Slide 1: Fiscal 2023 Fourth Quarter Earnings Call
Apogee Enterprises, Inc. Fiscal 2023 Fourth Quarter Earnings Call April 12, 2023 5050 Syracuse | Denver, CO | © JC Buck/Black Bike Productions LLC
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 historical and prospective financial performance, measure operational profitability on a consistent basis, and provide enhanced transparency to the investment comm
Slide 3: Agenda
Agenda Introductory remarks Ty Silberhorn Chief Executive Officer Financial results and outlook Mark Augdahl Interim Chief Financial Officer Q&A 330 Madison Avenue | New York | LEED Gold Q4 FY2023 Earnings | April 12, 2023 Apogee Enterprises, Inc. 3
Slide 4: Executing our Enterprise Strategy
Executing our Enterprise Strategy Three Pillar Enterprise Strategy ECONOMIC ACTIVELY STRENGTHEN LEADER MANAGE CORE IN TARGET THE PORTFOLIO CAPABILITIES & MARKETS PLATFORMS To Unlock Profitable Growth FOUNDATIONAL ENABLERS • Results-driven Culture • Apogee Management System • Talent Development • Bes
Slide 5: FY2023 Highlights
FY2023 Highlights FY 2023 Results • Advanced our Lean initiative to drive significant productivity gains Net sales $1.44 B • Effectively managed pricing and costs to offset inflation +10% year-over-year • Increased mix of differentiated products and services Adjusted operating $126 M • Strengthened
Slide 6: Our Strategy is Driving Results
Our Strategy is Driving Results Adjusted Operating Margin Trend* Architectural 12.6% Architectural Framing Systems Glass 9.0% 7.3% 5.6% 5.7% 3.0% FY21** FY22** FY23 FY21 FY22 FY23 *Adjusted operating margin is a non-GAAP metric, see reconciliation table Q4 FY2023 Earnings | April 12, 2023 **Architec
Slide 7: Driving Progress Toward our Financial Targets
Driving Progress Toward our Financial Targets Fiscal 2025 Enterprise Targets (announced at our Nov 2021 investor day) > 12% > 10% > 1.2x Construction Index Adjusted ROIC* Revenue Growth Operating Margin** 13.8% ✓ Target Target 9.6% 8.7% ✓ 7.9% 8.1% 7.1% 7.7% 6.3% FY21 FY22 FY23 FY21 FY22 FY23 Non-Re
Slide 8: FY2024 Priorities
FY2024 Priorities Continuing to execute our three-pillar strategy ECONOMIC • Invest in organic growth initiatives LEADER IN TARGET • Deliver sustainable productivity gains through AMS deployment MARKETS ACTIVELY • Continue to strengthen M&A capabilities and build pipeline MANAGE THE PORTFOLIO • Grow
Slide 9: Deploying the Apogee Management System
Deploying the Apogee Management System Lay the foundation Expand the scope Embed in the culture • Add key talent • Expand toolkit to • Shared language & other businesses philosophy • Reinvigorate Lean • Go beyond Lean: • Common tools & • Apply 80/20 to A multi-year processes offerings – Culture & va
Slide 10: Our Approach to M&A
Our Approach to M&A A focused and disciplined approach to strengthen existing core offerings and expand into high value adjacencies Strengthening our M&A Capabilities Target Characteristics Added key talent & resources Aligned with long-term industry trends Defined M&A strategy and focus areas Diffe
Slide 11: FY2023 Fourth-Quarter Results
FY2023 Fourth-Quarter Results $ in millions, except EPS Q4 FY23 Q4 FY22 Change Highlights • Revenue growth driven by improved pricing & mix in Net sales $344 $328 5% Framing Systems and Glass Adjusted operating income* $25.7 $27.7 (7)% • Adjusted operating income and margin decline driven by: – Incr
Slide 12: FY2023 Full-Year Results
FY2023 Full-Year Results $ in millions, except EPS FY2023 FY2022 Change Highlights • Record full-year revenue and adjusted EPS Net sales $1,441 $1,314 10% • Revenue growth in all four segments Adjusted operating income* $125.8 $82.6 52% • Pricing & cost management offset the impact of inflation Adju
Slide 13: Segment Results
Segment Results Fourth Quarter FY2023 Full Year FY2023 Adjusted Adjusted Revenue Revenue operating operating $M $M margin* margin* Architectural Framing Systems $149 10.5% Architectural Framing Systems $650 12.6% Year-over-year change 13% 370 bps Year-over-year change 19% 530 bps Architectural Servi
Slide 14: Cash Flow and Balance Sheet
Cash Flow and Balance Sheet $ in millions FY2023 FY2022 Highlights Cash flow from operations $102.7 $100.5 • $52 million of cash from operations in Q4 Capital expenditures $45.2 $21.8 • Increased full year cash from ops, despite higher working Free cash flow* $57.5 $78.7 capital related to revenue g
Slide 15: Capital Allocation Strategy
Capital Allocation Strategy Invest in Return Maintain a Profitable Capital to Strong Growth Shareholders Balance Sheet • High-return organic • Continued • Target leverage of investments dividend growth 1.5x Adj. EBITDA • M&A (active • Opportunistic • Capacity to flex portfolio manager) buybacks high
Slide 16: FY2024 Outlook
FY2024 Outlook Key Assumptions • FY24 will be a 53-week year, with an extra week in the fourth quarter • Expect flat to slightly declining revenue compared to FY2023, primarily reflecting lower volume in Architectural Services Earnings $3.90 to $4.25 per share • Expect continued progress toward our
Slide 17: Concluding Remarks
Concluding Remarks • Terrific progress to advance our strategy in FY23 • Improving execution, productivity, and cost management • Significant momentum toward achieving our financial targets • Record revenue and earnings per share • Strong cash flow and balance sheet • Deploying capital to drive valu
Slide 18: Q&A
Q&A Q4 FY2023 Earnings | April 12, 2023 Apogee Enterprises, Inc. 18
Slide 19: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted net earnings and adjusted earnings per diluted common share (unaudited) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended In thousands February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Net earnin
Slide 20: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted operating income and adjusted operating margin (unaudited) Three Months Ended February 25, 2023 Framing Systems Segment Architectural Services Segment Architectural Glass Segment Corporate Consolidated Operating Operating Operating Operating Ope
Slide 21: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Adjusted operating income and adjusted operating margin (unaudited) Twelve Months Ended February 25, 2023 Framing Systems Segment Architectural Services Segment Architectural Glass Segment Corporate Consolidated Operating Operating Operating Operating Op
Slide 22: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures EBITDA and Adjusted EBITDA (Unaudited) Three Months Ended Three Months Ended Twelve Months Ended Twelve Months Ended In thousands February 25, 2023 February 26, 2022 February 25, 2023 February 26, 2022 Net earnings (loss) $ 20,222 $ (16,273) $ 104,107 $
Slide 23: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Return on Invested Capital Reconciliation (unaudited) Twelve Months Ended Twelve Months Ended Twelve Months Ended In thousands, except percentages February 25, 2023 February 26, 2022 February 27, 2021 Operating income $ 125,788 $ 22,045 $ 25,527 Impairme
Slide 24: Reconciliation of non-GAAP financial measures
Reconciliation of non-GAAP financial measures Footnotes to non-GAAP reconciliation tables (1) Adjustment related to discrete income tax benefits for the Sotawall business in fiscal 2023. In the second quarter of fiscal 2023, a $13.7 million income tax benefit was recorded for a worthless stock deduc