Fiscal Year 2009 Full-Year Highlights:

Earnings from continuing operations were a record $1.82 per share, up 22% from earnings of $1.49 per share a year ago.

Operating margin was 8.4%, compared to 7.5% the prior year.

Architectural segment revenues were up 7%, and operating income grew 21% compared to the prior year.

Operating margin was 7.6%, up from 6.7% the prior year.

Large-scale optical segment revenues declined 14%, while operating income increased 10% versus the prior year.

Fiscal 2008 earnings from discontinued operations of $0.18 per share were related to Apogee’s exit from the auto glass segment.

Fiscal Year 2009 Fourth-Quarter Highlights:

Revenues of $201.7 million were down 17% from the strong prior-year period.

Operating income was $17.4 million, down 22% from the strong prior-year period.

Operating margin was 8.6%, compared to 9.2% in the prior-year period.

Earnings from continuing operations were $0.40 per share versus $0.49 per share a year earlier.

Architectural segment revenues declined 17%, and operating income decreased 25% versus the prior-year period.

Large-scale optical segment revenues declined 19%, while operating income increased 10% versus the prior-year period.

Net earnings, including discontinued operations, were $0.40 per share versus $0.50 per share in the prior-year period.

Comments:

Apogee delivered record earnings and revenues for the third consecutive year in fiscal 2009, as the acquisition of the storefront and entrance business late in the prior year and the architectural glass business contributed to revenue growth, stated Russell Huffer, Apogee chairman and chief executive officer. For the year, we achieved an operating margin of 8.4%, up from 7.5% the prior year, while paying off our bank debt as we generated significant free cash flow. Our operating performance, particularly in the second half of fiscal 2009, illustrates Apogee’s potential in strong commercial construction markets.

In fiscal 2009, the architectural segment benefitted from solid execution by the installation and window businesses of projects with good margins and mix, and good pricing in our architectural glass business, slightly offset by mid-year operational challenges in architectural glass, said Huffer. At the same time, our picture framing business delivered improved earnings as we continued to convert customers to our best value-added glass and acrylic products. Revenues for the large-scale optical segment decreased due to soft custom picture framing market conditions.

Turning to the fourth quarter, we achieved strong operating margins and cash flow, despite slowing markets for our architectural and picture framing glass products that resulted in lower revenues, added Huffer. As we manage through the economic downturn, we further reduced headcount and costs during the quarter.

Although future periods will be impacted by the commercial construction slowdown, we have entered the downturn with a very strong balance sheet and are generating significant positive cash flow, stated Huffer. Apogee is in its strongest financial condition in the decade that I’ve served as CEO.

Fourth Quarter Segment And Operating Highlights:

Architectural Products and Services:

Revenues of $185.6 million were down 17% compared to the strong prior-year period.

The revenue decline came primarily from the architectural glass and installation businesses due to the timing of project flow, along with some project delays and cancellations.

Operating income was $15.0 million, down 25% from the strong prior-year period.

Operating margin was 8.1%, compared to 8.9% in the prior-year period.

Solid execution by the installation and window businesses of projects with good margins and mix, good pricing in our architectural glass business, ongoing productivity improvements, and cost cutting efforts later in the quarter were somewhat offset by lower capacity utilization and downsizing expenses.

Backlog declined to $316.2 million, compared to $373.2 million at the end of the third quarter and $510.9 million in the prior-year period.

As work on existing backlog is completed, project cancellations and slow bid-to-award timing are impacting backlog levels, despite steady bidding activity and the green building trend which we believe is increasing demand for our energy-efficient glass products.

The mix shifted in the quarter, with institutional projects now comprising a larger portion of the backlog and office projects a smaller part. The shift reflects both market conditions and our change in focus earlier in the year in anticipation of a slowdown.

About $237 million, or 75%, of the backlog is to be delivered in fiscal 2010, and about $79 million, or 25%, in fiscal 2011.

Large-Scale Optical Technologies:

Revenues of $16.0 million declined 19% compared to the prior-year period due to weak retail market conditions.

Operating income was $3.7 million, up 10% compared to the prior-year period.

Operating margin was 22.8%, compared to 16.7% in the prior-year period.

The improved operating margin resulted from productivity improvements and cost management, along with a strong mix of our best value-added glass and acrylic framing products.

Outlook:

We are entering fiscal 2010 with an unprecedented level of uncertainty, and, as a result, will not be providing earnings per share and detailed annual guidance, stated Huffer. We expect continued profitability on revenues that will likely be down at least 15%. At this time, we are estimating operating margins in the mid-single digits as lower capacity utilization and competitive pricing are slightly offset by productivity improvements, and lower energy and some material costs. He noted, though, that the large-scale optical segment is expected to continue converting customers to value-added products through the downturn.

We expect that the first half will be stronger than the second half of fiscal 2010, as we execute projects in our architectural backlog that were bid in stronger market conditions, added Huffer. The second half could benefit from the addition of stimulus projects to upgrade government and school buildings that would incorporate our energy-efficient, green products and services; at this time, we have not secured any of these projects.

To manage through the downturn, we have already implemented and continue to evaluate further cost cutting initiatives, ranging from reduction of headcount and discretionary spending to ongoing productivity improvements, he said. In addition, we are seeing early success in pursuing work in underserved architectural glass markets, including smaller and international projects. We also remain focused on delivering new energy-efficient glass products for the green building market.

Our balance sheet remains strong, and we expect to have positive cash flow in fiscal 2010 as working capital declines and capital expenditures are less than $20 million, Huffer said. Our architectural segment businesses are also well positioned with the bonding capacity required by some contractors to assure completion of projects, a competitive strength in today’s markets.

As our fiscal 2009 second-half performance demonstrated, we have good architectural businesses with strong brands and operations that are positioned to serve the growing demand for green, energy-efficient commercial buildings, concluded Huffer. We anticipate that with our focus on quality, service and productivity improvements, Apogee will be well positioned when the economy improves.