Apogee Enterprises, Inc.
) delivered second quarter fiscal 2013 earnings of 17 cents per
share, in stark contrast to the prior year loss of 6 cents.
Earnings comfortably surpassed the Zacks Consensus Estimate of 9
cents per share.
Total Revenues improved 6% year over year to $175.9 million,
beating the Zacks Consensus Estimate of $170 million. The
improvement was driven by the growth in the Architectural as well
as Large-Scale Optical Technologies segment.
Cost of sales remained flat year-over-year to $139.8 million in
the quarter. Gross profit improved 39% to $36.1 million. Gross
margin in the quarter improved 480 basis points to 20.5%.
SG&A expenses remained flat year over year in the quarter to
$28.6 million. Operating income was $7.6 million compared to a loss
of $2.7 million in the year ago quarter.
Revenues in the
Architectural Products and Services
segment rose 5% year over year to $156.4 million. The growth was
attributable to share gains in storefront as well as installation
Operating income in the quarter was $3 million compared to the
year ago loss of $5.1 million. The improvement was driven by higher
pricing of architectural glass and volume growth in the storefront
and installation businesses along with good operation performance
throughout the segment.
Backlog in the segment was $299 million compared to $267.3
million in the year ago quarter. The company expects to deliver
roughly $166 million or 56% of the backlog in fiscal 2013 and $133
million or 44% in fiscal 2014.
Large-Scale Optical Technologies
segment's revenues went up 19% to $19.6 million. Operating income
in the reported quarter improved 48.6% to $5.2 million. The
improvement stemmed from higher value-added glass and acrylic mix
across the picture framing sectors.
Apogee ended the quarter with cash and short-term investments of
$68.3 million, compared to $79.3 million at fiscal 2012 end.
Long-term debt amounted to $30.8 million compared to $20.9 million
at fiscal 2012 end.
Capital expenditure for the first six month of fiscal 2013 was
$15.7 million compared to $3.6 million prior year period. Cash
provided by operating activities was $10.5 million during the first
six months of fiscal 2013 compared to cash used amounting to $14.7
million during year ago comparable period.
For fiscal 2013, Apogee has increased its earnings guidance to
the range of 56 cents to 64 cents per share from the previous
guidance of 48 cents to 58 cents. It expects revenue growth in the
mid-single digits, driven by share gains in the architectural
Further, the company expects to generate positive free cash flow
after spending $25 to $30 million to improve productivity and
capacity, besides introducing new products along with maintaining
The company has significant exposure to the U.S. market in the
installation and storefront businesses and is focusing on further
increasing its exposure in that market to gain share. The strategy
of increasing its domestic geographical footprint will help
revenues grow, moving forward.
The architectural segment returned to profitability in the
reported quarter. Moreover, the segment's backlog increased 30%
year over year and reached its maximum level in twelve quarters
which bodes well for its future performance.
However, macroeconomic conditions might be a headwind for
Apogee's performance in fiscal 2013. Moderating global economic
growth and uncertainty in the global economic scenario can limit
Apogee's near-term revenue visibility.
Apogee retains a short-term Zacks #3 Rank (Hold). We have a
long-term Outperform recommendation on the stock.
APOGEE ENTRPRS (APOG): Free Stock Analysis
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