Apogee Releases Second Quarter Results

Apogee Enterprises Inc. announced its fiscal 2018 second-quarter results, which included a 24-percent increase in revenues to $343.9 million compared to the prior year period. Its operating income of $27.8 million was down 16 percent before adjustments versus the same time a year ago.

Adjusted operating income of $34.1 million was up 3 percent versus the prior-year period, according to the report. Operating margin was 8.1 percent, or 9.9 percent adjusted, compared to 11.9 percent in the previous-year period. Net interest expense increased $1.6 million versus the same time a year ago, as debt was incurred for acquisitions.

“Our architectural framing systems segment, now our largest segment at more than 50 percent of revenues, is central to our strategy to deliver more stable future revenue streams and earnings,” says Joseph F. Puishys, Apogee chief executive officer. “During this cycle, architectural framing systems revenues have consistently grown and operating margins have been the strongest among our architectural segments. In the second quarter, this segment drove our revenue growth and more importantly, our existing framing systems businesses . . . excluding our two recent acquisitions . . . delivered double-digit top- and bottom-line growth in the quarter.

“We also had double-digit growth in architectural glass segment mid-size projects, an important step forward as we transform Apogee’s mix,” he adds. “In addition, across Apogee we continue to diversify our revenues as we grow our retrofit business, introduce new products and further penetrate newer geographies in our existing businesses.”

During fiscal 2018, the company completed the acquisitions of Sotawall and EFCO.

“We have internal visibility to continued end-market growth for the next two to three years, and we are confident Apogee is in a good position to capitalize on future opportunities,” says Puishys. “External commercial construction market metrics remain positive, and our heavy bidding activity has driven backlog growth.”

Architectural Framing Systems

Revenues of $189.0 million were up 105 percent; excluding the addition of Sotawall and EFCO, revenues increased 17 percent. Operating income grew to $16.5 million, up 27 percent; adjusted operating income of $19.2 million was up 47 percent. Operating margin was 8.7 percent, or 10.1 percent adjusted, compared to 14.1 percent. Operating margins for existing businesses were up substantially, offset by a lower operating margin at EFCO and a significant foreign exchange loss at the Canadian curtainwall business.

Segment backlog grew $240 million to $495.9 million from the fiscal 2018 first quarter backlog level, including $216 million from the acquisition of EFCO.

Architectural Glass

Revenues of $97.4 million were down 2 percent, as “double-digit mid-size project growth was somewhat offset by the timing of larger projects,” according to the report. Operating income was $10.3 million, up 7 percent. Operating margin was 10.5 percent, compared to 9.7 percent the previous period.

Architectural Services

Revenues of $46.8 million were down 40 percent, compared to the strong prior-year period. Operating income was $0.8 million, down 88 percent. Operating margin was 1.7 percent, compared to 8.0 percent, due to “lower volume leverage on project management, engineering and manufacturing capacity,” the report reads. Segment backlog grew $30 million to $323.0 million from the fiscal 2018 first-quarter backlog level.

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