Apogee Enterprises Reports Fiscal 2022 Fourth Quarter and Full Year Results

Apogee Enterprises, Inc. today announced its fiscal 2022 fourth-quarter and full-year results. Fourth-quarter revenue grew 6.3 percent to $328.0 million, compared to $308.6 million in the fourth quarter of fiscal year 2021, led by growth in Architectural Services and Architectural Framing Systems. The company reported a net loss of $(0.67) per diluted share in the fourth quarter, which included a non-cash, pre-tax impairment charge of $49.5 million in the Architectural Framing Systems segment, $6.3 million of pre-tax restructuring costs, and a $19.5 million gain on the sale of assets. This compares to a net loss of $(1.65) per diluted share in last year’s fourth quarter, which included $75 million of pre-tax impairment and restructuring costs. Adjusted earnings in this year’s fourth quarter were $0.91 per diluted share, up from $0.63 in the prior-year period.1

Full-year fiscal 2022 revenue grew 7 percent to $1.31 billion, from $1.23 billion in the prior-year. Full-year earnings were $0.14 per diluted share, compared to $0.59 in fiscal 2021, with full-year adjusted earnings per share of $2.48, up from $2.40 in fiscal 2021.

Commentary

“Our team continued to build momentum in the fourth quarter, delivering revenue growth, and increased adjusted earnings in what remains a challenging operating environment,” said Ty R. Silberhorn, Chief Executive Officer. “I am proud of what our team accomplished in fiscal 2022, achieving full-year revenue and adjusted earnings per share growth, while driving significant progress on our new strategy to position the company for long-term profitable growth.”

Mr. Silberhorn continued, “Looking ahead, we will continue to execute our three-pillar strategy, working to become the economic leader in our target markets, actively managing our portfolio to improve margins and returns, and strengthening our core capabilities to enable profitable growth. I am confident our team will drive further progress toward our financial goals in the new fiscal year.”

Segment Results

Architectural Framing Systems

Architectural Framing Systems fourth-quarter revenue grew 9 percent, to $143.1 million, from $131.1 million in the prior-year period, primarily driven by inflation-related pricing actions, partially offset by lower volume. Framing Systems had a fourth-quarter operating loss of $(43.8) million, which included a $49.5 million impairment charge taken on intangible assets in the Sotawall business. This compares to an operating loss of $(71.0) million in last year’s fourth quarter, which included $70.1 million of impairment charges and $4.4 million of restructuring costs. Fourth quarter adjusted operating income2 was $5.4 million, compared to $3.5 million in the prior-year period, reflecting improved pricing and the benefits from restructuring actions, which offset the impact of inflation. Segment backlog increased to $429 million, up from $419 million at the end of the third quarter.

Architectural Glass

Architectural Glass revenue in the fourth quarter was $72.5 million, compared to $82.0 million in the prior-year quarter, primarily reflecting lower volume. Operating income was $17.9 million, which included a $19.5 million gain on the sale of assets, and $6.2 million of restructuring costs. This compares to operating income of $3.4 million in last year’s fourth quarter, which included $0.2 million of restructuring costs. Adjusted operating income increased to $4.7 million, from $3.6 million in the prior-year quarter, driven by improved pricing and productivity, which offset the impact of inflation and lower volume.

Architectural Services

Architectural Services revenue grew 21 percent to a record $98.7 million, up from $81.9 million in the prior-year quarter, driven by increased volume from executing projects in backlog. Fourth-quarter operating income increased to a record $11.8 million, compared to $10.7 million in the prior-year period, primarily reflecting the increased volume, partially offset by the impact of inflation. For the full year, Architectural Services achieved record sales of $349.4 million and record operating income of $32.7 million. Segment backlog ended the quarter at $518 million, compared to $572 million at the end of the third quarter.

Large-Scale Optical

Large-Scale Optical revenue grew 23 percent to $26.6 million, up from $21.6 million in the fourth quarter last year, primarily driven by a more favorable sales mix. Operating income was $6.3 million, compared to $6.1 million in last year’s fourth quarter, primarily reflecting the more favorable sales mix, partially offset by increased operating costs. For the full year, LSO achieved record revenue of $101.7 million, exceeding $100 million of annual sales for the first time.

Financial Condition

Net cash provided by operating activities in fiscal 2022 was $100.5 million, compared to $141.9 million in fiscal 2021. Cash flow in the prior year benefited from reduced working capital and temporary actions related to the pandemic. Capital expenditures for the fiscal year were $21.8 million, down from $26.2 million last year, as the company slowed some investments while it conducted its strategic review. In the fourth quarter, the company repurchased 1.54 million shares of stock for $71.3 million. For the full year, the company returned $120.7 million of cash to shareholders through share repurchases and dividend payments, up from $52.5 million in fiscal 2021.

Year-end total debt was $163 million, compared to $165 million at the end of fiscal 2021. Cash and cash equivalents were $37.6 million, compared to $47.3 million at the end of fiscal 2021.

Restructuring

On August 11, 2021, the company announced plans to realign and simplify its business structure. During the fourth quarter, the company incurred $6.3 million of pre-tax restructuring charges related to this announcement, bringing the year-to-date total to $30.5 million. In the fourth quarter, $6.1 million of restructuring costs were included in cost of sales and $0.2 million were included in selling, general and administrative expenses. For the full year, $28.2 million of restructuring costs were included in cost of sales and $2.3 million were a part of selling, general and administrative expenses. The company expects the restructuring actions will be substantially completed by the end of the first quarter of fiscal 2023.

The $19.5 million gain on the sale of assets in the Architectural Glass segment was included in cost of sales, and the $49.5 million impairment in Framing Systems was included in selling, general, and administrative expenses.

Outlook

The company is providing initial guidance for fiscal year 2023, with full year adjusted earnings expected to be in the range of $2.90 to $3.30 per diluted share. The company expects revenue growth in fiscal 2023, primarily driven by growth in Architectural Framing Systems. The company forecasts full year capital expenditures of $35 to $40 million.

For the fourth quarter and full year results, click here.

About Apogee Enterprises

Apogee Enterprises, Inc. (Nasdaq: APOG) is a leading provider of architectural products and services for enclosing buildings, and glazing products for framing art. 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.