UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported): September 20, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | |||||||||||||||
| (Address of principal executive offices) | (Zip Code) | ||||||||||||||||
Registrant’s telephone number, including area code: (952 ) 835-1874
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
| Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (Section 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (Section 240.12b-2 of this chapter).
| Emerging growth company | |||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02 | RESULTS OF OPERATIONS AND FINANCIAL CONDITION | ||||
On September 20, 2022 , Apogee Enterprises, Inc. issued a press release announcing its financial results for the second quarter of fiscal 2023. A copy of this press release is furnished (not filed) as Exhibit 99.1 to this Current Report on Form 8-K, and is incorporated herein by reference.
| ITEM 9.01 | FINANCIAL STATEMENTS AND EXHIBITS | ||||
(d) Exhibits.
| Exhibit Number | Description | ||||||||||||||||
| 104 | Cover page interactive data file (embedded within the Inline XBRL document) | ||||||||||||||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| APOGEE ENTERPRISES, INC. | ||||||||
| By: | /s/ Mark Augdahl | |||||||
| Mark Augdahl Interim Chief Financial Officer | ||||||||
Dated: September 20, 2022
Press Release
FOR RELEASE: September 20, 2022
APOGEE ENTERPRISES REPORTS RECORD FISCAL 2023 SECOND QUARTER RESULTS
•Second-quarter revenue grows 14 percent, to record $372 million
•Second-quarter earnings increase to $1.68 per diluted share, which includes a tax benefit of $0.62 per share
•Adjusted earnings increase to record $1.06 per diluted share
•Full year adjusted earnings guidance increased to a range of $3.75 to $4.05 per diluted share
MINNEAPOLIS, MN, September 20, 2022 – Apogee Enterprises, Inc. (Nasdaq: APOG) today announced its fiscal 2023 second quarter results. Second-quarter revenue grew 14.2 percent to a record $372.1 million, compared to $325.8 million in the second quarter of fiscal year 2022, led by growth in Architectural Framing Systems and Architectural Services. Earnings per diluted share increased to $1.68, compared to a net loss of $(0.08) per diluted share in the prior-year quarter. Earnings in the quarter benefited from a $13.7 million income tax deduction for a worthless stock loss related to the Sotawall business. Earnings in the prior-year quarter included $20.8 million of pre-tax restructuring costs. Adjusted earnings, which exclude the impact of the tax deduction and restructuring costs, increased to a record $1.06 per diluted share, compared to $0.53 in the second quarter of fiscal 2022.1
“This was another strong quarter for Apogee, with improving execution driving record results,” said Ty R. Silberhorn, Chief Executive Officer. “We’re now a year into implementing Apogee’s new enterprise strategy and we are continuing to build momentum in the company’s transformation. While a lot of work remains to reach our goals, I am proud of the progress our team has made in just twelve months since we launched our new strategy.”
Mr. Silberhorn continued, “Our effort to become the economic leader in our target markets is taking hold. We are improving execution and driving productivity gains across the company.
1 Adjusted earnings and adjusted earnings per share are non-GAAP financial measures. See Use and Reconciliation of Non-GAAP Financial Measures later in this press release for more information and a reconciliation to the most directly comparable GAAP measures.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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We’re building a more competitive cost structure and strengthening our ability to deliver differentiated products and services that provide more value for customers. These actions have driven significant margin expansion and positioned us for continued profitable growth as we move forward.”
Segment Results
Architectural Framing Systems
Architectural Framing Systems second-quarter revenue grew 26 percent, to $172.9 million, from $137.0 million in the prior-year period, primarily driven by inflation-related pricing actions and a more favorable sales mix. Second quarter operating income increased to $20.5 million, compared to $8.4 million in last year’s second quarter, which included $2.0 million of restructuring costs. Excluding the restructuring costs, adjusted operating income2 in the prior year was $10.4 million. The increased income in this year’s second quarter was driven by improved pricing and mix, and the benefits from restructuring actions completed last year, which combined to offset the impact of inflation. Segment backlog at the end of the quarter was $286 million, compared to $310 million at the end of the first quarter. Framing Systems’ prior year results have been recast to reflect the move of the Sotawall business to the Architectural Services segment, which was effective at the beginning of this fiscal year.
Architectural Services
Architectural Services revenue grew 11 percent to $106.7 million, up from $96.4 million in the prior-year quarter, driven by increased volume from executing projects in backlog. Operating income was $5.5 million, compared to $7.1 million in the prior-year period, reflecting increased costs for investments to support future growth, partially offset by the higher volume. Segment backlog increased to $785 million, up from $681 million at the end of the first quarter, driven by significant new project wins in the transportation and healthcare markets. Prior-year results for Architectural Services have been recast to reflect the move of the Sotawall business into the segment, which was effective at the beginning of this fiscal year.
Architectural Glass
Architectural Glass revenue in the second quarter was $77.4 million, compared to $79.4 million in the prior-year quarter, primarily reflecting lower volume, partially offset by improved pricing. Operating income increased to $6.5 million, compared to an operating loss of $(17.0) million in last year’s second quarter, which included $17.4 million of restructuring costs. Excluding the restructuring costs, adjusted operating income in the prior year was $0.4 million. The increased income in this year’s second quarter was driven by improved pricing, productivity gains, and the positive impact of restructuring actions completed last year, which combined to offset the impact of inflation.
Large-Scale Optical
Large-Scale Optical revenue grew 7 percent to $25.2 million, compared to $23.5 million in the second quarter last year, primarily driven by higher volume. Operating income was $6.0 million, up from $5.5 million in last year’s second quarter, primarily reflecting higher volume and improved pricing, partially offset by cost inflation.
Financial Condition
In the second quarter, net cash provided by operating activities was $27.8 million, compared to $48.0 million in last year’s second quarter. Fiscal year to date, net cash used by operating activities is $2.6 million, compared to $54.9 million provided by operating activities in the prior-year period. The lower cash flow primarily reflects increased working capital related to revenue growth and inflation. Capital expenditures through the first half of the fiscal year were $9.3 million, compared to $10.1 million in the same period last year. Fiscal year to date, the company has returned $83.9 million of cash to shareholders through share repurchases and dividend payments, up from $32.5 million in the first half of fiscal 2022.
2 Adjusted operating income is a non-GAAP financial measure. See Use and Reconciliation of Non-GAAP Financial Measures later in this press release for more information and a reconciliation to the most directly comparable GAAP measures.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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Quarter-end total debt was $251 million, compared to $163 million at the end of last year’s second quarter. Cash and cash equivalents were $22.1 million, compared to $61.8 million at the end of the second quarter of fiscal 2022.
Outlook
Based on second-quarter results and increasing confidence in its outlook, the company is raising its guidance for full-year adjusted earnings to a range of $3.75 to $4.05 per diluted share, up from the previously announced range of $3.50 to $3.90. The company expects full year revenue growth of 8 to 10 percent, primarily driven by growth in Architectural Framing Systems. The company now expects full-year capital expenditures of approximately $40 million.
Conference Call Information
The company will host a conference call today at 8:00 a.m. Central Time to discuss its financial results and provide a business update. This call will be webcast and is available in the Investor Relations section of the company’s website, along with presentation slides, at https://www.apog.com/events-and-presentations. The webcast also will be archived for replay on the company’s website.
About Apogee Enterprises
Apogee Enterprises, Inc. (Nasdaq: APOG) is a leading provider of architectural products and services for enclosing buildings, and high-performance glass and acrylic products used for preservation, energy conservation, and enhanced viewing. Headquartered in Minneapolis, MN, our portfolio of industry-leading products and services includes high-performance architectural glass, windows, curtainwall, storefront and entrance systems, integrated project management and installation services, as well as value-added glass and acrylic for custom picture framing and displays. For more information, visit www.apog.com.
Use of Non-GAAP Financial Measures
This release and other financial communications may contain the following non-GAAP measures:
•Adjusted operating income, adjusted operating margin, adjusted net earnings and adjusted earnings per diluted share (“adjusted earnings per share” or “adjusted EPS”) are used by the company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period. Examples of items excluded to arrive at this adjusted measure in recent reporting periods include: impairment charges, restructuring costs, acquired project-related charges, gains or losses from significant asset sales, income tax deductions for worthless stock losses, and COVID-19 related expenditures.
•Free cash flow is defined as net cash provided by operating activities, minus capital expenditures. The company considers this measure an indication of its financial strength. However, free cash flow does not fully reflect the company’s ability to freely deploy generated cash, as it does not reflect, for example, required payments on indebtedness and other fixed obligations.
•Net debt is a non-GAAP measure defined as total debt (current debt plus long-term debt) on our consolidated balance sheet, less cash and cash equivalents. The company considers this measure helpful to evaluate our capital structure and financial leverage, and our ability to fund investing and financing activities.
•Adjusted EBITDA represents net income before interest, taxes, depreciation, amortization and certain non-cash, non-recurring and other adjustment items. We believe this metric provides useful information to investors and analysts about the Company's performance because it eliminates the effects of certain items that are unusual in nature or whose fluctuation from period to period do not necessarily correspond to changes in the operations of the company.
A reconciliation of non-GAAP guidance on Adjusted EPS to GAAP guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty of the magnitude and timing of future
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
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adjustments. These adjustments may include, among others, the impact of such items as impairment charges, restructuring costs, acquired project-related charges, and gains or losses from significant asset sales. Accordingly, the company is unable to provide a reconciliation of Adjusted EPS to the most directly comparable GAAP financial measure or address the probable significance of the unavailable information, which could be material to the company's future financial results computed in accordance with GAAP.
An operational measure that management uses is backlog. Backlog represents the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which is expected to be recognized as revenue. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. Backlog should not be used as the sole indicator of future segment revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog.
Management uses non-GAAP measures to evaluate the company’s historical and prospective financial performance, measure operational profitability on a consistent basis, and provide enhanced transparency to the investment community. Non-GAAP measures should be viewed in addition to, and not as a substitute for, the reported financial results of the company prepared in accordance with GAAP. Other companies may calculate these measures differently, limiting the usefulness of the measures for comparison with other companies.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements”. These statements reflect Apogee management’s expectations or beliefs as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified by factors that may affect the results, performance, financial condition, prospects and opportunities of the company , including the following: (A) uncertainty regarding the potential impacts and duration of the COVID-19 pandemic; (B) U.S. and global economic conditions, including the cyclical nature of the North American and Latin American commercial construction industries and the potential impact of an economic downturn or recession; (C) fluctuations in foreign currency exchange rates; (D) actions of new and existing competitors; (E) ability to effectively utilize and increase production capacity; (F) departure of key personnel and ability to source sufficient labor; (G) product performance, reliability and quality issues; (H) project management and installation issues that could affect the profitability of individual contracts; (I) changes in consumer and customer preference, or architectural trends and building codes; (J) dependence on a relatively small number of customers in certain business segments; (K) revenue and operating results that could differ from market expectations; (L) self-insurance risk related to a material product liability or other events for which the company is liable; (M) dependence on information technology systems and information security threats; (N) cost of compliance with and changes in environmental regulations; (O) supply chain disruptions, including fluctuations in the availability and cost of materials used in our products and the impact of trade policies and regulations; (P) integration of acquisitions and management of acquired contracts; (Q) impairment of goodwill or indefinite-lived intangible assets; (R) our ability to execute our strategy to become the economic leader in our target markets and build an operating model to enable profitable growth; (S) increases in costs related to employee health care benefits; (T) risks that anticipated results from business restructuring initiatives will not be achieved, implementation of cost-saving and business restructuring initiatives may take more time or cost more than expected, the anticipated cost savings may be materially less than anticipated, and the restructuring may result in disruption in delivery of services to our customers; (U) U.S. and global instability and uncertainty arising from events outside of our control; and (V) the impact of cost inflation and rising interest rates. . The company cautions investors that actual future results could differ materially from those described in the forward-looking statements and that other factors may in the future prove to be important in affecting the company’s results, performance, prospects, or opportunities. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. More information concerning potential factors that could affect future financial results is
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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included in the company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2022 and in subsequent filings with the U.S. Securities and Exchange Commission.
Contact
Jeff Huebschen
Vice President, Investor Relations & Communications
952.487.7538
ir@apog.com
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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| Apogee Enterprises, Inc. | ||||||||||||||||||||||||||||||||||||||
| Consolidated Condensed Statements of Income | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| (In thousands, except per share amounts) | August 27, 2022 | August 28, 2021 | % Change | August 27, 2022 | August 28, 2021 | % Change | ||||||||||||||||||||||||||||||||
| Net sales | $ | 372,109 | $ | 325,797 | 14 | % | $ | 728,744 | $ | 651,803 | 12 | % | ||||||||||||||||||||||||||
| Cost of sales | 287,173 | 277,795 | 3 | % | 558,191 | 536,091 | 4 | % | ||||||||||||||||||||||||||||||
| Gross profit | 84,936 | 48,002 | 77 | % | 170,553 | 115,712 | 47 | % | ||||||||||||||||||||||||||||||
| Selling, general and administrative expenses | 52,864 | 51,070 | 4 | % | 105,265 | 102,739 | 2 | % | ||||||||||||||||||||||||||||||
| Operating income (loss) | 32,072 | (3,068) | (1,145) | % | 65,288 | 12,973 | 403 | % | ||||||||||||||||||||||||||||||
| Interest expense, net | 1,698 | 1,072 | 58 | % | 2,904 | 2,310 | 26 | % | ||||||||||||||||||||||||||||||
| Other expense (income), net | 173 | (105) | (265) | % | 1,483 | 209 | 610 | % | ||||||||||||||||||||||||||||||
| Earnings (loss) before income taxes | 30,201 | (4,035) | (848) | % | 60,901 | 10,454 | 483 | % | ||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (7,188) | (1,919) | 275 | % | 781 | 1,753 | (55) | % | ||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 37,389 | $ | (2,116) | (1,867) | % | $ | 60,120 | $ | 8,701 | 591 | % | ||||||||||||||||||||||||||
| Earnings (loss) per share - basic | $ | 1.71 | $ | (0.08) | (2,238) | % | $ | 2.72 | $ | 0.34 | 700 | % | ||||||||||||||||||||||||||
| Earnings (loss) per share - diluted | $ | 1.68 | $ | (0.08) | (2,200) | % | $ | 2.66 | $ | 0.34 | 682 | % | ||||||||||||||||||||||||||
| Weighted average basic shares outstanding | 21,860 | 25,140 | (13) | % | 22,129 | 25,271 | (12) | % | ||||||||||||||||||||||||||||||
| Weighted average diluted shares outstanding | 22,245 | 25,140 | (12) | % | 22,563 | 25,637 | (12) | % | ||||||||||||||||||||||||||||||
| Cash dividends per common share | $ | 0.2200 | $ | 0.2000 | 10 | % | $ | 0.4400 | $ | 0.4000 | 10 | % | ||||||||||||||||||||||||||
| Business Segment Information | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| (In thousands) | August 27, 2022 | August 28, 2021 | % Change | August 27, 2022 | August 28, 2021 | % Change | ||||||||||||||||||||||||||||||||
| Net sales | ||||||||||||||||||||||||||||||||||||||
| Architectural Framing Systems | $ | 172,867 | $ | 136,973 | 26 | % | $ | 336,159 | $ | 273,741 | 23 | % | ||||||||||||||||||||||||||
| Architectural Services | 106,732 | 96,370 | 11 | % | 210,120 | 187,102 | 12 | % | ||||||||||||||||||||||||||||||
| Architectural Glass | 77,352 | 79,373 | (3) | % | 153,617 | 162,404 | (5) | % | ||||||||||||||||||||||||||||||
| Large-Scale Optical | 25,166 | 23,543 | 7 | % | 50,328 | 47,771 | 5 | % | ||||||||||||||||||||||||||||||
| Intersegment eliminations | (10,008) | (10,462) | (4) | % | (21,480) | (19,215) | 12 | % | ||||||||||||||||||||||||||||||
| Net sales | $ | 372,109 | $ | 325,797 | 14 | % | $ | 728,744 | $ | 651,803 | 12 | % | ||||||||||||||||||||||||||
| Operating income (loss) | ||||||||||||||||||||||||||||||||||||||
| Architectural Framing Systems | $ | 20,512 | $ | 8,381 | 145 | % | $ | 44,177 | $ | 16,752 | 164 | % | ||||||||||||||||||||||||||
| Architectural Services | 5,490 | 7,139 | (23) | % | 8,417 | 11,365 | (26) | % | ||||||||||||||||||||||||||||||
| Architectural Glass | 6,457 | (16,995) | (138) | % | 11,626 | (14,867) | (178) | % | ||||||||||||||||||||||||||||||
| Large-Scale Optical | 5,991 | 5,483 | 9 | % | 12,489 | 11,330 | 10 | % | ||||||||||||||||||||||||||||||
| Corporate and other | (6,378) | (7,076) | (10) | % | (11,421) | (11,607) | (2) | % | ||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 32,072 | $ | (3,068) | (1,145) | % | $ | 65,288 | $ | 12,973 | 403 | % | ||||||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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| Apogee Enterprises, Inc. | ||||||||||||||
| Consolidated Condensed Balance Sheets | ||||||||||||||
| (Unaudited) | ||||||||||||||
| (In thousands) | August 27, 2022 | February 26, 2022 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 22,065 | $ | 37,583 | ||||||||||
| Restricted cash | 8,684 | — | ||||||||||||
| Current assets | 393,469 | 300,309 | ||||||||||||
| Net property, plant and equipment | 232,766 | 249,995 | ||||||||||||
| Other assets | 291,990 | 299,976 | ||||||||||||
| Total assets | $ | 948,974 | $ | 887,863 | ||||||||||
| Liabilities and shareholders' equity | ||||||||||||||
| Current liabilities | 233,383 | 231,946 | ||||||||||||
| Current debt | — | 1,000 | ||||||||||||
| Long-term debt | 250,834 | 162,000 | ||||||||||||
| Other liabilities | 108,017 | 106,718 | ||||||||||||
| Shareholders' equity | 356,740 | 386,199 | ||||||||||||
| Total liabilities and shareholders' equity | $ | 948,974 | $ | 887,863 | ||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
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| Apogee Enterprises, Inc. | ||||||||||||||
| Consolidated Condensed Statement of Cash Flows | ||||||||||||||
| (Unaudited) | ||||||||||||||
| Six Months Ended | ||||||||||||||
| (In thousands) | August 27, 2022 | August 28, 2021 | ||||||||||||
| Net earnings | $ | 60,120 | $ | 8,701 | ||||||||||
| Depreciation and amortization | 21,448 | 25,808 | ||||||||||||
| Share-based compensation | 3,394 | 3,261 | ||||||||||||
| Asset impairment on property, plant, and equipment | — | 15,403 | ||||||||||||
| Gain on disposal of assets | (695) | (1,355) | ||||||||||||
| Other, net | 14,538 | 2,234 | ||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||
| Receivables | (65,760) | 15,520 | ||||||||||||
| Inventories | (17,636) | (3,607) | ||||||||||||
| Costs and earnings on contracts in excess of billings | 840 | 3,212 | ||||||||||||
| Accounts payable and accrued expenses | (8,226) | (10,895) | ||||||||||||
| Billings in excess of costs and earnings on uncompleted contracts | 21,051 | (2,144) | ||||||||||||
| Refundable and accrued income taxes | (20,486) | 1,981 | ||||||||||||
| Operating lease liability | (6,684) | (6,240) | ||||||||||||
| Other, net | (4,547) | 3,028 | ||||||||||||
| Net cash (used) provided by operating activities | (2,643) | 54,907 | ||||||||||||
| Capital expenditures | (9,255) | (10,121) | ||||||||||||
| Proceeds from sales of property, plant and equipment | 4,122 | 1,292 | ||||||||||||
| Other, net | 450 | 66 | ||||||||||||
| Net cash used by investing activities | (4,683) | (8,763) | ||||||||||||
| Borrowings on line of credit | 409,880 | — | ||||||||||||
| Repayment on debt | (151,000) | (2,000) | ||||||||||||
| Payments on line of credit | (171,000) | — | ||||||||||||
| Payments on debt issuance costs | (687) | — | ||||||||||||
| Proceeds from exercise of stock options | — | 4,115 | ||||||||||||
| Repurchase and retirement of common stock | (74,312) | (22,419) | ||||||||||||
| Dividends paid | (9,602) | (10,060) | ||||||||||||
| Other, net | (2,815) | (1,853) | ||||||||||||
| Net cash provided (used) by financing activities | 464 | (32,217) | ||||||||||||
| (Decrease) increase in cash, cash equivalents and restricted cash | (6,862) | 13,927 | ||||||||||||
| Effect of exchange rates on cash | 28 | 617 | ||||||||||||
| Cash, cash equivalents and restricted cash at beginning of year | 37,583 | 47,277 | ||||||||||||
| Cash, cash equivalents and restricted cash at end of period | $ | 30,749 | $ | 61,821 | ||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
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| Apogee Enterprises, Inc. | ||||||||||||||||||||||||||
| Reconciliation of Non-GAAP Financial Measures | ||||||||||||||||||||||||||
| Adjusted Net Earnings and Adjusted Earnings per Diluted Common Share | ||||||||||||||||||||||||||
| Unaudited | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (In thousands) | August 27, 2022 | August 28, 2021 | August 27, 2022 | August 28, 2021 | ||||||||||||||||||||||
| Net earnings (loss) | $ | 37,389 | $ | (2,116) | $ | 60,120 | $ | 8,701 | ||||||||||||||||||
Worthless stock deduction(1) | (13,702) | — | (13,702) | — | ||||||||||||||||||||||
Restructuring costs(2) | — | 20,814 | — | 20,814 | ||||||||||||||||||||||
Income tax impact on above adjustments(3) | — | (5,203) | — | (5,203) | ||||||||||||||||||||||
| Adjusted net earnings | $ | 23,687 | $ | 13,495 | $ | 46,418 | $ | 24,312 | ||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| August 27, 2022 | August 28, 2021 | August 27, 2022 | August 28, 2021 | |||||||||||||||||||||||
| Earnings (loss) per diluted common share | $ | 1.68 | $ | (0.08) | $ | 2.66 | $ | 0.34 | ||||||||||||||||||
Worthless stock deduction(1) | (0.62) | — | (0.61) | — | ||||||||||||||||||||||
Restructuring costs(2) | — | 0.82 | — | 0.81 | ||||||||||||||||||||||
Income tax impact on above adjustments(3) | — | (0.20) | — | (0.20) | ||||||||||||||||||||||
| Adjusted earnings per diluted common share | $ | 1.06 | $ | 0.53 | $ | 2.06 | $ | 0.95 | ||||||||||||||||||
| Shares outstanding for EPS | 22,245 | 25,140 | 22,563 | 25,637 | ||||||||||||||||||||||
Per share amounts are computed independently for each of the items presented so the sum of the items may not equal the total amount
(1) Adjustment related to income tax benefit from worthless stock loss deduction related to the Sotawall business.
(2) Adjustment related to previously announced decision to exit certain operations in the Architectural Glass segment and reorganize operations within the Architectural Framing Systems segment, including $15.4 million of asset impairment charges, $4.3 million of employee termination costs and $1.1 million of other costs associated with these restructuring plans.
(3) Income tax impact calculated using an estimated statutory tax rate of 25%, which reflects the estimated blended statutory tax rate for the jurisdiction in which the charge or income occurred.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
Page 10
| Adjusted Operating Income and Adjusted Operating Margin | |||||||||||||||||||||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||
| Three Months Ended August 27, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| Framing Systems Segment | Glass Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating income | Operating margin | Operating loss | Operating income | Operating margin | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 20,512 | 11.9 | % | $ | 6,457 | 8.3 | % | $ | (6,378) | $ | 32,072 | 8.6 | % | |||||||||||||||||||||||||||||||||
| Three Months Ended August 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
| Framing Systems Segment | Glass Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating (loss) income | Operating margin | Operating (loss) income | Operating (loss) income | Operating margin | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 8,381 | 6.1 | % | $ | (16,995) | (21.4) | % | $ | (7,076) | $ | (3,068) | (0.9) | % | |||||||||||||||||||||||||||||||||
Restructuring costs (1) | 2,048 | 1.5 | 17,391 | 21.9 | 1,375 | 20,814 | 6.3 | ||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 10,429 | 10429000 | 7.6 | % | $ | 396 | 0.5 | % | $ | (5,701) | $ | 17,746 | 5.4 | % | ||||||||||||||||||||||||||||||||
(1) Adjustment related to previously announced decision to exit certain operations in the Architectural Glass segment and reorganize operations within the Architectural Framing Systems segment, including $15.4 million of asset impairment charges, $4.3 million of employee termination costs and $1.1 million of other costs associated with these restructuring plans. | |||||||||||||||||||||||||||||||||||||||||||||||
| Six Months Ended August 27, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||
| Framing Systems Segment | Glass Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating income | Operating margin | Operating loss | Operating income | Operating margin | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 44,177 | 13.1 | % | $ | 11,626 | 7.6 | % | $ | (11,421) | $ | 65,288 | 9.0 | % | |||||||||||||||||||||||||||||||||
| Six Months Ended August 28, 2021 | |||||||||||||||||||||||||||||||||||||||||||||||
| Framing Systems Segment | Glass Segment | Corporate | Consolidated | ||||||||||||||||||||||||||||||||||||||||||||
| (In thousands) | Operating income | Operating margin | Operating (loss) income | Operating margin | Operating (loss) income | Operating income | Operating margin | ||||||||||||||||||||||||||||||||||||||||
| Operating income (loss) | $ | 16,752 | 6.1 | % | $ | (14,867) | (9.2) | % | $ | (11,607) | $ | 12,973 | 2.0 | % | |||||||||||||||||||||||||||||||||
Restructuring costs (1) | 2,048 | 0.8 | 17,391 | 10.7 | 1,375 | 20,814 | 3.2 | ||||||||||||||||||||||||||||||||||||||||
| Adjusted operating income (loss) | $ | 18,800 | 6.9 | % | $ | 2,524 | 1.6 | % | $ | (10,232) | $ | 33,787 | 5.2 | % | |||||||||||||||||||||||||||||||||
(1) Adjustment related to previously announced decision to exit certain operations in the Architectural Glass segment and reorganize operations within the Architectural Framing Systems segment, including $15.4 million of asset impairment charges, $4.3 million of employee termination costs and $1.1 million of other costs associated with these restructuring plans. | |||||||||||||||||||||||||||||||||||||||||||||||
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com
Apogee Enterprises, Inc.
Page 11
| Adjusted EBITDA Reconciliation | ||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (In thousands) | August 27, 2022 | August 28, 2021 | August 27, 2022 | August 28, 2021 | ||||||||||||||||||||||
| Net earnings (loss) | $ | 37,389 | $ | (2,116) | 60,120 | 8,701 | ||||||||||||||||||||
| Income tax (benefit) expense | (7,188) | (1,919) | 781 | 1,753 | ||||||||||||||||||||||
| Interest expense, net | 1,698 | 1,072 | 2,904 | 2,310 | ||||||||||||||||||||||
| Depreciation and amortization | 10,599 | 12,828 | 21,448 | 25,808 | ||||||||||||||||||||||
| EBITDA | 42,498 | 9,865 | 85,253 | 38,572 | ||||||||||||||||||||||
Restructuring(1) | — | 20,814 | — | 20,814 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | 42,498 | $ | 30,679 | $ | 85,253 | $ | 59,386 | ||||||||||||||||||
(1) Adjustment related to previously announced decision to exit certain operations in the Architectural Glass segment and reorganize operations within the Architectural Framing Systems segment, including $15.4 million of asset impairment charges, $4.3 million of employee termination costs and $1.1 million of other costs associated with these restructuring plans.
Apogee Enterprises, Inc. • 4400 West 78th Street • Minneapolis, MN 55435 • (952) 835-1874 • www.apog.com