Apogee First Quarter Earnings Per Share Increase 21 Percent; Full-Year EPS Guidance Reconfirmed.MINNEAPOLIS Minneapolis (mĭn'ēăp`əlĭs), city (1990 pop. 368,383), seat of Hennepin co., E Minn., at the head of navigation on the Mississippi River, at St. Anthony Falls; inc. 1856. -- 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 ) today announced fiscal 2007 first quarter earnings. Apogee 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 . FIRST QUARTER HIGHLIGHTS --Revenues of $195.1 million were up 19 percent in the 14-week period versus the prior-year 13-week period. --Earnings were $0.17 per share versus $0.14 per share a year earlier. --Fiscal 2007 includes $0.01 per share expense in the quarter for stock-based compensation. --Unusual items in the current quarter were: $0.03 per share charge resulting from higher than expected costs for health care utilization, and a net gain of $0.01 per share from architectural segment asset dispositions. --Operating margin was 4.1 percent, up from 3.8 percent in the prior-year period. --Architectural segment revenues were up 23 percent, and 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. increased 54 percent versus the prior-year period. --Large-scale optical segment revenues increased 5 percent, and operating income increased 2 percent versus the strong prior-year period. Commentary "We had a solid start to fiscal 2007, with strong revenue and earnings growth in the first quarter," 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 and chief executive officer. "Our operating margins Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: showed improvement from the prior year due to improved market conditions and better operations. And, margins would have been approximately one-half percentage point higher had we not experienced greater than expected health care utilization. "We had good operational performance in our architectural segment manufacturing businesses," he said. "Also, as we had anticipated, our picture framing business was impacted by a negative mix shift within value-added framing glass. "We continue to be optimistic op·ti·mist n. 1. One who usually expects a favorable outcome. 2. A believer in philosophical optimism. op about fiscal 2007 as we provide value-added architectural products and services for our stronger commercial construction markets." SEGMENT AND OPERATING HIGHLIGHTS Architectural Products and Services --Revenues of $165.3 million were up 23 percent over the prior-year period due to higher architectural glass volume and pricing, and job flow in the installation business. --Operating income was $5.6 million, up 54 percent from a year ago as pricing and manufacturing operations Manufacturing operations concern the operation of a facility, as opposed to maintenance, supply and distribution, health, and safety, emergency response, human resources, security, information technology and other infrastructural support organizations. continued to improve. --The current period includes a pre-tax pre-tax adj → anterior al impuesto pre-tax adj → avant impôt(s) pre-tax adj → al lordo d'imposta net gain of $0.5 million from architectural segment asset dispositions. --First quarter operating margin was 3.4 percent, compared to 2.7 percent in the prior-year period. The margin increase from improved pricing and operational performance was somewhat offset by the higher than expected health care costs. --Segment 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. was $360.4 million, compared to a backlog of $235.0 million in the prior-year period and $321.0 million at the end of fiscal 2006. --Construction began on the new St. George, Utah St. George is a city located in the southwestern part of the U.S. state of Utah, and the county seat of Washington County, Utah.GR6 It is the principal city of and is included in the St. George, Utah Metropolitan Statistical Area. , architectural glass fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. plant, scheduled to begin operations in the first quarter of fiscal 2008 and expected to reach about $40 million in annual capacity at full operation. Large-Scale Optical Technologies --Revenues of $21.8 million were up 5 percent from the strong prior-year period. Higher volume of value-added products was somewhat offset by a less favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. value-added product mix and lower pre-framed art sales. --Operating income was $3.1 million, up 2 percent from the prior-year period. --Operating margin in the first quarter was 14.4 percent, down from 14.8 percent in the prior-year period, as expected. Automotive Replacement Glass and Services --Revenues of $8.1 million decreased 6 percent compared to the prior-year period. Sales of aftermarket Aftermarket See: Secondary market. aftermarket See secondary market. automobile windshields were slightly lower than expected. --There was 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 $0.2 million, compared to operating income of $0.1 million in the prior-year period. Equity in Affiliates --There was a loss of $0.2 million from investment in 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 . This compares to earnings of $0.2 million in the prior-year period. Results were impacted by competitive pricing conditions and costs associated with a small acquisition integrated by PPG Auto Glass during the quarter. Financial Condition --Long-term debt increased as expected to $59.9 million at the end of the first quarter, compared to $45.2 million at the end of fiscal 2006. --Long-term debt-to-total-capital ratio increased to 22.6 percent. --Non-cash working capital (current assets Current Assets Appearing on a company's balance sheet, it represents cash, accounts receivable, inventory, marketable securities, prepaid expenses, and other assets that can be converted to cash within one year. , excluding cash, less current liabilities Current Liabilities Usually appearing on a company's balance sheet, it represents the amount owed for interest, accounts payable, short-term loans, expenses incurred but unpaid, and other debts due within one year. ) was $90.6 million, compared to $70.6 million at the end of fiscal 2006 as a result of seasonal and growth working capital requirements Capital requirements Financing required for the operation of a business, composed of long-term and working capital plus fixed assets. . --Depreciation and amortization were $5.2 million, up slightly from the prior year. --Capital expenditures were $7.9 million, including investments in architectural glass fabrication capacity expansions. This compares to capital expenditures of $5.1 million in the prior-year period. OUTLOOK "We have a good start to fiscal 2007 and expect to show strong earnings growth over the prior year due to more robust commercial construction markets and continued improvement in architectural segment operating performance," said Huffer. "We are maintaining our fiscal 2007 earnings guidance range of $0.88 to $0.94 per share, which includes $0.05 per share for the non-cash expensing of options. This is strong earnings growth compared to fiscal 2006, which at $0.85 per share included the impact of one-time one-time adj. 1. or one·time a. Occurring or undertaken only once: a one-time winner in 1995. b. net tax benefits of $0.07 per share. "We have increased our overall and architectural segment revenue guidance for the year, along with our architectural segment operating margin guidance," he said. "Our strong architectural backlog of $360 million with improving margins gives us confidence in our outlook for the year; approximately $280 million of the backlog is currently scheduled for fiscal 2007. "The improved outlook for our architectural segment is somewhat offset by a decrease in our expectations for large-scale optical segment revenues and operating margin," Huffer said. "Our large-scale optical segment is seeing some reduced demand due to softness in national retail accounts, partially offset by increases in picture framing glass sales to distributors. In addition, we expect an even less favorable mix of value-added picture framing glass in fiscal 2007 compared to the prior year. "We are pleased to have been notified that we will receive proceeds of approximately $2 million from a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax settlement with a flat glass manufacturer covering 1991 to 1995," he said. "The proceeds, which we anticipate receiving as soon as the second quarter, have been included in our current earnings outlook. We expect this will be offset by higher health care costs under our self-insured self-insured Self fund Health insurance adjective Referring to the practice of carrying an individual health insurance policy for oneself; self insurance is usually more expensive than group insurance programs for the balance of the year." The following statements are based on current expectations for fiscal 2007. These statements are 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. , and actual results may differ materially. --Overall fiscal 2007 revenues for the year are expected to increase 11 to 15 percent (prior guidance was 5 to 9 percent). --Architectural segment revenues are expected to increase 14 to 18 percent (prior guidance was 6 to 9 percent). --Growth is expected due to market improvement and some market share gain despite capacity constraints CONSTRAINTS - A language for solving constraints using value inference. ["CONSTRAINTS: A Language for Expressing Almost-Hierarchical Descriptions", G.J. Sussman et al, Artif Intell 14(1):1-39 (Aug 1980)]. . --Large-scale optical segment revenues are expected to be flat to slightly down (prior guidance was 3 to 5 percent growth). --Auto glass segment revenues are expected to be flat compared to fiscal 2006. --Annual gross margins are expected to be down slightly in fiscal 2007 compared to fiscal 2006 as pricing, operational improvements and cost reductions are offset by higher costs for health care, wages, energy, materials and freight. --Selling, general and administrative expenses as a percent of sales are projected to be approximately 13.5 percent, including the impact of expensing options. --Expected annual operating margins by segment are: architectural, 4.5 to 4.7 percent (prior guidance was 4.4 to 4.6 percent); large-scale optical, 11 to 12 percent (prior guidance was 14 percent); and auto glass, approximately breakeven breakeven 1. The level of output or sales necessary to cover fixed expenses. Companies in industries that have high fixed costs and, consequently, high breakevens, such as automobile and steel manufacturing, are likely to exhibit large fluctuations . --Equity in affiliates, which reflects Apogee's portion of the results of the PPG Auto Glass joint venture, is expected to report earnings of approximately $3 million. --Capital expenditures are projected to be $40 to $45 million, including an estimated $25 million related to building the new architectural glass fabrication plant. --Depreciation and amortization are estimated at $20 million for the year. --Debt is expected to be approximately $50 to $60 million at year end, reflecting borrowings for the new architectural glass facility. --The effective tax rate for the full year is anticipated to be approximately 35 percent. --Earnings per share 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 are expected to range from $0.88 to $0.94, including the $0.05 per share impact of expensing options. The discussion above, including all statements in the Outlook section, 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 Apogee management's expectations or beliefs as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified by factors that may affect the operating results of the company, including the following: operational risks within (A) the architectural segment: i) competitive, price-sensitive and changing market conditions, including unforeseen delays in project timing and work flow; ii) economic conditions and the cyclical cyclical Of or relating to a variable, such as housing starts, car sales, or the price of a certain stock, that is subject to regular or irregular up-and-down movements. nature of the North American North American named after North America. North American blastomycosis see North American blastomycosis. North American cattle tick see boophilusannulatus. commercial construction industry; iii) product performance, reliability or quality problems that could delay payments, increase costs, impact orders or lead to litigation An action brought in court to enforce a particular right. The act or process of bringing a lawsuit in and of itself; a judicial contest; any dispute. When a person begins a civil lawsuit, the person enters into a process called litigation. ; iv) the segment's ability to fully utilize production capacity; and v) construction and ramp-up to full production of the announced third Viracon plant in a timely and cost-efficient Adj. 1. cost-efficient - productive relative to the cost cost-effective efficient - being effective without wasting time or effort or expense; "an efficient production manager"; "efficient engines save gas" manner; (B) the large-scale optical segment: i) markets that are impacted by consumer confidence and trends; ii) dependence on a relatively small number of customers; iii) changing market conditions, including unfavorable shift in product mix; and iv) ability to utilize manufacturing facilities; and (C) the auto glass segment: i) transition of markets served as Viracon/Curvlite focuses on selling to aftermarket manufacturers following the end of its 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. supply agreement 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. in the second quarter of fiscal 2006; ii) changes in market dynamics; iii) market seasonality; iv) highly competitive, fairly mature industry; and v) performance of the PPG Auto Glass, LLC joint venture. Additional factors include: i) revenue and operating results that are volatile; ii) the possibility of a material product liability event; iii) the costs of compliance with governmental regulations relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc hazardous substances; iv) management of discontinued operations Discontinued operations Divisions of a business that have been sold or written off and that no longer are maintained by the business. exiting activities; and v) foreign currency risk related to discontinued operations. The company cautions readers that actual future results could differ materially from those described in the forward-looking statements. The company wishes to caution investors that other factors may in the future prove to be important in affecting the company's results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. For a more detailed explanation of the foregoing and other risks and uncertainties, see Item 1A of the company's Annual 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. 25, 2006. TELECONFERENCE AND SIMULTANEOUS WEBCAST Analysts, investors and media are invited to listen to Apogee's live teleconference or webcast at 7:30 a.m. Central Time tomorrow, June 28. To participate in the teleconference, call 1-800-901-5218 toll free or 617-786-4511 international, access code 53246512. The replay will be available from 9:30 a.m. Central Time on Wednesday, June 28, through midnight Central Time on Wednesday, July 12 by calling 1-888-286-8010 toll free, access code 80687005. 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 and services. The company is organized in three segments: --Architectural products and services companies design, engineer, fabricate, install, maintain and renovate the walls of glass and windows comprising the outside skin of commercial and institutional buildings. Businesses in this segment are: Viracon, the leading 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 for global markets; Harmon, Inc., one of the largest U.S. full-service building glass installation, maintenance and renovation companies; Wausau Window and Wall Systems, a manufacturer of custom aluminum window systems and curtainwall; and Linetec, a paint and anodizing anodizing Method of coating metal for corrosion resistance, electrical insulation, thermal control, abrasion resistance, sealing, improving paint adhesion, and decorative finishing. finisher of window frames and PVC PVC: see polyvinyl chloride. PVC in full polyvinyl chloride Synthetic resin, an organic polymer made by treating vinyl chloride monomers with a peroxide. shutters. --Large-scale optical segment consists of Tru Vue, a value-added glass and acrylic acrylic, artificial fiber made from a special group of vinyl compounds, primarily acrylonitrile. Acrylic fibers are thermoplastic (i.e., soften when heated, reharden upon cooling), have low moisture regain, are low in density, and can be made into bulky fabrics. manufacturer for the custom framing and pre-framed art markets, and a producer of optical thin film coatings for consumer electronics displays. --Automotive replacement glass and services segment consists of Viracon/Curvlite, a U.S. fabricator of aftermarket foreign and domestic car windshields.
Apogee Enterprises, Inc. & Subsidiaries
Consolidated Condensed Statement of Income
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended %
Dollar amounts in thousands, except June 3, 2006 May 28, 2005 Change
for per share amounts
------------ ------------ ------
Net sales $195,064 $164,132 19%
Cost of goods sold 161,708 134,283 20%
------------ ------------
Gross profit 33,356 29,849 12%
Selling, general and administrative
expenses 25,386 23,663 7%
------------ ------------
Operating income 7,970 6,186 29%
Interest income 323 187 73%
Interest expense 839 617 36%
Other (expense), net (58) (34) -71%
Equity in (loss) income of affiliated
companies (190) 190 N/M
------------ ------------
Earnings before income taxes 7,206 5,912 22%
Income taxes 2,464 1,972 25%
------------ ------------
Net earnings $4,742 $3,940 20%
============ ============
Net earnings per share - basic $0.17 $0.14 21%
Average common shares outstanding 27,603,473 27,280,889 1%
Net earnings per share - diluted $0.17 $0.14 21%
Average common and common equivalent
shares outstanding 28,021,688 27,750,695 1%
Cash dividends per common share $0.0650 $0.0625 4%
----------------------------------------------------------------------
Business Segments Information
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended %
June 3, 2006 May 28, 2005 Change
------------ ------------ ------
Sales
Architectural $165,263 $134,829 23%
Large-Scale Optical 21,765 20,766 5%
Auto Glass 8,064 8,610 -6%
Eliminations (28) (73) 62%
------------ ------------
Total $195,064 $164,132 19%
============ ============
Operating income (loss)
Architectural $5,567 $3,606 54%
Large-Scale Optical 3,133 3,083 2%
Auto Glass (176) 73 N/M
Corporate and other (554) (576) 4%
------------ ------------
Total $7,970 $6,186 29%
============ ============
----------------------------------------------------------------------
Consolidated Condensed Balance Sheets
(Unaudited)
June 3, February 25,
2006 2006
------------ ------------
Assets
Current assets $213,358 $203,134
Net property, plant and equipment 115,738 113,198
Other assets 84,345 87,626
------------ ------------
Total assets $413,441 $403,958
============ ============
Liabilities and shareholders' equity
Current liabilities $115,715 $127,809
Long-term debt 59,900 45,200
Other liabilities 32,708 31,896
Shareholders' equity 205,118 199,053
------------ ------------
Total liabilities and shareholders' equity $413,441 $403,958
============ ============
N/M = Not meaningful
Apogee Enterprises, Inc. & Subsidiaries
Consolidated Condensed Statement of Cash
Flows
(Unaudited)
Fourteen Thirteen
Weeks Ended Weeks Ended
Dollar amounts in thousands June 3, 2006 May 28, 2005
------------ ------------
Net earnings $4,742 $3,940
Depreciation and amortization 5,168 4,665
Results from equity investments 190 (190)
Other, net 228 (33)
Changes in operating assets and liabilities,
net of effect of acquisitions (18,104) (15,300)
------------ ------------
Net cash used in continuing operating
activities (7,776) (6,918)
------------ ------------
Capital expenditures (7,904) (5,116)
Proceeds on sale of property 1,522 2
Net sales (purchases) of marketable
securities 2,426 (300)
Other investing activities 1,250 -
------------ ------------
Net cash used in investing activities (2,706) (5,414)
------------ ------------
Net proceeds from long-term debt and
revolving credit agreement 14,700 12,050
Proceeds from issuance of common stock, net
of cancellations 1,889 2,119
Dividends paid (3,642) (1,738)
Other, net 48 (250)
------------ ------------
Net cash provided by financing activities 12,995 12,181
------------ ------------
Cash used in discontinued operations (162) (294)
------------ ------------
Increase (decrease) in cash and cash
equivalents 2,351 (445)
Cash and cash equivalents at beginning of
year 4,676 5,967
------------ ------------
Cash and cash equivalents at end of period $7,027 $5,522
============ ============
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