APOGEE ENTERPRISES, INC.
For the period ended Aug 30, 2025. Filed Oct 9, 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.
Aug 30, 2025 · Filed Oct 9, 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 2025-05-31; filed 2025-07-02.
0000006845-25-000128
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-08-30; filed 2025-10-09.
0000006845-25-000152
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 83 previous paragraphs and 102 current paragraphs.
49 unchanged; 24 reworded; 27 added; 10 removed; 0 previous and 2 current paragraphs rearranged.
Tables are not compared: 12 previous and 16 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 (27)
Current report
•Consolidated net sales increased 4.6%, to $358.2 million, driven by $24.9 million of inorganic sales contribution from the acquisition of UW Solutions and higher volume in Architectural Services. This was partially offset by lower volume and price in Architectural Glass and unfavorable product mix in Architectural Metals.
Current report
•Gross margin decreased to 23.1%, compared to 28.4%, primarily due to lower price and volume, unfavorable mix, and higher material, tariff, and health insurance costs, partially offset by lower incentive compensation expense.
Current report
•SG&A expense as a percent of net sales decreased to 15.6%, compared to 16.2%. The decrease was primarily due to lower incentive compensation expense, partially offset by higher amortization expense and integration costs related to the UW Solutions acquisition.
Current report
•Operating income declined to $26.9 million from $42.0 million, and operating margin decreased 480 basis points to 7.5%.
Current report
•Interest expense increased to $4.1 million, primarily due to higher debt resulting from the acquisition of UW Solutions.
Current report
•Other income was $5.1 million compared to $0.3 million. The change was due to a $4.6 million gain related to a New Market Tax Credit recognized in the current period.
Current report
•Net earnings were $23.6 million compared to $30.6 million.
Current report
Comparison of First Six Months Fiscal 2026 to First Six Months Fiscal 2025
Current report
•Gross margin decreased to 22.4%, compared to 29.1%, primarily due to lower price and volume, unfavorable mix, and higher material, tariff, health insurance costs, and restructuring charges, partially offset by lower incentive compensation expenses.
Current report
•Operating income declined to $33.8 million from $83.3 million, and operating margin decreased 760 basis points to 4.8%.
Current report
•Adjusted EBITDA decreased to $78.8 million compared to $105.7 million and adjusted EBITDA margin decreased to 11.2% compared to 15.7%. The decrease in adjusted EBITDA margin was primarily driven by lower price and volume, a less favorable mix and higher material, tariff and health insurance costs, partially offset by lower incentive compensation expense.
Current report
•Other income was $4.5 million compared to $0.4 million. The change was driven by a $4.6 million gain from a New Market Tax Credit recognized in the current period.
Current report
•Net earnings was $21.0 million compared to $61.6 million.
Current report
•Net sales were $140.9 million, compared to $141.4 million, primarily reflecting a less favorable mix, partially offset by higher volume and price.
Current report
•Adjusted EBITDA was $20.8 million, or 14.8% of net sales, compared to $22.2 million, or 15.7% of net sales. The decline in adjusted EBITDA margin was primarily driven by unfavorable mix, and higher material and tariff costs, partially offset by lower incentive compensation expense.
Current report
•Adjusted EBITDA was $30.2 million, or 11.2% of net sales, compared to $46.1 million, or 16.8% of net sales. The decline in adjusted EBITDA margin was primarily driven by higher material and tariff costs as well as lower price and a less favorable mix, partially offset by lower incentive compensation costs.
Current report
•Net sales were $100.5 million, compared to $98.0 million, primarily due to increased volume.
Current report
•Adjusted EBITDA decreased to $5.0 million, or 5.0% of net sales, compared to $7.3 million, or 7.5% of net sales. The decrease in adjusted EBITDA margin was primarily driven by project mix, partially offset by lower short-term incentive compensation costs.
Current report
•Net sales were $207.0 million, compared to $197.0 million, primarily due to increased volume, partially offset by an unfavorable project mix.
Current report
•Adjusted EBITDA decreased to $11.1 million, or 5.4% of net sales, compared to $13.9 million, or 7.1% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the impact of higher tariff costs and unfavorable project mix, partially offset by lower incentive compensation costs.
Current report
•Net sales were $72.2 million, compared to $90.1 million, primarily reflecting lower volume and price due to lower end-market demand.
Current report
•Adjusted EBITDA decreased to $11.6 million, or 16.1% of net sales, compared to $24.1 million, or 26.8% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower price and volume, partially offset by lower short-term incentive compensation expense.
Current report
•Adjusted EBITDA decreased to $25.1 million, or 17.2% of net sales, compared to $44.4 million, or 25.1% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower volume and price, partially offset by lower incentive compensation expense.
Current report
•Net sales were $48.4 million, compared to $19.8 million, which included $24.9 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 18.6%.
Current report
•Adjusted EBITDA was $11.2 million, or 23.2% of net sales, compared to $4.6 million, or 23.1% of net sales. The increase in adjusted EBITDA margin was primarily driven by favorable price and volume.
Current report
•Net sales were $90.6 million, compared to $41.0 million, which included $46.9 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 6.6%.
Current report
•Corporate and Other adjusted EBITDA expense was $6.8 million, compared to $8.8 million, primarily driven by lower incentive compensation expense, partially offset by higher health insurance expenses.
Removed paragraphs (10)
Previous report
•Gross margin decreased to 21.7%, compared to 29.8%, primarily due to restructuring charges of $6.9 million, a less favorable mix and higher aluminum costs in Architectural Metals, and higher tariff expense in Architectural Services.
Previous report
•Operating income declined to $6.9 million from $41.4 million, and operating margin decreased 1,050 basis points to 2.0%. The decline in operating margin was primarily driven by restructuring charges of $15.3 million, a less favorable mix and higher aluminum costs in Architectural Metals, higher tariff expense in Architectural Services, and increased amortization expense associated with the UW Solutions transaction, partially offset by lower long-term incentive expense.
Previous report
•Other income was $0.7 million compared to expense of $0.1 million. The change was driven by an increase in value of company-owned life insurance assets.
Previous report
•Net loss of $2.7 million compared to net earnings of $31.0 million.
Previous report
•Adjusted EBITDA was $9.4 million, or 7.3% of net sales, compared to $23.8 million, or 17.9% of net sales. The decline in adjusted EBITDA margin was primarily driven by a less favorable mix, higher aluminum costs, unfavorable productivity, and unfavorable sales leverage, partially offset by the impact from higher volume.
Previous report
•Net sales were $106.5 million, compared to $99.0 million, primarily due to increased volume.
Previous report
•Adjusted EBITDA decreased to $6.1 million, or 5.7% of net sales, compared to $6.6 million, or 6.6% of net sales. The decrease in adjusted EBITDA margin was primarily driven by higher tariff expense, partially offset by a more favorable mix of projects and favorable sales leverage.
Previous report
•Adjusted EBITDA decreased to $13.4 million, or 18.3% of net sales, compared to $20.2 million, or 23.3% of net sales. The decline in adjusted EBITDA margin was primarily driven by unfavorable sales leverage.
Previous report
•Net sales were $42.3 million, compared to $21.2 million, which included $22.0 million of inorganic sales contribution from the acquisition of UW Solutions.
Previous report
•We believe adjusted EBITDA and adjusted EBITDA margin metrics provide useful information to investors and analysts about our core operating performance. In addition, adjusted EBITDA is among the primary measures used by management for the planning and forecasting of future period, as well as for measuring performance for compensation of executives and other members of management.
Reworded paragraphs (24)
Previous wording
On April 23, 2025, we announced an extension of Project Fortify ("Project Fortify Phase 2" or "Phase 2") to drive further cost efficiencies, primarily in the Architectural Metals and Architectural Services Segments. Phase 2 focuses on further optimizing our operating footprint and aligning resources to enable a more effective operating model. We expect the actions of Phase 2 to incur approximately $24 million to $26 million of pre-tax charges. Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $13 million to $15 million. We expect the actions associated with Phase 2 to be substantially completed by the end of the fourth quarter of fiscal 2026. See Note 14 for additional information.
Current wording
On April 23, 2025, we announced an extension of Project Fortify ("Project Fortify Phase 2" or "Phase 2") to drive further cost efficiencies, primarily in the Architectural Metals and Architectural Services Segments. Phase 2 focuses on further optimizing our operating footprint and aligning resources to enable a more effective operating model. We expect the actions of Phase 2 to incur approximately $24.0 million to $26.0 million of pre-tax charges. Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $13.0 million to $15.0 million. We expect the actions associated with Phase 2 to be substantially completed by the end of the fourth quarter of fiscal 2026. See Note 14 for additional information.
Previous wording
•Adjusted EBITDA decreased to $34.4 million compared to $52.6 million and adjusted EBITDA margin decreased to 9.9% compared to 15.9%. The decrease in adjusted EBITDA margin was primarily driven by a less favorable mix and higher aluminum costs in Architectural Metals, as well as higher tariff expense in Architectural Services, partially offset by lower long-term incentive expense.
Current wording
•Adjusted EBITDA decreased to $44.4 million compared to $53.1 million and adjusted EBITDA margin decreased to 12.4% compared to 15.5%. The decrease in adjusted EBITDA margin was primarily driven by lower price and volume, unfavorable mix and higher material, tariff, and health insurance costs, partially offset by lower incentive compensation expense.
Previous wording
•Consolidated net sales increased 4.6%, to $346.6 million, driven by $22.0 million of inorganic sales contribution from the acquisition of UW Solutions. Growth from inorganic sales was partially offset by lower volume in Architectural Glass and a less favorable mix in Architectural Metals.
Current wording
•Consolidated net sales increased 4.6%, to $704.8 million, primarily driven by $46.6 million of inorganic sales contribution from the acquisition of UW Solutions and higher volume in Architectural Services. This was partially offset by lower price in Architectural Glass and a less favorable product mix in Architectural Metals.
Previous wording
•SG&A expenses increased $10.7 million to 19.7% of net sales, compared to 17.3% of net sales. The increase in SG&A as a percentage of net sales was primarily due to restructuring charges of $8.4 million and increased amortization expense associated with the UW Solutions transaction, partially offset by lower long-term incentive expense.
Current wording
•SG&A expenses as a percent of net sales increased to 17.6%, compared to 16.7%. The increase was primarily due to increased restructuring charges and increased amortization expense associated with the UW Solutions transaction, partially offset by lower incentive compensation expense.
Previous wording
•Interest expense, net increased to $3.8 million, primarily due to increased debt resulting from the acquisition of UW Solutions.
Current wording
•Interest expense, net increased to $7.9 million, primarily due to increased debt resulting from the acquisition of UW Solutions.
Previous wording
•Income tax expense as a percentage of earnings before income tax was 211.9%, compared to 24.5% for the same period last year. The increase in the effective tax rate was primarily due to lower earnings before income taxes.
Current wording
•Income tax expense as a percentage of earnings before income tax was 30.9%, compared to 25.1% for the same period last year. The increase in the effective tax rate was primarily due to lower earnings before income taxes, partially offset by a decrease in tax expense for discrete items.
Previous wording
The following table summarizes the impact that different items had on our net sales for the first quarter fiscal 2026. All net sales for the first quarter of fiscal 2025 were organic.
Current wording
The following table summarizes the impact that different items had on our net sales for the second quarter fiscal 2026. All net sales for the second quarter of fiscal 2025 were organic.
Previous wording
•Net sales were $128.6 million, compared to $133.2 million, primarily reflecting a less favorable mix, partially offset by increased volume.
Current wording
•Net sales were $269.6 million, compared to $274.5 million, primarily reflecting a less favorable mix and lower price, partially offset by increased volume.
Previous wording
•For the three months ended May 31, 2025 and June 1, 2024, cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:
Current wording
Cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:
Previous wording
•Net sales were $73.3 million, compared to $86.7 million, primarily reflecting reduced volume due to lower end-market demand.
Current wording
•Net sales were $145.5 million compared to $176.8 million, primarily reflecting lower volume due to lower end-market demand.
Previous wording
•Adjusted EBITDA was $8.0 million, or 18.8% of net sales, compared to $5.6 million, or 26.6% of net sales. The decline in adjusted EBITDA margin was primarily driven by the dilutive effect of lower adjusted EBITDA margin from UW Solutions, unfavorable mix, and increased corporate allocation expense.
Current wording
•Adjusted EBITDA was $19.2 million, or 21.2% of net sales, compared to $10.2 million, or 24.9% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the dilutive effect of lower adjusted EBITDA margin from the UW Solutions acquisition, partially offset by favorable pricing.
Previous wording
•Corporate and Other adjusted EBITDA expense was $2.4 million, compared to $3.7 million, primarily driven by lower long-term incentive expense.
Current wording
•Corporate and Other adjusted EBITDA expense was $4.3 million, compared to $5.2 million, primarily driven by lower incentive compensation expense, partially offset by higher health insurance costs.
Previous wording
As of May 31, 2025, segment backlog was approximately $682.9 million, compared to approximately $720.3 million at the end of the fourth quarter of fiscal 2025.
Current wording
As of August 30, 2025, segment backlog was approximately $792.3 million, compared to approximately $792.1 million at the end of the second quarter of fiscal 2025.
Previous wording
•We use adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period.
Current wording
•We use adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that we do not consider to be part of core operating results to enhance comparability of results from period to period.
Previous wording
Operating Activities. Net cash used in operating activities was $19.8 million for the first three months of fiscal 2026, compared to cash provided by operating activities of $5.5 million in the prior year period. The increase of cash used in operating activities was primarily driven by lower net earnings and an increased cash used for working capital, including a payment of $24.7 million for the settlement of an arbitration award.
Current wording
Operating Activities. Net cash provided by operating activities was $37.3 million for the first six months of fiscal 2026, compared to $64.1 million in the prior year period. The decrease in net cash provided by operating activities was primarily driven by lower net earnings and an increased cash used for working capital, including a net payment of $13.7 million for the settlement of an arbitration award.
Previous wording
Investing Activities. Net cash used in investing activities was $7.0 million for the first three months of fiscal 2026, compared to $7.3 million in the prior year period. The net cash used in investing activities was primarily related to capital expenditures in both periods.
Current wording
Investing Activities. Net cash used in investing activities was $10.9 million for the first six months of fiscal 2026, compared to $15.5 million in the prior-year period. The net cash used in investing activities was primarily related to capital expenditures in both periods.
Previous wording
Financing Activities. Net cash provided by financing activities was $17.6 million for the first three months of fiscal 2026, compared to $4.9 million of net cash used in financing activities in the prior year period. The increase in net cash provided by financing activities was primarily driven by differences in cash requirements to support the change in operating cash flows between periods.
Current wording
Financing Activities. Net cash used in financing activities was $29.1 million for the first six months of fiscal 2026, compared to $34.6 million in the prior year period. The decrease in net cash used in financing activities was primarily driven by a reduction in repurchases of common stock.
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 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 ma de 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.
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
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 $215.0 million as of May 31, 2025. Outstanding borrowings under the revolving credit facility were $96.0 million as of May 31, 2025.
Current wording
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 $215.0 million as of August 30, 2025. Outstanding borrowings under the revolving credit facility were $55.0 million as of August 30, 2025.
Previous wording
At May 31, 2025, we had a total of $2.6 million of ongoing letters of credit related to the senior credit facility, construction contracts and insurance collateral that expire in fiscal year 2026 and reduce borrowing capacity under the revolving credit facility. As of May 31, 2025, the amount available for revolving borrowings was $351.4 million.
Current wording
At August 30, 2025, we had a total of $2.6 million of ongoing letters of credit related to the senior credit facility, construction contracts and insurance collateral that expire in fiscal year 2026 and reduce borrowing capacity under the revolving credit facility. As of August 30, 2025, the amount available for revolving borrowings was $392.4 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 $71.8 million at May 31, 2025, with $12.5 million payable during the remainder of fiscal 2026.
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 $69.4 million at August 30, 2025, with $8.5 million payable during the remainder of fiscal 2026.
Previous wording
As of May 31, 2025, we had $16.0 million of open purchase obligations, of which payments totaling $7.8 million are expected to become due during the remainder of fiscal 2026. 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 August 30, 2025, we had $15.5 million of open purchase obligations, of which payments totaling $5.2 million are expected to become due during the remainder of fiscal 2026. 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 May 31, 2025, we had reserves of $6.1 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 August 30, 2025, we had reserves of $6.2 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 May 31, 2025, $1.2 billion of these types of bonds were outstanding, of which $339.2 milli on 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 August 30, 2025, $1.2 billion of these types of bonds were outstanding, of which $293.7 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 current paragraphs (2)
Current report — wording carried from elsewhere
•Income tax expense as a percentage of earnings before income tax was 15.4%, compared to 25.7%. The decrease in the effective tax rate was primarily due to a decrease in tax expense for discrete items.
Current report — wording carried from elsewhere
•Adjusted EBITDA represents adjusted net earnings before interest, taxes, depreciation, and amortization, and adjusted EBITDA margin is adjusted EBITDA as a percentage of net sales. We use adjusted EBITDA and adjusted EBITDA margin to assess segment performance and make decisions about the allocation of operating and capital resources by analyzing recent results, trends, and variances of each segment in relation to forecasts and historical performance.