(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||
(Address of principal executive offices) | (Zip Code) |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Emerging growth company |
ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS |
Exhibit Number | Description | ||||||||||||||||
104 | Cover page interactive data file (embedded within the Inline XBRL document) |
APOGEE ENTERPRISES, INC. | ||||||||
By: | /s/ Matthew J. Osberg | |||||||
Matthew J. Osberg Executive Vice President and Chief Financial Officer |
Three Months Ended | ||||||||||||||||||||
(Unaudited, $ in thousands, except per share amounts) | June 1, 2024 | May 27, 2023 | % Change | |||||||||||||||||
Net Sales | $ | 331,516 | $ | 361,713 | (8.3)% | |||||||||||||||
Operating income | $ | 41,381 | $ | 33,767 | 22.5% | |||||||||||||||
Operating margin | 12.5 | % | 9.3 | % | 34.4% | |||||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 1.05 | 34.3% | |||||||||||||||
Additional Non-GAAP Measures1 | ||||||||||||||||||||
Adjusted operating income | $ | 42,503 | $ | 33,767 | 25.9% | |||||||||||||||
Adjusted operating margin | 12.8 | % | 9.3 | % | 37.6% | |||||||||||||||
Adjusted diluted earnings per share | $ | 1.44 | $ | 1.05 | 37.1% | |||||||||||||||
Adjusted EBITDA | $ | 52,622 | $ | 43,761 | 20.2% | |||||||||||||||
Adjusted EBITDA margin | 15.9 | % | 12.1 | % | 31.4% |
Apogee Enterprises, Inc. | ||||||||||||||||||||
Consolidated Condensed Statements of Income | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands, except per share amounts) | June 1, 2024 | May 27, 2023 | % Change | |||||||||||||||||
Net sales | $ | 331,516 | $ | 361,713 | (8.3) | % | ||||||||||||||
Cost of sales | 232,661 | 268,727 | (13.4) | % | ||||||||||||||||
Gross profit | 98,855 | 92,986 | 6.3 | % | ||||||||||||||||
Selling, general and administrative expenses | 57,474 | 59,219 | (2.9) | % | ||||||||||||||||
Operating income | 41,381 | 33,767 | 22.5 | % | ||||||||||||||||
Interest expense, net | 450 | 2,036 | (77.9) | % | ||||||||||||||||
Other expense (income), net | (143) | 288 | N/M | |||||||||||||||||
Earnings before income taxes | 41,074 | 31,443 | 30.6 | % | ||||||||||||||||
Income tax expense | 10,063 | 7,867 | 27.9 | % | ||||||||||||||||
Net earnings | $ | 31,011 | $ | 23,576 | 31.5 | % | ||||||||||||||
Basic earnings per share | $ | 1.42 | $ | 1.08 | 31.5 | % | ||||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 1.05 | 34.3 | % | ||||||||||||||
Weighted average basic shares outstanding | 21,823 | 21,883 | (0.3) | % | ||||||||||||||||
Weighted average diluted shares outstanding | 22,061 | 22,386 | (1.5) | % | ||||||||||||||||
Cash dividends per common share | $ | 0.25 | $ | 0.24 | 4.2 | % |
Apogee Enterprises, Inc. | ||||||||||||||||||||
Business Segment Information | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three Months Ended | ||||||||||||||||||||
(In thousands) | June 1, 2024 | May 27, 2023 | % Change | |||||||||||||||||
Segment net sales | ||||||||||||||||||||
Architectural Framing Systems | $ | 133,172 | $ | 164,162 | (18.9) | % | ||||||||||||||
Architectural Glass | 86,703 | 97,202 | (10.8) | % | ||||||||||||||||
Architectural Services | 99,027 | 89,418 | 10.7 | % | ||||||||||||||||
Large-Scale Optical | 21,204 | 22,456 | (5.6) | % | ||||||||||||||||
Intersegment eliminations | (8,590) | (11,525) | (25.5) | % | ||||||||||||||||
Net sales | $ | 331,516 | $ | 361,713 | (8.3) | % | ||||||||||||||
Segment operating income (loss) | ||||||||||||||||||||
Architectural Framing Systems | $ | 18,336 | $ | 19,945 | (8.1) | % | ||||||||||||||
Architectural Glass | 17,091 | 16,521 | 3.5 | % | ||||||||||||||||
Architectural Services | 5,623 | (596) | N/M | |||||||||||||||||
Large-Scale Optical | 4,846 | 5,525 | (12.3) | % | ||||||||||||||||
Corporate and other | (4,515) | (7,628) | (40.8) | % | ||||||||||||||||
Operating income | $ | 41,381 | $ | 33,767 | 22.5 | % | ||||||||||||||
Segment operating margin | ||||||||||||||||||||
Architectural Framing Systems | 13.8 | % | 12.1 | % | ||||||||||||||||
Architectural Glass | 19.7 | % | 17.0 | % | ||||||||||||||||
Architectural Services | 5.7 | % | (0.7) | % | ||||||||||||||||
Large-Scale Optical | 22.9 | % | 24.6 | % | ||||||||||||||||
Corporate and other | N/M | N/M | ||||||||||||||||||
Operating margin | 12.5 | % | 9.3 | % | ||||||||||||||||
N/M - Indicates calculation is not meaningful |
Apogee Enterprises, Inc. | ||||||||||||||
Consolidated Condensed Balance Sheets | ||||||||||||||
(Unaudited) | ||||||||||||||
(In thousands) | June 1, 2024 | March 2, 2024 | ||||||||||||
Assets | ||||||||||||||
Current assets | ||||||||||||||
Cash and cash equivalents | $ | 30,363 | $ | 37,216 | ||||||||||
Receivables, net | 183,270 | 173,557 | ||||||||||||
Inventories, net | 80,495 | 69,240 | ||||||||||||
Contract assets | 43,957 | 49,502 | ||||||||||||
Other current assets | 34,417 | 29,124 | ||||||||||||
Total current assets | 372,502 | 358,639 | ||||||||||||
Property, plant and equipment, net | 242,292 | 244,216 | ||||||||||||
Operating lease right-of-use assets | 38,726 | 40,221 | ||||||||||||
Goodwill | 129,042 | 129,182 | ||||||||||||
Intangible assets, net | 64,981 | 66,114 | ||||||||||||
Other non-current assets | 41,436 | 45,692 | ||||||||||||
Total assets | $ | 888,979 | $ | 884,064 | ||||||||||
Liabilities and shareholders' equity | ||||||||||||||
Current liabilities | ||||||||||||||
Accounts payable | 82,841 | 84,755 | ||||||||||||
Accrued compensation and benefits | 28,900 | 53,801 | ||||||||||||
Contract liabilities | 36,377 | 34,755 | ||||||||||||
Operating lease liabilities | 12,090 | 12,286 | ||||||||||||
Other current liabilities | 66,895 | 59,108 | ||||||||||||
Total current liabilities | 227,103 | 244,705 | ||||||||||||
Long-term debt | 77,000 | 62,000 | ||||||||||||
Non-current operating lease liabilities | 30,462 | 31,907 | ||||||||||||
Non-current self-insurance reserves | 30,859 | 30,552 | ||||||||||||
Other non-current liabilities | 43,600 | 43,875 | ||||||||||||
Total shareholders’ equity | 479,955 | 471,025 | ||||||||||||
Total liabilities and shareholders’ equity | $ | 888,979 | $ | 884,064 |
Apogee Enterprises, Inc. | ||||||||||||||
Consolidated Statement of Cash Flows | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | ||||||||||||||
(In thousands) | June 1, 2024 | May 27, 2023 | ||||||||||||
Operating Activities | ||||||||||||||
Net earnings | $ | 31,011 | $ | 23,576 | ||||||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||||||
Depreciation and amortization | 9,976 | 10,282 | ||||||||||||
Share-based compensation | 2,704 | 2,178 | ||||||||||||
Deferred income taxes | 3,466 | (165) | ||||||||||||
Loss (gain) on disposal of assets | 22 | (27) | ||||||||||||
Non-cash lease expense | 2,895 | 2,714 | ||||||||||||
Other, net | (925) | (432) | ||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||
Receivables | (9,845) | (13,476) | ||||||||||||
Inventories | (11,337) | (2,068) | ||||||||||||
Contract assets | 5,511 | 14,368 | ||||||||||||
Accounts payable | (1,871) | (8,390) | ||||||||||||
Accrued compensation and benefits | (24,850) | (13,312) | ||||||||||||
Contract liabilities | 1,648 | 8,158 | ||||||||||||
Operating lease liability | (3,007) | (3,101) | ||||||||||||
Accrued income taxes | 6,535 | 7,590 | ||||||||||||
Other current assets and liabilities | (6,480) | (6,608) | ||||||||||||
Net cash provided by operating activities | 5,453 | 21,287 | ||||||||||||
Investing Activities | ||||||||||||||
Capital expenditures | (7,229) | (7,398) | ||||||||||||
Proceeds from sales of property, plant and equipment | 40 | 66 | ||||||||||||
Purchases of marketable securities | (740) | — | ||||||||||||
Sales/maturities of marketable securities | 600 | 400 | ||||||||||||
Net cash used by investing activities | (7,329) | (6,932) | ||||||||||||
Financing Activities | ||||||||||||||
Proceeds from revolving credit facilities | 30,000 | 105,852 | ||||||||||||
Repayments on revolving credit facilities | (15,000) | (105,000) | ||||||||||||
Repurchase of common stock | (15,061) | (5,193) | ||||||||||||
Dividends paid | — | (5,245) | ||||||||||||
Other, net | (4,865) | (1,677) | ||||||||||||
Net cash used by financing activities | (4,926) | (11,263) | ||||||||||||
Effect of exchange rates on cash | (51) | 77 | ||||||||||||
(Decrease) increase in cash and cash equivalents | (6,853) | 3,169 | ||||||||||||
Cash and cash equivalents at beginning of period | 37,216 | 21,473 | ||||||||||||
Cash and cash equivalents at end of period | $ | 30,363 | $ | 24,642 | ||||||||||
Non-cash Activity | ||||||||||||||
Dividends declared but not yet paid | $ | 5,409 | $ | — |
Apogee Enterprises, Inc. | |||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||
Adjusted Net Earnings and Adjusted Diluted Earnings per Share | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
(In thousands) | June 1, 2024 | May 27, 2023 | |||||||||||||||
Net earnings | $ | 31,011 | $ | 23,576 | |||||||||||||
Restructuring charges (1) | 1,122 | — | |||||||||||||||
Income tax impact on above adjustments (2) | (275) | — | |||||||||||||||
Adjusted net earnings | $ | 31,858 | $ | 23,576 | |||||||||||||
Three Months Ended | |||||||||||||||||
June 1, 2024 | May 27, 2023 | ||||||||||||||||
Diluted earnings per share | $ | 1.41 | $ | 1.05 | |||||||||||||
Restructuring charges (1) | 0.05 | — | |||||||||||||||
Income tax impact on above adjustments (2) | (0.01) | — | |||||||||||||||
Adjusted diluted earnings per share | $ | 1.44 | $ | 1.05 | |||||||||||||
Weighted average diluted shares outstanding | 22,061 | 22,386 |
(1) | Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs. | |||||||||||||
(2) | Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred. | |||||||||||||
Apogee Enterprises, Inc. | |||||||||||||||||||||||||||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||||||||||||||||||||||||||
Adjusted Operating Income (Loss) and Adjusted Operating Margin | |||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||
Three Months Ended June 1, 2024 | |||||||||||||||||||||||||||||||||||||||||
(In thousands) | Architectural Framing Systems | Architectural Glass | Architectural Services | LSO | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 18,336 | $ | 17,091 | $ | 5,623 | $ | 4,846 | $ | (4,515) | $ | 41,381 | |||||||||||||||||||||||||||||
Restructuring charges (1) | 998 | — | — | — | 124 | 1,122 | |||||||||||||||||||||||||||||||||||
Adjusted operating income (loss) | $ | 19,334 | $ | 17,091 | $ | 5,623 | $ | 4,846 | $ | (4,391) | $ | 42,503 | |||||||||||||||||||||||||||||
Operating margin | 13.8 | % | 19.7 | % | 5.7 | % | 22.9 | % | N/M | 12.5 | % | ||||||||||||||||||||||||||||||
Restructuring charges (1) | 0.7 | — | — | — | N/M | 0.3 | |||||||||||||||||||||||||||||||||||
Adjusted operating margin | 14.5 | % | 19.7 | % | 5.7 | % | 22.9 | % | N/M | 12.8 | % | ||||||||||||||||||||||||||||||
Three Months Ended May 27, 2023 | |||||||||||||||||||||||||||||||||||||||||
(In thousands) | Architectural Framing Systems | Architectural Glass | Architectural Services | LSO | Corporate and Other | Consolidated | |||||||||||||||||||||||||||||||||||
Operating income (loss) | $ | 19,945 | $ | 16,521 | $ | (596) | $ | 5,525 | $ | (7,628) | $ | 33,767 | |||||||||||||||||||||||||||||
Operating margin | 12.1 | % | 17.0 | % | (0.7) | % | 24.6 | % | N/M | 9.3 | % | ||||||||||||||||||||||||||||||
(1) | Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs. |
Apogee Enterprises, Inc. | |||||||||||||||||
Reconciliation of Non-GAAP Financial Measures | |||||||||||||||||
Adjusted EBITDA and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation and amortization) | |||||||||||||||||
(Unaudited) | |||||||||||||||||
Three Months Ended | |||||||||||||||||
(In thousands) | June 1, 2024 | May 27, 2023 | |||||||||||||||
Net earnings | $ | 31,011 | $ | 23,576 | |||||||||||||
Income tax expense | 10,063 | 7,867 | |||||||||||||||
Interest expense, net | 450 | 2,036 | |||||||||||||||
Depreciation and amortization | 9,976 | 10,282 | |||||||||||||||
EBITDA | $ | 51,500 | $ | 43,761 | |||||||||||||
Restructuring charges (1) | 1,122 | — | |||||||||||||||
Adjusted EBITDA | $ | 52,622 | $ | 43,761 | |||||||||||||
EBITDA Margin | 15.5 | % | 12.1 | % | |||||||||||||
Adjusted EBITDA Margin | 15.9 | % | 12.1 | % |
(1) | Restructuring charges related to Project Fortify, including $0.4 million of employee termination costs and $0.7 million of other costs. | |||||||||||||
Apogee Enterprises, Inc. | ||||||||||||||
Reconciliation of Non-GAAP Measure - Net Leverage Ratio | ||||||||||||||
(Unaudited) | ||||||||||||||
Net Debt (In thousands) | June 1, 2024 | March 2, 2024 | ||||||||||||
Total debt | $ | 77,000 | $ | 62,000 | ||||||||||
Less: Cash and cash equivalents | 30,363 | 37,216 | ||||||||||||
Net Debt | $ | 46,637 | $ | 24,784 | ||||||||||
Trailing twelve months ending | ||||||||||||||
Adjusted EBITDA | June 1, 2024 | March 2, 2024 | ||||||||||||
Net earnings | $ | 107,048 | $ | 99,613 | ||||||||||
Income tax expense | 31,836 | 29,640 | ||||||||||||
Interest expense, net | 5,083 | 6,669 | ||||||||||||
Depreciation and amortization | 41,282 | 41,588 | ||||||||||||
EBITDA | $ | 185,249 | $ | 177,510 | ||||||||||
Restructuring charges (1) | 13,525 | 12,403 | ||||||||||||
NMTC settlement gain (2) | (4,687) | (4,687) | ||||||||||||
Adjusted EBITDA | $ | 194,087 | $ | 185,226 | ||||||||||
Net Leverage | June 1, 2024 | March 2, 2024 | ||||||||||||
Net Debt | $ | 46,637 | $ | 24,784 | ||||||||||
Adjusted EBITDA | 194,087 | 185,226 | ||||||||||||
Net Leverage Ratio | 0.2 | x | 0.1 | x |
(1) | Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs incurred in fiscal 2024 and $0.4 million of employee termination costs and $0.7 million of other costs incurred in the first quarter of fiscal 2025. | |||||||||||||
(2) | Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net. |
Apogee Enterprises, Inc. | ||||||||||||||
Fiscal 2025 Outlook | ||||||||||||||
Reconciliation of Fiscal 2025 outlook of estimated Diluted Earnings per Share to Adjusted Diluted Earnings per Share | ||||||||||||||
(Unaudited) | ||||||||||||||
Fiscal Year Ending March 1, 2025 | ||||||||||||||
Low Range | High Range | |||||||||||||
Diluted earnings per share | $ | 4.56 | $ | 4.88 | ||||||||||
Restructuring charges (1) | 0.12 | 0.16 | ||||||||||||
Income tax impact on above adjustments per share | (0.03) | (0.04) | ||||||||||||
Adjusted diluted earnings per share | $ | 4.65 | $ | 5.00 | ||||||||||
(1) | Restructuring charges related to Project Fortify. |
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