Business News
American Reprographics Company Lowers Annual Revenue and Earnings Forecast
Friday 26. September 2008 - Reduced Credit Availability Will Further Constrict Non-Residential Construction Activity
American Reprographics Company (NYSE: ARP), the nation’s leading provider of reprographics services and technology, today announced that it is lowering its annual revenue and earnings forecast for 2008. The Company currently expects to see revenues in the range of $700-710 million, down from $720-760 million, and earnings per share in the range of $1.36-$1.40, down from $1.52-$1.60.
The Company noted that the current upheaval in financial markets will further aggravate lending restrictions and force more construction project delays and cancellations, which will impact the Company’s revenues in the short term. Credit availability for private projects is a key driver of the non-residential construction market.
“Our projections are the result of an increasingly volatile financial climate,” said K. “Suri” Suriyakumar, Chairman, President and CEO of American Reprographics Company. “We are not experiencing declining business volumes because of overcapacity in non-residential markets. Instead, there has been a growing lack of confidence in the credit markets that has lead to project cancellations and postponements. Given the events of last week on Wall Street, that confidence has eroded even further. Builders are going to be very hesitant to start new projects until cash comes back into the market.”
Mr. Suriyakumar went on to say, “We believe that when confidence returns there will be a quick resumption of building activity without the delays seen in the early part of the decade when it took several years to absorb excess capacity that had been built into the commercial real estate market.”
“In the meantime, our cash position is solid, our management team is completely engaged, our margins are healthy, and our acquisition pipeline is full. I am confident that we will weather this temporary slowdown and emerge as an even stronger player in the industry,” said Mr. Suriyakumar.