On March 2, 2011, we posted an article that delved into Service Point Solutions’ (SPS) then recently announced results for 2010. In that same article, we looked at comparisons between SPS’ numbers and ARC’s numbers.
We pointed out that, on an overall total Sales basis, SPS’s total Sales declined 5.16%, 2010 vs. 2009, whereas ARC’s total Sales declined 11.94%, 2010 vs. 2009.
And, we also pointed out that SPS’s Sales “in the U.S.A.” declined 14.44%.
Which prompted one of our blog-visitors to post this comment under the article we posted on March 2nd:
By Anonymous on Comments/thoughts about Service Point Solutions’ R... on 3/2/11
The relevant number when comparing sales is using SPS US sales decline of 14.4% to ARC's 11.9%......ARC derives over 90% sales from US...matching up those 2 numbers, it appears that SPS not only had negative bottom line, but also their sales have deteriorated faster in US in comparison to ARC's.
avid reader of repro101
On the surface, I had to agree with that comment. However, last night I read through the “10-K” Report ARC filed with the S.E.C., yesterday (March 9, 2011). A “10-K” report is an “annual report”. 10-K reports general include information well beyond what 10-Q (“quarterly”) reports include.
In ARC’s 10-K report, ARC provides a breakdown of its 2010 Sales, “U.S. vs. Foreign Countries.” As most of you know, ARC conducts operations in the U.S. and in China, India and the U.K. Here’s the “geographic breakdown” of ARC’s 2010, 2009 and 2008 Sales:
| | | | | | |
| | American Reprographics Co (ARC) | | |||
| | Geographic Breakdown of Sales (U.S. vs. Non-U.S.) | | |||
| | | | | | |
| | Revenues from External Customers | Sales in U.S. | Sales in Foreign Countries | Total Sales | |
| | year 2008 | $676,742,000 | $24,245,000 | $700,987,000 | |
| | year 2009 | $473,414,000 | $28,135,000 | $501,549,000 | |
| | year 2010 | $404,513,000 | $37,126,000 | $441,639,000 | |
| | | | | | |
| | | | | | |
| | 2009 vs. 2008 (Y/O/Y) | -30.05% | 16.04% | -28.45% | |
| | 2010 vs. 2009 (Y/O/Y) | -14.55% | 31.96% | -11.94% | |
| | | | | | |
| | 2010 vs. 2008 | -40.23% | 53.13% | -37.00% | |
| | | | | | |
| | | | | | |
So, as to my blog-visitor’s comments, he was not correct. ARC’s U.S. Sales, 2010 vs. 2009, declined 14.55% - compared to SPS’ U.S. Sales decline of 14.44%. In other words, the U.S. Sales of both companies were off nearly the same percentage.
Since I mentioned ARC’s 10-K report, I’d like to make one further comment about 10-K reports, in general. If you’ve not read 10-K reports, you should, in my opinion, devote some time to doing that. To me, they make for an interesting read, and you can learn a lot about a company from the information that’s provided in a 10-K report. If you are in the reprographics business and do not read ARC’s 10-Q and 10-K reports, shame on you! For doing so gives one great insight into how your competitor is doing.
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Joel, to your point whether your visitor was correct or not - he was correct based on the numbers you posted in your article...At the time of the post, 10K was not yet filed, and your visitor couldn't have known that ARC's domestic sales have decreased by 14.55% vs. 11.9% decline in overall sales....but your point is well taken - ARC US sales decline is on par with SPS's in 2010, and greater that ARC's overall sales decline.
ReplyDeleteSorry if I offended anyone; it was not my intent to criticize the person who posted the comment "quoted" in the above post. I do realize that, when he/she made that comment, he/she did not have access to the "geographical" sales data that ARC published in its 10K report. I think it showed great insight for him/her to post that remark, for that shows that he/she was thinking about the most relevant comparisons we should be making - ARC vs. SPS. I do appreciate all comments. Thank you, Joel (blog-author)
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