Apogee Enterprises Inc.

01/07/2026 | Press release | Distributed by Public on 01/07/2026 12:08

Quarterly Report for Quarter Ending November 29, 2025 (Form 10-Q)

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 March 1, 2025, 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.
Non-GAAP Measures
We have included in this report measures of financial performance that are not defined by U.S. GAAP. We believe that these measures provide useful information and include these measures in other communications to investors. For each of these non-GAAP financial measures, we provide a reconciliation of the differences between the non-GAAP measure and the most directly comparable U.S. GAAP measure (see "Reconciliation of Non-GAAP Financial Measures" in this Item 2 below), and an explanation of why we believe the non-GAAP measure provides useful information to management and investors. These non-GAAP measures should be viewed in addition to, and not in lieu of, the comparable U.S. GAAP measure.
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.Become the economic leader in our target markets.We have developed a deep understanding of our target markets and aligned our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings. We are focused on operational execution, driving productivity improvements, and maintaining a competitive cost structure, so that we may bring more value to our customers and improve our own profitability.
2.Actively manage our portfolio to drive higher margins and returns.We are shifting our business mix toward higher operating margin offerings in order to improve our return on invested capital performance. We accomplish this by allocating resources to grow our top performing businesses, actively addressing underperforming businesses, and investing to add new differentiated product and service offerings to accelerate our growth and increase margins. We continually analyze our current portfolio of products, services, and capabilities to identify the best areas for future profitable growth. We also evaluate inorganic opportunities where we can deploy capital to acquire businesses that will be accretive to our long-term growth rate and operating margins.
3.Strengthen our core capabilities.We are shifting from our historical, decentralized operating model to one with center-led functional expertise that enables us to leverage the scale of the enterprise to better support the needs of the business. We have established a Company-wide operating system with common tools and processes based on the foundation of Lean and Continuous Improvement, which we call the "Apogee Management System." Our strategy is
supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.
Recent Developments
On April 23, 2025, we announced an extension of Project Fortify ("Project Fortify Phase 2" or "Phase 2") to drive further cost efficiencies, primarily in the Architectural Metals and Architectural Services Segments. Phase 2 focuses on further optimizing our operating footprint and aligning resources to enable a more effective operating model. We expect the actions of Phase 2 to incur approximately $28 million to $29 million of pre-tax charges. Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $25 million to $26 million. We expect the actions associated with Phase 2 to be substantially completed by the end of the fourth quarter of fiscal 2026. See Note 14 for additional information.
On October 31, 2025, the Company announced the separation of its Chief Executive Officer. In connection with this separation agreement, the Board of Directors approved the accelerated vesting of certain outstanding unvested restricted stock awards and performance share unit awards previously granted. As a result of this modification, the Company recognized incremental stock-based compensation expense of $2.1 million during the third quarter of fiscal 2026, representing the fair value of the awards that would have otherwise vested over the remaining service periods. This amount is included in SG&A expenses in the Consolidated Results of Operations.
The following selected financial data should be read in conjunction with the Company's Form 10-K for the year ended March 1, 2025, and the consolidated financial statements, including the notes to consolidated financial statements, included therein.
Results of Operations
The following tables provide various components of operations as year over year U.S. dollar and percentage change, as well as a percentage of net sales.
Three Months Ended
% of Net Sales
(in thousands, except percentages) November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024
Net sales $ 348,563 $ 341,344 100.0 % 100.0 %
Cost of sales 265,571 252,195 76.2 % 73.9 %
Gross profit 82,992 89,149 23.8 % 26.1 %
Selling, general and administrative expenses 58,113 60,520 16.7 % 17.7 %
Operating income 24,879 28,629 7.1 % 8.4 %
Interest expense, net 3,227 1,044 0.9 % 0.3 %
Other income, net (2,458) (60) (0.7) % - %
Earnings before income taxes 24,110 27,645 6.9 % 8.1 %
Income tax expense 7,561 6,656 2.2 % 1.9 %
Net earnings $ 16,549 $ 20,989 4.7 % 6.1 %
Effective tax rate 31.4 % 24.1 %
Nine Months Ended
% of Net Sales
(in thousands, except percentages) November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024
Net sales $ 1,053,379 $ 1,015,300 100.0 % 100.0 %
Cost of sales 812,654 729,975 77.1 % 71.9 %
Gross profit 240,725 285,325 22.9 % 28.1 %
Selling, general and administrative expenses 182,026 173,350 17.3 % 17.1 %
Operating income 58,699 111,975 5.6 % 11.0 %
Interest expense, net 11,148 2,634 1.1 % 0.3 %
Other income, net (6,916) (493) (0.7) % - %
Earnings before income taxes 54,467 109,834 5.2 % 10.8 %
Income tax expense 16,956 27,268 1.6 % 2.7 %
Net earnings $ 37,511 $ 82,566 3.6 % 8.1 %
Effective tax rate 31.1 % 24.8 %
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Consolidated net sales increased 2.1%, to $348.6 million, driven by $18.4 million of inorganic sales contribution from the acquisition of UW Solutions and favorable product mix, partially offset by lower volume.
•Gross margin decreased to 23.8%, compared to 26.1%, primarily due to impact of lower volume and price, higher aluminum, restructuring and health insurance costs, partially offset by lower incentive compensation expense.
•SG&A expense as a percent of net sales decreased to 16.7%, compared to 17.7%. The decrease was primarily due to lower acquisition-related costs and lower incentive compensation expense, partially offset by higher amortization expense related to the UW Solutions acquisition and incremental stock-based compensation expense related to CEO transition costs.
•Operating income declined to $24.9 million from $28.6 million, and operating margin decreased 130 basis points to 7.1%.
•Adjusted EBITDA increased to $46.1 million compared to $45.8 million and adjusted EBITDA margin decreased to 13.2% compared to 13.4%. The decrease in adjusted EBITDA margin was primarily driven by lower volume and price, higher aluminum and health insurance costs, partially offset by lower incentive compensation expense and benefits from cost savings related to Project Fortify Phase 2.
•Interest expense increased to $3.2 million, primarily due to a higher average debt balance resulting from the acquisition of UW Solutions in November 2024.
•Other income was $2.5 million compared to $0.1 million. The change was due to a $2.1 million gain related to a New Markets Tax Credit recognized in the current period.
•Income tax expense as a percentage of earnings before income tax was 31.4%, compared to 24.1%. The increase in the effective tax rate was primarily due to an increase in tax expense for discrete items.
•Net earnings were $16.5 million compared to $21.0 million.
Comparison of First Nine Months Fiscal 2026 to First Nine Months Fiscal 2025
•Consolidated net sales increased 3.8%, to $1.1 billion, primarily driven by $65.3 million of inorganic sales contribution from the acquisition of UW Solutions. This was partially offset by lower volume and price as a result of lower demand.
•Gross margin decreased to 22.9%, compared to 28.1%, primarily due to lower price and volume, higher aluminum, restructuring and health insurance costs, partially offset by lower incentive compensation expenses.
•SG&A expenses as a percent of net sales increased to 17.3%, compared to 17.1%. The increase was primarily due to increased restructuring charges related to Project Fortify Phase 2, increased amortization expense associated with the UW Solutions transaction and incremental stock-based compensation expense related to CEO transition costs, partially offset by lower transaction-related costs and lower incentive compensation expense.
•Operating income declined to $58.7 million from $112.0 million, and operating margin decreased 540 basis points to 5.6%.
•Adjusted EBITDA decreased to $124.9 million compared to $151.5 million and adjusted EBITDA margin decreased to 11.9% compared to 14.9%. The decrease in adjusted EBITDA margin was primarily driven by lower price and volume, higher material and health insurance costs, partially offset by lower incentive compensation expense and cost savings as a result of Project Fortify Phase 2.
•Interest expense, net increased to $11.1 million, primarily due to a higher average debt balance resulting from the acquisition of UW Solutions.
•Other income was $6.9 million compared to $0.5 million. The change was driven by a $6.7 million gain from New Markets Tax Credits.
•Income tax expense as a percentage of earnings before income tax was 31.1%, compared to 24.8% for the same period last year. The increase in the effective tax rate was primarily due to increases in tax expense for discrete items.
•Net earnings were $37.5 million compared to $82.6 million.
Segment Analysis
We have four operating segments which are also reportable segments. Each of our four segments have distinct economic characteristics, including products and services provided, production processes and varying ranges in performance and results.
We evaluate the performance of our segments based on segment net sales and adjusted EBITDA. Our CEO is our CODM. The CODM uses these measurements 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.
The segment measurements provided to, and evaluated by, the CODM are described in Note 12 of our unaudited condensed consolidated financial statements.
The following table presents net sales, adjusted EBITDA and adjusted EBITDA margin by segment and the consolidated total.
Three Months Ended
Nine Months Ended
(In thousands, except percentages) November 29, 2025 November 30, 2024 % Change November 29, 2025 November 30, 2024 % Change
Segment net sales
Architectural Metals $ 124,433 $ 138,039 (9.9)% $ 393,991 $ 412,561 (4.5)%
Architectural Services 105,166 104,921 0.2% 312,161 301,966 3.4%
Architectural Glass 70,852 70,236 0.9% 216,306 247,040 (12.4)%
Performance Surfaces 52,980 33,196 59.6% 143,620 74,232 93.5%
Total segment sales 353,431 346,392 2.0% 1,066,078 1,035,799 2.9%
Intersegment eliminations (4,868) (5,048) (3.6)% (12,699) (20,499) (38.1)%
Net sales $ 348,563 $ 341,344 2.1% $ 1,053,379 $ 1,015,300 3.8%
Segment adjusted EBITDA
Architectural Metals $ 16,750 $ 17,483 (4.2)% $ 46,946 $ 63,551 (26.1)%
Architectural Services 10,198 9,994 2.0% 21,279 23,911 (11.0)%
Architectural Glass 11,534 13,180 (12.5)% 36,598 57,551 (36.4)%
Performance Surfaces 11,921 7,828 52.3% 31,100 18,053 72.3%
Corporate and Other (4,272) (2,682) 59.3% (11,040) (11,519) (4.2)%
Adjusted EBITDA $ 46,131 $ 45,803 0.7% $ 124,883 $ 151,547 (17.6)%
Segment adjusted EBITDA margins
Architectural Metals 13.5 % 12.7 % 11.9 % 15.4 %
Architectural Services 9.7 % 9.5 % 6.8 % 7.9 %
Architectural Glass 16.3 % 18.8 % 16.9 % 23.3 %
Performance Surfaces 22.5 % 23.6 % 21.7 % 24.3 %
Corporate and Other N/M N/M N/M N/M
Adjusted EBITDA margin 13.2 % 13.4 % 11.9 % 14.9 %
N/M Indicates calculation not meaningful.
The following table summarizes the impact that different items had on our net sales for the third quarter fiscal 2026. All net sales for the third quarter of fiscal 2025 were organic.
Three Months Ended November 29, 2025
(In thousands, except percentages)
Architectural Metals
Architectural Services
Architectural Glass
Performance Surfaces
Intersegment Eliminations
Consolidated
Fiscal 2025 net sales
$ 138,039 $ 104,921 $ 70,236 $ 33,196 $ (5,048) $ 341,344
Organic business (1)
(13,606) 245 616 1,417 180 (11,148)
Acquisition (2)
- - - 18,367 - 18,367
Fiscal 2026 net sales
$ 124,433 $ 105,166 $ 70,852 $ 52,980 $ (4,868) $ 348,563
Total net sales growth (decline)
(9.9) % 0.2 % 0.9 % 59.6 % (3.6) % 2.1 %
Organic business (1)
(9.9) % 0.2 % 0.9 % 4.3 % (3.6) % (3.3) %
Acquisition (2)
- % - % - % 55.3 % - % 5.4 %
Nine Months Ended November 29, 2025
(In thousands, except percentages)
Architectural Metals
Architectural Services
Architectural Glass
Performance Surfaces
Intersegment Eliminations
Consolidated
Fiscal 2025 net sales
$ 412,561 $ 301,966 $ 247,040 $ 74,232 $ (20,499) $ 1,015,300
Organic business (1)
(18,570) 10,195 (30,734) 4,117 7,800 (27,192)
Acquisition (2)
- - - 65,271 - 65,271
Fiscal 2026 net sales
$ 393,991 $ 312,161 $ 216,306 $ 143,620 $ (12,699) $ 1,053,379
Total net sales growth (decline)
(4.5) % 3.4 % (12.4) % 93.5 % (38.1) % 3.8 %
Organic business (1)
(4.5) % 3.4 % (12.4) % 5.5 % (38.1) % (2.7) %
Acquisition (2)
- % - % - % 87.9 % - % 6.4 %
(1)
Organic business includes net sales associated with acquired product lines or businesses that occur after the first twelve months from the date the product line or business is acquired and net sales from internally developed product lines or businesses.
(2)
On November 4, 2024, we completed the acquisition of UW Solutions. For additional information, see Note 13 to the accompanying consolidated financial statements.

Architectural Metals
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Net sales were $124.4 million, compared to $138.0 million, primarily due to lower volume, partially offset by favorable price and product mix.
•Adjusted EBITDA was $16.8 million, or 13.5% of net sales, compared to $17.5 million, or 12.7% of net sales. The higher adjusted EBITDA margin was primarily driven by favorable productivity including cost savings related to Project Fortify Phase 2, lower incentive compensation expense, and favorable price and product mix, partially offset by lower volume.
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
•Net sales were $394.0 million, compared to $412.6 million, primarily reflecting lower volume, partially offset by increased price.
•Adjusted EBITDA was $46.9 million, or 11.9% of net sales, compared to $63.6 million, or 15.4% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower volume, higher aluminum costs and less favorable product mix, partially offset by cost savings from Project Fortify Phase 2 and lower incentive compensation costs.
Architectural Services
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Net sales were $105.2 million, compared to $104.9 million, primarily due to increased volume.
•Adjusted EBITDA increased to $10.2 million, or 9.7% of net sales, compared to $10.0 million, or 9.5% of net sales. The increase in adjusted EBITDA margin was primarily driven by lower incentive compensation expense, partially offset by unfavorable project mix.
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
•Net sales were $312.2 million, compared to $302.0 million, primarily due to increased volume, partially offset by unfavorable project mix.
•Adjusted EBITDA decreased to $21.3 million, or 6.8% of net sales, compared to $23.9 million, or 7.9% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the impact of higher tariff costs and unfavorable project mix, partially offset by lower incentive compensation costs.
Cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:
Three Months Ended
(in thousands) November 29, 2025 November 30, 2024
Gross favorable adjustments
$ 10,763 $ 9,739
Gross unfavorable adjustments
(6,787) (3,938)
Net adjustments
$ 3,976 $ 5,801
Nine Months Ended
(in thousands) November 29, 2025 November 30, 2024
Gross favorable adjustments
$ 25,510 $ 20,111
Gross unfavorable adjustments
(20,735) (7,206)
Net adjustments
$ 4,775 $ 12,905
Architectural Glass
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Net sales were $70.9 million, compared to $70.2 million, primarily due to increased volume and favorable mix, partially offset by lower price driven by lower end-market demand.
•Adjusted EBITDA decreased to $11.5 million, or 16.3% of net sales, compared to $13.2 million, or 18.8% of net sales. The decrease in adjusted EBITDA margin was primarily driven by lower price and higher material costs, partially offset by higher volume, favorable mix, and lower short-term incentive compensation expense.
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
•Net sales were $216.3 million compared to $247.0 million, primarily reflecting lower volume and price due to lower end-market demand.
•Adjusted EBITDA decreased to $36.6 million, or 16.9% of net sales, compared to $57.6 million, or 23.3% of net sales. The decline in adjusted EBITDA margin was primarily driven by lower volume and price, partially offset by lower incentive compensation expense.
Performance Surfaces
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Net sales were $53.0 million, compared to $33.2 million, which included $18.4 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 4.3%.
•Adjusted EBITDA was $11.9 million, or 22.5% of net sales, compared to $7.8 million, or 23.6% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the dilutive impact of lower adjusted EBITDA margin from UW Solutions and unfavorable productivity, partially offset by favorable product mix and price.
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
•Net sales were $143.6 million, compared to $74.2 million, which included $65.3 million of inorganic sales contribution from the acquisition of UW Solutions and organic growth of 5.5%.
•Adjusted EBITDA was $31.1 million, or 21.7% of net sales, compared to $18.1 million, or 24.3% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the dilutive effect of lower adjusted EBITDA margin from the UW Solutions acquisition, partially offset by favorable pricing.
Corporate and Other
Comparison of Third Quarter Fiscal 2026 to Third Quarter Fiscal 2025
•Corporate and Other adjusted EBITDA expense was $4.3 million, compared to $2.7 million, primarily driven by higher health insurance costs.
Comparison of First Nine Months of Fiscal 2026 to First Nine Months of Fiscal 2025
•Corporate and Other adjusted EBITDA expense was $11.0 million, compared to $11.5 million primarily due to lower incentive compensation expense, partially offset by higher health insurance costs.
Backlog
Backlog represents the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which may be expected to be recognized as revenue in the future. Backlog is most meaningful for the Architectural Services Segment due to the longer-term nature of their projects. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. We view backlog as one indicator of future revenues, particularly in our longer-lead time businesses. In addition to backlog, we have a substantial amount of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog.
As of November 29, 2025, segment backlog in the Architectural Services segment was approximately $774.7 million, compared to approximately $742.2 million at the end of the third quarter of fiscal 2025.
Reconciliation of Non-GAAP Financial Measures
Adjusted net earnings, adjusted diluted earnings per share (adjusted diluted EPS), adjusted EBITDA, and adjusted EBITDA margin are supplemental non-GAAP financial measures provided by the Company to assess performance on a more comparable basis from period-to-period by excluding amounts that management does not consider part of core operating results. Management uses these non-GAAP measures as noted below:
•We use adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that we do not consider to be 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, and adjusted EBITDA margin is 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.
These non-GAAP measures should be viewed in addition to, and not as an alternative to, the reported financial results of the Company prepared in accordance with U.S. GAAP. Other companies may calculate these measures differently, thereby limiting the usefulness of the measures for comparison with other companies.
Apogee Enterprises, Inc.
Reconciliation of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted EBITDA Margin
(Unaudited)
Three Months Ended November 29, 2025
(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated
Net earnings (loss) $ 12,264 $ 7,614 $ 8,248 $ 7,749 $ (19,326) $ 16,549
Interest expense (income), net 430 (89) (174) - 3,060 3,227
Income tax expense - - 81 - 7,480 7,561
Depreciation and amortization 3,662 809 3,379 3,913 753 12,516
EBITDA 16,356 8,334 11,534 11,662 (8,033) 39,853
Acquisition-related costs (1)
- - - 259 56 315
Restructuring costs (2)
2,537 1,864 - - 679 5,080
CEO transition costs(3)
- - - - 3,026 3,026
NMTC settlement gain(4)
(2,143) - - - - (2,143)
Adjusted EBITDA $ 16,750 $ 10,198 $ 11,534 $ 11,921 $ (4,272) $ 46,131
EBITDA margin 13.1 % 7.9 % 16.3 % 22.0 % N/M 11.4 %
Adjusted EBITDA margin 13.5 % 9.7 % 16.3 % 22.5 % N/M 13.2 %
Three Months Ended November 30, 2024
(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated
Net earnings (loss) $ 12,146 $ 9,734 $ 10,115 $ 4,841 $ (15,847) $ 20,989
Interest expense (income), net 563 (4) (121) - 606 1,044
Income tax expense - - 117 - 6,539 6,656
Depreciation and amortization 3,932 981 3,069 2,461 691 11,134
EBITDA 16,641 10,711 13,180 7,302 (8,011) 39,823
Acquisition-related costs (1)
- - - 526 4,542 5,068
Restructuring costs (2)
842 (717) - - 787 912
Adjusted EBITDA $ 17,483 $ 9,994 $ 13,180 $ 7,828 $ (2,682) $ 45,803
EBITDA margin 12.1 % 10.2 % 18.8 % 22.0 % N/M 11.7 %
Adjusted EBITDA margin 12.7 % 9.5 % 18.8 % 23.6 % N/M 13.4 %
Nine Months Ended November 29, 2025
(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated
Net earnings (loss) $ 36,806 $ 2,855 $ 26,880 $ 18,126 $ (47,156) $ 37,511
Interest expense (income), net 1,331 (227) (450) - 10,494 11,148
Income tax (benefit) expense (43) (8) 198 - 16,809 16,956
Depreciation and amortization 11,229 2,789 9,970 11,251 2,217 37,456
EBITDA 49,323 5,409 36,598 29,377 (17,636) 103,071
Acquisition-related costs (1)
- - - 1,723 249 1,972
Restructuring costs (2)
4,363 15,870 - - 3,321 23,554
CEO transition costs (3)
- - - - 3,026 3,026
NMTC settlement gain (4)
(6,740) - - - - (6,740)
Adjusted EBITDA $ 46,946 $ 21,279 $ 36,598 $ 31,100 $ (11,040) $ 124,883
EBITDA margin 12.5 % 1.7 % 16.9 % 20.5 % N/M 9.8 %
Adjusted EBITDA margin 11.9 % 6.8 % 16.9 % 21.7 % N/M 11.9 %
Nine Months Ended November 30, 2024
(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated
Net earnings (loss) $ 46,509 $ 21,460 $ 49,342 $ 13,481 $ (48,226) $ 82,566
Interest expense (income), net 1,671 23 (317) - 1,257 2,634
Income tax expense (benefit) 7 - (632) - 27,893 27,268
Depreciation and amortization 12,609 2,887 9,158 4,046 2,098 30,798
EBITDA 60,796 24,370 57,551 17,527 (16,978) 143,266
Acquisition-related costs (1)
- - - 526 4,542 5,068
Restructuring costs (2)
2,755 (459) - - 917 3,213
Adjusted EBITDA $ 63,551 $ 23,911 $ 57,551 $ 18,053 $ (11,519) $ 151,547
EBITDA margin 14.7 % 8.1 % 23.3 % 23.6 % N/M 14.1 %
Adjusted EBITDA margin 15.4 % 7.9 % 23.3 % 24.3 % N/M 14.9 %
(1)
Costs related to the acquisition of UW Solutions.
(2)
Restructuring costs related to Project Fortify. Costs incurred in fiscal 2025 were associated with Phase 1 and costs incurred in fiscal 2026 are associated with Phase 2.
(3)
Transition costs related to departure of the Chief Executive Officer during the third quarter of fiscal 2026.
(4)
Gain related to the settlement of a New Markets Tax Credit transactions.
Reconciliation of Non-GAAP Financial Measures
Adjusted Net Earnings and Adjusted Diluted Earnings Per Share
(Unaudited)
Three Months Ended Nine Months Ended
(In thousands) November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024
Net earnings $ 16,549 $ 20,989 $ 37,511 $ 82,566
Acquisition-related costs (1)
315 5,873 1,972 5,873
Restructuring costs (2)
5,080 912 23,554 3,213
CEO transition costs (3)
3,026 - 3,026 -
NMTC settlement gain (4)
(2,143) - (6,740) -
Income tax impact on above adjustments (5)
(797) (1,662) (4,342) (2,226)
Adjusted net earnings $ 22,030 $ 26,112 $ 54,981 $ 89,426
Three Months Ended Nine Months Ended
November 29, 2025 November 30, 2024 November 29, 2025 November 30, 2024
Diluted earnings per share $ 0.77 $ 0.96 $ 1.74 $ 3.76
Acquisition-related costs (1)
0.01 0.27 0.09 0.27
Restructuring costs (2)
0.24 0.04 1.09 0.15
CEO transition costs (3)
0.14 - 0.14 -
NMTC settlement gain (4)
(0.10) - (0.31) -
Income tax impact on above adjustments (5)
(0.04) (0.08) (0.20) (0.10)
Adjusted diluted earnings per share $ 1.02 $ 1.19 $ 2.55 $ 4.08
Weighted average diluted shares outstanding 21,592 21,917 21,568 21,937
(1)
Acquisition-related costs include costs related to one-time expenses incurred to integrate the UW Solutions acquisition.
(2)
Restructuring costs related to Project Fortify. Costs incurred in fiscal 2025 were associated with Phase 1 and costs incurred in fiscal 2026 are associated with Phase 2.
(3)
Transition costs related to departure of the Chief Executive Officer during the third quarter of fiscal 2026.
(4)
Gain related to the settlement of a New Markets Tax Credit transactions.
(5)
Income tax impact reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred.
Liquidity and Capital Resources
We rely on cash provided by operations for our material 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 $66.6 million for the first nine months of fiscal 2026, compared to $95.1 million in the prior year period. The decrease in net cash provided by operating activities was primarily driven by lower net earnings and increased cash used for working capital, which included a net payment of $13.7 million for the settlement of an arbitration award during our first fiscal quarter. This was partially offset by lower taxes paid as a result of the One Big Beautiful Bill Act tax legislation.
Investing Activities. Net cash used in investing activities was $15.8 million for the first nine months of fiscal 2026, compared to $257.1 million in the prior-year period. The net cash used in investing activities was primarily related to capital expenditures in the current year period while the prior year period included a net use of cash for the acquisition of UW Solutions of $233.1 million.
Financing Activities.Net cash used in financing activities was $51.9 million for the first nine months of fiscal 2026, compared to $169.0 million of cash provided by financing activities in the prior year period. The prior year period included $250.0 million in proceeds from financing for the acquisition of UW Solutions. The prior year period also included $15.1 million for repurchases of common stock.
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.
On July 19, 2024, we entered into a Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent, and other lenders. The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $700.0 million, in which commitments were made through a $450.0 million, five-year revolving credit facility and a committed $250.0 million delayed draw term loan facility. Borrowings under the revolving credit facility can be in Canadian dollars (CAD) limited to $25.0 million USD. The term loan facility may be utilized in up to two drawdowns, which are available to be made within one year after the closing date. The senior credit facility has a term of five years with a maturity date of July 19, 2029.
The Credit Agreement replaced the previous revolving credit facility with Wells Fargo Bank, N.A., as administrative agent, and other lenders, with maximum borrowings up to $385.0 million, and the two Canadian credit facilities with Bank of Montreal totaling $25.0 million USD.
As a result of the execution of the Credit Agreement, in the second quarter of fiscal 2025, we recognized a loss on extinguishment of debt within interest expense of $0.5 million for the write-off of unamortized financing fees related to the previous revolving credit facility. Additionally, we capitalized $3.0 million of lender fees and $0.8 million of third-party fees
incurred in connection with the Credit Agreement, which were recorded as other non-current assets and are being amortized over the term of the credit facility as interest expense.
The Credit Agreement contains two maintenance financial covenants that require our Consolidated Leverage Ratio (as defined in the Credit Agreement) to be less than 3.50 and our Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) to exceed 3.00. At November 29, 2025, we were in compliance with all covenants as defined under the terms of the Credit Agreement.
The Credit Agreement also contains an acquisition "holiday". In the event we make an acquisition for which the purchase price is greater than $75 million, we can elect to increase the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) to 4.00 for a period of four consecutive fiscal quarters, commencing with the fiscal quarter in which a qualifying acquisition occurs. No more than two acquisition holidays can occur during the term of the Credit Agreement, and at least two fiscal quarters must separate qualifying acquisitions.
Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or for CAD borrowings, Canadian Overnight Repo Rate Average (CORRA) plus, in each a margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement). For Base Rate borrowings, the margin ranges from 0.25% to 0.75%. For Term SOFR and CORRA borrowings, the margin ranges from 1.25% to 1.75%, with an incremental Term SOFR and CORRA adjustment of 0.10% and 0.29547% respectively.
The Credit Agreement also contains an "accordion" provision. Under this provision, we can request that the senior credit facility be increased by unlimited additional amounts. Any lender may elect or decline to participate in the requested increase at their sole discretion.
On November 4, 2024, as part of the acquisition of UW Solutions, and for working capital and general corporate purposes, we executed a drawdown against the delayed draw term loan facility for $250.0 million. Outstanding borrowings under the term loan facility were $215.0 million as of November 29, 2025. Outstanding borrowings under the revolving credit facility were $40.0 million as of November 29, 2025.
At November 29, 2025, 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 November 29, 2025, the amount available for revolving borrowings was $407.4 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 $63.2 million at November 29, 2025, with $3.9 million payable during the remainder of fiscal 2026.
As of November 29, 2025, we had $16.4 million of open purchase obligations, of which payments totaling $2.7 million are expected to become due during the remainder of fiscal 2026. These purchase obligations primarily relate to raw material commitments and capital expenditures and are not expected to impact future liquidity, as amounts should be recovered through customer billings.
We expect to make contributions of $0.4 million to our defined-benefit pension plans in fiscal 2026, which will equal or exceed our minimum funding requirements.
As of November 29, 2025, we had reserves of $5.9 million for unrecognized tax benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits will ultimately be settled.
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 November 29, 2025, $1.2 billion of these types of bonds were outstanding, of which $253.0 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 March 1, 2025.
Critical Accounting Policies
There have been no material changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended March 1, 2025.
Apogee Enterprises Inc. published this content on January 07, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on January 07, 2026 at 18:09 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]