UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _________________________________ FORM 10-Q _________________________________ ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended November 30, 2024 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 0-6365 _________________________________ APOGEE ENTERPRISES, INC. (Exact n ...

Core Viewpoint - Apogee Enterprises' stock is experiencing a significant decline despite reporting better-than-expected sales and earnings, primarily due to disappointing revenue growth and deteriorating profit margins [1][2][3]. Financial Performance - Apogee reported adjusted earnings of $1.19 per share on sales of $341.3 million, surpassing analyst expectations of $1.11 per share and $332.2 million in sales [1]. - Year-over-year revenue growth was only 0.5%, largely attributed to the acquisition of UW Interco, which contributed additional revenue [2]. - GAAP earnings were reported at $0.96 per share, significantly lower than the adjusted figures, with GAAP net profit down 22% year over year [3]. Operational Challenges - The CEO cited weak demand in end markets as a key factor for the disappointing results, leading to lower volume and an unfavorable product mix, particularly in Architectural Framing Systems [4]. - The acquisition of UW Interco also introduced acquisition-related expenses that negatively impacted profit margins [4]. Future Outlook - Management anticipates a 5% decline in full-year sales for fiscal 2025, with continued weak demand expected to affect sales in fiscal Q4 [5]. - Despite the challenges, Apogee expects to earn at least $4.90 per share on a GAAP basis for the year, suggesting a price-to-earnings ratio of approximately 12x based on a share price around $59 [6].

Financial Data and Key Metrics Changes - Revenue for the quarter was $341 million, consistent with last year, despite ongoing pressure from soft end market demand in non-residential construction [7][23] - Adjusted operating margin declined by 70 basis points, primarily due to unfavorable sales leverage from lower volume and higher costs [23] - Adjusted diluted EPS decreased by 3%, coming in at $1.19, mainly driven by lower adjusted operating income [23][32] Business Line Data and Key Metrics Changes - Framing net sales declined approximately 1% to $138 million, reflecting a less favorable product mix, while adjusted operating margin in framing decreased to 9.8% [24][25] - Glass segment saw a decline in net sales due to soft end market demand, with margins sensitive to changes in volume and pricing [25][26] - Services segment achieved 11% growth in net sales, with adjusted operating margin improving to 8.6%, marking the fourth consecutive quarter of year-over-year margin expansion [26][27] Market Data and Key Metrics Changes - Non-residential construction market remains challenging, with leading indicators like the Architectural Billing Index indicating a contracting market for over 20 months [12][15] - Interest rate-sensitive sectors such as office and commercial have been weaker, while sectors like education and healthcare continue to grow [14][15] - FMI's forecast for 2025 indicates 1% growth in the overall market, with declines in interest rate-sensitive verticals and growth in institutional verticals benefiting from government funding [15] Company Strategy and Development Direction - The company is focusing on diversifying its sales mix towards sectors with higher growth rates and leveraging the capabilities of UW Solutions for expansion into attractive market adjacencies [18][19] - The acquisition of UW Solutions is seen as a growth lever, with expectations of significant contributions to revenue and margin enhancement [10][36] - The leadership team is working on a new strategic plan to drive growth while expanding the margin profile, with details to be shared in the new fiscal year [20][21] Management's Comments on Operating Environment and Future Outlook - Management expects continued pressure in the first half of the next fiscal year, primarily in glass and framing, but remains optimistic about outperforming the industry [16][17] - The company anticipates that the downturn in construction will be short and shallow, with a focus on executing a backlog secured for much of fiscal 2026 [15][16] - Fiscal 2026 is expected to face headwinds, particularly in glass margins, but management is confident in the structural changes made to maintain target margins [37][38] Other Important Information - Cash from operations was strong at $31 million for the quarter, with a year-to-date total of $95 million [30] - The company executed a $250 million delayed draw term loan to fund the acquisition of UW Solutions, finishing the quarter with a consolidated leverage ratio of 1.3 times [30][31] - Full-year adjusted diluted EPS is expected to be at the bottom of the range of $4.90 to $5.20, including dilution from the UW Solutions acquisition [33] Q&A Session Summary Question: Can you discuss the end market weakness in the glass segment? - Management noted that volume pressure is significant, with expectations for continued volume decline in Q4, primarily in framing and glass [45][46] Question: What is the expected contribution from UW Solutions? - The company projects a $100 million contribution from UW Solutions in FY26 at a 20% adjusted EBITDA margin, with ongoing integration efforts [110] Question: How are the services business trends aligning with third-party forecasts? - Management indicated that the services business is expected to outperform the market slightly, despite some softness and choppiness in project awards [68][70] Question: What are the plans for capital deployment in FY26? - The company plans to focus on paying down debt while actively pursuing M&A opportunities, with a robust pipeline for potential acquisitions [56][58] Question: How does the company view the industrial flooring market's sensitivity to economic changes? - Management expressed confidence in the industrial flooring market's resilience, noting its reliance on R&R rather than new construction [92][94]

Apogee Enterprises, Inc. Nasdaq: APOG Fiscal 2025 Third Quarter Earnings Call January 7, 2025 University of Washington, NanoES – Seattle © Aaron Leitz Photography; courtesy of ZGF Non-GAAP measures & forward-looking statements This presentation contains non-GAAP financial measures which the Company uses to evaluate its historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, and to provide enhanced transpare ...

Press Release FOR RELEASE: January 7, 2025 APOGEE ENTERPRISES REPORTS FISCAL 2025 THIRD QUARTER RESULTS MINNEAPOLIS, MN, January 7, 2025 – Apogee Enterprises, Inc. (Nasdaq: APOG) today reported its results for the third quarter of fiscal 2025. The Company reported the following selected financial results: Adjusted operating income, adjusted operating margin, adjusted diluted earnings per share (EPS), adjusted EBITDA, and adjusted EBITDA margin are non-GAAP financial measures. See Use of Non-GAAP Financial M ...

The Zacks Glass Products industry faces challenges from weak demand, rising costs and labor shortages, dampening its near-term outlook. However, the growing preference for glass, driven by its recyclability and sustainability, supports its long-term potential in packaging and construction.Apogee Enterprises (APOG) has navigated these headwinds effectively, achieving improved margins and earnings through cost reductions, strategic pricing and its Project Fortify initiative. Its focus on innovation and acquis ...

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