Apogee Enterprises (APOG) Tops Q1 EPS by 9c, Revenues Beat; Boosts FY19 EPS Outlook Above Consensus

June 28, 2018 6:33 AM EDT
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Price: $37.76 --0%

EPS Growth %: +23.5%

Financial Fact:
Operating loss: 33.05M

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Apogee Enterprises (NASDAQ: APOG) reported Q1 EPS of $0.62, $0.09 better than the analyst estimate of $0.53. Revenue for the quarter came in at $336.5 million versus the consensus estimate of $304.52 million.

FIRST-QUARTER HIGHLIGHTS

  • Revenues of $336.5 million were up 24% over the prior year period, driven by acquisition-related and organic growth in Architectural Framing Systems and growth in Architectural Services and in Large-Scale Optical Technologies. This was partially offset by an expected timing-related decline in Architectural Glass. As anticipated, on an organic basis, excluding the EFCO acquisition, revenues were comparable year-over-year.
  • Operating income was $22.0 million, down from $24.1 million a year ago, as a result of the timing-related decline in sales and operating leverage in Architectural Glass, partly offset by higher contribution from Architectural Services. Adjusted operating income was $24.9 million, compared to $26.8 million in the prior year.
  • Earnings per diluted share were $0.54, versus $0.56 in the prior year period. Adjusted EPS was $0.62, consistent with the prior year.
  • Free cash flow was $16.0 million in the quarter.
  • See Reconciliation of Non-GAAP Financial Measures at the end of this release.

COMMENTARY

“In the first quarter, we executed our plan for a solid start to fiscal 2019: revenues rose significantly, backlogs continued to grow across the business, we saw on-going productivity gains and excellent cash conversion. We also continued to make progress positioning the company for long-term, stable earnings and cash flow growth, regardless of the economic cycle,” said Joe Puishys, Apogee’s chief executive officer.

“Robust 60% year-over-year top-line growth in the company’s largest segment, Architectural Framing Systems, as well as substantial increases in Architectural Services demonstrate how we are executing our plan to build a larger, more stable and more diversified - by geography, project size and market segment - revenue base. On this strong foundation, we continued making investments and process improvements to increase efficiencies in project selection, manufacturing and delivery to raise long-term operating margins and drive earnings. We’re especially focused on the opportunity to leverage the best practices, technology and scale of our legacy businesses to raise long-term operating margins in recent acquisitions to those same levels of profitability. In fact, we’re seeing quarter-over-quarter improvements in margins at EFCO, and remain on track to achieve our synergy goals by fiscal 2020.”

Puishys concluded, “Based on the first quarter’s positive performance, sustained backlog growth and order activity, and a good outlook for the North American construction industry, we are raising our fiscal 2019 earnings guidance ranges by 5 cents per share, and can affirm our fiscal 2019 goals for revenue growth. We also remain confident in our outlook for continuing top- and bottom-line growth into fiscal 2020 and beyond.”

FY19 OUTLOOK

The company’s updated outlook for fiscal 2019 includes:

  • Revenue growth of approximately 10 percent.
  • Operating margin of 8.9 to 9.4 percent.
  • Adjusted operating margin of 9.2 to 9.7 percent.
  • Earnings of $3.35 to $3.55 per diluted share, up from $3.30 to $3.50 previously.
  • Adjusted EPS of $3.48 to $3.68, up from $3.43 to $3.63 previously.
  • Adjusted fiscal 2019 earnings guidance excludes the after-tax impact of amortization of short-lived acquired intangibles associated with the acquired backlog of Sotawall and EFCO of $3.8 million ($0.13 per diluted share).
  • Capital expenditures of $60 to $65 million.
  • Tax rate of approximately 24 percent.

GUIDANCE:

Apogee Enterprises sees FY2019 EPS of $3.48-$3.68, versus the consensus of $3.45.

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



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