Apogee Enterprises Reports Fiscal 2024 Fourth Quarter and Full Year Results

About this update from Apogee Enterprises, Inc.

Fourth-quarter net sales increase 5%, to $362 million Fourth-quarter diluted EPS of $0.71 ; adjusted diluted EPS grows 33%, to $1.14 Full year net sales of $1.42 billion Full-year diluted EPS of $4.51 ; full-year adjusted diluted EPS increases 20% to $4.77 Full-year operating margin improves to 9.4%; adjusted operating margin improves to 10.3% Full-year cash flow from operations reaches record $204 million Provides initial outlook for fiscal 2025 MINNEAPOLIS --(BUSINESS WIRE)-- Apogee Enterprises, Inc. (Nasdaq: APOG) today reported its fiscal 2024 fourth-quarter and full-year results. The fourth-quarter and full-year results for fiscal 2024 include the impact of an additional week of operations compared to fiscal 2023. The Company reported the following selected financial results: Three Months Ended (Unaudited, $ in thousands, except per share amounts) March 2, 2024 February 25, 2023 % Change Net Sales $ 361,840 $ 344,105 5.2% Operating income $ 21,866 $ 25,739 (15.0)% Operating margin 6.0 % 7.5 % (20.0)% Diluted earnings per share $ 0.71 $ 0.91 (22.0)% Additional Non-GAAP Measures1 Adjusted operating income $ 34,269 $ 25,739 33.1% Adjusted operating margin 9.5 % 7.5 % 26.7% Adjusted diluted earnings per share $ 1.14 $ 0.86 32.6% Adjusted EBITDA $ 43,039 $ 36,745 17.1% Adjusted EBITDA margin 11.9 % 10.7 % 11.2% “Fiscal 2024 was another great year for Apogee, with record adjusted EPS and cash flow, and adjusted operating margins and ROIC that exceeded the targets we set at our investor day in 2021,” said Ty R. Silberhorn , Chief Executive Officer. “Through executing our strategy, we have achieved a step change in performance and profitability, providing a stronger foundation from which to operate. We’ve driven sustainable cost and productivity improvements, significantly improved operational execution, and refocused our business to deliver differentiated product and service offerings that provide more value for our customers.” Mr. Silberhorn continued, “As we look ahead to fiscal 2025, our team is working to build on the gains we’ve achieved, while positioning the Company to drive long-term shareholder value. We are approaching fiscal 2025 with a growth mindset, continuing to diversify our business, strengthen our product and service offerings, and invest to position the Company for long-term profitable growth.” Project Fortify On January 30, 2024 , the Company announced strategic actions to further streamline its business operations, enable a more efficient cost model, and better position the Company for profitable growth (referred to as “Project Fortify”). During the fourth quarter, the Company incurred $12.4 million of pre-tax charges related to Project Fortify. $5.5 million of these charges were included in cost of sales and $6.9 million were included in selling, general, and administrative (“SG&A”) expenses. The Company continues to expect a total of $16 million to $18 million of pre-tax charges in connection with Project Fortify leading to annualized cost savings of $12 million to $14 million . The Company expects approximately 60% of these savings will be realized in fiscal 2025, and the remainder in fiscal 2026. The Company expects that approximately 70% of the savings will be realized in the Architectural Framing Systems Segment, 20% in the Architectural Services Segment, and 10% in the Corporate Segment, with the plan to be substantially complete in the third quarter of fiscal 2025. Fourth-Quarter Consolidated Results (Fourth Quarter Fiscal 2024 compared to Fourth Quarter Fiscal 2023) Net sales increased 5.2% to $361.8 million compared to $344.1 million , primarily due to improved pricing and mix, partially offset by lower volumes. Gross profit increased 13.3% to $88.5 million and gross margin improved by 170 bps to 24.4%, primarily driven by higher pricing, improved product mix, and the impact of cost saving initiatives, partially offset by restructuring charges related to Project Fortify. SG&A expenses increased $14.2 million to 18.4% of net sales compared to 15.2%, driven by restructuring charges related to Project Fortify and higher wages and benefits expense. Operating income was $21.9 million , and operating margin was 6.0%. Adjusted operating income grew 33.1% to $34.3 million and adjusted operating margin increased 200 basis points to 9.5% primarily driven by higher pricing, improved product mix, and the impact of cost saving initiatives, partially offset by higher wages and benefits expense. Other expense was $1.6 million reflecting the impact of an investment market-valuation adjustment. Diluted earnings per share (“EPS”) was $0.71 compared to $0.91 . Adjusted diluted EPS grew 32.6% to $1.14 driven by higher adjusted operating income and lower interest expense, partially offset by higher Other expense. Full-Year Consolidated Results (Fiscal 2024 compared to Fiscal 2023) Net sales were $1.42 billion , compared to $1.44 billion , primarily reflecting lower volumes, partially offset by improved product mix and higher pricing. Operating margin improved to 9.4%. Adjusted operating margin increased 160 basis points to 10.3% primarily driven by higher pricing, improved product mix, and the impact of cost saving initiatives, partially offset by a less favorable mix of projects in the Architectural Services Segment, higher salary and benefits costs, and the inflationary impact of higher costs. Other income was $2.1 million reflecting the impact of a $4.7 million pre-tax gain related to a New Markets Tax Credit, partially offset by an investment market-valuation adjustment. Income tax expense was $29.6 million , compared to $12.5 million primarily driven by a $14.8 million tax deduction for worthless stock and other related discrete tax benefits in the prior year. Diluted EPS was $4.51 compared to $4.64 . Adjusted diluted EPS grew 19.8% to a record $4.77 driven by higher adjusted operating income and lower interest expense, partially offset by higher Other expense. Fourth Quarter Segment Results (Fourth Quarter Fiscal 2024 Compared to Fourth Quarter Fiscal 2023) Architectural Framing Systems Architectural Framing Systems net sales were $139.2 million , compared to $148.6 million , primarily reflecting lower volume. Operating income was $6.8 million , which included $6.0 million of restructuring charges related to Project Fortify. Adjusted operating income was $12.8 million , or 9.2% of net sales, compared to $15.6 million , or 10.5% of net sales, primarily reflecting the impact of lower volume and a less favorable mix of projects, partially offset by the impact of cost savings initiatives. Segment backlog2 at the end of the quarter was $200.7 million , an increase of 9.1% compared to $183.9 million at the end of the third fiscal quarter. Architectural Glass Architectural Glass net sales grew 18.2%, to $96.2 million , driven by improved pricing and mix. Operating income increased to $18.9 million , or 19.7% of net sales, compared to $9.5 million , or 11.7% of net sales, primarily driven by the impact of improved pricing and mix, partially offset by cost inflation. Architectural Services Architectural Services net sales grew 7.9% to $106.3 million , primarily due to a more favorable mix of projects. Operating income was $3.6 million , which included $2.5 million of restructuring charges related to Project Fortify. Adjusted operating income increased to $6.2 million , or 5.8% of net sales, compared to $3.7 million , or 3.7% of net sales, primarily driven by a more favorable mix of projects. Segment backlog at the end of the quarter was $807.8 million , a 4.0% increase compared to $776.5 million at the end of the third fiscal quarter. Large-Scale Optical Large-Scale Optical net sales were $27.1 million , compared to $27.2 million , primarily due to lower volume, partially offset by a more favorable mix. Operating income grew to $6.9 million , or 25.6% of net sales, compared to $5.8 million , or 21.1% of net sales, primarily driven by the improved mix. Corporate and Other Corporate and other expense increased to $14.5 million , compared to $8.8 million , primarily due to $3.9 million of restructuring charges related to Project Fortify, and higher wages and benefits. Financial Condition Net cash provided by operating activities in the fourth quarter improved to $74.9 million , compared to $51.6 million in last year’s fourth quarter. For the full year, net cash provided by operating activities increased to a record $204.2 million , compared to $102.7 million in the prior year, primarily driven by favorable working capital changes. Capital expenditures for the fiscal year were $43.2 million , compared to $45.2 million last year. During the year, the Company returned $33.0 million of cash to shareholders through share repurchases and dividend payments. Year-end long-term debt was $62.0 million , compared to $169.8 million at the end of fiscal 2023. The net leverage ratio3 as of the end of the fiscal year improved to 0.1x compared to 0.9x at the end of fiscal 2023. Fiscal 2025 Outlook The Company expects a net sales decline in the range of 4% to 7%. This range includes approximately 2 percentage points of decline related to fiscal 2025 reverting to a 52-week year, and approximately 1 percentage point of decline related to the actions of Project Fortify to eliminate certain lower-margin product and service offerings. The Company expects diluted EPS in the range of $4.25 to $4.55 and adjusted diluted EPS in the range of $4.35 to $4.75 4. The Company expects the impact of the reversion to a 52-week year will reduce adjusted diluted EPS by approximately $0.20 compared to fiscal 2024 and that there will be no material impact to adjusted diluted EPS related to the adverse net sales impact of Project Fortify. The Company’s outlook assumes an adjusted effective tax rate of approximately 24.5%, and capital expenditures between $40 to $50 million . Conference Call Information The Company will host a conference call today at 8:00 a.m. Central Time to discuss this earnings release. 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 . A replay and transcript of the webcast will be available on the Company’s website for one year from the date of the conference call. 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 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. 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. This release and other financial communications may contain the following 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 part of core operating results to enhance comparability of results from period to period. Adjusted EBITDA represents adjusted net earnings before interest, taxes, depreciation, and amortization. The Company believes adjusted EBITDA and adjusted EBITDA margin metrics provide useful information to investors and analysts about the Company's core operating performance. 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. Adjusted return on invested capital (“ROIC”) is defined as adjusted operating income net of tax, divided by average invested capital. The Company believes this measure is useful in understanding operational performance and capital allocation over time. 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. Net leverage ratio is a non-GAAP ratio defined as net debt divided by trailing twelve months adjusted EBITDA. The Company considers this measure helpful to evaluate our capital structure and financial leverage, and our ability to fund investing and financing activities. Backlog is an operating measure used by management to assess future potential sales revenue. 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 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 the Company has a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog. As part of the actions of Project Fortify, the longer-cycle project business in the Architectural Framing Segment is expected to be phased out over time as the Segment eliminates certain lower-margin product and service offerings. As a result, the majority of projects in the Segment will generally be completed in six months or less, and therefore we believe that backlog as an operating measure will be less effective in assessing future potential sales revenue. Effective in the first quarter of fiscal 2025, we will no longer report backlog for this Segment. Forward-Looking Statements This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. 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) North American and global economic conditions, including the cyclical nature of the North American and Latin American non-residential construction industries and the potential impact of an economic downturn or recession; (B) U.S. and global instability and uncertainty arising from events outside of our control; (C) actions of new and existing competitors; (D) departure of key personnel and ability to source sufficient labor; (E) product performance, reliability and quality issues; (F) project management and installation issues that could affect the profitability of individual contracts; (G) dependence on a relatively small number of customers in one operating segment; (H) financial and operating results that could differ from market expectations; (I) self-insurance risk related to a material product liability or other events for which the Company is liable; (J) maintaining our information technology systems and potential cybersecurity threats; (K) cost of regulatory compliance, including environmental regulations; (L) supply chain disruptions, including fluctuations in the availability and cost of materials used in our products and the impact of trade policies and regulations, including potential future tariffs; (M) integration of acquisitions and management of acquired contracts; (N) impairment of goodwill or indefinite-lived intangible assets; (O) our ability to successfully manage and implement our enterprise strategy; (P) our ability to maintain effective internal controls over financial reporting; (Q) judgements regarding the accounting for tax positions and the resolution of tax disputes; (R) the impact of cost inflation and rising interest rates; and (S) the impact of changes in capital and credit markets on our liquidity and cost of capital. 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 included in the Company’s Annual Report on Form 10-K for the fiscal year ended February 25, 2023 , and in subsequent filings with the U.S. Securities and Exchange Commission . ______________________________ 1 Adjusted operating income, adjusted operating margin, adjusted diluted earnings per share, adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. See Use of Non-GAAP Financial Measures and reconciliations to the most directly comparable GAAP measures later in this press release. 2 Backlog is a non-GAAP financial measure. See Use of Non-GAAP Financial Measures later in this press release for more information. 3 Net leverage ratio is a non-GAAP financial measure. See Use of Non-GAAP Financial Measures later in this press release for more information. 4 See reconciliation of Fiscal 2024 estimated adjusted diluted earnings per share to GAAP diluted earnings per share later in this press release. Apogee Enterprises, Inc. Consolidated Condensed Statements of Income (Unaudited) Three Months Ended Twelve Months Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (In thousands, except per share amounts) (14 weeks) (13 weeks) % Change (53 weeks) (52 weeks) % Change Net sales $ 361,840 $ 344,105 5.2 % $ 1,416,942 $ 1,440,696 (1.6 )% Cost of sales 273,374 265,993 2.8 % 1,049,814 1,105,423 (5.0 )% Gross profit 88,466 78,112 13.3 % 367,128 335,273 9.5 % Selling, general and administrative expenses 66,600 52,373 27.2 % 233,295 209,485 11.4 % Operating income 21,866 25,739 (15.0 )% 133,833 125,788 6.4 % Interest expense, net 949 2,166 (56.2 )% 6,669 7,660 (12.9 )% Other expense (income), net 1,633 (528 ) N/M (2,089 ) 1,507 N/M Earnings before income taxes 19,284 24,101 (20.0 )% 129,253 116,621 10.8 % Income tax expense 3,548 3,879 (8.5 )% 29,640 12,514 136.9 % Net earnings $ 15,736 $ 20,222 (22.2 )% $ 99,613 $ 104,107 (4.3 )% Basic earnings per share $ 0.72 $ 0.92 (21.7 )% $ 4.55 $ 4.73 (3.8 )% Diluted earnings per share $ 0.71 $ 0.91 (22.0 )% $ 4.51 $ 4.64 (2.8 )% Weighted average basic shares outstanding 21,819 21,900 (0.4 )% 21,871 22,007 (0.6 )% Weighted average diluted shares outstanding 22,102 22,326 (1.0 )% 22,091 22,416 (1.4 )% Cash dividends per common share $ 0.2500 $ 0.2400 4.2 % $ 0.9700 $ 0.9000 7.8 % Apogee Enterprises, Inc. Business Segment Information (Unaudited) Three Months Ended Twelve Months Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (In thousands) (14 weeks) (13 weeks) % Change (53 weeks) (52 weeks) % Change Segment net sales Architectural Framing Systems $ 139,188 $ 148,606 (6.3 )% $ 601,736 $ 649,778 (7.4 )% Architectural Glass 96,187 81,396 18.2 % 378,449 316,554 19.6 % Architectural Services 106,278 98,476 7.9 % 378,422 410,627 (7.8 )% Large-Scale Optical 27,113 27,227 (0.4 )% 99,223 104,215 (4.8 )% Intersegment eliminations (6,926 ) (11,600 ) (40.3 )% (40,888 ) (40,478 ) 1.0 % Net sales $ 361,840 $ 344,105 5.2 % $ 1,416,942 $ 1,440,696 (1.6 )% Segment operating income (loss) Architectural Framing Systems $ 6,847 $ 15,609 (56.1 )% $ 64,833 $ 81,875 (20.8 )% Architectural Glass 18,927 9,523 98.8 % 68,046 28,610 137.8 % Architectural Services 3,629 3,691 (1.7 )% 11,840 18,140 (34.7 )% Large-Scale Optical 6,945 5,750 20.8 % 24,233 25,348 (4.4 )% Corporate and other (14,482 ) (8,834 ) 63.9 % (35,119 ) (28,185 ) 24.6 % Operating income $ 21,866 $ 25,739 (15.0 )% $ 133,833 $ 125,788 6.4 % Segment operating margin Architectural Framing Systems 4.9 % 10.5 % 10.8 % 12.6 % Architectural Glass 19.7 % 11.7 % 18.0 % 9.0 % Architectural Services 3.4 % 3.7 % 3.1 % 4.4 % Large-Scale Optical 25.6 % 21.1 % 24.4 % 24.3 % Corporate and other N/M N/M N/M N/M Operating margin 6.0 % 7.5 % 9.4 % 8.7 % Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions. Net sales intersegment eliminations are reported separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment. Operating income does not include any other income or expense, interest expense or a provision for income taxes. Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level. We report these unallocated corporate costs separately in Corporate and Other. Apogee Enterprises, Inc. Consolidated Condensed Balance Sheets (Unaudited) (In thousands) March 2, 2024 February 25, 2023 Assets Current assets Cash and cash equivalents $ 37,216 $ 19,924 Restricted cash — 1,549 Receivables, net 173,557 197,267 Inventories, net 69,240 78,441 Contract assets 49,502 59,403 Other current assets 29,124 26,517 Total current assets 358,639 383,101 Property, plant and equipment, net 244,216 248,867 Operating lease right-of-use assets 40,221 41,354 Goodwill 129,182 129,026 Intangible assets, net 66,114 65,966 Other non-current assets 45,692 47,051 Total assets $ 884,064 $ 915,365 Liabilities and shareholders' equity Current liabilities Accounts payable 84,755 86,549 Accrued compensation and benefits 53,801 51,651 Contract liabilities 34,755 28,011 Operating lease liabilities 12,286 11,806 Other current liabilities 59,108 64,532 Total current liabilities 244,705 242,549 Long-term debt 62,000 169,837 Non-current operating lease liabilities 31,907 33,072 Non-current self-insurance reserves 30,552 29,316 Other non-current liabilities 43,875 44,183 Total shareholders’ equity 471,025 396,408 Total liabilities and shareholders’ equity $ 884,064 $ 915,365 Apogee Enterprises, Inc. Consolidated Statement of Cash Flows (Unaudited) Twelve Months Ended March 2, 2024 February 25, 2023 (In thousands) (53 weeks) (52 weeks) Operating Activities Net earnings $ 99,613 $ 104,107 Adjustments to reconcile net earnings to net cash provided by operating activities: Depreciation and amortization 41,588 42,403 Share-based compensation 9,721 8,656 Deferred income taxes (9,748 ) (7,185 ) Asset impairment on property, plant, and equipment 6,195 — Loss (gain) on disposal of assets 826 (3,815 ) Proceeds from New Markets Tax Credit transaction, net of deferred costs — 18,390 Settlement of New Markets Tax Credit transaction (4,687 ) (19,523 ) Non-cash lease expense 11,721 11,878 Other, net 4,615 5,399 Changes in operating assets and liabilities: Receivables 23,993 (62,304 ) Inventories 9,366 1,731 Contract assets 9,880 (3,380 ) Accounts payable (2,655 ) (5,491 ) Accrued compensation and benefits 2,102 (1,810 ) Contract liabilities 6,590 20,952 Operating lease liability (12,632 ) (12,149 ) Refundable and accrued income taxes 6,523 (6,976 ) Other current assets and liabilities 1,143 11,813 Net cash provided by operating activities 204,154 102,696 Investing Activities Capital expenditures (43,180 ) (45,177 ) Proceeds from sales of property, plant and equipment 293 7,755 Purchases of marketable securities (2,953 ) — Sales/maturities of marketable securities 2,165 9,712 Net cash used by investing activities (43,675 ) (27,710 ) Financing Activities Proceeds from revolving credit facilities 196,964 485,879 Repayment on debt — (151,000 ) Repayments on revolving credit facilities (304,817 ) (327,865 ) Repurchase of common stock (11,821 ) (74,312 ) Dividends paid (21,133 ) (19,670 ) Other, net (3,800 ) (4,055 ) Net cash used by financing activities (144,607 ) (91,023 ) Effect of exchange rates on cash (129 ) (73 ) Increase (decrease) in cash, cash equivalents and restricted cash 15,743 (16,110 ) Cash, cash equivalents and restricted cash at beginning of year 21,473 37,583 Cash and cash equivalents at end of year $ 37,216 $ 21,473 Apogee Enterprises, Inc. Reconciliation of Non-GAAP Financial Measures Adjusted Net Earnings and Adjusted Diluted Earnings per Share (Unaudited) Three Months Ended Twelve Months Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (In thousands) (14 weeks) (13 weeks) (53 weeks) (52 weeks) Net earnings $ 15,736 $ 20,222 $ 99,613 $ 104,107 Restructuring charges (1) 12,403 — 12,403 — NMTC settlement gain (2) — — (4,687 ) — Worthless stock deduction and related discrete tax benefits (3) — (1,131 ) — (14,833 ) Income tax impact on above adjustments (3,039 ) — (1,890 ) — Adjusted net earnings $ 25,100 $ 19,091 $ 105,439 $ 89,274 Three Months Ended Twelve Months Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (14 weeks) (13 weeks) (53 weeks) (52 weeks) Diluted earnings per share $ 0.71 $ 0.91 $ 4.51 $ 4.64 Restructuring charges (1) 0.56 — 0.56 — NMTC settlement gain (2) — — (0.21 ) — Worthless stock deduction and related discrete tax benefits (3) — (0.05 ) — (0.66 ) Income tax impact on above adjustments (0.14 ) — (0.09 ) — Adjusted diluted earnings per share $ 1.14 $ 0.86 $ 4.77 $ 3.98 Weighted average diluted shares outstanding 22,102 22,326 22,091 22,416 (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. (2) Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net. (3) Worthless stock deduction and related discrete income tax benefits from the impairment of the Sotawall business in fiscal 2023 which was recorded in income tax expense. Apogee Enterprises, Inc. Reconciliation of Non-GAAP Financial Measures Adjusted Operating Income (Loss) and Adjusted Operating Margin (Unaudited) Three Months Ended March 2, 2024 (In thousands) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and Other Consolidated Operating income (loss) $ 6,847 $ 18,927 $ 3,629 $ 6,945 $ (14,482 ) $ 21,866 Restructuring charges (1) 5,970 — 2,526 — 3,907 12,403 Adjusted operating income (loss) $ 12,817 $ 18,927 $ 6,155 $ 6,945 $ (10,575 ) $ 34,269 Operating margin 4.9 % 19.7 % 3.4 % 25.6 % N/M 6.0 % Restructuring charges (1) 4.3 — 2.4 — N/M 3.4 Adjusted operating margin 9.2 % 19.7 % 5.8 % 25.6 % N/M 9.5 % Three Months Ended February 25, 2023 (In thousands) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and Other Consolidated Operating income (loss) $ 15,609 $ 9,523 $ 3,691 $ 5,750 $ (8,834 ) $ 25,739 Operating margin 10.5 % 11.7 % 3.7 % 21.1 % N/M 7.5 % (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. Apogee Enterprises, Inc. Reconciliation of Non-GAAP Financial Measures Adjusted Operating Income (Loss) and Adjusted Operating Margin (Unaudited) Twelve Months Ended March 2, 2024 (In thousands) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and Other Consolidated Operating income (loss) $ 64,833 $ 68,046 $ 11,840 $ 24,233 $ (35,119 ) $ 133,833 Restructuring charges (1) 5,970 — 2,526 — 3,907 12,403 Adjusted operating income (loss) $ 70,803 $ 68,046 $ 14,366 $ 24,233 $ (31,212 ) $ 146,236 Operating margin 10.8 % 18.0 % 3.1 % 24.4 % N/M 9.4 % Restructuring charges (1) 1.0 — 0.7 — N/M 0.9 Adjusted operating margin 11.8 % 18.0 % 3.8 % 24.4 % N/M 10.3 % Twelve Months Ended February 25, 2023 (In thousands) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and Other Consolidated Operating income (loss) $ 81,875 $ 28,610 $ 18,140 $ 25,348 $ (28,185 ) $ 125,788 Operating margin 12.6 % 9.0 % 4.4 % 24.3 % N/M 8.7 % (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. Apogee Enterprises, Inc. Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation and amortization) (Unaudited) Three Months Ended Twelve Months Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (In thousands) (14 weeks) (13 weeks) (53 weeks) (52 weeks) Net earnings $ 15,736 $ 20,222 $ 99,613 $ 104,107 Income tax expense 3,548 3,879 29,640 12,514 Interest expense, net 949 2,166 6,669 7,660 Depreciation and amortization 10,403 10,478 41,588 42,403 EBITDA $ 30,636 $ 36,745 $ 177,510 $ 166,684 Restructuring charges (1) 12,403 — 12,403 — NMTC settlement gain (2) — — (4,687 ) — Adjusted EBITDA $ 43,039 $ 36,745 $ 185,226 $ 166,684 EBITDA Margin 8.5 % 10.7 % 12.5 % 11.6 % Adjusted EBITDA Margin 11.9 % 10.7 % 13.1 % 11.6 % (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. (2) Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net. Apogee Enterprises, Inc. Reconciliation of Non-GAAP Measure - Net Leverage Ratio (Unaudited) Net Debt (In thousands) March 2, 2024 February 25, 2023 Total debt $ 62,000 $ 169,837 Less: Cash and cash equivalents 37,216 19,924 Net Debt $ 24,784 $ 149,913 Trailing twelve months ending Adjusted EBITDA March 2, 2024 February 25, 2023 Net earnings $ 99,613 $ 104,107 Income tax expense 29,640 12,514 Interest expense, net 6,669 7,660 Depreciation and amortization 41,588 42,403 EBITDA $ 177,510 $ 166,684 Restructuring charges (1) 12,403 — NMTC settlement gain (2) (4,687 ) — Adjusted EBITDA $ 185,226 $ 166,684 Net Leverage March 2, 2024 February 25, 2023 Net Debt $ 24,784 $ 149,913 Adjusted EBITDA 185,226 166,684 Net Leverage Ratio 0.1 x 0.9 x (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. (2) Realization of a New Market Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other expense (income), net. Apogee Enterprises, Inc. Reconciliation of Non-GAAP Measure - Adjusted Return on Invested Capital Reconciliation (Unaudited) Twelve Months Ended (In thousands, except percentages) March 2, 2024 February 25, 2023 Operating income $ 133,833 $ 125,788 Restructuring charges (1) 12,403 — Adjusted operating income $ 146,236 $ 125,788 Tax adjustment (2) 35,828 30,818 Adjusted operating income after taxes $ 110,408 $ 94,970 Average invested capital (3) $ 668,555 $ 686,124 Adjusted return on invested capital (ROIC) (4) 16.5 % 13.8 % (1) Restructuring charges related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs. (2) Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdiction in which the charge or income occurred. (3) Average invested capital represents a trailing five quarter average of total assets less average current liabilities (excluding current portion long-term debt). (4) Adjusted ROIC calculated by dividing adjusted operating income after taxes by average invested capital Apogee Enterprises, Inc. 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 $ 4.25 $ 4.55 Restructuring charges (1) 0.13 0.26 Income tax impact on above adjustments per share (0.03 ) (0.06 ) Adjusted diluted earnings per share $ 4.35 $ 4.75 (1) Restructuring charges related to Project Fortify. View source version on businesswire.com : https://www.businesswire.com/news/home/20240418312317/en/ Jeff Huebschen Vice President, Investor Relations & Communications 952.487.7538 [email protected] Source: Apogee Enterprises, Inc.

View stock analysis, news, and events for Apogee Enterprises, Inc.