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Apogee reports strong architectural glass results

Sept. 22, 2016 – Apogee CEO Joeseph Puishys reported strong results for its architectural glass and framing systems segment in his second quarter earnings conference call. Apogee is the parent company of Viracon, Alumicor, Wausau, Tubelite and Linetec. A portion of the transcript follows:

“Thank you. Good morning, everyone, and welcome to Apogee’s conference call. With our second quarter performance, we had outstanding results; revenues growing 16%, gross margin up 240 basis points to 26%, operating margin up 260 basis points to 11.9% and earnings per share up 54% to $0.77. I’m also pleased that our Lean initiative is paying dividends, and I’ll talk more about that in a few minutes.

“In addition, with our operating income up 47%, we’ve delivered 20 straight quarters of substantial double-digit operating income growth, bringing us to corporate records for revenue, profit and margins and more to come. Building on our strong performance year-to-date and expectations that this level of performance will continue in what is a healthy commercial construction market I’ll discuss that in a few moments, we are once again increasing our full-year EPS outlook to $2.80 to $2.90 per share, up from $2.70 to $2.85 per share in the prior guidance. We’ve narrowed the range and raised both ends of the guidance. The strength we’ve been seeing in all  of our non-residential construction end markets is evident in the results from our Architectural segments. All three segments in architectural grew revenues and operating income, with operating margins all increasing at least 200 basis points and topline growth rates ranging from 7% to 49%.

“Turning to the backlog. Backlog grew sequentially and year-on-year in Architectural Glass and Framing Systems. The decline in the consolidated backlog resulted from the inconsistent timing of committed Architectural Services segment projects progressing to signed contracts, at which point they enter our backlog. This business continues to have an impressive pipeline of active bids and awards.

“As Jim reminds you every quarter, the Architectural Services projects business has lumpy quarter-to-quarter revenues and backlog. This trend was evident as services revenues were up 49% in the quarter when no significant projects entered the backlog. I, too, would like to see revenues and earnings here more level, but this is not the project’s world. A challenge for a public company, yes. Although lumpy results are challenged, this business remains a gem and is our highest ROIC segment, and we manage this business for the long-term.”