APOGEE ENTERPRISES, INC.
For the period ended May 30, 2026. Filed Jun 30, 2026.
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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.
May 30, 2026 · Filed Jun 30, 2026
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 2025-11-29; filed 2026-01-07.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-05-30; filed 2026-06-30.
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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 109 previous paragraphs and 76 current paragraphs.
32 unchanged; 25 reworded; 19 added; 50 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 16 previous and 8 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 (19)
Current report
Accelerate Leadership in Target Markets. We intend to enhance our position in targeted end markets by differentiating through deep customer focus and insight, using an informed understanding of customer needs to shape our offerings and delivery models. By aligning our capabilities, investments, and operating approach around this customer‑focused strategy, we believe we will be better positioned to differentiate, compete effectively, and strengthen our position in the markets we serve.
Current report
Grow and Strengthen the Portfolio. We seek to grow and strengthen our portfolio through disciplined organic and inorganic investments in differentiated solutions that align with evolving customer needs. By prioritizing opportunities that enhance our competitive positioning and directly address customer challenges, we will reinforce our disciplined approach to portfolio growth and improvement.
Current report
Advance Core Capabilities. We expect to advance core capabilities by fostering a culture of continuous improvement grounded in operational excellence, talent development, and disciplined process execution. Through targeted investments in people, systems, and technology, we will strengthen our ability to deliver consistent performance and enhance the customer experience across the organization.
Current report
On May 27, 2026, we entered into a definitive agreement to acquire Keller Companies, Inc. (“KCI”), the controlling shareholder of Kalwall Corporation and Structures Unlimited Inc., for approximately $105 million in cash, subject to certain customary purchase price adjustments. The sellers may also receive up to $10 million in additional earn‑out consideration based on achieving certain financial objectives as defined in the agreement. We expect to fund the transaction with cash on hand and borrowings under our existing credit facility, and closing is anticipated in early July, subject to customary conditions. Upon closing, the acquired business is expected to be integrated into our Architectural Glass Segment and its results will be included in our consolidated results of operations from the date of acquisition.
Current report
The following is a discussion of our financial condition and results of operations during the three months ended May 30, 2026 and the three months ended May 31, 2025.
Current report
•Consolidated net sales decreased 1.1%, to $342.7 million, driven by lower volume within our Architectural Metals and Glass Segments, partially offset by volume improvement within our Architectural Services Segment. Improved pricing and mix within the Architectural Metals Segment offset part of the volume decline.
Current report
•Gross margin increased 20 basis to 21.9%, compared to 21.7%, primarily due to price, productivity improvements including savings from Project Fortify Phase 2, and favorable mix, partially offset by higher material and freight costs and impacts from lower volume.
Current report
•Selling, general, and administrative (SG&A) expense as a percent of net sales decreased to 16.4%, compared to 19.7%. This improvement was primarily driven by the benefits from cost savings included in Project Fortify Phase 2.
Current report
•Interest expense decreased to $2.8 million, due to a lower average debt balance in the first quarter of fiscal 2027 compared to the prior year.
Current report
•Other expense was $0.1 million compared to $0.7 million due to a decline in value of company-owned life insurance assets.
Current report
•Net earnings were $11.5 million compared to net loss of $2.7 million.
Current report
•Adjusted net earnings were $12.1 million compared to $11.9 million.
Current report
Non-GAAP measures include:
Current report
Adjusted Net Earnings
Current report
Disclosures related to our business segments are included in Note 12 of our Consolidated Financial Statements. We manage our business in four reportable segments: Architectural Metals, Architectural Services, Architectural Glass and Performance Surfaces.
Current report
•Net sales were $115.2 million, compared to $106.5 million, driven by increased volume.
Current report
•Adjusted EBITDA remained relatively consistent at $6.1 million, or 5.3% of net sales, compared to $6.1 million, or 5.7% of net sales. The decline in adjusted EBITDA margin was driven by unfavorable project mix, mostly offset by benefits from the actions of Project Fortify Phase 2 to reduce the impact of tariffs, and the impact from increased volume.
Current report
•Net sales were $67.7 million, compared to $73.3 million, driven by lower price and volume due to continued end market softness, partially offset by favorable mix.
Current report
•Adjusted EBITDA decreased to $5.9 million, or 8.7% of net sales, compared to $13.4 million, or 18.3% of net sales. The decrease in adjusted EBITDA margin was primarily driven by lower price, reduced volume, and material inflation.
Removed paragraphs (50)
Previous report
Non-GAAP Measures
Previous report
Become the economic leader in our target markets. We have developed a deep understanding of our target markets and aligned our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings. We are focused on operational execution, driving productivity improvements, and maintaining a competitive cost structure, so that we may bring more value to our customers and improve our own profitability.
Previous report
Actively manage our portfolio to drive higher margins and returns. We are shifting our business mix toward higher operating margin offerings in order to improve our return on invested capital performance. We accomplish this by allocating resources to grow our top performing businesses, actively addressing underperforming businesses, and investing to add new differentiated product and service offerings to accelerate our growth and increase margins. We continually analyze our current portfolio of products, services, and capabilities to identify the best areas for future profitable growth. We also evaluate inorganic opportunities where we can deploy capital to acquire businesses that will be accretive to our long-term growth rate and operating margins.
Previous report
Strengthen our core capabilities. We are shifting from our historical, decentralized operating model to one with center-led functional expertise that enables us to leverage the scale of the enterprise to better support the needs of the business. We have established a Company-wide operating system with common tools and processes based on the foundation of Lean and Continuous Improvement, which we call the “Apogee Management System.” Our strategy is supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.
Previous report
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 $28 million to $29 million of pre-tax charges. Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $25 million to $26 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 report
On October 31, 2025, the Company announced the separation of its Chief Executive Officer. In connection with this separation agreement, the Board of Directors approved the accelerated vesting of certain outstanding unvested restricted stock awards and performance share unit awards previously granted. As a result of this modification, the Company recognized incremental stock-based compensation expense of $2.1 million during the third quarter of fiscal 2026, representing the fair value of the awards that would have otherwise vested over the remaining service periods. This amount is included in SG&A expenses in the Consolidated Results of Operations.
Previous report
The following tables provide various components of operations as year over year U.S. dollar and percentage change, as well as a percentage of net sales.
Previous report
•Consolidated net sales increased 2.1%, to $348.6 million, driven by $18.4 million of inorganic sales contribution from the acquisition of UW Solutions and favorable product mix, partially offset by lower volume.
Previous report
•Gross margin decreased to 23.8%, compared to 26.1%, primarily due to impact of lower volume and price, higher aluminum, restructuring and health insurance costs, partially offset by lower incentive compensation expense.
Previous report
•SG&A expense as a percent of net sales decreased to 16.7%, compared to 17.7%. The decrease was primarily due to lower acquisition-related costs and lower incentive compensation expense, partially offset by higher amortization expense related to the UW Solutions acquisition and incremental stock-based compensation expense related to CEO transition costs.
Previous report
•Interest expense increased to $3.2 million, primarily due to a higher average debt balance resulting from the acquisition of UW Solutions in November 2024.
Previous report
•Other income was $2.5 million compared to $0.1 million. The change was due to a $2.1 million gain related to a New Markets Tax Credit recognized in the current period.
Previous report
•Net earnings were $16.5 million compared to $21.0 million.
Previous report
Comparison of First Nine Months Fiscal 2026 to First Nine Months Fiscal 2025
Previous report
•Consolidated net sales increased 3.8%, to $1.1 billion, primarily driven by $65.3 million of inorganic sales contribution from the acquisition of UW Solutions. This was partially offset by lower volume and price as a result of lower demand.
Previous report
•Gross margin decreased to 22.9%, compared to 28.1%, primarily due to lower price and volume, higher aluminum, restructuring and health insurance costs, partially offset by lower incentive compensation expenses.
Previous report
•SG&A expenses as a percent of net sales increased to 17.3%, compared to 17.1%. The increase was primarily due to increased restructuring charges related to Project Fortify Phase 2, increased amortization expense associated with the UW Solutions transaction and incremental stock-based compensation expense related to CEO transition costs, partially offset by lower transaction-related costs and lower incentive compensation expense.
Previous report
•Operating income declined to $58.7 million from $112.0 million, and operating margin decreased 540 basis points to 5.6%.
Previous report
•Adjusted EBITDA decreased to $124.9 million compared to $151.5 million and adjusted EBITDA margin decreased to 11.9% compared to 14.9%. The decrease in adjusted EBITDA margin was primarily driven by lower price and volume, higher material and health insurance costs, partially offset by lower incentive compensation expense and cost savings as a result of Project Fortify Phase 2.
Previous report
•Interest expense, net increased to $11.1 million, primarily due to a higher average debt balance resulting from the acquisition of UW Solutions.
Previous report
•Other income was $6.9 million compared to $0.5 million. The change was driven by a $6.7 million gain from New Markets Tax Credits.
Previous report
•Net earnings were $37.5 million compared to $82.6 million.
Previous report
We have four operating segments which are also reportable segments. Each of our four segments have distinct economic characteristics, including products and services provided, production processes and varying ranges in performance and results.
Previous report
The segment measurements provided to, and evaluated by, the CODM are described in Note 12 of our unaudited condensed consolidated financial statements.
Previous report
The following table summarizes the impact that different items had on our net sales for the third quarter fiscal 2026. All net sales for the third quarter of fiscal 2025 were organic.
Previous report
•Net sales were $394.0 million, compared to $412.6 million, primarily reflecting lower volume, partially offset by increased price.
Previous report
•Adjusted EBITDA was $46.9 million, or 11.9% of net sales, compared to $63.6 million, or 15.4% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower volume, higher aluminum costs and less favorable product mix, partially offset by cost savings from Project Fortify Phase 2 and lower incentive compensation costs.
Previous report
•Net sales were $105.2 million, compared to $104.9 million, primarily due to increased volume.
Previous report
•Adjusted EBITDA increased to $10.2 million, or 9.7% of net sales, compared to $10.0 million, or 9.5% of net sales. The increase in adjusted EBITDA margin was primarily driven by lower incentive compensation expense, partially offset by unfavorable project mix.
Previous report
•Net sales were $312.2 million, compared to $302.0 million, primarily due to increased volume, partially offset by unfavorable project mix.
Previous report
•Adjusted EBITDA decreased to $21.3 million, or 6.8% of net sales, compared to $23.9 million, or 7.9% 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.
Previous report
•Net sales were $216.3 million compared to $247.0 million, primarily reflecting lower volume and price due to lower end-market demand.
Previous report
•Adjusted EBITDA decreased to $36.6 million, or 16.9% of net sales, compared to $57.6 million, or 23.3% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower volume and price, partially offset by lower incentive compensation expense.
Previous report
•Net sales were $53.0 million, compared to $33.2 million, which included $18.4 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 4.3%.
Previous report
•Adjusted EBITDA was $11.9 million, or 22.5% of net sales, compared to $7.8 million, or 23.6% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the dilutive impact of lower adjusted EBITDA margin from UW Solutions and unfavorable productivity, partially offset by favorable product mix and price.
Previous report
•Net sales were $143.6 million, compared to $74.2 million, which included $65.3 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 5.5%.
Previous report
•Adjusted EBITDA was $31.1 million, or 21.7% of net sales, compared to $18.1 million, or 24.3% 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 report
•Corporate and Other adjusted EBITDA expense was $11.0 million, compared to $11.5 million primarily due to lower incentive compensation expense, partially offset by higher health insurance costs.
Previous report
Adjusted net earnings, adjusted diluted earnings per share (adjusted diluted EPS), adjusted EBITDA, and adjusted EBITDA margin are supplemental non-GAAP financial measures provided by the Company to assess performance on a more comparable basis from period-to-period by excluding amounts that management does not consider part of core operating results. Management uses these non-GAAP measures as noted below:
Previous report
These non-GAAP measures should be viewed in addition to, and not as an alternative to, the reported financial results of the Company prepared in accordance with U.S. GAAP. Other companies may calculate these measures differently, thereby limiting the usefulness of the measures for comparison with other companies.
Showing the first 40 of 50 passages. Open the source sections for the rest.
Reworded paragraphs (25)
Previous wording
•Operating income declined to $24.9 million from $28.6 million, and operating margin decreased 130 basis points to 7.1%.
Current wording
•Operating income increased to $18.8 million from $6.9 million, and operating margin increased 350 basis points to 5.5%.
Previous wording
•Income tax expense as a percentage of earnings before income tax was 31.1%, compared to 24.8% for the same period last year. The increase in the effective tax rate was primarily due to increases in tax expense for discrete items.
Current wording
•Income tax expense as a percentage of earnings before income tax was 27.6%, compared to 211.9%. The decline in the effective tax rate was primarily due to generating greater earnings before income taxes compared to the first quarter of last year.
Previous wording
•Adjusted EBITDA increased to $46.1 million compared to $45.8 million and adjusted EBITDA margin decreased to 13.2% compared to 13.4%. The decrease in adjusted EBITDA margin was primarily driven by lower volume and price, higher aluminum and health insurance costs, partially offset by lower incentive compensation expense and benefits from cost savings related to Project Fortify Phase 2.
Current wording
•Adjusted EBITDA decreased to $32.1 million, compared to $34.4 million, and adjusted EBITDA margin decreased to 9.4%, compared to 9.9%. The decrease in adjusted EBITDA margin was primarily driven by higher material and freight costs and the impacts from lower volume, partially offset by productivity improvements and benefits from cost savings of Fortify Phase 2.
Previous wording
Reconciliation of Non-GAAP Financial Measures
Current wording
Use and Reconciliation of Non-GAAP Financial Measures
Previous wording
We have included in this report measures of financial performance that are not defined by U.S. GAAP. We believe that these measures provide useful information and include these measures in other communications to investors. For each of these non-GAAP financial measures, we provide a reconciliation of the differences between the non-GAAP measure and the most directly comparable U.S. GAAP measure (see “Reconciliation of Non-GAAP Financial Measures” in this Item 2 below), and an explanation of why we believe the non-GAAP measure provides useful information to management and investors. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable U.S. GAAP measure.
Current wording
In addition to reporting financial results in accordance with U.S. GAAP, we also provide certain non-GAAP financial measures. These measures are not in accordance with, nor are they a substitute for U.S. GAAP measures, and may not be comparable to similarly titled measures used by other companies. Management uses non-GAAP measures to evaluate the Company’s historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, and to provide enhanced transparency to the investment community. For each of these non-GAAP measures, we provide a reconciliation between the non-GAAP measure and the most directly comparable U.S. GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to management and investors.
Previous 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.
Current wording
•Adjusted net earnings and adjusted earnings per diluted share (adjusted diluted EPS), used by the Company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered part of core operating results, to enhance comparability from period-to-period.
Previous wording
•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.
Current wording
•Adjusted EBITDA, defined as adjusted net earnings before interest, taxes, depreciation, and amortization, and adjusted EBITDA margin, defined as 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.
Previous wording
•Net sales were $124.4 million, compared to $138.0 million, primarily due to lower volume, partially offset by favorable price and product mix.
Current wording
•Net sales were $122.4 million, compared to $128.6 million, primarily due to lower volume, partially offset by favorable price and product mix.
Previous wording
•Adjusted EBITDA was $16.8 million, or 13.5% of net sales, compared to $17.5 million, or 12.7% of net sales. The higher adjusted EBITDA margin was primarily driven by favorable productivity including cost savings related to Project Fortify Phase 2, lower incentive compensation expense, and favorable price and product mix, partially offset by lower volume.
Current wording
•Adjusted EBITDA was $13.7 million, or 11.2% of net sales, compared to $9.4 million, or 7.3% of net sales. The higher adjusted EBITDA margin was primarily driven by improved mix and favorable productivity including cost savings related to Project Fortify Phase 2, partially offset by the impact of lower volume and the impact from higher aluminum costs.
Previous wording
•Net sales were $70.9 million, compared to $70.2 million, primarily due to increased volume and favorable mix, partially offset by lower price driven by lower end-market demand.
Current wording
•Net sales were $44.3 million, compared to $42.3 million, driven by increased volume and favorable price.
Previous wording
•Adjusted EBITDA decreased to $11.5 million, or 16.3% of net sales, compared to $13.2 million, or 18.8% of net sales. The decrease in adjusted EBITDA margin was primarily driven by lower price and higher material costs, partially offset by higher volume, favorable mix, and lower short-term incentive compensation expense.
Current wording
•Adjusted EBITDA was $6.6 million, or 14.8% of net sales, compared to $8.0 million, or 18.8% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the net impact of higher material and freight costs, partially offset by productivity.
Previous wording
•Corporate and Other adjusted EBITDA expense was $4.3 million, compared to $2.7 million, primarily driven by higher health insurance costs.
Current wording
•Corporate and Other adjusted EBITDA expense was $0.2 million, compared to $2.4 million, primarily due to an insurance-related benefit.
Previous wording
Backlog represents the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which may be expected to be recognized as revenue in the future. Backlog is most meaningful for the Architectural Services Segment due to the longer-term nature of their projects. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. We view backlog as one indicator of future revenues, particularly in our longer-lead time businesses. In addition to backlog, we have a substantial amount of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog.
Current wording
Backlog is defined as the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which is expected to be recognized as revenue. Backlog is an operating measure used by management to assess future potential sales revenue. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. Backlog should not be used as the sole indicator of future revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog. It is most meaningful for the Architectural Services segment, due to the long-term nature of their projects.
Previous wording
As of November 29, 2025, segment backlog in the Architectural Services segment was approximately $774.7 million, compared to approximately $742.2 million at the end of the third quarter of fiscal 2025.
Current wording
As of May 30, 2026, segment backlog in the Architectural Services Segment was approximately $734.5 million, compared to approximately $682.9 million at the end of the first quarter of fiscal 2026.
Previous wording
We rely on cash provided by operations for our material cash requirements, including working capital needs, capital expenditures, satisfaction of contractual commitments (including principal and interest payments on our outstanding indebtedness) and shareholder return through dividend payments and share repurchases.
Current wording
We rely on cash provided by operations for our ongoing cash requirements, including working capital needs, capital expenditures, satisfaction of contractual commitments (including principal and interest payments on our outstanding indebtedness) and shareholder return through dividend payments and share repurchases.
Previous wording
Operating Activities. Net cash provided by operating activities was $66.6 million for the first nine months of fiscal 2026, compared to $95.1 million in the prior year period. The decrease in net cash provided by operating activities was primarily driven by lower net earnings and increased cash used for working capital, which included a net payment of $13.7 million for the settlement of an arbitration award during our first fiscal quarter. This was partially offset by lower taxes paid as a result of the One Big Beautiful Bill Act tax legislation.
Current wording
Operating Activities. Net cash provided by operating activities was $7.4 million for the first three months of fiscal 2027, compared to a use of $19.8 million in the prior year period. The increase in net cash provided by operating activities was driven by higher net earnings and an arbitration settlement payment in the prior year that did not recur.
Previous wording
Investing Activities. Net cash used in investing activities was $15.8 million for the first nine months of fiscal 2026, compared to $257.1 million in the prior-year period. The net cash used in investing activities was primarily related to capital expenditures in the current year period while the prior year period included a net use of cash for the acquisition of UW Solutions of $233.1 million.
Current wording
Investing Activities. Net cash used in investing activities was $9.8 million for the first three months of fiscal 2027, compared to $7.0 million in the prior-year period. The increase net cash used in investing activities was primarily related purchases of marketable securities.
Previous wording
Financing Activities. Net cash used in financing activities was $51.9 million for the first nine months of fiscal 2026, compared to $169.0 million of cash provided by financing activities in the prior year period. The prior year period included $250.0 million in proceeds from financing for the acquisition of UW Solutions. The prior year period also included $15.1 million for repurchases of common stock.
Current wording
Financing Activities. Net cash used in financing activities was $11.1 million for the first three months of fiscal 2027, compared to $17.6 million of cash provided by financing activities in the prior year period. The change in net cash provided by financing activities was driven by lower net proceeds received from our revolving credit facility, partially offset by $9.7 million of repurchases of common stock.
Previous wording
Additional Liquidity Considerations. We periodically evaluate our liquidity requirements, cash needs and availability of debt resources relative to acquisition plans, significant capital plans, and other working capital needs.
Current wording
Additional Liquidity Considerations. We periodically evaluate our liquidity requirements, cash needs and availability of debt resources relative to acquisition plans, significant capital plans, and other working capital needs. See Note 5 to our Consolidated Financial Statements for more information related to our debt agreements.
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 November 29, 2025. Outstanding borrowings under the revolving credit facility were $40.0 million as of November 29, 2025.
Current wording
Outstanding borrowings under the term loan facility were $209.4 million as of May 30, 2026. Outstanding borrowings under the revolving credit facility were $28.0 million as of May 30, 2026.
Previous wording
At November 29, 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 2027 and reduce borrowing capacity under the revolving credit facility. As of November 29, 2025, the amount available for revolving borrowings was $407.4 million.
Current wording
At May 30, 2026, 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 2027 and reduce borrowing capacity under the revolving credit facility. As of May 30, 2026, the amount available for revolving borrowings was $419.4 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 $63.2 million at November 29, 2025, with $3.9 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 $56.8 million at May 30, 2026, with $11.8 million payable during the remainder of fiscal 2027.
Previous wording
As of November 29, 2025, we had $16.4 million of open purchase obligations, of which payments totaling $2.7 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 May 30, 2026, we had $14.9 million of open purchase obligations, of which payments totaling $7.4 million are expected to become due during the remainder of fiscal 2027.
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 November 29, 2025, $1.2 billion of these types of bonds were outstanding, of which $253.0 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 May 30, 2026, $1.1 billion of these types of bonds were outstanding, of which $239.8 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.
Previous wording
There have been no material changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 1, 2025.
Current wording
There have been no significant changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.
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Previous report — wording carried elsewhere
•Income tax expense as a percentage of earnings before income tax was 31.4%, compared to 24.1%. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
Previous report — wording carried elsewhere
We evaluate the performance of our segments based on segment net sales and adjusted EBITDA. Our CEO is our CODM. The CODM uses these measurements 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.