APOGEE ENTERPRISES INC
For the period ended Nov 30, 2024. Filed Jan 7, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Nov 30, 2024 · Filed Jan 7, 2025
APOG$45.77-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-08-31; filed 2024-10-04.
0000006845-24-000254
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-11-30; filed 2025-01-07.
0000006845-25-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 90 previous paragraphs and 95 current paragraphs.
47 unchanged; 27 reworded; 21 added; 13 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 10 previous and 10 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (21)
Current report
Recent Developments
Current report
In the third quarter of fiscal 2025, we acquired UW Solutions. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The Company serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. See Note 13 for additional information on the terms and conditions of this transaction.
Current report
•Consolidated net sales increased 0.5%, to $341.3 million, driven by $8.8 million of inorganic sales contribution from the acquisition of UW Solutions and a more favorable mix of projects in Architectural Services, partially offset by less favorable mix in Architectural Framing Systems and lower volume in Architectural Glass.
Current report
•Gross margin decreased to 26.1%, compared to 26.6%, primarily driven by the unfavorable sales leverage impact of lower volume, a less favorable product mix in the Architectural Framing Systems Segment, and higher incentive compensation and lease expenses, partially offset by a more favorable mix of projects in Architectural Services Segment, and lower quality and insurance-related costs.
Current report
•Operating income declined to $28.6 million from $37.6 million, and operating margin decreased 270 basis points to 8.4%. The lower operating margin was primarily driven by acquisition-related expenses associated with the UW Solutions transaction, unfavorable sales leverage impact on lower volume, less favorable product mix, higher incentive compensation, higher lease expense, and $0.9 million of restructuring costs related to Project Fortify, partially offset by a more favorable mix of projects in Architectural Services and lower insurance-related costs. Adjusted operating income was lower by 5.9% to $35.4 million, and adjusted operating margin was reduced to 10.4%.
Current report
•Interest expense, net declined to $1.0 million, primarily driven by lower weighted-average interest rates and higher interest income.
Current report
•Other income was $0.1 million compared to expense of $0.9 million. The change was driven by an increase in value of company-owned life insurance assets.
Current report
•Consolidated net sales decreased 3.8%, to $1,015.3 million, primarily driven by lower volume and mix, partially offset by a more favorable mix of projects in Architectural Services, improved pricing, and the $8.8 million inorganic sales contribution from the acquisition of UW Solutions.
Current report
•Other income was $0.5 million compared to $3.7 million. The higher amount of income in the prior year period was primarily due to $4.7 million of New Market Tax Credit income recognized in the prior year period.
Current report
•Net sales were $138.0 million, compared to $139.6 million, primarily reflecting a less favorable product mix, partially offset by increased volume.
Current report
•Operating income was $12.7 million, or 9.2% of net sales, compared to $17.0 million, or 12.2% of net sales. The decline in operating margin was primarily driven by the less favorable product mix as well as higher freight and compensation expenses and $0.8 million of restructuring charges related to Project Fortify. Adjusted operating income was $13.6 million, or 9.8% of net sales, compared to $17.0 million, or 12.2% of net sales.
Current report
•Operating income was $48.2 million, or 11.7% of net sales, compared to $58.0 million, or 12.5% of net sales. The decline in operating margin was primarily driven by the unfavorable sales leverage impact of lower volume, higher compensation costs, and $2.8 million of restructuring charges as part of Project Fortify, partially offset by favorable material costs and lower bad debt expense. Adjusted operating income was $50.9 million, or 12.3% of net sales, compared to $58.0 million, or 12.5% of net sales.
Current report
•Net sales were $70.2 million, compared to $91.0 million, primarily reflecting reduced volume due to lower end-market demand.
Current report
•Operating income decreased to $10.1 million, or 14.4% of net sales, compared to $15.2 million, or 16.7% of net sales. The lower operating margin was primarily driven by unfavorable sales leverage impact of lower volume partially offset by improved productivity, favorable freight costs, and lower quality-related expense.
Current report
•Operating income decreased to $48.3 million, or 19.5% of net sales, compared to $49.1 million, or 17.4% of net sales. The improvement in operating margin was primarily driven by improved pricing, improved productivity, and lower quality-related costs, partially offset by the unfavorable sales leverage impact of lower volume.
Current report
•Net sales were $302.0 million, compared to $272.1 million, primarily due increased volume and a more favorable mix of projects.
Current report
•LSO net sales were $33.2 million, compared to $26.0 million, which included $8.8 million of inorganic sales contribution from the acquisition of UW Solutions, partially offset by lower volume in the retail channel.
Current report
•Operating income was $4.8 million, or 14.6% of net sales, compared to $7.1 million, or 27.3% of net sales. The decline in operating margin was primarily driven by acquisition-related costs, the unfavorable sales leverage impact of lower volume, and the dilutive effect of lower operating margin from acquiring UW Solutions.
Current report
•Operating income was $13.5 million, or 18.2% of net sales, compared to $17.3 million, or 24.0% of net sales. The decline in operating margin was primarily driven by acquisition-related costs and the sales leverage impact of lower volume.
Current report
Financing Activities. Net cash provided by financing activities was $169.0 million for the first nine months of fiscal 2025, compared to $100.4 million of net cash used by financing activities in the prior year period. The increase in net cash provided by financing activities was primarily driven by the proceeds of $250.0 million from the delayed draw term loan utilized to finance the UW Solutions acquisition.
Current report
On November 4, 2024, as part of the acquisition of UW Solutions, and for working capital and general corporate purposes, we executed a drawdown against the delayed draw term loan facility for $250.0 million. Outstanding borrowings under the term loan facility were $230.0 million as of November 30, 2024. Outstanding borrowings under the revolving credit facility were $30.0 million as of November 30, 2024.
Removed paragraphs (13)
Previous report
•Consolidated net sales decreased 3.2%, to $342.4 million, primarily driven by lower volume, partially offset by improved pricing and mix.
Previous report
•Gross margin increased to 28.4%, compared to 27.0%, primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, and lower insurance-related costs, partially offset by the unfavorable sales leverage impact of lower volume, higher compensation and benefits expense, and $0.9 million of restructuring costs associated with Project Fortify.
Previous report
•Operating income increased to $42.0 million from $40.6 million, and operating margin increased 80 basis points to 12.3%. The improvement in operating margin was primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, and lower insurance-related costs, partially offset by the impact of higher incentive compensation expense, $1.2 million of restructuring costs related to Project Fortify, and the unfavorable sales leverage impact of lower volume. Adjusted operating income grew 6.4% to $43.1 million, and adjusted operating margin improved to 12.6%.
Previous report
•Consolidated net sales decreased 5.8%, to $674.0 million, primarily driven by lower volume, partially offset by improved pricing and mix.
Previous report
•Operating income was $17.1 million, or 12.1% of net sales, compared to $21.1 million, or 13.3% of net sales. The 120 basis point reduction in operating margin was primarily driven by the unfavorable sales leverage impact of lower volume, a less favorable mix and $0.9 million of restructuring charges related to Project Fortify, partially offset by favorable material costs. Adjusted operating income was $18.1 million, or 12.8% of net sales, compared to $21.1 million, or 13.3% of net sales.
Previous report
•Operating income was $35.5 million, or 12.9% of net sales, compared to $41.0 million, or 12.7% of net sales. The 20 basis point improvement in operating margin was primarily driven by favorable material costs and lower bad debt expense, partially offset by the unfavorable sales leverage impact of lower volume, and $1.9 million of restructuring charges as part of Project Fortify. Adjusted operating income was $37.4 million, or 13.6% of net sales, compared to $41.0 million, or 12.7% of net sales.
Previous report
•Net sales were $90.1 million, compared to $94.1 million, reflecting reduced volume due to lower end-market demand, partially offset by improved pricing and product mix.
Previous report
•Operating income increased to $21.1 million, or 23.4% of net sales, compared to $17.4 million, or 18.5% of net sales. The 490 basis point improvement in operating margin was primarily driven by improved pricing and product mix, and lower wages and benefits expense, partially offset by the unfavorable sales leverage impact of lower volume.
Previous report
•Operating income increased to $38.2 million, or 21.6% of net sales, compared to $34.0 million, or 17.7% of net sales. The 390 basis point improvement in operating margin was primarily driven by improved pricing and product mix, and lower wages and benefits expense, partially offset by the unfavorable sales leverage impact of lower volume.
Previous report
•Operating income was $3.8 million, or 19.1% of net sales, compared to $4.7 million, or 19.7% of net sales. The 60 basis point decline in operating margin primarily reflects the unfavorable sales leverage impact of lower volume, partially offset by improved mix and cost savings.
Previous report
•LSO net sales were $41.0 million, compared to $46.1 million, primarily reflecting lower volume in the retail channel, partially offset by a more favorable mix.
Previous report
•Operating income was $8.6 million, or 21.1% of net sales, compared to $10.2 million, or 22.1% of net sales. The 100 basis point decline in operating margin primarily reflects the unfavorable sales leverage impact of lower volume, partially offset by improved mix and cost savings.
Previous report
Financing Activities. Net cash used by financing activities was $34.6 million for the first six months of fiscal 2025, compared to $50.1 million in the prior year period. The decrease in cash used for financing activities was primarily driven by lower net debt repayments, partially offset by debt issuance costs related to our new credit agreement and increased share repurchases.
Reworded paragraphs (27)
Previous wording
We are a leading provider of architectural products and services for enclosing buildings, and high-performance glass and acrylic products used in applications for preservation, protection and enhanced viewing. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical (LSO).
Current wording
We are a leading provider of architectural products and services for enclosing buildings, and high-performance coating products used in applications for preservation, protection and enhanced viewing. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical.
Previous wording
In fiscal 2024 and through the second quarter of fiscal 2025, we drove further progress toward our strategic goals and financial targets. We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements. We invested in organic growth initiatives, including capacity expansion in the Large-Scale Optical Segment and geographic growth in the Architectural Services Segment. We increased our focus on differentiated products and services, and continued to diversify the mix of architectural projects that we serve while leaning more heavily into higher, value-added products. We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.
Current wording
In fiscal 2024 and through the third quarter of fiscal 2025, we drove further progress toward our strategic goals and financial targets. We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements. We have invested in inorganic and organic growth initiatives, including the acquisition of UW Interco, LLC (UW Solutions), capacity expansion in the Large-Scale Optical Segment and geographic growth in the Architectural Services Segment. We increased our focus on differentiated products and services, and continued to diversify the mix of architectural projects that we serve while leaning more heavily into higher, value-added products. We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.
Previous wording
•Selling, general and administrative (SG&A) expenses increased $0.5 million to 16.2% of net sales, compared to 15.5% of net sales. The increase in SG&A as a percentage of sales was primarily due to higher incentive compensation expense and the unfavorable sales leverage impact of lower volume.
Current wording
•SG&A expenses increased $7.9 million to 17.7% of net sales, compared to 15.5% of net sales. The increase in SG&A as a percentage of net sales was primarily due to acquisition-related expenses associated with the UW Solutions acquisition, restructuring expense related to Project Fortify, and the unfavorable sales leverage impact of lower volume.
Previous wording
•Income tax expense as a percentage of earnings before income tax was 25.7%, compared to 22.9% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
Current wording
•Income tax expense as a percentage of earnings before income tax was 24.1%, compared to 23.6% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
Previous wording
•Gross margin increased to 29.1%, compared to 26.3%, primarily driven by improved pricing and a more favorable mix of projects in Architectural Services, favorable material costs, and lower insurance-related costs, partially offset by the unfavorable sales leverage impact of lower volume, higher compensation and benefits expense, and $1.5 million of restructuring costs associated with Project Fortify.
Current wording
•Gross margin increased to 28.1%, compared to 26.4%, primarily driven by improved pricing and a more favorable mix of projects in Architectural Services, favorable material costs, and lower quality and insurance-related costs, partially offset by the unfavorable sales leverage impact of lower volume, higher incentive compensation expense, higher lease costs, and $1.3 million of restructuring costs associated with Project Fortify.
Previous wording
•SG&A expenses decreased $1.2 million to 16.7% of net sales, compared to 15.9% of net sales. The increase in SG&A as a percentage of sales was primarily due to the unfavorable sales leverage impact of lower volume and higher incentive compensation expense, partially offset by lower bad debt expense.
Current wording
•SG&A expenses increased $6.7 million to 17.1% of net sales, compared to 15.8% of net sales. The increase in SG&A as a percentage of net sales was primarily due to the impact of acquisition-related expenses, and the unfavorable sales leverage impact of lower volume, partially offset by lower bad debt expense.
Previous wording
•Operating income grew to $83.3 million from $74.3 million, and operating margin increased 200 basis points to 12.4%. The improvement in operating margin was primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, and lower bad debt expense, which more than offset the unfavorable sales leverage impact of lower volume, $2.3 million of restructuring costs related to Project Fortify, and higher incentive compensation expense. Adjusted operating income grew 15.2% to $85.6 million, and adjusted operating margin improved to 12.7%.
Current wording
•Operating income was $112.0 million and operating margin increased 40 basis points to 11.0%. The improvement in operating margin was primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, and lower bad debt expense, partially offset by the unfavorable sales leverage impact of lower volume, acquisition-related expenses, and $3.2 million of restructuring costs related to Project Fortify. Adjusted operating income grew 8.1% to $121.1 million, and adjusted operating margin improved to 11.9%.
Previous wording
•Interest expense, net was $1.1 million, compared to $2.2 million, primarily driven by lower average debt levels, partially offset by the impact of the write-off of unamortized financing fees related to the previous credit facility.
Current wording
•Interest expense, net was $2.6 million, compared to $5.7 million, primarily driven by lower average debt levels and increased interest income from higher invested cash over the periods, partially offset by the impact of the write-off of unamortized financing fees related to our previous credit facility.
Previous wording
•Income tax expense as a percentage of earnings before income tax was 25.1%, compared to 23.8% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
Current wording
•Income tax expense as a percentage of earnings before income tax was 24.8%, compared to 23.7% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
Previous wording
•Net sales were $141.4 million, compared to $158.8 million, primarily reflecting reduced volume due to exiting certain lower-margin product lines as part of Project Fortify and lower end market demand.
Current wording
•Net sales were $412.6 million, compared to $462.5 million, primarily reflecting reduced volume due to exiting certain lower-margin product lines as part of Project Fortify and lower end market demand as well as a less favorable product mix.
Previous wording
•Net sales were $176.8 million, compared to $191.3 million, reflecting lower volume due to lower end-market demand, partially offset by improved pricing and product mix.
Current wording
•Net sales were $247.0 million, compared to $282.3 million, reflecting lower volume due to lower end-market demand, partially offset by improved pricing.
Previous wording
•Net sales were $98.0 million, compared to $88.1 million, primarily due to a more favorable mix of projects and increased volume.
Current wording
•Net sales were $104.9 million, compared to $94.7 million, primarily due to a more favorable mix of projects and increased volume.
Previous wording
•Operating income increased to $6.1 million, or 6.3% of net sales, compared to $3.5 million, or 4.0% of net sales, primarily driven by a more favorable mix of projects, partially offset by higher compensation-related expenses, higher leasing costs, and the $0.3 million impact of restructuring costs as part of Project Fortify.
Current wording
•Operating income increased to $9.7 million, or 9.3% of net sales, compared to $5.3 million, or 5.6% of net sales. The improvement in operating margin was primarily driven by a more favorable mix of projects partially offset by higher incentive compensation expense and higher lease costs.
Previous wording
•Operating income increased to $11.8 million, or 6.0% of net sales, compared to $2.9 million, or 1.6% of net sales, primarily driven by a more favorable mix of projects, partially offset by higher compensation-related expenses, higher leasing costs, and the $0.3 million impact of restructuring costs as part of Project Fortify.
Current wording
•Operating income increased to $21.5 million, or 7.1% of net sales, compared to $8.2 million, or 3.0% of net sales. The improvement in operating margin was primarily driven by a more favorable mix of projects, partially offset by higher incentive compensation expense and higher lease costs.
Previous wording
•LSO net sales were $19.8 million, compared to $23.6 million, primarily reflecting lower volume in the retail channel, partially offset by a more favorable mix.
Current wording
•LSO net sales were $74.2 million, compared to $72.1 million, which included $8.8 million of sales from UW Solutions, partially offset by lower volume in the retail channel.
Previous wording
•Corporate and Other expense was $6.2 million, compared to $6.1 million. The increase was primarily driven by higher incentive compensation and benefits costs, partially offset by lower insurance-related costs.
Current wording
•Corporate and Other expense was $8.8 million, compared to $6.9 million. The increase was primarily driven by acquisition-related costs, partially offset by lower incentive compensation and insurance-related costs.
Previous wording
•Corporate and Other expense was $10.7 million, compared to $13.8 million, primarily due to lower insurance-related costs, partially offset by incentive compensation and benefits costs.
Current wording
•Corporate and Other expense was $19.5 million, compared to $20.6 million. The decrease was primarily due to lower insurance-related and incentive compensation costs, partially offset by acquisition-related costs.
Previous wording
As of August 31, 2024, segment backlog was approximately $792.1 million, compared to approximately $866.9 million at the end of the prior quarter. The decrease in backlog compared to the prior quarter was primarily driven by executing more project work in the quarter than securing new project awards that were added to backlog. Our backlog in this segment tends to vary significantly given the variable timing and relatively large size of projects awarded.
Current wording
As of November 30, 2024, segment backlog was approximately $742.2 million, compared to approximately $792.1 million at the end of the prior quarter. The decrease in backlog compared to the prior quarter was primarily driven by executing more project work in the quarter than securing new project awards that were added to backlog. Our backlog in this segment tends to vary significantly given the variable timing and relatively large size of projects awarded.
Previous wording
Operating Activities. Net cash provided by operating activities was $64.1 million for the first six months of fiscal 2025, compared to $62.6 million in the prior year period. The increase was primarily driven by increased net earnings and decreased cash payments for incentive compensation, partially offset by increased cash used for working capital.
Current wording
Operating Activities. Net cash provided by operating activities was $95.1 million for the first nine months of fiscal 2025, compared to $129.3 million in the prior year period. The decrease in net cash provided by operating activities was primarily driven by cash used for working capital.
Previous wording
Investing Activities. Net cash used by investing activities was $15.5 million for the first six months of fiscal 2025, compared to $15.1 million in the prior year, primarily related to capital expenditures in both periods.
Current wording
Investing Activities. Net cash used by investing activities was $257.1 million for the first nine months of fiscal 2025, compared to $26.3 million in the prior year period. The increase in net cash used by investing activities was primarily related to $233.1 million of cash used for the acquisition of UW Solutions.
Previous wording
On July 19, 2024, we entered into a Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent, and other lenders. The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $700.0 million, in which commitments are available through a $450.0 million, five-year revolving credit facility and a committed $250.0 million delayed draw term loan facility. Borrowings under the revolving credit facility can be in Canadian dollars (CAD) limited to $25.0 million USD. The term loan facility may be borrowed in up to two drawdowns, which are available to be made within one year after the closing date. The senior credit facility has a term of five years with a maturity date of July 19, 2029. Outstanding borrowings under the revolving credit facility were $50.0 million as of August 31, 2024. As of August 31, 2024, the term loan facility had not been drawn.
Current wording
On July 19, 2024, we entered into a Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent, and other lenders. The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $700.0 million, in which commitments were made through a $450.0 million, five-year revolving credit facility and a committed $250.0 million delayed draw term loan facility. Borrowings under the revolving credit facility can be in Canadian dollars (CAD) limited to $25.0 million USD. The term loan facility may be utilized in up to two drawdowns, which are available to be made within one year after the closing date. The senior credit facility has a term of five years with a maturity date of July 19, 2029.
Previous wording
As a result of the transaction, in the second quarter of fiscal 2025, we recognized a loss on extinguishment of debt within interest expense of $0.5 million for the write-off of unamortized financing fees related to the previous revolving credit facility. Additionally, we capitalized $3.0 million of lender fees and $0.6 million of third-party fees incurred in connection with the Credit Agreement, which were recorded as other non-current assets and will be amortized over the term of the credit facility as interest expense.
Current wording
As a result of the execution of the Credit Agreement, in the second quarter of fiscal 2025, we recognized a loss on extinguishment of debt within interest expense of $0.5 million for the write-off of unamortized financing fees related to the previous revolving credit facility. Additionally, we capitalized $3.0 million of lender fees and $0.8 million of third-party fees incurred in connection with the Credit Agreement, which were recorded as other non-current assets and will be amortized over the term of the credit facility as interest expense.
Previous wording
At August 31, 2024, we had a total of $42.5 million of ongoing letters of credit related to the senior credit facility and industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2026 through 2032 and reduce borrowing capacity under the revolving credit facility. As of August 31, 2024, the amount available for revolving borrowings was $357.5 million.
Current wording
At November 30, 2024, we had a total of $27.3 million of ongoing letters of credit related to the senior credit facility and industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2026 through 2032 and reduce borrowing capacity under the revolving credit facility. As of November 30, 2024, the amount available for revolving borrowings was $405.0 million.
Previous wording
We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment. Future payments for such leases, excluding leases with initial terms of one year or less, were $48.1 million at August 31, 2024, with $7.1 million payable during the remainder of fiscal 2025.
Current wording
We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment. Future payments for such leases, excluding leases with initial terms of one year or less, were $73.9 million at November 30, 2024, with $4.3 million payable during the remainder of fiscal 2025.
Previous wording
As of August 31, 2024, we had $14.2 million of open purchase obligations, of which payments totaling $9.3 million are expected to become due during the remainder of fiscal 2025. These purchase obligations primarily relate to raw material commitments and capital expenditures and are not expected to impact future liquidity, as amounts should be recovered through customer billings.
Current wording
As of November 30, 2024, we had $20.0 million of open purchase obligations, of which payments totaling $14.5 million are expected to become due during the remainder of fiscal 2025. These purchase obligations primarily relate to raw material commitments and capital expenditures and are not expected to impact future liquidity, as amounts should be recovered through customer billings.
Previous wording
As of August 31, 2024, we had reserves of $5.6 million for unrecognized tax benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits will ultimately be settled.
Current wording
As of November 30, 2024, we had reserves of $5.7 million for unrecognized tax benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits will ultimately be settled.
Previous wording
We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance. At August 31, 2024, $1.2 billion of these types of bonds were outstanding, of which $366.0 million is in our backlog. These bonds have expiration dates that align with completion of the purchase order or contract. We have not been required to make any payments under these bonds with respect to our existing businesses.
Current wording
We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance. At November 30, 2024, $1.2 billion of these types of bonds were outstanding, of which $307.2 million is in our backlog. These bonds have expiration dates that align with completion of the purchase order or contract. We have not been required to make any payments under these bonds with respect to our existing businesses.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
•Interest expense, net was $1.6 million, compared to $4.3 million, primarily driven by lower average debt levels, partially offset by the impact of the write-off of unamortized financing fees related to our previous credit facility.
Previous report — wording carried elsewhere
•Net sales were $274.5 million, compared to $323.0 million, primarily reflecting reduced volume due to exiting certain lower-margin product lines as part of Project Fortify and lower end market demand.
Previous report — wording carried elsewhere
•Net sales were $197.0 million, compared to $177.5 million, primarily due to a more favorable mix of projects and increased volume.