Financial Flash

Apogee’s Fiscal Year and Fourth Quarter 2020 Results Drop Slightly From 2019

Apogee Enterprises Inc. saw a slight dip in fourth-quarter 2020 and full-year fiscal 2020 revenue compared to the same periods in 2019. Fourth-quarter revenue was $337.1 million, compared to $346.3 million in the fourth quarter of fiscal year 2019. Full-year fiscal 2020 revenue was $1.38 billion, compared to $1.4 billion in the prior-year. Apogee’s fiscal year runs from March 2019 through February 2020.

“We had a strong fourth quarter, ending fiscal 2020 on a positive note, with earnings above our prior guidance range, strong order flow leading to record backlog levels and cash flow from operations well above the prior year,” says Joseph F. Puishys, CEO. “We also made significant progress on key strategic initiatives, including our procurement savings program and other cost-savings actions, with line of sight to our $30 to $40 million annual savings target when fully implemented. We entered fiscal year 2021 with a solid foundation, good momentum in our business and a path to improved performance.”

Architectural Framing Systems Segment

Fourth quarter revenue for Apogee’s architectural framing systems segment, which includes Alumicor, EFCO Corp., Linetec, Sotawall, Tubelite and Wausau Window and Wall Systems, declined from the prior year period, primarily due to lower volumes. Operating income reflected lower revenue and the impact of operational difficulties that were identified in the third quarter, which have been addressed. Operating income in the prior-year quarter included a $3.1 million charge for a trade name impairment. Excluding this charge, adjusted operating income in the prior-year period was $9.5 million.

Architectural Glass Segment

Fourth quarter revenue for the architectural glass segment, which includes Viracon, was $98.3 million, compared to $103.7 million in the prior year quarter, reflecting lower volumes driven by increased competition from foreign competitors leveraging the strength of the U.S. dollar. A decline in operating income was attributed to start-up costs related to the new manufacturing facility for the small projects growth initiative, higher insurance costs and decreased volumes, partially offset by improved factory productivity.

Architectural Services Segment

The architectural services segment, which includes Harmon, continued to have strong order flow during the quarter, according to the company. The segment’s revenue grew to $73.4 million in the fourth quarter from $66.3 million in the prior-year quarter, on higher volumes driven by favorable project timing. Fourth-quarter operating income dropped slightly from last year’s period, which benefited from favorable project maturity as a number of projects came to completion.

Large-Scale Optical Segment

Revenue for the large-scale optical segment, which includes Tru Vue, was $21.5 million, compared to $24 million in the fourth quarter last year.

“Even with this solid performance and encouraging momentum in our business, the events surrounding the COVID-19 outbreak that have happened since the quarter-end have become our primary focus. As a company, we are stepping up to this challenge. Our top priority is safeguarding the health and safety of our employees and their families, while we continue to serve our customers and ensure the long-term health of our business … ,” says Puishys. “To this point, all of Apogee’s architectural segments continue to operate, ship product and meet our customer’s requirements, while our large-scale optical segment is seeing a more significant reduction in near-term customer demand. The situation is evolving quickly and we are assessing the potential impact on our business and evaluating actions to react to changing market conditions. In light of this uncertainty, we are not providing annual guidance for fiscal 2021 at this time.”

Court Dismisses Investors’ Case Against Apogee

In the beginning of April, a Minnesota district judge granted a motion to dismiss a proposed securities class action lawsuit against Apogee Enterprises due to a lack of clarity and failure to state a claim. The lawsuit, filed in November 2018 in the U.S. District Court for the District of Minnesota by several investors, alleged that Apogee and two of its executive officers committed securities fraud by hiding the extent of problems with its EFCO business.

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