-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, J6RI+At8lADKlQ1u4IK3Ro0Ef03dhJi8kMumdZxAR/50Tzazx0y/U/afH320FTNi xoLPcDeytQFjgYNtSRvMuA== 0000950131-94-001163.txt : 19940715 0000950131-94-001163.hdr.sgml : 19940715 ACCESSION NUMBER: 0000950131-94-001163 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940628 FILED AS OF DATE: 19940708 FILER: COMPANY DATA: COMPANY CONFORMED NAME: APOGEE ENTERPRISES INC CENTRAL INDEX KEY: 0000006845 STANDARD INDUSTRIAL CLASSIFICATION: 1700 IRS NUMBER: 410919654 STATE OF INCORPORATION: MN FISCAL YEAR END: 0228 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06365 FILM NUMBER: 94538287 BUSINESS ADDRESS: STREET 1: 7900 XEXES AVE S STREET 2: SUITE 1800 CITY: MINNEAPOLIS STATE: MN ZIP: 55431 BUSINESS PHONE: 6128351874 MAIL ADDRESS: STREET 1: 7900 XEXES AVE S STREET 2: SUITE 1800 CITY: MINNEAPOLIS STATE: MO ZIP: 55431 FORMER COMPANY: FORMER CONFORMED NAME: HARMON GLASS CO INC DATE OF NAME CHANGE: 19720623 10-Q 1 FORM 10-Q CONFORMED COPY UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 10-Q [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR [_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended May 28, 1994 Commission File Number 0-6365 --------------------- ------ APOGEE ENTERPRISES, INC. -------------------------------------------------- (Exact Name of Registrant as Specified in Charter) Minnesota 41-0919654 ------------------------ --------------------- (State of Incorporation) (IRS Employer ID No.) 7900 Xerxes Avenue South, Suite 1800, Minneapolis, Minnesota 55431 ------------------------------------------------------------------- (Address of Principal Executive Offices) Registrant's Telephone Number (612) 835-1874 ---------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO ------- ------- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the close of the latest practicable date. Class Outstanding at June 30, 1994 - - --------------------------------- ---------------------------- Common Stock, $.33-1/3 Par Value 13,313,756 APOGEE ENTERPRISES, INC. FORM 10-Q TABLE OF CONTENTS FOR THE QUARTER ENDED MAY 28, 1994
Description Page ----------- ---- PART I - - ------ Item 1. Financial Statements Consolidated Balance Sheets as of May 28, 1994 and February 26, 1994 3 Consolidated Results of Operations for the Quarters Ended May 28, 1994 and May 29, 1993 4 Consolidated Statements of Cash Flows for the Quarters Ended May 28, 1994 and May 29, 1993 5 Notes to Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 7-9 PART II Other Information - - ------- Item 6. Exhibits 11
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Thousands of Dollars)
May 28, February 26, 1994 1994 -------- ------------ ASSETS Current assets Cash and cash equivalents $ 9,949 $ 10,824 Receivables, net of allowance for doubtful accounts 148,899 144,597 Inventories 52,990 52,732 Deferred income taxes 8,754 8,454 Other current assets 3,563 4,679 -------- -------- Total current assets 224,155 221,286 -------- -------- Property, plant and equipment, net 67,619 64,917 Intangible assets, at cost less accumulated amortization 2,041 1,972 Investments in and advances to affiliated companies 11,582 11,826 Deferred income taxes 3,826 3,526 Other assets 2,199 2,661 -------- -------- Total assets $311,422 $306,188 ======== ======== LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Accounts payable $ 40,009 $ 51,488 Accrued expenses 40,136 40,916 Billings in excess of costs and earnings on uncompleted contracts 15,444 15,911 Accrued income taxes 6,616 4,524 Notes payable 36,900 23,850 Current installments of long-term debt 4,154 4,157 -------- -------- Total current liabilities 143,259 140,846 -------- -------- Long-term debt 35,666 35,688 Other long-term liabilities 15,473 14,260 Minority interest 1,343 1,331 Shareholders' equity Common stock, $.33 1/3 par value; authorized 50,000,000 shares; issued and outstanding 13,314,000 and 13,312,000 shares, respectively 4,438 4,437 Additional paid-in capital 17,737 17,718 Retained earnings 93,506 91,908 -------- -------- Total shareholders' equity 115,681 114,063 -------- -------- Total liabilities and shareholders' equity $311,422 $306,188 ======== ========
See accompanying notes to consolidated financial statements. 3 APOGEE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED RESULTS OF OPERATIONS FOR THE QUARTERS ENDED MAY 28, 1994 AND MAY 29, 1993 (Thousands of Dollars Except Share and Per Share Amounts)
Quarter Ended ---------------------------- May 28, May 29, 1994 1993 -------------- ------------ Net sales $ 178,927 $ 148,752 Cost of sales 153,539 128,805 ----------- ----------- Gross profit 25,388 19,947 Selling, general and administrative expenses 20,670 18,798 Equity in net (earnings) of affiliated companies (177) (864) ----------- ----------- Operating income 4,895 2,013 Interest expense, net 562 544 ----------- ----------- Earnings before income taxes and cumulative effect of change in accounting for income taxes 4,333 1,469 Income taxes 1,733 551 ----------- ----------- Net earnings before cumulative effect of change in accounting for income taxes 2,600 918 Cumulative effect of change in accounting for income taxes - 525 ----------- ----------- Net earnings $ 2,600 $ 1,443 =========== =========== Earnings per share: Earnings per share before cumulative effect of change in accounting for income taxes $ .19 $ .07 Cumulative effect of change in accounting for income taxes - .04 ----------- ----------- Earnings per share $ .19 $ .11 =========== =========== Weighted average number of common shares and common share equivalents outstanding 13,376,000 13,212,000 =========== =========== Cash dividends per common share $ .075 $ .070 =========== ===========
See accompanying notes to consolidated financial statements. 4 APOGEE ENTERPRISES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE QUARTERS ENDED MAY 28, 1994 AND MAY 29, 1993 (Thousands of Dollars)
1994 1993 --------- -------- OPERATING ACTIVITIES Net earnings $ 2,600 $ 1,443 Adjustments to reconcile net earnings to net cash used in operating activities: Cumulative effect of change in accounting for income taxes - (525) Depreciation and amortization 3,667 3,848 Provision for losses on accounts receivable 753 601 Noncurrent deferred income taxes (300) (299) Equity in net (earnings) of affiliated companies (177) (864) Other, net 483 (73) Changes in operating assets and liabilities, net of effect of acquisitions: Receivables (5,011) (4,458) Inventories (248) 1,035 Other current assets 1,116 2,731 Accounts payable and accrued expenses (12,259) (6,877) Billings in excess of costs and earnings on uncompleted contracts (467) (2,002) Accrued and current deferred income taxes 1,792 (2,596) Other long-term liabilities 1,213 174 -------- ------- Net cash used in operating activities (6,838) (7,862) -------- ------- INVESTING ACTIVITIES Capital expenditures (6,069) (2,512) Acquisition of businesses, net of cash acquired (272) (898) Investments in and advances to affiliated companies 421 (86) Other, net (164) (1,054) -------- ------- Net cash used in investing activities (6,084) (4,550) -------- ------- FINANCING ACTIVITIES Increase in notes payable 13,050 - Payments on long-term debt (25) (100) Proceeds from issuance of long-term debt - 11,500 Proceeds from issuance of common stock 20 550 Dividends paid (998) (927) -------- ------- Net cash provided by financing activities 12,047 11,023 -------- ------- Decrease in cash (875) (1,389) Cash at beginning of period 10,824 8,908 -------- ------- Cash at end of period $ 9,949 $ 7,519 ======== =======
See accompanying notes to consolidated financial statements. 5 APOGEE ENTERPRISES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1. Summary of Significant Accounting Policies ------------------------------------------ Principles of Consolidation In the opinion of the Company, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of only normal recurring accruals) necessary to present fairly the financial position as of May 28, 1994 and February 26, 1994, and the results of operations and cash flows for the thirteen weeks ended May 28, 1994 and May 29, 1993. Certain prior year amounts have been reclassified to conform to the current period presentation. The financial statements and notes are presented as permitted by Form 10-Q and do not contain certain information included in the Company's annual financial statements and notes. The results of operations for the thirteen-week periods ended May 28, 1994 and May 29, 1993 are not necessarily indicative of the results to be expected for the full year. Accounting period The Company's fiscal year ends on the Saturday closest to February 28. Each interim quarter ends on the Saturday closest to the end of the months of May, August and November. 2. Inventories ----------- Inventories consist of the following:
May 28, February 26, 1994 1994 ------- ------------ Raw materials and supplies $11,626 $ 9,994 In process 4,098 3,413 Finished goods 26,061 29,565 Costs in excess of billings 11,205 9,760 ------- ------- $52,990 $52,732 ======= =======
6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS SALES AND EARNINGS - - ------------------ First quarter revenues rose 20% to $179 million from $149 million a year earlier. Net earnings rose 80% to $2.6 million, or $0.19 per share, from $1.4 million, or $0.11 per share, a year ago. Last year results included a $525,000, or 4 cents per share, one-time gain due to the adoption of FASB No. 109 - Accounting for Income Taxes. Exclusive of the accounting change, earnings were up 183% from a year ago. Each of the Company's divisions reported improved operating results as well as healthy sales growth. With the exception of the Commercial Construction Division (CCD), each of the divisions had operating earnings in the quarter. The following table presents the percentage change in sales and operating income for the Company's four divisions and on a consolidated basis for the first quarter, when compared to the corresponding period a year ago.
Percentage Change --------------------------- Division Sales Operating Income -------- ------ ------------------- Commercial Construction 25% Loss in both years Window Fabrication 9% Loss a year ago Glass Fabrication 21% 54% Installation and Distribution 13% 21% Consolidated 20% 143%
Commercial Construction - - ----------------------- Greater overseas activity and stronger detention/security sales accounted for CCD's revenue growth in the first quarter. Although the division recorded slightly improved project margins, CCD continued to experience tough market conditions. Low margins along with higher overhead on international operations accounted for the division reporting an operating loss. On the bright side, the division reduced domestic overhead, which when combined with strong results from the detention/security group, helped CCD to cut its loss by half when compared to a year ago. The detention/security segment's strong sales and solid earnings were its best quarterly results since the segment's units were acquired in fiscal 1992. The division believes industry conditions are slowly improving. The extent of future operating gains is dependent on the successful implementation of steps taken to improve project management and project bidding. At this time, the division expects to report better results for the remainder of the year when compared to fiscal 1994. CCD's backlog stood at $339 million, 7% behind the division's February 1994 balance, but 12% ahead of a year ago. The Company's overall consolidated backlog decreased 5% from year end to $386 million, but was up 15% compared to twelve months earlier. The Company estimates that approximately $110 million of CCD's current backlog will not be realized until fiscal 1996 or later. Window Fabrication - - ------------------ The Window Fabrication Division (WFD), which also serves the commercial and institutional construction markets, reported a small operating profit for the quarter, compared to a small operating loss a year ago. Stronger volume at the window coverings units and decreased operating costs at both the window coverings and architectural units resulted in improved revenues and earnings. Order rates during the first quarter were good for the division's architectural units. The division continues to look at manufacturing processes and cost controls to further improve earnings. Like CCD, the division anticipates favorable comparisons with year-ago results for the rest of the fiscal year. 7 Glass Fabrication - - ----------------- The Glass Fabrication Division (GFD) produced outstanding revenue and earnings results, largely attributable to brisk auto glass sales and improved margins for its architectural glass products. Viracon, GFD's architectural glass unit, operated near full capacity and benefited from improved pricing levels. The unit is currently expanding its facility to provide greater manufacturing capacity. The auto glass unit, Curvlite, reported record sales and earnings for the quarter due to strong unit demand. Curvlite is also investing in increased capacity. Marcon Coatings, a 50%-owned joint venture, had a strong quarter, showing 63% growth in pretax earnings when compared to a year ago. The increase is largely due to the strong activity of Viracon and Marvin Windows, the entity's other joint venture partner. Order rates for each of these units have been strong, suggesting continued solid operating results for the foreseeable future. Tru Vue, GFD's picture framing glass unit, had solid results, with both sales and operating income slightly ahead of a year ago. Tru Vue's acquired matboard unit, Miller Tru Vue (Miller), experienced a loss in the first quarter. Miller is in the process of relocating its operations from New York to Chicago, adjacent to Tru Vue. Reduced operating costs are expected, but additional sales volume will be required to bring the unit up to breakeven. Installation and Distribution - - ----------------------------- The Installation and Distribution Division (IDD) generated sales and earnings growth for the first quarter. While unit volume remained essentially unchanged from a year ago, modest price increases, as well as reduced operating costs, led to the improvement. The division's network segment, which subcontracts auto glass repair/replacement sales nationwide, reported unit volume up 10%. IDD continues to work on new marketing programs and improving its information systems. The division added six retail stores and four wholesale locations, ending the quarter with 242 retail units and 49 distribution centers. Expansion opportunities are continually looked at to determine areas of favorable growth. Viratec Thin Films - - ------------------ Viratec Thin Films (Viratec), a 50%-owned joint venture, develops and applies optical-quality coatings to glass and other substrates. Viratec reported significantly lower sales and earnings when compared to a year ago due to a number of factors. Line speed, uptime and yield performance of manufacturing coating equipment was below satisfactory levels, while pricing of coated products has become more competitive. New coating equipment and related product development projects which were scheduled to be in operation in the current fiscal year are behind schedule due to modifications and process startup delays. Plans are under way to deal with all of the above issues. 8 Consolidated - - ------------ The following table compares quarterly results with year-ago results, as a percentage of sales, for each caption.
Percentage of Sales ------------------- 1994 1993 --------- -------- Net sales 100.0 100.0 Cost of sales 85.8 86.6 ----- ----- Gross profit 14.2 13.4 Selling, general and administrative expenses 11.6 12.6 Equity in net (earnings) of affiliated companies (0.1) (0.6) ----- ----- Operating income 2.7 1.4 Interest expense, net 0.3 0.4 ----- ----- Earnings before taxes 2.4 1.0 Income taxes 1.0 0.4 ----- ----- Net earnings before cumulative effect of change in accounting for income taxes 1.5 0.6 Cumulative effect of change in accounting for income taxes - 0.4 ----- ----- Net earnings 1.5 1.0 ===== ===== Effective tax rate 40.0% 37.5%
On a consolidated basis, cost of sales, as a percentage of net sales, fell largely due to stronger pricing at GFD and IDD, which was offset partly by weak pricing at CCD. Selling, general and administrative (SG & A) expenses decreased as a percentage of sales due to greater sales volume. However, in absolute dollars, SG & A increased about 10% as expenses relating to that higher activity also increased -- commissions, marketing programs, bad debt expense, bonus and profit sharing. Equity in net earnings of affiliated companies decreased as a result of lower sales and earnings at Viratec. Net interest expense remained essentially even in absolute dollars, but tapered off a bit as a percentage of sales. The effective income tax rate grew from a year earlier with the increase in earnings. The lower rate last year reflected the non-taxability of our equity in net earnings of affiliated companies, which was a significant portion of our net earnings. The Company adopted FASB Statement No. 109 in the first quarter of fiscal 1994. As a result of the adoption, the Company benefited by a $525,000 gain. The gain reduced long-term deferred tax liabilities (netted against long- term deferred tax assets). The gain was largely due to the restatement of deferred tax depreciation originally booked at historically higher tax rates (46% Federal) and restated to reflect current tax rates (34% Federal). LIQUIDITY AND CAPITAL RESOURCES - - ------------------------------- At quarter end, the Company's working capital (current assets less current liabilities) and current ratio were essentially unchanged from the beginning of the fiscal year. However, current bank debt increased $13 million, to $37 million, while accounts payable and accrued expenses decreased $12 million. This substitution was caused primarily by normal variations in trade payables. The Company counts, as one of its competitive strengths, the ability to handle these variations. The Company believes that it has adequate credit facilities to meet its liquidity requirements. Additions to property, plant and equipment totaled approximately $6.1 million. Major projects included expenditures for GFD's manufacturing facilities and data management, information processing and technical systems throughout the Company, particularly IDD. 9 PART II OTHER INFORMATION ITEM 6. Exhibits and Reports on Form 8-K - - ----------------------------------------- (a) Exhibits: Exhibit 11. Statement of Determination of Common Shares and Common Share Equivalents. (b) The Company did not file any reports on Form 8-K during the quarter for which this report is filed. 10 CONFORMED COPY SIGNATURES Pursuant to the requirements 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. APOGEE ENTERPRISES, INC. Date: July 8, 1994 Donald W. Goldfus ------------------------- ------------------------------------ Donald W. Goldfus Chairman of the Board and Chief Executive Officer Date: July 8, 1994 William G. Gardner ------------------------- ------------------------------------ William G. Gardner Treasurer, Chief Financial Officer and Secretary 11 EXHIBIT 11 STATEMENT OF DETERMINATION OF COMMON SHARES AND COMMON SHARE EQUIVALENTS ------------------------------------------------------------------------
Average No. of Common Shares & Common Share Equivalents Assumed to be Outstanding During the Quarter Ended: ---------------------------- May 28, May 29, 1994 1993 ---------- ---------- Weighted average number of common shares outstanding (a) 13,313,043 13,191,078 Common share equivalents resulting from the assumed exercise of stock options (b) 62,694 20,533 ---------- ---------- Total primary common shares and common share equivalents 13,375,737 13,211,611 ========== ==========
(a) Beginning balance of common stock adjusted for changes in amount outstanding, weighted by the elapsed portion of the period during which the shares were outstanding. (b) Common share equivalents computed by the "treasury" method. Share amounts represent the dilutive effect of outstanding stock options which have an option value below the average market value for the current period. 12 -----END PRIVACY-ENHANCED MESSAGE-----