Apogee Posts 3Q Earnings

In a release, the company noted third-quarter highlights:

- Revenues of $240.4 million were up 14 percent from the prior-year
period.

- Operating income was $24.8 million, up 111 percent from the
prior-year period.

- Earnings from continuing operations were $0.63 per share versus $0.26
per share a year earlier.

-- In the current period, Apogee had a gain of $0.04 per share on the
sale of its 34-percent interest in the PPG Auto Glass LLC joint
venture, and in the prior-year period took an impairment charge of
$0.11 per share on its investment in this joint venture.

-- In the prior-year period, write-down of three Florida glass
installation projects reduced architectural segment earnings by $0.14
per share. In the current period, architectural segment earnings were
impacted by $0.07 per share of additional expenses for estimated final
remediation of two of the projects.

-- In the current period, long-term executive compensation expense
adjustments added $0.06 per share, primarily related to lower projected
payouts of stock-based incentives.

-- Net tax benefits of $0.02 per share were recognized in the current
period, primarily due to the Congressional extension of the research
and development tax credit. In the prior-year period, net tax benefits
of $0.08 per share were also recognized for research and development
tax credits.

- Architectural segment revenues grew 16 percent, while operating
income increased 154 percent versus the prior-year period.

- Large-scale optical segment revenues declined 2 percent, while
operating income increased 43 percent compared to the prior-year period.

- Net earnings, including discontinued operations, were $0.63 per share
versus $0.38 per share in the prior-year period.

-- In the prior-year period, conclusion of the sale of the
non-strategic recreational vehicle and bus windshield business resulted
in discontinued operations earnings of $0.12 per share.

- Fiscal 2009 guidance: expected earnings from continuing operations
are maintained at $1.65 to $1.82 per share.

Commentary: "Apogee's strong third-quarter performance is indicative of
our earnings potential in strong market conditions," said Russell
Huffer, Apogee chairman and chief executive officer. "Our architectural
businesses generally performed well on their healthy project backlog,
which was booked an average of nine to 12 months ago and had good
pricing and margins. Large-scale optical segment operating income
increased as sales of our best value-added products to retail chains
continued to grow.

"Although we expect future periods to be impacted by the commercial
construction slowdown, we have entered the downturn with a very strong
balance sheet," he said. "We are generating significant positive cash
flow, our long-term debt has declined to less than $30 million, and we
have a strong bank facility with available capacity."

Outlook:

"Our fiscal 2009 guidance for earnings from continuing operations
remains at $1.65 to $1.82 per share, and includes declines in revenues
and earnings per share in the fourth quarter compared to the prior
year, as Apogee experiences the first full quarterly impact of the
commercial construction slowdown," Huffer said. "Despite the
anticipated fourth-quarter declines, we expect to complete fiscal 2009
with record revenues and earnings.

"To manage through the downturn, we have already implemented and
continue to evaluate further cost cutting initiatives, ranging from
reduction of headcount and discretionary spending to productivity
improvements," he said. "We remain strongly focused on cash flow and
managing working capital, and will tightly control capital
expenditures. In addition, we are pursuing opportunities to generate
revenues by penetrating underserved markets.

"Delays, cancellations and slower conversion of bid projects into
awards have impacted the size of our backlog and have led to
uncertainty regarding our outlook for fiscal 2010," Huffer said. "At
this time, we estimate that our fiscal 2010 revenues are likely to be
down at least 10 percent.

"As our third-quarter performance demonstrated, we have good businesses
with strong brands and operations that are positioned to serve the
growing demand for green, energy-efficient commercial buildings. In
addition, we have a very strong balance sheet," he said. "We anticipate
that with our focus on quality, service and productivity improvements,
our architectural segment will emerge stronger than ever after the
economy strengthens."

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