What changed in this filing

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Item 1. Financial Statements

2022-01-06 compared with 2021-09-30 · 155 added, 100 removed, 494 unchanged (34% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

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

(In thousands, except stock data) November 27, 2021 February 27, 2021

Current assets

6 unchanged sentences

Property, plant and equipment, net 254,838 298,443

Assets held for sale 9,256 —

Operating lease right-of-use assets 50,845 58,864

28 unchanged sentences

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands, except per share data) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020

Net sales $ 334,217 $ 313,583 $ 986,020 $ 922,162

2 unchanged sentences

Selling, general and administrative expenses 46,970 19,835 149,709 126,590

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

Operating income 17,710 49,750 30,684 79,433

Interest expense, net 528 1,502 2,838 4,240

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

Other (expense) income, net ( 3,057 ) 472 ( 3,266 ) 684

Earnings before income taxes 14,125 48,720 24,580 75,877

Income tax expense 3,068 11,447 4,821 18,070

Net earnings $ 11,057 $ 37,273 $ 19,759 $ 57,807

Earnings per share - basic $ 0.44 $ 1.44 $ 0.79 $ 2.22

Earnings per share - diluted $ 0.44 $ 1.42 $ 0.78 $ 2.19

Weighted average basic shares outstanding 24,957 25,883 25,166 26,068

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

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

Three Months Ended Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020

Net earnings $ 11,057 $ 37,273 $ 19,759 $ 57,807

Other comprehensive earnings (loss):

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

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

2 unchanged sentences

Other comprehensive (loss) earnings ( 3,534 ) 1,191 ( 1,924 ) 2,029

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

Total comprehensive earnings $ 7,523 $ 38,464 $ 17,835 $ 59,836

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

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

Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020

Operating Activities

5 unchanged sentences

Asset impairment 16,638 —

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

Gain on disposal of assets ( 1,250 ) ( 19,346 )

Noncash lease expense 9,302 9,531

14 unchanged sentences

Other 76 ( 1,090 )

Net cash used by investing activities ( 8,763 ) ( 15,217 )

Net cash (used) provided by investing activities ( 11,647 ) 5,518

Financing Activities

42 unchanged sentences

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

Net earnings — — — 11,057 — — — 11,057

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 )

Foreign currency translation adjustments — — — — — — ( 2,515 ) ( 2,515 )

Issuance of stock, net of cancellations 1 — 22 — ( 3 ) 3 — 22

Share-based compensation — — 1,546 — — — — 1,546

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

Other share retirements ( 2 ) ( 1 ) ( 12 ) ( 51 ) — — — ( 64 )

Cash dividends — — — ( 4,990 ) — — — ( 4,990 )

Balance at November 27, 2021 25,227 $ 8,409 $ 158,579 $ 336,816 $ ( 195 ) $ 195 $ ( 29,951 ) $ 473,853

See accompanying notes to consolidated financial statements.

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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 ( 620 ) ( 207 ) ( 3,781 ) ( 12,012 ) — — — ( 16,000 )

Other share retirements ( 22 ) ( 7 ) ( 131 ) ( 331 ) — — — ( 469 )

Cash dividends — — — ( 4,795 ) — — — ( 4,795 )

Balance at November 28, 2020 25,962 $ 8,654 $ 155,974 $ 414,749 $ ( 183 ) $ 183 $ ( 32,034 ) $ 547,343

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

The results of operations for the three- and nine-month periods ended November 27, 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 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.

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

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

Subsequent events

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.

Equity Investment

During the third 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-down of the entire investment in the company.

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 Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020

Recognized at shipment $ 141,826 $ 129,132 $ 419,893 $ 379,292

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An account is written off when it is determined that the asset is no longer collectible.

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) August 28, 2021 February 27, 2021

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) November 27, 2021 February 27, 2021

Trade accounts $ 124,890 $ 120,534

5 unchanged sentences

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

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

(In thousands) November 27, 2021 February 27, 2021

Beginning balance $ 1,947 $ 2,469

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Other changes (1)

( 16 ) ( 24 )

Ending balance $ 2,315 $ 1,947

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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) August 28, 2021 February 27, 2021

(In thousands) November 27, 2021 February 27, 2021

Contract assets $ 54,487 $ 74,664

1 unchanged sentence

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 Six Months Ended

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

Other contract-related disclosures Three Months Ended Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020

Revenue recognized related to contract liabilities from prior year-end $ 1,687 $ 2,044 $ 18,266 $ 16,239

Revenue recognized related to prior satisfaction of performance obligations 5,051 4,016 12,568 10,545

Some of our contracts have an expected duration of longer than a year, with performance obligations extending over that timeframe.

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

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

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 transaction price associated with unsatisfied performance obligations was approximately $ 863.1 million.

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

(In thousands) August 28, 2021

(In thousands) November 27, 2021

Within one year

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Supplemental Balance Sheet Information

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

(In thousands) November 27, 2021 February 27, 2021

Raw materials $ 43,436 $ 36,681

3 unchanged sentences

Other current liabilities

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

(In thousands) November 27, 2021 February 27, 2021

Warranties $ 10,889 $ 12,298

Accrued project losses 904 4,572

Property and other taxes 7,388 7,459

Income and other taxes 8,727 7,459

Accrued self-insurance reserves 9,431 6,482

3 unchanged sentences

Other non-current liabilities

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

(In thousands) November 27, 2021 February 27, 2021

Deferred benefit from New Market Tax Credit transactions $ 9,165 $ 15,717

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

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

November 27, 2021 $ 12,337 $ 223 $ 33 $ 12,527

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 August 28, 2021, by contractual maturity, are shown below.

The amortized cost and estimated fair values of these bonds at November 27, 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 August 28, 2021, the interest rate swap contract had a notional value of $ 37.5 million.

As of November 27, 2021, the interest rate swap contract had a notional value of $ 30.0 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 August 28, 2021, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

As of November 27, 2021, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

dollar notional values of $ 16.5 million and $ 8.0 million, respectively.

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

August 28, 2021

November 27, 2021

Money market funds $ 58,482 $ — $ 58,482

2 unchanged sentences

Aluminum hedge contracts — 68 68

Interest rate swap contract — 69 69

Deferred compensation — 14,140 14,140

Foreign currency forward/option contracts — 446 446

Interest rate swap contract — 319 319

February 27, 2021

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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.

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.

Goodwill and Other Intangible Assets

Goodwill represents the excess of the cost over the net tangible and identified intangible assets of acquired businesses.

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.

3 unchanged sentences

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.

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 and concluded no adjustment to the carrying value of goodwill was necessary as a result of this change.

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

The carrying amount of goodwill attributable to each reporting segment was:

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Foreign currency translation ( 112 ) ( 54 ) — — ( 166 )

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

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.

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Translation Net

August 28, 2021

November 27, 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 $ 3.9 million and $ 3.7 million for the six-month periods ended August 28, 2021 and August 29, 2020, respectively.

Amortization expense on definite-lived intangible assets was $ 5.9 million and $ 5.6 million for the nine-month periods ended November 27, 2021 and November 28, 2020, respectively.

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

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

At November 27, 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 $ 2,075 $ 8,262 $ 8,082 $ 7,638 $ 7,621

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.

As of November 27, 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 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.

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 EBITDA-to-interest expense.

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

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.

At November 27, 2021, we were in compliance with both financial covenants.

Additionally, at November 27, 2021, we had a total of $ 16.4 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2023 to 2032 and reduce borrowing capacity under the revolving credit facility.

At November 27, 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.

The fair value of all industrial revenue bonds approximated carrying value at November 27, 2021, 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 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.

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

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

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

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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 and lease expense is recognized on a straight-line basis over the lease term.

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 and such leases are expensed on a straight-line basis over the lease term.

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.

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The components of lease expense were as follows:

Three Months Ended Six Months Ended

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

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

3 unchanged sentences

Other supplemental information related to leases was as follows:

Six Months Ended

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

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

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Future maturities of lease liabilities are as follows:

(In thousands) August 28, 2021

(In thousands) November 27, 2021

Remainder of Fiscal 2022 $ 3,501

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

At November 27, 2021, $ 1.2 billion of these types of bonds were outstanding, of which $ 448.0 million is in our backlog.

These bonds do not have stated expiration dates.

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A warranty rollforward follows:

Six Months Ended

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

Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020

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

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Balance at end of period $ 12,991 $ 15,733

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 Framing Systems businesses.

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 $ 1.3 million and $ 4.6 million as of August 28, 2021 and February 27, 2021, respectively.

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 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.

At November 27, 2021, we had $ 16.4 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 $ 203.8 million as of August 28, 2021.

Purchase obligations for raw material commitments and capital expenditures totaled $ 239.5 million as of November 27, 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 in our consolidated balance sheets.

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.

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Share-Based Compensation

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.

Total share-based compensation expense included in the results of operations was $ 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.

Stock options and SARs

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

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

2 unchanged sentences

Awards canceled ( 84,336 ) 23.04

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.

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

For the nine-months ended November 27, 2021 and November 28, 2020, cash proceeds from the exercise of stock options were $ 4.1 million and $ 1.5 million, 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 and $ 1.8 million, for the nine-months ended November 27, 2021 and November 28, 2020, respectively.

Executive Compensation Program

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Nonvested share awards and units

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

Nonvested share activity, including performance share units, for the current nine-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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Canceled ( 23,306 ) 29.68

Nonvested at August 28, 2021 (2)

Nonvested at November 27, 2021 (2)

501,620 $ 30.10

1 unchanged sentence

(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.

At November 27, 2021, there was $ 11.0 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 28 months.

The total fair value of shares vested during the nine months ended November 27, 2021 was $ 6.9 million.

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

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state jurisdictions or international jurisdictions.

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

The total liability for unrecognized tax benefits was $ 4.0 million at November 27, 2021, compared to $ 3.8 million at February 27, 2021.

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 Six Months Ended

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

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

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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 Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) November 27, 2021 November 28, 2020 November 27, 2021 November 28, 2020

Architectural Framing Systems $ 151,665 $ 136,688 $ 453,476 $ 439,779

7 unchanged sentences

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

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.

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.

1 unchanged sentence

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.

For the three- and nine-month periods ended November 27, 2021, we incurred $ 3.4 million and $ 24.2 million, respectively, of pre-tax costs associated with the execution of these plans, of which $ 3.6 million and $ 22.1 million are included within 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 $ 5 million, which will be incurred by the end of our fiscal year 2022.

Three months ended August 28, 2021

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.

Three Months Ended November 27, 2021

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

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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 fiscal year.

All balances are expected to be paid within the current fiscal year.

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

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Other adjustments ( 269 ) — — ( 269 )

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

Balance at November 27, 2021 $ 1,735 $ 760 $ 790 $ 3,285

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 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.

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