|
|
|
|
|
|
Minnesota
|
|
0-6365
|
|
41-0919654
|
|
(State or other jurisdiction of incorporation)
|
|
(Commission File Number)
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
||||
4400 West 78th Street, Suite 520
|
|
Minneapolis
|
Minnesota
|
|
55435
|
(Address of principal executive offices)
|
|
(Zip Code)
|
☐
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
☐
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
☐
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
☐
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
|
Trading Symbol(s)
|
|
Name of each exchange on which registered
|
Common stock, $0.33 1/3 Par Value
|
|
APOG
|
|
The Nasdaq Stock Market LLC
|
☐
|
Emerging growth company
|
ITEM 2.02
|
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
|
ITEM 9.01
|
FINANCIAL STATEMENTS AND EXHIBITS
|
|
|
|
APOGEE ENTERPRISES, INC.
|
||
|
|
|
By:
|
|
/s/ James S. Porter
|
|
|
James S. Porter
Executive Vice President and Chief Financial Officer
|
|
|
|
|
|
|
Exhibit Number
|
|
Description
|
|
|
|
|
•
|
Revenue of $357 million with earnings of $0.72 per diluted share
|
•
|
Strong year-over-year growth and margin improvement in Architectural Glass
|
•
|
Continued backlog growth to record levels in Architectural Services
|
•
|
Company reaffirms full-year guidance
|
•
|
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.
|
•
|
Adjusted operating income, adjusted operating margin, adjusted net earnings and adjusted earnings per diluted share (“adjusted earnings per share” or “adjusted EPS”) are used by the company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period. Examples of items excluded to arrive at this adjusted measure include: the impact of acquisition-related costs, amortization of short-lived acquired intangibles associated with backlog, restructuring costs, non-cash goodwill and other intangible impairment costs, and unusual project-related charges.
|
•
|
Backlog represents the dollar amount of revenues Apogee expects to recognize from firm contracts or orders. The company uses backlog as one of the metrics to evaluate sales trends in its long lead-time operating segments.
|
•
|
Free cash flow is defined as net cash provided by operating activities, minus capital expenditures. The company considers this measure an indication of its financial strength.
|
•
|
Adjusted EBITDA is equal to the sum of adjusted operating income depreciation and amortization expenses. We believe this metric provides useful information to investors and analysts about the Company's
|
Apogee Enterprises, Inc.
|
||||||||||||||||||||||
Consolidated Condensed Statements of Income
|
||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
Thirteen
|
|
Thirteen
|
|
|
|
Twenty-Six
|
|
Twenty-Six
|
|
|
||||||||||
|
|
Weeks Ended
|
|
Weeks Ended
|
|
|
|
Weeks Ended
|
|
Weeks Ended
|
|
|
||||||||||
In thousands, except per share amounts
|
|
August 31, 2019
|
|
September 1, 2018
|
|
% Change
|
|
August 31, 2019
|
|
September 1, 2018
|
|
% Change
|
||||||||||
Net sales
|
|
$
|
357,058
|
|
|
$
|
362,133
|
|
|
(1
|
)%
|
|
$
|
712,424
|
|
|
$
|
698,664
|
|
|
2
|
%
|
Cost of sales
|
|
270,851
|
|
|
277,667
|
|
|
(2
|
)%
|
|
545,250
|
|
|
533,468
|
|
|
2
|
%
|
||||
Gross profit
|
|
86,207
|
|
|
84,466
|
|
|
2
|
%
|
|
167,174
|
|
|
165,196
|
|
|
1
|
%
|
||||
Selling, general and administrative expenses
|
|
58,631
|
|
|
55,806
|
|
|
5
|
%
|
|
116,558
|
|
|
114,542
|
|
|
2
|
%
|
||||
Operating income
|
|
27,576
|
|
|
28,660
|
|
|
(4
|
)%
|
|
50,616
|
|
|
50,654
|
|
|
—
|
%
|
||||
Interest and other expense, net
|
|
2,203
|
|
|
1,727
|
|
|
28
|
%
|
|
4,813
|
|
|
3,467
|
|
|
39
|
%
|
||||
Earnings before income taxes
|
|
25,373
|
|
|
26,933
|
|
|
(6
|
)%
|
|
45,803
|
|
|
47,187
|
|
|
(3
|
)%
|
||||
Income tax expense
|
|
6,094
|
|
|
6,420
|
|
|
(5
|
)%
|
|
11,081
|
|
|
11,300
|
|
|
(2
|
)%
|
||||
Net earnings
|
|
$
|
19,279
|
|
|
$
|
20,513
|
|
|
(6
|
)%
|
|
$
|
34,722
|
|
|
$
|
35,887
|
|
|
(3
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Earnings per share - basic
|
|
$
|
0.73
|
|
|
$
|
0.73
|
|
|
—
|
%
|
|
$
|
1.31
|
|
|
$
|
1.28
|
|
|
2
|
%
|
Average common shares outstanding
|
|
26,413
|
|
|
28,128
|
|
|
(6
|
)%
|
|
26,505
|
|
|
28,127
|
|
|
(6
|
)%
|
||||
Earnings per share - diluted
|
|
$
|
0.72
|
|
|
$
|
0.72
|
|
|
—
|
%
|
|
$
|
1.30
|
|
|
$
|
1.26
|
|
|
3
|
%
|
Average common and common equivalent shares outstanding
|
|
26,736
|
|
|
28,379
|
|
|
(6
|
)%
|
|
26,789
|
|
|
28,377
|
|
|
(6
|
)%
|
||||
Cash dividends per common share
|
|
$
|
0.1750
|
|
|
$
|
0.1575
|
|
|
11
|
%
|
|
$
|
0.3500
|
|
|
$
|
0.3150
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Business Segment Information
|
||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||
|
|
Thirteen
|
|
Thirteen
|
|
|
|
Twenty-Six
|
|
Twenty-Six
|
|
|
||||||||||
|
|
Weeks Ended
|
|
Weeks Ended
|
|
|
|
Weeks Ended
|
|
Weeks Ended
|
|
|
||||||||||
In thousands
|
|
August 31, 2019
|
|
September 1, 2018
|
|
% Change
|
|
August 31, 2019
|
|
September 1, 2018
|
|
% Change
|
||||||||||
Sales
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Architectural Framing Systems
|
|
$
|
187,394
|
|
|
$
|
189,850
|
|
|
(1
|
)%
|
|
$
|
367,916
|
|
|
$
|
368,887
|
|
|
—
|
%
|
Architectural Glass
|
|
99,138
|
|
|
88,084
|
|
|
13
|
%
|
|
199,429
|
|
|
165,009
|
|
|
21
|
%
|
||||
Architectural Services
|
|
61,597
|
|
|
76,496
|
|
|
(19
|
)%
|
|
126,744
|
|
|
147,223
|
|
|
(14
|
)%
|
||||
Large-Scale Optical
|
|
20,785
|
|
|
20,383
|
|
|
2
|
%
|
|
42,045
|
|
|
41,145
|
|
|
2
|
%
|
||||
Eliminations
|
|
(11,856
|
)
|
|
(12,680
|
)
|
|
(6
|
)%
|
|
(23,710
|
)
|
|
(23,600
|
)
|
|
—
|
%
|
||||
Total
|
|
$
|
357,058
|
|
|
$
|
362,133
|
|
|
(1
|
)%
|
|
$
|
712,424
|
|
|
$
|
698,664
|
|
|
2
|
%
|
Operating income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Architectural Framing Systems
|
|
$
|
15,523
|
|
|
$
|
18,312
|
|
|
(15
|
)%
|
|
$
|
27,796
|
|
|
$
|
30,650
|
|
|
(9
|
)%
|
Architectural Glass
|
|
6,460
|
|
|
1,739
|
|
|
271
|
%
|
|
12,859
|
|
|
3,317
|
|
|
288
|
%
|
||||
Architectural Services
|
|
3,976
|
|
|
7,621
|
|
|
(48
|
)%
|
|
8,549
|
|
|
12,775
|
|
|
(33
|
)%
|
||||
Large-Scale Optical
|
|
4,630
|
|
|
4,236
|
|
|
9
|
%
|
|
8,807
|
|
|
9,218
|
|
|
(4
|
)%
|
||||
Corporate and other
|
|
(3,013
|
)
|
|
(3,248
|
)
|
|
(7
|
)%
|
|
(7,395
|
)
|
|
(5,306
|
)
|
|
39
|
%
|
||||
Total
|
|
$
|
27,576
|
|
|
$
|
28,660
|
|
|
(4
|
)%
|
|
$
|
50,616
|
|
|
$
|
50,654
|
|
|
—
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Apogee Enterprises, Inc.
|
|
|
||||||||||||||||||||
Consolidated Condensed Balance Sheets
|
|
|
||||||||||||||||||||
(Unaudited)
|
|
|
||||||||||||||||||||
In thousands
|
|
|
|
|
|
|
|
August 31, 2019
|
|
March 2, 2019
|
|
|
||||||||||
Assets
|
|
|
|
|
|
|
|
|||||||||||||||
Current assets
|
|
$
|
391,334
|
|
|
$
|
371,898
|
|
|
|
||||||||||||
Net property, plant and equipment
|
|
319,234
|
|
|
315,823
|
|
|
|
||||||||||||||
Other assets
|
|
428,258
|
|
|
380,447
|
|
|
|
||||||||||||||
Total assets
|
|
$
|
1,138,826
|
|
|
$
|
1,068,168
|
|
|
|
||||||||||||
Liabilities and shareholders' equity
|
|
|
|
|
|
|
||||||||||||||||
Current liabilities
|
|
$
|
215,862
|
|
|
$
|
227,512
|
|
|
|
||||||||||||
Current debt
|
|
155,400
|
|
|
—
|
|
|
|
||||||||||||||
Long-term debt
|
|
117,385
|
|
|
245,724
|
|
|
|
||||||||||||||
Other liabilities
|
|
147,098
|
|
|
98,615
|
|
|
|
||||||||||||||
Shareholders' equity
|
|
503,081
|
|
|
496,317
|
|
|
|
||||||||||||||
Total liabilities and shareholders' equity
|
|
$
|
1,138,826
|
|
|
$
|
1,068,168
|
|
|
|
Consolidated Condensed Statement of Cash Flows
|
||||||||
(Unaudited)
|
||||||||
|
|
Twenty-Six
|
|
Twenty-Six
|
||||
|
|
Weeks Ended
|
|
Weeks Ended
|
||||
In thousands
|
|
August 31, 2019
|
|
September 1, 2018
|
||||
Net earnings
|
|
$
|
34,722
|
|
|
$
|
35,887
|
|
Depreciation and amortization
|
|
22,759
|
|
|
26,457
|
|
||
Other, net
|
|
16,964
|
|
|
13,735
|
|
||
Changes in operating assets and liabilities
|
|
(56,643
|
)
|
|
(28,150
|
)
|
||
Net cash provided by operating activities
|
|
17,802
|
|
|
47,929
|
|
||
Capital expenditures
|
|
(22,559
|
)
|
|
(24,241
|
)
|
||
Net purchases of marketable securities
|
|
—
|
|
|
(4,123
|
)
|
||
Other, net
|
|
(451
|
)
|
|
(1,435
|
)
|
||
Net cash used by investing activities
|
|
(23,010
|
)
|
|
(29,799
|
)
|
||
Borrowings on line of credit, net
|
|
27,000
|
|
|
8,500
|
|
||
Repurchase and retirement of common stock
|
|
(20,010
|
)
|
|
—
|
|
||
Dividends paid
|
|
(9,203
|
)
|
|
(8,823
|
)
|
||
Other, net
|
|
(2,493
|
)
|
|
(935
|
)
|
||
Net cash used by financing activities
|
|
(4,706
|
)
|
|
(1,258
|
)
|
||
(Decrease) increase in cash and cash equivalents
|
|
(9,914
|
)
|
|
16,872
|
|
||
Effect of exchange rates on cash
|
|
118
|
|
|
(266
|
)
|
||
Cash, cash equivalents and restricted cash at beginning of year
|
|
29,241
|
|
|
19,359
|
|
||
Cash, cash equivalents and restricted cash at end of period
|
|
$
|
19,445
|
|
|
$
|
35,965
|
|
Apogee Enterprises, Inc.
|
||||||||||||||||
Reconciliation of Non-GAAP Financial Measures
|
||||||||||||||||
(Unaudited)
|
||||||||||||||||
Adjusted Net Earnings and Adjusted Earnings per Diluted Common Share
|
||||||||||||||||
|
|
Thirteen
|
|
Thirteen
|
|
Twenty-Six
|
|
Twenty-Six
|
||||||||
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
||||||||
In thousands
|
|
August 31, 2019
|
|
September 1, 2018
|
|
August 31, 2019
|
|
September 1, 2018
|
||||||||
Net earnings
|
|
$
|
19,279
|
|
|
$
|
20,513
|
|
|
$
|
34,722
|
|
|
$
|
35,887
|
|
Amortization of short-lived acquired intangibles
|
|
—
|
|
|
1,068
|
|
|
—
|
|
|
3,938
|
|
||||
Acquired project profits (1)
|
|
—
|
|
|
(448
|
)
|
|
—
|
|
|
(1,013
|
)
|
||||
Income tax impact on above adjustments
|
|
—
|
|
|
(148
|
)
|
|
—
|
|
|
(708
|
)
|
||||
Adjusted net earnings
|
|
$
|
19,279
|
|
|
$
|
20,985
|
|
|
$
|
34,722
|
|
|
$
|
38,104
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Thirteen
|
|
Thirteen
|
|
Twenty-Six
|
|
Twenty-Six
|
||||||||
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
||||||||
|
|
August 31, 2019
|
|
September 1, 2018
|
|
August 31, 2019
|
|
September 1, 2018
|
||||||||
Earnings per diluted common share
|
|
$
|
0.72
|
|
|
$
|
0.72
|
|
|
$
|
1.30
|
|
|
$
|
1.26
|
|
Amortization of short-lived acquired intangibles
|
|
—
|
|
|
0.04
|
|
|
—
|
|
|
0.14
|
|
||||
Acquired project profits (1)
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.04
|
)
|
||||
Income tax impact on above adjustments
|
|
—
|
|
|
(0.01
|
)
|
|
—
|
|
|
(0.02
|
)
|
||||
Adjusted earnings per diluted common share
|
|
$
|
0.72
|
|
|
$
|
0.74
|
|
|
$
|
1.30
|
|
|
$
|
1.34
|
|
|
|
|
|
|
|
|
|
|
||||||||
(1) Adjustment for profits recognized during fiscal 2019 on contracts that were acquired with the purchase of EFCO.
|
||||||||||||||||
|
|
|
|
|
Adjusted Operating Income and Adjusted Operating Margin
|
||||||||||||||||||
|
|
|
||||||||||||||||
|
|
Thirteen Weeks Ended August 31, 2019
|
||||||||||||||||
|
|
Framing Systems Segment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
In thousands
|
|
Operating income
|
|
Operating margin
|
|
Operating loss
|
|
Operating income
|
|
Operating margin
|
||||||||
Operating income (loss)
|
|
$
|
15,523
|
|
|
8.3
|
%
|
|
$
|
(3,013
|
)
|
|
$
|
27,576
|
|
|
7.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Thirteen Weeks Ended September 1, 2018
|
||||||||||||||||
|
|
Framing Systems Segment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
In thousands
|
|
Operating income
|
|
Operating margin
|
|
Operating loss
|
|
Operating income
|
|
Operating margin
|
||||||||
Operating income (loss)
|
|
$
|
18,312
|
|
|
9.6
|
%
|
|
$
|
(3,248
|
)
|
|
$
|
28,660
|
|
|
7.9
|
%
|
Amortization of short-lived acquired intangibles
|
|
1,068
|
|
|
0.6
|
|
|
—
|
|
|
1,068
|
|
|
0.3
|
|
|||
Acquired project profits (1)
|
|
—
|
|
|
—
|
|
|
(448
|
)
|
|
(448
|
)
|
|
(0.1
|
)
|
|||
Adjusted operating income
|
|
$
|
19,380
|
|
|
10.2
|
%
|
|
$
|
(3,696
|
)
|
|
$
|
29,280
|
|
|
8.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Twenty-Six Weeks Ended August 31, 2019
|
||||||||||||||||
|
|
Framing Systems Segment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
In thousands
|
|
Operating income
|
|
Operating margin
|
|
Operating income (loss)
|
|
Operating income
|
|
Operating margin
|
||||||||
Operating income (loss)
|
|
$
|
27,796
|
|
|
7.6
|
%
|
|
$
|
(7,395
|
)
|
|
$
|
50,616
|
|
|
7.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Twenty-Six Weeks Ended September 1, 2018
|
||||||||||||||||
|
|
Framing Systems Segment
|
|
Corporate
|
|
Consolidated
|
||||||||||||
In thousands
|
|
Operating income
|
|
Operating margin
|
|
Operating income (loss)
|
|
Operating income
|
|
Operating margin
|
||||||||
Operating income (loss)
|
|
$
|
30,650
|
|
|
8.3
|
%
|
|
$
|
(5,306
|
)
|
|
$
|
50,654
|
|
|
7.3
|
%
|
Amortization of short-lived acquired intangibles
|
|
3,938
|
|
|
1.1
|
|
|
—
|
|
|
3,938
|
|
|
0.6
|
|
|||
Acquired project profits (1)
|
|
—
|
|
|
—
|
|
|
(1,013
|
)
|
|
(1,013
|
)
|
|
(0.1
|
)
|
|||
Adjusted operating income
|
|
$
|
34,588
|
|
|
9.4
|
%
|
|
$
|
(6,319
|
)
|
|
$
|
53,579
|
|
|
7.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA
|
||||||||||||||||
|
|
Thirteen
|
|
Thirteen
|
|
Twenty-Six
|
|
Twenty-Six
|
||||||||
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
|
Weeks Ended
|
||||||||
In thousands
|
|
August 31, 2019
|
|
September 1, 2018
|
|
August 31, 2019
|
|
September 1, 2018
|
||||||||
Net earnings
|
|
$
|
19,279
|
|
|
$
|
20,513
|
|
|
$
|
34,722
|
|
|
$
|
35,887
|
|
Income tax expense
|
|
6,094
|
|
|
6,420
|
|
|
11,081
|
|
|
11,300
|
|
||||
Interest and other expense, net
|
|
2,203
|
|
|
1,727
|
|
|
4,813
|
|
|
3,467
|
|
||||
Depreciation and amortization
|
|
11,657
|
|
|
12,407
|
|
|
22,759
|
|
|
26,457
|
|
||||
EBITDA
|
|
$
|
39,233
|
|
|
$
|
41,067
|
|
|
$
|
73,375
|
|
|
$
|
77,111
|
|
Acquired project profits (1)
|
|
—
|
|
|
(448
|
)
|
|
—
|
|
|
(1,013
|
)
|
||||
Adjusted EBITDA
|
|
$
|
39,233
|
|
|
$
|
40,619
|
|
|
$
|
73,375
|
|
|
$
|
76,098
|
|
(1) Adjustment for profits recognized during fiscal 2019 on contracts that were acquired with the purchase of EFCO.
|