FinancialFlash, USGlass, July 2010

Volume 45, Issue 7 - July 2010

FinancialFlash

Architectural Segment Revenues Decline for Apogee in First Quarter
For the first quarter of fiscal 2011 Apogee Enterprises in Minneapolis reported that its architectural segment revenues declined 24 percent, with an operating loss of $8.6 million. The segment—which includes Viracon, Harmon Inc., Wausau Window & Wall Systems, Linetec and Tubelite—also reported backlog of $214.9 million at the period’s end, compared to $310.0 million in the prior-year period and $227.5 million at the end of fiscal 2010.

“As we expected, fiscal 2011 started out to be extremely challenging due to the tough commercial construction market conditions,” says Russell Huffer, Apogee chair and chief executive officer. “Our strategy to manage our business over a cycle has allowed us to establish a strong balance sheet, with cash on hand. This positions us well during these difficult markets.

“Architectural segment revenues were down comparable to our markets served, which have been impacted by tight commercial real estate credit and depressed employment levels,” he adds. “First-quarter architectural segment losses were the result of low pricing and low volume, although our manufacturing operations and installation project execution performed well.

“Although fiscal 2011 will be difficult for our architectural businesses, we are well positioned financially; have leading products, services and brands; and remain focused on operational and strategic initiatives to strengthen our business for the rebound in our markets,” Huffer says.

When compared to the prior year results, first quarter results for Apogee’s architectural products and services segment saw revenues of $126.4 million, down 24 percent, as well as an operating loss of $8.6 million, compared to income of $10.8 million the year before. Although bidding activity, which continues to be driven by institutional work, is starting to grow, bid-to-award timing remains slow, according to the company. The company expects approximately $160 million, or 74 percent, of its backlog to be delivered in fiscal 2011, and the remainder in fiscal 2012.

Also in its results, Apogee reports that company-wide revenues of $143.0 million were down 21 percent and an operating loss of $6.1 million, compared to earnings of $11.7 million. Loss from continuing operations was 13 cents per share, versus earnings of 27 cents per share. Cash and short-term investments totaled $69.6 million, compared to $102.6 million at the end of the fiscal 2010.
www.apog.com