ARC DOCUMENT SOLUTIONS, INC., 10-K filed on 2/24/2021
Annual Report
v3.20.4
Cover - USD ($)
 12 Months Ended
Dec. 31, 2020
Feb. 23, 2021
Jun. 30, 2020
Cover [Abstract]      
Document Type 10-K    
Document Annual Report true    
Document Period End Date Dec. 31, 2020    
Current Fiscal Year End Date --12-31    
Document Transition Report false    
Entity File Number 001-32407    
Entity Registrant Name ARC DOCUMENT SOLUTIONS, INC.    
Entity Incorporation, State or Country Code DE    
Entity Tax Identification Number 20-1700361    
Entity Address, Address Line One 12657 Alcosta Blvd, Suite 200    
Entity Address, City or Town San Ramon    
Entity Address, State or Province CA    
Entity Address, Postal Zip Code 94583    
City Area Code 925    
Local Phone Number 949-5100    
Title of 12(b) Security Common Stock, par value $0.001 per share    
Trading Symbol ARC    
Security Exchange Name NYSE    
Entity Well-known Seasoned Issuer No    
Entity Voluntary Filers No    
Entity Current Reporting Status Yes    
Entity Interactive Data Current Yes    
Entity Filer Category Non-accelerated Filer    
Entity Small Business true    
Entity Emerging Growth Company false    
ICFR Auditor Attestation Flag false    
Entity Shell Company false    
Entity Public Float     $ 37,190,279
Entity Common Stock, Shares Outstanding   42,792,219  
Documents Incorporated by Reference Portions of the Registrant’s definitive Proxy Statement on Form 14A for its April 29, 2021 Annual Meeting of Stockholders are incorporated by reference in this Annual Report on Form 10-K in Part III.    
Amendment Flag false    
Document Fiscal Year Focus 2020    
Document Fiscal Period Focus FY    
Entity Central Index Key 0001305168    
v3.20.4
Consolidated Balance Sheets - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Current assets:    
Cash and cash equivalents $ 54,950 $ 29,425
Accounts receivable, net of allowances for accounts receivable of $2,357 and $2,099 36,279 51,432
Inventories, net 9,474 13,936
Prepaid expenses 4,065 4,783
Other current assets 3,979 6,807
Total current assets 108,747 106,383
Property and equipment, net of accumulated depreciation of $219,834 and $210,849 57,830 70,334
Right-of-use assets from operating leases 37,859 41,238
Goodwill 121,051 121,051
Other intangible assets, net 515 1,996
Deferred income taxes, net 17,261 19,755
Other assets 2,175 2,400
Total assets 345,438 363,157
Current liabilities:    
Accounts payable 18,661 23,231
Accrued payroll and payroll-related expenses 10,088 14,569
Accrued expenses 17,783 20,440
Current operating lease liabilities 12,158 11,060
Current portion of long-term debt and finance leases 17,557 17,075
Total current liabilities 76,247 86,375
Long-term operating lease liabilities 33,561 37,260
Long-term debt and finance leases 79,679 89,082
Other long-term liabilities 1,615 400
Total liabilities 191,102 213,117
Commitments and contingencies (Note 6)
ARC Document Solutions, Inc. stockholders’ equity:    
Preferred stock, $0.001 par value, 25,000 shares authorized; 0 shares issued and outstanding 0 0
Common stock, $0.001 par value, 150,000 shares authorized; 49,422 and 49,189 shares issued and 42,792 and 45,228 shares outstanding 49 49
Additional paid-in capital 127,755 126,117
Retained earnings 37,308 31,969
Accumulated other comprehensive loss (2,787) (3,357)
Total stockholders equity before adjustment of treasury stock 162,325 154,778
Less cost of common stock in treasury, 6,630 and 3,960 shares 14,657 11,410
Total ARC Document Solutions, Inc. stockholders’ equity 147,668 143,368
Noncontrolling interest 6,668 6,672
Total equity 154,336 150,040
Total liabilities and equity $ 345,438 $ 363,157
v3.20.4
Consolidated Balance Sheets (Parenthetical) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Statement of Financial Position [Abstract]    
Allowance for accounts receivable $ 2,357 $ 2,099
Accumulated depreciation $ 219,834 $ 210,849
Preferred stock, par value (in dollars per share) $ 0.001 $ 0.001
Preferred stock, shares authorized (in shares) 25,000,000 25,000,000
Preferred stock, shares issued (in shares) 0 0
Preferred stock, shares outstanding (in shares) 0 0
Common stock, par value (in dollars per share) $ 0.001 $ 0.001
Common stock, shares authorized (in shares) 150,000,000 150,000,000
Common stock, shares issued (in shares) 49,422,000 49,189,000
Common stock, shares outstanding (in shares) 42,792,000 45,228,000
Treasury stock, shares (in shares) 6,630,000 3,960,000
v3.20.4
Consolidated Statements of Operations - USD ($)
shares in Thousands, $ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Total net sales $ 289,467 $ 382,415
Cost of sales 196,558 257,246
Gross profit 92,909 125,169
Selling, general and administrative expenses 79,016 107,260
Amortization of intangible assets 1,500 3,141
Restructuring expense 0 660
Income from operations 12,393 14,108
Other income, net (57) (71)
Loss on extinguishment and modification of debt 0 389
Interest expense, net 3,908 5,226
Income before income tax provision 8,542 8,564
Income tax provision 2,749 5,724
Net income 5,793 2,840
Loss attributable to noncontrolling interest 395 175
Net income attributable to ARC Document Solutions, Inc. shareholders $ 6,188 $ 3,015
Earnings per share attributable to ARC Document Solutions, Inc. shareholders:    
Basic (in dollars per share) $ 0.14 $ 0.07
Diluted (in dollars per share) $ 0.14 $ 0.07
Weighted average common shares outstanding:    
Basic (in shares) 42,925 44,997
Diluted (in shares) 43,021 45,083
Service sales    
Total net sales $ 267,159 $ 342,912
Equipment and supplies sales    
Total net sales $ 22,308 $ 39,503
v3.20.4
Consolidated Statements of Comprehensive Income - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Statement of Comprehensive Income [Abstract]    
Net income $ 5,793 $ 2,840
Other comprehensive income (loss), net of tax    
Foreign currency translation adjustments, net of tax 961 (192)
Other comprehensive income (loss), net of tax 961 (192)
Comprehensive income 6,754 2,648
Comprehensive loss attributable to noncontrolling interest (4) (361)
Comprehensive income attributable to ARC Document Solutions, Inc. shareholders $ 6,758 $ 3,009
v3.20.4
Consolidated Statements of Equity - USD ($)
shares in Thousands, $ in Thousands
Total
Common Stock
Additional Paid-in Capital
Retained Earnings
Accumulated Other Comprehensive Loss
Common Stock in Treasury
Noncontrolling Interest
Beginning Balance (in shares) at Dec. 31, 2018   48,492          
Beginning Balance at Dec. 31, 2018 $ 147,302 $ 48 $ 123,525 $ 29,397 $ (3,351) $ (9,350) $ 7,033
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock-based compensation (in shares)   607          
Stock-based compensation $ 2,460 $ 1 2,459        
Issuance of common stock under Employee Stock Purchase Plan (in shares) 90 90          
Issuance of common stock under Employee Stock Purchase Plan $ 133   133        
Treasury shares (2,060)         (2,060)  
Common stock cash dividends (443)     (443)      
Comprehensive income $ 2,648     3,015 (6)   (361)
Ending Balance (in shares) at Dec. 31, 2019 49,189 49,189          
Ending Balance at Dec. 31, 2019 $ 150,040 $ 49 126,117 31,969 (3,357) (11,410) 6,672
Increase (Decrease) in Stockholders' Equity [Roll Forward]              
Stock-based compensation (in shares)   140          
Stock-based compensation $ 1,571 1,571        
Issuance of common stock under Employee Stock Purchase Plan (in shares) 93 93          
Issuance of common stock under Employee Stock Purchase Plan $ 67   67        
Treasury shares (3,247)         (3,247)  
Common stock cash dividends (849)     (849)      
Comprehensive income $ 6,754     6,188 570   (4)
Ending Balance (in shares) at Dec. 31, 2020 49,422 49,422          
Ending Balance at Dec. 31, 2020 $ 154,336 $ 49 $ 127,755 $ 37,308 $ (2,787) $ (14,657) $ 6,668
v3.20.4
Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Cash flows from operating activities    
Net income $ 5,793 $ 2,840
Adjustments to reconcile net income to net cash provided by operating activities:    
Allowance for accounts receivable 932 590
Depreciation 28,860 28,763
Amortization of intangible assets 1,500 3,141
Amortization of deferred financing costs 65 208
Stock-based compensation 1,571 2,459
Deferred income taxes 2,697 5,157
Deferred tax valuation allowance (170) 51
Restructuring expense, non-cash portion 0 148
Loss on extinguishment and modification of debt 0 389
Other non-cash items, net 1 (444)
Changes in operating assets and liabilities:    
Accounts receivable 14,414 6,119
Inventory 4,566 2,791
Prepaid expenses and other assets 14,727 11,828
Accounts payable and accrued expenses (20,478) (11,259)
Net cash provided by operating activities 54,478 52,781
Cash flows from investing activities    
Capital expenditures (6,440) (12,885)
Other 512 641
Net cash used in investing activities (5,928) (12,244)
Cash flows from financing activities    
Proceeds from issuance of common stock under Employee Stock Purchase Plan 67 133
Share repurchases (3,247) (2,060)
Contingent consideration on prior acquisitions 0 (3)
Payments on long-term debt agreements and finance leases (14,935) (71,657)
Borrowings under revolving credit facilities 60,000 71,250
Payments under revolving credit facilities (65,000) (38,000)
Payment of deferred financing costs 0 (96)
Payments of Dividends (870) 0
Net cash used in financing activities (23,985) (40,433)
Effect of foreign currency translation on cash balances 960 (112)
Net change in cash and cash equivalents 25,525 (8)
Cash and cash equivalents at beginning of period 29,425 29,433
Cash and cash equivalents at end of period 54,950 29,425
Supplemental disclosure of cash flow information:    
Cash paid for interest 3,567 5,151
Income taxes (received) paid, net (31) 522
Noncash financing activities:    
Finance lease obligations incurred 10,192 17,057
Operating lease obligations incurred $ 7,530 $ 6,728
v3.20.4
Description of Business and Basis of Presentation
 12 Months Ended
Dec. 31, 2020
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Description of Business and Basis of Presentation DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
ARC Document Solutions, Inc. (“ARC Document Solutions,” “ARC” or the “Company”) is a leading document solutions provider to architectural, engineering, construction, and facilities management professionals, while also providing document solutions to businesses of all types. ARC offers a variety of services including: Construction Document Information Management ("CDIM"), Managed Print Services ("MPS"), and Archive and Information Management ("AIM"). In addition, ARC also sells Equipment and Supplies. The Company conducts its operations through its wholly-owned operating subsidiary, ARC Document Solutions, LLC, a Texas limited liability company, and its affiliates.
Basis of Presentation
The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis and relies on historical experience and various other factors that it believes to be reasonable under the circumstances to determine such estimates. Actual results could differ from those estimates and such differences may be material to the Consolidated Financial Statements.
Risk and Uncertainties
The Company generates the majority of its revenue from sales of services and products to customers in the architectural, engineering, construction and building owner/operator (AEC/O) industry. As a result, the Company’s operating results and financial condition can be significantly affected by economic factors that influence the AEC/O industry, such as non-residential construction spending, GDP growth, interest rates, unemployment rates, and office vacancy rates, all of which have been amplified due to the COVID-19 pandemic. Reduced activity (relative to historic levels) in the AEC/O industry would diminish demand for some of ARC’s services and products, and would therefore negatively affect revenues and have a material adverse effect on its business, operating results and financial condition.
As part of the Company’s growth strategy, ARC intends to continue to offer and grow a variety of service offerings, some of which are relatively new to the Company. The success of the Company’s efforts will be affected by its ability to acquire new customers for the Company’s new service offerings, as well as to sell the new service offerings to existing customers. The Company’s inability to successfully market and execute these relatively new service offerings could significantly affect its business and reduce its long term revenue, resulting in an adverse effect on its results of operations and financial condition.
v3.20.4
Summary of Significant Accounting Policies
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Cash Equivalents
Cash equivalents include demand deposits and short-term investments with a maturity of three months or less when purchased.
The Company maintains its cash deposits at numerous banks located throughout the United States, Canada, India, Australia, United Arab Emirates, the United Kingdom and China, which at times, may exceed federally insured limits. UDS, the Company’s joint venture in China, held $14.9 million and $12.7 million of the Company’s cash and cash equivalents as of December 31, 2020 and 2019, respectively. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk on cash and cash equivalents.
Concentrations of Credit Risk and Significant Vendors
Concentrations of credit risk with respect to trade receivables are limited due to a large, diverse customer base. No individual customer represented more than 2% of net sales during 2020 and 2019.
The Company has geographic concentration risk as sales in California, as a percent of total sales, were approximately 32% and 34% for 2020 and 2019, respectively.
The Company contracts with various suppliers. Although there are a limited number of suppliers that could supply the Company’s inventory, management believes any shortfalls from existing suppliers would be absorbed from other suppliers on comparable terms. However, a change in suppliers could cause a delay in sales and adversely affect results.
Purchases from the Company’s three largest vendors during 2020 and 2019 comprised approximately 53% and 41% respectively, of the Company’s total purchases of inventory and supplies.

Allowance for Doubtful Accounts
The Company performs periodic credit evaluations of the financial condition of its customers, monitors collections and payments from customers, and generally does not require collateral. The Company provides for the possible inability to collect accounts receivable by recording an allowance for doubtful accounts. The Company writes off an account when it is considered uncollectible. The Company estimates the allowance for doubtful accounts based on historical experience, aging of accounts receivable, and information regarding the credit worthiness of its customers. Additionally, the Company provides an allowance for returns and discounts based on historical experience. The allowance for doubtful accounts activity was as follows:
Balance at
Beginning
of Period		Charges to
Cost and
Expenses
Deductions (1)
Balance at
End of
Period
Year ended December 31, 2020
Allowance for accounts receivable$2,099 $932 $(674)$2,357 
Year ended December 31, 2019
Allowance for accounts receivable$2,016 $590 $(507)$2,099 
 (1) Deductions represent uncollectible accounts written-off net of recoveries.
Inventories
Inventories are valued at the lower of cost (determined on a first-in, first-out basis; or average cost) or net realizable value. Inventories primarily consist of reprographics materials for use and resale, and equipment for resale. On an ongoing basis, inventories are reviewed and adjusted for estimated obsolescence or unmarketable inventories to reflect the lower of cost or net realizable value. Charges to increase inventory reserves are recorded as an increase in cost of sales. As of December 31, 2020 and 2019, the reserves for inventory obsolescence was $0.8 million and $0.9 million, respectively.
Income Taxes
Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce the Company's deferred tax assets to the amount that is more likely than not to be realized. Changes in tax laws or accounting standards and methods may affect recorded deferred taxes in future periods.

When establishing a valuation allowance, the Company considers future sources of taxable income such as future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards and tax planning strategies. A tax planning strategy is an action that: is prudent and feasible; an enterprise ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused; and would result in realization of deferred tax assets. In the event the Company determines that its deferred tax assets, more likely than not, will not be realized in the future, the valuation adjustment to the deferred tax assets will be charged to earnings in the period in which the Company makes such a determination. The Company has a $2.1 million valuation allowance against certain deferred tax assets as of December 31, 2020.
In future quarters the Company will continue to evaluate its historical results for the preceding twelve quarters and its future projections to determine whether the Company will generate sufficient taxable income to utilize its deferred tax assets, and whether a valuation allowance is required.
The Company calculates its current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified.

Income taxes have not been provided on certain undistributed earnings of foreign subsidiaries because such earnings are considered to be permanently reinvested.
The amount of taxable income or loss the Company reports to the various tax jurisdictions is subject to ongoing audits by federal, state and foreign tax authorities. The Company's estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. The Company uses a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured and tax position taken or expected to be taken on its tax return. To the extent that the Company's assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company reports tax-related interest and penalties as a component of income tax expense.
Property and Equipment, net
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, as follows:
 
Buildings  
10-20 years
Leasehold improvements  
10-20 years or lease term, if shorter
Machinery and equipment  
3-7 years
Furniture and fixtures  
3-7 years
Assets acquired under capital lease arrangements are included in machinery and equipment, are recorded at the present value of the minimum lease payments, and are depreciated using the straight-line method over the life of the asset or term of the lease, whichever is shorter. Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized. Gains or losses on the sale or disposal of property and equipment are reflected in operating income.

The Company accounts for software costs developed for internal use in accordance with ASC 350-40, Intangibles – Goodwill and Other, which requires companies to capitalize certain qualifying costs incurred during the application development stage of the related software development project. The primary use of this software is for internal use and, accordingly, such capitalized software development costs are depreciated on a straight-line basis over the economic lives of the related products not to exceed three years. The Company’s machinery and equipment (see Note 4, Property and Equipment, Net) includes $1.4 million and $1.3 million of capitalized software development costs as of December 31, 2020 and 2019, net of accumulated amortization of $21.6 million and $20.7 million as of December 31, 2020 and 2019, respectively. Depreciation expense includes the amortization of capitalized software development costs which amounted to $0.9 million and $1.0 million, during the years ended December 31, 2020 and 2019, respectively.
Software development costs for products intended to be sold, leased or otherwise marketed are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized until the product is available for general release to customers. Technological feasibility is established when a product design and working model have been completed and the completeness of the working model and its consistency with the product design have been confirmed by testing. To date, the establishment of technological feasibility of the Company’s products and general release of such software have substantially coincided.
Software development costs for software to be sold, leased, or otherwise marketed are expensed as incurred until the establishment of technological feasibility, at which time those costs are capitalized until the product is available for general release to customers and amortized over the estimated life of the product. Technological feasibility is established upon the completion of a working prototype that has been certified as having no critical bugs and is a release candidate. To date, costs and time incurred between the establishment of technological feasibility and product release have not been material, and all software development costs have been charged to research and development expense in our consolidated statements of comprehensive income (loss).
Impairment of Long-Lived Assets
The Company periodically assesses potential impairments of its long-lived assets in accordance with the provisions of ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The Company groups its assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. The Company has determined that the lowest level for which identifiable cash flows are available is the regional level, which is the operating segment level.
Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if fair value is not available. The Company had no long-lived asset impairments in 2020 or 2019.

Goodwill and Other Intangible Assets
In accordance with ASC 350, Intangibles - Goodwill and Other, the Company assesses goodwill for impairment annually as of September 30, and more frequently if events and circumstances indicate that goodwill might be impaired.
Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill.
In 2017, the Company elected to early-adopt ASU 2017-04 which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test.
The Company determines the fair value of its reporting units using an income approach. Under the income approach, the Company determined fair value based on estimated discounted future cash flows of each reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, discount rates and future market conditions, among others. The level of judgement and estimation is inherently higher in the current environment considering the uncertainty created by the COVID-19 pandemic. The Company has evaluated numerous factors disrupting its business and made significant assumptions which include the severity and duration of the business disruption, the timing and degree of economic recovery and the combined effect of these assumptions on the Company's future operating results and cash flows.
Other intangible assets that have finite lives are amortized over their useful lives. Customer relationships are amortized using the accelerated method, based on customer attrition rates, over their estimated useful lives of 13 (weighted average) years.
Deferred Financing Costs
Direct costs incurred in connection with debt agreements are recorded as incurred and amortized based on the effective interest method for the Company's borrowings under its credit agreement ("Credit Agreement"). At December 31, 2020 and 2019, the Company had less than $0.1 million in unamortized deferred financing costs. The Company extinguished its term loan in December of 2019. See Note 5, Long-Term Debt, for additional information.

Fair Values of Financial Instruments
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments for disclosure purposes:
Cash equivalents: Cash equivalents are time deposits with maturity of three months or less when purchased, which are highly liquid and readily convertible to cash. Cash equivalents reported in the Company’s Consolidated Balance Sheet were $13.2 million and $9.3 million as of December 31, 2020 and 2019, respectively, and are carried at cost and approximate fair value due to the relatively short period to maturity of these instruments.
Short- and long-term debt and finance leases: The carrying amount of the Company’s finance leases reported in the Consolidated Balance Sheets approximates fair value based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements. The carrying amount reported in the Company’s Consolidated Balance Sheet as of December 31, 2020 for borrowings under its Credit Agreement is $55.0 million. The Company has determined that borrowings under its Credit Agreement of $55.0 million as of December 31, 2020 approximates its fair value.
Insurance Liability
The Company maintains a high deductible insurance policy for a significant portion of its risks and associated liabilities with respect to workers’ compensation. The Company’s deductible is $250 thousand per individual. The accrued liabilities associated with this program are based on the Company’s estimate of the ultimate costs to settle known claims, as well as claims incurred but not yet reported to the Company, as of the balance sheet date. The Company’s estimated liability is not discounted and is based upon an actuarial report obtained from a third party. The actuarial report uses information provided by the Company’s insurance brokers and insurers, combined with the Company’s judgments regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation, and the Company’s claims settlement practices.
The Company is self-insured for healthcare benefits provided to certain employees in the United States, with a stop-loss at $250 thousand per individual. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. The Company’s results could be materially affected by claims and other expenses related to such plans if future occurrences and claims differ from these assumptions and historical trends. Other employees are covered by other offered healthcare benefits.
Commitments and Contingencies
In the normal course of business, the Company estimates potential future loss accruals related to legal, workers’ compensation, healthcare, tax and other contingencies. These accruals require management’s judgment on the outcome of various events based on the best available information. However, due to changes in facts and circumstances, the ultimate outcomes could differ from management’s estimates.
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration that the Company is expected to be entitled to in exchange for those goods or services. The Company applied practical expedients related to unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.
Net sales of the Company’s principal services and products were as follows:
 
 Year Ended December 31,
 20202019
Service Sales
CDIM$175,532 $205,536 
MPS79,321 123,279 
AIM12,306 14,097 
Total services sales267,159 342,912 
Equipment and Supplies Sales22,308 39,503 
Total net sales$289,467 $382,415 
 
CDIM consists of professional services and software services to (i) re-produce and distribute large-format and small-format documents in either black & white or color (“Ordered Prints”) and (ii) specialized graphic color printing. Substantially, all of the Company’s revenue from CDIM comes from professional services to re-produce Ordered Prints. Sales of Ordered Prints are initiated through a customer order or quote and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligation under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the re-produced Ordered Prints. Transfer of control occurs at a specific point-in-time, when the Ordered Prints are delivered to the customer’s site or handed to the customer for walk in orders. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue.
MPS consists of placement, management, and optimization of print and imaging equipment in the customers' offices, job sites, and other facilities. MPS relieves the Company’s customers of the burden of purchasing print equipment and related supplies and maintaining print devices and print networks, and shifts their costs to a “per-use” basis. MPS is supported by the Company's hosted proprietary technology, Abacus®, which allows customers to capture, control, manage, print, and account for
their documents. Under its MPS contracts, the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge”. MPS sales are driven by the ongoing print needs of the Company’s customers at their facilities. Upon the issuance of ASC 842, Leases, the Company concluded that certain of its MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are accounted for as operating leases under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842. See Note 7, Leasing, for additional information.
AIM, combines software and professional services to facilitate the capture, management, access and retrieval of documents and information that have been produced in the past. AIM includes the Company's hosted SKYSITE ® software to organize, search and retrieve documents, as well as the provision of services that include the capture and conversion of hardcopy and electronic documents into digital files (“Scanned Documents”), and their cloud-based storage and maintenance. Sales of AIM professional services, which represent substantially all revenue for AIM, are initiated through a customer order or proposal and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligation under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the digital files. Transfer of control occurs at a specific point-in-time, when the Scanned Documents are delivered to the customer either through SKYSITE or through electronic media. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue.

Equipment and Supplies sales consist of reselling printing, imaging, and related equipment (“Goods”) to customers primarily in architectural, engineering and construction firms. Sales of Equipment and Supplies are initiated through a customer order and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligations under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the Goods. Transfer of control occurs at a specific point-in-time, when the Goods are delivered to the customer’s site. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has experienced minimal customer returns or refunds and does not offer a warranty on equipment that it is reselling.
The Company has established contractual pricing for certain large national customer accounts (“Global Solutions”). These contracts generally establish uniform pricing at all operating segments for Global Solutions. Revenues earned from the Company’s Global Solutions are recognized in the same manner as non-Global Solutions revenues.
Included in revenues are fees charged to customers for shipping, handling, and delivery services. Such revenues amounted to $9.9 million and $11.1 million for 2020 and 2019, respectively.
Revenues from hosted software licensing activities are recognized ratably over the term of the license. Revenues from software licensing activities comprise less than 2% of the Company’s consolidated revenues during the years ended December 31, 2020 and 2019.
Management provides for returns, discounts and allowances based on historic experience and adjusts such allowances as considered necessary.
Comprehensive Income (Loss)
The Company’s comprehensive income (loss) includes foreign currency translation adjustments, net of taxes.
Asset and liability accounts of international operations are translated into the Company’s functional currency, U.S. dollars, at current rates. Revenues and expenses are translated at the average currency rate for the fiscal year.

Segment and Geographic Reporting
The provisions of ASC 280, Segment Reporting, require public companies to report financial and descriptive information about their reportable operating segments. The Company identifies operating segments based on the various business activities that earn revenue and incur expense and whose operating results are reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker. Because its operating segments have similar products and services, classes of customers, production processes, distribution methods and economic characteristics, the Company operates as a single reportable segment.

The Company recognizes revenues in geographic areas based on the location to which the product was shipped or services have been rendered. See table below for revenues and property and equipment, net, attributable to the Company’s U.S. operations and foreign operations. 
Year Ended December 31,
 20202019
U.S.Foreign
Countries		TotalU.S.Foreign
Countries		Total
Revenues from external customers$253,179 $36,288 $289,467 $329,372 $53,043 $382,415 
Property and equipment, net$51,058 $6,772 $57,830 $63,458 $6,876 $70,334 
Advertising and Shipping and Handling Costs
Advertising costs are expensed as incurred and approximated $0.7 million and $1.8 million during 2020 and 2019, respectively. Shipping and handling costs incurred by the Company are included in cost of sales.
Stock-Based Compensation
The Company applies the Black-Scholes valuation model in determining the fair value of share-based payments to employees, which is then amortized on a straight-line basis over the requisite service period.
Total stock-based compensation for 2020 and 2019, was $1.6 million and $2.5 million, respectively, and was recorded in selling, general, and administrative expenses, consistent with the classification of the underlying salaries. In accordance with ASC 718, Income Taxes, any excess tax benefit resulting from stock-based compensation, in the Consolidated Statements of Cash Flows, are classified along with other income tax cash flows as an operating activity.
The weighted average fair value at the grant date for options issued in 2020 and 2019, was $0.60 and $1.30, respectively. The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted average assumptions for 2020 and 2019: 
Year Ended December 31,
 20202019
Weighted average assumptions used:
Risk free interest rate1.5 %2.5 %
Expected volatility52.2 %54.8 %
Expected dividend yield1.2 %— %
Using historical exercise data as a basis, the Company determined that the expected term for stock options issued in 2020 and 2019, was 6.7 years.
For fiscal years 2020 and 2019, expected stock price volatility is based on the Company’s historical volatility for a period equal to the expected term. The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of grant with an equivalent remaining term. Since inception the Company had never paid out dividends and did not plan to issue dividends until the fourth quarter of 2019. The Company accounts for forfeitures of share-based awards when they occur.
As of December 31, 2020, total unrecognized stock-based compensation expense related to nonvested stock-based compensation was approximately $1.2 million, which is expected to be recognized over a weighted average period of approximately 1.3 years.
For additional information, see Note 9, Employee Stock Purchase Plan and Stock Plan.
Research and Development Expenses
Research and development activities relate to costs associated with the design and testing of new technology or enhancements and maintenance to existing technology. Such costs are expensed as incurred are primarily recorded to cost of sales. In total, research and development amounted to $7.0 million and $9.3 million, during 2020 and 2019, respectively.
Noncontrolling Interest
The Company accounted for its investment in UNIS Document Solutions Co. Ltd., (“UDS”) under the purchase method of accounting, in accordance with ASC 805, Business Combinations. UDS has been consolidated in the Company’s financial
statements from the date of acquisition. Noncontrolling interest, which represents the 35 percent non-controlling interest in UDS, is reflected on the Company’s Consolidated Financial Statements.
Sales Taxes
The Company bills sales taxes, as applicable, to its customers. The Company acts as an agent and bills, collects, and remits the sales tax to the proper government jurisdiction. The sales taxes are accounted for on a net basis, and therefore are not included as part of the Company’s revenue.
Earnings Per Share
The Company accounts for earnings per share in accordance with ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income attributable to ARC by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is computed similarly to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if common shares subject to outstanding options and acquisition rights had been issued and if the additional common shares were dilutive. Common share equivalents are excluded from the computation if their effect is anti-dilutive. There were 5.2 million and 4.8 million common shares excluded from the calculation of diluted net income attributable to ARC per common share as their effect would have been anti-dilutive for 2020 and 2019, respectively. The Company’s common share equivalents consist of stock options issued under the Company’s Stock Plan.
Basic and diluted weighted average common shares outstanding were calculated as follows for 2020 and 2019:
 
 Year Ended December 31,
 20202019
Weighted average common shares outstanding during the period — basic42,925 44,997 
Effect of dilutive stock awards96 86 
Weighted average common shares outstanding during the period — diluted43,021 45,083 

Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. The Company elected to early adopt ASU 2019-12 on January 1, 2020. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Loss (Topic 326) (“ASU 2016-13”), which updates the guidance on recognition and measurement of credit losses for financial assets. The new requirements, known as the current expected credit loss model ("CECL") will require entities to adopt an impairment model based on expected losses rather than incurred losses. ASU 2016-13 must be adopted on a modified-retrospective approach. This update was effective for fiscal years beginning after December 15, 2020 including interim periods within those fiscal years. In October 2019, the FASB approved an extension for all non-SEC filers, including small reporting companies, to extend the effective date to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Therefore, the effective date for this update will be January 1, 2023. The Company is currently evaluating the potential impact of the adoption of the new standard on its consolidated statements of financial condition and results of operations.
v3.20.4
Goodwill and Other Intangibles
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Other Intangibles GOODWILL AND OTHER INTANGIBLES
Goodwill
In accordance with ASC 350, Intangibles - Goodwill and Other, the Company assesses goodwill for impairment annually as of September 30, and more frequently if events and circumstances indicate that goodwill might be impaired. At September 30, 2020, the Company performed its assessment and determined that goodwill was not impaired.
Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a
particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill.

In 2017 the Company elected to early-adopt ASU 2017-04, Intangibles - Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment, which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test.
Given the uncertainty regarding the ultimate financial impact of the COVID-19 pandemic and the ensuing economic recovery, there can be no assurance that the estimates and assumptions made for purposes of the Company's goodwill impairment analysis in 2020 will prove to be accurate predictions of the future. If the Company’s assumptions, including forecasted EBITDA of certain reporting units, are not achieved, or its assumptions regarding disruptions caused by the pandemic, and its impact on the recovery from COVID-19 change, then the Company may be required to record goodwill impairment charges in future periods, whether in connection with the Company’s next annual impairment testing in the third quarter of 2021, or on an interim basis, if any such change constitutes a triggering event (as defined under ASC 350, Intangibles-Goodwill and Other) outside of the quarter when the Company regularly performs its annual goodwill impairment test. It is not possible at this time to determine if any such future impairment charge would result or, if it does, whether such charge would be material.
The carrying amount of goodwill from January 1, 2019 through December 31, 2020 is summarized as follows:
Gross
Goodwill		Accumulated
Impairment
Loss		Net
Carrying
Amount
January 1, 2019$405,558 $284,507 $121,051 
December 31, 2019$405,558 $284,507 $121,051 
December 31, 2020$405,558 $284,507 $121,051 

Long-lived and Other Intangible Assets

The Company periodically assesses potential impairments of its long-lived assets in accordance with the provisions of ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The Company groups its assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. The Company has determined that the lowest level for which identifiable cash flows are available is the regional level, which is the operating segment level.

Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if fair value is not available. The Company assessed potential impairments of its long lived assets as of September 30, 2020 and concluded that there was no impairment.
The following table sets forth the Company’s other intangible assets resulting from business acquisitions as of December 31, 2020 and 2019 which continue to be amortized:
 
 December 31, 2020December 31, 2019
 Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizable other intangible assets
Customer relationships$99,425 $99,191 $234 $99,127 $97,430 $1,697 
Trade names and trademarks20,325 20,044 281 20,279 19,980 299 
$119,750 $119,235 $515 $119,406 $117,410 $1,996 
Estimated future amortization expense of other intangible assets for each of the next five fiscal years and thereafter are as follows:
 
2021$179 
2022102 
202344 
202442 
202538 
Thereafter110 
$515 
v3.20.4
Property and Equipment, Net
 12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Property and Equipment, Net PROPERTY AND EQUIPMENT, NET
Property and equipment, net consist of the following:
 December 31,
 20202019
Machinery and equipment$252,613 $256,249 
Buildings and leasehold improvements22,397 22,050 
Furniture and fixtures2,654 2,884 
277,664 281,183 
Less accumulated depreciation(219,834)(210,849)
$57,830 $70,334 
Depreciation expense was $28.9 million and $28.8 million for 2020 and 2019, respectively.
v3.20.4
Long-Term Debt
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Long-Term Debt LONG-TERM DEBT
Long-term debt consists of the following:
 
December 31,
20202019
Revolving Loans; 2.2% and 3.6% interest rate at December 31, 2020 and 2019
55,000 60,000 
Various finance leases; weighted average interest rate of 4.9% at December 31, 2020 and 2019; principal and interest payable monthly through September 2026
42,236 46,157 
97,236 106,157 
Less current portion(17,557)(17,075)
$79,679 $89,082 
Credit Agreement
On December 17, 2019, the Company amended its Credit Agreement which was originally entered into on November 20, 2014 with Wells Fargo Bank, National Association, as administrative agent and the lenders party thereto.
The amendment increased the maximum aggregate principal amount of revolving loans under the Credit Agreement from $65 million to $80 million. Proceeds of a portion of the revolving loans available to be drawn under the Credit Agreement were used to fully repay the $49.5 million term loan that was outstanding under the Credit Agreement.
As of December 31, 2020, the Company's borrowing availability of Revolving Loans under the Revolving Loan commitment was $22.8 million, after deducting outstanding letters of credit of $2.2 million and outstanding Revolving Loans of $55.0 million.
Loans borrowed under the Credit Agreement bear interest, in the case of LIBOR rate loans, at a per annum rate equal to the applicable LIBOR rate, plus a margin ranging from 1.25% to 1.75%, based on the Company’s Total Leverage Ratio (as defined in the Credit Agreement). Loans borrowed under the Credit Agreement that are not LIBOR rate loans bear interest at a per annum rate equal to (i) the greatest of (A) the Federal Funds Rate plus 0.50%, (B) the one month LIBOR rate plus 1.00% per
annum, and (C) the rate of interest announced, from time to time, by Wells Fargo Bank, National Association as its “prime rate,” plus (ii) a margin ranging from 0.25% to 0.75%, based on the Company’s Total Leverage Ratio.
The Company pays certain recurring fees with respect to the credit facility, including administration fees to the administrative agent.
Subject to certain exceptions, including in certain circumstances, reinvestment rights, the loans extended under the Credit Agreement are subject to customary mandatory prepayment provisions with respect to: the net proceeds from certain asset sales; the net proceeds from certain issuances or incurrences of debt (other than debt permitted to be incurred under the terms of the Credit Agreement); the net proceeds from certain issuances of equity securities; and net proceeds of certain insurance recoveries and condemnation events of the Company.
The Credit Agreement contains customary representations and warranties, subject to limitations and exceptions, and customary covenants restricting the ability (subject to various exceptions) of the Company and its subsidiaries to: incur additional indebtedness (including guarantee obligations); incur liens; sell certain property or assets; engage in mergers or other fundamental changes; consummate acquisitions; make investments; pay dividends, other distributions or repurchase equity interest of the Company or its subsidiaries; change the nature of their business; prepay or amend certain indebtedness; engage in certain transactions with affiliates; amend their organizational documents; or enter into certain restrictive agreements. In addition, the Credit Agreement contains financial covenants which requires the Company to maintain (i) at all times, a Total Leverage Ratio in an amount not to exceed 2.75 to 1.00; and (ii) a Fixed Charge Coverage Ratio (as defined in the Credit Agreement), as of the last day of each fiscal quarter, an amount not less than 1.15 to 1.00. We were in compliance with our covenants during the year ended December 31, 2020.
The amendment also modified certain tests the Company is required to meet in order to pay dividends, repurchase stock and make other restricted payments. In order to make such payments which are permitted subject to certain customary conditions set forth in the Credit Agreement, the amount of all such payments will be limited to $15 million during any twelve-month period. Per the amendment, when calculating the fixed charge coverage ratio the Company may now exclude up to $10 million of such restricted payments that would otherwise constitute fixed charges in any twelve month period.
The amendment allows for payment of dividends. In December 2020, the Company's Board of Directors declared a quarterly cash dividend of $0.01 per share that is payable on February 26, 2021 to shareholders of record as of January 29, 2021. Accordingly, the Company recorded a dividend payable of $422 thousand within accrued expenses as of December 31, 2020.
The Credit Agreement contains customary events of default, including with respect to: nonpayment of principal, interest, fees or other amounts; failure to perform or observe covenants; material inaccuracy of a representation or warranty when made; cross-default to other material indebtedness; bankruptcy, insolvency and dissolution events; inability to pay debts; monetary judgment defaults; actual or asserted invalidity or impairment of any definitive loan documentation, repudiation of guaranties or subordination terms; certain ERISA related events; or a change of control.
The obligations of the Company’s subsidiary that is the borrower under the Credit Agreement are guaranteed by the Company and each of its other United States subsidiaries. The Credit Agreement and any interest rate protection and other hedging arrangements provided by any lender party to the Credit facility or any affiliate of such a lender are secured on a first priority basis by a perfected security interest in substantially all of the borrower’s, the Company’s and each guarantor’s assets (subject to certain exceptions).
v3.20.4
Commitments and Contingencies
 12 Months Ended
Dec. 31, 2020
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies COMMITMENTS AND CONTINGENCIES
The Company leases machinery, equipment, and office and operational facilities under non-cancelable operating lease agreements. Certain lease agreements for the Company’s facilities generally contain renewal options and provide for annual increases in rent based on the local Consumer Price Index. Refer to Note 7, Leasing, for the schedule of the Company’s future minimum operating lease payments as of December 31, 2020.
The Company has entered into indemnification agreements with each director and named executive officer which provide indemnification under certain circumstances for acts and omissions which may not be covered by any directors’ and officers’ liability insurance. The indemnification agreements may require the Company, among other things, to indemnify its officers and directors against certain liabilities that may arise by reason of their status or service as officers and directors (other than liabilities arising from willful misconduct of a culpable nature), to advance their expenses incurred as a result of any proceeding against them as to which they could be indemnified, and to obtain officers’ and directors’ insurance if available on reasonable terms. There have been no events to date which would require the Company to indemnify its officers or directors.
The Company is involved, and will continue to be involved, in legal proceedings arising out of the conduct of our business, including commercial and employment-related lawsuits. Some of these lawsuits purport or may be determined to be class actions and seek substantial damages, and some may remain unresolved for several years. The Company establishes accruals for
specific legal proceedings when it is considered probable that a loss has been incurred and the amount of the loss can be reasonably estimated. The Company's evaluation of whether a loss is reasonably probable is based on our assessment and consultation with legal counsel regarding the ultimate outcome of the matter. As of December 31, 2020, the Company has accrued for the potential impact of loss contingencies that are probable and reasonably estimable. The Company does not currently believe that the ultimate resolution of any of these matters will have a material adverse effect on our results of operations, financial condition, or cash flows. However, the results of these matters cannot be predicted with certainty, and an unfavorable resolution of one or more of these matters could have a material adverse effect on our results of operations, financial condition, or cash flows.
v3.20.4
Leasing
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Leasing LEASING
Adoption of ASC Topic 842, Leases
In February 2016, the FASB issued ASC 842, Leases. The new guidance replaces the existing guidance in ASC 840, Leases. ASC 842 requires a dual approach for lessee accounting under which a lessee accounts for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases the lessee recognizes interest expense and amortization of the ROU asset, and for operating leases the lessee will recognize a straight-line total lease expense. In addition, ASC 842 changes the definition of a lease, which resulted in changes to the classification of certain service contracts with customers to lease arrangements. The Company adopted ASC 842 on January 1, 2019.
In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption. The Company elected, for its equipment asset classes, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Company's consolidated balance sheet.
As part of the transition, the Company completed a comprehensive review of its lease portfolio, including significant leases by geography and by asset type that were impacted by the new guidance, and enhanced its controls around leasing. The adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease ROU assets of approximately $46.9 million and operating lease liabilities of approximately $53.7 million, as of January 1, 2019. Finance leases were not impacted by the adoption of ASC 842, as finance lease liabilities and the corresponding ROU assets were already recorded in the balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s Consolidated Statements of Operations or Cash Flows.
Lessee Accounting
The Company determines whether an arrangement is a lease at contract inception. The Company's material lease contracts are generally for real estate or print equipment, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company’s leases that are classified as operating leases primarily consist of real estate leases. The Company’s real estate leases contain both lease and non-lease components, which are accounted for separately. The Company’s leases that are classified as finance leases primarily consist of print equipment. Certain print equipment leases have lease and non-lease components, which are accounted for as a single lease component as discussed above. Other than the election to treat the Company's fixed lease payment as a single lease component, the accounting for finance leases will remain unchanged under ASC 842.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and are reduced by any lease incentives received. The lease terms range from one to ten years, with renewal terms that can extend the lease term from 1 to 5 years. A portion of the Company’s real estate leases are generally subject to annual changes in the Consumer Price Index (CPI), which are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The tables below present financial information associated with the Company's leases as of, and the years ended, December 31, 2020 and December 31, 2019.
ClassificationDecember 31, 2020December 31, 2019
Assets
Operating lease assetsRight-of-use assets from operating leases$37,859 $41,238 
Finance lease assetsProperty and equipment85,205 85,914 
Less accumulated depreciation(50,550)(43,166)
Property and equipment, net34,655 42,748 
Total lease assets$72,514 $83,986 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$12,158 $11,060 
FinanceCurrent portion of long-term finance leases17,557 17,075 
Long-term
OperatingLong-term portion of operating lease liabilities33,561 37,260 
FinanceLong-term portion of finance leases24,679 29,082 
Total lease liabilities$87,955 $94,477 
ClassificationYear Ended
December 31, 2020December 31, 2019
Operating lease costCost of sales$14,341 $16,436 
Selling, general and administrative expenses3,601 3,381 
Total operating lease cost (1)(2)
$17,942 $19,817 
Finance lease cost
Amortization of leased assetsCost of sales$18,426 $18,314 
Selling, general and administrative expenses329 246 
Interest on lease liabilitiesInterest expense, net2,571 2,353 
Total finance lease cost21,326 20,913 
Total lease cost$39,268 $40,730 
(1) Includes variable lease costs and short-term lease costs of $2,774 and $340, respectively for the year ended December 31, 2020.
(2) Includes variable lease costs and short-term lease costs of $2,893 and $433, respectively for the year ended December 31, 2019.
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
December 31, 2020December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.05.5
Finance leases2.93.2
Weighted average discount rate
Operating leases5.8 %5.9 %
Finance leases4.9 %4.9 %
Other informationYear Ended December 31, 2020Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$12,842 $15,415 
Operating cash flows from finance leases$1,849 $2,373 
Financing cash flows from finance leases$14,935 $18,407 
Lessor Accounting
The Company concluded that certain of its contracts with customers contain leases under the new leasing standard and accordingly should be accounted for as operating leases upon adoption of ASC 842. Specifically, certain of the Company's MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are now accounted for as operating leases under ASC 842.
The Company's MPS arrangements consists of the placement, management, and optimization of print and imaging equipment in customers' offices, job sites, and other facilities under which the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge.” Accordingly, the fixed rate per unit charged to the customer covers the use of the equipment (i.e., the lease component), as well as the additional services performed by the Company as described above (i.e., the non-lease component). Certain of the Company's MPS contracts provide the customer the option to renew or terminate the agreement, which are considered when assessing the lease term. The Company elected the practical expedient to not separate certain lease and non-lease components related to its MPS arrangements, and accounts for the combined component under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842.
MPS revenue includes $72.9 million of rental income and $6.4 million of service income for the year ended December 31, 2020. MPS revenue includes $114.7 million of rental income and $8.6 million of service income for the year ended December 31, 2019. The Company's property and equipment, net of accumulated depreciation, includes approximately $35 million and $40 million of equipment subject to leases with customers under the Company's MPS arrangements for the years ended December 31, 2020 and December 31, 2019, respectively. Following termination of an MPS arrangement, the Company will place existing equipment at an alternate customer site pursuant to an MPS arrangement, at one of the Company's service centers, or dispose of the equipment.
Leasing LEASING
Adoption of ASC Topic 842, Leases
In February 2016, the FASB issued ASC 842, Leases. The new guidance replaces the existing guidance in ASC 840, Leases. ASC 842 requires a dual approach for lessee accounting under which a lessee accounts for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases the lessee recognizes interest expense and amortization of the ROU asset, and for operating leases the lessee will recognize a straight-line total lease expense. In addition, ASC 842 changes the definition of a lease, which resulted in changes to the classification of certain service contracts with customers to lease arrangements. The Company adopted ASC 842 on January 1, 2019.
In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption. The Company elected, for its equipment asset classes, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Company's consolidated balance sheet.
As part of the transition, the Company completed a comprehensive review of its lease portfolio, including significant leases by geography and by asset type that were impacted by the new guidance, and enhanced its controls around leasing. The adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease ROU assets of approximately $46.9 million and operating lease liabilities of approximately $53.7 million, as of January 1, 2019. Finance leases were not impacted by the adoption of ASC 842, as finance lease liabilities and the corresponding ROU assets were already recorded in the balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s Consolidated Statements of Operations or Cash Flows.
Lessee Accounting
The Company determines whether an arrangement is a lease at contract inception. The Company's material lease contracts are generally for real estate or print equipment, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company’s leases that are classified as operating leases primarily consist of real estate leases. The Company’s real estate leases contain both lease and non-lease components, which are accounted for separately. The Company’s leases that are classified as finance leases primarily consist of print equipment. Certain print equipment leases have lease and non-lease components, which are accounted for as a single lease component as discussed above. Other than the election to treat the Company's fixed lease payment as a single lease component, the accounting for finance leases will remain unchanged under ASC 842.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and are reduced by any lease incentives received. The lease terms range from one to ten years, with renewal terms that can extend the lease term from 1 to 5 years. A portion of the Company’s real estate leases are generally subject to annual changes in the Consumer Price Index (CPI), which are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The tables below present financial information associated with the Company's leases as of, and the years ended, December 31, 2020 and December 31, 2019.
ClassificationDecember 31, 2020December 31, 2019
Assets
Operating lease assetsRight-of-use assets from operating leases$37,859 $41,238 
Finance lease assetsProperty and equipment85,205 85,914 
Less accumulated depreciation(50,550)(43,166)
Property and equipment, net34,655 42,748 
Total lease assets$72,514 $83,986 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$12,158 $11,060 
FinanceCurrent portion of long-term finance leases17,557 17,075 
Long-term
OperatingLong-term portion of operating lease liabilities33,561 37,260 
FinanceLong-term portion of finance leases24,679 29,082 
Total lease liabilities$87,955 $94,477 
ClassificationYear Ended
December 31, 2020December 31, 2019
Operating lease costCost of sales$14,341 $16,436 
Selling, general and administrative expenses3,601 3,381 
Total operating lease cost (1)(2)
$17,942 $19,817 
Finance lease cost
Amortization of leased assetsCost of sales$18,426 $18,314 
Selling, general and administrative expenses329 246 
Interest on lease liabilitiesInterest expense, net2,571 2,353 
Total finance lease cost21,326 20,913 
Total lease cost$39,268 $40,730 
(1) Includes variable lease costs and short-term lease costs of $2,774 and $340, respectively for the year ended December 31, 2020.
(2) Includes variable lease costs and short-term lease costs of $2,893 and $433, respectively for the year ended December 31, 2019.
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
December 31, 2020December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.05.5
Finance leases2.93.2
Weighted average discount rate
Operating leases5.8 %5.9 %
Finance leases4.9 %4.9 %
Other informationYear Ended December 31, 2020Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$12,842 $15,415 
Operating cash flows from finance leases$1,849 $2,373 
Financing cash flows from finance leases$14,935 $18,407 
Lessor Accounting
The Company concluded that certain of its contracts with customers contain leases under the new leasing standard and accordingly should be accounted for as operating leases upon adoption of ASC 842. Specifically, certain of the Company's MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are now accounted for as operating leases under ASC 842.
The Company's MPS arrangements consists of the placement, management, and optimization of print and imaging equipment in customers' offices, job sites, and other facilities under which the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge.” Accordingly, the fixed rate per unit charged to the customer covers the use of the equipment (i.e., the lease component), as well as the additional services performed by the Company as described above (i.e., the non-lease component). Certain of the Company's MPS contracts provide the customer the option to renew or terminate the agreement, which are considered when assessing the lease term. The Company elected the practical expedient to not separate certain lease and non-lease components related to its MPS arrangements, and accounts for the combined component under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842.
MPS revenue includes $72.9 million of rental income and $6.4 million of service income for the year ended December 31, 2020. MPS revenue includes $114.7 million of rental income and $8.6 million of service income for the year ended December 31, 2019. The Company's property and equipment, net of accumulated depreciation, includes approximately $35 million and $40 million of equipment subject to leases with customers under the Company's MPS arrangements for the years ended December 31, 2020 and December 31, 2019, respectively. Following termination of an MPS arrangement, the Company will place existing equipment at an alternate customer site pursuant to an MPS arrangement, at one of the Company's service centers, or dispose of the equipment.
Leasing LEASING
Adoption of ASC Topic 842, Leases
In February 2016, the FASB issued ASC 842, Leases. The new guidance replaces the existing guidance in ASC 840, Leases. ASC 842 requires a dual approach for lessee accounting under which a lessee accounts for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases the lessee recognizes interest expense and amortization of the ROU asset, and for operating leases the lessee will recognize a straight-line total lease expense. In addition, ASC 842 changes the definition of a lease, which resulted in changes to the classification of certain service contracts with customers to lease arrangements. The Company adopted ASC 842 on January 1, 2019.
In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption. The Company elected, for its equipment asset classes, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Company's consolidated balance sheet.
As part of the transition, the Company completed a comprehensive review of its lease portfolio, including significant leases by geography and by asset type that were impacted by the new guidance, and enhanced its controls around leasing. The adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease ROU assets of approximately $46.9 million and operating lease liabilities of approximately $53.7 million, as of January 1, 2019. Finance leases were not impacted by the adoption of ASC 842, as finance lease liabilities and the corresponding ROU assets were already recorded in the balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s Consolidated Statements of Operations or Cash Flows.
Lessee Accounting
The Company determines whether an arrangement is a lease at contract inception. The Company's material lease contracts are generally for real estate or print equipment, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company’s leases that are classified as operating leases primarily consist of real estate leases. The Company’s real estate leases contain both lease and non-lease components, which are accounted for separately. The Company’s leases that are classified as finance leases primarily consist of print equipment. Certain print equipment leases have lease and non-lease components, which are accounted for as a single lease component as discussed above. Other than the election to treat the Company's fixed lease payment as a single lease component, the accounting for finance leases will remain unchanged under ASC 842.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and are reduced by any lease incentives received. The lease terms range from one to ten years, with renewal terms that can extend the lease term from 1 to 5 years. A portion of the Company’s real estate leases are generally subject to annual changes in the Consumer Price Index (CPI), which are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The tables below present financial information associated with the Company's leases as of, and the years ended, December 31, 2020 and December 31, 2019.
ClassificationDecember 31, 2020December 31, 2019
Assets
Operating lease assetsRight-of-use assets from operating leases$37,859 $41,238 
Finance lease assetsProperty and equipment85,205 85,914 
Less accumulated depreciation(50,550)(43,166)
Property and equipment, net34,655 42,748 
Total lease assets$72,514 $83,986 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$12,158 $11,060 
FinanceCurrent portion of long-term finance leases17,557 17,075 
Long-term
OperatingLong-term portion of operating lease liabilities33,561 37,260 
FinanceLong-term portion of finance leases24,679 29,082 
Total lease liabilities$87,955 $94,477 
ClassificationYear Ended
December 31, 2020December 31, 2019
Operating lease costCost of sales$14,341 $16,436 
Selling, general and administrative expenses3,601 3,381 
Total operating lease cost (1)(2)
$17,942 $19,817 
Finance lease cost
Amortization of leased assetsCost of sales$18,426 $18,314 
Selling, general and administrative expenses329 246 
Interest on lease liabilitiesInterest expense, net2,571 2,353 
Total finance lease cost21,326 20,913 
Total lease cost$39,268 $40,730 
(1) Includes variable lease costs and short-term lease costs of $2,774 and $340, respectively for the year ended December 31, 2020.
(2) Includes variable lease costs and short-term lease costs of $2,893 and $433, respectively for the year ended December 31, 2019.
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
December 31, 2020December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.05.5
Finance leases2.93.2
Weighted average discount rate
Operating leases5.8 %5.9 %
Finance leases4.9 %4.9 %
Other informationYear Ended December 31, 2020Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$12,842 $15,415 
Operating cash flows from finance leases$1,849 $2,373 
Financing cash flows from finance leases$14,935 $18,407 
Lessor Accounting
The Company concluded that certain of its contracts with customers contain leases under the new leasing standard and accordingly should be accounted for as operating leases upon adoption of ASC 842. Specifically, certain of the Company's MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are now accounted for as operating leases under ASC 842.
The Company's MPS arrangements consists of the placement, management, and optimization of print and imaging equipment in customers' offices, job sites, and other facilities under which the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge.” Accordingly, the fixed rate per unit charged to the customer covers the use of the equipment (i.e., the lease component), as well as the additional services performed by the Company as described above (i.e., the non-lease component). Certain of the Company's MPS contracts provide the customer the option to renew or terminate the agreement, which are considered when assessing the lease term. The Company elected the practical expedient to not separate certain lease and non-lease components related to its MPS arrangements, and accounts for the combined component under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842.
MPS revenue includes $72.9 million of rental income and $6.4 million of service income for the year ended December 31, 2020. MPS revenue includes $114.7 million of rental income and $8.6 million of service income for the year ended December 31, 2019. The Company's property and equipment, net of accumulated depreciation, includes approximately $35 million and $40 million of equipment subject to leases with customers under the Company's MPS arrangements for the years ended December 31, 2020 and December 31, 2019, respectively. Following termination of an MPS arrangement, the Company will place existing equipment at an alternate customer site pursuant to an MPS arrangement, at one of the Company's service centers, or dispose of the equipment.
Leasing LEASING
Adoption of ASC Topic 842, Leases
In February 2016, the FASB issued ASC 842, Leases. The new guidance replaces the existing guidance in ASC 840, Leases. ASC 842 requires a dual approach for lessee accounting under which a lessee accounts for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases the lessee recognizes interest expense and amortization of the ROU asset, and for operating leases the lessee will recognize a straight-line total lease expense. In addition, ASC 842 changes the definition of a lease, which resulted in changes to the classification of certain service contracts with customers to lease arrangements. The Company adopted ASC 842 on January 1, 2019.
In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption. The Company elected, for its equipment asset classes, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Company's consolidated balance sheet.
As part of the transition, the Company completed a comprehensive review of its lease portfolio, including significant leases by geography and by asset type that were impacted by the new guidance, and enhanced its controls around leasing. The adoption of ASC 842 resulted in an increase to total assets and liabilities due to the recording of operating lease ROU assets of approximately $46.9 million and operating lease liabilities of approximately $53.7 million, as of January 1, 2019. Finance leases were not impacted by the adoption of ASC 842, as finance lease liabilities and the corresponding ROU assets were already recorded in the balance sheet under the previous guidance, ASC 840. The adoption did not materially impact the Company’s Consolidated Statements of Operations or Cash Flows.
Lessee Accounting
The Company determines whether an arrangement is a lease at contract inception. The Company's material lease contracts are generally for real estate or print equipment, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company’s leases that are classified as operating leases primarily consist of real estate leases. The Company’s real estate leases contain both lease and non-lease components, which are accounted for separately. The Company’s leases that are classified as finance leases primarily consist of print equipment. Certain print equipment leases have lease and non-lease components, which are accounted for as a single lease component as discussed above. Other than the election to treat the Company's fixed lease payment as a single lease component, the accounting for finance leases will remain unchanged under ASC 842.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and are reduced by any lease incentives received. The lease terms range from one to ten years, with renewal terms that can extend the lease term from 1 to 5 years. A portion of the Company’s real estate leases are generally subject to annual changes in the Consumer Price Index (CPI), which are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The tables below present financial information associated with the Company's leases as of, and the years ended, December 31, 2020 and December 31, 2019.
ClassificationDecember 31, 2020December 31, 2019
Assets
Operating lease assetsRight-of-use assets from operating leases$37,859 $41,238 
Finance lease assetsProperty and equipment85,205 85,914 
Less accumulated depreciation(50,550)(43,166)
Property and equipment, net34,655 42,748 
Total lease assets$72,514 $83,986 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$12,158 $11,060 
FinanceCurrent portion of long-term finance leases17,557 17,075 
Long-term
OperatingLong-term portion of operating lease liabilities33,561 37,260 
FinanceLong-term portion of finance leases24,679 29,082 
Total lease liabilities$87,955 $94,477 
ClassificationYear Ended
December 31, 2020December 31, 2019
Operating lease costCost of sales$14,341 $16,436 
Selling, general and administrative expenses3,601 3,381 
Total operating lease cost (1)(2)
$17,942 $19,817 
Finance lease cost
Amortization of leased assetsCost of sales$18,426 $18,314 
Selling, general and administrative expenses329 246 
Interest on lease liabilitiesInterest expense, net2,571 2,353 
Total finance lease cost21,326 20,913 
Total lease cost$39,268 $40,730 
(1) Includes variable lease costs and short-term lease costs of $2,774 and $340, respectively for the year ended December 31, 2020.
(2) Includes variable lease costs and short-term lease costs of $2,893 and $433, respectively for the year ended December 31, 2019.
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
December 31, 2020December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.05.5
Finance leases2.93.2
Weighted average discount rate
Operating leases5.8 %5.9 %
Finance leases4.9 %4.9 %
Other informationYear Ended December 31, 2020Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$12,842 $15,415 
Operating cash flows from finance leases$1,849 $2,373 
Financing cash flows from finance leases$14,935 $18,407 
Lessor Accounting
The Company concluded that certain of its contracts with customers contain leases under the new leasing standard and accordingly should be accounted for as operating leases upon adoption of ASC 842. Specifically, certain of the Company's MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are now accounted for as operating leases under ASC 842.
The Company's MPS arrangements consists of the placement, management, and optimization of print and imaging equipment in customers' offices, job sites, and other facilities under which the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge.” Accordingly, the fixed rate per unit charged to the customer covers the use of the equipment (i.e., the lease component), as well as the additional services performed by the Company as described above (i.e., the non-lease component). Certain of the Company's MPS contracts provide the customer the option to renew or terminate the agreement, which are considered when assessing the lease term. The Company elected the practical expedient to not separate certain lease and non-lease components related to its MPS arrangements, and accounts for the combined component under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842.
MPS revenue includes $72.9 million of rental income and $6.4 million of service income for the year ended December 31, 2020. MPS revenue includes $114.7 million of rental income and $8.6 million of service income for the year ended December 31, 2019. The Company's property and equipment, net of accumulated depreciation, includes approximately $35 million and $40 million of equipment subject to leases with customers under the Company's MPS arrangements for the years ended December 31, 2020 and December 31, 2019, respectively. Following termination of an MPS arrangement, the Company will place existing equipment at an alternate customer site pursuant to an MPS arrangement, at one of the Company's service centers, or dispose of the equipment.
v3.20.4
Income Taxes
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Income Taxes INCOME TAXES
The following table includes the consolidated income tax provision for federal, state, and foreign income taxes related to the Company’s total earnings before taxes for 2020 and 2019:
 
 Year Ended December 31,
 20202019
Current:
Federal$(45)$(45)
State59 187 
Foreign208 354 
222 496 
Deferred:
Federal2,089 3,680 
State330 1,606 
Foreign108 (58)
2,527 5,228 
Income tax provision$2,749 $5,724 
The Company's foreign earnings before taxes were $0.9 million and $0.7 million for 2020 and 2019, respectively.
The Company’s US earnings before taxes were $7.6 million and $7.9 million for 2020 and 2019, respectively.
The consolidated deferred tax assets and liabilities consist of the following:
 December 31,
 20202019
Deferred tax assets:
Financial statement accruals not currently deductible$2,113 $2,047 
Social security tax deferral699 — 
Accrued vacation678 849 
Deferred revenue, net42 84 
Fixed assets3,595 3,637 
Right of use operating lease liabilities12,154 12,025 
Goodwill and other identifiable intangibles4,521 7,297 
Stock-based compensation2,850 2,952 
Federal tax net operating loss carryforward16,718 16,914 
State tax net operating loss carryforward, net5,765 5,803 
Foreign tax net operating loss carryforward659 602 
Tax credits, net1,681 1,726 
Gross deferred tax assets51,475 53,936 
Less: valuation allowance(2,092)(2,254)
Net deferred tax assets$49,383 $51,682 
Deferred tax liabilities:
Goodwill$(22,394)$(21,705)
Right of use assets(9,728)(10,222)
Net deferred tax assets$17,261 $19,755 

A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
 
 Year Ended December 31,
 20202019
Statutory federal income tax rate21 %21 %
State taxes, net of federal benefit6 7 
Foreign taxes2 2 
Valuation allowance(2)1 
Non-deductible expenses and other1 2 
Section 162(m) limitation1 3 
Stock based compensation4 29 
Discrete items for federal, state and foreign taxes(2)1 
Global intangible low taxed income1 1 
Effective income tax rate32 %67 %

In accordance with ASC 740-10, Income Taxes, the Company evaluates the need for deferred tax asset valuation allowances based on a more likely than not standard. The ability to realize deferred tax assets depends on the ability to generate sufficient taxable income within the carryback or carryforward periods provided for in the tax law for each applicable tax jurisdiction. The Company considers the following possible sources of taxable income when assessing the realization of deferred tax assets:
•Future reversals of existing taxable temporary differences;
•Future taxable income exclusive of reversing temporary differences and carryforwards;
•Taxable income in prior carryback years; and
•Tax-planning strategies.
The assessment regarding whether a valuation allowance is required or should be adjusted also considers all available positive and negative evidence factors, including but not limited to:
•Nature, frequency, and severity of recent losses;
•Duration of statutory carryforward periods;
•Historical experience with tax attributes expiring unused; and
•Near- and medium-term financial outlook.
The Company utilizes a rolling three years of actual and current year anticipated results as the primary measure of cumulative income/losses in recent years, as adjusted for permanent differences. The evaluation of deferred tax assets requires judgment in assessing the likely future tax consequences of events that have been recognized in the Company's financial statements or tax returns and future profitability. The Company's accounting for deferred tax consequences represents its best estimate of those future events. Changes in the Company's current estimates, due to unanticipated events or otherwise, could have a material effect on its financial condition and results of operations. The Company has a $2.1 million valuation allowance against certain deferred tax assets as of December 31, 2020.
Based on the Company’s current assessment, the remaining net deferred tax assets as of December 31, 2020 are considered more likely than not to be realized. The valuation allowance of $2.1 million may be increased or reduced as conditions change or if the Company is unable to implement certain available tax planning strategies. The realization of the Company’s net deferred tax assets ultimately depends on future taxable income, reversals of existing taxable temporary differences or through a loss carry back.
As of December 31, 2020, the Company had approximately $79.6 million of consolidated federal, $93.2 million of state and $3.7 million of foreign net operating loss carryforwards available to offset future taxable income, respectively. Certain federal net operating loss carryforwards will begin to expire in varying amounts between 2031 and 2037. Certain state net operating loss carryforwards will begin to expire in varying amounts between 2020 and 2041. The foreign net operating loss carryforwards begin to expire in varying amounts beginning in 2022. As of December 31, 2020, the Company had approximately $2.0 million of foreign and certain state tax credit carryforwards which will begin to expire in varying amounts between 2023 and 2024.
The Company and some of its subsidiaries files income tax returns in the U.S. federal jurisdiction, and various states and foreign jurisdictions. With few exceptions, the Company is no longer subject to U.S. federal, state and local, or non-U.S. income tax examinations by tax authorities for years before 2016. There were no unrecognized tax benefits as of and for the years ended December 31, 2020 or 2019. The Company includes interest and penalties related to uncertain tax positions as a component of income tax expense. The Company does not anticipate any significant changes to unrecognized tax benefits over the next 12 months. During the years ended December 31, 2020 and 2019, no interest or penalties were required to be recognized related to unrecognized tax benefits.
v3.20.4
Employee Stock Purchase Plan and Stock Plan
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Employee Stock Purchase Plan and Stock Plan EMPLOYEE STOCK PURCHASE PLAN AND STOCK PLAN
Employee Stock Purchase Plan
Under the Company’s Employee Stock Purchase Plan (the “ESPP”) eligible employees may purchase up to a calendar year maximum per eligible employee of the lesser of (i) 2,500 shares of common stock, or (ii) a number of shares of common stock having an aggregate fair market value of $25 thousand as determined on the date of purchase at 85% of the fair market value of such shares of common stock on the applicable purchase date. The compensation expense in connection with the ESPP in 2020 and 2019, was $11 thousand and $23 thousand, respectively.

Employees purchased the following shares in the periods presented:
 
 Year Ended December 31,
 20202019
Shares purchased93 90 
Average price per share$0.72 $1.51 
Stock Plan
The Company's Stock Plan provides for the grant of incentive and non-statutory stock options, stock appreciation rights, restricted stock, restricted stock units, stock bonuses and other forms of awards granted or denominated in the Company's common stock or units of the Company's common stock, as well as cash bonus awards to employees, directors and consultants of the Company. The Company's Stock Plan authorizes the Company to issue up to 7.0 million shares of common stock. At December 31, 2020, 1.5 million shares remain available for issuance under the Stock Plan.
Stock options granted under the Company's Stock Plan generally expire no later than ten years from the date of grant. Options generally vest and become fully exercisable over a period of three to four years from date of award, except that options granted to non-employee directors may vest over a shorter time period. The exercise price of options must be equal to at least 100% of the fair market value of the Company’s common stock on the date of grant. The Company allows for cashless exercises of vested outstanding options.
During 2020 and 2019, the Company granted options to acquire a total of 535 thousand shares and 747 thousand shares, respectively, of the Company's common stock to certain key employees with an exercise price equal to the fair market value of the Company’s common stock on the date of grant. The granted stock options vest annually over three to four years from the grant date and expire 10 years after the date of grant.
The following is a further breakdown of the stock option activity under the Stock Plan:
SharesWeighted
Average
Exercise
Price		Weighted
Average
Contractual
Life
(In years)		Aggregate
Intrinsic
Value
(In thousands)
Outstanding at December 31, 20185,257 $4.95 
Granted747 $2.30 
Exercised— $— 
Forfeited/Canceled(1,097)$7.11 
Outstanding at December 31, 20194,907 $4.06 
Granted535 $1.27 
Exercised— $— 
Forfeited/Canceled(230)$4.31 
Outstanding at December 31, 20205,212 $3.77 4.87$126 
Vested or expected to vest at December 31, 20205,212 $3.77 4.87$126 
Exercisable at December 31, 20204,017 $4.33 3.83$6 
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (the difference between the closing stock price on December 31, 2020 and the exercise price, multiplied by the number of in-the-money options) that would have been received by the option holders had all the option holders exercised their options on December 31, 2020. This amount changes based on the fair market value of the common stock. There were no options exercised during the years ended 2020 and 2019.

A summary of the Company’s non-vested stock options as of December 31, 2020, and changes during the year then ended is as follows:
Weighted
Average Grant Date
Non-vested OptionsSharesFair Market Value per Share
Non-vested at December 31, 20191,246 $1.44 
Granted535 $0.60 
Vested(560)$1.62 
Forfeited/Canceled(26)$1.12 
Non-vested at December 31, 20201,195 $0.99 
The following table summarizes certain information concerning outstanding options at December 31, 2020:
 
Range of Exercise Price per ShareOptions Outstanding at
December 31, 2020
$1.14 – $2.70
3,012 
$3.65 – $4.75
828 
$5.37 – $7.19
916 
$8.66 – $9.09
456 
$1.14 – $9.09
5,212 
Restricted Stock
In 2020, the Company granted 35 thousand shares of restricted stock to each of the Company's four non-employee members of its board of directors at a price per share equal to the closing price of the Company's common stock on the date the restricted stock was granted. The restricted stock vests on the one-year anniversary of the grant date.
In 2019, the Company granted 450 thousand shares of restricted stock to certain key employees at a price per share equal to the closing price of the Company's common stock on the date the restricted stock was granted. The granted restricted stock vest
annually over three years from the grant date. In addition, the Company granted approximately 26 thousand shares of restricted stock to each of the Company's six non-employee members of its board of directors at a price per share equal to the closing price of the Company's common stock on the date the restricted stock was granted. The restricted stock vests on the one-year anniversary of the grant date.

A summary of the Company’s non-vested restricted stock as of December 31, 2020, and changes during the year then ended is as follows:
Weighted
Average Grant Date
Non-vested Restricted StockSharesFair Market Value per Share
Non-vested at December 31, 2019926 $2.69 
Granted140 $0.70 
Vested(517)$2.87 
Forfeited/Canceled— $— 
Non-vested at December 31, 2020549 $2.02 
The total fair value of restricted stock awards vested during the years ended December 31, 2020 and 2019 was $0.5 million and $1.0 million, respectively.
v3.20.4
Retirement Plans
 12 Months Ended
Dec. 31, 2020
Retirement Benefits [Abstract]  
Retirement Plans RETIREMENT PLANSThe Company sponsors a 401(k) Plan, which covers substantially all employees of the Company who have attained age 21. Under the Company’s 401(k) Plan, eligible employees may contribute up to 75% of their annual eligible compensation (or in the case of highly compensated employees, up to 6% of their annual eligible compensation), subject to contribution limitations imposed by the Internal Revenue Service. The Company matches 20% of an employee’s contributions, up to a total of 4% of that employee’s compensation. An independent third party administers the Company’s 401(k) Plan. The Company's total expense under these plans amounted to $0.3 million and $0.5 million annually during 2020 and 2019, respectively.
v3.20.4
Fair Value Measurements
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value Measurements FAIR VALUE MEASUREMENTS
In accordance with ASC 820, Fair Value Measurement, the Company has categorized its assets and liabilities that are measured at fair value into a three-level fair value hierarchy as set forth below. If the inputs used to measure fair value fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the fair value measurement. The three levels of the hierarchy are defined as follows:
Level 1-inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets.
Level 2-inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
Level 3-inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The following table summarizes the bases used to measure certain assets and liabilities at fair value on a nonrecurring basis in the consolidated financial statements as of and for the year ended December 31, 2020 and 2019:

Significant Other Unobservable Inputs
December 31, 2020December 31, 2019
Level 3Total LossesLevel 3Total Losses
Nonrecurring Fair Value Measure
Goodwill$121,051 $— $121,051 $— 
v3.20.4
Summary of Significant Accounting Policies (Policies)
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation
The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation.
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. The Company evaluates its estimates and assumptions on an ongoing basis and relies on historical experience and various other factors that it believes to be reasonable under the circumstances to determine such estimates. Actual results could differ from those estimates and such differences may be material to the Consolidated Financial Statements.
Risk And Uncertainties
Risk and Uncertainties
The Company generates the majority of its revenue from sales of services and products to customers in the architectural, engineering, construction and building owner/operator (AEC/O) industry. As a result, the Company’s operating results and financial condition can be significantly affected by economic factors that influence the AEC/O industry, such as non-residential construction spending, GDP growth, interest rates, unemployment rates, and office vacancy rates, all of which have been amplified due to the COVID-19 pandemic. Reduced activity (relative to historic levels) in the AEC/O industry would diminish demand for some of ARC’s services and products, and would therefore negatively affect revenues and have a material adverse effect on its business, operating results and financial condition.
As part of the Company’s growth strategy, ARC intends to continue to offer and grow a variety of service offerings, some of which are relatively new to the Company. The success of the Company’s efforts will be affected by its ability to acquire new customers for the Company’s new service offerings, as well as to sell the new service offerings to existing customers. The Company’s inability to successfully market and execute these relatively new service offerings could significantly affect its business and reduce its long term revenue, resulting in an adverse effect on its results of operations and financial condition.
Cash Equivalents
Cash Equivalents
Cash equivalents include demand deposits and short-term investments with a maturity of three months or less when purchased.
Concentrations of Credit Risk and Significant Vendors
Concentrations of Credit Risk and Significant Vendors
Concentrations of credit risk with respect to trade receivables are limited due to a large, diverse customer base. No individual customer represented more than 2% of net sales during 2020 and 2019.
The Company has geographic concentration risk as sales in California, as a percent of total sales, were approximately 32% and 34% for 2020 and 2019, respectively.
The Company contracts with various suppliers. Although there are a limited number of suppliers that could supply the Company’s inventory, management believes any shortfalls from existing suppliers would be absorbed from other suppliers on comparable terms. However, a change in suppliers could cause a delay in sales and adversely affect results.
Allowance for Doubtful Accounts Allowance for Doubtful AccountsThe Company performs periodic credit evaluations of the financial condition of its customers, monitors collections and payments from customers, and generally does not require collateral. The Company provides for the possible inability to collect accounts receivable by recording an allowance for doubtful accounts. The Company writes off an account when it is considered uncollectible. The Company estimates the allowance for doubtful accounts based on historical experience, aging of accounts receivable, and information regarding the credit worthiness of its customers. Additionally, the Company provides an allowance for returns and discounts based on historical experience.
Inventories InventoriesInventories are valued at the lower of cost (determined on a first-in, first-out basis; or average cost) or net realizable value. Inventories primarily consist of reprographics materials for use and resale, and equipment for resale. On an ongoing basis, inventories are reviewed and adjusted for estimated obsolescence or unmarketable inventories to reflect the lower of cost or net realizable value. Charges to increase inventory reserves are recorded as an increase in cost of sales.
Income Taxes
Income Taxes
Deferred tax assets and liabilities reflect temporary differences between the amount of assets and liabilities for financial and tax reporting purposes. Such amounts are adjusted, as appropriate, to reflect changes in tax rates expected to be in effect when the temporary differences reverse. A valuation allowance is recorded to reduce the Company's deferred tax assets to the amount that is more likely than not to be realized. Changes in tax laws or accounting standards and methods may affect recorded deferred taxes in future periods.

When establishing a valuation allowance, the Company considers future sources of taxable income such as future reversals of existing taxable temporary differences, future taxable income exclusive of reversing temporary differences and carryforwards and tax planning strategies. A tax planning strategy is an action that: is prudent and feasible; an enterprise ordinarily might not take, but would take to prevent an operating loss or tax credit carryforward from expiring unused; and would result in realization of deferred tax assets. In the event the Company determines that its deferred tax assets, more likely than not, will not be realized in the future, the valuation adjustment to the deferred tax assets will be charged to earnings in the period in which the Company makes such a determination. The Company has a $2.1 million valuation allowance against certain deferred tax assets as of December 31, 2020.
In future quarters the Company will continue to evaluate its historical results for the preceding twelve quarters and its future projections to determine whether the Company will generate sufficient taxable income to utilize its deferred tax assets, and whether a valuation allowance is required.
The Company calculates its current and deferred tax provision based on estimates and assumptions that could differ from the actual results reflected in income tax returns filed in subsequent years. Adjustments based on filed returns are recorded when identified.

Income taxes have not been provided on certain undistributed earnings of foreign subsidiaries because such earnings are considered to be permanently reinvested.
The amount of taxable income or loss the Company reports to the various tax jurisdictions is subject to ongoing audits by federal, state and foreign tax authorities. The Company's estimate of the potential outcome of any uncertain tax issue is subject to management’s assessment of relevant risks, facts, and circumstances existing at that time. The Company uses a more-likely-than-not threshold for financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. The Company records a liability for the difference between the benefit recognized and measured and tax position taken or expected to be taken on its tax return. To the extent that the Company's assessment of such tax positions changes, the change in estimate is recorded in the period in which the determination is made. The Company reports tax-related interest and penalties as a component of income tax expense.
Property and Equipment
Property and Equipment, net
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, as follows:
 
Buildings  
10-20 years
Leasehold improvements  
10-20 years or lease term, if shorter
Machinery and equipment  
3-7 years
Furniture and fixtures  
3-7 years
Assets acquired under capital lease arrangements are included in machinery and equipment, are recorded at the present value of the minimum lease payments, and are depreciated using the straight-line method over the life of the asset or term of the lease, whichever is shorter. Expenses for repairs and maintenance are charged to expense as incurred, while renewals and betterments are capitalized. Gains or losses on the sale or disposal of property and equipment are reflected in operating income.
The Company accounts for software costs developed for internal use in accordance with ASC 350-40, Intangibles – Goodwill and Other, which requires companies to capitalize certain qualifying costs incurred during the application development stage of the related software development project. The primary use of this software is for internal use and, accordingly, such capitalized software development costs are depreciated on a straight-line basis over the economic lives of the related products not to exceed three years.
Software to be sold, leased, or otherwise marketed
Software development costs for products intended to be sold, leased or otherwise marketed are expensed as incurred until technological feasibility has been established, at which time such costs are capitalized until the product is available for general release to customers. Technological feasibility is established when a product design and working model have been completed and the completeness of the working model and its consistency with the product design have been confirmed by testing. To date, the establishment of technological feasibility of the Company’s products and general release of such software have substantially coincided.
Software development costs for software to be sold, leased, or otherwise marketed are expensed as incurred until the establishment of technological feasibility, at which time those costs are capitalized until the product is available for general release to customers and amortized over the estimated life of the product. Technological feasibility is established upon the completion of a working prototype that has been certified as having no critical bugs and is a release candidate. To date, costs and time incurred between the establishment of technological feasibility and product release have not been material, and all software development costs have been charged to research and development expense in our consolidated statements of comprehensive income (loss).
Impairment of Long-Lived Assets
Impairment of Long-Lived Assets
The Company periodically assesses potential impairments of its long-lived assets in accordance with the provisions of ASC 360, Accounting for the Impairment or Disposal of Long-lived Assets. An impairment review is performed whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. The Company groups its assets at the lowest level for which identifiable cash flows are largely independent of the cash flows of the other assets and liabilities. The Company has determined that the lowest level for which identifiable cash flows are available is the regional level, which is the operating segment level.
Factors considered by the Company include, but are not limited to, significant underperformance relative to historical or projected operating results; significant changes in the manner of use of the acquired assets or the strategy for the overall business; and significant negative industry or economic trends. When the carrying value of a long-lived asset may not be recoverable based upon the existence of one or more of the above indicators of impairment, the Company estimates the future undiscounted cash flows expected to result from the use of the asset and its eventual disposition. If the sum of the expected future undiscounted cash flows and eventual disposition is less than the carrying amount of the asset, the Company recognizes an impairment loss. An impairment loss is reflected as the amount by which the carrying amount of the asset exceeds the fair value of the asset, based on the fair value if available, or discounted cash flows, if fair value is not available.
Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
In accordance with ASC 350, Intangibles - Goodwill and Other, the Company assesses goodwill for impairment annually as of September 30, and more frequently if events and circumstances indicate that goodwill might be impaired.
Goodwill impairment testing is performed at the reporting unit level. Goodwill is assigned to reporting units at the date the goodwill is initially recorded. Once goodwill has been assigned to reporting units, it no longer retains its association with a particular acquisition, and all of the activities within a reporting unit, whether acquired or internally generated, are available to support the value of the goodwill.
In 2017, the Company elected to early-adopt ASU 2017-04 which simplifies subsequent goodwill measurement by eliminating step two from the goodwill impairment test.
The Company determines the fair value of its reporting units using an income approach. Under the income approach, the Company determined fair value based on estimated discounted future cash flows of each reporting unit. Determining the fair value of a reporting unit is judgmental in nature and requires the use of significant estimates and assumptions, including revenue growth rates and EBITDA margins, discount rates and future market conditions, among others. The level of judgement and estimation is inherently higher in the current environment considering the uncertainty created by the COVID-19 pandemic. The Company has evaluated numerous factors disrupting its business and made significant assumptions which include the severity and duration of the business disruption, the timing and degree of economic recovery and the combined effect of these assumptions on the Company's future operating results and cash flows.
Other intangible assets that have finite lives are amortized over their useful lives. Customer relationships are amortized using the accelerated method, based on customer attrition rates, over their estimated useful lives of 13 (weighted average) years.
Deferred Financing Costs Deferred Financing CostsDirect costs incurred in connection with debt agreements are recorded as incurred and amortized based on the effective interest method for the Company's borrowings under its credit agreement ("Credit Agreement").
Fair Values of Financial Instruments
Fair Values of Financial Instruments
The following methods and assumptions were used by the Company in estimating the fair value of its financial instruments for disclosure purposes:
Cash equivalents: Cash equivalents are time deposits with maturity of three months or less when purchased, which are highly liquid and readily convertible to cash. Cash equivalents reported in the Company’s Consolidated Balance Sheet were $13.2 million and $9.3 million as of December 31, 2020 and 2019, respectively, and are carried at cost and approximate fair value due to the relatively short period to maturity of these instruments.
Short- and long-term debt and finance leases: The carrying amount of the Company’s finance leases reported in the Consolidated Balance Sheets approximates fair value based on the Company’s current incremental borrowing rate for similar types of borrowing arrangements.
Insurance Liability Insurance Liability
The Company maintains a high deductible insurance policy for a significant portion of its risks and associated liabilities with respect to workers’ compensation. The Company’s deductible is $250 thousand per individual. The accrued liabilities associated with this program are based on the Company’s estimate of the ultimate costs to settle known claims, as well as claims incurred but not yet reported to the Company, as of the balance sheet date. The Company’s estimated liability is not discounted and is based upon an actuarial report obtained from a third party. The actuarial report uses information provided by the Company’s insurance brokers and insurers, combined with the Company’s judgments regarding a number of assumptions and factors, including the frequency and severity of claims, claims development history, case jurisdiction, applicable legislation, and the Company’s claims settlement practices.
The Company is self-insured for healthcare benefits provided to certain employees in the United States, with a stop-loss at $250 thousand per individual. Liabilities associated with the risks that are retained by the Company are estimated, in part, by considering historical claims experience, demographic factors, severity factors and other actuarial assumptions. The Company’s results could be materially affected by claims and other expenses related to such plans if future occurrences and claims differ from these assumptions and historical trends. Other employees are covered by other offered healthcare benefits.
Commitments and Contingencies
Commitments and Contingencies
In the normal course of business, the Company estimates potential future loss accruals related to legal, workers’ compensation, healthcare, tax and other contingencies. These accruals require management’s judgment on the outcome of various events based on the best available information. However, due to changes in facts and circumstances, the ultimate outcomes could differ from management’s estimates.
Revenue Recognition
Revenue Recognition
Revenue is recognized when control of the promised goods or services is transferred to the Company's customers, in an amount that reflects the consideration that the Company is expected to be entitled to in exchange for those goods or services. The Company applied practical expedients related to unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice for services performed.
CDIM consists of professional services and software services to (i) re-produce and distribute large-format and small-format documents in either black & white or color (“Ordered Prints”) and (ii) specialized graphic color printing. Substantially, all of the Company’s revenue from CDIM comes from professional services to re-produce Ordered Prints. Sales of Ordered Prints are initiated through a customer order or quote and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligation under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the re-produced Ordered Prints. Transfer of control occurs at a specific point-in-time, when the Ordered Prints are delivered to the customer’s site or handed to the customer for walk in orders. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue.
MPS consists of placement, management, and optimization of print and imaging equipment in the customers' offices, job sites, and other facilities. MPS relieves the Company’s customers of the burden of purchasing print equipment and related supplies and maintaining print devices and print networks, and shifts their costs to a “per-use” basis. MPS is supported by the Company's hosted proprietary technology, Abacus®, which allows customers to capture, control, manage, print, and account for
their documents. Under its MPS contracts, the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge”. MPS sales are driven by the ongoing print needs of the Company’s customers at their facilities. Upon the issuance of ASC 842, Leases, the Company concluded that certain of its MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are accounted for as operating leases under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842. See Note 7, Leasing, for additional information.
AIM, combines software and professional services to facilitate the capture, management, access and retrieval of documents and information that have been produced in the past. AIM includes the Company's hosted SKYSITE ® software to organize, search and retrieve documents, as well as the provision of services that include the capture and conversion of hardcopy and electronic documents into digital files (“Scanned Documents”), and their cloud-based storage and maintenance. Sales of AIM professional services, which represent substantially all revenue for AIM, are initiated through a customer order or proposal and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligation under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the digital files. Transfer of control occurs at a specific point-in-time, when the Scanned Documents are delivered to the customer either through SKYSITE or through electronic media. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue.

Equipment and Supplies sales consist of reselling printing, imaging, and related equipment (“Goods”) to customers primarily in architectural, engineering and construction firms. Sales of Equipment and Supplies are initiated through a customer order and are governed by established terms and conditions agreed upon at the onset of the customer relationship. Revenue is recognized when the performance obligations under the terms of a contract with a customer are satisfied; generally, this occurs with the transfer of control of the Goods. Transfer of control occurs at a specific point-in-time, when the Goods are delivered to the customer’s site. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Taxes collected concurrent with revenue-producing activities are excluded from revenue. The Company has experienced minimal customer returns or refunds and does not offer a warranty on equipment that it is reselling.
The Company has established contractual pricing for certain large national customer accounts (“Global Solutions”). These contracts generally establish uniform pricing at all operating segments for Global Solutions. Revenues earned from the Company’s Global Solutions are recognized in the same manner as non-Global Solutions revenues.
Comprehensive Income (Loss)
Comprehensive Income (Loss)
The Company’s comprehensive income (loss) includes foreign currency translation adjustments, net of taxes.
Asset and liability accounts of international operations are translated into the Company’s functional currency, U.S. dollars, at current rates. Revenues and expenses are translated at the average currency rate for the fiscal year.
Segment and Geographic Reporting
Segment and Geographic Reporting
The provisions of ASC 280, Segment Reporting, require public companies to report financial and descriptive information about their reportable operating segments. The Company identifies operating segments based on the various business activities that earn revenue and incur expense and whose operating results are reviewed by the Company's Chief Executive Officer, who is the Company's chief operating decision maker. Because its operating segments have similar products and services, classes of customers, production processes, distribution methods and economic characteristics, the Company operates as a single reportable segment.
The Company recognizes revenues in geographic areas based on the location to which the product was shipped or services have been rendered. See table below for revenues and property and equipment, net, attributable to the Company’s U.S. operations and foreign operations.
Advertising and Shipping and Handling Costs
Advertising and Shipping and Handling Costs
Advertising costs are expensed as incurred and approximated $0.7 million and $1.8 million during 2020 and 2019, respectively. Shipping and handling costs incurred by the Company are included in cost of sales.
Stock-Based Compensation Stock-Based CompensationThe Company applies the Black-Scholes valuation model in determining the fair value of share-based payments to employees, which is then amortized on a straight-line basis over the requisite service period.
Research and Development Expenses Research and Development ExpensesResearch and development activities relate to costs associated with the design and testing of new technology or enhancements and maintenance to existing technology. Such costs are expensed as incurred are primarily recorded to cost of sales.
Noncontrolling Interest
Noncontrolling Interest
The Company accounted for its investment in UNIS Document Solutions Co. Ltd., (“UDS”) under the purchase method of accounting, in accordance with ASC 805, Business Combinations. UDS has been consolidated in the Company’s financial
statements from the date of acquisition.
Sales Taxes
Sales Taxes
The Company bills sales taxes, as applicable, to its customers. The Company acts as an agent and bills, collects, and remits the sales tax to the proper government jurisdiction. The sales taxes are accounted for on a net basis, and therefore are not included as part of the Company’s revenue.
Earnings Per Share Earnings Per ShareThe Company accounts for earnings per share in accordance with ASC 260, Earnings Per Share. Basic earnings per share is computed by dividing net income attributable to ARC by the weighted-average number of common shares outstanding for the period. Diluted earnings per common share is computed similarly to basic earnings per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if common shares subject to outstanding options and acquisition rights had been issued and if the additional common shares were dilutive. Common share equivalents are excluded from the computation if their effect is anti-dilutive.
Recently Adopted Accounting Pronouncements and Recent Accounting Pronouncements Not Yet Adopted
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued Accounting Standards Update No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 will be effective for interim and annual periods beginning after December 15, 2020. Early adoption is permitted. The Company elected to early adopt ASU 2019-12 on January 1, 2020. The adoption of ASU 2019-12 did not have a material impact on the Company's consolidated financial statements.

Recent Accounting Pronouncements Not Yet Adopted
In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Loss (Topic 326) (“ASU 2016-13”), which updates the guidance on recognition and measurement of credit losses for financial assets. The new requirements, known as the current expected credit loss model ("CECL") will require entities to adopt an impairment model based on expected losses rather than incurred losses. ASU 2016-13 must be adopted on a modified-retrospective approach. This update was effective for fiscal years beginning after December 15, 2020 including interim periods within those fiscal years. In October 2019, the FASB approved an extension for all non-SEC filers, including small reporting companies, to extend the effective date to fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Therefore, the effective date for this update will be January 1, 2023. The Company is currently evaluating the potential impact of the adoption of the new standard on its consolidated statements of financial condition and results of operations.
Adoption of ASC Topic 842, Leases
In February 2016, the FASB issued ASC 842, Leases. The new guidance replaces the existing guidance in ASC 840, Leases. ASC 842 requires a dual approach for lessee accounting under which a lessee accounts for leases as finance leases or operating leases. Both finance leases and operating leases result in the lessee recognizing a ROU asset and a corresponding lease liability. For finance leases the lessee recognizes interest expense and amortization of the ROU asset, and for operating leases the lessee will recognize a straight-line total lease expense. In addition, ASC 842 changes the definition of a lease, which resulted in changes to the classification of certain service contracts with customers to lease arrangements. The Company adopted ASC 842 on January 1, 2019.
In July 2018, the FASB issued ASU 2018-11, Leases (Topic 842): Targeted Improvements, which provided entities the option to use the effective date as the date of initial application on transition to the new guidance. The Company elected this transition method, and as a result, the Company did not adjust comparative information for prior periods. The Company elected certain additional practical expedients permitted by the new guidance allowing the Company to carry forward historical accounting related to lease identification and classification for existing leases upon adoption. The Company elected, for its equipment asset classes, the practical expedient that allows lessees to treat the lease and non-lease components of leases as a single lease component. Leases with an initial term of 12 months or less are not recorded on the Company's consolidated balance sheet.
Lessee Accounting
Lessee Accounting
The Company determines whether an arrangement is a lease at contract inception. The Company's material lease contracts are generally for real estate or print equipment, and the determination of whether such contracts contain leases generally does not require significant estimates or judgments. The Company’s leases that are classified as operating leases primarily consist of real estate leases. The Company’s real estate leases contain both lease and non-lease components, which are accounted for separately. The Company’s leases that are classified as finance leases primarily consist of print equipment. Certain print equipment leases have lease and non-lease components, which are accounted for as a single lease component as discussed above. Other than the election to treat the Company's fixed lease payment as a single lease component, the accounting for finance leases will remain unchanged under ASC 842.
Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most of the Company's operating leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU assets also include any lease payments made and are reduced by any lease incentives received. The lease terms range from one to ten years, with renewal terms that can extend the lease term from 1 to 5 years. A portion of the Company’s real estate leases are generally subject to annual changes in the Consumer Price Index (CPI), which are treated as variable lease payments and recognized in the period in which the obligation for those payments was incurred. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Lessor Accounting
Lessor Accounting
The Company concluded that certain of its contracts with customers contain leases under the new leasing standard and accordingly should be accounted for as operating leases upon adoption of ASC 842. Specifically, certain of the Company's MPS arrangements, which had previously been accounted for as service revenue under ASC 606, Revenue from Contracts with Customers, are now accounted for as operating leases under ASC 842.
The Company's MPS arrangements consists of the placement, management, and optimization of print and imaging equipment in customers' offices, job sites, and other facilities under which the Company is paid a fixed rate per unit for each print produced (per-use), often referred to as a “click charge.” Accordingly, the fixed rate per unit charged to the customer covers the use of the equipment (i.e., the lease component), as well as the additional services performed by the Company as described above (i.e., the non-lease component). Certain of the Company's MPS contracts provide the customer the option to renew or terminate the agreement, which are considered when assessing the lease term. The Company elected the practical expedient to not separate certain lease and non-lease components related to its MPS arrangements, and accounts for the combined component under ASC 842. The pattern of revenue recognition for the Company's MPS revenue has remained substantially unchanged following the adoption of ASC 842.
v3.20.4
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2020
Accounting Policies [Abstract]  
Schedule of Allowance for Doubtful Accounts The allowance for doubtful accounts activity was as follows:
Balance at
Beginning
of Period		Charges to
Cost and
Expenses
Deductions (1)
Balance at
End of
Period
Year ended December 31, 2020
Allowance for accounts receivable$2,099 $932 $(674)$2,357 
Year ended December 31, 2019
Allowance for accounts receivable$2,016 $590 $(507)$2,099 
 (1) Deductions represent uncollectible accounts written-off net of recoveries.
Schedule of Useful Lives of Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, as follows:
 
Buildings  
10-20 years
Leasehold improvements  
10-20 years or lease term, if shorter
Machinery and equipment  
3-7 years
Furniture and fixtures  
3-7 years
Property and equipment, net consist of the following:
 December 31,
 20202019
Machinery and equipment$252,613 $256,249 
Buildings and leasehold improvements22,397 22,050 
Furniture and fixtures2,654 2,884 
277,664 281,183 
Less accumulated depreciation(219,834)(210,849)
$57,830 $70,334 
Schedule of Net Sales of Principal Services and Products
Net sales of the Company’s principal services and products were as follows:
 
 Year Ended December 31,
 20202019
Service Sales
CDIM$175,532 $205,536 
MPS79,321 123,279 
AIM12,306 14,097 
Total services sales267,159 342,912 
Equipment and Supplies Sales22,308 39,503 
Total net sales$289,467 $382,415 
Schedule of Segment and Geographic Reporting See table below for revenues and property and equipment, net, attributable to the Company’s U.S. operations and foreign operations. 
Year Ended December 31,
 20202019
U.S.Foreign
Countries		TotalU.S.Foreign
Countries		Total
Revenues from external customers$253,179 $36,288 $289,467 $329,372 $53,043 $382,415 
Property and equipment, net$51,058 $6,772 $57,830 $63,458 $6,876 $70,334 
Schedule of Weighted Average Assumptions for Stock-Based Compensation The fair value of each option grant was estimated on the date of grant using the Black-Scholes option-pricing model using the following weighted average assumptions for 2020 and 2019: 
Year Ended December 31,
 20202019
Weighted average assumptions used:
Risk free interest rate1.5 %2.5 %
Expected volatility52.2 %54.8 %
Expected dividend yield1.2 %— %
Schedule of Basic and Diluted Earnings Per Share
Basic and diluted weighted average common shares outstanding were calculated as follows for 2020 and 2019:
 
 Year Ended December 31,
 20202019
Weighted average common shares outstanding during the period — basic42,925 44,997 
Effect of dilutive stock awards96 86 
Weighted average common shares outstanding during the period — diluted43,021 45,083 
v3.20.4
Goodwill and Other Intangibles (Tables)
 12 Months Ended
Dec. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]  
Schedule of Goodwill
The carrying amount of goodwill from January 1, 2019 through December 31, 2020 is summarized as follows:
Gross
Goodwill		Accumulated
Impairment
Loss		Net
Carrying
Amount
January 1, 2019$405,558 $284,507 $121,051 
December 31, 2019$405,558 $284,507 $121,051 
December 31, 2020$405,558 $284,507 $121,051 
Schedule of Other Intangible Assets Resulting from Business Acquisitions
The following table sets forth the Company’s other intangible assets resulting from business acquisitions as of December 31, 2020 and 2019 which continue to be amortized:
 
 December 31, 2020December 31, 2019
 Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount		Gross
Carrying
Amount		Accumulated
Amortization		Net
Carrying
Amount
Amortizable other intangible assets
Customer relationships$99,425 $99,191 $234 $99,127 $97,430 $1,697 
Trade names and trademarks20,325 20,044 281 20,279 19,980 299 
$119,750 $119,235 $515 $119,406 $117,410 $1,996 
Schedule of Estimated Future Amortization Expense
Estimated future amortization expense of other intangible assets for each of the next five fiscal years and thereafter are as follows:
 
2021$179 
2022102 
202344 
202442 
202538 
Thereafter110 
$515 
v3.20.4
Property and Equipment, Net (Tables)
 12 Months Ended
Dec. 31, 2020
Property, Plant and Equipment [Abstract]  
Schedule of Property and Equipment
Property and equipment are stated at cost and are depreciated using the straight-line method over their estimated useful lives, as follows:
 
Buildings  
10-20 years
Leasehold improvements  
10-20 years or lease term, if shorter
Machinery and equipment  
3-7 years
Furniture and fixtures  
3-7 years
Property and equipment, net consist of the following:
 December 31,
 20202019
Machinery and equipment$252,613 $256,249 
Buildings and leasehold improvements22,397 22,050 
Furniture and fixtures2,654 2,884 
277,664 281,183 
Less accumulated depreciation(219,834)(210,849)
$57,830 $70,334 
v3.20.4
Long-Term Debt (Tables)
 12 Months Ended
Dec. 31, 2020
Debt Disclosure [Abstract]  
Schedule of Long-Term Debt
Long-term debt consists of the following:
 
December 31,
20202019
Revolving Loans; 2.2% and 3.6% interest rate at December 31, 2020 and 2019
55,000 60,000 
Various finance leases; weighted average interest rate of 4.9% at December 31, 2020 and 2019; principal and interest payable monthly through September 2026
42,236 46,157 
97,236 106,157 
Less current portion(17,557)(17,075)
$79,679 $89,082 
v3.20.4
Leasing (Tables)
 12 Months Ended
Dec. 31, 2020
Leases [Abstract]  
Schedule of Operating and Financing Lease Components and Classification The tables below present financial information associated with the Company's leases as of, and the years ended, December 31, 2020 and December 31, 2019.
ClassificationDecember 31, 2020December 31, 2019
Assets
Operating lease assetsRight-of-use assets from operating leases$37,859 $41,238 
Finance lease assetsProperty and equipment85,205 85,914 
Less accumulated depreciation(50,550)(43,166)
Property and equipment, net34,655 42,748 
Total lease assets$72,514 $83,986 
Liabilities
Current
OperatingCurrent portion of operating lease liabilities$12,158 $11,060 
FinanceCurrent portion of long-term finance leases17,557 17,075 
Long-term
OperatingLong-term portion of operating lease liabilities33,561 37,260 
FinanceLong-term portion of finance leases24,679 29,082 
Total lease liabilities$87,955 $94,477 
Schedule of Lease Costs and Supplemental Costs
ClassificationYear Ended
December 31, 2020December 31, 2019
Operating lease costCost of sales$14,341 $16,436 
Selling, general and administrative expenses3,601 3,381 
Total operating lease cost (1)(2)
$17,942 $19,817 
Finance lease cost
Amortization of leased assetsCost of sales$18,426 $18,314 
Selling, general and administrative expenses329 246 
Interest on lease liabilitiesInterest expense, net2,571 2,353 
Total finance lease cost21,326 20,913 
Total lease cost$39,268 $40,730 
(1) Includes variable lease costs and short-term lease costs of $2,774 and $340, respectively for the year ended December 31, 2020.
(2) Includes variable lease costs and short-term lease costs of $2,893 and $433, respectively for the year ended December 31, 2019.
December 31, 2020December 31, 2019
Weighted average remaining lease term (years)
Operating leases5.05.5
Finance leases2.93.2
Weighted average discount rate
Operating leases5.8 %5.9 %
Finance leases4.9 %4.9 %
Other informationYear Ended December 31, 2020Year Ended December 31, 2019
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$12,842 $15,415 
Operating cash flows from finance leases$1,849 $2,373 
Financing cash flows from finance leases$14,935 $18,407 
Schedule of Operating Lease Liability Maturity
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Schedule of Financing Lease Liability Maturity
Maturity of lease liabilities (as of December 31, 2020)
Operating Leases(1) (2)
Finance Leases(3)
2021$14,338 $19,187 
202210,793 13,104 
20238,812 8,277 
20246,312 3,875 
20254,784 684 
Thereafter7,588 7 
Total52,627 45,134 
Less amount representing interest6,908 2,898 
Present value of lease liability$45,719 $42,236 
(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2020. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2020. In the table above, annual rental payments of $0.5 million for related parties are included in 2021 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
Maturity of lease liabilities (as of December 31, 2019)
Operating Leases(1) (2)
Finance Leases(3)
2020$15,247 $19,421 
202112,709 15,183 
202210,797 9,784 
20238,418 5,229 
20245,709 1,777 
Thereafter11,970 65 
Total64,850 51,459 
Less amount representing interest16,530 5,302 
Present value of lease liability$48,320 $46,157 

(1) Reflects payments for non-cancelable operating leases with initial terms of one year or more as of December 31, 2019. The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.

(2) The Company leased several of its facilities under lease agreements with entities owned by certain of its current and former executive officers which expire through December 2023. The rental payments on these facilities amounted to $0.5 million during 2019. In the table above, annual rental payments of $0.5 million for related parties are included in 2020 through 2023.

(3) The table above does not include any legally binding minimum lease payments for leases signed but not yet commenced, and such leases are not material in the aggregate.
v3.20.4
Income Taxes (Tables)
 12 Months Ended
Dec. 31, 2020
Income Tax Disclosure [Abstract]  
Schedule of Income Tax Provision
The following table includes the consolidated income tax provision for federal, state, and foreign income taxes related to the Company’s total earnings before taxes for 2020 and 2019:
 
 Year Ended December 31,
 20202019
Current:
Federal$(45)$(45)
State59 187 
Foreign208 354 
222 496 
Deferred:
Federal2,089 3,680 
State330 1,606 
Foreign108 (58)
2,527 5,228 
Income tax provision$2,749 $5,724 
Schedule of Deferred Tax Assets and Liabilities
The consolidated deferred tax assets and liabilities consist of the following:
 December 31,
 20202019
Deferred tax assets:
Financial statement accruals not currently deductible$2,113 $2,047 
Social security tax deferral699 — 
Accrued vacation678 849 
Deferred revenue, net42 84 
Fixed assets3,595 3,637 
Right of use operating lease liabilities12,154 12,025 
Goodwill and other identifiable intangibles4,521 7,297 
Stock-based compensation2,850 2,952 
Federal tax net operating loss carryforward16,718 16,914 
State tax net operating loss carryforward, net5,765 5,803 
Foreign tax net operating loss carryforward659 602 
Tax credits, net1,681 1,726 
Gross deferred tax assets51,475 53,936 
Less: valuation allowance(2,092)(2,254)
Net deferred tax assets$49,383 $51,682 
Deferred tax liabilities:
Goodwill$(22,394)$(21,705)
Right of use assets(9,728)(10,222)
Net deferred tax assets$17,261 $19,755 
Schedule of Effective Income Tax Rate Reconciliation
A reconciliation of the statutory federal income tax rate to the Company’s effective tax rate is as follows:
 
 Year Ended December 31,
 20202019
Statutory federal income tax rate21 %21 %
State taxes, net of federal benefit6 7 
Foreign taxes2 2 
Valuation allowance(2)1 
Non-deductible expenses and other1 2 
Section 162(m) limitation1 3 
Stock based compensation4 29 
Discrete items for federal, state and foreign taxes(2)1 
Global intangible low taxed income1 1 
Effective income tax rate32 %67 %
v3.20.4
Employee Stock Purchase Plan and Stock Plan (Tables)
 12 Months Ended
Dec. 31, 2020
Share-based Payment Arrangement [Abstract]  
Schedule of Employee Share Purchases
Employees purchased the following shares in the periods presented:
 
 Year Ended December 31,
 20202019
Shares purchased93 90 
Average price per share$0.72 $1.51 
Schedule of Stock Option Plan Activity
The following is a further breakdown of the stock option activity under the Stock Plan:
SharesWeighted
Average
Exercise
Price		Weighted
Average
Contractual
Life
(In years)		Aggregate
Intrinsic
Value
(In thousands)
Outstanding at December 31, 20185,257 $4.95 
Granted747 $2.30 
Exercised— $— 
Forfeited/Canceled(1,097)$7.11 
Outstanding at December 31, 20194,907 $4.06 
Granted535 $1.27 
Exercised— $— 
Forfeited/Canceled(230)$4.31 
Outstanding at December 31, 20205,212 $3.77 4.87$126 
Vested or expected to vest at December 31, 20205,212 $3.77 4.87$126 
Exercisable at December 31, 20204,017 $4.33 3.83$6 
Schedule of Non-vested Stock Options
A summary of the Company’s non-vested stock options as of December 31, 2020, and changes during the year then ended is as follows:
Weighted
Average Grant Date
Non-vested OptionsSharesFair Market Value per Share
Non-vested at December 31, 20191,246 $1.44 
Granted535 $0.60 
Vested(560)$1.62 
Forfeited/Canceled(26)$1.12 
Non-vested at December 31, 20201,195 $0.99 
Schedule of Range of Exercise Price for Options Outstanding
The following table summarizes certain information concerning outstanding options at December 31, 2020:
 
Range of Exercise Price per ShareOptions Outstanding at
December 31, 2020
$1.14 – $2.70
3,012 
$3.65 – $4.75
828 
$5.37 – $7.19
916 
$8.66 – $9.09
456 
$1.14 – $9.09
5,212 
Schedule of Nonvested Restricted Stock Options
A summary of the Company’s non-vested restricted stock as of December 31, 2020, and changes during the year then ended is as follows:
Weighted
Average Grant Date
Non-vested Restricted StockSharesFair Market Value per Share
Non-vested at December 31, 2019926 $2.69 
Granted140 $0.70 
Vested(517)$2.87 
Forfeited/Canceled— $— 
Non-vested at December 31, 2020549 $2.02 
v3.20.4
Fair Value Measurements (Tables)
 12 Months Ended
Dec. 31, 2020
Fair Value Disclosures [Abstract]  
Fair Value, Assets Measured on Recurring and Nonrecurring Basis
The following table summarizes the bases used to measure certain assets and liabilities at fair value on a nonrecurring basis in the consolidated financial statements as of and for the year ended December 31, 2020 and 2019:

Significant Other Unobservable Inputs
December 31, 2020December 31, 2019
Level 3Total LossesLevel 3Total Losses
Nonrecurring Fair Value Measure
Goodwill$121,051 $— $121,051 $— 
v3.20.4
Summary of Significant Accounting Policies - Cash Equivalents (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Cash and Cash Equivalents [Line Items]    
Cash and cash equivalents $ 54,950 $ 29,425
UDS    
Cash and Cash Equivalents [Line Items]    
Cash and cash equivalents $ 14,900 $ 12,700
v3.20.4
Summary of Significant Accounting Policies - Concentrations of Credit Risk and Significant Vendors (Details)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Revenue from Contract with Customer | Customer Concentration Risk    
Concentration Risk [Line Items]    
Concentration risk 2.00% 2.00%
Revenue from Contract with Customer | Geographic Concentration Risk | California    
Concentration Risk [Line Items]    
Concentration risk 32.00% 34.00%
Purchases of Inventory and Supplies | Supplier Concentration Risk | Three Largest Vendors    
Concentration Risk [Line Items]    
Concentration risk 53.00% 41.00%
v3.20.4
Summary of Significant Accounting Policies - Summary of Allowance for Doubtful Accounts (Details) - Allowance for accounts receivable - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]    
Balance at Beginning of Period $ 2,099 $ 2,016
Charges to Cost and Expenses 932 590
Deductions (674) (507)
Balance at End of Period $ 2,357 $ 2,099
v3.20.4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($)
shares in Millions
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]    
Inventory obsolescence reserves $ (800,000) $ (900,000)
Valuation allowance 2,092,000 2,254,000
Deferred financing fees 100,000 100,000
Cash equivalents 13,200,000 9,300,000
Carrying amount of notes 55,000,000.0  
Fair value of notes 55,000,000.0  
Deductible insurance policy 250,000  
Self-insured for healthcare benefits 250,000  
Advertising costs 700,000 1,800,000
Research and development $ 7,000,000.0 $ 9,300,000
Noncontrolling Interest [Line Items]    
Common stock options excluded for anti-dilutive (in shares) 5.2 4.8
UDS    
Noncontrolling Interest [Line Items]    
Noncontrolling interest 35.00%  
v3.20.4
Summary of Significant Accounting Policies - Property and Equipment and Impairment of Long-Lived Assets (Details) - USD ($)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Capitalized software development costs $ 1,400,000 $ 1,300,000
Net of accumulated amortization 21,600,000 20,700,000
Depreciation expense and amortization of capitalized software development costs 900,000 1,000,000.0
Impairment of long-lived assets $ 0 $ 0
Software    
Property, Plant and Equipment [Line Items]    
Estimated useful lives of other intangible assets 3 years  
Minimum | Buildings    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 10 years  
Minimum | Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 10 years  
Minimum | Machinery and equipment    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 3 years  
Minimum | Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 3 years  
Maximum | Buildings    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 20 years  
Maximum | Leasehold improvements    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 20 years  
Maximum | Machinery and equipment    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 7 years  
Maximum | Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Estimated useful lives 7 years  
v3.20.4
Summary of Significant Accounting Policies - Goodwill and Other Intangible Assets (Details)
 12 Months Ended
Dec. 31, 2020
Customer relationships  
Finite-Lived Intangible Assets [Line Items]  
Estimated useful lives of other intangible assets 13 years
v3.20.4
Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Disaggregation of Revenue [Line Items]    
Total net sales $ 289,467 $ 382,415
Service Sales    
Disaggregation of Revenue [Line Items]    
Total net sales 267,159 342,912
CDIM    
Disaggregation of Revenue [Line Items]    
Total net sales 175,532 205,536
MPS    
Disaggregation of Revenue [Line Items]    
Total net sales 79,321 123,279
AIM    
Disaggregation of Revenue [Line Items]    
Total net sales 12,306 14,097
Equipment and Supplies Sales    
Disaggregation of Revenue [Line Items]    
Total net sales 22,308 39,503
Shipping and Handling    
Disaggregation of Revenue [Line Items]    
Total net sales $ 9,900 $ 11,100
Software Licensing Activities | Product Concentration Risk | Revenue from Contract with Customer    
Disaggregation of Revenue [Line Items]    
Concentration risk 2.00% 2.00%
v3.20.4
Summary of Significant Accounting Policies - Schedule of Segment and Geographic Reporting (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues from external customers $ 289,467 $ 382,415
Property and equipment, net 57,830 70,334
U.S.    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues from external customers 253,179 329,372
Property and equipment, net 51,058 63,458
Foreign Countries    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Revenues from external customers 36,288 53,043
Property and equipment, net $ 6,772 $ 6,876
v3.20.4
Summary of Significant Accounting Policies - Stock-Based Compensation (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]    
Total stock-based compensation $ 1,571 $ 2,459
Weighted average fair value of option (in dollars per share) $ 0.60 $ 1.30
Weighted average assumptions used:    
Risk free interest rate 1.50% 2.50%
Expected volatility 52.20% 54.80%
Expected dividend yield 1.20% 0.00%
Expected term of stock options granted 6 years 8 months 12 days 6 years 8 months 12 days
Total unrecognized stock-based compensation $ 1,200  
Expected weighted-average period to recognize compensation cost 1 year 3 months 18 days  
v3.20.4
Summary of Significant Accounting Policies - Schedule of Basic and Diluted Earnings Per Share (Details) - shares
shares in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Accounting Policies [Abstract]    
Weighted average common shares outstanding during the period—basic (in shares) 42,925 44,997
Effect of dilutive stock options (in shares) 96 86
Weighted average common shares outstanding during the period—diluted (in shares) 43,021 45,083
v3.20.4
Goodwill and Other Intangibles - Schedule of Goodwill (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Goodwill and Intangible Assets Disclosure [Abstract]      
Gross Goodwill $ 405,558 $ 405,558 $ 405,558
Accumulated Impairment Loss 284,507 284,507 284,507
Net Carrying Amount $ 121,051 $ 121,051 $ 121,051
v3.20.4
Goodwill and Other Intangibles - Schedule of Other Intangible Assets Resulting from Business Acquisitions (Details) - USD ($)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount $ 119,750,000 $ 119,406,000
Accumulated Amortization 119,235,000 117,410,000
Net Carrying Amount 515,000 1,996,000
Impairment of long-lived assets 0 0
Customer relationships    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 99,425,000 99,127,000
Accumulated Amortization 99,191,000 97,430,000
Net Carrying Amount 234,000 1,697,000
Trade names and trademarks    
Finite-Lived Intangible Assets [Line Items]    
Gross Carrying Amount 20,325,000 20,279,000
Accumulated Amortization 20,044,000 19,980,000
Net Carrying Amount $ 281,000 $ 299,000
v3.20.4
Goodwill and Other Intangibles - Schedule of Estimated Future Amortization Expense (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Goodwill and Intangible Assets Disclosure [Abstract]    
2021 $ 179  
2022 102  
2023 44  
2024 42  
2025 38  
Thereafter 110  
Net Carrying Amount $ 515 $ 1,996
v3.20.4
Property and Equipment, Net - Schedule of Property and Equipment (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 277,664 $ 281,183
Less accumulated depreciation (219,834) (210,849)
Property and equipment 57,830 70,334
Machinery and equipment    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 252,613 256,249
Buildings and leasehold improvements    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross 22,397 22,050
Furniture and fixtures    
Property, Plant and Equipment [Line Items]    
Property and equipment, gross $ 2,654 $ 2,884
v3.20.4
Property and Equipment, Net - Narrative (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Abstract]    
Depreciation $ 28,860 $ 28,763
v3.20.4
Long-Term Debt - Schedule of Long-Term Debt (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Debt Instrument [Line Items]    
Various finance leases; weighted average interest rate of 4.9% at December 31, 2020 and 2019; principal and interest payable monthly through September 2026 $ 42,236 $ 46,157
Long-term debt and capital lease obligations, including current maturities 97,236 106,157
Less current portion (17,557) (17,075)
Long-term debt and finance leases $ 79,679 $ 89,082
Finance lease, weighted average interest rate 4.90% 4.90%
Line of Credit | Revolving Loans    
Debt Instrument [Line Items]    
Long-term debt $ 55,000 $ 60,000
Debt instrument, interest rate, effective percentage 2.20% 3.60%
v3.20.4
Long-Term Debt - Narrative (Details) - USD ($)
 1 Months Ended 12 Months Ended
Dec. 17, 2019
Dec. 31, 2020
Dec. 31, 2020
Dec. 31, 2019
Nov. 20, 2014
Debt Instrument [Line Items]          
Debt instrument covenant terms, measurement period     12 months    
Cash dividends, per hare, declared (in dollars per share)   $ 0.01      
Cash dividends payable   $ 422,000 $ 422,000    
Line of Credit | Term A Loan Facility          
Debt Instrument [Line Items]          
Repayments of outstanding term loan $ 49,500,000        
Revolving Loans | Line of Credit          
Debt Instrument [Line Items]          
Term loan, maximum borrowing capacity $ 80,000,000       $ 65,000,000
Line of credit, remaining borrowing capacity   22,800,000 22,800,000    
Long-term debt   55,000,000 55,000,000 $ 60,000,000  
Total leverage ratio 2.75        
Debt instrument, covenant terms, fixed charged coverage ratio 1.15        
Debt instrument covenant terms maximum payments $ 15,000,000        
Debt instrument covenant terms fixed charges $ 10,000,000        
Revolving Loans | Line of Credit | London Interbank Offered Rate (LIBOR)          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 1.00%        
Revolving Loans | Line of Credit | London Interbank Offered Rate (LIBOR) | Minimum          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 1.25%        
Revolving Loans | Line of Credit | London Interbank Offered Rate (LIBOR) | Maximum          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 1.75%        
Revolving Loans | Line of Credit | Federal Funds Effective Swap Rate          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 0.50%        
Revolving Loans | Line of Credit | Prime Rate | Minimum          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 0.25%        
Revolving Loans | Line of Credit | Prime Rate | Maximum          
Debt Instrument [Line Items]          
Debt instrument, basis spread on variable rate 0.75%        
Revolving Loans | Letters of Credit          
Debt Instrument [Line Items]          
Line of credit facility, fair value of amount outstanding   $ 2,200,000 $ 2,200,000    
v3.20.4
Leasing - Additional Information, Lessee (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Jan. 01, 2019
Lessee, Lease, Description [Line Items]      
Right-of-use assets from operating leases $ 37,859 $ 41,238  
Present value of lease liability $ 45,719 $ 48,320  
Minimum      
Lessee, Lease, Description [Line Items]      
Range of lease terms 1 year    
Renewal lease extension terms 1 year    
Maximum      
Lessee, Lease, Description [Line Items]      
Range of lease terms 10 years    
Renewal lease extension terms 5 years    
Accounting Standards Update 2016-02      
Lessee, Lease, Description [Line Items]      
Right-of-use assets from operating leases     $ 46,900
Present value of lease liability     $ 53,700
v3.20.4
Leasing - Lessee, Operating and Financing Lease Components and Classifications (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Assets    
Right-of-use assets from operating leases $ 37,859 $ 41,238
Property and equipment 85,205 85,914
Less accumulated depreciation (50,550) (43,166)
Property and equipment, net 34,655 42,748
Total lease assets 72,514 83,986
Current    
Current portion of operating lease liabilities 12,158 11,060
Current portion of long-term finance leases 17,557 17,075
Long-term    
Long-term portion of operating lease liabilities 33,561 37,260
Long-term portion of finance leases 24,679 29,082
Total lease liabilities $ 87,955 $ 94,477
v3.20.4
Leasing - Components of Lease Cost (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Lessee, Lease, Description [Line Items]    
Total operating lease cost $ 17,942 $ 19,817
Interest on lease liabilities 2,571 2,353
Total finance lease cost 21,326 20,913
Total lease cost 39,268 40,730
Variable lease cost 2,774 2,893
Short-term lease cost 340 433
Cost of sales    
Lessee, Lease, Description [Line Items]    
Total operating lease cost 14,341 16,436
Amortization of leased assets 18,426 18,314
Selling, general and administrative expenses    
Lessee, Lease, Description [Line Items]    
Total operating lease cost 3,601 3,381
Amortization of leased assets $ 329 $ 246
v3.20.4
Leasing - Maturity of Lease Liabilities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Operating leases    
2020 $ 14,338 $ 15,247
2021 10,793 12,709
2022 8,812 10,797
2023 6,312 8,418
2024 4,784 5,709
Thereafter 7,588 11,970
Total 52,627 64,850
Less amount representing interest 6,908 16,530
Present value of lease liability 45,719 48,320
Finance leases    
2020 19,187 19,421
2021 13,104 15,183
2022 8,277 9,784
2023 3,875 5,229
2024 684 1,777
Thereafter 7 65
Total 45,134 51,459
Less amount representing interest 2,898 5,302
Various finance leases; weighted average interest rate of 4.9% at December 31, 2020 and 2019; principal and interest payable monthly through September 2026 42,236 46,157
Related Party    
Operating leases    
2020   500
2021   500
2022   500
Finance leases    
Operating lease expense $ 500 $ 500
v3.20.4
Leasing - Weighted Average Remaining Lease Term and Discount Rate (Details)
Dec. 31, 2020
Dec. 31, 2019
Weighted average remaining lease term (years)    
Operating leases 5 years 5 years 6 months
Finance leases 2 years 10 months 24 days 3 years 2 months 12 days
Weighted average discount rate    
Operating leases 5.80% 5.90%
Finance leases 4.90% 4.90%
v3.20.4
Leasing - Cash Paid for Amount Included in the Measurement of Lease Liabilities (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Cash paid for amounts included in the measurement of lease liabilities    
Operating cash flows from operating leases $ 12,842 $ 15,415
Operating cash flows from finance leases 1,849 2,373
Financing cash flows from finance leases $ 14,935 $ 18,407
v3.20.4
Leasing - Additional Information, Lessor (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Property, Plant and Equipment [Line Items]    
Property and equipment, net $ 34,655 $ 42,748
MPS    
Property, Plant and Equipment [Line Items]    
Rental income 72,900 114,700
Service income 6,400 8,600
MPS | Equipment Subject to Leases    
Property, Plant and Equipment [Line Items]    
Property and equipment, net $ 35,000 $ 40,000
v3.20.4
Income Taxes - Narrative (Details) - USD ($)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Income Tax Disclosure [Abstract]    
Foreign earnings (losses) before taxes $ 900,000 $ 700,000
Domestic earnings (losses) before taxes 7,600,000 7,900,000
Valuation allowance 2,092,000 2,254,000
Operating Loss Carryforwards [Line Items]    
Tax credit carryforward 2,000,000.0  
Unrecognized tax benefits 0 0
Unrecognized tax benefits, interest and penalties 0 $ 0
Federal    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforwards 79,600,000  
State and Local Jurisdiction    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforwards 93,200,000  
Foreign Tax Authority    
Operating Loss Carryforwards [Line Items]    
Operating loss carryforwards $ 3,700,000  
v3.20.4
Income Taxes - Schedule of Income Tax Provision (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Current:    
Federal $ (45) $ (45)
State 59 187
Foreign 208 354
Current income tax, total 222 496
Deferred:    
Federal 2,089 3,680
State 330 1,606
Foreign 108 (58)
Deferred income taxes 2,527 5,228
Income tax provision $ 2,749 $ 5,724
v3.20.4
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($)
$ in Thousands
Dec. 31, 2020
Dec. 31, 2019
Deferred tax assets:    
Financial statement accruals not currently deductible $ 2,113 $ 2,047
Social security tax deferral 699 0
Accrued vacation 678 849
Deferred revenue, net 42 84
Fixed assets 3,595 3,637
Right of use operating lease liabilities 12,154 12,025
Goodwill and other identifiable intangibles 4,521 7,297
Stock-based compensation 2,850 2,952
Federal tax net operating loss carryforward 16,718 16,914
State tax net operating loss carryforward, net 5,765 5,803
Foreign tax net operating loss carryforward 659 602
Tax credits, net 1,681 1,726
Gross deferred tax assets 51,475 53,936
Less: valuation allowance (2,092) (2,254)
Net deferred tax assets 49,383 51,682
Deferred tax liabilities:    
Goodwill (22,394) (21,705)
Right of use assets (9,728) (10,222)
Net deferred tax assets $ 17,261 $ 19,755
v3.20.4
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details)
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Reconciliation of the statutory federal income tax rate    
Statutory federal income tax rate 21.00% 21.00%
State taxes, net of federal benefit 6.00% 7.00%
Foreign taxes 2.00% 2.00%
Valuation allowance (2.00%) 1.00%
Non-deductible expenses and other 1.00% 2.00%
Section 162(m) limitation 1.00% 3.00%
Stock based compensation 4.00% 29.00%
Discrete items for federal, state and foreign taxes (2.00%) 1.00%
Global intangible low taxed income 1.00% 1.00%
Effective income tax rate 32.00% 67.00%
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Narrative (Details)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
USD ($)
member
shares
Dec. 31, 2019
USD ($)
member
shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Percentage on market value of common stock 100.00%  
Shares authorized under the plan (in shares) 7,000,000.0  
Shares available under Stock Plan (in shares) 1,500,000  
Maturity period of share 10 years  
Vesting period   3 years
Granted (in shares) 535,000 747,000
Exercised (in shares) 0 0
Restricted Stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Expiration period 10 years  
Shares, granted (in shares) 140,000  
Vested in period | $ $ 500 $ 1,000
Restricted Stock | Key Employees    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Shares, granted (in shares)   450,000
Restricted Stock | Non-employee Board Members    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 1 year 1 year
Shares, granted (in shares) 35,000 26,000
Number of awards grantees | member 4 6
Minimum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 3 years  
Minimum | Restricted Stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 3 years  
Maximum    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 4 years  
Maximum | Restricted Stock    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Vesting period 4 years  
ESPP    
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]    
Common stock, shares (in shares) 2,500  
Aggregate fair market value of common stock | $ $ 25  
Percentage on market value of common stock 85.00%  
Share-based compensation, expense | $ $ 11 $ 23
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Schedule of Employee Share Purchases (Details) - $ / shares
shares in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Share-based Payment Arrangement [Abstract]    
Shares purchased (in shares) 93 90
Average price per share (in dollars per share) $ 0.72 $ 1.51
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Schedule of Stock Option Plan Activity (Details) - USD ($)
$ / shares in Units, $ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Shares    
Beginning balance (in shares) 4,907,000 5,257,000
Granted (in shares) 535,000 747,000
Exercised (in shares) 0 0
Forfeited/canceled (in shares) (230,000) (1,097,000)
Ending balance (in shares) 5,212,000 4,907,000
Vested or expected to vest (in shares) 5,212,000  
Exercisable (in shares) 4,017,000  
Weighted Average Exercise Price    
Beginning balance (in dollars per share) $ 4.06 $ 4.95
Granted (in dollars per share) 1.27 2.30
Exercised (in dollars per share) 0 0
Forfeited/canceled (in dollars per share) 4.31 7.11
Ending balance (in dollars per share) 3.77 $ 4.06
Vested or expected to vest (in dollars per share) 3.77  
Exercisable (in dollars per share) $ 4.33  
Weighted Average Contractual Life (In years) and Aggregate Intrinsic Value    
Weighted average contractual life (in years), outstanding 4 years 10 months 13 days  
Weighted average contractual life (in years), vested or expected to vest 4 years 10 months 13 days  
Weighted average contractual life (in years), exercisable 3 years 9 months 29 days  
Aggregate intrinsic value, outstanding $ 126  
Aggregate intrinsic value, vested or expected to vest 126  
Aggregate intrinsic value, exercisable $ 6  
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Schedule of Non-vested Stock Options (Details) - $ / shares
shares in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Shares    
Beginning balance (in shares) 4,907 5,257
Granted (in shares) 535 747
Forfeited/canceled (in shares) (230) (1,097)
Ending balance (in shares) 5,212 4,907
Weighted Average Grant Date    
Beginning balance (in dollars per share) $ 4.06 $ 4.95
Granted (in dollars per share) 1.27 2.30
Ending balance (in dollars per share) $ 3.77 $ 4.06
Non-Vested Options    
Shares    
Beginning balance (in shares) 1,246  
Shares, vested (in shares) (560)  
Forfeited/canceled (in shares) (26)  
Ending balance (in shares) 1,195 1,246
Weighted Average Grant Date    
Beginning balance (in dollars per share) $ 1.44  
Granted (in dollars per share) 0.60  
Vested (in dollars per share) 1.62  
Forfeited/canceled (in dollars per share) 1.12  
Ending balance (in dollars per share) $ 0.99 $ 1.44
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Schedule of Range of Exercise Price for Options Outstanding (Details) - $ / shares
shares in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Share-based compensation arrangement, options, outstanding, number (in shares) 5,212 4,907 5,257
$1.14 – $2.70      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Range of exercise price range minimum (in dollars per share) $ 1.14    
Range of exercise price range maximum (in dollars per share) $ 2.70    
Share-based compensation arrangement, options, outstanding, number (in shares) 3,012    
$3.65 – $4.75      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Range of exercise price range minimum (in dollars per share) $ 3.65    
Range of exercise price range maximum (in dollars per share) $ 4.75    
Share-based compensation arrangement, options, outstanding, number (in shares) 828    
$5.37 – $7.19      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Range of exercise price range minimum (in dollars per share) $ 5.37    
Range of exercise price range maximum (in dollars per share) $ 7.19    
Share-based compensation arrangement, options, outstanding, number (in shares) 916    
$8.66 – $9.09      
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]      
Range of exercise price range minimum (in dollars per share) $ 8.66    
Range of exercise price range maximum (in dollars per share) $ 9.09    
Share-based compensation arrangement, options, outstanding, number (in shares) 456    
v3.20.4
Employee Stock Purchase Plan and Stock Plan - Schedule of Nonvested Restricted Stock Options (Details) - Restricted Stock
shares in Thousands
 12 Months Ended
Dec. 31, 2020
$ / shares
shares
Shares  
Beginning balance (in shares) | shares 926
Granted (in shares) | shares 140
Vested (in shares) | shares (517)
Forfeited/canceled (in shares) | shares 0
Ending balance (in shares) | shares 549
Weighted Average Grant Date  
Beginning balance (in dollars per share) | $ / shares $ 2.69
Granted (in dollars per share) | $ / shares 0.70
Vested (in dollars per share) | $ / shares 2.87
Forfeited/canceled (in dollars per share) | $ / shares 0
Ending balance (in dollars per share) | $ / shares $ 2.02
v3.20.4
Retirement Plans (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Defined Contribution Plan Disclosure [Line Items]    
Employer contribution 20.00%  
Percentage of employee's compensation 4.00%  
Defined contribution plan, cost recognized $ 0.3 $ 0.5
Eligible Employees    
Defined Contribution Plan Disclosure [Line Items]    
Employee contribution 75.00%  
Highly Compensated Employees    
Defined Contribution Plan Disclosure [Line Items]    
Employee contribution 6.00%  
v3.20.4
Fair Value Measurements (Details) - USD ($)
$ in Thousands
 12 Months Ended
Dec. 31, 2020
Dec. 31, 2019
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Total Losses $ 0 $ 0
Level 3    
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]    
Goodwill $ 121,051 $ 121,051