Apogee finds Texas buyer for glass unit

Apogee Enterprises has found a buyer for its retail auto glass business, announcing Tuesday it will sell Harmon AutoGlass to the Dwyer Group, a Texas-based franchise-management company.Terms of the transaction, scheduled to close by Dec. 31, were not disclosed.

The Bloomington-based glass manufacturer said in September it would shed Harmon to focus on its more profitable architectural-glass business line.

Company officials said most of the 265 Harmon stores included in the sale eventually would be converted into Glass Doctor franchises by Dwyer. Harmon also operates about 390 co-branded facilities across 40 states.

Glass Doctor has two existing glass-replacement shops in Minnesota, with franchise outlets in St. Louis Park and Bemidji. The 100-store chain has been managed since 1998 by Waco, Texas-based Dwyer, which was a publicly traded company until last week, when it was bought out by a private-equity firm.

The Glass Doctor unit produced about $2 million in overall revenues for the parent company through the first six months of the year, a 5 percent decline from year-ago levels. Dwyer, which also franchises carpet, plumbing, electrical, and heating and cooling service concepts, generates most of its income from sales royalties and franchise fees but does not disclose overall sales volumes for its individual units.

In its most recent reported quarter, Harmon AutoGlass produced a $650,000 profit on about $51.6 million in sales prior to taking a $5 million charge reflecting the reduced carrying value of the division. Overall, Apogee expects to take between $7 million and $9 million in charges connected with the upcoming sale.

Overall, Apogee reported a $1.8 million net loss on $135.8 million in sales during the three months ended Aug. 30, including the $5 million write-down.

In a statement, CEO Dina Dwyer said the pending acquisition would position Glass Doctor to better compete for national insurance business.

Dwyer also is likely expecting an easy time bringing Harmon AutoGlass under its fold. Typically, the company sells Glass Doctor franchises to existing glass-replacement business owners and then provides extensive management and operating support to the new affiliated owners.

For example, new franchisors are required to attend training classes at Dwyer’s corporate headquarters in Waco, where they get instruction on broad-based marketing techniques, customer service and staff retention, along with financial management of the local outlet. Dwyer also last year developed a proprietary business management software system, designed to help franchisees manage their businesses.

Following the sale, Apogee will retain its windshield manufacturing operations and its minority stake in a glass-distribution business with PPG Industries.

600450 Apogee finds Texas buyer for glass unit glassonweb.com
Date: 7 November 2003
Source: Finance-commerce.com

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