x | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Minnesota | 41-0919654 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |
4400 West 78th Street – Suite 520, Minneapolis, MN | 55435 | |
(Address of principal executive offices) | (Zip Code) |
Large accelerated filer | o | Accelerated filer | x | |||
Non-accelerated filer | o (Do not check if a smaller reporting company) | Smaller reporting company | o |
Page | ||
PART I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Item 1. | Financial Statements |
(In thousands, except per share data) | June 1, 2013 | March 2, 2013 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 37,147 | $ | 37,767 | ||||
Short-term available for sale securities | 29,775 | 26,007 | ||||||
Restricted short-term investments | 2,800 | 21,804 | ||||||
Receivables, net of allowance for doubtful accounts | 117,429 | 121,170 | ||||||
Inventories | 40,494 | 36,052 | ||||||
Refundable income taxes | 531 | 1,371 | ||||||
Deferred tax assets | 1,714 | 2,218 | ||||||
Other current assets | 4,782 | 5,452 | ||||||
Total current assets | 234,672 | 251,841 | ||||||
Property, plant and equipment, net | 164,052 | 168,948 | ||||||
Available for sale securities | 11,882 | 12,807 | ||||||
Restricted investments | 4,393 | 4,639 | ||||||
Goodwill | 61,380 | 61,342 | ||||||
Intangible assets | 13,068 | 13,675 | ||||||
Other non-current assets | 7,883 | 6,889 | ||||||
Total assets | $ | 497,330 | $ | 520,141 | ||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 32,484 | $ | 34,235 | ||||
Accrued payroll and related benefits | 16,011 | 26,732 | ||||||
Accrued self-insurance reserves | 5,295 | 6,145 | ||||||
Other current liabilities | 23,585 | 23,643 | ||||||
Billings in excess of costs and earnings on uncompleted contracts | 19,304 | 21,355 | ||||||
Current portion long-term debt | 58 | 10,057 | ||||||
Total current liabilities | 96,737 | 122,167 | ||||||
Long-term debt | 20,746 | 20,756 | ||||||
Unrecognized tax benefits | 6,525 | 6,765 | ||||||
Long-term self-insurance reserves | 8,247 | 8,030 | ||||||
Deferred tax liabilities | 3,211 | 3,480 | ||||||
Other non-current liabilities | 26,096 | 25,625 | ||||||
Commitments and contingent liabilities (Note 12) | ||||||||
Shareholders’ equity | ||||||||
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 28,741,227 and 28,513,536, respectively | 9,580 | 9,505 | ||||||
Additional paid-in capital | 122,624 | 119,759 | ||||||
Retained earnings | 210,487 | 211,135 | ||||||
Common stock held in trust | (768 | ) | (761 | ) | ||||
Deferred compensation obligations | 768 | 761 | ||||||
Accumulated other comprehensive loss | (6,923 | ) | (7,081 | ) | ||||
Total shareholders’ equity | 335,768 | 333,318 | ||||||
Total liabilities and shareholders’ equity | $ | 497,330 | $ | 520,141 |
Three Months Ended | ||||||||
(In thousands, except per share data) | June 1, 2013 | June 2, 2012 | ||||||
Net sales | $ | 179,311 | $ | 154,134 | ||||
Cost of sales | 142,925 | 123,059 | ||||||
Gross profit | 36,386 | 31,075 | ||||||
Selling, general and administrative expenses | 30,271 | 28,757 | ||||||
Operating income | 6,115 | 2,318 | ||||||
Interest income | 174 | 272 | ||||||
Interest expense | 499 | 363 | ||||||
Other income, net | 69 | 17 | ||||||
Earnings before income taxes | 5,859 | 2,244 | ||||||
Income tax expense | 1,700 | 638 | ||||||
Net earnings | $ | 4,159 | $ | 1,606 | ||||
Earnings per share - basic | $ | 0.15 | $ | 0.06 | ||||
Earnings per share - diluted | $ | 0.14 | $ | 0.06 | ||||
Weighted average basic shares outstanding | 28,441 | 27,788 | ||||||
Weighted average diluted shares outstanding | 29,337 | 28,223 | ||||||
Cash dividends declared per common share | $ | 0.0900 | $ | 0.0900 |
Three Months Ended | ||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | ||||||
Net earnings | $ | 4,159 | $ | 1,606 | ||||
Other comprehensive earnings: | ||||||||
Unrealized (loss) gain on marketable securities, net of $(29) and $12 tax (benefit) expense, respectively | (53 | ) | 24 | |||||
Unrealized loss on foreign currency hedge, net of $24 tax benefit | (41 | ) | — | |||||
Foreign currency translation adjustments | 252 | 497 | ||||||
Other comprehensive earnings | 158 | 521 | ||||||
Total comprehensive earnings | $ | 4,317 | $ | 2,127 |
Three Months Ended | ||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | ||||||
Operating Activities | ||||||||
Net earnings | $ | 4,159 | $ | 1,606 | ||||
Adjustments to reconcile net earnings to net cash used in operating activities: | ||||||||
Depreciation and amortization | 6,511 | 6,528 | ||||||
Stock-based compensation | 1,118 | 1,028 | ||||||
Deferred income taxes | 276 | 570 | ||||||
Excess tax benefits from stock-based compensation | (1,009 | ) | (25 | ) | ||||
Gain on disposal of assets | (304 | ) | (296 | ) | ||||
Other, net | 231 | 239 | ||||||
Changes in operating assets and liabilities: | ||||||||
Receivables | 3,782 | (3,590 | ) | |||||
Inventories | (4,413 | ) | (4,804 | ) | ||||
Accounts payable and accrued expenses | (11,911 | ) | (10,510 | ) | ||||
Billings in excess of costs and earnings on uncompleted contracts | (2,051 | ) | 5,210 | |||||
Refundable and accrued income taxes | 1,425 | (3,083 | ) | |||||
Other, net | 19 | (530 | ) | |||||
Net cash used in operating activities | (2,167 | ) | (7,657 | ) | ||||
Investing Activities | ||||||||
Capital expenditures | (1,512 | ) | (9,509 | ) | ||||
Proceeds from sales of property, plant and equipment | 169 | 14 | ||||||
Purchases of restricted investments | (2,800 | ) | (10,000 | ) | ||||
Sales/maturities of restricted investments | 22,053 | 1,740 | ||||||
Purchases of marketable securities | (10,225 | ) | (17,040 | ) | ||||
Sales/maturities of marketable securities | 6,656 | 5,915 | ||||||
Investments in corporate-owned life insurance policies | — | (900 | ) | |||||
Net cash provided by (used in) investing activities | 14,341 | (29,780 | ) | |||||
Financing Activities | ||||||||
Proceeds from issuance of debt | — | 10,000 | ||||||
Payments on debt | (10,015 | ) | (45 | ) | ||||
Payments on debt issue costs | — | (193 | ) | |||||
Shares withheld for taxes, net of stock issued to employees | (1,141 | ) | (817 | ) | ||||
Excess tax benefits from stock-based compensation | 1,009 | 25 | ||||||
Dividends paid | (2,687 | ) | (2,643 | ) | ||||
Net cash (used in) provided by financing activities | (12,834 | ) | 6,327 | |||||
Decrease in cash and cash equivalents | (660 | ) | (31,110 | ) | ||||
Effect of exchange rates on cash | 40 | 111 | ||||||
Cash and cash equivalents at beginning of year | 37,767 | 54,027 | ||||||
Cash and cash equivalents at end of period | $ | 37,147 | $ | 23,028 | ||||
Noncash Activity | ||||||||
Capital expenditures in accounts payable | $ | 298 | $ | 149 |
1. | Basis of Presentation |
2. | New Accounting Standards |
3. | Stock-Based Compensation |
Options/SARs Outstanding | ||||||||||||
Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Outstanding at March 2, 2013 | 1,362,373 | $ | 15.89 | |||||||||
Awards exercised | (249,923 | ) | 21.98 | |||||||||
Awards canceled | (7,376 | ) | 21.17 | |||||||||
Outstanding at June 1, 2013 | 1,105,074 | $ | 14.49 | 5.4 Years | $ | 13,545,626 | ||||||
Vested or expected to vest at June 1, 2013 | 1,105,074 | $ | 14.49 | 5.4 Years | $ | 13,545,626 | ||||||
Exercisable at June 1, 2013 | 804,733 | $ | 16.79 | 4.3 Years | $ | 8,037,372 |
Nonvested Shares and Units | ||||||
Number of Shares and Units | Weighted Average Grant Date Fair Value | |||||
Nonvested at March 2, 2013 | 831,573 | $ | 13.17 | |||
Granted | 114,123 | 26.35 | ||||
Vested | (223,225 | ) | 13.89 | |||
Canceled(1) | (75,547 | ) | 13.55 | |||
Nonvested at June 1, 2013(2) | 646,924 | $ | 15.21 |
(1) | Includes 75,547 of nonvested share units canceled under the fiscal 2011-2013 performance period because Apogee performed below target level for that performance period. Nonvested share units of 174,353 (at target) were previously granted in fiscal 2011 for this performance period. |
(2) | Includes a total of 117,765 nonvested share units granted and outstanding at target level for the fiscal 2012-2014 performance period. |
4. | Earnings per Share |
Three Months Ended | |||||||
(In thousands, except per share data) | June 1, 2013 | June 2, 2012 | |||||
Basic earnings per share – weighted common shares outstanding | 28,441 | 27,788 | |||||
Weighted average effect of nonvested share grants and assumed exercise of stock options | 896 | 435 | |||||
Diluted earnings per share – weighted common shares and potential common shares outstanding | 29,337 | 28,223 | |||||
Earnings per share – basic | $ | 0.15 | $ | 0.06 | |||
Earnings per share – diluted | 0.14 | 0.06 | |||||
Stock options excluded from the calculation of earnings per share because the exercise price was greater than the average market price of the common shares | 56 | 970 |
5. | Inventories |
(In thousands) | June 1, 2013 | March 2, 2013 | |||||
Raw materials | $ | 12,184 | $ | 11,834 | |||
Work-in-process | 8,133 | 7,754 | |||||
Finished goods | 13,347 | 13,397 | |||||
Costs and earnings in excess of billings on uncompleted contracts | 6,830 | 3,067 | |||||
Total inventories | $ | 40,494 | $ | 36,052 |
6. | Marketable Securities |
(In thousands) | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | |||||||||||
June 1, 2013 | |||||||||||||||
Municipal bonds | $ | 41,852 | $ | 91 | $ | (286 | ) | $ | 41,657 | ||||||
Total investments | $ | 41,852 | $ | 91 | $ | (286 | ) | $ | 41,657 | ||||||
March 2, 2013 | |||||||||||||||
Municipal bonds | $ | 38,927 | $ | 127 | $ | (240 | ) | $ | 38,814 | ||||||
Total investments | $ | 38,927 | $ | 127 | $ | (240 | ) | $ | 38,814 |
Less Than 12 Months | Greater Than or Equal to 12 Months | Total | |||||||||||||||||||||
(In thousands) | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | Fair Value | Unrealized Losses | |||||||||||||||||
Municipal bonds | $ | 18,506 | $ | (94 | ) | $ | 1,058 | $ | (192 | ) | $ | 19,564 | $ | (286 | ) | ||||||||
Total investments | $ | 18,506 | $ | (94 | ) | $ | 1,058 | $ | (192 | ) | $ | 19,564 | $ | (286 | ) |
(In thousands) | Amortized Cost | Estimated Market Value | |||||
Due within one year | $ | 29,777 | $ | 29,775 | |||
Due after one year through five years | 3,915 | 3,945 | |||||
Due after five years through 10 years | 6,539 | 6,504 | |||||
Due after 10 years through 15 years | 1,530 | 1,339 | |||||
Due beyond 15 years | 91 | 94 | |||||
Total | $ | 41,852 | $ | 41,657 |
7. | Fair Value Measurements |
(In thousands) | Quoted Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Unobservable Inputs (Level 3) | Total Fair Value | |||||||||||
June 1, 2013 | |||||||||||||||
Cash equivalents | |||||||||||||||
Money market funds | $ | 16,224 | $ | — | $ | — | $ | 16,224 | |||||||
Total cash equivalents | 16,224 | — | — | 16,224 | |||||||||||
Available for sale securities | |||||||||||||||
Municipal bonds | $ | — | $ | 41,657 | $ | — | $ | 41,657 | |||||||
Total available for sale securities | — | 41,657 | — | 41,657 | |||||||||||
Restricted investments | |||||||||||||||
Money market funds | $ | 7,193 | $ | — | $ | — | $ | 7,193 | |||||||
Total restricted investments | 7,193 | — | — | 7,193 | |||||||||||
Mutual fund investments | |||||||||||||||
Mutual funds | $ | 641 | $ | — | $ | — | $ | 641 | |||||||
Total mutual fund investments | 641 | — | — | 641 | |||||||||||
Total assets at fair value | $ | 24,058 | $ | 41,657 | $ | — | $ | 65,715 | |||||||
Foreign currency instruments | |||||||||||||||
Foreign currency instruments | $ | — | $ | 470 | $ | — | $ | 470 | |||||||
Total liabilities at fair value | $ | — | $ | 470 | $ | — | $ | 470 | |||||||
March 2, 2013 | |||||||||||||||
Cash equivalents | |||||||||||||||
Money market funds | $ | 17,639 | $ | — | $ | — | $ | 17,639 | |||||||
Total cash equivalents | 17,639 | — | — | 17,639 | |||||||||||
Available for sale securities | |||||||||||||||
Municipal bonds | $ | — | $ | 38,814 | $ | — | $ | 38,814 | |||||||
Total available for sale securities | — | 38,814 | — | 38,814 | |||||||||||
Restricted investments | |||||||||||||||
Money market funds | $ | 26,443 | $ | — | $ | — | $ | 26,443 | |||||||
Total restricted investments | 26,443 | — | — | 26,443 | |||||||||||
Mutual fund investments | |||||||||||||||
Mutual funds | $ | 251 | $ | — | $ | — | $ | 251 | |||||||
Total mutual fund investments | 251 | — | — | 251 | |||||||||||
Total assets at fair value | $ | 44,333 | $ | 38,814 | $ | — | $ | 83,147 | |||||||
Foreign currency instruments | |||||||||||||||
Foreign currency instruments | $ | — | $ | 405 | $ | — | $ | 405 | |||||||
Total liabilities at fair value | $ | — | $ | 405 | $ | — | $ | 405 |
8. | Goodwill and Other Identifiable Intangible Assets |
(In thousands) | Architectural Glass | Architectural Services | Architectural Framing Systems | Large-Scale Optical | Total | ||||||||||||||
Balance at March 3, 2012 | $ | 27,277 | $ | 1,120 | $ | 22,663 | $ | 10,557 | $ | 61,617 | |||||||||
Foreign currency translation | (275 | ) | — | — | — | (275 | ) | ||||||||||||
Balance at March 2, 2013 | 27,002 | 1,120 | 22,663 | 10,557 | 61,342 | ||||||||||||||
Foreign currency translation | 38 | — | — | — | 38 | ||||||||||||||
Balance at June 1, 2013 | $ | 27,040 | $ | 1,120 | $ | 22,663 | $ | 10,557 | $ | 61,380 |
June 1, 2013 | |||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net | |||||||||||
Debt issue costs | $ | 3,288 | $ | (2,226 | ) | $ | — | $ | 1,062 | ||||||
Non-compete agreements | 6,767 | (6,148 | ) | 6 | 625 | ||||||||||
Customer relationships | 15,309 | (9,745 | ) | 38 | 5,602 | ||||||||||
Purchased intellectual property | 7,996 | (2,245 | ) | 28 | 5,779 | ||||||||||
Total | $ | 33,360 | $ | (20,364 | ) | $ | 72 | $ | 13,068 |
March 2, 2013 | |||||||||||||||
(In thousands) | Gross Carrying Amount | Accumulated Amortization | Foreign Currency Translation | Net | |||||||||||
Debt issue costs | $ | 3,556 | $ | (2,209 | ) | $ | — | $ | 1,347 | ||||||
Non-compete agreements | 6,824 | (6,124 | ) | (38 | ) | 662 | |||||||||
Customer relationships | 15,628 | (9,541 | ) | (266 | ) | 5,821 | |||||||||
Purchased intellectual property | 8,210 | (2,169 | ) | (196 | ) | 5,845 | |||||||||
Total | $ | 34,218 | $ | (20,043 | ) | $ | (500 | ) | $ | 13,675 |
(In thousands) | Remainder of Fiscal 2014 | Fiscal 2015 | Fiscal 2016 | Fiscal 2017 | Fiscal 2018 | ||||||||||||||
Estimated amortization expense | $ | 1,367 | $ | 1,643 | $ | 1,296 | $ | 1,147 | $ | 1,050 |
9. | Debt |
10. | Employee Benefit Plans |
Three Months Ended | |||||||
(In thousands) | June 1, 2013 | June 2, 2012 | |||||
Interest cost | $ | 134 | $ | 142 | |||
Expected return on assets | (46 | ) | (44 | ) | |||
Amortization of unrecognized net loss | 59 | 53 | |||||
Net periodic benefit cost | $ | 147 | $ | 151 |
11. | Income Taxes |
12. | Commitments and Contingent Liabilities |
(In thousands) | Remainder of Fiscal 2014 | Fiscal 2015 | Fiscal 2016 | Fiscal 2017 | Fiscal 2018 | Thereafter | Total | ||||||||||||||||||||
Total minimum payments | $ | 6,106 | $ | 7,240 | $ | 7,097 | $ | 5,287 | $ | 3,943 | $ | 5,493 | $ | 35,166 |
Three Months Ended | |||||||
(In thousands) | June 1, 2013 | June 2, 2012 | |||||
Balance at beginning of period | $ | 8,323 | $ | 7,210 | |||
Additional accruals | 1,323 | 766 | |||||
Claims paid | (857 | ) | (823 | ) | |||
Balance at end of period | $ | 8,789 | $ | 7,153 |
13. | Segment Information |
Three Months Ended | |||||||
(In thousands) | June 1, 2013 | June 2, 2012 | |||||
Net Sales from operations | |||||||
Architectural Glass | $ | 74,803 | $ | 59,066 | |||
Architectural Services | 46,476 | 38,918 | |||||
Architectural Framing Systems | 44,446 | 42,407 | |||||
Large-Scale Optical | 19,473 | 19,258 | |||||
Intersegment eliminations | (5,887 | ) | (5,515 | ) | |||
Net sales | $ | 179,311 | $ | 154,134 | |||
Operating Income (Loss) from operations | |||||||
Architectural Glass | $ | 1,371 | $ | (2,406 | ) | ||
Architectural Services | (965 | ) | (2,579 | ) | |||
Architectural Framing Systems | 2,064 | 3,096 | |||||
Large-Scale Optical | 4,698 | 5,268 | |||||
Corporate and other | (1,053 | ) | (1,061 | ) | |||
Operating income | $ | 6,115 | $ | 2,318 |
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | ||||
(Percent of net sales) | June 1, 2013 | June 2, 2012 | ||
Net sales | 100.0 | % | 100.0 | % |
Cost of sales | 79.7 | 79.8 | ||
Gross profit | 20.3 | 20.2 | ||
Selling, general and administrative expenses | 16.9 | 18.7 | ||
Operating income | 3.4 | 1.5 | ||
Interest income | 0.1 | 0.2 | ||
Interest expense | 0.2 | 0.2 | ||
Other income, net | — | — | ||
Earnings from operations before income taxes | 3.3 | 1.5 | ||
Income tax expense | 1.0 | 0.5 | ||
Net earnings | 2.3 | % | 1.0 | % |
Effective tax rate | 29.0 | % | 28.4 | % |
Three Months Ended | ||||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | % Change | |||||||
Net sales | $ | 74,803 | $ | 59,066 | 26.6 | % | ||||
Operating income (loss) | 1,371 | (2,406 | ) | 157.0 | % | |||||
Operating margin | 1.8 | % | (4.1 | )% |
Three Months Ended | ||||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | % Change | |||||||
Net sales | $ | 46,476 | $ | 38,918 | 19.4 | % | ||||
Operating loss | (965 | ) | (2,579 | ) | 62.6 | % | ||||
Operating margin | (2.1 | )% | (6.6 | )% |
Three Months Ended | ||||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | % Change | |||||||
Net sales | $ | 44,446 | $ | 42,407 | 4.8 | % | ||||
Operating income | 2,064 | 3,096 | (33.3 | )% | ||||||
Operating margin | 4.6 | % | 7.3 | % |
Three Months Ended | ||||||||||
(In thousands) | June 1, 2013 | June 2, 2012 | % Change | |||||||
Net sales | $ | 19,473 | $ | 19,258 | 1.1 | % | ||||
Operating income | 4,698 | 5,268 | (10.8 | )% | ||||||
Operating margin | 24.1 | % | 27.4 | % |
Three Months Ended | |||||||
(Cash effect, in thousands) | June 1, 2013 | June 2, 2012 | |||||
Operating Activities | |||||||
Net cash used in operating activities | $ | (2,167 | ) | $ | (7,657 | ) | |
Investing Activities | |||||||
Capital expenditures | (1,512 | ) | (9,509 | ) | |||
Change in restricted investments, net | 19,253 | (8,260 | ) | ||||
Net purchases of marketable securities | (3,569 | ) | (11,125 | ) | |||
Financing Activities | |||||||
Proceeds from issuance of debt | — | 10,000 | |||||
Payments on debt | (10,015 | ) | (45 | ) | |||
Dividends paid | (2,687 | ) | (2,643 | ) |
Future Cash Payments Due by Fiscal Period | |||||||||||||||||||||||||||
(In thousands) | 2014 Remaining | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | ||||||||||||||||||||
Continuing operations | |||||||||||||||||||||||||||
Industrial revenue bonds | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 20,400 | $ | 20,400 | |||||||||||||
Other debt obligations | 58 | 58 | 58 | 58 | 58 | 114 | 404 | ||||||||||||||||||||
Operating leases (undiscounted) | 6,106 | 7,240 | 7,097 | 5,287 | 3,943 | 5,493 | 35,166 | ||||||||||||||||||||
Purchase obligations | 110,384 | 3,204 | — | — | — | — | 113,588 | ||||||||||||||||||||
Other obligations | 574 | — | — | — | — | — | 574 | ||||||||||||||||||||
Total cash obligations | $ | 117,122 | $ | 10,502 | $ | 7,155 | $ | 5,345 | $ | 4,001 | $ | 26,007 | $ | 170,132 |
Amount of Commitment Expiration Per Fiscal Period | |||||||||||||||||||||||||||
(In thousands) | 2014 Remaining | 2015 | 2016 | 2017 | 2018 | Thereafter | Total | ||||||||||||||||||||
Standby letters of credit | $ | — | $ | 20,982 | $ | — | $ | — | $ | 2,000 | $ | 2,500 | $ | 25,482 |
• | Revenue growth in the high single digits over fiscal 2013. |
• | We anticipate earnings per share of $0.90 to $1.00. |
• | Capital expenditures are projected to be $40 to $45 million. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
a) | Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. |
b) | Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended June 1, 2013, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) | Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs | ||||||||
March 3, 2013 through March 30, 2013 | 20,486 | $ | 28.85 | — | 970,877 | |||||||
March 31, 2013 through April 27, 2013 | 34,354 | 25.84 | — | 970,877 | ||||||||
April 28, 2013 through June 1, 2013 | 41,158 | 25.93 | — | 970,877 | ||||||||
Total | 95,998 | $ | 27.20 | — | 970,877 |
(a) | The shares in this column represent shares that were surrendered to us by plan participants to satisfy stock-for-stock option exercises or withholding tax obligations related to stock-based compensation. |
(b) | In April 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock, which was announced on April 10, 2003. In January 2008, the Board of Directors increased the authorization by 750,000 shares, which was announced on January 24, 2008. In October 2008, the Board of Directors increased the authorization by 1,000,000 shares, which was announced on October 8, 2008. The Company’s repurchase program does not have an expiration date. |
Item 6. | Exhibits |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 1, 2013 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of June 1, 2013 and March 2, 2013, (ii) the Consolidated Results of Operations for the three months ended June 1, 2013 and June 2, 2012, (iii) the Consolidated Statements of Comprehensive Earnings for the three months ended June 1, 2013 and June 2, 2012, (iv) the Consolidated Statements of Cash Flows for the three months ended June 1, 2013 and June 2, 2012, and (v) Notes to Consolidated Financial Statements. |
APOGEE ENTERPRISES, INC. | |||
Date: July 11, 2013 | By: /s/ Joseph F. Puishys | ||
Joseph F. Puishys President and Chief Executive Officer (Principal Executive Officer) |
Date: July 11, 2013 | By: /s/ James S. Porter | ||
James S. Porter Chief Financial Officer (Principal Financial and Accounting Officer) |
31.1 | Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
31.2 | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. |
32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
101 | The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended June 1, 2013 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of June 1, 2013 and March 2, 2013, (ii) the Consolidated Results of Operations for the three months ended June 1, 2013 and June 2, 2012, (iii) the Consolidated Statements of Comprehensive Earnings for the three months ended June 1, 2013 and June 2, 2012, (iv) the Consolidated Statements of Cash Flows for the three months ended June 1, 2013 and June 2, 2012, and (v) Notes to Consolidated Financial Statements. |
1. | I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Joseph F. Puishys | |
Joseph F. Puishys President and Chief Executive Officer |
1. | I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ James S. Porter | |
James S. Porter Chief Financial Officer |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Joseph F. Puishys | |
Joseph F. Puishys President and Chief Executive Officer | |
July 11, 2013 |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James S. Porter | |
James S. Porter Chief Financial Officer | |
July 11, 2013 |
Employee Benefit Plans
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2013
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Compensation and Retirement Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Employee Benefit Plans | Employee Benefit Plans Pension Plans The Company sponsors an unfunded Officers’ Supplemental Executive Retirement Plan for the benefit of certain executives and a defined-benefit pension plan, the Tubelite, Inc. Hourly Employees’ Pension Plan. Components of net periodic benefit cost for the plans for the three-month periods ended June 1, 2013 and June 2, 2012, were as follows:
|
Consolidated Results of Operations (unaudited) (USD $)
In Thousands, except Per Share data, unless otherwise specified |
3 Months Ended | |
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Jun. 01, 2013
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Jun. 02, 2012
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Income Statement [Abstract] | ||
Net sales | $ 179,311 | $ 154,134 |
Cost of sales | 142,925 | 123,059 |
Gross profit | 36,386 | 31,075 |
Selling, general and administrative expenses | 30,271 | 28,757 |
Operating income | 6,115 | 2,318 |
Interest income | 174 | 272 |
Interest expense | 499 | 363 |
Other income (expense), net | 69 | 17 |
Earnings from continuing operations before income taxes | 5,859 | 2,244 |
Income tax expense (benefit) | 1,700 | 638 |
Net earnings | $ 4,159 | $ 1,606 |
Earnings per share - basic | ||
Net earnings | $ 0.15 | $ 0.06 |
Earnings per share - diluted | ||
Net earnings | $ 0.14 | $ 0.06 |
Weighted average basic shares outstanding | 28,441 | 27,788 |
Weighted average diluted shares outstanding | 29,337 | 28,223 |
Cash dividends declared per common share | $ 0.0900 | $ 0.0900 |
Stock-Based Compensation
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3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2013
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Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Total stock-based compensation expense included in the results of operations for the three months ended June 1, 2013 and June 2, 2012, was $1.1 million and $1.0 million, respectively. Stock Options and SARs There were no options or SARs issued in the first three months of fiscal 2014 or 2013. The following table summarizes the award transactions for the three months ended June 1, 2013:
At June 1, 2013, there was $0.5 million of total unrecognized compensation cost related to stock option awards, which is expected to be recognized over a weighted average period of approximately 14 months. Cash proceeds from the exercise of stock options were $1.4 million and $0.2 million for the three months ended June 1, 2013 and June 2, 2012, respectively. The amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant for options exercised was $1.6 million during the three months ended June 1, 2013 and was immaterial during the prior-year period. Nonvested Shares and Share Units The following table summarizes the nonvested share award transactions, including nonvested share units, for the three months ended June 1, 2013:
At June 1, 2013, there was $7.0 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 26 months. The total fair value of shares vested during the three-month period of fiscal 2014 was $5.0 million. |
Marketable Securities (Tables)
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3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 01, 2013
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Marketable Securities [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Amortized cost, gross unrealized gains and losses, and estimated fair values of investments available for sale | The amortized cost, gross unrealized gains and losses, and estimated fair values of investments available for sale at June 1, 2013 and March 2, 2013, are as follows:
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Schedule of length of time that available-for-sale securities were in continuous unrealized loss positions | The following table presents the length of time that available-for-sale securities were in continuous unrealized loss positions, but were not deemed to be other than temporarily impaired, as of June 1, 2013:
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Schedule of amortized cost and estimated fair values of investments by contractual maturity | The amortized cost and estimated fair values of investments at June 1, 2013, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations with or without call or prepayment penalties.
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Income Taxes
|
3 Months Ended |
---|---|
Jun. 01, 2013
|
|
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, Brazil and other international jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years prior to fiscal 2009, or state and local income tax examinations for years prior to fiscal 2005. The Company is not currently under U.S. federal examination for years subsequent to fiscal year 2008, and there is very limited audit activity of the Company’s income tax returns in U.S. state jurisdictions or international jurisdictions. The total liability for unrecognized tax benefits at June 1, 2013 and March 2, 2013, was approximately $6.5 million and $6.8 million, respectively. The Company records the impact of penalties and interest related to unrecognized tax benefits in income tax expense, which is consistent with past practices. The total liability for unrecognized tax benefits is expected to decrease by approximately $1.0 million during the next 12 months due to lapsing of statutes. |
Commitments and Contingent Liabilities (Details) (USD $)
In Thousands, unless otherwise specified |
Jun. 01, 2013
|
---|---|
Future minimum rental payments under noncancelable operating leases | |
Total minimum payments, Remainder of Fiscal 2014 | $ 6,106 |
Total minimum payments, Fiscal 2015 | 7,240 |
Total minimum payments, Fiscal 2016 | 7,097 |
Total minimum payments, Fiscal 2017 | 5,287 |
Total minimum payments, Fiscal 2018 | 3,943 |
Total minimum payments, Thereafter | 5,493 |
Total | $ 35,166 |
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