Apogee Enterprises (APOG) Sees Q2 Benefit on Glass Coating Production

Apogee Enterprises (NASDAQ: APOG) announced that with the successful startup and commercial production of coatings on its new $30 million architectural glass coater earlier this month, it expects to benefit from a tax credit of approximately $6 million, or $0.20 earnings per share, in its fiscal 2015 second quarter, which ends August 30.

*** The Street sees Q2 revs of $217.6 million and EPS of $0.37.

“We are pleased to put our new state-of-the-art coater into production, an investment that positions us well competitively as architectural markets improve,” said Joseph F. Puishys, Apogee chief executive officer. “The coater allows our architectural glass business to offer today’s and tomorrow’s advanced energy-efficient and aesthetic coatings for landmark buildings around the world.”

He provided additional color on the second quarter. “We are experiencing significantly stronger growth in our architectural markets than we had anticipated,” Puishys said. “As customer lead times are extending industry-wide due to what we believe is a sustained growth trend for commercial construction, we are incurring higher costs in the quarter as we ramp up to meet immediate customer demand. At the same time, we are evaluating options to increase architectural glass capacity in the near term.”

He added, “With the market strength, we continue to expect strong backlog growth, and we are maintaining our full-year guidance before adding the approximately $0.20 per share tax credit impact.”

The anticipated second quarter tax credit, known as Section 48C of the Internal Revenue Code, was awarded in 2010 by the IRS in cooperation with the Department of Energy as part of the American Reinvestment and Recovery Act to incent energy-efficiency investments throughout the United States. Apogee invested in the coater to allow the company to produce coating products with higher levels of energy efficiency for commercial buildings.

Results for the quarter will be reported after the market on September 16, followed by a conference call with investors at 9 a.m. central time on September 17. (Call details will be announced approximately two weeks before the reporting date.)

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