What changed in this filing

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Item 1. Financial Statements

2021-09-30 compared with 2021-07-01 · 155 added, 90 removed, 439 unchanged (36% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

(In thousands, except stock data) May 29, 2021 February 27, 2021

(In thousands, except stock data) August 28, 2021 February 27, 2021

Current assets

36 unchanged sentences

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended

(In thousands, except per share data) May 29, 2021 May 30, 2020

Three Months Ended Six Months Ended

(In thousands, except per share data) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Net sales $ 325,797 $ 319,483 $ 651,803 $ 608,578

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Selling, general and administrative expenses 51,070 52,972 102,739 106,754

Operating income 16,042 6,469

Operating (loss) income ( 3,068 ) 23,215 12,973 29,683

Interest expense, net 1,072 1,324 2,310 2,739

Other expense, net 315 1,049

Earnings before income taxes 14,489 4,006

Income tax expense 3,672 1,130

Net earnings $ 10,817 $ 2,876

Earnings per share - basic $ 0.43 $ 0.11

Earnings per share - diluted $ 0.42 $ 0.11

Other income (expense), net 105 1,260 ( 209 ) 213

(Loss) earnings before income taxes ( 4,035 ) 23,151 10,454 27,157

Income tax (benefit) expense ( 1,919 ) 5,493 1,753 6,623

Net (loss) earnings $ ( 2,116 ) $ 17,658 $ 8,701 $ 20,534

(Loss) earnings per share - basic $ ( 0.08 ) $ 0.68 $ 0.34 $ 0.78

(Loss) earnings per share - diluted $ ( 0.08 ) $ 0.67 $ 0.34 $ 0.77

Weighted average basic shares outstanding 25,140 26,156 25,271 26,162

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Net earnings $ 10,817 $ 2,876

Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Net (loss) earnings $ ( 2,116 ) $ 17,658 $ 8,701 $ 20,534

Other comprehensive earnings (loss):

Unrealized gain on marketable securities, net of $ 2 , $ 13 , $ 1 and $ 39 of tax expense, respectively

Unrealized gain (loss) on derivative instruments, net of $ 211 and $( 189 ) of tax expense (benefit), respectively

Unrealized (loss) gain on derivative instruments, net of $( 203 ), $ 404 , $ 8 and $ 215 of tax (benefit) expense, respectively

( 666 ) 1,319 26 703

Foreign currency translation adjustments ( 4,300 ) 6,139 1,580 ( 12 )

Other comprehensive earnings (loss) 6,572 ( 6,671 )

Total comprehensive earnings (loss) $ 17,389 $ ( 3,795 )

Other comprehensive (loss) earnings ( 4,962 ) 7,508 1,610 838

Total comprehensive (loss) earnings $ ( 7,078 ) $ 25,166 $ 10,311 $ 21,372

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Six Months Ended

(In thousands) August 28, 2021 August 29, 2020

Operating Activities

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Deferred income taxes ( 4,560 ) 7,966

Asset impairment 15,403 —

(Gain) loss on disposal of assets ( 1,355 ) 18

Noncash lease expense 6,216 6,032

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Capital expenditures ( 10,121 ) ( 14,224 )

Proceeds from sales of property, plant and equipment 1,292 —

Other 66 ( 993 )

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Borrowings on line of credit — 192,581

Repayments on debt ( 2,000 ) ( 5,400 )

Payments on line of credit — ( 237,500 )

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Net cash used by financing activities ( 32,217 ) ( 66,062 )

Decrease in cash and cash equivalents ( 11,522 ) ( 3,046 )

Increase in cash and cash equivalents 13,927 4,051

Effect of exchange rates on cash 617 ( 2 )

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— — — — — — — —

Unrealized loss on foreign currency hedge, net of $ 211 tax expense

Unrealized gain on foreign currency hedge, net of $ 211 tax expense

— — — — — — 692 692

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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 )

Foreign currency translation adjustments — — — — — — ( 4,300 ) ( 4,300 )

Issuance of stock, net of cancellations 67 22 — — ( 3 ) 3 — 22

Share-based compensation — — 1,587 — — — — 1,587

Share repurchases ( 249 ) ( 83 ) ( 1,616 ) ( 8,095 ) — — — ( 9,794 )

Other share retirements ( 30 ) ( 9 ) ( 197 ) ( 496 ) — — — ( 702 )

Cash dividends — — — ( 5,025 ) — — — ( 5,025 )

Balance at August 28, 2021 25,394 $ 8,465 $ 158,115 $ 336,398 $ ( 192 ) $ 192 $ ( 26,417 ) $ 476,561

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(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

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Balance at May 30, 2020 26,369 $ 8,790 $ 153,862 $ 382,225 $ ( 696 ) $ 696 $ ( 40,733 ) $ 504,144

Net earnings — — — 17,658 — — — 17,658

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

Foreign currency translation adjustments — — — — — — 6,139 6,139

Issuance of stock, net of cancellations 121 41 ( 23 ) — ( 11 ) 11 — 18

Share-based compensation — — 2,256 — — — — 2,256

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

See accompanying notes to consolidated financial statements.

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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-month period ended May 29, 2021 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three- and six-month periods ended August 28, 2021 are not necessarily indicative of the results to be expected for the full year.

COVID-19 update

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We were also impacted by quarantine-related absenteeism among our production workforce, resulting in labor constraints at some of our facilities.

In the first quarter of fiscal 2022, the negative impacts on our business due to the COVID-19 pandemic have moderated.

The extent to which COVID-19 will continue to impact our business in the future will depend in part on the effectiveness of ongoing public health initiatives, which have been boosted by vaccine production and distribution.

In the first two 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 variant, and the effectiveness of ongoing public health initiatives, which have been boosted by vaccine production and distribution.

Adoption of new accounting standards

In the current quarter, we adopted the guidance in ASU 2019-12, Income Taxes (Topic 740):

At the beginning of fiscal 2022, we adopted the guidance in ASU 2019-12, Income Taxes (Topic 740):

Simplifying the Accounting for Income Taxes .

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The adoption of this ASU did not have a significant impact on the consolidated financial statements.

In the current quarter, we adopted the guidance in ASU 2020-04, Reference Rate Reform (Topic 848):

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 .

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Subsequent events

We have evaluated subsequent events for potential recognition and disclosure through the date of this filing.

Subsequent to the end of the quarter, we purchased 86,933 shares of stock under our authorized share repurchase program, at a total cost of $ 3.4 million.

We have evaluated subsequent events for potential recognition and disclosure through the date of this filing and determined that there were no subsequent events that required recognition or disclosure in the consolidated financial statements.

Revenue, Receivables and Contract Assets and Liabilities

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

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Recognized at shipment $ 137,783 $ 133,997 $ 278,066 $ 250,160

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

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Trade accounts $ 123,658 $ 120,534

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

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Beginning balance $ 1,947 $ 2,469

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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 amounts are released.

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Contract assets $ 60,022 $ 74,664

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

Other contract-related disclosures Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Other contract-related disclosures Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Revenue recognized related to contract liabilities from prior year-end $ 2,479 $ 1,184 $ 16,579 $ 14,195

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Generally, these contracts are in our businesses with long-term contracts which recognize revenue over time.

As of May 29, 2021, the transaction price associated with unsatisfied performance obligations was approximately $ 855.0 million.

As of August 28, 2021, the transaction price associated with unsatisfied performance obligations was approximately $ 857.2 million.

The performance obligations are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) May 29, 2021

(In thousands) August 28, 2021

Within one year

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Supplemental Balance Sheet Information

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Raw materials $ 41,730 $ 36,681

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Other current liabilities

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Warranties $ 11,234 $ 12,298

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Accrued self-insurance reserves 5,500 6,482

Accrued freight 1,837 1,477

Other 21,481 20,895

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Other non-current liabilities

(In thousands) May 29, 2021 February 27, 2021

(In thousands) August 28, 2021 February 27, 2021

Deferred benefit from New Market Tax Credit transactions $ 15,717 $ 15,717

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(In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated

May 29, 2021 $ 12,372 $ 384 $ 7 $ 12,749

August 28, 2021 $ 12,399 $ 385 $ 2 $ 12,782

February 27, 2021 12,517 386 10 12,893

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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 May 29, 2021, by contractual maturity, are shown below.

The amortized cost and estimated fair values of these bonds at August 28, 2021, 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.

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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 May 29, 2021, the interest rate swap contract had a notional value of $ 40 million.

As of August 28, 2021, the interest rate swap contract had a notional value of $ 37.5 million.

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 May 29, 2021, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

As of August 28, 2021, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

dollar notional values of $ 9.0 million and $ 6.9 million, respectively.

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(Level 1) Other Observable Inputs (Level 2) Total Fair Value

August 28, 2021

Money market funds $ 42,003 $ — $ 42,003

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Cash surrender value of life insurance — 18,750 18,750

Foreign currency forward/option contracts — 577 577

Aluminum hedge contracts — 1,200 1,200

Deferred compensation — 13,811 13,811

Foreign currency forward/option contracts — 269 269

Interest rate swap contract — 319 319

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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 quarter of fiscal 2022.

Goodwill and Other Intangible Assets

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Foreign currency translation 248 42 — — 290

Balance at May 29, 2021 $ 94,556 $ 25,228 $ 1,120 $ 10,557 $ 131,461

Balance at August 28, 2021 $ 93,347 $ 25,364 $ 1,120 $ 10,557 $ 130,388

(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.

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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 analysis, the fair value of each of our trade names and trademarks exceeded carrying amount,

except for the EFCO tradename, within our Architectural Framing Systems segment.

Based on our analysis, the fair value of each of our trade names and trademarks exceeded carrying amount, except for the EFCO tradename, within our Architectural Framing Systems segment.

The fair value determined for the EFCO tradename was less than its carrying value by $ 6.3 million;

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Translation Net

August 28, 2021

Definite-lived intangible assets:

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Total intangible assets $ 206,240 $ ( 74,677 ) $ ( 6,300 ) $ 4,790 $ 130,053

Amortization expense on definite-lived intangible assets was $ 2.0 million and $ 1.8 million for the three-month periods ended May 29, 2021 and May 30, 2020, respectively.

Amortization expense on definite-lived intangible assets was $ 3.9 million and $ 3.7 million for the six-month periods ended August 28, 2021 and August 29, 2020, respectively.

Amortization expense of other identifiable intangible assets is included in selling, general and administrative expenses.

At May 29, 2021, the estimated future amortization expense for definite-lived intangible assets was:

At August 28, 2021, the estimated future amortization expense for definite-lived intangible assets was:

(In thousands) Remainder of Fiscal 2022 Fiscal 2023 Fiscal 2024 Fiscal 2025 Fiscal 2026

Estimated amortization expense $ 4,174 $ 8,307 $ 8,047 $ 7,657 $ 7,640

As of May 29, 2021, we had a committed revolving credit facility with maximum borrowings of up to $ 235 million with a maturity of June 2024.

There were no outstanding borrowings under the revolving credit facility as of May 29, 2021 and February 27, 2021.

At May 29, 2021 and February 27, 2021, we also had a $ 150 million term loan with a maturity date of June 2024.

As of August 28, 2021, we had a committed revolving credit facility with maximum borrowings of up to $ 235 million with a maturity of June 2024.

There were no outstanding borrowings under the revolving credit facility as of August 28, 2021 and February 27, 2021.

At August 28, 2021 and February 27, 2021, we also had a $ 150 million term loan with a maturity date of June 2024.

Our revolving credit facility and term loan contain two financial covenants that require us to stay below a maximum debt-to-EBITDA ratio and maintain a minimum ratio of interest expense-to-EBITDA.

Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis.

At May 29, 2021, we were in compliance with both financial covenants.

Additionally, at May 29, 2021, we had a total of $ 18.7 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2022 to 2023 and reduce borrowing capacity under the revolving credit facility.

At May 29, 2021, debt included $ 15.0 million of industrial revenue bonds that mature in fiscal years 2022 through 2043.

The fair value of the industrial revenue bonds approximated carrying value at May 29, 2021, due to the variable interest rates on these instruments.

At August 28, 2021, we were in compliance with both financial covenants.

Additionally, at August 28, 2021, we had a total of $ 16.6 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2022 to 2032 and reduce borrowing capacity under the revolving credit facility.

At August 28, 2021, debt included $ 13.0 million of industrial revenue bonds that mature in fiscal years 2023 through 2043.

In July 2021, two $ 1.0 million industrial revenue bonds matured and were repaid.

The fair value of all industrial revenue bonds approximated carrying value at August 28, 2021, due to the variable interest rates on these instruments.

All debt 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 May 29, 2021 and February 27, 2021, there were no borrowings outstanding under the facilities.

Interest payments were $ 1.1 million and $ 1.4 million for the three months ended May 29, 2021 and May 30, 2020, respectively.

As of August 28, 2021 and February 27, 2021, there were no borrowings outstanding under the facilities.

Interest payments were $ 1.9 million and $ 2.5 million for the six months ended August 28, 2021 and August 29, 2020, respectively.

We lease certain of the buildings and equipment used in our operations.

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The components of lease expense were as follows:

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Operating lease cost $ 3,518 $ 3,290 $ 6,899 $ 6,851

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Other supplemental information related to leases was as follows:

Three Months Ended

(In thousands except weighted-average data) May 29, 2021 May 30, 2020

Six Months Ended

(In thousands except weighted-average data) August 28, 2021 August 29, 2020

Cash paid for amounts included in the measurement of operating lease liabilities $ 7,186 $ 6,562

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Future maturities of lease liabilities are as follows:

(In thousands) May 29, 2021

(In thousands) August 28, 2021

Remainder of Fiscal 2022 $ 6,956

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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 May 29, 2021, $ 1.2 billion of these types of bonds were outstanding, of which $ 527.3 million is in our backlog.

At August 28, 2021, $ 1.2 billion of these types of bonds were outstanding, of which $ 490.1 million is in our backlog.

These bonds do not have stated expiration dates.

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A warranty rollforward follows:

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Six Months Ended

(In thousands) August 28, 2021 August 29, 2020

Balance at beginning of period $ 14,999 $ 15,629

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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 $ 1.7 million and $ 4.6 million as of May 29, 2021 and February 27, 2021, respectively.

The liability for these types of project-related contingencies was $ 1.3 million and $ 4.6 million as of August 28, 2021 and February 27, 2021, respectively.

Letters of credit

At May 29, 2021, we had $ 18.7 million of ongoing letters of credit, all of which have been issued under our committed revolving credit facility, as discussed in Note 6.

At August 28, 2021, we had $ 16.6 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 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 $ 235.9 million as of May 29, 2021.

Purchase obligations for raw material commitments and capital expenditures totaled $ 203.8 million as of August 28, 2021.

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 non-current liabilities on our consolidated balance sheets.

Proceeds received from investors on these transactions are included within 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 on our consolidated balance sheets.

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 for each project, we are required to hold cash dedicated to fund each capital project which is classified as restricted cash on our consolidated balance sheets.

During the construction phase for each 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.

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Share-Based Compensation

Total share-based compensation expense included in the results of operations was $ 1.7 million for the three-month period ended May 29, 2021 and $ 1.4 million for the three-month period ended May 30, 2020.

Total share-based compensation expense included in the results of operations was $ 3.3 million for the six-month period ended August 28, 2021 and $ 3.7 million for the six-month period ended August 29, 2020.

Stock options and SARs

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

Stock option and SAR activity for the current six-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

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Awards canceled ( 84,336 ) 23.04

Outstanding at May 29, 2021 418,100 $ 23.04 9.1 years $ 6,258,957

Vested or expected to vest at May 29, 2021 418,100 $ 23.04 9.1 years $ 6,258,957

For the three-months ended May 29, 2021, cash proceeds from the exercise of stock options were $ 4.1 million and 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 $ 2.7 million.

No awards were issued or exercised during the three-months ended May 30, 2020.

Outstanding at August 28, 2021 370,800 $ 23.04 8.8 years $ 4,694,328

Vested or expected to vest at August 28, 2021 370,800 $ 23.04 8.8 years $ 4,694,328

For the six-months ended August 28, 2021, cash proceeds from the exercise of stock options were $ 4.1 million and 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.

No awards were issued or exercised during the six-months ended August 29, 2020.

Executive Compensation Program

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Nonvested share awards and units

Nonvested share activity, including performance share units, for the current three-month period is summarized as follows:

Nonvested share activity, including performance share units, for the current six-month period is summarized as follows:

Nonvested shares and units Number of Shares and Units Weighted Average Grant Date Fair Value

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Vested ( 166,975 ) 28.55

Nonvested at May 29, 2021 (1)

Canceled ( 20,654 ) 30.27

Nonvested at August 28, 2021 (2)

519,344 $ 30.62

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

At May 29, 2021, there was $ 11.3 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 31 months.

The total fair value of shares vested during the three months ended May 29, 2021 was $ 1.9 million.

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

At August 28, 2021, there was $ 12.4 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 30 months.

The total fair value of shares vested during the six months ended August 28, 2021 was $ 4.8 million.

The Company files income tax returns in the U.S.

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The Company is no longer subject to U.S.

federal tax examinations for years prior to fiscal 2018, or

state and local income tax examinations for years prior to fiscal 2013.

federal tax examinations for years prior to fiscal 2018, or state and local income tax examinations for years prior to fiscal 2013.

The Company is not currently under U.S.

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state jurisdictions or international jurisdictions.

The total liability for unrecognized tax benefits was $ 3.8 million at May 29, 2021 and February 27, 2021, respectively.

The total liability for unrecognized tax benefits was $ 3.8 million at August 28, 2021 and February 27, 2021, respectively.

Penalties and interest related to unrecognized tax benefits are recorded in income tax expense.

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

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Basic earnings per share – weighted average common shares outstanding

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Weighted average effect of nonvested share grants and assumed exercise of stock options

— 369 366 345

Diluted earnings per share – weighted average common shares and potential common shares outstanding

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• The Large-Scale Optical (LSO) segment manufactures value-added glass and acrylic products primarily for framing and display applications.

Three Months Ended

(In thousands) May 29, 2021 May 30, 2020

Three Months Ended Six Months Ended

(In thousands) August 28, 2021 August 29, 2020 August 28, 2021 August 29, 2020

Architectural Framing Systems $ 149,972 $ 152,927 $ 301,812 $ 303,091

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Corporate and other ( 7,076 ) ( 2,176 ) ( 11,607 ) ( 4,720 )

Operating income $ 16,042 $ 6,469

Operating (loss) income $ ( 3,068 ) $ 23,215 $ 12,973 $ 29,683

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.

Restructuring

On August 11, 2021, we announced plans to realign and simplify our business structure.

During the second quarter of fiscal 2022, we incurred $ 20.8 million of pre-tax costs associated with the execution of these plans, of which $ 18.5 million is included within cost of sales and $ 2.3 million is included within selling, general and administrative expenses within our consolidated statements of operations.

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 in order to build focus within 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 $ 5 million, which will be incurred by the end of our fiscal year 2022.

Three months ended August 28, 2021

(In thousands) Architectural Framing Architectural Glass Corporate and other Total

Asset impairment charges $ 85 $ 15,318 $ — $ 15,403

Termination benefits 1,824 1,577 939 4,340

Other restructuring charges 139 496 436 1,071

Total restructuring charges $ 2,048 $ 17,391 $ 1,375 $ 20,814

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 fiscal year.

(In thousands) Architectural Framing Architectural Glass Corporate and 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 2,872 230 161 3,263

Restructuring expense 1,963 2,073 1,375 5,411

Payments ( 2,384 ) ( 205 ) ( 100 ) ( 2,689 )

Other adjustments ( 98 ) — — ( 98 )

Balance at August 28, 2021 $ 2,353 $ 2,098 $ 1,436 $ 5,887

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements