Apogee Enterprises Reports Fiscal 2023 Third Quarter Results

Apogee Enterprises, Inc. announced its fiscal 2023 third quarter results. Third-quarter revenue grew 10.1 percent to $367.8 million, compared to $334.2 million in the third quarter of fiscal year 2022, led by Architectural Framing Systems and Architectural Glass. Earnings per diluted share increased to $1.07, compared to $0.44 per diluted share in the prior-year quarter. Earnings in the prior-year quarter included $6.4 million of pre-tax restructuring and impairment costs. Excluding these costs, adjusted earnings in last year’s third quarter were $0.63 per diluted share.¹

• Third-quarter revenue grows 10 percent, to $368 million
• Third-quarter earnings increase to $1.07 per diluted share
• Strong cash flow, with $54 million of cash from operations in the third quarter
• Full year adjusted earnings guidance narrowed to a range of $3.90 to $4.05 per diluted share

“Our team continued to deliver impressive results this quarter, with double-digit revenue growth, significant margin expansion, and strong cash flow,” said Ty R. Silberhorn, Chief Executive Officer. “The execution of our strategy is transforming Apogee into a higher performing, more resilient company. Over the past year, we’ve made significant, sustainable cost and productivity improvements, strengthened our focus on differentiated products and services, and fostered a results-driven culture to deliver value for our customers.”

Mr. Silberhorn continued, “The margin gains and earnings growth we’ve achieved over the past four quarters have established a new baseline of performance for the company. As we move forward, we expect to drive continued progress toward our margin and ROIC goals. We’re also investing to develop the talent and capabilities that we’ll need to enable sustained above-market growth.”

Segment Results

Architectural Framing Systems

Architectural Framing Systems revenue grew 17 percent, to $165.0 million, from $141.5 million in the prior-year period, primarily driven by inflation-related pricing. Operating income increased to $22.1 million, compared to $12.1 million in last year’s third quarter, primarily driven by improved pricing and mix, which more than offset the impact of inflation. Segment backlog at the end of the quarter was $246 million, compared to $286 million at the end of the second quarter and $269 million one year ago. Framing Systems’ prior year results have been recast to reflect the move of the Sotawall business to the Architectural Services segment, which was effective at the beginning of this fiscal year.

Architectural Services

Architectural Services revenue in the third quarter was $102.0 million, compared to $105.4 million in the prior-year quarter. Operating income was $6.0 million, compared to $7.8 million in the prior-year period, reflecting lower profitability on legacy Sotawall projects and costs related to investments to support future growth. Segment backlog at the end of the quarter was $741 million, compared to $785 million at the end of the second quarter and $722 million one year ago. Prior-year results for Architectural Services have been recast to reflect the move of the Sotawall business into the segment, which was effective at the beginning of this fiscal year.

Architectural Glass

Architectural Glass revenue grew 10 percent to $81.5 million, compared to $74.3 million in the prior-year quarter, primarily driven by improved pricing and mix. Operating income increased to $7.5 million, compared to an operating loss of $(1.3) million in last year’s third quarter, which included $3.5 million of restructuring costs. Excluding the restructuring costs, adjusted operating income² in the prior year was $2.2 million. The increased income in this year’s third quarter was driven by improved pricing, mix, and productivity gains, which combined to offset the impact of inflation.

Large-Scale Optical

Large-Scale Optical revenue was $26.7 million, compared to $27.4 million in last year’s third quarter, primarily reflecting lower volume. Operating income was $7.1 million, up from $6.0 million in last year’s third quarter, primarily reflecting lower operating costs.

Financial Condition

In the third quarter, net cash provided by operating activities was $53.8 million, compared to $31.4 million in last year’s third quarter. Fiscal year to date, net cash provided by operating activities was $51.1 million, compared to $86.3 million in the prior-year period. The lower year-to-date cash flow primarily reflects increased working capital related to revenue growth and inflation. Fiscal year to date, capital expenditures were $18.1 million, compared to $13.1 million in the same period last year. Fiscal year to date, the company has returned $88.7 million of cash to shareholders through share repurchases and dividend payments, up from $44.2 million in the same period last year.

Quarter-end total debt was $203.7 million, compared to $163.0 million at the end of last year’s third quarter. Cash and cash equivalents were $21.7 million, compared to $37.6 million at the end of the third quarter of fiscal 2022.

Outlook

Based on year-to-date results and increasing confidence in its outlook, the company is narrowing its guidance for full year adjusted earnings to a range of $3.90 to $4.05 per diluted share, from the previously announced range of $3.75 to $4.05. The company now expects full year revenue growth of approximately 10 percent, primarily driven by growth in Architectural Framing Systems, and full-year capital expenditures of approximately $40 million.

For the full third quarter results, click here.

¹Adjusted earnings and adjusted earnings per share are non-GAAP financial measures.  See Use and Reconciliation of Non-GAAP Financial Measures later in this press release for more information and a reconciliation to the most directly comparable GAAP measures. 

²Adjusted operating income is a non-GAAP financial measure.  See Use and Reconciliation of Non-GAAP Financial Measures later in this press release for more information and a reconciliation to the most directly comparable GAAP measures.

About Apogee Enterprises

Apogee Enterprises, Inc. (Nasdaq: APOG) is a leading provider of architectural products and services for enclosing buildings, and high-performance glass and acrylic products used for preservation, energy conservation, and enhanced viewing. Headquartered in Minneapolis, MN, our portfolio of industry-leading products and services includes high-performance architectural glass, windows, curtainwall, storefront and entrance systems, integrated project management and installation services, as well as value-added glass and acrylic for custom picture framing and displays. For more information, visit www.apog.com.

Contact:

Jeff Huebschen – Vice President, Investor Relations & Communications – ir@apog.com – (952) 487-7538

Source: Apogee Enterprises, Inc.