APOG 10-K & 10-Q changes, risk factors and insider trading
Apogee Enterprises, Inc. · Nasdaq · Glass Products, Made Of Purchased Glass · CIK 6845 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “Our customer concentration in the Performance Surfaces Segment creates a significant risk for product sale declines”
Largest changes
“A significant cybersecurity incident could lead to the compromise or loss of confidential business information, intellectual property, or personal data, disruption of manufacturing or financial operations, misstatement or unavailability of financial data, reputational harm, regulatory investigations, litigation, and the imposition of fines or penalties under applicable data privacy and security laws. …”see in full comparison
“We believe our mitigation measures reduce, but cannot eliminate, the risk of a cyber incident; however, there can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. …”see in full comparison
“Additionally, our information technology and Internet based systems, and those of our third-party service providers, are subject to disruption and data loss due to natural disasters, power losses, unauthorized access, telecommunication failures and cyber-attacks of increasing frequency and sophistication. These systems have in the past been, and may in the future be, subject to cyber-attacks and other attempts to gain unauthorized access, breach, damage, disrupt or otherwise compromise such systems, none of which have been material to us in the last three fiscal years. …”see in full comparison
“Our customer concentration in the Performance Surfaces Segment creates a significant risk for product sale declines”see in full comparison
“Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2025, we incurred $7.6 million of pre-tax impairment charges related to indefinite-lived intangibles in the Architectural Metals Segment as a result of strategic branding changes. Additionally, as a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of pre-tax impairment charges related to property, plant and equipment and operating lease right-of-use assets.”see in full comparison
“Our systems have in the past been, and may in the future be, subject to cyber‑attacks and other attempts to breach, damage, disrupt, or otherwise compromise our information technology infrastructure, none of which have been material to us in the last three fiscal years. Cyber threats continue to evolve in frequency and sophistication, including through the use of emerging technologies such as advanced forms of artificial intelligence. …”see in full comparison
Full comparison: every changed paragraph (27)
Our businessbusinesses facesface many risks. Any of the risks discussed below, or elsewhere in this Form 10-K or our other filings with the Securities and Exchange Commission, could have a material adverse impact on our business, financial condition or operating results.
Our Architectural Metals, Architectural Services, Architectural Glass,Glass Segments, and a portion of our Performance Surfaces Segment are influenced by North American economic conditions and the cyclical nature of the North American non-residential construction industry. The non-residential construction industry is impacted by macroeconomic trends, such as availability of credit, employment levels, consumer confidence, interest rates and commodity prices. In addition, changes in architectural design trends, demographic trends, and/or remote work trends could impact demand for our products and services. To the extent changes in these factors negatively impact the overall non-residential construction industry, our business, operating results and financial condition could be significantly adversely impacted.
Our customer concentration in the Performance Surfaces Segment creates a significant risk for product sale declines
The Performance Surfaces Segment is highly dependent on a relatively small number of customers for its sales, while working to grow in new markets and with new customers. Accordingly, loss of a significant customer, or a significant reduction in pricing for one or more of those customers could materially reduce the segment's operating results.
Our strategy includes differentiatingaccelerating ourleadership productin targeted markets by deepening customer insight, aligning capabilities and serviceinvestments offerings,around shiftingcustomer ourneeds, businessand mixstrengthening towardcompetitive higherdifferentiation for disciplined portfolio growth and operatingto margindrive productsconsistent execution, enhance customer value, and services,position drivingthe higherCompany returnfor onsustainable, investedgrowth‑oriented capital performance, and moving to a more centralized operating model.performance. Execution of this strategy requirerequires additional investments of time and resources and could fail to achieve the desired results. For example, we may be unable to increase our sales and earnings by differentiatingstrengthening competitive differentiation of our product and service offerings in a cost-effective manner.offerings. We may fail to accurately predict future customer needs and preferences, and thus focus on the wrong businesscore mix. Our centralized operating system may not produce the desired operating efficiencies.capabilities.
As we consider and execute acquisitions, we may incur risksthe infollowing risks, among others: difficulties with integrating operations, technologies, products, and employees; we may failfailing to realize expected revenue growth and cost synergies from integration initiatives; we would likely increaseincreasing debt levels to finance an acquisition; wefailing may notto fully anticipate changes in cash flows or other market-based assumptions or conditions that cause the value of acquired assets to fall below book value, requiring impairment of intangible assets including goodwill; we may identifyidentifying contingent liabilities subsequent to closing an acquisition; and we may be entering markets in which we have no or limited experience.
As we consider and execute future divestitures, we may be exposed to risksthe associatedfollowing withrisks, ouramong abilityothers: inability to find appropriate buyers; difficulties in executing transactions on favorable terms; separating divested business operations with minimal impact to our remaining operations; incur write-offs and impairment charges; and we may have challenges effectively managing any transition service arrangements.
As we consider and execute restructuring plans, we may be exposed to risksthe associatedfollowing withrisks, among others: failure to successfully completingcomplete the initiative in a timely manner, or at all; not advancing our business strategy as expected; not accurately predicting costs; not realizing anticipated cost savings, efficiencies, synergies, financial targets and other benefits; and we may experience the loss of key employees and/or reduced employee morale and productivity.
The loss of our CEO or any of our key senior executives could have a material adverse effect on our business, operating results and financial condition, particularly if we are unable to hire and integrate suitable replacements on a timely basis. Further, as our business evolves, we may have changes in our senior management team. If we are unable to attract or retain the right individuals for the team, it could hinder our ability to efficiently execute our business, and could disrupt our operations or otherwise have a material adverse effect on our business.
Additionally, anAn important aspect of our success depends on the skills of Company leadership, construction project managers and other key technical personnel, and our ability to secure sufficient manufacturing and installation labor. In recent years, low U.S. unemployment has caused increased competition for experienced construction project managers and other labor. If we are unable to retain existing employees, provide a safe and healthy working environment,employees and/or recruit and train additional employees with the requisite skills and experience, our operating results could be adversely impacted.
Our Architectural Metal and Architectural Services Segments use aluminum as a significant input to their products. Our operating results in those two segments could continue to be negatively impacted by supply chain disruptions and adverse price movements in the market for raw aluminum. In recent years, we have seen increased volatility in the price of aluminum that we purchase from both domestic and international sources. Due to our Architectural Metals and Architectural Services Segments presence in Canada, we have significant cross-border activity, as our Canadian businesses purchase inputs from U.S.-based suppliers and sell to U.S.-based customers. AContinued significant changechanges in U.S. trade policy with Canada could, therefore, have an adverse impact on our operating results.
Our Architectural Glass and Performance Surfaces Segments use rawfloat glass as a significant input to their products. Increases in demand for rawfloat glass may lead to lower supply or higher costs to acquire. Failure to acquire a sufficient supply of rawfloat glass on terms as favorable as current terms could negatively impact our operating results.
Difficulties in maintaining our informationInformation technology systems,failures and potential cybersecurity threats,threats could negativelyadversely affect our operating resultsoperations and/or our reputation
We rely on information technology systems, some of which are managed by third parties, to process, transmit, and store electronic information and to support critical business processes, including our manufacturing operations, financial systems, and data availability across the enterprise. The reliability and availability of these systems are essential to maintaining efficient operations and timely, accurate financial reporting. Disruptions to these systems—whether caused by cyber‑attacks, unauthorized access, system failures, human error, or third‑party service provider issues—could result in operational downtime, production disruptions, loss or unavailability of critical data, and increased costs, which could adversely affect our business and results of operations.
Our systems have in the past been, and may in the future be, subject to cyber‑attacks and other attempts to breach, damage, disrupt, or otherwise compromise our information technology infrastructure, none of which have been material to us in the last three fiscal years. Cyber threats continue to evolve in frequency and sophistication, including through the use of emerging technologies such as advanced forms of artificial intelligence. In addition, employee error, social engineering, and the use of non‑company‑managed networks in connection with remote or flexible work arrangements may increase the risk of unauthorized access to our systems or data.
A significant cybersecurity incident could lead to the compromise or loss of confidential business information, intellectual property, or personal data, disruption of manufacturing or financial operations, misstatement or unavailability of financial data, reputational harm, regulatory investigations, litigation, and the imposition of fines or penalties under applicable data privacy and security laws. We are subject to numerous cybersecurity, data protection, and privacy requirements imposed by law, regulation, and contract, and changes in these requirements—including regulations governing artificial intelligence and machine learning—could increase our compliance costs or otherwise adversely affect our business.
While we maintain security measures and controls designed to reduce cybersecurity risks, including certain preventative and recovery measures and reliance on third‑party safeguards, these measures may not be effective in preventing all incidents. Any failure to maintain the confidentiality, integrity, security, and availability of our information technology systems or the data they process could materially adversely affect our business, operating results, and financial condition.
Our operations are dependent upon various information technology systems that are used to process, transmit and store electronic information and data, and to manage or support our manufacturing operations and a variety of other business processes and activities, some of which are managed by third parties. We could encounter difficulties in maintaining our existing systems, developing and implementing new systems, or integrating information technology systems across our business units. Such difficulties could lead to disruption in business operations and/or significant additional expenses that could adversely affect our results.
Additionally, our information technology and Internet based systems, and those of our third-party service providers, are subject to disruption and data loss due to natural disasters, power losses, unauthorized access, telecommunication failures and cyber-attacks of increasing frequency and sophistication. These systems have in the past been, and may in the future be, subject to cyber-attacks and other attempts to gain unauthorized access, breach, damage, disrupt or otherwise compromise such systems, none of which have been material to us in the last three fiscal years. The occurrence of any of these events could adversely affect our reputation and could result in the compromise of confidential information, litigation, manipulation and loss of data and intellectual property, regulatory action, production downtimes, disruption in availability of financial data, misrepresentation of information via digital media, and increased costs and operational consequences of implementing further data protection systems.
Our security measures may also be breached in the future as a result of employee error, failure to implement appropriate processes and procedures, advances in computer and software capabilities and encryption technology, new tools and discoveries, malfeasance, third-party action, including cyber-attacks or other international misconduct by computer hackers or otherwise. Additionally, we may have heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements. Our workforce operates with a combination of remote work and flexible work schedules opening us up for cybersecurity threats and potential breaches as a result of increased employee usage of networks other than company-managed networks. This could result in one or more third-parties obtaining unauthorized access to our customer or supplier data or our internal data, including personally identifiable information, intellectual property and other confidential business information. Third-parties may also attempt to fraudulently induce employees into disclosing sensitive information such as user names, passwords or other information in order to gain access to customer or supplier data or our internal data, including intellectual property, financial, and other confidential business information.
We believe our mitigation measures reduce, but cannot eliminate, the risk of a cyber incident; however, there can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely. While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures. Though it is difficult to determine what harm may directly result from any specific interruption or breach, any failure to maintain performance, reliability, security and availability of our network infrastructure or otherwise maintain the confidentiality, security, and integrity of data that we store or otherwise maintain on behalf of third-parties may harm our reputation and our employee and customer relationships. If such unauthorized disclosure or access does occur, we may be required to notify our customers, employees or those persons whose information was improperly used, disclosed or accessed. We may also be subject to claims of breach of contract for such use or disclosure, investigation and penalties by regulatory authorities and potential claims by persons whose information was improperly used or disclosed. We could also become the subject of regulatory action or litigation from our customers, employees, suppliers, service providers, and shareholders, which could damage our reputation, require significant expenditures of capital and other resources, and cause us to lose business. Additionally, an unauthorized disclosure or use of information could cause interruptions in our operations and might require us to spend significant management time and other resources investigating the event and dealing with local and federal law enforcement. Regardless of the merits and ultimate outcome of these matters, we may be required to devote time and expense to their resolution.
In addition, the number of data security incidents has increased regulatory and industry focus on security requirements and heightened data security industry practices. New regulation, evolving industry standards, and the interpretation of both, may cause us to incur additional expense in complying with any new data security requirements. As a result, the failure to maintain the integrity of and protect customer or supplier data or our confidential internal data could have a material adverse effect on our business, operating results and financial condition.
The impact of geopolitical tensions, including the potential implementationeffects of more restrictivechanging trade policies,policies higherand tariffs or the renegotiation of existing trade agreements in the U.S. or countries where we sell our products and services or procure products, could have a material adverse effect on our business. In particular, political or trade disputes, or future phases of trade negotiations with Canada that could lead to the imposition of tariffs or other trade actions could require us to take further action to mitigate those effects. We may be unable to pass through additional tariff costs to our customers through price increases, and may be unable to secure adequate alternative sources of supply. Our inability to offset higher tariff costs could have a material adverse effect on our operating results, profitability, customer relationships and future cash flow.
We manufacture and/or install a significant portion of our products based on the specific requirements of each customer. We believe that future orders of our products or services will depend on our ability to maintain the performance, reliability, quality and timely delivery standards required by our customers. We have in the past, and are currently, subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products, and there is no certainty we will prevail on these claims. If our products have performance, reliability or quality problems, or products are installed using incompatible glazing materials or installed improperly (by us or a customer), we may experience additional warranty and other expenses; reduced or canceled orders; higher manufacturing or installation costs; or delays in the collection of accounts receivable. Additionally, product liability and warranty claims, including relating to the performance, reliability or quality of our products and services, could result in costly and time-consuming litigation that could require significant time and attention of management and involve significant monetary damages that could negatively impact our operating results. There is also no assurance that the number and value of product liability and warranty claims will not increase as compared to historical claim rates, or that our warranty reserve at any particular time is sufficient. No assurance can be given that coverage under insurance policies, if applicable, will be adequate to cover future product liability claims against us. If we are unable to recover on insurance claims,claims including through self insurance coverages, in whole or in part, or if we exhaust our available insurance coverage at some point in the future, then we might be forced to expend our own funds on legal fees and settlement or judgment costs, which could negatively impact our profitability, results of operations, cash flows and financial condition.
Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2025, we incurred $7.6 million of pre-tax impairment charges related to indefinite-lived intangibles in the Architectural Metals Segment as a result of strategic branding changes. Additionally, as a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of pre-tax impairment charges related to property, plant and equipment and operating lease right-of-use assets.
The discountedrevenue and cash flow projections and revenue projections used in our annual impairment valuation analysis are dependent upon achieving forecasted levels of revenue and profitability. If revenue or profitability were to fall below forecasted levels, or if market conditions were to decline in a material or sustained manner, impairment could be indicated and we could incur a non-cash impairment expense that would negatively impact our financial condition and results of operations.
We need sufficient sources of liquidity to fund our working capital requirements, service our outstanding indebtedness and finance business opportunities. Without sufficient liquidity, we could be forced to curtail our operations, or we may not be able to pursue business opportunities. The principal sources of our liquidity are funds generated from operating activities, available cash, credit facilities, and other debt arrangements. If our sources of liquidity do not satisfy our requirements, we may need to seek additional financing. The future availability of financing will depend on a variety of factors, such as economic and market conditions, the regulatory environment for banks and other financial institutions, the availability of credit and our reputation with potential lenders. These factors could materially adversely affect our liquidity, costs of borrowing and our ability to pursue business opportunities or grow our business. We may also assume or incur additional debt, including secured debt, in the future in connection with, or to fund, future acquisitions or for other operating needs.
Management's Discussion & Analysis (MD&A)
New heading “Non-GAAP Financial Measures”
Removed heading “Architectural Services”
Largest changes
•see in full comparisonOperatingAdjustedincomeEBITDA was$42.5$54.1 million, or8.1%10.7% of net sales, compared to$64.8$70.6 million, or10.8%13.5% of net sales. The decline inoperatingAdjusted EBITDA margin was primarily driven by$7.6inflation,millionincludingofhigherimpairmentaluminumcharges,costs, and theunfavorable sales leverageimpact of lowervolume and a less favorable product mix,volume, partially offset byfavorablepricing,materialcostcosts,savingslowerfromshort-termProjectincentiveFortifycosts,Phaselower bad debt expense, lower quality-related expense,2 and lowerrestructuringincentive compensation costs.Adjusted operating income was $54.1 million, or 10.3% of net sales, compared to $70.8 million, or 11.8% of net sales.
“•Operating income was $118.1 million and operating margin declined to 8.7%. The decline operating margin was primarily due to the unfavorable sales leverage impact of lower volume, $10.3 million of acquisition-related expenses, $9.4 million of expense related to an arbitration award, and $7.6 million impairment charges related to strategic rebranding. …”see in full comparison
•SG&A expensesee in full comparisonincreaseddecreased$8.5$6.8 million to17.8%16.7% of net sales, compared to16.5%17.8% of net sales. Theincrease in SG&A as a percentage of net salesdecrease was primarily due tothelowerimpactincentive compensation expense, lower acquisition related expenses, and benefits from cost savings of$8.6FortifymillionPhaseof acquisition-related expenses, impairment charges of $7.6 million, higher amortization expense and the unfavorable sales leverage impact of lower volume2, partially offset bylowerincreasedrestructuringamortizationcharges,associatedlowerwithbadthedebtUWexpense,Solutionsand lower long-term incentive costs.transaction.
•see in full comparisonOperatingAdjustedincomeEBITDA was$30.0$30.9 million, or7.2%7.0% of net sales, compared to$11.8$33.5millionmillion, or3.1%8.0% of net sales. Theimprovementdecline inoperatingAdjusted EBITDA margin was primarilydrivendueby a more favorable mix of projects,to thefavorableimpact ofcumulativeunfavorablecatch-upprojectadjustmentsmix,onlowerour longer-term contract estimates of $10.5 million,price, andlowerdirectrestructuringtariffcharges,expenses, partially offset byhighertheshort-termimpact of increased volume and lower incentive compensationexpense and higher leasecosts.
“We have included in this report measures of financial performance that are not defined by 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 GAAP measure, (see "Reconciliation of Non-GAAP Financial Measures" in this Item 7 below), and an explanation of why we believe the non-GAAP measure provides useful information to management and investors. …”see in full comparison
“Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions. We report net sales intersegment eliminations separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, and SG&A. 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. …”see in full comparison
Full comparison: every changed paragraph (82)
The following Management’s Discussion and Analysis of Financial Condition and Results of Operations is intended to assist the reader in understanding our financial condition and results of operations, including an evaluation of the amounts and certainty of cash flows from operations and from outside sources, and is provided as a supplement to and should be read in conjunction with the consolidated financial statements and related notes in Item 8. Financial Statements and Supplementary Data in this Form 10-K. Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended March 2, 2024, for discussion of the results of operations for the year ended March 2, 2024, compared to the year ended February 25, 2023, which is incorporated by reference herein.
Additional information about results of operations and financial condition for fiscal 2025 and 2024 (including the detailed discussion of the prior fiscal year 2025 to 2024 year-over-year changes) can be found in Management’s Discussion and Analysis of Financial Condition and Results of Operations sections in our Annual Report on Form 10-K for the year ended March 1, 2025.
We have included in this report measures of financial performance that are not defined by 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 GAAP measure, (see "Reconciliation of Non-GAAP Financial Measures" in this Item 7 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 GAAP measure. Adjusted net earnings and adjusted earnings per diluted share (adjusted diluted EPS) 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 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.
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.
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. See Note 13 to our Consolidated Financial Statements for additional information.
During the fourth quarter of fiscal 2025, we changed the names of two reportable segments to better reflect our product offerings and capabilities. The previously named Architectural Framing Systems Segment is now referred to as the Architectural Metals Segment. The previously named Large-Scale Optical Segment is now referred to as the Performance Surfaces Segment. The remaining two segments, Architectural Services Segment and Architectural Glass Segment remain unchanged. As part of these changes, there were no changes to the products or brands included within each of the reportable segments.
In the fourth quarter of fiscal 2024, the Company announced strategic actions to 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 of fiscal 2024, the Company incurred $12.4 million of pre-tax charges related to Project Fortify, of which $5.5 million is included in cost of sales and $6.9 million is included in selling, general, and administrative (SG&A) expenses. During fiscal 2025, the Company incurred $4.3 million of pre-tax charges related to Project Fortify, of which $2.5 million is included in cost of sales and $1.8 million is included in SG&A expenses. The Company completed Project Fortify during the fourth quarter of fiscal 2025, incurring a total of $16.7 million and delivering estimated annualized cost savings of approximately $14 million.
OnIn Aprilthe 23,first 2025,quarter of fiscal 2026, we announced an extension of Project Fortify ("Project Fortify Phase 2" or "Phase 2") to drive further cost efficiencies, primarily in the Architectural Metals andMetals, Architectural Services and Corporate Segments. An extension of Phase 2 willwas focusannounced on January 7, 2026 to drive additional cost savings in Architectural Metals and Corporate. Phase 2 focused on further optimizing our operating footprint and aligning resources to enable a more effective operating model. We expect theThe actions of Phase 2 toresulted incurin approximately $24 million to $26$27.4 million of pre-tax charges of which approximately $8 millionand are expected to be non-cash charges. Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $13 million to $15$26 million. We expect theThe actions associated with Phase 2 to bewere substantially completed by the end ofin the fourth quarter of fiscal 2026. See Note 18 to our Consolidated Financial Statements for additional information.
During the third quarter of fiscal 2025, we acquired UW Solutions for $240.9 million. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The business serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. See Note 17 for additional information.
As a result of a March 2025 appellate court decision confirming a December 2022 arbitration award, the Company paid the arbitration award, including accrued post-judgment interest, in the amount of $24.7 million, on April 7, 2025. As a result of the decision, we recorded expense of $9.4 million, which represents the impact of the award amount net of existing reserves and estimated insurance proceeds. This impact was recorded in cost of goods sold in the fourth quarter of fiscal 2025. See Note 10 to our Consolidated Financial Statements for additional information.
During the third quarter of fiscal 2025, we acquired UW Solutions for $240.9 million. UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The business serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. See Note 17 to our Consolidated Financial Statements for additional information.
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. For each of these non-GAAP measures, we provide a reconciliation of the differences between the non-GAAP measure and the most directly comparable GAAP measure, (see "Reconciliation of Non-GAAP Financial Measures" in this Item 7), 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), used 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.
•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.
Management uses these 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.
The following tables provide various components of our operations for fiscal years 2025,2026, 20242025 and 2023, in U.S. dollar amounts2024 and percentages reflecting annual changes in such amounts and as a percentage of net sales in each fiscal year.
The following table summarizes the impactchanges that different items had on ourin net sales forfrom fiscal 2025.2025 All net sales forto fiscal 2024 were organic.2026.
•Consolidated net sales were $1.40 billion compared to $1.36 billion, an increase of 3.2%, primarily driven by $65.3 million of inorganic sales contribution from the acquisition of UW Solutions in the Performance Surfaces Segment. This was partially offset by lower volume, primarily as a result of lower demand, primarily in the Architectural Glass and Metals Segments.
•Gross margin decreased to 22.7% of net sales, compared to 26.4%, primarily due to higher aluminum costs, impacts from lower volume, and higher health insurance costs, partially offset productivity improvements including savings from Project Fortify 2 and lower risk-based insurance and incentive compensation expense. Additionally, fiscal 2025 gross margin was impacted by a non-recurring $9.4 million arbitration award expense.
•Consolidated net sales were $1.36 billion compared to $1.42 billion, a decrease of 3.9%, primarily reflecting the unfavorable impact of the additional week in the prior year of approximately $28.7 million or 2.0%, and lower volume, primarily in Architectural Metals and Architectural Glass. These items were partially offset by net sales growth in Architectural Services, and a $32.0 million inorganic sales contribution from the acquisition of UW Solutions.
•Gross margin increased to 26.4% of net sales, compared to 25.9%. The gross margin improvement was primarily driven by a more favorable mix of projects and the net favorable impact of cumulative catch-up adjustments for changes in profitability estimates of long-term contracts in Architectural Services, and lower quality and insurance-related costs, as well as lower restructuring costs from Project Fortify. These items were partially offset by $9.4 million of expense related to an arbitration award, as well as unfavorable sales leverage impact of lower volume, higher lease costs, and $1.7 million of acquisition-related expenses.
•SG&A expense increaseddecreased $8.5$6.8 million to 17.8%16.7% of net sales, compared to 16.5%17.8% of net sales. The increase in SG&A as a percentage of net salesdecrease was primarily due to thelower impactincentive compensation expense, lower acquisition related expenses, and benefits from cost savings of $8.6Fortify millionPhase of acquisition-related expenses, impairment charges of $7.6 million, higher amortization expense and the unfavorable sales leverage impact of lower volume2, partially offset by lowerincreased restructuringamortization charges,associated lowerwith badthe debtUW expense,Solutions and lower long-term incentive costs.transaction.
•Operating income was $84.5 million and operating margin declined to 6.0%, compared to 8.7% in the prior year.
•Operating income was $118.1 million and operating margin declined to 8.7%. The decline operating margin was primarily due to the unfavorable sales leverage impact of lower volume, $10.3 million of acquisition-related expenses, $9.4 million of expense related to an arbitration award, and $7.6 million impairment charges related to strategic rebranding. These items were partially offset by a more favorable mix of projects and the net favorable impact of cumulative catch-up adjustments for changes in profitability estimates of long-term contracts in Architectural Services, lower quality and insurance-related costs, lower bad debt expense, and lower restructuring charges from Project Fortify of $8.1 million. Adjusted operating income grew 2.4% to $149.8 million, and adjusted operating margin improved to 11.0%.
•Interest expense, net was $6.2$14.0 million, compared to $6.7$6.2 million, primarily driven by increased interest income froma higher average levelsdebt balance resulting from the acquisition of investedUW cash, partially offset by the impact of the write-off of unamortized financing fees of $0.5 million related to our previous credit facility.Solutions.
•Other income was $7.0 million, compared to $0.6 million, driven by a $6.7 million gain from settling a New Markets Tax Credit transaction.
•Other income was $0.6 million, compared to $2.1 million. The lower income in fiscal 2025 was primarily due pre-tax gain related to a New Markets Tax Credit of $4.7 million, partially offset by the unfavorable impact of an investment market valuation adjustment, both recognized in the prior year period.
•Income tax expense as a percentage of earnings before income tax was 24.4%,30.1%, compared to 22.9%24.4% for fiscal 2024.2025. The increase in the effective tax rate was primarily due to an increase in tax expense foron discrete items.items in fiscal year 2026.
•Diluted EPS was $2.52, compared to $3.89.
•Diluted EPS was $3.89, compared to $4.51 driven by lower operating income, lower other income, and a higher effective tax rate. Adjusted diluted EPS grew 4.2% to $4.97.
Disclosures related to our business segments are included in Note 16 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.
Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions. We report net sales intersegment eliminations separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, and SG&A. 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. Operating income does not include other income or expense, interest expense or a provision for income taxes.
•Net sales were $504.0 million, compared to $524.7 million, due to lower volume, partially offset by favorable price.
•Net sales were $524.7 million, compared to $601.7 million. The decline in net sales was primarily driven by reduced volume due to exiting certain lower-margin product lines as part of Project Fortify and lower end market demand, the impact of one less week of net sales in the current year, and a less favorable product mix.
•OperatingAdjusted incomeEBITDA was $42.5$54.1 million, or 8.1%10.7% of net sales, compared to $64.8$70.6 million, or 10.8%13.5% of net sales. The decline in operatingAdjusted EBITDA margin was primarily driven by $7.6inflation, millionincluding ofhigher impairmentaluminum charges,costs, and the unfavorable sales leverage impact of lower volume and a less favorable product mix,volume, partially offset by favorablepricing, materialcost costs,savings lowerfrom short-termProject incentiveFortify costs,Phase lower bad debt expense, lower quality-related expense,2 and lower restructuringincentive compensation costs. Adjusted operating income was $54.1 million, or 10.3% of net sales, compared to $70.8 million, or 11.8% of net sales.
•Net sales were $419.9$439.2 million, compared to $378.4$419.9 million. The increase in net sales was primarilydriven due toby increased volume, a more favorable mix of projects and the net favorable impact of cumulative catch-up adjustments for changes in profitability estimates of long-term contracts, partially offset by theunfavorable impactproject ofmix oneand lesslower week of net sales in the current year.pricing.
•OperatingAdjusted incomeEBITDA was $30.0$30.9 million, or 7.2%7.0% of net sales, compared to $11.8$33.5 millionmillion, or 3.1%8.0% of net sales. The improvementdecline in operatingAdjusted EBITDA margin was primarily drivendue by a more favorable mix of projects,to the favorable impact of cumulativeunfavorable catch-upproject adjustmentsmix, onlower our longer-term contract estimates of $10.5 million,price, and lowerdirect restructuringtariff charges,expenses, partially offset by higherthe short-termimpact of increased volume and lower incentive compensation expense and higher lease costs.
•For the years ended MarchFebruary 1,28, 20252026 and March 2,1, 2024,2025, gross favorable and unfavorable cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:
•Net sales were $322.2$283.7 million, compared to $378.4$322.2 million. The decrease in net sales was primarily driven by lower volume and price due to lower end-market demand and the impact of one less week of net sales in the current year, partially offset by improved pricing.demand.
•OperatingAdjusted incomeEBITDA decreasedwas to $59.3$45.7 million, or 18.4%16.1% of net sales, compared to $68.0$71.7 million, or 18.0%22.2% of net sales. The improvementdecline in operatingAdjusted EBITDA margin was primarily driven by improvedthe pricing,impact improvedfrom productivity,lower volume and lowerprice, quality-relatedand higher manufacturing costs, partially offset by the unfavorable sales leverage impact of lower volume.incentive compensation costs.
•Net sales were $122.1$198.0 million, compared to $99.2$122.1 million. The increase in net sales was primarily driven by $32.0$65.3 million of inorganic sales contribution from the acquisition of UW Solutions, partiallyand offset by lowerhigher volume in the retail channel and the impact of one less week of net sales in the current year.price.
•OperatingAdjusted incomeEBITDA was $19.6$41.6 million, or 16.1%21.0% of net sales, compared to $24.2$30.9 million, or 24.4%25.3% of net sales. The decline in operatingAdjusted EBITDA margin was primarily driven by $4.5higher million in acquisition-relatedmanufacturing costs and the salesdilutive leverage impacteffect of lower organicadjusted volume.EBITDA margin from the UW Solutions acquisition, partially offset by favorable product mix and price.
•Corporate and Other Adjusted EBITDA expense was $33.3$5.0 million, compared to $35.1$14.0 million. The decreasedecline in Corporate expense was primarily due to lower insurance-related costs, lower incentive compensation expense, and lowerrisk-related restructuringinsurance costs, partially offset by $9.4higher millionhealth of expense related to an arbitration award, and $5.8 million in acquisition-relatedinsurance costs.
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 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.
Architectural Services
Adjusted operating income, adjusted operating margin, adjusted net earnings, adjusted diluted earnings per share (adjusted diluted EPS), adjusted earnings before interest, taxes, depreciation and amortization (adjusted EBITDA), adjusted EBITDA margin, and adjusted return on invested capital (ROIC) 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 operating income, adjusted operating margin, adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our 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 and adjusted EBITDA margin metrics provide useful information to investors and analysts about our core operating performance.
•Adjusted return on invested capital (ROIC) is defined as adjusted operating income net of tax, divided by average invested capital. We believe this measure is useful in understanding operational performance and capital allocation over time, and it is used as a factor in determining executive compensation.
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 GAAP. Other companies may calculate these measures differently, thereby limiting the usefulness of the measures for comparison with other companies.
Operating Activities. Net cash provided by operating activities was $125.2$122.5 million, compared to $204.2$125.2 million. . The decreasedecline in net cash provided by operating activities was primarily driven by reduced net earnings, partially offset by a reduction in cash used for working capital.
Investing Activities. Net cash used by investing activities was $265.9$30.5 million, compared to $43.7$265.9 million. TheIn increasefiscal in net2026, cash used by investing activities was primarily relatedused to $232.2fund millioncapital expenditures of $27.3 million, while in fiscal 2025, cash was primarily used forto fund the acquisition of UW Solutions.Solutions for $232.2 million, in addition to funding capital expenditures of $35.6 million.
Financing Activities. Net cash used by financing activities was $96.2 million in fiscal 2026, compared to $146.0 million of net cash provided by financing activities in fiscal 2025. The use of cash in fiscal 2026 was primarily for net repayment of debt compared to obtaining debt funding in fiscal 2025 to support the acquisition of UW Solutions. Net cash used to repurchase common stock was $15.0 million and $45.4 million for fiscal 2026 and fiscal 2025, respectively.
Financing Activities. Net cash provided by financing activities was $146.0 million, compared to $144.6 million of net cash used by financing activities. The increase in net cash provided by financing activities was primarily driven by the proceeds of $250.0 million from the delayed draw term loan utilized to finance the UW Solutions acquisition. We returned $67.1 million of cash to shareholders through share repurchases and dividends, compared to $33.0 million in the prior year.
As a result of the execution of the Credit Agreement, in fiscal 2025, we recognized a loss, 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 will be amortized over the term of the Credit Agreement 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 MarchFebruary 1,28, 2025,2026, we were in compliance with all covenants as defined under the terms of the Credit Agreement.
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.
What changed in the latest 10-Q
Risk Factors
There have been no significant changes or additions to our risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2026.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Comparison of First Six Months Fiscal 2027 to First Six Months Fiscal 2026”
Removed heading “Architectural Metals”
Removed heading “Architectural Services”
Largest changes
“Comparison of First Six Months Fiscal 2027 to First Six Months Fiscal 2026”see in full comparison
Onsee in full comparisonMayJuly27,1, 2026, weenteredcompletedintotheaacquisitiondefinitive agreement to acquireof Keller Companies, Inc. (“KCI”"Kalwall"), the controlling shareholder of Kalwall Corporation and Structures UnlimitedInc.,Inc.forTheapproximately $105 million in cash, subject to certain customarytotal purchasepriceconsiderationadjustments.was $112.2 million, including contingent earn-out consideration of $7.5 million. Thesellersacquisitionmaywasalso receive up to $10 million in additional earn‑out consideration based on achieving certain financial objectives as defined in the agreement. We expect to fund the transactionfunded withcash on hand andborrowings under our existing creditfacility,facility.and closing is anticipated in early July, subject to customary conditions. Upon closing, theThe acquired business isexpectedreportedto be integrated intowithin our Architectural GlassSegmentSegment, and its resultswillofbeoperations have been included in our consolidatedresultsfinancialofstatementsoperations fromsince thedateacquisitionof acquisition.date.
•Adjusted EBITDAsee in full comparisonremainedwasrelatively consistent at $6.1$22.1 million, or5.3%15.4% of net sales, compared to$6.1$20.8 million, or5.7%14.8% of netsales. The decline in adjusted EBITDA margin wassales, driven byunfavorableprice,projectimproved productivity and cost savings from Fortify Phase 2, and favorable mix,mostlypartially offset bybenefits fromtheactions of Project Fortify Phase 2 to reduce the impact of tariffs, and thenet impact fromincreasedhigher aluminum costs and lower volume.
•Adjusted EBITDAsee in full comparisondecreasedwasto $5.9$13.0 million, or8.7%14.9% of net sales, compared to$13.4$11.6 million, or18.3%16.1% of net sales. The decrease in adjusted EBITDA margin was primarily driven bylowerprice,reducedhigher manufacturing and freight costs, and lower volume, partially offset by the accretive contribution of the Kalwall acquisition andmaterialfavorableinflation.mix.
Full comparison: every changed paragraph (57)
On MayJuly 27,1, 2026, we enteredcompleted intothe aacquisition definitive agreement to acquireof Keller Companies, Inc. (“KCI”"Kalwall"), the controlling shareholder of Kalwall Corporation and Structures Unlimited Inc.,Inc. forThe approximately $105 million in cash, subject to certain customarytotal purchase priceconsideration adjustments.was $112.2 million, including contingent earn-out consideration of $7.5 million. The sellersacquisition maywas also receive up to $10 million in additional earn‑out consideration based on achieving certain financial objectives as defined in the agreement. We expect to fund the transactionfunded with cash on hand and borrowings under our existing credit facility,facility. and closing is anticipated in early July, subject to customary conditions. Upon closing, theThe acquired business is expectedreported to be integrated intowithin our Architectural Glass SegmentSegment, and its results willof beoperations have been included in our consolidated resultsfinancial ofstatements operations fromsince the dateacquisition of 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 is a discussion of our financial condition and results of operations during the three and six months ended MayAugust 30,29, 2026 and theAugust three months ended May 31,30, 2025.
The following table summarizes the changes in net sales from 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.
•Consolidated net sales decreased 1.1%, to $342.7 million, driven by lower volume within our Architectural Metals and Glass Segments, partially offset by volume improvement within our Architectural Services Segment. Improved pricing and mix within the Architectural Metals Segment offset part of the volume decline.
•Gross margin increased 20150 basis points to 21.9%,24.6%, compared to 21.7%,23.1%, primarily due to price, and productivity improvements including savingsthe net benefit from Project Fortify Phase 2, and favorablethe mix,accretive impact of the Kalwall acquisition, partially offset by higher material and freightmanufacturing costs and impacts from lower volume.
•Selling, general, and administrative (SG&A) expense as a percent of net sales decreasedincreased to 16.4%,16.0%, compared to 19.7%. This improvement was15.6%, primarily drivendue to higher incentive compensation expense, partially offset by the benefits from cost savings included in Projectfrom Fortify Phase 2.
•Interest expense decreased to $2.8$3.6 million, primarily due to a lower average debt balance in the first quarter of fiscal 2027 compared to the prior year.balance.
•Other expenseincome was $0.1$0.5 million compared to $0.7$5.1 million. The prior year included a $4.6 million duegain related to a declineNew inMarkets valueTax of company-owned life insurance assets.Credit.
•Income tax expense as a percentage of earnings before income tax was 27.6%,26.4%, compared to 211.9%.15.4%. The declineincrease in the effective tax rate was primarily dueattributable to generatingnon-recurring greaterfavorable earningsdiscrete beforetax incomeitems taxesrecognized compared toin the first quarter of lastprior year.
•Net earnings were $11.5 million compared to net loss of $2.7 million.
•Adjusted EBITDA decreased to $32.1 million, compared to $34.4 million, and adjusted EBITDA margin decreased to 9.4%, compared to 9.9%. The decrease in adjusted EBITDA margin was primarily driven by higher material and freight costs and the impacts from lower volume, partially offset by productivity improvements and benefits from cost savings of Fortify Phase 2.
•Adjusted netNet earnings were $12.1$22.4 million compared to $11.9$23.6 million.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.
•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.
Architectural Metals
•Net sales were $122.4 million, compared to $128.6 million, primarily due to lower volume, partially offset by favorable price and product mix.
•Adjusted EBITDA was $13.7 million, or 11.2% of net sales, compared to $9.4 million, or 7.3% of net sales. The higher adjusted EBITDA margin was primarily driven by improved mix and favorable productivity including cost savings related to Project Fortify Phase 2, partially offset by the impact of lower volume and the impact from higher aluminum costs.
Architectural Services
•Net sales were $115.2$143.5 million, compared to $106.5$140.9 million, driven by increasedfavorable price, partially offset by lower volume.
•Adjusted EBITDA remainedwas relatively consistent at $6.1$22.1 million, or 5.3%15.4% of net sales, compared to $6.1$20.8 million, or 5.7%14.8% of net sales. The decline in adjusted EBITDA margin wassales, driven by unfavorableprice, projectimproved productivity and cost savings from Fortify Phase 2, and favorable mix, mostlypartially offset by benefits from the actions of Project Fortify Phase 2 to reduce the impact of tariffs, and thenet impact from increasedhigher aluminum costs and lower volume.
•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.
•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.
•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.
•Net sales were $67.7$87.4 million,million compared to $73.3$72.2 million, driven by lowerthe price$16.4 million contribution from the Kalwall acquisition and volumefavorable due to continued end market softness,mix, partially offset by favorablelower mix.volume and price.
•Adjusted EBITDA decreasedwas to $5.9$13.0 million, or 8.7%14.9% of net sales, compared to $13.4$11.6 million, or 18.3%16.1% of net sales. The decrease in adjusted EBITDA margin was primarily driven by lower price, reducedhigher manufacturing and freight costs, and lower volume, partially offset by the accretive contribution of the Kalwall acquisition and materialfavorable inflation.mix.
•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.
•Net sales were $44.3$55.3 million, compared to $42.3$48.4 million, drivendue byto increasedhigher volume and favorable price.
•Adjusted EBITDA was $6.6$12.4 million, or 14.8%22.5% of net sales, compared to $8.0$11.2 million, or 18.8%23.2% of net sales. The decrease in adjusted EBITDA margin was primarily driven by the net impact of higher material and freight costs, partially offset by productivity.price and increased volume.
•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 adjusted EBITDA expense was $0.2$4.2 million, compared to $2.4$4.3 million,million in the prior year. The improvement was primarily due to anthe insurance-relatedbenefits benefit.from cost savings related to Fortify Phase 2 and lower health insurance costs, partially offset by higher incentive compensation expense.
•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.
As of MayAugust 30,29, 2026, segment backlog in the Architectural Services Segment was approximately $734.5$833.0 million, compared to approximately $682.9$792.3 million at the end of the firstsecond quarter of fiscal 2026.
Operating Activities. Net cash provided by operating activities was $7.4$43.3 million for the first threesix months of fiscal 2027, compared to a use of $19.8$37.3 million in the prior year period. The increase in net cash provided by operating activities wasis driven by higher net earningsearnings, andpartially anoffset arbitrationby settlementincreased paymentcash inused thefor priorworking year that did not recur.capital.
Investing Activities. Net cash used in investing activities was $9.8$121.8 million for the first threesix months of fiscal 2027, compared to $7.0$10.9 million in the prior-year period. The increase net cash used in investing activities was primarily related purchasesto the acquisition of marketable securities.Kalwall.
Financing Activities. Net cash usedprovided inby financing activities was $11.1$74.9 million for the first threesix months of fiscal 2027, compared to $17.6$29.1 million of cash providedused byin financing activities in the prior year period. The changeincrease inprimarily netrelates cashto provided by financing activities was driven by lower netadditional proceeds received from our revolving credit facility,facility partiallyused offsetto byfund $9.7the millionKalwall ofacquisition, repurchasesas ofwell commonas stock.lower debt payments compared to the prior year.
Outstanding borrowings under the term loan facility were $209.4$206.5 million as of MayAugust 30,29, 2026. Outstanding borrowings under the revolving credit facility were $28.0$129.0 million as of MayAugust 30,29, 2026.
At MayAugust 30,29, 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 MayAugust 30,29, 2026, the amount available for revolving borrowings was $419.4$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 $56.8$53.0 million at MayAugust 30,29, 2026, with $11.8$7.9 million payable during the remainder of fiscal 2027.
As of MayAugust 30,29, 2026, we had $14.9$33.5 million of open purchase obligations, of which payments totaling $7.4$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 MayAugust 30,29, 2026, $1.1$1.2 billion of these types of bonds were outstanding, of which $239.8$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.
APOG insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-09-11 | Streich Julie K |
Grant/award | 2,530 | — | — |
| 2026-08-07 | Wagner Patricia K |
Gift | 2,419 | — | — |
| 2026-08-05 | Hayek Joseph B |
Grant/award | 2,454 | — | — |
| 2026-08-05 | Krishna Suresh |
Grant/award | 2,454 | — | — |
| 2026-07-06 | Ede Christopher Willliam |
Grant/award | 5,026 | $39.79 | $200.0K |
| 2026-07-06 | Ede Christopher Willliam |
Grant/award | 5,089 | $39.79 | $202.5K |
| 2026-06-24 | Parker Herbert K |
Grant/award | 2,741 | $41.96 | $115.0K |
| 2026-06-24 | Wagner Patricia K |
Grant/award | 2,741 | $41.96 | $115.0K |
| 2026-04-30 | Augdahl Mark Richard |
Shares withheld for tax | 1,980 | $36.40 | $72.1K |
| 2026-04-30 | Christian Matthew Sean |
Shares withheld for tax | 708 | $36.40 | $25.8K |
| 2026-04-30 | Lakkundi Veena M |
Shares withheld for tax | 1,306 | $36.40 | $47.5K |
| 2026-04-30 | Johnson Troy R |
Shares withheld for tax | 2,471 | $36.40 | $89.9K |
| 2026-04-30 | Jewell Brent C |
Shares withheld for tax | 2,806 | $36.40 | $102.1K |
| 2026-04-30 | Welp Bryan Alan |
Shares withheld for tax | 180 | $36.40 | $6.6K |
| 2026-04-22 | Jewell Brent C |
Shares withheld for tax | 1,315 | $35.47 | $46.6K |
| 2026-04-22 | Jewell Brent C |
Grant/award | 2,527 | $35.47 | $89.6K |
| 2026-04-22 | Jewell Brent C |
Grant/award | 8,067 | $35.47 | $286.1K |
| 2026-04-22 | Johnson Troy R |
Grant/award | 2,385 | $35.47 | $84.6K |
| 2026-04-22 | Johnson Troy R |
Shares withheld for tax | 1,220 | $35.47 | $43.3K |
| 2026-04-22 | Johnson Troy R |
Grant/award | 8,671 | $35.47 | $307.6K |
| 2026-04-22 | Lakkundi Veena M |
Grant/award | 9,583 | $35.47 | $339.9K |
| 2026-04-22 | Christian Matthew Sean |
Grant/award | 6,628 | $35.47 | $235.1K |
| 2026-04-22 | Augdahl Mark Richard |
Shares withheld for tax | 428 | $35.47 | $15.2K |
| 2026-04-22 | Augdahl Mark Richard |
Grant/award | 905 | $35.47 | $32.1K |
| 2026-04-22 | Augdahl Mark Richard |
Grant/award | 11,630 | $35.47 | $412.5K |
| 2026-04-22 | Welp Bryan Alan |
Grant/award | 5,639 | $35.47 | $200.0K |
Well-known investors holding APOG (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 611,671 | $28.0M | 0.02% | Added 8% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 192,089 | $8.8M | 0.0% | Added 119% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 74,194 | $3.4M | 0.01% | Reduced 49% |
| Millennium Management (Israel Englander) | 2026-06-30 | 87,462 | $2.9M | — | Sold out |
| Renaissance Technologies | 2026-06-30 | 50,983 | $2.3M | 0.0% | Reduced 73% |
| D. E. Shaw & Co. | 2026-06-30 | 48,403 | $2.2M | 0.0% | Reduced 48% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 16,404 | $750.3K | 0.0% | Reduced 83% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 5,659 | $258.8K | 0.0% | New position |