Apogee reports fiscal 2012 second-quarter results

Apogee Enterprises, Inc. announced fiscal 2012 second-quarter results on 14 September, and said that for fiscal 2012, it continues to expect revenue growth to exceed 10%, and to be slightly profitable for the year.

Apogee Enterprises, Inc. announced fiscal 2012 second-quarter results on 14 September:
•    revenues of USD 165.6 million were up 14%;
•    operating loss was USD 2.7 million, compared to a loss of USD 7.4 million;
•    per share loss from continuing operations was USD 0.06, compared to a loss of USD 0.18;
•    results include USD 0.05 per share of CEO transition costs as Joseph F. Puishys became Apogee CEO 22 August, replacing Russell Huffer, who retired during the quarter;
•    architectural segment revenues increased 17%, with an operating loss of USD 5.1 million compared to a loss of USD 10.8 million;
•    backlog was USD 231.3 million, compared to USD 247.0 million in the first quarter and USD 193.0 million in the prior-year period;
•    large-scale optical segment revenues declined 6%, with operating income of USD 3.5 million compared to USD 4.2 million;
•    cash and short-term investments were USD 45.3 million;
•    net results were a loss of USD 0.06 per share, compared to USD 0.00 per share;
•    in the prior-year period, discontinued operations provided non-cash earnings of USD 0.18 per share from resolution of an outstanding exposure related to a foreign operation discontinued in 1998.
With regards to architectural products and services:
•    revenues of USD 149.1 million were up 17%, due to the addition of the Brazilian architectural glass business, which contributed 7%age points of the increase; growth in the window and storefront businesses; and improved architectural glass pricing;
•    operating loss was USD 5.1 million, compared to a loss of USD 10.8 million;
•    results improved from the prior-year period with higher architectural glass pricing and slightly better segment capacity utilization, partially offset by lower margin work in installation;
•    prior-year period results included approximately USD 2 million in expenses to address architectural glass quality issues due to a vendor-supplied material;
•    the Brazilian architectural glass business had minimal impact on operating income, as expected;
•    backlog was USD 231.3 million, compared to USD 247.0 million in the first quarter and USD 193.0 million in the prior-year period.
•    decline was due to the timing of projects entering backlog. The level of awarded projects awaiting final signed contracts grew to more than USD 60 million from USD 40 million in the first quarter.
•    approximately USD 116 million, or 50%, of the backlog is expected to be delivered in fiscal 2012, and approximately USD 116 million, or 50%, in fiscal 2013.
Large-scale optical technologies results:
•    revenues of USD 16.4 million were down 6%;
•    softer retail markets and the timing of customer promotions impacted sales;
•    operating income was USD 3.5 million compared to USD 4.2 million;
•    operating margin was 21.4%, compared to 24.4%, with the continued solid mix of value-added products and good operational performance.
Long-term debt was USD 21.1 million, compared to USD 21.4 million at the end of fiscal 2011. Long-term debt includes USD 20.4 million in long-term, low-interest industrial revenue and recovery zone facility bonds.
Cash and short-term investments totalled USD 45.3 million, compared to USD 43.0 million at the end of the first quarter and USD 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 USD 68.2 million, compared to USD 63.3 million at the end of the first quarter, and USD 39.4 million at the end of fiscal 2011.
Capital expenditures year-to-date were USD 3.6 million, down 29% from the prior-year period.
Depreciation and amortization year-to-date were USD 13.9 million, comparable to the prior-year period.
“For fiscal 2012, we continue to expect revenue growth to exceed 10%, and that Apogee will be slightly profitable for the year. We also expect Apogee to generate positive cash flow from operations in fiscal 2012,” Puishys said. “Our outlook for fiscal 2012 requires us to fill some fourth quarter architectural segment capacity. We expect to maintain the improved architectural glass pricing and mix, as well as the share gain in our window and storefront businesses, which will be somewhat offset by lower margins in the installation business as it executes projects bid at the cycle trough.
“Apogee continues to see good bidding activity, which is starting to move beyond institutional projects to other sectors,” said Joseph F. Puishys, Apogee chief executive officer. “A concern as the quarter ended is the softening in domestic commercial construction market indicators. The recent McGraw-Hill Construction forecast for non-residential construction and the American Institute of Architects Architecture Billings Index indicate that our end markets will not improve until calendar 2012, rather than later in 2011.
“I am excited to be at the helm of this financially strong US green building leader. I am focused on operational improvements, and developing and executing strategies to grow our business at home and internationally,” he said.