Apogee Enterprises Inc (APOG) 2010 Q4 法說會逐字稿

Good day, ladies and gentlemen, and welcome to the fourth quarter 2010 Apogee Enterprises conference call.

(Operator instructions)

As a reminder, this conference is being recorded for replay purposes.

I will now turn the presentation over to your host for today's call, to Mary Ann Jackson. You may proceed.

Thank you, Frances.

Good morning and welcome to the Apogee Enterprises fiscal 2010 fourth quarter and year-end conference call on Thursday, April 8, 2010. With us on the line today are Russ Huffer, Chairman and CEO, and Jim Porter, CFO. Their remarks will focus on our fiscal 2010 fourth quarter and full-year results, and the outlook for fiscal 2010 -- excuse me, 2011.

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. These 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 guarantees of future performance, and actual results may differ materially. Important risk and other important factors that could cause actual results to differ materially than 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 February 28, 2009, and in our earnings release issued last night and filed on Form 8-K.

Russell and I will give you a brief overview of the results, and then Jim will cover the financials. After they conclude, Russ and Jim will answer your questions. Russ?

Thank you, Mary Ann.

Good morning and welcome to our conference call.

Apogee achieved solid operating performance and our third highest earnings ever during fiscal 2010. Even though we experienced difficult domestic commercial construction market conditions. We executed well as we worked off architectural segment backlog booked in a stronger market, and focused on improving productivity and aggressively managing costs in the face of the most difficult market in my career. It was a year that saw pricing and margins decline as the year progressed. Despite the challenges, I'm proud of our success of positioning Apogee with a strong balance sheet, leading products, services and brands, and people focused on the company's future opportunities.

Apogee earned $1.13 per share from continuing operations on revenues of $696 million, which was down 25%. I'm pleased that we further strengthened our balance sheet, as cash and short-term investments grew to $102.6 million at the end of fiscal 2010.

Architectural segment revenues declined 27%, while operating income decreased 51%. Architectural segment revenues were down comparable to our markets served, which have been impacted by tight commercial real estate credit and depressed employment levels. The fiscal 2010 market for large projects, those projects greater than 10 stories, which are especially important to our architectural glass business, was down 50%-60%. This twice the decrease for the overall market for Apogee project types. Our success and growth in institutional market share were not enough to offset the decline in large office projects.

We have also been successful with our strategy to grow share in underserved architectural glass markets. We grew international export revenues 45%, to $36 million in fiscal 2010, and made significant in-roads serving new and existing customers in the smaller project market. Earnings declined with low architectural segment capacity utilization, declining pricing, as we completed work bid and stronger commercial construction markets. In the fourth quarter, only about 20% of the architectural revenue was from work that had been booked in stronger markets.

During fiscal 2010, our Large-Scale Optical segment maintained revenues and operating income in weak retail market conditions, as new and ongoing value-added product customers continued to convert to our best picture framing products.

Turning to the fourth quarter, we generated cash and again reduced costs as the Architectural segment fully felt the impact of the commercial construction downturn, with further volume and pricing declines resulting in a quarterly loss for the segment. Companywide fourth quarter revenues of $148.6 million were down 26%, and earnings from continuing operations were $0.01 per share versus $0.40 per share in the prior year period. Architectural segment revenues declined 30%, with an operating loss of $3.6 million. Revenues declined due to the challenging domestic commercial construction market conditions, as the new business from institutional small projects and international work couldn't offset the core market decline, especially for large and office projects which are important to the architectural glass business.

Regarding the Architectural segment operating loss, lower revenues and pricing, along with low capacity utilization, notably in our architectural glass business, more than offset productivity improvements, cost reductions, and good installation project margins. The Architectural segment backlog ended at $227.5 million, compared to $246.4 million at the end of the third quarter, and $316.2 million in the prior year period. Bidding activity has increased slightly, although average project values have declined and bid tool award timing continues to be slow.

Institutional work --institutional, including stimulus work, remains the largest sector of potential work for Apogee, which is ideally suited to meet the sector's demand for energy efficient and value-added products and services. As we had expected our backlog mix shifted even more toward institutional projects in the fourth quarter. Institutional projects now account for 65% to 70% of our backlog, up from 60% to 65% in the third quarter. We also saw a slight increase in the dollar value of the institutional projects from the third quarter to the fourth quarter.

The other sectors of our architectural backlog are office projects at 20% to 25% of the backlog, hotel entertainment sector at 5% to 10%, and condos at 0% to 5%. To illustrate the change in our product mix during fiscal 2010, here is our backlog by sector a year ago. Institutional was 40% to 45%, office 35% to 40%, hotel entertainment 5% to 10%, and condos 10% to 15%.

In the fourth quarter,Large-Scale Optical segment revenues increased 13%. Volume and mix of our best value-added picture framing products increased, compared to a weak prior year quarter. Large-Scale Optical segment operating margin was 19.9%, compared to 22.8%.

Next I'll cover our outlook. We've been stating since last fall that fiscal 2011 will be very challenging for our architectural businesses. Based on the degree of visibility we have from our bidding activity and backlog. Apogee is a late-cycle, commercial construction company, and our markets are worse than the last trough, as the commercial construction downturn appears to be deeper and longer than I've ever seen before. In addition, we've worked off the majority of projects booked in stronger markets.

We believe that the two most important variables that will move commercial construction markets are growth and employment, and the filing of credit for commercial real estate. And we have yet to see the needed improvement in these metrics. The March employment report was a positive sign, and we are seeing a few examples of financing being provided to commercial real estate projects.

Our markets are expected to be down 15% to 20% for fiscal 2011. We've adjusted the calendar McGraw Hill forecast for our lag to the market, which is approximately eight months, as well as for the sectors we serve. Our revenue outlook is somewhat better than the forecast for our markets. We are currently estimating company-wide revenues for the year will be down 10% to 15%. We believe we are beginning to see some positive movement in our business, as our bidding activity and inbound order rates have increased slightly. However, it is too soon to call it a trend.

We have focused on making our business as competitive as possible in difficult market conditions. We have aggressively reduced costs by more than $57 million on an annualized basis over the last year and a half, and are working continuously on productivity improvements. However we are strategically maintaining architectural capacity and people, to respond to the potential growth in fiscal 2012. Further capacity reductions would be structural, difficult, costly, and possibly slow to ramp up, but we will continue to monitor the market and evaluate this strategic decision. We are incurring $4 million to $6 million in annual costs to maintain this capacity.

Moving to our earnings outlook, we believe we have the potential for positive earnings per share in fiscal 2011. We anticipate that earnings from our Large-Scale Optical segment will offset losses in our Architectural segment, where we expect the second half will be stronger than the first half. With our $103 million in cash and short-term investments, and our untapped $100 million revolver, we are confident that we have the financial strength to work our way through the expected ongoing weak market conditions, and remain focused on our growth strategies for the recovery. Our architectural businesses have strong brands and operations that are well positioned to serve the aesthetic, energy efficient, hurricane and blast resistant glass requirements for commercial buildings, while our picture framing business continues to successfully convert customers to its industry leading framing products.

During fiscal 2011, our Architectural segment will be focused on continuing to penetrate underserved markets for smaller architectural glass projects and new installation project geographies, maintaining our facilities as state-of-the-art, including excess capacity, if we feel the recovery timing and opportunity support this decision, maintaining and developing our key people, evaluating upgrading facility and equipment capabilities that enable new products and productivity improvements, as well as growth capital for the future. Since we have some attractive incentives, primarily for architectural glass, that may justify committing sooner than we otherwise would. And, completing our analysis of international growth and expansion possibilities for our architectural glass. During this challenging year, we are willing to invest in projects that we believe present attractive long term opportunities to grow, gain share, and create shareholder value. Despite the unprecedented tough market conditions, I'm feeling good about our Architectural businesses and the strategic and operational progress we're making.

Our installation business is winning projects in new markets at decent margins, the window business is successfully penetrating its targeted institutional markets and our architectural glass business is growing previously underserved, small project and international export markets. We also believe that international will present some exciting additional growth potential.

In addition, we continue to develop and introduce new products for the new and retrofit green building industry, which is expected to be stronger than ever when markets improve. Curtain walls or windows are cost-effective and important contributors to the energy efficiency of green buildings, and I'm communicating this message as frequently and as passionately as I can. I'll be glad to take any questions in this area.

Jim will now comment on the financials. Jim?

Thanks, Russ.

Given the difficult market conditions, our fiscal 2010 performance was solid. We made progress in penetrating target and underserved architectural markets, increased our picture framing glass market share, improved productivity and aggressively managed our costs.

We earned $1.13 per share on revenues of $696.7 million, both down from the prior year, which was a record year for earnings per share and revenues. Overall, full year revenues were down 25%, slightly below the prior guidance of a 22 to 24% decline. Apogee's operating margin for the year was 6.5% compared to 8.4% in fiscal 2009, consistent with our prior guidance for margin ranging from 6.3% to 7% for the year.

Architectural segment revenues declined 27%, comperable to our overall markets served, but the large and office projects so important to our architectural glass business were down significantly more. This illustrates our success in penetrating underserved architectural glass markets, and serving new geographic markets for installation projects. Architectural segment operating income for the year was $31.6 million, down 51%. Fiscal 2010 segment earnings were impacted by low segment capacity utilization and declining pricing, somewhat offset with work we completed that was bid in stronger commercial construction markets.

Despite soft retail markets, our Large-Scale Optical segment maintained revenues and operating income for the year. Our superior product attributes, which prevent fading and control reflection, are allowing us to continue to convert more customers to our value-added and best value-added products. In addition, the business is operating well, as it leverages investments made previously.

Fiscal 2010 net earnings, including discontinued operations, were $1.15 per share compared to $1.81 per share the prior year. Fiscal 2010 and 2009 discontinued operations results reflect settlement of litigation and warranties.

At year-end, our cash and short-term investments totaled $102.6 million, compared to $83.1 million at the end of the third quarter, and $27.1 million at the end of fiscal 2009. During the year we generated $87 million of free cash flow. We define free cash flow as net cash from continuing operations less capital expenditures.

Our long term debt remained at $8.4 million throughout fiscal 2010, as we continue to hold low-interest industrial revenue bonds. Capital expenditures for the year were $9.8 million, down from $55.2 million in fiscal 2009. Key strategic investments for both segments were completed last year.

Day Sales Outstanding at year-end held at 45 days, from 44 days at the end of fiscal 2009. In general, we continue to feel good about the quality of our receivables in this tough economy. We closely monitor this and have lien rights on a majority of our outstanding accounts receivables. With the market and industry realities we face, we do expect our DSOs to increase in Fiscal 2011.

In the fourth quarter of fiscal 2010, as Russ said, we fully felt the impact of the commercial construction downturn. Operating earnings from the Large-Scale Optical segment offset losses in the Architectural segment, as we continued to reduce costs and generate cash in the quarter. Apogee revenues of $148.6 million were down 26%, and earnings from continuing operations were $.01 per share compared to $.40 per share in the prior year period.

Fourth quarter Architectural segment revenues declined 30%, with an operating loss of $3.6 million. Lower revenues, pricing, and capacity utilization more than offset productivity improvements, cost reductions, and good margins on installation projects being completed. As expected, approximately 20% of our revenue in the quarter had been booked in stronger markets, down from about 40% in the third quarter. With this significant decline in revenues booked and healthier market conditions, we really felt the impact of extremely competitive pricing and margins.

Overall, pricing is down approximately 10% compared to a year ago, and we expect pricing to be pressured until the market recovers or industry capacity declines. Roughly three points of this decline has been offset by cost reductions and productivity improvements.

Fourth quarter capacity utilization in our Architectural segment averaged approximately 50%. The full year capacity utilization level is 57%, compared to 78% for fiscal 2009. The current segment capacity utilization is lower than it was the last cycle trough, which was roughly 60%.

In the fourth quarter, Large-Scale Optical segment revenues increased 13%, as the volume and mix of our best value-added picture framing products increased compared to a weak prior year period. Operating income at $3.6 million was down 2%. The Large-Scale Optical operating margin was 19.9%, compared to 22.8%. A $1 million write-off of older technology production equipment that we were unable to sell, more than offset improvements in product mix and productivity.

I'll turn to our outlook. With the current domestic commercial construction downturn appearing to be deeper and longer than the last downturn, we are again expecting revenues to decline in fiscal 2011 and believe we have the potential for positive earnings per share. We are projecting that earnings from our Large-Scale Optical segment will offset losses in our Architectural segment for the year.

On a consolidated basis, we expect losses in the first half of the year, in part because we entered the year with a gap between completion of some projects and start up of new project work in our Architectural segment. We expect our revenues will be down 10%-15%. We believe we can out perform our markets, despite the historical importance of large and office projects, which are forecast to continue to be significantly down in the first half of fiscal 2011. Our success in the institutional sector, along with the growth of smaller projects and international work, are expected to somewhat offset the severe downturn in large building and office projects. We are projecting positive free cash flow for fiscal 2011, based on maintenance capital expenditures of $10 to $15 million.

As we continue to focus on our longer term strategic initiatives, to expand the breadth and capacity of our energy efficient architectural glass offerings in the US and internationally, along with evaluation of incentives we have available, we will consider additional strategic capital spending in fiscal 2011. For example, just this week, we took advantage of long-term, low-interest financing, and received $12 million in Recovery Zone bonds for future investments in our architectural glass facility in St. George, Utah. We have three years to invest the dollars, which we primarily targeted for extending the energy efficient products offered out of this facility, to better serve the Southwest market, especially California, where there are now more stringent energy codes.

We also have been awarded Energy Investment Tax Credits, available the next three years, for similar investments and better energy efficient product capabilities for our architectural glass facilities in Utah and Minnesota. And we expect to complete our analysis regarding whether to expand internationally by this summer. As Russ said, we are willing to invest if the timing is right for attractive long term opportunities.

Although we're facing a tough start to the year, we feel we may be beginning to see small positive signs in our Architectural businesses, as bidding, hit rates, and inbound order rates appear to be improving slightly. We continue to focus our sales efforts on markets where we can differentiate ourselves with our value-added, energy efficient, aesthetic hurricane and glass products. We've seen strong bidding activity for projects in the institutional sector, for education, healthcare and government projects including federal stimulus work. We remain focused on productivity improvements and managing our costs, in an effort to somewhat offset the impact of declining revenues on earnings.

With more than $100 million in cash and short-term investments, our priorities for use of the cash are that we intend to invest and grow our international architectural glass business, where we already have a leading international brand but no offshore fabrication. We'll also continue to invest in maintenance and safety, productivity improvements, and new product development, and we plan to continue paying our dividend. We are focused on effectively managing through this slowdown, and emerging stronger than ever when our markets rebound. We're well positioned financially, have leading products, services, and brands, and remain focused on operational and strategic initiatives to strengthen our business for the rebound in our markets.

Russ?

Thanks, Jim.

I am very proud of our employees and management team. They have been very proactive in managing costs and profitably gaining market share in this troubled economy. Apogee is in great shape to survive the downturn and thrive when the markets recover.

Let's turn it over to questions at this time.

(Operator instructions)

We have a question from the line of Eric Stine with Northland Securities. You may proceed.

Good morning everyone. Thanks for taking the questions.

Good morning, Eric.

Good morning.

I was wondering if you could just discuss kind of the linearity of revenues, and maybe the gap that you said you're experiencing in the first quarter. Should we read into that, that revenue levels could be pretty similar to the fourth?

Yes, I think that's right for the first quarter. And so just to remind you, we had projects that we were wrapping up in Q4, and even though we had projects in backlog in the pipeline, there are a number of projects that actually didn't begin until into Q1, so that's a reasonable assumption.

Okay, and then maybe turning to the margin mix, it sounds like it was kind of 20% older business. Should we think of that -- similar level in the first, or should that basically be almost zero percent, if you're all the way through it?

Yes, we pretty much worked through it all by the end of the quarter.

So directionally margins potentially lower than we saw in this quarter?

Potentially.

Okay.

Maybe we could just touch on operating expenses. It sounds like you're pretty committed to keeping the business where it is, to be ready for fiscal year '12,so should we assume that this is a good run rate for SG&A?

Yes, I think that's the right assumption.

Yes, we certainly are committed to maintaining our position, so we can go forward much more strongly than if we would make more cuts.

Yes. Quarter to quarter, as you know, it moves around a little bit, but it's a reasonable run rate for next year.

Okay, that's helpful. And then last question, any cancellations in backlog?

No. We really haven't seen that. That's really gone away for us.

Yes, over this entire fiscal year, there's actually one really small project, but we have one project that we consider a cancellation but really, it got moved out almost two years, and so we treat it as a cancellation. But really other than that, nothing.

Okay, very helpful. Thanks a lot.

Your next question is from the line of Brent Thielman with D.A. Davidson. You may proceed.

Hi, good morning.

Good morning.

Just with respect to Q4 on the Architectural business, just wanted to check, but was there any impact from seasonality or sort of weather, in terms of that segment? Obviously the markets had an impact as well, but any impact from seasonality or weather?

We would say no. Nothing that we can point at.

Okay. And then can you talk about sort of the competitive environment right now,and the pricing environment relative to what you saw in the last cycle? Is it better or worse, a little more rational this time around? Any sort of clarity there?

Well it does vary a lot. If I had to put a blanket over all of it, I would say that now we're starting to see a lot more people bid than we would have seen on a bid, so that's one thing that's taking place, and that makes it very competitive. We are seeing though, especially on the institutional side, but even on other projects, where people are recognizing that they need to have strong suppliers, so bonding and things like that are important, so we would really say that there's less fall out --

One of the factors, if we compare to last cycle, I think we actually saw probably more industry capacity and more competitors actually going out of the market at this point. We haven't seen that yet in this cycle. Candidly, we probably thought we'd see a little bit more of it by this point, but we haven't. So I think that's probably put a bit more pressure on us from a pricing standpoint, at this point in the cycle, than we experienced the last time.

As a follow-up to that. I guess for those that are still around, you guys indicated your stance on current capacity. Are you aware of any of your competitors taking out capacity at this point?

There certainly has been capacity reductions in the marketplace, but in the past downturns we've actually seen some major players exit, and we've not seen that occur at this time.

Okay. And then on the Large-Scale Optical, and I apologize if I missed this, I think you mentioned $1 million related to the write-off, so that implied your operating margins were closer to 25%, without that write-off?

That's right.

Okay. And then,just lastly, in terms of excess cash, could you take any shot at it? I guess if you sort of backed out what you need for working capital purposes, but obviously the cash position continues to build. What will you sort of think you have available to you?

Yeah, I'd say our working capital needs, really until we start to see significant growth in the market, are going to be pretty insignificant. And so it's probably going to be less than 10%, kind of near-term, that we need for working capital.

Okay, great. That's helpful.

Thanks very much.

Your next question is from the line of Robert Kelly from Sidoti. You may proceed.

Hi, Russ. Hi, Jim. Good morning.

Good morning.

Can you just touch on the $57 million in savings? How much of that was fixed costs?

Yes, probably a little over $10 million of that we consider to be kind of permanent or structural.

And that's between fixed capacity reduction and people that you don't expect to hire back?

Correct.

Okay, great.

Now as far as, you've seen positives on bidding. When would a job bid today or accepted today, when would that hit your backlog?

Unfortunately, the answer is, it depends. Certainly on our installation and window business, we have a different cycle. Those can hit the backlog sooner, especially the smaller projects. On the glass side, it really has to wait until the window glazing awards are made before those bids come through. So it's a little longer time. So the answer is, it just depends. I'd say on par, it's probably awarding sooner than it did under normal times.

Okay, and then--

This is Jim. If I could just add to that a little bit.

It really is a range, as Russ said, but we are seeing, and I'd say particularly in some of the federal government projects, we're seeing projects that have been identified out there and, as you know, there's been some comments about how quickly some of that stimulus money is getting moved. We are seeing some projects that actually both, you're seeing a bit of acceleration between bid and award, and also a bit of an acceleration between award and when they actually want activity to happen in the field. So normally at this point, it gets hard, especially for any meaningful size project, to impact the current fiscal year. But we are seeing opportunities that will have a shorter time horizon than that.

I guess I'm just trying to reconcile what you have in backlog to ship in F'11, and what you're going to need to do to hit that down 10% to 15% range you're giving. Do you expect the new order flow, or the book-to-bill stuff that we don't see, enter backlog to remain steady in F'11?

Actually, we expect it to grow. And I think it's a great point, because we have seen that increase as both, as we've been successful with the smaller project market. But I think we've talked about it before too. Some of these international projects actually have a shorter time horizon and some book-and-bill aspects to it as well. So we have seen already some growth in the book-and-bill within the quarter and we see that growing during the year.

So what do you have on a book-and-bill basis in Q1 '11 so far, versus what you did in Q4, if you have that at your fingertips?

I don't have that. But I think traditionally what we've talked about is about 25% of our revenues is kind of a book-and-bill basis, and in Q4, we saw that grow up to about 30%, and so we see that continuing to grow a little bit.

And then just one last one. On the international business, it grew nicely in F'10. If you had to take a guess on where that shakes out for a dollar level in F'11?

We think we'll get a similar growth, so it will increase nicely.

Okay, thanks guys.

Your next question is from the line of Ryan Levinson with [inaudible]. You may proceed.

Hi guys. Thanks for taking my question.

I'm just wondering if you could tell us what the embedded margin in the backlog is?

I think that, the margin in the backlog is really consistent with the outlook that we've given, which is going to be -- kind of consists during the Q4 performance into losses in fiscal '11.

Okay, I'm just trying to figure out what the new normal is, because there was a quarter of your business I think a quarter of the sales you indicated in the fourth quarter were old bid level type sales, and so I'm just wondering what the new pricing matrix is.

Right, so I think Q4, for the 80% of our revenues in Q4, I think represented a new normal from a pricing standpoint. Obviously that 20% goes away. We continue to find in our businesses where we can have differentiated products or, I think Russ mentioned, where we have an advantage from say a bonding capability as opposed to our competition. We still have the ability to have some percentage of our business retain the types of historical margins that we've seen.

Historical -- there's been a few different cycles, so I'm wondering if you can put a range on it.

If you look at our fiscal '09 margins, the differentiated portion of our business is continuing to be priced at those levels.

Okay.

Also, can you clarify what you mean by shorter bid to award time? Specifically, I'm just wondering if that bid that the award time is being held until later, before the project starts, or is it that you're submitting a bid and getting a quick response?

Let me talk at it a couple of ways. In our glass business, as you go from larger projects to smaller projects there's a significant reduction in bid to award time. So from months to weeks. So that's a different one. And then in our other businesses, you have, the larger projects are still taking about the same amount of time, but we're just doing more smaller projects, and those have a shorter bid to award time.

Okay.

Now, with that anecdotal commentary in place, I'm just wondering if you can help me reconcile something. If I look at what you have in backlog, that you're indicating is going to work off in fiscal 2011, by my estimates, just to reach the low end of your guidance, you're going to have to put at least $200 million into backlog during this quarter, and at five weeks into the quarter, can you tell us how much you've put in backlog already, or how much you think you have out there that's going to come in this quarter? I'm just wondering if you can help us understand that. This is a pretty critical quarter for your backlog.

Yes. So a few comments.

First of all, when we look at the outlook of our business and, Ryan, if you recall in our backlog, our backlog includes the full contractual value for our window and installation business and for our glass business, we have commitments and then the backlog only represents where we've received purchase orders, for kind of the next say six weeks of production relative to that project that we have a committment to. And so the point would be, between our visibility of our backlog and our commitments and our bidding activity, as well as our current trend in terms of the in-quarter book-and-bill rate, we feel comfortable with the revenue outlook that we've provided.

Okay.

Forgive my hammering on this point, but over the last few quarters, the actual results have come in consistently lower than the guidance, and now you're also indicating that you're going to exceed the performance that some of the trade groups are saying, are indicating what they're expecting for the upcoming 12 months . I'm just wondering if you could maybe get a little bit more granular with that, and help us understand what you have in hand today. Because what you're going to have in hand in Q3 is really not going to help much for the year. And so if we can understand where it's going to shake out for this quarter, and where you think backlog is going to be -- is now, and where it's going to be at the end of this quarter, that could give us a lot more comfort that you could in fact hit that low end, or maybe even the top end of

Well, a couple of things, and I'll let Jim answer as well. But we are seeing our win rate up nicely, especially on institutional projects, stimulus projects, and that has been a real boost in our confidence and what we see going forward. So those are the kinds of things that are giving us confidence. The other part of it simply is the amount of work that's turning during the quarter, so you have a lot more -- we're winning nicely in smaller, quick-term projects.

Right, but that's a third of your business, right?

And that continues to be a very -- and we expect that to continue to show nice improvement.

But on the other two-thirds, you've always had this kind of book-and-bill business. I'm just wondering if you can give us a couple of numbers here.

First of all I think I tried to articulate it ,which is our book-and-bill number has grown as a percentage of our business.

That's the 30% number right?

That's correct.

And is continuing to grow as a percentage of our business.

Is that going to grow to 70% though?

No.

Okay, so but on that other 70%, I just wonder if you could kind of hash it out a little bit for us.

You know, Ryan, I'm not sure what else that we can articulate, other than given the backlog that we have on our books, the commitments we have in house, the bidding activity that we're pursuing, and our confidence factors associated with our bidding activity, we believe that we have the potential to achieve the revenue outlook we've provided.

How about a new bookings to date number for the quarter?

We haven't provided that yet.

That's a very -- I appreciate, we've watched that, but it's a lumpy number. Those come in, those contracts come in and we'll get the full value of those contracts in our installation and window business, and you can get -- that number can be very misleading. We need to look at it over a longer period of time than five weeks.

Consistently, we've been in communicating that even quarter-to-quarter backlog is not the appropriate way to measure our business. And within the quarter, that's even more so the case.

But looking at it from over the course of the quarter, are we going to see a backlog number at the end of this quarter that's in the say $300 million range in total, with maybe $200 million, $225 million that could be worked off for the rest of this year?

We don't forecast our backlog.

All right, thanks.

(Operator instructions)

Our next question is from the line of Rod Hinze with Keypoint Capital. You may proceed.

My question has been answered, thank you.

At this time, there are no other questions in the queue.

Well, thank you very much. We certainly appreciate it and certainly we're always available to do any follow-up. The company is in great shape and we're excited about our future. So let's have a great day.

Thanks, folks.

Ladies and Gentlemen, thank you all for your participation in today's conference call. This concludes the presentation and you may now disconnect.