Apogee Enterprises, Inc. (NASDAQ:APOG) Q4 2024 Earnings Conference Call April 18, 2024 9:00 AM ET Company Participants Jeff Huebschen - VP, IR Ty Silberhorn - CEO Matthew Osberg - CFO Conference Call Participants Julio Romero - Sidoti & Company, LLC Brent Thielman - D.A. Davidson B.J. Cook - Singular Research Jon Braatz - KCCA Operator Good day, and thank you for standing by. Welcome to Q4 2024 Apogee Enterprises, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. [Oper ...

Apogee Enterprises (APOG) came out with quarterly earnings of $1.14 per share, beating the Zacks Consensus Estimate of $0.97 per share. This compares to earnings of $0.86 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 17.53%. A quarter ago, it was expected that this glass products company would post earnings of $1.05 per share when it actually produced earnings of $1.23, delivering a surprise of 17.14%.Over the last four quar ...

[Financial Highlights & CEO Commentary](index=1&type=section&id=Financial%20Highlights%20%26%20CEO%20Commentary) [Fiscal 2024 Performance Summary](index=1&type=section&id=Fiscal%202024%20Performance%20Summary) Apogee Enterprises reported a **5% increase** in fourth-quarter net sales to **$362 million**, with adjusted diluted EPS growing **33%** to **$1.14**, and full fiscal year 2024 net sales of **$1.42 billion** with record adjusted diluted EPS of **$4.77** Fiscal 2024 Full Year Key Financial Metrics | Metric | FY 2024 | Change vs. FY 2023 | | :--- | :--- | :--- | | Net Sales | $1.42 billion | -1.6% | | Diluted EPS | $4.51 | -2.8% | | Adjusted Diluted EPS | $4.77 | +19.8% | | Operating Margin | 9.4% | +70 bps | | Adjusted Operating Margin | 10.3% | +160 bps | | Cash Flow from Operations | $204 million | +98.8% | Fiscal 2024 Fourth Quarter Key Financial Metrics | Metric | Q4 FY2024 | Change vs. Q4 FY2023 | | :--- | :--- | :--- | | Net Sales | $362 million | +5.2% | | Diluted EPS | $0.71 | -22.0% | | Adjusted Diluted EPS | $1.14 | +32.6% | | Operating Income | $21.9 million | -15.0% | | Adjusted Operating Income | $34.3 million | +33.1% | [CEO Commentary](index=2&type=section&id=CEO%20Commentary) CEO Ty R. Silberhorn praised fiscal 2024 as a highly successful year with record adjusted EPS and cash flow, attributing success to strategic execution and outlining a fiscal 2025 growth mindset focused on diversification and enhanced offerings - The company achieved a **significant improvement in performance and profitability** by executing its strategy, which included sustainable cost savings, better operational execution, and focusing on differentiated offerings[3](index=3&type=chunk) - The outlook for fiscal 2025 is centered on a "**growth mindset**," with plans to diversify the business, strengthen products and services, and invest for long-term profitable growth[3](index=3&type=chunk) [Corporate Initiatives](index=2&type=section&id=Corporate%20Initiatives) [Project Fortify](index=2&type=section&id=Project%20Fortify) Apogee initiated **Project Fortify** in Q4 to streamline operations and improve cost structure, incurring **$12.4 million** in pre-tax charges with expected annualized savings of **$12 million to $14 million** Project Fortify Financial Impact | Metric | Amount | | :--- | :--- | | Q4 FY2024 Pre-tax Charges | $12.4 million | | Total Expected Pre-tax Charges | $16 million to $18 million | | Expected Annualized Cost Savings | $12 million to $14 million | - The majority of cost savings are expected to be realized in the Architectural Framing Systems Segment (**~70%**), followed by the Architectural Services Segment (**~20%**) and the Corporate Segment (**~10%**)[4](index=4&type=chunk) - The company expects to realize approximately **60%** of the savings in fiscal **2025** and the remainder in fiscal **2026**, with the project being substantially complete by Q3 FY2025[4](index=4&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) [Consolidated Results](index=2&type=section&id=Consolidated%20Results) Q4 fiscal 2024 net sales increased **5.2%** to **$361.8 million**, with adjusted operating income growing **33.1%** to **$34.3 million**, while full-year net sales were **$1.42 billion** and adjusted operating margin expanded **160 basis points** to **10.3%** - Q4 net sales growth was primarily driven by **improved pricing and mix**, which was partially offset by lower volumes[5](index=5&type=chunk) - Full-year adjusted diluted EPS grew **19.8%** to a record **$4.77**, driven by higher adjusted operating income and lower interest expense[8](index=8&type=chunk) Full-Year FY2024 vs. FY2023 Consolidated Results | Metric | Fiscal 2024 | Fiscal 2023 | | :--- | :--- | :--- | | Net Sales | $1.42 billion | $1.44 billion | | Operating Margin | 9.4% | 8.7% | | Adjusted Operating Margin | 10.3% | 8.7% | | Diluted EPS | $4.51 | $4.64 | [Segment Performance (Q4 FY2024)](index=3&type=section&id=Segment%20Performance%20%28Q4%20FY2024%29) In Q4, Architectural Glass led with **18.2%** net sales growth to **$96.2 million** and **19.7%** operating margin, while Architectural Services grew **7.9%**, and Architectural Framing Systems declined due to lower volume and restructuring charges Q4 FY2024 Segment Performance vs. Q4 FY2023 | Segment | Net Sales (Q4'24) | % Change YoY | Operating Income (Q4'24) | Operating Margin (Q4'24) | | :--- | :--- | :--- | :--- | :--- | | Architectural Framing Systems | $139.2M | -6.3% | $6.8M | 4.9% | | Architectural Glass | $96.2M | +18.2% | $18.9M | 19.7% | | Architectural Services | $106.3M | +7.9% | $3.6M | 3.4% | | Large-Scale Optical | $27.1M | -0.4% | $6.9M | 25.6% | - Architectural Framing Systems backlog increased **9.1%** sequentially to **$200.7 million**[10](index=10&type=chunk) - Architectural Services backlog grew **4.0%** sequentially to **$807.8 million**[12](index=12&type=chunk) [Financial Condition and Cash Flow](index=3&type=section&id=Financial%20Condition%20and%20Cash%20Flow) Fiscal 2024 saw significant financial strengthening, with record net cash from operating activities of **$204.2 million**, a reduction in long-term debt to **$62.0 million**, and an improved net leverage ratio of **0.1x** - Full-year net cash provided by operating activities increased to a record **$204.2 million**, compared to **$102.7 million** in the prior year[15](index=15&type=chunk) Debt and Leverage Comparison (Year-End) | Metric | FY 2024 | FY 2023 | | :--- | :--- | :--- | | Long-Term Debt | $62.0 million | $169.8 million | | Net Leverage Ratio | 0.1x | 0.9x | - During fiscal 2024, the company returned **$33.0 million** of cash to shareholders through share repurchases and dividend payments[16](index=16&type=chunk) [Fiscal 2025 Outlook](index=4&type=section&id=Fiscal%202025%20Outlook) [Guidance](index=4&type=section&id=Guidance) Apogee projects a fiscal 2025 net sales decline of **4% to 7%**, with diluted EPS between **$4.25 and $4.55**, and capital expenditures of **$40 million to $50 million** Fiscal 2025 Full-Year Guidance | Metric | Guidance Range | | :--- | :--- | | Net Sales Decline | 4% to 7% | | Diluted EPS | $4.25 to $4.55 | | Adjusted Diluted EPS | $4.35 to $4.75 | | Capital Expenditures | $40 million to $50 million | - The reversion to a 52-week fiscal year is expected to reduce adjusted diluted EPS by approximately **$0.20** compared to fiscal 2024[17](index=17&type=chunk) - The outlook assumes an adjusted effective tax rate of approximately **24.5%**[17](index=17&type=chunk) [Appendix: Financial Statements and Reconciliations](index=5&type=section&id=Appendix%3A%20Financial%20Statements%20and%20Reconciliations) [Use of Non-GAAP Financial Measures](index=4&type=section&id=Use%20of%20Non-GAAP%20Financial%20Measures) The company uses **non-GAAP measures** like adjusted operating income and diluted EPS to evaluate performance, determine compensation, and provide clearer investor insights by excluding non-core operational items - Management uses **non-GAAP measures** to assess historical and future performance, measure operational profitability consistently, and enhance transparency for investors[20](index=20&type=chunk) - Key non-GAAP measures include **Adjusted operating income**, **adjusted diluted EPS**, **Adjusted EBITDA**, **Free cash flow**, **Adjusted ROIC**, **Net debt**, and **Net leverage ratio**[20](index=20&type=chunk)[21](index=21&type=chunk) - Effective **Q1 FY2025**, the company will cease reporting backlog for the **Architectural Framing Segment** as Project Fortify actions will shorten project cycles, making the metric less effective for that segment[23](index=23&type=chunk) [Consolidated Financial Statements](index=7&type=section&id=Consolidated%20Financial%20Statements) This section presents Apogee Enterprises' detailed unaudited financial statements, including Consolidated Condensed Statements of Income, Balance Sheets, and Cash Flows, along with segment net sales and operating income breakdowns - The Consolidated Condensed Statements of Income show a year-over-year decrease in full-year net earnings from **$104.1 million** in **FY2023** to **$99.6 million** in **FY2024**, primarily due to a significantly higher income tax expense in FY2024[27](index=27&type=chunk)[28](index=28&type=chunk) - The Consolidated Condensed Balance Sheets indicate a reduction in total assets from **$915.4 million** to **$884.1 million** and a significant decrease in long-term debt from **$169.8 million** to **$62.0 million** year-over-year[30](index=30&type=chunk) - The Consolidated Condensed Statements of Cash Flows highlight a record **$204.2 million** in net cash from operating activities for **FY2024**, nearly double the **$102.7 million** generated in **FY2023**[31](index=31&type=chunk) [Non-GAAP Reconciliations](index=11&type=section&id=Non-GAAP%20Reconciliations) This section provides detailed reconciliations of GAAP to non-GAAP measures, including Adjusted Net Earnings, Diluted EPS, Operating Income, EBITDA, Net Leverage Ratio, and ROIC, adjusting for items like Project Fortify restructuring charges - Provides a reconciliation of GAAP Diluted EPS (**$4.51**) to Adjusted Diluted EPS (**$4.77**) for the full **fiscal year 2024**, detailing adjustments for restructuring charges and an NMTC settlement gain[33](index=33&type=chunk)[35](index=35&type=chunk) - Details the reconciliation of **GAAP Operating Income** to **Adjusted Operating Income** for each business segment, showing the specific impact of **Project Fortify restructuring charges**[38](index=38&type=chunk)[41](index=41&type=chunk) - Includes a reconciliation of the **Fiscal 2025 outlook** for **Diluted EPS** to **Adjusted Diluted EPS**, showing expected adjustments for future **Project Fortify restructuring charges**[52](index=52&type=chunk)[53](index=53&type=chunk)

Despite increased costs and labor shortage marring the near-term outlook of the Zacks Glass Products industry, it is poised to benefit from the rising demand for glass — both as a packaging option and for use in construction. This is backed by its endless recyclability and sustainability benefits. Growing demand for energy-efficient, smart windows or smart glass panels will be another catalyst for the industry going forward.Companies like Xinyi Glass (XYIGF) , Apogee Enterprises (APOG) and View, Inc. (VIEWQ ...

Apogee Enterprises (APOG) closed at $58.11 in the latest trading session, marking a +1.4% move from the prior day. The stock outperformed the S&P 500, which registered a daily gain of 0.57%. On the other hand, the Dow registered a gain of 0.83%, and the technology-centric Nasdaq increased by 0.39%.Shares of the glass products company witnessed a gain of 4.56% over the previous month, trailing the performance of the Industrial Products sector with its gain of 5.08% and outperforming the S&P 500's gain of 2.9 ...

Apogee Enterprises (APOG) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.Shares of this glass products company have returned +6.1% over the past month versus the Zacks S&P 500 composite's +3.2% change. The Zacks Glass Products industry, to which Apogee Enterprises belongs, has lost 2.6% over this period. Now the key question is: Where could the stock be headed in the near term? ...

Apogee Enterprises (APOG) ended the recent trading session at $56.78, demonstrating a +0.04% swing from the preceding day's closing price. This move lagged the S&P 500's daily gain of 1.12%. Elsewhere, the Dow gained 0.61%, while the tech-heavy Nasdaq added 1.54%.The the stock of glass products company has risen by 1.34% in the past month, lagging the Industrial Products sector's gain of 4.2% and the S&P 500's gain of 2.06%.The investment community will be closely monitoring the performance of Apogee Enterp ...

The latest trading session saw Apogee Enterprises (APOG) ending at $56.62, denoting a +1.14% adjustment from its last day's close. The stock outpaced the S&P 500's daily gain of 0.51%. Meanwhile, the Dow experienced a rise of 0.2%, and the technology-dominated Nasdaq saw an increase of 0.58%.Coming into today, shares of the glass products company had gained 5.4% in the past month. In that same time, the Industrial Products sector gained 5.36%, while the S&P 500 gained 2.94%.The investment community will be ...

Apogee Enterprises (APOG) has recently been on Zacks.com's list of the most searched stocks. Therefore, you might want to consider some of the key factors that could influence the stock's performance in the near future.Over the past month, shares of this glass products company have returned +4%, compared to the Zacks S&P 500 composite's +4% change. During this period, the Zacks Glass Products industry, which Apogee Enterprises falls in, has gained 9.1%. The key question now is: What could be the stock's fut ...

Apogee Enterprises (APOG) closed at $54.71 in the latest trading session, marking a -0.35% move from the prior day. This change lagged the S&P 500's 2.11% gain on the day. Meanwhile, the Dow gained 1.18%, and the Nasdaq, a tech-heavy index, added 2.96%.The glass products company's stock has climbed by 3.02% in the past month, falling short of the Industrial Products sector's gain of 5.43% and the S&P 500's gain of 3.08%.Analysts and investors alike will be keeping a close eye on the performance of Apogee En ...