A man is painting letters using a stencil onto a round stand-up sign that is lying sideways.
A male uses paint to stencil words on  a circular sign laying horizontal yet made to be erected.
A man painting letters using a stencil on a sign laying sideways means that a male using paint to stencil words is painting them on a sign laying horizontally.
Circular is a synonym for round.  A man is uses paint to stencil words on a sign laying sideways.
Man is a male creature who is painting letters which is going to be erected.