Apogee Enterprises Reports Fiscal 2021 First Quarter Results
Apogee Enterprises, Inc. (“Apogee”) announced its fiscal 2021 first-quarter results and provided a business update.
“We navigated our way through a very challenging quarter, with several significant COVID-19 related headwinds across our business,” said Joseph F. Puishys, Chief Executive Officer. “Most notably, the Large-Scale Optical segment had a near-complete shutdown of its customers for most of the quarter. Our three Architectural segments continued to operate as essential businesses, but saw several projects temporarily halted or delayed. We also had large numbers of COVID-related absences in our workforce, particularly in the Architectural Glass segment, and added costs as we adapted our operations to promote a healthy workplace environment for our employees. Despite these headwinds, we were able to effectively manage our capacity and costs to deliver positive earnings and strong cash flow.”
Mr. Puishys continued, “Following the end of the first quarter, we are beginning to see signs of improvement in our end markets and the economy and we remain optimistic that our results in the coming quarters will be stronger than the first quarter. Our Large-Scale Optical customers have begun to gradually reopen. In our Architectural segments, we expect project delays and workforce absences to moderate and our strong backlog provides good visibility in the longer lead-time parts of our business. Additionally, we should see increased benefit from our cost reduction actions as we enter the second quarter. Given the uncertainty in our end markets and the economy, at this time we are not providing guidance for fiscal 2021, but will strive to offer more details as the economic situation stabilizes.”
Mr. Puishys concluded, “I want to once again thank the entire Apogee team for their tremendous efforts and recognize the sacrifices they have made to help our company manage through these difficult market conditions. As we move through the rest of the fiscal year, we will remain focused on the health and safety of our employees, continuing to meet our customers’ needs, and ensuring the long-term health of our business.”
First-quarter revenue was $289.1 million, compared to $355.4 million in the first quarter of fiscal year 2020, reflecting COVID-19 related volume declines in each of the company’s segments. The company had earnings of $0.11 per diluted share, which included $1.4 million of COVID-19 related pre-tax costs. Excluding these costs, adjusted earnings(1) were $0.15 per diluted share, compared to $0.58 per diluted share in the prior year period.
Architectural Framing Systems
Architectural Framing Systems first-quarter revenue was $150.2 million, compared to $180.5 million in the prior year period, reflecting lower volume due to several COVID-19 related project delays and disruptions, particularly in regions with more state and local government restrictions on construction activity. Operating income in the quarter was $7.3 million, with operating margin of 4.9 percent, compared to $12.3 million and 6.8 percent respectively in the prior year quarter, reflecting the lower revenue, partially offset by the impact of cost reduction actions. Segment backlog stands at $423 million, compared to $432 million a quarter ago.
Architectural Glass revenue in the first quarter was $76.9 million, compared to $100.3 million in the prior year quarter, in part reflecting expected lower volumes due to project timing, along with COVID-related project delays and significant production disruptions caused by COVID-related workforce absences at its largest facility and the actions taken to mitigate this issue. The segment had an operating loss of $0.5 million and operating margin was (0.6) percent, down from operating income of $6.4 million and margin of 6.4 percent in last year’s first quarter, due to leverage on the lower volume and COVID-19 related costs.
Architectural Services revenue was $63.6 million in the first quarter, compared to $65.1 million in the prior-year quarter, reflecting COVID-19 related project delays. First-quarter operating income was $5.3 million with operating margin of 8.4 percent, up from $4.6 million and 7.0 percent respectively in the prior-year period, driven by strong project execution, disciplined project selection, and effective cost management. Architectural Services continued to have strong order flow during the quarter, with segment backlog increasing to a record $685 million, up from $660 million last quarter, and up more than 40 percent from $483 million a year ago.
Large-Scale Optical revenue was $6.3 million, down from $21.3 million in the first quarter last year, as most of the segment’s customers were closed for a large part of the quarter to comply with various state and local government directives. In response to the lower demand, and to comply with state government directives, the segment closed its two primary manufacturing locations for most of the first quarter. These facilities are expected to resume operations late in the second quarter, as customers reopen. The segment had an operating loss of $3.1 million and operating margin of (49.6) percent, compared to operating income of $4.2 million and margin of 19.6 percent in last year’s first quarter, reflecting the lower volume.
Net cash provided by operating activities in the first quarter was $24.0 million, up significantly compared to a use of cash of $9.7 million in the prior year period, driven by strong working capital management. Capital expenditures were $8.6 million, down from $11.2 million in last year’s first quarter, as the company began to restrict spending on non-essential capital projects. The company returned $4.9 million to shareholders through dividend payments and repurchased 231,000 shares of stock for $4.7 million, before announcing the temporary suspension of its share repurchase program.
During the quarter, the company reduced its total debt by $7 million, to $211 million, compared to $218 million at the end of fiscal year 2020, and down from $293 million a year ago. As previously announced, the company extended its $150 million term loan during the quarter, moving the maturity to April 2021.
For the full first quarter results, click here.
About Apogee Enterprises
Apogee Enterprises, Inc. (Nasdaq: APOG) delivers distinctive solutions for enclosing commercial buildings and framing art. Headquartered in Minneapolis, MN, we are a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings, as well as value-added glass and acrylic for custom picture framing and displays. For more information, visit www.apog.com.
Jeff Huebschen – Vice President Investor Relations & Communications – email@example.com – (952) 487-7538
Source: Apogee Enterprises, Inc.