UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): December 18, 2020
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (952 ) 835-1874
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||
On December 18, 2020, Apogee Enterprises, Inc. issued a press release announcing its financial results for the third quarter and full year of fiscal 2021. A copy of this press release is furnished (not filed) as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS | ||||
(d) Exhibits.
Exhibit 99.1 Press Release issued by Apogee Enterprises, Inc. dated December 18, 2020.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| APOGEE ENTERPRISES, INC. | ||||||||
| By: | /s/ Nisheet Gupta | |||||||
| Nisheet Gupta Executive Vice President and Chief Financial Officer | ||||||||
Dated: December 18, 2020
EXHIBIT INDEX
| Exhibit Number | Description | ||||||||||||||||
Press Release
FOR RELEASE: December 18, 2020
APOGEE ENTERPRISES REPORTS FISCAL 2021 THIRD-QUARTER RESULTS
•Earnings increase to $1.42 per diluted share; adjusted earnings grow to $0.90 per diluted share
•Revenue declines 7 percent to $314 million, with continued end-market headwinds
•On-track to achieve cost savings target of over $40 million in fiscal 2021; taking action to drive additional savings in fiscal 2022
•Strong cash flow, with $35 million of cash from operations in the quarter
MINNEAPOLIS, MN, December 18, 2020 – Apogee Enterprises, Inc. (Nasdaq: APOG) today announced results for the third quarter of fiscal 2021. Third-quarter revenue was $313.6 million, compared to $337.9 million in the third quarter of fiscal year 2020, reflecting market-related volume declines in Architectural Framing Systems and Architectural Glass, partially offset by growth in Architectural Services and Large-Scale Optical. Earnings were $1.42 per diluted share, compared to $0.57 per diluted share in the prior-year period, which included a pre-tax gain of $19.3 million on the sale of a building and $1.4 million of pre-tax costs related to COVID. Excluding these items, adjusted earnings increased to $0.90 per diluted share, from $0.57 in the prior year1.
Commentary
“We delivered another strong quarter, with adjusted earnings growth and improved cash flow, despite continued challenges from COVID and soft conditions in our architectural end markets,” said Joseph F. Puishys, Chief Executive Officer. “We focused aggressively on managing costs and improving execution across our business and remain on track to achieve our full-year cost reduction goal of over $40 million. Architectural Services continued its strong performance, with double-digit revenue and profit growth, and Large-Scale Optical returned to growth, rebounding faster than expected from its shutdown earlier in the year.”
1 Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. See Use and Reconciliation of Non-GAAP Financial Measures later in this press release for more information and a reconciliation to the most directly comparable GAAP measures.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
2
“During the quarter, we took several actions to further strengthen the company’s financial position and drive value,” continued Mr. Puishys. “We completed a sale-leaseback transaction for one of our facilities, generating a significant gain on the sale and $24 million in cash. We amended our term loan, extending the maturity by three years, and we resumed repurchases of our stock. We also initiated an effort to reduce our fixed cost base, which should add to the cost savings efforts we already had underway.”
Mr. Puishys concluded, “I want to commend the entire Apogee team for their efforts to manage through the past nine months. Our year-to-date results demonstrate the underlying strength and resilience of our company and our ability to produce solid results, even with difficult market conditions. Looking ahead, we will remain focused on managing what we can control, taking care of our employees and customers, while we execute strategic initiatives intended to position the company for long-term growth and improved profitability.”
Segment Results
Architectural Framing Systems
Architectural Framing Systems third-quarter revenue was $136.7 million, compared to $165.5 million in the prior-year period, primarily reflecting COVID and market-related project delays, and lower volume for short lead-time products. Operating income in the quarter increased to $7.2 million, with operating margin of 5.3 percent, from $6.3 million and 3.8 percent respectively in the prior-year quarter, primarily driven by cost reductions, which offset the impact of lower revenue. Segment backlog increased to $408 million, compared to $404 million at the end of the second quarter.
Architectural Glass
Architectural Glass revenue in the third quarter was $84.8 million, compared to $89.4 million in the prior-year quarter, primarily reflecting COVID and market-related project delays. The segment had operating income of $10.8 million and operating margin of 12.8 percent, compared to operating income of $4.0 million and margin of 4.6 percent in last year’s third quarter. Third quarter results included $7.4 million of operating income related to a New Markets Tax Credit transaction.
Architectural Services
Architectural Services revenue grew 11 percent to $76.7 million, from $69.0 million in the prior-year quarter, driven by increased volume from executing projects in backlog. Third-quarter operating income increased to $8.6 million with operating margin of 11.2 percent, up from $6.5 million and 9.5 percent respectively in the prior-year period, primarily driven by strong project execution. Segment backlog stood at $597 million, compared to $665 million at the end of the last quarter, and $607 million a year ago.
Large-Scale Optical
Large-Scale Optical revenue was $25.3 million, up from $24.4 million in the third quarter last year, driven by increased volume. Segment revenue grew sequentially by 50 percent compared to the second quarter, as customer demand increased significantly following the segment’s COVID-related shutdown earlier in the year. Segment operating income was $26.1 million with operating margin of 103.4 percent, which included a $19.3 million gain on the sale-leaseback of a building. Excluding this gain, adjusted operating income was $6.8 million, in-line with the prior-year quarter, with adjusted operating margin of 26.8 percent, compared to 27.7 percent last year.
Financial Condition
Fiscal year-to-date, net cash provided by operating activities is $121 million, more than double the $53.6 million for the same period last year, primarily driven by strong working capital management. Capital expenditures through the first nine months of the fiscal year were $17.1 million, down from $41.2 million in the prior-year period, as the company focused only on high return and essential capital projects. During the quarter,
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
3
the company repurchased 621,000 shares of stock for $16.0 million. Fiscal year-to-date, the company has returned $35 million to shareholders through dividend payments and share repurchases.
As previously disclosed, the company amended its credit agreement during the quarter to extend the maturity of its unsecured $150 million term loan for three years to June 2024. This extension is expected to benefit annual interest expense by $0.5 million. Total debt at the end of the third quarter was $168 million with no outstanding borrowings on the company’s $235 million revolving credit facility.
Outlook
The company is not providing detailed financial guidance due to continued uncertainty driven by the impact of COVID and end-market conditions. The company expects that continued project delays and soft market conditions will negatively impact revenue in the fourth quarter.
Conference Call Information
The company will host a conference call today at 8:00 a.m. Central Time to discuss its financial results and provide a business update. 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. The webcast also will be archived for replay on the company’s website.
About Apogee Enterprises
Apogee Enterprises, Inc. (Nasdaq: APOG) delivers distinctive solutions for enclosing commercial buildings and framing art. Headquartered in Minneapolis, MN, we are a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings, 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
This release and other financial communications may contain the following non-GAAP measures:
•Adjusted operating income, adjusted operating margin, adjusted net earnings and adjusted earnings per diluted share (“adjusted earnings per share” or “adjusted 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. Examples of items excluded to arrive at this adjusted measure in recent reporting periods include: restructuring costs, acquired project-related charges, and COVID-19 related expenditures.
•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.
•Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. We believe this metric provides useful information to investors and analysts about the Company's performance because it eliminates the effects of certain items that are unusual in nature or whose fluctuation from period to period do not necessarily correspond to changes in the operations of the company.
Another important non-GAAP operational measure that management uses is backlog. Backlog represents 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 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 segment revenue because 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.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
4
Management uses these non-GAAP measures to evaluate the company’s historical and prospective financial performance and liquidity, measure operational profitability on a consistent basis, and provide enhanced transparency to the investment community. These 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.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the 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, prospects and opportunities of the company , including the following: (A) potential continuing impacts from pandemic health issues, such as the coronavirus / COVID-19, along with the impact of government stay-at-home orders or other similar directives on our future financial results of operations, our future financial condition, and our ability to continue business activities in affected regions; (B) global economic conditions and the cyclical nature of the North American and Latin American commercial construction industries, which impact our three architectural segments, and consumer confidence and the condition of the U.S. economy, which impact our large-scale optical segment; (C) fluctuations in foreign currency exchange rates; (D) actions of new and existing competitors; (E) ability to effectively utilize and increase production capacity; (F) departure of key personnel and ability to source sufficient labor; (G) product performance, reliability and quality issues; (H) project management and installation issues that could affect the profitability of individual contracts; (I) changes in consumer and customer preference, or architectural trends and building codes; (J) dependence on a relatively small number of customers in certain business segments; (K) revenue and operating results that could differ from market expectations; (L) self-insurance risk related to a material product liability or other event for which the company is liable; (M) dependence on information technology systems and information security concerns; (N) cost of compliance with and changes in environmental regulations; (O) commodity price fluctuations, trade policy impacts, and supply availability; (P) integration of recent acquisitions and management of acquired contracts; and (Q) impairment of goodwill or indefinite-lived intangible assets. 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 February 29, 2020 and in subsequent filings with the U.S. Securities and Exchange Commission.
Contact
Jeff Huebschen
Vice President, Investor Relations & Communications
952.487.7538
ir@apog.com
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
5
| Apogee Enterprises, Inc. | ||||||||||||||||||||||||||||||||||||||
| Consolidated Condensed Statements of Income | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | November 28, 2020 | November 30, 2019 | % Change | November 28, 2020 | November 30, 2019 | % Change | ||||||||||||||||||||||||||||||||
| Net sales | $ | 313,583 | $ | 337,916 | (7) | % | $ | 922,162 | $ | 1,050,340 | (12) | % | ||||||||||||||||||||||||||
| Cost of sales | 243,998 | 263,606 | (7) | % | 716,139 | 808,856 | (11) | % | ||||||||||||||||||||||||||||||
| Gross profit | 69,585 | 74,310 | (6) | % | 206,023 | 241,484 | (15) | % | ||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 19,835 | 52,716 | (62) | % | 126,590 | 169,274 | (25) | % | ||||||||||||||||||||||||||||||
| Operating income | 49,750 | 21,594 | 130 | % | 79,433 | 72,210 | 10 | % | ||||||||||||||||||||||||||||||
| Interest expense, net | 1,502 | 1,995 | (25) | % | 4,240 | 7,176 | (41) | % | ||||||||||||||||||||||||||||||
| Other income, net | 472 | 231 | 104 | % | 684 | 599 | 14 | % | ||||||||||||||||||||||||||||||
| Earnings before income taxes | 48,720 | 19,830 | 146 | % | 75,877 | 65,633 | 16 | % | ||||||||||||||||||||||||||||||
| Income tax expense | 11,447 | 4,596 | 149 | % | 18,070 | 15,677 | 15 | % | ||||||||||||||||||||||||||||||
| Net earnings | $ | 37,273 | $ | 15,234 | 145 | % | $ | 57,807 | $ | 49,956 | 16 | % | ||||||||||||||||||||||||||
| Earnings per share - basic | $ | 1.44 | $ | 0.58 | 148 | % | $ | 2.22 | $ | 1.89 | 17 | % | ||||||||||||||||||||||||||
| Weighted average basic shares outstanding | 25,883 | 26,432 | (2) | % | 26,068 | 26,481 | (2) | % | ||||||||||||||||||||||||||||||
| Earnings per share - diluted | $ | 1.42 | $ | 0.57 | 149 | % | $ | 2.19 | $ | 1.87 | 17 | % | ||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | 26,225 | 26,750 | (2) | % | 26,350 | 26,776 | (2) | % | ||||||||||||||||||||||||||||||
| Cash dividends per common share | $ | 0.1875 | $ | 0.1750 | 7 | % | $ | 0.5625 | $ | 0.5250 | 7 | % | ||||||||||||||||||||||||||
| Business Segment Information | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||||||||||||||
| (In thousands) | November 28, 2020 | November 30, 2019 | % Change | November 28, 2020 | November 30, 2019 | % Change | ||||||||||||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||||||||||||||
| Architectural Framing Systems | $ | 136,688 | $ | 165,517 | (17) | % | $ | 439,779 | $ | 533,432 | (18) | % | ||||||||||||||||||||||||||
| Architectural Glass | 84,779 | 89,433 | (5) | % | 248,274 | 288,862 | (14) | % | ||||||||||||||||||||||||||||||
| Architectural Services | 76,690 | 69,043 | 11 | % | 213,911 | 195,787 | 9 | % | ||||||||||||||||||||||||||||||
| Large-Scale Optical | 25,267 | 24,405 | 4 | % | 48,438 | 66,449 | (27) | % | ||||||||||||||||||||||||||||||
| Intersegment eliminations | (9,841) | (10,482) | (6) | % | (28,240) | (34,190) | (17) | % | ||||||||||||||||||||||||||||||
| Net sales | $ | 313,583 | $ | 337,916 | (7) | % | $ | 922,162 | $ | 1,050,340 | (12) | % | ||||||||||||||||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||||||||||||||||
| Architectural Framing Systems | $ | 7,218 | $ | 6,345 | 14 | % | $ | 26,211 | $ | 34,141 | (23) | % | ||||||||||||||||||||||||||
| Architectural Glass | 10,825 | 4,092 | 165 | % | 15,306 | 16,951 | (10) | % | ||||||||||||||||||||||||||||||
| Architectural Services | 8,558 | 6,533 | 31 | % | 20,470 | 15,082 | 36 | % | ||||||||||||||||||||||||||||||
| Large-Scale Optical | 26,114 | 6,754 | 287 | % | 25,131 | 15,561 | 61 | % | ||||||||||||||||||||||||||||||
| Corporate and other | (2,965) | (2,130) | (39) | % | (7,685) | (9,525) | 19 | % | ||||||||||||||||||||||||||||||
| Operating income | $ | 49,750 | $ | 21,594 | 130 | % | $ | 79,433 | $ | 72,210 | 10 | % | ||||||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
6
| Apogee Enterprises, Inc. | ||||||||||||||
| Consolidated Condensed Balance Sheets | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In thousands) | November 28, 2020 | February 29, 2020 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 55,413 | $ | 14,952 | ||||||||||
| Current assets | 290,222 | 366,958 | ||||||||||||
| Net property, plant and equipment | 302,082 | 324,386 | ||||||||||||
| Other assets | 438,265 | 422,695 | ||||||||||||
| Total assets | $ | 1,085,982 | $ | 1,128,991 | ||||||||||
| Liabilities and shareholders' equity | ||||||||||||||
| Current liabilities | 209,700 | 271,457 | ||||||||||||
| Current debt | 2,000 | 5,400 | ||||||||||||
| Long-term debt | 166,463 | 212,500 | ||||||||||||
| Other liabilities | 160,476 | 122,856 | ||||||||||||
| Shareholders' equity | 547,343 | 516,778 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 1,085,982 | $ | 1,128,991 | ||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
7
| Apogee Enterprises, Inc. | ||||||||||||||
| Consolidated Statement of Cash Flows | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Nine Months Ended | ||||||||||||||
| (In thousands) | November 28, 2020 | November 30, 2019 | ||||||||||||
| Net earnings | $ | 57,807 | $ | 49,956 | ||||||||||
| Depreciation and amortization | 38,000 | 34,681 | ||||||||||||
| Share-based compensation | 6,163 | 4,617 | ||||||||||||
| Gain on disposal of assets | (19,346) | (623) | ||||||||||||
| Other, net | 14,474 | 17,074 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Receivables | 24,153 | (5,288) | ||||||||||||
| Inventories | (2,722) | 2,474 | ||||||||||||
| Costs and earnings on contracts in excess of billings | 44,501 | (17,156) | ||||||||||||
| Accounts payable and accrued expenses | (43,915) | (22,457) | ||||||||||||
| Billings on contracts in excess of costs and earnings | (6,981) | 4,901 | ||||||||||||
| Refundable and accrued income taxes | 12,424 | (6,159) | ||||||||||||
| Operating lease liability | (9,168) | (7,468) | ||||||||||||
| Other | 5,122 | (951) | ||||||||||||
| Net cash provided by operating activities | 120,512 | 53,601 | ||||||||||||
| Capital expenditures | (17,116) | (41,176) | ||||||||||||
| Proceeds from sales of property, plant and equipment | 23,724 | 591 | ||||||||||||
| Other | (1,090) | (857) | ||||||||||||
| Net cash provided (used) by investing activities | 5,518 | (41,442) | ||||||||||||
| Borrowings on line of credit | 193,332 | 108,000 | ||||||||||||
| (Repayment) borrowings on debt | (5,400) | 150,000 | ||||||||||||
| Payments on line of credit | (237,500) | (252,500) | ||||||||||||
| Repurchase and retirement of common stock | (20,732) | (20,010) | ||||||||||||
| Dividends paid | (14,546) | (13,808) | ||||||||||||
| Other | (852) | (2,584) | ||||||||||||
| Net cash used by financing activities | (85,698) | (30,902) | ||||||||||||
| Increase (decrease) in cash and cash equivalents | 40,332 | (18,743) | ||||||||||||
| Effect of exchange rates on cash | 129 | 32 | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of year | 14,952 | 29,241 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 55,413 | $ | 10,530 | ||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
8
| Apogee Enterprises, Inc. | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Adjusted Net Earnings and Adjusted Earnings per Diluted Common Share | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| (In thousands) | November 28, 2020 | November 30, 2019 | November 28, 2020 | November 30, 2019 | ||||||||||||||||||||||
| Net earnings | $ | 37,273 | $ | 15,234 | $ | 57,807 | $ | 49,956 | ||||||||||||||||||
| Gain on sale of building | (19,346) | — | (19,346) | — | ||||||||||||||||||||||
COVID-19 (1) | 1,372 | — | 4,068 | — | ||||||||||||||||||||||
| Post-acquisition and acquired project matters | — | (2,635) | 1,000 | (2,635) | ||||||||||||||||||||||
| Cooperation agreement advisory costs | — | 2,776 | — | 2,776 | ||||||||||||||||||||||
| Income tax impact on above adjustments | 4,224 | (33) | 3,398 | (34) | ||||||||||||||||||||||
| Adjusted net earnings | $ | 23,523 | $ | 15,342 | $ | 46,927 | $ | 50,063 | ||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| November 28, 2020 | November 30, 2019 | November 28, 2020 | November 30, 2019 | |||||||||||||||||||||||
| Earnings per diluted common share | $ | 1.42 | $ | 0.57 | $ | 2.19 | $ | 1.87 | ||||||||||||||||||
| Gain on sale of building | (0.74) | — | (0.73) | — | ||||||||||||||||||||||
COVID-19 (1) | 0.05 | — | 0.15 | — | ||||||||||||||||||||||
| Post-acquisition and acquired project matters | — | (0.10) | 0.04 | (0.10) | ||||||||||||||||||||||
| Cooperation agreement advisory costs | — | 0.10 | — | 0.10 | ||||||||||||||||||||||
| Income tax impact on above adjustments | 0.16 | — | 0.13 | — | ||||||||||||||||||||||
| Adjusted earnings per diluted common share | $ | 0.90 | $ | 0.57 | $ | 1.78 | $ | 1.87 | ||||||||||||||||||
| Per share amounts are computed independently for each of the items presented so the sum of the items may not equal the total amount. | ||||||||||||||||||||||||||
(1) Adjustment for COVID-19-related costs, primarily incremental labor costs due to quarantine-related absenteeism and personal protective equipment for employees. | ||||||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
9
| Adjusted Operating Income and Adjusted Operating Margin | ||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||
| Three Months Ended November 28, 2020 | ||||||||||||||||||||||||||||||||
| LSO Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating loss | Operating income | Operating margin | |||||||||||||||||||||||||||
| Operating (loss) income | $ | 26,114 | 103.4 | % | $ | (2,965) | $ | 49,750 | 15.9 | % | ||||||||||||||||||||||
| Gain on sale of building | (19,346) | (76.6) | — | (19,346) | (6.2) | |||||||||||||||||||||||||||
COVID-19 (1) | — | — | 1,372 | 1,372 | 0.4 | |||||||||||||||||||||||||||
| Adjusted operating income | $ | 6,768 | 26.8 | % | $ | (1,593) | $ | 31,776 | 10.1 | % | ||||||||||||||||||||||
(1) Adjustment for COVID-19-related costs, primarily incremental labor costs due to quarantine-related absenteeism and personal protective equipment for employees. | ||||||||||||||||||||||||||||||||
| Three Months Ended November 30, 2019 | ||||||||||||||||||||||||||||||||
| LSO Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating loss | Operating income | Operating margin | |||||||||||||||||||||||||||
| Operating income (loss) | $ | 6,754 | 27.7 | % | $ | (2,130) | $ | 21,594 | 6.4 | % | ||||||||||||||||||||||
| Cooperation agreement advisory costs | — | — | 2,776 | 2,776 | 0.8 | |||||||||||||||||||||||||||
| Acquired project matters | — | — | (2,635) | (2,635) | (0.8) | |||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 6,754 | 27.7 | % | $ | (1,989) | $ | 21,735 | 6.4 | % | ||||||||||||||||||||||
| Nine Months Ended November 28, 2020 | ||||||||||||||||||||||||||||||||
| LSO Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating loss | Operating income | Operating margin | |||||||||||||||||||||||||||
| Operating (loss) income | $ | 25,131 | 51.9 | % | $ | (7,685) | $ | 79,433 | 8.6 | % | ||||||||||||||||||||||
| Gain on sale of building | (19,346) | (39.9) | — | (19,346) | (2.1) | |||||||||||||||||||||||||||
COVID-19 (1) | — | — | 4,068 | 4,068 | 0.4 | |||||||||||||||||||||||||||
| Post-acquisition and acquired project matters | — | — | 1,000 | 1,000 | 0.1 | |||||||||||||||||||||||||||
| Adjusted operating (loss) income | $ | 5,785 | 11.9 | % | $ | (2,617) | $ | 65,155 | 7.1 | % | ||||||||||||||||||||||
(1) Adjustment for COVID-19-related costs, primarily incremental labor costs due to quarantine-related absenteeism and personal protective equipment for employees. | ||||||||||||||||||||||||||||||||
| Nine Months Ended November 30, 2019 | ||||||||||||||||||||||||||||||||
| LSO Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating loss | Operating income | Operating margin | |||||||||||||||||||||||||||
| Operating income (loss) | $ | 15,561 | 23.4 | % | $ | (9,525) | $ | 72,210 | 6.9 | % | ||||||||||||||||||||||
| Cooperation agreement advisory costs | — | — | 2,776 | 2,776 | 0.3 | |||||||||||||||||||||||||||
| Acquired project matters | — | — | (2,635) | (2,635) | (0.3) | |||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 15,561 | 23.4 | % | $ | (9,384) | $ | 72,351 | 6.9 | % | ||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
10
| EBITDA and Adjusted EBITDA | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||||||||||||||
| November 28, 2020 | November 30, 2019 | November 28, 2020 | November 30, 2019 | |||||||||||||||||||||||
| Net earnings | $ | 37,273 | $ | 15,234 | 57,807 | 49,956 | ||||||||||||||||||||
| Income tax expense | 11,447 | 4,596 | 18,070 | 15,677 | ||||||||||||||||||||||
| Interest expense, net | 1,502 | 1,995 | 4,240 | 7,176 | ||||||||||||||||||||||
| Other income, net | 472 | 231 | 684 | 599 | ||||||||||||||||||||||
| Depreciation and amortization | 12,716 | 11,922 | 38,000 | 34,681 | ||||||||||||||||||||||
| EBITDA | $ | 62,466 | $ | 33,516 | 117,433 | 106,891 | ||||||||||||||||||||
| Gain on sale of building | (19,346) | — | (19,346) | — | ||||||||||||||||||||||
COVID-19 (1) | 1,372 | — | 4,068 | — | ||||||||||||||||||||||
| Post-acquisition and acquired project matters | — | (2,635) | 1,000 | (2,635) | ||||||||||||||||||||||
| Cooperation agreement advisory costs | — | 2,776 | — | 2,776 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 44,492 | $ | 33,657 | $ | 103,155 | $ | 107,032 | ||||||||||||||||||
(1) Adjustment for COVID-19-related costs, primarily incremental labor costs due to quarantine-related absenteeism and personal protective equipment for employees. | ||||||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com