Apogee Enterprises 4th Quarter Earnings Exceed Estimates, Increase Significantly From Prior Year; FY2002 Earnings Guidance Increased.Business Editors MINNEAPOLIS--(BUSINESS WIRE)--April 4, 2001 Continuing strong improvement in operations produced fiscal 2001 fourth quarter earnings that exceeded expectations and were significantly improved over the prior year for Apogee apogee (ăp`əjē), point farthest from the earth in the orbit of a body about the earth. See apsis. The farthest point. Enterprises, Inc. (Nasdaq:APOG APOG Advanced Operational Planning Group APOG Aberdeen Police Officer's Guild ), which develops and delivers value-added val·ue-add·ed adj. Of or relating to the estimated value that is added to a product or material at each stage of its manufacture or distribution: glass products and services for the architectural, large-scale large-scale adj. 1. Large in scope or extent. 2. Drawn or made large to show detail. large-scale Adjective 1. wide-ranging or extensive 2. optical and automotive industries Automotive Industries, Ltd. (Hebrew: תעשיות רכב נצרת עלית, תע"ר . Apogee today reported fourth quarter earnings from continuing operations continuing operations Parts of a business that are expected to be maintained as an ongoing segment of an overall business operation. Income and losses from continuing operations are reported separately if any segments have been discontinued during the of $0.15 per share, or $4.2 million, compared with a loss of $0.07 per share, or $2.0 million, in the prior-year period. Net earnings were $0.21 per share, or $5.8 million, versus a net loss of $0.12 per share, or $3.5 million, in the fiscal 2000 fourth quarter. All earnings per share figures refer to diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of . Reported revenues for the fourth quarter totaled $194.3 million, a 9 percent decrease from revenues of $212.7 million in the same period last year. Revenues grew 2 percent compared to the fourth quarter of last year after being adjusted for the formation of the PPG PPG Points Per Game (basketball player statistic) PPG Power Play Goals (hockey) PPG Planning Policy Guidance (UK) PPG Programmable Pulse Generator PPG Power Puff Girls Auto Glass, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control joint venture in July July: see month. . "Our quarterly results were strong and continued the momentum we've we've Contraction of we have. we've have achieved throughout fiscal 2001," said Russell Russell, English noble family. It first appeared prominently in the reign of Henry VIII when John Russell, 1st earl of Bedford, 1486?–1555, rose to military and diplomatic importance. Huffer huff n. A fit of anger or annoyance; a pique: stormed off in a huff. v. huffed, huff·ing, huffs v.intr. 1. To puff; blow. 2. , Apogee chairman, president and chief executive officer. "I'm I'm Contraction of I am. Our Living Language Speakers of some scattered varieties of American English sometimes use I'm instead of I've or I have in present perfect constructions, as in especially pleased with the ongoing operational improvement in our manufacturing, which made major strides in the second half of the year, and in our retail auto replacement glass business which significantly improved upon its performance compared with last year." Apogee has redefined its financial business segments to better reflect its changing focus and business mix. Commenting on the new segment structure, Huffer said, "Our segments are now more closely aligned with the markets we serve to highlight the growth potential for our businesses, especially those in the architectural and large-scale optical segments." Historical information by segment was released March 29. The new segments are: -- Architectural products and services: design, engineer, fabricate and install the walls of glass and windows comprising the outside skin of commercial and institutional buildings -- Large-scale optical technologies: develop and produce high technology glass that enhances the visual performance of products for the display, imaging and picture framing industries -- Automotive replacement glass and services: fabricate, repair and replace automobile windshields and windows Architectural products and services Operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. for this segment grew to $9.4 million, a 23 percent increase from $7.7 million in the fiscal 2000 fourth quarter, on flat revenues totaling $110.2 million. Exceptional improvement in both sales and operating income at Viracon was offset by revenue and earnings weakness at Wausau Wausau (wô`sô), city (1990 pop. 37,060), seat of Marathon co., central Wis., on the Wisconsin River; settled 1839, inc. 1872. It is an industrial, commercial, and agricultural city in the heart of Wisconsin's dairy region. Window & Wall Systems which, as expected, continued to experience a decrease in shipments largely due to a product mix issue in the second half of fiscal 2001. Large-scale optical technologies In the fourth quarter, this segment's revenues grew 25 percent to $24.6 million, while operating income was $1.0 million. Strong operational improvement at Viratec that positively impacted both sales and earnings was countered by slightly lower earnings at Tru Vue as it integrated operations of two pre-framed art businesses acquired in fiscal 2001. As a result of softening softening /sof·ten·ing/ (sof´en-ing) malacia. softening a change of consistency, with loss of firmness or hardness. in the PC market, Apogee is closing its Viratec San Diego San Diego (săn dēā`gō), city (1990 pop. 1,110,549), seat of San Diego co., S Calif., on San Diego Bay; inc. 1850. San Diego includes the unincorporated communities of La Jolla and Spring Valley. Coronado is across the bay. facility, which coats computer monitors, during the first quarter of fiscal 2002. "We were unable to identify other products or applications for this facility with the predictable profitability we demanded," said Huffer. He added that the impact here, which is not expected to be material, has been reflected in Apogee's fiscal 2001 fourth quarter results and forward-looking for·ward-look·ing adj. Concerned with or making provision for the future: forward-looking educators; a forward-looking corporate plan. Adj. 1. estimates for fiscal 2002. Automotive replacement glass and services The segment reported an operating loss operating loss The excess of operating expenses over revenue. As with operating income, operating losses exclude revenues and expenses from operations that are not considered a regular part of the business. Also called deficit. Compare operating income. of $1.7 million, a significant improvement from an operating loss of $7.7 million in the same period last year. Reported revenues for the seasonally low fourth quarter were $59.5 million, compared to $82.9 million in the prior-year period. Revenues for this segment decreased 2 percent compared to the fourth quarter of last year after being adjusted for the formation of the PPG Auto Glass joint venture. The positive impact of the Harmon Harmon is a surname, and may refer to:
Fiscal 2001 Full-Year Results In fiscal 2001, Apogee significantly increased earnings from operations, and reduced debt, working capital and capital expenditures, compared with fiscal 2000. For the 12-month period ended March 3, 2001, Apogee's earnings from continuing operations were $0.48 per share or $13.4 million, compared with $0.11 per share or $3.1 million a year ago. Net earnings were $0.54 per share or $15.0 million, compared with $0.44 per share or $12.2 million for fiscal 2000. The fiscal 2001 results included $0.06 per share or $1.6 million of earnings from discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. , primarily from cash collected in the fourth quarter that was in excess of anticipated receipts related to European European emanating from or pertaining to Europe. European bat lyssavirus see lyssavirus. European beech tree fagussylvaticus. European blastomycosis see cryptococcosis. operations, compared to $0.33 per share or $9.1 million from discontinued operations in fiscal 2000. Reported revenues for fiscal 2001 increased 3 percent to $865.2 million, compared to $840.5 million last year. Fiscal 2001 revenues grew 11 percent compared to the prior year after being adjusted for the formation of the PPG Auto Glass joint venture in July. Operating income was $31.9 million, compared with $19.4 million in last year's 12-month period. Equity in Affiliates The increase in this category in the fourth quarter and for the entire year versus the comparable prior-year periods reflects the formation of the PPG Auto Glass joint venture and is related to the successful startup (STARTing UP) "At startup" means when the computer is first turned on or when a program is first loaded. See Startup folder. , rationalization rationalization, in psychology: see defense mechanism. of costs, and transfer of assets The conveyance of something of value from one person, place, or situation to another. The law recognizes that persons are generally entitled to transfer their assets to whomever they wish and for whatever reason. The most common means of transfer are wills, trusts, and gifts. to the venture, somewhat offset by continued funding of the TerraSun joint venture. Financial Condition At March 3, 2001, Apogee's long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. decreased to $104.2 million from $164.4 million at the end of fiscal 2000 as the company continued to focus on reducing its debt. Apogee's long-term debt to total capital ratio at the close of fiscal 2001 was 41 percent compared with 54 percent at the end of the prior-year. Apogee's EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) A metric used to show a company's profitability, but not its cash flow. EBITDA became popular in the 1980s to show the potential profitability of leveraged buyouts, but has become increased 76 percent to $16.0 million during the fourth quarter, compared to $9.1 million in the same period last year. In the fourth quarter, depreciation and amortization totaled $7.1 million, compared with $8.1 million in the year-ago quarter. For the year, EBITDA was $66.1 million, a 26 percent increase from fiscal 2000. Depreciation and amortization were $34.2 million in fiscal 2001, up from $33.0 million the prior year. Working capital was $37.8 million at the end of fiscal 2001, down from $79.0 million at the end of last year, largely due to the contribution of inventory into PPG Auto Glass in the second quarter. Capital expenditures were $4.1 million in the fourth quarter, an increase from $2.3 million in last year's fourth quarter. Capital expenditures totaled $15.0 million in fiscal 2001, less than half the $44.0 million invested last year for plant expansions. First Quarter and FY2002 Outlook "We remain comfortable with our fiscal 2002 earnings estimate which is being revised upward to $0.64 to $0.74 per share from continuing operations, from $0.60 to $0.70 per share previously, to reflect a reduction in the anticipated effective tax rate to 31 percent due to changes in applicable tax statutes," said Huffer. "Despite the slowing economy, we still see growth opportunities for our leading brands, especially in the custom portion of the construction market and in the art and picture framing industry. In addition, we entered fiscal 2002 with approximately six months backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. in our largest segment, architectural products and services." "Another factor contributing to our future confidence is our decision to implement the Six Sigma Not to be confused with Sigma 6. Six Sigma is a set of practices originally developed by Motorola to systematically improve processes by eliminating defects.[1] A defect is defined as nonconformity of a product or service to its specifications. business improvement process companywide, as a means of instilling in·still also in·stil tr.v. in·stilled, in·still·ing, in·stills also in·stils 1. To introduce by gradual, persistent efforts; implant: "Morality . . . a continuous improvement culture within Apogee," said Huffer. "We are starting our training in Six Sigma which we expect to improve margins longer term through variation reduction and streamlining of processes." The following statements related to the fiscal 2002 full year are based on current expectations. These statements are forward-looking, and actual results may differ materially. -- The company expects revenue to grow in the single digits for the year after being adjusted for the formation of the PPG Auto Glass joint venture. -- Architectural products and services: The construction industry is Apogee's largest market and impacts this segment. Although independent construction industry research firms are currently predicting a flat market overall for 2002, the segments in which Apogee participates are expected by these firms to have single-digit growth for the same period. Apogee expects high single-digit growth as markets continue to shift to the value-added materials and services provided by the company's businesses. -- Large-scale optical technologies: This segment is expected to have low double-digit dou·ble-dig·it adj. Being between 10 and 99 percent: double-digit inflation. revenue growth in fiscal 2002, with strong growth in value-added picture framing glass offset by the softening PC industry and the closure of the Viratec San Diego facility. -- Automotive replacement glass and services: Revenues are expected to be flat to slightly up for the year after being adjusted for the formation of the PPG Auto Glass joint venture. Apogee anticipates windshield prices to increase slightly this year, but expects industry and Harmon AutoGlass windshield replacement units to continue to decline in fiscal 2002. -- The company expects a slight improvement in the gross margin percentage for the year as operating efficiencies are partially offset by labor, material and energy cost increases. -- Sales, general and administrative expense is expected to be flat as a percent of sales for the year. -- Apogee's estimated earnings of $0.64 to $0.74 for fiscal 2002 broken down by quarter are: Q1, $0.09 to $0.11 per share; Q2, $0.23 to $0.26 per share; Q3, $0.18 to $0.21 per share; and Q4, $0.14 to $0.16 per share. -- Apogee's anticipated earnings increase in fiscal 2002 compared with the prior year results from: -- Continuing operations earnings growth of 15 to 20 percent; -- Decrease in the tax rate from 35 percent to 31 percent for the full year (the lower effective tax rate reflects changes in applicable tax statutes); and -- Contribution from "equity in affiliates" will include the positive impact from PPG Auto Glass being offset by continued funding of the TerraSun joint venture. -- Capital spending capital spending Spending for long-term assets such as factories, equipment, machinery, and buildings that permits the production of more goods and services in future years. is anticipated to be approximately $25 to $30 million for fiscal 2002. -- Depreciation and amortization is expected to be $30 to $32 million in fiscal 2002. The discussion above contains "forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. These statements reflect management's current expectations or beliefs. There can be no assurances given that the ongoing reorganization and realignment re·a·lign tr.v. re·a·ligned, re·a·lign·ing, re·a·ligns 1. To put back into proper order or alignment. 2. To make new groupings of or working arrangements between. of Harmon AutoGlass will lead to successful operating results now or in the future. There can be no assurances that PPG Auto Glass, Apogee's automotive replacement glass distribution joint venture with PPG Industries PPG Industries (NYSE: PPG) was founded in 1883 as the Pittsburgh Plate Glass Company. PPG is an American manufacturer of glass and chemical products, including automotive safety glass. , will achieve favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. short-term Short-term Any investments with a maturity of one year or less. short-term 1. Of or relating to a gain or loss on the value of an asset that has been held less than a specified period of time. or long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. operating results. In addition, in recent years there has been excess capacity at the distribution level of the automotive replacement glass industry and margins have narrowed. There is no assurance PPG Auto Glass will achieve any anticipated efficiencies or be able to improve or maintain margins. There can be no assurances that the shutdown shut·down n. A cessation of operations or activity, as at a factory. shutdown Noun the closing of a factory, shop, or other business Verb shut down of Viratec San Diego will not have a material impact on Apogee operations. In addition, there can be no assurances that the company's expected growth due to its strength serving high-end high-end adj. Informal 1. Appealing to sophisticated and discerning customers: a high-end department store; high-end video equipment. 2. markets with value-added products will not be impacted by the slowing economy. The Company cautions readers that actual future results could differ materially from those described in the forward-looking statements depending upon the outcome of certain factors, including the risks and uncertainties identified in Exhibit 99 to the Company's Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the fiscal year ended February February: see month. 26, 2000. Teleconference and Simultaneous Webcast Analysts, investors and media are invited to listen to Apogee's live teleconference or webcast at 9 a.m. Central Time tomorrow, April 5. To participate in the teleconference, call 1-877-679-9051 toll free or 952-556-2804 local and reference "Apogee Enterprises." The replay will be available from 1 p.m. CST CST abbr. 1. Central Standard Time 2. convulsive shock treatment CST Central Standard Time Noun 1. tomorrow, April 5 through midnight CST on Thursday Thursday: see week. , April 12, by calling 1-800-615-3210 toll free, access code 5079630. 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 Investor relations The process by which the corporation communicates with its investors. " and then the webcast link at the top of that page. The webcast also will be archived on the company's web site. Apogee Enterprises, Inc., headquartered in Minneapolis, is a world leader in technologies involving the design and development of value-added glass products, services and systems. The company is organized in three segments: -- Architectural products and services companies design, engineer, fabricate and install the walls of glass and windows comprising the outside skin of commercial and institutional buildings. Businesses in this segment are: Viracon, a leading global fabricator fab·ri·cate tr.v. fab·ri·cat·ed, fab·ri·cat·ing, fab·ri·cates 1. To make; create. 2. To construct by combining or assembling diverse, typically standardized parts: of coated, high-performance architectural glass; Harmon, Inc., the second largest U.S. full-service building glass installation and maintenance company; Wausau Window & Wall Systems, a manufacturer of custom, non-residential aluminum window systems and curtainwall; and Linetec, one of the largest U.S. architectural paint and anodizing anodizing Method of coating metal for corrosion resistance, electrical insulation, thermal control, abrasion resistance, sealing, improving paint adhesion, and decorative finishing. finishers. -- Large-scale optical technologies companies develop and produce high technology glass that enhances the visual performance of products for the display, imaging and picture framing industries. Businesses in this segment are: Tru Vue, a leading U.S. value-added glass and matboard manufacturer for the art and framing industry; and Viratec Thin Films, a leading global producer of optical thin film coatings for the display and imaging markets. -- Automotive replacement glass and services companies fabricate, repair and replace automobile windshields and windows. Businesses in this segment are: Harmon AutoGlass, the nation's second largest chain of retail auto glass replacement and repair stores; and Viracon/Curvlite, a leading U.S. fabricator of aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. foreign and domestic car windshields.
PRESS RELEASE EXHIBIT
APOGEE ENTERPRISES, INC.
Apogee Enterprises, Inc. & Subsidiaries
Consolidated Condensed Statement of Income
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended %
March 3, 2001 Feb. 26, 2000 Change
------------- ------------- ------
Net sales $ 194,292 $ 212,736 -9%
Cost of goods sold 151,586 168,665 -10%
------------- -------------
Gross profit 42,706 44,071 -3%
Selling, general and
administrative expenses 33,802 43,129 -22%
------------- -------------
Operating income (loss) 8,904 942 845%
Interest expense, net 2,241 2,769 -19%
Equity in income (loss) of
affiliated companies 213 (855) N/M
------------- -------------
Earnings (loss) from
continuing operations
before income taxes and
other items below 6,876 (2,682) N/M
Income taxes 2,697 (639) N/M
------------- -------------
Earnings (loss) from
continuing operations 4,179 (2,043) N/M
Earnings (loss) from
discontinued operations 1,640 (1,415) N/M
------------- -------------
Net earnings (loss) $ 5,819 $ (3,458) N/M
============= =============
Earnings per share - basic:
Earnings (loss) from
continuing operations $0.15 ($0.07) N/M
Earnings (loss) from
discontinued operations $0.06 ($0.05) N/M
Net earnings (loss) $0.21 ($0.12) N/M
Average common shares outstanding 27,843,024 27,757,120 0%
Earnings per share - diluted:
Earnings (loss) from
continuing operations $0.15 ($0.07) N/M
Earnings (loss) from
discontinued operations $0.06 ($0.05) N/M
Net earnings (loss) $0.21 ($0.12) N/M
Average common and common
equivalent shares outstanding 28,014,608 27,757,120 1%
Cash dividends per common share $0.053 $0.053 0%
Fifty-three Fifty-two
Weeks Ended Weeks Ended %
March 3, 2001 Feb. 26, 2000 Change
------------- ------------- ------
Net sales $ 865,200 $ 840,488 3%
Cost of goods sold 686,203 673,253 2%
------------- -------------
Gross profit 178,997 167,235 7%
Selling, general and
administrative expenses 147,103 147,817 0%
------------- -------------
Operating income (loss) 31,894 19,418 64%
Interest expense, net 11,122 10,359 7%
Equity in income (loss) of
affiliated companies 1,465 (2,817) N/M
------------- -------------
Earnings (loss) from
continuing operations
before income taxes and
other items below 22,237 6,242 256%
Income taxes 8,876 3,171 180%
------------- -------------
Earnings (loss) from
continuing operations 13,361 3,071 335%
Earnings (loss) from
discontinued operations 1,641 9,104 -82%
------------- -------------
Net earnings (loss) $ 15,002 $ 12,175 23%
============= =============
Earnings per share - basic:
Earnings (loss) from
continuing operations $0.48 $0.11 334%
Earnings (loss) from
discontinued operations $0.06 $0.33 -82%
Net earnings (loss) $0.54 $0.44 23%
Average common shares outstanding 27,834,629 27,746,279 0%
Earnings per share - diluted:
Earnings (loss) from continuing
operations $0.48 $0.11 333%
Earnings (loss) from
discontinued operations $0.06 $0.33 -82%
Net earnings (loss) $0.54 $0.44 23%
Average common and common
equivalent shares outstanding 27,898,116 27,793,617 0%
Cash dividends per common share $0.210 $0.210 0%
----------------------------------------------------------------------
Business Segments Information
(Unaudited)
Thirteen Thirteen
Weeks Ended Weeks Ended %
March 3, 2001 Feb. 26, 2000 Change
------------- ------------- ------
Sales
Architectural $110,181 $110,283 0%
Large-Scale Optical 24,619 19,673 25%
Auto Glass 59,511 82,872 -28%
Eliminations (19) (92) -79%
-------------- -------------
Total $194,292 $212,736 -9%
-------------- -------------
Operating income (loss)
Architectural $9,405 $7,671 23%
Large-Scale Optical 998 976 2%
Auto Glass (1,747) (7,690) -77%
Corporate and other 248 (15) N/M
-------------- -------------
Total $8,904 $942 845%
-------------- -------------
Fifty-three Fifty-two
Weeks Ended Weeks Ended %
March 3, 2001 Feb. 26, 2000 Change
------------- ------------ ------
Sales $441,466 $394,104 12%
Architectural 90,768 69,934 30%
Large-Scale Optical 333,311 377,499 -12%
Auto Glass (345) (1,049) -67%
Eliminations ------------- ------------
$865,200 $840,488 3%
Total ------------- ------------
Operating income (loss) $27,393 $20,513 34%
Architectural 4,571 (540) N/M
Large-Scale Optical 1,429 184 677%
Auto Glass (1,499) (739) 103%
Corporate and other ------------- ------------
$31,894 $19,418 64%
Total ------------- ------------
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