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Apogee Reports Solid Fiscal 2012 Third-Quarter Results

Apogee Enterprises, Inc. (Nasdaq:APOG) today announced fiscal 2012 third-quarter results. Apogee provides distinctive value-added glass solutions for the architectural and picture framing industries.

FY12 THIRD QUARTER VS. PRIOR-YEAR PERIOD

  • Revenues of $174.9 million were up 19 percent.
  • Operating income was $7.2 million, compared to a loss of $1.8 million.
  • Per share earnings were $0.20, compared to a loss of $0.08.
  • Architectural segment revenues increased 21 percent, with operating income of $0.6 million compared to a loss of $8.4 million.
  • Backlog was maintained at $231 million from the second quarter.
  • Large-scale optical segment revenues increased 6 percent, with operating income consistent at $7.4 million.

Commentary

“I am pleased to report very positive results for the third quarter, as we returned to quarterly earnings and grew revenues significantly,” said Joseph F. Puishys, Apogee chief executive officer. “The architectural segment moved to profitability on strong third-quarter revenues and maintained its backlog on increased order flow, and the large-scale optical segment revenues increased. We achieved excellent top-line growth in both segments, given current market conditions.

“During the quarter, we also had solid balance sheet performance with cash flow from operations of $10 million,” he said. “In addition, we maintained our cash and short-term investments position from the second quarter after using $2.4 million in cash to repurchase shares in the current period.”

FY12 THIRD-QUARTER SEGMENT AND OPERATING RESULTS VS. PRIOR-YEAR PERIOD

Architectural Products and Services

  • Revenues of $152.1 million were up 21 percent, with 7 percentage points of the increase coming from the addition of the Brazilian architectural glass business acquired in the fourth quarter of fiscal 2011. The remaining growth was split between increased volume in the window and storefront businesses, and improved architectural glass pricing.
  • Operating earnings were $0.6 million, compared to a loss of $8.4 million.
    • Results improved from the prior-year period with higher architectural glass pricing and leverage on volume growth, partially offset by lower margin work in the installation business.
    • The Brazilian architectural glass business was slightly accretive in the quarter, as expected.
  • Backlog was $230.7 million, compared to $231.3 million in the second quarter and $165.7 million in the prior-year period.
    • Approximately $96 million, or 41 percent, of the backlog is expected to be delivered in fiscal 2012; approximately $126 million, or 55 percent, in fiscal 2013; and approximately $9 million, or 4 percent in fiscal 2014.
    • Awarded projects awaiting final signed contracts held at the second quarter level of approximately $60 million.

Large-Scale Optical Technologies

  • Revenues of $22.8 million were up 6 percent with increased sales to independent framers.
  • Operating income was maintained at $7.4 million.
    • Operating margin in the seasonally strong quarter declined to 32.5 percent, compared to 34.5 percent, due to spending on growth initiatives.

Financial Condition

  • Long-term debt was $21.0 million, compared to $21.4 million at the end of fiscal 2011.
    • Long-term debt includes $20.4 million in long-term, low-interest industrial revenue and recovery zone facility bonds.
    • Cash and short-term investments totaled $46.4 million, compared to $45.3 million at the end of the second quarter and $60.6 million at the end of fiscal 2011.
  • Non-cash working capital (current assets, excluding cash and short-term investments, less current liabilities) was $70.9 million, compared to $68.2 million at the end of the second quarter, and $39.4 million at the end of fiscal 2011.
  • Capital expenditures year-to-date were $6.2 million, down 18 percent from the prior-year period.
  • Depreciation and amortization year-to-date were $20.6 million, comparable to the prior-year period.
  • Third-quarter tax expense included a benefit of approximately $1 million from finalization of previous tax positions.

OUTLOOK

“With the strong third-quarter performance, we have increased our fiscal 2012 full-year outlook,” Puishys said. “We now anticipate that revenues will increase approximately 14 percent, up from prior expectations of more than 10 percent growth, and our full-year earnings per share should be at least $0.07. We also expect to generate positive cash flow from operations in fiscal 2012.

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