Apogee Enterprises Inc (APOG) 2009 Q1 法說會逐字稿

Good day, ladies and gentlemen and welcome to the first quarter 2009 Apogee Enterprises, Inc. conference call. My name is Lacy and I will be your coordinator for today. At this time, all participants are in a listen-only mode. We will be facilitating a question-and-answer session toward the end of this conference. (OPERATOR INSTRUCTIONS) As a reminder this conference is being recorded for replay purposes. I would now like the turn the presentation over to your host for today's call Ms. Mary Ann Jackson. Please proceed.

Thank you Lacy. Good morning and welcome the Apogee Enterprises fiscal 2009 first quarter conference call on Wednesday, June 25, 2008. With us on the line today are Russ Huffer, Chairman and CEO and Jim Porter, CFO. Their remarks will focus on our first quarter results and the outlook for fiscal 2009. During the course of this conference call we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

The statements are based on current expectations and the current economic environment and are of course subject to risks and uncertainties which are beyond the control of management. These statements are not guaranteed to future performance and actual results may differ materially.

Important risks and other important factors that could cause actual results to differ materially from those in the forward-looking statements and projections, are described in the company's annual report on Form 10-K for the fiscal year ended March 1st, 2008 and in our earnings release issued last night and filed this morning on Form 8-K.

The information in this conference call related to projections or other forward-looking statements may be relied upon subject to the previous Safe Harbor statement as of the date of this call, and may continue to be used while this call remains on the Apogee web site. Russ will now you give a brief overview of the results and Jim will cover the financials. After they conclude, Russ and Jim will answer your questions. Russ?

Thank you, Mary Ann. Good morning. Welcome to our conference call. We feel good about our first quarter results. They met our expectations for growth and architectural segment revenues and earnings as all businesses performed well.

With the on going strength in our architectural segment which serves the market where we are seeing high levels of commercial construction activity, we remain optimistic about Apogee's outlook and are confirming our earnings per share guidance for fiscal 2009. We are expecting $1.82 to $1.94 per share from continuing operations, which would represent a 22% to 30% increase from our fiscal 2008 record earnings of $1.49 per share.

In the first quarter, we earned $0.36 per share from continuing operations compared to $0.34 per share a year earlier. At the same time, revenues grew 14% in the quarter. Architectural segment revenues increased 17% and architectural segment operating income was up 28% in the first quarter.

Architectural revenue growth, which was in line with our expectations, resulted from continued ramp up of new architectural glass capacity in Utah and the converted Minnesota facility, as well as the addition of the store front and entrance business in the fourth quarter of last year.

The architectural segment operating margin was solid at 6.7% for the quarter and up from 6.2% in the prior year period. But was slightly lower than we had expected due to project and product mix and productivity. Productivity was impacted by higher than anticipated labor costs, resulting from the mix shift in ramp up of new capacity.

We expect that our labor will return to normal levels for the remainder of the year. Architectural segment backlog remains high at $491 million, up 19% from the prior year period. This is our second highest quarterly backlog ever. We have repeatedly stated that we need to maintain our backlog at a high level and don't need growth each quarter to support our revenue growth outlook.

Our backlog level can and does vary depending on the size and duration of new projects added in a quarter. Our fourth quarter had some larger, longer duration projects in the backlog that we are working through. This quarter's change in backlog is not a reflection of a change in market conditions for Apogee.

We feel positive about the mix in our current backlog. We maintained the institutional segment of our backlog at about one-third and saw growth in the office sector to just over 40% of the backlog. Both of these markets predominantly incorporate value-added, energy efficient glass and products and systems and their projects.

This backlog mix supports our view that there continues to be plenty of good work in the marketplace to fill our capacity. We have strong visibility for fiscal 2009 and beyond due to our backlog level, project commitments, strong bidding activity and the construction levels in green building trends in markets we serve.

Our architectural segment has strong operations serving markets that are using more and more value-added design and energy efficient products. New studies continue to demonstrate that green buildings are more valuable to owners, commanding higher rents and sales prices.

We believe these tangible benefits will accelerate the demand for new leadership in energy environmental design or lead certified buildings and will encourage renovation of existing buildings.

Two trends that offer growth opportunities for our energy efficient glass and aluminum systems. Current estimates indicate that today about 51% of the commercial architectural glass market is using coated, high energy efficient glass up substantially from the 32% coated glass penetration at the trough of the last commercial construction cycle in 2002. This increase underscores the strength of the green building trend.

In addition, every month new cities are increasing requirements that buildings meet need energy efficiency standards. At a minimum these laws and regulations cover public buildings, but more and more municipalities are often requiring the greening of both new and renovated private buildings as well.

With the vast majority of our glass and window and wall products being energy efficient, these trends offer great opportunities for Apogee. We have a wide variety of esthetic products, architects want with the best energy efficient properties available in our markets. We are excited about our growth potential related to the accelerating green building trend.

I would like to provide a quick update on some newer initiatives, which are driving architectural segment growth this year. The ramp up of our new architectural glass capacity in Utah and Minnesota is progressing nicely. We have reached the original capacity level for the new plant in Utah and we have plans in place to continue to increase architectural glass capacity and capabilities for all of our facilities through fiscal 2010.

The integration of Tubelite which fabricates aluminum store front, entrance and curtain wall products for the U.S. commercial construction industry, is going well since the acquisition in December 2007. It was accretive in our first quarter as we had planned. We are also making progress on other related synergies with Tubelite that we expect to start contributing next year. Turning to the large-scale optical segment, our operating margin remained high at 18.4% and met our expectations as our best value-added products were more than 50% of segment sales for the third consecutive quarter.

Revenues declined 18% with the elimination of less profitable product lines and soft picture framing market conditions. As we had anticipated, operating income declined 17% on lower revenues. Next I will cover our outlook.

We are expecting another outstanding year for fiscal 2009 driven by our architectural segment. Demand for our architectural products and services remains healthy. Our backlog remains at a high level. New capacity is in place, and we expect to see further operational improvements. We are reconfirming our earnings per share guidance of $1.82 to $1.94 from continuing operations, which would represent a 22 to 30% increase over fiscal 2008 results. We also continue to anticipate revenue growth of 12 to 15%.

Looking ahead to fiscal 2010, our longer term goals of 8% annual revenue growth and 20% average earnings growth, remain achievable, despite mixed signals from industry forecasters. We continue to see high levels of construction activity in markets utilizing our value-added products and services, reflected in the size and mix of our backlog beyond fiscal 2009 along with our bidding activity which continues strong and allows us to fill our capacity with good work.

We also are seeing opportunities resulting from the increase in green building, the sector demanding our energy efficient products along with our ability to expand to the markets currently underserved by Apogee, including the broader mid-sized project at international projects.

For fiscal 2009, we have slightly increased our architectural segment revenue guidance to 14 to 17% growth from 13 to 16%. Full-year growth will come primarily from our architectural glass business with some incremental growth expected from additional capacity and mix shift.

Specifically, demand for higher margin laminated glass for hurricane resistance products has slowed and been replaced with higher volume, but slightly lower margin insulating glass products. We will also have full-year growth from the store-front products acquisition.

At the same time, we expect our architectural business will achieve an operating margin ranging from 7.8 to 8.1%, down somewhat from our prior guidance of 8.0 to 8.3% and up from our fiscal 2008 architectural operating margin of 6.7%. Our architectural segment margin outlook includes improvement over the balance of fiscal 2009.

We will continue to ramp up new architectural glass capacity and expect improved project mix and flow. At the same time, we will leverage increased overhead spending over the remainder of the year.

However, our architectural segment operating margin outlook has declined slightly from our prior guidance, driven by increased cost, primarily for fuel and petroleum-based materials and some product mix.

Regarding our markets, forecasters are calling for a slight decline in commercial construction markets which are currently at high levels and as with we have said, we don't need overall market growth to support our growth. Given our backlog in the markets we serve and the focus on energy efficiency. We continue to have unmet demand and underserved markets. We often are questioned about the stability of our backlog.

Over the ten years of my leadership of Apogee, the cancellation of signed projects in the backlog or committed projects awaiting final specifications before hitting backlog has been minimal. We do see delays on a small percentage of committed projects resulting from various customer or project issues. There are two reasons our backlog is solid.

The lag between start of a project and the need for glass products and services means significant costs have already been expanded on a typical large project before Apogee gets involved. In addition we have a conservative policy for project and customer selection.

I am confident that we will experience minimal cancellations in our backlog, based on current or forecasted business conditions. Our picture framing business continues to convert customers to our best framing glass and acrylic products allowing us to raise operating margin guidance for year to 18 to 19%, from previous guidance of 17.5 to 18.5%.

We expect the second half to be stronger than the first half, which will be slightly impacted by investments in new capacity that will come online in the third quarter. During the year, we will be exploring new markets for these high end products.

We now anticipate full-year large-scale optical revenues will decline slightly as a result of soft retail and customer picture framing market conditions. Our businesses are executing well. We have solid markets and backlogs, new capacity, and strong cash flow. I am feeling very good about the future prospects and potential for Apogee and its businesses.

Jim will now comment on the financials. Jim?

Thank, Russ. Good morning and welcome to our conference call. We had a good first quarter and we are pleased that all of our businesses performed well to meet our expectations.

At the same time, market conditions and trends continue to support demand for our value-added products and services. We earned $0.36 per share from continuing operations in the first quarter on revenues of $238.5 million, which increased 14%. Operating income grew 11% to $16.6 million.

We have only slight seasonality in our business, but we tend to experience slightly lower first quarter seasonal revenues, while the third quarter is generally our largest quarter. The architectural segment had strong revenue growth from our new architectural glass capacity and Tubelite acquisition late last year and operating income increased 28%.

Although the first quarter operating margin, at 6.7% was slightly below our expectation due to mix and productivity, we expect continued improvement in architectural operating margins throughout fiscal 2009. Our architectural segment backlog was our second highest in company history at $491 million, which gives us good visibility.

We see normal quarter to quarter variation in our backlog, often driven by timing, duration and size of particular jobs booked during a quarter. The slight decline from the fourth quarter, reflects this normal variation, has not driven by a change in market conditions for our products and services. Approximately $350 million or 71% of the backlog is scheduled to be delivered in fiscal 2009.

Approximately $120 million or 25% in fiscal 2010, and approximately $20 million of the backlog is even booked into fiscal 2011. The large-scale optical segment operating margin came in at 18.4% up slightly from the prior year period and we achieved a third consecutive quarter of our best value-added premium products accounting for more than 50% of segment sales.

Revenues and operating income for the large-scale optical segment dropped by similar percentages. Revenue was impacted by the elimination of some less profitable product lines during last fiscal year. In addition we are operating in a soft custom framing market.

The first quarter earnings per share reconciliation between the current earnings from continuing operations of $0.36 per share and the $0.34 per share earned in the prior period is, the architectural segment core operations added $0.02 per share. Other architectural segment items not reflected in this amount were, we added $0.01 per share from Tubelite acquired last December and in the prior year, $0.05 per share start up costs for the new Utah architectural glass facility.

The large-scale optical segment declined by $0.02 per share and earnings per share was also reduced $0.04, by the combination of performance of equity and affiliates, a higher tax rate and corporate related expenses. EBITDA, earnings before interest, taxes depreciation and amortization from continuing operation, was up 13% and we continue to have good cash flow performance. We ended the quarter with $73.4 million in long-term debt.

Debt grew as expected with increases in capital expenditures and working capital. Capital expenditures were $23.3 million with spending related to investment in our window, architectural glass and picture framing businesses. We continue to focus on working capital management. The first quarter is impacted by seasonal working capital growth for tax pension and incentive payments.

The first quarter tax rate was 36%. Net income for the quarter was $0.36 per share. In the prior year period, net income was $0.40 per share and included income of $0.07 per share in discontinued operations. In the first quarter, we repurchased approximately 156,000 shares at an average price of $20.27 per share for a total of $3.2 million.

We have remaining authorization to purchase 1.2 million shares after having purchased a total of approximately 494,000 shares during the fourth quarter of last year and the first quarter of this year. I will turn to our outlook for fiscal 2009. We remain very optimistic about fiscal 2009. Our fiscal 2009 outlook is for earnings of $1.82 to $1.94 per share from continuing operations on revenue growth of 12 to 15%.

Growth will be driven by our architectural segment where we are expecting revenues to increase 14 to 17% up slightly from our previous guidance. Architectural operating margins should continue to improve and are expected to range from 7.8 to 8.1% exceeding our prior cycle peak of approximately 7% operating margins. Contributing to the ongoing margin improvement will be the continued ramp up of new architectural glass capacity and expected mix and project flow improvements.

We also will leverage increase overhead spending over the remainder of the year. Our operating margin outlook for fiscal 2009 has declined slightly driven by some product mix and increased cost primarily for fuel and petroleum-based materials.

We have substantial visibility into fiscal 2009 operating conditions, with the backlog for the year currently at $350 million or 71% of our full backlog and our longer term capacity for the current year essentially already committed. Our total backlog remains high and is spread across commercial construction sectors. The office sector has grown to greater than 40% of our backlog from 35 to 40% at year end.

Institutional, education, health care and government, continues to be 30 to 35% of backlog. High end condominiums remain at 15 to 20% and hotel, entertainment and casino continue at 5% to 10% of the backlog.

There are two key positives related to our backlog mix. We are pleased that the institutional sector, which tends to be stable in good times and bad remains one-third of our backlog. We also feel good that the office sector of our backlog has grown slightly, confirming that there are still very good office projects available despite concerns about the economy.

For our large-scale optical segment, we increased our operating margin outlook slightly to 18 to 19%, from earlier guidance of 17.5 to 18.5%, on a revenue decline of about 3%.

Our previous guidance was for flat revenues but soft framing market conditions are making it somewhat more challenging to replace less profitable product lines that we have eliminated with framing glass and acrylic. We expect the second half to be stronger than the first half which will be slightly impacted by investments and new capacity for our best products that will come on line in the third quarter.

I am going to briefly cover our cash flow outlook for full-year fiscal 2009. We are estimating EBITDA, earnings before interest, taxes, depreciation, and amortization from continuing operations, of 114 to $120 million. Depreciation and amortization will increase to approximately $31 million in fiscal 2009, due to depreciation on recent capital investments and amortization of intangibles related to the acquisition of Tubelite.

We estimate net cash provided by continuing operations of 70 to $80 million for the year. Capital expenditures are projected to be approximately $60 million. Fiscal 2009 strategic investments include building a new lead certified architectural window facility and capacity expansions in productivity improvements if both operating segments. We expect this will give us free cash flow of so 10 to $20 million.

We will continue to focus on ways to invest on growing our business as the use for our free cash flow. And we have authority to repurchase approximately 1.2 million shares. We define free cash flow as net cash flow provided by operating activities minus capital expenditures.

We expect record earnings and strong cash flow for fiscal 2009 and don't see our business slowing this year. We also remain confident that we can achieve our longer term goals of 8% annual revenue growth and 20% average earnings growth in fiscal 2010. Our businesses offer value added products, ideally suited to today's building trends. Our products improve the operations and performance of buildings. The prospects for Apogee remain very positive. Russ?

Thanks Jim. I would like to go ahead and open up the call for questions at this time.

(OPERATOR INSTRUCTIONS). Our first question will come from the line of Michael Cox with Piper Jaffray. Please proceed.

Good morning. Thanks for taking my questions.

Hi, Mike.

Good morning.

My first question is on the comments you made about the margins within the architectural, the fuel and input cost. In the past you have described the ability to pass those through. I am just curious if there is something changing from a pricing environment that is making that more difficult?

Actually the change in the environment is more a function of the real significant and rapid increase in costs. So, we have been able to hold pricing and in fact all of our businesses either recently have or are introducing price increases. But given the lag time that we have in our projects there's going to be a bit of a lag between the cost increases relative to our ability to pass those on in pricing.

Let me add to that the energy surcharges that we have been passing through continue to provide us with significant protection. A lot of the petroleum-based increases that we saw were not in those major, major supply items. So they were in a lot of little items that plus fuel that came in to the picture. So things that were petroleum based. So we have reacted to that now and feel that that is, that pretty much is behind us at this point.

Okay. That's very had helpful. Can you remind me of the flexibility to adjust pricing for projects that are already in the backlog?

Yes, really there's not an ability to adjust pricing for projects in the backlog. That's certainly a reason why we saw this impact in the quarter.

Okay. That's helpful. On the corporate expenses this quarter jumped up about one million. Are there any special items or one-time events in this number?

No, I think we will see a growth in SG&A for the full year and we started to see some of that in the first quarter. It is a number of items. I mean we do actually have a new system implementation project across the company and actually had our first two entities, go on live. So we started to see a bit of an increased cost relative to that. Other than that, pretty much kind of normal ongoing cost increases.

Okay. My last question, Russ, you had mentioned that seeing a small percentage of delays which isn't out of character from what you have talked about in the past. But I am just curious if you are seeing anything from accounts receivable perspective, any aging of receivables there from customers feeling the pinch of tighter credit markets?

Our DSO remains very low. We really are pretty pleased with that.

Ye, we are actually continued to reduce our DSO slightly from year end and more so over the prior year. But we haven't seen particular receivables issues related to market conditions, but it is definitely something that we watch closely.

Okay. Thank you very much.

And our next question will come from the line of Steve Denault with Northland Securities. Please proceed.

Good morning everyone.

Morning, Steve.

Your CapEx comments about a new LEED certification facility is in reference to what?

This is our Wausau facility. So we are actually, just now completing a new factory and office facility for our Wausau window business. That's a business that is over 50 years old and is currently operating in a number of separate very old facilities.

So we actually made the decision to build a new facility. It is really all driven by productivity improvements associated with it and then we actually built the facility to achieve what we believe will be silver LEED certification.

It will be the only window manufacturing plant in the country at its opening that is LEED certified.

Any further thoughts on how you are going to approach if at all the international market?

International market remains an opportunity for us. There is no question for our glass especially for our glass sales and right now, it is still is a market that where our opportunities domestically are more attractive.

We will be looking at that as our expansions are completed here and our ability to grow the business here sort of levels off, then we will be taking a look at international opportunities in more detail. So that's on the horizon, near horizon.

Steve, we do continue to service the international market with key premier projects. The key is we do have some strategy work underway this year which by the end of this year, we expect to have some more formalization over our opportunities and goals relative to international.

What do you think international sales and replacement business will be as a percent of total architectural sales this year?

International and replacement?

Yes, if you could separate the two.

Oh, international will be between 5% and 10% of revenues. And we estimate that replacement probably about 20% of revenues.

You also, the stat you quoted about 51% coated glass penetration versus 32%, whose statistic is that and the 32% was in reference to what period of time?

It's Ducker and the 32 is approximately I think in 2002, 2003. So calendar 2003 versus today, or versus last year. So the use of these high performance products, energy efficient products is expanding and we expect it to continue to expand and at 50% there's a lot of room for growth.

And whose statistic is this?

Ducker.

Ducker is a firm that does research in the commercial window marketplace.

Within the LSO, the drop off in revenue quarter-over-quarter year-over-year, I guess, how much of that was elimination versus -- elimination of low end glass versus just a really soft retail market?

Actually a majority of it was elimination of products and as a combination of the low end glass, probably more of the revenue decline was getting out of some other products like our preframed art product line and some of the commercial products servicing the non picture framing market.

Is there anything that can help us get comfortable with in terms of the sort of second half uptick in LSO sale, you are clearly adding capacity. I know you are very methodical in the way you approach your business. Is it safe to assume that you have got a home for that product?

Well, first of all I mean the large-scale optical segment doesn't have the benefit of long lead times like we do in our architectural segment, but that said we had the relationships with key retailers and distributors that give us a lot of confidence in being able to do that.

Also if you recall, the new capacity was really driven by, really reaching full capacity on our museum our highest quality of products last year. So we were actually constraining the expansion or conversion of certain customers for those products. So we have new product conversions scheduled for this year.

We also are expecting some very nice improvements in cost with this new highly automated line. So.

Okay. That makes sense. And of course your renewed or downward revision in architectural operating margins. Do you feel like you have got a handle on that which was somewhat unknown when you first provided that guidance in terms of incremental petroleum-based cost increases and things of that nature?

Yes, we really do. And certainly some of that is going to continue. We were getting a little feedback there. I'm sorry. Some of that is certainly, we expect these higher cost to continue so we have to overcome those and we have identified ways to do that.

The rapid price increases that you saw in advance of your expectations, is there any certain bucket that we, that you can point to?

In terms of our cost increases, the really, obviously fuel which would be either our delivery costs or kind of delivery costs that we incur, is one key area. But I would probably describe our cost increases in more what we would refer to as secondary materials.

Right.

So when you look at the key material, glass, we are protected this year on and aluminum we are largely able which has been pretty volatile and increasing. As we have talked we are able to protect ourselves or pass those on, but we do have timing issues.

So particularly in our shorter lead time, aluminum parts of the business we expect to be able to recover that in pricing, but we have a timing issue. So for the year we won't be able to fully recover that. But then we drop down into some of the areas like chemicals, paints, vinyl, those types of items, sealants used in our products and manufacturing processes.

Okay. Thank you.

(OPERATOR INSTRUCTIONS). Our next question will come from the line of Robert Kelly with Sidoti. Please proceed.

Good morning. Thanks for taking my call.

Morning.

Just had a question, I don't know if you covered this already, the contribution from Tubelite in 1Q on both backlog and the quarterly results in architectural?

The contribution for Tubelite was $0.01 for the quarter, so it was accretive in the quarter. And if you asked backlog, it was maybe $1 to $2 million it was.

Very insignificant.

That's a very short lead time business.

Okay. Great. A question also, you had just said that you are protected through the year on glass. Does that reset in your fiscal 2010 period?

Right. Across the board it will reset and we have anticipated that with price increases.

Okay. So the price increases going through now will cover you for fiscal 2010?

Yes, we believe so.

Okay. And then, finally the backlog growth continues to be strong and you point to share gains and green building. Can we just nail down the bulk of your backlog is, is Harmon is it not, or split between Harmon and Wausau?

That's correct.

Do you get green building initiative share gains through Harmon, Wausau? I guess that's where it doesn't kind of add up to me. I guess the whole picking up share through Viracon and Wausau a little bit, but do you see share gains driving Harmon business? The green building share gain driving that Harmon business?

Harmon you have to recall that Harmon has a very small -- they're the largest glazing contractor in the United States. They're number one, but it was a very small market share. So the market is highly fractioned. So, saying, gaining market share a better way to describe what they're doing is the mobility strategy that we put in place.

What they're really doing is keeping -- their capacity is defined by their project management team and they're keeping their project management team fully engaged and busy by selecting good projects and traveling to those more often than we have done in the past. And by doing so, we are able to keep our margins toward the higher end of kind of projects we can execute well and gives us the best opportunity for success.

I would say, so I would not articulate that green is driving share gains so much for Harmon. Where Harmon captures share is where customers are looking for value-added suppliers of services and Harmon really being able to satisfy more complex projects.

So we have kind of described them as being able to bring the national project competencies to local markets involvement and so what you see is part of the green building movement is you see more sophistication, more complexity into projects, which gives frequently gives Harmon an advantage in their marketplace when they're bidding on it.

Wausau is still not so much driven by green though, particularly with the operable window as one of the elements for LEED certification. That's a benefit that does help Wausau. I would say though in both of those businesses, we do see green building movement being an increasing presence in the projects that we see.

Okay. And then just finally just on 1Q you had talked about a lower project mix partial reason for I guess softer operating margins. What does that entail exactly? Is that just seasonal or --

No, one thing we have talked about in our business is really one key area of uncertainty if you will is just the timing of projects that we deal with. And that always has the effect of just moving particular project timing of revenue flow around month to month or quarter to quarter just to a certain degree.

Some of that project mix was where we had a little bit of revenue that moved out of Q1. So then you have, then what's the balance of work in Q1. So some of that, so for example, in our Harmon business we still had a couple of million dollars based on percentage of completion revenue related to the Florida jobs that we were completing. So you have a couple of million dollars revenue at zero margin. So of you have mix related to those kind of project issues. And then in Viracon, as Russ called out, we just had some particular product mix and it is a real slight impact, I want to emphasize that, but you had a little less complexity with less laminated product relative to insulated product, with slightly less margin associated with it.

But when you talk about project mix it is really just the timing of when you book your revenue?

Right, yes. Right.

Thanks, guys have a good one.

Thanks.

And our next question will come from the line of Robert Vermilion with Axial Capital. Please proceed.

Hi, there. Good morning.

Morning.

In the press release you break out backlog between what's going to happen this fiscal year and next fiscal year and the fiscal year after that. How does that compare to -- or could you give me that break out for Q1 of last year?

I will have to look at that up. Hold on a second. So I think in terms of the current, in the current year, so for example, so currently if we look at our backlog relative to the current fiscal year, we are about 70% and then year ago the amount relative to the current year was 63%.

Okay. How about in the one fiscal year out and two fiscal year out?

Yes, I don't have that specific detail here. I think a year ago, I don't believe we had any backlog that went out beyond one fiscal year.

Okay. Great. Thanks. And then, what was the revenue contribution of Tubelite in the quarter?

It was approximately 12 or $13 million.

Great. And then how should I think about the backlog? I mean obviously Viracon has a shorter lead time, I guess around six weeks of backlog in there?

A little bit more than that, but short.

Okay. And then, so how much of that backlog is made up of your large Viracon projects like the Goldman building and the Freedom Tower, etc?

Probably around, maybe a little less than 20% of the total backlog is Viracon's.

Yes, I mean total right is Viracon is probably about 25% or so. But just to be clear, project like the Goldman or something like that we will only have a couple of months worth of production related to that in our backlog at one time. So no significant concentration in Viracon's backlog.

Okay. Great. Great. Thank you very much.

And our next question will come from the line of Ryan [Levinson] with Private fund. Please proceed.

Good morning. Thanks for taking my question. I just have a quick question, a quick clarification of something I kind of missed it from two questions ago. Did you say there were still a few million dollars of revenue from the Florida jobs that had been written off in Q3, that there were still a few million dollars of revenue in this quarter?

That's right. And to be clear, the right downs in Q3 were related to our projected cost to complete those projects. So as those projected are completed we recognized the revenue associated with them.

But that revenue is at zero margin.

Okay. I thought and I am trying to find my notes from the third quarter conference call, but I thought that those jobs were largely done and that they were, and in the third quarter and they were going to be completed in the fourth quarter. Did something change? Did they drag on in some other way?

Actually on time. I think we did articulate in the fourth quarter they were not complete as of the third quarter. What we articulated at the end of the third quarter was that two of the projects were nearing completion and one was a little bit further out. Two were completed during the fourth quarter and the final project actually completed in the first quarter.

Okay. So this is in line with your expectations that were --?

Yes, yes.

What was the billing and excess cost number in the quarter for the current quarter?

It was up about $10 million, I think about $49 million.

Okay. Does this trend ever reverse?

It would reverse based on a decline in revenue, but we still consider this to be a good thing that we are intentionally implementing to accelerate cash flow and feel like we have done it effectively.

Okay. All right. Thanks for your time.

Thank you.

At this time, we have no questions in queue. I would now like the turn the presentation back over to Russ Huffer for closing remarks.

Thank you. Our businesses remain strong, as reflected if our sustained high levels of backlog and commitments, as well as market demand for our products. We are executing on our strategies including leveraging the green building trend.

We are excited about the opportunities for Apogee in fiscal 2009 and beyond. Thank you very much.

Thank you for your participation in today's conference. This concludes your presentation. You may now disconnect. Good day.