APOG - Earnings call transcript Q3 2019 | Apogee Enterprises, Inc.

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Operator

Good day, ladies and gentlemen. And welcome to the Apogee Enterprises’ Third Quarter 2019 Earnings Conference Call. At this time all participants are in a listen-only mode. [Operator Instructions] Later we will conduct a question-and-answer session and instructions will follow at that time.

As a reminder, today’s conference maybe recorded. introduce for to conference, like now your today’s host Mr. I’d Huebschen. Jeff go Sir, please ahead.

Jeff Huebschen

morning. website. Apogee there available Joe Relations welcome third you. to which Porter, And Thank Good are I’d Officer. to to Executive and call. of like section accompany me Chief remarks, Financial Chief everyone quarter With Investor Enterprises slides today in Apogee’s are that the Puishys, remind Officer; Apogee’s Jim are earnings XXXX fiscal today’s

non-GAAP which certain financial on that nearest financial Definitions this provided management’s found our call, can also reference available to During our More Also, a contain currently Actual issued the differ will non-GAAP available the call these and to in we reflecting website. factors in you, information that SEC I and results call And about is I’d over Joe. forward-looking GAAP business measures. results will measures statements are Apogee’s based morning with may release that, materially. filings. we of is and will like this on be everyone turn the to our affect reconciliation earnings expectations, measures could remind information.

Joe Puishys

the at and it of context quarter the segments, our and in for Thanks, on business we some joining Jim All to over turn quarter you quarter’s to for our I the outlook. highlights seeing This thank Jeff, strategy end like our will look more right. in of across morning the I’d and are the us. trends long-term everyone discuss the markets, review details

starts, growth remained indicators such continue conditions Index, and overall office be as new favorable. trends Market Billing rates market positive. end for So vacancy the Architectural employment construction to

is was growth sectors, most and many regional most you as this which the in just our growth reflected being know. one of at of regions In recent of largest which U.S. in in the years in all almost primary fact, it scores market highest XX% Tuesday ABI, commercial, week reflected released the

had delays markets near-term job In their some are QX, timing we in great the Specific experiencing solid project of these saw of Apogee, for some to we following and its schedules. These and a progress expect At quarter we hold strong and seeing Framing and order cancellation delays bidding Glass and Systems the second ground. long-term in and future historical backlog segments. we a quarter In in remains of remained segment it’s timing help QX in work project site saw to increase issues. in delays Orders are won. bode not made serve. Apogees’s activity So the out quarter. our are huge These revenue thought we the indicator Services across lost our that Framing continued well however, we future have This pushed as projects we impact at we future. spite Architectural levels Systems, point, in record slowed encouraging and this to were for expected in nor trends revenue the third quoting we less customers year. the flow

at numerous drive opportunities the market Looking we our in in our are Framing longer System strong position and growth term, confident see segment.

four to turn highlight across me Let our segments.

project strong led adding backlog. the been several by cylinders, all were Our firing organic new for is impressive results and This wins on margin another certainly contributed gains, which quarter Architectural growth, Services. terrific segment revenue to

fiscal during orders now strong well the stretches backlog XXXX. services With quarter, the into

is usual. the year second has for I accomplished. more fact, team couldn’t out our backlog heavier what of be proud In than this

is, it showing nature the to stronger site There improve ago. was that no question, variability will years execution be in there and in few but better efficiency the based at the to optimize large business all segment are quarter-to-quarter always in strategy manufacturing results. Our it business drive up is and construction project their due a selection, performing and than is of this a the project operations

continue as the Glass, plans our continued results, In project work tight optimize overgrow for we We in delivering will management last capacity. manage profitability, to business labor despite markets. we to place are this Architectural put quarter

We have been new ramping adding having employees and good success up production.

since have quarter second new our added we XXX fact, in In successfully the now jobs started. large factory

Our saw improvement result compared factories, better quality labor rework in rates operational and scrap operational on-time in efforts our with showed better the results. year-over-year in for first fiscal programs drove segment’s improvements in We metrics The time of quarter. in second and These quarter rates. to financial points segment improved efficiency, the higher we XXX first shipments, revised lower focused and gains key training the and had throughput complete revenue margins since and sequentially. basis QX. up growth XX% up the to Revenue were increased XXXX returned

margin topline and in good beyond. improvements We a have QX to further roadmap

remain in flow with customer strong importantly, as order pricing. Just commitments good

mid-sized to continue in projects. in We markets have regained and share large win

have year. are to and we quarter With performance. a advance the As however we growth offers in engage backlog fiscal segment construction. the on expect operational ahead reminder, said, us improving of customers We Glass often extend segment. This encouraged fourth in continue hand, into next at and revenue outlook potential this Glass that business our Based our report awards revenue to work continue do long-term still we with projects for of potential point the on added with this for not visibility. well in

showing Glass return to profit QX. earlier. of In down to progress the were improvement of potential delays Systems, growth. I due believe recent We We expect now represents year-over-year, into Architectural have productivity achieved to however likely extend return a revenue fiscal to level continued margin this and earnings significant double-digit Framing targeted efforts period. anticipate part underway will ‘XX. this control our We timing mentioned segment largely We largely driver first initiatives in and to in under margin is cash flow opportunity margins and operating

earnings outlook progress the volumes. lower to operational improve our synergies Based We expect EFCO was more Framing Unfortunately, on drive performance Framing Systems’ in turned growth a we remain guidance, recently work this will of for make to the believe across Longer segment. this to substantial long-term potential. remaining margin will Jim opportunity impressive We and growth executing year against is profitability business. topline Framing segment quarter. our over the to Optical continue another impact opportunity We initiatives competitive Large-Scale offset optimistic growth which updated that including in cautious to position segment great quarter. continue in for be Systems term, will organic acquired for confident in go we successfully this Framing progress about there allow deliver Glass, have be detail. done and in and exceeding Operating And Apogee. by fourth and our we this Systems lastly, full XX% improve

near-term profitability XXXX, results, are to stable our strategy. throughout we cycles. on delivering to of better our and set we a back on focused for position important think I step the operations strategic the In the put long-term While and more strengthen and business Apogee and growth it’s diversify economic growth out our fiscal in quarter context and

strategy. this executing progress excellent made have We

efforts This are ups to our to of consecutive despite in on a we growth be our the have track year diversify this strengthen topline This is we eighth many great downs the We and year. testament company. record serve. made and will revenue markets

We see growth. drive continue to to numerous organic further opportunities

As earlier, I market indicators favorable. remain stated overall

we new expand good Our are the a products. backlog have visibility lead pursuing and longer on customer to pipeline that we provide business and portions healthy opportunities market the and new of time geographies commitments in segments of of very our top new and

are our five Apogee’s lean drive years We to now journey into over approach enterprise into businesses. our

stand a in XX-year we near-term did year the highest much stronger had challenges, a profitability for earnings be have in we just years history. than foundation ago Apogee on second will year and we While some few our this today

Finally, cash strong balanced Apogee growth, return company. and to position to a a healthy cash shareholders. financial solid businesses of our strategy, financial productivity investing has This improve have pursue deployment been capital position to enabled long our drive and hallmarks in flow

compared continued we high to up and increase the of returned point dividend have I this fiscal can a three are and to $XX laser sheet quarters strong, fiscal improving over urgency. shareholders making is And our and million year. extremely first return have tremendous buybacks, to year, million sense we capital to XX% investments We this compared $XX shareholders focused of on through year-to-date with balance operations is our that a you our share we flow and year-to-date approach last are acting for internally XXXX, last cash assure

on outlook. take line the And Jim? Jim turn me will questions, who will to a come I back it and now more provide quarter few Let we before the comments. more details for on over

Jim Porter

quarter. were prior with $XX.X along everyone. amortization versus per in offset presentation. quarter. company earnings which to you in diluted see period backs came driven million up margin $X.XX our out in Adjusted margins and EFCO compared third and by consolidated results, margins lower of operating year’s Framing Services. income begin our Total was $XXX.X gains the which at operating year’s the last in is year Joe, I earnings $XX.X with in $X.XX. lower intangibles of million, acquisitions. $XX.X $XXX.X million, Thanks, the $XX and in Sotawall Adjusted million decreased Architectural revenue third income morning, per share good adjusted slide million, was million, Total which to share can short-lived Architectural from five in EBITDA will $X.XX on year-over-year Architectural Glass, from last Earnings Systems

X.X%, Joe timing leverage with segment mix. the to lower with down operating by adjusted due primarily revenue on million along million margin an cover recap less will sales million, to negative was which six. that last favorable of I Systems the Framing year, XX% ended $XX.X $XXX operating Now, quarter decreased $XXX.X Adjusted for driven volumes margin last million the year. delays primarily $XXX.X Architectural results, reduced compared are income Framing to Systems operating was backlog. from The mentioned. in on slide

initiatives the an down growth. segment, saw EFCO Sotawall year, to both to the progress recently acquired to projects the improvements achieve production Looking legacy and from and long-term in were its steady lower operating mix performance income remain in Systems that drive can on primarily prior operational I continues time, our over and within results quarters. businesses. up as EFCO make at uptick But less confident businesses levels We on EFCO’s volumes Framing that they sales due were recent to Systems ramp mentioned. booked favorable similar that Framing

Relative increasing sequential and year’s segment million grew quarter. The to than Architectural to to margin Services was points. operating the it margin made volume X.X%. lower operating operating Joe described, levels. revenue is execution. by As another Glass but improvements below to Architectural turned X% $XX.X revenue second more progress the level XXX year, strong to increasing driven solid made tripled compared million $X.X last quarter, productivity, in basis XX% at grew prior by to prior on and and XX% solid with increased still sequentially income great year operating XX.X%, leverage and margin improved Revenue improving and

backlog order segment addition, well strong again the increased ago. $XXX future. million, to $XXX the as segment’s for above In in the backlog bodes flow a year This increased well the quarter, million which

the are project like Joe’s about segments I’d lumpiness However, results inherent that repeat timing. the in comments by driven to

supports point we dip nicely on third quarter, still fiscal but provides last than this a XX.X%, long-term performance. but sizable modest growth currently a schedules, XXXX, lower solid we Architectural for deliver backlog of process compared at Large-Scale XX.X% XXXX. last based anticipated in are next really to continued margin our year. segment segment operating The projects Optical a improved expect Revenue the in Services planning $XX.X year’s good fiscal revenue million and was visibility to year, to our in visibility of Although,

to the roughly position million financial slide Total $XXX Turning stands remains debt X.X EBITDA. seven, or company’s times at strong. XX-month trailing

million, $XX.X million, million cash year’s with $XX.X which cash last X% to continue stands through Free to cash generate flow operations year-to-date above of year. from We last compared flow is quarter $XX.X the third level. at solid

third our year-to-date, shares we have of now we During buybacks cash through quarter, million the to repurchased stock share for and returned XXX,XXX dividend over $XX.X $XX shareholders and of payments. million

In enable return now million the good drive we to expenditures we capacity investments underway EFCO, and ahead, Looking capital specifically, productivity. in approximately number on and our at invest to other projects we along $XX of be growth. strategic full year our as continuing improve with a be to operations growth quarter strategic to work will projects expect fourth improve

fourth the using as plan attractive shares more what we free quarter also to cash buyback in We valuation and view current flow levels.

slightly and sequential margin outlook X% our expect though in operating in guidance. fiscal updated growth we lower guidance and into to strong the XX%. continued timing We in Services. margin forecast to offsetting previously than operating margins fourth adjusted of slower me look forecast approximately delays approximately we see Slide full an with between to projecting previous now Architectural of than Glasses at Systems are company ramp Glass, remainder due nice and Architectural now year a let X.X% and the in expect in presents the quarter. for expect We previously now turn we expect eight year. total Architectural up revenue the to From performance Glass X.X%, Finally, X%, of Architectural which the volume Framing compared our full-year carry our over Systems, of Framing to fourth our X% quarter to outlook, growth

We all Joe will at rate I approximately approximately for at remarks. per XX%. expect it now adjusted the per range $X.XX. and low of over share turn previous With back together, putting that, call share the some $X of forecast to earnings to our guidance of approximately our concluding we earnings And tax continue end

Joe Puishys

I’d long-term like optimism Apogee’s All right. Thanks, up, Jim. To reiterate wrap to our direction. about

near for I growth on record are pace and still per another as topline share, of mentioned. year We earnings

shareholder continue us the to I’d Thank you. strong Liz, please. operations, big your how if long-term backlog our We have With you to open our call balance And cash position that, flow improve in into a tell allow sheet, up for value. place deliver to like get could and roadmap the our please very to questions. to our the queue team

Operator

Our from the question line Instructions] with [Operator first Sachs. Certainly. Doug of comes Clark Goldman

is line Your open.

Doug Clark

taking for question morning. Thanks my good and Great. Hey.

Joe Puishys

Hi.

Doug Clark

that some with us an little conditions that Framing My expansion are you remaining comments cause trends help in the more Joe kind kind just detail the at and growth territory? of commentary made reconcile business, beginning you a bit the that first in you the delays getting everything overall one kind of of providing is your of terms of and earlier on and can the of

Joe Puishys

Yeah.

in six have we that businesses So got segment.

at So terms delays the in general we site. construction are seeing

the community think I general little a bit oversubscribed with contracting is work.

time specifically the selection. Architectural business services build we in any installation, that ago. allows we because project done of I seen have we cancelled, of which slowness and but the fulfill businesses such extremely up is talked said are second between our project them experiencing purchase As well extended, any in to demand award very, not and or have just not projects about share at other demand our Glass, a very awards unfortunately, product our actual installation has and levels very in we have issues several we small in we for ship loss order commitments And than and world with that seeing are in of high quarter. the to pent and a customer in are awards the us course substantially But, just and obvious the a are year a we

So States into as I while be talk mentioned, may to recession. a the trying itself United

bookable issues We seeing be seeing are of high. awards anything. purchase activity continued timing lost I to reiterate the not and not actual the But it, bidding are as very far have conversion We award we just as some to orders.

Doug Clark

revenue, double-digit type on can is we that I on down next that Okay. margins understand should of and secondarily perhaps, it’s That’s the year. in margin go-forward services, tell comment or expect if Why helpful. am the piece level if is the And again that with basis? a the on services being then, to connected wondering just see me you services

Joe Puishys

final while in business. Yeah. get fabrication the $XXX approaching but interested very have high not very put It’s investment been have of ROI. investment we -- pays, margin install we size very to don’t million. I the a my is a high this to curtain am The long-term be being goal a low We low, our together margin us since parts X% in project here in operating average the do are million, wall investment arrived operating business, I ROI people. very facilities is XX% business. help building, to that It’s our $XX

your coming the won of We same of a backlog projects a ago installation up impossible you that’s picks a a handful have the on one business quarter. if and year construction next in the you the to in got finishes, every next have project cadence when day. to go It’s while are project perfect

to as point that Jim absolutely lumpy I There wrong and nothing very is out. with like business. it So is

certainly performance are that as have been. they double metric ‘XX, have got consistent quarter-to-quarter because assembly a control more next have one and the ago. substantially higher the lack as the frustrating the challenging represents just revenue a not digits, is is orders, business it little same year fiscal backlog expect that to actually can And to in profitable. right than backlog ever have but solid company, Their streams. of is to sites now we fact, of at become profitability It’s our to we construction bit manage at In backlog for smooth XXXX this the fiscal while up. be public low, but I as year a

that that traditionally will and in we winning that. and we some actually So can year in fiscal fill bill we orders book with try to that do

nothing close with ahead lot a that absolutely time to that of business. of us So it’s gap. wrong There’s

we see -- up excellent at to to due at services the expect margins trend disciplines continued trends site. in We are job our

Doug Clark

it turn will over. I questions. my taking for Thanks Great. Okay.

Joe Puishys

All right. Thanks, Doug.

Operator

Moore with comes Securities. Our next from CJS question Chris

is open. line now Your

Chris Moore

guys. morning, just the… Good Yeah, Hey. on

Joe Puishys

Chris. Hi,

Chris Moore

good -- … morning. on

that’s necessarily? more certain the delays, or geographic Framing, any -- in are concentrated the not timing markets On that

Jim Porter

is Jim. Chris, this

is answer the no. generally think I

of some we concentration than is shortage base. Framing For Systems have it the market that’s a a time of more function bit Midwest pretty the Northeast. more and footprint our in broad It’s in business, But conditions.

Joe Puishys

and no don’t measures the buildings know those prior what of off versus Chris, obviously, like -- for it to may architect November These it’s is XX come same a is beyond. from ABI work year trepidation. is a now that is architectural no the indication Things month period. there in the for this continue a a the of table, level who from underground year question -- there products the us revenue and There that whole the -- now of for you are that become move forward. is, no months metric

of years quarter. the we we as the maturity contracting an not over led of far general people assumptions has continue market would about to wars offset and from think have I overcook on last oversubscription the There and are trade hasn’t our sector move continued in when for anything while is the we concerned in a community any more awards have every folks didn’t mention projects managed it our tariffs be strength I input been. seeing pushing seeing costs, bit at couple are of attribute projects to we along a to and as a just out and of been just been little to reason won as little the impact But bit we it our want people are there clearly and out that don’t because to that, that’s I we awards slower. construction concern

Chris Moore

are trying next EFCO profitable XX Can kind little it to get how that sense in is seeing over or it close Just a business of progression? bit of is we the marginally about six terms the flow Okay. to you months? more -- to talk a

Joe Puishys

in business. see -- We operationally will improvement increase just need we seeing I are orders. the an substantial definitely to Yeah. in

Operating with I have side. issues that the of seeing confident our have the We executive place what is the some are operationally I heart the on have improve support I sales been performance, seeing put we leader been in and facility. of recent focused dramatically in historically that added weak. am new

which basis we from that have mentioned, That as points in us. substantial stepped to to we we our that something going up factory think we investment improvement productivity, believe fairly clear speak, of substantial will was hundred is drive needed. margin many capital desperately a was I very

fiscal we us and have profitability. meaning that in of the we are second the of the and will steps funded take During forward online May, diligence we the about timeframe, go ‘XX believe need, aware June end early on first quarter at next help some due we the substantial quarter that, of

Jim Porter

performance And of Chris, I the will just speak to financial business. the

that business you and of volume seen we and Joe seeing quarter. that driver said, the so the the fourth more key expect with a in is have But in improvement are in leverage we As that metrics quarter operational visibility in business. continuous volumes in third productivity

So in of and the but earnings a really second in in a we the quarter. bit And business. performance Marketing a in the the of Vice continuous business will we Sales year, see importantly, this little progression put be President business new that negative for beginning that fiscal in

activity our a rate top the are from progression One order nice to to we and the leverage seeing fiscal in company we of see ‘XX. be pickup volume and positive on improve, that guys performance able the and see and within expect really

Joe Puishys

that story. a operating we This be really is penalized Framing of double-digit like in and it, is just in rest margin. certainly the Systems there good that well our the you headwinds will the given for segment have new a and know echo been Chris, results business panes

kind XXXX have mean working margins it’s point, of I a familiar of with years next expansion it on you basis it’s So performance everything the and that are us a the starting expect. we and to point proven can have our don’t provides but make over that legacy over light we in businesses the of margin current few tough

Chris Moore

helpful. That’s it. Got

back queue. guys. Let jump Thanks in me

Joe Puishys

Thank you, Chris.

Operator

with question from comes Eric next Stine Our Craig-Hallum.

Your open. line is now

Eric Stine

everyone. morning, Good

Jim Porter

Eric. Hi,

Joe Puishys

morning. Good

Eric Stine

well. expansion, I obviously given trying turn as would there those can thoughts kind just soon hold that into that made acquisitions, plans all mean had looking comment integrate confidence to that were expand feel through to I acquisition you as on of know you of there’s and that something like have has will get changed I organically? you is you that all or at just you you are issues do the So maybe of lot mean that on your on you sort the EFCO end mean, or and your other I that corner geographies on and the

Joe Puishys

I Yeah. -- I was word for No. I am organic thought, this reason. repeat a

are noted on to that are this at the on certainly But the planning is operations are and do analysis, publicly sale. our our and properties time not eyes for we this are purchased. out our keeping focus We looking -- time. that our our recently acquisitions we keep We being most we pipeline at do not there, ones are and acquisitions focus we and time of business for improving internal particularly

Eric Stine

it. Got

Joe Puishys

across segment, and that over Board on am a focus of amped System say acquisition. synergies certainly driving not I the synergies across half help we just some talent the startup the have brought the EFCO, entire across executive Framing but me And been we I to last with that. to pretty potential on segment, with year have and some happy the the with up occupied entire issues EFCO now in

Eric Stine

Right.

the and the ‘XX and in gets operational are of given the business, level a Again seem possible side is it I then put targeted But business some about in had that you Thanks some, kind for there that things? you at some know that bigger I filled is be that your fiscal that. maybe just that at at this fiscal growth. profitability for that turning ago potentially maybe could backlog where level but the commentary you there mean it on does can to top ‘XX. as you or probably maintaining place, end things potentially that this Okay. is And and have of like this a it while and look services of it’s year sustain

Joe Puishys

price can is a they are say if up when for managing end low I strategy. and to you backlog that large that it are When projects our go business pile looking marginal want not you chasing on that to profitability on very often a and when large with you we and you frankly sell growth, companies versus Yeah. do are fairly business

We grow? project a our are resource our on Absolutely. is trying to most that resources. trying to want But problems project Are and our managers. critical, skill manage It a key profit we with we is focus are is your I but The business in capacities. ahead to don’t to is willing imply work certainly.

at that performing If that services, as segment are year, million you for last was look is and million performing now mentioned, $XXX this Jim on it’s backlog we how call, this that year $XXX business that the way we the are track business. starting very though from challenge $XXX on business that looks bright that that you can future a point quarter-to-quarter understand of million, to It’s so for basis.

have higher We will quarters. will lower quarters, we have

if at eight quarters, over over you from the six trend always good Our see be or XX% going to are continue But long-term you news XX%. look four over margins to to that segment. will to

Jim Porter

and the allows that is, for times been of growth growth, pursue us the emphasize talent we have focused going that In to point are selection just project capacities. drivers Joe’s business development be management to our existing optimizing looking which ‘XX, And affect from in sight the that for at to project do we point, go that and still lead we ‘XX, one And fiscal into before fiscal more types geographic work which in the for it kind management some of us project more on projects that can some is of quarter ‘XX about is, value-added have we line fill fiscal have probably really business, to are while work. probably, of beyond.

Joe Puishys

about acquisitions, -- you our about asked you me we businesses. talking reiterate when about I with Eric, And mentioned to about growth geographic and existing are

more some opportunities help become I products launch and we our will and to we think products some covered we in of businesses. We have the businesses. of announce continued don’t in footprint We place four walked expand But for are all U.S. but ready reasons of not will have our plans walls more willing got have to opportunities in of XX now that new geographically us are they all also public. -- we am competitive when just with I our that in we come. our said and those gentle to not have we believe efforts, offerings, have

Eric Stine

lot. Okay. Thanks a

Joe Puishys

Take you. care. Thank

Operator

Our with Thielman D.A. question from next Brent Davidson. comes

now is open. line Your

Brent Thielman

morning. Good Thanks.

Joe Puishys

Hey, Brent.

Jim Porter

Good morning.

Joe Puishys

Good morning.

Brent Thielman

what’s little to right? back come and and margin of that a Glass to want that pushed recovery to expectations in a Joe, further confused, just the the segment kind transpired

Joe Puishys

have great of done of our Framing month It’s -- the keep is Systems not month are a improvement in basis expect like basically first issue this start was new They margin a more. XXX of points quarter. substantial volumes, mentioned they off expansion. hired but already see I I will great They XXX the fourth to they improved they December, I They would bigger pace. to which people. the up job.

We have XXX people adding. are more we

pretty challenging quarter. additional a we points, improvement complicated the to bit very taking quarter workforce with and the had further hundreds just XX% just that substantially a It’s something us to of substantial third is But this a or expansion QX. are I am it’s fourth new basis business. I challenge. to complexity get of It a business with expansion But grow in XXX we very heads and to XXX increase in it. hires grow hire longer the It’s committing is to points real. in over to It’s new actually QX, basis committing in a net substantial obviously. workforce, been impacted think that really in to

Brent Thielman

Framing and in back, year, given what’s next margin of I you like then, you point, said get how optimistic of end you markets? preventing everything kind a presuming, that And this kind the some run beyond at around rate you get Okay. are to volumes guess you EFCO double-digit can

Joe Puishys

leveraging the I to we plan Board volume productivity. Our process annual -- even key, haven’t February. continue given make guidance FXX in our by volume February to January any my which happens segment obviously give with report improvements place and we completed on to not in will operating in willing am a

legacy be the improved. recently of So That can I we not lean front the from is also in the tell initiatives. horse just our But will business, and to operations but here going at I not you am the, cart our will businesses our control acquired things Brent. get

the left in businesses, orders Our but is products, in lead to extremely two period. of within our our the geographic biggest And Framing impact a shipped going Systems short expansion, new several week backlog leveraging businesses. time volume are

more the it’s to we of I Framing will future attractive, but also But quite on on we because opportunities provide challenging a not because but of going is So guidance bit the EFCO, more starting Systems point FXX. partly of that synergy guidance am extremely to long-term on forecast. the have, provide

Brent Thielman

it and Well, you come Glass, sounds in guess, I work back to mean, like Okay. winning then, I are mid…

Joe Puishys

Yeah.

Brent Thielman

and share large. in … regaining

Joe Puishys

Yeah.

Brent Thielman

sector the talk you and momentum ago? that same that saw about overall though Can few years does market had large a you the

Joe Puishys

Yeah.

segment, down left seeing We a are not large whatsoever. in a project

the package revenue of are I in or the business in the right? think, year may projects, general as a opportunities dealing that have evidenced because in in campuses, in from a years. by Google it’s lot There’s bid large us they of term a a offices the or even the interesting, maybe for very Glass the seeing out large maybe that Activity there. two, the future, to the bidding we which in ground Amazon. people they activity hole is contractors three and strong are are Our become installation our architects business, visibility probably with so longest

an Our that from Harmon win when the the it’s amount been actually of shorter on actually business, time award backlog when Street. from which has work is much longest is from in they out

services, often about, concrete have have a a we The contractual purchase is revenue of of then we year hence within where our deliver into we which will said million view So to in work $XXX to of I seen never a have entire levels commitment -- backlog, work fiscal seven visibility. book have I goods come backlog. order, years that and and have have most four a go in my is good here out plus

bidder awarded the have and that with that’s level architectural a for we back project had But with great have we have negotiations that, believe about awarded beyond believe we it’s our we in verbally teams come pretty and or capabilities kind backlog, of only legal rare. we the that spec. contract very I a have and we that’s been been to are visibility, it’s in is deal. a work our mile think perhaps we solid we second the enter work had That’s

with in amount the project pipeline category a the us. if for last work it’s So is with contractors think some of and in in lastly, wind goes billions that’s the least substantial. tunnel we that’s are of for and bidding the forward, of And in the glazers work our then, concrete is four that businesses we in our

a of very Some low probability projects being have won.

say, very look the in it world comments talk nor not when is, this reacts live a give the I seems while seeing. news high. at our nor the We caveat is in what to that -- we good world and we economy, it trying in, overreacts we are are general news, into all my a -- and U.S. to new itself bad -- of we long-term all like, have Some architects, this seeing it to recession, this contractors. health our of about our

Brent Thielman

Thanks Jeff. color, Appreciate the for it. Okay.

Joe Puishys

You bet.

Operator

question next Julio comes & Sidoti from with Company. Our Romero

line now is open. Your

Julio Romero

everyone. Hey. morning, Good

Joe Puishys

Julio, morning. good

Julio Romero

you that mix you just on about legacy to I give EFCO the segment, kind also and here? Framing I the Framing normal rebounding of mix wanted the talked some of just you new you know that called or So color that, forward business mix. favorable kind a the on for is but less out see the of going Can do portion ask

Joe Puishys

some and I of businesses the that’s go overall starting we products that two to And different business from then see on. different lead one acquired One It’s the projects you No. also had kind this large of to in normal basically ways mean time of highly Systems, troubled level The the Framing across kind we of just mix mix a within some had they quarter. we of of a going some and you for way standards, some just it. know rebounding more mixed kind activity. they shorter margin that products mixed Standard of engineered forward. a was those with just they variation kind EFCO, complex no Products commentary they dynamics is associated projects of -- going are producing where are primarily but so have generic storefront kind

So that mix. we sales it work it’s the see bids to in tied pipeline unlike momentum award, out into in the waiting that returning the are in order we see for there mix a rebuild activity of better and in the

Jim Porter

a have had month but orders few last trend, seen one as have some And business we that Yeah. nice improvement -- in we the negative in in weeks.

Julio Romero

staying Understood. is. USMCA aluminum like as that on kind tariffs pending segment, And just Canadian the of left

increases how pass Just there confidence price maybe any the your the that on and and color to in you what’s along competitors continuing affects there?

Joe Puishys

Yeah.

a We have nice job. done

hardworking You to us treated. and fiscal are expect still hard of continue IMCA, that haven’t the out, I very, Jay work mentioned called manufacturers the and from Association be to Manufacturers we heard moving Simmons his ‘XX. in There headwinds involved fairly National a am lot with I very represent parts. that of to team [ph]

is only. to lot of a of spread, cost have we have an think I material metric maintain attractive a versus which we minus price managed But potential.

continue So have not believe at input at I material a lot our parts a in anticipating I of this with there’s we I moving there’s in to this. discussion have any to that on so Washington look fiscal time, lot been I able D.C. do on we can that -- should price. offset mentioned, emotion this cost, as of ‘XX. we when But am and we and

Jim Porter

you we are talking about of competitors. in the know, position same all we our aluminum are as essentially primarily As and really

Julio Romero

Yeah.

Jim Porter

difference cost. effect, When the that pricing moved industry as help kind first time material between said, into and they of up, went Joe price and

Joe Puishys

the moved the the direction. other market in premium Exchange, London have Midwest Metal And some of actually

almost when prices oil sometimes like is de a tax gasoline it’s we impact and minimis going have the what down, so seen. that’s are overall And

Julio Romero

allocation, you out, you then, maybe Understood. the fourth called And just in buybacks expect just on quarter. capital further

price to there? on offset dilution maybe buybacks the you just or levels, any the accelerating given thoughts color consider Just would than further

Jim Porter

Yeah.

aggressive We of opportunistic taken been source at a buyback more will dilution approaches. But -- approach the free as of one past so has just looking have more kind have year to we shares. dilution, been I cash say aggressively a our over flow our

So shares we back ongoing offsetting we dilution as will on than quarter more and you to that XXX,XXX in basis. the an saw evaluate so continue bought

Julio Romero

I will you. hop Okay. back in Thank queue.

Joe Puishys

Julio. Thanks,

Operator

from comes next Our with Bill Titan of Instructions] question line the [Operator Desellum Capital.

open. now is line Your

Bill Desellum

Thank you. I have a group of questions.

unfolding, referenced some you more that geographic coming where whether Framing Would orders. that’s orders expansion, have from, how whether of strong First discuss is product those it’s are expansion, you please? all,

Joe Puishys

about Framing you are asking or mean? I services,

Bill Desellum

Framing.

Joe Puishys

mentioned convert There that’s the we strong to of region kind those we are awards we really I is been into short-term specific across the product a pipeline or What of metrics is strength waiting that Yeah. that Framing. in have segment. have experienced. order no commitments is issue The line. and

offer continue products new year. to We every

-- in awards We in on issue there’s launched our where come are that last in XX% there’s have that’s from segment. contributing. -- businesses, different years this a coming from our approximately of product of revenues the vitality isolation no But five index, products no each new in isolation

Jim Porter

market across of diversity we are kind Bill, And nice segment. also the end seeing

So healthcare-related and for segment. continued that we are multi-family seeing seeing office work work, activity we are

Bill Desellum

have trying unfolding they that customers is with back with challenges I your relative how that my operational to are grasp then productivity the please? have words in box and result you? the the last And you. your a came to improved that reacted given as business, quarter? right Thank Glass orders? more are orders quarter, had this orders really How of am how or they that overwhelmed How is whether put you whether penalty circling been you temporarily What have Great. that these or

Joe Puishys

Yeah.

in the and prior of we So first rate a about numbers, of from QX the the second XX% QX mentioned quarter, in I increase that had the run year. orders

quarters grew in quarterly to million but in of it second end that QX, year, the $XXX So those experienced at roughly in was million over quarter. the it up in highest in orders That about $XX ever its history. last input business has picked the

high on XXs in to fourth us increase We both be quarter in a put feel continue quarter, allowing going or our very to perspective, $XXX to quarter this So backlog in million million revenue over strong. orders, is attractive. to we were $XXX

are standard levels. normal to is we blast traditional can order customers let’s line, out rallied still lead our think four -- time. delivery certainly call, our on times weeks of us core our our We Our another around lead product to, carve back meaning

is you do $XXX Bill, which So, the a over million numbers have nice improvement.

expect reflect orders quarter We with us. customers that continued in fourth strong weeks growth quarter the and continued in few the the our of or first are

Jim Porter

is business growing the that as have in times, as and continue time didn’t projects lead But important but we understand have those our successful it’s lead some those with couldn’t time. customers we the stretch to in we lost, lose doing were to mid-size lost anxious really are did there to work And and projects been out, that market we because might we lead customers hit with might us. project have smaller those shorter

Bill Desellum

Thank you and congratulations. fantastic. That’s really

able relationships maintain those are to well. You so

over circle the your EFCO, us sales to does you that to become you over, that complete increase that for XX reference project the margin that points have capital relative would and to, focus kind complete individual and EFCO, picture that brought also that back enhancement us have to Lastly, on sales the the will ability for presumably made of deliveries, you growth understand… then help will over, that of to it that project, you when will percentage lead

Joe Puishys

Yeah.

Bill Desellum

issue please? that …

Joe Puishys

the the if Framing know we Bill, different markets, above that of are margins let legacy next well statement. productivity words brands, in enabler similar going you in my years. the in saying plus our my be XX%. I let Yeah. five was operating Systems business. to margin EFCO position a to exactly that that double-digit our will I points project that in XXXX in will And was -- capital That’s project to capital EFCO me believe course, the if in that correct, improvements with look expansion. is, we not The drive tremendous and What like businesses same have basis

that point a just a low provides fix It’s business. as tailwind. it starting So nice we

to now that like will diligence, is rest improvement capital officer running making The named here direct operations. -- issues report him this Apogee. business the due help improve us in our layout primarily investment some an of help next to north factories the the is factory was leader to of this to of run our over It achieve Apogee. he of that That in executive $XX are have identify So investment I a of I doing opportunity due of factory our one all years. we down operate us moved our diligence during was million. were me, that charge business, of this operations that because several

right. off no are believe in lost know sales did add order is are we capable in-charge time now we focus in drive After top been The You now faith the slow to down the improvement The customers process. customer see question. leaders my dramatic I relationships during Apogee, of acquisition, full sales and the There’s improvement. They intake and expect they and there one them we We EFCO topline Apogee is the going orders forward. of. in won know to sales It’s back. going.

Bill Desellum

Great. Thank my the time the perspective. help you. with correcting Appreciate and

Joe Puishys

Thanks, Bill. Anyone?

Operator

queue Mr. at questions for in further call this time. I’d And turn to to no I like back showing the am Puishys remarks. closing

Joe Puishys

for in Thank anyone All today Liz. joining torture right, I you. everyone’s you us. anymore. attention won’t Thank

to real Have to holiday forward like wish great that yearend and we Of look you those course look Thank I I’d Merry season, happy a who updating on to April. day. to forward we you. have our this. many for a Christmas results celebrate in follow-up calls those. everyone

Operator

your This great concludes in you today’s the a Everyone now gentlemen, for and may day. have conference. disconnect. thank you participation and program Ladies

Apogee Enterprises (APOG) 20 Dec 182019 Q3 Earnings call transcript