Acquisition aligns with growth strategies
FY18 outlook, excluding EFCO, reaffirmed
MINNEAPOLIS--(BUSINESS WIRE)--Jun. 12, 2017--
Apogee Enterprises, Inc. (Nasdaq:APOG) announced today that it has
closed on its acquisition of 100 percent of the stock of privately-held
EFCO Corporation from Pella Corporation for approximately $195 million.
EFCO is a leading U.S. manufacturer of architectural aluminum window,
curtainwall, storefront and entrance systems for commercial construction
projects. Apogee provides distinctive value-added glass and metal
solutions for the architectural and picture framing industries.
“We are excited to begin the process of integrating EFCO into the Apogee
family and realizing the benefits the acquisition will bring to Apogee
and to the EFCO business,” said Joseph F. Puishys, Apogee chief
executive officer. “Our acquisition of EFCO, with annual revenues of
more than $250 million, will accelerate Apogee’s growth strategies, and
expand our presence in mid-size commercial buildings, broaden our
product offerings and increase our geographic presence across the United
States. To summarize, with the addition of EFCO, we’ve achieved another
milestone in our journey to position Apogee to deliver consistently
solid performance regardless of economic conditions.
“In addition, EFCO operates in a space we know and structurally has
similar operations to those across the Apogee businesses,” he said.
“These similarities should benefit both Apogee and EFCO as we share best
operational practices, including in productivity, Lean and supply chain,
and work to capture $10 to $15 million in annual synergies by fiscal
2020. We also see significant margin enhancement opportunities as we
leverage Apogee’s scale and build on initiatives already being
implemented by EFCO’s strong management team, which is continuing to
lead the business.
“EFCO is a growing and profitable company, and in fiscal 2018, we expect
the acquisition will add $200 to $220 million to Apogee’s revenues and
be accretive to Apogee’s EBITDA and earnings per share, excluding
transaction-related costs,” said Puishys.
“We are pleased to be joining the Apogee family, and feel Apogee is an
ideal parent company for EFCO and our employees,” said Cameron McGinley,
EFCO president. “We are looking forward to working with Apogee to
capitalize on product, market and operational opportunities for EFCO. We
will be collaborating with Apogee on strategic plans to grow EFCO and
continuously improve operations.”
Apogee funded the EFCO acquisition through expansion of its existing
credit facility. EFCO is a ninth independent operating unit in the
Apogee portfolio and is reported as part of the architectural framing
Apogee’s first quarter outlook, which does not
include any revenues or earnings from EFCO, is for revenue growth of
approximately 10 percent and for earnings per diluted share to be down
approximately 10 percent compared to the prior-year period, as expected.
First-quarter results will be impacted by the expected and previously
discussed first-half revenue decline for the architectural services
segment, as well as transaction-related costs from the Sotawall and EFCO
acquisitions. The longer-term outlook for the architectural services
segment continues to be positive, following a substantial increase in
segment backlog in the fiscal 2017 fourth quarter, combined with
significant backlog growth expected in the fiscal 2018 first quarter and
further expansion anticipated in the second quarter. This backlog growth
supports architectural services segment revenue growth in fiscal year
2019 and beyond.
Excluding the impact of the EFCO acquisition, the company reaffirms its
stated fiscal 2018 full-year outlook for approximately 10 percent
revenue growth and earnings of $3.35 to $3.55 per diluted share. Apogee
will incorporate EFCO’s expected impact on fiscal 2018 full-year results
when it releases first-quarter earnings on June 22.
ABOUT EFCO CORPORATION
EFCO, founded in 1951, is
headquartered in Monett, MO, where full production capabilities are
located; it has additional facilities in Missouri, Illinois and
Virginia. It is a leading U.S. manufacturer of architectural aluminum
window, curtainwall, storefront and entrance systems for commercial
construction projects. EFCO has approximately 1,600 employees.
ABOUT APOGEE ENTERPRISES
Apogee Enterprises, Inc.,
headquartered in Minneapolis, is a leader in technologies involving the
design and development of value-added glass products and services. The
company is organized in four segments, with three of the segments
serving the commercial construction market:
Architectural Glass segment consists of Viracon, the leading
fabricator of coated, high-performance architectural glass for global
Architectural Framing Systems segment businesses design, engineer,
fabricate and finish the aluminum frames for window, curtainwall and
storefront systems that comprise the outside skin of buildings.
Businesses in this segment are: Wausau, a manufacturer of custom
aluminum window systems and curtainwall; Sotawall, a manufacturer of
unitized curtainwall systems; Tubelite, a fabricator of aluminum
storefront, entrance and curtainwall products; Alumicor, a fabricator
of aluminum storefront, entrance, curtainwall and window products for
Canadian markets; and Linetec, a paint and anodizing finisher of
window frames and PVC shutters.
Architectural Services segment consists of Harmon, Inc., one of the
largest U.S. full-service building glass installation companies.
Large-Scale Optical segment consists of Tru Vue, a value-added glass
and acrylic manufacturer primarily for the custom picture framing
The discussion above contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements reflect
Apogee management’s expectations or beliefs as of the date of this
release. The company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. All forward-looking statements
are qualified by factors that may affect the operating results of the
company, including the following: (A) global economic conditions and the
cyclical nature of the North American and Latin American commercial
construction industries, which impact our three architectural segments,
and consumer confidence and the conditions of the U.S. economy, which
impact our large-scale optical segment; (B) fluctuations in foreign
currency exchange rates; (C) actions of new and existing competitors;
(D) ability to effectively utilize and increase production capacity;
(E) product performance, reliability and quality issues; (F) project
management and installation issues that could result in losses on
individual contracts; (G) changes in consumer and customer preference,
or architectural trends and building codes; (H) dependence on a
relatively small number of customers in certain business segments; (I)
revenue and operating results that could differ from market
expectations; (J) self-insurance risk related to a material product
liability or other event for which the company is liable; (K) dependence
on information technology systems and information security threats; (L)
cost of compliance with and changes in environmental regulations; (M)
interruptions in glass supply; (N) loss of key personnel and inability
to source sufficient labor; and (O) integration of recent acquisitions.
The company cautions investors that actual future results could differ
materially from those described in the forward-looking statements, and
that other factors may in the future prove to be important in affecting
the company’s results of operations. New factors emerge from time to
time and it is not possible for management to predict all such factors,
nor can it assess the impact of each such factor on the business or the
extent to which any factor, or a combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. For a more detailed explanation of the
foregoing and other risks and uncertainties, see Item 1A of the
company’s Annual Report on Form 10-K for the fiscal year ended March 4,
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Source: Apogee Enterprises, Inc.
Apogee Enterprises, Inc.
Mary Ann Jackson, 952-487-7538