Apogee Enterprises, Inc.

Nasdaq: APOG

Fiscal 2024 Third Quarter Earnings Call

December 21, 2023

Taxation Building - Trenton, NJ © Greg West Photography

Non-GAAP measures & forward-looking statements

This presentation contains non-GAAP financial measures which the company uses to evaluate historical and prospective financial performance, measure operational profitability on a consistent basis, and provide enhanced transparency to the investment community. Definitions for these non-GAAP financial measures are included in today's press release and reconciliations to the most directly comparable GAAP measures are included at the end of this presentation.

This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should" and similar expressions are intended to identify "forward-looking statements". These statements reflect Apogee management's expectations or beliefs as

of the date of this presentation. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements are subject to significant risks that could cause actual results to differ materially from the expectations reflected in the forward-looking statements. More information concerning potential factors that could affect future financial results is included in today's press release, the company's Annual Report on Form 10-K for the fiscal year ended February 25, 2023, and in subsequent filings with the U.S. Securities and Exchange Commission.

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Agenda

Introductory remarks

Ty Silberhorn

Chief Executive Officer

Financial results and outlook

Matt Osberg

Chief Financial Officer

Q&A

University of Washington,

Nanoengineering & Sciences Building | Seattle, WA

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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FY2024 Third Quarter Highlights

  • Second consecutive quarter of double-digit adjusted diluted EPS growth
  • Third quarter and YTD operating margins above 10% target
  • Continued sales growth and margin expansion in Glass
  • Services backlog grew 15% sequentially compared to Q2
  • Significant increase in operating cash flow compared to last year
  • Increasing our full-year adjusted diluted EPS outlook

Q3 FY2024 Results

Net sales

$340 M

(8)% year-over-year

Operating

$37.6 M

income

+8% year-over-year

Adjusted

$1.23

diluted

EPS*

+15% year-over-year

*Non-GAAP metric, see reconciliation table

Another quarter of strong margin expansion and earnings growth

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Executing our Enterprise Strategy

Create Peak Value by

building

differentiated

businesses with

strong

operational execution

ECONOMIC

ACTIVELY

STRENGTHEN

LEADER

MANAGE

CORE

IN TARGET

THE PORTFOLIO

CAPABILITIES &

MARKETS

PLATFORMS

F O U N D A T I O N A L E N A B L E R S

•

Results-driven Culture

• Apogee Management System (AMS)

•

Talent Development

• Best-in-class Governance

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Consolidated Results

Third quarter

$ in millions, except EPS

Q3 FY24

Q3 FY23

Change

Net sales

$339.7

$367.8

(7.6)%

Operating income

$37.6

$34.8

8.3%

Operating margin

11.1%

9.4%

170 bps

Adjusted EBITDA*

$47.3

$44.7

5.8%

Adjusted diluted EPS*

$1.23

$1.07

15.0%

*Non-GAAP metrics, see reconciliation table

Year-to-date

$ in millions, except EPS

FY24

FY23

Change

Net sales

$1,055.1

$1,096.6

(3.8)%

Operating income

$112.0

$100.0

11.9%

Operating margin

10.6%

9.1%

150 bps

Adjusted EBITDA*

$142.2

$129.9

9.4%

Adjusted diluted EPS*

$3.64

$3.13

16.3%

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Segment Results

Third quarter FY2024

Year-to-date FY2024

Segment

Segment

net sales

operating

$M

margin

Architectural Framing Systems

$139.6

12.2%

Year-over-year change

(15.4)%

(120) bps

Architectural Glass

$91.0

16.7%

Year-over-year change

11.6%

760 bps

Architectural Services

$94.7

5.6%

Year-over-year change

(7.2)%

(30) bps

Large-Scale Optical

$26.0

27.3%

Year-over-year change

(2.4)%

60 bps

Segment

Segment

net sales

operating

$M

margin

Architectural Framing Systems

$462.5

12.5%

Year-over-year change

(7.7)%

(70) bps

Architectural Glass

$282.3

17.4%

Year-over-year change

20.0%

930 bps

Architectural Services

$272.1

3.0%

Year-over-year change

(12.8)%

(160) bps

Large-Scale Optical

$72.1

24.0%

Year-over-year change

(6.3)%

(150) bps

  • Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.
  • Segment operating income is defined as operating income for a certain segment including operating income related to intersegment transactions and excluding certain corporate costs that are not allocated at a segment level.
  • Segment operating margin is defined as segment operating income divided by segment net sales.

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Cash Flow and Balance Sheet

$ in millions

Thirty-Nine

Thirty-Nine

Weeks Ended

Weeks Ended

Nov 25, 2023

Nov 26, 2022

Cash flow from operations

$129.3

$51.1

Capital expenditures

$27.0

$18.1

Free cash flow*

$102.3

$33.0

Share repurchases

$11.8

$74.3

Dividends

$15.7

$14.4

Nov 25, 2023

Feb 25, 2023

Total debt

$100.7

$169.8

Cash & equivalents

$23.4

$19.9

Net debt**

$77.3

$149.9

Net leverage**

0.4x

0.9x

*Free cash flow is a non-GAAP metric which the Company defines as cash flow from operations less capital expenditures. **Net debt and net leverage are non-GAAP metrics. See reconciliation table.

Tables may not foot due to rounding

Highlights

  • Year-over-yearcash flow increase primarily driven by improvement in working capital
  • Increased CapEx to support strategic investments
  • Reduced net debt by $50.0 million in the quarter
  • No significant debt maturities until 2027
  • Returned $27.5 million of cash to shareholders YTD through dividends and share repurchases

Strong financial position - Deploying capital to drive value

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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FY2024 Outlook

Key Assumptions

Adjusted

• FY2024 is a 53-week year, with an extra week in the fourth quarter

diluted

$4.55 to $4.70

• Now expect net sales decline of approximately 3% compared to FY2023

EPS*

• Continue to expect long-term average tax rate of approximately 24.5%

• Now expect CapEx of $40 to $50 million

Increased from previous range of $4.35 to $4.65

*Non-GAAP metric, see reconciliation table

Increasing our full-year adjusted diluted EPS outlook

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Concluding Remarks

  • Another strong quarter for Apogee
  • Execution of our strategy is driving operational performance
  • Continued margin expansion and adjusted diluted EPS growth
  • Strong cash flow and balance sheet provide flexibility to create value
  • Increasing our full-year adjusted diluted EPS outlook
  • Positioned to drive further progress as we move forward

Q3 FY2024 Earnings | December 21, 2023

Apogee Enterprises, Inc.

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Wolf Point East Apartments | Chicago Photo credit: Harmon, Inc.

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Disclaimer

Apogee Enterprises Inc. published this content on 20 December 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 21 December 2023 16:05:50 UTC.