UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________

FORM 10-Q

_________________________________


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November ~~27, 2021~~26, 2022


☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 0-6365

_________________________________

APOGEE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

_________________________________

Minnesota

41-0919654

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

4400 West 78th Street, Suite 520

Minneapolis

Minnesota

55435

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (952) 835-1874

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.33 1/3 per share

APOG

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

x☐

Non-accelerated filer

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes x No

As of ~~January 3,~~December 26, 2022, ~~24,865,480~~22,213,890 shares of the registrant’s common stock, par value $0.33 1/3 per share, were outstanding.

~~Table of Contents~~

APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In thousands, except stock data)	(In thousands, except stock data)	November 27, 2021		February 27, 2021		(In thousands, except stock data)	November 26, 2022		February 26, 2022
Assets	Assets					Assets
Current assets	Current assets					Current assets
Cash and cash equivalents	Cash and cash equivalents	$	78,272	$	47,277	Cash and cash equivalents	$	21,746	$	37,583

Restricted cash						Restricted cash	3,718		—
Receivables, net	Receivables, net	165,005		175,917		Receivables, net	222,554		168,592
Inventories	Inventories	75,437		72,823		Inventories	86,032		80,494
Costs and earnings on contracts in excess of billings	Costs and earnings on contracts in excess of billings	28,323		29,497		Costs and earnings on contracts in excess of billings	32,964		30,403
Other current assets	Other current assets	19,837		25,160		Other current assets	29,676		20,820
Total current assets	Total current assets	366,874		350,674		Total current assets	396,690		337,892
Property, plant and equipment, net	Property, plant and equipment, net	254,838		298,443		Property, plant and equipment, net	231,173		249,995
Assets held for sale		9,256		—
Operating lease right-of-use assets	Operating lease right-of-use assets	50,845		58,864		Operating lease right-of-use assets	44,198		47,912
Goodwill	Goodwill	129,932		130,098		Goodwill	129,268		130,102
Intangible assets	Intangible assets	123,553		130,053		Intangible assets	68,825		72,481
Other non-current assets	Other non-current assets	46,793		46,967		Other non-current assets	48,292		49,481
Total assets	Total assets	$	982,091	$	1,015,099	Total assets	$	918,446	$	887,863
Liabilities and Shareholders’ Equity	Liabilities and Shareholders’ Equity					Liabilities and Shareholders’ Equity
Current liabilities	Current liabilities					Current liabilities
Accounts payable	Accounts payable	$	80,995	$	76,204	Accounts payable	$	70,137	$	92,104
Accrued payroll and related benefits	Accrued payroll and related benefits	48,017		50,125		Accrued payroll and related benefits	55,528		50,977

Billings on contracts in excess of costs and earnings		18,458		22,789
Billings in excess of costs and earnings on uncompleted contracts						Billings in excess of costs and earnings on uncompleted contracts	29,121		8,659
Operating lease liabilities	Operating lease liabilities	11,834		13,251		Operating lease liabilities	11,077		12,744
Current portion of debt		1,000		2,000
Current portion long-term debt						Current portion long-term debt	—		1,000
Other current liabilities	Other current liabilities	57,586		53,183		Other current liabilities	66,174		67,462
Total current liabilities	Total current liabilities	217,890		217,552		Total current liabilities	232,037		232,946
Long-term debt	Long-term debt	162,000		163,000		Long-term debt	203,735		162,000
Non-current operating lease liabilities	Non-current operating lease liabilities	43,608		48,439		Non-current operating lease liabilities	36,778		39,591
Non-current self-insurance reserves	Non-current self-insurance reserves	26,628		24,880		Non-current self-insurance reserves	21,062		22,544
Other non-current liabilities	Other non-current liabilities	58,112		68,483		Other non-current liabilities	47,196		44,583
Commitments and contingent liabilities (Note 8)	Commitments and contingent liabilities (Note 8)					Commitments and contingent liabilities (Note 8)
Shareholders’ equity	Shareholders’ equity					Shareholders’ equity
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 25,227,367 and 25,713,688 respectively		8,409		8,571
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 22,213,635 and 23,701,491 respectively						Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 22,213,635 and 23,701,491 respectively	7,405		7,901
Additional paid-in capital	Additional paid-in capital	158,579		154,958		Additional paid-in capital	144,358		149,713
Retained earnings	Retained earnings	336,816		357,243		Retained earnings	258,836		254,825

Accumulated other comprehensive loss	Accumulated other comprehensive loss	(29,951)		(28,027)		Accumulated other comprehensive loss	(32,961)		(26,240)
Total shareholders’ equity	Total shareholders’ equity	473,853		492,745		Total shareholders’ equity	377,638		386,199
Total liabilities and shareholders’ equity	Total liabilities and shareholders’ equity	$	982,091	$	1,015,099	Total liabilities and shareholders’ equity	$	918,446	$	887,863

See accompanying notes to consolidated financial statements.

Table of Contents

CONSOLIDATED RESULTS OF OPERATIONS

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(In thousands, except per share data)	(In thousands, except per share data)	November 27, 2021		November 28, 2020		November 27, 2021		November 28, 2020		(In thousands, except per share data)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Net sales	Net sales	$	334,217	$	313,583	$	986,020	$	922,162	Net sales	$	367,847	$	334,217	$	1,096,591	$	986,020
Cost of sales	Cost of sales	269,537		243,998		805,627		716,139		Cost of sales	281,239		269,537		839,430		805,627
Gross profit	Gross profit	64,680		69,585		180,393		206,023		Gross profit	86,608		64,680		257,161		180,393
Selling, general and administrative expenses	Selling, general and administrative expenses	46,970		19,835		149,709		126,590		Selling, general and administrative expenses	51,847		46,970		157,112		149,709
Operating income	Operating income	17,710		49,750		30,684		79,433		Operating income	34,761		17,710		100,049		30,684

Interest expense, net	Interest expense, net	528		1,502		2,838		4,240		Interest expense, net	2,590		528		5,494		2,838
Other (expense) income, net		(3,057)		472		(3,266)		684
Other expense, net										Other expense, net	552		3,057		2,035		3,266
Earnings before income taxes	Earnings before income taxes	14,125		48,720		24,580		75,877		Earnings before income taxes	31,619		14,125		92,520		24,580
Income tax expense	Income tax expense	3,068		11,447		4,821		18,070		Income tax expense	7,854		3,068		8,635		4,821
Net earnings	Net earnings	$	11,057	$	37,273	$	19,759	$	57,807	Net earnings	$	23,765	$	11,057	$	83,885	$	19,759
Earnings per share - basic	Earnings per share - basic	$	0.44	$	1.44	$	0.79	$	2.22	Earnings per share - basic	$	1.09	$	0.44	$	3.81	$	0.79
Earnings per share - diluted	Earnings per share - diluted	$	0.44	$	1.42	$	0.78	$	2.19	Earnings per share - diluted	$	1.07	$	0.44	$	3.74	$	0.78
Weighted average basic shares outstanding	Weighted average basic shares outstanding	24,957		25,883		25,166		26,068		Weighted average basic shares outstanding	21,870		24,957		22,043		25,166
Weighted average diluted shares outstanding	Weighted average diluted shares outstanding	25,309		26,225		25,459		26,350		Weighted average diluted shares outstanding	22,278		25,309		22,456		25,459

See accompanying notes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(Unaudited)


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021		November 28, 2020		November 27, 2021		November 28, 2020		(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Net earnings	Net earnings	$	11,057	$	37,273	$	19,759	$	57,807	Net earnings	$	23,765	$	11,057	$	83,885	$	19,759
Other comprehensive earnings (loss):
Unrealized (loss) gain on marketable securities, net of $(40), $0, $(39) and $39 of tax (benefit) expense, respectively		(151)		(2)		(147)		145
Unrealized (loss) gain on derivative instruments, net of $(265), $90, $(257) and $305 of tax (benefit) expense, respectively		(868)		294		(842)		997
Other comprehensive (losses) earnings:										Other comprehensive (losses) earnings:
Unrealized loss on marketable securities, net of $(24), $(40), $(127) and $(39) of tax benefit, respectively										Unrealized loss on marketable securities, net of $(24), $(40), $(127) and $(39) of tax benefit, respectively	(88)		(151)		(470)		(147)
Unrealized gain (loss) on derivative instruments, net of $277, $(265), $(1,192) and $(257) of tax expense (benefit), respectively										Unrealized gain (loss) on derivative instruments, net of $277, $(265), $(1,192) and $(257) of tax expense (benefit), respectively	905		(868)		(3,911)		(842)
Foreign currency translation adjustments	Foreign currency translation adjustments	(2,515)		899		(935)		887		Foreign currency translation adjustments	(1,295)		(2,515)		(2,340)		(935)
Other comprehensive (loss) earnings		(3,534)		1,191		(1,924)		2,029
Other comprehensive losses										Other comprehensive losses	(478)		(3,534)		(6,721)		(1,924)
Total comprehensive earnings	Total comprehensive earnings	$	7,523	$	38,464	$	17,835	$	59,836	Total comprehensive earnings	$	23,287	$	7,523	$	77,164	$	17,835

See accompanying notes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


		Nine Months Ended					Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021		November 28, 2020		(In thousands)	November 26, 2022		November 27, 2021
Operating Activities	Operating Activities					Operating Activities
Net earnings	Net earnings	$	19,759	$	57,807	Net earnings	$	83,885	$	19,759
Adjustments to reconcile net earnings to net cash provided by operating activities:	Adjustments to reconcile net earnings to net cash provided by operating activities:					Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	38,353		38,000		Depreciation and amortization	31,925		38,353
Share-based compensation	Share-based compensation	4,807		6,163		Share-based compensation	5,961		4,807
Deferred income taxes	Deferred income taxes	(5,412)		5,012		Deferred income taxes	2,341		(5,412)
Asset impairment	Asset impairment	16,638		—		Asset impairment	—		16,638
Gain on disposal of assets	Gain on disposal of assets	(1,250)		(19,346)		Gain on disposal of assets	(1,484)		(1,250)

Proceeds from New Markets Tax Credit transaction, net of deferred costs						Proceeds from New Markets Tax Credit transaction, net of deferred costs	18,390		—
Settlement of New Markets Tax Credit transaction						Settlement of New Markets Tax Credit transaction	(19,523)		—
Noncash lease expense	Noncash lease expense	9,302		9,531		Noncash lease expense	8,924		9,302
Other, net	Other, net	3,009		(69)		Other, net	4,700		3,009
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Receivables	Receivables	6,443		24,153		Receivables	(58,202)		6,443
Inventories	Inventories	(2,657)		(2,722)		Inventories	(5,822)		(2,657)
Costs and earnings on contracts in excess of billings	Costs and earnings on contracts in excess of billings	1,168		44,501		Costs and earnings on contracts in excess of billings	(2,599)		1,168
Accounts payable and accrued expenses	Accounts payable and accrued expenses	5,440		(43,915)		Accounts payable and accrued expenses	(11,985)		5,440
Billings on contracts in excess of costs and earnings		(4,474)		(6,981)
Billings in excess of costs and earnings on uncompleted contracts						Billings in excess of costs and earnings on uncompleted contracts	20,884		(4,474)
Refundable and accrued income taxes	Refundable and accrued income taxes	5,255		12,424		Refundable and accrued income taxes	(14,391)		5,255
Operating lease liability	Operating lease liability	(9,387)		(9,168)		Operating lease liability	(9,168)		(9,387)
Other		(703)		5,122
Other, net						Other, net	(2,724)		(703)
Net cash provided by operating activities	Net cash provided by operating activities	86,291		120,512		Net cash provided by operating activities	51,112		86,291
Investing Activities	Investing Activities					Investing Activities
Capital expenditures	Capital expenditures	(13,070)		(17,116)		Capital expenditures	(18,119)		(13,070)
Proceeds from sales of property, plant and equipment	Proceeds from sales of property, plant and equipment	1,347		23,724		Proceeds from sales of property, plant and equipment	5,212		1,347

Other		76		(1,090)
Net cash (used) provided by investing activities		(11,647)		5,518
Other, net						Other, net	923		76
Net cash used by investing activities						Net cash used by investing activities	(11,984)		(11,647)
Financing Activities	Financing Activities					Financing Activities
Borrowings on line of credit	Borrowings on line of credit	—		193,332		Borrowings on line of credit	430,879		—
Repayments on debt		(2,000)		(5,400)
Repayment on debt						Repayment on debt	(151,000)		(2,000)
Payments on line of credit	Payments on line of credit	—		(237,500)		Payments on line of credit	(239,000)		—
Payments on debt issue costs						Payments on debt issue costs	(790)		—
Proceeds from exercise of stock options	Proceeds from exercise of stock options	4,115		1,456		Proceeds from exercise of stock options	—		4,115
Repurchase and retirement of common stock	Repurchase and retirement of common stock	(29,164)		(20,731)		Repurchase and retirement of common stock	(74,312)		(29,164)
Dividends paid	Dividends paid	(15,050)		(14,546)		Dividends paid	(14,415)		(15,050)
Other		(1,895)		(2,309)
Other, net						Other, net	(2,959)		(1,895)
Net cash used by financing activities	Net cash used by financing activities	(43,994)		(85,698)		Net cash used by financing activities	(51,597)		(43,994)
Increase in cash and cash equivalents		30,650		40,332
(Decrease) increase in cash, cash equivalents and restricted cash						(Decrease) increase in cash, cash equivalents and restricted cash	(12,469)		30,650
Effect of exchange rates on cash	Effect of exchange rates on cash	345		129		Effect of exchange rates on cash	350		345
Cash, cash equivalents and restricted cash at beginning of year	Cash, cash equivalents and restricted cash at beginning of year	47,277		14,952		Cash, cash equivalents and restricted cash at beginning of year	37,583		47,277
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	78,272	$	55,413	Cash, cash equivalents and restricted cash at end of period	$	25,464	$	78,272
Noncash Activity	Noncash Activity					Noncash Activity
Capital expenditures in accounts payable	Capital expenditures in accounts payable	$	1,095	$	684	Capital expenditures in accounts payable	$	1,557	$	1,095

See accompanying notes to consolidated financial statements.

Table of Contents

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


(In thousands)	(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Stock Held in Trust		Deferred Compensation Obligation		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity		(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at February 27, 2021		25,714	$	8,571	$	154,958	$	357,243	$	(186)	$	186	$	(28,027)	$	492,745
Balance at February 26, 2022																	Balance at February 26, 2022	23,701	$	7,901	$	149,713	$	254,825	$	(26,240)	$	386,199
Net earnings	Net earnings	—	—		—		10,817		—		—		—		10,817		Net earnings	—	—		—		22,731		—		22,731
Unrealized gain on marketable securities, net of $0 tax expense		—	—		—		—		—		—		—		—
Unrealized gain on foreign currency hedge, net of $211 tax expense		—	—		—		—		—		—		692		692
Foreign currency translation adjustments		—	—		—		—		—		—		5,880		5,880
Issuance of stock, net of cancellations		90	30		(7)		—		(3)		3		—		23
Share-based compensation		—	—		1,674		—		—		—		—		1,674
Exercise of stock options		179	60		4,055		—		—		—		—		4,115
Share repurchases		(357)	(119)		(2,218)		(10,288)		—		—		—		(12,625)
Other share retirements		(20)	(7)		(121)		(607)		—		—		—		(735)
Cash dividends		—	—		—		(5,035)		—		—		—		(5,035)
Balance at May 29, 2021		25,606	$	8,535	$	158,341	$	352,130	$	(189)	$	189	$	(21,455)	$	497,551
Net loss		—	—		—		(2,116)		—		—		—		(2,116)
Unrealized gain on marketable securities, net of $2 tax expense		—	—		—		—		—		—		4		4
Unrealized loss on foreign currency hedge, net of $203 tax benefit		—	—		—		—		—		—		(666)		(666)
Unrealized loss on marketable securities, net of $74 tax benefit																	Unrealized loss on marketable securities, net of $74 tax benefit	—	—		—		—		(276)		(276)
Unrealized loss on derivative instruments, net of $1,317 tax benefit																	Unrealized loss on derivative instruments, net of $1,317 tax benefit	—	—		—		—		(4,316)		(4,316)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		—		—		(4,300)		(4,300)		Foreign currency translation adjustments	—	—		—		—		1,732		1,732
Issuance of stock, net of cancellations	Issuance of stock, net of cancellations	67	22		—		—		(3)		3		—		22		Issuance of stock, net of cancellations	100	33		23		—		—		56
Share-based compensation	Share-based compensation	—	—		1,587		—		—		—		—		1,587		Share-based compensation	—	—		1,597		—		—		1,597

Share repurchases	Share repurchases	(249)	(83)		(1,616)		(8,095)		—		—		—		(9,794)		Share repurchases	(1,571)	(524)		(10,350)		(63,438)		—		(74,312)
Other share retirements	Other share retirements	(30)	(9)		(197)		(496)		—		—		—		(702)		Other share retirements	(30)	(10)		(198)		(1,120)		—		(1,328)
Cash dividends	Cash dividends	—	—		—		(5,025)		—		—		—		(5,025)		Cash dividends	—	—		—		(4,793)		—		(4,793)
Balance at August 28, 2021		25,394	$	8,465	$	158,115	$	336,398	$	(192)	$	192	$	(26,417)	$	476,561
Balance at May 28, 2022																	Balance at May 28, 2022	22,200	$	7,400	$	140,785	$	208,205	$	(29,100)	$	327,290
Net earnings	Net earnings	—	—		—		11,057		—		—		—		11,057		Net earnings	—	—		—		37,389		—		37,389
Unrealized loss on marketable securities, net of $40 tax benefit		—	—		—		—		—		—		(151)		(151)
Unrealized loss on foreign currency hedge, net of $265 tax benefit		—	—		—		—		—		—		(868)		(868)
Unrealized loss on marketable securities, net of $28 tax benefit																	Unrealized loss on marketable securities, net of $28 tax benefit	—	—		—		—		(106)		(106)
Unrealized loss on derivative instruments, net of $152 tax benefit																	Unrealized loss on derivative instruments, net of $152 tax benefit	—	—		—		—		(500)		(500)
Foreign currency translation adjustments																	Foreign currency translation adjustments	—	—		—		—		(2,777)		(2,777)
Issuance of stock, net of cancellations																	Issuance of stock, net of cancellations	(14)	(5)		61		—		—		56
Share-based compensation																	Share-based compensation	—	—		1,797		—		—		1,797
Exercise of stock options																	Exercise of stock options	36	12		(954)		—		—		(942)

Other share retirements																	Other share retirements	(13)	(4)		(114)		(540)		—		(658)
Cash dividends																	Cash dividends	—	—		—		(4,809)		—		(4,809)
Balance at August 27, 2022																	Balance at August 27, 2022	22,209	$	7,403	$	141,575	$	240,245	$	(32,483)	$	356,740
Net earnings																	Net earnings	—	—		—		23,765		—		23,765
Unrealized loss on marketable securities, net of $24 tax benefit																	Unrealized loss on marketable securities, net of $24 tax benefit	—	—		—		—		(88)		(88)
Unrealized gain on derivative instruments, net of $277 tax expense																	Unrealized gain on derivative instruments, net of $277 tax expense	—	—		—		—		905		905
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		—		—		(2,515)		(2,515)		Foreign currency translation adjustments	—	—		—		—		(1,295)		(1,295)
Issuance of stock, net of cancellations	Issuance of stock, net of cancellations	1	—		22		—		(3)		3		—		22		Issuance of stock, net of cancellations	9	3		250		(196)		—		57
Share-based compensation	Share-based compensation	—	—		1,546		—		—		—		—		1,546		Share-based compensation	—	—		2,567		—		—		2,567

Share repurchases		(166)	(55)		(1,092)		(5,598)		—		—		—		(6,745)

Other share retirements	Other share retirements	(2)	(1)		(12)		(51)		—		—		—		(64)		Other share retirements	(4)	(1)		(34)		(165)		—		(200)
Cash dividends	Cash dividends	—	—		—		(4,990)		—		—		—		(4,990)		Cash dividends	—	—		—		(4,813)		—		(4,813)
Balance at November 27, 2021		25,227	$	8,409	$	158,579	$	336,816	$	(195)	$	195	$	(29,951)	$	473,853
Balance at November 26, 2022																	Balance at November 26, 2022	22,214	$	7,405	$	144,358	$	258,836	$	(32,961)	$	377,638

See accompanying notes to consolidated financial statements.

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CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(Unaudited)


(In thousands)	(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Common Stock Held in Trust		Deferred Compensation Obligation		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity		(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at February 29, 2020		26,443	$	8,814	$	154,016	$	388,010	$	(685)	$	685	$	(34,062)	$	516,778
Balance at February 27, 2021																	Balance at February 27, 2021	25,714	$	8,571	$	154,958	$	357,243	$	(28,027)	$	492,745
Net earnings	Net earnings	—	—		—		2,876		—		—		—		2,876		Net earnings	—	—		—		10,817		—		10,817
Unrealized gain on marketable securities, net of $26 tax expense		—	—		—		—		—		—		97		97
Unrealized loss on foreign currency hedge, net of $189 tax benefit		—	—		—		—		—		—		(617)		(617)
Unrealized gain on marketable securities, net of $0 tax expense																	Unrealized gain on marketable securities, net of $0 tax expense	—	—		—		—		—		—
Unrealized gain on derivative instruments, net of $211 tax expense																	Unrealized gain on derivative instruments, net of $211 tax expense	—	—		—		—		692		692
Foreign currency translation adjustments																	Foreign currency translation adjustments	—	—		—		—		5,880		5,880
Issuance of stock, net of cancellations																	Issuance of stock, net of cancellations	90	30		(7)		—		—		23
Share-based compensation																	Share-based compensation	—	—		1,674		—		—		1,674
Exercise of stock options																	Exercise of stock options	179	60		4,055		—		—		4,115
Share repurchases																	Share repurchases	(357)	(119)		(2,218)		(10,288)		—		(12,625)
Other share retirements																	Other share retirements	(20)	(7)		(121)		(607)		—		(735)
Cash dividends																	Cash dividends	—	—		—		(5,035)		—		(5,035)
Balance at May 29, 2021																	Balance at May 29, 2021	25,606	$	8,535	$	158,341	$	352,130	$	(21,455)	$	497,551
Net loss																	Net loss	—	—		—		(2,116)		—		(2,116)
Unrealized gain on marketable securities, net of $2 tax expense																	Unrealized gain on marketable securities, net of $2 tax expense	—	—		—		—		4		4
Unrealized loss on derivative instruments, net of $203 tax benefit																	Unrealized loss on derivative instruments, net of $203 tax benefit	—	—		—		—		(666)		(666)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		—		—		(6,151)		(6,151)		Foreign currency translation adjustments	—	—		—		—		(4,300)		(4,300)
Issuance of stock, net of cancellations	Issuance of stock, net of cancellations	183	62		(39)		—		(11)		11		—		23		Issuance of stock, net of cancellations	67	22		—		—		—		22
Share-based compensation	Share-based compensation	—	—		1,406		—		—		—		—		1,406		Share-based compensation	—	—		1,587		—		—		1,587

Share repurchases	Share repurchases	(231)	(77)		(1,370)		(3,284)		—		—		—		(4,731)		Share repurchases	(249)	(83)		(1,616)		(8,095)		—		(9,794)
Other share retirements	Other share retirements	(26)	(9)		(151)		(505)		—		—		—		(665)		Other share retirements	(30)	(9)		(197)		(496)		—		(702)
Cash dividends	Cash dividends	—	—		—		(4,872)		—		—		—		(4,872)		Cash dividends	—	—		—		(5,025)		—		(5,025)
Balance at May 30, 2020		26,369	$	8,790	$	153,862	$	382,225	$	(696)	$	696	$	(40,733)	$	504,144
Balance at August 28, 2021																	Balance at August 28, 2021	25,394	$	8,465	$	158,115	$	336,398	$	(26,417)	$	476,561
Net earnings	Net earnings	—	—		—		17,658		—		—		—		17,658		Net earnings	—	—		—		11,057		—		11,057
Unrealized gain on marketable securities, net of $13 tax expense		—	—		—		—		—		—		50		50
Unrealized gain on foreign currency hedge, net of $404 tax expense		—	—		—		—		—		—		1,319		1,319
Unrealized loss on marketable securities, net of $40 tax benefit																	Unrealized loss on marketable securities, net of $40 tax benefit	—	—		—		—		(151)		(151)
Unrealized loss on derivative instruments, net of $265 tax benefit																	Unrealized loss on derivative instruments, net of $265 tax benefit	—	—		—		—		(868)		(868)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		—		—		6,139		6,139		Foreign currency translation adjustments	—	—		—		—		(2,515)		(2,515)
Issuance of stock, net of cancellations	Issuance of stock, net of cancellations	121	41		(23)		—		(11)		11		—		18		Issuance of stock, net of cancellations	1	—		22		—		—		22
Share-based compensation	Share-based compensation	—	—		2,256		—		—		—		—		2,256		Share-based compensation	—	—		1,546		—		—		1,546

Other share retirements		(23)	(8)		(139)		(390)		—		—		—		(537)
Cash dividends		—	—		—		(4,879)		—		—		—		(4,879)
Balance at August 29, 2020		26,467	$	8,823	$	155,956	$	394,614	$	(707)	$	707	$	(33,225)	$	526,168
Net earnings		—	—		—		37,273		—		—		—		37,273
Unrealized loss on marketable securities, net of $0 tax benefit		—	—		—		—		—		—		(2)		(2)
Unrealized gain on foreign currency hedge, net of $90 tax expense		—	—		—		—		—		—		294		294
Foreign currency translation adjustments		—	—		—		—		—		—		899		899
Issuance of stock, net of cancellations		10	3		15		—		524		(524)		—		18
Share-based compensation		—	—		2,501		—		—		—		—		2,501
Exercise of stock options		127	42		1,414		—		—		—		—		1,456
Share repurchases	Share repurchases	(620)	(207)		(3,781)		(12,012)		—		—		—		(16,000)		Share repurchases	(166)	(55)		(1,092)		(5,598)		—		(6,745)
Other share retirements	Other share retirements	(22)	(7)		(131)		(331)		—		—		—		(469)		Other share retirements	(2)	(1)		(12)		(51)		—		(64)
Cash dividends	Cash dividends	—	—		—		(4,795)		—		—		—		(4,795)		Cash dividends	—	—		—		(4,990)		—		(4,990)
Balance at November 28, 2020		25,962	$	8,654	$	155,974	$	414,749	$	(183)	$	183	$	(32,034)	$	547,343
Balance at November 27, 2021																	Balance at November 27, 2021	25,227	$	8,409	$	158,579	$	336,816	$	(29,951)	$	473,853

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1.Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements of Apogee Enterprises, Inc. (we, us, our or the Company) have been prepared in accordance with accounting principles generally accepted in the United States. The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended February ~~27, 2021.~~26, 2022. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly and year to date operating results are reflected herein and are of a normal, recurring nature. The results of operations for the three- and nine-month periods ended November ~~27, 2021~~26, 2022 are not necessarily indicative of the results to be expected for the full year.

~~COVID-19 update~~

During fiscal 2021, as a result of the global COVID-19 pandemic, we experienced some delays in commercial construction projects and orders and other disruptions to our business, including various physical distancing and health-related precautions, and we were required to close operations at two facilities in our Large-Scale Optical (LSO) segment for a portion of fiscal 2021 due to governmental orders. We were also impacted by quarantine-related absenteeism among our production workforce, resulting in labor constraints at some of our facilities. Through the first three quarters of fiscal 2022, the negative impacts on our business directly due to the COVID-19 pandemic have moderated. The extent to which COVID-19 will continue to impact our businesses in the future will depend on numerous evolving factors including, but not limited to, the emergence of new variants of the coronavirus, such as the Delta and Omicron variants, and the effectiveness of ongoing public health initiatives, which have been boosted by vaccine production and distribution.

~~Adoption of new accounting standards~~

At the beginning of ~~fiscal 2022, we adopted~~ the ~~guidance in ASU 2019-12,~~ ~~Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes~~. The amendments in this ASU removed exceptions on intra-period tax allocations and reporting and provided simplification on accounting for franchise taxes, tax basis goodwill and tax law changes. The adoption of this ASU did not have a significant impact on the consolidated financial statements.

~~At the beginning of fiscal 2022, we adopted the guidance in ASU 2020-04,~~ ~~Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting~~. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The adoption of this ASU did not have a significant impact on the consolidated financial statements.

~~Equity Investment~~

~~During the third~~first quarter of fiscal 2022, an impairment of $3.0 million was recognized within other (expense) income within the consolidated results of operations related to a minority equity investment held by the Company which represents a write-down2023, we began management of the ~~entire investment~~Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The comparative fiscal 2022 segment results for the ~~company.~~Architectural Framing Systems and Architectural Services segments have been recast to reflect the move of the Sotawall business into the Architectural Services segment from the Architectural Framing Systems segment, effective at the start of the first quarter of fiscal 2023.

2.Revenue, Receivables and Contract Assets and Liabilities

Revenue

The following table disaggregates total revenue by timing of recognition (see Note 12 for disclosure of revenue by segment):


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021		November 28, 2020		November 27, 2021		November 28, 2020		(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Recognized at shipment	Recognized at shipment	$	141,826	$	129,132	$	419,893	$	379,292	Recognized at shipment	$	168,593	$	141,826	$	504,450	$	419,893
Recognized over time	Recognized over time	192,391		184,451		566,127		542,870		Recognized over time	199,254		192,391		592,141		566,127
Total	Total	$	334,217	$	313,583	$	986,020	$	922,162	Total	$	367,847	$	334,217	$	1,096,591	$	986,020

Receivables

Receivables reflected in the financial statements represent the net amount expected to be collected. An allowance for credit losses is established based on expected losses. Expected losses are estimated by reviewing individual accounts, considering aging, financial condition of the debtor, recent payment history, current and forecast economic conditions and other relevant factors. Upon billing, aging of receivables is monitored until collection. An account is considered current when it is within agreed upon payment terms. An account is written off when it is determined that the asset is no longer collectible. Retainage on

~~Table of Contents~~

construction contracts represents amounts withheld by our customers on long-term projects until the project reaches a level of completion where amounts are ~~released.~~released to us from the customer.


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Trade accounts	Trade accounts	$	124,890	$	120,534	Trade accounts	$	142,591	$	129,085
Construction contracts	Construction contracts	16,266		12,163		Construction contracts	50,423		12,857
Contract retainage	Contract retainage	26,164		45,167		Contract retainage	31,395		28,782
Total receivables	Total receivables	167,320		177,864		Total receivables	224,409		170,724
Less: allowance for credit losses	Less: allowance for credit losses	2,315		1,947		Less: allowance for credit losses	1,855		2,132
Net receivables		$	165,005	$	175,917
Receivables, net						Receivables, net	$	222,554	$	168,592

The following table summarizes the activity in the allowance for credit losses:


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Beginning balance	Beginning balance	$	1,947	$	2,469	Beginning balance	$	2,132	$	1,947
Additions charged to costs and expenses	Additions charged to costs and expenses	635		389		Additions charged to costs and expenses	20		729
Deductions from allowance, net of recoveries	Deductions from allowance, net of recoveries	(251)		(887)		Deductions from allowance, net of recoveries	(279)		(514)
Other changes (1)	Other changes (1)	(16)		(24)		Other changes (1)	(18)		(30)
Ending balance	Ending balance	$	2,315	$	1,947	Ending balance	$	1,855	$	2,132
(1) Result of foreign currency effects	(1) Result of foreign currency effects					(1) Result of foreign currency effects

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Contract assets and liabilities

Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to the customer. Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts. Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our consolidated balance sheets.

The time period between when performance obligations are complete and when payment is due is not significant. In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values, and retainage is withheld by the customer until the project reaches a level of completion ~~where~~at which point amounts are ~~released.~~released to us from the customer.


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Contract assets	Contract assets	$	54,487	$	74,664	Contract assets	$	64,359	$	59,185
Contract liabilities	Contract liabilities	20,689		25,000		Contract liabilities	31,657		11,373

The ~~change~~changes in contract assets and contract liabilities ~~was~~were mainly due to timing of project activity within our businesses that operate under long-term contracts.


Other contract-related disclosures	Other contract-related disclosures	Three Months Ended				Nine Months Ended				Other contract-related disclosures	Three Months Ended				Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021		November 28, 2020		November 27, 2021		November 28, 2020		(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Revenue recognized related to contract liabilities from prior year-end	Revenue recognized related to contract liabilities from prior year-end	$	1,687	$	2,044	$	18,266	$	16,239	Revenue recognized related to contract liabilities from prior year-end	$	3,473	$	1,687	$	36,630	$	18,266
Revenue recognized related to prior satisfaction of performance obligations	Revenue recognized related to prior satisfaction of performance obligations	5,051		4,016		12,568		10,545		Revenue recognized related to prior satisfaction of performance obligations	4,640		5,051		9,586		12,568

Some of our contracts have an expected duration of longer than a year, with performance obligations extending over that time frame. Generally, these contracts are found in our businesses that typically operate with long-term contracts, which recognize revenue over time. ~~As of November 27, 2021, the~~The transaction ~~price~~prices associated with unsatisfied performance obligations ~~was approximately $863.1 million. The performance obligations~~at November 26, 2022 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:


(In thousands)	November ~~27, 2021~~26, 2022
Within one year	$	~~547,110~~493,289
Within two years	~~247,753~~280,427
Beyond two years	~~68,209~~87,660
Total	$	~~863,072~~861,376

~~Table of Contents~~

3.Supplemental Balance Sheet Information

Inventories


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Raw materials	Raw materials	$	43,436	$	36,681	Raw materials	$	43,722	$	42,541
Work-in-process	Work-in-process	17,532		18,932		Work-in-process	17,081		18,144
Finished goods	Finished goods	14,469		17,210		Finished goods	25,229		19,809
Total inventories	Total inventories	$	75,437	$	72,823	Total inventories	$	86,032	$	80,494

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Other current liabilities


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Warranties	Warranties	$	10,889	$	12,298	Warranties	$	14,137	$	11,786
Accrued project losses		904		4,572

Income and other taxes	Income and other taxes	8,727		7,459		Income and other taxes	5,832		15,770
Accrued self-insurance reserves	Accrued self-insurance reserves	9,431		6,482		Accrued self-insurance reserves	15,888		8,796
Accrued freight	Accrued freight	1,931		1,477		Accrued freight	1,917		2,078
Deferred revenue						Deferred revenue	2,536		2,714
Other	Other	25,704		20,895		Other	25,864		26,318
Total other current liabilities	Total other current liabilities	$	57,586	$	53,183	Total other current liabilities	$	66,174	$	67,462

Other non-current liabilities


(In thousands)	(In thousands)	November 27, 2021		February 27, 2021		(In thousands)	November 26, 2022		February 26, 2022
Deferred benefit from New Market Tax Credit transactions		$	9,165	$	15,717
Deferred benefit from New Markets Tax Credit transactions						Deferred benefit from New Markets Tax Credit transactions	$	9,250	$	9,165
Retirement plan obligations	Retirement plan obligations	7,575		7,730		Retirement plan obligations	6,269		7,041
Deferred compensation plan	Deferred compensation plan	12,682		13,507		Deferred compensation plan	6,851		9,483
Deferred tax liabilities	Deferred tax liabilities	4,773		8,310		Deferred tax liabilities	3,793		2,296
Deferred payroll taxes		6,789		6,789

Other	Other	17,128		16,430		Other	21,033		16,598
Total other non-current liabilities	Total other non-current liabilities	$	58,112	$	68,483	Total other non-current liabilities	$	47,196	$	44,583

4.Financial Instruments

Marketable securities

Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), we hold the following available-for-sale marketable securities, made up of municipal and corporate bonds:

(In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated
Fair Value
November 27, 2021 $ 12,337 $ 223 $ 33 $ 12,527
February 27, 2021 12,517 386 10 12,893


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
November 26, 2022	$	10,835	$	—	$	675	$	10,160
February 26, 2022	11,862		45		123		11,784

Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of these bonds at November ~~27, 2021,~~26, 2022, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.

~~Table of Contents~~


(In thousands)	(In thousands)	Amortized Cost		Estimated Fair Value		(In thousands)	Amortized Cost		Estimated Fair Value
Due within one year	Due within one year	$	1,011	$	1,024	Due within one year	$	1,739	$	1,720
Due after one year through five years	Due after one year through five years	9,536		9,716		Due after one year through five years	9,096		8,440
Due after five years through 10 years		990		973

Due beyond 15 years		800		814

Total	Total	$	12,337	$	12,527	Total	$	10,835	$	10,160

Derivative instruments

We use interest rate swaps, foreign exchange forward contracts, commodity swaps and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance.

In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility and term loan. As of November ~~27, 2021,~~26, 2022, the interest rate swap contract had a notional value of $30.0 million.

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We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates (primarily related to the Canadian dollar). These contracts generally have an original maturity date of less than one year. As of November ~~27, 2021,~~26, 2022, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S. dollar notional values of ~~$16.5~~$3.0 million and ~~$8.0~~$8.1 million, respectively.

These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income.

Fair value measurements

Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.

(In thousands) Quoted Prices in
Active Markets
(Level 1) Other Observable Inputs (Level 2) Total Fair Value
November 27, 2021
Assets:
Money market funds $ 58,482 $ — $ 58,482
Municipal and corporate bonds — 12,527 12,527
Cash surrender value of life insurance — 18,839 18,839
Aluminum hedge contracts — 68 68
Interest rate swap contract — 69 69
Liabilities:
Deferred compensation — 14,140 14,140
Foreign currency forward/option contracts — 446 446
February 27, 2021
Assets:
Money market funds $ 26,034 $ — $ 26,034
Municipal and corporate bonds — 12,893 12,893
Cash surrender value of life insurance — 18,632 18,632
Foreign currency forward/option contracts — 606 606
Aluminum hedge contracts — 363 363
Liabilities:
Deferred compensation — 13,507 13,507
Interest rate swap contract — 504 504

~~Table of Contents~~


(In thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total Fair Value
November 26, 2022
Assets:
Money market funds	$	6,629	$	—	$	6,629

Municipal and corporate bonds	—		10,160		10,160
Cash surrender value of life insurance	—		16,247		16,247


Interest rate swap contract	—		1,917		1,917
Liabilities:
Deferred compensation	—		9,277		9,277
Foreign currency forward/option contract	—		192		192
Aluminum hedging contract	—		2,382		2,382


February 26, 2022
Assets:
Money market funds	$	19,288	$	—	$	19,288

Municipal and corporate bonds	—		11,784		11,784
Cash surrender value of life insurance	—		17,831		17,831

Aluminum hedging contract	—		2,133		2,133
Interest rate swap contract	—		718		718
Liabilities:
Deferred compensation	—		12,491		12,491
Foreign currency forward/option contract	—		161		161

Money market funds and commercial paper

Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets.

Municipal and corporate bonds

Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as other current or other non-current assets based on maturity date.

Cash surrender value of life insurance and deferred compensation

Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. Changes in cash surrender value are recorded in other expense. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.

Derivative instruments

The interest rate swap is measured at fair value using other observable market inputs, based off of benchmark interest rates.

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Forward foreign exchange and fixed/floating aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates, and forward purchase aluminum prices. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates and aluminum prices.

Nonrecurring fair value measurements

We measure certain financial instruments at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment, by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, we would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

~~See Note 13 for additional information on the impairment charges recorded to fixed assets and right-of-use lease assets during the second and third quarters of fiscal 2022.~~

5.Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of the cost over the value of net tangible and identified intangible assets of acquired businesses. We evaluate goodwill for impairment annually as of the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

~~Based on~~At the ~~impairment analysis performed in~~beginning of the ~~fourth~~first quarter of fiscal ~~2021, estimated fair value was~~2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in ~~excess~~order to create a single, unified offering for larger custom curtainwall projects, which resulted in the combination of ~~carrying value at six of our eight reporting units. However, estimated fair value did not exceed carrying value for two~~the Sotawall and Harmon reporting units ~~within the Architectural Framing Systems segment, EFCO and Sotawall. As~~into a ~~result, as of February 27, 2021, we incurred goodwill impairment expense of $46.7 million and $17.1 million in our EFCO and Sotawall~~single reporting units, respectively. The goodwill impairment expense recorded during the year ended February 27, 2021, as reflected in the table below, represents the total accumulated goodwill impairment expenses recorded.

During the third quarter of fiscal 2022, we combined certain reporting units to form two reporting units, following certain structural and leadership changes at the Company, specifically within the Architectural Framing Systems segment. Within this

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segment, as a result of integration efforts that are ongoing, leadership over our Wausau, EFCO and Sotawall reporting units have been combined to form the Window and Wall Systems reporting unit, and our Linetec and Tubelite reporting units have been combined to form the Storefront and Finishing Solutions reporting unit. With these organizational changes, Architectural Framing Systems segment management regularly reviews and evaluates the results of the Window and Wall Systems and Storefront and Finishing Solutions reporting units.Additionally, functional leaders in areas such as operations, sales, marketing and general and administrative areas are responsible for allocating resources and reviewing results of the Window and Wall Systems and Storefront and Finishing Solutions reporting units. The goodwill of the five individual pre-integration reporting units was aggregated to the respective combined reporting units. We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded that no adjustment to the carrying value of goodwill was ~~necessary~~necessary. Concurrent with the move of Sotawall from the Architectural Framing Systems segment to the Architectural Services segment effective at the start of our first quarter of fiscal 2023, goodwill was reallocated to the affected reporting units within each segment, using a relative fair value approach as ~~a result of this change.~~outlined in ASC 350, Intangibles - Goodwill and Other. In addition, for all reporting units, no qualitative indicators of impairment were identified during the ~~third~~first quarter of fiscal 2023, and therefore, no interim quantitative goodwill impairment evaluation was performed.

The following table presents the carrying amount of goodwill attributable to each reporting segment ~~was:~~ including the amount of goodwill that was reallocated from the Architectural Framing Systems segment to the Architectural Services segment using the relative fair value approach during the first quarter of fiscal 2023:

(In thousands) Architectural Framing Systems Architectural Glass Architectural Services Large-Scale
Optical Total
Balance at February 29, 2020 $ 148,183 $ 25,656 $ 1,120 $ 10,557 $ 185,516
Adjustment (1)
6,315 — — — 6,315
Impairment expense (63,769) — — — (63,769)
Foreign currency translation 2,370 (334) — — 2,036
Balance at February 27, 2021 93,099 25,322 1,120 10,557 130,098
Foreign currency translation (112) (54) — — (166)
Balance at November 27, 2021 $ 92,987 $ 25,268 $ 1,120 $ 10,557 $ 129,932
(1) During the first quarter of fiscal 2021, we recorded a $6.3 million increase to goodwill and corresponding increase to deferred tax liabilities to correct an immaterial error related to prior periods. The error was not material to any previously reported annual or interim consolidated financial statements.


(In thousands)	Architectural Framing Systems		Architectural Services		Architectural Glass		Large-Scale Optical		Total
Balance at February 27, 2021	$	93,099	$	1,120	$	25,322	$	10,557	$	130,098


Foreign currency translation	82		—		(78)		—		4
Balance at February 26, 2022	93,181		1,120		25,244		10,557		130,102

Reallocation among reporting units (1)	(2,048)		2,048		—		—		—

Foreign currency translation	(763)		(105)		34		—		(834)
Balance at November 26, 2022	$	90,370	$	3,063	$	25,278	$	10,557	$	129,268

(1) Represents the reallocation of goodwill as a result of transitioning Sotawall from the Architectural Framing Systems segment to the Architectural Services segment as of the start of the first quarter of fiscal 2023.

Other intangible assets

Indefinite-lived intangible assets

We have intangible assets for certain acquired trade names and trademarks which are determined to have indefinite useful lives. We test indefinite-lived intangible assets for impairment annually at the same measurement date as goodwill, the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Based on ~~our~~the impairment analysis performed in the fourth quarter of fiscal 2022, the fair value of each of our

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trade names and trademarks exceeded the carrying ~~amount, except~~amount. However, due to triggering events identified in the fourth quarter of fiscal 2022, resulting from the finalization of our plans for integrating the ~~EFCO tradename, within our~~Sotawall business into the Architectural ~~Framing Systems segment. The~~Services segment, beginning in fiscal 2023, we determined that the carrying value of the Sotawall trade name exceeded fair value by $12.7 million. We determined ~~for~~that Sotawall had an immaterial fair value, resulting in the ~~EFCO tradename was less than its carrying value by $6.3 million;~~trade name being fully impaired as of fiscal 2022 year-end. We recognized this amount ~~was recognized~~ as impairment expense in the fourth quarter ended February ~~27, 2021,~~26, 2022.

Finite-lived intangible assets

Long-lived assets or asset groups, including intangible assets subject to amortization and property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable. We use undiscounted cash flows to determine whether impairment exists and measure any impairment loss using discounted cash flows to determine the fair value of long-lived assets. Due to triggering events identified during the fourth quarter of fiscal 2022, as ~~reflected~~a result of finalization of our plans for integrating the Sotawall business into the Architectural Services segment, beginning in fiscal 2023, we determined that the finite-lived intangible assets of Sotawall were impaired as of February 26, 2022. As such, we recognized a long-lived asset impairment charge of $36.7 million in finite-lived intangible assets in the ~~table below.~~fourth quarter of fiscal year 2022, within the Architectural Framing Systems segment.

The gross carrying amount of other intangible assets and related accumulated amortization was:


(In thousands)	(In thousands)	Gross Carrying Amount		Accumulated Amortization		Impairment Expense		Foreign Currency Translation		Net		(In thousands)	Gross Carrying Amount		Accumulated Amortization		Impairment Expense		Foreign Currency Translation		Net
November 27, 2021
November 26, 2022												November 26, 2022
Definite-lived intangible assets:	Definite-lived intangible assets:											Definite-lived intangible assets:
Customer relationships	Customer relationships	$	122,961	$	(45,351)	$	—	$	(373)	$	77,237	Customer relationships	$	89,495	$	(48,843)	$	—	$	(2,077)	$	38,575
Other intangibles	Other intangibles	41,838		(35,149)		—		(134)		6,555		Other intangibles	39,449		(35,300)		—		(815)		3,334
Total definite-lived intangible assets		164,799		(80,500)		—		(507)		83,792
Total												Total	128,944		(84,143)		—		(2,892)		41,909
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:											Indefinite-lived intangible assets:
Trademarks	Trademarks	39,832		—		—		(71)		39,761		Trademarks	27,129		—		—		(213)		26,916
Total intangible assets	Total intangible assets	$	204,631	$	(80,500)	$	—	$	(578)	$	123,553	Total intangible assets	$	156,073	$	(84,143)	$	—	$	(3,105)	$	68,825
February 27, 2021
February 26, 2022												February 26, 2022
Definite-lived intangible assets:	Definite-lived intangible assets:											Definite-lived intangible assets:
Customer relationships	Customer relationships	$	119,647	$	(40,443)	$	—	$	3,315	$	82,519	Customer relationships	$	122,961	$	(47,226)	$	(33,608)	$	141	$	42,268
Other intangibles	Other intangibles	41,293		(34,234)		—		643		7,702		Other intangibles	41,838		(35,613)		(3,127)		(14)		3,084
Total definite-lived intangible assets		160,940		(74,677)		—		3,958		90,221
Total												Total	164,799		(82,839)		(36,735)		127		45,352
Indefinite-lived intangible assets:	Indefinite-lived intangible assets:											Indefinite-lived intangible assets:
Trademarks	Trademarks	45,300		—		(6,300)		832		39,832		Trademarks	39,832		—		(12,738)		35		27,129
Total intangible assets	Total intangible assets	$	206,240	$	(74,677)	$	(6,300)	$	4,790	$	130,053	Total intangible assets	$	204,631	$	(82,839)	$	(49,473)	$	162	$	72,481

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Amortization expense on definite-lived intangible assets was ~~$5.9~~$3.1 million and ~~$5.6~~$5.9 million for the nine-month periods ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, respectively. Amortization expense of other identifiable intangible assets is included in selling, general and administrative expenses. At November ~~27, 2021,~~26, 2022, the estimated future amortization expense for definite-lived intangible assets was:


(In thousands)	(In thousands)	Remainder of Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		(In thousands)	Remainder of 2023		2024		2025		2026		2027
Estimated amortization expense	Estimated amortization expense	$	2,075	$	8,262	$	8,082	$	7,638	$	7,621	Estimated amortization expense	$	1,136	$	4,393	$	4,363	$	4,346	$	4,292

6.Debt

~~As of November~~During the second quarter ended August 27, ~~2021,~~2022, we ~~had a~~amended and extended our committed revolving credit facility ~~with~~to include maximum borrowings of up to ~~$235~~$385 million with a maturity of ~~June 2024. There~~August 2027. As part of the amendment, we repaid the $150 million term loan with borrowings under the revolving credit facility. As of November 26, 2022, outstanding borrowings under our revolving credit facility were $188.0 million, while there were no outstanding borrowings under the revolving credit facility as of ~~November 27, 2021 and~~ February ~~27, 2021. At November 27, 2021 and February 27, 2021, we also had a $150 million term loan with a maturity date of June 2024.~~26, 2022.

Our revolving credit facility ~~and term loan contain~~contains two maintenance financial covenants that require us to stay below a maximum debt-to-EBITDA ratio and maintain a minimum ratio of EBITDA-to-interest expense. Both ratios are computed quarterly, with

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EBITDA calculated on a rolling four-quarter basis. At November ~~27, 2021,~~26, 2022, we were in compliance with both financial covenants. Additionally, at November ~~27, 2021,~~26, 2022, we had a total of ~~$16.4~~$12.3 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years ~~2023~~2024 to 2032 and reduce borrowing capacity under the revolving credit facility.

At November ~~27, 2021,~~26, 2022, debt included ~~$13.0~~$12.0 million of industrial revenue bonds that mature in fiscal years ~~2023~~2036 through 2043. In ~~July 2021, two~~March 2022, a $1.0 million industrial revenue ~~bonds~~bond matured and ~~were~~was repaid. The fair value of all industrial revenue bonds approximated carrying value at November ~~27, 2021,~~26, 2022, due to the variable interest rates on these instruments. Our credit facility, term loan and industrial revenue bonds would be classified as Level 2 within the fair value hierarchy described in Note 4.

We also maintain two Canadian committed, revolving credit facilities totaling $25.0 million (USD). ~~As of~~At November ~~27, 2021 and February 27, 2021,~~26, 2022, outstanding borrowings under our Canadian committed, revolving credit facilities were $3.7 million, while there were no outstanding borrowings ~~outstanding~~ under the ~~facilities.~~Canadian facilities as of February 26, 2022.

Interest payments were ~~$2.7~~$5.3 million and ~~$3.7~~$2.7 million for the nine months ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, respectively.

7. Leases

We lease certain of the buildings and equipment used in our operations. We determine if an arrangement contains a lease at inception. Currently, all of our lease arrangements are classified as operating leases. We elected the package of practical expedients permitted under the transition guidance in adopting ASC 842, which among other things, allowed us to carry forward our historical lease classification. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term. Our leases have remaining lease terms of one to ten years, some of which include renewal options that can extend the lease for up to an additional ten years at our sole discretion. We have made an accounting policy election not to record leases with an original term of 12 months or less on our consolidated balance sheet; such leases are expensed on a straight-line basis over the lease term.

In determining lease asset value, we consider fixed or variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. We use a discount rate for each lease based upon an estimated incremental borrowing rate over a similar term. We have elected the practical expedient to account for lease and non lease components (e.g., common-area maintenance costs) as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We are not a lessor in any transactions.

The components of lease expense were as follows:


	Three Months Ended				Nine Months Ended
(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Operating lease cost	$	3,293	$	3,422	$	9,298	$	10,321
Short-term lease cost	144		357		804		821
Variable lease cost	904		725		2,667		2,182

Total lease cost	$	4,341	$	4,504	$	12,769	$	13,324

Other supplemental information related to leases was as follows:


	Nine Months Ended
(In thousands except weighted-average data)	November 26, 2022			November 27, 2021

Cash paid for amounts included in the measurement of operating lease liabilities	$	10,580		$	10,744
Lease assets obtained in exchange for new operating lease liabilities	$	11,125		$	3,107
Weighted-average remaining lease term - operating leases	4.7 years			5.4 years
Weighted-average discount rate - operating leases	3.14		%	2.88		%

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~~The components of lease expense were as follows:~~

Three Months Ended Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020
Operating lease cost $ 3,422 $ 3,477 $ 10,321 $ 10,329
Short-term lease cost 357 472 821 1,384
Variable lease cost 725 678 2,182 2,071
Total lease cost $ 4,504 $ 4,627 $ 13,324 $ 13,784

~~Other supplemental information related to leases was as follows:~~

Nine Months Ended
(In thousands except weighted-average data) November 27, 2021 November 28, 2020
Cash paid for amounts included in the measurement of operating lease liabilities $ 10,744 $ 10,233
Lease assets obtained in exchange for new operating lease liabilities $ 3,107 $ 19,623
Weighted-average remaining lease term - operating leases 5.4 years 5.8 years
Weighted-average discount rate - operating leases 2.88 % 3.18 %

Future maturities of lease liabilities are as follows:


(In thousands)	November ~~27, 2021~~26, 2022
Remainder of Fiscal ~~2022~~2023	$	~~3,501~~
~~Fiscal 2023~~	~~13,563~~3,243
Fiscal 2024	~~11,261~~12,587
Fiscal 2025	~~9,915~~11,326
Fiscal 2026	~~7,903~~9,371
Fiscal 2027	~~6,395~~7,960
Fiscal 2028	4,270
Thereafter	~~6,721~~2,324
Total lease payments	~~59,259~~51,081
Less: Amounts representing interest	~~3,817~~3,226
Present value of lease liabilities	$	~~55,442~~47,855

8.Commitments and Contingent Liabilities

Bond commitments

In the ordinary course of business, predominantly in our Architectural Services and Architectural Framing Systems segments, we are required to provide surety or performance bonds that commit payments to our customers for any non-performance. At November ~~27, 2021, $1.2~~26, 2022, $1.4 billion of these types of bonds were outstanding, of which ~~$448.0~~$578.7 million is in our backlog. These bonds do not have stated expiration dates. We have never been required to make payments under surety or performance bonds with respect to our existing businesses.

Warranty and project-related contingencies

We reserve estimated exposures on known claims, as well as on a portion of anticipated claims, for product warranty and rework cost, based on historical product liability claims as a ratio of sales. Claim costs are deducted from the accrual when paid. Factors that could have an impact on ~~the warranty accrual~~these accruals in any given period include the following: changes in manufacturing quality, changes in product mix and any significant changes in sales volume. ~~A warranty rollforward follows:~~


		Nine Months Ended					Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021		November 28, 2020		(In thousands)	November 26, 2022		November 27, 2021
Balance at beginning of period	Balance at beginning of period	$	14,999	$	15,629	Balance at beginning of period	$	13,923	$	14,999
Additional accruals	Additional accruals	6,678		4,175		Additional accruals	11,201		4,175

Claims paid	Claims paid	(8,686)		(4,071)		Claims paid	(7,755)		(4,071)

Balance at end of period	Balance at end of period	$	12,991	$	15,733	Balance at end of period	$	17,369	$	15,103

Additionally, we 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

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Framing Systems businesses. We manage the risk of these exposures through contract negotiations, proactive project management and insurance coverages. ~~The liability for these types of project-related contingencies was $0.9 million and $4.6 million as of November 27, 2021 and February 27, 2021, respectively.~~

Letters of credit

At November ~~27, 2021,~~26, 2022, we had ~~$16.4~~$12.3 million of ongoing letters of credit, all of which have been issued under our committed revolving credit facility, as discussed in Note 6. We also have a ~~$6.9~~$3.4 million letter of credit which has been issued outside our committed revolving credit facility, with no impact on our borrowing capacity and debt covenants.

Purchase obligations

Purchase obligations for raw material commitments and capital expenditures totaled ~~$239.5~~$222.2 million as of November ~~27, 2021.~~26, 2022.

New Markets Tax Credit (NMTC) transactions

We have three outstanding NMTC arrangements which help to support operational expansion. Proceeds received from investors on these transactions are included within other current and other non-current liabilities in our consolidated balance sheets. The NMTC arrangements are subject to 100 percent tax credit recapture for a period of seven years from the date of each respective transaction. Upon the termination of each arrangement, these proceeds will be recognized in earnings in exchange for the transfer of tax credits. The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other non-current assets in our consolidated balance sheets. These costs will be recognized in conjunction with the recognition of the related proceeds on each arrangement. During the construction phase or for working capital purposes for each

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project, we are required to hold cash dedicated to fund each ~~capital~~ project which is classified as restricted cash in our consolidated balance sheets. Variable-interest entities, which have been included within our consolidated financial statements, have been created as a result of the structure of these transactions, as investors in the programs do not have a material interest in their underlying economics.

During the first quarter of fiscal 2023, one NMTC transaction was terminated, and a new NMTC transaction was established as a replacement. As a result of these transactions, $19.5 million in previous proceeds received were repaid and $19.5 million was contributed back to the Company as part of the newly established NMTC transaction. This NMTC transaction will be held for the remainder of the original seven-year term.

The table below provides a summary of our outstanding NMTC transactions (in millions):


Inception date	Inception date	Termination date	Proceeds received		Deferred costs		Net benefit		Inception date	Termination date	Deferred Benefit		Deferred costs		Net benefit

June 2016	June 2016	June 2023	$	6.0	$	1.2	$	4.8	June 2016	June 2023	$	6.0	$	1.2	$	4.8
August 2018		August 2025	6.6		1.4		5.2
September 2018	September 2018	September 2025	3.2		1.0		2.2		September 2018	September 2025	3.2		1.0		2.2
May 2022(1)									May 2022(1)	August 2025	6.1		1.6		4.5
Total	Total		$	15.8	$	3.6	$	12.2	Total		$	15.3	$	3.8	$	11.5

(1) Continuation of the August 2018 NMTC financing transaction

Litigation

The Company is a party to various legal proceedings incidental to its normal operating activities. In particular, like others in the construction supply and services industry, the Company is routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. 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. The Company intends to appeal 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. The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability matters. Although 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.

9.Share-Based Compensation

Total share-based compensation expense included in the results of operations was $6.0 million for the nine-month period ended November 26, 2022 and $4.8 million for the nine-month period ended November 27, ~~2021 and $6.2 million for the nine-month period ended November 28, 2020.~~2021.

Stock options ~~and SARs~~

Stock option ~~and SAR~~ activity for the current nine-month period is summarized as follows:

Stock options and SARs Number of Shares Weighted Average Exercise Price Weighted Average Remaining Contractual Life Aggregate Intrinsic Value
Outstanding at February 27, 2021 633,700 $ 23.04
Awards exercised (178,564) 23.04
Awards canceled (84,336) 23.04
Outstanding at November 27, 2021 370,800 $ 23.04 8.6 years $ 4,694,328
Vested or expected to vest at November 27, 2021 370,800 $ 23.04 8.6 years $ 4,694,328

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Stock Options	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at beginning of year	370,800	$	23.04

Awards exercised	(145,060)	23.04
Awards canceled/expired	(67,740)	23.04
Outstanding and expected to vest at November 26, 2022	158,000	$	23.04	0.7 years	$	2,000,280

For the nine-months ended November ~~27, 2021 and November 28, 2020,~~26, 2022, there were no cash proceeds from the exercise of stock options as all stock options were ~~$4.1 million and $1.5 million, respectively.~~exercised on a stock-for-stock basis. The aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was ~~$2.3 million and $1.8 million, for~~$2.7 million. For the nine-months ended November 27, 2021, cash proceeds from the exercise of stock options was $4.1 million and ~~November 28, 2020, respectively.~~the aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $2.3 million.

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Executive ~~Compensation Program~~

compensation program
In fiscal 2022, the Compensation Committee of the Board of Directors implemented an executive compensation program for certain key employees. In each of the first ~~quarter~~quarters of fiscal 2023 and fiscal 2022, we issued performance shares in the form of nonvested share unit awards, which give the recipient the right to receive shares earned at the ~~vesting date.~~end of the respective performance periods. The number of share units issued at grant is equal to the target number of performance shares and allows for the right to receive ~~an additional~~a variable number of shares dependent on achieving a defined performance goal of return on invested capital and being employed at the end of the performance period.

Nonvested share awards and units

Nonvested share activity, including restricted stock awards and performance share units, for the current nine-month period is summarized as follows:


Nonvested shares and units	Nonvested shares and units	Number of Shares and Units	Weighted Average Grant Date Fair Value		Nonvested shares and units	Number of Shares and Units	Weighted Average Grant Date Fair Value
Nonvested at February 27, 2021		475,227	$	27.52
Nonvested at February 26, 2022 (1)					Nonvested at February 26, 2022 (1)	488,944	$	30.14
Granted~~(1)~~(2)	Granted~~(1)~~(2)	235,028	35.48		Granted~~(1)~~(2)	182,493	46.10
Vested	Vested	(185,329)	30.36		Vested	(148,332)	27.56
Canceled(3)	Canceled(3)	(23,306)	29.68		Canceled(3)	(44,932)	36.02
Nonvested at November 27, 2021(2)		501,620	$	30.10
Nonvested at November 26, 2022(4)					Nonvested at November 26, 2022(4)	478,173	$	36.48

(1)~~Includes a total of 54,395 nonvested share units granted and outstanding at target level for the fiscal 2022-2024 performance period.~~

~~(2)~~ Includes a total of 50,825 nonvested share units granted and outstanding at target level for the fiscal 2022-2024 performance period.

(2)Includes a total of 38,654 nonvested share units granted and outstanding at target level for the 2023-2025 performance period.

(3) Includes a total of 9,690 nonvested share units cancelled for the fiscal 2022-2024 and fiscal 2023-2025 performance periods.

(4)Includes a total of 45,207 and 34,492 nonvested share units granted and outstanding at target level for the 2022-2024 and 2023-2025 performance periods, respectively.

At November ~~27, 2021,~~26, 2022, there was ~~$11.0~~$11.4 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 2825 months. The total fair value of shares vested during the nine months ended November ~~27, 2021~~26, 2022 was ~~$6.9~~$6.2 million.

10.Income Taxes

The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state and local jurisdictions, Canada, Brazil and other international jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years prior to fiscal ~~2018,~~2019, or state and local income tax examinations for years prior to fiscal 2013. The Company is not currently under U.S. federal examination for years subsequent to fiscal year ~~2017,~~2018, and there is very limited audit activity of the Company’s income tax returns in U.S. state jurisdictions or international jurisdictions.

In the second quarter of fiscal 2023, the Company claimed certain tax deductions, including a worthless stock loss deduction, related to its investment in Sotawall Limited, a Canadian subsidiary. These deductions generated a net tax benefit of $13.7 million.

The total liability for unrecognized tax benefits was ~~$4.0~~$5.5 million at November ~~27, 2021,~~26, 2022, compared to ~~$3.8~~$3.3 million at February ~~27, 2021.~~26, 2022. The increase was primarily related to the tax deductions claimed during the second quarter of fiscal 2023 associated with the Company's investment in Sotawall Limited, a Canadian subsidiary. Penalties and interest related to unrecognized tax benefits are recorded in income tax expense.

11.Earnings per Share

The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share:

Three Months Ended Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020
Basic earnings per share – weighted average common shares outstanding 24,957 25,883 25,166 26,068
Weighted average effect of nonvested share grants and assumed exercise of stock options 352 342 293 282
Diluted earnings per share – weighted average common shares and potential common shares outstanding 25,309 26,225 25,459 26,350
Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares) — 159 — 238

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	Three Months Ended		Nine Months Ended
(In thousands)	November 26, 2022	November 27, 2021	November 26, 2022	November 27, 2021
Basic earnings per share – weighted average common shares outstanding	21,870	24,957	22,043	25,166
Weighted average effect of nonvested share grants and assumed exercise of stock options	408	352	413	293
Diluted earnings per share – weighted average common shares and potential common shares outstanding	22,278	25,309	22,456	25,459
Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares)	109	—	109	—

12.Business Segment Data

We have 4four reporting segments:

•The Architectural Framing Systems segment designs, engineers, fabricates and finishes ~~the~~ aluminum ~~frames used in customized aluminum and glass~~ window, curtainwall, storefront and entrance systems ~~comprising~~for the ~~outside skin and entrances~~exterior of ~~commercial, institutional and high-end multi-family residential buildings.~~

•~~The~~ ~~Architectural Glass~~ ~~segment fabricates coated, high-performance glass used globally in customized window and wall systems comprising the outside skin of commercial, institutional and high-end multi-family residential~~ buildings.

•The Architectural Services segment ~~provides full-service~~integrates technical services, project management, and field installation ~~of the walls of~~services to design, engineer, fabricate, and install building glass ~~windows~~ and ~~other~~ curtainwall ~~products making up the outside skin of~~systems.

•The Architectural Glass segment coats and fabricates, high-performance glass used in custom window and wall systems on commercial ~~and institutional~~ buildings.

•The Large-Scale Optical (LSO) segment manufactures ~~value-added~~high-performance glass and acrylic products ~~primarily~~ for custom framing, museum, and ~~display applications.~~technical glass markets.

Three Months Ended Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020
Net sales
Architectural Framing Systems $ 151,665 $ 136,688 $ 453,476 $ 439,779
Architectural Glass 74,289 84,779 236,693 248,274
Architectural Services 91,971 76,690 250,657 213,911
Large-Scale Optical 27,351 25,267 75,122 48,438
Intersegment eliminations (11,059) (9,841) (29,928) (28,240)
Net sales $ 334,217 $ 313,583 $ 986,020 $ 922,162
Operating income (loss)
Architectural Framing Systems $ 10,689 $ 7,218 $ 27,027 $ 26,211
Architectural Glass(1)
(1,277) 10,825 (16,143) 15,306
Architectural Services 9,203 8,558 20,982 20,470
Large-Scale Optical(2)
5,996 26,114 17,326 25,131
Corporate and other (6,901) (2,965) (18,508) (7,685)
Operating income $ 17,710 $ 49,750 $ 30,684 $ 79,433
(1) Architectural Glass operating loss amounts for the three- and nine-month periods ended November 27, 2021 include $3.5 million and $20.9 million of restructuring related costs, respectively.
(2) LSO operating income amounts for the three- and nine-month periods ended November 28, 2020 include a $19.3 million gain on the sale-lease back of a building.


	Three Months Ended				Nine Months Ended
(In thousands)	November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Net sales
Architectural Framing Systems	$	165,013	$	141,462	$	501,172	$	415,203
Architectural Services	102,031		105,404		312,151		292,506
Architectural Glass	81,541		74,289		235,158		236,693
Large-Scale Optical	26,660		27,351		76,988		75,122
Intersegment eliminations	(7,398)		(14,289)		(28,878)		(33,504)
Net sales	$	367,847	$	334,217	$	1,096,591	$	986,020
Operating income (loss)
Architectural Framing Systems	$	22,089	$	12,085	$	66,266	$	28,837
Architectural Services	6,032		7,807		14,449		19,172
Architectural Glass	7,461		(1,277)		19,087		(16,143)
Large-Scale Optical	7,109		5,996		19,598		17,326
Corporate and other	(7,930)		(6,901)		(19,351)		(18,508)
Operating income	$	34,761	$	17,710	$	100,049	$	30,684

Due to the varying combinations and integration of individual window, storefront and curtainwall systems, it is impractical to report product revenues generated by class of product, beyond the segment revenues currently reported.

13. Restructuring

On August 11, 2021, we announced plans to realign and simplify our business structure. ~~For~~During the ~~three- and nine-month periods ended November 27, 2021,~~first quarter of fiscal 2023, we ~~incurred $3.4 million and $24.2 million, respectively, of pre-tax costs associated with~~completed the execution of these plans with the sale of ~~which $3.6~~the remaining manufacturing assets at our Architectural Glass location, in Dallas, Texas, for $4.1 million. The remaining assets had a carrying value of $3.4 million, and ~~$22.1~~we recognized a gain on the sale of approximately $0.6 million, ~~are~~net of associated transaction costs, which is included ~~within~~as a reduction of cost of sales ~~and $(0.2) million and $2.1 million are included within selling, general and administrative expenses~~ within our consolidated statements of operations. These costs primarily related to asset impairment charges due to the closure of two facilities within the Architectural Glass segment, in Dallas, Texas and Statesboro, Georgia, which closures were made in order to concentrate this segment on premium, high-performance products. Additionally, employee termination costs were incurred related to these facility closures, realignment of the Architectural Framing Systems segment, and within the Corporate office. We expect future pre-tax costs associated with the ongoing execution of these plans to be approximately $2 to $3 million, which we expect will be incurred during the fourth quarter of our fiscal year 2022. At the end of the third quarter of fiscal 2022, $9.3 million of assets were classified as held for sale on the consolidated balance sheets related to the building and related equipment of our Statesboro, Georgia facility within the Architectural Glass segment.

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Three Months Ended November 27, 2021
(In thousands) Architectural Framing Architectural Glass Corporate and other Total
Asset impairment charges $ (32) $ 1,353 $ — $ 1,321
Termination benefits (14) 1,638 (179) 1,445
Other restructuring charges 2 527 124 653
Total restructuring charges $ (44) $ 3,518 $ (55) $ 3,419

Nine Months Ended November 27, 2021
(In thousands) Architectural Framing Architectural Glass Corporate and other Total
Asset impairment charges $ 54 $ 16,584 $ — $ 16,638
Termination benefits 1,809 3,215 760 5,784
Other restructuring charges 141 1,110 560 1,811
Total restructuring charges $ 2,004 $ 20,909 $ 1,320 $ 24,233

The following table summarizes our restructuring related accrual balances included within accrued payroll and related costs and other current liabilities in the consolidated balance sheets. All balances are expected to be paid within the current fiscal year.


(In thousands)	(In thousands)	Architectural Framing		Architectural Glass		Corporate and other		Total		(In thousands)	Architectural Framing		Architectural Glass		Corporate & Other		Total
Balance at March 1, 2020		$	—	$	—	$	—	$	—
Restructuring expense		4,020		325		229		4,574
Payments		(1,148)		(95)		(68)		(1,311)

Balance at February 27, 2021	Balance at February 27, 2021	2,872		230		161		3,263		Balance at February 27, 2021	$	2,872	$	230	$	161	$	3,263
Restructuring expense	Restructuring expense	1,984		884		1,221		4,089		Restructuring expense	2,000		1,036		1,039		4,075
Payments	Payments	(2,852)		(354)		(592)		(3,798)		Payments	(3,567)		(529)		(972)		(5,068)
Other adjustments	Other adjustments	(269)		—		—		(269)		Other adjustments	(865)		—		—		(865)
Balance at November 27, 2021		$	1,735	$	760	$	790	$	3,285
Balance at February 26, 2022										Balance at February 26, 2022	440		737		228		1,405
Restructuring expense										Restructuring expense	—		116		—		116
Payments										Payments	(203)		(690)		(203)		(1,096)
Other adjustments										Other adjustments	(152)		(18)		—		(170)
Balance at November 26, 2022										Balance at November 26, 2022	$	85	$	145	$	25	$	255

14. Subsequent Events

We have evaluated subsequent events for potential recognition and disclosure through the date of this ~~filing. Subsequent to~~filing and determined that there were no subsequent events that required recognition or disclosure in the ~~end of the quarter, we purchased 484,646 shares of stock under our authorized share repurchase program, at a total cost of $22.3 million.~~

In December 2021, we sold all of the property and assets at the Architectural Glass segment’s Statesboro, Georgia manufacturing facility for $29.1 million. The carrying value of the building and related equipment was $9.3 million. We will recognize a gain on this sale of approximately $19.0 million, net of associated transaction costs, which will be included as a reduction of cost of sales within our consolidated ~~statements of operations for the fourth quarter of fiscal 2022.~~financial statements.

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-looking statements

This Quarterly Report on Form 10-Q, including the section, Management’s Discussion and Analysis of Financial Condition and Results of Operations, contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” “should,” "will," "continue" and similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this document are “forward-looking statements,” and are based on management’s current expectations or beliefs. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public, such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.

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Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. Information about factors that could materially affect our results can be found in the “Risk Factors” section of our Annual Report on Form 10-K for the year ended February ~~27, 2021~~26, 2022 and in subsequent filings with the U.S. Securities and Exchange Commission, including this Quarterly Report on Form 10-Q.

We also wish to caution investors that other factors might in the future prove to be important in affecting the Company’s results of operations. New factors emerge from time to time; it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a leader in the design and development of value-added glass and metal products and ~~services for enclosing commercial buildings and framing and displays.~~services. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical (LSO).

During fiscal 2022, we conducted a strategic review of our business and the markets we serve in order to establish a new enterprise strategy with three key elements, as discussed below:

1.Become the economic leader in our target markets. We will achieve this by developing a deep understanding of our target markets and aligning our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings. We will also build a relentless 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.

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2.Actively manage our portfolio to drive higher margins and returns. We intend to shift our business mix toward higher operating margin offerings and improve our return on invested capital performance. We will 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.

3.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 establishing a Company-wide operating system with common tools and processes that are based on the foundation of Lean and Continuous Improvement. This will be supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The comparative fiscal 2022 segment results for the Architectural Framing Systems and Architectural Services segments have been recast to reflect the move of the Sotawall business into the Architectural Services segment from the Architectural Framing Systems segment, effective at the start of the first quarter of fiscal 2023.

The following selected financial data should be read in conjunction with the Company’s Form 10-K for the year ended February ~~27, 2021~~26, 2022 and the consolidated financial statements, including the notes to consolidated financial statements, included therein.

Highlights of Third Quarter of Fiscal ~~2022~~2023 Compared to Third Quarter of Fiscal ~~2021~~2022

Net sales

Consolidated net sales increased ~~6.6~~10.1 percent, or ~~$20.6~~$33.6 million, and ~~increased 6.9~~11.2 percent, or ~~$63.9~~$110.6 million, for the three- and nine-month periods ended November ~~27, 2021,~~26, 2022, compared to the same periods in the prior year, primarily driven by ~~volume growth in the Architectural Services and LSO segments, as well as,~~ flow-through from pricing actions taken to offset inflation within the Architectural Framing ~~segment. LSO was closed for most of the first~~Systems and ~~second quarters of fiscal 2021, due to COVID-19.~~Architectural Glass segments.

The relationship between various components of operations, as a percentage of net sales, is presented below:


		Three Months Ended				Nine Months Ended					Three Months Ended				Nine Months Ended
		November 27, 2021		November 28, 2020		November 27, 2021		November 28, 2020			November 26, 2022		November 27, 2021		November 26, 2022		November 27, 2021
Net sales	Net sales	100.0	%	100.0	%	100.0	%	100.0	%	Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	Cost of sales	80.6		77.8		81.7		77.7		Cost of sales	76.5		80.6		76.5		81.7
Gross margin		19.4		22.2		18.3		22.3
Gross profit										Gross profit	23.5		19.4		23.5		18.3
Selling, general and administrative expenses	Selling, general and administrative expenses	14.1		6.3		15.2		13.7		Selling, general and administrative expenses	14.1		14.1		14.3		15.2
Operating income	Operating income	5.3		15.9		3.1		8.6		Operating income	9.4		5.3		9.1		3.1
Interest expense, net	Interest expense, net	0.2		0.5		0.3		0.5		Interest expense, net	0.7		0.2		0.5		0.3
Other (expense) income, net		(0.9)		0.2		(0.3)		0.1
Other expense, net										Other expense, net	0.2		0.9		0.2		0.3
Earnings before income taxes	Earnings before income taxes	4.2		15.5		2.5		8.2		Earnings before income taxes	8.6		4.2		8.4		2.5
Income tax expense	Income tax expense	0.9		3.7		0.5		2.0		Income tax expense	2.1		0.9		0.8		0.5
Net earnings	Net earnings	3.3	%	11.9	%	2.0	%	6.2	%	Net earnings	6.5	%	3.3	%	7.6	%	2.0	%
Effective tax rate	Effective tax rate	21.7	%	23.5	%	19.6	%	23.8	%	Effective tax rate	24.8	%	21.7	%	9.3	%	19.6	%

Gross profit

Gross profit as a percent of sales (gross margin) was 23.5 percent for each of the three- and nine-month periods ended November 26, 2022, respectively, compared to 19.4 percent and 18.3 percent for the three- and nine-month periods ended November 27, ~~2021, compared to 22.2 percent~~2021. Both period improvements in gross margin were driven primarily by pricing actions that exceeded the inflation-related cost increases in the Architectural Framing Systems and ~~22.3 percent for the three- and~~Architectural Glass segments. The nine-month ~~periods~~period ended November ~~28, 2020. Gross margin decreased~~26, 2022, includes the benefits from restructuring actions completed in the ~~current year three- and nine-month periods compared to~~second quarter of the prior year ~~primarily due to~~in the Architectural Glass and Architectural Framing Systems segments. The prior-year periods included $3.6 million and $22.1 million of restructuring charges which were included in cost of ~~goods sold~~sales and incurred during the three- and nine-month periods of the current fiscal year, as well as inflationary pressure on raw materials and freight within the Architectural Glass and Architectural Framing Systems segments. These costs were partially offset by positive impacts from continued recovery of the LSO segment (which closed for most of the first and second quarters last year, based on COVID-related government directives).ended November 27, 2021.

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Selling, general and administrative (SG&A) expenses

SG&A expenses as a percent of sales were 14.1 percent and ~~15.2~~14.3 percent for the three- and nine-month periods ended November ~~27, 2021,~~26, 2022, respectively, compared to ~~6.3~~14.1 percent and ~~13.7~~15.2 percent for the prior year three- and nine-month periods. SG&A expenses in the three- and nine-month periods ended November 27, 2021, included increased Corporate and other costs, primarily related to investments in transformation initiatives in the current year periods and higher health care costs in the current year compared to the prior-year periods. Additionally, SG&A expenses in the prior year third quarter were reduced by a $19.3 million gain on the sale-leaseback of a building and $7.4 million of income related to a New Markets Tax Credit transaction, driving lower SG&A expensesdecreased as a percent of sales compared to the nine-month period in the prior year three- and nine-month periods. In addition, we recognized a benefit of $1.0 million and $5.5 million during the three- and nine-month periods ended November 27, 2021, respectively, compared to $4.2 million and $5.5 million in the prior year three- and nine-month periods, from a Canadian wage subsidy program offered to support Canadian businessesprimarily due to the ~~ongoing impacts~~benefits realized from previously completed restructuring actions.

Table of ~~the COVID-19 pandemic.~~Contents

Income tax expense

The effective income tax rate in the third quarter of fiscal ~~2022~~2023 was ~~21.7~~24.8 percent, compared to ~~23.5~~21.7 percent in the same period last year, and ~~19.6~~9.3 percent for the first nine months of fiscal ~~2022,~~2023, compared to ~~23.8~~19.6 percent in the prior year period. The rate decrease was primarily related to lower year-to-date net income, as well as, the release of a $1.2 million valuation allowance on certain state net operating losses, which is the result of a realignment and simplification of our business and legal-entity structure duringIn the second quarter of fiscal ~~2022.~~2023, the Company claimed certain tax deductions, including a worthless stock loss deduction, related to its investment in Sotawall Limited, a Canadian subsidiary. These deductions generated a net tax benefit of 13.7 million, and reduced our effective tax rate for the nine-month period of fiscal 2023 by approximately 14.8 percentage points.

Segment Analysis

Architectural Framing Systems


		Three Months Ended								Nine Months Ended									Three Months Ended								Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021			November 28, 2020			% Change		November 27, 2021			November 28, 2020			% Change		(In thousands)	November 26, 2022			November 27, 2021			% Change		November 26, 2022			November 27, 2021			% Change
Net sales	Net sales	$	151,665		$	136,688		11.0	%	$	453,476		$	439,779		3.1	%	Net sales	$	165,013		$	141,462		16.6	%	$	501,172		$	415,203		20.7	%
Operating income	Operating income	10,689			7,218			48.1	%	27,027			26,211			3.1	%	Operating income	22,089			12,085			82.8	%	66,266			28,837			129.8	%
Operating margin	Operating margin	7.0		%	5.3		%			6.0		%	6.0		%			Operating margin	13.4		%	8.5		%			13.2		%	6.9		%

Architectural Framing Systems net sales increased ~~$15.0~~$23.6 million, or ~~11.0~~16.6 percent, and ~~increased $13.7~~$86.0 million, or ~~3.1~~20.7 percent, for the three- and nine-month periods ended November ~~27, 2021,~~26, 2022, respectively, compared to the ~~prior-year~~prior year periods, primarily driven by ~~flow-through from~~inflation-related pricing ~~actions taken to offset inflation.~~actions.

Operating margin increased ~~170~~490 basis points and 630 basis points for the ~~three-month period~~three- and nine-month periods of the current year, compared to the same ~~period~~periods in the prior year, ~~primarily driven by~~reflecting improved pricing and mix, which more than offset the impact of inflation, and the benefits from restructuring actions ~~which offset increased costs for materials, freight and labor. As previously announced, the segment incurred restructuring-related termination costs~~completed in the ~~second~~prior year, which further strengthened our competitive position and ~~third quarters~~more than offset the impact of the current fiscal year related to realignment of the segment to increase focus on target markets, better serve customers, improve operational execution, and reduce overall costs. Operating margin was 6.0 percent for the nine-month periods in the current and prior fiscal years. In addition, this segment benefited from a Canadian wage subsidy of $1.0 million and $5.5 million during the three- and nine-month periods ended November 27, 2021, respectively, compared to $4.2 million and $5.5 million in the prior-year three- and nine-month periods, respectively, as a result of a program to support Canadian businesses due to the ongoing impacts of the COVID-19 pandemic.cost inflation.

As of November ~~27, 2021,~~26, 2022, segment backlog was approximately ~~$419~~$246 million, compared to approximately ~~$406~~$286 million at the end of the prior ~~quarter.~~quarter of the current fiscal year, and was approximately $269 million at the end of third quarter fiscal 2022. Backlog represents the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which may be expected to be recognized as revenue in the future. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. We view backlog as one indicator of future revenues, particularly in our longer-lead time businesses. In addition to backlog, we have a substantial amount of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog. We have strong visibility into future business commitments beyond backlog, as projects awarded, verbal commitments and bidding activities are not included in backlog.

Architectural ~~Glass~~

Three Months Ended Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020 % Change November 27, 2021 November 28, 2020 % Change
Net sales $ 74,289 $ 84,779 (12.4) % $ 236,693 $ 248,274 (4.7) %
Operating (loss) income (1,277) 10,825 N/M (16,143) 15,306 N/M
Operating margin (1.7) % 12.8 % (6.8) % 6.2 %

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Net sales decreased $10.5 million, or 12.4 percent, and $11.6 million, or 4.7 percent, for the three- and nine-month periods ended November 27, 2021, compared to the same periods in the prior year, primarily reflecting lower volume due to weaker order backlog from fiscal year 2021, partially offset by an improved sales mix.

In the current quarter, the segment had operating loss of $1.3 million and negative operating margin of 1.7 percent, compared to operating income of $10.8 million and operating margin of 12.8 percent in the same period of the prior year. For the nine-months ended November 27, 2021, the segment had an operating loss of $16.1 million and negative operating margin of 6.8 percent, compared to operating income of $15.3 million and operating margin of 6.2 percent in the prior year period. The results for the current year periods were primarily driven by $3.5 million and $20.9 million of restructuring costs for the three- and nine-month periods ended November 27, 2021, respectively. As previously announced, this segment incurred restructuring charges related to the closure of two operating facilities and the associated employee termination costs in the second and third quarters of the current fiscal year. This restructuring is intended to enable the segment to emphasize more premium, high-performance products in its business. The three- and nine-month periods of the prior fiscal year also included $7.4 million of operating income related to the settlement of a New Markets Tax Credit transaction during the third quarter of fiscal 2021.

~~Architectural~~ Services


		Three Months Ended								Nine Months Ended									Three Months Ended								Nine Months Ended
(In thousands)	(In thousands)	November 27, 2021			November 28, 2020			% Change		November 27, 2021			November 28, 2020			% Change		(In thousands)	November 26, 2022			November 27, 2021			% Change		November 26, 2022			November 27, 2021			% Change
Net sales	Net sales	$	91,971		$	76,690		19.9	%	$	250,657		$	213,911		17.2	%	Net sales	$	102,031		$	105,404		(3.2)	%	$	312,151		$	292,506		6.7	%
Operating income	Operating income	9,203			8,558			7.5	%	20,982			20,470			2.5	%	Operating income	6,032			7,807			(22.7)	%	14,449			19,172			(24.6)	%
Operating margin	Operating margin	10.0		%	11.2		%			8.4		%	9.6		%			Operating margin	5.9		%	7.4		%			4.6		%	6.6		%

Architectural Services net sales ~~increased $15.3~~decreased $3.4 million, or ~~19.9 percent, and $36.7 million, or 17.2~~3.2 percent for the ~~three- and nine-month periods~~three-month period ended November ~~27, 2021,~~26, 2022, respectively, compared to the same ~~periods~~period in the prior year, driven by decreased project activity. In the comparative nine-month period ended November 26, 2022 net sales increased $19.6 million, or 6.7 percent compared to the same period in the prior year, driven by increased volume from executing projects in backlog.

Operating margin decreased ~~120~~150 basis points and 200 basis points in ~~each~~the three- and nine-month periods of the current year, respectively, compared to the same periods in the prior year, primarily reflecting lower profitability on legacy Sotawall projects and costs related to investments to support future growth, partially offset by higher volume.

As of November 26, 2022, segment backlog was approximately $741 million, compared to approximately $785 million at the end of the prior quarter of the current fiscal year, and was approximately $722 million at the end of third quarter of fiscal 2022. Backlog, a non-GAAP financial measure, and the implication thereof is described within the Architectural Framing Systems discussion above.

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Architectural Glass


	Three Months Ended								Nine Months Ended
(In thousands)	November 26, 2022			November 27, 2021			% Change		November 26, 2022			November 27, 2021			% Change
Net sales	$	81,541		$	74,289		9.8	%	$	235,158		$	236,693		(0.6)	%
Operating income (loss)	7,461			(1,277)			684.3	%	19,087			(16,143)			218.2	%
Operating margin	9.1		%	(1.7)		%			8.1		%	(6.8)		%

Net sales increased $7.3 million, or 9.8 percent, for the three-month period ended November 26, 2022, compared to the same period in the prior year, primarily reflecting improved pricing and mix. Net sales decreased $1.5 million, or 0.6 percent for the nine-month period ended November 26, 2022, compared to the same period in the prior year, primarily reflecting lower volume, mostly offset by improved pricing and mix.

In the current quarter, the segment had operating income of $7.5 million and operating margin of 9.1 percent, compared to operating loss of $1.3 million and negative operating margin of 1.7 percent in the same period of the prior year. The current year third quarter reflects improved pricing, mix and productivity gains, which combined to offset the impact of inflation, while the prior year period included $3.5 million of restructuring costs. For the nine-months ended November 26, 2022, the segment had operating income of $19.1 million and operating margin of 8.1 percent, compared to operating loss of $16.1 million and negative operating margin of 6.8 percent in the same period of the prior year, primarily related to the restructuring costs of $20.9 million incurred during the prior fiscal year. In addition, while the current-year period reflects improved pricing, productivity gains and the positive impacts of restructuring actions completed during the prior year, all of which offset the impact of inflation.

Large-Scale Optical (LSO)


	Three Months Ended								Nine Months Ended
(In thousands)	November 26, 2022			November 27, 2021			% Change		November 26, 2022			November 27, 2021			% Change
Net sales	$	26,660		$	27,351		(2.5)	%	$	76,988		$	75,122		2.5	%
Operating income	7,109			5,996			18.6	%	19,598			17,326			13.1	%
Operating margin	26.7		%	21.9		%			25.5		%	23.1		%

LSO net sales decreased $0.7 million, or 2.5 percent, for the three-month period ended November 26, 2022 compared to the same period in the prior year driven by lower volume. In the comparative nine-month period ended November 26, 2022, net sales increased $1.9 million, or 2.5 percent, compared to the same period in the prior year, primarily driven by improved pricing.

Operating margin increased 480 basis points and 240 basis points in the three- and nine-month periods of the current year, compared to the same periods in the prior year, primarily ~~reflecting a less favorable project mix. Additionally, the nine-month period was negatively impacted~~driven by ~~isolated performance challenges on certain projects experienced during the first quarter of fiscal 2022.~~

~~As of November 27, 2021, segment backlog of $572 million was unchanged from the end~~lower operating costs. A significant portion of the ~~prior quarter. Segment backlog at the end~~lower operating costs was a non-recurring property tax adjustment contributing to a 210 basis points and 80 basis points of the ~~third quarter of fiscal 2021 was approximately $597 million. Backlog is described within the Architectural Framing Systems discussion above.~~

~~Large-Scale Optical (LSO)~~

Three Months Ended Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020 % Change November 27, 2021 November 28, 2020 % Change
Net sales $ 27,351 $ 25,267 8.2 % $ 75,122 $ 48,438 55.1 %
Operating income (loss) 5,996 26,114 (77.0) % 17,326 25,131 (31.1) %
Operating margin 21.9 % 103.4 % 23.1 % 51.9 %

~~LSO net sales increased $2.1 million or 8.2 percent, and $26.7 million or 55.1 percent~~margin increase for the three- and nine-month periods ended November 27, 2021, compared to the same periods in the prior year, reflecting a more favorable sales mix, as demand recovered from the impact of COVID in the prior year nine-month period. In fiscal 2021, most of the ~~segment's customers and the segment's manufacturing operations were closed for a large part of the first and second quarters to comply with COVID-related government directives.~~current year, respectively.

~~The segment had operating income of $6.0 million~~

Liquidity and $17.3 million and operating margin of 21.9 percent and 23.1 percent, for the three- and nine-month periods ended November 27, 2021, respectively, compared to operating income of $26.1 million and $25.1 million, and operating margin of 103.4 percent and 51.9 percent, in the same periods of the prior year. The decreases for the fiscal 2022 periods are primarily the result of a $19.3 million gain on the sale-leaseback of a segment manufacturing facility recorded during the prior year third quarter.Capital Resources


Selected cash flow data	Nine Months Ended
(In thousands)	November 26, 2022		November 27, 2021
Operating Activities
Net cash provided by operating activities	$	51,112	$	86,291
Investing Activities
Capital expenditures	(18,119)		(13,070)

Proceeds from sales of property, plant and equipment	5,212		1,347

Financing Activities
Borrowings on line of credit	430,879		—
Repayment on debt	(151,000)		(2,000)
Payments on line of credit	(239,000)		—
Repurchase and retirement of common stock	(74,312)		(29,164)
Dividends paid	(14,415)		(15,050)

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~~Liquidity and Capital Resources~~

Selected cash flow data Nine Months Ended
(In thousands) November 27, 2021 November 28, 2020
Operating Activities
Net cash provided by operating activities $ 86,291 $ 120,512
Investing Activities
Capital expenditures (13,070) (17,116)
Proceeds from sale of property, plant and equipment 1,347 23,724
Financing Activities
Borrowings on line of credit — 193,332
Payments on line of credit — (237,500)
Repurchase and retirement of common stock (29,164) (20,731)
Dividends paid (15,050) (14,546)

Operating Activities. Net cash provided by operating activities was ~~$86.3~~$51.1 million for the first nine months of fiscal ~~2022, a decrease of $34.2 million~~2023, compared to $86.3 million of net cash provided by operating activities in the ~~prior-year~~prior year period, reflecting ~~a decline in net earnings of $38.0 million in the current-year period compared~~increased working capital required to ~~the prior-year period, as well as, the impact of temporary actions related to COVID in the prior-year period.~~support revenue growth and inflation.

Investing Activities. Net cash used by investing activities was ~~$11.6~~$12.0 million for the first nine months of fiscal ~~2022,~~2023, driven primarily by capital expenditures of ~~$13.1~~$18.1 million, partially offset by proceeds received from sales of property, plant and equipment of $5.2 million. In the first nine months of the prior year, net cash ~~provided~~used by investing activities was ~~$5.5~~$11.6 million, primarily driven ~~by proceeds of $23.7 million on the sale-leaseback of a building, offset~~ by capital expenditures of ~~$17.1~~$13.1 million. ~~Capital~~The majority of our capital expenditures in the ~~first nine months of the~~ current year ~~declined $4.0 million from the~~and prior year ~~due~~periods are smaller in nature to ~~slower investments while we conducted our strategic review.~~support future growth and cost reduction initiatives.

Financing Activities. Net cash used by financing activities was ~~$44.0~~$51.6 million for the first nine months of fiscal ~~2022,~~2023, compared to ~~$85.7 million in the prior-year period, primarily driven~~net cash used by ~~net debt repayments~~financing activities of ~~$47.5 million in the prior year. Additionally, in the first nine months of the current year, we made share repurchases totaling $29.2 million, compared to $20.7~~$44.0 million in the prior year ~~nine-month~~ period. ~~At November 27, 2021, we were in compliance with~~The current year period was primarily driven by share repurchases and dividend payments totaling $88.7 million, partially offset by net debt borrowings of $40.9 million, while the ~~financial covenants under our revolving credit facility~~prior year period included $44.2 million of share repurchases and ~~term loan.~~dividend payments.

We paid dividends totaling ~~$15.1~~$14.4 million ($~~0.6000~~0.6600 per share) in the first nine months of fiscal ~~2022,~~2023, compared to ~~$14.5~~$15.1 million ($~~0.5625~~0.6000 per share) in the comparable ~~prior-year~~prior year period. During the first nine months of fiscal 2023, we repurchased 1,571,139 shares under our authorized share repurchase program, for a total cost of $74.3 million. In the first nine months of fiscal 2022, we repurchased 755,384 shares under ~~our authorized~~the share repurchase program, for a total cost of $28.8 ~~million. In the first nine months of fiscal 2021, we repurchased 852,029 shares under the share repurchase program, for a total cost of $20.7~~ million. Since the inception of the share repurchase program in 2004, we have purchased a total of ~~7,888,000~~10,996,601 shares, at a total cost of ~~$236.1~~$381.6 million. ~~We currently have~~As of November 26, 2022, we had remaining authority to repurchase an additional ~~1,362,000~~1,253,399 shares under this program. We will continue to evaluate making future share repurchases, considering our cash flow, debt levels and market conditions, in the context of all our capital allocation options, with the goal of maximizing long-term value for our shareholders.

~~Other Financing Activities.~~Additional Liquidity Considerations. ~~The following summarizes our significant contractual obligations that impact~~We periodically evaluate our liquidity asrequirements, cash needs and availability of ~~November 27, 2021:~~debt resources relative to acquisition plans, significant capital plans, and other working capital needs.

Payments Due by Fiscal Period
(In thousands) Remainder of Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026 Thereafter Total
Debt obligations $ — $ 1,000 $ — $ 150,000 $ — $ 12,000 $ 163,000
Operating leases (undiscounted) 3,501 13,563 11,261 9,915 7,903 13,116 59,259
Purchase obligations 61,169 166,446 8,530 1,433 1,433 487 239,498
Total cash obligations $ 64,670 $ 181,009 $ 19,791 $ 161,348 $ 9,336 $ 25,603 $ 461,757

During the second quarter ended August 27, 2022, we amended and extended our committed revolving credit facility to include maximum borrowings of up to $385 million with a maturity of August 2027. As part of the amendment, we repaid the $150 million term loan with borrowings under the revolving credit facility. As of November 26, 2022, outstanding borrowings under our revolving credit facility were $188.0 million, while there were no outstanding borrowings under the revolving credit facility as of February 26, 2022. We are required to make periodic interest payments on our outstanding indebtedness, and future interest payments will be determined based on the amount of outstanding borrowings and prevailing interest rates during that time.

Our revolving credit facility contains two maintenance financial covenants that require us to stay below a maximum debt-to-EBITDA ratio and maintain a minimum ratio of EBITDA-to-interest expense. Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis. At November 26, 2022, we were in compliance with both financial covenants. Additionally, at November 26, 2022, we had a total of $12.3 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2024 to 2032 and reduce borrowing capacity under the revolving credit facility.

We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment. ~~Purchase~~Future payments for such leases, excluding leases with initial terms of one year or less, were $51.1 million at November 26, 2022, with $3.2 million payable during the remainder of fiscal 2023.

As of November 26, 2022, we had $222.2 million of open purchase obligations, inof which payments totaling $53.4 million are expected to become due within the ~~table above~~remainder of fiscal 2023. These purchase obligations primarily relate to raw material commitments and capital ~~expenditures.~~expenditures and are not expected to impact future liquidity as amounts should be recovered through customer billings.

~~Table of Contents~~

We expect to make contributions of $0.7 million to our defined-benefit pension plans in fiscal ~~2022,~~2023, which will equal or exceed our minimum funding requirements.

As of November ~~27, 2021,~~26, 2022, we had reserves of ~~$4.0~~$5.5 million for unrecognized tax benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits will ultimately be settled.

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We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance. At November ~~27, 2021, $1.2~~26, 2022, $1.4 billion of these types of bonds were outstanding, of which ~~$448.0~~$578.7 million is in our backlog. These bonds do not have stated expiration dates. We have never been required to make payments under surety or performance bonds with respect to our existing businesses.

During calendar year 2020, we took advantage of the option to defer remittance of the employer portion of Social Security tax as provided in the ~~CARES~~Coronavirus Aid, Relief, and Economic Security Act. This deferral allowed us to retain cash during calendar year 2020 that would have otherwise been remitted to the federal government. AtWe paid our first installment of these deferred social security taxes, totaling approximately $6.8 million, in the ~~end~~fourth quarter of fiscal ~~2021, we had deferred tax payments~~2022, and paid our final installment of ~~$13.6~~approximately $6.8 million which are included within accrued payroll and other benefits and other non-current liabilities on our consolidated balance sheets. The deferred tax payments will be repaid in two equal portions in calendar years 2021 and 2022.at the start of the fourth quarter of fiscal 2023.

Due to our ability to generate strong cash from operations and our borrowing capability under our committed revolving credit facility, we believe that our sources of liquidity will ~~continue to~~ be adequate to ~~fund~~meet our ~~working~~short-term and long-term liquidity and capital ~~requirements, planned capital expenditures and dividend payments for at least the next 12 months. While~~expenditure needs. In addition, we believe we have ~~adequate sources of liquidity~~the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. We also believe we will be able to operate our business so as to continue to ~~fund~~be in compliance with our ~~business for at least~~existing debt covenants over the next 12 months, the extent to which the ongoing COVID-19 pandemic may impact our results of operations or liquidity is uncertain. The extent to which COVID-19 will continue to impact our business will depend on numerous evolving factors including, but not limited to, the emergence of new variants of the coronavirus, such as the Delta and Omicron variants, and the effectiveness of ongoing public health initiatives, which have been boosted by vaccine production and distribution.fiscal year.

~~Off-balance sheet arrangements.~~We have no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Outlook

~~The company has~~Based on our year-to-date results and increasing confidence in our outlook, we have narrowed ~~its~~our guidance for full-year adjusted earnings to a range of ~~$2.25~~$3.90 to ~~$2.40~~$4.05 per ~~diluted~~diluted* share, up from the previous range of $2.20 to $2.40. This guidance excludes the impact of restructuring and impairment costs. The company expects to record a pre-tax gain of approximately $19.0 million in the fourth quarter, related to the previously announced ~~sale~~range of ~~its Architectural Glass facility in Statesboro, Georgia. The company intends~~$3.75 to ~~exclude this gain from its adjusted earnings results. The company continues to~~$4.05. We expect ~~a long-term average tax rate~~full year revenue growth of approximately ~~24.5~~10 percent, ~~and~~primarily driven by growth in our Architectural Framing Systems segment. The company continues to expect full-year capital expenditures of approximately ~~$25 million, down~~$40 million.

* A reconciliation of non-GAAP guidance on adjusted earnings per diluted share (“Adjusted EPS”) to GAAP guidance is not available on a forward-looking basis without unreasonable effort due to the uncertainty of the magnitude and timing of future adjustments. These adjustments may include the impact of such items as impairment charges, restructuring costs, acquired project-related charges, and gains or losses from ~~the previous estimate of approximately $35 million, as~~significant asset sales. Accordingly, the company ~~has slowed some investments while it conducted its strategic review.~~is unable to provide a reconciliation of Adjusted EPS to the most directly comparable GAAP financial measure or address the probable significance of the unavailable information, which could be material to the company's future financial results computed in accordance with GAAP.

Related Party Transactions

No material changes have occurred in the disclosure with respect to our related party transactions set forth in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021.~~26, 2022.

Critical Accounting Policies

There have been no material changes to our critical accounting policies from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021,~~26, 2022, except as noted below.

~~Goodwill and~~Impairment of goodwill, indefinite-lived intangible ~~asset impairment~~assets and long-lived assets

Goodwill

~~During~~At the ~~third~~beginning of the first quarter of fiscal ~~2022,~~2023, we ~~combined certain~~began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects, which resulted in the combination of the Sotawall and Harmon reporting units ~~to form two~~into a single reporting units, following certain structural and leadership changes at the Company, specifically within the Architectural Framing Systems segment. Within this segment, as a result of integration efforts that are ongoing, leadership over our Wausau, EFCO and Sotawall reporting units have been combined to form the Window and Wall Systems reporting unit, and our Linetec and Tubelite reporting units have been combined to form the Storefront and Finishing Solutions reporting unit. With these organizational changes, Architectural Framing Systems segment management regularly reviews and evaluates the results of the Window and Wall Systems and Storefront and Finishing Solutions reporting units.Additionally, functional leaders in areas such as operations, sales, marketing and general and administrative areas are responsible for allocating resources and reviewing results of the Window and Wall Systems and Storefront and Finishing Solutions reporting units. The goodwill of the five individual pre-integration reporting units was aggregated to the respective combined reporting units. We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded that no adjustment to the carrying value of goodwill was ~~necessary~~necessary. Concurrent with the move of Sotawall from the Architectural Framing Systems segment to the Architectural Services segment effective at the start of our first quarter of fiscal 2023, goodwill was reallocated to the affected reporting units within each segment, using a relative fair value approach as ~~a result of this~~outlined in ASC 350,

~~Table of Contents~~Intangibles - Goodwill and Other

~~change.~~. In addition, for all reporting units, no qualitative indicators of impairment were identified during the ~~third~~first quarter of fiscal 2023, and therefore, no interim quantitative goodwill impairment evaluation was performed.

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Refer to the Company’s Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021~~26, 2022 for a ~~complete~~ discussion onof the Company’s market risk. There have been no material changes in market risk ~~from those disclosed in our Annual Report on Form 10-K for the fiscal year ended~~since February ~~27, 2021, except as noted below.~~26, 2022.

~~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. As a result, commodity costs can be volatile, as we have experienced from time to time during recent fiscal quarters, and may become more volatile in the future. 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.

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

Table of suppliers, a production cutback by one or more of our current suppliers could create challenges in meeting delivery schedules to our customers. The prices we offer to our customers are also impacted by changes in commodity costs. We manage the alignment of the cost of our raw materials and the prices offered to customers, and attempt to pass changes to raw material costs through to our customers. To improve our management of commodity costs, we attempt to maintain inventory levels not in excess of our production requirements.

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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 2022 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.

Item 4.Controls and Procedures

a)Evaluation of disclosure controls and procedures: As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Interim Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding required disclosure.

b)Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended November ~~27, 2021,~~26, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1.Legal Proceedings

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Item 1A.Risk Factors

There have been no material changes or additions to our risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended February ~~27, 2021.~~26, 2022.

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

The following table provides information with respect to purchases made by the Company of its own stock during the third quarter of fiscal ~~2022:~~2023:

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)
August 29, 2021 to September 25, 2021 7,400 $ 42.71 7,400 520,451
September 26, 2021 to October 23, 2021 1,707 37.76 — 1,520,451
October 24, 2021 to November 27, 2021 158,451 40.61 158,451 1,362,000
Total 167,558 $ 40.78 165,851 1,362,000


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)
August 28, 2022 to September 24, 2022	3,351	$	41.16	—	1,253,399
September 25, 2022 to October 22, 2022	1,639	38.22		—	1,253,399
October 23, 2022 to November 26, 2022	—	—		—	1,253,399
Total	4,990	$	40.57	—	1,253,399

(a)The shares in this column represent the total number of shares that were ~~repurchased by us pursuant to our publicly announced repurchase program, plus the shares~~ surrendered to us by plan participants to satisfy withholding tax obligations related to share-based compensation. 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. The Board increased the authorization by 750,000 shares, announced on January 24, 2008; by 1,000,000 shares on each of the announcement dates of October 8, 2008, January 13, 2016, January 9, 2018, January 14, 2020, ~~and~~ October 7, ~~2021;~~2021, and June 22, 2022; and by 2,000,000 shares, ~~announced~~ on each of the announcement dates of October 3, ~~2018.~~2018 and January 14, 2022. The repurchase program does not have an expiration date.

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Item 6.Exhibits


3.1			Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year-ended February 28, 2004.)
3.2			Articles of Amendment to Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on January 16, 2020.)
3.3			Amended and Restated Bylaws of Apogee Enterprises, Inc. (Incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter-ended May 29, 2021).
~~10.1~~			Apogee Enterprises, Inc. 2021 Deferred Compensation Plan for Non-Employee Directors (Incorporated by reference to Exhibit 4.5 to Apogee’s Registration Statement on Form S-8 filed on October 13, 2021).
31.1#			Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
31.2#			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
32.1#			Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2#			Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
~~101~~101#			The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November ~~27, 2021,~~26, 2022, formatted in iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of November ~~27, 2021~~26, 2022 and February ~~27, 2021,~~26, 2022, (ii) the Consolidated Results of Operations for the three- and nine-months ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, (iii) the Consolidated Statements of Comprehensive Earnings for the three- and nine-months ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, (iv) the Consolidated Statements of Cash Flows for the nine-months ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, (v) the Consolidated Statements of Shareholders' Equity for the three- and nine-months ended November ~~27, 2021~~26, 2022 and November ~~28, 2020,~~27, 2021, and (vi) Notes to Consolidated Financial Statements.
~~104~~104#			Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)
			Exhibits marked with a (#) sign are filed herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	APOGEE ENTERPRISES, INC.

Date: ~~January 6,~~December 29, 2022	By: /s/ Ty R. Silberhorn
		Ty R. Silberhorn President and Chief Executive Officer (Principal Executive Officer)


Date: ~~January 6,~~December 29, 2022	By: /s/ ~~Nisheet Gupta~~Mark R. Augdahl
		~~Nisheet Gupta~~Mark R. Augdahl ~~Executive Vice President and~~Interim Chief Financial Officer ~~(Principal~~ (Principal Financial and Accounting Officer)


		Page
PART I	Financial Information

Item 1.	Financial Statements (Unaudited):

	Consolidated Balance Sheets	4

	Consolidated Results of Operations	5

	Consolidated Statements of Comprehensive Earnings	6

	Consolidated Statements of Cash Flows	7

	Consolidated Statements of Shareholders' Equity	8

	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2726

Item 4.	Controls and Procedures	27

PART II	Other Information

Item 1.	Legal Proceedings	27

Item 1A.	Risk Factors	2827

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2827

Item 6.	Exhibits	28

Signatures		29


Stock options and SARs	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at February 27, 2021	633,700	$	23.04

Awards exercised	(178,564)	23.04
Awards canceled	(84,336)	23.04
Outstanding at November 27, 2021	370,800	$	23.04	8.6 years	$	4,694,328
Vested or expected to vest at November 27, 2021	370,800	$	23.04	8.6 years	$	4,694,328


	Three Months Ended November 27, 2021
(In thousands)	Architectural Framing		Architectural Glass		Corporate and other		Total
Asset impairment charges	$	(32)	$	1,353	$	—	$	1,321
Termination benefits	(14)		1,638		(179)		1,445
Other restructuring charges	2		527		124		653
Total restructuring charges	$	(44)	$	3,518	$	(55)	$	3,419


	Nine Months Ended November 27, 2021
(In thousands)	Architectural Framing		Architectural Glass		Corporate and other		Total
Asset impairment charges	$	54	$	16,584	$	—	$	16,638
Termination benefits	1,809		3,215		760		5,784
Other restructuring charges	141		1,110		560		1,811
Total restructuring charges	$	2,004	$	20,909	$	1,320	$	24,233


	Payments Due by Fiscal Period
(In thousands)	Remainder of Fiscal 2022		Fiscal 2023		Fiscal 2024		Fiscal 2025		Fiscal 2026		Thereafter		Total
Debt obligations	$	—	$	1,000	$	—	$	150,000	$	—	$	12,000	$	163,000
Operating leases (undiscounted)	3,501		13,563		11,261		9,915		7,903		13,116		59,259
Purchase obligations	61,169		166,446		8,530		1,433		1,433		487		239,498
Total cash obligations	$	64,670	$	181,009	$	19,791	$	161,348	$	9,336	$	25,603	$	461,757