Volume 50, Issue 6 - June 2015

FinancialFlash

Apogee Reports “Significant” Growth in Fourth Quarter

A strong commercial construction market brought positive results for Apogee Enterprises Inc.’s fourth-quarter 2015 results. Revenues for its architectural glass segment, which includes Viracon, were up 22 percent to $92.3 million. Operating income grew to $4.5 million, and operating margin expanded 480 basis points to 4.9 percent.
“As the U.S. non-residential construction sector strengthened, the architectural glass segment benefitted from operating leverage on volume growth, and improved pricing and productivity, somewhat offset by costs to restart the Utah factory,” a release from the company reads.

Apogee’s revenues were up 15 percent in the quarter and 21 percent over the year. The company also reported that its backlog sits at $491 million—a 49-percent increase over the prior year.

“We built our backlog significantly during the year, giving us momentum moving into fiscal 2016,” says CEO Joseph Puishys. “We expect fiscal 2016 will continue our trend of double-digit, top-line growth and very strong bottom-line growth.”

The architectural services segment, which includes Harmon Inc., saw “flat” revenues of $63.5 million. The company’s architectural framing systems segment—Wausau Window and Wall Systems, Tubelite, Alumicor and Linetec—saw revenues of $77 million, up 22 percent.

“We are confident that Apogee will again achieve strong growth in fiscal 2016,” says Puishys. “… Our architectural markets are expected to again grow in the mid-double digits in fiscal 2016, and we continue to have robust bidding and award activity. Together, these factors give us continued confidence in sustained growth for Apogee.”

First Quarter Proves “Strong” for Glaston

Net sales for Glaston Corp. increased nearly 28 percent in the first quarter of 2015. According to the company, orders received from January to March totaled $28.2 (EUR 25.8) million, and its orders at the end of March were $60.1 (EUR 55.1) million. Consolidated net sales in the quarter were $32.1 (EUR 29.5) million.

Glaston expects 2015 net sales and operating profit, excluding non-recurring items, will exceed 2014 levels.
“The positive development of Glaston’s business continued during the first quarter of 2015,” says president and CEO Arto Metsänen. “… Demand for our products continued to be strong, particularly in the North American area. After our good order intake in the final quarter of 2014, the situation in other markets levelled off and orders received in the first quarter of 2015 were at the previous year’s level.”

Sector-wise, both machines and services increased their net sales.

“The machines segment’s profitability growth continued to be a strong sign that our products and product development investments during recent years are fulfilling customers’ needs,” says Metsänen. “In addition, our internal processes are developing positively. In the services segment, profitability fell short of our targets to some extent, mainly due to our investments in developing the Glaston Care concept. In the longer term, this will make our relationship with our customers even closer.”

The company expects that the market will grow moderately in 2015, particularly in sales of heat-treatment machines in Europe, the Middle East, Africa and North America.

Apogee’s Financial Results
(Unaudited; in thousands of U.S. dollars)
By Business Segment 13 weeks
ended
Feb. 28, ’15
13 weeks
ended
March 1, ’14
%
change
Sales
Architectural Glass $92,333 $75,668 22%
Architectural Services 63,504 63,531 0%
Architectural Framing Systems 77.026 63,531 22%
Operating Income (loss)
Architectural Glass $4,496 $79 N/M
Architectural Services 5,163 5,880 (12%)
Architectural Framing Systems 4,834 1,904 154%

Net Sales up 15 Percent for Sisecam Group
Sisecam Group, a global manufacturer of glass, reported consolidated net sales of $2.57 billion (Turkish Lira 6.9 billion), up 15 percent compared to the previous year. The company recorded a net profit of $156.67 million (TL 420 million) and an EBITDA volume of $522 million (TL 1.4 billion) for the year ended December 31, 2014.
The company recorded $450 million (TL 1.2 billion) in investment spending.


PPG Glass Sees Highest Quarter this Decade

PPG Industries’ glass segment delivered its highest first-quarter earnings in more than 10 years, according to the company’s first-quarter 2015 report. The segment’s net sales were $267 million for the quarter, up $1 million year-over-year. Flat glass sales volumes grew modestly, and results were aided by an improved value-added product mix, according to the report. Segment income was $30 million, up $26 million versus the prior year “due to the favorable product mix and lower manufacturing costs including the benefits from PPG’s flat glass manufacturing facility sale in 2014 and the absence of prior-year major repair and maintenance costs,” the company said in a statement. These benefits were partly offset by higher pension expense and about $5 million of unfavorable foreign currency translation, according to the report.

PPG also announced a business-restructuring program that includes “actions necessary to achieve cost synergies related to recent acquisitions. The program aims to further right-size employee headcount and production capacity in certain businesses and regions based on current product demand and in various global administrative functions.”

According to the company, a pretax restructuring charge of $135 million to $140 million will be recorded in PPG’s second-quarter 2015 financial results, of which about 85 percent represents cash charges. PPG said it expects these restructuring actions will result in full-year pretax savings of $100 million to $105 million by 2017, including 2015 partial-year savings of $15 million to $20 million.

PPG and Consolidated Subsidiaries Business Segment
(unaudited) ($ in millions)
Three Months Ended March 31 2015 2014
Glass Net Sales 267 266
Glass Segment Income 30 4

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