Apogee Enterprises Reports Fiscal 2023 Fourth Quarter and Full Year Results

Apogee Enterprises, Inc. announced its fiscal 2023 fourth-quarter and full-year results. Fourth-quarter revenue grew 4.9 percent to $344.1 million, compared to $328.0 million in the fourth quarter of fiscal year 2022, led by double-digit growth in Architectural Framing Systems and Architectural Glass. Earnings per diluted share were $0.91, which included a discrete $1.1 million income tax benefit related to the Sotawall business. This compared to a net loss of $(0.67) per diluted share in the prior-year quarter, which included $55.8 million of pre-tax impairment and restructuring charges and a $19.5 million gain on the sale of assets. Adjusted earnings in this year’s fourth quarter were $0.86 per diluted share, compared to $0.91 in the prior-year period.¹

Full year fiscal 2023 revenue grew 9.6 percent, to a record $1.44 billion, up from $1.31 billion in the prior year, with growth in each of the company’s segments. Full-year earnings grew to a record $4.64 per diluted share, compared to $0.14 in fiscal 2022. Full year adjusted earnings per diluted share increased 60 percent, to a record $3.98.

“The fourth quarter was a solid close to a terrific year for Apogee, as we continued to build momentum in executing our strategy,” said Ty R. Silberhorn, Chief Executive Officer. “The combination of the right strategy, improving operational execution, and a strong team, helped us deliver record full-year revenue and earnings, and significant progress toward achieving our long-term financial targets.”

Mr. Silberhorn continued, “In fiscal 2024, we expect to drive further progress toward our financial goals, as we continue to execute our strategy to position the company as an economic leader in our target markets, with a stronger foundation of core capabilities.”

Segment Results

Architectural Framing Systems

Architectural Framing Systems fourth-quarter revenue grew 13 percent, to $148.6 million, from $131.4 million in the prior-year quarter, primarily driven by inflation-related pricing and improved mix, partially offset by lower volume. Operating income increased to $15.6 million, compared to $9.3 million in last year’s fourth quarter, primarily driven by improved pricing which more than offset the impact of inflation. Segment backlog¹ at the end of the quarter was $243 million, compared to $246 million at the end of the third quarter, and $281 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 fourth quarter was $98.5 million, compared to $114.9 million in the prior-year quarter, reflecting lower volume due to the timing of projects in backlog. Operating income was $3.7 million, compared to an operating loss of $(41.2) million in the prior-year period, which included a $49.5 million impairment expense related to intangible assets. Excluding the impairment expense, adjusted operating income² in the prior year quarter was $8.2 million. The decreased adjusted operating income in this year’s fourth quarter reflects lower volume and higher costs on legacy Sotawall projects. Segment backlog at the end of the quarter was $727 million, compared to $741 million at the end of the third quarter, and $665 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 fourth-quarter revenue grew 12 percent to $81.4 million, from $72.5 million in the prior-year quarter, primarily driven by improved pricing and mix. Operating income was $9.5 million, compared to $17.9 million in last year’s fourth quarter, which included a $19.5 million gain on the sale of assets and $6.2 million of restructuring costs. Excluding these items, adjusted operating income in the prior year quarter was $4.7 million. The higher adjusted operating income in this year’s fourth quarter was primarily driven by improved pricing which more than offset the impact of inflation.

Large-Scale Optical

Large-Scale Optical revenue grew 3 percent, to $27.2 million, up from $26.6 million in last year’s fourth quarter, primarily reflecting improved pricing. Operating income was $5.8 million, compared to $6.3 million in last year’s fourth quarter, primarily reflecting higher operating costs, partially offset by improved pricing.

Financial Condition

In the fourth quarter, net cash provided by operating activities was $51.6 million, compared to $14.2 million in last year’s fourth quarter. For the full year, net cash provided by operating activities improved to $102.7 million, compared to $100.5 million in fiscal 2022, primarily driven by higher net earnings, which more than offset increased working capital related to revenue growth and inflation. Capital expenditures for the fiscal year were $45.2 million, compared to $21.8 million last year, as the company increased investments in projects to support its strategy. During the year, the company returned $94.0 million of cash to shareholders through share repurchases and dividend payments.

Year-end total debt was $169.8 million, compared to $163.0 million at the end of fiscal 2022. Cash and cash equivalents were $19.9 million, compared to $37.6 million at the end of fiscal 2022.

Outlook

The company is providing initial guidance for fiscal year 2024, with earnings per diluted share expected in the range of $3.90 to $4.25. Fiscal 2024 will be a 53-week year, with an extra week in the fourth quarter. Including the extra week of operations, the company expects flat to slightly declining revenue compared to fiscal 2023, primarily reflecting expected lower volume in Architectural Services. The company continues to expect a long-term average tax rate of approximately 24.5 percent and forecasts capital expenditures in fiscal 2024 between $50 to $60 million.

For the full fourth quarter results, click here.

(1)		Adjustment related to impairment charge recorded during the fourth quarter of the prior year on indefinite- and long-lived intangible assets within the Architectural Framing Systems segment as a result of triggering events during the fourth quarter of prior fiscal year. In the first quarter of fiscal 2023, the Sotawall business was re-aligned from Architectural Framing Systems segment into the Architectural Services segment, the comparative fiscal 2022 results have been recast to reflect the change.
(2)		Adjustment related to previously announced decision to exit certain operations in the Architectural Glass segment and reorganize operations within the Architectural Framing Systems segment, including $4.9 million and $21.5 million of asset impairment charges, $0.4 million and $6.2 million of employee termination costs and $1.0 million and $2.8 million of other costs associated with these restructuring plans incurred during the fourth quarter and full year of fiscal 2022, respectively.

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.