What changed in this filing

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Item 1. Financial Statements

2022-09-29 compared with 2022-07-01 · 128 added, 91 removed, 465 unchanged (32% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

(In thousands, except stock data) May 28, 2022 February 26, 2022

(In thousands, except stock data) August 27, 2022 February 26, 2022

Current assets

37 unchanged sentences

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended

(In thousands, except per share data) May 28, 2022 May 29, 2021

Three Months Ended Six Months Ended

(In thousands, except per share data) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Net sales $ 372,109 $ 325,797 $ 728,744 $ 651,803

2 unchanged sentences

Selling, general and administrative expenses 52,864 51,070 105,265 102,739

Operating income 33,216 16,042

Operating income (loss) 32,072 ( 3,068 ) 65,288 12,973

Interest expense, net 1,698 1,072 2,904 2,310

Other expense, net 1,310 315

Earnings before income taxes 30,700 14,489

Income tax expense 7,969 3,672

Net earnings $ 22,731 $ 10,817

Earnings per share - basic $ 1.01 $ 0.43

Earnings per share - diluted $ 1.00 $ 0.42

Other expense (income), net 173 ( 105 ) 1,483 209

Earnings (loss) before income taxes 30,201 ( 4,035 ) 60,901 10,454

Income tax (benefit) expense ( 7,188 ) ( 1,919 ) 781 1,753

Net earnings (loss) $ 37,389 $ ( 2,116 ) $ 60,120 $ 8,701

Earnings (loss) per share - basic $ 1.71 $ ( 0.08 ) $ 2.72 $ 0.34

Earnings (loss) per share - diluted $ 1.68 $ ( 0.08 ) $ 2.66 $ 0.34

Weighted average basic shares outstanding 21,860 25,140 22,129 25,271

2 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Three Months Ended

(In thousands) May 28, 2022 May 29, 2021

Net earnings $ 22,731 $ 10,817

Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Net earnings (loss) $ 37,389 $ ( 2,116 ) $ 60,120 $ 8,701

Other comprehensive (loss) earnings:

Unrealized (loss) gain on marketable securities, net of $( 28 ), $ 2 , $( 102 ) and $ 1 of tax (benefit) expense, respectively

( 106 ) 4 ( 382 ) 4

Unrealized (loss) gain on derivative instruments, net of $( 152 ), $( 203 ), $( 1,469 ) and $ 8 of tax (benefit) expense, respectively

2 unchanged sentences

Other comprehensive (loss) earnings ( 3,383 ) ( 4,962 ) ( 6,243 ) 1,610

Total comprehensive earnings $ 19,871 $ 17,389

Total comprehensive earnings (loss) $ 34,006 $ ( 7,078 ) $ 53,877 $ 10,311

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

(In thousands) May 28, 2022 May 29, 2021

Six Months Ended

(In thousands) August 27, 2022 August 28, 2021

Operating Activities

4 unchanged sentences

Deferred income taxes 6,858 ( 4,560 )

Asset impairment — 15,403

Gain on disposal of assets ( 695 ) ( 1,355 )

22 unchanged sentences

Payments on line of credit ( 171,000 ) —

Payments on debt issue costs ( 687 ) —

Proceeds from exercise of stock options — 4,115

3 unchanged sentences

Net cash provided (used) by financing activities 464 ( 32,217 )

Decrease in cash, cash equivalents and restricted cash ( 13,776 ) ( 11,522 )

(Decrease) increase in cash, cash equivalents and restricted cash ( 6,862 ) 13,927

Effect of exchange rates on cash 28 617

19 unchanged sentences

Balance at May 28, 2022 22,200 $ 7,400 $ 140,785 $ 208,205 $ ( 29,100 ) $ 327,290

Net earnings — — — 37,389 — 37,389

Unrealized loss on marketable securities, net of $ 28 tax benefit

— — — — ( 106 ) ( 106 )

Unrealized loss on derivative instruments, net of $ 152 tax benefit

— — — — ( 500 ) ( 500 )

Foreign currency translation adjustments — — — — ( 2,777 ) ( 2,777 )

Issuance of stock, net of cancellations ( 14 ) ( 5 ) 61 — — 56

Share-based compensation — — 1,797 — — 1,797

Exercise of stock options 36 12 ( 954 ) — — ( 942 )

Other share retirements ( 13 ) ( 4 ) ( 114 ) ( 540 ) — ( 658 )

Cash dividends — — — ( 4,809 ) — ( 4,809 )

Balance at August 27, 2022 22,209 $ 7,403 $ 141,575 $ 240,245 $ ( 32,483 ) $ 356,740

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 Accumulated Other Comprehensive (Loss) Income Total Shareholders' Equity

12 unchanged sentences

Balance at May 29, 2021 25,606 $ 8,535 $ 158,341 $ 352,130 $ ( 21,455 ) $ 497,551

Net loss — — — ( 2,116 ) — ( 2,116 )

Unrealized gain on marketable securities, net of $ 2 tax expense

Unrealized loss on derivative instruments, net of $ 203 tax benefit

— — — — ( 666 ) ( 666 )

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

Issuance of stock, net of cancellations 67 22 — — — 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 $ ( 26,417 ) $ 476,561

See accompanying notes to consolidated financial statements.

7 unchanged sentences

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 28, 2022 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 27, 2022 are not necessarily indicative of the results to be expected for the full year.

2 unchanged sentences

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 28, 2022 May 29, 2021

Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Recognized at shipment $ 174,693 $ 137,783 $ 335,857 $ 278,066

8 unchanged sentences

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 to us from the customer.

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Trade accounts $ 146,035 $ 129,085

5 unchanged sentences

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

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Beginning balance $ 2,132 $ 1,947

10 unchanged sentences

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 to us from the customer.

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Contract assets $ 51,789 $ 59,185

1 unchanged sentence

The changes in contract assets and contract liabilities were 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 28, 2022 May 29, 2021

Other contract-related disclosures Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Revenue recognized related to contract liabilities from prior year-end $ 4,978 $ 2,479 $ 33,157 $ 16,579

2 unchanged sentences

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

As of May 28, 2022, the transaction price associated with unsatisfied performance obligations was approximately $ 810.6 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 28, 2022

The transaction prices associated with unsatisfied performance obligations at August 27, 2022 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) August 27, 2022

Within one year

3 unchanged sentences

Supplemental Balance Sheet Information

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Raw materials $ 51,284 $ 42,541

3 unchanged sentences

Other current liabilities

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Warranties $ 13,482 $ 11,786

2 unchanged sentences

Accrued freight 2,410 2,078

Deferred revenue 2,405 2,714

Other 26,773 26,318

1 unchanged sentence

Other non-current liabilities

(In thousands) May 28, 2022 February 26, 2022

(In thousands) August 27, 2022 February 26, 2022

Deferred benefit from New Markets Tax Credit transactions $ 9,250 $ 9,165

9 unchanged sentences

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

May 28, 2022 $ 11,731 $ 7 $ 435 $ 11,303

August 27, 2022 $ 11,344 $ 3 $ 565 $ 10,782

February 26, 2022 11,862 45 123 11,784

1 unchanged sentence

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 28, 2022, by contractual maturity, are shown below.

The amortized cost and estimated fair values of these bonds at August 27, 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.

8 unchanged sentences

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 28, 2022, the interest rate swap contract had a notional value of $ 30.0 million.

As of August 27, 2022, 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 May 28, 2022, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

As of August 27, 2022, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S.

dollar notional values of $ 3.2 million and $ 12.2 million, respectively.

10 unchanged sentences

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

August 27, 2022

Money market funds $ 15,034 $ — $ 15,034

1 unchanged sentence

Cash surrender value of life insurance — 16,625 16,625

Foreign currency forward/option contract — 13 13

Interest rate swap contract — 1,584 1,584

Deferred compensation — 10,299 10,299

Foreign currency forward/option contract — 82 82

Aluminum hedging contract — 3,515 3,515

34 unchanged sentences

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.

In connection with the transition, leadership of our Sotawall and Harmon businesses have been combined to form the Architectural Services reporting unit.

We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded no adjustment to the carrying value of goodwill was necessary as a result of this change.

Concurrent with this change in composition of the operating segments effective at the start of our first quarter of fiscal 2023, goodwill was reallocated to the affected reporting units within each operating segment, using a relative fair value approach as outlined in ASC 350, Intangibles - Goodwill and Other.

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 which resulted in the combination of the Sotawall and Harmon reporting units into a single reporting unit.

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.

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 outlined in ASC 350, Intangibles - Goodwill and Other .

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

The following table presents the carrying amount of goodwill attributable to each reporting segment including the amount of goodwill that has been reallocated from the Architectural Framing Systems segment to the Architectural Services segment using the relative fair value approach as of the start of fiscal 2023:

The following table presents the carrying amount of goodwill attributable to each reporting segment 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 Services Architectural Glass Large-Scale

6 unchanged sentences

Foreign currency translation ( 644 ) ( 53 ) 71 — ( 626 )

Balance at May 28, 2022 $ 91,095 $ 3,165 $ 25,434 $ 10,557 $ 130,251

Balance at August 27, 2022 $ 90,489 $ 3,115 $ 25,315 $ 10,557 $ 129,476

(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.

10 unchanged sentences

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 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 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 fourth quarter of fiscal year 2022, within the Architectural Framing Systems segment.

4 unchanged sentences

Translation Net

August 27, 2022

Definite-lived intangible assets:

13 unchanged sentences

Total intangible assets $ 204,631 $ ( 82,839 ) $ ( 49,473 ) $ 162 $ 72,481

Amortization expense on definite-lived intangible assets was $ 1.1 million and $ 2.0 million for the three-month periods ended May 28, 2022 and May 29, 2021, respectively.

Amortization expense on definite-lived intangible assets was $ 2.1 million and $ 3.9 million for the six-month periods ended August 27, 2022 and August 28, 2021, respectively.

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

At May 28, 2022, the estimated future amortization expense for definite-lived intangible assets was:

At August 27, 2022, the estimated future amortization expense for definite-lived intangible assets was:

(In thousands) Remainder of 2023 2024 2025 2026 2027

Estimated amortization expense $ 2,258 $ 4,362 $ 4,332 $ 4,315 $ 4,313

As of May 28, 2022, we had a committed revolving credit facility with maximum borrowings of up to $ 235 million with a maturity of June 2024.

As of May 28, 2022, outstanding borrowings under our revolving credit facility were $ 99.0 million, while there were no outstanding borrowings under the revolving credit facility as of February 26, 2022.

At May 28, 2022 and February 26, 2022, 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.

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 August 27, 2022, outstanding borrowings under our revolving credit facility were $ 235.0 million, while there were no outstanding borrowings under the revolving credit facility as of February 26, 2022.

Our revolving credit facility contains 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 May 28, 2022, we were in compliance with both financial covenants.

Additionally, at May 28, 2022, 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 May 28, 2022, debt included $ 12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

At August 27, 2022, we were in compliance with both financial covenants.

Additionally, at August 27, 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 2023 to 2032 and reduce borrowing capacity under the revolving credit facility.

At August 27, 2022, debt included $ 12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

In March 2022, a $ 1.0 million industrial revenue bond matured and was repaid.

The fair value of all industrial revenue bonds approximated carrying value at May 28, 2022, due to the variable interest rates on these instruments.

The fair value of all industrial revenue bonds approximated carrying value at August 27, 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 May 28, 2022 and February 26, 2022, there were no borrowings outstanding under the facilities.

Interest payments were $ 1.1 million for each of the three-months ended May 28, 2022 and May 29, 2021, respectively.

At August 27, 2022, outstanding borrowings under our Canadian committed, revolving credit facilities were $ 3.8 million, while there were no outstanding borrowings under the Canadian facilities as of February 26, 2022.

Interest payments were $ 2.8 million and $ 1.9 million for the six months ended August 27, 2022 and August 28, 2021, respectively.

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

14 unchanged sentences

The components of lease expense were as follows:

Three Months Ended

(In thousands) May 28, 2022 May 29, 2021

Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Operating lease cost $ 2,954 $ 3,518 $ 6,005 $ 6,899

3 unchanged sentences

Other supplemental information related to leases was as follows:

Three Months Ended

(In thousands except weighted-average data) May 28, 2022 May 29, 2021

Six Months Ended

(In thousands except weighted-average data) August 27, 2022 August 28, 2021

Cash paid for amounts included in the measurement of operating lease liabilities $ 7,069 $ 7,186

3 unchanged sentences

Future maturities of lease liabilities are as follows:

(In thousands) May 28, 2022

(In thousands) August 27, 2022

Remainder of Fiscal 2023 $ 6,676

11 unchanged sentences

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 28, 2022, $ 1.2 billion of these types of bonds were outstanding, of which $ 409.3 million is in our backlog.

At August 27, 2022, $ 1.1 billion of these types of bonds were outstanding, of which $ 361.1 million is in our backlog.

These bonds do not have stated expiration dates.

3 unchanged sentences

Claim costs are deducted from the accrual when paid.

Factors that could have an impact on the warranty accrual in any given period include the following:

Factors that could have an impact on 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:

Three Months Ended

(In thousands) May 28, 2022 May 29, 2021

Six Months Ended

(In thousands) August 27, 2022 August 28, 2021

Balance at beginning of period $ 13,923 $ 14,999

5 unchanged sentences

Letters of credit

At May 28, 2022, 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.

At August 27, 2022, we had $ 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 $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 $ 196.5 million as of May 28, 2022.

Purchase obligations for raw material commitments and capital expenditures totaled $ 225.2 million as of August 27, 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 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.

19 unchanged sentences

Share-Based Compensation

Total share-based compensation expense included in the results of operations was $ 1.6 million for the three-month period ended May 28, 2022 and $ 1.7 million for the three-month period ended May 29, 2021.

Total share-based compensation expense included in the results of operations was $ 3.4 million for the six-month period ended August 27, 2022 and $ 3.3 million for the six-month period ended August 28, 2021.

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

Outstanding at beginning of period 370,800 $ 23.04

Outstanding at beginning of year 370,800 $ 23.04

Awards exercised ( 145,060 ) 23.04

Awards canceled/expired ( 67,740 ) 23.04

Outstanding at end of period 158,000 $ 23.04 0.9 years $ 2,000,280

Vested or expected to vest at end of period 158,000 $ 23.04 0.9 years $ 2,000,280

No awards were issued or exercised during the three-months ended May 28, 2022.

For the three-months ended May 29, 2021, cash proceeds from the exercise of stock options was $ 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.

For the six-months ended August 27, 2022, there were no cash proceeds from the exercise of stock options as all stock options were 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 $ 2.7 million.

For the six-months ended August 28, 2021, cash proceeds from the exercise of stock options was $ 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.

Executive Compensation Program

In fiscal 2022, the Compensation Committee of the Board of Directors implemented an executive compensation program for certain key employees.

In the each of the first 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.

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 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.

The number of share units issued at grant is equal to the target number of performance shares and allows for the right to receive 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 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

3 unchanged sentences

Vested ( 134,499 ) 27.94

Canceled ( 7,878 ) 29.36

Nonvested at May 28, 2022 (1) (2)

( 44,232 ) 36.00

Nonvested at August 27, 2022 (4)

484,606 $ 36.09

(1) 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 38,564 nonvested share units granted and outstanding at target level for the fiscal 2023-2025 performance period.

At May 28, 2022, there was $ 14.8 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 29 months.

The total fair value of shares vested during the three months ended May 28, 2022 was $ 2.0 million.

(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 August 27, 2022, there was $ 12.8 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 27 months.

The total fair value of shares vested during the six months ended August 27, 2022 was $ 3.8 million.

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

6 unchanged sentences

state jurisdictions or international jurisdictions.

The total liability for unrecognized tax benefits was $ 3.4 million at May 28, 2022, compared to $ 3.3 million at February 26, 2022.

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 $ 5.3 million at August 27, 2022, compared to $ 3.3 million at February 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.

1 unchanged sentence

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 28, 2022 May 29, 2021

Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Basic earnings per share – weighted average common shares outstanding

1 unchanged sentence

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

385 — 434 366

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

9 unchanged sentences

The fiscal 2022 segment results were recast for comparability.

Three Months Ended

(In thousands) May 28, 2022 May 29, 2021

Three Months Ended Six Months Ended

(In thousands) August 27, 2022 August 28, 2021 August 27, 2022 August 28, 2021

Architectural Framing Systems $ 172,867 $ 136,973 $ 336,159 $ 273,741

10 unchanged sentences

Corporate and other ( 6,378 ) ( 7,076 ) ( 11,421 ) ( 11,607 )

Operating income $ 33,216 $ 16,042

Operating income (loss) $ 32,072 $ ( 3,068 ) $ 65,288 $ 12,973

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 three-month period ended May 28, 2022, we completed the execution of these plans with the sale of the remaining manufacturing assets at our Architectural Glass location, in Dallas, Texas, for $ 4.1 million.

During the first quarter of fiscal 2023, we completed the execution of these plans with the sale of 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 we recognized a gain on the sale of approximately $ 0.6 million, net of associated transaction costs, which is included as a reduction of cost of sales within our consolidated statements of operations.

1 unchanged sentence

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

Architectural Framing Architectural Glass Corporate & Other Total

(In thousands) Architectural Framing Architectural Glass Corporate & Other Total

Balance at February 27, 2021 $ 2,872 $ 230 $ 161 $ 3,263

3 unchanged sentences

Balance at February 26, 2022 440 737 228 1,405

Restructuring expense — 62 — 62

Payments ( 171 ) ( 531 ) ( 136 ) ( 838 )

Other adjustments ( 151 ) ( 17 ) — ( 168 )

Balance at May 28, 2022 $ 302 $ 342 $ 160 $ 804

Balance at August 27, 2022 $ 118 $ 251 $ 92 $ 461

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, the Board of Directors increased the share repurchase authorization by an additional 1,000,000 shares.

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.

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