Apogee Enterprises is benefiting from the country's construction boom.
The company attributed a 24 percent increase in first-quarter sales partly to strong nonresidential construction markets.
The company said sales were $336.5 million in the quarter ended June 2. Net income was down 4 percent to $15.4 million, or 54 cents a share. Adjusted for acquisition costs, earnings per share were 62 cents, even with the same quarter last year.
"In the first quarter, we executed our plan for a solid start to fiscal 2019: Revenues rose significantly, backlogs continued to grow across the business, we saw ongoing productivity gains and excellent cash conversion," said Joe Puishys, Apogee's chief executive, in a statement. "We also continued to make progress positioning the company for long-term, stable earnings and cash-flow growth, regardless of the economic cycle."
The company's largest segment, Architectural Framing Systems, reported sales up 62 percent to $179 million. Included were results from EFCO Corp., which Apogee acquired from Pella Corp. for $195 million last June.
Revenue from Apogee's Architectural Services segment was $70.7 million, up 41 percent, helped by a strong order backlog among other factors.
Apogee said sales in its Architectural Glass segment were down 21 percent to $76.9 million, but noted that order activity grew throughout the quarter so it should show better results going forward.
Eric Stine, an analyst who covers Apogee for Craig-Hallum Capital Group, said the Architecture Billings Index (ABI), a leading indicator for the nonresidential construction market, showed billing activity up for the eighth straight month in May. That bodes well for Apogee's growth over the next nine to 12 months, he said.
"Along with being an important indicator for non-res construction market conditions, the ABI is an important indicator of APOG's business 18 to 24 months out," Stine wrote in a research report. "In our view, the ABI continues to clearly illustrate a steady market tailwind for Apogee's business."
The company raised its guidance for the remainder of 2019, now expecting revenue to increase 10 percent, and adjusted earnings per share in the range of $3.48 to $3.68, up from a previous guidance of $3.43 to $3.63.
"We also remain confident in our outlook for continuing top- and bottom-line growth into fiscal 2020 and beyond," Puishys said.
Shares of Apogee closed Thursday at $48.67, up 12.7 percent. For the year, Apogee shares are up 5.9 percent and shares have traded in the range of $37.24 to $58.30 over the previous 52 weeks.
Patrick Kennedy • 612-673-7926