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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."
((Comments on this story may be sent to newsdesk@closeupmedia.com))
((Distributed via M2 Communications Ltd - http://www.m2.com))
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