Apogee Enterprises (APOG) Tops Q2 EPS by 6c, Revenues Beat; Reaffirms FY20 EPS Mid-Point Guidance Above Consensus

September 17, 2019 6:33 AM EDT

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Apogee Enterprises (NASDAQ: APOG) reported Q2 EPS of $0.72, $0.06 better than the analyst estimate of $0.66. Revenue for the quarter came in at $357 million versus the consensus estimate of $353.43 million.

“We delivered solid operational and financial performance in the second quarter, with results largely in-line with our expectations,” said Joseph F. Puishys, Chief Executive Officer. “Our Architectural Glass segment made significant year-over-year improvements, with increased revenue and margins, and Architectural Services continued to build on its record backlog. We also made substantial progress toward completing the last remaining legacy EFCO project, tracking as expected to our schedule and cost estimates. We are delivering on our commitments and see positive momentum in our business.”

“Looking forward, we remain confident that our strategy to diversify revenue streams, broaden our growth opportunities, and improve the efficiency and productivity of our operations positions the company well for future earnings growth and more consistent operating performance,” continued Mr. Puishys. “During the quarter we progressed on a number of initiatives to advance this strategy. We completed a facility upgrade that we expect to significantly enhance productivity and margins in our EFCO business. We also began to implement plans to enhance profitability across the entire Framing Systems segment and took initial steps to increase supply chain integration, reduce procurement costs, and optimize our facility footprint. Finally, we made significant progress on a new operation that will be focused on the short lead-time segment of the architectural glass market, which continues our efforts to diversify our business mix and provide new opportunities for long-term growth.”

GUIDANCE:

Apogee Enterprises sees FY2020 EPS of $3.00-$3.20, versus the consensus of $3.05.

The company reaffirmed its guidance for fiscal 2020. For the full-year the company continues to expect:

  • Revenue growth of 1 to 3 percent, with growth in three of the company’s segments, partially offset by a decline in Architectural Services due to the execution schedules for projects in backlog.
  • Operating margins between 8.2 to 8.6 percent, with margin improvement in Architectural Glass and Architectural Framing Systems, offset by reduced margins in Architectural Services due to reduced leverage on lower volumes and less favorable project maturity compared to fiscal 2019. Margins will also be negatively impacted by start-up costs related to the strategic growth investment in Architectural Glass, costs associated with supply chain initiatives, and increased corporate costs from higher legal and other advisory expenses.
  • Diluted earnings per share in the range of $3.00 to $3.20, which excludes the possible benefit of any potential expense recovery associated with the EFCO-related charges the company recorded in the previous fiscal year.
  • Tax rate of approximately 24.5 percent.
  • Capital expenditures of $60 to $65 million.

For earnings history and earnings-related data on Apogee Enterprises (APOG) click here.



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