APOG - Earnings call transcript Q4 2019 | Apogee Enterprises, Inc.

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Operator

Good day, ladies and gentlemen and welcome to the Apogee's Fiscal 2019 Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will be given at that time. [Operator Instructions] As a reminder, today's conference maybe recorded. I would now like turn the call over to Mr. Huebschen. Jeff begin. may you Sir,

Jeff Huebschen

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

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

Joe Puishys

key chance our outlook and it more release. end most review direction All Good us. for read now, Thanks charge had recorded favorable guidance. over the of strategies. XXXX long-term morning, and we of fiscal our and in and the on quarter This making Jim press discuss highlight well quarter to details a to We'll turn on our as you we're for the as I'll right. markets. our By our comment course, our on morning, I'd have to joining everyone. Jeff. Thanks, like progress the

with the on a increasing many revenue year we year. to growth fronts of XXXX, during despite For record delivered billion. a on We $X.X another challenges made few progress

XXXX. Full Architectural and growth and portfolio order to faced of year the to the operating the fourth driven the markets Apogee's healthy interrupted made a strength solid year. fourth the serve. installation the first been an to In with services even which for tight share which of Harmon, progress increase impressive large backlog led of Full made XX% we particular, And toward production very Fourth leverage, enter and in reflected lead fiscal XX%. and we earlier for is in backlog. stronger markets. restore year challenges productivity, entire show point the nearly the And and higher to employees were Strong as hired XX% the jobs XXX large site compared net February. month to ended severe continued XXX a the of long year improvement products the is continue our curtainwall We our a parts business. Architectural company projects. disciplined We operating overcoming progress Apogee's fiscal winter the storms, strength. labor about which over trained known record project of see backlogs recover have year. In new production in in strong time began the margin, up reflecting of We significant year quarter We in half in to during orders Glass, great we quarter, would profitability. we during revenue is some quarter saw year, some margins basis over the demand for primarily the end markets except which by business, with year large our execution segment, grew Services record slate we finished operating at and selection, to

realize we continued fiscal anticipate and to margin year initiatives expansion productivity in further benefits expect XXXX. We from our

a had we challenges, some had the we year. though of during even So, lot positives

segment When more charges. revenue related large dependent EFCO I on the of to and less this diversify laid base to into the acquisitions. largest organic Apogee, project market, I our we Apogee of strategic dependent. turn one Architectural heavily over cyclical time, end, out construction make joined both Systems our Framing me priorities expanded was segment have through where very growth the Let To that we and were

Given I its Framing margin future expanding the of provides has improvements. part scale, very an product long-term and our strong market Apogee also strategy EFCO and in to our future EFCO increased serve. our remain recent growth that acquisitions, opportunity confident Systems. markets adding acquisition is and it important our offerings largest revenue advanced and The diversification position for we our is at It expansion.

related the previously we The EFCO on substantial quarter. also installation morning the to late issues. costs a expect presented quarter We acquisition discussed, that we projects, completion announced third progress complete these year. projects as in are the to few on towards largest these be the legacy XXXX the have cover and these inherited last projects fourth the legacy charges significantly in of substantial we remaining we started substantially year However, and projects this to by made calendar and with expected this

recoveries potential meaning costs working providing available for costs legal actions. announced they not We through charges recoveries. all is today do insurance not are minimize pursuing to guidance and in – these we future there options to well, any any are us aggressively that recover and these These our and include F’XX as to actively are and added other we're

tremendous has first EFCO from of which since continued quarter, under sales success. place and summer, the XXXX. profitability. As into issues weeks and in process I reengaged last acquisition. been order top approval significantly for and is on the and laying in new revenue place. opportunity we improve nicely fiscal We segment XXXX, established a leader leadership improvements very good a pricing these EFCO Systems grow the fiscal put positioning the project us The more focused We've we're put executive behind for foundation and Framing operations my force Apogee. to move in putting new into for they We momentum disciplined fourth few see these overall long-term

and Framing underway positive year the investments team systems synergies do, Systems driven across still we're process through confident implementing leadership. facility realizing to delivering we're business. EFCO. progress layout factory we begin on and improve very have place our into also results by Apogee the improvement I'm seeing the but of continuous to that right to We lot segment There and have is our the And second lean in from a in flow

Turning to and our long-term direction. outlook

of people good strong employment first year healthy XXXX. for us. to recovery age end activity and also most -- I'd long report a a like and sales continued U.S. of favorable, the last of and has remain trended levels, pace rates the expansion, future to or a decade-low we new minute office this. Commerce businesses rest go And on well months comment the care, has our indicators about a off markets. a we're I'm internal new for building much Looking Conditions in higher since end Many particularly at with on in external particularly our indicators economic vacancy office-occupying the Department are the the backlog all for and seeing architectural time the falling health of cycles. The three The March, activity, Architectural strong positive us for falls visibility starts issued been markets downturn. we're that sectors, fiscal time optimistic into for architects short construction pipeline prior comment predict below the I'd construction which the developers, at the months, Billing and and with quote of of XXXX, future. our in fiscal all and In significant education, favorable. track and like the straight activity XX the at remain script very lead and important markets entering Apogee, remain bidding XX% XX while provide Wells remain XX Index of tended growth level, and higher try Fargo steadily this to positive,

saw XXXX XX the non-residential investment over in the course only have the recession, of the over cycle, investment structures XX non-resi cumulative expanded a after of investment expansion years. peak structures end six XX% in risen the of at XXXXs last a had Nearly example, the XX%. The years years. For XX% rise

in We continue for industry to as the feel everyone continue confident our growth. we top to well bump along that the markets end modest bode see and

which to Architectural in have numerous but Apogee, segment this We've further we see operating launching to fiscal very limiting comments glass growth and will construction. determining with opportunity opportunity This to presence 'XX. expand margin for continue for growth organic initiative growth presence we're is best meaningfully We new facility. opportunities our our long-term in segments. for been the at to how expand revenues significant our evaluated intentionally a for a about reasons. in operating are nonresidential our excited carefully contribute competitive this and fabricated new across thoughtful and this market initiative, the to improvement income We're point, Glass, Glass begin In

year on coming margin for in quarters. segment growth is beyond. XXXX positioned more provide We we and well investment fiscal Overall, this will details in expansion believe Glass the our and

Turning we opportunities to operations to have Framing EFCO. at the mentioned previously Systems segment, I improve

sales never business the last product Aside Architectural expansion, unit for include introductions, for passed which targeting segment expansion. in long-term new product fiscal $XX year. mark we're revenue Services opportunities continued initiative and EFCO, also has and our of efforts million and geographic stronger. ramp-up building a margin other growth numerous from These both synergies core been continued renovation the

year in are We fiscal outstanding XXXX. off an coming

customers will Not advance business like projects lumpiness, segment small good completed the engage regularly we lumpy Services started. getting the inherently makes projects. a business in our one focused in have reminder, actually Despite momentum. year pipeline. visibility of just of a the This with in of this to well every timing projects long-term As as our the large is on due this our look we regardless number of

for see as short-term drive stronger. we manage XXXX's segment earnings. the short-term record rather We decline, comfortable fiscal lower and our revenues long-term will this timing schedules than of project been a operating back has to step 'XX, Architectural Despite are never business of In fiscal as dynamic Services this from success with we income. performance level experienced this and expect

year Our backlog just higher is substantially one than ago.

another year million be see is we commitments further customer terrific to in strong this segment. up year out well over shaping 'XX backlog for and for fiscal already have multiple fiscal Services years We 'XX. for ahead and Looking $XXX

Apogee. project by We and this attractive also focus our to are years. our segment's a and our on continuing opportunity approach well-founded best believe supported to several that for fit is disciplined selection the past those performance have projects confidence in We have numerous pipeline sales is over

impacted negatively confidence were For back example, across we they future we performance at as backlog enthusiasm historical backlogs delivered believe And our segment. year But we and for 'XX this of a schedule-related gave looking segment similar fiscal business that this us quickly fiscal would segment's project results the this by that We projected results, justifies XXXX flow. in board. around tremendous turn the our and projected, existing prospects that.

condition shareholder solid organic expansion. Lastly value. to remains share 'XX, mentioned, both We deploying margin increased drive $XX our over buybacks drive quite to internally we're I've capital and investing of shareholders. and And returning growth financial capital and to as in dividends million fiscal we're the

and capital fiscal guidance. quarter over the to With the on balanced that, this continue who'll provide details will the I'll call approach and outlook in Jim pass the XXXX. We deployment

Before your Thank questions, a we Jim? you. comments. few return take I'll for additional

Jim Porter

everyone. Joe quarter. in revenue results, million was $XXX on last our consolidated good and begin of I'll to with million fourth see presentation. earnings you which compared $XXX morning six can Total year's our Thanks page

the As charges includes mentioned, in was estimate quarter. increased pretax the related Joe increased on recorded disputes. cost project to the complete EFCO we delays and to an contracts. claims projects and other of $XX.X to project-related million legacy the charges related This

for fourth charges, million a We quarter $XX.X also a loss related recorded these we had to $X.X million. operating charge Including of impairment intangibles the of non-cash EFCO. trade name

was fourth in in volumes fourth fourth intangibles, $XX.X quarter Architectural million by last lower and EBITDA $XX.X $XX.X margins Excluding in last operating which came year's of in Services. quarter. at reduced was primarily to Architectural driven year's income Framing The income $XX.X the Adjusted million these and adjusted in higher decrease amortization compared acquired million operating charges quarter. to compared million Systems offset short-lived

per $X.XX basis $X.XX had charges adjusted the year loss the earnings quarter. On we With prior share fourth period. included, a of net share in $X.XX, was the per compared an in to

from implementation share per fourth $X.XX adjusted share per earnings As new the a quarter reform of reminder, reported last law. included and year's benefit a tax

weather well $X.XX quarter job at customers' severe in a This our included at several of interruptions the the our In our severe through the manufacturing to some total, unusually our During segments. disruption combination impacted business Midwest production fourth as quarter, per as fourth operational sites. winter multiple weather revenue of cost. locations $X.XX of increased some we lost reduced estimate share earnings well by as as

press and some recognized found regarding of the details year can release diluted the earnings the these share full reconciliation Looking I'd year. The mention at in our today's we We quarters basis for first that per results. had project-related be in $X.XX. to results, included for full included of share profits quarter, the adjusted an was charges year adjusted fourth presentation. full adjustments the in recorded earnings our year like non-GAAP in that per On these in $X.XX. adjustments charges tables three fiscal

turn $XX in the basis on driven a of margin operating Architectural margin points quarter. favorable margin improved of last came results, last year, Architectural $XXX operating in X.X% quarter quarter allowing The Systems' year's year. execution expanding to on primarily at completion the Framing revenue million income I'll million. progress an half volumes million, reduced sales to its slide $XXX.X demand Glass improving favorable to was The down toward and Systems make X.X% and operating Framing volumes less first The XX.X%, $XXX projects to XX% that XXXX. to to fiscal we increased fourth due to operating million continued was segment's in at in during workforce a on the the segment by the the more year. Operating operating negative of in Revenue fiscal quarter. margin in increased last to to productivity million has of compared is compared with grew million to leverage lower and was turned Architectural margin which the slightly adjusted Architectural came write-ups outstanding grew saw segment following to was quarter. XX% improved mature strong revenues million operating of second mix. and mix a compared due lower million $XXX X.X%. income X% and $X.X X. backlog Services project Glass EFCO. its XXX primarily number Now $XX.X to $XX Adjusted by projects another now from

segment. Architectural mentioned, is a Joe business with margins from for in Services backlog was The and order and life years, slide can illustrates increased are years. quarter page over on quarter-to-quarter Services' As XXXX during lumpy inherently an cycle. as extraordinary had on variability schedules project strong other vary considerable segment this projects depending million. the project Services and year-to-year. strong backlog Fiscal two where the the In year Architectural past flow growth to $XXX has X, the achieved considerably their

expect balance we backlog for be XX% in revenue scheduled will fiscal the by to XXXX. converted XXXX XXXX established customers, of Given or schedules our with the roughly Services fiscal project the

at point, XXXX Architectural Services As year steady in at the margin The strong X% The this that add quarters. and to Fourth million. of good pipeline quarter quarter. backlog XX.X% like have in segment Joe up is a operating deliver solid fourth it set for to $XX another XX.X% was mentioned, opportunities we Optical continued grew looks year's will coming very to to last segment in revenue performance. Large-Scale compared fiscal

Architectural at $XX we increase operations organic as to CapEx our Turning X. year productivity, flow Full to drive add from cash $XX million. investments capabilities continued was came and growth, slide year Full in million, net and Joe at million EFCO debt our Total stands in that or the of including at with adjusted $XXX Glass million XX-month EBITDA. mentioned. debt trailing segment roughly $XXX times investments X.X

outstanding present shares on we to With quarter, $XX our for buybacks nearly repurchased X% million our During and of year than shares, of that the XX shares full fiscal year. for details of stock XXXX. that, million, guidance me more were XX stock beginning outlook. our the Slide fourth let to fiscal XXX,XXX the X.X turn at bringing

We Systems expect Optical schedules in due growth Architectural and execution a by Architectural to backlog. offset three growth continued to Glass, up top segments: driven in of revenue Large-Scale decline X%, X% in Framing Services, of our with line by the projects Architectural

project on margins cost, and overhead as to Architectural company we leverage margin to negative such total needed million scheduled architectural X.X% resources, backlog Architectural to XXXX. is start-up we and leverage corporate Services, margins in to between flow impact management be the and Systems, cannot by and segment's million costs significant $X as lower $X expect We impacted maturity. by from which margins full robust Glass operating volume Company for We The will engineering X.X%. project lower increased and legal Glass execute other year expenses. be to higher XXXX anticipate in aggressively and in cost less Architectural due that -- new key cut initiative. also of growth anticipate favorable project are Architectural advisory pipeline gains fiscal And Framing the will growth offset

is We a and $X full of million. approximately rate earnings expense we XXXX's $XX in year expect level. above to $X.XX. the Putting approximately together, it expect and interest to slightly range tax of all per fiscal projected be share Depreciation amortization XX.X%

with will past year in years. in years, the past of we the similar through weakest seasonally fiscal seen be to As quarter our the expect we've first progression quarter what couple

short-lived XXXX, EPS the acquired complete. years few from past fiscal excluded adjusted intangibles will the our be of into amortization Going we've that

we're result, for adjusted presenting guidance earnings per not XXXX. share a As fiscal

Systems, Framing between expect Architectural operating to X.X%. we growth margins we our expect X% with following. at Looking segments, single-digit the mid

year work be improvements Glass, through will with EFCO XX% approximately less-favorable mix as fiscal operating revenue margins We In along initiatives is we X%. Architectural expect expected we some and half of at to positive back weighted margin of have underway remaining the the generate contributions. growth and of growth approximately

expected the leverage progress has make from turn XXX costs initiative. and further on short will have early back This expect level. revenue of profitability. opportunities. toward are segment favorable slightly Based XX% basis be to these growth -- Large-Scale XXXX be both adjacent into due then throughout With margins of impacted be make to projects. fiscal These lower revenues operating by start-up the Joe. execution the to limited as X% to single stage and at less currently impact the will and which expect on project We new productivity balanced volumes schedules, expect restoring call in to project number on we benefit year. are levels, We In progress quarters we related the time current In points negative Segment maturity to start-up growth that, will of lead we quarter-to-quarter its roughly the segment project XXX Optical, we approximately begin with digit year. mid down revenue second extend a XX% services margins X% I'll the approximately between greatest the are revenue you likely within initiatives the our generate variability margins just schedules Services, to to below and market to the timing business as third fourth quarter. on costs in Architectural will to the expect

Joe Puishys

we're in long-term. and wrap I'd F our shareholder the XXXX up reiterate for continued Jim. strengthen Thanks, Apogee's to strategy making progress to about To Despite company value on the our some confidence direction. create right. like challenges All

demonstrated and Apogee's and also healthy. Our solid remain products end today and I've the remain as for services demand healthy markets

finally, opportunities With up also us for return and giving Chelsea We open and profitable growth significant remains And financial have quite organic I'd capital invest that, to businesses please. numerous margin questions shareholders. market call our position the like to time and for at strong to flexibility same in leading expansion. growth the our you

Operator

line question Moore Chris with come first you. of from the [Operator Instructions] CJS Thank will Securities. our And

Your open. line is

Chris Moore

Thanks. Good morning, guys.

Jim Porter

morning. Good

Chris Moore

bit in morning performance just good talk terms of could EFCO's Obviously, core -- Can on framing? kind -- the we with a struggling. margin core framing start business of about little EFCO you the the versus still Maybe framing.

Jim Porter

margin businesses forward is This across kind see see I our been Chris. mean, we look mean cover in that I'll that in a portfolio long legacy -- our fiscal Sure, when nice that. expansion and have those we continued core for time well. to Jim. I as businesses another going for XXXX growth at of businesses, and

Chris Moore

-- troubled The -- sounds of be this year, EFCO QX like most contracts will it troubles by of completed. the

that -- remarks to reasonable assume and in improved margins of know forward reasonable? is improved your then framing So terms from last don't I EFCO -- quarter

Joe Puishys

leader business this put core productivity. were performing weeks but Joe. is that. it's is EFCO QX of sales I to starting had charged at Window new place & see Yeah. is at QX good experience a -- fellow rewards join top We that to is one first. year. year our very We're new EFCO Wall. had I Apogee. in also strong. was EFCO. to was here Chris, the still mentioned Wausau on starting and of of to only the developing our our want better. orders. We're has he We're comment. team X.X business. strong The him retrofit at very important. He our has remained last have into really I our -- I from the to in orders business come half guys down second installation our He at see strong. creating the orders with moved Harmon And

more than should the these the the can get some through site efforts installation project look at the field is good. the I with and starting done of by The complete that on core mentioned substantial in then I goes We're after away. so, on that through at the substantially focus halfway we're the with that August from legacy And recovery we call. And installation. product be We has site. the one almost distraction EFCO projects, business and manufacturing to particular been overhang

Jim Porter

should there within Framing work Systems, first be the of through specifically the that half -- in within legacy year. really Chris And

margin into of knowing a stronger really have that expectation see our in is and is So to QX we QX, starting Framing in Systems. where carrying QX QX, that seasonality improvements than over little bit

Chris Moore

it. helpful. just you anticipated that talk you Jim, costs corporate advisory. to higher legal That's Can a increased Got bit? and from mentioned maybe had little

Jim Porter

I expenses line the our we're in bottom corporate probably corporate at And legal increased that types about legal of the point line line. core activities costs million of really is business think with things. legacy various it's mean, on to talked well the variety estimating about this associated related the $X as activities as those outside I charges projects Yeah. and we the a of and

Chris Moore

it. Got

Let me line. jump in back it guys. Appreciate

Jim Porter

Chris. Thanks,

Operator

Thank comes from you. of the line question Stine Craig-Hallum. Eric And next with our

open. is line Your

Eric Stine

everyone. morning, Good

Joe Puishys

Good morning, Eric.

Eric Stine

with just the mean, Maybe -- leg this? -- ability it's I know on. on I insurance part thoughts of to confidence any tough just pretty question how to be a any this see a your progressing? stand recover thoughts or And process. good may sticking I legal some I that whether and But you've mean seem but got a regarding obviously, have level would of its -- maybe on a EFCO. mean, to you

Joe Puishys

Yeah.

So included $X highlighted was fumbling in not let -- be And my kind the are guidance I clear. fumbled they're the my in call. -- of Eric not today. included I Jim Any tongue that and charges, $X.XX recoveries in the me

obviously, lower We, odds we take. success. do certain that paths our insurance. have can then they obviously, feel of anything to are have on I and So, don't we upside. I confident want comment

some We that take. and years, I'll also be other have it I'm we to the leave news silent future deliver have on Eric. to just going actions good hopefully -- those and to or year at actions plan in

Eric Stine

question category, not maybe was same in But know just we to a of Got you it. in mean amount just that from of I geography you're the and but answer you? that quantifying it sharing think high And I thank and that. Glass. No investment terms that you're able a understood. this Well, part in -- level, -- If market for our is lot. of whole a or should just as new new that for

Joe Puishys

question. know have don't preferred had nothing the would I and that. to you appreciate a the understand Glass something I XXX be I gift-wrap than today. shareholders we and But more basis to be say package I No would overhang. Yes. say I to year-over-year. would And is want Eric, competitors, upset points because distraught. of improving to The

But not could it going we'd able we'd the have more not believe we about beyond on. by hold be you talking to talk the to this adds would said, an unfortunately, We hole. we That of in by is point to existing ignore want I'm quarter And I be had is down that that thought acquisition. related And organic. second believe been ask important and effort. about end to questions first certainly go don't I rat highlight further that. to Eric well out. we'll thought a that. some by it it. quarter forced mislead It's was to the It So anyone to more to have headcount not have our in I facility. thoroughly

Eric Stine

Yes. that's helpful. No,

if you year-over-year that the large to quarter, growth to could typical talk just of commentary, talked jobs you on time-to-time, there? that know about to but a set saw of one compare interested in this that about your And in backlog last me. enter you a slate large have might the Maybe or quarter I'm of way maybe jobs business. Joe some you the make Okay. I that slate for from comparison top Services how maybe

Joe Puishys

Yes.

when it amazing ago earlier I been job. the last the word singular and selection done business dividends. the mean Actually sites, has paying of their say didn't selection an used installation Our phenomenal that. I At field A about execution a done at they've several job sites, said I site. seven construction project over years. the years to has efforts began on project

Their The the and building. again. will been the done not substantially job of company: I'll grew the backlog going project selection out in and have wall backlog the parts the is the And at we're awarded, job. first substantial you of there's I design an they've a of the the on then limb the fiscal So up curtain but two go and They've site that quarter expect a engineering of they phenomenal solution slate company side through of other yet. XXXX. the half just the process expand year tell early contracting

enter chances slate someone of they’ll projects QX. that awarded feel be late good And this about a on and large quarter on, we're there's our So to will some active that into pretty many that projects. them backlog core of

from on million, is momentum upward So is revenue have a in in smooth for win literally is the to. when roll impossible in pushed get it's literally as you the We've that will of that to you business. out, revenue that excess impossible start so time the continue tried trajectory your world verbally it, a to average projects actually an flow. project it's projects stream to it's year. that time a usually $XX literally we the believe are to steady. impossible awarded But have your And It lumpiness

after maintain The to hole go us in that lumpiness. performance on more selection. has can appropriate, because been of that to pipeline. look to also business a business over of pipeline flow, project based opposed which kind XX-month award to you don't some year-over-year a revenue jobs desperate cycle, We you get at disciplined as the the If frankly allows see probably risky steady the it's of

strong. So the pipeline is very

increase see QX. in You'll backlog

in want what more had year year mentioned, million than -- backlog as last ago. after don't projections. $XXX pipeline record in happened get we we year. business the a I I backlog to than a the did -- into look And that got that after that Beyond we've that after But

isn't the why work have. F expectations. There's outperform obviously you more just than year We second the a "Well, just problem. even to F the to business a XXXX in better?" we It's liked hope So meaning of that there And ago. be because flow we liked going was year lot the second year We it. the in of say, XXXX continues

Eric Stine

Yes.

you. Thank Okay.

Joe Puishys

Thank you, Eric.

Operator

with Davidson. Thank Thielman from question the of D.A. you. comes Brent next And our line

is line Your open.

Brent Thielman

morning. Hey, Thanks. great. Good

Joe Puishys

margins? quarter? of we progress impacted the was see sequential then know challenging should I any Hey -- first some much quarter sense should the Brent. that And Jim perspective. headwinds Good Joe Glass, the we morning. understanding the to it disruptions into how year, or on a weather-related from some

Joe Puishys

Yes.

Let me give -- Jim Brent. you give detail answer will the you

The was happened that a It weather or -- it mean, was amount I closure mandatory had We in of tell easy unprecedented just easy. there me were February. what of Let in you the highways. Minneapolis relatively here bizarre.

Southern The one closed. the rescue trying hour were National on away was highway. Minnesota to Guard people highways

of weather-related a but mean, we and think Because production happened I days didn't think factory later is well. in chance the lost. I smaller, that much XX business had end the shutdowns quarter. it we business don't We to about we February That it the had call production impacted have in of up quarter. Optical was well. our as shifts it that out Large-Scale impacted seven of It I the make it because as

comment Jim impact or on I'll it was is, points it. basis per So share real. let The earnings the impact

Jim Porter

really had we margins And but revenue, to specifically, that Joe, related little over kind Glass, of the it basis storages operating Brent, XXX take the of Yes, of wasn't between led to I mean, segment. having loss I'll as point shutdowns, to material. the quarter mean, Architectural employees get many described split drag of productivity couldn't not on which that. that it, I Joe just days where plant in it challenges the factory had bit just business. probably in was estimate staffing But a we because

I quarter, should points, goes in that basis away. over -- it's and little So as that said, the XXX a

Brent Thielman

Yes.

Okay. this projecting weigh expectation little on to Is bit go we this year. margins the it as investments you costs Understand in away? business that margins of are some year. your kind to segment to going go are in those through X% back these a of And guys then as double-digits get

Joe Puishys

Absolutely.

to some launched As continue get to business will get our improve productivity, tailwinds give we revenue back has Without project -- to expansion. double-digits. that and margin this question us on head this growth

Jim Porter

we we be that run as second at been to have as the rate. the get And is we expect our end quarter expectation of saying to

expect So to second operating that the level. at be of margin we half year the double-digit

Brent Thielman

that at performance year. does I business want large gets I the change obviously, you year's the large business your thoughts. business of want I this pie. But really you your kind to the to how kind installation get? Got it. how The all a of great. manage thresholds know piece get want to Joe, of mean, for whole great

Joe Puishys

We Yes. don't a of It of part want a this $XXX is a bit a challenge. million company. to be our portfolio public obviously as

because have years been here but business – happens. an when public not would We're problematic for still clearly. has I headache be we're trajectory another, eight add room operated differently it of to continued call project company, a eight let's all managers just it's going because The slowdown on For and a these my that we've and for engineers, seven shift almost a never upward I've years. half, growth. we

can continue grow So to we the business.

cycle at approximately in like in the to our margin, operating higher. as at I'd great performed the as bottom admittedly the experienced. as in other is the And to about as for is be but F it going be and a The mentioned business. to the as margin shouldn't year was XXXX a won't ago. we projects I levels high our in cycle be $XXX F that's a has think any hope expectations aspects better the million very I'm prove a of – revenue we talk will are of in in But than – the F approach talk return The XXXX the maybe backlog F it I than execution. on at team. better XXXs, lowest. It of and than of to we factor. mentioned about that XXXX younger the just results, where end of XXXX backlog I at historically key maturity, think in project – is results. top important. really Jim F projects proud age all the powerful Brent and business be XXXX the manner. now just are better I selection We that my low that's

projects, As progress to you installation. the immediately. obvious as see well, we later we good take more we as bit little have If news ever projects the take a tend it news, out projects end execute we for But pickup close of bad we in the to margin reasons.

we've XXXX been little is conservative Our maturity F expectation little lower, on our there. a so bit

business longer than to continue be at would my the no can of extremely will stretch margin think stretch that to well. of I I the getting more a peak I someday that And goal. believe XX% say, our perform a expectations norm goal markets. of are

Brent Thielman

could. I if one, Last it. Got

I really work Just to agree Does or and there would understand kind it opportunities fill you of sticking Joe. times segment, just market long with into that a is still the mean, the kind lead that some in associated obviously don't seem want year outlook. pursue? to like is I now. factored with the through really right holes you of that strong necessarily

Joe Puishys

Well, have some that engineering. they XXXX. flow projects revenue in get point get can its very flows It still we in – as will design have awarded win they calendar, that projects beginning will this to revenue F the little most

forward. it's Projects slip be a – on for out, everything fill XXXX beyond. they do but and few pull sometimes holes, booking can now will they So we're F

in Filling be holes the calendar is our in that for year. a more confidence at solid. So business in pretty forecast challenge would point this our

Brent Thielman

Great. turn Okay. over. Thank you. I'll it

Joe Puishys

Brent. Thanks,

Operator

[Operator And line Instructions] Julio our will with Sidoti question next from come the you. Company. of Romero Thank &

is line open. Your

Julio Romero

retrofit the a that for us margins you a would just ask $XX for to like year? million upcoming the Hey on taking be Nice retrofit questions. wanted for initiative. what Thanks about refresher the for the revenues that year. give job good for work? the look And growing expectation I what fair morning. Can about

Joe Puishys

But go Yes is have do existing through the without are not generally this this revenues is market. a we had It margins call All reflective business what our the we of initiative. would make segments. businesses. our current

customers kind you're on of customers convincing project basis. You're a not There's working competition. often with

still effort partner, it a came in goes I We when doesn't. I here times. million from which to a stream project follows believe inside out can either were I that. impact. believe get of the on the I I want tends initiative. You're buildings. point The the massive revenue I be brought It or anti-cyclical at industry million forward this awards to was this annual $XX had we to an as or came in $XXX the orders.

window of hired And our year Framing have engineers the working own this added use regional said, installers, our so our Glass. involves for the it the and through I businesses. further continue U.S. geography this finishing forward. I glass, on using They energy installation market target our as initiative Systems typically to We've the We're with expanding $XXX footprint see It's our it hope and for sales push We across team. pulling to And with initiative. not we're people going this. retire. usually I'll does us, usually systems, million but I And wall before to our a capability. collaborate

Julio Romero

$XX CapEx, maintenance how much growth? versus just that million of on Okay, $XX would And very million, the be to good.

Jim Porter

About capital. -- maintenance roughly kind is $XX $XX million million of

Julio Romero

back hop in the I’ll very Okay, queue. good. Thanks very much.

Joe Puishys

the any Okay. from there questions of can any listeners? are more Chelsea, see you if

Operator

this Mr. I'm call turn Puishys Joe time. for I'll at remarks. questions now not the further showing to any closing back

Joe Puishys

lot great and extremely all look for on next our today. I you. the our of the Okay, is of is Thank we and Chelsea the meeting phone news day. thank Have fiscal forward you, I'll forward to our and next be I calls. over know call Jeff folks we 'XX and good analysts, many and are table thank to today. The up on had investors I road. Jim provided listening on you. guidance with available the a a believe guidance week look to today. all delivering we to realistic with you follow And

Operator

a day. in This does thank gentlemen, conclude for disconnect. Everyone have program and you participating the you conference. Ladies great all may and today's

Apogee Enterprises (APOG) 11 Apr 192019 Q4 Earnings call transcript