Apogee Enterprises Inc (NASDAQ:APOG) Q2 2021 Earnings Conference Call - Final Transcript

Ladies and gentlemen, thank you for standing by and welcome to the Apogee Enterprises Second Quarter 2021 Conference Call. [Operator Instructions]

I would now like to hand the conference to your speaker today, Jeff Huebschen. Please go ahead, sir.

Thank you, Joelle.

Good morning and welcome to Apogee Enterprises fiscal 2021 second quarter earnings call. With me today are Joe Puishys, Apogee's Chief Executive Officer; and Nisheet Gupta, Chief Financial Officer.

I'd like to remind everyone that there are slides to accompany today's remarks which are available in the Investor Relations section of Apogee's website.

During this call, we will reference certain non-GAAP financial measures. Definitions of these non-GAAP measures and a reconciliation to the nearest GAAP measures is provided in earnings release we issued this morning, which is also available on our website. I'd like to remind everyone that our call will contain forward-looking statements reflecting management's expectations which are based on currently available information. Actual results may differ materially. More information about factors that could affect Apogee's business and financial results can be found in our SEC filings.

And with that, I'll turn the call over to you, Joe.

Okay. Thank you, Jeff, and good morning, everyone. Thanks for joining the call today.

I'm very, very proud of our team for the results we delivered this quarter. On our last earnings call, I said we expected second quarter sales and operating income increase in each and every one of our four segments relative to the first quarter, and that is exactly what we delivered. We achieved adjusted earnings of $0.73 a share in the second quarter, rebounding nicely from the $0.15 per share in the first quarter and well above prior year. The decisive actions we've taken in response to COVID have stabilized our business and driven strong earnings and cash flow despite a still challenging operating environment.

This morning, I will review highlights from the quarter and discuss the trends we are seeing in the business and how we are positioned for the future. I'll then turn it over to Nisheet for additional details on the results, our financial condition and our outlook. After that, I'll take your questions, of course.

So let's talk about the second quarter. Start with the highlights. First, we saw continued headwinds from COVID and economic conditions, which caused year-over-year revenue declines in three of our four segments. But margins and earnings rebounded strongly compared to the first quarter as our team did an impressive job of [Technical Issues] and control. Our cost savings are tracking ahead of expectations. Nisheet will provide more details on this when he remarks.

Additionally, we had very strong execution across all four of our segments, with improved factory productivity, particularly in Architectural Glass. And we are seeing orders begin to ramp up at our Velocity small projects glass business. Our Large-Scale Optical segment came back stronger than expected, returning to profitability in the quarter.

Recall that in the first quarter, the LSO segment was essentially shut down