SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of report (Date of earliest event reported): April 9, 1998
APOGEE ENTERPRISES, INC.
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(Exact name of registrant as specified in its charter)
Minnesota 0-6365 41-0919654
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(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
7900 Xerxes Avenue South, Suite 1800, Minneapolis, Minnesota 55431
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (612) 835-1874
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Not Applicable
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(Former name or former address, if changed since last report.)
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Item 5. Other Events.
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Apogee Enterprises, Inc. announced April 8, 1998 that the Company had net
losses for both the fourth quarter and full-year fiscal 1998, mainly due to
nonrecurring charges and operating losses related to the Company's exit from its
Asian and European curtainwall operations. For the fourth quarter, in addition
to previously announced nonrecurring charges totaling $35.9 million pre-tax or
$1.26 diluted per share related to exiting its European curtainwall operations,
the Company incurred $32.0 million in operating losses related to its Asian and
European curtainwall operations. While the Auto Glass segment also reported a
fourth quarter loss, both the Glass Technologies segment and the remaining
businesses of the Building Products & Services segment were profitable in the
fourth quarter. The Company also commented on the outlook for fiscal 1999. See
Exhibit 99.1 attached hereto.
Item 7. Financial Statements and Exhibits
---------------------------------
(c) Exhibits:
99.1 Press release, dated April 8, 1998
Signature
Pursuant to the requirements of Section 12 of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Dated: April 9, 1998
APOGEE ENTERPRISES, INC.
By /s/ Robert G. Barbieri
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Robert G. Barbieri
Chief Financial Officer
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EXHIBITS INDEX
Exhibit No. Page
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99.1 Press Release, dated April 8, 1998...................... 4
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Exhibit 99
NEWS RELEASE
APOGEE
FOR IMMEDIATE RELEASE
WEDNESDAY, APRIL 8, 1998
APOGEE ENTERPRISES, INC. REPORTS
FOURTH QUARTER AND FISCAL 1998 RESULTS
-- Net loss primarily reflects nonrecurring charges and operating losses
from international curtainwall units.
Management remains confident of earnings expectations for fiscal 1999 --
. Apogee had a fourth quarter loss due to:
-- Nonrecurring charges and operating losses related to Apogee's exit from
international curtainwall.
-- Auto Glass had a larger loss than expected due to weak industry demand and
a write-off of certain information systems assets.
. Nonrecurring charges and operating losses from international curtainwall also
caused a loss for fiscal 1998.
-- Apogee's ongoing businesses, aside from Auto Glass, posted solid profit
growth in FY98.
Fourth Quarter and Fiscal 1998 Highlights (Amounts in thousands, except per
share data and percentages)
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Fourth Quarter Ended % 12-Months Ended %
2/28/98 3/1/97 Change 2/28/98 3/1/97 Change
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Net Sales $207,943 $240,234 (13)% $912,831 $950,777 (4)%
Net Earnings (Loss) (1) $(57,051) $ 5,663 N/M $(51,055) $ 26,220 N/M
Diluted Earnings (Loss) per Share (1) $ (2.06) $ 0.20 N/M $ (1.84) $ 0.93 N/M
Average Shares Outstanding - Diluted 27,646 28,497 (3)% 27,795 28,057 (1)%
Operating Income (Loss) (1) $(68,657) $ 9,132 N/M $(55,267) $ 46,496 N/M
- -- Glass Technologies $ 5,918 $ 5,446 9% $ 27,330 $ 19,908 37%
- -- Auto Glass $ (5,669) $ 1,284 N/M $ 15,046 $ 20,149 (25)%
- -- Building Products & Services $(68,320) $ 2,194 N/M $(96,433) $ 5,557 N/M
- -- Corporate and other $ (586) $ 208 N/M $ (1,210) $ 882 N/M
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(1) FY 1998 Q4 includes nonrecurring charge of $35.9 million pre-tax; $34.9
million after-tax, or $1.26 per share.
FY 1998 includes nonrecurring charges of $61.9 million pre-tax; $50.9
million after-tax, or $1.83 per share.
Both Q4 and Q3 nonrecurring charges primarily relate to Apogee's exit from
European and Asian curtainwall.
================================================================================
"We are very disappointed by the results, but we now believe we have taken the
charges needed for Apogee's exit from its Asian and European curtainwall
businesses. While we expected a tough fourth quarter, we did not anticipate the
magnitude of the operating losses from international curtainwall. On a positive
note, our remaining businesses are in their strongest position collectively in
years, and we remain on track to produce fiscal 1999 earnings per share that are
on par with our record fiscal 1997."
-- Russell Huffer, President and Chief Executive Officer
================================================================================
Apogee Enterprises, Inc. At the Company: At the Financial Relations Board:
7900 Xerxes Ave., South Donald W. Goldfus, Chairman Larry Stein Suzy Lynde
Minneapolis, MN 55431 Russell Huffer, CEO General Inquiries Investor Inquiries
(612) 835-1874 Robert G. Barbieri, CFO (312) 266-7800 (312) 266-7800
(612) 835-1874
NEWS RELEASE
APOGEE
FOR IMMEDIATE RELEASE
WEDNESDAY, APRIL 8, 1998
APOGEE ENTERPRISES, INC. REPORTS
FOURTH QUARTER AND FISCAL 1998 RESULTS
-- Net loss primarily reflects nonrecurring charges and operating losses
from international curtainwall units.
Management remains confident of earnings expectations for fiscal 1999 --
MINNEAPOLIS, MN, April 8, 1998 -- Apogee Enterprises, Inc. (Nasdaq: APOG) today
announced that it had net losses for both the fourth quarter and full-year
fiscal 1998, mainly due to nonrecurring charges and operating losses related to
the company's exit from its Asian and European curtainwall operations. For the
fourth quarter, in addition to previously announced nonrecurring charges
totaling $35.9 million pre-tax or $1.26 diluted per share related to exiting its
European curtainwall operations, Apogee incurred $32.0 million in operating
losses related to its Asian and European curtainwall operations. While Auto
Glass also reported a fourth quarter loss, Glass Technologies was solidly
profitable in the fourth quarter.
"We believe we have now taken the charges needed for Apogee's exit from its
Asian and European curtainwall businesses," said Russell Huffer, Apogee's
President and Chief Executive Officer. "We are very disappointed by the size
and scope of our fourth quarter loss. While we expected a tough quarter, we did
not anticipate the magnitude of the operating losses related to our exit from
international curtainwall. In addition, Auto Glass had a larger than expected
operating loss due to weak demand industrywide and a $1.8 million write-off of
certain information systems assets."
Huffer added, "On a positive note, our remaining businesses are in their
strongest position collectively in years, with Glass Technologies embarking on
the largest expansion in Apogee's history, Auto Glass now #2 in its industry,
and four solidly profitable businesses in Building Products & Services. We
continue to expect to produce fiscal 1999 earnings per share that are on par
with our record fiscal 1997, and look forward to further growth in the years
ahead."
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Apogee Enterprises, Inc.
Add 2
Fourth Quarter Results
For the fourth quarter ended February 28, 1998, Apogee had a net loss of $57.1
million or $2.06 diluted per share, compared with net earnings of $5.7 million
or $0.20 diluted per share for fiscal 1997. The fourth quarter fiscal 1998 net
loss included a nonrecurring pre-tax charge of $35.9 million or $1.26 diluted
per share, plus operating losses of $32.0 million or $0.72 diluted per share
related to the Asian and European curtainwall operations being exited by Apogee.
Fourth quarter sales decreased 13 percent to $207.9 million, as sales growth at
Glass Technologies and Auto Glass was more than offset by a 36 percent decrease
at Building Products & Services. The exit from Europe resulted in the
deconsolidation of those operations for all of fiscal 1998.
Apogee reported a fourth quarter operating loss of $68.7 million compared with
operating income of $9.1 million in the prior year. Operating income at Glass
Technologies rose 9 percent to $5.9 million on a 14 percent increase in sales,
as margins were reduced by low unit volume at Viratec's CaRT/(R)/ operation. As
previously announced, this operation has been closed in advance of an
anticipated move to a location nearer to its customers' computer monitor supply
chains. Auto Glass recorded an operating loss of $5.7 million (including a $1.8
million write-off) compared with operating income of $1.3 million a year ago,
while Building Product & Services had an operating loss of $68.3 million versus
operating income of $2.2 million in the year-ago period, as operating losses and
a nonrecurring charge recorded in its international curtainwall operations more
than offset a profitable quarter collectively in its U.S. curtainwall and non-
curtainwall businesses.
Huffer detailed the main items that led to the fourth quarter net loss:
. $17.0 million primarily related to write-downs on three of the remaining
projects in Asia, as well as costs incurred on projects in which, from an
accounting standpoint, Apogee was unable to recognize revenue during the
quarter. Any future revenue recognized by these projects would be in addition
to Apogee's fiscal 1999 earnings forecasts.
. A previously announced (February 26) fourth quarter after-tax charge of
$34.9 million, or $1.26 diluted per share. This charge provided amounts for
exiting all international curtainwall and related operations. The cash impact
of the action is expected to result in expenditures of $16 million.
. A fourth quarter loss of $5.7 million in Auto Glass, as soft demand
industrywide reduced sales growth and profit margins in a seasonally soft
quarter. Part of the Auto Glass loss was due to the $1.8 million write-off
resulting from a decision to choose a more effective information technology
strategy.
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Apogee Enterprises, Inc.
Add 3
Fiscal 1998 Results
For the fiscal year ended February 28, 1998, Apogee had a net loss of $51.1
million or $1.84 diluted per share, compared with net earnings of $26.2 million
or $0.93 diluted per share in the prior year. The fiscal 1998 net loss included
nonrecurring charges totaling $61.9 million or $1.83 diluted per share,
including the previously announced $35.9 million pre-tax charge in the fourth
quarter and the $26.0 million pre-tax charge in the third quarter, plus
operating losses of $53.8 million or $1.20 diluted per share related to the
Asian and European curtainwall operations being exited by Apogee.
Sales decreased 4 percent to $912.8 million, as double-digit growth in Glass
Technologies and Auto Glass was offset by the expected reduction in sales by
Building Products & Services as well as the deconsolidation of the European
curtainwall unit.
Apogee had a fiscal 1998 operating loss of $55.3 million, due to a $96.4 million
operating loss in Building Products & Services resulting from nonrecurring
charges and operating losses related to its exit from Asian and European
curtainwall. Auto Glass operating income decreased 25 percent in fiscal 1998 to
$15.0 million, as its fourth quarter loss offset a 10 percent increase in
operating income through the first nine months of the year. Glass Technologies
continued to show strong growth, with operating income up 37% to $27.3 million,
led by excellent performance in each of its businesses.
Looking Ahead
"Our exit from international curtainwall is exceedingly difficult, but we are
now moving into position for considerably stronger performance over the long
term," said Huffer. "We are taking a very aggressive approach toward increasing
profitability and realizing the potential of our businesses. In fiscal 1999
alone, we intend to invest an estimated $100 million in capital expenditures,
primarily in our Glass Technologies businesses."
Huffer addressed the prospects in each of Apogee's business segments: "The
losses from international curtainwall masked the considerable progress in the
ongoing businesses of our Building Products & Services segment. In fact, each
of this segment's ongoing businesses, including U.S. curtainwall, were solidly
profitable in fiscal 1998. These units are positioned for further progress in
fiscal 1999, particularly with the industry's favorable business conditions.
"Unquestionably, Auto Glass is a top priority for fiscal 1999. Our Auto Glass
business recently became the second largest company in its market due to an
industry merger, and we are already seeing positive signs from this enhanced
position. At the same time, we are very focused on improving productivity, and
these efforts could benefit from recent increases in industry pricing.
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Apogee Enterprises, Inc.
Add 4
"We now clearly expect Glass Technologies to be Apogee's main sales and earnings
driver. During the past four years, segment sales have more than doubled and
operating income has more than tripled. Even still, demand has outpaced our
production capabilities. Now, we expect to realize the potential of this
business by investing approximately $80 million in capital expenditures in
fiscal 1999. Although the start-up costs of these new operations will reduce
fiscal 1999 results, the positive impact on future years could be considerable.
We expect this expansion program to increase the segment's sales in the next few
years, with further improvement in profit margins."
CAUTIONARY STATEMENT
The discussion above contains forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. A number of factors
should be considered in conjunction with the above forward-looking statements,
including changes in economic and market conditions, factors related to
competitive pricing, commercial building market conditions, management of growth
or restructuring of core business units, expected cost savings from the
restructuring cannot be fully realized or realized within the expected time
frame, revenues following the restructuring are lower than expected, costs or
difficulties related to the operation of the businesses or execution of the
restructuring are greater than expected, the realization of expected economies
gained through expansion and information systems technology, the impact of
foreign currency markets and other factors are set forth in the cautionary
statements included in Exhibit 99 to Apogee's Form 10-K filed with the
Securities and Exchange Commission. Apogee wishes to caution investors and
others to review the statements set forth in Exhibit 99 and that other factors
may prove to be important in affecting Apogee's business or results of
operations.
Apogee Enterprises, Inc. is a leading fabricator, distributor and installer of
value-added glass products and systems. The company is organized into three
operating segments: Building Products & Services (BPS), Glass Technologies (GT)
and Auto Glass (AG). Headquartered in Minneapolis, the company's stock is
traded on the Nasdaq Stock Market under the symbol APOG.
For more information on Apogee Enterprises, Inc. via facsimile at no cost,
simply dial 1-800-PRO-INFO and enter the company code ticker APOG.
Financial tables follow...
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENT OF INCOME
(Unaudited)
Thirteen Thirteen Fifty-two Fifty-three
Weeks Ended Weeks Ended % Weeks Ended Weeks Ended %
February 28, 1998 March 1, 1997 Change February 28, 1998 March 1, 1997 Change
----------------- ------------- ------ ----------------- ------------- ------
Net sales $ 207,943 $ 240,234 -13% $ 912,831 $ 960,777 -4%
Operating income (loss) (68,657) 9,132 N/M (55,267) 48,496 N/M
Net earnings (loss) $ (57,051) $ 5,663 N/M $ (51,055) $ 26,220 N/M
Earnings (loss) per share - basic $ (2.06) $ 0.20 N/M $ (1.84) $ 0.96 N/M
Earnings (loss) per share - diluted $ (2.06) $ 0.20 N/M $ (1.84) $ 0.93 N/M
Average shares outstanding - basic 27,646,483 27,690,832 -- 27,795,173 27,384,023 2%
Average shares outstanding - diluted 27,646,483 28,497,449 -3% 27,795,173 28,057,088 -1%
Cash dividends per common share $0.050 $0.045 11% $0.190 $0.175 9%
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BUSINESS SEGMENTS INFORMATION
(Unaudited)
Thirteen Thirteen Fifty-two Fifty-three
Weeks Ended Weeks Ended % Weeks Ended Weeks Ended %
February 28, 1998 March 1, 1997 Change February 28, 1998 March 1, 1997 Change
----------------- ------------- ------ ----------------- ------------- ------
Sales
Glass technologies $ 55,722 $ 48,951 14% $ 227,203 $ 192,827 18%
Auto glass 75,667 71,535 6% 347,191 307,935 13%
Building products & services 78,605 122,165 -36% 348,892 460,714 -24%
Eliminations (2,051) (2,417) -15% (10,455) (10,699) -2%
----------------- ------------- ------ ----------------- ------------- ------
Total $ 207,943 $ 240,234 -13% $ 912,831 $ 950,777 -4%
================= ============= ====== ================= ============= ======
Operating income (Loss)
Glass technologies $ 5,918 $ 5,446 9% $ 27,330 $ 19,908 37%
Auto glass (5,669) 1,284 N/M 15,046 20,149 -25%
Building products & services (68,320) 2,194 N/M (96,433) 5,557 N/M
Corporate and other (586) 208 N/M (1,210) 882 N/M
----------------- ------------- ------ ----------------- ------------- ------
Total $ (68,657) $ 9,132 N/M $ (55,267) $ 46,496 N/M
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