Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-looking statements
This Quarterly Report on Form 10-Q, including the section, Management's Discussion and Analysis of Financial Condition and Results of Operations, contains certain statements that are considered "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may," "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should," "will," "continue" or similar words or expressions. All forecasts and projections in this document are "forward-looking statements," and are based on management's current expectations or beliefs of the Company's near-term results, based on current information available pertaining to the Company. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public, such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.
Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. These uncertainties and other risk factors include, but are not limited to, the risks and uncertainties set forth under "Risk Factors" section of our Annual Report on Form 10-K for the year ended February 28, 2026, and in subsequent filings with the U.S. Securities and Exchange Commission, including this Quarterly Report on Form 10-Q.
We also wish to caution investors that other factors might in the future prove to be important in affecting the Company's results of operations. New factors emerge from time to time; it is not possible for management to predict all such factors, nor can it assess the impact of each such 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. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
Overview
We are a leading provider of architectural products and services for enclosing buildings, and high-performance coating products used in applications for preservation, protection and enhanced viewing. Our four reporting segments are: Architectural Metals, Architectural Services, Architectural Glass, and Performance Surfaces.
Our enterprise strategy is based on the following three key elements:
1.Accelerate Leadership in Target Markets. We intend to enhance our position in targeted end markets by differentiating through deep customer focus and insight, using an informed understanding of customer needs to shape our offerings and delivery models. By aligning our capabilities, investments, and operating approach around this customer-focused strategy, we believe we will be better positioned to differentiate, compete effectively, and strengthen our position in the markets we serve.
2.Grow and Strengthen the Portfolio. We seek to grow and strengthen our portfolio through disciplined organic and inorganic investments in differentiated solutions that align with evolving customer needs. By prioritizing opportunities that enhance our competitive positioning and directly address customer challenges, we will reinforce our disciplined approach to portfolio growth and improvement.
3.Advance Core Capabilities. We expect to advance core capabilities by fostering a culture of continuous improvement grounded in operational excellence, talent development, and disciplined process execution. Through targeted investments in people, systems, and technology, we will strengthen our ability to deliver consistent performance and enhance the customer experience across the organization.
Recent Developments
On July 1, 2026, we completed the acquisition of Keller Companies, Inc. ("Kalwall"), the controlling shareholder of Kalwall Corporation and Structures Unlimited Inc. The total purchase consideration was $112.2 million, including contingent earn-out consideration of $7.5 million. The acquisition was funded with borrowings under our existing credit facility. The acquired business is reported within our Architectural Glass Segment, and its results of operations have been included in our consolidated financial statements since the acquisition date.
On September 18, 2026, we completed the acquisition of SIA "Alzette", the parent company of SIA "GroGlass" ("Groglass"), a Latvia-based provider of high-performance glass surface solutions specializing in anti-reflective and other advanced coating technologies, for up to €62.5 million on a cash-free, debt-free basis, subject to certain customary purchase price adjustments. For additional information regarding this acquisition, see Note 15, Subsequent Events, in our consolidated financial statements.
The following selected financial data should be read in conjunction with the Company's Form 10-K for the year ended February 28, 2026, and the consolidated financial statements, including the notes to consolidated financial statements, included therein.
Results of Operations
The following is a discussion of our financial condition and results of operations during the three and six months ended August 29, 2026 and August 30, 2025.
| Three Months Ended | % of Net Sales | |||||||||||||||||||||||||
| (in thousands, except percentages) | August 29, 2026 | August 30, 2025 | August 29, 2026 | August 30, 2025 | ||||||||||||||||||||||
| Net sales | $ | 391,135 | $ | 358,194 | 100.0 | % | 100.0 | % | ||||||||||||||||||
| Cost of sales | 294,970 | 275,587 | 75.4 | % | 76.9 | % | ||||||||||||||||||||
| Gross profit | 96,165 | 82,607 | 24.6 | % | 23.1 | % | ||||||||||||||||||||
| Selling, general and administrative expenses | 62,679 | 55,719 | 16.0 | % | 15.6 | % | ||||||||||||||||||||
| Operating income | 33,486 | 26,888 | 8.6 | % | 7.5 | % | ||||||||||||||||||||
| Interest expense, net | 3,554 | 4,075 | 0.9 | % | 1.1 | % | ||||||||||||||||||||
| Other income, net | 485 | 5,140 | 0.1 | % | 1.4 | % | ||||||||||||||||||||
| Earnings before income taxes | 30,417 | 27,953 | 7.8 | % | 7.8 | % | ||||||||||||||||||||
| Income tax expense | 8,037 | 4,304 | 2.1 | % | 1.2 | % | ||||||||||||||||||||
| Net earnings | $ | 22,380 | $ | 23,649 | 5.7 | % | 6.6 | % | ||||||||||||||||||
| Effective tax rate | 26.4 | % | 15.4 | % | ||||||||||||||||||||||
| Non-GAAP Measures | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 49,538 | $ | 44,368 | 12.7 | % | 12.4 | % | ||||||||||||||||||
| Adjusted net earnings | $ | 24,401 | $ | 21,098 | 6.2 | % | 5.9 | % | ||||||||||||||||||
| Six Months Ended | % of Net Sales | |||||||||||||||||||||||||
| (in thousands, except percentages) | August 29, 2026 | August 30, 2025 | August 29, 2026 | August 30, 2025 | ||||||||||||||||||||||
| Net sales | $ | 733,820 | $ | 704,816 | 100.0 | % | 100.0 | % | ||||||||||||||||||
| Cost of sales | 562,624 | 547,084 | 76.7 | % | 77.6 | % | ||||||||||||||||||||
| Gross profit | 171,196 | 157,732 | 23.3 | % | 22.4 | % | ||||||||||||||||||||
| Selling, general and administrative expenses | 118,870 | 123,913 | 16.2 | % | 17.6 | % | ||||||||||||||||||||
| Operating income | 52,326 | 33,819 | 7.1 | % | 4.8 | % | ||||||||||||||||||||
| Interest expense, net | 6,388 | 7,921 | 0.9 | % | 1.1 | % | ||||||||||||||||||||
| Other income, net | 412 | 4,458 | 0.1 | % | 0.6 | % | ||||||||||||||||||||
| Earnings before income taxes | 46,350 | 30,356 | 6.3 | % | 4.3 | % | ||||||||||||||||||||
| Income tax expense | 12,433 | 9,394 | 1.7 | % | 1.3 | % | ||||||||||||||||||||
| Net earnings | $ | 33,917 | $ | 20,962 | 4.6 | % | 3.0 | % | ||||||||||||||||||
| Effective tax rate | 26.8 | % | 30.9 | % | ||||||||||||||||||||||
| Non-GAAP Measures | ||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 81,653 | $ | 78,752 | 11.1 | % | 11.2 | % | ||||||||||||||||||
| Adjusted net earnings | $ | 36,520 | $ | 32,948 | 5.0 | % | 4.7 | % | ||||||||||||||||||
The following table summarizes the changes in net sales from Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026:
| Components of Changes in Net Sales | ||||||||||||||||||||||||||||||||||||||
| (Unaudited) | ||||||||||||||||||||||||||||||||||||||
Three Months Ended August 29, 2026 | ||||||||||||||||||||||||||||||||||||||
| (In thousands, except percentages) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Intersegment eliminations | Consolidated | ||||||||||||||||||||||||||||||||
| Fiscal 2026 net sales | $ | 140,935 | $ | 100,490 | $ | 72,181 | $ | 48,390 | $ | (3,802) | $ | 358,194 | ||||||||||||||||||||||||||
Organic business (1) | 2,585 | 7,974 | (1,120) | 6,867 | 273 | 16,579 | ||||||||||||||||||||||||||||||||
Acquisition (2) | - | - | 16,362 | - | - | 16,362 | ||||||||||||||||||||||||||||||||
| Fiscal 2027 net sales | $ | 143,520 | $ | 108,464 | $ | 87,423 | $ | 55,257 | $ | (3,529) | $ | 391,135 | ||||||||||||||||||||||||||
| Total net sales growth (decline) | 1.8 | % | 7.9 | % | 21.1 | % | 14.2 | % | 7.2 | % | 9.2 | % | ||||||||||||||||||||||||||
Organic business (1) | 1.8 | % | 7.9 | % | (1.6) | % | 14.2 | % | 7.2 | % | 4.6 | % | ||||||||||||||||||||||||||
Acquisition (2) | - | % | - | % | 22.7 | % | - | % | - | % | 4.6 | % | ||||||||||||||||||||||||||
Six Months Ended August 29, 2026 | ||||||||||||||||||||||||||||||||||||||
| (In thousands, except percentages) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Intersegment eliminations | Consolidated | ||||||||||||||||||||||||||||||||
| Fiscal 2026 net sales | $ | 269,559 | $ | 206,995 | $ | 145,454 | $ | 90,640 | $ | (7,832) | $ | 704,816 | ||||||||||||||||||||||||||
Organic business (1) | (3,596) | 16,705 | (6,679) | 8,941 | (2,729) | 12,642 | ||||||||||||||||||||||||||||||||
Acquisition (2) | - | - | 16,362 | - | - | 16,362 | ||||||||||||||||||||||||||||||||
| Fiscal 2027 net sales | $ | 265,963 | $ | 223,700 | $ | 155,137 | $ | 99,581 | $ | (10,561) | $ | 733,820 | ||||||||||||||||||||||||||
| Total net sales (decline) growth | (1.3) | % | 8.1 | % | 6.7 | % | 9.9 | % | (34.8) | % | 4.1 | % | ||||||||||||||||||||||||||
Organic business (1) | (1.3) | % | 8.1 | % | (4.6) | % | 9.9 | % | (34.8) | % | 1.8 | % | ||||||||||||||||||||||||||
Acquisition (2) | - | % | - | % | 11.2 | % | - | % | - | % | 2.3 | % | ||||||||||||||||||||||||||
| (1) | Organic business is defined as growth (decline) in net sales from legacy businesses and from acquired businesses, twelve months after the acquisition date. | ||||
| (2) | Kalwall was acquired on July 1, 2026. | ||||
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Consolidated net sales increased 9.2%, to $391.1 million, driven by a $16.4 million contribution from the Kalwall acquisition, price, and favorable mix, partially offset by lower volume.
•Gross margin increased 150 basis points to 24.6%, compared to 23.1%, primarily due to price, and productivity improvements including the net benefit from Project Fortify 2, and the accretive impact of the Kalwall acquisition, partially offset by higher material and manufacturing costs and impacts from lower volume.
•Selling, general, and administrative (SG&A) expense as a percent of net sales increased to 16.0%, compared to 15.6%, primarily due to higher incentive compensation expense, partially offset by cost savings from Fortify Phase 2.
•Operating income increased to $33.5 million from $26.9 million, and operating margin increased 110 basis points to 8.6%.
•Interest expense decreased to $3.6 million, primarily due to lower average debt balance.
•Other income was $0.5 million compared to $5.1 million. The prior year included a $4.6 million gain related to a New Markets Tax Credit.
•Income tax expense as a percentage of earnings before income tax was 26.4%, compared to 15.4%. The increase in the effective tax rate was primarily attributable to non-recurring favorable discrete tax items recognized in the prior year.
•Net earnings were $22.4 million compared to $23.6 million in the prior year.
•Adjusted EBITDA increased to $49.5 million, compared to $44.4 million, and adjusted EBITDA margin increased to 12.7%, compared to 12.4%.
Comparison of First Six Months Fiscal 2027 to First Six Months Fiscal 2026
•Consolidated net sales increased 4.1%, to $733.8 million, primarily driven by price and mix favorability, in addition to the $16.4 million contribution from the Kalwall acquisition, partially offset by lower volume.
•Gross margin increased to 23.3%, compared to 22.4%, primarily due to price and productivity improvements, including the net benefit from Fortify Phase 2, and favorable mix, partially offset by higher material and manufacturing costs and impacts from lower volume.
•SG&A expenses as a percent of net sales decreased to 16.2%, compared to 17.6%. The decrease was driven by the net cost savings from Fortify Phase 2, partially offset by higher incentive expense.
•Operating income increased to $52.3 million from $33.8 million, and operating margin increased 230 basis points to 7.1%.
•Interest expense, net decreased to $6.4 million, due to a lower average debt balance compared to the prior year.
•Other income was $0.4 million compared to $4.5 million. The prior year included a $4.6 million gain related to a New Markets Tax Credit.
•Income tax expense as a percentage of earnings before income tax was 26.8%, compared to 30.9% for the same period last year, as a result of the similar value of discrete tax items on higher earnings before income tax in the current year.
•Net earnings were $33.9 million compared to $21.0 million.
•Adjusted EBITDA increased to $81.7 million compared to $78.8 million and adjusted EBITDA margin remained consistent at 11.1% compared to 11.2% in the prior year.
Use and Reconciliation of Non-GAAP Financial Measures
In addition to reporting financial results in accordance with U.S. GAAP, we also provide certain non-GAAP financial measures. These measures are not in accordance with, nor are they a substitute for U.S. GAAP measures, and may not be comparable to similarly titled measures used by other companies. Management uses non-GAAP measures to evaluate the Company's historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, and to provide enhanced transparency to the investment community. For each of these non-GAAP measures, we provide a reconciliation between the non-GAAP measure and the most directly comparable U.S. GAAP measure, and an explanation of why we believe the non-GAAP measure provides useful information to management and investors.
Non-GAAP measures include:
•Adjusted net earnings and adjusted earnings per diluted share (adjusted diluted EPS), is 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 from period-to-period.
•Adjusted EBITDA, defined as adjusted net earnings before interest, taxes, depreciation, and amortization, and adjusted EBITDA margin, defined as adjusted EBITDA as a percentage of net sales. We use adjusted EBITDA and adjusted EBITDA margin to assess segment performance and make decisions about the allocation of operating and capital resources by analyzing recent results, trends, and variances of each segment in relation to forecasts and historical performance.
| Reconciliation of Non-GAAP Financial Measures | ||
| Adjusted EBITDA and Adjusted EBITDA Margin | ||
| (Unaudited) | ||
| Three Months Ended August 29, 2026 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 18,221 | $ | 5,488 | $ | 7,804 | $ | 8,349 | $ | (17,482) | $ | 22,380 | ||||||||||||||||||||||||||
| Interest expense (income), net | 384 | (40) | (250) | - | 3,461 | 3,554 | ||||||||||||||||||||||||||||||||
| Income tax expense | - | - | 325 | - | 7,711 | 8,037 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 3,511 | 801 | 4,207 | 3,929 | 743 | 13,191 | ||||||||||||||||||||||||||||||||
| EBITDA | 22,116 | 6,249 | 12,086 | 12,278 | (5,567) | 47,162 | ||||||||||||||||||||||||||||||||
Acquisition-related costs (1) | - | - | 906 | 132 | 1,338 | 2,376 | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 22,116 | $ | 6,249 | $ | 12,992 | $ | 12,410 | $ | (4,229) | $ | 49,538 | ||||||||||||||||||||||||||
| EBITDA margin | 15.4 | % | 5.8 | % | 14.4 | % | 22.2 | % | N/M | 12.1 | % | |||||||||||||||||||||||||||
| Adjusted EBITDA margin | 15.4 | % | 5.8 | % | 15.5 | % | 22.5 | % | N/M | 12.6 | % | |||||||||||||||||||||||||||
| Three Months Ended August 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 20,874 | $ | 1,433 | $ | 8,429 | $ | 6,245 | $ | (13,332) | $ | 23,649 | ||||||||||||||||||||||||||
| Interest expense (income), net | 444 | (86) | (131) | - | 3,848 | 4,075 | ||||||||||||||||||||||||||||||||
| Income tax expense | - | - | 26 | - | 4,278 | 4,304 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 3,752 | 911 | 3,323 | 3,789 | 732 | 12,507 | ||||||||||||||||||||||||||||||||
| EBITDA | 25,070 | 2,258 | 11,647 | 10,034 | (4,474) | 44,535 | ||||||||||||||||||||||||||||||||
Acquisition-related costs (1) | - | - | - | 1,187 | 120 | 1,307 | ||||||||||||||||||||||||||||||||
Restructuring costs (2) | 355 | 2,758 | - | - | 10 | 3,123 | ||||||||||||||||||||||||||||||||
NMTC settlement gain (3) | (4,597) | - | - | - | - | (4,597) | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 20,828 | $ | 5,016 | $ | 11,647 | $ | 11,221 | $ | (4,344) | $ | 44,368 | ||||||||||||||||||||||||||
| EBITDA margin | 17.8 | % | 2.2 | % | 16.1 | % | 20.7 | % | N/M | 12.4 | % | |||||||||||||||||||||||||||
| Adjusted EBITDA margin | 14.8 | % | 5.0 | % | 16.1 | % | 23.2 | % | N/M | 12.4 | % | |||||||||||||||||||||||||||
| Six Months Ended August 29, 2026 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 27,981 | $ | 10,860 | $ | 10,300 | $ | 10,976 | $ | (26,200) | $ | 33,917 | ||||||||||||||||||||||||||
| Interest expense (income), net | 770 | (74) | (422) | - | 6,114 | 6,388 | ||||||||||||||||||||||||||||||||
| Income tax expense | - | - | 396 | - | 12,037 | 12,433 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 7,065 | 1,599 | 7,705 | 7,879 | 1,521 | 25,769 | ||||||||||||||||||||||||||||||||
| EBITDA | 35,816 | 12,385 | 17,979 | 18,855 | (6,528) | 78,507 | ||||||||||||||||||||||||||||||||
Acquisition-related costs (1) | - | - | 906 | 132 | 2,108 | 3,146 | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 35,816 | $ | 12,385 | $ | 18,885 | $ | 18,987 | $ | (4,420) | $ | 81,653 | ||||||||||||||||||||||||||
| EBITDA margin | 13.5 | % | 5.5 | % | 12.4 | % | 18.9 | % | N/M | 10.7 | % | |||||||||||||||||||||||||||
| Adjusted EBITDA margin | 13.5 | % | 5.5 | % | 13.1 | % | 19.1 | % | N/M | 11.0 | % | |||||||||||||||||||||||||||
| Six Months Ended August 30, 2025 | ||||||||||||||||||||||||||||||||||||||
| (In thousands) | Architectural Metals | Architectural Services | Architectural Glass | Performance Surfaces | Corporate and Other | Consolidated | ||||||||||||||||||||||||||||||||
| Net earnings (loss) | $ | 24,543 | $ | (4,759) | $ | 18,631 | $ | 10,377 | $ | (27,830) | $ | 20,962 | ||||||||||||||||||||||||||
| Interest expense (income), net | 901 | (138) | (276) | - | 7,434 | 7,921 | ||||||||||||||||||||||||||||||||
| Income tax (benefit) expense | (43) | (8) | 116 | - | 9,329 | 9,394 | ||||||||||||||||||||||||||||||||
| Depreciation and amortization | 7,566 | 1,983 | 6,593 | 7,338 | 1,463 | 24,943 | ||||||||||||||||||||||||||||||||
| EBITDA | 32,967 | (2,922) | 25,064 | 17,715 | (9,604) | 63,220 | ||||||||||||||||||||||||||||||||
Acquisition-related costs (1) | - | - | - | 1,464 | 193 | 1,657 | ||||||||||||||||||||||||||||||||
Restructuring costs (2) | 1,825 | 14,006 | - | - | 2,641 | 18,472 | ||||||||||||||||||||||||||||||||
NMTC settlement gain (3) | (4,597) | - | - | - | - | (4,597) | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 30,195 | $ | 11,084 | $ | 25,064 | $ | 19,179 | $ | (6,770) | $ | 78,752 | ||||||||||||||||||||||||||
| EBITDA margin | 12.2 | % | (1.4) | % | 17.2 | % | 19.5 | % | N/M | 9.0 | % | |||||||||||||||||||||||||||
| Adjusted EBITDA margin | 11.2 | % | 5.4 | % | 17.2 | % | 21.2 | % | N/M | 11.2 | % | |||||||||||||||||||||||||||
(1) | Acquisition-related costs for the Kalwall acquisition in fiscal 2027 and UW Solutions acquisition in fiscal 2026, respectively, which management does not consider reflective of core operating performance for the periods presented. | ||||
(2) | Restructuring costs related to Project Fortify Phase 2 in fiscal 2026. | ||||
| (3) | Settlement of a New Markets Tax Credit transactions. | ||||
| Reconciliation of Non-GAAP Financial Measures | ||
| Adjusted Net Earnings | ||
| (Unaudited) | ||
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||
| (In thousands) | August 29, 2026 | August 30, 2025 | August 29, 2026 | August 30, 2025 | ||||||||||||||||||||||
| Net earnings | $ | 22,380 | $ | 23,649 | $ | 33,917 | $ | 20,962 | ||||||||||||||||||
Acquisition-related costs (1) | 2,376 | 1,307 | 3,146 | 1,657 | ||||||||||||||||||||||
Restructuring costs (2) | - | 3,123 | - | 18,472 | ||||||||||||||||||||||
NMTC settlement gain (3) | - | (4,597) | - | (4,597) | ||||||||||||||||||||||
Income tax impact on above adjustments (4) | (355) | (2,384) | (543) | (3,546) | ||||||||||||||||||||||
| Adjusted net earnings | $ | 24,401 | $ | 21,098 | $ | 36,520 | $ | 32,948 | ||||||||||||||||||
(1) | Acquisition-related costs for the Kalwall acquisition in fiscal 2027 and UW Solutions acquisition in fiscal 2026, respectively, which management does not consider reflective of core operating performance for the periods presented. | ||||
(2) | Restructuring costs related to Project Fortify Phase 2 in fiscal 2026. | ||||
| (3) | Settlement of a New Markets Tax Credit transactions. | ||||
| (4) | Income tax impact reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred. | ||||
Segment Analysis
Disclosures related to our business segments are included in Note 12 of our Consolidated Financial Statements. We manage our business in four reportable segments: Architectural Metals, Architectural Services, Architectural Glass and Performance Surfaces.
The following table presents net sales, adjusted EBITDA and adjusted EBITDA margin by segment and the consolidated total.
| Three Months Ended | Six Months Ended | |||||||||||||||||||||||||||||||||||||
| (In thousands, except percentages) | August 29, 2026 | August 30, 2025 | % Change | August 29, 2026 | August 30, 2025 | % Change | ||||||||||||||||||||||||||||||||
| Segment net sales | ||||||||||||||||||||||||||||||||||||||
| Architectural Metals | $ | 143,520 | $ | 140,935 | 1.8% | $ | 265,963 | $ | 269,559 | (1.3)% | ||||||||||||||||||||||||||||
| Architectural Services | 108,464 | 100,490 | 7.9% | 223,700 | 206,995 | 8.1% | ||||||||||||||||||||||||||||||||
| Architectural Glass | 87,423 | 72,181 | 21.1% | 155,137 | 145,454 | 6.7% | ||||||||||||||||||||||||||||||||
| Performance Surfaces | 55,257 | 48,390 | 14.2% | 99,581 | 90,640 | 9.9% | ||||||||||||||||||||||||||||||||
| Intersegment eliminations | (3,529) | (3,802) | (7.2)% | (10,561) | (7,832) | 34.8% | ||||||||||||||||||||||||||||||||
| Net sales | $ | 391,135 | $ | 358,194 | 9.2% | $ | 733,820 | $ | 704,816 | 4.1% | ||||||||||||||||||||||||||||
| Segment adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||
| Architectural Metals | $ | 22,116 | $ | 20,828 | 6.2% | $ | 35,816 | $ | 30,195 | 18.6% | ||||||||||||||||||||||||||||
| Architectural Services | 6,249 | 5,016 | 24.6% | 12,385 | 11,084 | 11.7% | ||||||||||||||||||||||||||||||||
| Architectural Glass | 12,992 | 11,647 | 11.5% | 18,885 | 25,064 | (24.7)% | ||||||||||||||||||||||||||||||||
| Performance Surfaces | 12,410 | 11,221 | 10.6% | 18,987 | 19,179 | (1.0)% | ||||||||||||||||||||||||||||||||
| Corporate and Other | (4,229) | (4,344) | 2.6% | (4,420) | (6,770) | (34.7)% | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 49,538 | $ | 44,368 | 11.7% | $ | 81,653 | $ | 78,752 | 3.7% | ||||||||||||||||||||||||||||
| Segment adjusted EBITDA margin | ||||||||||||||||||||||||||||||||||||||
| Architectural Metals | 15.4 | % | 14.8 | % | 13.5 | % | 11.2 | % | ||||||||||||||||||||||||||||||
| Architectural Services | 5.8 | % | 5.0 | % | 5.5 | % | 5.4 | % | ||||||||||||||||||||||||||||||
| Architectural Glass | 14.9 | % | 16.1 | % | 12.2 | % | 17.2 | % | ||||||||||||||||||||||||||||||
| Performance Surfaces | 22.5 | % | 23.2 | % | 19.1 | % | 21.2 | % | ||||||||||||||||||||||||||||||
| Corporate and Other | N/A | N/A | N/M | N/M | ||||||||||||||||||||||||||||||||||
| Adjusted EBITDA margin | 12.7 | % | 12.4 | % | 11.1 | % | 11.2 | % | ||||||||||||||||||||||||||||||
Architectural Metals
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Net sales were $143.5 million, compared to $140.9 million, driven by favorable price, partially offset by lower volume.
•Adjusted EBITDA was $22.1 million, or 15.4% of net sales, compared to $20.8 million, or 14.8% of net sales, driven by price, improved productivity and cost savings from Fortify Phase 2, and favorable mix, partially offset by the net impact from higher aluminum costs and lower volume.
Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026
•Net sales were $266.0 million, compared to $269.6 million, driven by lower volume offsetting favorable price and mix.
•Adjusted EBITDA was $35.8 million, or 13.5% of net sales, compared to $30.2 million, or 11.2% of net sales. The improvement in adjusted EBITDA margin was primarily driven by price, improved productivity and cost savings from Fortify Phase 2, and favorable mix, partially offset by the net impact from higher aluminum costs and lower volume.
Architectural Services
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Net sales were $108.5 million, compared to $100.5 million, primarily due to increased volume.
•Adjusted EBITDA increased to $6.2 million, or 5.8% of net sales, compared to $5.0 million, or 5.0% of net sales, primarily driven by project mix and higher volume.
Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026
•Net sales were $223.7 million, compared to $207.0 million, driven by increased volume.
•Adjusted EBITDA increased to $12.4 million, or 5.5% of net sales, compared to $11.1 million, or 5.4% of net sales, driven by increased volume, partially offset by unfavorable mix and price.
Cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| (in thousands) | August 29, 2026 | August 30, 2025 | August 29, 2026 | August 30, 2025 | |||||||||||||||||||
| Gross favorable adjustments | $ | 4,949 | $ | 9,454 | $ | 9,250 | $ | 14,747 | |||||||||||||||
| Gross unfavorable adjustments | (3,416) | (8,722) | (8,386) | (13,948) | |||||||||||||||||||
Net adjustments | $ | 1,532 | $ | 731 | $ | 863 | $ | 799 | |||||||||||||||
Architectural Glass
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Net sales were $87.4 million compared to $72.2 million, driven by the $16.4 million contribution from the Kalwall acquisition and favorable mix, partially offset by lower volume and price.
•Adjusted EBITDA was $13.0 million, or 14.9% of net sales, compared to $11.6 million, or 16.1% of net sales. The decrease in adjusted EBITDA margin was primarily driven by price, higher manufacturing and freight costs, and lower volume, partially offset by the accretive contribution of the Kalwall acquisition and favorable mix.
Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026
•Net sales were $155.1 million compared to $145.5 million, driven by the $16.4 million contribution from the Kalwall acquisition and favorable mix, partially offset by lower volume and price.
•Adjusted EBITDA decreased to $18.9 million, or 13.1% of net sales, compared to $25.1 million, or 17.2% of net sales. The decrease in adjusted EBITDA margin was primarily driven by price, lower volume and higher manufacturing and freight costs, partially offset by the accretive contribution of the Kalwall acquisition and favorable mix.
Performance Surfaces
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Net sales were $55.3 million, compared to $48.4 million, due to higher volume and price.
•Adjusted EBITDA was $12.4 million, or 22.5% of net sales, compared to $11.2 million, or 23.2% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the impact of higher material costs, partially offset by price and increased volume.
Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026
•Net sales were $99.6 million, compared to $90.6 million, due to higher volume and price.
•Adjusted EBITDA was $19.0 million, or 19.1% of net sales, compared to $19.2 million, or 21.2% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the impact of higher material costs, partially offset by favorable price and increased volume.
Corporate and Other
Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026
•Corporate and Other adjusted EBITDA expense was $4.2 million, compared to $4.3 million in the prior year. The improvement was primarily due to the benefits from cost savings related to Fortify Phase 2 and lower health insurance costs, partially offset by higher incentive compensation expense.
Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026
•Corporate and Other adjusted EBITDA expense was $4.4 million, compared to $6.8 million in the prior year driven by net cost savings related to Fortify Phase 2 and lower health insurance costs, partially offset by higher incentive compensation expense.
Backlog
Backlog is defined as 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 an operating measure used by management to assess future potential sales 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 revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog. It is most meaningful for the Architectural Services segment, due to the long-term nature of their projects.
As of August 29, 2026, segment backlog in the Architectural Services Segment was approximately $833.0 million, compared to approximately $792.3 million at the end of the second quarter of fiscal 2026.
Liquidity and Capital Resources
We rely on cash provided by operations for our ongoing cash requirements, including working capital needs, capital expenditures, satisfaction of contractual commitments (including principal and interest payments on our outstanding indebtedness) and shareholder return through dividend payments and share repurchases.
Operating Activities. Net cash provided by operating activities was $43.3 million for the first six months of fiscal 2027, compared to $37.3 million in the prior year period. The increase in cash provided by operating activities is driven by higher net earnings, partially offset by increased cash used for working capital.
Investing Activities. Net cash used in investing activities was $121.8 million for the first six months of fiscal 2027, compared to $10.9 million in the prior-year period. The increase net cash used in investing activities was primarily related to the acquisition of Kalwall.
Financing Activities. Net cash provided by financing activities was $74.9 million for the first six months of fiscal 2027, compared to $29.1 million of cash used in financing activities in the prior year period. The increase primarily relates to additional proceeds from our revolving credit facility used to fund the Kalwall acquisition, as well as lower debt payments compared to the prior year.
Additional Liquidity Considerations. We periodically evaluate our liquidity requirements, cash needs and availability of debt resources relative to acquisition plans, significant capital plans, and other working capital needs. See Note 5 to our Consolidated Financial Statements for more information related to our debt agreements.
Outstanding borrowings under the term loan facility were $206.5 million as of August 29, 2026. Outstanding borrowings under the revolving credit facility were $129.0 million as of August 29, 2026.
At August 29, 2026, we had a total of $2.6 million of ongoing letters of credit related to the senior credit facility, construction contracts and insurance collateral that expire in fiscal 2027 and reduce borrowing capacity under the revolving credit facility. As of August 29, 2026, the amount available for revolving borrowings was $318.4 million.
We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment. Future payments for such leases, excluding leases with initial terms of one year or less, were $53.0 million at August 29, 2026, with $7.9 million payable during the remainder of fiscal 2027.
As of August 29, 2026, we had $33.5 million of open purchase obligations, of which payments totaling $10.6 million are expected to become due during the remainder of fiscal 2027.
We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance. At August 29, 2026, $1.2 billion of these types of bonds were outstanding, of which $264.3 million is in our backlog. These bonds have expiration dates that align with completion of the purchase order or contract. We have not been required to make any payments under these bonds with respect to our existing businesses.
Due to our ability to generate strong cash from operations and our borrowing capability under our committed revolving credit facility, we believe that our sources of liquidity will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs, including additional sources of debt to finance potential acquisitions, for the foreseeable future. We also believe we will be able to operate our business so as to continue to be in compliance with our existing debt covenants over the next fiscal year.
We continually review our portfolio of businesses and their assets and how they support our business strategy and performance objectives. As part of this review, we may acquire other businesses, pursue geographic expansion, take actions to manage capacity and further invest in, divest and/or sell parts of our current businesses.
Related Party Transactions
No material changes have occurred in the disclosure with respect to our related party transactions set forth in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.
Critical Accounting Policies
There have been no significant changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.