Apogee Reports Fiscal 2011 Second-Quarter Results
September 16, 2010
Architectural segment revenues for Minneapolis-based Apogee Enterprises Inc. declined 25 percent, with an operating loss of $10.8 million, the company reported in its fiscal 2011 second-quarter results. Segment backlog ended at $193.0 million, compared to $214.9 million at the end of the first quarter and $295.0 million at the end of the prior-year period.
Company-wide, revenues were $144.7 million, down 23 percent compared to the prior-year period and operating loss was $7.4 million, compared to earnings of $17.9 million of the prior-year period. The company also reported loss from continuing operations was 18 cents per share, versus earnings of 46 cents per share and cash and short-term investments totaled $69.4 million, compared to $69.6 million at the end of the first quarter and $102.6 million at the end of fiscal 2010.
"Our results are being impacted by extremely challenging commercial construction market conditions with low pricing and tight project margins," said Russell Huffer, Apogee chairman and chief executive officer. "Our strategy to manage our business over a cycle has positioned us to sustain these losses while maintaining a strong balance sheet and cash on hand. At the end of the quarter, our cash and short-term investment level remained at approximately $70 million.
"Second-quarter architectural segment revenues declined at rates comparable to our markets served, while architectural segment operating losses were primarily the result of low architectural glass pricing on lower volume," he said, noting that manufacturing operations and installation project execution performed well.
Huffer added, "We continue to see weakness in overall non-residential construction markets. Although our second-quarter architectural backlog declined compared to the first quarter, a significant amount of work, primarily scheduled for fiscal 2012, has been awarded to us and is awaiting contract signing before being added to backlog.
“Although fiscal 2011 will be extremely difficult for our architectural businesses, we are well positioned financially; have leading products, services and brands; and remain focused on operational and strategic initiatives to strengthen our business for the rebound in our markets," he said.
Looking at the architectural products and services segment specifically, the company reported its revenues of $127.3 million were down 25 percent compared to the prior-year period and operating loss was $10.8 million, compared to income of $14.9 million.
Backlog ended at $193.0 million, compared to $214.9 million at the end of the first quarter and $295.0 million in the prior-year period.
The company notes that bidding activity, which continues to be driven by institutional work, remains solid; however, bid to award and contract timing remains slow. The institutional sector--government, education and health care projects--remained at nearly three-quarters of the backlog; office projects are nearly a fifth of the backlog; and the condo and hotel/entertainment sectors are each a small percentage of future projects. The company says approximately $125 million, or 65 percent, of the backlog is expected to be delivered in fiscal 2011, and approximately $68 million, or 35 percent, in fiscal 2012.
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