Apogee Enterprises (APOG) investor relations material

Executive summary

• Net sales for Q1 FY2027 were $342.7 million, down 1.1% year-over-year, with lower volumes in Metals and Glass, partially offset by growth in Architectural Services and Performance Surfaces and favorable pricing and mix.

• Adjusted diluted EPS was $0.57, up year-over-year, driven by lower interest expense and improved margins; diluted EPS was $0.54, up from a loss of $0.13 last year.

• Operating income rose to $18.8 million, with operating margin up 350 basis points to 5.5%, reflecting cost savings and productivity improvements from Project Fortify Phase 2.

• $15.3 million was returned to shareholders via $9.7 million in share repurchases and $5.6 million in dividends.

• Pending Kalwall acquisition (also referred to as Keller Companies) is a strategic move to expand in higher-margin, specification-driven building envelope markets, expected to close in early July and support long-term growth.

Financial highlights

• Gross margin improved to 21.9% from 21.7% year-over-year, driven by pricing, productivity, and favorable mix, partially offset by higher material and freight costs.

• Adjusted EBITDA was $32.1 million (9.4% margin), down from $34.4 million (9.9% margin) year-over-year, reflecting higher input costs and lower volume.

• SG&A expense as a percent of sales decreased to 16.4% from 19.7%, reflecting cost savings from Project Fortify Phase 2.

• Interest expense declined to $2.8 million from $3.8 million due to lower average debt.

• Free cash flow improved to $1.1 million from negative $27.0 million year-over-year; net cash from operating activities was $7.4 million, compared to a $19.8 million use last year.

Outlook and guidance

• Fiscal 2027 full-year net sales expected between $1.38 billion and $1.43 billion, with adjusted EPS of $2.70 to $3.25, excluding Kalwall.

• Including Kalwall, net sales range increases to $1.43 billion–$1.48 billion; interest expense rises to $14 million, capex projected at $35–$40 million.

• Results anticipated to be stronger in the second half of the year as market conditions improve; Q2 net sales and adjusted EPS expected to be slightly lower year-over-year.

• Kalwall expected to generate $85 million revenue at ~15% adjusted EBITDA margin in first 12 months, targeting 20% long-term.

• Guidance based on current market conditions; macroeconomic and interest rate environment remains dynamic.