APOG Apogee Enterprises Inc

• Net sales decrease of 8%, to $332 million
• Operating margin improves to 12.5%; adjusted operating margin of 12.8%
• Diluted EPS grows to $1.41; adjusted diluted EPS increases 37% to $1.44
• Raising full-year EPS outlook

Apogee Enterprises, Inc. (Nasdaq: APOG) today reported its results for the first quarter of fiscal 2025. The Company reported the following selected financial results:

 

 

Three Months Ended

 

 

(Unaudited, $ in thousands, except per share amounts)

 

June 1, 2024

 

May 27, 2023

 

% Change

Net Sales

 

$

331,516

 

 

$

361,713

 

 

(8.3

)%

Operating income

 

$

41,381

 

 

$

33,767

 

 

22.5

%

Operating margin

 

 

12.5

%

 

 

9.3

%

 

34.4

%

Diluted earnings per share

 

$

1.41

 

 

$

1.05

 

 

34.3

%

Additional Non-GAAP Measures1

 

 

 

 

 

Adjusted operating income

 

$

42,503

 

 

$

33,767

 

 

25.9

%

Adjusted operating margin

 

 

12.8

%

 

 

9.3

%

 

37.6

%

Adjusted diluted earnings per share

 

$

1.44

 

 

$

1.05

 

 

37.1

%

Adjusted EBITDA

 

$

52,622

 

 

$

43,761

 

 

20.2

%

Adjusted EBITDA margin

 

 

15.9

%

 

 

12.1

%

 

31.4

%

“Our team continued to drive operational execution across the business, delivering significant operating income growth and record adjusted EPS, despite continued volume pressure,” said Ty R. Silberhorn, Chief Executive Officer. “As we look ahead, we continue to expect pressure on volume and pricing through the remainder of the fiscal year, due to softening end markets. We are focused on continuing to deliver results in this environment, while investing to position the Company for long-term growth.”

First-Quarter Consolidated Results (First Quarter Fiscal 2025 compared to First Quarter Fiscal 2024)

• Net sales decreased 8.3% to $331.5 million, primarily driven by lower volume.
• Gross margin improved by 410 basis points to 29.8%, primarily driven by a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, and productivity gains, partially offset by the impact of lower volume.
• Selling, general and administrative (SG&A) expenses as a percent of net sales increased 90 basis points to 17.3%, primarily due to unfavorable sales leverage, partially offset by lower bad debt expense.
• Operating income increased to $41.4 million, and operating margin was 12.5%. Adjusted operating income grew 25.9% to $42.5 million and adjusted operating margin improved to 12.8%. The 350 basis point improvement in adjusted operating margin was primarily driven by a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, productivity gains, and lower bad debt expense, which more than offset the impact of lower volume and unfavorable segment mix.
• Interest expense was $0.5 million, compared to $2.0 million, primarily driven by lower average debt levels.
• Diluted earnings per share (EPS) increased to $1.41 compared to $1.05. Adjusted diluted EPS grew 37.1% to $1.44, primarily driven by higher adjusted operating income and lower interest expense.

First Quarter Segment Results (First Quarter Fiscal 2025 Compared to First Quarter Fiscal 2024)

Architectural Framing Systems

Architectural Framing Systems net sales were $133.2 million, compared to $164.2 million, primarily reflecting reduced volume due to lower end-market demand and the exit of certain lower-margin product lines as part of Project Fortify. Operating income was $18.3 million, which included $1.0 million of restructuring charges. Adjusted operating income was $19.3 million, or 14.5% of net sales, compared to $19.9 million, or 12.1% of net sales. The 240 basis point improvement in adjusted operating margin was primarily driven by favorable material costs, favorable mix, productivity gains, and lower bad debt expense, partially offset by the impact of lower volume.

Architectural Glass

Architectural Glass net sales were $86.7 million, compared to $97.2 million, reflecting lower volume due to lower end-market demand, partially offset by improved pricing. Operating income increased to $17.1 million, or 19.7% of net sales, compared to $16.5 million, or 17.0% of net sales. The 270 basis point improvement in operating margin was primarily driven by productivity gains, and improved pricing, partially offset by the impact of lower volume.

Architectural Services

Architectural Services net sales grew 10.7% to $99.0 million, compared to $89.4 million, primarily due to a more favorable mix of projects and increased volume. Operating income increased to $5.6 million, or 5.7% of net sales, compared to an operating loss of $0.6 million, primarily driven by a more favorable mix of projects. Segment backlog2 at the end of the quarter increased by 7.3% to $866.9 million, compared to $807.8 million at the end of the fourth quarter of fiscal 2024.

Large-Scale Optical

Large-Scale Optical net sales were $21.2 million, compared to $22.5 million, primarily reflecting lower volume in the retail channel, partially offset by a more favorable mix. Operating income was $4.8 million, or 22.9% of net sales, compared to $5.5 million, or 24.6% of net sales. The 170 basis point decline in operating margin primarily reflects the impact of lower volume, partially offset by cost savings and improved mix.

Corporate and Other

Corporate and other expense was $4.5 million, compared to $7.6 million, primarily due to lower insurance-related costs.

Financial Condition

Net cash provided by operating activities was $5.5 million, compared to $21.3 million in last year’s first quarter, primarily driven by increased cash used for working capital. Capital expenditures were $7.2 million, compared to $7.4 million last year. During the quarter, the Company repurchased $15.1 million of stock.

Quarter-end long-term debt was $77.0 million, compared to $62.0 million at the end of fiscal 2024. The net leverage ratio3 as of the end of the quarter was 0.2x compared to 0.1x at the end of fiscal 2024.

Fiscal 2025 Outlook

The Company continues to expect a full-year net sales decline in the range of 4% to 7%. This range includes approximately 2 percentage points of decline related to fiscal 2025 reverting to a 52-week year, and approximately 1 percentage point of decline related to the actions of Project Fortify to eliminate certain lower-margin product and service offerings.

The Company is increasing its outlook for full-year diluted EPS to a range of $4.56 to $4.88 and adjusted diluted EPS to a range of $4.65 to $5.004. The Company continues to expect the impact of the reversion to a 52-week year will reduce adjusted diluted EPS by approximately $0.20 compared to fiscal 2024 and that there will be no material impact to adjusted diluted EPS related to the adverse net sales impact of Project Fortify.

The Company now expects a total of $15 million to $16 million of pre-tax charges in connection with Project Fortify leading to annualized cost savings of $12 million to $14 million. The Company continues to expect approximately 60% of these savings will be realized in fiscal 2025, and the remainder in fiscal 2026, with approximately 70% of the savings to be realized in Architectural Framing Systems, 20% in Architectural Services, and 10% in Corporate and Other, with the plan to be substantially complete in the third quarter of fiscal 2025.

The Company continues to expect an effective tax rate of approximately 24.5%, and capital expenditures between $40 to $50 million.

Conference Call Information

The Company will host a conference call today at 8:00 a.m. Central Time to discuss this earnings release. This call will be webcast and is available in the Investor Relations section of the Company’s website, along with presentation slides, at https://www.apog.com/events-and-presentations. A replay and transcript of the webcast will be available on the Company’s website for one year from the date of the conference call.

About Apogee Enterprises

Apogee Enterprises, Inc. (Nasdaq: APOG) is a leading provider of architectural products and services for enclosing buildings, and high-performance glass and acrylic products used for preservation, energy conservation, and enhanced viewing. Headquartered in Minneapolis, MN, our portfolio of industry-leading products and services includes high-performance architectural glass, windows, curtainwall, storefront and entrance systems, integrated project management and installation services, as well as value-added glass and acrylic for custom picture framing and displays. For more information, visit www.apog.com.

Use of Non-GAAP Financial Measures

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. Non-GAAP measures should be viewed in addition to, and not as a substitute for, the reported financial results of the Company prepared in accordance with GAAP. Other companies may calculate these measures differently, limiting the usefulness of the measures for comparison with other companies. This release and other financial communications may contain the following non-GAAP measures:

• Adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted effective tax rate, and adjusted diluted EPS are 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 of results from period to period.
• Adjusted EBITDA represents adjusted net earnings before interest, taxes, depreciation, and amortization. The Company believes adjusted EBITDA and adjusted EBITDA margin metrics provide useful information to investors and analysts about the Company’s core operating performance.
• Free cash flow is defined as net cash provided by operating activities, minus capital expenditures. The Company considers this measure an indication of its financial strength. However, free cash flow does not fully reflect the Company’s ability to freely deploy generated cash, as it does not reflect, for example, required payments on indebtedness and other fixed obligations.
• Net debt is a non-GAAP measure defined as total debt (current debt plus long-term debt) on our consolidated balance sheet, less cash and cash equivalents. The Company considers this measure helpful to evaluate our capital structure and financial leverage, and our ability to fund investing and financing activities.
• Net leverage ratio is a non-GAAP ratio defined as net debt divided by trailing twelve months adjusted EBITDA. The Company considers this measure helpful to evaluate our capital structure and financial leverage, and our ability to fund investing and financing activities.

Backlog is an operating measure used by management to assess future potential sales revenue. 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 and 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. Backlog should not be used as the sole indicator of future revenue because the Company has a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog.

Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements”. These statements reflect Apogee management’s expectations or beliefs as of the date of this release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified by factors that may affect the results, performance, financial condition, prospects and opportunities of the Company, including the following: (A) North American and global economic conditions, including the cyclical nature of the North American and Latin American non-residential construction industries and the potential impact of an economic downturn or recession; (B) U.S. and global instability and uncertainty arising from events outside of our control; (C) actions of new and existing competitors; (D) departure of key personnel and ability to source sufficient labor; (E) product performance, reliability and quality issues; (F) project management and installation issues that could affect the profitability of individual contracts; (G) dependence on a relatively small number of customers in one operating segment; (H) financial and operating results that could differ from market expectations; (I) self-insurance risk related to a material product liability or other events for which the Company is liable; (J) maintaining our information technology systems and potential cybersecurity threats; (K) cost of regulatory compliance, including environmental regulations; (L) supply chain disruptions, including fluctuations in the availability and cost of materials used in our products and the impact of trade policies and regulations, including potential future tariffs; (M) integration of acquisitions and management of acquired contracts; (N) impairment of goodwill or indefinite-lived intangible assets; (O) our ability to successfully manage and implement our enterprise strategy; (P) our ability to maintain effective internal controls over financial reporting; (Q) our judgements regarding the accounting for tax positions and the resolution of tax disputes; (R) the impact of cost inflation and interest rates; and (S) the impact of changes in capital and credit markets on our liquidity and cost of capital. The Company cautions investors that actual future results could differ materially from those described in the forward-looking statements and that other factors may in the future prove to be important in affecting the Company’s results, performance, prospects, or opportunities. New factors emerge from time to time, and it is not possible for management to predict all such factors, nor can it assess the impact of each factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. More information concerning potential factors that could affect future financial results is included in the Company’s Annual Report on Form 10-K for the fiscal year ended March 2, 2024, and in subsequent filings with the U.S. Securities and Exchange Commission.

______________________________

1

 

Adjusted operating income, adjusted operating margin, adjusted diluted earnings per share (EPS), adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. See Use of Non-GAAP Financial Measures and reconciliations to the most directly comparable GAAP measures later in this press release.

2

 

Backlog is a non-GAAP financial measure. See Use of Non-GAAP Financial Measures later in this press release for more information.

3

 

Net leverage ratio is a non-GAAP financial measure. See Use of Non-GAAP Financial Measures later in this press release for more information.

4

 

See reconciliation of Fiscal 2025 estimated adjusted diluted earnings per share to GAAP diluted earnings per share later in this press release.

 

Apogee Enterprises, Inc.

Consolidated Condensed Statements of Income

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

(In thousands, except per share amounts)

 

June 1, 2024

 

May 27, 2023

 

% Change

Net sales

 

$

331,516

 

 

$

361,713

 

(8.3

)%

Cost of sales

 

 

232,661

 

 

 

268,727

 

(13.4

)%

Gross profit

 

 

98,855

 

 

 

92,986

 

6.3

%

Selling, general and administrative expenses

 

 

57,474

 

 

 

59,219

 

(2.9

)%

Operating income

 

 

41,381

 

 

 

33,767

 

22.5

%

Interest expense, net

 

 

450

 

 

 

2,036

 

(77.9

)%

Other expense (income), net

 

 

(143

)

 

 

288

 

N/M

 

Earnings before income taxes

 

 

41,074

 

 

 

31,443

 

30.6

%

Income tax expense

 

 

10,063

 

 

 

7,867

 

27.9

%

Net earnings

 

$

31,011

 

 

$

23,576

 

31.5

%

 

 

 

 

 

 

 

Basic earnings per share

 

$

1.42

 

 

$

1.08

 

31.5

%

Diluted earnings per share

 

$

1.41

 

 

$

1.05

 

34.3

%

Weighted average basic shares outstanding

 

 

21,823

 

 

 

21,883

 

(0.3

)%

Weighted average diluted shares outstanding

 

 

22,061

 

 

 

22,386

 

(1.5

)%

Cash dividends per common share

 

$

0.25

 

 

$

0.24

 

4.2

%

Apogee Enterprises, Inc.

Business Segment Information

(Unaudited)

 

 

Three Months Ended

 

 

(In thousands)

 

June 1, 2024

 

May 27, 2023

 

% Change

Segment net sales

 

 

 

 

 

 

Architectural Framing Systems

 

$

133,172

 

 

$

164,162

 

 

(18.9

)%

Architectural Glass

 

 

86,703

 

 

 

97,202

 

 

(10.8

)%

Architectural Services

 

 

99,027

 

 

 

89,418

 

 

10.7

%

Large-Scale Optical

 

 

21,204

 

 

 

22,456

 

 

(5.6

)%

Intersegment eliminations

 

 

(8,590

)

 

 

(11,525

)

 

(25.5

)%

Net sales

 

$

331,516

 

 

$

361,713

 

 

(8.3

)%

Segment operating income (loss)

 

 

 

 

 

 

Architectural Framing Systems

 

$

18,336

 

 

$

19,945

 

 

(8.1

)%

Architectural Glass

 

 

17,091

 

 

 

16,521

 

 

3.5

%

Architectural Services

 

 

5,623

 

 

 

(596

)

 

N/M

 

Large-Scale Optical

 

 

4,846

 

 

 

5,525

 

 

(12.3

)%

Corporate and other

 

 

(4,515

)

 

 

(7,628

)

 

(40.8

)%

Operating income

 

$

41,381

 

 

$

33,767

 

 

22.5

%

Segment operating margin

 

 

 

 

 

 

Architectural Framing Systems

 

 

13.8

%

 

 

12.1

%

 

 

Architectural Glass

 

 

19.7

%

 

 

17.0

%

 

 

Architectural Services

 

 

5.7

%

 

 

(0.7

)%

 

 

Large-Scale Optical

 

 

22.9

%

 

 

24.6

%

 

 

Corporate and other

 

 

N/M

 

 

 

N/M

 

 

 

Operating margin

 

 

12.5

%

 

 

9.3

%

 

 

N/M - Indicates calculation is not meaningful

 

 

 

 

 

 

• Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.
• Net sales intersegment eliminations are reported separately to exclude these sales from our consolidated total.
• Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment.
• Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level. We report these unallocated corporate costs separately in Corporate and Other.
• Operating income does not include any other income or expense, interest expense or a provision for income taxes.

 

Apogee Enterprises, Inc.

Consolidated Condensed Balance Sheets

(Unaudited)

(In thousands)

 

June 1, 2024

 

March 2, 2024

Assets

 

 

 

 

Current assets

 

 

 

 

Cash and cash equivalents

 

$

30,363

 

$

37,216

Receivables, net

 

 

183,270

 

 

173,557

Inventories, net

 

 

80,495

 

 

69,240

Contract assets

 

 

43,957

 

 

49,502

Other current assets

 

 

34,417

 

 

29,124

Total current assets

 

 

372,502

 

 

358,639

Property, plant and equipment, net

 

 

242,292

 

 

244,216

Operating lease right-of-use assets

 

 

38,726

 

 

40,221

Goodwill

 

 

129,042

 

 

129,182

Intangible assets, net

 

 

64,981

 

 

66,114

Other non-current assets

 

 

41,436

 

 

45,692

Total assets

 

$

888,979

 

$

884,064

Liabilities and shareholders' equity

 

 

 

 

Current liabilities

 

 

 

 

Accounts payable

 

 

82,841

 

 

84,755

Accrued compensation and benefits

 

 

28,900

 

 

53,801

Contract liabilities

 

 

36,377

 

 

34,755

Operating lease liabilities

 

 

12,090

 

 

12,286

Other current liabilities

 

 

66,895

 

 

59,108

Total current liabilities

 

 

227,103

 

 

244,705

Long-term debt

 

 

77,000

 

 

62,000

Non-current operating lease liabilities

 

 

30,462

 

 

31,907

Non-current self-insurance reserves

 

 

30,859

 

 

30,552

Other non-current liabilities

 

 

43,600

 

 

43,875

Total shareholders’ equity

 

 

479,955

 

 

471,025

Total liabilities and shareholders’ equity

 

$

888,979

 

$

884,064

 

Apogee Enterprises, Inc.

Consolidated Statement of Cash Flows

(Unaudited)

 

 

Three Months Ended

(In thousands)

 

June 1, 2024

 

May 27, 2023

Operating Activities

 

 

 

 

Net earnings

 

$

31,011

 

 

$

23,576

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

Depreciation and amortization

 

 

9,976

 

 

 

10,282

 

Share-based compensation

 

 

2,704

 

 

 

2,178

 

Deferred income taxes

 

 

3,466

 

 

 

(165

)

Loss (gain) on disposal of assets

 

 

22

 

 

 

(27

)

Non-cash lease expense

 

 

2,895

 

 

 

2,714

 

Other, net

 

 

(925

)

 

 

(432

)

Changes in operating assets and liabilities:

 

 

 

 

Receivables

 

 

(9,845

)

 

 

(13,476

)

Inventories

 

 

(11,337

)

 

 

(2,068

)

Contract assets

 

 

5,511

 

 

 

14,368

 

Accounts payable

 

 

(1,871

)

 

 

(8,390

)

Accrued compensation and benefits

 

 

(24,850

)

 

 

(13,312

)

Contract liabilities

 

 

1,648

 

 

 

8,158

 

Operating lease liability

 

 

(3,007

)

 

 

(3,101

)

Accrued income taxes

 

 

6,535

 

 

 

7,590

 

Other current assets and liabilities

 

 

(6,480

)

 

 

(6,608

)

Net cash provided by operating activities

 

 

5,453

 

 

 

21,287

 

Investing Activities

 

 

 

 

Capital expenditures

 

 

(7,229

)

 

 

(7,398

)

Proceeds from sales of property, plant and equipment

 

 

40

 

 

 

66

 

Purchases of marketable securities

 

 

(740

)

 

 

—

 

Sales/maturities of marketable securities

 

 

600

 

 

 

400

 

Net cash used by investing activities

 

 

(7,329

)

 

 

(6,932

)

Financing Activities

 

 

 

 

Proceeds from revolving credit facilities

 

 

30,000

 

 

 

105,852

 

Repayments on revolving credit facilities

 

 

(15,000

)

 

 

(105,000

)

Repurchase of common stock

 

 

(15,061

)

 

 

(5,193

)

Dividends paid

 

 

—

 

 

 

(5,245

)

Other, net

 

 

(4,865

)

 

 

(1,677

)

Net cash used by financing activities

 

 

(4,926

)

 

 

(11,263

)

Effect of exchange rates on cash

 

 

(51

)

 

 

77

 

(Decrease) increase in cash and cash equivalents

 

 

(6,853

)

 

 

3,169

 

Cash and cash equivalents at beginning of period

 

 

37,216

 

 

 

21,473

 

Cash and cash equivalents at end of period

 

$

30,363

 

 

$

24,642

 

Non-cash Activity

 

 

 

Dividends declared but not yet paid

 

$

5,409

 

 

$

—

 

 

 

Apogee Enterprises, Inc.

 

Reconciliation of Non-GAAP Financial Measures

 

Adjusted Net Earnings and Adjusted Diluted Earnings per Share

 

(Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

(In thousands)

 

June 1, 2024

 

May 27, 2023

 

Net earnings

 

$

31,011

 

 

$

23,576

 

Restructuring charges (1)

 

 

1,122

 

 

 

—

 

Income tax impact on above adjustments (2)

 

 

(275

)

 

 

—

 

Adjusted net earnings

 

$

31,858

 

 

$

23,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

June 1, 2024

 

May 27, 2023

 

Diluted earnings per share

 

$

1.41

 

 

$

1.05

 

Restructuring charges (1)

 

 

0.05

 

 

 

—

 

Income tax impact on above adjustments (2)

 

 

(0.01

)

 

 

—

 

Adjusted diluted earnings per share

 

$

1.44

 

 

$

1.05

 

 

 

 

 

 

 

Weighted average diluted shares outstanding

 

 

22,061

 

 

 

22,386

 

(1)

 

Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs.

(2)

 

Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred.

 

Apogee Enterprises, Inc.

Reconciliation of Non-GAAP Financial Measures

Adjusted Operating Income (Loss) and Adjusted Operating Margin

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended June 1, 2024

(In thousands)

 

Architectural Framing Systems

 

Architectural Glass

 

Architectural Services

 

LSO

 

Corporate and Other

 

Consolidated

Operating income (loss)

 

$

18,336

 

 

$

17,091

 

 

$

5,623

 

 

$

4,846

 

 

$

(4,515

)

 

$

41,381

 

Restructuring charges (1)

 

 

998

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

124

 

 

 

1,122

 

Adjusted operating income (loss)

 

$

19,334

 

 

$

17,091

 

 

$

5,623

 

 

$

4,846

 

 

$

(4,391

)

 

$

42,503

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

 

13.8

%

 

 

19.7

%

 

 

5.7

%

 

 

22.9

%

 

 

N/M

 

 

 

12.5

%

Restructuring charges (1)

 

 

0.7

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

N/M

 

 

 

0.3

 

Adjusted operating margin

 

 

14.5

%

 

 

19.7

%

 

 

5.7

%

 

 

22.9

%

 

 

N/M

 

 

 

12.8

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended May 27, 2023

(In thousands)

 

Architectural Framing Systems

 

Architectural Glass

 

Architectural Services

 

LSO

 

Corporate and Other

 

Consolidated

Operating income (loss)

 

$

19,945

 

 

$

16,521

 

 

$

(596

)

 

$

5,525

 

 

$

(7,628

)

 

$

33,767

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating margin

 

 

12.1

%

 

 

17.0

%

 

 

(0.7

)%

 

 

24.6

%

 

 

N/M

 

 

 

9.3

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs.

 

Apogee Enterprises, Inc.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

(Earnings before interest, taxes, depreciation and amortization)

(Unaudited)

 

 

 

 

 

 

 

 

Three Months Ended

 

(In thousands)

 

June 1, 2024

 

May 27, 2023

 

Net earnings

 

$

31,011

 

 

$

23,576

 

 

Income tax expense

 

 

10,063

 

 

 

7,867

 

 

Interest expense, net

 

 

450

 

 

 

2,036

 

 

Depreciation and amortization

 

 

9,976

 

 

 

10,282

 

 

EBITDA

 

$

51,500

 

 

$

43,761

 

 

Restructuring charges (1)

 

 

1,122

 

 

 

—

 

 

Adjusted EBITDA

 

$

52,622

 

 

$

43,761

 

 

 

 

 

 

 

 

EBITDA Margin

 

 

15.5

%

 

 

12.1

%

 

Adjusted EBITDA Margin

 

 

15.9

%

 

 

12.1

%

 

(1)

 

Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs.

 

Apogee Enterprises, Inc.

Reconciliation of Non-GAAP Measure - Net Leverage Ratio

(Unaudited)

 

 

 

 

 

Net Debt (In thousands)

 

June 1, 2024

 

March 2, 2024

Total debt

 

$

77,000

 

 

$

62,000

 

Less: Cash and cash equivalents

 

 

30,363

 

 

 

37,216

 

Net Debt

 

$

46,637

 

 

$

24,784

 

 

 

 

 

 

 

 

Trailing twelve months ending

Adjusted EBITDA

 

June 1, 2024

 

March 2, 2024

Net earnings

 

$

107,048

 

 

$

99,613

 

Income tax expense

 

 

31,836

 

 

 

29,640

 

Interest expense, net

 

 

5,083

 

 

 

6,669

 

Depreciation and amortization

 

 

41,282

 

 

 

41,588

 

EBITDA

 

$

185,249

 

 

$

177,510

 

Restructuring charges (1)

 

 

13,525

 

 

 

12,403

 

NMTC settlement gain (2)

 

 

(4,687

)

 

 

(4,687

)

Adjusted EBITDA

 

$

194,087

 

 

$

185,226

 

 

 

 

 

 

Net Leverage

 

June 1, 2024

 

March 2, 2024

Net Debt

 

$

46,637

 

 

$

24,784

 

Adjusted EBITDA

 

 

194,087

 

 

 

185,226

 

Net Leverage Ratio

 

 

0.2

x

 

 

0.1

x

(1)

 

Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs incurred in fiscal 2024 and $0.4 million of employee termination costs and $0.7 million of other costs incurred in the first quarter of fiscal 2025.

(2)

 

Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net.

 

Apogee Enterprises, Inc.

Fiscal 2025 Outlook

Reconciliation of Fiscal 2025 outlook of estimated

Diluted Earnings per Share to Adjusted Diluted Earnings per Share

(Unaudited)

 

 

 

 

 

 

 

Fiscal Year Ending March 1, 2025

 

 

Low Range

 

High Range

Diluted earnings per share

 

$

4.56

 

 

$

4.88

 

Restructuring charges (1)

 

 

0.12

 

 

 

0.16

 

Income tax impact on above adjustments per share

 

 

(0.03

)

 

 

(0.04

)

Adjusted diluted earnings per share

 

$

4.65

 

 

$

5.00

 

(1)

 

Restructuring charges related to Project Fortify.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240627316996/en/

Jeff Huebschen Vice President, Investor Relations & Communications 952.487.7538 ir@apog.com