Apogee Reports Net Loss as a Result of Charges Related to Previously Announced Plans to Sell Harmon Autoglass; Updates Guidance

Apogee Enterprises, Inc. (Nasdaq:APOG), which develops and delivers value-added glass products and services for the architectural, large-scale optical and automotive industries, today announced second quarter results, revised its guidance to reflect the anticipated sale of Harmon AutoGlass, announced September 10, and lowered full-year guidance. Apogee had previously provided guidance of $0.14 to $0.18 per share for the second quarter of fiscal 2004.

Excluding Harmon AutoGlass, Apogee's second quarter guidance for continuing operations would have ranged from $0.10 to $0.12 per share.

Apogee reported second quarter earnings per share from continuing operations of $0.09, or $2.5 million, which includes a charge of $0.01 per share, or $0.5 million, resulting from the closure of a small satellite architectural paint finishing facility in Atlanta. This compares to earnings from continuing operations of $0.25 per share, or $7.1 million, in the prior-year period. All earnings per share figures refer to diluted earnings per share. Prior-year results have been reclassified to reflect Harmon AutoGlass as a discontinued operation.

Second quarter net results were a loss of $0.07 per share, or $1.9 million, compared with net earnings of $0.30 per share, or $8.6 million, in the previous-year period. This reflects a loss of $0.16 per share from discontinued operations in the second quarter, which includes a charge of $0.18 per share, or $5.0 million, due to reduction of the carrying value of Harmon AutoGlass.

Second quarter revenues from continuing operations totaled $135.8 million, down 8 percent compared to revenues of $147.8 million in the same period last year.

"Although our earnings from continuing operations were slightly below expectations, we are pleased that the large-scale optical segment second quarter revenues were slightly ahead of expectations due to stronger than anticipated growth in sales of value-added picture framing glass and anti-reflective acrylic products," said Russell Huffer, Apogee chairman, president and chief executive officer. "Architectural revenues for the quarter were generally down with the market. In addition, margins in our glass installation business were negatively impacted due to some isolated project management issues, and we have implemented improved processes to address these issues.

"Our cash flow remains solid," said Huffer. "Even though we were slightly below our guidance and recorded the discontinued operations charges, we still reduced our long-term debt by more than $10 million from the first quarter, ending the second quarter at $40.4 million.

"Looking at the remainder of the year, although we are starting to see indications that the decline in some sectors of the commercial construction market may be ending, the turnaround is not occurring as quickly as we had originally anticipated," he said. "This challenging architectural environment continues to lead to project delays, and we had some project management issues, reducing our revenues and putting pressure on our margins. As a result, we are lowering full-year guidance for continuing operations by $0.08 per share to $0.38 to $0.50, from $0.46 to $0.58 per share adjusted for the treatment of Harmon AutoGlass as a discontinued operation. Prior guidance before the discontinued operations adjustment was $0.50 to $0.65 per share. New full-year net earnings guidance including anticipated charges in discontinued operations is $0.04 to $0.27 per share."

600450 Apogee Reports Net Loss as a Result of Charges Related to Previously Announced Plans to Sell Harmon Autoglass; Updates Guidance glassonweb.com
Date: 23 September 2003
Source: Businesswire.com

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