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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 26, 2022
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)
 _________________________________
Minnesota41-0919654
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
4400 West 78th Street, Suite 520MinneapolisMinnesota55435
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (952835-1874
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 classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.33 1/3 per shareAPOGThe Nasdaq Stock Market LLC
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
x
  Accelerated filer
Non-accelerated filero  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 December 26, 2022, 22,213,890 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
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 6.
3

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except stock data)November 26, 2022February 26, 2022
Assets
Current assets
Cash and cash equivalents$21,746 $37,583 
Restricted cash3,718  
Receivables, net222,554 168,592 
Inventories86,032 80,494 
Costs and earnings on contracts in excess of billings32,964 30,403 
Other current assets29,676 20,820 
Total current assets396,690 337,892 
Property, plant and equipment, net231,173 249,995 
Operating lease right-of-use assets44,198 47,912 
Goodwill129,268 130,102 
Intangible assets68,825 72,481 
Other non-current assets48,292 49,481 
Total assets$918,446 $887,863 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable$70,137 $92,104 
Accrued payroll and related benefits55,528 50,977 
Billings in excess of costs and earnings on uncompleted contracts29,121 8,659 
Operating lease liabilities11,077 12,744 
Current portion long-term debt 1,000 
Other current liabilities66,174 67,462 
Total current liabilities232,037 232,946 
Long-term debt203,735 162,000 
Non-current operating lease liabilities36,778 39,591 
Non-current self-insurance reserves21,062 22,544 
Other non-current liabilities47,196 44,583 
Commitments and contingent liabilities (Note 8)
Shareholders’ equity
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 22,213,635 and 23,701,491 respectively
7,405 7,901 
Additional paid-in capital144,358 149,713 
Retained earnings258,836 254,825 
Accumulated other comprehensive loss(32,961)(26,240)
Total shareholders’ equity377,638 386,199 
Total liabilities and shareholders’ equity$918,446 $887,863 
See accompanying notes to consolidated financial statements.

4

Table of Contents
CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
Three Months EndedNine Months Ended
(In thousands, except per share data)November 26, 2022November 27, 2021November 26, 2022November 27, 2021
Net sales$367,847 $334,217 $1,096,591 $986,020 
Cost of sales281,239 269,537 839,430 805,627 
Gross profit86,608 64,680 257,161 180,393 
Selling, general and administrative expenses51,847 46,970 157,112 149,709 
Operating income34,761 17,710 100,049 30,684 
Interest expense, net2,590 528 5,494 2,838 
Other expense, net552 3,057 2,035 3,266 
Earnings before income taxes31,619 14,125 92,520 24,580 
Income tax expense7,854 3,068 8,635 4,821 
Net earnings$23,765 $11,057 $83,885 $19,759 
Earnings per share - basic$1.09 $0.44 $3.81 $0.79 
Earnings per share - diluted$1.07 $0.44 $3.74 $0.78 
Weighted average basic shares outstanding21,870 24,957 22,043 25,166 
Weighted average diluted shares outstanding22,278 25,309 22,456 25,459 
See accompanying notes to consolidated financial statements.

5

Table of Contents
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Unaudited)
Three Months EndedNine Months Ended
(In thousands)November 26, 2022November 27, 2021November 26, 2022November 27, 2021
Net earnings$23,765 $11,057 $83,885 $19,759 
Other comprehensive (losses) earnings:
Unrealized loss on marketable securities, net of $(24), $(40), $(127) and $(39) of tax benefit, respectively
(88)(151)(470)(147)
Unrealized gain (loss) on derivative instruments, net of $277, $(265), $(1,192) and $(257) of tax expense (benefit), respectively
905 (868)(3,911)(842)
Foreign currency translation adjustments(1,295)(2,515)(2,340)(935)
Other comprehensive losses(478)(3,534)(6,721)(1,924)
Total comprehensive earnings$23,287 $7,523 $77,164 $17,835 

See accompanying notes to consolidated financial statements.

6

Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
(In thousands)November 26, 2022November 27, 2021
Operating Activities
Net earnings$83,885 $19,759 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization31,925 38,353 
Share-based compensation5,961 4,807 
Deferred income taxes2,341 (5,412)
Asset impairment 16,638 
Gain on disposal of assets(1,484)(1,250)
Proceeds from New Markets Tax Credit transaction, net of deferred costs18,390  
Settlement of New Markets Tax Credit transaction(19,523) 
Noncash lease expense8,924 9,302 
Other, net4,700 3,009 
Changes in operating assets and liabilities:
Receivables(58,202)6,443 
Inventories(5,822)(2,657)
Costs and earnings on contracts in excess of billings(2,599)1,168 
Accounts payable and accrued expenses(11,985)5,440 
Billings in excess of costs and earnings on uncompleted contracts20,884 (4,474)
Refundable and accrued income taxes(14,391)5,255 
Operating lease liability(9,168)(9,387)
Other, net(2,724)(703)
Net cash provided by operating activities51,112 86,291 
Investing Activities
Capital expenditures(18,119)(13,070)
Proceeds from sales of property, plant and equipment5,212 1,347 
Other, net923 76 
Net cash used by investing activities(11,984)(11,647)
Financing Activities
Borrowings on line of credit430,879  
Repayment on debt(151,000)(2,000)
Payments on line of credit(239,000) 
Payments on debt issue costs(790) 
Proceeds from exercise of stock options 4,115 
Repurchase and retirement of common stock(74,312)(29,164)
Dividends paid(14,415)(15,050)
Other, net(2,959)(1,895)
Net cash used by financing activities(51,597)(43,994)
(Decrease) increase in cash, cash equivalents and restricted cash(12,469)30,650 
Effect of exchange rates on cash350 345 
Cash, cash equivalents and restricted cash at beginning of year37,583 47,277 
Cash, cash equivalents and restricted cash at end of period$25,464 $78,272 
Noncash Activity
Capital expenditures in accounts payable$1,557 $1,095 
See accompanying notes to consolidated financial statements.

7

Table of Contents
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)Common Shares OutstandingCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive (Loss) IncomeTotal Shareholders' Equity
Balance at February 26, 202223,701 $7,901 $149,713 $254,825 $(26,240)$386,199 
Net earnings— — — 22,731 — 22,731 
Unrealized loss on marketable securities, net of $74 tax benefit
— — — — (276)(276)
Unrealized loss on derivative instruments, net of $1,317 tax benefit
— — — — (4,316)(4,316)
Foreign currency translation adjustments— — — — 1,732 1,732 
Issuance of stock, net of cancellations100 33 23 — — 56 
Share-based compensation— — 1,597 — — 1,597 
Share repurchases(1,571)(524)(10,350)(63,438)— (74,312)
Other share retirements(30)(10)(198)(1,120)— (1,328)
Cash dividends— — — (4,793)— (4,793)
Balance at May 28, 202222,200 $7,400 $140,785 $208,205 $(29,100)$327,290 
Net earnings— — — 37,389 — 37,389 
Unrealized loss on marketable securities, net of $28 tax benefit
— — — — (106)(106)
Unrealized loss on derivative instruments, net of $152 tax benefit
— — — — (500)(500)
Foreign currency translation adjustments— — — — (2,777)(2,777)
Issuance of stock, net of cancellations(14)(5)61 — — 56 
Share-based compensation— — 1,797 — — 1,797 
Exercise of stock options36 12 (954)— — (942)
Other share retirements(13)(4)(114)(540)— (658)
Cash dividends— — — (4,809)— (4,809)
Balance at August 27, 202222,209 $7,403 $141,575 $240,245 $(32,483)$356,740 
Net earnings— — — 23,765 — 23,765 
Unrealized loss on marketable securities, net of $24 tax benefit
— — — — (88)(88)
Unrealized gain on derivative instruments, net of $277 tax expense
— — — — 905 905 
Foreign currency translation adjustments— — — — (1,295)(1,295)
Issuance of stock, net of cancellations9 3 250 (196)— 57 
Share-based compensation— — 2,567 — — 2,567 
Other share retirements(4)(1)(34)(165)— (200)
Cash dividends— — — (4,813)— (4,813)
Balance at November 26, 202222,214 $7,405 $144,358 $258,836 $(32,961)$377,638 









See accompanying notes to consolidated financial statements.

8

Table of Contents
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

(In thousands)Common Shares OutstandingCommon StockAdditional Paid-In CapitalRetained EarningsAccumulated Other Comprehensive (Loss) IncomeTotal Shareholders' Equity
Balance at February 27, 202125,714 $8,571 $154,958 $357,243 $(28,027)$492,745 
Net earnings— — — 10,817 — 10,817 
Unrealized gain on marketable securities, net of $0 tax expense
— — — —   
Unrealized gain on derivative instruments, net of $211 tax expense
— — — — 692 692 
Foreign currency translation adjustments— — — — 5,880 5,880 
Issuance of stock, net of cancellations90 30 (7)— — 23 
Share-based compensation— — 1,674 — — 1,674 
Exercise of stock options179 60 4,055 — — 4,115 
Share repurchases(357)(119)(2,218)(10,288)— (12,625)
Other share retirements(20)(7)(121)(607)— (735)
Cash dividends— — — (5,035)— (5,035)
Balance at May 29, 202125,606 $8,535 $158,341 $352,130 $(21,455)$497,551 
Net loss— — — (2,116)— (2,116)
Unrealized gain on marketable securities, net of $2 tax expense
— — — — 4 4 
Unrealized loss on derivative instruments, net of $203 tax benefit
— — — — (666)(666)
Foreign currency translation adjustments— — — — (4,300)(4,300)
Issuance of stock, net of cancellations67 22 — — — 22 
Share-based compensation— — 1,587 — — 1,587 
Share repurchases(249)(83)(1,616)(8,095)— (9,794)
Other share retirements(30)(9)(197)(496)— (702)
Cash dividends— — — (5,025)— (5,025)
Balance at August 28, 202125,394 $8,465 $158,115 $336,398 $(26,417)$476,561 
Net earnings— — — 11,057 — 11,057 
Unrealized loss on marketable securities, net of $40 tax benefit
— — — — (151)(151)
Unrealized loss on derivative instruments, net of $265 tax benefit
— — — — (868)(868)
Foreign currency translation adjustments— — — — (2,515)(2,515)
Issuance of stock, net of cancellations1 — 22 — — 22 
Share-based compensation— — 1,546 — — 1,546 
Share repurchases(166)(55)(1,092)(5,598)— (6,745)
Other share retirements(2)(1)(12)(51)— (64)
Cash dividends— — — (4,990)— (4,990)
Balance at November 27, 202125,227 $8,409 $158,579 $336,816 $(29,951)$473,853 



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. The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended February 26, 2022. 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 26, 2022 are not necessarily indicative of the results to be expected for the full year.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The comparative fiscal 2022 segment results for the Architectural Framing Systems and Architectural Services segments have been recast to reflect the move of the Sotawall business into the Architectural Services segment from the Architectural Framing Systems segment, effective at the start of the first quarter of fiscal 2023.

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 EndedNine Months Ended
(In thousands)November 26, 2022November 27, 2021November 26, 2022November 27, 2021
Recognized at shipment$168,593 $141,826 $504,450 $419,893 
Recognized over time199,254 192,391 592,141 566,127 
Total$367,847 $334,217 $1,096,591 $986,020 

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 forecast 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. 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.
(In thousands)November 26, 2022February 26, 2022
Trade accounts$142,591 $129,085 
Construction contracts50,423 12,857 
Contract retainage31,395 28,782 
Total receivables224,409 170,724 
Less: allowance for credit losses1,855 2,132 
Receivables, net$222,554 $168,592 

The following table summarizes the activity in the allowance for credit losses:
(In thousands)November 26, 2022February 26, 2022
Beginning balance$2,132 $1,947 
Additions charged to costs and expenses20 729 
Deductions from allowance, net of recoveries(279)(514)
Other changes (1)
(18)(30)
Ending balance$1,855 $2,132 
      (1) Result of foreign currency effects
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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. Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts. Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our consolidated balance sheets.

The time period between when performance obligations are complete and when payment is due is not significant. In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values, and retainage is withheld by the customer until the project reaches a level of completion at which point amounts are released to us from the customer.
(In thousands)November 26, 2022February 26, 2022
Contract assets$64,359 $59,185 
Contract liabilities31,657 11,373 

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 disclosuresThree Months EndedNine Months Ended
(In thousands)November 26, 2022November 27, 2021November 26, 2022November 27, 2021
Revenue recognized related to contract liabilities from prior year-end$3,473 $1,687 $36,630 $18,266 
Revenue recognized related to prior satisfaction of performance obligations4,640 5,051 9,586 12,568 

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 26, 2022 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:
(In thousands)November 26, 2022
Within one year
$493,289 
Within two years
280,427 
Beyond two years
87,660 
Total$861,376 

3.Supplemental Balance Sheet Information

Inventories
(In thousands)November 26, 2022February 26, 2022
Raw materials$43,722 $42,541 
Work-in-process17,081 18,144 
Finished goods25,229 19,809 
Total inventories$86,032 $80,494 











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Other current liabilities
(In thousands)November 26, 2022February 26, 2022
Warranties$14,137 $11,786 
Income and other taxes5,832 15,770 
Accrued self-insurance reserves15,888 8,796 
Accrued freight1,917 2,078 
Deferred revenue2,536 2,714 
Other25,864 26,318 
Total other current liabilities$66,174 $67,462 

Other non-current liabilities
(In thousands)November 26, 2022February 26, 2022
Deferred benefit from New Markets Tax Credit transactions$9,250 $9,165 
Retirement plan obligations6,269 7,041 
Deferred compensation plan6,851 9,483 
Deferred tax liabilities3,793 2,296 
Other21,033 16,598 
Total other non-current liabilities$47,196 $44,583 

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 municipal and corporate bonds: 
(In thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
November 26, 2022$10,835 $ $675 $10,160 
February 26, 202211,862 45 123 11,784 

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 bonds at November 26, 2022, 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 CostEstimated Fair Value
Due within one year$1,739 $1,720 
Due after one year through five years9,096 8,440 
Total$10,835 $10,160 

Derivative instruments
We use interest rate swaps, foreign exchange forward contracts, commodity swaps 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 our floating-rate revolving credit facility and term loan. As of November 26, 2022, the interest rate swap contract had a notional value of $30.0 million.

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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 (primarily related to the Canadian dollar). These contracts generally have an original maturity date of less than one year. As of November 26, 2022, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S. dollar notional values of $3.0 million and $8.1 million, respectively.

These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income.

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 26, 2022
Assets:
Money market funds$6,629 $— $6,629 
Municipal and corporate bonds— 10,160 10,160 
Cash surrender value of life insurance— 16,247 16,247 
Interest rate swap contract— 1,917 1,917 
Liabilities:
Deferred compensation— 9,277 9,277 
Foreign currency forward/option contract— 192 192 
Aluminum hedging contract— 2,382 2,382 
February 26, 2022
Assets:
Money market funds$19,288 $— $19,288 
Municipal and corporate bonds— 11,784 11,784 
Cash surrender value of life insurance— 17,831 17,831 
Aluminum hedging contract— 2,133 2,133 
Interest rate swap contract— 718 718 
Liabilities:
Deferred compensation— 12,491 12,491 
Foreign currency forward/option contract— 161 161 

Money market funds and commercial paper
Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets.

Municipal and corporate bonds
Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as other current or other non-current assets based on maturity date.

Cash surrender value of life insurance and deferred compensation
Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. Changes in cash surrender value are recorded in other expense. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.

Derivative instruments
The interest rate swap is measured at fair value using other observable market inputs, based off of benchmark interest rates.
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Forward foreign exchange and fixed/floating aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates, and forward purchase aluminum prices. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates and aluminum prices.

Nonrecurring fair value measurements
We measure certain financial instruments at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment, by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, we would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

5.Goodwill and Other Intangible Assets

Goodwill
Goodwill represents the excess of the cost over the value of net tangible and identified intangible assets of acquired businesses. We evaluate goodwill for impairment annually as of the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects, which resulted in the combination of the Sotawall and Harmon reporting units into a single reporting unit. We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded that no adjustment to the carrying value of goodwill was necessary. Concurrent with the move of Sotawall from the Architectural Framing Systems segment to the Architectural Services segment effective at the start of our first quarter of fiscal 2023, goodwill was reallocated to the affected reporting units within each segment, using a relative fair value approach as outlined in ASC 350, Intangibles - Goodwill and Other. In addition, for all reporting units, no qualitative indicators of impairment were identified during the first quarter of fiscal 2023, and therefore, no interim quantitative goodwill impairment evaluation was performed.

The following table presents the carrying amount of goodwill attributable to each reporting segment including the amount of goodwill that was reallocated from the Architectural Framing Systems segment to the Architectural Services segment using the relative fair value approach during the first quarter of fiscal 2023:
(In thousands)Architectural Framing SystemsArchitectural ServicesArchitectural GlassLarge-Scale
Optical
Total
Balance at February 27, 2021$93,099 $1,120 $25,322 $10,557 $130,098 
Foreign currency translation82  (78) 4 
Balance at February 26, 202293,181 1,120 25,244