Share Prices and Market Caps – Service Point Solutions (SPS) vs. American Reprographics Company (ARC) (an update to a previous post)

We did a post on August 6, 2011 on Reprographics 101 to share these same numbers as of August 5, 2011, so today’s post is “simply” an updated comparison.

At current share prices (as of December 11, 2011) ….. if you bought 100% of SPS, it’d be like paying a purchase price equivalent to approximately 13.55% of annual sales revenues, or, if you bought 100% of ARC, it’s be like paying a purchase price equivalent to approximately 47.67% of annual sales revenues.

I know, I know, I know … both have debt and debt is a consideration, but I’m too lazy to look back at SPS’s debt picture.

But, still, I can remember “the days” in the reprographics business where you could purchase reprographics companies for 50% of Sales Revenues - and sometimes for less than that. But, as time went on, some reprographics companies sold for more than 100% of Sales. There was a time when ARC, itself, was valued at more than 250% of Sales.

Referring to the table below:

I’ve “estimated” full-year 2011 sales for both SPS and ARC simply by dividing their 9 month sales by 3, then multiplying that number by 4. A simple “annualization” if you will. Please note, however, that ARC, historically, has lower sales in Q4 than in earlier quarters, so I do think (and have previously projected) that ARC’s full-year 2011 sales will come in somewhat less than the number shown in the second table. As to SPS’ sales, SPS’ Q4 2011 sales will benefit from the Holmbergs acquisition completed earlier in the year, but SPS’ Q4 numbers have not been particularly strong in the past and “some say” that Europe is now in a recession, so that, too, may have a negative affect on SPS’ full-year 2011 sales vs. the “estimate” in table 2.

When I did the comparisons in August 2011, the Euro/Dollar exchange rate was around 1.43. Now, the Euro/Dollar exchange rate has fallen to around 1.33. Since I convert Euros to USD for the comparisons, SPS’ numbers are proportionately less because of the decline of the Euro against the Dollar.

Figures in table are in $USD
Euro/USD exchange rate 1.43
From blog post on 8/6/11	($USD / mil)	($USD / mil)
	SPS	ARC
Sales - first half 2011	$158.09	$216.09
multiplier (to annualize)	2	2
Estim Sales - full year 2011*	$316.18	$432.18
Closing share price - 08/05/11	$0.47	$4.58
Market Capitalization - 08/05/11	$51.67	$211.51
Market Cap as a %age of Sales	16.34%	48.94%
Figures in table are in $USD
Euro/USD exchange rate 1.34
For blog post on 12/12/11	($USD / mil)	($USD / mil)
	SPS	ARC
Sales - 1st 9 mo's 2011	$216.13	$320.88
multiplier (to annualize)	1.333	1.333
Estim Sales - full year 2011*	$288.10	$427.73
Closing share price - 12/11/11	$0.351	$4.41
Market Capitalization - 12/11/11	$39.04	$203.90
Market Cap as a %age of Sales	13.55%	47.67%