Apogee Enterprises, Inc. · NASDAQ:APOG
Apogee Enterprises — Q2 2025 Earnings Presentation
26 slides from Apogee Enterprises's earnings presentation, Oct 4, 2024
Slide 1: Fiscal 2025 Second Quarter Earnings Call
Apogee Enterprises, Inc. Nasdaq: APOG Fiscal 2025 Second Quarter Earnings Call October 4, 2024 University of Washington, NanoES – Seattle © Aaron Leitz Photography; courtesy of ZGF
Slide 2: Non-GAAP measures & forward-looking statements
Non-GAAP measures & forward-looking statements This presentation contains non-GAAP financial measures which the Company uses to evaluate its historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, a
Slide 3: Agenda
Agenda • Q2 FY2025 Results and FY2025 Outlook • UW Solutions Acquisition Overview • Q&A Brooklyn Health Center, New York Photo courtesy of Terry Wieckert Q2 FY2025 Earnings | October 4, 2024 Apogee Enterprises, Inc. 3
Slide 4: Q2 FY2025 Results
Q2 FY2025 Results Q2 FY2025 Earnings | October 4, 2024 Apogee Enterprises, Inc. 4
Slide 5: FY2025 Second Quarter Highlights
FY2025 Second Quarter Highlights • Lower sales volume driven by softening end markets and exiting lower Net sales $342 M margin product lines as part of Project Fortify (3)% year-over-year • Another quarter of strong profitability gains, with improved adjusted operating margin and adjusted EPS growt
Slide 6: Consolidated Results
Consolidated Results Second quarter Year-to-date $ in millions, except EPS $ in millions, except EPS Q2 FY25 Q2 FY24 Change FY25 FY24 Change Net sales $342.4 $353.7 (3.2)% Net sales $674.0 $715.4 (5.8)% Adjusted operating income* $43.1 $40.6 6.4% Adjusted operating income* $85.6 $74.3 15.2% Adjusted
Slide 7: Segment Results
Segment Results Second quarter FY2025 Year-to-date FY2025 Segment Adjusted Segment Adjusted net sales operating net sales operating $M margin* $M margin* Architectural Framing Systems $141.4 12.8% Architectural Framing Systems $274.5 13.6% Year-over-year change (11.0)% (50) bps Year-over-year change
Slide 8: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet $ in millions Six Months Six Months Ended Ended Commentary 8/31/24 8/26/23 Cash flow from operations $64.1 $62.6 • Increased cash flow, primarily driven by higher net earnings Capital expenditures $15.7 $15.0 • Returned $25.9M of cash to shareholders year-to-date Free cas
Slide 9: FY2025 Outlook
FY2025 Outlook Additional details (7)% to (4)% • Net sales impacted by: Net sales compared to FY24 ‒ ~2 percentage point decline related to reverting to a 52-week year ‒ ~1 percentage point decline related to Project Fortify • Reversion to 52-week year expected to reduce adjusted diluted EPS by ~$0.
Slide 10: Second Quarter Summary
Second Quarter Summary • Continuing to build momentum through executing our strategy • Margin expansion & adjusted diluted EPS growth, despite lower sales • Raising our full year adjusted diluted EPS* outlook • Strong financial position and deploying capital to drive value • Planned acquisition of U
Slide 11: Apogee Enterprises' Acquisition of UW Solutions
Apogee Enterprises’ Acquisition of UW Solutions Q2 FY2025 Earnings | October 4, 2024 Apogee Enterprises, Inc. 11
Slide 12: Transaction Summary
Transaction Summary • Apogee to acquire UW Solutions for purchase price of $240 million Transaction o Represents approximately 8.5x estimated adjusted EBITDA* for fiscal 2026, inclusive of run- rate cost synergies of approximately $5 million and net of an approximately $27 million tax step up benefi
Slide 13: Executive Summary
Executive Summary A compelling acquisition to advance our strategy Acquisition of a leading provider of high-performance coated substrates for a diverse set of applications Aligns with strategy, adding a differentiated business with leading positions in attractive markets Complements our portfolio,
Slide 14: UW Solutions Overview
UW Solutions Overview Metric / Comment HDPM Printable Materials IFS Industrial Flooring EC Engineered Coatings Composite engineered wood flooring Enables high-definition images to be Highly engineered, custom panels for mezzanines, elevated Description applied to metals, wood and other platforms, an
Slide 15: Aligned with our Strategy to Create Peak Value
Aligned with our Strategy to Create Peak Value 1 Adds a market leader in targeted applications ➢ Strong track record of growth Create Peak ECONOMIC ➢ Differentiation through coatings development and process capability Value by LEADER ➢ Strong margins of ~20% adjusted EBITDA* IN TARGET MARKETS buildi
Slide 16: Builds on and Strengthens Apogee's Core Capabilities
Builds on and Strengthens Apogee’s Core Capabilities Specialty Finishing Process Technology • Architectural paint • Vacuum deposition • Anodize finishing • Glass & polymer substrates Performance Coatings Material Conversion • Low-emissivity • Aluminum extrusion • Optical • Glass & metal fabrication
Slide 17: Provides a Diverse Set of Products and Applications
Provides a Diverse Set of Products and Applications Complementary capabilities across a broad range a manufacturing processes and substrates Apogee UW Solutions Sputter Roll Coating Curtain Coating Spray Coating Deposition (Thermal) (UV) (E-Beam) Coating Process Substrate Glass Acrylic Polycarbonate
Slide 18: Creates a Scalable Platform for Growth
Creates a Scalable Platform for Growth Leveraging our combined strengths to expand our capabilities and market reach Leading Brands with Broad Reach • Brings together leading brands and provides cross-selling opportunities to accelerate current growth drivers • R&D capabilities enable new product de
Slide 19: Expands and Diversifies Our Addressable Markets
Expands and Diversifies Our Addressable Markets Expands our offerings R&D capabilities provide a platform Accelerates our efforts to grow and for non-residential for product development and diversify Large-Scale Optical construction markets expansion into new markets End-market opportunities End-mar
Slide 20: Q&A
Q&A Q2 FY2025 Earnings | October 4, 2024 Apogee Enterprises, Inc. 20
Slide 21: Non-GAAP Measures
Non-GAAP Measures • Adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted effective tax rate, and adjusted diluted EPS are used by the Company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered p
Slide 22: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted net earnings and adjusted diluted earnings per share (Unaudited) Three Months Ended Six Months Ended In thousands August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023 Net earnings $ 30,566 $ 33,327 $ 61,577 $ 56,903 Restructuring char
Slide 23: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted operating income (loss) and adjusted operating margin (Unaudited) Three Months Ended August 31, 2024 Architectural Architectural Architectural Corporate In thousands Framing Systems Glass Services LSO and Other Consolidated Operating income (los
Slide 24: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted operating income (loss) and adjusted operating margin (Unaudited) Six Months Ended August 31, 2024 Architectural Architectural Architectural Corporate In thousands Framing Systems Glass Services LSO and Other Consolidated Operating income (loss)
Slide 25: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation, and amortization) (Unaudited) Three Months Ended Six Months Ended In thousands August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023 Net earning
Slide 26: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures 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 $ 4.81 $ 5.08 Restructur