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Apogee Delivers Record Fy16 Revenues, Earnings; REAFFIRMS GUIDANCE FOR DOUBLE-DIGIT GROWTH IN FY17

The following excerpt is from the company's SEC filing.

Q4 revenues up 6%, 8% in constant currency

Q4 EPS up 47%; operating margin up 300 basis points

FY16 revenues up 5%, 7% in constant currency

FY16 EPS up 48% vs. prior-year adjusted EPS

Backlog >$0.5 billion for third consecutive quarter

FY17 outlook:

10% revenue growth; EPS of $2.65-$2.80

MINNEAPOLIS, MN (April 6, 2016) - Apogee Enterprises, Inc. (Nasdaq:APOG) today announced fiscal 2016 fourth-quarter and full-year results. Apogee provides distinctive solutions for enclosing commercial buildings and framing art.

FY16 FOURTH QUARTER VS. PRIOR-YEAR PERIOD

Revenues of $262.1 million were up 6 percent.

In constant currency, revenues were up 8 percent.

Operating income of $28.9 million was up 47 percent.

Operating margin was 11.0 percent, up 300 basis points.

Earnings per share of $0.69 were up 47 percent.

Backlog of $508.0 million was up 4 percent.

Cash and short-term investments were $90.6 million.

FY16 FULL YEAR VS. PRIOR-YEAR PERIOD

Revenues of $981.2 million were up 5 percent.

In constant currency, revenues were up 7 percent.

Gross margin was 24.8 percent, up 250 basis points.

Operating income of $97.4 million was up 53 percent.

Operating margin was 9.9 percent, up 310 basis points.

Earnings per share of $2.22 were up 48 percent vs. prior-year adjusted EPS of $1.50.

Prior-year reported EPS of $1.72 included $0.22 from a tax credit.

COMMENTARY

“Strong fourth quarter results - with revenues up 6 percent, earnings up 47 percent and operating margin growing 300 basis points to 11 percent - contributed to Apogee achieving an across-the-board record performance in fiscal 2016,” said Joseph F. Puishys, Apogee chief executive officer. “We did what we said we would do three years ago, essentially delivering on our fiscal 2016 goals of $1 billion in revenues at 10 percent operating margin.

- MORE -

• 4400 West 78

Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com

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“I am pleased that all four of our segments grew revenues and operating margin in fiscal 2016, and that our backlog grew from the end of fiscal 2015 to exceed $0.5 billion for the last three quarters,” he said. “Contributing to our strong earnings growth in fiscal 2016 were improved pricing, mix, productivity and project margins, as well as lower material costs and leverage on increased volume.

“For fiscal 2017, we continue to expect U.S. commercial construction market growth, based on our visibility from backlog, commitments and bidding activity, as well as external market metrics,” said Puishys. “This positive outlook supports our fiscal 2017 guidance for double-digit revenue growth of approximately 10 percent and record earnings of $2.65 to $2.80 per share.”

FY16 FOURTH-QUARTER SEGMENT AND OPERATING RESULTS VS. PRIOR-YEAR PERIOD

Architectural Glass

Revenues of $98.6 million were up 7 percent, on U.S. volume growth and improved pricing.

In constant currency, revenues were up 10 percent.

Operating income grew to $12.1 million, up 169 percent from $4.5 million.

Operating margin expanded 740 basis points to 12.3 percent, compared to 4.9 percent, due to improved pricing and mix, strong operational performance and volume leverage.

Architectural Services

Revenues of $76.8 million were up 21 percent, due to strong project activity during the quarter.

Operating income grew to $5.6 million, up 9 percent from $5.2 million, on increased volume at better margins and good project execution.

Operating margin was 7.3 percent, compared to 8.1 percent.

Architectural Framing Systems

Revenues of $79.6 million were up 3 percent, on U.S. volume growth and improved mix.

In constant currency, revenues were up 5 percent.

Operating income grew to $7.7 million, up 60 percent from $4.8 million.

Operating margin expanded 340 basis points to 9.7 percent, compared to 6.3 percent, as a result of lower raw material costs, volume leverage and execution of higher-margin window projects.

Large-Scale Optical Technologies

Revenues of $21.7 million were down 5 percent, due to timing of customer orders.

Operating income of $4.8 million was down 19 percent from $6.0 million.

Operating margin was 22.3 percent, compared to 26.2 percent, due to timing within the year of volume and product mix; full-year results and operational performance remained strong.

Consolidated Backlog

Backlog of $508.0 million was up 4 percent from $490.8 million in the prior-year period, and down 7 percent from the backlog of $544.7 million in the third quarter.

Approximately $407 million, or 80 percent, of the backlog is expected to be delivered in fiscal 2017; and approximately $101 million, or 20 percent, in fiscal 2018.

Financial Condition

Cash and short-term investments totaled $90.6 million, compared to $52.5 million at the end of fiscal 2015.

Share repurchases in fiscal 2016 totaled 575,000 shares at a cost of $24.9 million.

Debt was $20.4 million, compared to $20.6 million at the end of fiscal 2015. All debt is long-term, low-interest industrial revenue bonds.

Non-cash working capital was...


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