What can I say? They did it again.

Nearly three months ago, I found myself pondering the way some companies grow into their names. For example, there was Netflix (NASDAQ:NFLX), moving from mailing movies to actually sending flicks out over the Net. And more precisely, there was commercial glassmaker Apogee (NASDAQ:APOG), which was reporting superb earnings and watching its stock leap to an all-time high -- an apogee, if you will. Well, today I gave serious thought to just recycling that April column, because Apogee did it again.

Reporting earnings late Tuesday, the company blew out the windows on not only the Wall Street Wise Men's estimates, but its own as well:

  • Revenue grew 12% to $209.9 million versus expectations of $207 million.
  • Profits from continuing operations doubled to $0.34 a share.

The company accomplished this by following a tack we've seen before at firms like American Woodmark (NASDAQ:AMWD) and ChoicePoint (NYSE:CPS): cutting out its low-margin operations and focusing on the business that makes the company, and its shareholders, the most money. By getting out of the automobile windshield-glass biz and redirecting its production capacity to higher-margin architectural and "large-scale optical" (read: "picture-framing") glass products, Apogee hit a new height of operating profitability -- a 7.1% margin, up from 4.4% one year ago.

Looking forward, Apogee predicts its margins will decline over the course of the full year, ending up somewhere between 6.6% and 6.9%, below last year's near-record 7.1%. But with revenue continuing to climb, management nonetheless felt confident in raising guidance for the full year. By the end of fiscal 2008, Apogee believes it will have booked $1.37 to $1.47 per share in profits on 11% to 14% sales growth.

Cash flow
One final point: I made a point of critiquing the firm's free cash flow generation earlier this week, observing that rising capital investments were eating up most of its operating cash flow. There's good news and bad news on that front. The good news is that Apogee's operating cash flow of negative $3.2 million was less negative than in fiscal Q1 2007. The bad news is that, as expected, capex nearly doubled, and management raised its estimation of total capital costs for the full year to $60 million. Despite Apogee's rising fortunes, Fools should keep low expectations on the free-cash-flow front for the remainder of the year.

For more crystal-clear analysis of the glassmaker's progress, read:

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Fool contributor Rich Smith does not own shares of any company named above. The Fool has a disclosure policy.