Ended December 31, 2004                                                 
|          
|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                                                           |  | 20-1700361                              
|(State or other jurisdiction of
    incorporation or organization) |  | (I.R.S. Employer
    Identification No.)

700 North Central Avenue, Suite 550


Glendale, California 91203


(818) 500-0225


(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 Registered
|                                         |  |                                          
|Common Stock, par value $0.001 per share |  | New York Stock Exchange                  

Securities registered pursuant to Section 12(g) of the
Act:


NONE


o þ


þ


o þ






DOCUMENTS INCORPORATED BY REFERENCE












---










AMERICAN REPROGRAPHICS COMPANY


ANNUAL REPORT ON FORM 10-K


for the fiscal year ended December 31, 2004


Table of Contents


|              |  |                                                                                                                      |    |  |    |  |  | 
|------------- |  | -------------------------------------------------------------------------------------------------------------------- | -- |  | -- |  |  | 
|PART I        |  |                                                                                                                      | 3  | 
|Item 1.       |  | Business                                                                                                             |    |  | 3  | 
|Item 2.       |  | Properties                                                                                                           |    |  | 17 | 
|Item 3.       |  | Legal Proceedings                                                                                                    |    |  | 18 | 
|Item 4.       |  | Submission Of Matters To A Vote Of Security
    Holders                                                              |    |  | 19 | 
|PART II       |  |                                                                                                                      | 19 | 
|Item 5.       |  | Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities |    |  | 19 | 
|Item 6.       |  | Selected Consolidated Financial Data                                                                                 |    |  | 21 | 
|Item 7.       |  | Managements Discussion and Analysis
    of Financial Condition and Results of Operation                             |    |  | 22 | 
|Item 7A.      |  | Quantitative and Qualitative Disclosures
    about Market Risk                                                       |    |  | 40 | 
|Item 8.       |  | Consolidated Financial Statements and
    Supplementary Data                                                         |    |  | 41 | 
|Item 9.       |  | Changes in and Disagreements with
    Accountants on Accounting and Financial Disclosure                             |    |  | 41 | 
|Item 9A.      |  | Controls and Procedures                                                                                              |    |  | 42 | 
|Item 9B.      |  | Other Information                                                                                                    |    |  | 42 | 
|PART III      |  |                                                                                                                      | 42 | 
|Item 10.      |  | Directors and Executive Officers of the
    Registrant                                                               |    |  | 42 | 
|Item 11.      |  | Executive Compensation                                                                                               |    |  | 48 | 
|Item 12.      |  | Security Ownership of Certain Beneficial
    Owners and Management and Related Stockholder Matters                   |    |  | 52 | 
|Item 13.      |  | Certain Relationships and Related
    Transactions                                                                   |    |  | 55 | 
|Item 14.      |  | Principal Accounting Fees and Services                                                                               |    |  | 56 | 
|PART IV       |  |                                                                                                                      | 57 | 
|Item 15.      |  | Exhibits, Financial Statement Schedules                                                                              |    |  | 57 | 
|SIGNATURES    |  |                                                                                                                      | 62 | 
|EXHIBIT 3.1  
|EXHIBIT 3.2  
|EXHIBIT 10.33
|EXHIBIT 10.34
|EXHIBIT 10.35
|EXHIBIT 10.36
|EXHIBIT 10.37
|EXHIBIT 10.38
|EXHIBIT 10.39
|EXHIBIT 10.40
|EXHIBIT 10.41
|EXHIBIT 10.42
|EXHIBIT 10.43
|EXHIBIT 10.44
|EXHIBIT 10.45
|EXHIBIT 14.1 
|EXHIBIT 23.1 
|EXHIBIT 23.2 
|EXHIBIT 31.1 
|EXHIBIT 31.2 
|EXHIBIT 32.1 







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##### Table of Contents



In this report, American Reprographics Company,
ARC, the company, we,
us, and our refer to American
Reprographics Company and its consolidated subsidiaries, unless
the context otherwise dictates.


FORWARD-LOOKING STATEMENTS










| |   |                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | general economic conditions and a downturn in the architectural,
    engineering and construction industry;                                                                                                                                            
|
| |  | competition in our industry and innovation by our competitors;                                                                                                                                                                                         
|
| |  | our failure to anticipate and adapt to future changes in our
    industry;                                                                                                                                                                             
|
| |  | uncertainty regarding our product and service innovations;                                                                                                                                                                                             
|
| |  | the inability to charge for our value-added services to offset
    potential declines in print volumes;                                                                                                                                                
|
| |  | adverse developments affecting the State of California,
    including general and local economic conditions, macroeconomic
    trends, and natural disasters;                                                                                          
|
| |  | our inability to successfully identify and manage our
    acquisitions or open new branches;                                                                                                                                                           
|
| |  | our inability to successfully monitor and manage the business
    operations of our subsidiaries and uncertainty regarding the
    effectiveness of financial and management policies and
    procedures we established to improve accounting controls;
|
| |  | adverse developments concerning our relationships with certain
    key vendors;                                                                                                                                                                        
|
| |  | our inability to adequately protect our intellectual property
    and litigation regarding intellectual property;                                                                                                                                      
|
| |  | acts of terrorism, violence, war, natural disaster or other
    circumstances that cause damage or disruption to us, our
    facilities, our technology centers, our vendors or a majority of
    our customers;                                       
|
| |  | the loss of key personnel or qualified technical staff;                                                                                                                                                                                                
|
| |  | the increased expenses and administrative workload associated
    with being a public company;                                                                                                                                                         
|
| |  | failure to maintain an effective system of internal controls
    necessary to accurately report our financial results and prevent
    fraud.                                                                                                           



1



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TRADEMARKS AND TRADE NAMES


sm sm tm sm sm tm sm sm tm sm


2



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AMERICAN REPROGRAPHICS COMPANY 2004 ANNUAL REPORT





PART I







|        |         
|------- | --------
|Item 1. | Business

Our Company












3



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Available Information


www.sec.gov.


www.e-arc.com. www.e-arc.com




Corporate Background and Reorganization






4



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Recent Developments








Acquisitions






Industry Overview




5



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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
    our PlanWell online planrooms are well positioned to become the
    industry standard for managing and procuring reprographics
    services within the AEC industry. In addition, we have developed
    other proprietary software applications that complement PlanWell
    and have enabled us to improve the efficiency of our services,
    add complementary services and increase our revenue.                                                                                                                                                                                                                                                                                             
|
| |  | Extensive National Footprint with Regional
    Expertise. Our national network of service centers
    maintains local customer relationships while benefiting from the
    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
    among our service centers within each market. In addition, we
    serve our national and regional customers under a single
    contract through our Premier Accounts business unit, while
    offering centralized access to project specific services,
    billing, and tracking information.
|
| |  | Flexible Operating Model. By promoting regional
    decision making for marketing, pricing, and selling practices,
    we 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 an improving business environment.                                                                                                                                                                                                                                                                                                                                                                            
|
| |  | Consistent, Strong Cash Flow. Through management
    of our inventory and receivables and our low capital expenditure
    requirements, we have consistently generated strong cash flow
    from operations after capital expenditures regardless of
    industry and economic conditions.                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Low Cost Operator. We believe we are one of the
    lowest cost operators in the reprographics industry, which we
    have accomplished by minimizing branch level expenses and
    capitalizing on our significant scale for purchasing
    efficiencies.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Experienced Management Team and Highly Trained
    Workforce. Our senior management team has an average of
    over 20 years of industry experience. We have also
    successfully retained approximately 93% of the managers of the
    86 businesses we have acquired since 1997.                                                                                                                                                                                                                                                                                                                                                                                                                                                                  

Our Services




6



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Document Management.


Document Distribution and Logistics.


Print-on-demand.








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | PlanWell, our proprietary, internet-based planroom launched in
    June 2000, and our suite of other reprographics software
    products that enable the online purchase and fulfillment of
    reprographics services. While PlanWell typically facilitates the
    management of large and small format documents for professionals
    in the AEC industry, the application can be used to manage small
    format document collections and color documents for non-AEC
    users. PlanWell is provided in two primary configurations:
    PlanWell Enterprise, a hosted, comprehensive documentation
    system with a wide variety of administration and document
    management features; and PlanWell PDS, a simple, stand alone
    online planroom that acts as a document viewing and distribution
    tool for a single set of plans.
|
| |  | Production services, including print-on-demand, document
    assembly, document finishing, mounting, laminating, binding, and
    kitting. We utilize a broad range of digital output equipment
    and finishing and assembly skills to produce print-on-demand
    projects at each of our 181 service centers. These services
    include the production of large format and small format
    documents in both black and white and color. Documents can be
    digitally transferred from one service facility to another to
    balance production capacity or take advantage of a
    distribute and print operating system.                                                                                                                                                                                                            
|
| |  | Document distribution and logistics, including the physical pick
    up, delivery, and shipping of time-sensitive, critical
    documents. These services are supported by a fleet of
    approximately 680 vehicles and nearly 700 employees. Our service
    facilities provide pedestrian, bicycle and car courier services
    in most metropolitan markets, and we also offer third party
    shipping services to all of our customers. Contracted courier
    services allow our divisions to manage additional delivery
    capacity through approximately 160 vehicles and drivers.                                                                                                                                                                                                                                                    
|
| |  | Highly customized large and small format reprographics in color
    and black and white. For our non-AEC customers this includes
    digital reproduction of posters, tradeshow displays, plans,
    banners, signage and maps. We offer large format color services
    through a variety of processes, including inkjet, bubblejet,
    large format electrostatic printing and photographic printing.
    We also offer small format color reprographics services, which
    typically use laser printing technology, for products such as
    flyers, real estate deal books and financial presentations.                                                                                                                                                                                                                                   

7



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Facilities management, including recurring on-site document
    management services and staffing at our customers
    locations. We currently have more than 2,000 facilities
    management programs, which typically include the management and
    procurement of related on-site equipment and supplies. Our
    facilities management services generally eliminate reprographics
    capital expenditures for our customers and keep equipment
    current and in good condition. Our facilities management
    services also help our customers track and capture reprographics
    costs that are often reimbursable, and frequently transform a
    customers cost center into profit center.
|
| |  | Sales of reprographics equipment and supplies to other
    reprographics companies and end-users in the AEC industry to
    further complement our service and product offerings and
    increase our purchasing power. In addition, a number of our
    service centers are authorized dealers for reprographics
    equipment manufactures such as Oce and Xerox. Sales of
    reprographics equipment and supplies accounted for approximately
    $38.2 million, or 8.6%, of our net sales in 2004.                                                                                                                                                                                                
|
| |  | The design and development of other document management and
    reprographics software, in addition to PlanWell, that supports
    ordering, tracking, job costing, and other customer specific
    accounting information for a variety of projects and services.
    Many of these applications create greater value and offer a
    wider range of services when used in conjunction with one
    another, providing an incentive to our customers to use our
    services beyond a single need. These proprietary applications
    include:                                                                                                                                                        



| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Electronic Work Order (EWO), which offers our customers
    access to the services of all of our service centers through the
    internet. This application also offers the reprographer the
    ability to create internet-based order forms that conform to
    their available service offerings and pricing. Customers can use
    a simple upload application to send files to the reprographer or
    schedule a pickup for original documents. This application can
    also be configured to interface with other third party
    internet-based products, acting as the driving e-commerce engine
    for a reprographics organization.
|
| |  | Abacus Print Cost Recovery (PCR) System, 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
    (ITB) System, a data management internet application
    that issues customizable invitations to bid from a
    customers desktop using email and a hosted fax server.
    This application links potential bidders directly to a PlanWell
    online planroom to evaluate and order plans used in the
    submission of project bids, and tracks bid responses to provide
    the customer a much faster, convenient and efficient way to
    gather and complete project bids.                                                                                                                           
|
| |  | 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.                                                                                                                                                                                                                                                                                                                                               
|
| |  | 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, regardless
    of which of our local production facilities stores the relevant
    documents. This application also imports and consolidates
    invoice data from each of our service centers in a variety of
    formats and reports.                                                                                                                                                                  





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | License our suite of reprographics technology products,
    including our flagship online planroom, PlanWell, to independent
    reprographers. Our licensing efforts promote our technology as
    the digital standard for the fulfillment of reprographics
    services in the AEC industry. Through December 31, 2004, we
    have licensed PlanWell and our other technology products to 82
    reprographics companies operating 103 service facilities across
    the United States.
|
| |  | Operate PEiR (Profit and Education in Reprographics), 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,
    currently consisting of 57 independent reprographers,                                                                                                                                                                             

8



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| |  |                                                                                                                                                                                                                                                                                                                                                                                           
| |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | are required to license PlanWell and may purchase equipment and
    supplies at a lower cost than they could obtain independently.
    In turn, their purchasing volumes increase our buying power and
    influence with our vendors. 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.


Central Hub Facilities.


Satellite Facilities.


Management Systems and Controls.




9



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##### Table of Contents



Suppliers and Vendors






Sales and Marketing


Divisional Sales Force.


Premier Accounts.


PEiR Group.


10



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Competition




Research and Development




Proprietary Rights








Information Technology






11



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Employees




Risk Factors




Risks Related to Our Business




| |                                                                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Future downturns in the architectural, engineering and
    construction industry, or AEC industry, could diminish demand
    for our products and services, which would impair our future
    revenue and profitability.





12



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| |                                                                                                                                                              
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Competition in our industry and innovation by our
    competitors may hinder our ability to execute our business
    strategy and maintain our profitability.







| |                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The reprographics industry has undergone vast changes in
    the last six years and will continue to evolve, and our failure
    to anticipate and adapt to future changes in our industry could
    harm our competitive position.







| |                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we fail to continue to develop and introduce new
    services successfully, our competitive positioning and our
    ability to grow our business could be harmed.



13



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| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.





| |                                                                                                                                                                                                                                        
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Our growth strategy depends in part on our ability to
    successfully identify and manage our acquisitions and branch
    openings. Failure to do so could impede our future growth and
    adversely affect our competitive position.





14



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| |                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------
| | If we are unable to successfully monitor and manage the
    business operations of our subsidiaries, 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.





| |                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------
| | Our failure to adequately protect the proprietary aspects
    of our technology, including PlanWell, may cause us to lose
    market share.



15



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| |                                                                                                                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.





| |                                                                               
| | ------------------------------------------------------------------------------
| | Being a public company increases our expenses and
    administrative workload.



16



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| |                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | If we fail to maintain an effective system of internal
    controls, we may not be able to accurately report our financial
    results or prevent fraud. As a result, our business could be
    harmed and current and potential stockholders could lose
    confidence in our company, which could cause our stock price to
    fall.



Risks Related to Our Common Stock




| |                                 
| | --------------------------------
| | Our stock price may be volatile.





| |                                                                                                                                                                                             
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Because a limited number of stockholders control the
    majority of the voting power of our common stock, investors will
    not be able to determine the outcome of stockholder
    votes.








|        |           
|------- | ----------
|Item 2. | Properties



17



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|                    |       |                |   |   |         |  |           |               |  |  |            |     |  |  |         |           | 
|------------------- | ----- | -------------- | - | - | ------- |  | --------- | ------------- |  |  | ---------- | --- |  |  | ------- | --------- | 
|                    |       | Number of      |   |   |         |  | Number of |               |  | 
|                    |       | Administrative |   |   | Square  |  |           | Production    |  |  | Square     |    
|Region              |       | Facilities     |   |   | Footage |  |           | Facilities(1) |  |  | Footage(1) |    
|                    |       |                |   |   |         |  |           |               |  |  |            |    
|Southern California |       |                | 1 |   |         |  | 7,000     |               |  |  | 37         | (2) |  |  | 266,000 |          
|Northern California |       |                | 1 |   |         |  | 5,000     |               |  |  | 34         |     |  |  | 268,000 |          
|Pacific Northwest   |       |                | 0 |   |         |  | 0         |               |  |  | 10         |     |  |  | 99,000  |          
|Northeast           |       |                | 1 |   |         |  | 4,600     |               |  |  | 33         |     |  |  | 192,000 |          
|Southern            |       |                | 0 |   |         |  | 0         |               |  |  | 44         |     |  |  | 278,000 |          
|Midwest             |       |                | 0 |   |         |  | 0         |               |  |  | 30         | (3) |  |  | 243,000 |          
|                    |       |                |   |   |         |  |           |               |  |  |            |    
|                    | Total |                |   | 3 |         |  |           | 16,600        |  |  |            | 188 |  |  |         | 1,346,000 | 






|    |                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------
|(1) | Includes five production support facilities and our two
    technology centers in Fremont, California.
|   
|(2) | Includes one service center in Mexico City, Mexico                                                    
|   
|(3) | Includes four service centers in the Toronto metropolitan area.                                       








|        |                  
|------- | -----------------
|Item 3. | Legal Proceedings





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Environmental and Regulatory Considerations









|        |                                                    
|------- | ---------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security Holders






PART II







|        |                                                                                                                     
|------- | --------------------------------------------------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity
    Securities

Market Information




Holders




Dividends




Sales of Unregistered Securities






| |   |                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Holdings has issued options to certain employees to purchase an
    aggregate of 307,915 common units under Holdings unit
    option plan. During 2004, 22,500 options issued during prior
    years were exercised at a purchase price of $5.25 per unit.





| |   |                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------
| |  | Rule 701 promulgated under the Securities Act; or                                                     
|
| |  | Section 4(2) of the Securities Act as transactions by an
    issuer not involving any public offering.

19



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Use of Proceeds from Sales of Registered Securities








|                                           |  |   |               | 
|------------------------------------------ |  | - | ------------- | 
|Aggregate offering proceeds to the Company |  | $ | 99.7  million | 
|Underwriting discounts and commissions     |  |   | 7.0 million   | 
|Finders fees                               |  |   | -0-           | 
|Underwriters fees                         |  |   | -0-           | 
|Other fees and expenses (estimated)        |  |   | 3.4 million   | 
|                                           |  |   |              
|Total expenses (estimated)                 |  |   | 10.4 million  | 
|                                           |  |   |              
|Net proceeds to the Company                |  | $ | 89.3  million | 
|                                           |  |   |              





| |   |                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | approximately $28.3 million to repurchase our preferred
    equity, including accrued interest, which became payable upon
    our initial public offering;                                                                                                        
|
| |  | approximately $50.7 million to repay a portion of our
    $225 million senior second priority secured term loan
    facility, which has a maturity date of December 2009 and bears
    interest at a floating rate which was 8.9% as of
    December 31, 2004; and
|
| |  | approximately $9.0 million to repay a portion of our
    $100 million senior first priority secured term loan
    facility, which has a maturity date of June 2009 and bears
    interest at a floating rate which was 5.3% as of
    December 31, 2004.          





20



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|        |                                     
|------- | ------------------------------------
|Item 6. | Selected Consolidated Financial Data



|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |         |         |  |   |         |         | 
|----------------------------------------------------------------------- | --------------- | ------------------------------ | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- |  | ---- | ------- | ------- |  | - | ------- | ------- | 
|                                                                        |                 | Fiscal Year Ended December 31, |        
|                                                                        |                 |                                |        
|                                                                        |                 | 2000                           |         |         | 2001 |   |         | 2002    |  |   | 2003    |         |  | 2004 |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|                                                                        |                 | (Dollars in thousands)         |        
|Statement of Operations Data:                                           |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |         |         |  |   |         |        
|Reprographics services                                                  |                 | $                              | 287,995 |         |      | $ | 338,124 |         |  | $ | 324,402 |         |  | $    | 315,995 |         |  | $ | 333,305 |        
|Facilities management                                                   |                 |                                | 24,624  |         |      |   | 39,875  |         |  |   | 52,290  |         |  |      | 59,311  |         |  |   | 72,360  |        
|Equipment and supplies sales                                            |                 |                                | 38,480  |         |      |   | 42,702  |         |  |   | 42,232  |         |  |      | 40,654  |         |  |   | 38,199  |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|                                                                        | Total net sales |                                |         | 351,099 |      |   |         | 420,701 |  |   |         | 418,924 |  |      |         | 415,960 |  |   |         | 443,864 | 
|Cost of sales                                                           |                 |                                | 201,390 |         |      |   | 243,710 |         |  |   | 247,778 |         |  |      | 252,028 |         |  |   | 263,787 |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|Gross profit                                                            |                 |                                | 149,709 |         |      |   | 176,991 |         |  |   | 171,146 |         |  |      | 163,932 |         |  |   | 180,077 |        
|Selling, general and administrative expenses                            |                 |                                | 89,371  |         |      |   | 104,004 |         |  |   | 103,305 |         |  |      | 101,252 |         |  |   | 105,780 |        
|Provision for sales tax dispute settlement                              |                 |                                |        |         |      |   |        |         |  |   |        |         |  |      |        |         |  |   | 1,389   |        
|Amortization of intangibles                                             |                 |                                | 3,966   |         |      |   | 5,801   |         |  |   | 1,498   |         |  |      | 1,709   |         |  |   | 1,695   |        
|Costs incurred in connection with the 2000 recapitalization             |                 |                                | 20,544  |         |      |   |        |         |  |   |        |         |  |      |        |         |  |   |        |        
|Write-off of intangible assets                                          |                 |                                |        |         |      |   | 3,438   |         |  |   |        |         |  |      |        |         |  |   |        |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|Income from operations                                                  |                 |                                | 35,828  |         |      |   | 63,748  |         |  |   | 66,343  |         |  |      | 60,971  |         |  |   | 71,213  |        
|Other income                                                            |                 |                                | 713     |         |      |   | 304     |         |  |   | 541     |         |  |      | 1,024   |         |  |   | 420     |        
|Interest expense                                                        |                 |                                | (29,238 | )       |      |   | (47,530 | )       |  |   | (39,917 | )       |  |      | (39,390 | )       |  |   | (33,565 | )      
|Loss on early extinguishment of debt                                    |                 |                                | (1,195  | )       |      |   |        |         |  |   |        |         |  |      | (14,921 | )       |  |   |         |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|Income before income tax provision                                      |                 |                                | 6,108   |         |      |   | 16,522  |         |  |   | 26,967  |         |  |      | 7,684   |         |  |   | 38,068  |        
|Income tax provision                                                    |                 |                                | 4,784   |         |      |   | 5,787   |         |  |   | 6,267   |         |  |      | 4,131   |         |  |   | 8,520   |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|Net income                                                              |                 |                                | 1,324   |         |      |   | 10,735  |         |  |   | 20,700  |         |  |      | 3,553   |         |  |   | 29,548  |        
|Dividends and amortization of discount on preferred
    members equity |                 |                                | (2,158  | )       |      |   | (3,107  | )       |  |   | (3,291  | )       |  |      | (1,730  | )       |  |   |        |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        
|Net income (loss) attributable to common members                        |                 | $                              | (834    | )       |      | $ | 7,628   |         |  | $ | 17,409  |         |  | $    | 1,823   |         |  | $ | 29,548  |        
|                                                                        |                 |                                |         |         |      |   |         |         |  |   |         |         |  |      |        

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|                                                                  |         |                                         |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |        | 
|----------------------------------------------------------------- | ------- | --------------------------------------- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  | ---- | - | ------ |  |  | - | ------ | 
|                                                                  |         | Fiscal Year Ended December 31,          |  
|                                                                  |         |                                         |  
|                                                                  |         | 2000                                    |   |        | 2001 |  |   | 2002   |  |  | 2003 |        |  | 2004 |  
|                                                                  |         |                                         |   |        |      |  |   |        |  |  |      |        |  |      |  
|                                                                  |         | (In thousands, except per unit amounts) |  
|Net income (loss) attributable to common members per common unit: |         |                                         |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |       
|                                                                  | Basic   |                                         | $ | (0.02  | )    |  | $ | 0.21   |  |  | $    | 0.48   |  |      | $ | 0.05   |  |  | $ | 0.83   | 
|                                                                  | Diluted |                                         | $ | (0.02  | )    |  | $ | 0.21   |  |  | $    | 0.47   |  |      | $ | 0.05   |  |  | $ | 0.79   | 
|Weighted average units:                                           |         |                                         |   |        |      |  |   |        |  |  |      |        |  |      |   |        |  |  |   |       
|                                                                  | Basic   |                                         |   | 35,308 |      |  |   | 36,629 |  |  |      | 36,406 |  |      |   | 35,480 |  |  |   | 35,493 | 
|                                                                  | Diluted |                                         |   | 35,371 |      |  |   | 36,758 |  |  |      | 36,723 |  |      |   | 37,298 |  |  |   | 37,464 | 

|                                 |  |                                |        |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |        | 
|-------------------------------- |  | ------------------------------ | ------ |  | ---- | - | ------ | ---- |  | - | ------ |  |  | ---- | ------ |  |  | - | ------ | 
|                                 |  | Fiscal Year Ended December 31, |       
|                                 |  |                                |       
|                                 |  | 2000                           |        |  | 2001 |   |        | 2002 |  |   | 2003   |  |  | 2004 |       
|                                 |  |                                |        |  |      |   |        |      |  |   |        |  |  |      |       
|                                 |  | (Dollars in thousands)         |       
|Other Financial Data:            |  |                                |        |  |      |   |        |      |  |   |        |  |  |      |        |  |  |   |        | 
|Depreciation and amortization(1) |  | $                              | 14,942 |  |      | $ | 25,442 |      |  | $ | 19,178 |  |  | $    | 19,937 |  |  | $ | 18,730 | 
|Capital expenditures, net        |  | $                              | 5,228  |  |      | $ | 8,659  |      |  | $ | 5,209  |  |  | $    | 4,992  |  |  | $ | 5,898  | 
|Interest expense                 |  | $                              | 29,238 |  |      | $ | 47,530 |      |  | $ | 39,917 |  |  | $    | 39,390 |  |  | $ | 33,565 | 

|                                                                                                 |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|------------------------------------------------------------------------------------------------ |  | ---------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | - |  | ---- | ------- | - |  | - | ------- | -
|                                                                                                 |  | As of December 31,     |        
|                                                                                                 |  |                        |        
|                                                                                                 |  | 2000                   |         |   | 2001 |   |         | 2002 |  |   | 2003    |   |  | 2004 |        
|                                                                                                 |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |        
|                                                                                                 |  | (Dollars in thousands) |        
|Balance Sheet Data:                                                                              |  |                        |         |   |      |   |         |      |  |   |         |   |  |      |         |   |  |   |         |  
|Cash and cash equivalents                                                                        |  | $                      | 31,565  |   |      | $ | 29,110  |      |  | $ | 24,995  |   |  | $    | 17,315  |   |  | $ | 13,826  |  
|Total assets                                                                                     |  | $                      | 358,026 |   |      | $ | 372,583 |      |  | $ | 395,128 |   |  | $    | 374,716 |   |  | $ | 377,334 |  
|Long term obligations and mandatorily redeemable preferred and
    common membership units(2)(3) |  | $                      | 359,746 |   |      | $ | 371,515 |      |  | $ | 378,102 |   |  | $    | 360,008 |   |  | $ | 338,371 |  
|Total members equity (deficit)                                                                  |  | $                      | (80,479 | ) |      | $ | (78,955 | )    |  | $ | (61,082 | ) |  | $    | (60,015 | ) |  | $ | (35,009 | )
|Working capital                                                                                  |  | $                      | 34,742  |   |      | $ | 24,338  |      |  | $ | 24,371  |   |  | $    | 16,809  |   |  | $ | 22,387  |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Depreciation and amortization includes a write-off of intangible
    assets of $3.4 million for the year ended December 31,
    2001.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|   
|(2) | In July 2003, we adopted SFAS No. 150,
    Accounting for Certain Financial Instruments with
    Characteristics of both Liabilities and Equity. In
    accordance with SFAS No. 150, the redeemable preferred
    equity of Holdings has been reclassified in our financial
    statements as a component of our total debt upon our adoption of
    this new standard. The redeemable preferred equity amounted to
    $25.8 million as of December 31, 2003 and
    $27.8 million as of December 31, 2004.
    SFAS No. 150 does not permit the restatement of
    financial statements for periods prior to the adoption of this
    standard.
|   
|(3) | Redeemable common membership units amounted to $6.0 million
    and $8.1 million at December 31, 2000 and 2001,
    respectively.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   






|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 7. | Managements Discussion and Analysis of Financial
    Condition and Results of Operation



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Overview














Recent Developments






23



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Factors Affecting Financial Performance






Key Financial Measures






| |          
| | ---------
| | Net Sales











24



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| |                   
| | ------------------
| | Costs and Expenses









Impact of Conversion from an LLC to a Corporation




Income Taxes




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|                                                                                          |         |                                         |        |       |      |   |       |      |  |   |        |      |  |      |       |      |  |   |        |      | 
|----------------------------------------------------------------------------------------- | ------- | --------------------------------------- | ------ | ----- | ---- | - | ----- | ---- |  | - | ------ | ---- |  | ---- | ----- | ---- |  | - | ------ | ---- | 
|                                                                                          |         | Fiscal Year Ended December 31,          |       
|                                                                                          |         |                                         |       
|                                                                                          |         | 2000                                    |        |       | 2001 |   |       | 2002 |  |   | 2003   |      |  | 2004 |      
|                                                                                          |         |                                         |        |       |      |   |       |      |  |   |        |      |  |      |      
|                                                                                          |         | (In thousands, except per unit amounts) |       
|Net income (loss) attributable to common members                                          |         | $                                       | (834   | )     |      | $ | 7,628 |      |  | $ | 17,409 |      |  | $    | 1,823 |      |  | $ | 29,548 |     
|Unaudited pro forma incremental income tax provision                                      |         |                                         | 2,618  |       |      |   | 2,574 |      |  |   | 6,211  |      |  |      | 673   |      |  |   | 9,196  |     
|                                                                                          |         |                                         |        |       |      |   |       |      |  |   |        |      |  |      |      
|Unaudited pro forma net income (loss) attributable to common
    members                  |         | $                                       | (3,452 | )     |      | $ | 5,054 |      |  | $ | 11,198 |      |  | $    | 1,150 |      |  | $ | 20,352 |     
|                                                                                          |         |                                         |        |       |      |   |       |      |  |   |        |      |  |      |      
|Unaudited pro forma net income (loss) attributable to common
    members per common unit: |         |                                         |        |       |      |   |       |      |  |   |        |      |  |      |       |      |  |   |        |     
|                                                                                          | Basic   |                                         | $      | (0.10 | )    |   | $     | 0.14 |  |   | $      | 0.31 |  |      | $     | 0.03 |  |   | $      | 0.57 | 
|                                                                                          | Diluted |                                         | $      | (0.10 | )    |   | $     | 0.14 |  |   | $      | 0.30 |  |      | $     | 0.03 |  |   | $      | 0.54 | 

Members Deficit and Capital Accounts






Acquisitions






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Critical Accounting Policies






| |                                     
| | ------------------------------------
| | Goodwill and Other Intangible Assets











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| |                                
| | -------------------------------
| | Allowance for Doubtful Accounts





| |                              
| | -----------------------------
| | Commitments and Contingencies



Non-GAAP Measures












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| |   |                                                                                                                                                                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 and Adjusted EBITDA do not
    reflect any cash requirements for such replacements;
|
| |  | Adjusted EBITDA does not reflect the impact of earnings or
    charges resulting from matters we consider not to be indicative
    of our ongoing operations, as discussed in our presentation of
    Adjusted EBITDA in this report; and                 
|
| |  | other companies, including companies in our industry, may
    calculate these measures differently than we do, limiting their
    usefulness as comparative measures.                                                                                       





|                                            |                                                                         |                                |        |         |      |   |        |         |   |   |        |         |  
|------------------------------------------- | ----------------------------------------------------------------------- | ------------------------------ | ------ | ------- | ---- | - | ------ | ------- | - | - | ------ | ------- | -
|                                            |                                                                         | Fiscal Year Ended December 31, |       
|                                            |                                                                         |                                |       
|                                            |                                                                         | 2002                           |        |         | 2003 |   |        | 2004    |  
|                                            |                                                                         |                                |        |         |      |   |        |         |  
|                                            |                                                                         | (Dollars in thousands)         |       
|Cash flows provided by operating activities |                                                                         | $                              | 56,413 |         |      | $ | 48,237 |         |   | $ | 60,858 |        
|                                            | Changes in operating assets and liabilities                             |                                |        | (4,040  | )    |   |        | (1,102  | ) |   |        | (5,219  | )
|                                            | Non-cash expenses, including depreciation and amortization              |                                |        | (31,673 | )    |   |        | (43,582 | ) |   |        | (26,091 | )
|                                            | Income tax provision                                                    |                                |        | 6,267   |      |   |        | 4,131   |   |   |        | 8,520   |  
|                                            | Interest expense                                                        |                                |        | 39,917  |      |   |        | 39,390  |   |   |        | 33,565  |  
|                                            |                                                                         |                                |        |         |      |   |        |         |  
|EBIT                                        |                                                                         |                                | 66,884 |         |      |   | 47,074 |         |   |   | 71,633 |        
|                                            | Depreciation and amortization                                           |                                |        | 19,178  |      |   |        | 19,937  |   |   |        | 18,730  |  
|                                            |                                                                         |                                |        |         |      |   |        |         |  
|EBITDA                                      |                                                                         |                                | 86,062 |         |      |   | 67,011 |         |   |   | 90,363 |        
|                                            | Interest expense                                                        |                                |        | (39,917 | )    |   |        | (39,390 | ) |   |        | (33,565 | )
|                                            | Income tax provision                                                    |                                |        | (6,267  | )    |   |        | (4,131  | ) |   |        | (8,520  | )
|                                            | Depreciation and amortization                                           |                                |        | (19,178 | )    |   |        | (19,937 | ) |   |        | (18,730 | )
|                                            | Dividends and amortization of discount on preferred
    members equity |                                |        | (3,291  | )    |   |        | (1,730  | ) |   |        |        |  
|                                            |                                                                         |                                |        |         |      |   |        |         |  
|Net income attributable to common members   |                                                                         | $                              | 17,409 |         |      | $ | 1,823  |         |   | $ | 29,548 |        
|                                            |                                                                         |                                |        |         |      |   |        |         |  

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|                |                                      |                                |        |        |      |   |        |        |  |   |        |        | 
|--------------- | ------------------------------------ | ------------------------------ | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ | 
|                |                                      | Fiscal Year Ended December 31, |       
|                |                                      |                                |       
|                |                                      | 2002                           |        |        | 2003 |   |        | 2004   | 
|                |                                      |                                |        |        |      |   |        |        | 
|                |                                      | (Dollars in thousands)         |       
|Net income      |                                      | $                              | 20,700 |        |      | $ | 3,553  |        |  | $ | 29,548 |       
|                | Interest expense, net                |                                |        | 39,917 |      |   |        | 39,390 |  |   |        | 33,565 | 
|                | Income tax provision                 |                                |        | 6,267  |      |   |        | 4,131  |  |   |        | 8,520  | 
|                | Depreciation and amortization        |                                |        | 19,178 |      |   |        | 19,937 |  |   |        | 18,730 | 
|                |                                      |                                |        |        |      |   |        |        | 
|EBITDA          |                                      |                                | 86,062 |        |      |   | 67,011 |        |  |   | 90,363 |       
|                | Loss on early extinguishment of debt |                                |        |       |      |   |        | 14,921 |  |   |        |       | 
|                |                                      |                                |        |        |      |   |        |        | 
|Adjusted EBITDA |                                      | $                              | 86,062 |        |      | $ | 81,932 |        |  | $ | 90,363 |       
|                |                                      |                                |        |        |      |   |        |        | 



|                       |                                      |                   |      |     |      |  |      |      |   |  |      |     |  
|---------------------- | ------------------------------------ | ----------------- | ---- | --- | ---- |  | ---- | ---- | - |  | ---- | --- | -
|                       |                                      | Fiscal Year Ended |     
|                       |                                      | December 31,      |     
|                       |                                      |                   |     
|                       |                                      | 2002              |      |     | 2003 |  |      | 2004 |  
|                       |                                      |                   |      |     |      |  |      |      |  
|Net income margin      |                                      |                   | 4.9  | %   |      |  | 0.9  | %    |   |  | 6.7  | %  
|                       | Interest expense, net                |                   |      | 9.5 | %    |  |      | 9.5  | % |  |      | 7.6 | %
|                       | Income tax provision                 |                   |      | 1.5 | %    |  |      | 1.0  | % |  |      | 1.9 | %
|                       | Loss on early extinguishment of debt |                   |      |    |      |  |      | 3.6  | % |  |      |    |  
|                       |                                      |                   |      |     |      |  |      |      |  
|Adjusted EBIT margin   |                                      |                   | 16.0 | %   |      |  | 14.9 | %    |   |  | 16.2 | %  
|                       | Depreciation and amortization        |                   |      | 4.6 | %    |  |      | 4.8  | % |  |      | 4.2 | %
|                       |                                      |                   |      |     |      |  |      |      |  
|Adjusted EBITDA margin |                                      |                   | 20.5 | %   |      |  | 19.7 | %    |   |  | 20.4 | %  
|                       |                                      |                   |      |     |      |  |      |      |  

Results of Operations




|                                             |                        |                              |       |      |      |  |       |      |   |  |       |      |  
|-------------------------------------------- | ---------------------- | ---------------------------- | ----- | ---- | ---- |  | ----- | ---- | - |  | ----- | ---- | -
|                                             |                        | As a Percentage of Net Sales |      
|                                             |                        |                              |      
|                                             |                        | Fiscal Year Ended            |      
|                                             |                        | December 31,                 |      
|                                             |                        |                              |      
|                                             |                        | 2002                         |       |      | 2003 |  |       | 2004 |  
|                                             |                        |                              |       |      |      |  |       |      |  
|Net sales                                    |                        |                              | 100.0 | %    |      |  | 100.0 | %    |   |  | 100.0 | %   
|Cost of sales                                |                        |                              | 59.1  |      |      |  | 60.6  |      |   |  | 59.4  |     
|                                             |                        |                              |       |      |      |  |       |      |  
|                                             | Gross profit           |                              |       | 40.9 |      |  |       | 39.4 |   |  |       | 40.6 |  
|Selling, general and administrative expenses |                        |                              | 24.7  |      |      |  | 24.3  |      |   |  | 23.8  |     
|Provision for sales tax dispute settlement   |                        |                              |      |      |      |  |      |      |   |  | 0.3   |     
|Amortization of intangibles                  |                        |                              | 0.4   |      |      |  | 0.4   |      |   |  | 0.4   |     
|Write-off of intangible assets               |                        |                              |      |      |      |  |      |      |   |  |      |     
|                                             |                        |                              |       |      |      |  |       |      |  
|                                             | Income from operations |                              |       | 15.8 |      |  |       | 14.7 |   |  |       | 16.1 |  
|Other income                                 |                        |                              | 0.1   |      |      |  | 0.2   |      |   |  | 0.1   |     
|Interest expense, net                        |                        |                              | (9.5  | )    |      |  | (9.5  | )    |   |  | (7.6  | )   
|Loss on early extinguishment of debt         |                        |                              |      |      |      |  | (3.6  | )    |   |  |      |     
|                                             |                        |                              |       |      |      |  |       |      |  
|Income before income tax provision           |                        |                              | 6.4   |      |      |  | 1.8   |      |   |  | 8.6   |     
|Income tax provision                         |                        |                              | (1.5  | )    |      |  | (1.0  | )    |   |  | (1.9  | )   
|                                             |                        |                              |       |      |      |  |       |      |  
|                                             | Net income             |                              |       | 4.9  | %    |  |       | 0.8  | % |  |       | 6.7  | %
|                                             |                        |                              |       |      |      |  |       |      |  

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Year Ended December 31, 2004 Compared to Year Ended
December 31, 2003


|                                             |                 |               |       |       |                     |   |       |              |  |   |           |      |  |  |       |     |  
|-------------------------------------------- | --------------- | ------------- | ----- | ----- | ------------------- | - | ----- | ------------ |  | - | --------- | ---- |  |  | ----- | --- | -
|                                             |                 | Year Ended    |       |       |                    
|                                             |                 | December 31,  |       |       | Increase (Decrease) |  
|                                             |                 |               |       |       |                     |  
|                                             |                 | 2003          |       |       | 2004                |   |       | (In Dollars) |  |   | (Percent) |     
|                                             |                 |               |       |       |                     |   |       |              |  |   |           |     
|                                             |                 | (In millions) |      
|Reprographics services                       |                 | $             | 316.1 |       |                     | $ | 333.3 |              |  | $ | 17.2      |      |  |  | 5.4   | %  
|Facilities management                        |                 |               | 59.3  |       |                     |   | 72.4  |              |  |   | 13.1      |      |  |  | 22.1  | %  
|Equipment and supplies sales                 |                 |               | 40.6  |       |                     |   | 38.2  |              |  |   | (2.4      | )    |  |  | (5.9  | )% 
|                                             |                 |               |       |       |                     |   |       |              |  |   |           |     
|                                             | Total net sales |               | $     | 416.0 |                     |   | $     | 443.9        |  |   | $         | 27.9 |  |  |       | 6.7 | %
|Gross profit                                 |                 | $             | 163.9 |       |                     | $ | 180.1 |              |  | $ | 16.2      |      |  |  | 9.9   | %  
|Selling, general and administrative expenses |                 | $             | 101.3 |       |                     | $ | 105.8 |              |  | $ | 4.5       |      |  |  | 4.4   | %  
|Provision for sales tax liability            |                 |               |      |       |                     | $ | 1.4   |              |  | $ | 1.4       |      |  |  | n/a   |    
|Amortization of intangibles                  |                 | $             | 1.7   |       |                     | $ | 1.7   |              |  | $ |          |      |  |  |      | %  
|Interest expense, net                        |                 | $             | 39.4  |       |                     | $ | 33.6  |              |  | $ | (5.8      | )    |  |  | (14.7 | )% 
|Income taxes                                 |                 | $             | 4.1   |       |                     | $ | 8.5   |              |  | $ | 4.4       |      |  |  | 107.3 | %  
|Net income                                   |                 | $             | 3.6   |       |                     | $ | 29.5  |              |  | $ | 25.9      |      |  |  | 719.4 | %  
|EBITDA                                       |                 | $             | 67.0  |       |                     | $ | 90.4  |              |  | $ | 23.4      |      |  |  | 34.9  | %  

Net Sales.




Gross Profit.


Selling, General and Administrative Expenses.


31



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Provision for Sales Tax Dispute Settlement.


Amortization of Intangibles.


Interest Expense, Net.




Income Taxes.


Net Income.


EBITDA.


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Year Ended December 31, 2003 Compared to Year Ended
December 31, 2002


|                                             |                 |              |       |               |                     |   |       |              |  |   |           |      |   |  |       |      |   
|-------------------------------------------- | --------------- | ------------ | ----- | ------------- | ------------------- | - | ----- | ------------ |  | - | --------- | ---- | - |  | ----- | ---- | --
|                                             |                 | Year Ended   |       |               |                    
|                                             |                 | December 31, |       |               | Increase (Decrease) |  
|                                             |                 |              |       |               |                     |  
|                                             |                 | 2002         |       |               | 2003                |   |       | (In Dollars) |  |   | (Percent) |     
|                                             |                 |              |       |               |                     |   |       |              |  |   |           |     
|                                             |                 |              |       | (In millions) |                     |   |      
|Reprographics services                       |                 | $            | 324.4 |               |                     | $ | 316.1 |              |  | $ | (8.3      | )    |   |  | (2.6  | )%  
|Facilities management                        |                 |              | 52.3  |               |                     |   | 59.3  |              |  |   | 7.0       |      |   |  | 13.4  | %   
|Equipment and supplies sales                 |                 |              | 42.2  |               |                     |   | 40.6  |              |  |   | (1.6      | )    |   |  | (3.8  | )%  
|                                             |                 |              |       |               |                     |   |       |              |  |   |           |     
|                                             | Total net sales |              | $     | 418.9         |                     |   | $     | 416.0        |  |   | $         | (2.9 | ) |  |       | (0.7 | )%
|Gross profit                                 |                 | $            | 171.1 |               |                     | $ | 163.9 |              |  | $ | (7.2      | )    |   |  | (4.2  | )%  
|Selling, general and administrative expenses |                 | $            | 103.3 |               |                     | $ | 101.3 |              |  | $ | (2.0      | )    |   |  | (1.9  | )%  
|Amortization of intangibles                  |                 | $            | 1.5   |               |                     | $ | 1.7   |              |  | $ | 0.2       |      |   |  | 13.0  | %   
|Interest expense, net                        |                 | $            | 39.9  |               |                     | $ | 39.4  |              |  | $ | 0.5       |      |   |  | 1.3   | %   
|Income taxes                                 |                 | $            | 6.3   |               |                     | $ | 4.1   |              |  | $ | (2.2      | )    |   |  | (34.9 | )%  
|Net income                                   |                 | $            | 20.7  |               |                     | $ | 3.6   |              |  | $ | (17.1     | )    |   |  | (82.6 | )%  
|EBITDA                                       |                 | $            | 86.1  |               |                     | $ | 67.0  |              |  | $ | (19.1     | )    |   |  | (22.2 | )%  
|Adjusted EBITDA                              |                 | $            | 86.1  |               |                     | $ | 81.9  |              |  | $ | (4.2      | )    |   |  | (4.9  | )%  

Net Sales.


Gross Profit.


Selling, General and Administrative Expenses.


Amortization of Intangibles.


33



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Interest Expense, Net.


Income Taxes.




Net Income.


EBITDA and Adjusted EBITDA.


Quarterly Results of Operations




|                                       |                 |                                   |        |         |          |   |        |           |  |   |          |         |  |          |         |        |          |   |        |           |  |   |          |         |  |   |        |         |  |   |        |         | 
|-------------------------------------- | --------------- | --------------------------------- | ------ | ------- | -------- | - | ------ | --------- |  | - | -------- | ------- |  | -------- | ------- | ------ | -------- | - | ------ | --------- |  | - | -------- | ------- |  | - | ------ | ------- |  | - | ------ | ------- | 
|                                       |                 | Quarter Ended                     |       
|                                       |                 |                                   |       
|                                       |                 | Mar. 31,                          |        |         | June 30, |   |        | Sept. 30, |  |   | Dec. 31, |         |  | Mar. 31, |         |        | June 30, |   |        | Sept. 30, |  |   | Dec. 31, |        
|                                       |                 |                                   |        |         |          |   |        |           |  |   |          |         |  |          |         |        |          |   |        |           |  |   |          |        
|                                       |                 | 2003                              |        |         | 2004     |  
|                                       |                 |                                   |        |         |          |  
|                                       |                 | (Unaudited, dollars in thousands) |       
|Reprographics services                 |                 | $                                 | 81,301 |         |          | $ | 83,794 |           |  | $ | 77,411   |         |  | $        | 73,489  |        |          | $ | 84,170 |           |  | $ | 87,237   |         |  | $ | 81,958 |         |  | $ | 79,938 |        
|Facilities management                  |                 |                                   | 13,644 |         |          |   | 14,448 |           |  |   | 14,628   |         |  |          | 16,592  |        |          |   | 16,529 |           |  |   | 17,954   |         |  |   | 19,254 |         |  |   | 18,624 |        
|Equipment and supplies sales           |                 |                                   | 10,327 |         |          |   | 10,640 |           |  |   | 10,145   |         |  |          | 9,541   |        |          |   | 9,819  |           |  |   | 10,424   |         |  |   | 8,953  |         |  |   | 9,004  |        
|                                       |                 |                                   |        |         |          |   |        |           |  |   |          |         |  |          |         |        |          |   |        |           |  |   |          |        
|                                       | Total net sales |                                   | $      | 105,272 |          |   | $      | 108,882   |  |   | $        | 102,184 |  |          | $       | 99,622 |          |   | $      | 110,518   |  |   | $        | 115,615 |  |   | $      | 110,165 |  |   | $      | 107,566 | 
|Quarterly sales as a % of annual sales |                 |                                   | 25.3   | %       |          |   | 26.2   | %         |  |   | 24.6     | %       |  |          | 23.9    | %      |          |   | 24.9   | %         |  |   | 26.1     | %       |  |   | 24.8   | %       |  |   | 24.2   | %      
|Gross profit                           |                 | $                                 | 42,292 |         |          | $ | 44,551 |           |  | $ | 39,229   |         |  | $        | 37,860  |        |          | $ | 45,919 |           |  | $ | 49,424   |         |  | $ | 44,287 |         |  | $ | 40,447 |        
|Income from operations                 |                 | $                                 | 16,625 |         |          | $ | 18,329 |           |  | $ | 13,722   |         |  | $        | 12,295  |        |          | $ | 18,588 |           |  | $ | 20,639   |         |  | $ | 17,702 |         |  | $ | 14,284 |        
|EBITDA                                 |                 | $                                 | 21,989 |         |          | $ | 23,889 |           |  | $ | 19,097   |         |  | $        | 2,036   |        |          | $ | 23,376 |           |  | $ | 25,839   |         |  | $ | 22,627 |         |  | $ | 18,521 |        
|Adjusted EBITDA                        |                 | $                                 | 21,989 |         |          | $ | 23,889 |           |  | $ | 19,097   |         |  | $        | 16,957  |        |          | $ | 23,376 |           |  | $ | 25,839   |         |  | $ | 22,627 |         |  | $ | 18,521 |        
|Net income (loss)                      |                 | $                                 | 5,946  |         |          | $ | 8,049  |           |  | $ | 2,583    |         |  | $        | (13,025 | )      |          | $ | 8,438  |           |  | $ | 9,845    |         |  | $ | 7,191  |         |  | $ | 4,074  |        

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|                                     |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          |         |   |          |   |        |           |  |   |          |   |  |   |        |   |  |   |        |  
|------------------------------------ |  | --------------------------------- | ------ | - | -------- | - | ------ | --------- |  | - | -------- | - |  | -------- | ------- | - | -------- | - | ------ | --------- |  | - | -------- | - |  | - | ------ | - |  | - | ------ | -
|                                     |  | Quarter Ended                     |       
|                                     |  |                                   |       
|                                     |  | Mar. 31,                          |        |   | June 30, |   |        | Sept. 30, |  |   | Dec. 31, |   |  | Mar. 31, |         |   | June 30, |   |        | Sept. 30, |  |   | Dec. 31, |  
|                                     |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          |         |   |          |   |        |           |  |   |          |  
|                                     |  | 2003                              |        |   | 2004     |  
|                                     |  |                                   |        |   |          |  
|                                     |  | (Unaudited, dollars in thousands) |       
|Adjusted EBITDA                      |  | $                                 | 21,989 |   |          | $ | 23,889 |           |  | $ | 19,097   |   |  | $        | 16,957  |   |          | $ | 23,376 |           |  | $ | 25,839   |   |  | $ | 22,627 |   |  | $ | 18,521 |  
|Loss on early extinguishment of debt |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          | (14,921 | ) |          |   |        |           |  |   |          |   |  |   |        |   |  |   |        |  
|                                     |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          |         |   |          |   |        |           |  |   |          |  
|EBITDA                               |  |                                   | 21,989 |   |          |   | 23,889 |           |  |   | 19,097   |   |  |          | 2,036   |   |          |   | 23,376 |           |  |   | 25,839   |   |  |   | 22,627 |   |  |   | 18,521 |  
|Interest expense                     |  |                                   | (9,317 | ) |          |   | (8,799 | )         |  |   | (10,842  | ) |  |          | (10,432 | ) |          |   | (8,125 | )         |  |   | (8,405   | ) |  |   | (8,559 | ) |  |   | (8,476 | )
|Income tax benefit (provision)       |  |                                   | (1,562 | ) |          |   | (2,012 | )         |  |   | (646     | ) |  |          | 89      |   |          |   | (2,299 | )         |  |   | (2,682   | ) |  |   | (1,959 | ) |  |   | (1,580 | )
|Depreciation and amortization        |  |                                   | (5,164 | ) |          |   | (5,029 | )         |  |   | (5,026   | ) |  |          | (4,718  | ) |          |   | (4,514 | )         |  |   | (4,907   | ) |  |   | (4,918 | ) |  |   | (4,391 | )
|                                     |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          |         |   |          |   |        |           |  |   |          |  
|Net income (loss)                    |  | $                                 | 5,946  |   |          | $ | 8,049  |           |  | $ | 2,583    |   |  | $        | (13,025 | ) |          | $ | 8,438  |           |  | $ | 9,845    |   |  | $ | 7,191  |   |  | $ | 4,074  |  
|                                     |  |                                   |        |   |          |   |        |           |  |   |          |   |  |          |         |   |          |   |        |           |  |   |          |  



Impact of Inflation




Liquidity and Capital Resources




|                                          |  |                         |         |   |      |   |         |      |  |   |         |  
|----------------------------------------- |  | ----------------------- | ------- | - | ---- | - | ------- | ---- |  | - | ------- | -
|                                          |  | Year Ended December 31, |        
|                                          |  |                         |        
|                                          |  | 2002                    |         |   | 2003 |   |         | 2004 | 
|                                          |  |                         |         |   |      |   |         |      | 
|                                          |  | (Dollars in thousands)  |        
|Net cash provided by operating activities |  | $                       | 56,413  |   |      | $ | 48,237  |      |  | $ | 60,858  |  
|                                          |  |                         |         |   |      |   |         |      | 
|Net cash used in investing activities     |  | $                       | (45,918 | ) |      | $ | (8,336  | )    |  | $ | (10,586 | )
|                                          |  |                         |         |   |      |   |         |      | 
|Net cash used in financing activities     |  | $                       | (14,610 | ) |      | $ | (47,581 | )    |  | $ | (53,761 | )
|                                          |  |                         |         |   |      |   |         |      | 

Operating Activities




35



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Investing Activities




Financing Activities






|                                                             |                        |                        |         |         |      |   |         |         |  |   |         |         | 
|------------------------------------------------------------ | ---------------------- | ---------------------- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                                             |                        | December 31,           |        
|                                                             |                        |                        |        
|                                                             |                        | 2002                   |         |         | 2003 |   |         | 2004    | 
|                                                             |                        |                        |         |         |      |   |         |         | 
|                                                             |                        | (Dollars in thousands) |        
|Cash and cash equivalents                                    |                        | $                      | 24,995  |         |      | $ | 17,315  |         |  | $ | 13,826  |        
|Working capital                                              |                        |                        | 24,371  |         |      |   | 16,809  |         |  |   | 22,387  |        
|Mandatorily redeemable preferred and common membership units |                        |                        | 23,903  |         |      |   | 25,791  |         |  |   | 27,814  |        
|Other debt obligations                                       |                        |                        | 378,608 |         |      |   | 359,340 |         |  |   | 320,833 |        
|                                                             |                        |                        |         |         |      |   |         |         | 
|                                                             | Total debt obligations |                        | $       | 402,511 |      |   | $       | 385,131 |  |   | $       | 348,647 | 

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Debt Obligations


Senior Secured Credit Facilities.




37



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1 2








|                                                  |  |                         |         |           |                         |   |          |      |  |  |           |           |  |          |          |  |      |   |        |  |  |  |      |  
|------------------------------------------------- |  | ----------------------- | ------- | --------- | ----------------------- | - | -------- | ---- |  |  | --------- | --------- |  | -------- | -------- |  | ---- | - | ------ |  |  |  | ---- | -
|                                                  |  | As of December 31, 2003 |         |           | As of December 31, 2004 |  
|                                                  |  |                         |         |           |                         |  
|                                                  |  |                         |         | Available |                         |   |          |      |  |  | Available |           |  |         
|                                                  |  |                         |         | Borrowing |                         |   | Interest |      |  |  |           | Borrowing |  |          | Interest | 
|                                                  |  | Balance                 |         |           | Capacity                |   |          | Rate |  |  | Balance   |           |  | Capacity |          |  | Rate |  
|                                                  |  |                         |         |           |                         |   |          |      |  |  |           |           |  |          |          |  |      |  
|                                                  |  | (Dollars in thousands)  |        
|Term facility                                     |  | $                       | 100,000 |           |                         | $ |         |      |  |  | 5.75      | %         |  | $        | 94,800   |  |      | $ |       |  |  |  | 5.26 | %
|Revolving facility                                |  |                         | 15,000  |           |                         |   | 15,000   |      |  |  | 5.75      | %         |  |          |         |  |      |   | 30,000 |  |  |  |     |  
|Second priority facility, excluding debt discount |  |                         | 225,000 |           |                         |   |         |      |  |  | 9.8       | %         |  |          | 208,231  |  |      |   |       |  |  |  | 8.92 | %
|                                                  |  |                         |         |           |                         |   |          |      |  |  |           |           |  |          |          |  |      |  
|                                                  |  | $                       | 340,000 |           |                         | $ | 15,000   |      |  |  |           |           |  | $        | 303,031  |  |      | $ | 30,000 |  |  |  |      |  
|                                                  |  |                         |         |           |                         |   |          |      |  |  |           |           |  |          |          |  |      |  



Redeemable Preferred Units.


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Seller Notes.


Off-Balance Sheet Arrangements




Contractual Obligations and Other Commitments




|                                                                        |       |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |   |         |         |  |   |        |        | 
|----------------------------------------------------------------------- | ----- | --------------------------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ | ---------- | - | ------- | ------- |  | - | ------ | ------ | 
|                                                                        |       | Twelve Months Ending December 31, |        |        |     
|                                                                        |       |                                   |        |        |     
|                                                                        |       | 2005                              |        |        | 2006 |   |        | 2007   |  |   | 2008   |        |  | 2009 |        |        | Thereafter |  
|                                                                        |       |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  
|                                                                        |       | (Dollars in thousands)            |       
|Debt obligations, including mandatorily redeemable preferred
    equity |       | $                                 | 31,688 |        |      | $ | 1,852  |        |  | $ | 797    |        |  | $    | 48,044 |        |            | $ | 251,569 |         |  | $ | 9      |       
|Capital lease obligations                                               |       |                                   | 6,402  |        |      |   | 4,152  |        |  |   | 2,462  |        |  |      | 1,098  |        |            |   | 423     |         |  |   | 151    |       
|Operating lease obligations                                             |       |                                   | 29,422 |        |      |   | 20,420 |        |  |   | 13,931 |        |  |      | 9,083  |        |            |   | 6,214   |         |  |   | 13,954 |       
|                                                                        |       |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  
|                                                                        | Total |                                   | $      | 67,512 |      |   | $      | 26,424 |  |   | $      | 17,190 |  |      | $      | 58,225 |            |   | $       | 258,206 |  |   | $      | 14,114 | 
|                                                                        |       |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  



|                            |                |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |   |         |         |  |   |        |        | 
|--------------------------- | -------------- | --------------------------------- | ------ | ------ | ---- | - | ------ | ------ |  | - | ------ | ------ |  | ---- | ------ | ------ | ---------- | - | ------- | ------- |  | - | ------ | ------ | 
|                            |                | Twelve Months Ending December 31, |        |        |     
|                            |                |                                   |        |        |     
|                            |                | 2005                              |        |        | 2006 |   |        | 2007   |  |   | 2008   |        |  | 2009 |        |        | Thereafter |  
|                            |                |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  
|Debt obligations            |                | $                                 | 3,874  |        |      | $ | 1,852  |        |  | $ | 797    |        |  | $    | 48,044 |        |            | $ | 191,838 |         |  | $ | 9      |       
|Capital lease obligations   |                |                                   | 6,402  |        |      |   | 4,152  |        |  |   | 2,462  |        |  |      | 1,098  |        |            |   | 423     |         |  |   | 151    |       
|Operating lease obligations |                |                                   | 29,422 |        |      |   | 20,420 |        |  |   | 13,931 |        |  |      | 9,083  |        |            |   | 6,214   |         |  |   | 13,954 |       
|                            |                |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  
|                            | Proforma total |                                   | $      | 39,698 |      |   | $      | 26,424 |  |   | $      | 17,190 |  |      | $      | 58,225 |            |   | $       | 198,475 |  |   | $      | 14,114 | 
|                            |                |                                   |        |        |      |   |        |        |  |   |        |        |  |      |        |        |            |  

Operating Leases.


Contingent Transaction Consideration.




39



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Recent Accounting Pronouncements















|         |                                                               
|-------- | --------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures about Market
    Risk



40



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|        |                                                             
|------- | ------------------------------------------------------------
|Item 8. | Consolidated Financial Statements and Supplementary
    Data








|        |                                                                                         
|------- | ----------------------------------------------------------------------------------------
|Item 9. | Changes in and Disagreements with Accountants On
    Accounting And Financial Disclosure







41



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|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

Disclosure Controls and Procedures






Changes in Internal Controls Over Financial Reporting









|         |                  
|-------- | -----------------
|Item 9B. | Other Information






PART III







|         |                                                   
|-------- | --------------------------------------------------
|Item 10. | Directors and Executive Officers of the Registrant

Board of Directors




|                             |  |            |      |     |     |  |    | 
|---------------------------- |  | ---------- | ---- | --- | --- |  | -- | 
|                             |  | Year First |      |     |    
|Name                         |  | Elected    |      |     | Age | 
|                             |  |            |      |     |     | 
|Sathiyamurthy Chandramohan   |  |            | 1998 | (1) |     |  | 46 | 
|Kumarakulasingam Suriyakumar |  |            | 1998 | (1) |     |  | 52 | 
|Andrew W. Code               |  |            | 2002 | (2) |     |  | 46 | 
|Thomas J. Formolo            |  |            | 2000 | (3) |     |  | 40 | 
|Edward D. Horowitz           |  |            | 2005 |     |     |  | 57 | 
|Mark W. Mealy                |  |            | 2005 |     |     |  | 47 | 
|Manuel Perez de la Mesa      |  |            | 2002 | (4) |     |  | 48 | 






|    |                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------
|(1) | Served as an advisor of Holdings since 1998 and as a director of
    ARC since October 2004.           
|   
|(2) | Served as an advisor of Holdings since 2002 and as a director of
    ARC since October 2004.           
|   
|(3) | Served as an advisor of Holdings since 2000 and as a director of
    ARC since October 2004.           
|   
|(4) | Functioned as a director of Holdings since 2002 and served as a
    director of ARC since October 2004.

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Sathiyamurthy (Mohan) Chandramohan


Kumarakulasingam (Suri) Suriyakumar


Andrew W. Code


Thomas J. Formolo


Edward D. Horowitz e-Citi


Mark W. Mealy


Manuel Perez de la Mesa


Procedures for Stockholder Recommendations of Nominees to our
Board




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Solicitation Notice


Consideration of Director Nominees; Director
Qualifications






| |   |                                                                              
| | - | -----------------------------------------------------------------------------
| |  | Judgment, experience, skills and personal character of the
    candidate; and
|
| |  | the needs of the board.                                                      

Executive Officers




|                             |  |     |    |  |          |                                                            
|---------------------------- |  | --- | -- |  | -------- | -----------------------------------------------------------
|Name                         |  | Age |    |  | Position
|                             |  |     |    |  |         
|Sathiyamurthy Chandramohan   |  |     | 46 |  |          | Chief Executive Officer; Chairman of the Board of Directors
|Kumarakulasingam Suriyakumar |  |     | 52 |  |          | President; Chief Operating Officer; Director               
|Mark W. Legg                 |  |     | 50 |  |          | Chief Financial Officer; Secretary                         
|Rahul K. Roy                 |  |     | 45 |  |          | Chief Technology Officer                                   

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Mark W. Legg


Rahul K. Roy


Director Independence








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | The director is not and has not been an employee of the Company,
    and no member of the directors immediate family is or has
    served as an executive officer of the Company or any of its
    consolidated subsidiaries, during the last three years.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| |  | Neither the director nor any member of the directors
    immediate family has received more than $100,000 in direct
    compensation from the Company or any of its consolidated
    subsidiaries (excluding director and committee fees, pensions or
    deferred compensation for prior service) during any twelve-month
    period within the last three years.                                                                                                                                                                                                                                                                                                                                                                                                                                               
|
| |  | The director: (i) is not, and does not have an immediate
    family member that is a current partner of a firm that is the
    Companys, or any of its consolidated subsidiaries,
    internal or external auditor; (ii) is not a current
    employee of such external audit firm; (iii) does not have
    an immediate family member who is a current employee of such
    external audit firm who participates in such firms audit,
    assurance or tax compliance (but not tax planning) practice; and
    (iv) was not, and does not have an immediate family member
    that was, within the last three years (but is no longer) a
    partner or employee of such external audit firm who personally
    worked on the Companys, or any of its consolidated
    subsidiaries, audit within that time.
|
| |  | Neither the director nor any member of the directors
    immediate family is or has been employed within the last three
    years as an executive officer of any company whose compensation
    committee, or the compensation committee of any of its
    consolidated subsidiaries, includes or included an executive
    officer of the Company.                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| |  | The director is not a current employee of, and does not have an
    immediate family member who is a current executive officer of,
    another company that has made payments to, or has received
    payments from, the Company or any of its consolidated
    subsidiaries, for property or services in an amount which, in
    any of the last three fiscal years, exceeds the greater of
    $1 million or 2% of the consolidated gross revenues of such
    other company.                                                                                                                                                                                                                                                                                                                                   

45



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the nature of any relationships with the Company,                                                                                                                                                                                                                                                                                                                                                                                                    
|
| |  | the significance of the relationship to the Company, the other
    organization and the individual director,                                                                                                                                                                                                                                                                                                                                         
|
| |  | whether or not the relationship is solely a business
    relationship in the ordinary course of the Companys and
    the other organizations businesses and does not afford the
    director any special benefits, and                                                                                                                                                                                                                             
|
| |  | any commercial, industrial, banking, consulting, legal,
    accounting, charitable and familial relationships, and such
    other criteria as the board may determine from time to time.                                                                                                                                                                                                                                                             
|
| |  | If a proposed director serves as an executive officer, director
    or trustee of a tax exempt organization, whether contributions
    from the Company, or any of its consolidated subsidiaries, to
    such tax exempt organization in any of the last three fiscal
    years are less than the greater of (i) $1 million or
    (ii) 2% of the consolidated gross revenues of such tax
    exempt organization for its last completed fiscal year.



Executive Sessions of Board of Directors




Board Committees




|                |                         |  |                        |                          |                         |                      |  |  |                    | 
|--------------- | ----------------------- |  | ---------------------- | ------------------------ | ----------------------- | -------------------- |  |  | ------------------ | 
|                |                         |  |                        | Nominating and Corporate |                        
|Audit Committee |                         |  | Compensation Committee |                          |                         | Governance Committee | 
|                |                         |  |                        |                          |                         |                      | 
|                | Mark W. Mealy           |  |                        |                          | Manuel Perez de la Mesa |                      |  |  | Edward D. Horowitz | 
|                | Edward D. Horowitz      |  |                        |                          | Thomas J. Formolo       |                      |  |  | Andrew W. Code     | 
|                | Manuel Perez de la Mesa |  |                        |                          | Edward D. Horowitz      |                      |  |  | Mark W. Mealy      | 

Audit Committee






46



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Section 16(a) Beneficial Ownership Reporting
Compliance






Code of Ethics




Compensation Committee








| |                                              
| | ---------------------------------------------
| | Nominating and Corporate Governance Committee



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Certain Executive Officer Certifications











|         |                       
|-------- | ----------------------
|Item 11. | Executive Compensation



Summary Compensation Table


|                            |                                                                |      |      |                     |        |              |            |         |            |                        |                 |           |  |         |        |        |              |   |         |   |  |   |       |       |    
|--------------------------- | -------------------------------------------------------------- | ---- | ---- | ------------------- | ------ | ------------ | ---------- | ------- | ---------- | ---------------------- | --------------- | --------- |  | ------- | ------ | ------ | ------------ | - | ------- | - |  | - | ----- | ----- | ---
|                            |                                                                |      |      |                     |        |              |            |         |            | Long Term Compensation |                
|                            |                                                                |      |      |                     |        | Awards       |           
|                            |                                                                |      |      | Annual Compensation |        |              |            |        
|                            |                                                                |      |      |                     |        |              | Securities |         |            |                       
|                            |                                                                |      |      |                     |        | Other Annual |            |         | Underlying |                        |                 | All Other | 
|Name and Principal Position |                                                                | Year |      |                     | Salary |              |            | Bonus   |            |                        | Compensation(1) |           |  | Options |        |        | Compensation |  
|                            |                                                                |      |      |                     |        |              |            |         |            |                        |                 |           |  |         |        |        |              |  
|S. Chandramohan             |                                                                |      | 2004 |                     |        | $            | 600,000    |         |            | $                      |                |           |  | $       | 58,718 | (2)    |              | $ |        |   |  | $ | 288   | (3)  
|                            | Chairman of the Board of Directors and Chief Executive Officer |      |      | 2003                |        |              |            | 600,000 |            |                        |                 |          |  |         |        | 52,150 | (4)          |   |         |  |  |   |       | 288   | (3)
|K. Suriyakumar              |                                                                |      | 2004 |                     |        |              | 600,000    |         |            |                        |                |           |  |         | 66,332 | (5)    |              |   |        |   |  |   | 288   | (3)  
|                            | President, Chief Operating Officer and Director                |      |      | 2003                |        |              |            | 600,000 |            |                        |                 |          |  |         |        | 66,527 | (5)          |   |         |  |  |   |       | 288   | (3)
|Mark W. Legg                |                                                                |      | 2004 |                     |        |              | 196,667    |         |            |                        | 490,000         |           |  |         |       |        |              |   | 15,000  |   |  |   | 1,280 | (6)  
|                            | Chief Financial Officer and Secretary                          |      |      | 2003                |        |              |            | 200,000 |            |                        |                 | 387,000   |  |         |        |       |              |   |         |  |  |   |       | 1,288 | (7)
|Rahul K. Roy                |                                                                |      | 2004 |                     |        |              | 360,000    |         |            |                        |                |           |  |         |       |        |              |   | 100,000 |   |  |   | 3,018 | (8)  
|                            | Chief Technology Officer                                       |      |      | 2003                |        |              |            | 360,000 |            |                        |                 |          |  |         |        |       |              |   |         |  |  |   |       | 2,688 | (9)






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Certain perquisites and other personal benefits provided by us
    to the Named Executive Officers are not included in the above
    table as permitted by the SEC regulations because the aggregate
    amount of such perquisites and other personal benefits for each
    Named Executive Officer in each year reflected in the table did
    not exceed the lesser of $50,000 or 10% of the sum of such
    officers salary and bonus in each respective year.
|   
|(2) | Includes $54,218 for automobile lease payments.                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(3) | Consists of premiums for life insurance.                                                                                                                                                                                                                                                                                                                                                                                                                           
|   
|(4) | Includes $47,770 for automobile lease payments.                                                                                                                                                                                                                                                                                                                                                                                                                    

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|    |                                                                                                                       
|--- | ----------------------------------------------------------------------------------------------------------------------
|(5) | Consists of automobile lease payments.                                                                                
|   
|(6) | Consists of $213 of premiums for life insurance and $1,067 paid
    by us as the employer match under our 401(k) plan.
|   
|(7) | Consists of $288 of premiums for life insurance and $1,000 paid
    by us as the employer match under our 401(k) plan.
|   
|(8) | Consists of $360 of premiums for life insurance and $2,658 paid
    by us as the employer match under our 401(k) plan.
|   
|(9) | Consists of $288 of premiums for life insurance and $2,400 paid
    by us as the employer match under our 401(k) plan.

Option Grants During the Year Ended December 31, 2004




Options/ SAR Grants In Last Fiscal Year


|                |  |                   |         |  |              |  |                         |           |  |                  |            |  |                      |                   |          |                |    |   |         |     |  |   |           |  |  |   |           | 
|--------------- |  | ----------------- | ------- |  | ------------ |  | ----------------------- | --------- |  | ---------------- | ---------- |  | -------------------- | ----------------- | -------- | -------------- | -- | - | ------- | --- |  | - | --------- |  |  | - | --------- | 
|                |  | Individual Grants |         |  |              |  | Potential Realizable    |          
|                |  |                   |         |  |              |  | Value at Assumed Annual |          
|                |  | Number of         |         |  | % of Total   |  |                         |           |  | Potential        |            |  | Rates of Stock Price |                  
|                |  | Securities        |         |  | Options      |  |                         |           |  | Realizable Value |            |  | Appreciation for     |                  
|                |  | Underlying        |         |  | Granted to   |  |                         | Exercise  |  |                  |            |  | at Initial           |                   |          | Option Term(3) |   
|                |  | Options           |         |  | Employees in |  |                         | Price per |  |                  | Expiration |  |                      | Offering Price of |          |                |    |  
|Name            |  | Granted           |         |  | Fiscal Year  |  |                         | Share     |  |                  | Date       |  |                      | $13.00/Share      |          |                | 5% |   |         | 10% | 
|                |  |                   |         |  |              |  |                         |           |  |                  |            |  |                      |                   |          |                |    |   |         |     | 
|S. Chandramohan |  |                   |        |  |              |  |                        |           |  |                  |           |  |                      |                   |         |                |    |   |        |     |  |   |          |  |  |   |          | 
|K. Suriyakumar  |  |                   |        |  |              |  |                        |           |  |                  |           |  |                      |                   |         |                |    |   |        |     |  |   |          |  |  |   |          | 
|Mark W. Legg(1) |  |                   | 15,000  |  |              |  | 4.9                     | %         |  | $                | 5.6168     |  |                      |                   | 02/28/14 |                |    | $ | 110,748 |     |  | $ | 233,382   |  |  | $ | 421,528   | 
|Rahul K. Roy(2) |  |                   | 100,000 |  |              |  | 32.8                    |           |  |                  | 5.8520     |  |                      |                   | 05/30/14 |                |    | $ | 714,800 |     |  |   | 1,532,363 |  |  |   | 2,786,665 | 






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Options vest as to 100% of the covered shares on
    February 28, 2005.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
|   
|(2) | Options vest as to 20% of the covered shares on each of the
    first, second, third, fourth and fifth anniversaries of
    April 30, 2004.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(3) | Realizable values are reported net of the option exercise price.
    The dollar amounts under these columns are the result of
    calculations at the 5% and 10% rates (determined from the
    initial public offering price of $13.00 per share) set by
    the SEC and, therefore, are not intended to forecast possible
    future appreciation, if any, of our stock price. Actual gains,
    if any, on stock option exercises are dependent on the future
    performance of our common stock as well as the
    optionholders continued employment through the vesting
    period. The potential realizable value calculation assumes that
    the optionholder waits until the end of the option term to
    exercise the option.

Aggregated Option Exercises During the Year Ended
December 31, 2004 and Value of Options Held at
December 31, 2004




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Fiscal Year-End Option Values


|                |  |                    |   |  |                |                        |   |                           |                      |  |                           |  |  |   |                     | 
|--------------- |  | ------------------ | - |  | -------------- | ---------------------- | - | ------------------------- | -------------------- |  | ------------------------- |  |  | - | ------------------- | 
|                |  |                    |   |  |                | Number of Securities   |   |                           | Value of Unexercised | 
|                |  |                    |   |  |                | Underlying Unexercised |   |                           | In-The-Money         | 
|                |  |                    |   |  |                | Options at FY-End      |   |                           | Options at FY-End    | 
|                |  | Shares Acquired on |   |  |                |                        |   |                           |                      |  |                          
|Name            |  | Exercise           |   |  | Value Realized |                        |   | Exercisable/Unexercisable |                      |  | Exercisable/Unexercisable | 
|                |  |                    |   |  |                |                        |   |                           |                      |  |                           | 
|S. Chandramohan |  |                    |  |  |                |                        |  |                           |                      |  |                          |  |  |   |                    | 
|K. Suriyakumar  |  |                    |  |  |                |                        |  |                           |                      |  |                          |  |  |   |                    | 
|Mark W. Legg    |  |                    |  |  |                |                        |  |                           |                      |  | 15,000/0                  |  |  | $ | 110,748/$0          | 
|Rahul K. Roy    |  |                    |  |  |                |                        |  |                           |                      |  | 640,000/160,000           |  |  |   | 5,072,252/1,179,978 | 



Compensation of Directors




Employment Agreements






50



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Compensation Committee Interlocks and Insider
Participation








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|         |                                                                                                   
|-------- | --------------------------------------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial Owners and
    Management and Related Stockholder Matters

Equity Compensation Plan Information






|                                                       |  |                         |           |  |                      |                         |      |                         |  |  |        |    
|------------------------------------------------------ |  | ----------------------- | --------- |  | -------------------- | ----------------------- | ---- | ----------------------- |  |  | ------ | ---
|                                                       |  | (a)                     |           |  | (b)                  |                         |      | (c)                     | 
|                                                       |  |                         |           |  |                      |                         |      |                         | 
|                                                       |  |                         |           |  |                      | Number of Securities    |     
|                                                       |  |                         |           |  |                      | Remaining Available for |     
|                                                       |  |                         |           |  |                      | Future Issuance under   |     
|                                                       |  | Number of Securities to |           |  | Weighted-Average     |                         |      | Equity Compensation     | 
|                                                       |  | be Issued upon Exercise |           |  | Exercise Price of    |                         |      | Plans (Excluding        | 
|                                                       |  | of Outstanding Options, |           |  | Outstanding Options, |                         |      | Securities Reflected in | 
|Plan Category                                          |  | Warrants and Rights(1)  |           |  | Warrants and Rights  |                         |      | Column (a))             | 
|                                                       |  |                         |           |  |                      |                         |      |                         | 
|Equity compensation plans approved by stockholders     |  |                         | 1,690,415 |  |                      | $                       | 5.22 |                         |  |  | 22,500 | (2)
|Equity compensation plans not approved by stockholders |  |                         | 0         |  |                      | $                       |     |                         |  |  | 0      |    
|Total                                                  |  |                         | 1,690,415 |  |                      | $                       | 5.22 |                         |  |  | 22,500 | (2)






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Represents 1,690,415 outstanding options granted under the Unit
    Plan to acquire common units in Holdings. Upon completion of our
    initial public offering, members of Holdings exchanged their
    outstanding options granted under the Unit Plan for options
    under our 2005 Stock Plan. At that time, the Unit Plan was
    terminated.                                                                                                                                                                                                                                                                     
|   
|(2) | Upon completion of our initial public offering in February 2005,
    the Unit Plan was terminated and therefore no securities
    currently remain available for future issuance under the Unit
    Plan. Prior to our initial public offering, our stockholders
    approved the 2005 Stock Plan, which provides for the issuance of
    options to acquire 5,000,000 shares of our common stock.
    Although 22,500 options remained available for future issuance
    under the Unit Plan as of December 31, 2004, the 2005 Stock
    Plan is the only plan ARC currently uses to make stock
    compensation awards.

Security Ownership of Certain Beneficial Owners and
Management






| |   |                                                                                         
| | - | ----------------------------------------------------------------------------------------
| |  | each person who is known to us to own beneficially more than 5%
    of our common stock;
|
| |  | each of our directors and each of our Named Executive Officers;
    and                 
|
| |  | all directors and Named Executive Officers as a group.                                  

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|                                                                         |                                                        |                     |            |  |         |  |      |   | 
|------------------------------------------------------------------------ | ------------------------------------------------------ | ------------------- | ---------- |  | ------- |  | ---- | - | 
|                                                                         |                                                        | Shares Beneficially |           
|                                                                         |                                                        | Owned               |           
|                                                                         |                                                        |                     |           
|Name and Address of Beneficial Owner                                     |                                                        | Number              |            |  | Percent | 
|                                                                         |                                                        |                     |            |  |         | 
|Principal Stockholders:                                                  |                                                        |                     |            |  |         |  |      |  
|ARC Acquisition Co., L.L.C.(1)                                           |                                                        |                     | 11,042,194 |  |         |  | 25.1 | %
|                                                                         | 10 S. Wacker Drive, Suite 3175
    Chicago, IL 60606   |                     |            |  |         |  |      |   | 
|Micro Device, Inc.                                                       |                                                        |                     | 6,630,442  |  |         |  | 15.1 | %
|Billy E. Thomas(2)(3)                                                    |                                                        |                     | 4,741,610  |  |         |  | 10.8 | %
|                                                                         | 600 North Central Expressway
    Richardson, TX 75080  |                     |            |  |         |  |      |   | 
|OCB Reprographics, Inc.                                                  |                                                        |                     | 4,332,882  |  |         |  | 9.9  | %
|                                                                         | 17721 Mitchell North
    Irvine, CA 92714              |                     |            |  |         |  |      |   | 
|Directors and Named Executive Officers:                                  |                                                        |                     |            |  |         |  |      |  
|Sathiyamurthy Chandramohan(2)(3)(4)(5)(6)                                |                                                        |                     | 13,877,269 |  |         |  | 31.6 | %
|Kumarakulasingam Suriyakumar(2)(3)(4)(5)(6)(7)                           |                                                        |                     | 13,845,929 |  |         |  | 31.5 | %
|                                                                         | 1981 N. Broadway, Suite 202
    Walnut Creek, CA 94596 |                     |            |  |         |  |      |   | 
|Andrew W. Code(8)                                                        |                                                        |                     | 11,086,577 |  |         |  | 25.2 | %
|Thomas J. Formolo(8)                                                     |                                                        |                     | 11,068,327 |  |         |  | 25.2 | %
|Edward D. Horowitz                                                       |                                                        |                     | 8,000      |  |         |  | **   |  
|Mark W. Legg(9)                                                          |                                                        |                     | 340,682    |  |         |  | **   |  
|Mark W. Mealy(10)                                                        |                                                        |                     | 70,000     |  |         |  | **   |  
|Manuel Perez de la Mesa(11)                                              |                                                        |                     | 45,500     |  |         |  | **   |  
|Rahul K. Roy(12)                                                         |                                                        |                     | 654,819    |  |         |  | 1.5  | %
|All directors and Named Executive Officers as a group
    (nine persons) |                                                        |                     | 26,205,460 |  |         |  | 58.7 | %






| |   |                                                                                                                                                                                          
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | * | Except as otherwise noted, the address of each person listed in
    the table is c/o American Reprographics Company, 700 North
    Central Avenue, Suite 550, Glendale, California 91203.



| |    |                                                                 
| | -- | ----------------------------------------------------------------
| | ** | Less than one percent of the outstanding shares of common stock.



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | The sole member of ARC Acquisition Co., L.L.C. is Code
    Hennessey & Simmons IV LP. The general partner of
    Code Hennessy & Simmons IV LP is CHS
    Management IV LP. The general partner of CHS
    Management IV LP is Code Hennessy & Simmons LLC.
    Code Hennessy & Simmons LLC, CHS Management IV LP
    and Code Hennessy & Simmons IV LP may be deemed to
    beneficially own these shares, but disclaim beneficial ownership
    of shares in which they do not have a pecuniary interest. The
    investment committee of Code Hennessy & Simmons LLC is
    composed of Andrew W. Code, Daniel J. Hennessy, Brian P.
    Simmons, Thomas J. Formolo, Jon S. Vesely and Peter M. Gotsch.
    Messrs. Code, Hennessy, Simmons, Formolo, Vesely and Gotsch
    may be deemed to beneficially own these shares due

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| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |     | to the fact that they share investment and voting control over
    shares held by ARC Acquisition Co., L.L.C., but disclaim
    beneficial ownership of shares in which they do not have a
    pecuniary interest.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (2) | Includes 4,332,882 shares held by OCB Reprographics, Inc.
    As Messrs. Chandramohan, Suriyakumar and Thomas have
    ownership interests of 22.4%, 17.6% and 40%, respectively, in
    OCB Reprographics, Inc. and serve on its board of directors,
    each could be deemed to have beneficial ownership of all these
    shares. Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.                                                                                                                                                                                                                                                     
|
| | (3) | Includes 408,728 shares held by Color Expressions of
    California, Inc. As Messrs. Chandramohan, Suriyakumar and
    Thomas have ownership interests of 24.8%, 19.5% and 26.7%,
    respectively, in Color Expressions of California, Inc. and serve
    on its board of directors, each could be deemed to have
    beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.                                                                                                                                                                                                                     
|
| | (4) | Includes 6,630,442 shares held by Micro-Device, Inc. As
    Messrs. Chandramohan and Suriyakumar have ownership
    interests of 56% and 44%, respectively, in Micro-Device, Inc.
    and serve on its board of directors, each could be deemed to
    have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.                                                                                                                                                                                                                                                                                
|
| | (5) | Includes 1,553,982 shares held by Brownies Blueprint, Inc.
    As Messrs. Chandramohan and Suriyakumar have ownership
    interests of 42% and 33%, respectively, in Brownies Blueprint,
    Inc. and serve on its board of directors, each could be deemed
    to have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.                                                                                                                                                                                                                                                                    
|
| | (6) | Includes 805,282 shares held by Dietrich-Post Company. As
    Messrs. Chandramohan and Suriyakumar have ownership
    interests of 47.6% and 37.4%, respectively, in Dietrich-Post
    Company and serve on its board of directors, each could be
    deemed to have beneficial ownership of all these shares.
    Messrs. Chandramohan and Suriyakumar each disclaim
    beneficial ownership of these shares except to the extent of
    each of their pecuniary interests therein.                                                                                                                                                                                                                                                                       
|
| | (7) | Includes 114,613 shares held by the Suriyakumar Family
    Trust. Mr. Suriyakumar and his spouse, as trustees of the
    Suriyakumar Family Trust, share voting and investment power over
    these shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|
| | (8) | Includes 11,042,194 shares held by ARC Acquisition Co.,
    L.L.C. and 18,133 shares held by CHS Associates IV. Andrew
    W. Code and Thomas J. Formolo are members of the investment
    committee of Code Hennessy & Simmons LLC, the general
    partner of CHS Management IV LP, which in turn is the
    general partner of Code Hennessy & Simmons IV LP,
    which is the sole member of ARC Acquisition Co., L.L.C. Code
    Hennessy & Simmons LLC is also the general partner of
    CHS Associates IV. Messrs. Code and Formolo may be deemed
    to beneficially own the shares owned by ARC Acquisition Co.,
    L.L.C. and CHS Associates IV, but disclaim beneficial ownership
    of shares in which they do not have a pecuniary interest.
|
| | (9) | Includes 15,000 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    March 2, 2005. Shares held by the Legg Family Trust.
    Mr. Legg and his spouse, as trustees of the Legg Family
    Trust, share voting and investment power over these shares.                                                                                                                                                                                                                                                                                                                                                                                                                                                           



|     |                                                                                                                                                                                        
|---- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes 35,000 shares held by Eastover Group LLC.
    Mr. Mealy has a 100% ownership interest in Eastover Group
    LLC and has sole voting and investment power over these shares.   
|    
|(11) | Includes 25,500 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    March 2, 2005. Includes 6,000 shares held by
    Mr. Perezs children.
|    
|(12) | Includes 640,000 shares issuable upon exercise of
    outstanding stock options exercisable within 60 days of
    March 2, 2005.                                                       

54



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##### Table of Contents








|         |                                               
|-------- | ----------------------------------------------
|Item 13. | Certain Relationships and Related Transactions



Related Party Leases and Purchases






Management Agreement




Indemnification Agreements




Registration Rights Agreement




Demand Registrations.


55



---



##### Table of Contents





Piggyback Rights.


Piggyback Registrations.


Conditions and Limitations; Expenses.


Investor Unitholders Agreement









|         |                                       
|-------- | --------------------------------------
|Item 14. | Principal Accounting Fees and Services

Audit Fees




Audit-Related Fees




|                                                                                                                     |  |   |         | 
|-------------------------------------------------------------------------------------------------------------------- |  | - | ------- | 
|Retrospective reviews of our consolidated financial statements
    during the years ended December 31, 2004 and 2003 |  | $ | 172,000 | 
|Review of registration statement on Form S-1 and related
    matters                                                 |  |   | 809,000 | 
|                                                                                                                     |  |   |        
|                                                                                                                     |  | $ | 981,000 | 
|                                                                                                                     |  |   |        

56



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##### Table of Contents



Tax Fees




All Other Fees




Audit and Compliance Committee Pre-Approval Policies and
Procedures









PART IV







|         |                                        
|-------- | ---------------------------------------
|Item 15. | Exhibits, Financial Statement Schedules







| |                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------
| | The following consolidated financial statements are filed as
    part of this report at pages F-1 through F-32:



| |                                                                                                                                  
| | ---------------------------------------------------------------------------------------------------------------------------------
| | Reports of Independent Registered Public Accounting Firms                                                                        
|
| | Consolidated Balance Sheets as of December 31, 2003 and 2004                                                                     
|
| | Consolidated Statements of Operations for the years ended
    December 31, 2002, 2003 and 2004                                   
|
| | Consolidated Statements of Members Deficit and
    Comprehensive Income for the years ended December 31, 2002,
    2003 and 2004
|
| | Consolidated Statements of Cash Flows for the years ended
    December 31, 2002, 2003 and 2004                                   
|
| | Notes to Consolidated Financial Statements                                                                                       

57



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##### Table of Contents







| |                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The following consolidated financial statement schedule for each
    of the years in the three-year period ended
    December 31,  2004 is filed as part of this report at
    page F-33:                                                                                                  
|
| | Schedule II  Valuation and Qualifying
    Accounts  Years Ended December 31, 2002, 2003
    and 2004                                                                                                                                                                                     
|
| | All other schedules have been omitted as the required
    information is not present or is not present in amounts
    sufficient to require submission of the schedule, or because the
    information required is included in the consolidated financial
    statements and notes thereto.





Index to Exhibits


|       |    |             |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|------ | -- | ----------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    | Description
|       |    |            
|       | 3  | .1          |  | Amended and Restated Certificate of Incorporation, filed
    February 2, 2005.*                                                                                                                                                                                                                                                                                                                                                                          
|      
|       | 3  | .2          |  | Amended and Restated Bylaws, adopted by Board February 2,
    2005.*                                                                                                                                                                                                                                                                                                                                                                                     
|      
|       | 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          |  | Credit and Guaranty Agreement, dated as of December 18,
    2003, among American Reprographics Company, L.L.C., American
    Reprographics Holdings, L.L.C., certain subsidiaries of American
    Reprographics Company, as guarantors, and the lenders named
    therein (incorporated by reference to Exhibit 10.1 to the
    Registrants Registration Statement on Form S-1 (Reg.
    No. 333-119788), as filed on October 15, 2004).                
|      
|       | 10 | .2          |  | Second Lien Credit and Guaranty Agreement, dated as of
    December 18, 2003, among American Reprographics Company,
    L.L.C., American Reprographics Holdings, L.L.C., certain
    subsidiaries of American Reprographics Company, as guarantors,
    and the lenders named therein (incorporated by reference to
    Exhibit 10.2 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as
    filed on October 15, 2004).
|      
|       | 10 | .3          |  | Intercreditor Agreement, dated as of December 18, 2003,
    between American Reprographics Company, L.L.C. and General
    Electric Capital Corporation and Goldman Sachs Credit Partners
    L.P., as collateral agents (incorporated by reference to
    Exhibit 10.3 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).                                                             
|      
|       | 10 | .4          |  | 2004 Bonus Plan, dated March 24, 2004, between American
    Reprographics Company and Mr. Legg (incorporated by
    reference to Exhibit 10.4 to the Registrants
    Registration Statement on Form S-1 (Reg.
    No. 333-119788), as filed on October 15, 2004).                                                                                                                                                                                       
|      
|       | 10 | .5          |  | American Reprographics Holdings, L.L.C. Unit Option
    Plan II, adopted effective as of January 1, 2001
    (incorporated by reference to Exhibit 10.5 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 dated as of July 1, 2003 to American
    Reprographics Holdings, L.L.C. Unit Option Plan II
    (incorporated by reference to Exhibit 10.6 to the
    Registrants Registration Statement on Form S-1 (Reg.
    No. 333-119788), as filed on October 15, 2004).                                                                                                                                                                          
|      
|       | 10 | .7          |  | 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 | .8          |  | 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).                                                                                                                                                                                                                           

58



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|       |    |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|------ | -- | --- | ----------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    |     | Description
|       |    |     |            
|      
|       | 10 | .9  |             | American Reprographics Company 2005 Employee Stock Purchase Plan
    (incorporated by reference to Exhibit 10.9 to the
    Registrants Registration Statement on Form S-1 (Reg.
    No. 333-119788), as filed on October 15, 2004).                                                                                                                                                                                                                                    
|      
|       | 10 | .10 |             | 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 | .11 |             | 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 | .12 |             | 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 | .13 |             | 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 | .14 |             | 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 | .15 |             | 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 | .16 |             | 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 | .17 |             | Management Agreement, dated April 10, 2000, between
    American Reprographics Company, L.L.C. and CHS
    Management IV LP (incorporated by reference to
    Exhibit 10.17 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).                                                                                                                                                                        
|      
|       | 10 | .18 |             | Termination Agreement to Management Agreement, dated
    November 29, 2004, between American Reprographics Company,
    L.L.C. and CHS Management IV LP (incorporated by reference
    to Exhibit 10.18 to the Registrants Registration
    Statement on Form S-1/ A(Reg. No. 333-119788), as
    amended on December 6, 2004).                                                                                                                                        
|      
|       | 10 | .19 |             | 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.,
    Dietrich-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 | .20 |             | 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).                            

59



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|       |    |     |             |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|------ | -- | --- | ----------- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    |     | Description
|       |    |     |            
|      
|       | 10 | .21 |             | 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 | .22 |             | Warrant Agreement, dated April 10, 2000, between American
    Reprographics Holdings, L.L.C. and each of GS Mezzanine
    Partners II, L.P. and GS Mezzanine Partners II
    Offshore, L.P. (incorporated by reference to Exhibit 10.22
    to the Registrants Registration Statement on Form S-1
    (Reg. No. 333-119788), as filed on October 15, 2004).                                                                                                                                                                                                                                                     
|      
|       | 10 | .23 |             | First Amendment to Warrant Agreement, dated September 8,
    2000, between American Reprographics Holdings, L.L.C. and each
    of GS Mezzanine Partners II, L.P. and GS Mezzanine
    Partners II Offshore, L.P. (incorporated by reference to
    Exhibit 10.23 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).                                                                                                                                                                                                                           
|      
|       | 10 | .24 |             | Investor Unitholders Agreement, dated April 10, 2000, among
    American Reprographics Holdings, L.L.C., ARC Acquisition Co.,
    L.L.C., GS Mezzanine Partners II, L.P. and GS Mezzanine
    Partners II Offshore, L.P. (incorporated by reference to
    Exhibit 10.24 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).                                                                                                                                                                                                                    
|      
|       | 10 | .25 |             | Termination Agreement of Investor Unitholders Agreement, dated
    November 29, 2004, among American Reprographics Holdings,
    L.L.C., ARC Acquisition Co., L.L.C., 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 10.25 to the Registrants
    Registration Statement on Form S-1/A (Reg.
    No. 333-119788), as amended on December 6, 2004).                                                                                        
|      
|       | 10 | .26 |             | 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 | .27 |             | 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 | .28 |             | 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 | .29 |             | 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).                                                                                                                                                                                                                                                                                                              
|      
|       | 10 | .30 |             | 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 | .31 |             | 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 | .32 |             | 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 | .33 |             | First Amendment to the First Lien Credit Agreement, dated as of
    October 11, 2004.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           
|      
|       | 10 | .34 |             | Second Amendment to the First Lien Credit Agreement, dated as of
    February 4, 2005.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|      
|       | 10 | .35 |             | First Amendment to the Second Lien Credit Agreement, dated as of
    February 4, 2005.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          

60



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|       |    |     |             |                                                                                                                                                                                                                                                                                                   
|------ | -- | --- | ----------- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Number |    |     | Description
|       |    |     |            
|      
|       | 10 | .36 |             | Agreement to Grant Stock dated effective December 7 2004,
    between American Reprographics Company and Rahul K. Roy.*                                                                                                                                                                           
|      
|       | 10 | .37 |             | Indemnification Agreement made as of September 30, 2004
    between American Reprographics Company and Sathiyamurthy
    Chandramohan.*                                                                                                                                                           
|      
|       | 10 | .38 |             | Indemnification Agreement made as of September 30, 2004
    between American Reprographics Company and Andrew W. Code.*                                                                                                                                                                           
|      
|       | 10 | .39 |             | Indemnification Agreement made as of September 30, 2004
    between American Reprographics Company and Thomas J. Formolo.*                                                                                                                                                                        
|      
|       | 10 | .40 |             | Indemnification Agreement made as of October 7, 2004
    between American Reprographics Company and Mark W. Legg.*                                                                                                                                                                                
|      
|       | 10 | .41 |             | Indemnification Agreement made as of September 30, 2004
    between American Reprographics Company and Manuel Perez de la
    Mesa.*                                                                                                                                                              
|      
|       | 10 | .42 |             | Indemnification Agreement made as of January 11, 2005
    between American Reprographics Company and Edward D. Horowitz.*                                                                                                                                                                         
|      
|       | 10 | .43 |             | Indemnification Agreement made as of March 3, 2005 between
    American Reprographics Company and Mark W. Mealy.*                                                                                                                                                                                 
|      
|       | 10 | .44 |             | Indemnification Agreement made as of September 30, 2004
    between American Reprographics Company and Kumarakulasingam
    Suriyakumar.*                                                                                                                                                         
|      
|       | 10 | .45 |             | Indemnification Agreement made as of October 7, 2004
    between American Reprographics Company and Rahul K. Roy.*                                                                                                                                                                                
|      
|       | 14 | .1  |             | Code of Conduct.*                                                                                                                                                                                                                                                                                 
|      
|       | 16 | .1  |             | Letter from Ernst & Young LLP regarding Change in
    Independent Registered Public Accounting Firm dated
    October 15, 2004 (incorporated by reference to
    Exhibit 16.1 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).
|      
|       | 21 | .1  |             | List of Subsidiaries (incorporated by reference to
    Exhibit 21.1 to the Registrants Registration
    Statement on Form S-1 (Reg. No. 333-119788), as filed
    on October 15, 2004).                                                                                                          
|      
|       | 23 | .1  |             | Consent of PricewaterhouseCoopers LLP, Independent Registered
    Public Accounting Firm.*                                                                                                                                                                                                        
|      
|       | 23 | .2  |             | Consent of Ernst & Young LLP, Independent Registered
    Public Accounting Firm.*                                                                                                                                                                                                                 
|      
|       | 24 | .1  |             | Power of Attorney (included on page 62).*                                                                                                                                                                                                                                                         
|      
|       | 31 | .1  |             | Certification by the Chief Executive Officer pursuant to
    Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of
    1934.*                                                                                                                                                               
|      
|       | 31 | .2  |             | Certification by the Chief Financial Officer pursuant to
    Rules 13a-14(a)/15d-14(a) of the Securities Exchange Act of
    1934.*                                                                                                                                                               
|      
|       | 32 | .1  |             | Certification pursuant to 18 U.S.C. Section 1350, as
    adopted pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.*                                                                                                                                                                  






|  |               
|- | --------------
|* | Filed herewith

61



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##### Table of Contents






SIGNATURES






| |                               
| | ------------------------------
| | AMERICAN REPROGRAPHICS COMPANY



| |     |                               
| | --- | ------------------------------
| | By: | /s/ SATHIYAMURTHY CHANDRAMOHAN

| |                                       
| | --------------------------------------
| |                                       
| | Chairman of the Board of Directors and
| | Chief Executive Officer               



Power of Attorney






|                                                                 |  |                                                                                                  |  | 
|---------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------ |  | 
|Signature                                                        |  | Title                                                                                           
|                                                                 |  |                                                                                                 
|                                                                
|/s/ SATHIYAMURTHY CHANDRAMOHANSathiyamurthy
    Chandramohan     |  | Chairman of the Board of Directors and Chief Executive Officer
    (Principal Executive Officer)
|                                                                
|/s/ KUMARAKULASINGAM SURIYAKUMARKumarakulasingam
    Suriyakumar |  | President, Chief Operating Officer, and Director                                                
|                                                                
|/s/ MARK W. LEGGMark
    W. Legg                                 |  | Chief Financial Officer and Secretary                                                           
|                                                                
|/s/ ANDREW W. CODEAndrew
    W. Code                             |  | Director                                                                                        
|                                                                
|/s/ THOMAS J. FORMOLOThomas
    J. Formolo                       |  | Director                                                                                        
|                                                                
|/s/ EDWARD D. HOROWITZEdward
    D. Horowitz                     |  | Director                                                                                        
|                                                                
|/s/ MANUEL PEREZ DE LA MESAManuel
    Perez de la Mesa           |  | Director                                                                                        
|                                                                
|/s/ MARK W. MEALYMark
    W. Mealy                               |  | Director                                                                                        

62



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##### Table of Contents



INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


|                                                                                                                                  |                                                     |     |     
|--------------------------------------------------------------------------------------------------------------------------------- | --------------------------------------------------- | --- | ----
|Reports of Independent Registered Public
    Accounting Firms                                                                     |                                                     | F-2
|Consolidated Balance Sheets as of
    December 31, 2003 and 2004                                                                  |                                                     | F-4
|Consolidated Statements of Operations for
    the years ended December 31, 2002, 2003 and 2004                                    |                                                     | F-5
|Consolidated Statements of Members
    Deficit and Comprehensive Income for the years ended
    December 31, 2002, 2003 and 2004 |                                                     | F-6
|Consolidated Statements of Cash Flows for
    the years ended December 31, 2002, 2003 and 2004                                    |                                                     | F-7
|Notes to Consolidated Financial
    Statements                                                                                    |                                                     | F-8
|Financial Statement Schedule:                                                                                                     |                                                     |    
|                                                                                                                                  | Schedule II  Valuation and
    Qualifying Accounts |     | F-33

F-1



---



##### Table of Contents






REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM












| |                               
| | ------------------------------
| | /s/ PRICEWATERHOUSECOOPERS LLP





F-2



---



##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
















| |                      
| | ---------------------
| | /s/ ERNST & YOUNG LLP





F-3



---



##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.





CONSOLIDATED BALANCE SHEETS


|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |         |         |        |          |         |  
|------------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------ | -------------------------------------- | ------ | -------- | ------- | ------- | ------ | -------- | ------- | -
|                                                        |                                                                                                                                                                                                                    | December 31,                         |                                       
|                                                        |                                                                                                                                                                                                                    |                                      |                                       
|                                                        |                                                                                                                                                                                                                    | 2003                                 |                                        |        | 2004     |        
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    | (Dollars in thousands)               |                                       
|ASSETS                                                 
|Current assets:                                         |                                                                                                                                                                                                                    |                                      |                                        |        |          |         |         |       
|                                                        | Cash and cash equivalents                                                                                                                                                                                          |                                      | $                                      | 17,315 |          |         | $       | 13,826 |         
|                                                        | Accounts receivable, less allowance of $2,790 and $3,053 at
    December 31, 2003 and 2004, respectively                                                                                                           |                                      |                                        | 56,663 |          |         |         | 61,679 |         
|                                                        | Inventories, net                                                                                                                                                                                                   |                                      |                                        | 5,937  |          |         |         | 6,012  |         
|                                                        | Prepaid expenses and other current assets                                                                                                                                                                          |                                      |                                        | 5,661  |          |         |         | 9,219  |         
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total current assets                   |        |          | 85,576  |         |        |          | 90,736  |  
|Property and equipment, net                             |                                                                                                                                                                                                                    |                                      | 37,268                                 |        |          |         | 35,023  |       
|Goodwill                                                |                                                                                                                                                                                                                    |                                      | 229,059                                |        |          |         | 231,357 |       
|Other intangible assets, net                            |                                                                                                                                                                                                                    |                                      | 12,647                                 |        |          |         | 12,095  |       
|Deferred financing costs, net                           |                                                                                                                                                                                                                    |                                      | 8,288                                  |        |          |         | 6,619   |       
|Other assets                                            |                                                                                                                                                                                                                    |                                      | 1,878                                  |        |          |         | 1,504   |       
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total assets                           |        | $        | 374,716 |         |        | $        | 377,334 |  
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                       
|LIABILITIES AND MEMBERS DEFICIT                       
|Current liabilities:                                    |                                                                                                                                                                                                                    |                                      |                                        |        |          |         |         |       
|                                                        | Accounts payable                                                                                                                                                                                                   |                                      | $                                      | 18,742 |          |         | $       | 21,170 |         
|                                                        | Accrued payroll and payroll-related expenses                                                                                                                                                                       |                                      |                                        | 9,906  |          |         |         | 11,683 |         
|                                                        | Accrued expenses                                                                                                                                                                                                   |                                      |                                        | 14,996 |          |         |         | 25,220 |         
|                                                        | Current portion of long-term debt and capital leases                                                                                                                                                               |                                      |                                        | 25,123 |          |         |         | 10,276 |         
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total current liabilities              |        |          | 68,767  |         |        |          | 68,349  |  
|Long-term debt and capital leases, net of debt discount |                                                                                                                                                                                                                    |                                      | 334,217                                |        |          |         | 310,557 |       
|Mandatorily redeemable preferred membership units       |                                                                                                                                                                                                                    |                                      | 25,791                                 |        |          |         | 27,814  |       
|Other long-term liabilities                             |                                                                                                                                                                                                                    |                                      | 5,956                                  |        |          |         | 5,623   |       
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total liabilities                      |        |          | 434,731 |         |        |          | 412,343 |  
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|Commitments and contingencies (Note 6)                  |                                                                                                                                                                                                                    |                                      |                                        |        |          |         |         |       
|Members deficit:                                       |                                                                                                                                                                                                                    |                                      |                                        |        |          |         |         |       
|                                                        | Common members capital, including warrants to purchase
    common membership units  35,487,511 and 35,510,011
    common membership units issued and outstanding at
    December 31, 2003 and 2004, respectively |                                      |                                        | 26,228 |          |         |         | 29,309 |         
|                                                        | Deferred compensation                                                                                                                                                                                              |                                      |                                        |       |          |         |         | (2,527 | )       
|                                                        | Accumulated deficit:                                                                                                                                                                                               |                                      |                                        |        |          |         |         |        |         
|                                                        |                                                                                                                                                                                                                    | Accumulated distributions to members |                                        |        | (142,343 | )       |         |        | (148,467 | )      
|                                                        |                                                                                                                                                                                                                    | Accumulated earnings                 |                                        |        | 56,922   |         |         |        | 86,470   |        
|                                                        |                                                                                                                                                                                                                    | Accumulated other comprehensive loss |                                        |        | (822     | )       |         |        | 206      |        
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total members deficit                 |        |          | (60,015 | )       |        |          | (35,009 | )
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        
|                                                        |                                                                                                                                                                                                                    |                                      | Total liabilities and members deficit |        | $        | 374,716 |         |        | $        | 377,334 |  
|                                                        |                                                                                                                                                                                                                    |                                      |                                        |        |          |        



F-4



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.





CONSOLIDATED STATEMENTS OF OPERATIONS


|                                                                        |                 |                                                 |         |            |      |   |         |            |  |   |         |            | 
|----------------------------------------------------------------------- | --------------- | ----------------------------------------------- | ------- | ---------- | ---- | - | ------- | ---------- |  | - | ------- | ---------- | 
|                                                                        |                 | Year Ended December 31,                         |        
|                                                                        |                 |                                                 |        
|                                                                        |                 | 2002                                            |         |            | 2003 |   |         | 2004       | 
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|                                                                        |                 | (Dollars in thousands, except per unit amounts) |        
|Reprographics services                                                  |                 | $                                               | 324,402 |            |      | $ | 315,995 |            |  | $ | 333,305 |           
|Facilities management                                                   |                 |                                                 | 52,290  |            |      |   | 59,311  |            |  |   | 72,360  |           
|Equipment and supplies sales                                            |                 |                                                 | 42,232  |            |      |   | 40,654  |            |  |   | 38,199  |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|                                                                        | Total net sales |                                                 |         | 418,924    |      |   |         | 415,960    |  |   |         | 443,864    | 
|Cost of sales                                                           |                 |                                                 | 247,778 |            |      |   | 252,028 |            |  |   | 263,787 |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Gross profit                                                            |                 |                                                 | 171,146 |            |      |   | 163,932 |            |  |   | 180,077 |           
|Selling, general and administrative expenses                            |                 |                                                 | 103,305 |            |      |   | 101,252 |            |  |   | 105,780 |           
|Provision for sales tax dispute settlement                              |                 |                                                 |        |            |      |   |        |            |  |   | 1,389   |           
|Amortization of intangible assets                                       |                 |                                                 | 1,498   |            |      |   | 1,709   |            |  |   | 1,695   |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Income from operations                                                  |                 |                                                 | 66,343  |            |      |   | 60,971  |            |  |   | 71,213  |           
|Other income                                                            |                 |                                                 | 541     |            |      |   | 1,024   |            |  |   | 420     |           
|Interest expense, net                                                   |                 |                                                 | (39,917 | )          |      |   | (39,390 | )          |  |   | (33,565 | )         
|Loss on early extinguishment of debt                                    |                 |                                                 |        |            |      |   | (14,921 | )          |  |   |        |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Income before income tax provision                                      |                 |                                                 | 26,967  |            |      |   | 7,684   |            |  |   | 38,068  |           
|Income tax provision                                                    |                 |                                                 | 6,267   |            |      |   | 4,131   |            |  |   | 8,520   |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Net income                                                              |                 |                                                 | 20,700  |            |      |   | 3,553   |            |  |   | 29,548  |           
|Dividends and amortization of discount on preferred
    members equity |                 |                                                 | (3,291  | )          |      |   | (1,730  | )          |  |   |        |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Net income attributable to common members                               |                 | $                                               | 17,409  |            |      | $ | 1,823   |            |  | $ | 29,548  |           
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Net income attributable to common members per common unit:              |                 |                                                 |         |            |      |   |         |            |  |   |         |           
|                                                                        | Basic           |                                                 | $       | 0.48       |      |   | $       | 0.05       |  |   | $       | 0.83       | 
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|                                                                        | Diluted         |                                                 | $       | 0.47       |      |   | $       | 0.05       |  |   | $       | 0.79       | 
|                                                                        |                 |                                                 |         |            |      |   |         |            | 
|Weighted average common member units outstanding:                       |                 |                                                 |         |            |      |   |         |            |  |   |         |           
|                                                                        | Basic           |                                                 |         | 36,406,220 |      |   |         | 35,480,289 |  |   |         | 35,493,136 | 
|                                                                        | Diluted         |                                                 |         | 36,723,031 |      |   |         | 37,298,349 |  |   |         | 37,464,123 | 



F-5



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.





CONSOLIDATED STATEMENTS OF MEMBERS DEFICIT AND
COMPREHENSIVE INCOME


|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   |         |        |  
|------------------------------------------------------------------------------------------------ | ---------------------------------------------------------------------------- | ---------------------- | ---------- | - | -------- | - | ------ | --------------------- |  | ----------- | ---------------- | ------ | - | ----------- | ------------- | - | ------ | - | ------ | ------ |  | - | ------ | ----- | - | - | ------- | ------ | -
|                                                                                                 |                                                                              |                        |            |   |          |   |        | Retained Earnings     |  |             |                  |        |  
|                                                                                                 |                                                                              |                        |            |   |          |   |        | (Accumulated Deficit) |  |             | Accumulated      |        |   |            
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             | Other            |        |   |            
|                                                                                                 |                                                                              | Common                 |            |   | Common   |   |        |                       |  | Accumulated |                  |        |   |             | Comprehensive |   |        |  
|                                                                                                 |                                                                              | Membership             |            |   | Members |   |        | Deferred              |  |             | Distributions to |        |   | Accumulated |               |   | Income |   |        |       
|                                                                                                 |                                                                              | Units                  |            |   | Capital  |   |        | Compensation          |  |             | Members          |        |   | Earnings    |               |   | (Loss) |   |        | Total  | 
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|                                                                                                 |                                                                              | (Dollars in thousands) |           
|Balance at December 31, 2001                                                                     |                                                                              |                        | 35,467,511 |   |          | $ | 26,117 |                       |  | $           |                 |        |   | $           | (135,794      | ) |        | $ | 32,669 |        |  | $ | (1,947 | )     |   | $ | (78,955 | )     
|Comprehensive income:                                                                            |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   |         |       
|                                                                                                 | Net income                                                                   |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        | 20,700 |  |   |        |      |   |   |         | 20,700 |  
|                                                                                                 | Reclassification to interest expense related to swap contract                |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        |       |  |   |        | 1,113 |   |   |         | 1,113  |  
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Comprehensive income                                                                             |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   | 21,813  |       
|Distributions to members                                                                         |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (3,897        | ) |        |   |       |        |  |   |       |       |   |   | (3,897  | )     
|Accretion of noncash portion of yield on mandatorily redeemable
    preferred membership units   |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (1,543        | ) |        |   |       |        |  |   |       |       |   |   | (1,543  | )     
|Amortization of discount on mandatorily redeemable preferred
    membership units                |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (325          | ) |        |   |       |        |  |   |       |       |   |   | (325    | )     
|Redemption of common membership units                                                            |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | 1,825         |   |        |   |       |        |  |   |       |       |   |   | 1,825   |       
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Balance at December 31, 2002                                                                     |                                                                              |                        | 35,467,511 |   |          |   | 26,117 |                       |  |             |                 |        |   |             | (139,734      | ) |        |   | 53,369 |        |  |   | (834   | )     |   |   | (61,082 | )     
|Comprehensive income:                                                                            |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   |         |       
|                                                                                                 | Net income                                                                   |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        | 3,553  |  |   |        |      |   |   |         | 3,553  |  
|                                                                                                 | Reclassification to interest expense related to swap contract                |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        |       |  |   |        | 834   |   |   |         | 834    |  
|                                                                                                 | Interest rate swap fair value adjustment                                     |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        |       |  |   |        | (822  | ) |   |         | (822   | )
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Comprehensive income                                                                             |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   | 3,565   |       
|Issuance of common membership units                                                              |                                                                              |                        | 20,000     |   |          |   | 111    |                       |  |             |                 |        |   |             |              |   |        |   |       |        |  |   |       |       |   |   | 111     |       
|Distributions to members                                                                         |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (1,670        | ) |        |   |       |        |  |   |       |       |   |   | (1,670  | )     
|Accretion of noncash portion of yield on mandatorily redeemable
    preferred membership units   |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (858          | ) |        |   |       |        |  |   |       |       |   |   | (858    | )     
|Amortization of discount on mandatorily redeemable preferred
    membership units                |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (81           | ) |        |   |       |        |  |   |       |       |   |   | (81     | )     
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Balance at December 31, 2003                                                                     |                                                                              |                        | 35,487,511 |   |          |   | 26,228 |                       |  |             |                 |        |   |             | (142,343      | ) |        |   | 56,922 |        |  |   | (822   | )     |   |   | (60,015 | )     
|                                                                                                 | Deferred stock-based compensation charge for options issued to
    employees |                        |            |  |          |   |        | 3,074                 |  |             |                  | (3,074 | ) |             |               |  |        |   |        |       |  |   |        |      |   |   |         |       |  
|                                                                                                 | Amortization of deferred stock-based compensation                            |                        |            |  |          |   |        |                      |  |             |                  | 547    |   |             |               |  |        |   |        |       |  |   |        |      |   |   |         | 547    |  
|Comprehensive income:                                                                            |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   |         |       
|                                                                                                 | Net income                                                                   |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        | 29,548 |  |   |        |      |   |   |         | 29,548 |  
|                                                                                                 | Fair value adjustment of derivatives                                         |                        |            |  |          |   |        |                      |  |             |                  |       |   |             |               |  |        |   |        |       |  |   |        | 1,028 |   |   |         | 1,028  |  
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Comprehensive income                                                                             |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        |  |   |        |       |   |   | 30,576  |       
|Issuance of common membership units                                                              |                                                                              |                        | 22,500     |   |          |   | 118    |                       |  |             |                 |        |   |             |              |   |        |   |       |        |  |   |       |       |   |   | 118     |       
|Write-off of notes receivable from members related to common
    membership units issued in 1998 |                                                                              |                        |           |   |          |   | (111   | )                     |  |             |                 |        |   |             |              |   |        |   |       |        |  |   |       |       |   |   | (111    | )     
|Distributions to members                                                                         |                                                                              |                        |           |   |          |   |       |                       |  |             |                 |        |   |             | (6,124        | ) |        |   |       |        |  |   |       |       |   |   | (6,124  | )     
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 
|Balance at December 31, 2004                                                                     |                                                                              |                        | 35,510,011 |   |          | $ | 29,309 |                       |  | $           | (2,527           | )      |   | $           | (148,467      | ) |        | $ | 86,470 |        |  | $ | 206    |       |   | $ | (35,009 | )     
|                                                                                                 |                                                                              |                        |            |   |          |   |        |                       |  |             |                  |        |   |             |               |   |        |   |        |        | 



F-6



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.





CONSOLIDATED STATEMENTS OF CASH FLOWS


|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |        |        |  
|----------------------------------------------------------------------------------------------------------------------------- | ---------------------------------------------------------------------------------------- | ------------------------------------- | ------- | ------ | ------ | - | -------- | ------ | ------ | - | ------- | ------ | ------ | -
|                                                                                                                              |                                                                                          | Year Ended December 31,               |        
|                                                                                                                              |                                                                                          |                                       |        
|                                                                                                                              |                                                                                          | 2002                                  |         |        | 2003   |   |          | 2004   |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|                                                                                                                              |                                                                                          | (Dollars in thousands)                |        
|Operating activities                                                                                                          |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|Net income                                                                                                                    |                                                                                          | $                                     | 20,700  |        |        | $ | 3,553    |        |        | $ | 29,548  |       
|Adjustments to reconcile net income to net cash provided by
    operating activities:                                         |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|                                                                                                                              | Accretion of yield on redeemable preferred member units                                  |                                       |         |       |        |   |          | 949    |        |   |         | 2,023  |       
|                                                                                                                              | Allowance for doubtful accounts                                                          |                                       |         | 816    |        |   |          | 1,698  |        |   |         | 1,281  |       
|                                                                                                                              | Reserve for inventory obsolescence                                                       |                                       |         | 135    |        |   |          | 248    |        |   |         | 89     |       
|                                                                                                                              | Reserve for sales tax liability                                                          |                                       |         |       |        |   |          |       |        |   |         | 1,389  |       
|                                                                                                                              | Depreciation                                                                             |                                       |         | 17,680 |        |   |          | 18,228 |        |   |         | 17,035 |       
|                                                                                                                              | Amortization of intangible assets                                                        |                                       |         | 1,498  |        |   |          | 1,709  |        |   |         | 1,695  |       
|                                                                                                                              | Amortization of deferred financing costs                                                 |                                       |         | 1,350  |        |   |          | 1,559  |        |   |         | 1,964  |       
|                                                                                                                              | Noncash interest expense                                                                 |                                       |         | 9,740  |        |   |          | 8,565  |        |   |         |       |       
|                                                                                                                              | Deferred income taxes                                                                    |                                       |         | 454    |        |   |          | 1,622  |        |   |         | 867    |       
|                                                                                                                              | Write-off of intangible assets                                                           |                                       |         |       |        |   |          |       |        |   |         |       |       
|                                                                                                                              | Write-off of unamortized debt discount                                                   |                                       |         |       |        |   |          | 3,875  |        |   |         |       |       
|                                                                                                                              | Write-off of deferred financing costs                                                    |                                       |         |       |        |   |          | 5,129  |        |   |         | 590    |       
|                                                                                                                              | Amortization of deferred stock-based compensation                                        |                                       |         |       |        |   |          |       |        |   |         | 547    |       
|                                                                                                                              | Changes in operating assets and liabilities, net of effect of
    business acquisitions: |                                       |         |        |        |   |          |        |        |   |         |        |       
|                                                                                                                              |                                                                                          | Accounts receivable, net              |         |        | (1,395 | ) |          |        | 1,802  |   |         |        | (5,780 | )
|                                                                                                                              |                                                                                          | Inventory                             |         |        | 718    |   |          |        | 1,034  |   |         |        | 386    |  
|                                                                                                                              |                                                                                          | Prepaid expenses and other assets     |         |        | 2,058  |   |          |        | 410    |   |         |        | (3,133 | )
|                                                                                                                              |                                                                                          | Accounts payable and accrued expenses |         |        | 2,659  |   |          |        | (2,144 | ) |         |        | 12,357 |  
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Net cash provided by operating activities                                                                                     |                                                                                          |                                       | 56,413  |        |        |   | 48,237   |        |        |   | 60,858  |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Investing activities                                                                                                          |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|Capital expenditures                                                                                                          |                                                                                          |                                       | (5,209  | )      |        |   | (4,992   | )      |        |   | (5,898  | )     
|Payments for businesses acquired, net of cash acquired and
    including other cash payments associated with the acquisitions |                                                                                          |                                       | (40,355 | )      |        |   | (3,116   | )      |        |   | (4,654  | )     
|Other                                                                                                                         |                                                                                          |                                       | (354    | )      |        |   | (228     | )      |        |   | (34     | )     
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Net cash used in investing activities                                                                                         |                                                                                          |                                       | (45,918 | )      |        |   | (8,336   | )      |        |   | (10,586 | )     
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Financing activities                                                                                                          |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|Proceeds from borrowings under debt agreements                                                                                |                                                                                          |                                       | 32,000  |        |        |   | 337,750  |        |        |   | 1,000   |       
|Payments on long-term debt under debt agreements                                                                              |                                                                                          |                                       | (35,507 | )      |        |   | (375,613 | )      |        |   | (48,400 | )     
|Payment of loan fees                                                                                                          |                                                                                          |                                       | (950    | )      |        |   | (8,159   | )      |        |   | (355    | )     
|Proceeds from issuance of common membership units                                                                             |                                                                                          |                                       |        |        |        |   | 111      |        |        |   | 118     |       
|Member distributions and redemptions                                                                                          |                                                                                          |                                       | (10,153 | )      |        |   | (1,670   | )      |        |   | (6,124  | )     
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Net cash used in financing activities                                                                                         |                                                                                          |                                       | (14,610 | )      |        |   | (47,581  | )      |        |   | (53,761 | )     
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Net decrease in cash and cash equivalents                                                                                     |                                                                                          |                                       | (4,115  | )      |        |   | (7,680   | )      |        |   | (3,489  | )     
|Cash and cash equivalents at beginning of period                                                                              |                                                                                          |                                       | 29,110  |        |        |   | 24,995   |        |        |   | 17,315  |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Cash and cash equivalents at end of period                                                                                    |                                                                                          | $                                     | 24,995  |        |        | $ | 17,315   |        |        | $ | 13,826  |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Supplemental disclosure of cash flow information                                                                              |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|Cash paid for:                                                                                                                |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|                                                                                                                              | Interest                                                                                 |                                       | $       | 29,891 |        |   | $        | 28,190 |        |   | $       | 25,165 |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|                                                                                                                              | Income taxes                                                                             |                                       | $       | 4,233  |        |   | $        | 1,966  |        |   | $       | 5,720  |       
|                                                                                                                              |                                                                                          |                                       |         |        |        |   |          |        |       
|Noncash investing and financing activities                                                                                    |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|Noncash transactions include the following:                                                                                   |                                                                                          |                                       |         |        |        |   |          |        |        |   |         |       
|                                                                                                                              | Accretion of noncash portion of yield on preferred membership
    units                  |                                       | $       | 1,543  |        |   | $        | 858    |        |   | $       |       |       
|                                                                                                                              | Amortization of discount on preferred membership units                                   |                                       | $       | 325    |        |   | $        | 81     |        |   | $       |       |       
|                                                                                                                              | Accretion to redemption price of redeemable common membership
    units                  |                                       | $       | (1,825 | )      |   | $        |       |        |   | $       |       |       
|                                                                                                                              | Capital lease obligations incurred                                                       |                                       | $       | 5,685  |        |   | $        | 4,443  |        |   | $       | 7,413  |       
|                                                                                                                              | Issuance of subordinated notes in connection with the
    acquisition of businesses      |                                       | $       | 316    |        |   | $        |       |        |   | $       | 915    |       
|                                                                                                                              | Change in fair value of derivatives                                                      |                                       | $       |       |        |   | $        | (822   | )      |   | $       | 1,028  |       



F-7



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.





NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


(Dollars in thousands, except dollars per unit)




|   |                                                                           
|-- | --------------------------------------------------------------------------
|1. | Description of Business and Summary of Significant Accounting
    Policies





| |               
| | --------------
| | Reorganization





| |                            
| | ---------------------------
| | Principles of Consolidation





| |                 
| | ----------------
| | Cash Equivalents







| |                                                          
| | ---------------------------------------------------------
| | Concentrations of Credit Risk and Significant
    Vendors







F-8



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |            
| | -----------
| | Inventories





| |                       
| | ----------------------
| | Property and Equipment



|                                     |  |  |               | 
|------------------------------------ |  |  | ------------- | 
|Buildings and leasehold improvements |  |  | 10 - 20 years | 
|Machinery and equipment              |  |  | 3 - 7 years   | 
|Furniture and fixtures               |  |  | 3 - 7 years   | 







F-9



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets





| |                                     
| | ------------------------------------
| | Goodwill and Other Intangible Assets









F-10



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                             |  |          |         | 
|---------------------------- |  | -------- | ------- | 
|                             |  | Goodwill |        
|                             |  |          |        
|Balance at December 31, 2003 |  | $        | 229,059 | 
|Additions                    |  |          | 2,298   | 
|                             |  |          |        
|Balance at December 31, 2004 |  | $        | 231,357 | 
|                             |  |          |        







|           |  |   |        | 
|---------- |  | - | ------ | 
|2005       |  | $ | 1,570  | 
|2006       |  |   | 1,379  | 
|2007       |  |   | 1,223  | 
|2008       |  |   | 1,035  | 
|2009       |  |   | 955    | 
|Thereafter |  |   | 5,933  | 
|           |  |   |       
|           |  | $ | 12,095 | 
|           |  |   |       



| |                         
| | ------------------------
| | Deferred Financing Costs



F-11



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






| |                                 
| | --------------------------------
| | Derivative Financial Instruments















F-12



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








| |                                                                   
| | ------------------------------------------------------------------
| | Adoption of Statement of Financial Accounting Standard
    No. 150







| |                                     
| | ------------------------------------
| | Fair Values of Financial Instruments





| |                                                                                                                                                                                                                           
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Cash and cash equivalents: The carrying amounts
    reported in the balance sheets for cash and cash equivalents
    approximate their fair value due to the relatively short period
    to maturity of these instruments.

F-13



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                                                                                                                                                                                                                                                                                                                                                                       
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Short- and long-term debt (excluding the Holdings and Opco
    Notes): The carrying amounts of the Companys
    borrowings reported in the consolidated balance sheets
    approximate their fair value based on the Companys current
    incremental borrowing rates for similar types of borrowing
    arrangements or since the floating rates change with market
    conditions.
|
| | Interest rate swap and collar agreements: The fair
    values of the interest rate swap and collar agreements, as
    previously disclosed, are the amounts at which they could be
    settled based on estimated market rates.                                                                                                                                                       



| |                    
| | -------------------
| | Revenue Recognition















| |                     
| | --------------------
| | Comprehensive Income





| |                                 
| | --------------------------------
| | Segment and Geographic Reporting



F-14



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|                                      |       |                         |         |         |      |   |         |         |  |   |         |         | 
|------------------------------------- | ----- | ----------------------- | ------- | ------- | ---- | - | ------- | ------- |  | - | ------- | ------- | 
|                                      |       | Year Ended December 31, |        
|                                      |       |                         |        
|                                      |       | 2002                    |         |         | 2003 |   |         | 2004    | 
|                                      |       |                         |         |         |      |   |         |         | 
|Reprographics services                |       | $                       | 324,169 |         |      | $ | 315,227 |         |  | $ | 332,004 |        
|Facilities management                 |       |                         | 52,290  |         |      |   | 59,311  |         |  |   | 72,360  |        
|Equipment and supplies sales          |       |                         | 42,231  |         |      |   | 40,654  |         |  |   | 38,199  |        
|Software licenses and membership fees |       |                         | 234     |         |      |   | 768     |         |  |   | 1,301   |        
|                                      |       |                         |         |         |      |   |         |         | 
|                                      | Total |                         | $       | 418,924 |      |   | $       | 415,960 |  |   | $       | 443,864 | 
|                                      |       |                         |         |         |      |   |         |         | 



| |                                            
| | -------------------------------------------
| | Advertising and Shipping and Handling Costs





| |                                         
| | ----------------------------------------
| | Accounting for Equity-Based Compensation







F-15



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |   |  |   |        |  
|------------------------------------------ | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----------------------- | - | ------ | ---- |  | - | ----- | - |  | - | ------ | -
|                                           |                                                                                                                                                                                         | Year Ended December 31, |  
|                                           |                                                                                                                                                                                         |                         |  
|                                           |                                                                                                                                                                                         | 2002                    |   |        | 2003 |  |   | 2004  |  
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|Net income attributable to common members: |                                                                                                                                                                                         |                         |   |        |      |  |   |       |   |  |   |       
|                                           | As reported                                                                                                                                                                             |                         | $ | 17,409 |      |  | $ | 1,823 |   |  | $ | 29,548 |  
|                                           | Equity-based employee compensation cost included in as reported
    net income                                                                                                          |                         |   |       |      |  |   |      |   |  |   | 547    |  
|                                           | Equity-based employee compensation cost that would have been
    included in the determination of net income if the fair value
    method had been applied                              |                         |   | (204   | )    |  |   | (225  | ) |  |   | (727   | )
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|                                           | Adjusted                                                                                                                                                                                |                         | $ | 17,205 |      |  | $ | 1,598 |   |  | $ | 29,368 |  
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|Basic earnings per common member unit:     |                                                                                                                                                                                         |                         |   |        |      |  |   |       |   |  |   |       
|                                           | As reported                                                                                                                                                                             |                         | $ | 0.48   |      |  | $ | 0.05  |   |  | $ | 0.83   |  
|                                           | Equity-based employee compensation cost, net of related tax
    effects, included in as reported net income                                                                             |                         |   |       |      |  |   |      |   |  |   | 0.02   |  
|                                           | Equity-based employee compensation cost, net of related tax
    effects, that would have been included in the determination of
    net income if the fair value method had been applied |                         |   | (0.01  | )    |  |   | (0.01 | ) |  |   | (0.02  | )
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|                                           | Adjusted                                                                                                                                                                                |                         | $ | 0.47   |      |  | $ | 0.04  |   |  | $ | 0.83   |  
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|Diluted earnings per common member unit:   |                                                                                                                                                                                         |                         |   |        |      |  |   |       |   |  |   |       
|                                           | As reported                                                                                                                                                                             |                         | $ | 0.47   |      |  | $ | 0.05  |   |  | $ | 0.79   |  
|                                           | Equity-based employee compensation cost, net of related tax
    effects, included in as reported net income                                                                             |                         |   |       |      |  |   |      |   |  |   | 0.02   |  
|                                           | Equity-based employee compensation cost, net of related tax
    effects, that would have been included in the determination of
    net income if the fair value method had been applied |                         |   | (0.01  | )    |  |   | (0.01 | ) |  |   | (0.02  | )
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  
|                                           | Adjusted                                                                                                                                                                                |                         | $ | 0.46   |      |  | $ | 0.04  |   |  | $ | 0.79   |  
|                                           |                                                                                                                                                                                         |                         |   |        |      |  |   |       |  





F-16



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |                                  
| | ---------------------------------
| | Research and development expenses





| |                 
| | ----------------
| | Use of Estimates





| |                                
| | -------------------------------
| | Earnings Per Common Member Unit





|                                                               |  |                         |            |  |      |  |            |      |  |  |            | 
|-------------------------------------------------------------- |  | ----------------------- | ---------- |  | ---- |  | ---------- | ---- |  |  | ---------- | 
|                                                               |  | Year Ended December 31, |           
|                                                               |  |                         |           
|                                                               |  | 2002                    |            |  | 2003 |  |            | 2004 | 
|                                                               |  |                         |            |  |      |  |            |      | 
|Weighted common member units outstanding  basic               |  |                         | 36,406,220 |  |      |  | 35,480,289 |      |  |  | 35,493,136 | 
|Effect of dilutive stock options                               |  |                         | 120,597    |  |      |  | 985,991    |      |  |  | 1,138,918  | 
|Effect of dilutive warrants                                    |  |                         | 196,214    |  |      |  | 832,069    |      |  |  | 832,069    | 
|                                                               |  |                         |            |  |      |  |            |      | 
|Weighted average common member units outstanding 
    diluted |  |                         | 36,723,031 |  |      |  | 37,298,349 |      |  |  | 37,464,123 | 
|                                                               |  |                         |            |  |      |  |            |      | 



| |                                 
| | --------------------------------
| | Recent Accounting Pronouncements



F-17



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|   |             
|-- | ------------
|2. | Acquisitions





F-18



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)










|                                                        |                        |              |     |     |      |   |       |       | 
|------------------------------------------------------- | ---------------------- | ------------ | --- | --- | ---- | - | ----- | ----- | 
|                                                        |                        | December 31, |    
|                                                        |                        |              |    
|                                                        |                        | 2003         |     |     | 2004 |  
|                                                        |                        |              |     |     |      |  
|Purchase price                                          |                        | $            | 870 |     |      | $ | 3,740 |      
|                                                        |                        |              |     |     |      |  
|Cash and cash equivalents                               |                        |              | 12  |     |      |   | 97    |      
|Accounts receivable                                     |                        |              | 83  |     |      |   | 518   |      
|Property and equipment                                  |                        |              | 32  |     |      |   | 1,476 |      
|Inventories                                             |                        |              | 34  |     |      |   | 550   |      
|Other assets                                            |                        |              |    |     |      |   | 52    |      
|                                                        |                        |              |     |     |      |  
|                                                        | Total assets           |              |     | 161 |      |   |       | 2,693 | 
|Accounts payable                                        |                        |              | 75  |     |      |   | 576   |      
|Accrued expenses                                        |                        |              | 5   |     |      |   | 316   |      
|Long-term debt                                          |                        |              |    |     |      |   | 40    |      
|                                                        |                        |              |     |     |      |  
|                                                        | Net assets acquired    |              |     | 81  |      |   |       | 1,761 | 
|                                                        |                        |              |     |     |      |  
|Excess purchase price over net tangible assets acquired |                        | $            | 789 |     |      | $ | 1,979 |      
|                                                        |                        |              |     |     |      |  
|Intangible assets:                                      |                        |              |     |     |      |   |       |      
|                                                        | Customer relationships |              | $   | 615 |      |   | $     | 1,049 | 
|                                                        | Trade names            |              |     | 4   |      |   |       | 86    | 
|                                                        | Goodwill               |              |     | 170 |      |   |       | 844   | 
|                                                        |                        |              |     |     |      |  
|                                                        |                        | $            | 789 |     |      | $ | 1,979 |      
|                                                        |                        |              |     |     |      |  



F-19



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                                          |         |                         |         |      |      |   |         |      |  |   |         |      | 
|----------------------------------------- | ------- | ----------------------- | ------- | ---- | ---- | - | ------- | ---- |  | - | ------- | ---- | 
|                                          |         | Year Ended December 31, |        
|                                          |         |                         |        
|                                          |         | 2002                    |         |      | 2003 |   |         | 2004 | 
|                                          |         |                         |         |      |      |   |         |      | 
|Net sales                                 |         | $                       | 448,645 |      |      | $ | 430,130 |      |  | $ | 450,906 |     
|Net income attributable to common members |         | $                       | 18,866  |      |      | $ | 2,286   |      |  | $ | 29,813  |     
|Earnings per common member unit:          |         |                         |         |      |      |   |         |      |  |   |         |     
|                                          | Basic   |                         | $       | 0.52 |      |   | $       | 0.06 |  |   | $       | 0.84 | 
|                                          | Diluted |                         | $       | 0.51 |      |   | $       | 0.06 |  |   | $       | 0.80 | 











|   |                       
|-- | ----------------------
|3. | Property and Equipment



|                                               |  |              |         |   |      |   |         |  
|---------------------------------------------- |  | ------------ | ------- | - | ---- | - | ------- | -
|                                               |  | December 31, |        
|                                               |  |              |        
|                                               |  | 2003         |         |   | 2004 |  
|                                               |  |              |         |   |      |  
|Machinery and equipment                        |  | $            | 76,030  |   |      | $ | 82,796  |  
|Buildings and leasehold improvements           |  |              | 15,143  |   |      |   | 15,463  |  
|Furniture and fixtures                         |  |              | 3,086   |   |      |   | 3,417   |  
|                                               |  |              |         |   |      |  
|                                               |  |              | 94,259  |   |      |   | 101,676 |  
|Less accumulated depreciation and amortization |  |              | (56,991 | ) |      |   | (66,653 | )
|                                               |  |              |         |   |      |  
|                                               |  | $            | 37,268  |   |      | $ | 35,023  |  
|                                               |  |              |         |   |      |  



F-20



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|   |               
|-- | --------------
|4. | Long-Term Debt



|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |   |         |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------------ | ------- | - | ---- | - | ------- | -
|                                                                                                                                                                                                                                                                                                                         |  | December 31, |        
|                                                                                                                                                                                                                                                                                                                         |  |              |        
|                                                                                                                                                                                                                                                                                                                         |  | 2003         |         |   | 2004 |  
|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |  
|Borrowings from senior secured First Priority 
    Revolving Credit Facility; variable interest payable quarterly
    (5.75% interest rate at December 31, 2003); any unpaid
    principal and interest due December 18, 2008                                                                                           |  | $            | 15,000  |   |      | $ |        |  
|Borrowings from senior secured First Priority  Term
    Loan Credit Facility; variable interest payable quarterly
    (5.75% and 5.26% interest rate at December 31, 2003 and
    2004, respectively); principal payable in varying quarterly
    installments; any unpaid principal and interest due
    June 18, 2009 |  |              | 100,000 |   |      |   | 94,800  |  
|Borrowings from senior secured Second Priority  Term
    Loan Credit Facility; variable interest payable quarterly
    (9.88% and 8.92% interest rate at December 31, 2003 and
    2004, respectively); any unpaid principal and interest due
    December 18, 2009                                                     |  |              | 225,000 |   |      |   | 208,231 |  
|Various subordinated notes payable; interest ranging from 5% to
    11%; principal and interest payable monthly through January 2007                                                                                                                                                                                     |  |              | 7,510   |   |      |   | 4,833   |  
|Various capital leases; interest rates ranging to 15.9%;
    principal and interest payable monthly through September 2009                                                                                                                                                                                               |  |              | 14,064  |   |      |   | 14,688  |  
|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |  
|                                                                                                                                                                                                                                                                                                                         |  |              | 361,574 |   |      |   | 322,552 |  
|Less debt discount on Second Priority Credit Facility                                                                                                                                                                                                                                                                    |  |              | (2,234  | ) |      |   | (1,719  | )
|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |  
|                                                                                                                                                                                                                                                                                                                         |  |              | 359,340 |   |      |   | 320,833 |  
|Less current portion                                                                                                                                                                                                                                                                                                     |  |              | (25,123 | ) |      |   | (10,276 | )
|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |  
|                                                                                                                                                                                                                                                                                                                         |  | $            | 334,217 |   |      | $ | 310,557 |  
|                                                                                                                                                                                                                                                                                                                         |  |              |         |   |      |  





F-21



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)
















F-22



---



##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                         |      |           |         |         |               |   |        |       | 
|------------------------ | ---- | --------- | ------- | ------- | ------------- | - | ------ | ----- | 
|                         |      | Long-Term |         |         | Capital Lease |  
|                         |      | Debt      |         |         | Obligations   |  
|                         |      |           |         |         |               |  
|Year ending December 31: |      |           |         |         |               |   |        |      
|                         | 2005 |           | $       | 3,874   |               |   | $      | 7,428 | 
|                         | 2006 |           |         | 1,852   |               |   |        | 4,669 | 
|                         | 2007 |           |         | 797     |               |   |        | 2,676 | 
|                         | 2008 |           |         | 48,044  |               |   |        | 1,179 | 
|                         | 2009 |           |         | 251,569 |               |   |        | 446   | 
|Thereafter               |      |           | 9       |         |               |   | 155    |      
|                         |      |           |         |         |               |  
|                         |      | $         | 306,145 |         |               |   | 16,553 |      
|                         |      |           |         |         |               |  
|Less interest            |      |           |         |         |               |   | (1,865 | )    
|                         |      |           |         |         |               |  
|                         |      |           |         |         |               | $ | 14,688 |      
|                         |      |           |         |         |               |  



|   |             
|-- | ------------
|5. | Income Taxes



F-23



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




|                     |         |                         |       |       |      |   |       |       |  |   |       |       | 
|-------------------- | ------- | ----------------------- | ----- | ----- | ---- | - | ----- | ----- |  | - | ----- | ----- | 
|                     |         | Year Ended December 31, |      
|                     |         |                         |      
|                     |         | 2002                    |       |       | 2003 |   |       | 2004  | 
|                     |         |                         |       |       |      |   |       |       | 
|Current:             |         |                         |       |       |      |   |       |       |  |   |       |      
|                     | Federal |                         | $     | 4,394 |      |   | $     | 1,562 |  |   | $     | 6,079 | 
|                     | State   |                         |       | 1,419 |      |   |       | 947   |  |   |       | 1,574 | 
|                     |         |                         |       |       |      |   |       |       | 
|                     |         |                         | 5,813 |       |      |   | 2,509 |       |  |   | 7,653 |      
|Deferred:            |         |                         |       |       |      |   |       |       |  |   |       |      
|                     | Federal |                         |       | 410   |      |   |       | 1,411 |  |   |       | 310   | 
|                     | State   |                         |       | 44    |      |   |       | 211   |  |   |       | 557   | 
|                     |         |                         |       |       |      |   |       |       | 
|                     |         |                         | 454   |       |      |   | 1,622 |       |  |   | 867   |      
|                     |         |                         |       |       |      |   |       |       | 
|Income tax provision |         | $                       | 6,267 |       |      | $ | 4,131 |       |  | $ | 8,520 |      
|                     |         |                         |       |       |      |   |       |       | 



|                             |                                                                                                                      |              |        |        |      |   |        |        |  
|---------------------------- | -------------------------------------------------------------------------------------------------------------------- | ------------ | ------ | ------ | ---- | - | ------ | ------ | -
|                             |                                                                                                                      | December 31, |       
|                             |                                                                                                                      |              |       
|                             |                                                                                                                      | 2003         |        |        | 2004 |  
|                             |                                                                                                                      |              |        |        |      |  
|Deferred tax assets:         |                                                                                                                      |              |        |        |      |   |        |       
|                             | Financial statement accruals not currently deductible                                                                |              | $      | 1,179  |      |   | $      | 1,206  |  
|                             | State taxes                                                                                                          |              |        | 28     |      |   |        | 158    |  
|                             |                                                                                                                      |              |        |        |      |  
|                             |                                                                                                                      |              | 1,207  |        |      |   | 1,364  |       
|Deferred tax liabilities:    |                                                                                                                      |              |        |        |      |   |        |       
|                             | Excess of net book value for financial reporting purposes over
    income tax basis of property, plant and equipment |              |        | (1,700 | )    |   |        | (1,653 | )
|                             | Excess of net book value for financial reporting purposes over
    income tax basis of intangible assets             |              |        | (3,075 | )    |   |        | (3,981 | )
|                             |                                                                                                                      |              |        |        |      |  
|                             |                                                                                                                      |              | (4,775 | )      |      |   | (5,634 | )     
|                             |                                                                                                                      |              |        |        |      |  
|Net deferred tax liabilities |                                                                                                                      | $            | (3,568 | )      |      | $ | (4,270 | )     
|                             |                                                                                                                      |              |        |        |      |  





|                                             |  |              |     |   |      |  |    |      |  |  |     |  
|-------------------------------------------- |  | ------------ | --- | - | ---- |  | -- | ---- |  |  | --- | -
|                                             |  | Year Ended   |    
|                                             |  | December 31, |    
|                                             |  |              |    
|                                             |  | 2002         |     |   | 2003 |  |    | 2004 | 
|                                             |  |              |     |   |      |  |    |      | 
|Statutory federal income tax rate            |  |              | 34  | % |      |  | 34 | %    |  |  | 35  | %
|State taxes                                  |  |              | 4   |   |      |  | 14 |      |  |  | 4   |  
|Non-deductible expenses                      |  |              | 1   |   |      |  | 8  |      |  |  |    |  
|Income of the LLC not taxed at the LLC level |  |              | (16 | ) |      |  | (2 | )    |  |  | (17 | )
|                                             |  |              |     |   |      |  |    |      | 
|Effective income tax rate                    |  |              | 23  | % |      |  | 54 | %    |  |  | 22  | %
|                                             |  |              |     |   |      |  |    |      | 

F-24



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                              
|-- | -----------------------------
|6. | Commitments and Contingencies



|                         |            |       |        |        |         |   |        |       |  |   |        |        | 
|------------------------ | ---------- | ----- | ------ | ------ | ------- | - | ------ | ----- |  | - | ------ | ------ | 
|                         |            | Third |        |        | Related |   |        |      
|                         |            | Party |        |        | Party   |   |        | Total | 
|                         |            |       |        |        |         |   |        |       | 
|Year ending December 31: |            |       |        |        |         |   |        |       |  |   |        |       
|                         | 2005       |       | $      | 26,638 |         |   | $      | 2,784 |  |   | $      | 29,422 | 
|                         | 2006       |       |        | 18,080 |         |   |        | 2,340 |  |   |        | 20,420 | 
|                         | 2007       |       |        | 11,631 |         |   |        | 2,300 |  |   |        | 13,931 | 
|                         | 2008       |       |        | 6,771  |         |   |        | 2,312 |  |   |        | 9,083  | 
|                         | 2009       |       |        | 4,102  |         |   |        | 2,112 |  |   |        | 6,214  | 
|                         | Thereafter |       |        | 6,698  |         |   |        | 7,256 |  |   |        | 13,954 | 
|                         |            |       |        |        |         |   |        |       | 
|                         |            | $     | 73,920 |        |         | $ | 19,104 |       |  | $ | 93,024 |       
|                         |            |       |        |        |         |   |        |       | 







F-25



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)












|                         |      |   |       |       | 
|------------------------ | ---- | - | ----- | ----- | 
|Year ending December 31: |      |   |       |      
|                         | 2005 |   | $     | 2,927 | 
|                         | 2006 |   |       | 2,540 | 
|                         | 2007 |   |       | 2,405 | 
|                         | 2008 |   |       | 162   | 
|                         |      |   |      
|                         |      | $ | 8,034 |      
|                         |      |   |      







F-26



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|   |                           
|-- | --------------------------
|7. | Related Party Transactions









|   |                 
|-- | ----------------
|8. | Retirement Plans



F-27



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|   |                   
|-- | ------------------
|9. | Equity Option Plan







|                                       |           |                         |           |          |          |   |      |           |          |  |           |         |   |           |      |       |          |  |           |         |   |   |      |       |  
|-------------------------------------- | --------- | ----------------------- | --------- | -------- | -------- | - | ---- | --------- | -------- |  | --------- | ------- | - | --------- | ---- | ----- | -------- |  | --------- | ------- | - | - | ---- | ----- | -
|                                       |           | Year Ended December 31, |          
|                                       |           |                         |          
|                                       |           | 2002                    |           |          | 2003     |   |      | 2004      |         
|                                       |           |                         |           |          |          |   |      |           |         
|                                       |           |                         |           | Weighted |          |   |      |           | Weighted |  |           |         |   | Weighted  |     
|                                       |           |                         |           | Average  |          |   |      |           | Average  |  |           |         |   | Average   |     
|                                       |           | Number of               |           |          | Exercise |   |      | Number of |          |  | Exercise  |         |   | Number of |      |       | Exercise | 
|                                       |           | Units                   |           |          | Price    |   |      | Units     |          |  | Price     |         |   | Units     |      |       | Price    | 
|                                       |           |                         |           |          |          |   |      |           |          |  |           |         |   |           |      |       |          | 
|Outstanding at beginning of the period |           |                         | 667,500   |          |          | $ | 4.87 |           |          |  | 1,421,500 |         |   | $         | 5.07 |       |          |  | 1,446,000 |         |   | $ | 5.09 |      
|                                       | Granted   |                         |           | 761,500  |          |   |      | 5.25      |          |  |           | 39,500  |   |           |      | 5.55  |          |  |           | 307,915 |   |   |      | 5.91  |  
|                                       | Canceled  |                         |           | (7,500   | )        |   |      | (4.87     | )        |  |           | (15,000 | ) |           |      | (4.87 | )        |  |           | (41,000 | ) |   |      | (5.52 | )
|                                       | Expired   |                         |           |         |          |   |      |          |          |  |           |        |   |           |      |      |          |  |           |        |   |   |      |      |  
|                                       | Exercised |                         |           |         |          |   |      |          |          |  |           |        |   |           |      |      |          |  |           | (22,500 | ) |   |      | (5.25 | )
|                                       |           |                         |           |          |          |   |      |           |          |  |           |         |   |           |      |       |          | 
|Outstanding at end of the period       |           |                         | 1,421,500 |          |          | $ | 5.07 |           |          |  | 1,446,000 |         |   | $         | 5.09 |       |          |  | 1,690,415 |         |   | $ | 5.22 |      
|                                       |           |                         |           |          |          |   |      |           |          |  |           |         |   |           |      |       |          | 





F-28



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)








|    |                                                
|--- | -----------------------------------------------
|10. | Members Equity and Redeemable Membership Units



| |                                              
| | ---------------------------------------------
| | Common and Redeemable Common Membership Units





| |                                                  
| | -------------------------------------------------
| | Mandatorily Redeemable Preferred Membership Units







| |                         
| | ------------------------
| | Distributions to Members



F-29



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|    |                                     
|--- | ------------------------------------
|11. | Quarterly Financial Data (Unaudited)



|                                                           |         |               |         |      |          |   |         |               |  |   |              |      |  |   |         |       |  
|---------------------------------------------------------- | ------- | ------------- | ------- | ---- | -------- | - | ------- | ------------- |  | - | ------------ | ---- |  | - | ------- | ----- | -
|                                                           |         | Quarter Ended |        
|                                                           |         |               |        
|                                                           |         | March 31,     |         |      | June 30, |   |         | September 30, |  |   | December 31, |     
|                                                           |         | 2003          |         |      | 2003     |   |         | 2003          |  |   | 2003         |     
|                                                           |         |               |         |      |          |   |         |               |  |   |              |     
|Net sales                                                  |         | $             | 105,272 |      |          | $ | 108,882 |               |  | $ | 102,184      |      |  | $ | 99,622  |      
|Gross profit                                               |         | $             | 42,292  |      |          | $ | 44,551  |               |  | $ | 39,229       |      |  | $ | 37,860  |      
|Net income (loss)                                          |         | $             | 5,946   |      |          | $ | 8,049   |               |  | $ | 2,583        |      |  | $ | (13,025 | )    
|Net income (loss) attributable to common members           |         | $             | 5,110   |      |          | $ | 7,155   |               |  | $ | 2,583        |      |  | $ | (13,025 | )    
|Net income (loss) attributable to common members per unit: |         |               |         |      |          |   |         |               |  |   |              |      |  |   |         |      
|                                                           | Basic   |               | $       | 0.14 |          |   | $       | 0.20          |  |   | $            | 0.07 |  |   | $       | (0.36 | )
|                                                           | Diluted |               | $       | 0.14 |          |   | $       | 0.20          |  |   | $            | 0.07 |  |   | $       | (0.36 | )

|                                                    |         |               |         |      |          |   |         |               |  |   |              |      |  |   |         |      | 
|--------------------------------------------------- | ------- | ------------- | ------- | ---- | -------- | - | ------- | ------------- |  | - | ------------ | ---- |  | - | ------- | ---- | 
|                                                    |         | Quarter Ended |        
|                                                    |         |               |        
|                                                    |         | March 31,     |         |      | June 30, |   |         | September 30, |  |   | December 31, |     
|                                                    |         | 2004          |         |      | 2004     |   |         | 2004          |  |   | 2004         |     
|                                                    |         |               |         |      |          |   |         |               |  |   |              |     
|Net sales                                           |         | $             | 110,518 |      |          | $ | 115,615 |               |  | $ | 110,165      |      |  | $ | 107,566 |     
|Gross profit                                        |         | $             | 45,919  |      |          | $ | 49,424  |               |  | $ | 44,287       |      |  | $ | 40,447  |     
|Net income                                          |         | $             | 8,438   |      |          | $ | 9,845   |               |  | $ | 7,191        |      |  | $ | 4,074   |     
|Net income attributable to common members           |         | $             | 8,438   |      |          | $ | 9,845   |               |  | $ | 7,191        |      |  | $ | 4,074   |     
|Net income attributable to common members per unit: |         |               |         |      |          |   |         |               |  |   |              |      |  |   |         |     
|                                                    | Basic   |               | $       | 0.24 |          |   | $       | 0.28          |  |   | $            | 0.20 |  |   | $       | 0.11 | 
|                                                    | Diluted |               | $       | 0.23 |          |   | $       | 0.26          |  |   | $            | 0.19 |  |   | $       | 0.11 | 



|    |                  
|--- | -----------------
|12. | Subsequent Events



| |                                           
| | ------------------------------------------
| | Initial Public Offering and Reorganization



F-30



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)






|                                           |  |   |        | 
|------------------------------------------ |  | - | ------ | 
|Aggregate offering proceeds to the Company |  | $ | 99,667 | 
|Underwriting discounts and commissions     |  |   | 6,977  | 
|Finders fees                               |  |   |       | 
|Underwriters fees                         |  |   |       | 
|Other fees and expenses (estimated)        |  |   | 3,400  | 
|                                           |  |   |       
|Total expenses (estimated)                 |  |   | 10,377 | 
|                                           |  |   |       
|Net proceeds to the Company                |  | $ | 89,290 | 
|                                           |  |   |       





| |   |                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | $28,263 to repurchase the Companys mandatorily redeemable
    preferred membership units, including accrued interest, which
    became payable upon the Companys initial public offering;
|
| |  | $50,731 to repay a portion of the Companys
    $225 million Second Priority  Term
    Loan Credit Facility                                                                               
|
| |  | $9,000 to repay a portion of the Companys
    $100 million First Priority  Term Loan Credit
    Facility                                                                                 









F-31



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##### Table of Contents



AMERICAN REPROGRAPHICS HOLDINGS, L.L.C.


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)




| |             
| | ------------
| | Acquisitions



F-32



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##### Table of Contents



Schedule II





AMERICAN REPROGRAPHICS HOLDINGS, LLC


VALUATION AND QUALIFYING ACCOUNTS


|                              |                                      |            |       |       |            |   |       |            |  |            |        |        |   |   |       |       | 
|----------------------------- | ------------------------------------ | ---------- | ----- | ----- | ---------- | - | ----- | ---------- |  | ---------- | ------ | ------ | - | - | ----- | ----- | 
|                              |                                      | Balance at |       |       | Charges to |   |       |            |  | Balance at |       
|                              |                                      | Beginning  |       |       | Cost and   |   |       |            |  | End of     |       
|                              |                                      | of Period  |       |       | Expenses   |   |       | Deductions |  |            | Period |       
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|Year ended December 31, 2002: |                                      |            |       |       |            |   |       |            |  |            |        |        |   |   |       |      
|                              | Allowance for doubtful accounts      |            | $     | 1,875 |            |   | $     | 816        |  |            | $      | (543   | ) |   | $     | 2,148 | 
|                              | Allowance for inventory obsolescence |            |       | 297   |            |   |       | 135        |  |            |        | (159   | ) |   |       | 273   | 
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|                              |                                      | $          | 2,172 |       |            | $ | 951   |            |  | $          | (702   | )      |   | $ | 2,421 |      
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|Year ended December 31, 2003: |                                      |            |       |       |            |   |       |            |  |            |        |        |   |   |       |      
|                              | Allowance for doubtful accounts      |            | $     | 2,148 |            |   | $     | 1,698      |  |            | $      | (1,056 | ) |   | $     | 2,790 | 
|                              | Allowance for inventory obsolescence |            |       | 273   |            |   |       | 248        |  |            |        | (243   | ) |   |       | 278   | 
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|                              |                                      | $          | 2,421 |       |            | $ | 1,946 |            |  | $          | (1,299 | )      |   | $ | 3,068 |      
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|Year ended December 31, 2004: |                                      |            |       |       |            |   |       |            |  |            |        |        |   |   |       |      
|                              | Allowance for doubtful accounts      |            | $     | 2,790 |            |   | $     | 1,281      |  |            | $      | (1,018 | ) |   | $     | 3,053 | 
|                              | Allowance for inventory obsolescence |            |       | 278   |            |   |       | 89         |  |            |        | (46    | ) |   |       | 321   | 
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       
|                              |                                      | $          | 3,068 |       |            | $ | 1,370 |            |  | $          | (1,064 | )      |   | $ | 3,374 |      
|                              |                                      |            |       |       |            |   |       |            |  |            |        |       

F-33