Apogee Enterprises, Inc.
) delivered fourth-quarter fiscal 2013 earnings of 15 cents per
share, up 36% from 11 cents per share earned in the prior-year
quarter but falling short of the Zacks Consensus Estimate of 19
cents per share.
Total revenue improved 6% year over year to $179.7 million in the
quarter but missed the Zacks Consensus Estimate of $185 million.
The improvement was driven by growth in the Architectural
segment, somewhat offset by a decline in the Large-Scale Optical
Cost of goods sold increased 6% to $143 million in the quarter.
Gross profit improved 11% to $36.3 million. Gross margin in the
quarter improved 80 basis points to 20.2%. SG&A expenses
inched up 1% to $30.1 million. Operating income was $6.1 million,
more than double of $2.8 million earned in the year-ago quarter.
Revenues from the Architectural Products and Services segment
rose 9% year over year to $160.3 million, led by solid
performance of installation, window and architectural glass
businesses. Operating income in the quarter was $2.2 million, a
stellar improvement from loss of $0.5 million in the year-ago
quarter. The improvement was driven by higher pricing of
architectural glass and increased margins in the installation
business. Backlog in the segment was $297 million, up 25% from
$237.0 million in the prior-year quarter.
Large-Scale Optical Technologies segment's revenues went down 9%
to $19.5 million. Operating income in the reported quarter
remained flat at $4 million.
Fiscal 2013 Performance
Apogee's fiscal 2013 earnings per share more than tripled to 67
cents from 17 cents in the prior year. Revenues increased 6% to
$700 million in the year.
Apogee ended the year with cash and short-term investments of
$85.6 million, compared with $79.3 million at fiscal 2012 end.
Long-term debt amounted to $20.7 million, in line with the fiscal
2012 end. Cash provided by operating activities was $40.7 million
during fiscal 2013 compared to $28 million in fiscal 2012.
For fiscal 2013, Apogee expects earnings to lie in the range of
90 cents to $1.00 per share on the back of high single-digit
revenue growth. Gross margin is anticipated to be at least 22% in
fiscal 2014. Geographic growth in the domestic markets,
introduction of new strong architectural glass pricing and mix
and improving installation margins are expected to contribute to
revenue growth. Furthermore, Apogee's productivity initiatives
are expected to generate 50 to 100 basis points of margin
Capital spending for fiscal 2014 is projected in the range of $40
to $45 million as Apogee continues to invest in growth,
productivity and product development capabilities, including the
new architectural glass coater.
Apogee has set a benchmark of $1 billion in revenues by the end
of fiscal 2016. Apogee also expected to achieve 10% operating
margins through its focus on productivity and operational
The architectural segment returned to profitability in the second
quarter of 2013 and maintained the momentum since then. Moreover,
the segment's backlog remains strong, which bodes well for its
future performance. The company intends to add new capacities as
well as to fund acquisitions. Focus on operational improvements,
expansion in new geographies and markets, new product launches
will fuel Apogee's revenue growth going forward.
Apogee has faced challenging commercial construction market
conditions so far. However, the U.S. construction is finally
stabilizing and is on the road to a much-awaited recovery, which
looks promising for Apogee.
However, macroeconomic conditions might continue to be a headwind
for Apogee. Moderating global economic growth and uncertainty in
the global economic scenario can limit Apogee's near-term revenue
Apogee Enterprises is a leader in technologies for the design and
development of value-added glass products, services, and systems.
The company presently has two reportable segments - The
Architectural segment and the Large-Scale Optical Technologies
Apogee retains a Zacks Rank #3 (Hold). Other stocks in the same
industrial products sector with favorable Zacks Ranks are
Valmont Industries, Inc.
) - Zacks Rank #1 (Strong Buy),
) - Zacks Rank #2 (Buy) and
) - Zacks Rank #2 (Buy).
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