Apogee Enterprises, Inc. (Nasdaq:APOG) today announced fiscal 2014 fourth-quarter and full-year results. Apogee provides distinctive solutions for enclosing commercial buildings and framing art. FY14 FOURTH QUARTER VS. PRIOR-YEAR PERIOD
- Revenues of $214.4 million were up 19 percent.
- Operating income of $12.1 million was up 97 percent.
- Earnings per share of $0.27 were up 80 percent.
- Consolidated backlog of $330 million was up 11 percent, or $31 million.
- Revenues of $771.4 million were up 10 percent.
- Operating income of $40.3 million was up 47 percent.
- Earnings per share of $0.95 were up 42 percent.
- Cash and short-term investments were $28.7 million.
- Free cash flow of $11.1 million after capital expenditures of $41.9 million.
- Completed two acquisitions during the fiscal year for approximately $54 million in cash.
“The fourth quarter finished strong despite the unexpected severe winter weather late in the quarter that adversely impacted the Architectural Framing Systems and Large-Scale Optical segments and costs related to the acquisitions made in the second and third quarters,” said Puishys.“I am pleased with our fiscal 2014 results, which put us on a path to achieve our strategic goals of $1 billion in revenues and 10 percent operating margin by the end of our fiscal 2016,” he said. “Our top-line growth and bottom-line improvement are on track even though the recovery of our commercial construction market lagged behind our original expectations.” FY14 FOURTH-QUARTER SEGMENT AND OPERATING RESULTS VS. PRIOR-YEAR PERIOD Architectural Glass
- Revenues of $75.7 million were up 9 percent with growth in the United States and Brazil.
- Operating income of $0.1 million was improved from a loss of $0.4 million due to improved mix and pricing on flat volumes, partially offset by timing of expenses and increased incentive compensation.
- Operating margin was 0.1 percent, compared to negative 0.6 percent, up 70 basis points.
- Revenues of $63.5 million were up 22 percent.
- Operating income of $5.9 million was up 111 percent.
- Operating margin was 9.3 percent, compared to 5.4 percent, up 390 basis points.
- Top- and bottom-line growth resulted from favorable project timing and cost flow and generally good execution, along with improving project margins.
- Revenues of $63.2 million were up 41 percent, with organic growth of 16 percent excluding the Canadian acquisition.
- Operating income was $1.9 million, compared to a loss of $0.2 million.
- Operating margin was 3.0 percent, compared to negative 0.3 percent, up 330 basis points.
- Top- and bottom-line increases were driven by performance in the window business.
- Revenues were $19.2 million, compared to $19.5 million due to retail softness impacted by the severe winter weather, partially offset by good sales growth in the fine art and museum market.
- Operating income of $5.2 million was up 30 percent due to reduced expenses and a strong mix of higher value-added framing products.
- Operating margin was 27.0 percent, compared to 20.4 percent, up 660 basis points.
- Backlog was $329.6 million, up 10 percent from $299.9 million in the third quarter and up 11 percent from $298.3 million in the prior-year period.
- Approximately $314 million, or 95 percent, of the backlog is expected to be delivered in fiscal 2015, and approximately $15 million, or 5 percent, in fiscal 2016 and beyond.
- Debt was $20.7 million, compared to $30.8 million at the end of fiscal 2013. Almost all the debt is long-term, low-interest industrial revenue bonds.
- Cash and short-term investments totaled $28.7 million, compared to $22.5 million in the third quarter and $85.6 million at the end of fiscal 2013.
- Non-cash working capital was $77.3 million, compared to $72.1 million in the third quarter and $54.2 million at the end of fiscal 2013.
- Third and fourth quarters included addition of working capital from Alumicor acquisition.
- Capital expenditures for the year were $41.9 million, compared to $34.7 million in fiscal 2013. Fiscal 2014 investments included the new Architectural Glass coater for improved capabilities and new products, as well as Architectural Framing Systems capacity additions in the finishing and U.S. storefront businesses.
- Depreciation and amortization for the year was $26.6 million.
“In fiscal 2015, we again expect to outperform domestic commercial construction market growth by approximately 5 percentage points,” said Puishys. “The outlook for commercial construction markets, based on Apogee’s lag to McGraw-Hill forecasts for the segments we serve, is for high single-digit growth this fiscal year. Other signs of market improvement include the American Institute of Architects’ Architecture Billings Index, which continues to indicate modest increases in billings for architects; declining office vacancy rates; and job growth.“We expect that capital spending for fiscal 2015 will be approximately $40 million as we invest for growth, product development capabilities and productivity, as well as in maintenance,” he said. “We again expect to be free cash flow positive after this level of investments.” He added that the fiscal 2015 gross margin is anticipated to be approximately 23 percent. “We believe that our strategies to grow through new geographies, new products and new markets will allow Apogee to reach $1 billion in revenues by the end of fiscal 2016,” Puishys said. “At the same time, we believe we can achieve 10 percent operating margin in this timeframe, in part through our focus on productivity and operational improvements.” TELECONFERENCE AND SIMULTANEOUS WEBCASTApogee will host a teleconference and webcast at 9 a.m. Central Time tomorrow, April 10. To participate in the teleconference, call 1-877-280-4960 toll free or 857-244-7317 international, access code 39601427. The replay will be available from noon Central Time on April 10 through midnight Central Time on Thursday, April 17 by calling 1-888-286-8010 toll free, access code 48078950. To listen to the live conference call over the internet, go to the Apogee web site at http://www.apog.com and click on “investor relations” and then the webcast link at the top of that page. The webcast also will be archived on the company’s web site. ABOUT APOGEE ENTERPRISESApogee Enterprises, Inc., headquartered in Minneapolis, is a leader in technologies involving the design and development of value-added glass products and services. The company is organized in four segments, with three of the segments serving the commercial construction market:
- Architectural Glass segment consists of Viracon, the leading fabricator of coated, high-performance architectural glass for global markets.
- Architectural Services segment consists of Harmon, Inc., one of the largest U.S. full-service building glass installation and renovation companies.
- Architectural Framing Systems segment businesses design, engineer, fabricate and finish the aluminum frames for window, curtainwall and storefront systems that comprise the outside skin of buildings. Businesses in this segment are: Wausau Window and Wall Systems, a manufacturer of custom aluminum window systems and curtainwall; Tubelite, a fabricator of aluminum storefront, entrance and curtainwall products; Alumicor, a fabricator of aluminum storefront, entrance, curtainwall and window products for Canadian markets; and Linetec, a paint and anodizing finisher of window frames and PVC shutters.
- Large-Scale Optical segment consists of Tru Vue, a value-added glass and acrylic manufacturer primarily for the custom picture framing market.
|Apogee Enterprises, Inc. & Subsidiaries|
|Consolidated Condensed Statement of Income|
|Weeks Ended||Weeks Ended||%||Weeks Ended||Weeks Ended||%|
|Dollar amounts in thousands, except for per share amounts||March 1, 2014||March 2, 2013||Change||March 1, 2014||March 2, 2013||Change|
|Cost of goods sold||167,475||143,452||17||%||606,193||554,491||9||%|
|Selling, general and administrative expenses||34,837||30,144||16||%||124,967||118,314||6||%|
|Other (expense) income, net||(159||)||(385||)||59||%||(87||)||224||N/M|
|Earnings before income taxes||11,894||5,392||121||%||39,766||26,907||48||%|
|Income tax expense||3,856||996||287||%||11,780||7,796||51||%|
|Earnings per share - basic||$0.28||$0.16||75||%||$0.98||$0.68||44||%|
|Average common shares outstanding||28,614,742||28,076,220||2||%||28,483,251||27,953,686||2||%|
|Earnings per share - diluted||$0.27||$0.15||80||%||$0.95||$0.67||42||%|
|Average common and common equivalent shares outstanding||29,571,261||29,072,573||2||%||29,373,886||28,641,050||3||%|
|Cash dividends per common share||$0.1000||$0.0900||11||%||$0.3700||$0.3600||3||%|
|Business Segments Information|
|Weeks Ended||Weeks Ended||%||Weeks Ended||Weeks Ended||%|
|March 1, 2014||March 2, 2013||Change||March 1, 2014||March 2, 2013||Change|
|Architectural Framing Systems||63,182||44,954||41||%||216,059||191,137||13||%|
|Operating income (loss)|
|Architectural Framing Systems||1,904||(152||)||N/M||14,930||14,584||2||%|
|Corporate and other||(938||)||(41||)||-2188||%||(4,237||)||(2,759||)||-54||%|
|Consolidated Condensed Balance Sheets|
|March 1,||March 2,|
|Net property, plant and equipment||193,946||168,948|
|Liabilities and shareholders' equity|
|Total liabilities and shareholders' equity||$565,357||$520,141|
|N/M = Not meaningful|
|Apogee Enterprises, Inc. & Subsidiaries|
|Consolidated Condensed Statement of Cash Flows|
|Weeks Ended||Weeks Ended|
|Dollar amounts in thousands||March 1, 2014||March 2, 2013|
|Depreciation and amortization||26,550||26,529|
|Proceeds from new markets tax credit transaction, net of deferred costs||7,471||-|
|Changes in operating assets and liabilities||(4,164||)||(11,788||)|
|Net cash provided by continuing operating activities||52,921||40,523|
|Proceeds on sale of property||806||1,078|
|Acquisition of businesses and intangibles, net of cash acquired||(53,301||)||(15||)|
|Net sales (purchases) of restricted investments||23,915||(4,528||)|
|Net sales (purchases) of marketable securities||26,458||(17,552||)|
|Investments in life insurance||-||(1,451||)|
|Net cash used in investing activities||(43,974||)||(57,132||)|
|Proceeds from issuance of debt||-||10,000|
|Payments on debt||(10,082||)||(164||)|
|Stock issued to employees, net of shares withheld||710||862|
|Net cash (used in) provided by financing activities||(17,576||)||232|
|Decrease in cash and cash equivalents||(8,629||)||(16,377||)|
|Effect of exchange rates on cash||(673||)||117|
|Cash and cash equivalents at beginning of year||37,767||54,027|
|Cash and cash equivalents at end of period||$28,465||$37,767|