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MINNEAPOLIS--(BUSINESS WIRE)-- Apogee Enterprises, Inc. (Nasdaq: APOG) today announced its fiscal 2023 first quarter results. First-quarter revenue grew 9.4 percent to $356.6 million, compared to $326.0 million in the first quarter of fiscal year 2022, led by growth in Architectural Framing Systems and Architectural Services. Earnings per diluted share increased to $1.00, compared to $0.42 per diluted share in the prior-year quarter, primarily driven by improved profitability in Architectural Framing Systems and Architectural Glass, and a lower share count.

“These strong results demonstrate the continued positive momentum in our business as we execute our strategy to create peak value,” said Ty R. Silberhorn, Chief Executive Officer. “Our team did a terrific job executing this quarter, improving service to customers, while effectively managing costs and pricing. Our strategy is driving improved operational execution and productivity gains, while strengthening our ability to manage costs.”

Mr. Silberhorn continued, “While we expect continued cost inflation and supply chain challenges, we are encouraged by this start to our fiscal year. We are well positioned to drive continued year-over-year revenue growth and margin expansion. As a result, we’re increasing our guidance for full-year earnings.”

Architectural Framing Systems first-quarter revenue grew 19 percent, to $163.3 million, from $136.8 million in the prior-year period, primarily driven by inflation-related pricing actions. First quarter operating income increased to $23.7 million, compared to $8.4 million in last year’s first quarter, reflecting improved pricing and the benefits from previously completed restructuring and cost actions, which offset the impact of inflation. Framing Systems’ operating income also benefited from the timing of inventory flows and the volatility of aluminum prices, as it sold products this quarter using aluminum that was purchased in previous periods at lower costs. Segment backlog increased to $310 million, up from $281 million at the end of the fourth quarter of fiscal 2022. Framing Systems’ prior year results have been recast to reflect the move of the Sotawall business to the Architectural Services segment, effective this quarter.

Architectural Services revenue grew 14 percent to $103.4 million, from $90.7 million in the prior-year quarter, driven by increased volume from executing projects in backlog. Operating income was $2.9 million, compared to $4.2 million in the prior-year period, primarily reflecting performance write downs on a discrete number of projects, increased costs for investments to support future growth, and a less favorable project mix, partially offset by the higher volume. Segment backlog improved to $681 million, up from $665 million at the end of the fourth quarter of fiscal 2022. Prior-year results for Architectural Services have been recast to reflect the move of the Sotawall business into the segment, effective this quarter.

Architectural Glass revenue in the first quarter was $76.3 million, compared to $83.0 million in the prior-year quarter, primarily reflecting lower volume. Operating income improved to $5.2 million, compared to $2.1 million in last year’s first quarter, driven by productivity gains, the positive impact of restructuring actions completed last year, and improved pricing, which offset the impact of inflation and lower volume.

Large-Scale Optical revenue grew 4 percent to $25.2 million, up from $24.3 million in the first quarter last year, driven by improved pricing and a more favorable sales mix. Operating income was $6.5 million, up from $5.8 million in last year’s first quarter, primarily reflecting improved productivity, partially offset by cost inflation.

Net cash used by operating activities in the first quarter was $30.5 million, compared to $6.9 million provided by operating activities in the prior-year period. The lower cash flow primarily reflected increased working capital related to revenue growth. Capital expenditures were $5.1 million, compared to $4.7 million in last year’s first quarter. During the first quarter, the company repurchased 1.57 million shares of stock for $74.3 million and returned $4.8 million to shareholders through dividend payments.

Quarter-end total debt was $261 million, compared to $165 million at the end of last year’s first quarter. Cash and cash equivalents were $15.2 million, compared to $36.5 million at the end of the first quarter of fiscal 2022.

Based on first-quarter results and increasing confidence in its outlook, the company is raising its guidance for full-year adjusted earnings to a range of $3.50 to $3.90 per diluted share, up from the previously announced range of $2.90 to $3.30. The company continues to expect full-year capital expenditures of $35 million to $40 million.

The company will host a conference call today at 8:00 a.m. Central Time to discuss its financial results and provide a business update. This call will be webcast and is available in the Investor Relations section of the company’s website, along with presentation slides, at https://www.apog.com/events-and-presentations . The webcast also will be archived for replay on the company’s website.

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 .

Use of Non-GAAP Financial Measures

This release and other financial communications may contain the following non-GAAP measures:

A reconciliation of non-GAAP guidance on Adjusted EPS to GAAP guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty of the magnitude and timing of future adjustments. These adjustments may include the impact of such items as impairment charges, restructuring costs, acquired project-related charges, and gains or losses from significant asset sales. Accordingly, the company is unable to provide a reconciliation of Adjusted EPS to the most directly comparable GAAP financial measure or address the probable significance of the unavailable information, which could be material to the company's future financial results computed in accordance with GAAP.

An operational measure that management uses is backlog. Backlog represents 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 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 segment revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog.

Management uses non-GAAP measures to evaluate the company’s historical and prospective financial performance, measure operational profitability on a consistent basis, and provide enhanced transparency to the investment community. Non-GAAP measures should be viewed in addition to, and not as a substitute for, the reported financial results of the company prepared in accordance with GAAP. Other companies may calculate these measures differently, limiting the usefulness of the measures for comparison with other companies.

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should” and similar expressions are intended to identify “forward-looking statements”. These statements reflect Apogee management’s expectations or beliefs as of the date of this release. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. All forward-looking statements are qualified by factors that may affect the results, performance, financial condition, prospects and opportunities of the company , including the following: (A) uncertainty regarding the potential impacts and duration of the COVID-19 pandemic; (B) global economic conditions and the cyclical nature of the North American and Latin American commercial construction industries, which impact our three architectural segments, and consumer confidence and the condition of the U.S. economy, which impact our large-scale optical segment; (C) fluctuations in foreign currency exchange rates; (D) actions of new and existing competitors; (E) ability to effectively utilize and increase production capacity; (F) departure of key personnel and ability to source sufficient labor; (G) product performance, reliability and quality issues; (H) project management and installation issues that could affect the profitability of individual contracts; (I) changes in consumer and customer preference, or architectural trends and building codes; (J) dependence on a relatively small number of customers in certain business segments; (K) revenue and operating results that could differ from market expectations; (L) self-insurance risk related to a material product liability or other event for which the company is liable; (M) dependence on information technology systems and information security threats; (N) cost of compliance with and changes in environmental regulations; (O) fluctuations in the availability and cost of materials used in our products and the impact of trade; (P) integration of recent acquisitions and management of acquired contracts; (Q) impairment of goodwill or indefinite-lived intangible assets; (R) our ability to execute our strategy to become the economic leader in our target markets and build an operating model to enable profitable growth; (S) increases in costs related to employee health care benefits; and (T) risks that anticipated results from business restructuring initiatives will not be achieved, implementation of cost-saving and business restructuring initiatives may take more time or cost more than expected, the anticipated cost savings may be materially less than anticipated, and the restructuring may result in disruption in delivery of services to our customers. The company cautions investors that actual future results could differ materially from those described in the forward-looking statements, and that other factors may in the future prove to be important in affecting the company’s results, performance, prospects, or opportunities. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. More information concerning potential factors that could affect future financial results is included in the company’s Annual Report on Form 10-K for the fiscal year ended February 26, 2022 and in subsequent filings with the U.S. Securities and Exchange Commission.

Consolidated Condensed Statements of Income

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Selling, general and administrative expenses

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Earnings per share - diluted

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View source version on businesswire.com: https://www.businesswire.com/news/home/20220623005209/en/

Jeff Huebschen Vice President, Investor Relations & Communications 952.487.7538 [email protected]

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