Volume 49, Issue 6 - June 2014

FinancialFlash

Architectural Segments Lead to Financial Growth for Apogee

Growth in its architectural segments contributed to a positive financial report from Apogee Enterprises. The architectural glass segment saw revenues of $75.7 million, up 9 percent for the fourth quarter. Growth came primarily from the U.S. and Brazil.The glass segment saw an operating income of $0.1 million, improved from a loss of $0.4 million due to improved mix and pricing on flat volumes, partially offset by timing of expenses and increased incentive compensation, according to the company.

Likewise, for its architectural services segment the company reported revenues of $63.5 million, up 22 percent. Operating income was $5.9 million, up 111 percent. For architectural framing, the company saw revenues of $63.2 million, up 41 percent, with organic growth of 16 percent excluding the Canadian acquisition of Alumicor Ltd. Operating income was $1.9 million, compared to a loss of $0.2 million.



Overall, the company saw fiscal 2014 fourth-quarter revenues up 19 percent from the previous year to $214.4 million, while operating income increased 97 percent to $12.1 million. For the full fiscal year, the company reported revenues of $771.4 million, up 10 percent, and an operating income of $40.3 million, up 47 percent from fiscal year 2013.

“With fourth-quarter revenues up 19 percent and operating income up 97 percent, Apogee delivered an outstanding finish to a year of significant growth,” says CEO Joseph Puishys. “In fiscal 2014, all four segments grew at the top and bottom line as they successfully executed our growth strategies, contributing to Apogee’s revenue growth of 10 percent and operating margin improvement of 130 basis points to 5.2 percent. Our organic growth, which excludes the Canadian storefront acquisition, was 8 percent as we benefitted from increased sales and improving pricing and project margins.

“Our backlog at year end grew more than $30 million from the end of fiscal 2013 as we had anticipated, signaling strengthening of our architectural markets,” he continues.

Puishys adds, “I believe that fiscal 2015 will be another exceptional year for Apogee, as we expect revenues to grow in the double digits and operating income to be up approximately 50 percent.”

PPG Reports First-Quarter Glass Segment Net Sales Increase 4 Percent
In its first-quarter results, PPG Industries reported its glass segment saw net sales increase from last year by 4 percent, totaling $266 million for the quarter. That $10 million boost, however, represents just a sliver of the 17 percent increase across the board, as PPG’s net sales from continuing operations were up $528 million to finish the quarter at $3.6 billion.

“We achieved year-over-year global volume growth of 5 percent, our highest level in three years,” says PPG chairman and chief executive officer Charles E. Bunch. “Additionally, growth rates accelerated in each region versus recent quarters, including in Europe, where our volumes grew 5 percent as we benefited from the early stages of that region’s economic recovery.”

According to the statement from PPG, glass segment net sales were $266 million for the quarter, up $10 million, or 4 percent, year-over-year. Segment volumes grew 3 percent on continued improvement in global fiber glass demand, partly offset by lower flat glass volumes. Flat glass pricing increased year-over-year. Segment earnings were $4 million, down $1 million versus the prior year primarily due to scheduled maintenance and repair costs of $12 million and higher natural gas costs that were partly offset by improved earnings from the higher net sales.

PPG anticipates continued solid global growth, though Bunch adds that “it will not be uniform across geographies or end-use markets.”

“PPG remains well-positioned with a balanced coatings portfolio, both regionally and by end-use market, providing broad growth opportunities while minimizing the impact of any individual fluctuations,” he says. “Additionally, we have a stronger cash position, which we intend to deploy in a timely, disciplined manner with a continued focus on earnings-accretive cash uses, including additional acquisitions and share repurchases.”

Glaston’s Net Sales Dip in First Quarter
Glaston Corp. saw a slight loss in net sales during the 2014 January-March quarter, totaling approximately $32 million (USD), a $1 million drop from the last period.

“Seasonal fluctuations are typical in Glaston’s industry and the first quarter is traditionally quiet,” says Arto Metsänen, president and CEO. “Both the crisis in Ukraine and particularly its impact on neighboring areas as well as a quiet market in Brazil affected order intake in the early part of the year.”

The company does, however, expect net sales and operating profit to grow this year. The report says the company’s relative profitability has increased due to a lighter cost structure in comparison with the corresponding period of the previous year.

“Our order book has developed positively and stood at [$57.2 million USD] on 31 March 2014. Deliveries resulting from last year’s good order intake will be made after the first quarter,” says Metsänen. “This will create a foundation for a positive performance in 2014. We continue to expect that the market will grow moderately this year.

“The Asian market is expected to grow in the long term. As a technology leader, Glaston wants to be well positioned when demand for low-emissivity glass and high-quality glass starts to grow. To respond to market needs, we will expand our factory located in Tianjin. The expansion is expected to be completed in autumn 2015.”


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