Full-year revenues up 6%; EPS more than tripled; Q4 revenues up 7%, operating income more than doubled, EPS up 36%; FY14 outlook: EPS of USD 0.90-USD 1.00 on high single-digit revenue growth.
Apogee Enterprises, Inc. has announced fiscal 2013 full-year and fourth-quarter results. Apogee provides distinctive value-added glass solutions for the architectural and picture framing industries.
With regards to FY13 full year vs. prior year results:
Revenues of USD 700.2 million were up 6%.
Operating income was USD 27.4 million, compared to USD 3.8 million.
Per share earnings from continuing operations were USD 0.66, compared to USD 0.17.
Net earnings per share were USD 0.67, compared to USD 0.17.
Architectural segment revenues increased 6%, with operating income of USD 9.2 million compared to an operating loss of USD 12.1 million.
Large-scale optical segment revenues increased 2%, with operating income of USD 21.0 million compared to USD 19.6 million.
Cash and short-term investments totalled USD 85.6 million, compared to USD 79.3 million.
FY13 fourth quarter vs. prior-year period results were:
Revenues of USD 179.7 million were up 7%.
Operating income was USD 6.1 million, up from USD 2.8 million.
Per share earnings from continuing operations were USD 0.15, compared to USD 0.11.
Architectural segment revenues increased 9%, with operating income of USD 2.2 million compared to an operating loss of USD 0.5 million.
Backlog was USD 297.0 million, compared to USD 300.4 million in the third quarter and USD 237.0 million in the prior-year period.
Large-scale optical segment revenues declined 9%, with operating income of USD 4.0 million, equal to the prior year.
“I am very pleased with our fiscal 2013 results, as our earnings per share more than tripled to USD 0.66 on revenue growth of 6% in commercial construction markets that continued to be flat,” said Joseph F. Puishys, Apogee chief executive officer. “Our architectural backlog is up 25% from the previous year end, and we generated USD 41 million in operating cash flow to support USD 35 million in capital investments for growth, productivity and product capabilities.
“At the same time, we made considerable progress on our growth strategies, ranging from success in our new Texas installation and storefront markets, to new products in our businesses,” he said. “In addition, in our architectural glass business we made significant productivity improvements as we managed capacity and upgraded operations, and are investing in new capabilities and efficiencies in our largest facility via a new state-of-the-art coater.
“During fiscal 2013, architectural segment revenues grew 6%, led by the installation, storefront and window businesses, and operating income improved by more than USD 20 million, driven by improved architectural glass pricing and product mix, good operational performance across the segment and earnings on revenue growth,” said Puishys. “The large-scale optical segment continued its strong performance as it introduced new glass and acrylic products, and entered new international picture framing markets.
“Continuing our quarterly year-over-year improvement in fiscal 2013, fourth quarter revenues were up 7% and operating income more than doubled,” he said. “Architectural segment revenue growth was led by our installation, window and architectural glass businesses, and segment earnings benefited from improved architectural glass pricing and the strong installation revenue. I was also pleased that in spite of one less week in our fiscal quarter and the timing of the December holidays, large-scale optical segment operating income was equal to the prior-year period due to strong operational performance and mix of value-added framing products.”
FY13 fourth-quarter segment and operating results vs. prior-year period for Architectural Products and Services were as follows:
Revenues of USD 160.3 million were up 9%, with growth led by the installation, window and architectural glass businesses.
Operating income was USD 2.2 million, compared to an operating loss of USD 0.5 million.
Operating margin was 1.4%.
Results improved due to higher architectural glass pricing and strong installation revenues with improving margins.
Backlog was USD 297.0 million, compared to USD 300.4 million in the third quarter and USD 237.0 million in the prior-year period.
Approximately USD 255 million, or 86%, of the backlog is expected to be delivered in fiscal 2014, and approximately USD 42 million, or 14%, in fiscal 2015.
Large-Scale Optical Technologies revenues of USD 19.5 million were down USD 1.8 million, or 9%, impacted by one less week in the current year period and the timing of the holidays. Operating income was USD 4.0 million, equal to the prior-year period, and operating margin was 20.4%, compared to 19.0%, as a result of strong operational performance and product mix.
With regards to Financial Condition, total debt was USD 30.8 million, compared to USD 21.0 million at the end of fiscal 2012. Total debt includes USD 30.4 million in current and long-term, low-interest industrial revenue and recovery zone facility bonds. Cash and short-term investments totalled USD 85.6 million, compared to USD 79.3 million at the end of fiscal 2012. Non-cash working capital was USD 44.1 million, compared to USD 44.4 million at the end of fiscal 2012. Fiscal 2013 capital expenditures were USD 34.7 million, including investments in growth for the storefront and installation businesses, and new product development capabilities and productivity improvements in architectural glass. This compares to USD 9.7 million in the prior year. Fiscal 2013 depreciation and amortization was USD 26.5 million. Fiscal 2013 had 52 weeks compared to 53 weeks in fiscal 2012, with the extra week in the fourth quarter.
“We expect to drive strong top- and bottom-line improvement in fiscal 2014 as we continue to implement growth and productivity initiatives,” said Puishys. “We anticipate revenue growth in the high single digits and earnings from continuing operations of USD 0.90 to USD 1.00 per share.
“Revenue growth should largely come from domestic geographic growth and new products, and our earnings should benefit from strong architectural glass pricing and mix and improving installation margins, as both businesses execute more complex, private projects,” he said. “In addition, Apogee expects to gain 50 to 100 basis points of further margin improvement from our productivity initiatives.
“We are experiencing stronger bidding activity for future work, and margins on new orders are improving,” Puishys said. “The outlook for US commercial construction markets in fiscal 2014, based on Apogee’s lag to McGraw-Hill forecasts for the segments we serve, is for low single-digit market growth. We again expect to outperform market growth by several percentage points.
“Capital spending for fiscal 2014 is expected to be in the range of USD 40 to USD 45 million as we continue to invest for growth, productivity and product development capabilities, including for the new architectural glass coater,” he said. “We expect to be free cash flow positive after these investments.” He added that the fiscal 2014 gross margin is anticipated to be at least 22%.
“I believe that our strategies to grow through new geographies, new products and new markets will allow Apogee to reach USD 1 billion in revenues by the end of fiscal 2016,” Puishys said. “At the same time, we believe we can achieve 10% operating margin in this timeframe, in part through our focus on productivity and operational improvements.”