APOGEE ENTERPRISES INC

For the period ended Oct 4, 2024. Filed Oct 4, 2024.

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Oct 4, 2024 · Filed Oct 4, 2024

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APOG$45.77-0.3%Stored close · as of Nov 6, 2026

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EX-99.1 · Contact

Contact

Jeff Huebschen

Vice President, Investor Relations & Communications

952.487.7538

ir@apog.com

Apogee Enterprises, Inc.
Consolidated Condensed Statements of Income
(Unaudited)
Three Months Ended · Six Months Ended
(In thousands, except per share amounts) · August 31, 2024 · August 26, 2023 · % Change · August 31, 2024 · August 26, 2023 · % Change
Net sales	$342,440		$353,675	(3.2)%	$673,956	$715,388	(5.8)%
Cost of sales	245,119		258,304	(5.1)%	477,780	527,031	(9.3)%
Gross profit	97,321		95,371	2.0%	196,176	188,357	4.2%
Selling, general and administrative expenses	55,356		54,818	1.0%	112,830	114,037	(1.1)%
Operating income	41,965		40,553	3.5%	83,346	74,320	12.1%
Interest expense, net	1,140		2,230	(48.9)%	1,590	4,266	(62.7)%
Other income, net	290		4,900	(94.1)%	433	4,612	(90.6)%
Earnings before income taxes	41,115		43,223	(4.9)%	82,189	74,666	10.1%
Income tax expense	10,549		9,896	6.6%	20,612	17,763	16.0%
Net earnings	$30,566		$33,327	(8.3)%	$61,577	$56,903	8.2%
Basic earnings per share	$1.40		$1.54	(9.1)%	$2.83	$2.61	8.4%
Diluted earnings per share	$1.40		$1.52	(7.9)%	$2.80	$2.57	8.9%
Weighted average basic shares outstanding	21,762		21,708	0.2%	21,793	21,813	(0.1)%
Weighted average diluted shares outstanding	21,875		21,962	(0.4)%	21,985	22,105	(0.5)%
Cash dividends per common share	$0.25		$0.24	4.2%	$0.50	$0.48	4.2%
% of Sales
Gross margin	28.4%	27.0%		29.1%	26.3%
Selling, general and administrative expenses	16.2%	15.5%		16.7%	15.9%
Operating margin	12.3%	11.5%		12.4%	10.4%

Apogee Enterprises, Inc.
Business Segment Information
(Unaudited)
Three Months Ended · Six Months Ended
(In thousands) · August 31, 2024 · August 26, 2023 · % Change · August 31, 2024 · August 26, 2023 · % Change
Segment net sales
Architectural Framing Systems	$141,350		$158,801	(11.0)%	$274,522	$322,963	(15.0)%
Architectural Glass	90,101		94,096	(4.2)%	176,804	191,298	(7.6)%
Architectural Services	98,018		88,064	11.3%	197,045	177,482	11.0%
Large-Scale Optical	19,832		23,645	(16.1)%	41,036	46,101	(11.0)%
Intersegment eliminations	(6,861)		(10,931)	(37.2)%	(15,451)	(22,456)	(31.2)%
Net sales	$342,440		$353,675	(3.2)%	$673,956	$715,388	(5.8)%
Segment operating income (loss)
Architectural Framing Systems	$17,141		$21,060	(18.6)%	$35,477	$41,005	(13.5)%
Architectural Glass	21,068		17,434	20.8%	38,159	33,955	12.4%
Architectural Services	6,130		3,519	74.2%	11,753	2,923	302.1%
Large-Scale Optical	3,793		4,663	(18.7)%	8,639	10,188	(15.2)%
Corporate and other	(6,167)		(6,123)	0.7%	(10,682)	(13,751)	(22.3)%
Operating income	$41,965		$40,553	3.5%	$83,346	$74,320	12.1%
Segment operating margin
Architectural Framing Systems	12.1%	13.3%		12.9%	12.7%
Architectural Glass	23.4%	18.5%		21.6%	17.7%
Architectural Services	6.3%	4.0%		6.0%	1.6%
Large-Scale Optical	19.1%	19.7%		21.1%	22.1%
Corporate and other	N/M	N/M		N/M	N/M
Operating margin	12.3%	11.5%		12.4%	10.4%
N/M - Indicates calculation is not meaningful

Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.

Net sales intersegment eliminations are reported separately to exclude these sales from our consolidated total.

Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment.

Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level. We report these unallocated corporate costs separately in Corporate and Other.

Operating income does not include any other income or expense, interest expense or a provision for income taxes.

Apogee Enterprises, Inc.
Consolidated Condensed Balance Sheets
(Unaudited)
(In thousands)	August 31, 2024	March 2, 2024
Assets
Current assets
Cash and cash equivalents	$51,024	$37,216
Receivables, net	177,146	173,557
Inventories, net	79,591	69,240
Contract assets	49,285	49,502
Other current assets	36,742	29,124
Total current assets	393,788	358,639
Property, plant and equipment, net	240,627	244,216
Operating lease right-of-use assets	41,886	40,221
Goodwill	129,119	129,182
Intangible assets, net	64,547	66,114
Other non-current assets	47,125	45,692
Total assets	$917,092	$884,064
Liabilities and shareholders' equity
Current liabilities
Accounts payable	86,035	84,755
Accrued compensation and benefits	40,901	53,801
Contract liabilities	41,655	34,755
Operating lease liabilities	12,661	12,286
Other current liabilities	57,597	59,108
Total current liabilities	238,849	244,705
Long-term debt	62,000	62,000
Non-current operating lease liabilities	33,323	31,907
Non-current self-insurance reserves	32,055	30,552
Other non-current liabilities	44,443	43,875
Total shareholders’ equity	506,422	471,025
Total liabilities and shareholders’ equity	$917,092	$884,064

Apogee Enterprises, Inc.
Consolidated Statement of Cash Flows
(Unaudited)
	Six Months Ended
(In thousands)	August 31, 2024	August 26, 2023
Operating Activities
Net earnings	$61,577	$56,903
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	19,664	20,661
Share-based compensation	5,642	4,483
Deferred income taxes	2,016	(4,281)
Loss (gain) on disposal of assets	291	(62)
Settlement of New Markets Tax Credit transaction	—	(4,687)
Non-cash lease expense	5,844	6,153
Other, net	1,002	(1,121)
Changes in operating assets and liabilities:
Receivables	(3,698)	(8,238)
Inventories	(10,509)	5,841
Contract assets	238	8,992
Accounts payable	1,335	(3,529)
Accrued compensation and benefits	(12,823)	(17,567)
Contract liabilities	6,987	4,244
Operating lease liability	(5,748)	(6,608)
Accrued income taxes	(224)	4,292
Other current assets and liabilities	(7,462)	(2,912)
Net cash provided by operating activities	64,132	62,564
Investing Activities
Capital expenditures	(15,662)	(15,018)
Proceeds from sales of property, plant and equipment	608	143
Purchases of marketable securities	(2,246)	(969)
Sales/maturities of marketable securities	1,850	775
Net cash used by investing activities	(15,450)	(15,069)
Financing Activities
Proceeds from revolving credit facilities	95,201	174,853
Repayments on revolving credit facilities	(95,201)	(199,000)
Payments of debt issuance costs	(3,485)	—
Repurchase of common stock	(15,061)	(11,821)
Dividends paid	(10,821)	(10,467)
Other, net	(5,266)	(3,705)
Net cash used by financing activities	(34,633)	(50,140)
Effect of exchange rates on cash	(241)	(405)
Increase (decrease) in cash and cash equivalents	13,808	(3,050)
Cash and cash equivalents at beginning of period	37,216	21,473
Cash and cash equivalents at end of period	$51,024	$18,423

Apogee Enterprises, Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Earnings and Adjusted Diluted Earnings per Share
(Unaudited)
	Three Months Ended		Six Months Ended
(In thousands)	August 31, 2024	August 26, 2023	August 31, 2024	August 26, 2023
Net earnings	$30,566	$33,327	$61,577	$56,903
Restructuring charges (1)	1,179	—	2,301	—
NMTC settlement gain (2)	—	(4,687)	—	(4,687)
Income tax impact on above adjustments (3)	(289)	1,148	(564)	1,148
Adjusted net earnings	$31,456	$29,788	$63,314	$53,364
	Three Months Ended		Six Months Ended
	August 31, 2024	August 26, 2023	August 31, 2024	August 26, 2023
Diluted earnings per share	$1.40	$1.52	$2.80	$2.57
Restructuring charges (1)	0.05	—	0.10	—
NMTC settlement gain (2)	—	(0.21)	—	(0.21)
Income tax impact on above adjustments (3)	(0.01)	0.05	(0.03)	0.05
Adjusted diluted earnings per share	$1.44	$1.36	$2.88	$2.41
Weighted average diluted shares outstanding	21,875	21,962	21,985	22,105

(1)	Restructuring charges related to Project Fortify, including $0.5 million of employee termination costs, $0.1 million of contract termination costs and $0.6 million of other costs incurred in the second quarter of fiscal 2025, and $0.9 million of employee termination costs, $0.1 million of contract termination costs and $1.3 million of other costs incurred in the first six months of fiscal 2025.
(2)	Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other income, net.
(3)	Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred.

Apogee Enterprises, Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted Operating Income (Loss) and Adjusted Operating Margin
(Unaudited)
(In thousands) · Architectural Framing Systems · Architectural Glass · Architectural Services · LSO · Corporate and Other · Consolidated
Operating income (loss)		$17,141		$21,068		$6,130		$3,793		$(6,167)		$41,965
Restructuring charges (1)		916		—		258		—		5		1,179
Adjusted operating income (loss)		$18,057		$21,068		$6,388		$3,793		$(6,162)		$43,144
Operating margin		12.1%		23.4%		6.3%		19.1%		N/M	12.3%
Restructuring charges (1)		0.6		—		0.3		—		N/M	0.3
Adjusted operating margin		12.8%		23.4%		6.5%		19.1%		N/M	12.6%
(In thousands)		Architectural Framing Systems	Architectural Glass		Architectural Services	LSO	Corporate and Other		Consolidated
Operating income (loss)		$21,060		$17,434		$3,519		$4,663		$(6,123)		$40,553
Operating margin		13.3%		18.5%		4.0%		19.7%		N/M	11.5%
(1)	Restructuring charges related to Project Fortify, including $0.5 million of employee termination costs, $0.1 million of contract termination costs and $0.6 million of other costs incurred in the second quarter of fiscal 2025.

Apogee Enterprises, Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted Operating Income (Loss) and Adjusted Operating Margin
(Unaudited)
(In thousands) · Architectural Framing Systems · Architectural Glass · Architectural Services · LSO · Corporate and Other · Consolidated
Operating income (loss)		$35,477		$38,159		$11,753		$8,639		$(10,682)		$83,346
Restructuring charges (1)		1,914		—		258		—		129		2,301
Adjusted operating income (loss)		$37,391		$38,159		$12,011		$8,639		$(10,553)		$85,647
Operating margin		12.9%		21.6%		6.0%		21.1%		N/M	12.4%
Restructuring charges (1)		0.7		—		0.1		—		N/M	0.3
Adjusted operating margin		13.6%		21.6%		6.1%		21.1%		N/M	12.7%
(In thousands)		Architectural Framing Systems	Architectural Glass		Architectural Services	LSO	Corporate and Other		Consolidated
Operating income (loss)		$41,005		$33,955		$2,923		$10,188		$(13,751)		$74,320
Operating margin		12.7%		17.7%		1.6%		22.1%		N/M	10.4%
(1)	Restructuring charges related to Project Fortify, including $0.9 million of employee termination costs, $0.1 million of contract termination costs and $1.3 million of other costs incurred in the first six months of fiscal 2025.

Apogee Enterprises, Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin(Earnings before interest, taxes, depreciation and amortization)
(Unaudited)
	Three Months Ended		Six Months Ended
(In thousands)	August 31, 2024	August 26, 2023	August 31, 2024	August 26, 2023
Net earnings	$30,566	$33,327	$61,577	$56,903
Income tax expense	10,549	9,896	20,612	17,763
Interest expense, net	1,140	2,230	1,590	4,266
Depreciation and amortization	9,688	10,379	19,664	20,661
EBITDA	$51,943	$55,832	$103,443	$99,593
Restructuring charges (1)	1,179	—	2,301	—
NMTC settlement gain (2)	—	(4,687)	—	(4,687)
Adjusted EBITDA	$53,122	$51,145	$105,744	$94,906
EBITDA Margin	15.2%	15.8%	15.3%	13.9%
Adjusted EBITDA Margin	15.5%	14.5%	15.7%	13.3%

(1)	Restructuring charges related to Project Fortify, including $0.5 million of employee termination costs, $0.1 million of contract termination costs and $0.6 million of other costs incurred in the second quarter of fiscal 2025, and $0.9 million of employee termination costs, $0.1 million of contract termination costs and $1.3 million of other costs incurred in the first six months of fiscal 2025.
(2)	Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other income, net.

Apogee Enterprises, Inc.
Fiscal 2025 Outlook
Reconciliation of Fiscal 2025 outlook of estimated Diluted Earnings per Share to Adjusted Diluted Earnings per Share
(Unaudited)
	Low Range	High Range
Diluted earnings per share	$4.81	$5.08
Restructuring charges (1)	0.12	0.16
Income tax impact on above adjustments per share	(0.03)	(0.04)
Adjusted diluted earnings per share	$4.90	$5.20

(1)	Restructuring charges related to Project Fortify.

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