FIRST QUARTER HIGHLIGHTS
-- Revenues of $238.5 million were up 14 percent from the
-- Operating income was $16.6 million, up 11 percent from the
-- Earnings from continuing operations were $0.36 per share
versus $0.34 per share a year earlier.
-- Architectural segment revenues grew 17 percent, and operating
income increased 28 percent versus the prior-year period.
-- Large-scale optical segment revenues declined 18 percent,
while operating income decreased 17 percent versus the
prior-year period, as expected.
-- Net earnings were $0.36 per share versus $0.40 per share in
the prior-year period when there was non-cash income in
-- Fiscal 2009 guidance reconfirmed: earnings from continuing
operations are expected to range from $1.82 to $1.94 per
We feel good about our first quarter results, which met Apogee's expectations for improvement in architectural segment revenues and earnings as all businesses performed well, said Russell Huffer, Apogee chairman and chief executive officer. The architectural segment operating margin was slightly lower than we had expected due to project and product mix, and productivity. He noted that the company tends to experience slightly lower first quarter seasonal revenues.
Our large-scale optical segment operating margin remained high and met our expectations, as our best value-added products were more than 50 percent of segment sales for the third consecutive quarter, said Huffer. We continue to convert customers to our best glass and acrylic framing products, even though elimination of less-profitable product lines and soft picture framing market conditions impacted revenues.
With the ongoing strength in our architectural segment, we remain optimistic about Apogee's outlook and are reconfirming our earnings per share guidance for fiscal 2009, said Huffer. We have strong visibility for fiscal 2009 and into fiscal 2010 due to our backlog, project commitments, solid bidding activity, and the construction levels and green building trends in markets we serve.
SEGMENT AND OPERATING HIGHLIGHTS
Architectural Products and Services
-- Revenues of $220.7 million were up 17 percent over the prior-year
-- The continued ramp-up of new architectural glass capacity in the
Utah and converted Minnesota facilities, as well as the addition
of the storefront and entrance business contributed to revenue
-- Operating income was $14.8 million, up 28 percent from a year ago.
-- Operating margin was 6.7 percent, compared to 6.2 percent in the
prior-year period. It was slightly below company expectations for
the quarter due to project and product mix, and productivity. The
mix shift and ramp up of new capacity led to higher than expected
first-quarter labor costs, which are expected to return to normal
-- Segment backlog was maintained at high levels, reflecting normal
quarter-to-quarter variation rather than a change in Apogee's market
-- Backlog was $491.0 million, up 19 percent from $413.7 million in
the prior-year period; backlog was $510.9 million at the end of
-- Backlog continues to be balanced across all segments, with
growth in office projects.
-- Approximately $350 million, or 71 percent, of the backlog is to
be delivered in fiscal 2009; approximately $120 million, or 25
percent, in fiscal 2010; and approximately $20 million, or 4
percent, in fiscal 2011.
Large-Scale Optical Technologies
-- Revenues of $17.7 million declined 18 percent compared to the
-- Elimination of less-profitable product lines, along with soft
picture framing market conditions led to the decrease.
-- Operating income was $3.3 million, down 17 percent from the prior-
year period as expected.
-- Operating margin was 18.4 percent, compared to 18.1 percent in
the prior-year period.
-- Our best value-added framing glass products exceeded 50 percent
of revenues for the third consecutive quarter.
Equity in Affiliates
-- There was a loss of $0.4 million from the PPG Auto Glass, LLC
joint venture, compared to break-even results in the
-- In the prior-year period, there was non-cash income of $2.0
million, net of tax, due to favorable resolution of an
international curtainwall project legal matter.
-- Long-term debt was $73.4 million, compared to $43.4 million in
the prior-year period and $58.2 million at the end of fiscal
2008. Debt grew as expected, with increases in capital
expenditures and working capital, along with share
-- Non-cash working capital (current assets, excluding cash, less
current liabilities) was $83.5 million, compared to
$69.7 million at the end of fiscal 2008. Seasonal cash flow
resulted in higher working capital requirements.
-- Depreciation and amortization were $6.6 million, up 17 percent
from the prior year, due to new capacity depreciation and
-- Capital expenditures were $23.3 million, compared to $14.0
million in the prior year period. There was spending on
productivity improvements and capacity expansions in both
-- First-quarter share repurchases totaled approximately 156,000
shares at an average price of $20.27 per share, for a total of
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