SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 or 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended August 28, 2004
Commission File Number 0-6365
APOGEE ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
| Minnesota | 41-0919654 | |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| 7900 Xerxes Ave S. – Suite 1800, Minneapolis, MN | 55431 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (952) 835-1874
Common Stock $0.33 1/3 Par Value
(Title of each class)
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark whether the Registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes x No ¨
As of September 30, 2004, 27,308,833 shares of the Registrant’s common stock, par value $0.33 1/3 per share, were outstanding.
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
2
(unaudited)
| (In thousands, except per share data) |
August 28, 2004 |
February 28, 2004 |
||||||
| Assets |
||||||||
| Current assets |
||||||||
| Cash and cash equivalents |
$ | 5,452 | $ | 7,822 | ||||
| Receivables, net of allowance for doubtful accounts |
115,284 | 99,968 | ||||||
| Inventories |
37,909 | 35,533 | ||||||
| Refundable income taxes |
6,515 | 2,578 | ||||||
| Current assets of discontinued operations |
— | 1,343 | ||||||
| Deferred tax assets |
6,877 | 6,700 | ||||||
| Other current assets |
3,127 | 3,910 | ||||||
| Total current assets |
175,164 | 157,854 | ||||||
| Property, plant and equipment, net |
100,453 | 98,536 | ||||||
| Marketable securities available for sale |
14,257 | 13,987 | ||||||
| Investments in affiliated companies |
16,214 | 16,668 | ||||||
| Assets of discontinued operations |
3,260 | 3,260 | ||||||
| Goodwill |
42,960 | 42,960 | ||||||
| Intangible assets, at cost less accumulated amortization of $1,095 and $845, respectively |
1,232 | 1,365 | ||||||
| Other assets |
1,301 | 573 | ||||||
| Total assets |
$ | 354,841 | $ | 335,203 | ||||
| Liabilities and Shareholders’ Equity |
||||||||
| Current liabilities |
||||||||
| Accounts payable |
$ | 39,358 | $ | 38,293 | ||||
| Accrued expenses |
40,391 | 41,294 | ||||||
| Current liabilities of discontinued operations |
2,767 | 3,643 | ||||||
| Billings in excess of costs and earnings on uncompleted contracts |
9,267 | 7,100 | ||||||
| Accrued income taxes |
13,438 | — | ||||||
| Current installments of long-term debt |
300 | 308 | ||||||
| Total current liabilities |
105,521 | 90,638 | ||||||
| Long-term debt, less current installments |
43,200 | 39,650 | ||||||
| Long-term self-insurance reserves |
13,362 | 14,065 | ||||||
| Other long-term liabilities |
13,194 | 14,104 | ||||||
| Liabilities of discontinued operations |
8,628 | 9,290 | ||||||
| Commitments and contingent liabilities (Note 11) |
||||||||
| Shareholders’ equity |
||||||||
| Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 27,248,000 and 27,358,000, respectively |
9,083 | 9,119 | ||||||
| Additional paid-in capital |
56,286 | 55,749 | ||||||
| Retained earnings |
108,454 | 106,271 | ||||||
| Common stock held in trust |
(5,608 | ) | (5,368 | ) | ||||
| Deferred compensation obligations |
5,608 | 5,368 | ||||||
| Unearned compensation |
(2,137 | ) | (2,474 | ) | ||||
| Accumulated other comprehensive loss |
(750 | ) | (1,209 | ) | ||||
| Total shareholders’ equity |
170,936 | 167,456 | ||||||
| Total liabilities and shareholders’ equity |
$ | 354,841 | $ | 335,203 | ||||
See accompanying notes to consolidated financial statements.
3
CONSOLIDATED RESULTS OF OPERATIONS
(unaudited)
| Three months ended |
Six months ended |
||||||||||||||
| (In thousands, except per share data) |
August 28, 2004 |
August 30, 2003 |
August 28, 2004 |
August 30, 2003 |
|||||||||||
| Net sales |
$ | 150,957 | $ | 135,844 | $ | 296,857 | $ | 257,311 | |||||||
| Cost of sales |
122,813 | 111,468 | 242,899 | 210,460 | |||||||||||
| Gross profit |
28,144 | 24,376 | 53,958 | 46,851 | |||||||||||
| Selling, general and administrative expenses |
21,213 | 21,172 | 42,730 | 41,719 | |||||||||||
| Operating income |
6,931 | 3,204 | 11,228 | 5,132 | |||||||||||
| Interest income |
455 | 153 | 1,538 | 312 | |||||||||||
| Interest expense |
878 | 917 | 1,776 | 1,883 | |||||||||||
| Other income (expense), net |
6 | (6 | ) | (36 | ) | (6 | ) | ||||||||
| Equity in income (loss) of affiliated companies |
184 | 555 | (466 | ) | (6 | ) | |||||||||
| Earnings from continuing operations before income taxes |
6,698 | 2,989 | 10,488 | 3,549 | |||||||||||
| Income taxes |
2,377 | 488 | 3,078 | 639 | |||||||||||
| Earnings from continuing operations |
4,321 | 2,501 | 7,410 | 2,910 | |||||||||||
| (Loss) earnings from discontinued operations, net of income taxes |
— | (4,352 | ) | 67 | (4,454 | ) | |||||||||
| Net earnings (loss) |
$ | 4,321 | $ | (1,851 | ) | $ | 7,477 | $ | (1,544 | ) | |||||
| Earnings (loss) per share – basic |
|||||||||||||||
| Earnings from continuing operations |
$ | 0.16 | $ | 0.09 | $ | 0.27 | $ | 0.10 | |||||||
| Earnings from discontinued operations |
— | (0.16 | ) | 0.01 | (0.16 | ) | |||||||||
| Net earnings (loss) |
$ | 0.16 | $ | (0.07 | ) | $ | 0.28 | $ | (0.06 | ) | |||||
| Earnings (loss) per share – diluted |
|||||||||||||||
| Earnings from continuing operations |
$ | 0.16 | $ | 0.09 | $ | 0.27 | $ | 0.10 | |||||||
| Earnings from discontinued operations |
— | (0.16 | ) | — | (0.16 | ) | |||||||||
| Net earnings (loss) |
$ | 0.16 | $ | (0.07 | ) | $ | 0.27 | $ | (0.06 | ) | |||||
| Weighted average basic shares outstanding |
27,066 | 27,057 | 27,085 | 27,002 | |||||||||||
| Weighted average diluted shares outstanding |
27,646 | 27,829 | 27,709 | 27,738 | |||||||||||
| Cash dividends declared per common share |
$ | 0.0600 | $ | 0.0575 | $ | 0.1200 | $ | 0.1150 | |||||||
See accompanying notes to consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
| Six months ended |
||||||||
| (In thousands) |
August 28, 2004 |
August 30, 2003 |
||||||
| Operating Activities |
||||||||
| Net earnings (loss) |
$ | 7,477 | $ | (1,544 | ) | |||
| Adjustments to reconcile net earnings to net cash provided by operating activities: |
||||||||
| Net (income) loss from discontinued operations |
(67 | ) | 4,454 | |||||
| Depreciation and amortization |
9,040 | 10,173 | ||||||
| Deferred income taxes |
167 | 328 | ||||||
| Equity in loss of affiliated companies |
466 | 6 | ||||||
| Gain on disposal of assets |
(678 | ) | (402 | ) | ||||
| Other, net |
783 | (485 | ) | |||||
| Changes in operating assets and liabilities, net of effect of acquisitions: |
||||||||
| Receivables |
(15,316 | ) | 7,508 | |||||
| Inventories |
(2,376 | ) | 3,104 | |||||
| Accounts payable and accrued expenses |
(574 | ) | (19,934 | ) | ||||
| Billings in excess of costs and earnings on uncompleted contracts |
2,167 | 1,627 | ||||||
| Refundable and accrued income taxes |
9,501 | (1,469 | ) | |||||
| Other, net |
(663 | ) | 143 | |||||
| Net cash provided by continuing operating activities |
9,927 | 3,509 | ||||||
| Investing Activities |
||||||||
| Capital expenditures |
(10,539 | ) | (3,046 | ) | ||||
| Proceeds from sales of property, plant and equipment |
86 | 15 | ||||||
| Investments in equity investments |
(12 | ) | (43 | ) | ||||
| Purchases of marketable securities |
(14,126 | ) | (550 | ) | ||||
| Sales/maturities of marketable securities |
13,715 | 2,212 | ||||||
| Net cash used in investing activities |
(10,876 | ) | </ | |||||