APOG - Earnings call transcript Q4 2018 | Apogee Enterprises, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Apogee Enterprises' Fiscal 2018 Full Year and Q4 Earnings Conference Call. [Operator Instructions] As a reminder, this conference call maybe recorded. I'd now like to turn the conference over to Ms. Mary Ann Jackson. Ma'am, you may begin.

Mary Ann Jackson

you. Thank welcome quarter Enterprises' April conference and year XXXX XX, the fourth and call to morning fiscal Apogee full XXXX. Good on Thursday, CEO; on Jim us the today Joe With line Porter, Puishys, CFO. are and focus will results quarter outlook and our remarks XXXX full on Their and and XXXX year fiscal for fourth fiscal beyond. our

we will call, measures the non-GAAP financial when talking During discuss about Apogee’s performance.

out and recent for these measures in our reconciling We called in acquisition financial non-GAAP press our to restructuring, measures definitions adjusted financial find are related can the tables You non-GAAP release. and earnings release. included

Our Joe and strategic Apogee's in expectations the your Apogee's results and will filings. then the call will available our factors also may XXXX fiscal XXXX contains Joe on Actual affect the found forward-looking cover could questions. business statements Jim and about for reflecting will in information. conclude, information Jim against that based plans they progress management's transformation fiscal financial results. differ answer results More Joe? materially. be After and currently discuss SEC can

Joe Puishys

Today, Good performance Please the all their call. forecast. to fourth will of the as fiscal my and his cycle. I call. delivered in before Jim on on stay company our XXXX in last the morning, welcome detail. provide met view context take the the with Apogee XXXX financial finished today segments of difference in quarter I versus outlook Then our Apogee's usual and four will XXXX beyond, expectations, on We that conference questions, your for I provide you. and longer-term commentary Thank fiscal after share fiscal

than and tax quarter, usual. planning active tax from the the benefits in projected addition we as reported higher In reform

businesses year cash revenue and time we adjusted beyond. to advanced as momentum XXXX shareholder we record business our For in this fiscal in operating expanded diversify generated and we streams per earnings our $XXX our the build longer Against and order significantly our lead flow million to deliver backdrop, strategies in enter strengthen in to XXXX and record backlog share revenues, full achieved value.

acquisitions Our been segments strategies new geographies, We've of performance. are margins markets project positioning our architectural The of segment. and initiatives. every introductions centered North our range now on and through broad on products achieve in product organic is expansion new we profitable through new more We've each and underserved driving productivity new selection largest unit the levels a business Architectural four most geographies while our Systems, in new focused Canada. to United and America strategically are serves and segment Framing of which of into improving products States with numerous growing through and Western

Framing Architectural improved and new through initiatives. Systems lean the into plans, event grow runway ongoing continue products has to to geographies through plenty current Beyond of margins

continue penetrate large midsize projects, markets We fixed Architectural Utah more to of that reducing facility. the Glass through in while fourth our awarded are closure quarter being costs

expansion Our Glass markets. strategies Glass moving also into pursue broader forward to segment is with Architectural

bidding, this backlog strong Architectural start EBIT fiscal fourth growth services XXXX the in and the capability sizable initiatives timing we cash now architectural XXXX year. the growth. services order in XXXX stated EFCO substantial half substantial which support issue strength fiscal only contributions improvement. We and more pipeline show the than quarters and fiscal backlog us that we well fiscal investments services are proved F will grow business. second to years a to had 'XX regard and the in The by this made with point In F our excluding into fiscal was in and will the moved of already issue while million fiscal we $XXX bodes beyond. backlog 'XX, their won business issues there Our I new gives segment The in as number experiencing timing awards, backlog consecutive has the 'XX skepticism. projects and at productivity trends and flow of that has organization XXXX recent time. substantial positive Glass this possible a for timing backlog from fiscal five reductions expand believe we quarter optic XXXX margin by to were XXXX orders segment in

expected and this glass XXXX. Our business investment fiscal deliver segment for market dividends. our large-scale investments now this regularly they are new our in are and for to paying growth in sectors in acrylic We optical products high-margin highlighted

moment newer upward steady as in our United building better buildings, for substantial cycles their of States one will expect and million my to which $XX expanded market ecstatic relief being is won meeting construction projects. the In ups fiscal retrofit law benefits we to reform the consider revenues more retrofit drive addition, the properties the buildings more time, efficient with be older penetrate upgrade. of from tax believe to provides downs again will the orders competitive these and team XXXX commercial tax clearly us keep the in managers renovating same owners the on that key I new and At through energy ROIs initiatives. older new help them building of

be X% markets. which more we margin segment were triple mix was up Systems year-over-year to our digits. operating Architectural the our up this segment outperformed from centered in fiscal Revenues businesses XXXX again legacy Framing commercial on continued During and business to reshape construction

again product five a have for productivity businesses legacy has story now share us. This to performance Our the been years ahead and of penetration, new runway of we and plus increase pricing, lot geographic improvement. superior delivered gains, introductions increased

of Architectural other Systems of to businesses. product ideal those operations Framing in and with is very U.S. our It's acquisitions systems Apogee our part EFCO penetration for Our fit which geographic expands framing an offering. similar

line of sight executing it buying we've spearheaded by of EFCO in now our being and our identified we're performance. We've levels now everything business the said, businesses Although it all that common XXXX. Apogee's improvement of Apogee reality EFCO Senior so capture the from margin have This with impacted do and is in bring XXXX VP at to behind process. we to of lower of Operations, who fiscal XXXX leveraging Already started purchasing on for has comes EFCO in savings XXXX. That starting fiscal expertise fiscal and are additional still improvements, that margins recognize point President have challenges, months XX savings to are Yet upside, EFCO. will we fiscal in resources the a materials and up does do. approximately this legacy beginning and by operational Apogee we

EFCO approved We in us manage productivity brought We investments expertise efforts execution we with and for to have other projects the automation inherited no effectively equipment for at at challenges Apogee expectations additional to allowing EFCO. surprises. project

improved for Apogee We lead selection, process that to our have put other proven model a a margins businesses. project place has operating in in

We are of activity improving an I’d delivery products EFCO excellent order customers. to increased seeing that fit as repeat is our Apogee. to we like are on-time

architectural operating the for markets begun the outlook other levels. coating It investments We perform this In revenues are generate and in in supporting manufactures awards glass. segments progressed, committed new maintained ability for business have that XXXX has year outlook performance our XXXX. Optical to been three to segment, full in our made framing good making as high in on margin Apogee yield in have it and Large-Scale fiscal to segment greater significant it a to we've the we on display comment XXXX. used allowing fiscal flat high business is value moving before technology on our same I’ll systems products margins. and strong our growth that the the very at centered an XX% in great potential added repetitive, efficiencies The portfolio the

project basis As occurred we significant down business for result bidding to encouraged fiscal fiscal fiscal strong to and been fiscal and activity in same in timing. substantial on do expected fiscal be XXXX a we've the frankly XXXX. as the year-over-year late the time, XXXX, backlog that well a results clear XXXX service At projects into revenue growth build I'm remains that that XXXX, the during were will in back to revenues as well. profit in guided of architectural

to growth to began international ago services continue ROIC continue impacted and we generation. benefit a were to few its share. and through glass to a projects and high Architectural from fiscal in As complex years results as lost competitors less gaining cash the we we by XXXX mix manage midsize decline midway large projects product pursue

are one and the clear, larger is have to commitments value-added be made encouraging ago glass deliver architectural ahead attracted of Apogee value. better currently point exact margins. me strengthen where more fiscal continue at XX% business In year midsize were and project is that our Let It today opportunities strategies they bidding progress diversify our leverage activity shareholder XXXX, and and to business and XXXX this on fiscal beyond to will strong. in at complex

year. Turning for outlook to the our new

per about record primarily to We operating grow stable transforming focused for growth revenues operating more we in anticipate catalysts our goals to revenue We fiscal share. fiscal decline earnings continue expect level that to revenue the We're fiscal expect a momentum adjusted we achieve delivering continue increase in margin operating company of the on business beyond. breakeven earnings and while improvements for to we’ll in outlook and to XXXX. and will EFCO realize our XXXX and in XXXX, operational In improvement margin serve our due optimistic XXXX, In our a will be profitability and margin we to a operating for markets. end XX% be although impact of and which the investments year-on-year income deliver Apogee the approximately pursue streams as long-term.

on same a architectural architectural backlog. the margins. us to also XXXX the gain broader expansion success and the in continue is continue initiatives EFCO Optical expand leverage investments geographic recent architectural fit improve and to resources in large investing and for Major our in we'll we earlier, have and grow expertise to Large-Scale segment to our productivity pursuing the noted initiatives execute markets. I At focus glass, in share framing systems revenues to As time, for includes perfect and services revenues fiscal

longer-term macroeconomic indicators supported and of yet has a on backlog to the healthy pipeline Our commercial includes determined. a also tariffs U.S. impact aluminum remain U.S. economic recent our are and bidding. robust we're growth healthy. positive be outlook construction and for visibility projects of is although goods steel Canadian external forecasts continued indicators by

Index construction Regarding through Momentum the fiscal as on continue ABI Canada XXXX XXXX supports in fiscal from growth Construct time to internal are well, work. markets, and lead based in to longer our rebound and Dodge commercial certainly future for XXXX Apogee's into visibility growth forecasts indicate and Connect. for starts anticipated outlook projects fiscal

are we out not commercial continued growth guidance, guide. Although that in is seeing we slowdown either and projecting any XXXX are fiscal not two 'XX to out income beyond far markets too We're revenue years. providing fiscal operating but in construction

delivering We great to the have more as financials. business to our details is our now a strengthen strategies value will we company. on Jim that and diversify provide shareholders execute

Jim Porter

Good per project additional margin services share geographic of offset to all slightly. per XX% were down adjustments to midsize in from restructuring-related full XXXX. growth Cuts million Offsetting inclusion morning. was costs in operating volume XX.X% the saw with all press from and fourth-quarter record framing investing shareholder while and growth reconciliation benefits growth Tax share quarter We lower XXXX I’ll largely by down results of balance allocation, in a EFCO enactment excluding revenue quarter XX.X% is into and and for X% growth. a margin the of glasses our down XX.X% of full and margins of per The in on opportunities is look continued share productivity across associated acquisition reflect and then as focus the segment factory related share resulting funding approach at acquisition. the a in EFCO Optical, fiscal operating $X.XX. objectives. we tax of support sheet shutdown XXXX volume lower per projects on X.X% glass of margin segment results improved flow adjustments, With Fiscal pricing and business. diluted regard in up architectural costs, architectural X% or were and architectural but prior-year. amortization excluding the to and in a framing of and deferred acquisition Utah, all by a these on from the we Revenue adjusted acquired driven Sotawall opportunities and hurricane included $X.XX which have segments. share of well in earnings and Joe. is still due leverage productivity. and reduced currently net was growth and were fourth increased of Sotawall coming larger expected Apogee timing with of backlogs delays. focus decline primarily we in release. and billion in which outlook. systems projects, Thanks to had We record and near-term somewhat revenues to start We December $X.XX and as fourth Despite of review knew smallest has of XXXX acquisition intangibles and architectural revenues XXXX. of in our but acquired Fiscal to Full-year our to and earnings per fiscal earnings of share Both discussion were characteristics was $X.X there. Gross cash $X.X believe XXXX were services and our adjusted short-lived down our these year that our for revenues EFCO reduction initiatives our respectively operating Optical Large-Scale Sotawall income return organic X% year Related compared architectural to EFCO Jobs to earnings glass committed liabilities. declines fiscal Act are margin the margins, XX% in recognizing flow systems XX% and Included from were the integration related glass, with as the margin now specifically, of growth in with cash operating the down acquisitions architectural tax our gains our of for XX% Apogee EFCO in in capital activity clear

free the flow balance cash the XXXX full-year for was cash was $XXX fiscal flow and $XX. and our year For operating sheet, million

Full-year to was continue We XX.X% increased fiscal of improve and quarter continue architectural have dividends to automation of was cash capability in strong new XXXX. capital cost paid million dividend and spending management for the primarily working structure. in products and the investment productivity discipline. on $XX for company $XX.X capital glass an to Apogee's fourth focused our million

During value. believe years XX.X% in the to fiscal benefits reform XXXX, approximately for year also to year. compared tax fiscal recent The due million tax at repurchased we was of million. our with fiscal to rate for debt a benefit. XXXX was shares our common Both was in stock discrete included Debt investment current compared acquisition. XXXX year end the support Apogee $XXX the prior create including was XXX,XXX to expense XX.X% in which one-time good to year zero Net $X interest increase the

up Framing fourth Turning Architectural Systems to in XX% the segment fourth segment were the revenues quarter quarter. results.

framing period business increases of quarter for margin versus XX%. for strong segment the operating systems operating were to by digit compared the point were prior-year margin currently. The Excluding year-over-year the in profile due XX.X% which a adjusted basis margins the project Triple acquisitions, revenues a in legacy down offset year-on-year lower addition EFCO timing has differences. to operating X% was

As our business. while Joe margin EFCO, margins we expectations double-digit path on see for to are operating discussed improvement this a previous we behind for continue to at

of quarter, revenue. more Operating due operating moved costs operating and was in XXXX. revenues bidding improved in that was segment the We deal million came quarter, fiscal and Architectural fourth Framing for transferred services The project grew into project that strong. backlog increased volume. excluding work EFCO XX% performance, pipeline maturity quarter the remains slightly margin quarter. $XXX.X the quarter year and mix in fiscal the architectural that services the this project to a flow to As later income in of framing XXXX was backlog timing million. detailed Fourth to end to we started release, and the knowing press quarter generate the X% In fourth Segment architectural activity on $XX see the insurance backlog .At sequentially projects in architectural grew had our good during X.X% these higher of

significant based volume. margin operating pleased mix We’re the has project on this with and results segment quarter-to-quarter just volatility but improvement in

Architectural backlog business we the operating $XX execution sequential Fourth projects up million yet. around management run rather fiscal activity So at significantly revenue rate transferred than growth. X% framing. backlog drive don't plus backlog services was of million. for to capacity Bidding from We architectural this see excluding for a strong manage growth project had quarter expected to XXXX. $XXX.X remains into

to in Looking growth and forward, sequential see continued not we backlog. need don't may see

new to mix levels. we resulting quarter reduced Utah margin was prior-year on orders quarter-to-quarter on gains. was segment The the but the by margin lower X.X% quarter. look productivity order facility replace in glass XX% declined came for the The period than fluctuations new efficient. facility strong with of has offset workbook, fourth in X.X%. timing They pricing, fourth As in Architectural XX.X% we prior-year adjusted market backlog a it on anticipated. of partially revenue complex products compared cost recognize very volume, slightly closure compared originally and at the shutdown operating less and at Utah revenues architecture cost this lower to The operating lumpy glass was to

happy worked progress closer team the time being efforts than to that remaining of hard jobs more good reemployment Our for employees. had new made for employee with of facilitate the the by workers and are half our and the base

government sector in backlog. segments the of sectors healthcare down few quarter for the prior-year Large-Scale is the was operating period. and architectural cost The larger income hotel overall transportation with primarily backlog each residential XX% although at education strong slightly compared margin of is versus Institutional, three and was rate high-end I’ll now the the on office activity than from sector. up backlog XX% in tax management. is was the XX% by XXXX. XX% multifamily entertainment to The X% slightly and improved orders less working characteristics. segment retailers, to were increase mix Backlog projects and national mix project projects operating XX.X% of for XX.X% for to XX.X% reflect across Optical the and revenues driven of of almost which fiscal multiuse Finally and mix on timing in outlook a the turn multifamily many our

We future fiscal operating expect XXXX. in we continue growth to and good topline feel and income Apogee's about

revenue architectural We by architectural XX% growth expect driven segment. growth and in our framing services

growth compared by Our as fiscal fiscal for and bear digits Optical glass market to XX% framing new in flat legacy new outlook expected is product XXXX initiatives architectural businesses. continued be to up up begin to approximately Large-Scale segment XX%. share, our up gains geographic expected is up architectural are to be base. XXXX and services to as low Architectural in slightly. fruit a to the single expected be With

close operating will the X.X%. of improvement offset decline margin is The Our to margin in The triple to adjusted legacy XX% in XX% to the margin in in for almost a operating we architectural outlook segment, operating operating operating up profile Large-Scale fiscal architectural of glass the the outlook group range EFCO expect to X.X% by basis full-year of to operating to XX%, in margins margin expecting businesses for is adjusted point margin almost we impact are the XXXX. margin with improving compared a for to margin improved margin from X.X% of X.X% framing X.X% approximately X.X% X% in an prior-year. Optical. and architectural services By systems our

XXXX. previous EFCO improvement the XXX come overall by fiscal primarily margin lower for off XXXX expectation point for fiscal We in expectations for have our basis driven

and we're to to at volume fiscal achieve As expecting delays Joe in EFCO the indicated, XXXX operational improvements. breakeven lower

previously stated, have contributions opportunities a about its we remain EFCO so longer As margin and business longer-term Apogee. and for We point had improvement. to the a journey has low starting we this to optimistic

in these synergies XXXX through savings annual out. more good $X against Through and that We begin plans we in later million have to-date going are initiatives progress and than have making identified fiscal Joe flow identified will that to we have laid forward. for

be project don't for terms we overall I expectations based half visibility second is quarterly in first want we most In have the first guidance therefore that XXXX, down to timing of than but year-over-year will expect glass from lower the and from half. which visibility the fiscal service, Systems at be architectural the schedules give some margins. that that provide for growth the the Architectural significantly to We we stronger of on inclusion Framing will be of first quarter quarter EFCO

the lower on revenues for based to factors in in that capabilities most margins pick and can't the $XX first nicely growth give to approximately year productivity visibility monitor. $X.XX $X.XX. margin I'd be by expected these We drive quarter. for second be savings expected requirements. our quarter. they million. tax fairly share our not fiscal our are quarter segments rest tax earnings balanced with plan overall the that second to So quarter from to the million Fiscal are capacity expenditures are $XX That $X.XX companies these however, $X.XX schedules assured our share Again the range it up same we to starting lowering per like underscore, anticipate we XX%. will will in capital to the is and over have with rate be the diluted adjusted discipline of of per are to of expected every public Earnings non noted XXXX which up are competitors XXXX to U.S. our cash

we’re seeing depreciation in and on For lumber. uncertainty $XX like and trade recent fiscal some pressures expect comment inflation of cost and amortization million. briefly industry. affecting freight our affecting increases policy approximately We're aluminum XXXX to seeing I'd we

current our monitor forward we and estimates of that the and adjust these We possible. we're majority these and use. covers aluminum outlook costs for items to able a continually cost prices Our bid purchase projections were

items rationally we've competitors we is industry on won't risk respond that to these continue that focus inflationary recently well. time any additional seen lead prices as to shorter increases have we’ll and offset raising businesses, with The For pricing. the offset

internal backlog, awards We bidding U.S. low continue expect to at single-digit to based for mid through our growth and Apogee XXXX. fiscal growth on least for forecast sustained commercial for visibility construction and market, in

perform the Joe strategies call believe to to position We closing solid have we environment. better that any good for back in continue momentum economic comments. turn and I’ll us,

Joe Puishys

Jim. Thanks

to improvement XX% other I your productivity Before markets margin structure questions, with plus. XX where glass actually. revenue is build I'd Seven over outlook take was of of reiterate of capability work reprofile since of XX% positive was at staff the and and and of a no-lean Today than this and operations systems with the a place. and is underserved. half company our weak and as margin and focus and to Apogee last strategies margin operating it. to improve Apogee like excellence more price, well view a percent $XXX segments. of that again. than small journey - framing began higher focus transformation tied When was completely no approximately tripling model decade We acquisitions retrofit so and cost selling for prophecies Apogee segment, fragmented this for operating effort no this volatile non-residential To hence framing a the end less limited segment in in my systems a will our most expense of Apogee to make segment, gain we, we more share, surprise on in with construction. dominant glass was the result of our we part towers triple mistake had longer-term were the did years in crashed, None in Apogee never We ago, Apogee investing digit embarked chased was an architectural the on million the one-third

we acquisitions and are opportunities we our technologies the comes business our factories. significant. At for is pricing and are while the pricing was addressed and time, provided, that began framing inorganic challenges, in long growth with glass overdue huge systems runway smart ones up immediately Our investments the

it. As glass not United largest States fabricator were the like we in the acting

As as value as traditional margin this segment in We the of awards share exchange we glass losing earnings XX-year to this well downstream we had factory where the historical time, our mix we and us. operating last and less our base complexity. massive and hurdle moved thrown in of export our, markets coatings attributes high fiscal year. foreign in we at substantial lost spite players the in the A loss in rose felt to further all in of as a midmarket margin revenue, in Apogee. the and We whilst international lower of margin operating project margins products. me the shift segment. margin And the those better are good price segment glass. this have XXXX were investments added product by did still accretive in F At glass impacting full than XXXX both business be massive but brunt selection launch our and oversized glass similar In similar to same clear funded new processes major investments we the equally revenue productivity margins let share in large or factory core

international you are with Viracon on-time in perform with assure the also the admit this with is projects all ago. By I in reduce and now not to further will investments and like work seven less currency many delivery and us. our cost back bidding awards to regards was situation now far at fraction current years that to mere on large structure way the our business Our dependence help we I'm going forward. of pleased than Apogee can to customers business glass come also what glass it our have competitors that improvement quality. experiencing and

nearly project a the admittedly is world our business of a construction like segment awards services out Our there. business site the at in to is one we the construction to We timing. lumpiest perfect project while impossible for It’s to best have. book seat installed having

We and locally have a national footprint executed are substantial. our lives

bid Our made process of over let business this projects outgrow profile optical improve see and large ensure not will investments project fiscal so. in been We the Apogee years margins of management highlight Fiscal for remain position. the again to lastly, is capabilities that you’ll XXXX fault our to will has XXXX. and drive the our business keeps And smartly This grow our delivering business manage soundness stated large-scale this been what goose the a well. to Apogee. and strategy or our to golden has execute five proof of and order not and ability do capacity those this gem your small investments for for

now. the questions call to Here, for up I’d like open

Operator

first of [Operator comes Sam Goldman the Eisner from question with Instructions] Our line Sachs.

line open. now Your is

Sam Eisner

So with the are for can think in expectation make you guys business of we clarity got in color can some going up when fiscal give greater what's for originally EFCO thought? start you to obviously kind sure breakeven EFCO I on just just why to guidance want I right, this I XXXX, what the matching guess was and are kind I profit on now out maybe not of

Joe Puishys

curtainwall I’m these the services’ cost put the a calendar to of were most and in we before got of resources to program. complexities work. operational the EFCO good to from on we’ve familiar the executive primarily named good our comments, projects of projects. complex the execute year is feel work He I work. seeing. We of business at projects of what large the and we a fault. of learned help to they skies revenue more been in to in. on they have half which going Apogee out it have And They XXXX years moved my force our to to as business segment and place that due resources of new should like hindsight turnaround prior our the substantial margin diligence them what we into has second at they force company just underestimated feel always that's the kind couple the they've the involved in is weren't Sam I throughout one their about they and President window large He We I couple realized and problems focused the as our in than the no doctor running execution fiscal during or divested years that in be them in that we've put with ordered officers as put in XXXX. we’re of in embarked on lot that got more a The migrate mentioned the they been areas

uncovered You begin. starting surprises confident the can heard we've journey before feel but now all point from new it I'm I a our Sam and

core of to their contributing - seen few definitely their delivery think inbound work. months. do we work that lack after after fiscal I a will We’ve to the We've projects to the several downward that months to the see last and year improved uptick these so performance end work behind our poor rectified their real XXXX. began projects we’ve to large There I'm us quality order attention slope in be the business. in and we’re We’ll work return. we’re half have These order continue of is a the financial confident contributing that better. most the to large and of second of

Sam Eisner

the bridging to to going of kind maybe over for fiscal XXXX. guidance that And

So I of your think margin let’s EBIT implied margin X.X/X.X. the midpoint call it profit operating or

about year so down XX/XX did basis this You points. XX

XXX of helpful? to EFCO three that related of provide over that is can be large digit is You I’m will to related think related there how basis guys if the in period is kind margin points much month buckets were there XXX three of there last competition so much is roughly us what know has I you expansion you so is months three basis guidance inflation, point saying is months, changed breakdown much the ago how to a way swing to triple how and the curious there in

Jim Porter

ramp primary The operating margin is a of And bucket we really is flow from of that expectation get really change difference improvement. to to improving we from it and ability important ability in be the to is to having that into the initiative EFCO that that take that the identified breakeven. the that visibility top between single-digit mid to time the be an are those going up for most and the to business

Sam Eisner

experiencing that I that are something just guys provide buckets. the you environments competitive cycle, see what you mentioned risk. is about those audit could that risk intense that all I Do to see you have the highlight? dynamics seen commentary in. competition And across seen and now past inflationary one back or why when cost various maybe and guys be perhaps just When you inflation you more have Jim you comment the and guess last can about guess I if you a in that sneak guys have look you over it the

Joe Puishys

business right and than our spread if ago. I aluminum First our XX a between lead the year shorter now of actually price in days all time last cost you material tell the is better

the movement been noise was around recent turmoil really of did foolish up risk been price inflation able little been continue Midwest the de there not a benefit aluminum into able to the not reform had the lot oligarchs risk, of has turn So, far on be premium to Sam and to we've do public offset would has there Exchange primary been so to been recently somewhat a highlight minimis. Metal has pricing we aren’t been down. tax London The conversations but offset site. aluminum The intend of lower our our factors a it has to lot to we've more we lot company. competitors It turn that in but the Russian

Jim costs There mentioned input decisions. folks industry that it. the in model intelligence pricing addressing price of risk greater the a follow in always don't been that's has So form

not point feel but not had the to this significant, the years. last been couple case, felt is we is So it risk it we We for historical out. been has the

built some happening. keeping I plan our we been and around with think the has trend of pricing up that it

Jim Porter

I’ll The can years the continue one framing terms and as Joe expect disciplined be to more the that manage seen we the pricing of the is points over And echo we’ve primarily that aluminum quite factors. risk and said, Joe last other just or industry made. of of in primarily two the And so than segment that. we system from what

if but that a we’ve historically slow to pricing be years to continued. what Joe the would expectation you our look said two industry the bit be seen in inflationary to adjust tended last As pressures

Joe Puishys

exempt for of countries. aluminum add we I’ll you the the from and rest of Sam the And buy most audience, is

for So soon. be our when to fruition. we The countries first it directed everyone to exempted all primarily we chain been expect tariffs be alarm there is had in supply the exempted at actually that not were very to expected announced one that's coming only country

we the more tariff limited all States United very global the perspective, I’m supply from how about aware So I think concerned you're risks. the feel much well imports.

is that countries So reality advantage but going the our folks of supplying not some of most of do affect that's take would of I think the on, Sam. try tariffs matter the rhetoric our

Operator

from question the next CJS comes of Chris Our Securities. Moore of line

now is line open. Your

Chris Moore

on Maybe could we start the services.

So that into the target Is X.X%. business all EFCO margin the million that's coming operating - the was I being services? impacted think by EFCO XX at in

Jim Porter

overall Yes, a do margins than their small are they they of be XX% be relatively so of lower a revenues little their exhibited. revenues to bit will may have amount going

Chris Moore

put rough backlog XXXX, can and into the of just at a look kind fiscal two kind you on If split? between give of you a XXXX buckets fiscal -

Jim Porter

much terms versus of talking about go how XXXX in is to you backlog fiscal expected the XXXX? Are of

Chris Moore

Correct.

Jim Porter

it two-thirds XXXX fiscal is beyond. one-third of and Yes, XXXX about fiscal I is think and about

Joe Puishys

fourth all are hand. XXXX is Chris, fiscal of a I’ll point plan revenues virtually in segment add in that

literally long And down mentioned mentioned de minimis second, recent bill quarter for I first the business it’s And we to see sky blue have the in last year business glass percentage glass for current to you the usually year. as even part is some year. so and you XXXX have with our we fourth achieve a is in the have business. in though in year quarters than where time have been growth. we don't year-over-year book where in hand year revenue Jim my comment in The and win revenue the for really well it higher support that XX% most revenues fully revenued to work bode business third is the fiscal does enter some the requirements where every of quite this that of and plan we’ll Now in that where work stood XX, it

dependent less as same and the far we’re in again on the book in once well. glass So business bill year

Chris Moore

XX% - from talked four in five or that back… this that That you’ve levels terms about of overall just

Jim Porter

backlog the adding to more from book metrics up the non-GAAP away shied XX% always awards but we’re We’ve add if about year. you over prior

bidding talk with we’ve we of been have we about. those bidder given forward work We somebody we work the the or also and often four going have levels sole we’re glass we’re visibility verbally feel have won projects

we’re The when about first year. last concrete the and most are say of two talking XX% I’m I that's ahead when

Chris Moore

Can talking the on just little talk side And about glass the broader things one glass expanding you’re of about architectural bit markets. into you further?

Joe Puishys

modern believe in competitive is work partition, more in more more Yes, in we mid the where - underserved. projects a we’ve and There’s There's today's, been the downstream building. as of glass railing, the interiors walls the up. can being the cubicles and And interior move years going glass a world. we traditional have most of And bit glass and glass versus the ago that. we larger share world smaller lot building then skin outside

Chris Moore

on the as anticipate relatively same margins is you the would or And …? or there outside the

Joe Puishys

be at efficiency point coating silver investments. heat but there. versus you may on in the single a we automation don’t complexity glass we - may on treated. and margins yes, continued believe the and have margins obviously lower interiors as only I They achieve smaller are The there’s that downstream outside, our no projects see, with similar The move the not price difference margins can productivity margins the

Operator

Stine the of question line Eric next from comes Craig of Our Hallum.

open. now line Your is

Eric Stine

just it not all. that you to start here, increased out last especially really does In I So, know discuss competition with wanted midsize call in glass, called your commentary projects.

all to ease that So, I it your you a you to and persist feel I you or seen have you mean, do nod outlook? just that the curious, like, that be just factor expect going current that's you know and that in environment to going forward is mean

Joe Puishys

continued that That substantial competition. in the was the as attracted into more address the price as guess, I’m were today. a But of it larger the out was our explaining, our growth came F case I And market mid to did and job today F on projects for Yes. segment, share I had projects. not we quarter, Eric, poor in and the XXXX XXXX. XXXX where and true. last I XXXX admit, the all margins record into losses I’ll large move a operating earnings offset we equally what share try mid largest to the halfway margin. projects in the our That It's fiscal of had gain we year trend smaller market, were in of kind made record in in meaning wall middle and We into but ran weren’t we to the more. share hit a any a gain. market, on wall of We into a lot market. gaining started tapped mid share of the the losing we

lower it’s value-added. So doesn't price but downstream we The the the It glass to are lower has we mean we moved less prices, project. where competitors but in complex less had space. world more now competitive content even was been further a either necessarily playing

back so more we to of but We loss in kinds revenues at large margin revenues be lose turned the continue efforts continue the ramped same was Frankly to has years in around it competitive the we were win to we feel our to to it margins projects. that that award to a lower Unfortunately share that space, few good. business. in earlier, trend and get cost up came that but

it better to So, competition so downstream projects. I today - step regards explain it hope in as complex continuing with I the more to less Eric, wasn’t much us

Eric Stine

see talked you Is - there. you level, and feel situation know key of of I the is you’re share like there, a fairly you've the of XXX regaining the euro past starting now, in mean, it's something just that being some sticking well some to in I that recent know kind has obviously legs? terms about

Joe Puishys

do. I

Eric Stine

Okay.

Joe Puishys

do. I

to to supply great of frankly, all cost model the before they by cost dollar favor. the risky country comes one to the along were easily You a and valued know, logistics percent the coming in is experienced unanticipated as customers on of first definitely glass move even save it back aren’t attributed started currency a to largest chain, some that of our the try in. the efficacies around downsides logistics offshore with per our backward, building chain long set very of construction fatigue had that se. the competitors But going world We supply installers the the

So, euro few the competitive against years we just And this work ago. and up same be projects people per didn’t for at and work. won been bidding with have years some couldn't we a where players give again avoiding I just a us international $X.XX recently half two

So our this we’re yes, - business there dependent our like on things beyond running in our and do control and but are be glass continued feel our factories. legs model investments in our - I hence currencies to our on down will not cost bring structure

Eric Stine

how well, mean forward acquisition? how talking see product I do just on about do you I also organically me think going about - perspective, geographic perspective you know from versus from question by that down I a - that that mean, breaking expanding you’re as framing, Last we

Joe Puishys

Yes.

Let me be clear.

to not do looking acquisitions. We’re

focus on Our is EFCO.

runway of States the Where we say in But our fire. improving and there will not hands business our businesses. Our foreseeable growth to in systems geographic well at we’re out to keep my be there. just focus keep irons United as have but Canada. will competitors. I’m as the going, not inorganic lot opportunities my Jim future. is tip on We’ll going let I we in continue with our of all framing in system for eyes looking to me in framing a the

Operator

[Operator Our of Thielman Brent the line D.A. question Davidson. comes with next from Instructions]

is now line Your open.

Brent Thielman

side, glass of or backseat that of grow to the you shift on Maybe take midsize a do in still project? as is kind going market more to fiscal expect headwind the kind topline XXXX towards you Joe, in large

Joe Puishys

No.

grow. to capacity have We

the then was Center. back the tapped we last because our We expect but that, the large evaporated. like States Trade ever midsize you project went And upward segment. to to feel which project prices downturn continue tried, see we’re United We to glass one movement in don’t business, World if back the large don’t Viracon that in expect There it frankly, to out. see was

penetrate to and market - weeks didn’t segment miserably company business to tried the to five operational have footprint Our because in failed requires. deliver the four the that that they that

large and five for every virtually material we less our place model. you some we and lot was more last handling times the XX-week order in because ship DNA Our core it’s and put a single visited for consistently, in Today become of today projects. years weeks factories. lead and several the There’s our have automation automation

in competing of capable we’re market. So that

to continue levels our so cost continuing at structure, be We’re to of can they’ve that our capable also been. margins high fix

Jim Porter

adjacencies. which the situation and to that We work we've the in or just business, to with all the lines really improvement emphasize or of of midsize a Brent, have made it the capabilities on And do that projects along poor model those isn’t cost large continue is those. structure operating in

Brent Thielman

project, as ago? And were years at it large you at This this? then through from the of job is order activity few expect you’re seeing in seeing margin back or the sort pricing least level you’d

Joe Puishys

bidding good is - at activity The that margins. going Yes. There’s on. nothing

along in I project, I track is continues seen peaking. the up the market believe top. are use downward tell think margins. the question would - large to would pricing are in the bump no haven’t they I We there. any do large term I There’s not the you, end or price

future. the to top bump foreseeable I think the continue to for we’re going along

grow the will I mid, a is purposes home our our a mid I large well the feel but to company reasonably other play cities the but new we’re that now and from Apartments to grow, our the upper in frankly we’ll to intent and with instead any as of all continue non-resi much continue think small, small bigger we that continue for offset help will have bodes business think condos generation and level seeing I for buyers along what countryside moving multifamily projects. market model this see in which is we good the slope, on of which into And future. potential high trend downturn. workload. high-rise captured the work project the get buildings foreseeable nonresidential in the bump large doesn’t continued for to this of always in they strength

top large So for sometime bumping growth along the projects. mid in the and it continue see projects in I and small

Brent Thielman

get the planned On EFCO, mean of was Joe as we’re margin. additional obviously initially kind delays out that and I the since transaction hasn’t targeted into at and looking you played

looking yes here? color is that I'm So you’ve sort I helped for got feel guess, the of us additional that reflected risk any appropriately like

Joe Puishys

leader for on then expected the reflected had we everything EFCO. said you out there down that’s are with more said, in - know we it who their risk for I projects wanted We’ve and massive appropriate pick organization feel got I'll like entire I us the definitely is problems leaders job. We be a that selling that profile. order had. skies a get put of a it now the in They EFCO taken surprises with of here and we business got believe I pleased risk We’ll of we today. been tomorrow. people a large tonight I'm turnaround was time. how and long phenomenal identified far doing managing the out 'XX talented I we F hands reflects And company and the our in could we've business the new is in We’ve challenge. We believe with right now the front didn't place. our them that they up the guidance were. full have

Jim Porter

couple leader give I’ll XX since days down little a put Brent, the current a there of mean ago. just we - perspectives you I over our

What to flow low maybe able fruit Some existing for and needed was started. savings finishing procurement of spec we’ve projects hanging example, the in in have to change to been underestimated cases or identified. about learnings a that meaningful talked we've in made be we material that be got some

equipment see And floor we’ve so We able modest improvements some those some was those been needed. terms that placed and to orders the things. shop types for process of and we on delay equipment in of identified cost that

we just of we So really anticipated. into put later list have it as great tangible going articulated place be than to I initiative a

Brent Thielman

think on over where to time about want you and lastly of back that financial trying if guidance your I follow transparent be and I a and to similar practices go you be with mean, perspective. to I from And think

I today. look You’ve about and great what done recent of job, a history bit of folks easy about we're think skeptical to kind it be for a guidance talking

mean about question you're EBIT two-part a of sub me. two, you that any processes least? how basis X% can at and And seems frankly you in I mean pretty on So changed growth thinking to one, guidance. on based quite comment approaching conservative guess I have be terms I adjusted

Joe Puishys

to I’ll comment you it get going to front to skis, in our of we Brent, and I will believe plan assure disappoint. not on - put to our I it’s fiscal XXXX. through not that will we've not can we’re got backside out going continue a go we hit loft work another we I’m

Jim Porter

to in with think We guidance risk business as outlook we're aspect a letting always risk look up opportunities at the bit and a more. probably taking and come our their approach I we little

Operator

concludes the Puishys question-and-answer back turn today’s Ladies like you. this conference would remarks. and closing over gentlemen, I Joe to to Thank for session.

Joe Puishys

please you. Mary will in or Jim thank ask a And question, Takia I Yes, to to out if Ann, ignore queue myself. not I were apologize reach you you the

us. know to You reach how

talk will a of apologize lot I We questions than talk today certainly a normal. to more lot you and -

got up Thank very So forward look you, we a today solid much. hope message and to we’ll and going across I just to all we am wrap tell now very you year. talk clearly soon. a I more now you

Operator

today’s thank your concludes in program. Ladies you participation and conference. gentlemen, This today’s for

disconnect. day. You have may now Everyone great a

Apogee Enterprises (APOG) 12 Apr 182018 Q4 Earnings call transcript