Apogee Enterprises, Inc.
) rose 1.6% as the company reported a 50% year-over-year increase
in its first-quarter fiscal 2015 earnings to 21 cents per share.
However, earnings lagged the Zacks Consensus Estimate of 23 cents.
Total revenue increased 18% year over year to $211 million in the
quarter, but fell short of the Zacks Consensus Estimate of $212
Cost of goods sold increased 19% to $169 million in the quarter.
Gross profit improved 14% to $41 million. Gross margin, however,
decreased 60 basis points (bps) to 19.7%.
Selling, general and administrative (SG&A) expenses rose 11%
year over year to $33.6 million. Operating income was $7.8 million,
which grew 28% from $6.1 million earned in the year-ago quarter.
Operating margin rose 30 bps to 3.7%.
Revenues from the
segment increased 6% year over year to $79.6 million driven by
growth in the U.S. and international market sectors. Operating
income in the quarter grew a whopping 104% year over year to $2.8
million, aided by higher volume resulting in better capacity
Revenues from the
segment increased 11% year over year to $51.6 million.. The segment
reported an operating profit of $0.2 million, a turnaround from a
loss of $1 million incurred in the year-ago quarter driven by
improved project margins.
Architectural Framing Systems
segment's revenues increased 44% year over year to $64 million.
Organic growth, excluding the Canadian acquisition was 22%. The
three U.S. businesses in the segment delivered double-digit growth,
with the window business particularly delivering strong growth. The
segment's operating income decreased 6% year over year to $1.9
million, led by loss in the Canadian business.
Large-Scale Optical Technologies
segment's revenues rose 3% year over year $20 million. Operating
income in the reported quarter was $3.9 million, declining from
$4.7 million in the year ago quarter due to increased investments
in research and development for new products and new market
sectors, as well as in manufacturing capacity.
Apogee had cash and short-term investments of $17.7 million at the
end of the reported quarter compared with $28.7 million as of
fiscal 2014 end. Cash flow from operations was $1.2 million in the
first quarter of 2015, against cash usage of $2.2 million in the
prior year quarter. Long-term debt remained flat at $20.7 million
at the end of first-quarter fiscal 2015 compared with fiscal 2014
Consolidated backlog at the end of the first quarter increased 28%
to $385 million from $302 million in the prior-year quarter.
Approximately 80% of the backlog or $307 million is expected to be
delivered in fiscal 2015 and the balance 20% or around $78 million
in fiscal 2016 and beyond.
Fiscal 2015 Guidance
For fiscal 2015, Apogee affirmed revenue growth in the range of 15%
to 20%. The company raised the low end of its previous earnings
guidance range from $1.35 to $1.40 and now expects to earn $1.40 to
$1.50 per share. Apogee also expects its previous acquisitions to
be accretive to its fiscal 2015 earnings.
This guidance is based on an increasing backlog, commitments and
strong bidding pipeline as well as an improving commercial
construction market. Most of the indices are exhibiting
improvement, which signal growth in the construction sector. Apogee
expects to outperform domestic commercial construction market
growth by around 5 percentage points.
Apogee confirmed capital spending for fiscal 2015 to be about $40
million. The spending will aid product development capabilities and
productivity as well as positive free cash flow. In addition, the
company predicts gross margin for fiscal 2015 to be approximately
Apogee reiterated its revenue target of $1 billion by the end of
fiscal 2016. It also expects to achieve 10% operating margins on
the back of its focus on productivity and operational improvements.
Apogee will benefit from its strategy of international growth and
new product introductions. Apogee's backlog remains strong, which
bodes well for its future performance. The company intends to add
new capacities and fund acquisitions. Focus on operational
improvements, expansion into new geographies and markets as well as
product launches will drive Apogee's revenue growth going forward.
Apogee Enterprises is a leader in technologies for the design and
development of value-added glass products, services and systems.
Apogee currently carries a Zacks Rank #3 (Hold).
Some other stocks worth considering in the industrial product
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). All of these stocks have a Zacks Rank #2 (Buy).
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