SEC Filing | Apogee Enterprises, Inc.

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apog-20241130

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________

FORM 10-Q

_________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2024


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-6365

_________________________________

APOGEE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

_________________________________

Minnesota

41-0919654

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

4400 West 78th Street, Suite 520

Minneapolis

Minnesota

55435

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (952) 835-1874

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.33 1/3 per share

APOG

The Nasdaq Stock Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

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.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

As of January 3, 2025, 21,953,364 shares of the registrant’s common stock, par value $0.33 1/3 per share, were outstanding.

APOGEE ENTERPRISES, INC. AND SUBSIDIARIES


		Page
PART I	Financial Information

Item 1.	Financial Statements (Unaudited):

	Consolidated Balance Sheets	4

	Consolidated Results of Operations	5

	Consolidated Statements of Comprehensive Earnings	6

	Consolidated Statements of Cash Flows	7

	Consolidated Statements of Shareholders' Equity	8

	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33

Item 4.	Controls and Procedures	33

PART II	Other Information

Item 1.	Legal Proceedings	34

Item 1A.	Risk Factors	34

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	34

Item 5.	Other Information	34

Item 6.	Exhibits	35

Signatures		36

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS


	(Unaudited)
(In thousands, except stock data)	November 30, 2024		March 2, 2024
Assets
Current assets
Cash and cash equivalents	$	43,855	$	37,216

Receivables, net	187,799		173,557
Inventories, net	97,003		69,240
Contract assets	57,545		49,502
Other current assets	45,119		29,124
Total current assets	431,321		358,639
Property, plant and equipment, net of accumulated depreciation of $465,837 and $445,017	269,063		244,216
Operating lease right-of-use assets	63,663		40,221
Goodwill	234,814		129,182
Intangible assets, net	140,390		66,114
Other non-current assets	41,269		45,692
Total assets	$	1,180,520	$	884,064
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	96,372	$	84,755
Accrued compensation and benefits	39,432		53,801

Contract liabilities	46,165		34,755
Operating lease liabilities	14,958		12,286

Other current liabilities	66,982		59,108
Total current liabilities	263,909		244,705
Long-term debt	272,000		62,000
Non-current operating lease liabilities	54,188		31,907
Non-current self-insurance reserves	33,303		30,552
Other non-current liabilities	35,051		43,875
Commitments and contingent liabilities (Note 6)
Shareholders’ equity
Junior preferred stock of $1.00 par value; authorized 200,000 shares; zero issued and outstanding	—		—
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 21,939,010 and 22,089,265, respectively	7,313		7,363
Additional paid-in capital	158,248		152,818
Retained earnings	388,478		340,375


Accumulated other comprehensive loss	(31,970)		(29,531)
Total shareholders’ equity	522,069		471,025
Total liabilities and shareholders’ equity	$	1,180,520	$	884,064

See accompanying notes to consolidated financial statements.

Table of Contents

CONSOLIDATED RESULTS OF OPERATIONS

(Unaudited)


	Three Months Ended				Nine Months Ended
(In thousands, except per share data)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Net sales	$	341,344	$	339,714	$	1,015,300	$	1,055,102
Cost of sales	252,195		249,409		729,975		776,440
Gross profit	89,149		90,305		285,325		278,662
Selling, general and administrative expenses	60,520		52,658		173,350		166,695
Operating income	28,629		37,647		111,975		111,967
Interest expense, net	1,044		1,454		2,634		5,720

Other (income) expense, net	(60)		890		(493)		(3,722)
Earnings before income taxes	27,645		35,303		109,834		109,969
Income tax expense	6,656		8,329		27,268		26,092
Net earnings	$	20,989	$	26,974	$	82,566	$	83,877
Basic earnings per share	$	0.96	$	1.24	$	3.79	$	3.83
Diluted earnings per share	$	0.96	$	1.23	$	3.76	$	3.80
Weighted average basic shares outstanding	21,782		21,819		21,789		21,889
Weighted average diluted shares outstanding	21,917		22,013		21,937		22,093

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Unaudited)


	Three Months Ended				Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Net earnings	$	20,989	$	26,974	$	82,566	$	83,877
Other comprehensive (loss) earnings:
Unrealized (loss) gain on marketable securities, net of $(13), $(2), $16 and $23 of tax (benefit) expense, respectively	(48)		(7)		60		86
Unrealized (loss) gain on derivative instruments, net of $(21), $56, $86 and $1 of tax (benefit) expense, respectively	(69)		186		281		6
Foreign currency translation adjustments	(1,619)		(604)		(2,780)		340
Other comprehensive (loss) earnings	(1,736)		(425)		(2,439)		432
Total comprehensive earnings	$	19,253	$	26,549	$	80,127	$	84,309

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023
Operating Activities
Net earnings	$	82,566	$	83,877
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	30,798		31,185
Share-based compensation	8,067		6,644
Deferred income taxes	5,109		1,296

Loss (gain) on disposal of property, plant and equipment	159		(50)


Settlement of New Markets Tax Credit transaction	—		(4,687)
Non-cash lease expense	9,926		8,742
Other, net	1,800		10
Changes in operating assets and liabilities:
Receivables	(2,191)		(846)
Inventories	(8,284)		8,256
Contract assets	(8,168)		11,194
Accounts payable	6,796		(1,902)

Accrued compensation and benefits	(20,958)		(7,015)
Contract liabilities	11,499		7,635
Operating lease liability	(9,387)		(9,214)
Accrued income taxes	(6,498)		(7,587)
Other current assets and liabilities	(6,104)		1,714
Net cash provided by operating activities	95,130		129,252
Investing Activities
Capital expenditures	(24,696)		(26,956)
Proceeds from sales of property, plant and equipment	744		247
Purchases of marketable securities	(2,394)		(969)
Sales/maturities of marketable securities	2,370		1,370
Acquisition of business, net of cash acquired	(233,125)		—

Net cash used by investing activities	(257,101)		(26,308)
Financing Activities
Proceeds from revolving credit facilities	95,201		195,851
Repayment on revolving credit facilities	(115,201)		(265,000)
Proceeds from term loans	250,000		—
Repayment of term loans	(20,000)		—
Payments of debt issuance costs	(3,798)		—

Repurchase of common stock	(15,061)		(11,821)
Dividends paid	(16,238)		(15,690)

Other, net	(5,884)		(3,781)
Net cash provided (used) by financing activities	169,019		(100,441)
Effect of exchange rates on cash	(409)		(569)
Increase in cash and cash equivalents	6,639		1,934
Cash and cash equivalents at beginning of period	37,216		21,473
Cash and cash equivalents at end of period	$	43,855	$	23,407
Non-cash Activity
Capital expenditures in accounts payable	$	2,299	$	1,231

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


(In thousands)	Common Shares Outstanding	Common Stock at Par Value		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at March 2, 2024	22,089	$	7,363	$	152,818	$	340,375	$	(29,531)	$	471,025
Net earnings	—	—		—		31,011		—		31,011
Other comprehensive income, net of tax	—	—		—		—		521		521
Issuance of stock, net of cancellations	170	57		(57)		—		—		—
Share-based compensation	—	—		2,704		—		—		2,704

Share repurchases	(242)	(81)		(1,860)		(13,120)		—		(15,061)
Other share retirements	(80)	(27)		(603)		(4,206)		—		(4,836)
Declared dividends	—	—		—		(5,409)		—		(5,409)
Balance at June 1, 2024	21,937	$	7,312	$	153,002	$	348,651	$	(29,010)	$	479,955
Net earnings	—	—		—		30,566		—		30,566
Other comprehensive loss, net of tax	—	—		—		—		(1,224)		(1,224)
Issuance of stock, net of cancellations	16	5		(5)		—		—		—
Share-based compensation	—	—		2,938		—		—		2,938


Other share retirements	(7)	(2)		(52)		(347)		—		(401)
Cash dividends	—	—		—		(5,412)		—		(5,412)
Balance at August 31, 2024	21,946	$	7,315	$	155,883	$	373,458	$	(30,234)	$	506,422
Net earnings	—	—		—		20,989		—		20,989
Other comprehensive loss, net of tax	—	—		—		—		(1,736)		(1,736)
Issuance of stock, net of cancellations	1	—		—		—		—		—
Share-based compensation	—	—		2,425		—		—		2,425


Other share retirements	(8)	(2)		(60)		(552)		—		(614)
Cash dividends	—	—		—		(5,417)		—		(5,417)
Balance at November 30, 2024	21,939	$	7,313	$	158,248	$	388,478	$	(31,970)	$	522,069

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


(In thousands)	Common Shares Outstanding	Common Stock at Par Value		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at February 25, 2023	22,224	$	7,408	$	146,816	$	273,740	$	(31,556)	$	396,408
Net earnings	—	—		—		23,576		—		23,576
Other comprehensive income, net of tax	—	—		—		—		159		159
Issuance of stock, net of cancellations	155	52		13		(9)		—		56
Share-based compensation	—	—		2,178		—		—		2,178

Share repurchases	(120)	(40)		(829)		(4,324)		—		(5,193)
Other share retirements	(40)	(14)		(281)		(1,438)		—		(1,733)
Cash dividends	—	—		—		(5,245)		—		(5,245)
Balance at May 27, 2023	22,219	$	7,406	$	147,897	$	286,300	$	(31,397)	$	410,206
Net earnings	—	—		—		33,327		—		33,327
Other comprehensive income, net of tax	—	—		—		—		697		697
Issuance of stock, net of cancellations	(3)	(1)		7		(195)		—		(189)
Share-based compensation	—	—		2,305		—		—		2,305
Exercise of stock options	25	8		(1,192)		—		—		(1,184)
Share repurchases	(160)	(53)		(1,160)		(5,415)		—		(6,628)
Other share retirements	(9)	(3)		(444)		(547)		—		(994)
Cash dividends	—	—		—		(5,222)		—		(5,222)
Balance at August 26, 2023	22,072	$	7,357	$	147,413	$	308,248	$	(30,700)	$	432,318
Net earnings	—	—		—		26,974		—		26,974
Other comprehensive loss, net of tax	—	—		—		—		(424)		(424)
Issuance of stock, net of cancellations	15	6		(5)		—		—		1
Share-based compensation	—	—		2,161		—		—		2,161


Other share retirements	(2)	(1)		(12)		(64)		—		(77)
Cash dividends	—	—		—		(5,222)		—		(5,222)
Balance at November 25, 2023	22,085	$	7,362	$	149,557	$	329,936	$	(31,124)	$	455,731

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements of Apogee Enterprises, Inc. (we, us, our or the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended March 2, 2024. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly and year to date operating results are reflected herein and are of a normal, recurring nature. The results of operations for the three- and nine-month periods ended November 30, 2024 are not necessarily indicative of the results to be expected for the full year.

New accounting standards

In November 2023, the Financial Accounting Standards Board (FASB) issued ASU 2023-07, Improvements to Reportable Segment Disclosures, which expands the required disclosure for reportable segments. This guidance requires entities to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all segment disclosures which are currently required annually. This ASU additionally requires entities to disclose the title and position of the individual or the name of the group or committee identified as its chief operating decision-maker. Such guidance, which is required to be applied retrospectively, is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, although early adoption is permitted. While the adoption of this ASU will not have an impact on our financial position and/or results of operations, we are currently evaluating the impact to our segment disclosures for the year ended March 1, 2025 and future interim periods.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, intended to enhance the transparency and decision-usefulness of income tax disclosures. Such guidance requires entities to provide additional information within their income tax rate reconciliation, including further disclosure of federal, state, and foreign income taxes and to provide more details about these reconciling items if a quantitative threshold is met. This guidance additionally requires expanded disclosure of income taxes paid, including amounts paid for federal, state, and foreign taxes. This ASU, which is required to be applied prospectively, is effective for fiscal years beginning after December 15, 2024, although early adoption and retrospective application is permitted. While the adoption of this ASU will not have an impact on our financial position and/or results of operations, we are currently evaluating the impact on our income tax disclosures, including the processes and controls around the collection of this information.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. This guidance requires entities to disclose more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions such as cost of sales and selling, general and administrative (SG&A) expenses. Such guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, although early adoption is permitted. This guidance should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements. While the adoption of this ASU will not have an impact on our financial position and/or results of operations, we are currently evaluating the impact this ASU may have on our consolidated financial statement disclosures, including the processes and controls around the collection of this information.

2.Revenue, Receivables and Contract Assets and Liabilities

Revenue

The following table disaggregates total revenue by timing of recognition (see Note 12 for disclosure of revenue by segment):


	Three Months Ended				Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Recognized at shipment	$	150,704	$	144,910	$	427,945	$	449,805
Recognized over time (input method)	125,451		115,345		360,815		356,996
Recognized over time (output method)	65,189		79,459		226,540		248,301
Total	$	341,344	$	339,714	$	1,015,300	$	1,055,102

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Receivables

Receivables reflected in the financial statements represent the net amount expected to be collected. An allowance for credit losses is established based on expected losses. Expected losses are estimated by reviewing individual accounts, considering aging, financial condition of the debtor, recent payment history, current and forecasted economic conditions and other relevant factors. Upon billing, aging of receivables is monitored until collection. An account is considered current when it is within agreed upon payment terms. An account is written off when it is determined that the asset is no longer collectible.


(In thousands)	November 30, 2024		March 2, 2024
Trade accounts	$	121,329	$	115,061
Construction contracts	68,953		61,879
Total receivables	190,282		176,940
Less: allowance for credit losses	2,483		3,383
Receivables, net	$	187,799	$	173,557

The following table summarizes the activity in the allowance for credit losses for the nine-month period ended:


(In thousands)	November 30, 2024
Beginning balance	$	3,383
Credits charged to costs and expenses	(1,412)
Deductions from allowance, net of recoveries	(72)
Allowance for credit losses from acquisitions	607
Other adjustments	(23)
Ending balance	$	2,483

Contract assets and liabilities

Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to the customer. Retainage on construction contracts represents amounts withheld by our customers on long-term projects until the project reaches a level of completion where amounts are released to us from the customer. Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts.

The time period between when performance obligations are complete and payment is due is not significant. In certain parts of our business that recognize revenue over time, progress billings follow an agreed-upon schedule of values.

The changes in contract assets and contract liabilities were mainly due to timing of project activity within our businesses that operate under long-term contracts.


Other contract-related disclosures	Three Months Ended				Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Revenue recognized related to contract liabilities from prior year-end	$	399	$	191	$	30,760	$	25,147
Revenue recognized related to prior satisfaction of performance obligations	4,129		730		12,295		5,634

Some of our contracts have an expected duration of longer than a year, with performance obligations extending over that time frame. Generally, these contracts are found in our businesses that typically operate with long-term contracts, which recognize revenue over time. The transaction prices associated with unsatisfied performance obligations at November 30, 2024 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:


(In thousands)	November 30, 2024
Within one year	$	530,834
Between one and two years	261,463
Beyond two years	88,030
Total	$	880,327

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3.Inventories

Inventories


(In thousands)	November 30, 2024		March 2, 2024
Raw materials	$	37,871	$	31,363
Work-in-process	17,504		12,291
Finished goods	41,628		25,586
Total inventories, net	$	97,003	$	69,240

4.Financial Instruments

Marketable securities

Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), we hold the following available-for-sale marketable securities, made up of fixed-maturity investments:


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
November 30, 2024	$	11,444	$	43	$	389	$	11,098
March 2, 2024	11,327		15		437		10,905

Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of these investments at November 30, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.


(In thousands)	Amortized Cost		Estimated Fair Value
Due within one year	$	4,081	$	3,971
Due after one year through five years	7,363		7,127



Total	$	11,444	$	11,098

Derivative instruments

We periodically use interest rate swaps, currency put options, and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance.

In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on floating-rate borrowings under our credit facility. As of November 30, 2024, the interest rate swap contract had a notional value of $30.0 million and has a maturity date of February 5, 2026.

We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates. These contracts generally have an original maturity date of less than one year. As of November 30, 2024, we held aluminum purchase contracts and foreign exchange option contracts with U.S. dollar notional values of $0.2 million and $0.8 million, respectively.

The mark to market adjustments on these derivative instruments are recorded within our consolidated balance sheets within other current assets and other current liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive loss until which time the hedged transaction is settled and gains or losses are reclassified to net earnings.

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Fair value measurements

Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.


(In thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total Fair Value
November 30, 2024
Assets:
Money market funds	$	25,010	$	—	$	25,010

Municipal and corporate bonds	—		11,098		11,098
Foreign currency option contract	—		39		39

Interest rate swap contract	—		713		713

Liabilities:

Aluminum hedging contract			6		6


March 2, 2024
Assets:
Money market funds	$	26,529	$	—	$	26,529

Municipal and corporate bonds	—		10,905		10,905
Foreign currency option contract	—		3		3
Interest rate swap contract	—		1,292		1,292

Liabilities:

Aluminum hedging contract	—		529		529

5.Debt

On July 19, 2024, we entered into a Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent, and other lenders. The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $700.0 million, in which commitments were made through a $450.0 million, five-year revolving credit facility and a committed $250.0 million delayed draw term loan facility. Borrowings under the revolving credit facility can be in Canadian dollars (CAD) limited to $25.0 million USD. The term loan facility may be utilized in up to two drawdowns, which are available to be made within one year after the closing date. The senior credit facility has a term of five years with a maturity date of July 19, 2029.

The Credit Agreement replaces the previous revolving credit facility with Wells Fargo Bank, N.A., as administrative agent, and other lenders, with maximum borrowings up to $385.0 million, and the two Canadian credit facilities with Bank of Montreal totaling $25.0 million USD. Outstanding borrowings under the previous revolving credit facility were $50.0 million as of March 2, 2024. We had no outstanding borrowings under the Canadian facilities as of March 2, 2024.

As a result of the execution of the Credit Agreement, in the second quarter of fiscal 2025, we recognized a loss on extinguishment of debt within interest expense of $0.5 million for the write-off of unamortized financing fees related to the previous revolving credit facility. Additionally, we capitalized $3.0 million of lender fees and $0.8 million of third-party fees incurred in connection with the Credit Agreement, which were recorded as other non-current assets and will be amortized over the term of the credit facility as interest expense.

The Credit Agreement contains two maintenance financial covenants that require our Consolidated Leverage Ratio (as defined in the Credit Agreement) to be less than 3.50 and our Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) to exceed 3.00. At November 30, 2024, we were in compliance with all covenants as defined under the terms of the Credit Agreement.

The Credit Agreement also contains an acquisition “holiday.” In the event we make an acquisition for which the purchase price is greater than $75 million, we can elect to increase the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) to 4.00 for a period of four consecutive fiscal quarters, commencing with the fiscal quarter in which a qualifying acquisition occurs. No more than two acquisition holidays can occur during the term of the Credit Agreement, and at least two fiscal quarters must separate qualifying acquisitions.

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Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or, for CAD borrowings, Canadian Overnight Repo Rate Average (CORRA) plus, in each a margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement). For Base Rate borrowings, the margin ranges from 0.25% to 0.75%. For Term SOFR and CORRA borrowings, the margin ranges from 1.25% to 1.75%, with an incremental Term SOFR and CORRA adjustment of 0.10% and 0.29547%, respectively.

The Credit Agreement also contains an “accordion” provision. Under this provision, we can request that the senior credit facility be increased by unlimited additional amounts. Any lender may elect or decline to participate in the requested increase at their sole discretion.

On November 4, 2024, as part of the acquisition of UW Interco, LLC (UW Solutions), and for working capital and general corporate purposes, we executed a drawdown against the delayed draw term loan facility for $250.0 million. Outstanding borrowings under the term loan facility were $230.0 million as of November 30, 2024. Outstanding borrowings under the revolving credit facility were $30.0 million as of November 30, 2024.

At November 30, 2024, we had a total of $27.3 million of ongoing letters of credit related to the senior credit facility and industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2026 through 2032 and reduce borrowing capacity under the revolving credit facility. As of November 30, 2024, the amount available for revolving borrowings was $405.0 million.

At November 30, 2024, debt included $12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

The fair value of our senior credit facility and industrial revenue bonds approximated carrying values at November 30, 2024, and would be classified as Level 2 within the fair value hierarchy described in Note 4, due to the variable interest rates on these instruments.


	Three Months Ended				Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Interest on debt	$	2,077	$	2,000	$	4,590	$	7,171
Interest rate swap gain	(223)		(236)		(695)		(656)
Other interest expense	38		274		653		352
Interest income	$	(848)	$	(584)	$	(1,914)	$	(1,147)
Interest expense, net	$	1,044	$	1,454	$	2,634	$	5,720

Interest payments under the credit facilities were $3.5 million and $7.5 million for the nine months ended November 30, 2024 and November 25, 2023, respectively. The weighted average interest rates on borrowings outstanding, inclusive of the impact of our interest rate swap as of November 30, 2024 and March 2, 2024 were 5.6% and 4.9%, respectively.

6.Commitments and Contingent Liabilities

Bond commitments

In the ordinary course of business, predominantly in our Architectural Services and Architectural Framing Systems Segments, we are required to provide surety or performance bonds that commit payments to our customers for any non-performance. At November 30, 2024, $1.2 billion of these types of bonds were outstanding, of which $307.2 million is in our backlog. These bonds have expiration dates that align with completion of the sales order or contract. We have never been required to make payments under surety or performance bonds with respect to our existing businesses.

Warranty and project-related contingencies

We reserve estimated exposures on known claims, as well as on a portion of anticipated claims, for product warranty and rework cost, based on historical product liability claims as a ratio of sales. Claim costs are deducted from the accrual when paid. Factors that could have an impact on these accruals in any given period include changes in manufacturing quality, changes in product mix, and any significant changes in sales volume.

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	Nine Months Ended
(In thousands)	November 30, 2024
Balance at beginning of period	$	21,362
Additions charged to costs and expenses	6,795

Deductions from reserve, net of recoveries	(8,438)
Balance at end of period	$	19,719

Additionally, we are subject to project management and installation-related contingencies as a result of our fixed-price material supply and installation service contracts, primarily in our Architectural Services Segment and in certain parts of our Architectural Framing Systems Segment. We manage the risk of these exposures through contract negotiations, proactive project management and insurance coverages.

Letters of credit

At November 30, 2024, we had $27.3 million of ongoing letters of credit as discussed in Note 5.

Purchase obligations

Purchase obligations for raw material commitments and capital expenditures totaled $20.0 million as of November 30, 2024.

New Markets Tax Credit (NMTC) transactions

We have two outstanding NMTC arrangements which help to support operational expansion. Proceeds received from investors on these transactions are included within other current liabilities in our consolidated balance sheets. The NMTC arrangements are subject to 100 percent tax credit recapture for a period of seven years from the date of each respective transaction. Upon the termination of each arrangement, these proceeds will be recognized in earnings in exchange for the transfer of tax credits. The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other current assets in our consolidated balance sheets. These costs will be recognized in conjunction with the recognition of the related proceeds on each arrangement. During the construction phase or for working capital purposes for each project, we are required to hold cash dedicated to fund each project, which is classified as restricted cash in our consolidated balance sheets. As a result of the structure of these transactions, variable-interest entities were created. As the other investors in these programs do not have a material interest in the entities' underlying economics, we include 100% of the results of the variable-interest entities in our consolidated financial statements.

The table below provides a summary of estimated benefits related to our outstanding NMTC transactions (in thousands):


Inception date	Termination date	Deferred Benefit		Deferred costs		Net benefit
May 2022(1)	August 2025	$	6,052	$	1,875	$	4,177
September 2018	September 2025	$	3,198	$	1,031	$	2,167
Total		$	9,250	$	2,906	$	6,344

(1) Continuation of the August 2018 NMTC financing transaction

Litigation

The Company is a party to various legal proceedings incidental to its normal operating activities. In particular, like others in the construction supply and services industry, the Company is routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. We have in the past and are currently subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products. In December 2022, the claimant in an arbitration of one such claim was awarded $20 million. The Company has appealed the award and believes, after taking into account all currently available information, including the advice of counsel and the likelihood of available insurance coverage, that this award will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows. The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability matters. Although it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no matters will result in losses that would have a material adverse effect on the results of operations, cash flows or financial condition of the Company.

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7.Supplier Finance Program Obligations

In the first quarter of fiscal 2024, we implemented a supplier financing arrangement that enables select suppliers, at their sole discretion, to sell our receivables (i.e., our payment obligations to the suppliers) on a non-recourse basis in order to be paid earlier than our payment terms provide. These suppliers’ voluntary inclusion of invoices in the supplier financing arrangement has no bearing on our payment terms, the amounts we pay, or our liquidity. We have no economic interest in the supplier’s decision to participate in the supplier financing program, and we do not provide any guarantees in connection with it. The balances owed are reflected in accounts payable in the consolidated balance sheets and are reflected in net cash provided by operating activities in our consolidated statements of cash flows when settled.

The following table summarizes the obligation activity for the nine months ended November 30, 2024 and outstanding balance as of November 30, 2024 that we have confirmed as valid to the administrators of our program:


(In thousands)	November 30, 2024
Balance at beginning of period	$	6,527
Obligations added to the program	35,881
Obligations settled	(34,612)
Balance at end of period	$	7,796

8.Shareholders' Equity

We paid dividends totaling $16.2 million ($0.75 per share) in the first nine months of fiscal 2025, compared to dividends paid of $15.7 million ($0.72 per share) in the comparable prior year period.

During fiscal 2004, the Board of Directors authorized a share repurchase program allowing us to repurchase shares of our outstanding common stock, with subsequent increases in authorization. During the nine-months ended November 30, 2024, we repurchased 241,573 shares under the program, for a total cost of $15.1 million, inclusive of the applicable excise tax. During the nine-months ended November 25, 2023, we repurchased 279,916 shares under the program, for a total cost of $11.8 million. We have repurchased a total of 11,518,090 shares, at a total cost of $408.5 million, since the inception of this program in fiscal 2004. We have remaining authority to repurchase 2,731,910 shares under this program, which has no expiration date. We may also elect to repurchase additional shares of common stock under our authorization, subject to limitations contained in our debt agreements and based upon our assessment of a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities. We may finance share repurchases with available cash, additional debt or other sources of financing.

Additionally, shares withheld from the vesting of restricted awards, or the settlement of performance-based awards, are treated as purchases and retirements, and are included within other, net in the financing activities section in the consolidated statement of cash flows.

9.Share-Based Compensation

As part of our compensation structure, we grant stock-based compensation awards to certain employees and non-employee directors during the fiscal year. These awards may be in the form of incentive stock options (to employees only), restricted stock awards and restricted stock units, and performance share unit awards, all of which are granted at a price or with an exercise price equal to the fair market value of the Company’s stock at the date of award, unless the date of the award is on a day the Nasdaq Stock Market is not open for trading, then the exercise price shall equal the fair market value on the most recent preceding date when such market is open.

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The table below sets forth the number of stock-based compensation awards granted during the nine-months ended November 30, 2024, along with the weighted average grant date fair value:


Awards	Number of Awards	Weighted Average Grant Date Fair Value
Restricted stock awards and restricted stock units(1)	127,117	$	63.45
Performance share units (2)	37,151	$	62.78

(1) Represent service condition awards which generally vest over a two- or three-year period.
(2) Represent performance condition awards with the grant equal to the target number of performance shares based on the share price at grant date. These grants allow for the right to receive a variable number of shares, between 0% and 200% of target, dependent on being employed at the end of the performance period and achieving defined performance goals for average return on invested capital and cumulative earnings per share.

Total share-based compensation expense included in the results of operations was $2.4 million and $2.2 million for the three-month periods ended November 30, 2024 and November 25, 2023, respectively and $8.1 million and $6.6 million for the nine-month periods ended November 30, 2024 and November 25, 2023, respectively.

At November 30, 2024, there was $14.2 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 24 months. The total fair value of shares vested during the nine-months ended November 30, 2024 was $9.5 million.

10.Income Taxes

We file income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, Canada, Brazil, and other international jurisdictions. We are not subject to U.S. federal tax examinations for years prior to fiscal 2021, or state and local income tax examinations for years prior to fiscal 2020. We are not currently under U.S. federal examination for years subsequent to fiscal year 2020, and there is very limited audit activity of our income tax returns in U.S. state jurisdictions or international jurisdictions.

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions and other items. For the three-months ended November 30, 2024, income tax expense as a percentage of earnings before income tax was 24.1%, compared to 23.6% for the same period last year. For the nine-months ended November 30, 2024, income tax expense as a percentage of earnings before income tax was 24.8%, compared to 23.7% for the same period last year. The change in the effective tax rate for both the three- and nine-month periods was primarily due to an increase in tax expense for discrete items.

The total liability for unrecognized tax benefits was $5.7 million at November 30, 2024 compared to $5.1 million at March 2, 2024, respectively. Penalties and interest related to unrecognized tax benefits are recorded in income tax expense.

11.Earnings per Share

The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share (diluted EPS):


	Three Months Ended		Nine Months Ended
(In thousands)	November 30, 2024	November 25, 2023	November 30, 2024	November 25, 2023
Basic earnings per share – weighted average common shares outstanding	21,782	21,819	21,789	21,889
Weighted average effect of nonvested share grants and assumed exercise of stock options	135	194	148	204
Diluted earnings per share – weighted average common shares and potential common shares outstanding	21,917	22,013	21,937	22,093
Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares)	1	37	18	56

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12.Business Segment Data

We have four reporting segments:

•The Architectural Framing Systems Segment designs, engineers, fabricates and finishes aluminum window, curtainwall, storefront and entrance systems for the exterior of buildings.

•The Architectural Glass Segment coats and fabricates high-performance glass used in custom window and wall systems on non-residential buildings.

•The Architectural Services Segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install building glass and curtainwall systems.

•The Large-Scale Optical (LSO) Segment manufactures high-performance coated substrate products for the custom framing, fine and graphic art, industrial flooring and engineered optics markets.

Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions. We report net sales intersegment eliminations separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, SG&A expenses, 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 in Corporate and Other. Operating income does not include other income or expense, interest expense or income tax expense.


	Three Months Ended				Nine Months Ended
(In thousands)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Segment net sales
Architectural Framing Systems	$	138,039	$	139,585	$	412,561	$	462,548
Architectural Glass	70,236		90,964		247,040		282,262
Architectural Services	104,921		94,662		301,966		272,144
Large-Scale Optical	33,196		26,009		74,232		72,110
Intersegment eliminations	(5,048)		(11,506)		(20,499)		(33,962)
Net sales	$	341,344	$	339,714	$	1,015,300	$	1,055,102
Segment operating income (loss)
Architectural Framing Systems	$	12,710	$	16,981	$	48,187	$	57,986
Architectural Glass	10,118		15,164		48,277		49,119
Architectural Services	9,730		5,288		21,483		8,211
Large-Scale Optical	4,842		7,100		13,481		17,288
Corporate and Other	(8,771)		(6,886)		(19,453)		(20,637)
Operating income	$	28,629	$	37,647	$	111,975	$	111,967

Due to the varying combinations and integration of individual window, storefront and curtainwall systems, it is impractical to report product revenues generated by class of product, beyond the segment revenues currently reported.

13. Acquisitions

On November 4, 2024, we completed the acquisition of UW Solutions for $241.8 million in cash. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates with a portfolio of well-known brands, including ResinDEK®, ChromaLuxe®, RDC Coatings™, and Unisub®, each known as a leader in its specified applications. The UW Solutions business activity is included in our Large-Scale Optical Segment.

The total purchase consideration was $233.1 million in cash, net of a preliminary net working capital adjustment of $1.8 million and cash acquired of $8.7 million. The acquisition was funded with cash on hand and borrowings under our existing credit agreement. During the third quarter of fiscal 2025, we incurred pre-tax acquisition-related expenses of $5.9 million associated with the UW Solutions acquisition. We incurred $0.4 million for inventory step-up expense which was included in costs of sales as well as $3.7 million of transaction costs, $0.9 million of integration costs, and $0.8 million of amortization of acquired backlog, which was included in SG&A within our consolidated results of operations.

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We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill of $106.3 million. The goodwill recognized is attributable primarily to expected synergies by integrating UW Solutions into our Large-Scale Optical Segment and by creating a scalable growth platform in the specialty coatings and materials market. The goodwill is expected to be amortized and deductible for income tax purposes. We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired. We assigned $21.0 million to tradenames and are amortizing over a 15-year expected life. We assigned $3.2 million to contract backlog and are amortizing over a 4-month expected life. We assigned $47.4 million to customer relationships and are amortizing a portion over a 10-year expected life and the remainder over a 15-year expected life, based on historical customer attrition rates. We assigned $7.8 million to developed technology and are amortizing over a 7.5-year expected life.

The following table presents the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date:


(In thousands)
Assets:
Cash and cash equivalents	$	8,703
Receivables, net	12,673
Inventories, net	19,805
Other current assets	1,335
Property, plant, and equipment	27,701
Operating lease right-of-use assets	14,268
Intangible assets	79,420
Goodwill	106,264
Other non-current assets	166
Total Assets	$	270,335
Liabilities:
Accounts payable	5,032
Accrued compensation and benefits	6,767
Operating lease liabilities	1,447
Other current liabilities	1,287
Non-current operating lease liabilities	14,030
Total Liabilities	$	28,563
Net assets recorded	$	241,772

The impact of the acquisition of UW Solutions on our consolidated results of operations for the three and nine-month periods ended on November 30, 2024 was $8.8 million of net sales and $4.2 million net loss, respectively. The net sales and net loss represent approximately four weeks of operating results, transaction and integration-related costs, interest and the net tax effect.

The following supplemental unaudited pro forma information presents our financial results as if the acquisition of UW Solutions had occurred on February 26, 2023. This supplemental pro forma information has been prepared for comparative purposes and would not necessarily indicate what may have occurred if the acquisition had been completed on February 26, 2023, and this information is not intended to be indicative of future results.

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(in thousands, except earnings per share data) (Unaudited)	Three Months Ended				Nine Months Ended
	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Net sales	$	359,904	$	368,243	$	1,077,941	$	1,131,489
Net earnings	25,364		26,951		84,804		71,890

Earnings per share:
Basic	1.16		1.24		3.89		3.28
Diluted	1.16		1.22		3.86		3.25

Nonrecurring charges of $3.7 million of transaction costs, $0.9 million of integration costs, $0.8 million of amortization of acquired backlog, and $0.4 million of inventory step-up expense incurred in the third quarter of fiscal 2025 are reflected as if those charges were incurred in the first quarter of fiscal 2024 supplemental pro forma earnings.

These amounts have been calculated after applying our accounting policies and adjusting the results of UW Solutions to reflect the effect of definite-lived intangible assets recognized as part of the business combination on amortization expense as if the acquisition had occurred on February 26, 2023.

14. Restructuring

During the fourth quarter of fiscal 2024, we announced strategic actions to further streamline our business operations, enable a more efficient cost model, and better position the Company for profitable growth (referred to as “Project Fortify”). Project Fortify primarily impacts the Architectural Framing Systems Segment and includes:

•Eliminating certain lower-margin product and service offerings, enabling consolidation into a single operating entity.

•Transferring production operations from the Company’s facility in Walker, Michigan, to the Company’s facilities in Monett, Missouri and Wausau, Wisconsin.

•Simplifying the segment’s brand portfolio and commercial model to improve flexibility, better leverage the Company’s capabilities, and enhance customer service.

Additionally, the Company has implemented similar actions to optimize processes and streamline resources in its Architectural Services Segment and Corporate and Other.

During the third quarter of fiscal 2025, we incurred $0.9 million of pre-tax costs associated with Project Fortify, which included $(0.1) million within cost of sales and $1.0 million included within SG&A expenses. During the first nine-months of fiscal 2025, we incurred $3.2 million of pre-tax costs associated with Project Fortify, of which $1.3 million was included within cost of sales and $1.9 million was included within SG&A expenses. Since announcing Project Fortify, we have incurred $15.6 million of pre-tax costs. The Company now expects these restructuring actions to be substantially complete by the end of the fourth quarter of fiscal 2025 and expects to incur total pre-tax charges of approximately $16.0 million to $17.0 million. Total Project Fortify restructuring charges are expected to include:

•Approximately $7.0 million of severance and employee related costs;

•Approximately$1.7 million of contract termination costs; and

•$7.5 million to $8.5 million of other expenses.

The Company expects that these actions will lead to annualized cost savings of $13 million to $14 million.


	Three Months Ended November 30, 2024
(In thousands)	Architectural Framing		Architectural Services		Corporate & Other		Total

Termination benefits	$	387	$	(764)	$	787	$	410

Other restructuring charges	455		47		—		502
Total restructuring charges	$	842	$	(717)	$	787	$	912

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	Nine Months Ended November 30, 2024
(In thousands)	Architectural Framing		Architectural Services		Corporate & Other		Total

Termination benefits	$	960	$	(592)	$	917	$	1,285
Contract termination costs	108		—		—		108
Other restructuring charges	1,687		133		—		1,820
Total restructuring charges	$	2,755	$	(459)	$	917	$	3,213

The following table summarizes our restructuring related accrual balances included within accrued payroll and related benefits and other current liabilities in the consolidated balance sheets. All remaining accrual balances are expected to be paid within fiscal 2025.


(In thousands)	Architectural Framing		Architectural Services		Corporate & Other		Total






Balance at March 2, 2024	$	2,814	$	2,067	$	56	$	4,937
Restructuring expense	1,090		(764)		912		1,238
Payments	(3,829)		(518)		(180)		(4,527)
Other adjustments	778		—		—		778
Balance at November 30, 2024	$	853	$	785	$	788	$	2,426

The charges presented in the roll forward of our restructuring accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued payroll and related benefits and other current liabilities in the consolidated balance sheets.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking statements

This Quarterly Report on Form 10-Q, including the section, Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains certain statements that are considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “may,” “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” “will,” “continue” or similar words or expressions. All forecasts and projections in this document are “forward-looking statements,” and are based on management’s current expectations or beliefs of the Company's near-term results, based on current information available pertaining to the Company. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public, such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.

Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to, the risks and uncertainties set forth under “Risk Factors” section of our Annual Report on Form 10-K for the year ended March 2, 2024 and in subsequent filings with the U.S. Securities and Exchange Commission, including this Quarterly Report on Form 10-Q.

We also wish to caution investors that other factors might in the future prove to be important in affecting the Company’s results of operations. New factors emerge from time to time; it is not possible for management to predict all such factors, nor can it assess the impact of each such 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. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Non-GAAP Measures

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.

Overview

We are a leading provider of architectural products and services for enclosing buildings, and high-performance coating products used in applications for preservation, protection and enhanced viewing. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical.

Our enterprise strategy is based on the following three key elements:

1.Become the economic leader in our target markets. We are developing a deep understanding of our target markets and aligning 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.

2.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 expect to 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.

3.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. In fiscal 2022, we 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.

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We set this strategy by developing a deep knowledge of the markets we serve and by gaining extensive input from customers and industry influencers, along with detailed competitive benchmarking. We continually analyze our portfolio of products, services, and capabilities to identify the best areas for future profitable growth. We also evaluate our operating model to ensure we have the organizational structure and capabilities needed to deliver consistent profitable growth. Through this work, we validate strengths that we can leverage and identify opportunities to improve our performance.

In fiscal 2024 and through the third quarter of fiscal 2025, we drove further progress toward our strategic goals and financial targets. We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements. We have invested in inorganic and organic growth initiatives, including the acquisition of UW Interco, LLC (UW Solutions), capacity expansion in the Large-Scale Optical Segment and geographic growth in the Architectural Services Segment. We increased our focus on differentiated products and services, and continued to diversify the mix of architectural projects that we serve while leaning more heavily into higher, value-added products. We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.

Recent Developments

In the third quarter of fiscal 2025, we acquired UW Solutions. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The Company serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. See Note 13 for additional information on the terms and conditions of this transaction.

The following selected financial data should be read in conjunction with the Company’s Form 10-K for the year ended March 2, 2024 and the consolidated financial statements, including the notes to consolidated financial statements, included therein.

Results of Operations

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.


	Three Months Ended				% of Net Sales
(in thousands, except percentages)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Net sales	$	341,344	$	339,714	100.0	%	100.0	%
Cost of sales	252,195		249,409		73.9		73.4
Gross profit	89,149		90,305		26.1		26.6
Selling, general and administrative expenses	60,520		52,658		17.7		15.5
Operating income	28,629		37,647		8.4		11.1
Interest expense, net	1,044		1,454		0.3		0.4

Other (income) expense, net	(60)		890		—		0.3
Earnings before income taxes	27,645		35,303		8.1		10.4
Income tax expense	6,656		8,329		1.9		2.5
Net earnings	$	20,989	$	26,974	6.1	%	7.9	%
Effective tax rate					24.1	%	23.6	%

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	Nine Months Ended				% of Net Sales
(in thousands, except percentages)	November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023
Net sales	$	1,015,300	$	1,055,102	100.0	%	100.0	%
Cost of sales	729,975		776,440		71.9		73.6
Gross profit	285,325		278,662		28.1		26.4
Selling, general and administrative expenses	173,350		166,695		17.1		15.8
Operating income	111,975		111,967		11.0		10.6
Interest expense, net	2,634		5,720		0.3		0.5

Other (income) expense, net	(493)		(3,722)		—		(0.4)
Earnings before income taxes	109,834		109,969		10.8		10.4
Income tax expense	27,268		26,092		2.7		2.5
Net earnings	$	82,566	$	83,877	8.1	%	7.9	%
Effective tax rate					24.8	%	23.7	%

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•Consolidated net sales increased 0.5%, to $341.3 million, driven by $8.8 million of inorganic sales contribution from the acquisition of UW Solutions and a more favorable mix of projects in Architectural Services, partially offset by less favorable mix in Architectural Framing Systems and lower volume in Architectural Glass.

•Gross margin decreased to 26.1%, compared to 26.6%, primarily driven by the unfavorable sales leverage impact of lower volume, a less favorable product mix in the Architectural Framing Systems Segment, and higher incentive compensation and lease expenses, partially offset by a more favorable mix of projects in Architectural Services Segment, and lower quality and insurance-related costs.

•SG&A expenses increased $7.9 million to 17.7% of net sales, compared to 15.5% of net sales. The increase in SG&A as a percentage of net sales was primarily due to acquisition-related expenses associated with the UW Solutions acquisition, restructuring expense related to Project Fortify, and the unfavorable sales leverage impact of lower volume.

•Operating income declined to $28.6 million from $37.6 million, and operating margin decreased 270 basis points to 8.4%. The lower operating margin was primarily driven by acquisition-related expenses associated with the UW Solutions transaction, unfavorable sales leverage impact on lower volume, less favorable product mix, higher incentive compensation, higher lease expense, and $0.9 million of restructuring costs related to Project Fortify, partially offset by a more favorable mix of projects in Architectural Services and lower insurance-related costs. Adjusted operating income was lower by 5.9% to $35.4 million, and adjusted operating margin was reduced to 10.4%.

•Interest expense, net declined to $1.0 million, primarily driven by lower weighted-average interest rates and higher interest income.

•Other income was $0.1 million compared to expense of $0.9 million. The change was driven by an increase in value of company-owned life insurance assets.

•Income tax expense as a percentage of earnings before income tax was 24.1%, compared to 23.6% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•Consolidated net sales decreased 3.8%, to $1,015.3 million, primarily driven by lower volume and mix, partially offset by a more favorable mix of projects in Architectural Services, improved pricing, and the $8.8 million inorganic sales contribution from the acquisition of UW Solutions.

•Gross margin increased to 28.1%, compared to 26.4%, primarily driven by improved pricing and a more favorable mix of projects in Architectural Services, favorable material costs, and lower quality and insurance-related costs, partially

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offset by the unfavorable sales leverage impact of lower volume, higher incentive compensation expense, higher lease costs, and $1.3 million of restructuring costs associated with Project Fortify.

•SG&A expenses increased $6.7 million to 17.1% of net sales, compared to 15.8% of net sales. The increase in SG&A as a percentage of net sales was primarily due to the impact of acquisition-related expenses, and the unfavorable sales leverage impact of lower volume, partially offset by lower bad debt expense.

•Operating income was $112.0 million and operating margin increased 40 basis points to 11.0%. The improvement in operating margin was primarily driven by improved pricing, a more favorable mix of projects in Architectural Services, favorable material costs, lower insurance-related costs, and lower bad debt expense, partially offset by the unfavorable sales leverage impact of lower volume, acquisition-related expenses, and $3.2 million of restructuring costs related to Project Fortify. Adjusted operating income grew 8.1% to $121.1 million, and adjusted operating margin improved to 11.9%.

•Interest expense, net was $2.6 million, compared to $5.7 million, primarily driven by lower average debt levels and increased interest income from higher invested cash over the periods, partially offset by the impact of the write-off of unamortized financing fees related to our previous credit facility.

•Other income was $0.5 million compared to $3.7 million. The higher amount of income in the prior year period was primarily due to $4.7 million of New Market Tax Credit income recognized in the prior year period.

•Income tax expense as a percentage of earnings before income tax was 24.8%, compared to 23.7% for the same period last year. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.

Segment Analysis

The following table presents net sales, operating income (loss) and operating margin by segment and consolidated total.


	Three Months Ended								Nine Months Ended
(In thousands, except percentages)	November 30, 2024			November 25, 2023			% Change		November 30, 2024			November 25, 2023			% Change
Segment net sales
Architectural Framing Systems	$	138,039		$	139,585		(1.1)	%	$	412,561		$	462,548		(10.8)	%
Architectural Glass	70,236			90,964			(22.8)		247,040			282,262			(12.5)
Architectural Services	104,921			94,662			10.8		301,966			272,144			11.0
Large-Scale Optical	33,196			26,009			27.6		74,232			72,110			2.9
Intersegment eliminations	(5,048)			(11,506)			(56.1)		(20,499)			(33,962)			(39.6)
Net sales	$	341,344		$	339,714		0.5	%	$	1,015,300		$	1,055,102		(3.8)	%
Segment operating income (loss)
Architectural Framing Systems	$	12,710		$	16,981		(25.2)	%	$	48,187		$	57,986		(16.9)	%
Architectural Glass	10,118			15,164			(33.3)		48,277			49,119			(1.7)
Architectural Services	9,730			5,288			84.0		21,483			8,211			161.6
Large-Scale Optical	4,842			7,100			(31.8)		13,481			17,288			(22.0)
Corporate and Other	(8,771)			(6,886)			27.4		(19,453)			(20,637)			(5.7)
Operating income	$	28,629		$	37,647		(24.0)	%	$	111,975		$	111,967		—	%
Segment operating margin
Architectural Framing Systems	9.2		%	12.2		%			11.7		%	12.5		%
Architectural Glass	14.4			16.7					19.5			17.4
Architectural Services	9.3			5.6					7.1			3.0
Large-Scale Optical	14.6			27.3					18.2			24.0
Corporate and Other	N/M			N/M					N/M			N/M
Operating income	8.4		%	11.1		%			11.0		%	10.6		%
N/M Indicates calculation not meaningful.

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Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions. We report net sales intersegment eliminations 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 in Corporate and Other. Operating income does not include other income or expense, interest expense or income tax expense.

Architectural Framing Systems

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•Net sales were $138.0 million, compared to $139.6 million, primarily reflecting a less favorable product mix, partially offset by increased volume.

•Operating income was $12.7 million, or 9.2% of net sales, compared to $17.0 million, or 12.2% of net sales. The decline in operating margin was primarily driven by the less favorable product mix as well as higher freight and compensation expenses and $0.8 million of restructuring charges related to Project Fortify. Adjusted operating income was $13.6 million, or 9.8% of net sales, compared to $17.0 million, or 12.2% of net sales.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•Net sales were $412.6 million, compared to $462.5 million, primarily reflecting reduced volume due to exiting certain lower-margin product lines as part of Project Fortify and lower end market demand as well as a less favorable product mix.

•Operating income was $48.2 million, or 11.7% of net sales, compared to $58.0 million, or 12.5% of net sales. The decline in operating margin was primarily driven by the unfavorable sales leverage impact of lower volume, higher compensation costs, and $2.8 million of restructuring charges as part of Project Fortify, partially offset by favorable material costs and lower bad debt expense. Adjusted operating income was $50.9 million, or 12.3% of net sales, compared to $58.0 million, or 12.5% of net sales.

Architectural Glass

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•Net sales were $70.2 million, compared to $91.0 million, primarily reflecting reduced volume due to lower end-market demand.

•Operating income decreased to $10.1 million, or 14.4% of net sales, compared to $15.2 million, or 16.7% of net sales. The lower operating margin was primarily driven by unfavorable sales leverage impact of lower volume partially offset by improved productivity, favorable freight costs, and lower quality-related expense.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•Net sales were $247.0 million, compared to $282.3 million, reflecting lower volume due to lower end-market demand, partially offset by improved pricing.

•Operating income decreased to $48.3 million, or 19.5% of net sales, compared to $49.1 million, or 17.4% of net sales. The improvement in operating margin was primarily driven by improved pricing, improved productivity, and lower quality-related costs, partially offset by the unfavorable sales leverage impact of lower volume.

Architectural Services

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•Net sales were $104.9 million, compared to $94.7 million, primarily due to a more favorable mix of projects and increased volume.

•Operating income increased to $9.7 million, or 9.3% of net sales, compared to $5.3 million, or 5.6% of net sales. The improvement in operating margin was primarily driven by a more favorable mix of projects partially offset by higher incentive compensation expense and higher lease costs.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•Net sales were $302.0 million, compared to $272.1 million, primarily due increased volume and a more favorable mix of projects.

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•Operating income increased to $21.5 million, or 7.1% of net sales, compared to $8.2 million, or 3.0% of net sales. The improvement in operating margin was primarily driven by a more favorable mix of projects, partially offset by higher incentive compensation expense and higher lease costs.

Large-Scale Optical (LSO)

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•LSO net sales were $33.2 million, compared to $26.0 million, which included $8.8 million of inorganic sales contribution from the acquisition of UW Solutions, partially offset by lower volume in the retail channel.

•Operating income was $4.8 million, or 14.6% of net sales, compared to $7.1 million, or 27.3% of net sales. The decline in operating margin was primarily driven by acquisition-related costs, the unfavorable sales leverage impact of lower volume, and the dilutive effect of lower operating margin from acquiring UW Solutions.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•LSO net sales were $74.2 million, compared to $72.1 million, which included $8.8 million of sales from UW Solutions, partially offset by lower volume in the retail channel.

•Operating income was $13.5 million, or 18.2% of net sales, compared to $17.3 million, or 24.0% of net sales. The decline in operating margin was primarily driven by acquisition-related costs and the sales leverage impact of lower volume.

Corporate and Other

Comparison of Third Quarter Fiscal 2025 to Third Quarter Fiscal 2024

•Corporate and Other expense was $8.8 million, compared to $6.9 million. The increase was primarily driven by acquisition-related costs, partially offset by lower incentive compensation and insurance-related costs.

Comparison of First Nine Months of Fiscal 2025 to First Nine Months of Fiscal 2024

•Corporate and Other expense was $19.5 million, compared to $20.6 million. The decrease was primarily due to lower insurance-related and incentive compensation costs, partially offset by acquisition-related costs.

Backlog

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 Architectural Services 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.

Architectural Services

As of November 30, 2024, segment backlog was approximately $742.2 million, compared to approximately $792.1 million at the end of the prior quarter. The decrease in backlog compared to the prior quarter was primarily driven by executing more project work in the quarter than securing new project awards that were added to backlog. Our backlog in this segment tends to vary significantly given the variable timing and relatively large size of projects awarded.

Reconciliation of Non-GAAP Financial Measures

Adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted diluted earnings per share (adjusted diluted EPS), adjusted net earnings before interest, taxes, depreciation and amortization (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:

•We use adjusted operating income, adjusted operating margin, adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period.

•We believe adjusted EBITDA and adjusted EBITDA margin metrics provide useful information to investors and analysts about our core operating performance.

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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.


Reconciliation of Non-GAAP Financial Measures
Adjusted Operating Income and Adjusted Operating Margin
(Unaudited)
	Three Months Ended November 30, 2024
(In thousands, except percentages)	Architectural Framing Systems			Architectural Glass			Architectural Services			LSO			Corporate and Other		Consolidated
Operating income	$	12,710		$	10,118		$	9,730		$	4,842		$	(8,771)	$	28,629
Acquisition-related costs (1)
Transaction	—			—			—			—			3,748		3,748
Integration	—			—			—			147			794		941
Backlog amortization	—			—			—			805			—		805
Inventory step-up	—			—			—			379			—		379
Total Acquisition-related costs	—			—			—			1,331			4,542		5,873
Restructuring charges (2)	842			—			(717)			—			787		912
Adjusted operating income	$	13,552		$	10,118		$	9,013		$	6,173		$	(3,442)	$	35,414

Operating margin	9.2		%	14.4		%	9.3		%	14.6		%	N/M		8.4		%
Acquisition-related costs (1)
Transaction	—		%	—		%	—		%	—		%	N/M		1.1		%
Integration	—		%	—		%	—		%	0.4		%	N/M		0.3		%
Backlog amortization	—		%	—		%	—		%	2.4		%	N/M		0.2		%
Inventory step-up	—		%	—		%	—		%	1.1		%	N/M		0.1		%
Total Acquisition-related costs	—		%	—		%	—		%	4.0		%	N/M		1.7		%
Restructuring charges (2)	0.6		%	—		%	(0.7)		%	—		%	N/M		0.3		%
Adjusted operating margin	9.8		%	14.4		%	8.6		%	18.6		%	N/M		10.4		%

	Three Months Ended November 25, 2023
	Architectural Framing Systems			Architectural Glass			Architectural Services			LSO			Corporate and Other		Consolidated
Operating income	$	16,981		$	15,164		$	5,288		$	7,100		$	(6,886)	$	37,647

Operating margin	12.2		%	16.7		%	5.6		%	27.3		%	N/M		11.1		%



(1)			Acquisition-related costs include: •Transaction costs related to the UW Solutions acquisition. •Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. •Backlog amortization is related to the value attributed to contracting the backlog purchased in the UW Solutions acquisition. These costs will be amortized in SG&A over the period that the contracted backlog is shipped. •Inventory step-up is related to the incremental cost to value inventory acquired as part of the UW Solutions acquisition at fair value. These costs will be expensed to cost of goods sold over the period the inventory is sold.
(2)			Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.5 million of other costs incurred in the third quarter of fiscal 2025.

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	Nine Months Ended November 30, 2024
(In thousands, except percentages)	Architectural Framing Systems			Architectural Glass			Architectural Services			LSO			Corporate and Other		Consolidated
Operating income	$	48,187		$	48,277		$	21,483		$	13,481		$	(19,453)	$	111,975
Acquisition-related costs (1)
Transaction	—			—			—			—			3,748		$	3,748
Integration	—			—			—			147			794		$	941
Backlog amortization	—			—			—			805			—		$	805
Inventory step-up	—			—			—			379			—		$	379
Total Acquisition-related costs	—			—			—			1,331			4.542		$	5,873
Restructuring charges (2)	2,755			—			(459)			—			917		3,213
Adjusted operating income	$	50,942		$	48,277		$	21,024		$	14,812		$	(13,994)	$	121,061

Operating margin	11.7		%	19.5		%	7.1		%	18.2		%	N/M		11.0		%
Acquisition-related costs (1)
Transaction	—		%	—		%	—		%	—		%	N/M		0.4		%
Integration	—		%	—		%	—		%	0.2		%	N/M		0.1		%
Backlog amortization	—		%	—		%	—		%	1.1		%	N/M		0.1		%
Inventory step-up	—		%	—		%	—		%	0.5		%	N/M		—		%
Total Acquisition-related costs	—		%	—		%	—		%	1.8		%	N/M		0.6		%
Restructuring charges (2)	0.7		%	—		%	(0.2)		%	—		%	N/M		0.3		%
Adjusted operating margin	12.3		%	19.5		%	7.0		%	20.0		%	N/M		11.9		%

	Nine Months Ended November 25, 2023
	Architectural Framing Systems			Architectural Glass			Architectural Services			LSO			Corporate and Other		Consolidated
Operating income	$	57,986		$	49,119		$	8,211		$	17,288		$	(20,637)	$	111,967

Operating margin	12.5		%	17.4		%	3.0		%	24.0		%	N/M		10.6		%



(1)			Acquisition-related costs include: •Transaction costs related to the UW Solutions acquisition. •Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. •Backlog amortization is related to the value attributed to contracting the backlog purchased in the UW Solutions acquisition. These costs will be amortized in SG&A over the period that the contracted backlog is shipped. •Inventory step-up is related to the incremental cost to value inventory acquired as part of the UW Solutions acquisition at fair value. These costs will be expensed to cost of goods sold over the period the inventory is sold.
(2)			Restructuring charges related to Project Fortify, including $1.3 million of employee termination costs, $0.1 million of contract termination costs and $1.8 million of other costs incurred in the first nine months of fiscal 2025.

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	Reconciliation of Non-GAAP Financial Measures
	Adjusted Net Earnings and Adjusted Diluted Earnings Per Share
	(Unaudited)

		Three Months Ended				Nine Months Ended
(In thousands, except per share amounts)		November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023

Net earnings		$	20,989	$	26,974	$	82,566	$	83,877
Acquisition-related costs (1)
Transaction		3,748		—		3,748		—
Integration		941		—		941		—
Backlog amortization		805		—		805		—
Inventory step-up		379		—		379		—
Total Acquisition-related costs		5,873		—		5,873		—
Restructuring charges (2)		912		—		3,213		—
NMTC settlement gain (3)		—		—		—		(4,687)
Income tax impact on above adjustments (4)		(1,662)		—		(2,226)		1,148
Adjusted net earnings		$	26,112	$	26,974	$	89,426	$	80,338

		Three Months Ended				Nine Months Ended
		November 30, 2024		November 25, 2023		November 30, 2024		November 25, 2023

Diluted EPS		$	0.96	$	1.23	$	3.76	$	3.80
Acquisition-related costs (1)
Transaction		0.17		—		0.17		—
Integration		0.04		—		0.04		—
Backlog amortization		0.04		—		0.04		—
Inventory step-up		0.02		—		0.02		—
Total Acquisition-related costs		0.27		—		0.27		—
Restructuring charges (2)		0.04		—		0.15		—
NMTC settlement gain (3)		—		—		—		(0.21)
Income tax impact on above adjustments (4)		(0.08)		—		(0.10)		0.05
Adjusted diluted EPS		$	1.19	$	1.23	$	4.08	$	3.64

Shares outstanding for EPS		21,917		22,013		21,937		22,093

(1)	Acquisition-related costs include: •Transaction costs related to the UW Solutions acquisition. •Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. •Backlog amortization is related to the value attributed to contracting the backlog purchased in the UW Solutions acquisition. These costs will be amortized in SG&A over the period that the contracted backlog is shipped. •Inventory step-up is related to the incremental cost to value inventory acquired as part of the UW Solutions acquisition at fair value. These costs will be expensed to cost of goods sold over the period the inventory is sold.
(2)	Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.5 million of other costs incurred in the third quarter of fiscal 2025, and $1.3 million of employee termination costs, $0.1 million of contract termination costs and $1.8 million of other costs incurred in the first nine months of fiscal 2025.
(3)	Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net.



(4)	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.

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Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation and amortization)
(Unaudited)

	Three Months Ended						Nine Months Ended
(In thousands)	November 30, 2024			November 25, 2023			November 30, 2024			November 25, 2023

Net earnings	$	20,989		$	26,974		$	82,566		$	83,877
Income tax expense	6,656			8,329			27,268			26,092
Interest expense, net	1,044			1,454			2,634			5,720
Depreciation and amortization	11,134			10,524			30,798			31,185
EBITDA	$	39,823		$	47,281		$	143,266		$	146,874
Acquisition-related costs (1)
Transaction	3,748			—			3,748			—
Integration	941			—			941			—
Inventory step-up	379			—			379			—
Total Acquisition-related costs	5,068			—			5,068			—
Restructuring charges (2)	912			—			3,213			—
NMTC settlement gain (3)	—			—			—			(4,687)
Adjusted EBITDA	$	45,803		$	47,281		$	151,547		$	142,187

EBITDA Margin	11.7		%	13.9		%	14.1		%	13.9		%
Adjusted EBITDA Margin	13.4		%	13.9		%	14.9		%	13.5		%


(1)			Acquisition-related costs include: •Transaction costs related to the UW Solutions acquisition. •Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. •Inventory step-up is related to the incremental cost to value inventory acquired as part of the UW Solutions acquisition at fair value. These costs will be expensed to cost of goods sold over the period the inventory is sold.
(2)			Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.5 million of other costs incurred in the third quarter of fiscal 2025, and $1.3 million of employee termination costs, $0.1 million of contract termination costs and $1.8 million of other costs incurred in the first nine months of fiscal 2025.
(3)			Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net.

Liquidity and Capital Resources

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.

Operating Activities. Net cash provided by operating activities was $95.1 million for the first nine months of fiscal 2025, compared to $129.3 million in the prior year period. The decrease in net cash provided by operating activities was primarily driven by cash used for working capital.

Investing Activities. Net cash used by investing activities was $257.1 million for the first nine months of fiscal 2025, compared to $26.3 million in the prior year period. The increase in net cash used by investing activities was primarily related to $233.1 million of cash used for the acquisition of UW Solutions.

Financing Activities. Net cash provided by financing activities was $169.0 million for the first nine months of fiscal 2025, compared to $100.4 million of net cash used by financing activities in the prior year period. The increase in net cash provided by financing activities was primarily driven by the proceeds of $250.0 million from the delayed draw term loan utilized to finance the UW Solutions acquisition.

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.

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Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or for CAD borrowings, Canadian Overnight Repo Rate Average (CORRA) plus, in each a margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement). For Base Rate borrowings, the margin ranges from 0.25% to 0.75%. For Term SOFR and CORRA borrowings, the margin ranges from 1.25% to 1.75%, with an incremental Term SOFR and CORRA adjustment of 0.10% and 0.29547% respectively.

On November 4, 2024, as part of the acquisition of UW Solutions, and for working capital and general corporate purposes, we executed a drawdown against the delayed draw term loan facility for $250.0 million. Outstanding borrowings under the term loan facility were $230.0 million as of November 30, 2024. Outstanding borrowings under the revolving credit facility were $30.0 million as of November 30, 2024.

We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment. Future payments for such leases, excluding leases with initial terms of one year or less, were $73.9 million at November 30, 2024, with $4.3 million payable during the remainder of fiscal 2025.

As of November 30, 2024, we had $20.0 million of open purchase obligations, of which payments totaling $14.5 million are expected to become due during the remainder of fiscal 2025. These purchase obligations primarily relate to raw material commitments and capital expenditures and are not expected to impact future liquidity, as amounts should be recovered through customer billings.

We expect to make contributions of $0.4 million to our defined-benefit pension plans in fiscal 2025, which will equal or exceed our minimum funding requirements.

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As of November 30, 2024, we had reserves of $5.7 million for unrecognized tax benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits will ultimately be settled.

We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance. At November 30, 2024, $1.2 billion of these types of bonds were outstanding, of which $307.2 million is in our backlog. These bonds have expiration dates that align with completion of the purchase order or contract. We have not been required to make any payments under these bonds with respect to our existing businesses.

Due to our ability to generate strong cash from operations and our borrowing capability under our committed revolving credit facility, we believe that our sources of liquidity will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs, including additional sources of debt to finance potential acquisitions, for the foreseeable future. We also believe we will be able to operate our business so as to continue to be in compliance with our existing debt covenants over the next fiscal year.

We continually review our portfolio of businesses and their assets and how they support our business strategy and performance objectives. As part of this review, we may acquire other businesses, pursue geographic expansion, take actions to manage capacity and further invest in, divest and/or sell parts of our current businesses.

Related Party Transactions

No material changes have occurred in the disclosure with respect to our related party transactions set forth in our Annual Report on Form 10-K for the fiscal year ended March 2, 2024.

Critical Accounting Policies

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 2, 2024.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended March 2, 2024 for a discussion of the Company’s market risk. There have been no material changes in market risk since March 2, 2024.

Item 4.Controls and Procedures

a)Evaluation of disclosure controls and procedures: As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

b)Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended November 30, 2024, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1.Legal Proceedings

Item 1A.Risk Factors

There have been no material changes or additions to our risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended March 2, 2024.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases made by the Company of its own stock during the third quarter of fiscal 2025:


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b)
September 1, 2024 to September 28, 2024	122	$	67.50	—	2,731,910
September 29, 2024 to October 26, 2024	7,648	77.53		—	2,731,910
October 27, 2024 to November 30, 2024	—	—		—	2,731,910
Total	7,770	$	75.02	—	2,731,910

(a)The shares in this column represent the total number of shares surrendered to us by plan participants to satisfy withholding tax obligations related to share-based compensation. We did not purchase any shares pursuant to our publicly announced repurchase program during the fiscal quarter.

(b)In fiscal 2004, announced on April 10, 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock. The Board increased the authorization by 750,000 shares, announced on January 24, 2008; by 1,000,000 shares on each of the announcement dates of October 8, 2008, January 13, 2016, January 9, 2018, January 14, 2020, October 7, 2021, and June 22, 2022; and by 2,000,000 shares, on each of the announcement dates of October 3, 2018, January 14, 2022 and October 6, 2023. The repurchase program does not have an expiration date.

Item 5. Other Information

Insider Adoption or Termination of Trading Arrangements

During the three months ended November 30, 2024, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement”, as each term is defined in Item 408(c) of Regulation S-K.

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Item 6. Exhibits


2.1			Membership Interest Purchase Agreement, dated as of September 23, 2024, by and among UW Holdings, LLC, UW Interco, LLC and Apogee Enterprises, Inc. Incorporate by reference to Exhibit 2.1 to Registrant's Current Report on Form 8-K filed on September 25, 2024.
3.1			Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year-ended February 28, 2004.)
3.2			Articles of Amendment to Restated Articles of Incorporation. Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on January 16, 2020.
3.3			Amended and Restated Bylaws of Apogee Enterprises, Inc. Incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q filed on July 1, 2021.
10.1			Apogee Enterprises, Inc. 2019 Non-Employee Director Stock Plan as Amended and Restated (2024). Incorporated by reference to Exhibit 4.5 to Apogee’s Registration Statement on Form S-8 filed on June 20, 2024.
10.2			Credit Agreement dated July 19, 2024 between Apogee Enterprises, Inc., certain material domestic subsidiaries of the Company as guarantors, Bank of America, N.A., as administrative agent, swingline lender and L/C issuer and the syndicate of lenders which are party thereto from time to time. Incorporated by reference to Exhibit 10.1 to Registrant's Current Report on Form 8-K filed on July 25, 2024.
31.1#			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2#			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1#			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2#			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101#			The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2024, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of November 30, 2024 and March 2, 2024, (ii) the Consolidated Results of Operations for the three- and nine-months ended November 30, 2024 and November 25, 2023, (iii) the Consolidated Statements of Comprehensive Earnings for the three- and nine-months ended November 30, 2024 and November 25, 2023, (iv) the Consolidated Statements of Cash Flows for the nine-months ended November 30, 2024 and November 25, 2023, (v) the Consolidated Statements of Shareholders' Equity for the three- and nine-months ended November 30, 2024 and November 25, 2023, and (vi) Notes to Consolidated Financial Statements.
104#			Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)
			Exhibits marked with a (#) sign are filed herewith.

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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.

Date: January 7, 2025	By: /s/ Ty R. Silberhorn
		Ty R. Silberhorn President and Chief Executive Officer (Principal Executive Officer)


Date: January 7, 2025	By: /s/ Matthew J. Osberg
		Matthew J. Osberg Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

Document

Exhibit 31.1

CERTIFICATION

I, Ty R. Silberhorn, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 7, 2025


			/s/ Ty R. Silberhorn
			Ty R. Silberhorn President and Chief Executive Officer

Document

Exhibit 31.2

CERTIFICATION

I, Matthew J. Osberg, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.;

a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: January 7, 2025


			/s/ Matthew J. Osberg
			Matthew J. Osberg Executive Vice President and Chief Financial Officer

Document

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Apogee Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended November 30, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, Ty R. Silberhorn, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Ty R. Silberhorn
Ty R. Silberhorn President and Chief Executive Officer
January 7, 2025

Document

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Apogee Enterprises, Inc. (the “Company”) on Form 10-Q for the period ended November 30, 2024 as filed with the Securities and Exchange Commission (the “Report”), I, Matthew J. Osberg, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that based on my knowledge:

(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.


/s/ Matthew J. Osberg
Matthew J. Osberg Executive Vice President and Chief Financial Officer
January 7, 2025