Apogee Reports FY2015 fourth-quarter and full-year results

The company reports strong performance with revenue growth in three of four segments

Apogee Enterprises, Inc. announced fiscal 2015 fourth-quarter and full-year results. Apogee provides distinctive solutions for enclosing commercial buildings and framing art.
“Apogee’s growth engine continued in the fourth quarter as we again grew revenues in the double digits and income more than 50 percent,” said Joseph F. Puishys, Apogee chief executive officer. “Performance across the company was strong, with double-digit earnings and revenue growth in three of four segments.
“I am pleased with our fourth-quarter operating margin of 8 percent, up 240 basis points from the prior-year period, as we leverage the strong growth in our architectural markets and continue to improve productivity,” he said. “Backlog was up significantly from the prior year and essentially held at the high third-quarter level even as we grew fourth-quarter revenues 15 percent.
“The full fiscal year was a similar story of strong revenue and earnings growth, driven by all segments. The architectural segments again outperformed commercial construction markets, and the large-scale optical segment showed impressive top-line growth and continued to deliver strong earnings,” said Puishys. “I’m pleased with our margin improvement, and that we grew cash and short-term investments by $24 million to $53 million.
“During the year, we made significant investments across the company for capability, capacity and productivity, including in our architectural glass business where we completed installation and startup of a new coater; with the coater startup, we earned a $0.22 per share tax credit in the second quarter,” he said. Other fiscal 2015 highlights, Puishys noted, were the continued progress on Apogee’s Lean initiative and the 10 percent cash dividend increase.
“We built our backlog significantly during the year, giving us momentum moving into fiscal 2016,” said Puishys. “We expect fiscal 2016 will continue our trend of double-digit top-line growth and very strong bottom-line growth.” “We expect revenues to grow 10 to 15 percent, and earnings to increase to $2.05 to $2.20 per share.”
“We are entering the year with a high level of backlog, which we expect will grow over the year,” he also said.
Puishys noted that backlog growth rates will likely moderate somewhat as growth in the architectural services segment, the largest contributor to backlog, is held to mid-single digits to focus on margin improvement.
“Our architectural markets are expected to again grow in the mid-double digits in fiscal 2016, and we continue to have robust bidding and award activity,” he said. “Together, these factors give us continued confidence in sustained growth for Apogee.”
He added that capital expenditures are anticipated to range from $45 to $50 million as Apogee invests to increase capabilities, capacity and productivity. The gross margin is expected to be approximately 24 percent.
“Our strategies to grow through new geographies, new products and new markets along with our focus on productivity and operational improvements are delivering results,” Puishys said. “We expect to surpass $1 billion in revenues in fiscal 2016 and to achieve a trailing 12-month operating margin of 10 percent midway through fiscal 2017. Longer term, our outlook is for revenues of $1.3 billion at 12 percent operating margin in fiscal 2018.”