APOG - Earnings call transcript Q3 2020 | Apogee Enterprises, Inc.

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Operator

Ladies and gentlemen, thank you for standing by, and welcome to the Apogee Enterprises Fiscal 2020 Third Quarter Earnings Conference Call. [Operator Instructions].

I would now like to hand the conference over to your speaker today, Jeff Huebschen. Thank you. Please go ahead, sir.

Jeff Huebschen

Shannon. you, Thank welcome Earnings and Enterprises XXXX Fiscal Good to Quarter Call. Third morning, Apogee today Apogee's With and Joe are me Puishys, Chief Officer. Jim Chief Financial Porter, Officer; Executive

accompany that I'd remind section of in there today's Relations remarks, website. are the like Investor which everyone slides to Apogee's available are to

which certain issued we in also nearest Definitions GAAP is is financial provided of this reconciliation these website. this call, non-GAAP a the During non-GAAP earnings to we release the morning, will reference our on measures. measures and available measures

Also, contain can I'd that factors available materially. expectations, found be based like call to differ remind everyone SEC results about currently forward-looking which could in that our our affect on information. will may information management's Actual Apogee's results statements business filings. reflecting More financial are and

turn I'll call the you, over Joe. that, with And to

Joseph Puishys

in Thank Jim the this us of business shortfall throughout driven release. did Systems morning. and difficulties provide for yours. expectations you, Framing our a morning. operational seen you, units. the shortfalls or this By not results by in I detail sales on And Jeff. our couple will everyone, have quarter more this our that Clearly, you joining quarter and was primarily thank meet now, The

address more issues, a provide We in are taking actions to on information Jim. these that and I'll moment, will as

quarter. positives the business well positioned are in our and units issues, a these other businesses had number other Beyond of and our have

project performing XX%. and approaching First, than our operating Architectural Services strong execute levels. continues segment execution better high to expected with at They're margins

backlog to the next ago. least and line top marketplace, our the this its X XX% the we positioned in a win the current quarter increase see quarter increase million for year business Services our from And the already $XXX from XX% at quarter, Just With segment during the as Services growth to solid and growth fourth on importantly, bottom backlog, to over in segment. even more a in is based continues our pipeline, record last expect a for backlog years. adding

also continues along impressive with business, high performing XX%. on in Optical usual Large-Scale a operating planned to margins the growth be of quarter its delivering

to in the in market. improvement cost part In Architectural in segment of the that performance project have competitors our We in compete Glass we start-up pressure pricing to from factories, the factory as the a And market, we launched the the this absorbing seen continue is strategy new our response shipped we see largest of see the foreign small operational core particularly quarter, strategy new orders to weaker their our Texas, leveraging which segment is the in milestone currencies market favorable Architectural This in we our grow in to factory. from States. Glass, first critically Glass of diversify the successfully and United executing of our out to market our important in traditional continued our facility offering.

we completing claims related and some to and during and solid this strong, costs pay projects, to cash we pursue EFCO see which net toward note remaining that of continue expected the favorable quarter, during did the down of flow financial last we the quarter, the position and recovery resolution as to used legacy project. to we our I'd remains to the operating we as very Additionally, like debt. also had progress free continue

top. remains to positive. bumping end our view along the the continue Finally, view of market the as fairly markets I

and our it's our mix activity in growth and of overall, other After Architectural this of concerns But and some Services of construction view few the growth a customer-driven of our in quoting days. still long-term across about market points healthy backlog pipeline months conditions in has last economy, higher the XX upbeat Architectural the a bidding for with market segments support future. for and we U.S. businesses. that to changed, activity more not levels businesses, have more strong foreseeable delays the turned continued strong the over story, States of see In Our others. schedule United things

Turning Systems. back to Framing

operational resolving are leadership by businesses. but revenue entire some and our provide charged and one that announced businesses X a just who in reins of a segment me as Systems, The leader on and Framing on created with driving results a by leader financial for subset had QX. be the provide issues. led I Last and Jim manufacturing synergies Let team focused shortfalls will Framing specific segment Systems underlying The issues Framing sales new details performance. operating X our are actions we're The and volumes the few more improved impacted on quarter integration, disappointing, lower will the quarter our this they in the we quarter, we taking. the include businesses. was took drivers, in overall in of Architectural and detail difficulties

quickly, Given drive efforts accelerating but are moving this positive challenges, change. to quarter's deliberately, these we

First, individual made business particularly of we businesses, businesses. have the in significant of several these unit changes leadership underperforming the to

operational plan our are to addition The in plan optimizing focused building and reducing and key value product improve Page our X and leadership integrated minimizing on First, with our manufacturing program strategies, outlined drive focused to chain our excellence, cost in deck: controllable on structure and the productivity procurement which these footprint from segment. reductions cost developing slide across in which an the on sales, considering third, X segment on selection; pillars, second, team is integration, integration every businesses to management, capacity actions, savings, pricing lessons commercial Services supply available overhead learned In costs; enterprise and is through is improvement our lean these and performance streams lever. this along marketing and applying project Architectural

like year, retained Earlier a AlixPartners, I'd procurement program. advisory to global I cost savings help leading quarter, us our identify company. provide update in firm across initiative. also progress Last our savings an we this enterprise-wide opportunities to on discussed this our

includes The direct services; which XX significant material; total of freight, of categories of past half all Apogee's analyzed progress. been spend, divided quarter, cost and and project spend: roughly the Over we scope We X structure. accounting material indirect have for of made have ways. categories into the

next through We various are X strategies ways currently opportunities, savings capture quarters. implementing identified working come the and over several will the this to the

this a who join report leverages will As and January. centralized team a and are synergies Procurement will model the that our new lead better role our moving I have me initiative, Officer, across our part will toward added of to To Chief procurement supply effort, of chain. in scale drive we

Taken in of project together, improvements to to the We on our and impact savings we savings. projects million the building further the $XX $XX benefit next expect the as million procurement expected the some plan provide 'XX we see the savings details immediately in provide generate year. begin mature We'll to guidance annual with when fiscal Framing over Systems' call. performance to year-end

improvements Though direction our reducing drive remain we confident and long-term for opportunities are outlook in to the numerous forward. I see going year, our

backlogs supportive outlined with near-term taking are earlier, to concrete robust remains and markets. address solid performance end market We healthy positions, of much as business I And issues. strong our execution, actions

reasons savings provide Finally, our for small optimism. initiatives projects procurement and Architectural our like project more Glass entry

outlook. more on details pass before who questions, will few the Jim, our a I I'll provide with Jim? I'll over it that, And and additional With quarter to comments. take return

James Porter

to at came in sales with Thanks, operational presentation. in good of Systems sales and X begin results, that from in volumes Total in year's see third revenue earnings and Joe, you the on Architectural year's and can challenges I'll mentioned. which morning. was Framing of due last third down $XXX last X.X% Systems lower Architectural Glass. X.X% primarily from lower our Operating our in consolidated Page leverage quarter, on Joe the down reflecting quarter, Framing margin million,

at slightly EBITDA effective of to last debt decreased $XX.X million we compared rates with from quarter. Net resulting quarter. interest lower actions $XX.X was came The XX.X% in in year's third other expense announced interest last rate refinancing tax $X.X million, Adjusted down and the to million repurchases earnings share year. Putting $X.XX to year's were the the together, share compared year million dropped and million year in shares XX.X count last our from over diluted level, XX.X $X.XX due all quarter. this past prior share from our per last diluted to to

some operational operational of X last Now on which businesses. were volumes, operating Slide to are I'll $XXX million and in difficulties Framing compared in turn a decrease to Operating year's X.X% presentation. couple impacted Operating lower income a margins $X.X of X.X% delays an of in Systems leverage quarter. with third costs due couple in largely operating margin manufacturing year's higher-than-expected million and on was in the revenue was the This million was last segment to in the quarter margin third results, to customer-driven $XXX businesses. by of challenges quarter. compared adjusted

Specifically, nice to offsetting approximately we This true-up project lead we XXX one costs written write-downs. requiring project see the margins projects Framing remain our These and growth operational for short did time had our total on with manufacturing some projects but date be estimated profitable, margins higher-than-expected curtainwall cost to of margin revised a businesses, resulting the in had segment progress EFCO in had quarter. Only the businesses. solid at an continued point and in this, partly basis negative legacy impact down.

been for from basis $X.X from to primarily due have competitors margins start-up impacted costs to to performance manufacturing our to our has volumes X% last growth factories. in facility offset well about overseas customer-driven initiative. from were initiative. Operating million impact negatively this as declined by revenue competition of as X.X% partially the delays. XXX to to by million projects Glass Glass million we margin million, lower $X estimated of for Architectural QX start-up The costs some increased year. operational $XX the small $X compared related X.X% decreased segment points new resulting improved Year-to-date, incurred

increasing with have great segment's $XXX the during million. project quarter, to Architectural Services continued record several wins a backlog the new success to

from to As with and very revenue base $X.X third third lower down bit $XX income anticipated, margin due less strong project million year's with in from revenue last of XX.X% in year's a operating to X.X%, on project decreased the quarter million million the schedules. of Operating operating last Architectural Services leverage was $XX reduced maturity. favorable timing quarter,

mix product million last in margin year's good was revenue quarter. in Finally, $XX XX.X% grew to the by to Large-Scale X% XX.X% compared operating its third Segment quarter. with Optical

of the on flow We XX. now I'll million generated Slide million cash year-to-date, in with $XX cash have $XX had the of cover cash positive and flow we sheet cash Fiscal from operations balance from operations. quarter.

fourth year, the below cash year-to-date expect flow which reduced Year-to-date related this improvements new primarily by of point of expenditures of legacy million, previous the positive from year. increased has $XX cash and fiscal million in last which million. primarily at our from flow approximately still in year earlier continued year's that Architectural to in Overall, million up $XX at projects, are Glass guidance completion tightened $XX due completed investments We EFCO facility driven approximately the working the CapEx we've million, now quarter. we were to to full capital level, last expect million. our $XX capital $XX $XX are We EFCO facility by fabrication

we the total our quarter. at used debt of the million pay of million flow to $XXX quarter, excess to million debt, second $XXX free the our down end cash During from reducing $XX.X

share balance buybacks. As to we'll the deploy fiscal we flow the free cash reduce opportunistic year, continue move to along debt through with of

I'll XX. cover our on outlook Page

We increased outlook year year delays, full offset be previous will Systems, full to rate our down a the per effective guidance expect lower from in margins to forecast expect between earnings third the softer to the In revenue year improvements seasonality. in $X.XX. some down expected in adjusting results to fourth tax We Framing and previous fourth are And fiscal X% and to we growth. full compared customer-driven of now we lower approximately operational quarter. expect by the X% continue diluted and guidance due $X.XX quarter to lower-than-expected from of to schedule full We and orders revenues revenue quarter, now of share compared XX.X%. XXXX, our flat year X% our $X.XX $X

our We've guidance, also which XX. segment on is Slide adjusted

we guidance, guidance. decline growth. and of between fiscal guidance last in issues And from expected 'XX mid-single outlook the projected quarter due the Our in customer the X% be U.S. in to the margin revenue moving our to This volumes some X.X%, third to shortfalls quarter. compared experienced manufacturing window is orders share to fourth be to the the lower in down Framing and for from prior out wall and is the now addition, quarter, our Systems projected business. declined cost the is from schedule our looking for higher-than-normal with has prior revenue quarter. digit delays, down Operating and fourth lower loss Revenue third

we As we're these businesses you these heard taking from strong actions shortfalls are to great and Joe, seriously, around. turn taking

expect higher In for continuing Architectural guidance to the of increased digits, mid in customer slightly. schedule midsized We Glass, see from full continue to in our our outlook year down international the revenue success now due We to has changed impact slightly previous competition upper the growth project market. and delays large good do projects. single

volume. year X%, outlook to approximately primarily to due to Glass margin our the full leverage Architectural our of lowering approximately X% for are forecast compared on reduced lower We previous

the million year guidance to Glass Glass new expect We $X basis XXX approximately of which costs XXX by is which continue included reduces full to in points, year full provided. million for margins the initiative, growth Architectural Architectural $X to start-up

limited ramp effective XXXX, facility lead-time operating expect initiative and We the positive fourth revenue deliveries, contributions this up making both will as for income. from this to ramp we it in are quarter revenue in expecting fiscal and continue short to we

Architectural and fiscal for bode for strong our project we of unchanged, outlook year well execution. full forecast segment approximately due XX%. now We to 'XX. Services year project approximately the to for of forecasting of wins full ahead above see a X% margins Services backlog X%, Our and previous revenue operating the decline The as fiscal 'XX look to X% is

is expecting to slightly, low down year full growth. outlook just Optical revenue mid-single digit for Large-Scale our Finally,

continue margins expect of operating We XX%. approximately to

call turn Joe. over With back that, to the I'll you,

Joseph Puishys

All right. Thanks, Jim.

know are we and the satisfied by they I reiterating are know We that where are. am with and we close me Let satisfied, not quarter's issues what not this results.

business that drive our Performance We improved strong. of taking in will quickly, are moving much results. actions remains

solid with attractive have financial position We a leverage.

nonrecurring in of fiscal We have number 'XX. a costs substantial

upward remain months. employment and recent gains, Additionally, indicators all our end in markets supportive like the construction trending with starts ABI, new the

We businesses resolve like and beyond we to the positioned fiscal for work 'XX our issues. as near-term

questions, key over to want primarily for years has for Apogee's as XX up friend. and team as we many retire role for been Apogee acknowledge contributions from over my CFO. part before I'd I his years. thank open to decision of dedication being and Jim Finally, like leadership to Jim's him his for a those And

his me. to through successor, you a beginning we role facilitate agreed We transition. the for process and thank a you've has search are for his Jim, smooth and to Jim thank stay in I for done on current you. for everything us

to up With that, to Shannon your I'd like ask the for Shannon? call open questions.

Operator

[Operator Instructions].

comes with Chris CJS. first Our question Moore from

Christopher Moore

denominator we terms maybe any the of start so there with kind what delays, was could Framing. customer-driven that? driving Yes, common in Yes, is of

James Porter

Yes, Chris, this Jim. is

out. projects just on progressing schedules as we've kind the we is was kind of the sites further one to those I'd issues of construction a But in you rate it to Availability top ability of general did projects fast of the just As up just labor in start has these get out. if the move on the in contractor there's project know, project. schedule the saw customers value normal the projects has -- we and scheduled go projects variety. a you job the that a that start, Pareto and want as drivers, a kind number are say, of of resulted not were too higher of number line themselves, started chain, optimistic about the a the is Similarly, our that we of are cases, if time those moved and

and of scheduled So as kind we've reasons, just those said, are all but our happen of of higher industry time, types as I a seen Top those the level X the those delays.

Christopher Moore

you. Got

issues kind were terms ago, anticipate, were little but In sounds didn't a that something that. you bit quarter bit operational projects little to there you more? were of of challenges like the more perhaps It of like where some break a and you -- Framing that the Can some self-inflicted, say, out? talk that can a just perhaps mispriced,

Joseph Puishys

margin rest the they or is project they going have of to more The were These businesses, very original but on of projects, this new losing-money time one reflect -- -- X manufacturing of the some substantially significant. or projects that business met. margin. projects, take its third believe lesson we accordingly to quarter, is the for not the the about we that's our I -- factory substantially projects And In a We've -- business curtainwall there expectations Joe. below low team priced this similar primary the pricing is in In where our booked-in to is challenges very full. primary became and factory. X at business, are be this are has the the pretty manufacturing in complex project from our to business. were really learned bidding the not we're curtainwall had adjustment this. had to then learned darn are been that's some losses installation a it is -- revenues not learned businesses, But apparent services, we've to we're we believe date. Chris, our not rate. -- We're forward. the The are the full pretty margin and Yes. at win learnings going has one the We higher business to of the

James Porter

to in for environment those as beginning that that and that, add manufacturing just became when a a And couple a of it I'll Joe of of manufacturing originally than are was projects. projects facility, of kind in that specifically higher as challenge estimated. more the costs a that And there difficult became offset at-capacity complexity mentioned overcome have happening just is, degree manufacturing started

Joseph Puishys

report organization installed made years, our curtainwall moved talked addressing of large projects is leader of curtainwall frankly, to complex gentleman like who for changes up has impact the global into manufacturing running the in segment, direct Services him -- this we on for two X.X the last Harmon of and to Chris, a about. huge have our Services was, we expecting a leadership been business. our doing a one He's two who, businesses, operations, businesses, I'm segment and just me like issues position the we've new grew companies our

Christopher Moore

I mean, they primary those sense they? have 'XX, projects, And big fiscal do you any or there? well two into how extend Do are

James Porter

Yes.

be mean, it early, the first I fiscal So these 'XX. portion will I quarter projects will mean, smaller by it quarter. complete of largely carry into will into But the majority a fiscal probably of probably of second 'XX. carry

originally So talked we'll a as a margin the up lower than we quarter. at about, true-up, was early was for on we see really quarter projects, do these margin fourth the year. had In kind wrapping of just next in forecasted which fiscal now, third and to charge but these

Operator

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

Eric Stine

So back projects just to coming these quickly. two

mean, that maybe appropriately maybe bit that But with margins little appropriate complexity profile I forward. should that they you level fully them expect about going captures your of I know business laid new just that out write-downs be mean, confidence going where talk you taken kind maybe the be confidence will you've So fiscal fits on that that, priced those just a And I on forward. the then that 'XX. this into

Joseph Puishys

our we of Apogee at the went have these Eric, Yes. this. the we the involved confident completion We X obviously margin can top the put in to DEFCON level projects believe projects. to and we people that for taken perform write-downs I'm on

forward, mentioned, is margin substantially the not I we're It We higher forward. as is mentioned, but going we're but certainly lost make our product. on should they business have. And as similar projects pricing it I complex, can substantially in are wheelhouse. at less going As than

backlog that finish am at margin with falling confident as in these we're into can is So us behind be are the will charges I margins. both normal the assumptions that and we current and projects

Eric Stine

later reductions call you the that Okay, it, frame, cost $XX $XX to did full... fiscal but think maybe at 'XX, time you'll might you out missed be on in got it. a I then run when million. in have And of it's rate whether million

Joseph Puishys

'XX Yes. fiscal Well, certainly, not We're by I guidance for in over that favorable now. say 'XX. 'XX the end can fiscal impact substantial there'll fiscal be fiscal providing 'XX. of

begin to of fairly get But quarter, Some we'll of immediately. decent-sized some provide And first not relatively piece it -- second but the going impact savings to we're the a be just through 'XX, that. the full will substantial. and

Eric Stine

it in nice sound Okay. Framing. then And missteps of great. like part really sounds that's doesn't mean, I No, the like that's that of kind EFCO lastly, actually

I of guess, problem also but that So few residual work. talked project, you, a I kind know the of quarters confirming with you've that about last

of that are project about, thoughts any with putting associated you? just risks and that So there any behind wrapping up kind

Joseph Puishys

and well EFCO enclosed, year meeting always tower almost project, all is there's While work. then are in what's expectations, means any and has world. my performing the construction the that are on up to -- the they where which been building called shafts go primarily the doors windows That's this practice there and the we be standard the complete elevator leave-outs, have a installed removed,

a small a us. financial won't forecast. the part, been They cost believe a is for it's that of blow. we got completed estimates make. It's complete with say good EFCO we've some have but completely in terrible risk-free, I that And And our listen, number For project to to been units most project. it's

half first is a to according XX-yard the I we're balanced. did plan. calendar project we which have on our in to continue net to and forecast claims project, going we've kind of be is gain have. the I on completed of until line as call, claims things and after us A -- won't risk-free recoveries. But We of continue on the but things a XXXX. work until never believe we the the have mentioned you've against gone modest some in been We'll

James Porter

our Joe performing and to comment of said, question core EFCO they about And your expectations. business, then, just as opening kind Eric, are the

now And seeing of the we've are our operationally, the driving looking We really to business. in so business of from business. productivity line is that in been focus seeing improvements, top emphasis opportunities that operations we're that the at the improved and side the kind

Operator

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

Brent Thielman

you've all ask within business. step a integrate Joe, trying of wanted I process I the and these back results been this of of the here, to to take sort Framing some in subsidiaries guess, kind to degree, are a to pause plan that? of consequence of give to terms do for or you're in change any do you there the at of that? it trying what sort trying all game does And

Joseph Puishys

Well, listen, Brent, this was effort first acceptable. our a of integrate for consolidate off, the not consequence to performance and not segment is It this.

getting effort. that going We help is leader that misses segment. issues. just going being same company. the these These forward. our us by changes we're X is the kinds role It's operating made mess to the adding are creating are a We're big We and segment in avoid in of businesses the or started alienate business, leadership performance believe to up and customers we've careful, not the goal

another. quarter's performance All not because factor us. our this And front footprint, causal on the do products X the offering same segment. was leveraging in operating new in efforts manufacturing things leverage these us, have to in business product we if products X of to a our We create no so launch baseline opportunity leveraging can there of job behind better our don't we this that are

Brent Thielman

Okay.

the of at? And that the be double margin to range wanted you that businesses to been that target have rest business out of sort in the kind of digits is your low parsing performed expectations,

Joseph Puishys

Yes.

Brent Thielman

the the then, of primarily principally on the in see seaboard, you you. the kind foreign I I know of I picking on for guess, guess, And But thought been what I of in and Eastern And commentary Okay. it Glass kind the but market. out about the in do was that? and think been markets past, they've competition, up I Northeast

So comments there. maybe any

Joseph Puishys

and company we're business move. low-margin But of that. Well, large prepared of the we kind that's the towers. business It back XX prepared projects, that been pleased Glass that and course, leader XX, it's losing is money not what work back We, a to why if also that lower at going over believe chase the a 'XX. and not primarily Apogee and lot we We're good going we look was will projects, away fiscal of in large ago, and margins to I spend it's walk strategically that at I've the take. a are Jim, did time to Northeast years do challenge. margin Midwest, the of

monumental On time come world and virtually can anywhere the in an the the large is towers, lead product not times. from lead issue, and meet

the have opened the it's -- We in are exchange the small project euro spot segment. move landing our mid-market and good the most $X.XX, competition, has markets Europe, that into than into it project all competition. and at for with become and competitors good world. this strategy to for The small actually the combination the square end We dollar And pretty to of rate accept poor has a up around that's competition. the we door foreign recently The markets larger in mid-market. segment large world live footage in, is our hence, the the

in But imperative strategic exchange and markets this future someday. the return rate, foreseeable here feel is start a in the we I competition the until large for we a to us. it's and recovery projects hopefully, So their more for maybe favor balanced see can

Brent Thielman

then think I that early fiscal the Okay. of what I guess, that when business? know the you congratulations facility, ramping up. XXXX? on kind thoughts going. from margins gets sort the business of And in optimal expect from up project -- that you Maybe capacity that any and to it's and on small expect on getting you

Joseph Puishys

that, it $X fiscal It's fiscal in revenue on 'XX. bode in achieving increase the or you they're can orders, automated, quality, for product. tell What 'XX. in have the but will made. highly amazing fiscal we for beating more we'll producing excellent costs. orders investment inbound thesis income that be We won't guidance contributor I is provide our for have in a investment can't I 'XX. that Yes. the provide And operating us the well it's start-up and million It'll

provide it risk the balance will help we some So note large us projects. the in upside and

James Porter

range have a a of million upon having operation to talked types about potential $XX expect years up things a of ramp to and revenue. that of those it a would capacity a to lot couple We range, depends levels. mix annual but big of those It's of it $XX to of take million and

Brent Thielman

Okay.

Joseph Puishys

Brent, phenomenally another? have we've The initial our you I We're cut feedback been you customer positive. with off, didn't the on has received, pleased mean performance. to shipments over-the-top if

Operator

with Romero Our Sidoti. next from question Julio comes

Julio Romero

at First your off, Jim, Apogee. congratulations on the retirement success all and of

James Porter

Julio. Thank you,

Julio Romero

guidance, narrow on the on the consolidated your us I hear you guidance anything I'm OP I missed just on but plenty range overall if sure consolidated mean, segment the I guidance, margin? for there. margin did I gave the guess, you

James Porter

mean, that out. call No. I didn't we

Julio Romero

Okay, I expected talked on elaborate also you Glass mentioned next maybe that you large-scale persist and but impact, delays. the year? the just fair to projects the at segment, about guess, are all? that enough. if the And on you those customer-driven Can fiscal into

Joseph Puishys

start-up -- in what not talk our and our project that the This reiterate -- Julio. there'll is QX, I costs talk They well. Systems this start-up segment. said. we has repeat, been just something be within Joe, their delays The can we I'll and No, Glass to costs projects absorbed project business pleased our or the as delays have in smaller here. out But performed Framing Glass, some more he Glass, has and to Jim the a called little about projects. wrap with into QX margins the in about I'll was of couple battle 'XX in that work. mix as we the delay systems Framing performance. Volumes dramatic. were top, fight curtainwall and was project due with off the at of the projects. loss revenue share program and in small continue We'll margin pickup not a F up the the bit the issue enjoy on Very project their mid-segment entry In

Julio Romero

the all I business. it. I the Glass same thought Got heard out you for

guess, I staying So business. just Glass on that maybe

how EFCO that can goes, with -- Framing in opportunities say, you self-supply hand-in-hand Texas, new just maybe next ability can businesses. how maybe other about I have assume talk your facility On the to, an glass more about to And you elaborate integration you'd year? and some thinking of you're on just

Joseph Puishys

Yes.

to the be from of has $XX revenue supplying million million can business that $XX that and businesses, to our that, factory. the we profile, about, capability Jim will that that believe of that intercompany correct You're glass come talked part

We and with our are have in businesses. growth them Framing that volume parcel that base many be have of going are our in and -- in. we businesses to leaders bringing mentioned, part the for that and that I Apogee great supply our well several folks supporting forward. are from But business coming that as ranks partners will new Systems this we're new We

promotes of business more cross and I've of So got more and forward business more Apogee continued it believe units the across in I mix that capabilities. from across looking I'm other leveraging come to more leaders segments and cooperation. a segments, have And -- our work

Operator

[Operator Instructions].

from with next City Jon Kansas comes question Capital. Our Braatz

Jonathan Braatz

protect of simpler -- you difficulty. it business, strategy behind all? that there than Framing were that down. not the changed to it it originally? the Or will at Joe, the you more is it's the difficulties? disruptions has is that help the more consequence turns changed is in -- market is creating cycle one has thinking complex Is a this that susceptible something current segment the business was Yet when and business more maybe that's -- Is the causing most Architectural been has business

Joseph Puishys

certainly business site. small doesn't balance then project very concern kind have business, That's we our susceptible We focus, that substantially to had up of entrance projects, projects, and businesses all project nice the and do curtainwall consistently a bit do The ones couple Jon. of and that those X quarter always a is of lumpy, are way larger and less this on We next. in focused complexity no. reliable, a have issues very storefront some on performing fair large They've move are the schedule of and quarter. been the a been segment from we had question little that answer -- are to have to as profiled challenge, is a The it.

I our consistent We and businesses performance those Systems eliminate comes out in of businesses. more basically of Service mentioned our experience manufacturing with lot these that experience, curtainwall Installation I segment from surprises of good and projects. can large of our curtainwall experience X Framing with segment. A X believe new great have in Services our leader that we comes some

have all long some And We our quarter. with tough needed believe in the This a fire with I the for to of some offset larger term. was every of is X good at make performance don't in the We a at mix. leadership we mix we other good cylinders changes team. a mix but X quarter X, the for businesses that couldn't us

James Porter

the segment smaller performance we of margin focus segment that on do the the -- revenues see the Systems Framing The forward. in growth is majority the and to majority for continue projects, we've in where, of talked, growth and as good revenue Jon, going is the

Jonathan Braatz

may way Joe, will difficulties do current that, or the change? where that you you the it like ratio would you Jim imagine given -- look ahead that today? as the Or these mix stands you

Joseph Puishys

change the I will don't think mix substantially.

that this understanding where from project embarked learnings that growth a a call selection better I on our do because X Framing Systems understanding projects well better a performed in job last on business I a and no that didn't through we we they having and point where our commentary, on has understanding mentioned job segment or segment. at. leverage history of years, of mentioned are of project ago to a the We complexity, we surprise do forensics so of performed selection to subtle well to inside going and we large my Services focus few will tied better the that X journey in our are on years in it's what

We growth our have better focused selection. strategy on a -- project strategy, is

with in success the platform So shown we we start have better than for a quarter. last

Jonathan Braatz

of Okay. Jim, to savings and you or that? you $XX over $XX as the next so, won't year will maybe in cost million $XX be savings million much as will reinvest $XX net those the million the retain some Or to savings million?

James Porter

I plans for next mean, that will be evaluated as year. we our develop

is to majority at that. point, for least 'XX, on intention, fiscal to Our of a this at hang

Joseph Puishys

add drive further that look investments out will savings you Jon, to at takes just return cost we -- opportunity. Shannon? If to the as obviously the I'll we say breakoff, and of degree And business. have to apply Do can any some some of we that will investment, short you that that, the to more calls,

Operator

Our Bill Tieton Next question with Dezellem Capital. from comes

William Dezellem

I one? terms or number? $XX savings secondarily, are And that the what of to cost are there anticipating upside $XX where million you then actually component follow-up how million to that, on? that savings much wanted of Would you it breakout, number would, from, to then is if to question. And in you million the on rock-solid $XX just coming you potential million characterize $XX

Joseph Puishys

little a I'll provide So color.

said, global that we're guidance million, as you can of But for $XX As 'XX. -- I we I'm million $XX to F providing initiative. larger procurement the heavy not mentioned. us I our it's the a is tell that not pie piece months easy because I of But last going going firm to partner, it's that's not. certainly lifting the helping for X the with say been lot of that on has our

savings that a to procurement and go, more effectively have we'll We implementing be immediately. identified of and portion have substantial

component the of million good I really the million feel that to $XX side. on $XX that's procurement So about

lifting And we on really feel good face more little the let's do opportunities. about Systems There's heavy but to it. synergies, a Framing the

at to We operate a have low substantially higher basis. margins. Systems Framing We used

get then certainly to to not an those to back getting drive -- where think synergies. we and is should expectation I margins back unrealistic be to

about a easier good that have $XX good And from identify. it hard procurement, which some substantial can from feel in million I that or we that's fiscal 'XX. Systems. million $XX felt in be coming savings is feel as Framing is And on put little a within the our to of wouldn't guidance. will chunk that So Bill, some big also I to take are A as will it call. there work portion today's far have to really I bit about come

William Dezellem

component in you'll quantitatively. I able this Is of therefore, aspect million frankly, have to don't call and, further, been into heard discuss what to vetted going may to maybe fall see just you there potential? a said. beyond aren't murky so a go a it, meaningful million I'm that pretty there opportunity? I Or lot less But of, $XX would you you just What has bit and terms the is little future $XX if category? on simply today, if are though clear that well even

Joseph Puishys

in that leader not that to business and opportunities my is the Procurement going deliver to for It's quantified not cost continued this make and hard higher beyond is drive commercial one-shot drive identified. much playbook AlixPartners my million the management, hiring put procurement. -- competitors Framing well with drive. This not X to we Phase a goal are going work that continued savings is is murky. these in Those to I then to There leaders obviously the range The with fairly unit Officer meaning, X on line just expect in discussion this today playing deal. product Chief beginning I'm and on procurement through that our a Systems it's Phase not forward, -- regards we savings. $XX sure I'm $XX effort to mentioned a beginning, tip I to savings million.

gains operating have have that long-term expect we from X segment that or different and X unit segment to with yes, factories our brands So I as today. operating operating discrete

Operator

And for I'm Joe no you. to further I'd turn like call the back Thank to at questions remarks. showing time. over this closing Puishys

Joseph Puishys

Shannon. you, Thank right. All

'XX for Glass, Framing a achieve to I in our commitment have us. to driven in Apogee, substantial primarily tirelessly think from Okay. I improvement 'XX rapidly. -- believe you the Systems, fiscal and happen to Services started, also this will but will performance it but I project we our by surprises, you at strong for and turnaround Framing segment, and our excellence new substantial the I orders I happen. by which I see to will be mentioned, on that. future this of a And also my And end project commitment some backlog seeing we're believe get where return work is increase tailwinds what I both sorry, disappointed. cost had as went feel elimination know we through cost we've side, the it. year, I we nonrecurring I'm fiscal seeing with

thank safe tireless his end our you and happy happy today. I your you you his a for and service, much. again, and I'd to to wish year Once like So thank one. I a for Jim company, and attention very congratulate service holiday Thank all

Operator

conference gentlemen, call. and Thank this concludes today's Ladies for you participating.

may disconnect. You now

Apogee Enterprises (APOG) 19 Dec 192020 Q3 Earnings call transcript