US-based Apogee Enterprises Inc. said it will close facilities and eliminate some jobs to improve performance in its automotive glass operations.
Apogee designs and develops glass products, services …
US-based Apogee Enterprises Inc. said it will close facilities and eliminate some jobs to improve performance in its automotive glass operations. Apogee designs and develops glass products, services and systems. Organized in two business segments, its Glass Technologies business makes architectural glass and high-end glass coatings for the electronics markets, while its Glass Services business provides replacement automotive glass and building glass services. Apogee also said it continues to expect a loss from continuing operations in fiscal 2000“s fourth quarter, which ends February 26. Fiscal 2000 diluted earnings from continuing operations are expected to be about breakeven, compared with earnings of 71 cents diluted per share in fiscal 1999. Including discontinued operations, fiscal 2000 earnings are expected to be about 40 cents diluted per share. The automotive glass unit of the Glass Services business segment will retain its presence in all current markets, but will move to a flexible service structure, the company said. As a result, costs will be reduced by eliminating jobs and closing some facilities, a process that has already begun with headcount reductions of 2% of the automotive glass field workforce and 13% at automotive glass headquarters. The retail automotive glass business will close about 40 retail facilities by the end of fiscal 2001, in addition to the 13 facilities already closed during this fiscal year. In markets where retail facilities will be closed, retail coverage will be maintained by mobile vans and service centres operated from facilities shared with other businesses outside of Apogee. Apogee said this shift to a variable-cost model is expected to enable the automotive glass unit to operate profitably in a wider range of industry conditions, including the very difficult environment that currently exists. In the Glass Technologies segment, management said all of its businesses are back on track and fully operational to meet demand, with expectations of profitability in the upcoming fiscal year. For fiscal 2001, Apogee said it expects earnings from continuing operations of 25 cents to 30 cents diluted per share, based on improving profits by Glass Technologies during the second half of the fiscal year and a conservative assessment of a flat performance by the automotive glass unit of the Glass Services segment. “Our expectations of 25 cents to 30 cents diluted earnings per share for fiscal 2001 earnings from continuing operations are very disappointing,” said Russell Huffer, Apogee“s chairman, president and chief executive officer. But Huffer added that the company believes the worst is behind in both Glass Technologies and automotive glass. Huffer said Apogee is reducing fixed-cost overhead and moving to a variable-cost structure, which should enable the company to operate profitably going forward. With the conclusion of its US$ 100-million expansion programme in Glass Technologies, Apogee“s capital expenditures will be reduced significantly. Fiscal 2000 capital expenditures are expected to be about US$ 48 million, with plans for a greater than 50% reduction in fiscal 2001.