Apogee Enterprises, Inc.’s (APOG - Free Report) Chief Executive Officer, Joe F. Puishys during its fourth-quarter fiscal 2014 conference call stated that strong fiscal 2014 results along with a growing backlog and prospects of future awards has set the momentum for improved results in 2015. Puishys added that it is a stepping stone toward achieving the company’s previously-stated goal of $1 billion in revenues and 10% operating margin by the end of fiscal 2016.
The leader in technologies for design and development of value-added glass products, services and systems, reported earnings per share of 95 cents in fiscal 2014, up 42% year over year driven by increased sales and improving pricing and project margins. During the year, Apogee invested in two acquisitions: Custom Window Company, Inc., which makes historically accurate aluminum window products, and Toronto-based Alumicor Limited, which finishes and fabricates aluminum frames for window, storefront, entrance and curtainwall products for the Canadian commercial construction industry.
This is in sync with the company’s strategy of international growth and new product introductions. The company is at its highest level ever with respect to new product introductions.
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Backlog at year end increased 11% from the prior-year period to $330 million. In addition, based on the growing pipeline of awards, improvement in markets, acquisitions and successful implementation of its growth strategies, the company guided revenue growth in a range of 15% to 20% and earnings per share in the range of $1.35 to $1.50 for 2015.
Operating income in 2013 improved 47% with contribution from all of its segments. Puishys attributed 50% of this improvement to productivity improvement and lean implementation across Apogee’s factories. He expects a similar positive impact in fiscal 2015. Puishys projected capital spending for fiscal 2015 to be about $40 million. The spending will aid in product development capabilities and productivity as well as positive free cash flow.
He remains confident that the company will outperform its commercial construction markets by approximately five percentage points, as in the last several years. He highlighted that McGraw Hill Financial, Inc. has projected high-single-digit growth for Apogee’s end markets. Furthermore, the Architectural Billing Index continues to indicate modest increases in billings for architects.
While discussing the financial details, Apogee’s Chief Financial Officer, Jim S. Porter added that the first quarter is generally the softest in terms of revenue and expects it to decline sequentially based on the timing of backlog flow and negative impact from winter weather. He expects third-quarter results to outperform the other quarters.
According to Puishys, fiscal 2014 results along with the company’s strategies to grow through new geographies, new products and new markets has put it well on track to achieve its 2016 targets as stated above. He added that focus on continued productivity and operational improvements will also help ensure 10% operating margin in this time frame.
Apogee currently carries a Zacks Rank #3 (Hold). Some other stocks worth considering in the industrial product sector include Kadant Inc. (KAI - Free Report) and Middleby Corp. (MIDD - Free Report) . Both of these sport a Zacks Rank #1 (Strong Buy).