What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-04-26 compared with 2023-04-21 · 343 added, 318 removed, 832 unchanged (44% of the section changed)

9 unchanged sentences

Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of February 25, 2023, using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) .

The Company's management believes that, as of February 25, 2023, the Company's internal control over financial reporting was effective based on those criteria.

Following this report are reports from the Company's independent registered public accounting firm, Deloitte & Touche LLP, on the Company's consolidated financial statements and on the effectiveness of the Company's internal control over financial reporting as of February 25, 2023.

The Company's management assessed the effectiveness of the Company's internal control over financial reporting as of March 2, 2024, using criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control - Integrated Framework (2013) .

The Company's management believes that, as of March 2, 2024, the Company's internal control over financial reporting was effective based on those criteria.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

3 unchanged sentences

We have audited the accompanying consolidated balance sheets of Apogee Enterprises, Inc.

and subsidiaries (the "Company") as of February 25, 2023 and February 26, 2022, and the related consolidated results of operations, statements of comprehensive earnings, cash flows, and shareholders' equity, for each of the three years in the period ended February 25, 2023, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of February 25, 2023 and February 26, 2022, and the results of its operations and its cash flows for each of the three years in the period ended February 25, 2023, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of February 25, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 21, 2023, expressed an unqualified opinion on the Company's internal control over financial reporting.

and subsidiaries (the "Company") as of March 2, 2024 and February 25, 2023, and the related consolidated results of operations, statements of comprehensive earnings, cash flows, and shareholders' equity, for each of the three years in the period ended March 2, 2024, and the related notes (collectively referred to as the "financial statements").

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of March 2, 2024 and February 25, 2023, and the results of its operations and its cash flows for each of the three years in the period ended March 2, 2024, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of March 2, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 26, 2024, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

9 unchanged sentences

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current-period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Net Sales — Revenue Recognition for Long-Term Contracts in the Architectural Services Segment — Refer to Notes 1, 2, and 15 to the consolidated financial statements

The Architectural Services segment, which provides building glass and curtainwall installation services and operates under long-term, fixed-price contracts, accounted for approximately $410.6 million, or 29 percent of total net sales for the year ended February 25, 2023.

The Architectural Services segment, which provides building glass and curtainwall installation services and operates under long-term, fixed-price contracts, accounted for approximately $378.4 million, or 27 percent of total net sales for the year ended March 2, 2024.

The contracts for this business typically have a single, bundled performance obligation, as the business generally provides interrelated services and integrates these services into a combined output specified by the customer.

4 unchanged sentences

Our audit procedures related to management’s estimates of total costs and profit for the contract performance obligations used to recognize revenue for certain long-term contracts in the Architectural Services segment included, but were not limited to the following:

• We tested the effectiveness of controls over long-term contract revenue in the Architectural Services segment, including those over the estimates of total costs and profit for performance obligations.

• We developed an expectation of the amount of total long-term contract revenue in the Architectural Services segment based on prior year margins applied to cost of sales in the current year and compared our expectation to the amount of long-term contract revenue ultimately recorded by management.

• We tested the effectiveness of controls over long-term contract revenue, including those over the estimates of total costs and profit for performance obligations.

• We developed an expectation of the amount of total long-term contract revenue based on prior year margins applied to cost of sales in the current year and compared our expectation to the amount of long-term contract revenue ultimately recorded by management.

• We evaluated management’s ability to estimate total costs and profit by comparing actual costs and profit to management’s historical estimates for performance obligations that have been fulfilled.

• We selected a sample of long-term contracts from the Architectural Services segment contract portfolio and performed the following procedures:

• We selected a sample of long-term contracts from the contract portfolio and performed the following procedures:

• Evaluated whether the long-term contracts were properly included in management’s calculation of long-term contract revenue based on the terms and conditions of each contract, including whether continuous transfer of control to the customer occurred as progress was made toward fulfillment of the performance obligations.

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• Evaluating management’s ability to achieve the estimates of total cost and profit by performing corroborating inquiries with the Company’s project managers and engineers, and comparing the estimates to management’s work plans, engineering specifications, and supplier contracts.

• Comparing management’s estimates for the selected contracts to costs and profit of similar performance obligations, when applicable.

Goodwill and Intangible Assets — Window and Wall Systems Reporting Unit and EFCO Trade Name Indefinite-Lived Intangible Asset — Refer to Notes 1 and 6 to the consolidated financial statements

The Company’s evaluation of goodwill and indefinite-lived intangible assets for impairment involves the comparison of the fair value of each reporting unit or indefinite-lived intangible asset to its carrying value.

The Company estimates the fair value of its reporting units using both the income approach and the market approach and estimates the fair value of its indefinite-lived trade name intangible assets using the relief-from-royalty method.

The determination of fair value involves significant judgment and projections of future performance, including future revenues, future operating expenses, discount rates, and royalty rates.

Changes in these assumptions could have a significant impact on either the fair value, the amount of any impairment charge, or both.

The Company’s goodwill balance was $129.0 million as of February 25, 2023, of which $54.5 million relates to the Window and Wall Systems reporting unit.

The Company’s indefinite-lived intangible assets balance was $26.9 million as of February 25, 2023, of which $23.0 million relates to the EFCO trade name indefinite-lived intangible asset.

The fair values exceeded their carrying values as of the measurement date and, therefore, no impairment was identified.

Given the significant judgments made by management to estimate the fair values of the Window and Wall Systems reporting unit and the EFCO trade name indefinite-lived intangible asset, performing audit procedures to evaluate the reasonableness of management's estimates and assumptions related to selection of future revenues, future operating expenses, discount rates, and royalty rates required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter Was Addressed in the Audit

Our audit procedures related to future revenues, future operating expenses, discount rates, and royalty rates used by management to estimate the fair values included the following, among others:

• We tested the effectiveness of controls over management’s goodwill and indefinite-lived intangible assets impairment evaluation, including those over the determination of the fair value, such as controls related to management's selection of future revenues, future operating expenses, discount rates, and royalty rates.

• With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodology, (2) discount rates, and (3) royalty rates, including testing the source information underlying the determination of the valuation assumptions, testing the mathematical accuracy of the calculation, and developing a range of independent estimates and

comparing those to the valuation assumptions selected by management.

• We evaluated the reasonableness of management’s forecasts by comparing the forecasts to (1) historical results, (2) internal communications to management and the Board of Directors, (3) industry information, and (4) forecasted information included in Company press releases, as well as in analyst and industry reports of the Company.

• We evaluated management’s ability to accurately forecast future revenue and future operating expenses by comparing actual results to management’s historical forecasts.

• We evaluated the allocation of the Company’s estimated fair value to its reporting units and the comparison of the Company’s estimated fair value to its market capitalization.

/s/ Deloitte & Touche LLP

7 unchanged sentences

We have audited the internal control over financial reporting of Apogee Enterprises, Inc.

and subsidiaries (the “Company”) as of February 25, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of February 25, 2023, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended February 25, 2023, of the Company and our report dated April 21, 2023, expressed an unqualified opinion on those financial statements.

and subsidiaries (the “Company”) as of March 2, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of March 2, 2024, based on criteria established in Internal Control — Integrated Framework (2013) issued by COSO.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated financial statements as of and for the year ended March 2, 2024, of the Company and our report dated April 26, 2024, expressed an unqualified opinion on those financial statements.

Basis for Opinion

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CONSOLIDATED BALANCE SHEETS

(In thousands, except per share data) February 25, 2023 February 26, 2022

(In thousands, except per share data) March 2, 2024 February 25, 2023

Current assets

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Receivables, net 173,557 197,267

Inventories 78,441 80,494

Costs and earnings on contracts in excess of billings 33,569 30,403

Inventories, net 69,240 78,441

Contract assets 49,502 59,403

Other current assets 29,124 26,517

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Goodwill 129,182 129,026

Intangible assets 67,375 72,481

Intangible assets, net 66,114 67,375

Other non-current assets 45,692 45,642

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Accounts payable $ 84,755 $ 86,549

Accrued payroll and related benefits 51,651 50,977

Billings in excess of costs and earnings on uncompleted contracts 25,595 8,659

Accrued compensation and benefits 53,801 51,651

Contract liabilities 34,755 28,011

Operating lease liabilities 12,286 11,806

Current portion long-term debt — 1,000

Other current liabilities 59,108 64,532

6 unchanged sentences

Shareholders’ equity

Junior preferred stock of $ 1.00 par value;

authorized 200,000 shares;

zero issued and outstanding

Common stock of $ 0.33 -1/3 par value;

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CONSOLIDATED RESULTS OF OPERATIONS

(In thousands, except per share data) February 25, 2023 February 26, 2022 February 27, 2021

March 2, 2024 February 25, 2023 February 26, 2022

(In thousands, except per share data) (53 weeks) (52 weeks) (52 weeks)

Net sales $ 1,416,942 $ 1,440,696 $ 1,313,977

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Interest expense, net 6,669 7,660 3,767

Other expense (income), net 1,507 4,409 ( 1,492 )

Other (income) expense, net

( 2,089 ) 1,507 4,409

Earnings before income taxes 129,253 116,621 13,869

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Net earnings $ 99,613 $ 104,107 $ 3,486

Earnings per share - basic $ 4.73 $ 0.14 $ 0.59

Earnings per share - diluted $ 4.64 $ 0.14 $ 0.59

Basic earnings per share

$ 4.55 $ 4.73 $ 0.14

Diluted earnings per share

$ 4.51 $ 4.64 $ 0.14

Weighted average basic shares outstanding 21,871 22,007 24,920

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(In thousands) February 25, 2023 February 26, 2022 February 27, 2021

March 2, 2024 February 25, 2023 February 26, 2022

(In thousands) (53 weeks)

(52 weeks) (52 weeks)

Net earnings $ 99,613 $ 104,107 $ 3,486

Other comprehensive (loss) earnings:

Unrealized (loss) gain on marketable securities, net of $( 131 ), $( 96 ) and $ 22 of tax (benefit) expense, respectively

Other comprehensive earnings (loss):

Unrealized gain (loss) on marketable securities, net of $ 59 , $( 131 ) and $( 96 ) of tax expense (benefit), respectively

222 ( 492 ) ( 360 )

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Foreign currency translation adjustments 1,018 ( 3,345 ) ( 309 )

Other comprehensive (loss) earnings ( 5,316 ) 1,787 6,035

Other comprehensive earnings (loss) 2,025 ( 5,316 ) 1,787

Total comprehensive earnings $ 101,638 $ 98,791 $ 5,273

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CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands) February 25, 2023 February 26, 2022 February 27, 2021

March 2, 2024 February 25, 2023 February 26, 2022

(In thousands)

(53 weeks) (52 weeks) (52 weeks)

Operating Activities

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Deferred income taxes ( 9,748 ) ( 7,185 ) ( 7,956 )

Asset impairment — 21,497 1,400

Gain on disposal of assets ( 3,815 ) ( 20,987 ) ( 20,044 )

Asset impairment charges 6,195 — 21,497

Loss (gain) on disposal of property, plant and equipment 826 ( 3,815 ) ( 20,987 )

Impairment expense on goodwill and intangible assets — — 49,473

1 unchanged sentence

Settlement of New Markets Tax Credit transaction ( 4,687 ) ( 19,523 ) —

Noncash lease expense 11,878 12,418 12,235

Non-cash lease expense 11,721 11,878 12,418

Other, net 4,615 5,399 ( 1,272 )

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Inventories 9,366 1,731 ( 7,706 )

Costs and earnings on contracts in excess of billings ( 3,212 ) ( 897 ) 44,183

Accounts payable and accrued expenses 10,206 3,348 ( 32,591 )

Billings in excess of costs and earnings on uncompleted contracts 17,467 ( 14,288 ) ( 10,351 )

Refundable and accrued income taxes ( 6,976 ) 11,017 2,652

Contract assets 9,880 ( 3,380 ) ( 897 )

Accounts payable ( 2,655 ) ( 5,491 ) 14,738

Accrued compensation and benefits 2,102 ( 1,810 ) 912

Contract liabilities 6,590 20,952 ( 14,288 )

Operating lease liability ( 12,632 ) ( 12,149 ) ( 12,720 )

Other, net ( 5,842 ) 1,251 ( 1,268 )

Refundable and accrued income taxes 6,523 ( 6,976 ) 11,017

Other current assets and liabilities 1,143 11,813 ( 11,051 )

Net cash provided by operating activities 204,154 102,696 100,471

6 unchanged sentences

Financing Activities

Borrowings on line of credit 485,879 — 198,601

Proceeds from revolving credit facilities 196,964 485,879 —

Repayment on debt — ( 151,000 ) ( 2,000 )

Payments on line of credit ( 327,865 ) — ( 246,340 )

Repayments on revolving credit facilities ( 304,817 ) ( 327,865 ) —

Proceeds from exercise of stock options — — 4,115

Repurchase and retirement of common stock ( 74,312 ) ( 100,414 ) ( 32,878 )

Repurchase of common stock ( 11,821 ) ( 74,312 ) ( 100,414 )

Dividends paid ( 21,133 ) ( 19,670 ) ( 20,266 )

1 unchanged sentence

Net cash used by financing activities ( 144,607 ) ( 91,023 ) ( 120,572 )

(Decrease) increase in cash, cash equivalents and restricted cash ( 16,037 ) ( 10,818 ) 31,840

Effect of exchange rates on cash ( 129 ) ( 73 ) 1,124

Increase (decrease) in cash, cash equivalents and restricted cash 15,743 ( 16,110 ) ( 9,694 )

Cash, cash equivalents and restricted cash at beginning of year 21,473 37,583 47,277

Cash, cash equivalents and restricted cash at end of period $ 21,473 $ 37,583 $ 47,277

Noncash Activity

Cash and cash equivalents at end of year $ 37,216 $ 21,473 $ 37,583

Non-cash Activity

Capital expenditures in accounts payable $ 3,588 $ 2,909 $ 2,326

1 unchanged sentence

Consolidated Statements of Shareholders' Equity

(In thousands, except per share data) Common Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Shareholders' Equity

(In thousands, except per share data) Common Shares Outstanding Common Stock at Par Value

Additional Paid-In Capital Retained Earnings Accumulated Other Comprehensive (Loss) Income Total Shareholders' Equity

Balance at February 27, 2021 25,714 $ 8,571 $ 154,958 $ 357,243 $ ( 28,027 ) $ 492,745

Net earnings — — — 3,486 — 3,486

Unrealized gain on marketable securities, net of $ 22 tax expense

— — — — 80 80

Unrealized gain on derivative instruments, net of $ 450 tax expense

— — — — 1,475 1,475

Unrealized gain on pension obligation, net of $ 32 tax expense

— — — — 105 105

Foreign currency translation adjustments — — — — 4,375 4,375

Other comprehensive income, net of tax — — — — 1,787 1,787

Issuance of stock, net of cancellations 172 57 ( 190 ) 221 — 88

Share-based compensation — — 6,293 — — 6,293

Exercise of stock options 179 60 4,055 — — 4,115

Share repurchases ( 2,309 ) ( 769 ) ( 15,055 ) ( 84,590 ) — ( 100,414 )

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Net earnings — — — 104,107 — 104,107

Unrealized loss on marketable securities, net of $ 96 tax benefit

— — — — ( 360 ) ( 360 )

Unrealized gain on derivative instruments, net of $ 633 tax expense

— — — — 2,074 2,074

Unrealized gain on pension obligation, net of $ 117 tax expense

— — — — 382 382

Foreign currency translation adjustments — — — — ( 309 ) ( 309 )

Other comprehensive loss, net of tax — — — — ( 5,316 ) ( 5,316 )

Issuance of stock, net of cancellations 113 37 153 35 — 225

7 unchanged sentences

Net earnings — — — 99,613 — 99,613

Unrealized loss on marketable securities, net of $ 131 tax benefit

— — — — ( 492 ) ( 492 )

Unrealized loss on derivative instruments, net of $ 672 tax benefit

— — — — ( 2,205 ) ( 2,205 )

Unrealized gain on pension obligation, net of $ 222 tax expense

— — — — 726 726

Foreign currency translation adjustments — — — — ( 3,345 ) ( 3,345 )

Other comprehensive income, net of tax — — — — 2,025 2,025

Issuance of stock, net of cancellations 171 58 ( 150 ) ( 40 ) — ( 132 )

5 unchanged sentences

— — — ( 21,133 ) — ( 21,133 )

Balance at February 25, 2023 22,224 $ 7,408 $ 146,816 $ 273,740 $ ( 31,556 ) $ 396,408

Balance at March 2, 2024 22,089 $ 7,363 $ 152,818 $ 340,375 $ ( 29,531 ) $ 471,025

See accompanying notes to consolidated financial statements.

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and its subsidiaries (Apogee, we, us, our or the Company) after elimination of intercompany balances and transactions.

We consolidate variable interest entities related to our New Market Tax Credit transactions as it has been determined that the Company is the primary beneficiary of those entities' operations (refer to Note 10 for more information).

Our fiscal year ends on the Saturday closest to the last day of February, or as determined by the Board of Directors.

Fiscal 2023, 2022 and 2021 each consisted of 52 weeks.

We consolidate variable interest entities related to our New Markets Tax Credit transactions as it has been determined that the Company is the primary beneficiary of those entities' operations (refer to Note 10 for more information).

Our fiscal year ends on the Saturday closest to the last day of February, or as otherwise determined by our Board of Directors.

Fiscal 2024 consisted of 53 weeks, while fiscal 2023 and fiscal 2022 each consisted of 52 weeks.

Accounting estimates

3 unchanged sentences

Reclassifications

Certain reclassifications of amounts previously reported have been made to the accompanying consolidated statements of cash flows and notes to consolidated financial statements to conform to current year presentation.

These reclassifications had no impact on reported net income, cash flows, total assets and liabilities.

Certain reclassifications of amounts previously reported have been made to the accompanying consolidated balance sheets, consolidated statements of cash flows and notes to consolidated financial statements to conform to current year presentation of contract assets and liabilities.

These reclassifications had no impact on reported cash flows or total assets and liabilities.

Cash equivalents

3 unchanged sentences

Marketable securities

To the extent the amortized cost basis of the available-for-sale securities exceeds the fair value, the Company assesses the debt securities for credit loss.

When assessing the risk of credit loss, the Company considers factors such as the severity and the reason of the decline in value, such as any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security, and management's intended holding period and time horizon for selling.

To the extent the amortized cost basis of the available-for-sale securities exceeds the fair value, we assess the debt securities for credit loss.

When assessing the risk of credit loss, we consider factors such as the severity and the reason of the decline in value, including any changes to the rating of the security by a rating agency or other adverse conditions specifically related to the security, and management's intended holding period and time horizon for selling.

During fiscal 2024, 2023, and 2022, the Company did not recognize any credit losses related to its available-for-sale securities.

Further, as of February 25, 2023 and February 26, 2022, the Company did not record an allowance for credit losses related to its available-for-sale securities.

Marketable securities are included in other current and non-current assets on the consolidated balance sheets and gross realized gains and losses are included in other expense (income), net in our consolidated results of operations.

Inventories, which consist primarily of purchased glass and aluminum, are valued at lower of cost or market using the first-in, first-out (FIFO) method.

Further, as of March 2, 2024 and February 25, 2023, the Company did not record an allowance for credit losses related to its available-for-sale securities.

Marketable securities are included in other current and non-current assets on the consolidated balance sheets and gross realized gains and losses are included in other (income) expense, net in our consolidated results of operations.

Inventories, which consist primarily of purchased glass and aluminum, are valued at lower of cost or net realizable value using the first-in, first-out (FIFO) method.

Property, plant and equipment

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3 to 10 years for machinery and equipment;

and 3 to 7 years for office equipment and furniture.

and 3 to 7 years for computer and office equipment and furniture.

Impairment of long-lived assets

Long-lived assets or asset groups, including finite-lived intangible assets subject to amortization and property and equipment, are reviewed for impairment whenever events or changes in circumstances such as asset utilization, physical change, legal factors or other matters indicate that the carrying value of those assets may not be recoverable.

When this review indicates the

carrying value of an asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group, an asset impairment expense is recognized in earnings in the period such a determination is made.

Long-lived assets or asset groups, including definite-lived intangible assets subject to amortization and property and equipment, are reviewed for impairment whenever events or changes in circumstances such as asset utilization, physical change, legal factors or other matters indicate that the carrying value of those assets may not be recoverable.

When this review indicates the carrying value of an asset or asset group exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset or asset group, an asset impairment expense is recognized in earnings in the period such a determination is made.

The amount of the impairment expense recorded is the amount by which the carrying value of the impaired asset or asset group exceeds its fair value based on discounted cash flows.

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.

As a result of restructuring plans announced during the fourth quarter of fiscal 2024, asset impairments on property, plant and equipment and leases in the amount of $ 6.2 million were recorded for the year ended March 2, 2024.

As a result of restructuring plans announced during the second quarter of fiscal 2022, asset impairments on property, plant and equipment and leases in the amount of $ 21.5 million were recorded for the year ended February 26, 2022.

During the third quarter of fiscal 2022, an impairment of $ 3.0 million was recognized within other (income) expense within the consolidated results of operations related to a minority equity investment held by the Company.

This represents a write-down of the entire investment in the other company.

During the fourth quarter of fiscal 2022, based on the finalization of our plans for integrating the Sotawall business into the Architectural Services segment, which was effective beginning in fiscal 2023, we determined that the finite-lived intangible assets were impaired as of February 26, 2022.

During the fourth quarter of fiscal 2022, based on the finalization of our plans for integrating the Sotawall business into the Architectural Services Segment, which was effective beginning in fiscal 2023, we determined that the related definite-lived intangible assets were impaired as of February 26, 2022.

As such, a long-lived asset impairment charge of $ 36.7 million in finite-lived intangible assets was recognized in the fourth quarter of fiscal year 2022 within the Architectural Framing Systems Segment.

As a result of restructuring plans announced during the second quarter of fiscal 2022, asset impairments on property plant and equipment and leases in the amount of $ 21.5 million were recorded for the year ended February 26, 2022.

Goodwill and intangible assets

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The reporting units for our fiscal 2024 annual impairment test align with reporting segments, with the exception of our Architectural Framing Systems Segment.

This segment contains two reporting units, Window and Wall Systems and Storefront and Finishing Solutions, which represent $54.5 million and $35.7 million, of the goodwill balance at February 25, 2023, respectively.

This segment contains two reporting units, Window and Wall Systems and Storefront and Finishing Solutions, which represent $ 53.6 million and $ 35.7 million, of the goodwill balance at March 2, 2024, respectively.

During the fourth quarter of fiscal 2024, as a result of an announced restructuring plan, we reassessed our reporting units, which led to a combination of the Window and Wall Systems and Storefront and Finishing Solutions reporting units into one Architectural Framing Systems reporting unit.

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

In addition, no qualitative indicators of impairment were identified during the fourth quarter of fiscal 2024.

Following this change, we have four reporting units, which align with our reporting segments.

We estimate the fair value of a reporting unit using both the income approach and the market approach.

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The assessment of fair value involves significant judgment and projections about future performance.

Finite-lived intangible assets are amortized based on estimated useful lives ranging from 18 months to 30 years and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Definite-lived intangible assets are amortized based on estimated useful lives ranging from 18 months to 30 years and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

We use undiscounted cash flows to determine whether impairment exists and measure any impairment loss using discounted cash flows to determine the fair value of long-lived assets.

The estimated useful lives of all intangible assets are reviewed annually, and we have determined that the remaining lives were appropriate.

Refer to Note 6 for additional information.

We have commercially negotiated leases where we recognize a right-of-use asset and lease liability on our consolidated balance sheet at lease commencement for leases with terms greater than twelve months.

3 unchanged sentences

We combine lease and non-lease components, such as common area maintenance costs, in calculating the related asset and lease liabilities for all underlying asset groups.

Refer to additional information in Note 8.

Refer to Note 8 for additional information.

Self-Insurance

8 unchanged sentences

We reserve estimated exposures on known claims, as well as on a portion of anticipated claims for product warranty and rework costs, based on historical product liability claims as a ratio of sales.

We also reserve for estimated exposures on other claims as they are known and reasonably estimable.

We also reserve for estimated backcharge exposures or other claims as they are known and reasonably estimable.

Reserves are included in other current and non-current liabilities based on the estimated timing of dispute resolution.

7 unchanged sentences

In order to manage the exposure and volatility arising from these risks, we utilize derivative financial instruments to offset a portion of these risks.

We use derivative financial instruments only to the extent necessary to hedge identified business risks, and do not hold or issue derivative financial instruments for trading purposes and are not a party to leveraged derivatives.

We use derivative financial instruments only to hedge identified business risks, and do not hold or issue derivative financial instruments for trading purposes and are not a party to leveraged derivatives.

All derivative instruments within the scope of ASC 815, Derivatives and Hedging , are recorded as either assets or liabilities at fair value on the consolidated balance sheets.

All hedging instruments that qualify for hedge accounting are designated and effective as hedges with changes recognized in other comprehensive earnings (loss).

Instruments that do not qualify for hedge accounting are marked to market with changes recognized in current earnings.

Instruments that do not qualify for hedge accounting are marked to market with changes recognized directly in earnings.

Cash flows from derivative instruments are classified in the statements of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships.

Please refer to Note 4 for further disclosure on derivatives.

Refer to Note 4 for additional information.

Revenue recognition

Our significant accounting policy for revenue recognition follows ASC 606, Revenue from Contracts with Customers .

We generate revenue from the design, engineering and fabrication of architectural glass, curtainwall, window, storefront and entrance systems, and from installing those products on commercial buildings.

We also manufacture value-added glass and acrylic products.

Due to the diverse nature of our operations and various types of contracts with customers, we have businesses that recognize revenue over time and businesses that recognize revenue at a point in time.

During fiscal 2023 , approximately 45 percent of our total revenue is recognized at the time products are shipped from our manufacturing facilities, which is when control is transferred to our customer, consistent with past practices.

Due to the diverse nature of our operations and various types of contracts with customers, we have businesses that recognize revenue at a point in time at shipment, businesses that recognize revenue following an over-time input method and businesses that recognize revenue following an over-time output method.

Approximately 42 % of our fiscal 2024 revenue was recognized at the time products were shipped from our manufacturing facilities, which is when control is transferred to our customer, consistent with past practices.

These businesses do not generate contract-related assets or liabilities.

Variable consideration associated with these contracts and orders, generally related to early pay discounts or volume rebates, is not considered significant.

We also have three businesses which operate under long-term, fixed-price contracts, representing approximately 36 percent of our total revenue in the current year.

Approximately 34 % of our fiscal 2024 revenue was from long-term, fixed-price contracts, following an over-time input method.

The contracts for these businesses have a single, bundled performance obligation, as these businesses generally provide interrelated products and services and integrate these products and services into a combined output specified by the customer.

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We generate contract liabilities when we have billed the customer in excess of revenue recognized on a contract.

Finally, we h ave one business, making up approximately 19 percent of our to tal revenue in the current year, that recognizes revenue following an over-time output method based upon units produced.

A pproximately 24 % of our fiscal 2024 revenue was recognized following an over-time output method based upon units produced.

The customer is considered to have control over the products at the time of production, as the products are highly customized with no alternative use, and we have an enforceable right to payment for performance completed over the production p eriod.

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Restructuring

During the second quarter of fiscal 2022, we announced plans to realign and simplify our business structure which resulted in the closure of two facilities within the Architectural Glass segment, in Dallas, Texas and Statesboro, Georgia.

These 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.

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.

Refer to additional information in Note 16.

Restructuring charges are recorded as a result of fundamental changes in the manner in which certain business functions are conducted, including initiatives to drive earnings and cash flow growth and to realign and simplify our business structure.

These charges primarily consist of employee severance benefits, asset impairments on property, plant and equipment and operating lease assets and termination penalties for facility closures and consolidations.

We record restructuring accruals when it is probable that a liability has been incurred and the amount of the liability is reasonably estimable.

To the extent our assumptions and estimates differ from our actual costs, subsequent adjustments to restructuring accruals have been and will be required.

Restructuring accruals for severance-related costs are included in accrued compensation and related benefits and accruals for remaining obligations and termination penalties are included in other current liabilities in our consolidated balance sheets.

Refer to Note 16 for additional information.

Research and development

2 unchanged sentences

These costs are expensed as incurred.

Advertising costs are expensed as incurred within selling, general and administrative expenses, and were $ 1.2 million in fiscal 2023, $ 1.2 million in fiscal 2022 and $ 1.1 million in fiscal 2021.

Advertising costs are expensed as incurred within selling, general and administrative expenses , and were $ 1.3 million in fiscal 2024 and $ 1.2 million in fiscal 2023 and 2022.

The Company recognizes deferred tax assets and liabilities based upon the future tax consequences of temporary differences between financial statement carrying amounts of assets and liabilities and their respective tax bases.

See Note 13 for additional information regarding income taxes.

Refer to Note 13 for additional information.

Subsequent events

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Adoption of new accounting standards

At the beginning of fiscal 2024, we adopted the guidance in ASU 2022-04, Liabilities – Supplier Finance Programs, Disclosure of Supplier Finance Program Obligations.

The guidance requires that entities that use supplier finance programs disclose information about the nature and potential magnitude of the programs, activity during the period, and changes from period to period.

Beginning in the first quarter, we implemented a supplier financing arrangement with U.S.

Bank that enables our suppliers, at their sole discretion, to sell the Company's receivables (i.e., our payment obligations to the suppliers) to U.S.

Bank on a non-recourse basis in order to be paid earlier than our payment terms provide.

Our suppliers’ voluntary inclusion of invoices in the supplier financing arrangement has no bearing on our payment terms, the amounts we pay, or our liquidity.

We have no economic interest in a supplier’s decision to participate in the supplier financing program, and we do not provide any guarantees in connection with it.

These balances are reflected in accounts payable in the consolidated balance sheets and are reflected in net cash provided by operating activities in our consolidated statements of cash flows when settled.

The following table summarizes the obligation activity and outstanding as of March 2, 2024 that we have confirmed as valid to the administrators of our program with U.S.

(In thousands) 2024

Balance at beginning of period

Obligations added to the program

Obligations settled

Balance at end of period

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

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

Accounting standards not yet adopted

In November 2023, the FASB issued ASU 2023-07, Improvements to Reportable Segment Disclosures , which expands the required disclosure for reportable segments.

This guidance requires entities to disclose significant segment expenses and other segment items on an annual and interim basis and to provide in interim periods all segment disclosures which are currently required annually.

This ASU additionally requires entities to disclose the title and position of the individual or the name of the group or committee identified as its chief operating decision-maker.

Such guidance, which is required to be applied retrospectively, is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, although early adoption is permitted.

While the adoption of this ASU will not have an impact on our financial position and/or results of operations, we are currently evaluating the impact to our segment disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures , intended to enhance the transparency and decision-usefulness of income tax disclosures.

Such guidance requires entities to provide additional information within their income tax rate reconciliation, including further disclosure of federal, state, and foreign income taxes and to provide more details about these reconciling items if a quantitative threshold is met.

This guidance additionally requires expanded disclosure of income taxes paid, including amounts paid for federal, state, and foreign taxes.

This ASU, which is required to be applied prospectively, is effective for fiscal years beginning after December 15, 2024, although early adoption and retrospective application is permitted.

While the adoption of this ASU will not have an impact on our financial position and/or results of operations, we are currently evaluating the impact on our income tax disclosures, including the processes and controls around the collection of this information.

Revenue, Receivables and Contract Assets and Liabilities

The following table disaggregates total revenue by timing of recognition (see Note 15 for disclosure of revenue by segment):

(In thousands) February 25, 2023 February 26, 2022 February 27, 2021

March 2, 2024 February 25, 2023 February 26, 2022

(In thousands) (53 weeks) (52 weeks) (52 weeks)

Recognized at shipment $ 596,270 $ 649,792 $ 551,783

Recognized over time 790,904 762,194 726,191

Recognized over time (input method) 483,109 514,826 503,972

Recognized over time (output method) 337,563 276,078 258,222

Total $ 1,416,942 $ 1,440,696 $ 1,313,977

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Construction contracts 61,879 58,331

Contract retainage 25,834 28,782

Total receivables 176,940 199,063

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Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to the customer.

Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts.

Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our consolidated balance sheets.

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.

Contract liabilities consist of billings in excess of costs and earnings and other unearned revenue on contracts.

The time period between when performance obligations are complete and when payment is due is not significant.

In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values, and retainage is withheld by the customer until the project reaches a level of completion where amounts are released.

(In thousands) February 25, 2023 February 26, 2022

In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values.

(In thousands) March 2, 2024 February 25, 2023

Contract assets $ 49,502 $ 59,403

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Other contract-related disclosures

(In thousands) February 25, 2023 February 26, 2022

March 2, 2024 February 25, 2023

(In thousands) (53 weeks) (52 weeks)

Revenue recognized related to contract liabilities from prior year-end $ 25,342 $ 37,594

Revenue recognized related to prior satisfaction of performance obligations 9,257 16,612

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 February 25, 2023, the transaction price associated with unsatisfied performance obligations was approximately $ 835.8 million.

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

(In thousands) February 25, 2023

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.

The transaction price associated with unsatisfied performance obligations at March 2, 2024 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) March 2, 2024

Within one year

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Finished goods 25,586 23,548

Total inventories $ 78,441 $ 80,494

Total inventories, net $ 69,240 $ 78,441

Other current liabilities

(In thousands) 2024 2023

Warranties $ 14,872 $ 11,786

Income and other taxes 7,129 15,770

Warranties and backcharges $ 18,874 $ 14,872

Accrued self-insurance reserves 17,592 14,447

Deferred revenue 2,416 2,714

Income and other taxes 7,202 7,129

Other 15,440 28,084

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(In thousands) 2024 2023

Deferred warranty revenue $ 10,274 $ 10,352

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

Retirement plan obligations 5,749 7,041

Deferred compensation plan 5,938 5,577

Retirement plan obligations 4,769 5,749

Deferred tax liabilities 1,456 1,417

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

February 25, 2023 $ 10,647 $ — $ 702 $ 9,945

March 2, 2024 $ 11,327 $ 15 $ 437 $ 10,905

February 25, 2023 10,647 — 702 9,945

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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 our municipal and corporate bonds at February 25, 2023, by contractual maturity, are shown below.

The amortized cost and estimated fair values of our municipal and corporate bonds at March 2, 2024, 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.

Investments that are due within one year are included in other current assets while those due after one year are included as other non-current assets.

Gross realized gains and losses were insignificant for all periods presented.

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Derivative instruments

We use interest rate swaps, currency swaps, and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations.

We use interest rate swaps, currency put options, and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations.

The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance.

In fiscal 2020, we entered into an interest rate swap to hedge a portion of our exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility.

As of February 25, 2023, the interest rate swap contract had a notional value of $ 30 million.

In fiscal 2020, we entered into an interest rate swap with a notional value of $ 30 million with an expiration date of February 5, 2026, to hedge a portion of our exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility.

We periodically enter into forward purchase contracts to manage the risk associated with fluctuations in foreign currency rates (primarily related to the Canadian dollar and Euro) and aluminum prices, generally with an original maturity date of less than one year.

As of February 25, 2023, we held foreign exchange forward contracts and aluminum purchase contracts with U.S.

As of March 2, 2024, we held foreign exchange option contracts and aluminum purchase contracts with U.S.

dollar notional values of $ 1.4 million and $ 9.3 million, respectively.

These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities.

The mark to market adjustments on these derivative instruments are recorded within our consolidated balance sheets within other current assets and other current liabilities.

Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive loss until which time the hedged transaction is settled and gains or losses are reclassified to earnings.

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

February 25, 2023

March 2, 2024

Money market funds $ 26,529 $ — $ 26,529

Municipal and corporate bonds — 10,905 10,905

Cash surrender value of life insurance — 8,282 8,282

Foreign currency option contract — 3 3

Interest rate swap contract — 1,292 1,292

Deferred compensation — 9,515 9,515

Foreign currency forward/option contract — 206 206

Aluminum hedging contract — 529 529

2 unchanged sentences

Municipal and corporate bonds — 9,945 9,945

Cash surrender value of life insurance — 17,831 17,831

Aluminum hedging contract — 2,133 2,133

Interest rate swap contract — 1,817 1,817

Deferred compensation — 12,491 12,491

Foreign currency forward/option contract — 161 161

Foreign currency option contract — 206 206

Aluminum hedging contract — 1,075 1,075

Money market funds and commercial paper

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

Cash surrender value of life insurance and deferred compensation

Contracts insuring the lives of certain employees who are eligible to participate in non-qualified pension and deferred compensation plans are held in trust.

Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by these participants.

Changes in cash surrender value are recorded in other expense.

The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.

Derivative instruments

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

Forward foreign exchange and forward purchase aluminum contracts are measured at fair value using unobservable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates and forward purchase aluminum prices.

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

Forward foreign exchange and forward purchase aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates and forward purchase aluminum prices.

Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters.

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Fair value measurements for long-lived assets or asset groups, including intangible assets subject to amortization, property and equipment and right-of-use lease assets, are valued using 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.

See Note 1 and Note 6 for additional information on the impairment charges recorded to indefinite- and finite-lived intangible assets during the fourth quarter of fiscal 2022.

See Note 16 for additional information on the impairment charges recorded to property, plant and equipment during fiscal 2022.

Property, Plant and Equipment

3 unchanged sentences

Machinery and equipment 391,236 376,721

Office equipment and furniture 69,465 69,017

Computer and office equipment and furniture 62,586 69,465

Construction in progress 42,099 41,842

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Goodwill represents the excess of the cost over the 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 the carrying value of goodwill may not be recoverable.

Based on the impairment analysis performed in the fourth quarter, estimated fair value was in excess of carrying value at all of our reporting units.

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

(In thousands) Architectural Framing Systems Architectural Services Architectural Glass Large-Scale Optical Total

Balance at February 27, 2021 $ 93,099 $ 1,120 $ 25,322 $ 10,557 $ 130,098

Foreign currency translation 82 — ( 78 ) — 4

(In thousands) Architectural Framing Systems Architectural Glass Architectural Services Large-Scale Optical Total

Balance at February 26, 2022 $ 93,181 $ 25,244 $ 1,120 $ 10,557 $ 130,102

3 unchanged sentences

Balance at February 25, 2023 90,137 25,301 3,031 10,557 129,026

Foreign currency translation 49 100 7 — 156

Balance at March 2, 2024 $ 90,186 $ 25,401 $ 3,038 $ 10,557 $ 129,182

(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.

Intangible assets

Indefinite-lived intangible assets

We have intangible assets for certain acquired trade names and trademarks which are determined to have indefinite useful lives.

We test indefinite-lived intangible assets for impairment annually at the same measurement date as goodwill, the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

Based on our annual analysis, the fair value of each of our trade names and trademarks exceeded the carrying amount.

During fiscal 2022, as a result of triggering events resulting from the finalization of our plans for integrating the

Sotawall business into the Architectural Services segment, beginning in fiscal 2023, it was determined that the carrying value of the Sotawall trade name exceeded fair value by $ 12.7 million as it was determined to have an immaterial fair value, resulting in the trade name being fully impaired as of fiscal 2022 year end.

During fiscal 2022, as a result of triggering events resulting from the finalization of our plans for integrating the Sotawall business into the Architectural Services Segment, beginning in fiscal 2023, it was determined that the carrying value of the Sotawall trade name exceeded fair value by $ 12.7 million as it was determined to have an immaterial fair value, resulting in the trade name being fully impaired as of fiscal 2022 year end.

This amount was recognized as impairment expense in the fourth quarter ended February 26, 2022.

Finite-lived intangible assets

Long-lived assets or asset groups, including intangible assets subject to amortization and property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of those assets may not be recoverable.

We use undiscounted cash flows to determine whether impairment exists and measure any impairment loss using discounted cash flows to determine the fair value of long-lived assets.

Due to triggering events 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.

Definite-lived intangible assets

Due to triggering events 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 certain related finite-lived intangible assets were impaired as of February 26, 2022.

As such, a long-lived asset impairment charge of $ 36.7 million in finite-lived intangible assets was recognized in the fourth quarter of fiscal year 2022.

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

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

(In thousands) Gross Carrying Amount Accumulated

Amortization Impairment Expense Foreign

Amortization Foreign

Translation Net

February 25, 2023

Finite-lived intangible assets:

March 2, 2024

Definite-lived intangible assets:

Customer relationships $ 86,798 $ ( 53,200 ) $ 246 $ 33,844

Other intangibles 37,505 ( 32,250 ) 150 5,405

Total finite-lived intangible assets 128,899 ( 84,633 ) — ( 3,742 ) 40,524

124,303 ( 85,450 ) 396 39,249

Indefinite-lived intangible assets:

Trade names and trademarks 27,129 — — ( 278 ) 26,851

26,851 — 14 26,865

Total intangible assets $ 151,154 $ ( 85,450 ) $ 410 $ 66,114

February 25, 2023

Finite-lived intangible assets:

Definite-lived intangible assets:

Customer relationships $ 89,495 $ ( 49,404 ) $ ( 2,697 ) $ 37,394

Other intangibles 39,404 ( 35,229 ) ( 1,045 ) 3,130

Total finite-lived intangible assets 164,799 ( 82,839 ) ( 36,735 ) 127 45,352

128,899 ( 84,633 ) ( 3,742 ) 40,524

Indefinite-lived intangible assets:

Trade names and trademarks 39,832 — ( 12,738 ) 35 27,129

27,129 — ( 278 ) 26,851

Total intangible assets $ 156,028 $ ( 84,633 ) $ ( 4,020 ) $ 67,375

Amortization expense on finite-lived intangible assets was $ 4.9 million, $ 4.2 million and $ 7.8 million in fiscal 2024, 2023 and 2022, respectively.

Amortization expense is included within selling, general and administrative expenses for all intangible assets other than that of debt issuance costs, which is included in interest expense.

All amortization expense is included within selling, general and administrative expenses.

Estimated future amortization expense for finite-lived intangible assets is:

1 unchanged sentence

Estimated amortization expense $ 4,824 $ 4,824 $ 4,822 $ 4,801 $ 4,167

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 February 25, 2023, outstanding borrowings under our revolving credit facility were $ 156 million, while there were no outstanding borrowings under the revolving credit facility and $ 150 million of borrowings outstanding under the term loan as of February 26, 2022.

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

As of March 2, 2024, we had a committed revolving credit facility with Wells Fargo Bank, N.A.

as administrative agent, and other lenders (U.S.

credit facility) with maximum borrowings of up to $ 385 million and a maturity of August 5, 2027.

Outstanding borrowings under the revolving credit facility were $ 50.0 million and $ 156.0 million as of March 2, 2024 and February 25, 2023, respectively.

We also maintain two Canadian committed, revolving credit facilities with the Bank of Montreal totaling $ 25.0 million USD (Canadian facilities).

The Canadian facilities expire annually in February, but can be renewed each year solely at our discretion until August 5, 2027.

Therefore, we classify all outstanding amounts under these facilities as long-term debt within our consolidated balance sheets.

At March 2, 2024, we had no outstanding borrowings under these Canadian facilities.

At February 25, 2023, outstanding borrowings under these Canadian facilities were $ 1.8 million.

Our revolving credit facilities contain two maintenance financial covenants that require us to stay below a maximum debt-to-EBITDA ratio of 3.25 and maintain a minimum ratio of EBITDA-to-interest expense of 3.00 .

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

At February 25, 2023, we were in compliance with both financial covenants.

Debt at February 25, 2023 also included $ 12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

The fair value of the industrial revenue bonds approximated carrying value at February 25, 2023, due to the variable interest rates on these instruments.

The 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).

At February 25, 2023, outstanding borrowings under our Canadian committed, revolving credit facilities were $ 1.8 million, while there were no outstanding borrowings under the facilities in place as of as of February 26, 2022.

At March 2, 2024, we were in compliance with both financial covenants.

The revolving credit facilities also contain an acquisition holiday.

In the event we make an acquisition for which the purchase price is greater than $ 75 million, we can elect to increase the maximum debt-to-EBITDA ratio to 3.75 for a period of four consecutive fiscal quarters, commencing with the fiscal quarter in which a qualifying acquisition occurs.

No more than two acquisition "holidays" can occur during the term of the facilities, and at least two fiscal quarters must separate qualifying acquisitions.

Borrowings under the credit facilities bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or, in the case of the Canadian facilities, Canadian Overnight Repo Rate Average (CORRA) plus, in each a margin based on the Leverage Ratio (as defined in the Credit Agreements).

For Base Rate borrowings, the margin ranges from 0.125 % to 0.75 %.

For Term SOFR and CORRA borrowings, the margin ranges from 1.125 % to 1.75 %, with an incremental Term SOFR and CORRA adjustment of 0.10 % and 0.29547 %.

credit facility also contains an "accordion" provision.

Under this provision, we can request that the facility be increased by as much as $ 200.0 million.

Any Lender may elect or decline to participate in the requested increase at the Lender’s sole discretion.

At March 2, 2024, we had a total of $ 15.0 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal year 2025 and reduce borrowing capacity under the revolving credit facility.

As of March 2, 2024, the amount available for revolving borrowings was $ 320.0 million and $ 25.0 million under the U.S.

credit facility and Canadian facilities, respectively.

At March 2, 2024, debt included $ 12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

The fair value of our U.S.

credit facility, Canadian credit facilities and industrial revenue bonds approximated carrying value at March 2, 2024, and would be classified as Level 2 within the fair value hierarchy described in Note 4, due to the variable interest rates on these instruments.

Debt maturities and other selected information follows:

3 unchanged sentences

Average daily borrowings during the year $ 130,939 $ 225,773

Maximum borrowings outstanding during the year 285,329 168,669

Weighted average interest rate during the year 6.03 % 3.54 %

(In thousands) February 25, 2023 February 26, 2022 February 27, 2021

(In thousands) March 2, 2024 February 25, 2023 February 26, 2022

Interest on debt $ 8,704 $ 8,558 $ 3,228

Interest rate swap (income) expense ( 893 ) ( 418 ) 467

Other interest expense 178 294 866

Interest expense $ 8,434 $ 4,561 $ 5,585

Interest payments were $ 8.2 million in fiscal February 25, 2023, $ 3.5 million in fiscal February 26, 2022 and $ 4.6 million in fiscal February 27, 2021.

Interest expense, net

$ 7,989 $ 8,434 $ 4,561

Interest payments were $ 9.3 million in fiscal 2024, $ 8.2 million in fiscal 2023 and $ 3.5 million in fiscal 2022.

We have operating leases for certain of the buildings and equipment used in our operations.

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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 twelve months or less on our consolidated balance sheet;

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

As of March 2, 2024, we have one additional future operating lease commitment of $ 13.7 million that is signed but has not yet commenced, for one facility located in Texas within our Architectural Services Segment.

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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Our lease agreements do not contain any material residual value guarantees or material restrictive covenants.

We are not a lessor in any transactions.

The components of lease expense were as follows:

(In thousands) February 25, 2023 February 26, 2022

(In thousands) March 2, 2024 February 25, 2023

Operating lease cost $ 14,312 $ 12,336

1 unchanged sentence

Variable lease cost 2,629 3,487

Sublease income ( 1,479 ) ( 671 )

Total lease cost $ 16,811 $ 16,731

Other supplemental information related to leases for the year ended February 25, 2023 was as follows:

(In thousands) February 25, 2023 February 26, 2022

Other supplemental information related to leases are as follows:

(In thousands) March 2, 2024 February 25, 2023

Cash paid for amounts included in the measurement of operating lease liabilities $ 14,656 $ 14,086

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We sponsor a single 401(k) retirement plan covering substantially all full-time, non-union employees, as well as union employees at two of our manufacturing facilities.

Under the plan, employees are allowed to contribute up to 60 percent of eligible earnings to the plan, up to statutory limits.

On January 1, 2023, we began matching 100 percent of the first two percent contributed and 50 percent of the next four percent contributed on eligible compensation that non-union employees contribute and according to contract terms for union employees.

Previously, we matched 100 percent of the first one percent contributed and 50 percent of the next five percent contributed on eligible compensation that non-union employees contribute.

In response to the effects of COVID-19 on our business, we suspended the matching contribution from June 1, 2020 until December 31, 2020.

Under the plan, employees are allowed to contribute up to 60 % of eligible earnings to the plan, up to statutory limits.

On January 1, 2023, we began matching 100 % of the first two percent contributed and 50 % of the next four percent contributed on eligible compensation that non-union employees contribute.

Previously, we matched 100 % of the first one percent contributed and 50 % of the next five percent contributed on eligible compensation that non-union employees contribute.

We contribute to the union plans based on the contractual terms.

In total, our matching contributions were $ 9.6 million in fiscal 2024, $ 8.6 million in fiscal 2023 and $ 7.7 million in fiscal 2022.

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We maintain a plan that allows participants to defer compensation.

The deferred compensation liability was $ 9.5 million and $ 12.5 million at February 25, 2023 and February 26, 2022, respectively.

The deferred compensation liability was $ 5.9 million and $ 9.5 million at March 2, 2024 and February 25, 2023, respectively.

We have investments in corporate-owned life insurance policies (COLI) of $ 8.5 million and money market funds (classified as cash equivalents) of $ 0.3 million with the intention of utilizing them as long-term funding sources for this plan.

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We contribute to a number of multi-employer union retirement plans, which provide retirement benefits to the majority of our union-represented employees;

none of the plans are considered significant.

none of the plans is considered significant.

However, the risks of participating in these multi-employer plans are different from single-employer plans in the following aspects:

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The zone status is based on information that we have received from each plan, certified by an actuary.

Among other factors, plans in the red zone are generally less than 65 percent funded, plans in the yellow zone are between 65 percent and 80 percent funded, and plans in the green zone are at least 80 percent funded.

Among other factors, plans in the red zone are generally less than 65% funded, plans in the yellow zone are between 65% and 80% funded, and plans in the green zone are at least 80% funded.

Pension Protection Act Zone Status Contributions

(In thousands)

Pension Fund EIN/Pension Plan Number 2023 2022 2023 2022 2021 FIP/RP Status Pending/Implemented Minimum Contribution Surcharge Imposed Expiration Date of Collective Bargaining Agreement (1)

Pension Fund EIN/Pension Plan Number 2024 2023 2024 2023 2022 FIP/RP Status Pending/Implemented (2)

Minimum Contribution Surcharge Imposed Expiration Date of Collective Bargaining Agreement (1)

Iron Workers Local Union No.

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International Painters and Allied Trades Industry Pension Fund 526073909 Red Red 971 869 932 Implemented No No 11/30/2017

Ironworkers Local 580 Pension Fund 136178514 Green Green 883 596 31 Implemented No Yes 6/30/2023

Western Glaziers Retirement Plan (Washington) 916123685 Green Green 423 815 160 No No No 6/30/2017

Ironworkers Local 580 Shop Pension Fund 136178514 Green Green 596 31 26 Implemented No Yes 6/30/2023

Western Glaziers Retirement Fund (Oregon and Southwest Washington) 936074376 Green Green 441 — 51 No No No 11/30/2017

Iron Workers Mid-America Pension Fund 366488227 Green Green 237 429 431 No No No 5/31/2017

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Atlanta Ironworkers Local Union 387 Pension Plan 586051152 Green Green 109 125 209 No No No 1/31/2017

Western Glaziers Retirement Fund (Oregon and Southwest Washington) 936074376 Green Green 22 441 — No No No 11/30/2017

Other funds 801 493 530

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(1) Plans include contributions required by collective bargaining agreements which have expired, but contain provisions automatically renewing their terms in the absence of a subsequent negotiated agreement.

The Company was listed in the plans' Forms 5500 as providing more than 5 percent of the total contributions for the following plans and plan years:

(2) FIP is defined as Funding Improvement Plan;

RP is defined as Rehabilitation Plan

The Company was listed in the plans' Forms 5500 as providing more than 5% of the total contributions for the following plans and plan years:

Pension Fund Year contributions to Plan Exceeded More Than 5 Percent of Total Contributions

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Iron Workers Mid-America Pension Fund 2023 and 2022

Iron Workers St.

Louis District Council Pension Trust Fund 2021

Atlanta Ironworkers Local Union 387 Pension Plan 2023

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Expected return on assets.

To develop the expected long-term rate of return on assets, we considered historical long-term rates of return achieved by the plan investments, the plan's investment strategy, and current and projected market conditions.

The expected long-term rate of return on assets is based on historical long-term rates of return achieved by the plan investments, the plan's investment strategy, and current and projected market conditions.

During fiscal 2019, the assets of the Tubelite plan were moved from investment in a short-term bond fund to various duration fixed income funds.

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Contributions

Company contributions to the plans for fiscal 2023 and fiscal 2022 were $ 0.7 million in each year, which equaled or exceeded the minimum funding requirements.

Company contributions to the plans for fiscal 2024 were $ 0.6 million and fiscal 2023 were $ 0.7 million, which equaled or exceeded the minimum funding requirements.

Estimated Future Benefit Payments

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In the ordinary course of business, predominantly in the 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 February 25, 2023, $ 1.4 billion of these types of bonds were outstanding, of which, $ 523.0 million is on our backlog.

These bonds do not have stated expiration dates, as we are released from the bonds upon completion of the contract.

At March 2, 2024, $ 1.3 billion of these types of bonds were outstanding, of which, $ 463.3 million is on our backlog.

These bonds have expiration dates that align with completion of the purchase order or contract.

We have never been required to make payments under surety or performance bonds with respect to our existing businesses.

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changes in manufacturing quality, changes in product mix, and any significant changes in sales volume.

A warranty rollforward follows:

(In thousands) 2024 2023

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Letters of credit

At February 25, 2023, we had $ 12.3 million of ongoing letters of credit, all of which have been issued under our revolving credit facility, as discussed in Note 7.

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.

At March 2, 2024, we had $ 15.0 million of ongoing letters of credit, all of which have been issued under our revolving credit facility, as discussed in Note 7.

Purchase obligations

Purchase obligations, primarily for raw material commitments and capital expenditures totaled $ 241.7 million as of February 25, 2023.

Purchase obligations for raw material commitments and capital expenditures totaled $ 41.2 million as of March 2, 2024.

Environmental liability

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Remediation of these conditions is ongoing without significant disruption to our operations.

The estimated remaining liability for these remediation activities was $ 0.4 million and $ 0.5 million at February 25, 2023 and February 26, 2022, respectively.

The estimated remaining liability for these remediation activities was $ 0.4 million at March 2, 2024 and February 25, 2023, respectively.

New Markets Tax Credit (NMTC) transactions

We have three outstanding NMTC arrangements which help to support operational expansion.

Proceeds received from investors on these transactions are included within other current and non-current liabilities on 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.

We have two 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.

The NMTC arrangements are subject to 100% 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 current and 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 on 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 or for working capital purposes 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.

Variable-interest entities, which have been included within our consolidated financial statements, have been created as a result of the structure of these transactions, as investors in the programs do not have a material interest in their underlying economics.

During the first quarter of fiscal 2023, one NMTC transaction was terminated, and a new NMTC transaction was established as a replacement.

As a result of these transactions, $19.5 million in previous proceeds received were repaid and $19.5 million was contributed back to the Company as part of the newly established NMTC transaction.

This NMTC transaction will be held for the remainder of the original seven-year term.

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

During the second quarter of fiscal 2024, one NMTC transaction was settled as expected and as a result, a $ 4.7 million benefit was recorded in other (income) expense, net.

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

Inception date Termination date Proceeds received Deferred costs Net benefit

June 2016 June 2023 $ 6.0 $ 1.2 $ 4.8

August 2025 $ 6,052 $ 1,604 $ 4,448

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In December 2022, the claimant in an arbitration of one such claim was awarded $ 20 million.

The Company intends to appeal the award and believes, after taking into account all currently available information, including the advice of counsel and the likelihood of available insurance coverage, that this award will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

The Company has appealed the award and believes, after taking into account all currently available information, including the advice of counsel and the likelihood of available insurance coverage, that this award will not have a material adverse effect on the Company's business, financial condition, results of operations or cash flows.

The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability matters.

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Shareholders' Equity

A class of 200,000 shares of junior preferred stock with a par value of $ 1.00 is authorized, but unissued.

Share Repurchases

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We repurchased 279,916 shares under the program during fiscal 2024, for a total cost of $ 11.8 million.

We repurchased 2,292,846 shares under the program, for a total cost of $ 100.0 million, in fiscal 2022, and 1,177,704 shares under the program, for a total cost of $ 32.9 million, in fiscal 2021.

The Company has repurchased a total of 10,996,601 shares, at a total cost of $ 381.6 million, since the inception of this program.

We repurchased 1,571,139 shares under the program, for a total cost of $ 74.3 million, in fiscal 2023, and repurchased 2,292,846 shares under the program, for a total cost of $ 100.0 million, in fiscal 2022.

We have repurchased a total of 11,276,517 shares, at a total cost of $ 393.5 million, since the inception of this program.

On October 6, 2023, the Board of Directors increased the share repurchase authorization by 2 million shares.

We have remaining authority to repurchase 2,973,483 shares under this program, which has no expiration date.

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Accumulated Other Comprehensive Loss

The following summarizes the accumulated other comprehensive loss, net of tax, at February 25, 2023 and February 26, 2022:

The following summarizes the accumulated other comprehensive loss, net of tax, at March 2, 2024 and February 25, 2023:

(In thousands) 2024 2023

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We have a 2019 Stock Incentive Plan and a 2019 Non-Employee Director Stock Plan (the Plans) that provide for the issuance of 1,150,000 and 150,000 shares, respectively, for various forms of stock-based compensation to employees and non-employee directors.

We also have a 2009 Stock Incentive Plan and 2009 Non-Employee Director Stock Incentive Plan with shares reserved for issuance for outstanding unvested awards.

Awards under these Plans may be in the form of incentive stock options (to employees only), nonstatutory options, stock-settled stock appreciation rights (SARs), or nonvested share awards and units, all of which are granted at a price or with an exercise price equal to the fair market value of the Company’s stock at the date of award.

No additional awards can be made under the 2009 Stock Incentive Plan or the 2009 Non-Employee Director Stock Incentive Plan.

Nonvested share awards and units generally vest over a two , three or four -year period.

Total stock-based compensation expense was $ 8.7 million in fiscal 2023, $ 6.3 million in fiscal 2022 and $ 8.6 million in fiscal 2021.

We account for any forfeitures as they occur.

Awards under these Plans may be in the form of incentive stock options (to employees only), non-statutory options, stock-settled stock appreciation rights (SARs), or nonvested share awards and units, all of which are granted at a price or with an exercise price equal to the fair market value of the Company’s stock at the date of award.

We also have 2009 Non-Employee Director Stock Incentive Plan under which deferred restricted stock units were allocated, in addition to deferred restricted stock units acquired pursuant to a dividend equivalent reinvestment feature.

As of June 23, 2019, no additional awards can be made under the 2009 Non-Employee Director Stock Incentive Plan.

We recorded share-based compensation expense, in which we account for any forfeitures as they occur, as follows:

(In thousands) 2024 2023 2022

Restricted stock awards and restricted stock unit awards $ 6,753 $ 5,607 $ 5,345

Performance stock unit awards 2,714 2,389 501

Stock options 254 660 447

In June 2020, we granted 660,600 stock options which had a weighted average fair value per option at the date of grant of $5.01.

The fair value of each award grant is estimated on the date of grant using the binomial lattice option-pricing model with the following weighted-average assumptions used for grants issued in fiscal 2021.

Dividend yield 3.3 %

Expected volatility 40.0 %

Risk-free interest rate 0.7 %

Maximum price $ 35.70

The expected stock price volatility is based on historical experience.

The risk-free rate for periods that coincide with the expected life of the options is based on the U.S.

Treasury Department yield curve in effect at the time of grant.

Share-based compensation expense

9,721 8,656 6,293

Stock Options

Stock option and SAR activity for the current fiscal year is summarized below:

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Awards canceled ( 71,542 ) 23.04

Outstanding at February 25, 2023 158,000 $ 23.04 0.5 years $ 2,000,280

Vested or expected to vest at February 25, 2023 158,000 $ 23.04 0.5 years $ 2,000,280

For the fiscal year ended February 25, 2023, there were no cash proceeds from the exercise of stock options as all stock options were exercised on a stock-for-stock basis.

Outstanding at March 2, 2024

— $ — 0.0 years $ —

For the fiscal year ended March 2, 2024, 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 $ 1.8 million.

For the fiscal year ended February 26, 2022, cash proceeds from the exercise of stock options were $ 4.1 million.

The aggregate intrinsic value of the securities exercised 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 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 end of the respective three-fiscal-year performance periods.

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

The following table summarizes nonvested share activity for fiscal February 25, 2023:

For the fiscal year ended February 25, 2023, 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 was $ 2.7 million.

Service Condition Awards

Nonvested share awards and units generally vest over a two , three or four-year period.

The following table summarizes nonvested restricted stock awards and restricted stock units activity for fiscal 2024:

Number of Shares and Units Weighted Average Grant Date Fair Value

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199,138 43.38

183,793 46.08

Vested ( 166,957 ) 32.54

( 22,800 ) 42.82

March 2, 2024 384,461 $ 40.28

Performance Condition Awards

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

In each of the first quarters of fiscal 2024, 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 end of the respective three -fiscal-year 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, ranging from 0 % to 200 % of target, dependent on achieving a defined performance goal and being employed at the end of the performance period.

The following table summarizes nonvested performance share units granted and outstanding for which all plans are at maximum achievement of 200 % of target:

Number of Shares and Units Weighted Average Grant Date Fair Value

February 25, 2023 79,699 $ 40.83

( 13,078 ) 41.80

(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 38,654 nonvested share units granted and outstanding at target level for the 2023-2025 performance period.

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

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

At February 25, 2023, there was $ 9.7 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 23 months.

The total fair value of shares vested during fiscal February 25, 2023 was $ 4.5 million.

March 2, 2024 115,104 $ 41.89

At March 2, 2024, there was $ 11.2 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 21 months.

The total fair value of shares vested during fiscal 2024 was $ 5.8 million.

Earnings before income taxes consisted of the following:

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Foreign tax rate differential ( 0.2 ) ( 0.2 ) ( 15.4 )

Nondeductible goodwill impairment expense — — 5.6

Valuation allowance 1.0 ( 4.7 ) 63.2

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Consolidated effective income tax rate 22.9 % 10.7 % 74.9 %

The estimated effective tax rate for fiscal 2023 decreased 64.2 percentage points from fiscal 2022, primarily due to the non-deductible intangible impairment charge in Canada in fiscal 2022 as well as the tax benefits claimed in fiscal 2023 related to a worthless stock loss deduction related to the Company's investment in Sotawall Limited, a Canadian subsidiary.

Deferred tax assets and deferred tax liabilities at February 25, 2023 and February 26, 2022 were:

The effective tax rate for fiscal 2024 increased 12.2 percentage points from fiscal 2023, primarily due to the impact of discrete items in fiscal 2023.

Deferred tax assets and deferred tax liabilities at March 2, 2024 and February 25, 2023 were:

(In thousands) 2024 2023

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Operating lease liabilities 13,064 13,639

(In thousands) 2023 2022

Net operating losses and tax credits 12,332 11,459

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A valuation allowance of $ 9.0 million has been established for these net operating loss carryforwards due to the uncertainty of the use of the tax benefits in future periods.

The Tax Cuts and Jobs Act of 2017 ("TCJA") requires taxpayers to capitalize and amortize research and development costs pursuant to Internal Revenue Code ("IRC") Section 174.

Although Congress may consider legislation that would defer capitalization and amortization requirements to later years, we have no assurance that the requirement will be repealed or otherwise modified.

The requirement was effective for the company beginning 2/27/2022.

For the tax year ended 2/25/2023, the Company recorded an increase to income tax payable as well as deferred tax assets of approximately $ 12.2 million due to Section 174 capitalization.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing Deferred Tax Assets ("DTAs").

This has resulted in valuation allowances being recorded against DTAs in prior years in Brazil, Canada and various states.

During the second quarter of fiscal 2023, the Company recorded a worthless stock deduction related to the Sotawall business.

Additionally, the Company concluded that a portion of the Canadian DTAs were more likely than not to be realized.

The related valuation allowance was reduced by $ 8.3 million, as we expect to realize this amount in the future.

Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing Deferred Tax Assets.

This has resulted in valuation allowances being recorded against Deferred Tax Assets in prior years in Brazil, Canada and various states.

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 2020, or state and local income tax examinations for years prior to fiscal 2013.

federal tax examinations or state and local tax examinations for years prior to fiscal 2021.

The Company is not currently under U.S.

federal examination for years subsequent to fiscal year 2019, and there is very limited audit activity of the Company’s income tax returns in U.S.

federal examination for years subsequent to fiscal 2020, and there is very limited audit activity of the Company’s income tax returns in U.S.

state jurisdictions or international jurisdictions.

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subsidiaries to be indefinitely invested outside of the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and specific plans for reinvestment of those subsidiary earnings.

Should the Company decide to repatriate the foreign earnings, it would need to increase the income tax provision in the period it was determined that the earnings will no longer be indefinitely invested outside the U.S.

Should the Company decide to repatriate the foreign earnings, it would need to adjust the income tax provision in the period it was determined that the earnings will no longer be indefinitely invested outside the U.S.

If we were to prevail on all unrecognized tax benefits recorded, $ 3.3 million, $ 3.8 million and $ 1.7 million for fiscal 2024, 2023 and 2022, respectively, would benefit the effective tax rate.

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Gross unrecognized tax benefits at end of year $ 5,053 $ 5,312 $ 3,321

In December 2021, the OECD issued model rules for a new global minimum tax framework (“Pillar Two”), and various governments around the world have issued, or are in the process of issuing, legislation to implement these rules.

The Company is within the scope of the OECD Pillar Two model rules and is assessing the impact thereof.

As of March 4, 2024, we believe the implementation of these rules will not have a material impact on our financial results.

Earnings per Share

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• The Architectural Framing Systems Segment designs, engineers, fabricates and finishes the aluminum window, curtainwall, storefront and entrance systems for the exterior of buildings.

• The Architectural Glass Segment coats and fabricates high-performance glass used in custom window and wall systems on non-residential buildings.

• The Architectural Services Segment integrates technical services, project management, and field installation services to design, engineer, fabricate, and install building glass and curtainwall systems.

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

• The Large-Scale Optical (LSO) Segment manufactures high-performance glazing products for the custom framing, fine art, and engineered optics markets.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects.

The segment results for fiscal 2022 and 2021 were recast for comparability.

Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.

We report net sales intersegment eliminations separately to exclude these sales from our consolidated total.

Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment.

Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not allocated at a segment level.

We report these unallocated corporate costs separately in Corporate and other.

Operating income does not include other income or expense, interest expense or a provision for income taxes.

(In thousands) 2024 2023 2022

Architectural Framing Systems $ 601,736 $ 649,778 $ 546,557

Architectural Services 410,627 407,421 358,685

Architectural Glass

378,449 316,554 309,241

Architectural Services

378,422 410,627 407,421

Large-Scale Optical 99,223 104,215 101,673

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Total $ 1,416,942 $ 1,440,696 $ 1,313,977

(In thousands) 2023 2022 2021

Operating Income (Loss)

Architectural Framing Systems $ 64,833 $ 81,875 $ 38,088

Architectural Services 18,140 ( 22,071 ) 15,451

Architectural Glass

68,046 28,610 1,785

Architectural Services

11,840 18,140 ( 22,071 )

Large-Scale Optical 24,233 25,348 23,618

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Architectural Framing Systems $ 19,226 $ 19,386 $ 20,361

Architectural Services 3,953 7,495 7,196

Architectural Glass

11,955 11,964 14,564

Architectural Services

4,011 3,953 7,495

Large-Scale Optical 3,040 3,088 3,185

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Architectural Framing Systems $ 4,733 $ 11,432 $ 7,344

Architectural Services 3,683 3,449 1,516

Architectural Glass

12,142 5,613 5,865

Architectural Services

3,166 3,683 3,449

Large-Scale Optical 16,896 13,474 2,250

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Architectural Framing Systems $ 363,512 $ 426,946 $ 414,012

Architectural Services 141,840 114,120 194,409

Architectural Glass

208,651 207,730 225,362

Architectural Services

131,651 141,840 114,120

Large-Scale Optical 83,731 69,035 56,926

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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.

Segment operating income is equal to net sales less cost of sales and operating expenses.

Operating income does not include interest expense or a provision for income taxes.

Architectural Services segment results include $ 49.5 million and $ 17.1 million of impairment charges in fiscal 2022 and fiscal 2021, respectively.

Architectural Framing Systems segment results include $ 53.0 million of impairment charges in fiscal 2021 and $ 1.7 million of restructuring charges in fiscal 2022, with no impairment or restructuring charges included in fiscal 2023.

Architectural Glass segment results include $ 0.1 million and $ 27.1 million of restructuring charges in fiscal 2023 and fiscal 2022, respectively.

Corporate and other includes miscellaneous corporate activity, including certain legal, consulting and advisory costs and certain employee benefit costs not allocable to our segments, as well as $ 1.7 million of restructuring charges in fiscal 2022.

Identifiable assets for Corporate and other include all short- and long-term available-for-sale securities.

The following table presents net sales, based on the location in which the sale originated, and long-lived assets, representing property, plant and equipment, net of related depreciation, by geographic region.

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Total $ 1,416,942 $ 1,440,696 $ 1,313,977

(In thousands) 2023 2022 2021

Long-Lived Assets

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Total $ 244,216 $ 248,867 $ 249,995

Apogee's export net sales from U.S.

operations were $ 56.2 million, $ 59.5 million, and $ 33.1 million in fiscal 2023, 2022, and 2021, respectively, representing approximately 4 percent of consolidated net sales in each of these fiscal years.

Our export net sales from U.S.

operations were $ 47.6 million, $ 56.2 million, and $ 59.5 million in fiscal 2024, 2023, and 2022, respectively, representing approximately 3 %, 4 %, and 5 % of consolidated net sales in each of these fiscal years, respectively.

Restructuring

During the fourth quarter of fiscal 2024, we announced strategic actions to further streamline our business operations, enable a more efficient cost model, and better position the Company for profitable growth (referred to as “Project Fortify”).

Project Fortify will primarily impact the Architectural Framing Systems Segment and include:

• Eliminating certain lower-margin product and service offerings, enabling consolidation into a single operating entity.

• Transferring production operations from the Company’s facility in Walker, Michigan, to the Company’s facilities in Monett, Missouri and Wausau, Wisconsin.

• Simplifying the segment’s brand portfolio and commercial model to improve flexibility, better leverage the Company’s capabilities, and enhance customer service.

Additionally, the Company will implement actions to optimize processes and streamline resources in its Architectural Services and Corporate Segments.

The Company expects these actions to be substantially complete by the third quarter of fiscal 2025.

The Company expects to incur approximately $ 16 million to $ 18 million of pre-tax charges in connection with Project Fortify, including:

• $ 7 million to $ 9 million of severance and employee related costs;

• $ 2 million to $ 3 million of contract termination costs:

• $ 6 million to $ 7 million of other expenses.

During the second quarter of fiscal 2022, we announced plans to realign and simplify our business structure, which resulted in the closure of two facilities within the Architectural Glass Segment, in Dallas, Texas and Statesboro, Georgia.

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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.

For the year ended February 25, 2023, we incurred $ 0.1 million of additional pre-tax costs associated with the finalization of these restructuring plans.

For the year ended February 26, 2022, we incurred $ 30.5 million of pre-tax costs associated with the execution of these restructuring plans, of which $ 28.2 million is included within cost of sales and $ 2.3 million is included within selling, general and administrative expenses, excluding the gain on sale mentioned above, within our consolidated statements of operations.

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

During fiscal 2024, we incurred $ 12.4 million of pre-tax costs associated Project Fortify, of which $ 5.5 million is included within cost of sales and $ 6.9 million is included within selling, general and administrative expenses.

During fiscal 2023, we incurred $ 0.1 million of additional pre-tax costs associated with the finalization of the restructuring plans that were announced in fiscal 2022.

During fiscal 2022, we incurred $ 30.5 million of pre-tax costs associated with the execution of the restructuring plans that were announced in fiscal 2022, of which $ 28.2 million is included within cost of sales and $ 2.3 million is included within selling, general and administrative expenses, excluding the gain on sale mentioned above, within our consolidated statements of operations.

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

March 2, 2024

Asset impairment on property, plant and equipment $ 2,329 $ — $ 49 $ 3,851 $ 6,229

Termination benefits 3,348 — 2,475 56 5,879

Other restructuring charges 293 — 2 — 295

Total restructuring charges $ 5,970 $ — $ 2,526 $ 3,907 $ 12,403

February 25, 2023

7 unchanged sentences

The following table summarizes our restructuring related accrual balances included within accrued payroll and related benefits and other current liabilities in the consolidated balance sheets.

All remaining balances are expected to be paid within fiscal 2024.

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

All remaining accrual balances are expected to be paid within fiscal 2025.

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

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

3 unchanged sentences

Balance at February 25, 2023

$ 62 $ 23 $ — $ — $ 85

Restructuring expense 3,985 — 2,477 56 6,518

Payments ( 1,233 ) ( 23 ) ( 410 ) — ( 1,666 )

Other adjustments ( 151 ) ( 17 ) ( 14 ) ( 182 )

Balance at February 25, 2023 62 23 — 85

Balance at March 2, 2024 $ 2,814 $ — $ 2,067 $ 56 $ 4,937

The charges presented in the rollforward of our restructuring accruals do not include items charged directly to expense as incurred, as those items are not reflected in accrued payroll and related benefits and other current liabilities in the consolidated balance sheets.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

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-K

Item 8. Financial Statements and Supplementary Data