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What changed in APOGEE ENTERPRISES, INC.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of APOGEE ENTERPRISES, INC.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+245 added−229 removedSource: 10-K (2025-04-24) vs 10-K (2024-04-26)

Top changes in APOGEE ENTERPRISES, INC.'s 2025 10-K

245 paragraphs added · 229 removed · 172 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

47 edited+14 added−17 removed23 unchanged
Biggest changePrior to joining the Company, Ms. Elliott was a partner with Lindquist & Vennum, PLLP (n/k/a Ballard Spahr LLP). Brent C. Jewell 50 President of Apogee's Architectural Glass Segment since October 2023. Prior to this role, Mr.
Biggest changeMeghan M. Elliott 48 Vice President, Chief Legal Officer, and Secretary of the Company since June 2020. Prior to this role, Ms. Elliott served as Assistant General Counsel for the Company since 2014. Prior to joining the Company, Ms. Elliott was a partner with Lindquist & Vennum, PLLP (n/k/a Ballard Spahr LLP). Nick C.
Our windows, curtainwall, storefront and entrance systems are sold using a combination of direct sales forces and independent sales representatives and distributors. Our installation services are sold by a direct sales force in certain metropolitan areas in the U.S and Canada.
Our windows, curtainwall, storefront and entrance systems are sold using a combination of direct sales forces, independent sales representatives, and distributors. Our installation services are sold by a direct sales force in certain metropolitan areas in the U.S and Canada.
Also available on our website are various corporate governance documents, including our Code of Business Ethics and Conduct, Corporate Governance Guidelines, and charters for the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board of Directors. 10 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Name Age Positions with Apogee Enterprises and Past Experience Ty R.
Also available on our website are various corporate governance documents, including our Code of Business Ethics and Conduct, Corporate Governance Guidelines, and charters for the Audit, Compensation, and Nominating and Corporate Governance Committees of the Board of Directors (the Board). 10 Table of Contents INFORMATION ABOUT OUR EXECUTIVE OFFICERS Name Age Positions with Apogee Enterprises and Past Experience Ty R.
Our executive leadership and Human Resources teams regularly conduct talent reviews and succession planning to assist with meeting critical talent and leadership needs. International Sales Information regarding export and international sales is included in Item 8, Financial Statements and Supplementary Data, within Note 15 of our Consolidated Financial Statements. Available Information Our internet address is www.apog.com .
Our executive leadership and Human Resources teams regularly conduct talent reviews and succession planning to assist with meeting critical talent and leadership needs. International Sales Information regarding export and international sales is included in Item 8, Financial Statements and Supplementary Data, within Note 16 of our Consolidated Financial Statements. Available Information Our internet address is www.apog.com .
Our aim is to create an environment where people feel included as a part of a team because of their diversity of outlooks, perspectives, and characteristics, and have an equal opportunity to add value to our Company. We strive to create a culture of inclusion, reduce bias in our talent practices, and invest in and engage with our communities.
Our aim is to create an environment where people feel included as a part of a team because of their diversity of outlooks, perspectives, and characteristics, and have an equal opportunity to add value to our Company. We work to create a culture of inclusion, reduce bias in our talent practices, and invest in and engage with our communities.
Equal Employment Opportunity Commission, our U.S employees had the following race and ethnicity demographics: Employee Demographic Percent of Total White 66% Hispanic / Latinx 19% Black / African American 8% Asian 5% Multiracial, Native American, Native Hawaiian, and Pacific Islander 2% Competition for qualified employees in the markets and industries in which we operate is significant, and our success depends on the ability to attract, select, develop and retain a productive and engaged workforce.
Equal Employment Opportunity Commission, our U.S employees had the following race and ethnicity demographics: Employee Demographic Percent of Total White 66% Hispanic / Latinx 20% Black / African American 7% Asian 5% Multiracial, Native American, Native Hawaiian, and Pacific Islander 2% Competition for qualified employees in the markets and industries in which we operate is significant, and our success depends on the ability to attract, select, develop and retain a productive and engaged workforce.
Silberhorn 56 Chief Executive Officer of the Company since January 2021. Prior to joining the Company, Mr. Silberhorn worked for 3M, a diversified global manufacturer and technology company, most recently serving as Senior Vice President of 3M's Transformation, Technologies and Services from April 2019 through December 2020.
Silberhorn 57 Chief Executive Officer (CEO) of the Company since January 2021. Prior to joining the Company, Mr. Silberhorn worked for 3M, a diversified global manufacturer and technology company, most recently serving as Senior Vice President of 3M's Transformation, Technologies and Services from April 2019 through December 2020.
Prior to this position and since 2001, he held several 3M global business unit leadership roles, serving as Vice President and General Manager for divisions within Safety & Industrial, Transportation & Electronics, and the Consumer business groups. Matt Osberg 48 Executive Vice President and Chief Financial Officer of the Company since April 2023. Prior to joining the Company, Mr.
Prior to this position and since 2001, he held several 3M global business unit leadership roles, serving as Vice President and General Manager for divisions within Safety & Industrial, Transportation & Electronics, and the Consumer business groups. Matthew Osberg 49 Executive Vice President and Chief Financial Officer of the Company since April 2023. Prior to joining the Company, Mr.
In fiscal 2022, we established a Company-wide operating system with common tools and processes based on the foundation of Lean and Continuous Improvement, which we call the "Apogee Management System". Our strategy is supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.
We have established a Company-wide operating system with common tools and processes based on the foundation of Lean and Continuous Improvement, which we call the "Apogee Management System." Our strategy is supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.
Strengthen our core capabilities. We are shifting from our historical, decentralized operating model, to one with center-led functional expertise that enables us to leverage the scale of the enterprise to better support the needs of the business.
We are shifting from our historical, decentralized operating model, to one with center-led functional expertise that enables us to leverage the scale of the enterprise to better support the needs of the business.
Jewell served as President of Apogee's Architectural Framing Systems segment from August 2019 to October 2023, and as Senior Vice President, Business Development and Strategy for the Company from May 2018 to August 2019. Prior to joining the Company, Mr.
Jewell served as President of Apogee's Architectural Metals Segment from August 2019 to October 2023, and as Senior Vice President, Business Development and Strategy for the Company from May 2018 to August 2019. Prior to joining the Company, Mr.
We will focus on operational execution, driving productivity improvements, and maintaining a competitive cost structure, so that we may bring more value to our customers and improve our own profitability. 2. Actively manage our portfolio to drive higher margins and returns.
We are focused on operational execution, driving productivity improvements, and maintaining a competitive cost structure, so that we may bring more value to our customers and improve our own profitability. 2. Actively manage our portfolio to drive higher margins and returns.
Additionally, we evaluate data on U.S. and Canadian non-residential construction market activity, industry analysis and longer-term trends provided by external data sources.
Additionally, we evaluate data on U.S. and Canadian non-residential construction market activity, industry analysis, interest rates, and other longer-term trends provided by external data sources.
Our company-wide commitment to sustainable business practices is focused on delivering long-term profitable growth while carefully stewarding the resources entrusted to us, and delivering products and services that address our customers’ increased focus on energy efficiency and greenhouse gas reductions. 8 Table of Contents Our architectural products and services are key enablers of green building and sustainable design.
Our company-wide commitment to sustainable business practices is focused on delivering long-term profitable growth while carefully stewarding the resources entrusted to us, and delivering products and services that address our customers’ increased focus on energy efficiency, greenhouse gas reductions, and other performance requirements. Our architectural products and services are key enablers of green building and sustainable design.
We are shifting our business mix toward higher operating margin offerings in order to improve our return on invested capital performance. We expect to accomplish this by allocating resources to grow our top performing businesses, actively addressing underperforming businesses, and investing to add new differentiated product and service offerings to accelerate our growth and increase margins. 3.
We are shifting our business mix toward higher operating margin offerings in order to improve our return on invested capital performance. We accomplish this by allocating resources to grow our top performing businesses, actively addressing underperforming businesses, and investing in differentiated product and service offerings to accelerate our growth and increase margins. 3. Strengthen our core capabilities.
We also rely on internal indicators to analyze demand, including our sales pipeline, which is made up of contracts in review, projects awarded or committed, and bidding activity. Our sales pipeline, together with ongoing feedback, analysis and data from our customers, architects and building owners, provides visibility into near- and medium-term demand.
We also rely on internal indicators to analyze demand, including our sales pipeline, which is made up of contracts in review, projects awarded or committed, and bidding activity. Our sales pipeline, together with ongoing feedback, analysis and data from our customers, architects and building owners, provides information related to near- and mid-term demand.
We also conduct employee engagement surveys at the site level annually to hear directly from our employees with respect to what we are doing well, in addition to areas where they may need additional support. 9 Table of Contents Diversity, Equity and Inclusion Our diversity, equity and inclusion program promotes a workplace where each employee’s abilities are recognized, respected, and utilized to further our goals.
We also conduct employee engagement surveys at the site level annually to hear directly from our employees with respect to what we are doing well, in addition to areas where they may need additional support. 9 Table of Contents Diversity and Equal Opportunity We strive to promote a workplace where each employee’s abilities are recognized, respected, and utilized to further our goals.
Longman 52 President of Apogee's Architectural Framing Systems Segment since October 2023. Prior to this role, Mr. Longman served as President of Apogee's Architectural Glass segment from June 2021 to October 2023. Prior to joining the Company, Mr.
Longman 53 President of Apogee's Architectural Metals Segment since October 2023. Prior to this role, Mr. Longman served as President of Apogee's Architectural Glass segment from June 2021 to October 2023. Prior to joining the Company, Mr.
Working Capital Requirements Trade and contract-related receivables and other contract assets are the largest components of our working capital. Inventory requirements, mainly related to raw materials, are most significant in our Architectural Framing Systems, Architectural Glass, and LSO Segments.
Working Capital Requirements Trade and contract-related receivables and other contract assets are the largest components of our working capital. Inventory requirements, mainly related to raw materials, are most significant in our Architectural Metals, Architectural Glass, and Performance Surfaces Segments.
In fiscal 2024, this segment accounted for approximately 42% of our net sales. • The Architectural Glass Segment coats and fabricates high-performance glass used in custom window and wall systems on non-residential buildings.
In fiscal 2025, this segment accounted for approximately 31% of our net sales. • The Architectural Glass Segment cuts, treats, coats and fabricates high-performance glass used in custom window and wall systems used primarily in non-residential buildings.
Sources and Availability of Raw Materials Materials used in the Architectural Framing Systems Segment include aluminum billet and extrusions, fabricated glass, plastic extrusions, hardware, paint and chemicals. Within the Architectural Services Segment, materials used include fabricated glass, finished aluminum extrusions, fabricated metal panels and hardware.
Sources and Availability of Raw Materials Materials used in the Architectural Metals Segment include aluminum billet and extrusions, fabricated glass, plastic extrusions, hardware, paint and chemicals. Within the Architectural Services Segment, materials used include fabricated glass, finished aluminum extrusions, fabricated metal panels and hardware. Raw materials used within the Architectural Glass Segment include float glass, vinyl, silicone sealants and lumber.
Our competitive strengths include innovative proprietary products and process technologies, a highly automated manufacturing model, innovative marketing programs, strong customer relationships, and an established distribution network. Warranties We offer product and service warranties that we believe are competitive for the markets in which our products and services are sold.
Our competitive strengths include innovative proprietary products, domain expertise in coating processes and technologies, a highly automated manufacturing model, strong customer relationships, an established distribution network, and a portfolio of well-known brands. Warranties We offer product and service warranties that we believe are competitive for the markets in which our products and services are sold.
Human Capital Resources We had approximately 4,400 employees on March 2, 2024, down from 4,900 employees on February 25, 2023, of which 78% are male and 22% are female. As of March 2, 2024, approximately 367, or approximately 8%, of our employees are covered by collective bargaining agreements.
Human Capital Resources We had approximately 4,500 employees on March 1, 2025, up from 4,400 employees on March 2, 2024, of which 78% are male and 22% are female. As of March 1, 2025, approximately 351, or approximately 8%, of our employees are covered by collective bargaining agreements.
This commitment requires focus and dedication to fundamental aspects of our business to minimize the risk of accidents, injury, and exposure to health hazards. In fiscal 2024, we adopted an enterprise-wide health and safety program to build centralized oversight of workplace safety and to actively share best practices across our business.
This commitment requires focus and dedication to fundamental aspects of our business to minimize the risk of accidents, injury, and exposure to health hazards. In fiscal 2025, we continued to improve our enterprise-wide health and safety program which centralizes oversight of workplace safety and actively shares best practices across our business.
Longman served as Chief Executive Officer and Chief Operating Officer for Harvey Building Products, a manufacturer of windows, doors and accessory products, from March 2018 to November 2020 and in various functional and business leadership roles at Colfax Fluid Handling, a diversified technology company, from 2012 to 2018. Jane Boyce 59 President of Apogee’s Large-Scale Optical Segment since February 2006.
Longman served as Chief Executive Officer and Chief Operating Officer for Harvey Building Products, a manufacturer of windows, doors and accessory products, from March 2018 to November 2020 and in various functional and business leadership roles at Colfax Fluid Handling, a diversified technology company, from 2012 to 2018. Troy R.
Osberg served as Chief Financial Officer at Helen of Troy Limited, a global consumer products company. Previously, Mr. Osberg worked in finance roles at Best Buy Co., Inc. and Ernst & Young LLP. Curtis Dobler 59 Executive Vice President and Chief Human Resources Officer since April 2019. Prior to joining the Company, Mr.
Osberg served as Chief Financial Officer at Helen of Troy Limited, a global consumer products company. Previously, Mr. Osberg worked in finance roles at Best Buy Co., Inc. and Ernst & Young LLP. Raelyn Trende 49 Executive Vice President and Chief Human Resources Officer since July 2024. Ms.
We differentiate by providing a wide range of high-quality products, including several proprietary offerings, that we can bundle together into customized solutions. We maintain strong relationships with architects, developers, and other industry stakeholders, and provide strong customer service and reliable delivery. Architectural Services Segment Our Architectural Services Segment competes against international, national and regional glass installation companies.
We differentiate by providing a wider range of high-quality products, including several proprietary offerings, that we can bundle together into customized solutions. We work to maintain strong relationships with architects, developers, and other industry stakeholders, and provide strong customer service and reliable delivery.
ITEM 1. BUSINESS The Company Apogee Enterprises, Inc. (Apogee, we, us, our or the Company) was incorporated under the laws of the State of Minnesota in 1949. We are a leading provider of architectural products and services for enclosing buildings, and high-performance glass and acrylic products used in applications for preservation, protection and enhanced viewing.
ITEM 1. BUSINESS The Company Apogee Enterprises, Inc. (Apogee, we, us, our or the Company) was incorporated under the laws of the State of Minnesota in 1949. We are a leading provider of architectural building products and services, as well as high-performance coated materials used in a variety of applications.
In addition, we have procedures in place that enable us to properly manage the regulated materials used in and wastes created by our manufacturing processes. We believe we are currently in material compliance with all such laws and regulations.
In addition, we have procedures in place that enable us to properly manage the regulated materials used in and wastes created by our manufacturing processes. We believe we are currently in compliance with all such laws and regulations. 8 Table of Contents Supporting Sustainability We are committed to integrating sustainable business practices and environmental stewardship throughout our business.
Competitive Conditions The North American non-residential construction market is highly fragmented. Competitive factors include price, product quality, product attributes and performance, reliable service, on-time delivery, lead-time, warranties, and the ability to provide project management, technical engineering and design services.
We have a global distribution network and supply our products to customers outside of North America, primarily in Europe and Asia. Competitive Conditions The North American non-residential construction market is highly fragmented. Competitive factors include price, product quality, product attributes and performance, reliable service, on-time delivery, lead-time, warranties, and the ability to provide project management, technical engineering and design services.
Architectural Services Segment Our Architectural Services Segment delivers value by integrating technical capabilities, project management skills and field installation services, to provide design, engineering, fabrication and installation for the exteriors of non-residential buildings.
We sell our products and services under the Tubelite®, EFCO, and Linetec® brands in the U.S. and under Alumicor™ in Canada. Architectural Services Segment Our Architectural Services Segment delivers value by integrating technical capabilities, project management skills and field installation services, to provide design, engineering, fabrication and installation for the exteriors of primarily non-residential buildings.
We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.
We continue to focus on offering differentiated products and services and diversifying the mix of architectural projects that we serve. We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.
Become the economic leader in our target markets. We are developing a deep understanding of our target markets and align our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings.
Strategy Our enterprise strategy is based on the following three key elements: 1. Become the economic leader in our target markets. We have developed a deep understanding of our target markets and aligned our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings.
In fiscal 2024, this segment accounted for approximately 24% of our net sales. • The Architectural Services Segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install building glass and curtainwall systems.
In fiscal 2025, this segment accounted for approximately 39% of our net sales. • The Architectural Services Segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install architectural curtainwall and other façade-related systems used primarily in non-residential construction.
To protect and improve our competitive position, we maintain strong relationships with building owners, architects, and other stakeholders who influence the selection of products and services on a project, and with general contractors, who initiate projects and develop specifications.
To protect and improve our competitive position, we maintain strong relationships with building owners, architects, and other stakeholders who influence the selection of products and services on a project, and with general contractors, who initiate projects and develop specifications. 7 Table of Contents Architectural Metals Segment Our Architectural Metals Segment competes against several national, regional, and local aluminum window and storefront manufacturers, as well as regional finishing companies.
The nature and extent of these warranties depend upon the product or service, the market and, in some cases, the customer being served. Our standard warranties are generally from two to 12 years for our curtainwall, window system and architectural glass products, while we generally offer warranties of two years or less on our other products and services.
Our standard warranties are generally from two to 12 years for our curtainwall, window system, and architectural glass and certain coated products, while we generally offer warranties of two years or less on our other products and services.
Products vary based on size and coatings to provide conservation-grade UV protection, anti-reflective and anti-static properties and/or security features. 6 Table of Contents Product Demand and Distribution Channels Architectural Framing Systems, Architectural Glass and Architectural Services Segments Demand for the products and services offered by our architectural segments is not only impacted by general economic conditions, but has historically been affected by changes in the North American non-residential construction industry, which is cyclical in nature.
We sell our products under the Tru Vue®, ResinDEK®, ChromaLuxe®, RDC Coatings™, and Unisub® brands. 6 Table of Contents Product Demand and Distribution Channels Architectural Metals, Architectural Services and Architectural Glass Segments Demand for the products and services offered by our architectural segments is not only impacted by general economic conditions, but has historically been affected by changes in the North American non-residential construction industry, which is cyclical in nature.
We fabricate insulating, laminated, and monolithic glass units that are used in windows, curtainwall, storefront, and entrance systems. We provide premium glass solutions to meet our customers’ design and energy-performance requirements. These include proprietary, high-performance coatings, digital and silkscreen printing, heat-soaking of tempered glass, and thermal spacers.
We provide premium glass solutions to meet our customers’ design and energy-performance requirements. These include proprietary, high-performance coatings, digital and silkscreen printing, heat-soaking of tempered glass, and thermal spacers. We sell our products under the Viracon® and GlassecViracon® brands.
We have four reporting segments, with three of the four segments serving the non-residential construction market, and the fourth serving the custom framing and fine art market: • The Architectural Framing Systems Segment designs, engineers, fabricates and finishes aluminum window, curtainwall, storefront and entrance systems for the exterior of buildings.
We have four reporting segments: • The Architectural Metals Segment designs, engineers, fabricates and finishes aluminum window, curtainwall, storefront and entrance systems used primarily in non-residential construction.
Our businesses compete by providing a broad portfolio of high-quality products, robust engineering capabilities, a vertically integrated manufacturing model, and dependable, short lead-time service. 7 Table of Contents Architectural Glass Segment In our Architectural Glass Segment, we compete with regional glass fabricators and international competitors who can provide certain products with attributes similar to ours.
Our businesses compete by providing a broad portfolio of high-quality products, robust engineering capabilities, a vertically integrated manufacturing model, and dependable, short lead-time service. Architectural Services Segment Our Architectural Services Segment competes against international, national and regional glass installation companies. We compete by offering a robust set of capabilities at a competitive cost.
Under the Tru Vue brand, products are sold primarily in North America through national and regional retail chains using a direct sales force, as well as to local retailers through an independent distribution network. We have a global distribution network and supply our products to museums, galleries and other customers outside of North America, including Europe and Asia.
These products are sold primarily in North America under the Tru Vue, ChromaLuxe, and Unisub brands, through national and regional retail chains using a direct sales force, as well as to local retailers through an independent distribution network. Through our ResinDEK brand, we offer engineered panels used in flooring systems designed for material handling, supply chain, and self-storage applications.
We also extrude aluminum and provide finishing services for metal components used in a variety of building materials applications, as well as plastic components for other markets. Architectural Glass Segment Our Architectural Glass Segment provides a wide range of high-performance glass products, offering customized solutions that enable architects and building owners to meet their design, aesthetic, and performance goals.
Architectural Glass Segment Our Architectural Glass Segment provides a wide range of high-performance glass products, offering customized solutions that enable architects and building owners to meet their design, aesthetic, and performance goals. We fabricate insulating, laminated, and monolithic glass units that are used in windows, curtainwall, storefront, and entrance systems.
Jewell served in multiple Senior leadership positions at Valspar, a developer, manufacturer and distributor of paints and coatings, from 2010 to 2017. Troy R. Johnson 50 President of Apogee’s Architectural Services Segment since March 2020. Prior to this role, Mr. Johnson served in several leadership roles in the Architectural Services segment since 2011. Nick C.
Jewell served in multiple Senior leadership positions at Valspar, a developer, manufacturer and distributor of paints and coatings, from 2010 to 2017. Veena Lakkundi 56 President of Apogee’s Performance Surfaces Segment since January 2025. Prior to joining the Company, Ms.
Our ability to efficiently design high-quality window and curtainwall systems and effectively manage the installation of building façades enables our customers to meet schedule and cost requirements of their projects. LSO Segment The LSO Segment provides coated glass and acrylic primarily for use in custom picture framing, museum framing, wall decor and technical glass and acrylic for other display applications.
Our ability to efficiently design high-quality window and curtainwall systems and effectively manage the installation of building façades enables our customers to meet schedule and cost requirements of their projects. We sell our products and services under the Harmon® brand.
Raw materials used within the Architectural Glass Segment include flat glass, vinyl, silicone sealants and lumber. Materials used in the LSO Segment are primarily glass and acrylic. Most of our raw materials are readily available from a variety of domestic and international sources.
Materials used in the Performance Surfaces Segment are float glass, acrylic, aluminum sheets, medium-density fiberboard (MDF), and certain chemicals. Most of our raw materials are readily available from a variety of domestic and international sources.
We set this strategy by developing a deep knowledge of the markets we serve and by gaining extensive input from customers and industry influencers, along with detailed competitive benchmarking. We continually analyze our portfolio of products, services, and capabilities to identify the best areas for future profitable growth.
We continually analyze our current portfolio of products, services, and capabilities to identify the best areas for future profitable growth.
LSO Segment In our LSO Segment, we have a leading brand of value-added coated glass and acrylic used in the custom picture-framing market, museum market, and various technical glass applications.
Performance Surfaces Segment Demand for our products in our Performance Surfaces Segment is impacted by general economic conditions, including consumer confidence, spending in residential improvements, as well as growth in non-residential construction. We offer value-added coated glass, acrylic, metals, and other substrates used in the custom picture-framing market, museum market, graphic arts and decor markets, and various technical glass applications.
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In fiscal 2024, this segment accounted for approximately 27% of our net sales. • The Large-Scale Optical (LSO) Segment manufactures high-performance glazing products for the custom framing, fine art, and engineered optics markets. In fiscal 2024, this segment accounted for approximately 7% of our net sales. Strategy Our enterprise strategy is based on the following three key elements: 1.
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Segment Information During the fourth quarter of fiscal 2025, the Company changed the names of two of our reporting segments to better reflect their product focus and capabilities. The previously named Architectural Framing Systems Segment is now referred to as the Architectural Metals Segment. The previously named Large-Scale Optical Segment is now referred to as the Performance Surfaces Segment.
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We also evaluate our operating model to ensure we have the organizational structure and capabilities needed to deliver consistent profitable growth. Through this work, we validate strengths that we can leverage and identify opportunities to improve our performance. We have made significant progress against our strategy and will continue to identify opportunities to build upon it.
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There were no changes in the products or brands included within each of the reportable segments, nor the way in which our CEO assesses performance and allocates resources for these or our other segments.
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To measure our progress, we established three consolidated enterprise financial targets: • Adjusted Return on Invested Capital (ROIC) 1 greater than 12% • Adjusted operating margin 1 greater than 10% • Revenue growth greater than 1.2 times the overall non-residential construction market. 1 Adjusted ROIC and adjusted operating margin are non-GAAP measures.
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In fiscal 2025, this segment accounted for approximately 21% of our net sales. • The Performance Surfaces Segment develops and manufactures high-performance coated materials for a variety of applications, including wall decor, museums, graphic design, digital displays, architectural interiors, and industrial flooring. In fiscal 2025, this segment accounted for approximately 9% of our net sales.
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See discussion of non-GAAP measures within the Overview section of Management's Discussion and Analysis. 5 Table of Contents In fiscal 2024, we drove further progress toward our strategic goals and financial targets. We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements.
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We also evaluate inorganic investment opportunities where we can deploy capital to acquire businesses that will be accretive to our long-term growth rate and operating margins. 5 Table of Contents Fiscal 2025 Highlights In fiscal 2025, we drove further progress toward our strategic goals and financial targets.
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We invested in organic growth initiatives, including capacity expansion in the Large-Scale Optical Segment and geographic growth in Architectural Services. We increased our focus on differentiated products and services, and continued to diversify the mix of architectural projects that we serve while leaning more heavily into higher, value-added products.
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We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements. We invested in organic and inorganic growth initiatives, including the acquisition of UW Interco, LLC (UW Solutions) and capacity expansion in the Performance Surfaces segment as well as capacity expansion to support geographic growth in the Architectural Services segment.
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Products and Services Architectural Framing Systems, Architectural Glass and Architectural Services Segments These three segments primarily serve the non-residential construction industry and participate in various phases of the value stream to design, engineer, fabricate and install custom glass and aluminum window, curtainwall, storefront and entrance systems for the exterior of buildings, primarily in the non-residential construction sectors.
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Products and Services Architectural Metals Segment Our Architectural Metals Segment designs, engineers and fabricates aluminum windows, curtainwall, storefront and entrance systems. We also extrude aluminum and provide finishing services for metal components used in a variety of building materials applications.
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Our product and service offerings across these architectural segments allow architects to create distinctive looks for buildings in the non-residential construction industry such as healthcare facilities, government buildings, office towers, hotels, education and athletic facilities, retail centers, transportation centers, mixed use and multi-family residential buildings.
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Performance Surfaces Segment The Performance Surfaces Segment develops and manufactures high-performance coated materials for a variety of applications, including wall decor, museums, graphic design, digital displays, architectural interiors, and industrial flooring. We are a vertically integrated manufacturer, differentiated by our proprietary formulations and coating application processes.
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Our solutions also help meet functional requirements such as energy efficiency, hurricane, blast and other impact resistance and sound control. Many of our architectural products and services help architects, developers, and building owners achieve their energy-efficiency and sustainability goals by improving energy performance, reducing greenhouse gas emissions, providing daylight and natural ventilation, and increasing comfort and safety for occupants.
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These products are sold through a combination of a direct sales force and third-party representatives. Our RDC Coatings brand offers coating solutions for a variety of applications, that are custom engineered to meet customer specifications. Markets for these coatings include flooring, furniture, cabinetry, and other applications.
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These architectural products include high-performance thermal framing systems, energy efficient glass coatings, and sun control products such as sunshades and light shelves. Many of our framing systems products can be specified with recycled aluminum content and utilize environmentally friendly anodize and paint finishes.
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Our capabilities include engineering and design services, project management, manufacturing, and field installation. We deliver these services using an operating model that is designed to reduce costs and risk for our customers. Architectural Glass Segment In our Architectural Glass Segment, we compete with regional glass fabricators and international competitors who can provide certain products with attributes similar to ours.
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In addition, we offer renovation solutions to help modernize aging buildings, providing significantly improved energy performance, while preserving historically accurate aesthetics. Architectural Framing Systems Segment Our Architectural Framing Systems Segment designs, engineers and fabricates aluminum windows, storefront and entrance systems.
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Performance Surfaces Segment Our Performance Surfaces Segment competes primarily with European, U.S., and Asia Pacific providers of both basic and value-added glass and acrylic, and other high-performance coated substrates.
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Architectural Framing Systems Segment Our Architectural Framing Systems Segment competes against several national, regional, and local aluminum window and storefront manufacturers, as well as regional finishing companies.
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The nature and extent of these warranties depend upon the product or service, the market and, in some cases, the customer being served.
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We compete by offering a robust set of capabilities at a competitive cost. Our capabilities include preconstruction services, engineering and design, project management, manufacturing, and field installation.
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Trende joined the Company from Medtronic where she served as Vice President of Global Talent Acquisition, Human Resources Technology, Analytics, and Project Management Office. Prior to Medtronic, Ms. Trende was Senior Vice President of Human Resources for OptumHealth, a subsidiary of UnitedHealth Group. In addition, Ms. Trende served in several human resources leadership roles at Target Corporation and Cargill.
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We deliver these services using an operating model that is designed to reduce costs and risk for our customers, and we have established a track record of regularly meeting each project's unique execution requirements. LSO Segment Our LSO Segment competes primarily with European, U.S., and Asia Pacific providers of both basic and valued-added glass and acrylic.
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Johnson 51 President of Apogee’s Architectural Services Segment since March 2020. Prior to this role, Mr. Johnson served in several leadership roles in the Architectural Services Segment. Brent C. Jewell 51 President of Apogee's Architectural Glass Segment since October 2023. Prior to this role, Mr.
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Sustainability Focus As a leading provider of architectural products and services, we are committed to integrating sustainable business practices and environmental stewardship throughout our business.
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Lakkundi served as Senior Vice President, Strategy and Corporate Development at Rockwell Automation, a global leader in industrial automation and digital transformation. Previously, Ms. Lakkundi served at Senior Vice President and Chief Strategy Officer at 3M Company along with other key leadership positions across 3M.
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During fiscal 2024, we calculated and publicly disclosed our baseline Scope 1 and Scope 2 greenhouse gas emissions, along with data on enterprise-wide energy consumption. We plan to use this data to evaluate new opportunities for reducing our emissions and energy use.
Removed
Dobler served as Executive Vice President and Chief Human Resources Officer at Associated Materials, Inc., a manufacturer and distributor of exterior residential building products, from 2015 through 2019. Meghan M. Elliott 47 Vice President, General Counsel and Secretary of the Company since June 2020. Prior to this role, Ms. Elliott served as Assistant General Counsel for the Company since 2014.
Removed
Prior to joining Apogee, Ms. Boyce held general management and marketing leadership roles in consumer packaged goods companies including North American General Manager and Vice President of Marketing for Equal Sweetener (Merisant) and marketing roles with United Signature Foods, Quaker Oats and Kraft Foods.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAs we consider and execute future divestitures, we may be exposed to risks associated to our ability to find appropriate buyers; difficulties in executing transactions on favorable terms; separating divested business operations with minimal impact to our remaining operations; incur write-offs and impairment charges; and we may have challenges effectively managing any transition service arrangements. 12 Table of Contents As we consider and execute restructuring plans, we may be exposed to risks associated with successfully completing the initiative in a timely manner, or at all; advancing our business strategy as expected; accurately predicting costs; realizing anticipated cost savings, efficiencies, synergies, financial targets and other benefits; and we may experience the loss of key employees and/or reduced employee morale and productivity.
Biggest changeAs we consider and execute restructuring plans, we may be exposed to risks associated with successfully completing the initiative in a timely manner, or at all; advancing our business strategy as expected; accurately predicting costs; realizing anticipated cost savings, efficiencies, synergies, financial targets and other benefits; and we may experience the loss of key employees and/or reduced employee morale and productivity.
Additionally, we may have heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements. Our workforce operates with a combination of remote work and flexible work schedules opening us up for cybersecurity threats and potential breaches as a result of increased employee usage of networks other than company-managed.
Additionally, we may have heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements. Our workforce operates with a combination of remote work and flexible work schedules opening us up for cybersecurity threats and potential breaches as a result of increased employee usage of networks other than company-managed networks.
Execution of this strategy will require additional investments of time and resources and could fail to achieve the desired results. For example, we may be unable to increase our sales and earnings by differentiating our product and service offerings in a cost-effective manner.
Execution of this strategy require additional investments of time and resources and could fail to achieve the desired results. For example, we may be unable to increase our sales and earnings by differentiating our product and service offerings in a cost-effective manner.
Cost inflation, including significant cost increases for freight, aluminum, glass, paint and other materials used in our operations, has impacted, and could continue to impact, our profitability. Furthermore, in some of our segments, we operate on contracts wherein we bear part or all of the risk of inflation on materials costs and the cost of installation services.
Cost inflation, including significant cost increases for freight, aluminum, glass, paint, wood-based and other materials used in our operations, has impacted, and could continue to impact, our profitability. Furthermore, in some of our segments, we operate on contracts wherein we bear part or all of the risk of inflation on materials costs and the cost of installation services.
In addition, the increase in the number and the scope of data security incidents has increased regulatory and industry focus on security requirements and heightened data security industry practices. New regulation, evolving industry standards, and the interpretation of both, may cause us to incur additional expense in complying with any new data security requirements.
In addition, the number of data security incidents has increased regulatory and industry focus on security requirements and heightened data security industry practices. New regulation, evolving industry standards, and the interpretation of both, may cause us to incur additional expense in complying with any new data security requirements.
As we consider and execute future acquisitions, we may incur risks in integrating operations, technologies, products, and employees; we may fail to realize expected revenue growth and cost synergies from integration initiatives; we would likely increase debt levels to finance the acquisition; we may not fully anticipate changes in cash flows or other market-based assumptions or conditions that cause the value of acquired assets to fall below book value, requiring impairment of intangible assets including goodwill; we may subsequently identify contingent liabilities; and we may be entering markets in which we have no or limited experience.
As we consider and execute acquisitions, we may incur risks in integrating operations, technologies, products, and employees; we may fail to realize expected revenue growth and cost synergies from integration initiatives; we would likely increase debt levels to finance an acquisition; we may not fully anticipate changes in cash flows or other market-based assumptions or conditions that cause the value of acquired assets to fall below book value, requiring impairment of intangible assets including goodwill; we may identify contingent liabilities subsequent to closing an acquisition; and we may be entering markets in which we have no or limited experience.
Our customer concentration in the LSO Segment creates a significant risk for product sale declines The LSO Segment is highly dependent on a relatively small number of customers for its sales, while working to grow in new markets and with new customers.
Our customer concentration in the Performance Surfaces Segment creates a significant risk for product sale declines The Performance Surfaces Segment is highly dependent on a relatively small number of customers for its sales, while working to grow in new markets and with new customers.
Strategic Risks We could be unable to effectively manage and implement our enterprise strategy, which could have a material adverse effect on our business, financial condition, and results of operations Our strategy includes differentiating our product and service offerings, shifting our business mix toward higher operating margin products and services and higher return on invested capital performance, and moving away from our historical, decentralized operating model.
Strategic Risks We could be unable to effectively manage and implement our enterprise strategy, which could have a material adverse effect on our business, financial condition, and results of operations Our strategy includes differentiating our product and service offerings, shifting our business mix toward higher growth and operating margin products and services, driving higher return on invested capital performance, and moving to a more centralized operating model.
If we are unable to retain existing employees, provide a safe and healthy working environment, and/or recruit and train additional employees with the requisite skills and experience, our operating results could be adversely impacted. Continuing inflation may negatively impact our profitability.
If we are unable to retain existing employees, provide a safe and healthy working environment, and/or recruit and train additional employees with the requisite skills and experience, our operating results could be adversely impacted.
Global economic conditions and trade policies may impact their ability to operate their businesses. They may also be impacted by the increasing costs or availability of raw materials, labor and distribution, resulting in demands for less attractive contract terms or an inability for them to meet our requirements or conduct their own businesses.
They may also be impacted by the increasing costs or availability of raw materials, labor and distribution, resulting in demands for less attractive contract terms or an inability for them to meet our requirements or conduct their own businesses.
Further, as we continue to grow our business, we will continue to adjust our senior management team. If we are unable to attract or retain the right individuals for the team, it could hinder our ability to efficiently execute our business, and could disrupt our operations or otherwise have a material adverse effect on our business.
Further, as our business evolves, we may have changes in our senior management team. If we are unable to attract or retain the right individuals for the team, it could hinder our ability to efficiently execute our business, and could disrupt our operations or otherwise have a material adverse effect on our business.
Additionally, our success depends on the skills of construction project managers and other key technical personnel, and our ability to secure sufficient manufacturing and installation labor. In recent years, strong residential and non-residential construction and low U.S. unemployment have caused increased competition for experienced construction project managers and other labor.
Additionally, an important aspect of our success depends on the skills of construction project managers and other key technical personnel, and our ability to secure sufficient manufacturing and installation labor. In recent years, low U.S. unemployment has caused increased competition for experienced construction project managers and other labor.
Operational Risks Loss of key personnel and inability to source sufficient labor could adversely affect our operating results The loss of our CEO or any of our key senior executives could have a material adverse effect on our business, operating results and financial condition, particularly if we are unable to hire and integrate suitable replacements on a timely basis.
Any acquisition, divestiture or restructuring plan, if not favorably executed by management, could have a material adverse effect on our operating results and/or financial condition. 12 Table of Contents Operational Risks Loss of key personnel and inability to source sufficient labor could adversely affect our operating results The loss of our CEO or any of our key senior executives could have a material adverse effect on our business, operating results and financial condition, particularly if we are unable to hire and integrate suitable replacements on a timely basis.
Market and Industry Risks North American and global economic and industry-related business conditions materially adversely affect our sales and results of operations Our Architectural Framing Systems, Architectural Glass, and Architectural Services Segments are influenced by North American economic conditions and the cyclical nature of the North American non-residential construction industry.
Market and Industry Risks North American and global economic and industry-related business conditions materially adversely affect our sales and results of operations Architectural Metals, Architectural Services, Architectural Glass, and a portion of our Performance Surfaces Segment are influenced by North American economic conditions and the cyclical nature of the North American non-residential construction industry.
A decline in consumer confidence, whether as a result of an economic slowdown, uncertainty regarding the future or other factors, could materially and adversely reflect the operating results of the segment. 11 Table of Contents Global instability and uncertainty arising from events outside of our control, such as significant natural disasters, political crises, public health crises, and/or other catastrophic events could materially adversely affect our results of operations Natural disasters, political crises, public health crises, and other catastrophic events or other events outside of our control, may negatively impact our facilities or the facilities of third parties on which we depend, have broader adverse impacts on the non-residential construction market, consumer confidence and spending, and/or impact both the well-being of our employees and our ability to operate our facilities.
Global instability and uncertainty arising from events outside of our control, such as significant natural disasters, political crises, public health crises, and/or other catastrophic events could materially adversely affect our results of operations Natural disasters, political crises, public health crises, and other catastrophic events or other events outside of our control, may negatively impact our facilities or the facilities of third parties on which we depend, have broader adverse impacts on the non-residential construction market, consumer confidence and spending, and/or impact both the well-being of our employees and our ability to operate our facilities.
All of these impacts could adversely affect the price of our common stock and our business overall. 16 Table of Contents Our liquidity or cost of capital may be materially adversely affected by constraints or changes in the capital and credit markets, interest rates and limitations under our financing arrangements We need sufficient sources of liquidity to fund our working capital requirements, service our outstanding indebtedness and finance business opportunities.
Our liquidity or cost of capital may be materially adversely affected by constraints or changes in the capital and credit markets, interest rates and limitations under our financing arrangements We need sufficient sources of liquidity to fund our working capital requirements, service our outstanding indebtedness and finance business opportunities.
Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures.
While we maintain cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. Because techniques used to obtain unauthorized access or sabotage systems change frequently and generally are not identified until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative or mitigation measures.
If we are unable to recover on insurance claims, in whole or in part, or if we exhaust our available insurance coverage at some point in the future, then we might be forced to expend our own funds on legal fees and settlement or judgment costs, which could negatively impact our profitability, results of operations, cash flows and financial condition. 15 Table of Contents Potential future tariffs may result in increased costs and could adversely affect the Company’s operating results We utilize certain aluminum products in our manufacturing processes.
If we are unable to recover on insurance claims, in whole or in part, or if we exhaust our available insurance coverage at some point in the future, then we might be forced to expend our own funds on legal fees and settlement or judgment costs, which could negatively impact our profitability, results of operations, cash flows and financial condition.
To the extent changes in these factors negatively impact the overall non-residential construction industry, our business, operating results and financial condition could be significantly adversely impacted. Our LSO Segment primarily depends on the strength of the U.S. retail custom picture framing industry. This industry is heavily influenced by consumer confidence and the conditions of the U.S. economy.
To the extent changes in these factors negatively impact the overall non-residential construction industry, our business, operating results and financial condition could be significantly adversely impacted. A significant portion of our Performance Surfaces Segment primarily depends on the strength of the U.S. retail custom picture framing industry.
The performance and financial condition of one or more suppliers may cause us to alter our business terms or to cease doing business with a particular supplier or suppliers, or change our sourcing practices generally, which could in turn adversely affect our business and financial condition. 13 Table of Contents If we encounter problems with distribution, our ability to deliver our products to market could be adversely affected.
The performance and financial condition of one or more suppliers may cause us to alter our business terms or to cease doing business with a particular supplier or suppliers, or change our sourcing practices generally, which could in turn adversely affect our business and financial condition.
Our operations are vulnerable to interruptions in the event of work stoppages, whether due to public health concerns, labor disputes or shortages, and natural disasters that may affect our distribution and transportation to job sites.
If we encounter problems with distribution, our ability to deliver our products to market could be adversely affected. Our operations are vulnerable to interruptions in the event of work stoppages, whether due to public health concerns, labor disputes or shortages, and natural disasters that may affect our distribution and transportation to job sites.
Such failure could additionally expose us to litigation and/or reputational harm, impair our ability to obtain financing, or increase the cost of any financing we obtain.
Such failure could additionally expose us to litigation and/or reputational harm, impair our ability to obtain financing, or increase the cost of any financing we obtain. All of these impacts could adversely affect the price of our common stock and our business overall.
We frequently evaluate our brand and product portfolios and may consider acquisitions that complement our business or divestitures of businesses that we no longer believe to be an appropriate strategic fit. We have initiated, and may initiate in the future, restructuring plans to achieve strategic objectives and improve financial results.
We frequently evaluate our brand and product portfolios and may consider acquisitions that complement our business or divestitures of businesses that we no longer believe to be an appropriate strategic fit.
Additionally, our information technology and Internet based systems, and those of our third-party service providers, are subject to disruption and data loss due to natural disasters, power losses, unauthorized access, telecommunication failures and cyber-attacks of increasing frequency and sophistication.
Such difficulties could lead to disruption in business operations and/or significant additional expenses that could adversely affect our results. 13 Table of Contents Additionally, our information technology and Internet based systems, and those of our third-party service providers, are subject to disruption and data loss due to natural disasters, power losses, unauthorized access, telecommunication failures and cyber-attacks of increasing frequency and sophistication.
Accordingly, loss of a significant customer, a significant reduction in pricing, or a shift to a less favorable mix of value-added picture framing glass or acrylic products for one or more of those customers could materially reduce the segment's operating results.
Accordingly, loss of a significant customer, or a significant reduction in pricing for one or more of those customers could materially reduce the segment's operating results.
Third-parties may also attempt to fraudulently induce employees into disclosing sensitive information such as user names, passwords or other information in order to gain access to customer or supplier data or our internal data, including intellectual property, financial, and other confidential business information. 14 Table of Contents We believe our mitigation measures reduce, but cannot eliminate, the risk of a cyber incident; however, there can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely.
We believe our mitigation measures reduce, but cannot eliminate, the risk of a cyber incident; however, there can be no assurance that our existing and planned precautions of backup systems, regular data backups, security protocols and other procedures will be adequate to prevent significant damage, system failure or data loss and the same is true for our partners, vendors and other third parties on which we rely.
We may experience further impairment of our goodwill, indefinite- and definite-lived intangible assets and long-lived assets, in the future, which could adversely impact our financial condition and results of operations Our assets include a significant amount of goodwill, indefinite- and definite-lived intangible assets and long-lived assets.
Our ability to mitigate these costs, or recover the cost increases through price increases, may lag the cost increases, which could negatively impact our margins. 15 Table of Contents We may experience further impairment of our goodwill, indefinite- and definite-lived intangible assets and long-lived assets, in the future, which could adversely impact our financial condition and results of operations Our assets include a significant amount of goodwill, indefinite- and definite-lived intangible assets and long-lived assets.
We could encounter difficulties in maintaining our existing systems, developing and implementing new systems, or integrating information technology systems across our business units. Such difficulties could lead to disruption in business operations and/or significant additional expenses that could adversely affect our results.
We could encounter difficulties in maintaining our existing systems, developing and implementing new systems, or integrating information technology systems across our business units.
We are subject to a legal and regulatory framework imposed under federal and state laws and regulatory agencies, including laws and regulations that apply specifically to U.S. public companies and laws and regulations applicable to our manufacturing and construction site operations.
Violations of legal and regulatory compliance requirements, including environmental laws, and changes in existing legal and regulatory requirements, may have a negative impact on our business and results of operations We are subject to a legal and regulatory framework imposed under federal and state laws and regulatory agencies, including 14 Table of Contents laws and regulations that apply specifically to U.S. public companies and laws and regulations applicable to our manufacturing and construction site operations.
As a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of impairment charges related to property, plant and equipment and operating lease right-of-use assets. The discounted cash flow projections and revenue projections used in our annual impairment valuation analysis are dependent upon achieving forecasted levels of revenue and profitability.
Additionally, as a result of a publicly announced restructuring plan in the fourth quarter of fiscal 2024, we incurred $6.2 million of pre-tax impairment charges related to property, plant and equipment and operating lease right-of-use assets.
If we are unable to manage our supply and distribution chains effectively our results of operations will be negatively affected Our Architectural Framing Systems and Architectural Services Segments use aluminum as a significant input to their products and our operating results in those two segments could be negatively impacted by supply chain disruptions and adverse price movements in the market for raw aluminum.
If we are unable to manage our supply and distribution chains effectively our results of operations will be negatively affected Our Architectural Metal and Architectural Services Segments use aluminum as a significant input to their products.
If we encounter problems with our distribution systems, our ability to meet customer and consumer expectations, manage inventory, manage transportation-related costs, complete sales and achieve operating efficiencies could be adversely affected. Project management and installation issues could adversely affect our operating results Some of our segments are awarded fixed-price contracts that include material supply and installation services.
If we encounter problems with our distribution systems, our ability to meet customer and consumer expectations, manage inventory, manage transportation-related costs, complete sales and achieve operating efficiencies could be adversely affected.
As a result, our future actual results could vary materially from our projections which could have an adverse impact on the market price of our common stock.
As a result, our future actual results could vary materially from our projections which could have an adverse impact on the market price of our common stock. Changes in macroeconomic factors may negatively impact our profitability Rising interest rates, inflation, and higher input costs, could reduce the demand for our products and services and impact our profitability.
In recent years, we have seen increased volatility in the price of aluminum that we purchase from both domestic and international sources. Due to our Architectural Framing Systems and Architectural Services Segments presence in Canada, we have significant cross-border activity, as our Canadian businesses purchase inputs from U.S.-based suppliers and sell to U.S.-based customers.
Due to our Architectural Metals and Architectural Services Segments presence in Canada, we have significant cross-border activity, as our Canadian businesses purchase inputs from U.S.-based suppliers and sell to U.S.-based customers. A significant change in U.S. trade policy with Canada could, therefore, have an adverse impact on our operating results.
Failure to acquire a sufficient amount of raw glass on terms as favorable as current terms, including as a result of a significant unplanned downtime or shift in strategy at one or more of our key suppliers, could negatively impact our operating results. Our suppliers are subject to the fluctuations in general economic cycles.
Our Architectural Glass and Performance Surfaces Segments use raw glass as a significant input to their products. Increases in demand for raw glass may lead to lower supply or higher costs to acquire. Failure to acquire a sufficient supply of raw glass on terms as favorable as current terms could negatively impact our operating results.
Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2024, there was no impairment of goodwill or indefinite and definite-lived intangibles identified.
Based on our annual impairment valuation analysis performed in the fourth quarter of fiscal 2025, we incurred $7.6 million of pre-tax impairment charges related to indefinite-lived intangibles in the Architectural Metals Segment as a result of strategic branding changes.
Tariffs imposed in the U.S. or other countries on these aluminum products imported into the U.S. could result in increased costs and a decreased available supply. We may be unable to pass price increases on to our customers and may be unable to secure adequate alternative sources.
We may be unable to pass through additional tariff costs to our customers through price increases, and may be unable to secure adequate alternative sources of supply. Our inability to offset higher tariff costs could have a material adverse effect on our operating results, profitability, customer relationships and future cash flow.
Removed
Our LSO Segment competes with several specialty glass manufacturers and acrylic suppliers. If these competitors are able to successfully improve their product attributes, service capabilities and production capacity and/or improve their sales and marketing focus within the markets we serve, this segment's operating results could be negatively impacted.
Added
This industry is heavily influenced by consumer confidence and the conditions of the U.S. economy. A 11 Table of Contents decline in consumer confidence, whether as a result of an economic slowdown, uncertainty regarding the future or other factors, could materially and adversely reflect the operating results of the segment.
Removed
Any acquisition, divestiture or restructuring plan, if not favorably executed by management, could have a material adverse effect on our operating results and/or financial condition.
Added
As we consider and execute future divestitures, we may be exposed to risks associated with our ability to find appropriate buyers; difficulties in executing transactions on favorable terms; separating divested business operations with minimal impact to our remaining operations; incur write-offs and impairment charges; and we may have challenges effectively managing any transition service arrangements.
Removed
Rising inflation, interest rates, and construction costs, or any one of them, could reduce the demand for our products and services and impact our profitability.
Added
Our operating results in those two segments could be negatively impacted by supply chain disruptions and adverse price movements in the market for raw aluminum. In recent years, we have seen increased volatility in the price of aluminum that we purchase from both domestic and international sources.
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Our ability to mitigate these costs, or recover the cost increases through price increases, may lag the cost increases, which could negatively impact our margins.
Added
Our suppliers are subject to the fluctuations in general economic cycles. Global economic conditions and trade policies may impact their ability to operate their businesses.
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A significant change in U.S. trade policy with Canada could, therefore, have an adverse impact on our operating results. Our Architectural Glass and LSO Segments use raw glass as a significant input to their products. We periodically experience a tighter supply of raw glass when there is growth in automotive manufacturing and residential and non-residential construction.
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Project management and installation issues could adversely affect our operating results Some of our segments are occasionally awarded fixed-price contracts that do not include escalation clauses on material and labor costs. These bids are required before all aspects of a construction project are known.
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Often, bids are required before all aspects of a construction project are known.
Added
Third-parties may also attempt to fraudulently induce employees into disclosing sensitive information such as user names, passwords or other information in order to gain access to customer or supplier data or our internal data, including intellectual property, financial, and other confidential business information.
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Legal, Regulatory and Tax Risks Violations of legal and regulatory compliance requirements, including environmental laws, and changes in existing legal and regulatory requirements, may have a negative impact on our business and results of operations.
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Legislative, Regulatory and Tax Risks Changes in trade policies may result in increased costs and could adversely affect our operating results The impact of geopolitical tensions, including the potential implementation of more restrictive trade policies, higher tariffs or the renegotiation of existing trade agreements in the U.S. or countries where we sell our products and services or procure products, could have a material adverse effect on our business.
Removed
The tariffs, and our inability to offset them with higher pricing, could have a material adverse effect on our operating results.
Added
In particular, political or trade disputes, or future phases of trade negotiations with Canada that could lead to the imposition of tariffs or other trade actions could require us to take action to mitigate those effects.
Added
The discounted cash flow projections and revenue projections used in our annual impairment valuation analysis are dependent upon achieving forecasted levels of revenue and profitability.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe have not encountered cybersecurity incidents or identified risks from cybersecurity threats that have had a material adverse effect on our operations or financial standing. Notwithstanding the efforts we take to manage our cybersecurity risk, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Biggest changeNotwithstanding the efforts we take to manage our cybersecurity risk, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. While the Company maintains cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. See Item 1A.
In addition to the incident response plan and vendor management process, our cyber risk management program includes: • an information technology and cybersecurity training program, and ongoing employee testing to evaluate the effectiveness of quarterly internal training and awareness communications; • external advisors to assist with cybersecurity risk assessment, including third-party monitoring of the Company's systems, external network penetration testing, and yearly cyber event preparedness exercises; • development of strategies to mitigate cyber risks; • crisis management, business continuity, and disaster recovery plans.
In addition to the incident response plan and vendor management process, our cybersecurity risk management program includes: • an information technology and cybersecurity training program, and ongoing employee testing to evaluate the effectiveness of quarterly internal training and awareness communications; • external advisors to assist with cybersecurity risk assessment, including third-party monitoring of the Company's systems, external network penetration testing, and yearly cyber event preparedness exercises; • development of strategies to mitigate cyber risks; and, • crisis management, business continuity, and disaster recovery plans.
Board's Role in Oversight Our full Board oversees our cyber risk management program, and includes cybersecurity as part of the assessment of the Company's overall Enterprise Risk Management program. At least twice per year, and more frequently, if necessary, our CIO updates our Board on the Company's cyber risk profile and the steps taken by management to mitigate those risks.
Board's Role in Oversight Our Board oversees our cybersecurity risk management program, and includes cybersecurity as part of the assessment of the Company's overall Enterprise Risk Management program. At least twice per year, and more frequently, if necessary, our CIO updates our Board on the Company's cyber risk profile and the steps taken by management to mitigate those risks.
Our cyber risk management program includes an incident response plan for evaluation, response and reporting of cybersecurity incidents, including notification of the Board and third parties, as appropriate.
Our cybersecurity risk management program includes an incident response plan for evaluation, response and reporting of cybersecurity incidents, including notification of the Board and third parties, as appropriate.
Our SDIS has over 15 years of experience managing information technology and cybersecurity matters in multiple industries. The SDIS maintains Certified Information Systems Security Professional (CISSP) and Certified Information Security Manager (CISM) certifications and holds a degree in information technology management.
Our SDIS has over 15 years of experience managing information technology and cybersecurity matters in multiple industries. The SDIS maintains Certified Information Systems Security Professional and Certified Information Security Manager certifications and holds a degree in information technology management.
Under the plan, a Cybersecurity Intake Team (CIT), which is comprised of the Chief Information Officer (CIO), Senior Director of Information Security (SDIS) and other executive management, is responsible for a materiality assessment of cybersecurity incidents, taking into consideration both quantitative and qualitative factors, and subject to ongoing monitoring and escalation based on materiality.
Under the plan, a Cybersecurity 16 Table of Contents Intake Team, which is comprised of the Chief Information Officer (CIO), Senior Director of Information Security (SDIS) and other executive management, is responsible for a materiality assessment of cybersecurity incidents, taking into consideration both quantitative and qualitative factors, and subject to ongoing monitoring and escalation based on materiality.
Third party vendors and suppliers also play a role in our cyber risk management program.
Third party vendors and suppliers also play a role in our cybersecurity risk management program.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We recognize the critical importance of maintaining the confidentiality, integrity and availability of our information systems and data, and of effectively, assessing, identifying and managing cybersecurity and related risks.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We recognize the critical importance of maintaining the confidentiality, integrity and availability of our information systems and data, and of effectively assessing, identifying and managing cybersecurity and related risks. Our cybersecurity risk management program is integrated into our Enterprise Risk Management framework and utilizes a holistic approach to addressing cybersecurity risk.
The underlying controls for the cyber risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology (NIST) and the Center for Internet Security Benchmark (CIS).
It is supported by our employees, cybersecurity team, senior management, the Enterprise Risk Management committee, and our Board of Directors (Board). The underlying controls for the cybersecurity risk management program are based on recognized best practices and standards for cybersecurity and information technology, including the National Institute of Standards and Technology and the Center for Internet Security Benchmark.
While the Company maintains cybersecurity insurance, the costs related to cybersecurity threats or disruptions may not be fully insured. See Item 1A. “Risk Factors” for a discussion of cybersecurity risks. 17 Table of Contents Governance Management's Role in Managing Risk Within our organization, our CIO, who reports to our CEO, oversees our cybersecurity function.
“Risk Factors” for a discussion of cybersecurity risks. 17 Table of Contents Governance Management's Role in Managing Risk Within our organization, our CIO, who reports to our CEO, oversees cybersecurity.
Removed
Our cybersecurity risk management program is integrated into our Enterprise Risk Management framework and utilizes a holistic approach to addressing cybersecurity risk, and it is supported by our employees, cybersecurity team, senior management, the Enterprise Risk Management committee (a committee comprised of primary corporate functions) and our Board of Directors.
Added
We have not encountered cybersecurity incidents or identified risks from cybersecurity threats that have had a material adverse effect or are reasonably likely to have a material effect on our business strategy, operations or financial condition.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeProperty Location Owned/ Leased Function Architectural Framing Systems Segment Wausau, WI Owned Manufacturing/Administrative Stratford, WI Owned Manufacturing Reed City, MI Owned Manufacturing Walker, MI Leased Manufacturing/Administrative Mesquite, TX Leased Manufacturing Monett, MO Owned Manufacturing/Warehouse/Administrative Toronto, ON Canada Leased Manufacturing/Warehouse/Administrative Architectural Glass Segment Owatonna, MN Owned Manufacturing/Administrative Nazaré Paulista, Brazil Owned (1) Manufacturing/Administrative Architectural Services Segment Minneapolis, MN Leased Administrative West Chester, OH Leased Manufacturing Mesquite, TX Leased Manufacturing Brampton, ON Canada Leased Manufacturing/Warehouse/Administrative LSO Segment McCook, IL Leased Manufacturing/Warehouse/Administrative Faribault, MN Owned Manufacturing/Administrative Other Minneapolis, MN Leased Administrative (1) This is an owned facility; however, the land is leased from the city. 18 Table of Contents
Biggest changeProperty Location Owned/ Leased Function Architectural Metals Segment Wausau, WI Owned Manufacturing/Administrative Reed City, MI Owned Manufacturing Mesquite, TX Leased Manufacturing Monett, MO Owned Manufacturing/Warehouse/Administrative Toronto, ON Canada Leased Manufacturing/Warehouse/Administrative Architectural Services Segment Minneapolis, MN Leased Administrative West Chester, OH Leased Manufacturing Mesquite, TX Leased Manufacturing Brampton, ON Canada Leased Manufacturing/Warehouse/Administrative Architectural Glass Segment Owatonna, MN Owned Manufacturing/Administrative Performance Surfaces Segment McCook, IL Leased Manufacturing/Warehouse/Administrative Faribault, MN Owned Manufacturing/Administrative Louisville, KY Leased Manufacturing/Administrative Other Minneapolis, MN Leased Administrative 18 Table of Contents
ITEM 2. PROPERTIES The following table lists, by segment, the Company's principal physical properties as of March 2, 2024. We believe these properties are generally in good operating condition, suitable for their respective uses and adequate for our current needs as our business is presently conducted.
ITEM 2. PROPERTIES The following table lists, by segment, the Company's principal physical properties as of March 1, 2025. We believe these properties are generally in good operating condition, suitable for their respective uses and adequate for our current needs as our business is presently conducted.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeAlthough it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no matters will result in losses that would have a material adverse effect on the results of operations, cash flows or financial condition of the Company.
Biggest changeAlthough it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no matters will result in losses that would have a material adverse effect on the results of operations, cash flows or financial condition of the Company. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 19 Table of Contents PART II
We have in the past and are currently subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products. In December 2022, the claimant in an arbitration of one such claim was awarded $20 million.
We have in the past and are currently subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products. In December 2022, the claimant in an arbitration of one such claim was awarded $20 million by an arbitration panel.
Removed
The Company has appealed the award and believes, after taking into account all currently available information, including the advice of counsel and the likelihood of available insurance coverage, that this award will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.
Added
The claimant then sought to confirm this award in Los Angeles Superior Court in March 2023. In response, the Company moved to vacate the award. Later in March 2023, the Superior Court confirmed the award, which the Company appealed in June 2023.
Added
The appeal was argued before the California Court of Appeals, Second Appellate District, Division Seven, on March 7, 2025. The California Court of Appeals confirmed the judgment of the Superior Court on March 25, 2025. The Company paid the final arbitration award, including accrued post-judgment interest, in the amount of $24.7 million, on April 7, 2025.
Added
As a result of the judgment by the Superior Court, the Company recorded expense of $9.4 million, which represents the impact of the award amount net of existing reserves and estimated insurance proceeds. This impact was recorded in cost of goods sold in the fourth quarter of fiscal 2025.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFiscal Year First Second Third Fourth Total 2024 $ 0.2400 $ 0.2400 $ 0.2400 $ 0.2500 $ 0.9700 2023 0.2200 0.2200 0.2200 0.2400 0.9000 2022 0.2000 0.2000 0.2000 0.2200 0.8200 Purchases of Equity Securities by the Company The following table provides information with respect to purchases made by the Company of its own stock during the fourth quarter of fiscal 2024: Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b) November 26, 2023 through December 30, 2023 — $ — — 2,973,483 December 31, 2023 through January 27, 2024 229 53.79 — 2,973,483 January 28, 2024 through March 2, 2024 120 54.02 — 2,973,483 Total 349 $ 53.86 — 2,973,483 (a) The shares in this column represent the total number of shares that were surrendered to us by plan participants to satisfy withholding tax obligations related to share-based compensation.
Biggest changeFiscal Year First Second Third Fourth Total 2025 $ 0.2500 $ 0.2500 $ 0.2500 $ 0.2600 $ 1.0100 2024 0.2400 0.2400 0.2400 0.2500 0.9700 Purchases of Equity Securities by the Company The following table provides information with respect to purchases made by the Company of its own stock during the fourth quarter of fiscal 2025: Period Total Number of Shares Purchased (a) Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b) December 1, 2024 through December 28, 2024 260 $ 71.73 — 2,731,910 December 29, 2024 through January 25, 2025 545,181 55.04 545,117 2,186,793 January 26, 2025 through March 1, 2025 2,896 52.98 — 2,186,793 Total 548,337 $ 58.70 545,117 2,186,793 (a) The shares in this column represent the total number of shares that were surrendered by plan participants to satisfy withholding tax obligations related to share-based compensation and the total number of shares that were repurchased pursuant to our publicly announced repurchase program.
Dividends Quarterly, the Board of Directors evaluates declaring dividends based on operating results, available funds and the Company's financial condition. Cash dividends have been paid each quarter since 1974. The chart below shows quarterly and annual cumulative cash dividends per share for the past three fiscal years.
Dividends Quarterly, the Board of Directors evaluates declaring dividends based on operating results, available funds and the Company's financial condition. Cash dividends have been paid each quarter since 1974. The chart below shows quarterly and annual cumulative cash dividends per share for the past two fiscal years.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Stock Market under the ticker symbol "APOG". As of April 5, 2024, there were 1,061 shareholders of record and 12,990 shareholders for whom securities firms acted as nominees.
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Market Information Our common stock is traded on The Nasdaq Stock Market under the ticker symbol "APOG". As of April 4, 2025, there were 1,032 shareholders of record and 22,627 shareholders for whom securities firms acted as nominees.
We did not purchase any shares pursuant to our publicly announce repurchase program during the fiscal quarter. (b) In fiscal 2004, announced on April 10, 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock.
(b) In fiscal 2004, announced on April 10, 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock.
The graph assumes an investment at the close of trading on March 2, 2019, and also assumes the reinvestment of all dividends. 2019 2020 2021 2022 2023 2024 Apogee $ 100.00 $ 85.42 $ 109.04 $ 135.34 $ 139.22 $ 176.98 S&P 600 Industrials 100.00 94.77 136.18 138.58 150.46 184.84 Russell 2000 Index 100.00 94.22 142.27 133.31 128.11 141.46 S&P SmallCap 600 Growth Index 100.00 93.43 137.20 135.00 124.44 138.14 ITEM 6. [RESERVED] 21 Table of Contents
The graph assumes an investment at the close of trading on February 29, 2020, and also assumes the reinvestment of all dividends. 2020 2021 2022 2023 2024 2025 Apogee $ 100.00 $ 127.65 $ 158.44 $ 162.99 $ 207.19 $ 176.84 S&P 600 Industrials 100.00 143.70 146.23 158.76 195.04 210.66 Russell 2000 Index 100.00 151.00 141.49 135.97 150.14 160.18 S&P SmallCap 600 Growth Index 100.00 146.85 144.50 133.20 147.87 153.24 ITEM 6. [RESERVED] 21 Table of Contents

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeReconciliation of Non-GAAP Financial Measures Adjusted Operating Income and Adjusted Operating Margin (Unaudited) Year Ended March 2, 2024 (53 weeks) (In thousands, except percentages) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and other Consolidated Operating income $ 64,833 $ 68,046 $ 11,840 $ 24,233 $ (35,119) $ 133,833 Restructuring costs (1) 5,970 — 2,526 — 3,907 12,403 Adjusted operating income $ 70,803 $ 68,046 $ 14,366 $ 24,233 $ (31,212) $ 146,236 Operating margin 10.8 % 18.0 % 3.1 % 24.4 % N/M 9.4 % Restructuring costs (1) 1.0 % — % 0.7 % — % N/M 0.9 % Adjusted operating margin 11.8 % 18.0 % 3.8 % 24.4 % N/M 10.3 % Year Ended February 25, 2023 (52 weeks) Architectural Framing Systems Architectural Glass Architectural Services LSO Corporate and other Consolidated Operating income (2) $ 81,875 $ 28,610 $ 18,140 $ 25,348 $ (28,185) $ 125,788 Operating margin (2) 12.6 % 9.0 % 4.4 % 24.3 % N/M 8.7 % (1) Restructuring costs related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs.
Biggest changeOther companies may calculate these measures differently, thereby limiting the usefulness of the measures for comparison with other companies. 27 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted Operating Income and Adjusted Operating Margin (Unaudited) Year Ended March 1, 2025 (52 weeks) (In thousands, except percentages) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and other Consolidated Operating income $ 42,466 $ 30,046 $ 59,274 $ 19,611 $ (33,287) $ 118,110 Acquisition-related costs (1) Transaction — — — — 4,424 4,424 Integration — — — 706 1,349 2,055 Backlog amortization — — — 2,340 — 2,340 Inventory step-up — — — 1,483 — 1,483 Total Acquisition-related costs — — — 4,529 5,773 10,302 Restructuring costs (2) 4,024 (489) — — 788 4,323 Impairment expense (3) 7,634 — — — — 7,634 Arbitration award expense (4) — — — — 9,393 9,393 Adjusted operating income $ 54,124 $ 29,557 $ 59,274 $ 24,140 $ (17,333) $ 149,762 Operating margin 8.1 % 7.2 % 18.4 % 16.1 % N/M 8.7 % Acquisition-related costs (1) Transaction — % — % — % — % N/M 0.3 % Integration — % — % — % 0.6 % N/M 0.2 % Backlog amortization — % — % — % 1.9 % N/M 0.2 % Inventory step-up — % — % — % 1.2 % N/M 0.1 % Total Acquisition-related costs — — — 3.7 % N/M 0.8 % Restructuring costs (2) 0.8 % (0.1) % — % — % N/M 0.3 % Impairment expense (3) 1.5 % — % — % — % N/M 0.6 % Arbitration award expense (4) — % — % — % — % N/M 0.7 % Adjusted operating margin 10.3 % 7.0 % 18.4 % 19.8 % N/M 11.0 % Year Ended March 2, 2024 (53 weeks) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and other Consolidated Operating income $ 64,833 $ 11,840 $ 68,046 $ 24,233 $ (35,119) $ 133,833 Restructuring costs (2) 5,970 2,526 — — 3,907 12,403 Adjusted operating income $ 70,803 $ 14,366 $ 68,046 $ 24,233 $ (31,212) $ 146,236 Operating margin 10.8 % 3.1 % 18.0 % 24.4 % N/M 9.4 % Restructuring costs (2) 1.0 % 0.7 % — % — % N/M 0.9 % Adjusted operating margin 11.8 % 3.8 % 18.0 % 24.4 % N/M 10.3 % (1) Acquisition-related costs include: • Transaction costs related to the UW Solutions acquisition. • Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. • Backlog amortization is related the value attributed to contracting the backlog purchased in the UW Solutions acquisition.
GAAP. Preparation of these consolidated financial statements requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the consolidated financial statements, reported amounts of revenues and expenses during the reporting period and related disclosures of contingent assets and liabilities.
Preparation of these consolidated financial statements requires us to make estimates and assumptions affecting the reported amounts of assets and liabilities at the date of the consolidated financial statements, reported amounts of revenues and expenses during the reporting period and related disclosures of contingent assets and liabilities.
If an impairment expense is recognized, the adjusted carrying amount becomes the asset's new accounting basis. 31 Table of Contents Fair value is measured using the relief-from-royalty method. This method assumes the trade name or trademark has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from the asset.
If an impairment expense is recognized, the adjusted carrying amount becomes the asset's new accounting basis. 35 Table of Contents Fair value is measured using the relief-from-royalty method. This method assumes the trade name or trademark has value to the extent that the owner is relieved of the obligation to pay royalties for the benefits received from the asset.
For our fiscal 2024 annual impairment test, we bypassed a qualitative assessment and performed a quantitative impairment test to compare the fair value of each indefinite-lived intangible asset with its carrying value. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment expense is recognized in an amount equal to that excess.
For our fiscal 2025 annual impairment test, we bypassed a qualitative assessment and performed a quantitative impairment test to compare the fair value of each indefinite-lived intangible asset with its carrying value. If the carrying value of an indefinite-lived intangible asset exceeds its fair value, an impairment expense is recognized in an amount equal to that excess.
During the fourth quarter, the Company incurred $12.4 million of pre-tax charges related to Project Fortify, of which $5.5 million is included in cost of sales and $6.9 million is included in selling, general, and administrative (SG&A) expenses.
During the fourth quarter of fiscal 2024, the Company incurred $12.4 million of pre-tax charges related to Project Fortify, of which $5.5 million is included in cost of sales and $6.9 million is included in selling, general, and administrative (SG&A) expenses.
We also are subject to project management and installation-related contingencies as a result of our fixed-price material supply and installation service contracts, primarily in our Architectural Services Segment and certain of our Architectural Framing Systems businesses. The time period from when a claim is asserted to when it is resolved, either by negotiation, settlement or litigation, can be several years.
We also are subject to project management and installation-related contingencies as a result of our fixed-price material supply and installation service contracts, primarily in our Architectural Services Segment and certain of our Architectural Metals businesses. The time period from when a claim is asserted to when it is resolved, either by negotiation, settlement or litigation, can be several years.
Based on this assessment, management must evaluate the need for, and amount of, a valuation allowance against the deferred tax assets. As facts and circumstances change, adjustment to the valuation allowance may be required. 32 Table of Contents
Based on this assessment, management must evaluate the need for, and amount of, a valuation allowance against the deferred tax assets. As facts and circumstances change, adjustment to the valuation allowance may be required. 36 Table of Contents
Revenue recognition We generate revenue from the design, engineering and fabrication of architectural glass, curtainwall, window, storefront and entrance systems, and from installing those products on non-residential buildings. We also manufacture value-added glass and acrylic products.
Revenue recognition We generate revenue from the design, engineering and fabrication of architectural glass, curtainwall, window, storefront and entrance systems, and from installing those products on non-residential buildings. We also manufacture value-added glass, acrylic, and industrial flooring products.
We expect to make contributions of approximately $0.4 million to our defined-benefit pension plans in fiscal 2025, which will equal or exceed our minimum funding requirements. As of March 2, 2024, we had reserves of $5.1 million and $0.4 million for long-term unrecognized tax benefits and environmental liabilities, respectively.
We expect to make contributions of approximately $0.4 million to our defined-benefit pension plans in fiscal 2026, which will equal or exceed our minimum funding requirements. As of March 1, 2025, we had reserves of $6.0 million and $0.1 million for long-term unrecognized tax benefits and environmental liabilities, respectively.
For example, keeping all other assumptions constant, a 100 basis point increase in the weighted average cost of capital would cause the estimated fair values of our reporting units to decrease in the range of $17 million to $46 million.
For example, keeping all other assumptions constant, a 100 basis point increase in the weighted average cost of capital would cause the estimated fair values of our reporting units to decrease in the range of $13 million to $60 million.
In addition, keeping all other assumptions constant, a 100 basis point reduction in the long-term growth rate would cause the estimated fair values of our reporting units to decrease in the range of $7 million to $20 million.
In addition, keeping all other assumptions constant, a 100 basis point reduction in the long-term growth rate would cause the estimated fair values of our reporting units to decrease in the range of $14 million to $31 million.
No more than two acquisition "holidays" can occur during the term of the facilities, and at least two fiscal quarters must separate qualifying acquisitions.
No more than two acquisition holidays can occur during the term of the Credit Agreement, and at least two fiscal quarters must separate qualifying acquisitions.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended February 25, 2023, for discussion of the results of operations for the year ended February 25, 2023, compared to the year ended February 26, 2022, which is incorporated by reference herein.
Refer to Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations, in our Form 10-K for the fiscal year ended March 2, 2024, for discussion of the results of operations for the year ended March 2, 2024, compared to the year ended February 25, 2023, which is incorporated by reference herein.
At March 2, 2024, $463.3 million of our backlog was bonded by performance bonds with a face value of $1.3 billion. These bonds have expiration dates that align with completion of the purchase order or contract. We have not been required to make any payments under these bonds with respect to our existing businesses.
At March 1, 2025, $394.1 million of our backlog was bonded by performance bonds with a face value of $1.2 billion. These bonds have expiration dates that align with completion of the purchase order or contract. We have never been required to make payments under surety or performance bonds with respect to our existing businesses.
As of March 2, 2024, we had $41.2 million of open purchase obligations, of which payments totaling $33.7 million are expected to become due within the next 12 months. These purchase obligations primarily relate to raw material commitments.
As of March 1, 2025, we had $10.2 million of open purchase obligations, of which payments totaling $7.3 million are expected to become due within the next 12 months. These purchase obligations primarily relate to raw material commitments.
Recently Issued Accounting Pronouncements See Note 1 of the Notes to Consolidated Financial Statements within Item 8 of this Form 10-K for information pertaining to recently issued accounting pronouncements, incorporated herein by reference. 29 Table of Contents Critical Accounting Policies and Estimates Our analysis of operations and financial condition is based on our consolidated financial statements prepared in accordance with U.S.
Recently Issued Accounting Pronouncements See Note 1 for information pertaining to recently issued accounting pronouncements, incorporated herein by reference. 33 Table of Contents Critical Accounting Policies and Estimates Our analysis of operations and financial condition is based on our consolidated financial statements prepared in accordance with U.S. GAAP.
Following this change, we have four reporting units, which align with our reporting segments. For our fiscal 2024 annual impairment test, we elected to bypass the qualitative assessment process and proceed directly to comparing the fair value of each of our reporting units to carrying value, including goodwill. If fair value exceeds the carrying value, goodwill impairment is not indicated.
For our fiscal 2025 annual impairment test, we elected to bypass the qualitative assessment process and proceed directly to comparing the fair value of each of our reporting units to carrying value, including goodwill. If fair value exceeds the carrying value, goodwill impairment is not indicated.
Due to the significant judgments utilized in our revenue recognition on long-term contracts, if subsequent actual results and/or updated assumptions, estimates, or projections were to change from those utilized at March 2, 2024, it could result in a material impact to our results of operations in the future.
Due to the significant judgments utilized in our revenue recognition on long-term contracts, if subsequent actual results and/or updated assumptions, estimates, or projections were to change from those utilized at March 1, 2025, our results of operations in the future could be materially impacted.
In the fair value analysis, we assumed discount rates ranging from 13.5% to 14.0%, a royalty rate of 1.5%, and a long-term growth rate of 3.0%. Based on our annual analysis, the fair value of each of our trade names and trademarks exceeded the carrying amount.
In the fair value analysis, we assumed a discount rate of 12.5%, a royalty rate of 1.5%, and long-term growth rates ranging from 0.0% to 1.5%. Based on our annual analysis, the carrying amount for certain of our trade names exceeded the fair value, indicating impairment of $7.6 million.
In the event we make an acquisition for which the purchase price is greater than $75 million, we can elect to increase the maximum debt-to-EBITDA ratio to 3.75 for a period of four consecutive fiscal quarters, commencing with the fiscal quarter in which a qualifying acquisition occurs.
The Credit Agreement also contains an acquisition "holiday." In the event we make an acquisition for which the purchase price is greater than $75 million, we can elect to increase the maximum Consolidated Leverage Ratio (as defined in the Credit Agreement) to 4.00 for a period of four consecutive fiscal quarters, commencing with the fiscal quarter in which a qualifying acquisition occurs.
Backlog Backlog is an operating measure used by management to assess future potential sales revenue. Backlog is defined as 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.
Backlog is defined as 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.
If future revenue were to fall below forecasted levels or if market conditions were to decline in a material or sustained manner, impairment could be indicated on these indefinite-lived intangible assets.
We continue to conclude that the useful lives of our remaining indefinite-lived intangible assets are appropriate. If future revenue were to fall below forecasted levels or if market conditions were to decline in a material or sustained manner, impairment could be indicated on these indefinite-lived intangible assets.
Due to the nature of the work required under these long-term contracts, the estimation of total revenue and costs incurred and remaining to complete on a project is subject to many variables and requires significant judgment.
We believe this method of recognizing revenue is consistent with our progress in satisfying our contract obligations. Due to the nature of the work required under these long-term contracts, the estimation of total revenue and costs incurred and remaining to complete on a project is subject to many variables and requires significant judgment.
Management uses these non-GAAP measures as noted below: • We use adjusted operating income, adjusted operating margin, adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period. • Adjusted EBITDA represents adjusted net earnings before interest, taxes, depreciation, and amortization.
Management uses these non-GAAP measures as noted below: • We use adjusted operating income, adjusted operating margin, adjusted net earnings, and adjusted diluted EPS to provide meaningful supplemental information about our operating performance by excluding amounts that are not considered part of core operating results to enhance comparability of results from period to period. • Adjusted EBITDA and adjusted EBITDA margin metrics provide useful information to investors and analysts about our core operating performance. • Adjusted return on invested capital (ROIC) is defined as adjusted operating income net of tax, divided by average invested capital.
Borrowings under the credit facilities bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or, in the case of the Canadian facilities, Canadian Overnight Repo Rate Average (CORRA) plus, in each, a margin based on the Leverage Ratio (as defined in the Credit Agreements).
Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or, for CAD borrowings, Canadian Overnight Repo Rate Average (CORRA) plus a margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement). For Base Rate borrowings, the margin ranges from 0.25% to 0.75%.
As of March 2, 2024, the amount available for revolving borrowings under the U.S credit facility was $320.0 million. We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment.
As of March 1, 2025, the amount available for revolving borrowings was $365.0 million. 32 Table of Contents We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment.
Our fiscal year ends on the Saturday closest to the last day of February, or as otherwise determined by the Board of Directors.
Our fiscal year ends on the Saturday closest to the last day of February.
(4) Adjusted ROIC calculated by dividing adjusted operating income after taxes by average invested capital Liquidity and Capital Resources We rely on cash provided by operations for our material cash requirements, including working capital needs, capital expenditures, satisfaction of contractual commitments (including principal and interest payments on our outstanding indebtedness) and shareholder return through dividend payments and share repurchases.
Liquidity and Capital Resources We rely on cash provided by operations for our material cash requirements, including working capital needs, capital expenditures, satisfaction of contractual commitments (including principal and interest payments on our outstanding indebtedness) and shareholder return through dividend payments and share repurchases. Operating Activities. Net cash provided by operating activities was $125.2 million, compared to $204.2 million.
Additionally, at March 2, 2024, we had a total of $15.0 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal year 2025 and reduce borrowing capacity under the U.S. revolving credit facility.
At March 1, 2025, we had a total of $15.0 million of ongoing letters of credit that expire in fiscal year 2026 and reduce borrowing capacity under the revolving credit facility.
At March 2, 2024, we had outstanding borrowings under our revolving credit facility of $50.0 million, while there were no outstanding borrowings under the Canadian committed, revolving credit facilities.
Outstanding borrowings under the term loan facility were $215.0 million as of March 1, 2025. Outstanding borrowings under the revolving credit facility were $70.0 million as of March 1, 2025. Outstanding borrowings under the previous revolving credit facility were $50.0 million as of March 2, 2024. We had no outstanding borrowings under the Canadian facilities as of March 2, 2024.
Evaluating goodwill for impairment involves the determination of the fair value of each reporting unit in which goodwill is recorded using a qualitative or quantitative analysis.
Evaluating goodwill for impairment involves the determination of the fair value of each reporting unit in which goodwill is recorded using a qualitative or quantitative analysis. A reporting unit is an operating segment, or a component of an operating segment, for which discrete financial information is available and is reviewed by segment management on a regular basis.
Segment Analysis % Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Segment net sales Architectural Framing Systems $ 601,736 $ 649,778 $ 546,557 (7.4) % 18.9 % Architectural Glass 378,449 316,554 309,241 19.6 % 2.4 % Architectural Services 378,422 410,627 407,421 (7.8) % 0.8 % Large-Scale Optical 99,223 104,215 101,673 (4.8) % 2.5 % Intersegment eliminations (40,888) (40,478) (50,915) 1.0 % (20.5) % Net sales $ 1,416,942 $ 1,440,696 $ 1,313,977 (1.6) % 9.6 % Segment operating income (loss) Architectural Framing Systems $ 64,833 $ 81,875 $ 38,088 (20.8) % 115.0 % Architectural Glass 68,046 28,610 1,785 137.8 % 1,502.8 % Architectural Services 11,840 18,140 (22,071) (34.7) % N/M Large-Scale Optical 24,233 25,348 23,618 (4.4) % 7.3 % Corporate and other (35,119) (28,185) (19,375) 24.6 % 45.5 % Operating income $ 133,833 $ 125,788 $ 22,045 6.4 % 470.6 % Segment operating margin Architectural Framing Systems 10.8 % 12.6 % 7.0 % Architectural Glass 18.0 % 9.0 % 0.6 % Architectural Services 3.1 % 4.4 % (5.4) % Large-Scale Optical 24.4 % 24.3 % 23.2 % Corporate and other N/M N/M N/M Operating margin 9.4 % 8.7 % 1.7 % Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.
Adjusted diluted EPS grew 4.2% to $4.97. 24 Table of Contents Segment Analysis % Change (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Segment net sales Architectural Metals $ 524,709 $ 601,736 $ 649,778 (12.8) % (7.4) % Architectural Services 419,861 378,422 410,627 11.0 % (7.8) % Architectural Glass 322,197 378,449 316,554 (14.9) % 19.6 % Performance Surfaces 122,131 99,223 104,215 23.1 % (4.8) % Intersegment eliminations (27,904) (40,888) (40,478) (31.8) % 1.0 % Net sales $ 1,360,994 $ 1,416,942 $ 1,440,696 (3.9) % (1.6) % Segment operating income (loss) Architectural Metals $ 42,466 $ 64,833 $ 81,875 (34.5) % (20.8) % Architectural Services 30,046 11,840 18,140 153.8 % (34.7) % Architectural Glass 59,274 68,046 28,610 (12.9) % 137.8 % Performance Surfaces 19,611 24,233 25,348 (19.1) % (4.4) % Corporate and Other (33,287) (35,119) (28,185) (5.2) % 24.6 % Operating income $ 118,110 $ 133,833 $ 125,788 (11.7) % 6.4 % Segment operating margin Architectural Metals 8.1 % 10.8 % 12.6 % Architectural Services 7.2 % 3.1 % 4.4 % Architectural Glass 18.4 % 18.0 % 9.0 % Performance Surfaces 16.1 % 24.4 % 24.3 % Corporate and other N/M N/M N/M Operating margin 8.7 % 9.4 % 8.7 % Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.
The customer obtains control of this combined output, generally integrated window systems or installed window and curtainwall systems, over time. We measure progress on these contracts following an input method, by comparing total costs incurred to-date to the total estimated costs for the contract, and record that proportion of the total contract price as revenue in the period.
We measure progress on these contracts following an input method, by comparing total costs incurred to-date to the total estimated costs for the contract, and record that proportion of the total contract price as revenue in the period. Contract costs include materials, labor and other direct costs related to contract performance.
Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level. We report these unallocated corporate costs separately in Corporate and other.
We report net sales intersegment eliminations separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, and SG&A. Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level.
Backlog should not be used as the sole indicator of future revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog. 25 Table of Contents Architectural Framing Systems As of fiscal 2024 year-end, segment backlog was $200.7 million, compared to $243.3 million at the end of the prior year, reflecting a decrease in order volume.
Backlog should not be used as the sole indicator of future revenue because we have a substantial number of projects with short lead times that book-and-bill within the same reporting period that are not included in backlog.
Architectural Services As of fiscal 2024 year-end, backlog in the Architectural Services Segment was $807.8 million, compared to $726.7 million at the end of the prior year, primarily driven by several large project awards in the current year.
Architectural Services As of fiscal 2025 year-end, backlog in the Architectural Services Segment was $720.3 million, compared to $807.8 million at the end of the prior year.
For Base Rate borrowings, the margin ranges from 0.125% to 0.75%. For Term SOFR and CORRA borrowings, the margin ranges from 1.125% to 1.75%, with an incremental Term SOFR and CORRA adjustment of 0.10% and 0.29547%, respectively. The U.S. facility also contains an "accordion" provision.
For Term SOFR and CORRA borrowings, the margin ranges from 1.25% to 1.75%, with an incremental Term SOFR and CORRA adjustment of 0.10% and 0.29547%. The Credit Agreement also contains an "accordion" provision. Under this provision, we can request that the senior credit facility be increased unlimited additional amounts.
Fiscal 2024 consisted of 53 weeks, while fiscal 2023 and fiscal 2022 each consisted of 52 weeks. % Change (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 2023 vs. 2022 Net sales $ 1,416,942 $ 1,440,696 $ 1,313,977 (1.6) % 9.6 % Cost of sales 1,049,814 1,105,423 1,039,816 (5.0) % 6.3 % Gross profit 367,128 335,273 274,161 9.5 % 22.3 % Selling, general and administrative expenses 233,295 209,485 202,643 11.4 % 3.4 % Impairment expense on goodwill and intangible assets — — 49,473 N/M (100.0) % Operating income 133,833 125,788 22,045 6.4 % 470.6 % Interest expense, net 6,669 7,660 3,767 (12.9) % 103.3 % Other (income) expense, net (2,089) 1,507 4,409 N/M (65.8) % Earnings before income taxes 129,253 116,621 13,869 10.8 % 740.9 % Income tax expense 29,640 12,514 10,383 136.9 % 20.5 % Net earnings $ 99,613 $ 104,107 $ 3,486 (4.3) % 2,886.4 % Diluted earnings per share $ 4.51 $ 4.64 $ 0.14 (2.8) % 3,214.3 % N/M - Indicates calculation is not meaningful (Percentage of net sales) 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 74.1 76.7 79.1 Gross profit 25.9 23.3 20.9 Selling, general and administrative expenses 16.5 14.5 15.4 Impairment expense on goodwill and intangible assets — — 3.8 Operating income 9.4 8.7 1.7 Interest expense, net 0.5 0.5 0.3 Other (income) expense, net (0.1) 0.1 0.3 Earnings before income taxes 9.1 8.1 1.1 Income tax expense 2.1 0.9 0.8 Net earnings 7.0 % 7.2 % 0.3 % Effective income tax rate 22.9 % 10.7 % 74.9 % Comparison of Fiscal 2024 to Fiscal 2023 • Consolidated net sales were $1.42 billion compared to $1.44 billion, a decrease of 1.6%, primarily reflecting lower volumes, partially offset by improved product mix and higher pricing. • Gross profit margin improved to 25.9% of net sales, compared to 23.3%.
Fiscal 2025 and fiscal 2023 each consisted of 52 weeks, while fiscal 2024 consisted of 53 weeks. % Change (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 Net sales $ 1,360,994 $ 1,416,942 $ 1,440,696 (3.9) % (1.6) % Cost of sales 1,001,101 1,049,814 1,105,423 (4.6) % (5.0) % Gross profit 359,893 367,128 335,273 (2.0) % 9.5 % Selling, general and administrative expenses 241,783 233,295 209,485 3.6 % 11.4 % Operating income 118,110 133,833 125,788 (11.7) % 6.4 % Interest expense, net 6,159 6,669 7,660 (7.6) % (12.9) % Other (income) expense, net (623) (2,089) 1,507 N/M N/M Earnings before income taxes 112,574 129,253 116,621 (12.9) % 10.8 % Income tax expense 27,522 29,640 12,514 (7.1) % 136.9 % Net earnings $ 85,052 $ 99,613 $ 104,107 (14.6) % (4.3) % Diluted earnings per share $ 3.89 $ 4.51 $ 4.64 (13.7) % (2.8) % N/M - Indicates calculation is not meaningful (Percentage of net sales) 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales 73.6 74.1 76.7 Gross profit 26.4 25.9 23.3 Selling, general and administrative expenses 17.8 16.5 14.5 Operating income 8.7 9.4 8.7 Interest expense, net 0.5 0.5 0.5 Other (income) expense, net — (0.1) 0.1 Earnings before income taxes 8.3 9.1 8.1 Income tax expense 2.0 2.1 0.9 Net earnings 6.2 % 7.0 % 7.2 % Effective income tax rate 24.4 % 22.9 % 10.7 % The following table summarizes the impact that different items had on our net sales for fiscal 2025.
Net cash used by financing activities was $144.6 million, compared to $91.0 million, primarily driven by higher net debt repayments in the current year period, partially offset by lower share repurchases. Additional Liquidity Considerations. We periodically evaluate our liquidity requirements, cash needs and availability of debt resources relative to acquisition plans, significant capital plans, and other working capital needs.
We returned $67.1 million of cash to shareholders through share repurchases and dividends, compared to $33.0 million in the prior year. Additional Liquidity Considerations. We periodically evaluate our liquidity requirements, cash needs and availability of debt resources relative to acquisition plans, significant capital plans, and other working capital needs.
Future payments for such leases, excluding leases with initial terms of one year or less, were $44.8 million at March 2, 2024, with $12.5 million payable within the next 12 months.
Future payments for such leases, excluding leases with initial terms of one year or less, were $76.9 million at March 1, 2025, with $17.7 million payable within the next 12 months. See Note 8 for further detail surrounding our lease obligations and the timing of expected future payments.
On January 30, 2024, the Company announced strategic actions to further streamline its business operations, enable a more efficient cost model, and better position the Company for profitable growth (referred to as “Project Fortify”).
As part of these changes, there were no changes to the products or brands included within each of the reportable segments. In the fourth quarter of fiscal 2024, the Company announced strategic actions to streamline its business operations, enable a more efficient cost model, and better position the Company for profitable growth (referred to as “Project Fortify”).
We expect that approximately 70% of the savings will be realized in the Architectural Framing Systems segment, 20% in the Architectural Services Segment, and 10% in Corporate and other, with the plan to be substantially complete in the third quarter of fiscal 2025. 22 Table of Contents Results of Operations The following tables provide various components of our operations for fiscal years 2024, 2023 and 2022, in U.S. dollar amounts and percentages reflecting annual changes in such amounts and as a percentage of net sales in each fiscal year.
This impact was recorded in cost of goods sold in the fourth quarter of fiscal 2025. 22 Table of Contents Results of Operations The following tables provide various components of our operations for fiscal years 2025, 2024 and 2023, in U.S. dollar amounts and percentages reflecting annual changes in such amounts and as a percentage of net sales in each fiscal year.
Operating Activities. Net cash provided by operating activities was $204.2 million, compared to $102.7 million, primarily driven by favorable changes in working capital. Investing Activities. Net cash used by investing activities was $43.7 million, compared to $27.7 million.
The decrease in net cash provided by operating activities was primarily driven by cash used for working capital. Investing Activities. Net cash used by investing activities was $265.9 million, compared to $43.7 million. The increase in net cash used by investing activities was primarily related to $232.2 million of cash used for the acquisition of UW Solutions. Financing Activities.
(2) Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other (income) expense, net. (3) Worthless stock deduction and related discrete income tax benefits from the impairment of the Sotawall business in fiscal 2023, which was recorded in income tax expense.
(3) Impairment expense for intangible assets in the Architectural Metals Segment. (4) Expense related to an arbitration award which represent the impact of the award amount net of existing reserves and estimated insurance proceeds. (5) Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other (income) expense, net.
These items were partially offset by the impact of lower volume, a less favorable mix of projects in the Architectural Services Segment, $5.5 million of restructuring costs related to Project Fortify, and the inflationary impact of higher costs. • SG&A expense increased $23.8 million to 16.5% of net sales, compared to 14.5%.
These items were partially offset by $9.4 million of expense related to an arbitration award, as well as unfavorable sales leverage impact of lower volume, higher lease costs, and $1.7 million of acquisition-related expenses. • SG&A expense increased $8.5 million to 17.8% of net sales, compared to 16.5% of net sales.
Approximately 34% of our total revenue in fiscal 2024 was from longer-term, fixed-price contracts. The contracts for these businesses have a single, bundled performance obligation, as these businesses generally provide interrelated products and services and integrate these products and services into a combined output specified by the customer.
The contracts for this business have a single, bundled performance obligation, as this business generally provides interrelated products and services and integrate these products and services into a combined output specified by the customer. The customer obtains control of this combined output, generally integrated window systems or installed window and curtainwall systems, over time.
(2) Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other income (expense), net. 27 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted Return on Invested Capital Reconciliation (Unaudited) Year Ended March 2, 2024 February 25, 2023 (In thousands, except percentages) (53 weeks) (52 weeks) Operating income $ 133,833 $ 125,788 Restructuring costs (1) 12,403 — Adjusted operating income $ 146,236 $ 125,788 Tax adjustment (2) 35,828 30,818 Adjusted operating income after taxes $ 110,408 $ 94,970 Average invested capital (3) $ 668,555 $ 686,124 Adjusted return on invested capital (ROIC) (4) 16.5 % 13.8 % (1) Restructuring costs related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs.
(5) Realization of a New Markets Tax Credit (NMTC) benefit during the second quarter of fiscal 2024, which was recorded in other income (expense), net. 30 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted Return on Invested Capital Reconciliation (Unaudited) Year Ended March 1, 2025 March 2, 2024 (In thousands, except percentages) (52 weeks) (53 weeks) Net earnings $ 85,052 $ 99,613 Interest expense, net (after tax) 4,619 5,002 Other income, net (after tax) (467) (1,567) Net operating income after taxes 89,204 103,048 Adjustments: Acquisition-related costs (1) 10,302 — Restructuring costs (2) 4,323 12,403 Impairment expense (3) 7,634 — Arbitration award expense (4) 9,393 — Total adjustments $ 31,652 $ 12,403 Income tax impact on adjustments (5) 7,832 3,101 Adjusted net operating income after taxes $ 113,024 $ 112,350 Average invested capital (6) $ 757,178 $ 668,555 Return on invested capital (ROIC) (7) 11.8 % 15.4 % Adjusted ROIC (8) 14.9 % 16.8 % (1) Acquisition-related costs include: • Transaction costs related to the UW Solutions acquisition. • Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. • Backlog amortization is related the value attributed to contracting the backlog purchased in the UW Solutions acquisition.
As of the end of fiscal 2024, we had a committed revolving credit facility in the U.S. with maximum borrowings of up to $385 million, with a maturity date of August 5, 2027, and two Canadian committed, revolving credit facilities totaling $25 million (USD).
The Credit Agreement replaces the previous revolving credit facility with Wells Fargo Bank, N.A., as administrative agent, and other lenders, with maximum borrowings up to $385.0 million, and the two Canadian credit facilities with Bank of Montreal totaling $25.0 million USD.
Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation and amortization) (Unaudited) Year Ended March 2, 2024 February 25, 2023 (In thousands) (53 weeks) (52 weeks) Net earnings $ 99,613 $ 104,107 Income tax expense 29,640 12,514 Interest expense, net 6,669 7,660 Depreciation and amortization 41,588 42,403 EBITDA $ 177,510 $ 166,684 Restructuring costs (1) 12,403 — NMTC settlement gain (2) (4,687) — Adjusted EBITDA $ 185,226 $ 166,684 Adjusted EBITDA Margin 13.1 % 11.6 % (1) Restructuring costs related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs.
(6) Income tax impact reflects the estimated tax rate for the jurisdictions in which the charge or income occurred. 29 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted EBITDA and Adjusted EBITDA Margin (Earnings before interest, taxes, depreciation and amortization) (Unaudited) Year Ended March 1, 2025 March 2, 2024 (In thousands) (52 weeks) (53 weeks) Net earnings $ 85,052 $ 99,613 Income tax expense 27,522 29,640 Interest expense, net 6,159 6,669 Depreciation and amortization 44,608 41,588 EBITDA $ 163,341 $ 177,510 Acquisition-related costs (1) Transaction 4,424 — Integration 2,055 — Inventory step-up 1,483 — Total acquisition-related costs 7,962 — Restructuring costs (2) 4,323 12,403 Impairment expense (3) 7,634 — Arbitration award expense (4) 9,393 — NMTC settlement gain (5) — (4,687) Adjusted EBITDA $ 192,653 $ 185,226 Adjusted EBITDA Margin 14.2 % 13.1 % (1) Acquisition-related costs include: • Transaction costs related to the UW Solutions acquisition. • Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. • Inventory step-up is related to the incremental cost to value inventory acquired as part of the UW Solutions acquisition at fair value.
(4) Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred.
(3) Impairment expense for intangible assets in the Architectural Metals Segment. (4) Expense related to an arbitration award which represent the impact of the award amount net of existing reserves and estimated insurance proceeds. (5) Income tax impact reflects the estimated tax rate for the jurisdictions in which the charge or income occurred.
Large-Scale Optical (LSO) Comparison of Fiscal 2024 to Fiscal 2023 • Net sales were $99.2 million, compared to $104.2 million, primarily reflecting lower volume due to slower customer demand in the retail markets, partially offset by favorable mix and pricing. • Operating income was $24.2 million and operating margin increased 10 basis points to 24.4% of net sales, compared to $25.3 million, or 24.3% of net sales, primarily driven by favorable mix and pricing, partially offset by the impact of lower volume.
The improvement in operating margin was primarily driven by improved pricing, improved productivity, and lower quality-related costs, partially offset by the unfavorable sales leverage impact of lower volume. Performance Surfaces Comparison of Fiscal 2025 to Fiscal 2024 • Net sales were $122.1 million, compared to $99.2 million.
These items were partially offset by a less favorable mix of projects in the Architectural Services Segment, increased salaries and benefits costs, $12.4 million of restructuring costs related to Project Fortify, and the inflationary impact of higher costs.
These items were partially offset by a more favorable mix of projects and the net favorable impact of cumulative catch-up adjustments for changes in profitability estimates of long-term contracts in Architectural Services, lower quality and insurance-related costs, lower bad debt expense, and lower restructuring charges from Project Fortify of $8.1 million.
Adjusted operating margin increased by 160 basis points, to 10.3%. • Other income was $2.1 million, reflecting the impact of a $4.7 million pre-tax gain related to a New Markets Tax Credit, partially offset by an investment valuation adjustment. • Net interest expense was $6.7 million, compared to $7.7 million driven by a lower average debt level, partially offset by a higher average interest rate. • The effective tax rate was 22.9%, compared to 10.7%.
The lower income in fiscal 2025 was primarily due pre-tax gain related to a New Markets Tax Credit of $4.7 million, partially offset by the unfavorable impact of an investment market valuation adjustment, both recognized in the prior year period. • Income tax expense as a percentage of earnings before income tax was 24.4%, compared to 22.9% for fiscal 2024.
Overview We are 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. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical (LSO).
Overview We are a leading provider of architectural products and services for enclosing buildings, and high-performance coating products used in applications for preservation, protection and enhanced viewing. During the fourth quarter of fiscal 2025, we changed the names of two reportable segments to better reflect our product offerings and capabilities.
(2) For fiscal year 2023, we did not make any adjustments to operating income or operating margin as calculated in accordance with GAAP. 26 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted Net Earnings and Adjusted Diluted Earnings Per Share (Unaudited) Diluted per share amounts Year Ended Year Ended March 2, 2024 February 25, 2023 March 2, 2024 February 25, 2023 (In thousands, except per share amounts) (53 weeks) (52 weeks) (53 weeks) (52 weeks) Net earnings $ 99,613 $ 104,107 $ 4.51 $ 4.64 Restructuring costs (1) 12,403 — 0.56 — NMTC Settlement Gain (2) (4,687) — (0.21) — Worthless stock deduction and other discrete tax benefits (3) — (14,833) — (0.66) Income tax impact on above adjustments (4) (1,890) — (0.09) — Adjusted net earnings $ 105,439 $ 89,274 $ 4.77 $ 3.98 Shares outstanding for EPS 22,091 22,416 (1) Restructuring costs related to Project Fortify, including $6.2 million of asset impairment charges, $5.9 million of employee termination costs and $0.3 million of other costs.
(4) Expense related to an arbitration award which represent the impact of the award amount net of existing reserves and estimated insurance proceeds. 28 Table of Contents Reconciliation of Non-GAAP Financial Measures Adjusted Net Earnings and Adjusted Diluted Earnings Per Share (Unaudited) Diluted per share amounts Year Ended Year Ended March 1, 2025 March 2, 2024 March 1, 2025 March 2, 2024 (In thousands, except per share amounts) (52 weeks) (53 weeks) (52 weeks) (53 weeks) Net earnings $ 85,052 $ 99,613 $ 3.89 $ 4.51 Acquisition-related costs (1) Transaction 4,424 — 0.20 — Integration 2,055 — 0.09 — Backlog amortization 2,340 — 0.11 — Inventory step-up 1,483 — 0.07 — Total Acquisition-related costs 10,302 — 0.47 — Restructuring costs (2) 4,323 12,403 0.20 0.56 Impairment expense (3) 7,634 — 0.35 — Arbitration award expense (4) 9,393 — 0.43 — NMTC Settlement Gain (5) — (4,687) — (0.21) Income tax impact on above adjustments (6) (7,832) (1,890) (0.36) (0.09) Adjusted net earnings $ 108,872 $ 105,439 $ 4.97 $ 4.77 Shares outstanding for EPS 21,891 22,091 (1) Acquisition-related costs include: • Transaction costs related to the UW Solutions acquisition. • Integration costs related to one-time expenses incurred to integrate the UW Solutions acquisition. • Backlog amortization is related the value attributed to contracting the backlog purchased in the UW Solutions acquisition.
Corporate and other Comparison of Fiscal 2024 to Fiscal 2023 • Corporate and other expense was $35.1 million, compared to $28.2 million, primarily driven by $3.9 million of restructuring costs related to Project Fortify, increased compensation expense and higher consulting costs, partially offset by lower insurance-related costs.
The decline in operating margin was primarily driven by $4.5 million in acquisition-related costs and the sales leverage impact of lower organic volume. Corporate and Other Comparison of Fiscal 2025 to Fiscal 2024 26 Table of Contents • Corporate and Other expense was $33.3 million, compared to $35.1 million.
(2) Income tax impact calculated using an estimated statutory tax rate of 24.5%, which reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred. (3) Average invested capital represents a trailing five quarter average of total assets less average current liabilities (excluding current portion long-term debt).
(6) Average invested capital represents a trailing five quarter average of total assets less average current liabilities (excluding current portion long-term debt). (7) ROIC is calculated by dividing net operating income after taxes by average invested capital. (8) Adjusted ROIC is calculated by dividing adjusted net operating income after taxes by average invested capital.
Operating income does not include other income or expense, interest expense or a provision for income taxes. 24 Table of Contents Architectural Framing Systems Comparison of Fiscal 2024 to Fiscal 2023 • Net sales were $601.7 million, compared to $649.8 million, primarily reflecting lower volume, partially offset by more favorable sales mix and improved pricing. • Operating income was $64.8 million and operating margin decreased 180 basis points to 10.8% of net sales, primarily driven by the impact of lower volume, a less favorable mix of projects and $6.0 million of restructuring costs related to Project Fortify.
We report these unallocated corporate costs separately in Corporate and other. Operating income does not include other income or expense, interest expense or a provision for income taxes. 25 Table of Contents Architectural Metals Comparison of Fiscal 2025 to Fiscal 2024 • Net sales were $524.7 million, compared to $601.7 million.
Architectural Services Comparison of Fiscal 2024 to Fiscal 2023 • Net sales were $378.4 million, compared to $410.6 million, primarily reflecting lower project volume and a less favorable mix of projects. • Operating income was $11.8 million and operating margin decreased 130 basis points to 3.1% of net sales primarily driven by lower project volume, a less favorable mix of projects, and $2.5 million of restructuring costs related to Project Fortify, partially offset by lower short-term incentive compensation expense.
The improvement in operating margin was primarily driven by a more favorable mix of projects, the favorable impact of cumulative catch-up adjustments on our longer-term contract estimates of $10.5 million, and lower restructuring charges, partially offset by higher short-term incentive compensation expense and higher lease costs. • For the years ended March 1, 2025 and March 2, 2024, gross favorable and unfavorable cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows: (in thousands) 2025 2024 Gross favorable adjustments $ 28,430 $ 19,058 Gross unfavorable adjustments (12,123) (13,298) Net adjustments $ 16,307 $ 5,760 Architectural Glass Comparison of Fiscal 2025 to Fiscal 2024 • Net sales were $322.2 million, compared to $378.4 million.
Removed
In fiscal 2024, we made further progress toward our strategic goals and financial targets we established in fiscal 2021. We continued the deployment of the Apogee Management System across our business, supporting sustainable cost and productivity improvements. We invested in organic growth initiatives, including capacity expansion in the Large-Scale Optical Segment and geographic growth in Architectural Services.
Added
The previously named Architectural Framing Systems Segment is now referred to as the Architectural Metals Segment. The previously named Large-Scale Optical Segment is now referred to as the Performance Surfaces Segment. The remaining two segments, Architectural Services Segment and Architectural Glass Segment remain unchanged.
Removed
We increased our focus on differentiated products and services, and continued to diversify the mix of architectural projects that we serve while leaning more heavily into higher, value-added products. We also advanced several initiatives to strengthen our core capabilities, driving the standardization of key business processes and systems, and strengthening talent management and leadership development programs.
Added
During fiscal 2025, the Company incurred $4.3 million of pre-tax charges related to Project Fortify, of which $2.5 million is included in cost of sales and $1.8 million is included in SG&A expenses.
Removed
The Company expects a total of $16 million to $18 million of pre-tax charges in connection with Project Fortify, leading to annualized cost savings of $12 million to $14 million. We expect that approximately 60% of these savings will be realized in fiscal 2025, with the remainder in fiscal 2026.
Added
The Company completed Project Fortify during the fourth quarter of fiscal 2025, incurring a total of $16.7 million and delivering estimated annualized cost savings of approximately $14 million. On April 23, 2025, we announced an extension of Project Fortify ("Project Fortify Phase 2" or "Phase 2") to drive further cost efficiencies, primarily in the Architectural Metals and Architectural Services Segments.
Removed
The gross margin improvement was primarily driven by higher pricing, improved mix and the impact of lower costs from saving initiatives.
Added
Phase 2 will focus on further optimizing our operating footprint and aligning resources to enable a more effective operating model. We expect the actions of Phase 2 to incur approximately $24 million to $26 million of pre-tax charges of which approximately $8 million are expected to be non-cash charges.
Removed
The increase in expense was primarily due to increased salaries and benefits costs as well as $6.9 million in restructuring costs related to Project Fortify. 23 Table of Contents • Operating income grew 6.4% to $133.8 million, and operating margin increased 70 basis points to 9.4%, driven by higher pricing, improved product mix, and the impact of lower costs from saving initiatives.
Added
Phase 2 is expected to deliver annualized pre-tax cost savings of approximately $13 million to $15 million. We expect the actions associated with Phase 2 to be substantially completed by the end of the fourth quarter of fiscal 2026. See Note 18 for additional information. During the third quarter of fiscal 2025, we acquired UW Solutions for $240.9 million.
Removed
During fiscal 2023, we claimed certain tax deductions, including a worthless stock loss deduction and other discrete tax benefits, related to our investment in Sotawall Limited, a Canadian subsidiary.
Added
UW Solutions is a U.S. based, vertically integrated manufacturer of high-performance coated substrates, differentiated by its proprietary formulations and coating application processes. The business serves a broad range of customers in attractive end markets, including building products for distribution centers and manufacturing facilities, as well as premium products for the graphic arts market. See Note 17 for additional information.
Removed
These deductions generated a net tax benefit of $14.8 million, and reduced our effective tax rate for fiscal 2023 by approximately 13.1 percentage points. • Diluted EPS was $4.51 compared to $4.64 driven by higher operating income, which was more than offset by a higher effective tax rate. Adjusted diluted EPS grew 19.8% to $4.77.
Added
As a result of a March 2025 appellate court decision confirming a December 2022 arbitration award, the Company paid the arbitration award, including accrued post-judgment interest, in the amount of $24.7 million, on April 7, 2025.
Removed
We report net sales intersegment eliminations separately to exclude these sales from our consolidated total. Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment.
Added
As a result of the decision, we recorded expense of $9.4 million, which represents the impact of the award amount net of existing reserves and estimated insurance proceeds.
Removed
These items were partially offset by improved sales mix and pricing, as well as the impact of lower costs from saving initiatives. Adjusted operating income was $70.8 million and adjusted operating margin decreased 80 basis points to 11.8% of net sales.
Added
All net sales for fiscal 2024 were organic.
Removed
Architectural Glass Comparison of Fiscal 2024 to Fiscal 2023 • Net sales were $378.4 million, compared to $316.6 million, primarily driven by improved pricing and a more favorable sales mix. • Operating income was $68.0 million and operating margin increased 900 basis points to 18.0% of net sales, primarily driven by improved pricing and mix, partially offset by cost inflation.
Added
(In thousands, except percentages) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Intersegment eliminations Consolidated Fiscal 2024 net sales $ 601,736 $ 378,422 $ 378,449 $ 99,223 $ (40,888) $ 1,416,942 Organic business (1) (66,113) 50,332 (49,124) (6,835) 12,512 (59,228) Impact of 53rd week (2) (10,914) (8,893) (7,128) (2,241) 472 (28,704) Acquisition (3) — — — 31,984 — 31,984 Fiscal 2025 net sales $ 524,709 $ 419,861 $ 322,197 $ 122,131 $ (27,904) $ 1,360,994 Total net sales growth (decline) (12.8) % 11.0 % (14.9) % 23.1 % (31.8) % (3.9) % Organic business (1) (11.0) % 13.3 % (13.0) % (6.9) % (30.6) % (4.2) % Impact of 53rd week (2) (1.8) % (2.4) % (1.9) % (2.3) % (1.2) % (2.0) % Acquisition (3) — % — % — % 32.2 % — % 2.3 % 23 Table of Contents (1) Organic business includes net sales associated with acquired product lines or businesses that occur after the first twelve months from the date the product line or business is acquired and net sales from internally developed product lines or businesses.
Removed
Adjusted operating income was $14.4 million and adjusted operating margin decreased 60 basis points to 3.8% of net sales.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

10 edited+0 added−0 removed5 unchanged
Biggest changeFrom time to time, we enter into forward purchase foreign currency contracts, generally with an original maturity date of less than one year, to hedge foreign currency risk (see Note 4 of the Notes to Consolidated Financial Statements in Item 8 of this Form 10-K). Sales from our domestic operations are generally denominated in U.S. dollars.
Biggest changeThus, changes in exchange rates between the Canadian dollar, Brazilian Real, Euro, and Australian dollar versus the U.S. dollar, will impact our reported financial results. From time to time, we enter into forward purchase foreign currency contracts, generally with an original maturity date of less than one year, to hedge foreign currency risk (see Note 4).
Foreign Currency Exchange Rate Risk We are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We have operations in Canada and Brazil, which primarily transact business in local currencies. We manage these operating activities locally.
Foreign Currency Exchange Rate Risk We are subject to market risk due to changes in the value of foreign currencies in relation to our reporting currency, the U.S. dollar. We have operations in Canada, Brazil, Belgium, and Australia which primarily transact business in local currencies. We manage these operating activities locally.
We cannot accurately calculate the pre-tax impact a one percent change in the commodity costs of aluminum and/or lumber would have on our fiscal 2024 operating results, as the change in commodity costs would both impact the cost to purchase materials and the selling prices we offer our customers.
We cannot accurately calculate the pre-tax impact a one percent change in the commodity costs of aluminum and/or lumber would have on our fiscal 2025 operating results, as the change in commodity costs would both impact the cost to purchase materials and the selling prices we offer our customers.
The impact to our operating results would significantly depend on the competitive environment and the costs of other alternative products, which could impact our ability to pass commodities costs to our customers. 33 Table of Contents
The impact to our operating results would significantly depend on the competitive environment and the costs of other alternative products, which could impact our ability to pass commodities costs to our customers. 37 Table of Contents
We do not hold any financial instruments for trading purposes. We also hedge a portion of the floating interest rate on our long-term line of credit through a floating-to-fixed interest rate swap. The primary measure of interest rate risk is the simulation of net income under different interest rate environments.
We do not hold any financial instruments for trading purposes. We also hedge a portion of the floating interest rate on our long-term line of credit through two floating-to-fixed interest rate swaps. The primary measure of interest rate risk is the simulation of net income under different interest rate environments.
If interest rates were to increase or decrease over the next 12 months by 200 basis points, net earnings would be impacted by approximately $1.0 million. Our debt exceeded investments at March 2, 2024, so as interest rates increase, net earnings decrease; as interest rates decrease, net earnings increase.
If interest rates were to increase or decrease over the next 12 months by 200 basis points, net earnings would be impacted by approximately $0.6 million. Our debt exceeded investments at March 1, 2025, so as interest rates increase, net earnings decrease; as interest rates decrease, net earnings increase.
We principally manage our exposures to the market fluctuations in the aluminum industry through fixed/floating rate swaps and forward purchase agreements. Although we have the ability to purchase aluminum from a number of suppliers, a production cutback by one or more of our current suppliers could create challenges in meeting delivery schedules to our customers.
We principally manage our exposures to the market fluctuations in the aluminum industry through forward purchase agreements. Although we have the ability to purchase aluminum from a number of suppliers, a production cutback by one or more of our current suppliers could create challenges in meeting delivery schedules to our customers.
Revenues, costs, assets and liabilities of these operations are generally denominated in local currencies, thereby mitigating some of the risk associated with changes in foreign exchange rates. However, our consolidated financial results are reported in U.S. dollars. Thus, changes in exchange rates between the Canadian dollar and Brazilian Real, versus the U.S. dollar, will impact our reported financial results.
Revenues, costs, assets and liabilities of these operations are generally denominated in local currencies, thereby mitigating some of the risk associated with changes in foreign exchange rates. However, our consolidated financial results are reported in U.S. dollars.
As a result, commodity costs can be volatile. Commodity costs are influenced by numerous factors beyond our control, including general economic conditions, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, import duties and other trade restrictions.
The commodities markets, which include the aluminum industry, are highly cyclical in nature. As a result, commodity costs can be volatile. Commodity costs are influenced by numerous factors beyond our control, including general economic conditions, the availability of raw materials, competition, labor costs, freight and transportation costs, production costs, tariffs, import duties and other trade restrictions.
Raw Material Pricing Risk We are subject to market risk exposure related to volatility in the prices of aluminum and lumber, among other raw materials and supplies used in our end products. A significant amount of our cost of sales relates to materials costs. The commodities markets, which include the aluminum industry, are highly cyclical in nature.
Sales from our domestic operations are generally denominated in U.S. dollars. Raw Material Pricing Risk We are subject to market risk exposure related to volatility in the prices of aluminum and lumber, among other raw materials and supplies used in our end products. A significant amount of our cost of sales relates to materials costs.

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