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Apogee Reports Improved Fiscal 2013 First-Quarter Earnings

Apogee Enterprises, Inc. (Nasdaq:APOG) today announced fiscal 2013 first-quarter results. Apogee provides distinctive value-added glass solutions for the architectural and picture framing industries.

FY13 FIRST QUARTER VS. PRIOR-YEAR PERIOD

  • Revenues of $154.1 million were up 1 percent.
  • Operating income was $2.3 million, compared to a loss of $3.4 million.
  • Per share earnings were $0.06, compared to a loss of $0.08.
  • Architectural segment revenues were flat, with an operating loss of $1.9 million compared to a loss of $7.1 million.
    • Backlog grew $30.3 million, or 13 percent, to $267.3 million.
  • Large-scale optical segment revenues increased 7 percent, with operating income of $5.3 million compared to $4.6 million.

Commentary“We started the new year with strong earnings on revenues that grew 1 percent,” said Joseph F. Puishys, Apogee chief executive officer. “With strong orders and awards leading to an architectural backlog increase of 13 percent, we have confidence in our planned growth for the full year.

“Gross and operating margins for both our architectural and large-scale optical segments improved year on year, and we operated well throughout Apogee’s businesses,” he said. “Cash and short-term investments ended at $58 million after normal first-quarter seasonal uses and capital investments for growth and productivity enhancements, with ongoing positive working capital performance.”

FY13 FIRST-QUARTER SEGMENT AND OPERATING RESULTS VS. PRIOR-YEAR PERIOD

Architectural Products and Services

  • Revenues of $134.9 million were flat.
    • Strong growth from share gains in the storefront and installation businesses was offset by the expected first-quarter gap in architectural glass project timing.
  • Operating loss was $1.9 million, compared to a loss of $7.1 million.
    • Results improved from the prior-year period, with higher architectural glass pricing and the impact from storefront volume growth, partially offset by lower margin work in the installation business as expected.
  • Backlog was $267.3 million, compared to $237.0 million in the fiscal 2012 fourth quarter and $237.1 million in the prior-year period.
    • Approximately $188 million, or 70 percent, of the backlog is expected to be delivered in fiscal 2013, and approximately $79 million, or 30 percent, in fiscal 2014.

Large-Scale Optical Technologies

  • Revenues of $19.3 million were up 7 percent.
  • Operating income was $5.3 million, compared to $4.6 million.
    • Operating margin was 27.4 percent, compared to 25.7 percent.
  • Improvements resulted from a better mix of higher value-added picture framing glass and acrylic across all markets.

Financial Condition

  • Long-term debt was $30.9 million, compared to $20.9 million at the end of fiscal 2012.
    • Long-term debt includes $30.4 million in long-term, low-interest industrial revenue and recovery zone facility bonds; reflected in the total is $10 million in industrial revenue bonds issued in the quarter by Michigan for current and projected capacity expansions in the storefront business.
    • Cash and short-term investments totaled $57.5 million, compared to $79.3 million at the end of fiscal 2012.
  • Non-cash working capital was $61.2 million, compared to $44.4 million at the end of fiscal 2012 and $63.3 million in the prior-year period.
  • Capital expenditures were $9.5 million, compared to $1.6 million in the prior-year period. Fiscal 2013 expenditures include purchase of curtainwall fabrication equipment for new geographies, and investments to increase capacity and improve productivity in the storefront and architectural glass businesses.
  • Depreciation and amortization was $6.5 million.

OUTLOOK“With our first-quarter earnings and strong backlog, we are more confident in our revenue forecast and have greater visibility into the mix of projects we will be executing over the remainder of the year, allowing us to increase our earnings outlook for fiscal 2013 to $0.48 to $0.58 per share, from $0.40 to $0.50 per share, on mid single-digit revenue growth,” said Puishys. “Our anticipated revenue growth for fiscal 2013 will come in part from continued U.S. geographic expansion in our installation and storefront businesses, while earnings for the year are expected to benefit from improved architectural glass pricing, higher project margins in the second half and the ongoing strong performance of our picture framing glass and acrylic business.

“I am pleased by the first-quarter growth in our architectural backlog at improving margins,” noted Puishys. ”Based on the margins of projects in our backlog and our continued outlook for mid-single digit revenue growth for the year, we anticipate that our second half will be better than the first half of fiscal 2013.

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