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Item 1. Financial Statements

2024-10-04 compared with 2024-07-09 · 136 added, 102 removed, 353 unchanged (40% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

(In thousands, except stock data) June 1, 2024 March 2, 2024

(In thousands, except stock data) August 31, 2024 March 2, 2024

Current assets

40 unchanged sentences

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended

(In thousands, except per share data) June 1, 2024 May 27, 2023

Three Months Ended Six Months Ended

(In thousands, except per share data) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Net sales $ 342,440 $ 353,675 $ 673,956 $ 715,388

4 unchanged sentences

Interest expense, net 1,140 2,230 1,590 4,266

Other (income) expense, net ( 143 ) 288

Other income, net 290 4,900 433 4,612

Earnings before income taxes 41,115 43,223 82,189 74,666

7 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Net earnings $ 30,566 $ 33,327 $ 61,577 $ 56,903

Other comprehensive earnings:

Unrealized (loss) gain on marketable securities, net of $( 1 ) and $ 33 of tax (benefit) expense, respectively

Unrealized gain (loss) on derivative instruments, net of $ 364 and $( 121 ) of tax expense (benefit), respectively

Other comprehensive earnings (loss):

Unrealized gain (loss) on marketable securities, net of $ 30 , $( 8 ), $ 29 and $ 25 of tax expense (benefit), respectively

114 ( 28 ) 108 93

Unrealized (loss) gain on derivative instruments, net of $( 257 ), $ 66 , $ 107 and $( 55 ) of tax (benefit) expense, respectively

( 846 ) 217 350 ( 180 )

Foreign currency translation adjustments ( 492 ) 508 ( 1,161 ) 943

Other comprehensive earnings 521 159

Other comprehensive (loss) earnings ( 1,224 ) 697 ( 703 ) 856

Total comprehensive earnings $ 29,342 $ 34,024 $ 60,874 $ 57,759

1 unchanged sentence

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Six Months Ended

(In thousands) August 31, 2024 August 26, 2023

Operating Activities

5 unchanged sentences

Loss (gain) on disposal of property, plant and equipment 291 ( 62 )

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

Non-cash lease expense 5,844 6,153

20 unchanged sentences

Repayments on revolving credit facilities ( 95,201 ) ( 199,000 )

Payments of debt issuance costs ( 3,485 ) —

Repurchase of common stock ( 15,061 ) ( 11,821 )

3 unchanged sentences

Effect of exchange rates on cash ( 241 ) ( 405 )

(Decrease) increase in cash and cash equivalents ( 6,853 ) 3,169

Increase (decrease) in cash and cash equivalents 13,808 ( 3,050 )

Cash and cash equivalents at beginning of period 37,216 21,473

2 unchanged sentences

Capital expenditures in accounts payable $ 1,426 $ 2,493

Dividends declared but not yet paid $ 5,409 $ —

See accompanying notes to consolidated financial statements.

11 unchanged sentences

Balance at June 1, 2024 21,937 $ 7,312 $ 153,002 $ 348,651 $ ( 29,010 ) $ 479,955

Net earnings — — — 30,566 — 30,566

Other comprehensive loss, net of tax — — — — ( 1,224 ) ( 1,224 )

Issuance of stock, net of cancellations 16 5 ( 5 ) — — —

Share-based compensation — — 2,938 — — 2,938

Other share retirements ( 7 ) ( 2 ) ( 52 ) ( 347 ) — ( 401 )

Cash dividends — — — ( 5,412 ) — ( 5,412 )

Balance at August 31, 2024 21,946 $ 7,315 $ 155,883 $ 373,458 $ ( 30,234 ) $ 506,422

(In thousands) Common Shares Outstanding Common Stock at Par Value

9 unchanged sentences

Balance at May 27, 2023 22,219 $ 7,406 $ 147,897 $ 286,300 $ ( 31,397 ) $ 410,206

Net earnings — — — 33,327 — 33,327

Other comprehensive income, net of tax — — — — 697 697

Issuance of stock, net of cancellations ( 3 ) ( 1 ) 7 ( 195 ) — ( 189 )

Share-based compensation — — 2,305 — — 2,305

Exercise of stock options 25 8 ( 1,192 ) — — ( 1,184 )

Share repurchases ( 160 ) ( 53 ) ( 1,160 ) ( 5,415 ) — ( 6,628 )

Other share retirements ( 9 ) ( 3 ) ( 444 ) ( 547 ) — ( 994 )

Cash dividends — — — ( 5,222 ) — ( 5,222 )

Balance at August 26, 2023 22,072 $ 7,357 $ 147,413 $ 308,248 $ ( 30,700 ) $ 432,318

See accompanying notes to consolidated financial statements.

7 unchanged sentences

All adjustments necessary for a fair presentation of quarterly and year to date operating results are reflected herein and are of a normal, recurring nature.

The results of operations for the three-month period ended June 1, 2024 are not necessarily indicative of the results to be expected for the full year.

The results of operations for the three- and six-month periods ended August 31, 2024 are not necessarily indicative of the results to be expected for the full year.

New accounting standards

11 unchanged sentences

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

Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Recognized at shipment $ 140,518 $ 152,241 $ 277,240 $ 304,895

8 unchanged sentences

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

(In thousands) June 1, 2024 March 2, 2024

(In thousands) August 31, 2024 March 2, 2024

Trade accounts $ 108,449 $ 115,061

3 unchanged sentences

Receivables, net $ 177,146 $ 173,557

The following table summarizes the activity in the allowance for credit losses for the three-month period ended:

(In thousands) June 1, 2024

The following table summarizes the activity in the allowance for credit losses for the six-month period ended:

(In thousands) August 31, 2024

Beginning balance $ 3,383

Reductions to allowance of credit losses ( 659 )

Foreign currency effects ( 8 )

Credits charged to costs and expenses ( 1,414 )

Deductions from allowance, net of recoveries 13

Other adjustments ( 7 )

Ending balance $ 1,975

6 unchanged sentences

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

Other contract-related disclosures Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Other contract-related disclosures Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Revenue recognized related to contract liabilities from prior year-end $ 3,451 $ 2,249 $ 30,361 $ 24,956

2 unchanged sentences

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

The transaction prices associated with unsatisfied performance obligations at June 1, 2024 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) June 1, 2024

The transaction prices associated with unsatisfied performance obligations at August 31, 2024 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) August 31, 2024

Within one year

2 unchanged sentences

Total $ 952,631

(In thousands) June 1, 2024 March 2, 2024

(In thousands) August 31, 2024 March 2, 2024

Raw materials $ 31,952 $ 31,363

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

June 1, 2024 $ 11,455 $ 19 $ 448 $ 11,026

August 31, 2024 $ 11,708 $ 37 $ 323 $ 11,422

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

1 unchanged sentence

The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of these investments at June 1, 2024, by contractual maturity, are shown below.

The amortized cost and estimated fair values of these investments at August 31, 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.

4 unchanged sentences

Derivative instruments

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.

We periodically 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 exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility.

As of June 1, 2024, the interest rate swap contract had a notional value of $ 30.0 million and has a maturity date of February 5, 2026.

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

As of August 31, 2024, the interest rate swap contract had a notional value of $ 30.0 million and has a maturity date of February 5, 2026.

We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates.

These contracts generally have an original maturity date of less than one year.

As of June 1, 2024, we held aluminum purchase contracts and foreign exchange option contracts with U.S.

As of August 31, 2024, we held aluminum purchase contracts and foreign exchange option contracts with U.S.

dollar notional values of $ 2.0 million and $ 1.5 million, respectively.

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

August 31, 2024

Money market funds $ 42,400 $ — $ 42,400

Municipal and corporate bonds — 11,422 11,422

Foreign currency option contract — 28 28

Interest rate swap contract — 781 781

6 unchanged sentences

Aluminum hedging contract — 529 529

As of June 1, 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 date of August 5, 2027.

Outstanding borrowings under the revolving credit facility were $ 65.0 million and $ 50.0 million as of June 1, 2024 and March 2, 2024, 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 2027.

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

As of June 1, 2024 and March 2, 2024, we had no outstanding borrowings under these Canadian facilities.

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 June 1, 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 facility, 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).

On July 19, 2024, we entered into a Credit Agreement (the Credit Agreement) with Bank of America, N.A., as administrative agent, and other lenders.

The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $ 700.0 million, in which commitments are available through a $ 450.0 million, five-year revolving credit facility and a committed $ 250.0 million delayed draw term loan facility.

Borrowings under the revolving credit facility can be in Canadian dollars (CAD) limited to $ 25.0 million USD.

The term loan facility may be borrowed in up to two drawdowns, which are available to be made within one year after the closing date.

The senior credit facility has a term of five years with a maturity date of July 19, 2029.

Outstanding borrowings under the revolving credit facility were $ 50.0 million as of August 31, 2024.

As of August 31, 2024, the term loan facility had not been drawn.

The Credit Agreement replaces the previous revolving credit facility with Wells Fargo Bank, N.A., as administrative agent, and other lenders, with maximum borrowings up to $ 385.0 million, and the two Canadian credit facilities with Bank of Montreal totaling $ 25.0 million USD.

Outstanding borrowings under the previous revolving credit facility were $ 50.0 million as of March 2, 2024.

We had no outstanding borrowings under the Canadian facilities as of March 2, 2024.

As a result of the transaction, in the second quarter of fiscal 2025, we recognized a loss on extinguishment of debt within interest expense of $ 0.5 million for the write-off of unamortized financing fees related to the previous revolving credit facility.

Additionally, we capitalized $ 3.0 million of lender fees and $ 0.6 million of third-party fees incurred in connection with the Credit Agreement, which were recorded as other non-current assets and will be amortized over the term of the credit facility as interest expense.

The Credit Agreement contains two maintenance financial covenants that require our Consolidated Leverage Ratio (as defined in the Credit Agreement) to be less than 3.50 and our Consolidated Interest Coverage Ratio (as defined in the Credit Agreement) to exceed 3.00 .

At August 31, 2024, we were in compliance with all covenants as defined under the terms of the Credit Agreement.

The Credit Agreement also contains 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 Consolidated Leverage Ratio (as defined in the Credit Agreement) to 4.00 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 Credit Agreement, and at least two fiscal quarters must separate qualifying acquisitions.

Borrowings under the Credit Agreement bear floating interest at either the Base Rate or Term Secured Overnight Financing Rate (SOFR), or, for CAD borrowings, Canadian Overnight Repo Rate Average (CORRA) plus, in each a margin based on the Consolidated Leverage Ratio (as defined in the Credit Agreement).

For Base Rate borrowings, the margin ranges from 0.25 % to 0.75 %.

For Term SOFR and CORRA borrowings, the margin ranges from 1.25 % to 1.75 %, with an incremental Term SOFR and CORRA adjustment of 0.10 % and 0.29547 % respectively.

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.

The Credit Agreement also contains an “accordion” provision.

Under this provision, we can request that the senior credit facility be increased by unlimited additional amounts.

Any lender may elect or decline to participate in the requested increase at their sole discretion.

At June 1, 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 years 2026 through 2032 and reduce borrowing capacity under the revolving credit facility.

As of June 1, 2024, the amount available for revolving borrowings was $ 305.0 million and $ 25.0 million under the U.S.

credit facility and Canadian facilities, respectively.

At June 1, 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 values at June 1, 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.

(In thousands) June 1, 2024 May 27, 2023

At August 31, 2024, we had a total of $ 42.5 million of ongoing letters of credit related to the senior credit facility and industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2026 through 2032 and reduce borrowing capacity under the revolving credit facility.

As of August 31, 2024, the amount available for revolving borrowings was $ 357.5 million.

At August 31, 2024, debt included $ 12.0 million of industrial revenue bonds that mature in fiscal years 2036 through 2043.

The fair value of our senior credit facility and industrial revenue bonds approximated carrying values at August 31, 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.

Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Interest on debt $ 1,339 $ 2,661 $ 2,513 $ 5,171

4 unchanged sentences

$ 1,140 $ 2,230 $ 1,590 $ 4,266

Interest payments under the U.S.

and Canadian credit facilities were $ 1.1 million and $ 2.4 million for the three months ended June 1, 2024 and May 27, 2023, respectively.

Interest payments under the credit facilities were $ 2.6 million and $ 5.4 million for the six months ended August 31, 2024 and August 26, 2023, respectively.

Commitments and Contingent Liabilities

1 unchanged sentence

In the ordinary course of business, predominantly in our Architectural Services and Architectural Framing Systems Segments, we are required to provide surety or performance bonds that commit payments to our customers for any non-performance.

At June 1, 2024, $ 1.3 billion of these types of bonds were outstanding, of which $ 434.7 million is in our backlog.

At August 31, 2024, $ 1.2 billion of these types of bonds were outstanding, of which $ 366.0 million is in our backlog.

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

3 unchanged sentences

Claim costs are deducted from the accrual when paid.

Factors that could have an impact on these accruals in any given period include the following:

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

Three Months Ended

(In thousands) June 1, 2024

Factors that could have an impact on these accruals in any given period include changes in manufacturing quality, changes in product mix, and any significant changes in sales volume.

Six Months Ended

(In thousands) August 31, 2024

Balance at beginning of period $ 21,362

Additional accruals 2,399

Claims paid ( 3,529 )

Additions charged to costs and expenses 5,967

Deductions from reserve, net of recoveries ( 6,585 )

Balance at end of period $ 20,744

2 unchanged sentences

Letters of credit

At June 1, 2024, we had $ 15.0 million of ongoing letters of credit, all of which have been issued under our committed revolving credit facility, as discussed in Note 5.

At August 31, 2024, we had $ 42.5 million of ongoing letters of credit as discussed in Note 5.

Purchase obligations

Purchase obligations for raw material commitments and capital expenditures totaled $ 17.9 million as of June 1, 2024.

Purchase obligations for raw material commitments and capital expenditures totaled $ 14.2 million as of August 31, 2024.

New Markets Tax Credit (NMTC) transactions

5 unchanged sentences

These costs will be recognized in conjunction with the recognition of the related proceeds on each arrangement.

During the construction phase or for working capital purposes for each

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

As a result of the structure of these transactions, variable-interest entities were created.

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Supplier Finance Program Obligations

In the first quarter of fiscal 2024, we implemented a supplier financing arrangement that enables our suppliers, at their sole discretion, to sell our receivables (i.e., our payment obligations to the suppliers) 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 balances as of June 1, 2024 and March 2, 2024 that we have confirmed as valid to the administrators of our program:

(In thousands) June 1, 2024 March 2, 2024

In the first quarter of fiscal 2024, we implemented a supplier financing arrangement that enables select suppliers, at their sole discretion, to sell our receivables (i.e., our payment obligations to the suppliers) on a non-recourse basis in order to be paid earlier than our payment terms provide.

These 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 the supplier’s decision to participate in the supplier financing program, and we do not provide any guarantees in connection with it.

The balances owed 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 balance as of August 31, 2024 that we have confirmed as valid to the administrators of our program:

(In thousands) August 31, 2024

Balance at beginning of period $ 6,527

3 unchanged sentences

Shareholders' Equity

We declared dividends totaling $ 5.4 million ($ 0.25 per share) in the first three months of fiscal 2025, compared to dividends paid of $ 5.2 million ($ 0.24 per share) in the comparable prior year period.

We paid dividends totaling $ 10.8 million ($ 0.50 per share) in the first six months of fiscal 2025, compared to dividends paid of $ 10.5 million ($ 0.48 per share) in the comparable prior year period.

During fiscal 2004, the Board of Directors authorized a share repurchase program allowing us to repurchase shares of our outstanding common stock, with subsequent increases in authorization.

During the three-months ended June 1, 2024, we repurchased 241,573 shares under the program, for a total cost of $ 15.1 million, inclusive of the applicable excise tax.

During the three-months ended May 27, 2023, we repurchased 119,916 shares under the program, for a total cost of $ 5.2 million.

During the six-months ended August 31, 2024, we repurchased 241,573 shares under the program, for a total cost of $ 15.1 million, inclusive of the applicable excise tax.

During the six-months ended August 26, 2023, we repurchased 279,916 shares under the program, for a total cost of $ 11.8 million.

We have repurchased a total of 11,518,090 shares, at a total cost of $ 408.5 million, since the inception of this program in fiscal 2004.

We have remaining authority to repurchase 2,731,910 shares under this program, which has no expiration date.

We may also elect to repurchase additional shares of common stock under our authorization, subject to limitations contained in our debt

agreements and based upon our assessment of a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities.

We may also elect to repurchase additional shares of common stock under our authorization, subject to limitations contained in our debt agreements and based upon our assessment of a number of factors, including share price, trading volume and general market conditions, working capital requirements, general business conditions, financial conditions, any applicable contractual limitations, and other factors, including alternative investment opportunities.

We may finance share repurchases with available cash, additional debt or other sources of financing.

Additionally, shares withheld from the vesting of restricted awards, or the settlement of performance-based awards, are treated as purchases and retirements, and are included within other, net in the financing activities section in the consolidated statement of cash flows.

Share-Based Compensation

1 unchanged sentence

These awards may be in the form of incentive stock options (to employees only), nonstatutory options, 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, unless the date of the award is on a day the Nasdaq Stock Market is not open for trading, then the exercise price shall equal the fair market value on the most recent preceding date when such market is open.

The table below sets forth the number of stock-based compensation awards granted during the three-months ended June 1, 2024, along with the weighted average grant date fair value:

The table below sets forth the number of stock-based compensation awards granted during the six-months ended August 31, 2024, along with the weighted average grant date fair value:

Awards Number of Awards Weighted Average Grant Date Fair Value

6 unchanged sentences

These grants allow for the right to receive a variable number of shares, between 0 % and 200 % of target, dependent on being employed at the end of the performance period and achieving defined performance goals for average return on invested capital and cumulative earnings per share.

Total share-based compensation expense included in the results of operations was $ 2.7 million for the three-month period ended June 1, 2024, and $ 2.2 million for the three-month period ended May 27, 2023.

At June 1, 2024, there was $ 10.6 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 19 months.

The total fair value of shares vested during the three-months ended June 1, 2024 was $ 9.0 million.

Total share-based compensation expense included in the results of operations was $ 2.9 million and $ 2.3 million for the three-month periods ended August 31, 2024 and August 26, 2023, respectively and $ 5.6 million and $ 4.5 million for the six-month periods ended August 31, 2024 and August 26, 2023, respectively.

At August 31, 2024, there was $ 17.3 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 24 months.

The total fair value of shares vested during the six-months ended August 31, 2024 was $ 8.6 million.

We file income tax returns in the U.S.

1 unchanged sentence

state and local jurisdictions, Canada, Brazil and other international jurisdictions.

We are no longer subject to U.S.

We are not subject to U.S.

federal tax examinations for years prior to fiscal 2021, or state and local income tax examinations for years prior to fiscal 2015.

We are not currently under U.S.

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

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

state jurisdictions or international jurisdictions.

For interim periods, our income tax expense and resulting effective tax rate are based upon an estimated annual effective tax rate adjusted for the effects of items required to be treated as discrete to the period, including changes in tax laws, changes in estimated exposures for uncertain tax positions and other items.

Income tax expense as a percentage of earnings before income tax was 24.5 %, compared to 25.0 % for the same period last year.

The decrease in the effective tax rate was primarily due to a decrease in tax expense for discrete items, partially offset by an increase in non-deductible executive compensation expense.

The total liability for unrecognized tax benefits was $ 5.6 million at June 1, 2024 compared to $ 5.1 million at March 2, 2024, respectively.

For the three-months ended August 31, 2024, income tax expense as a percentage of earnings before income tax was 25.7 %, compared to 22.9 % for the same period last year.

For the six-months ended August 31, 2024, income tax expense as a percentage of earnings before income tax was 25.1 %, compared to 23.8 % for the same period last year.

The change in the effective tax rate for both the three- and six-month periods was primarily due to an increase in tax expense on discrete items.

The total liability for unrecognized tax benefits was $ 5.6 million at August 31, 2024 compared to $ 5.1 million at March 2, 2024, respectively.

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

1 unchanged sentence

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

Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Basic earnings per share – weighted average common shares outstanding

1 unchanged sentence

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

113 254 192 292

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

12 unchanged sentences

We report these unallocated corporate costs in Corporate and Other.

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

Three Months Ended

(In thousands) June 1, 2024 May 27, 2023

Operating income does not include other income or expense, interest expense or income tax expense.

Three Months Ended Six Months Ended

(In thousands) August 31, 2024 August 26, 2023 August 31, 2024 August 26, 2023

Segment net sales

20 unchanged sentences

Additionally, the Company has implemented actions to optimize processes and streamline resources in its Architectural Services Segment and Corporate.

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

The Company now expects to incur approximately $ 15.0 million to $ 16.0 million of pre-tax charges in connection with Project Fortify leading to annualized cost savings of $ 12 million to $ 14 million.

Restructuring charges are expected to include:

During the second quarter of fiscal 2025, we incurred $ 1.2 million of pre-tax costs associated with Project Fortify, of which $ 0.9 million was included within cost of sales and $ 0.3 million was included within selling, general and administrative expenses.

During the first six-months of fiscal 2025, we incurred $ 2.3 million of pre-tax costs associated with Project Fortify, of which $ 1.5 million was included within cost of sales and $ 0.8 million was included within selling, general and administrative expenses.

Since announcing Project Fortify, we have incurred $ 14.7 million of pre-tax costs.

The Company expects these restructuring actions to be substantially complete by the end of the third quarter of fiscal 2025 and expects to incur total pre-tax charges of approximately $ 15.0 million to $ 16.0 million.

Total Project Fortify restructuring charges are expected to include:

• $ 6.5 million to $ 7.0 million of severance and employee related costs;

• $ 1.5 million to $ 2.0 million of contract termination costs:

• Approximately $ 1.7 million of contract termination costs;

• $ 6.5 million to $ 7.5 million of other expenses.

During the first quarter of fiscal 2025, we incurred $ 1.1 million of pre-tax costs associated with Project Fortify, of which $ 0.6 million was included within cost of sales and $ 0.5 million was included within selling, general and administrative expenses.

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

The Company expects that these actions will lead to annualized cost savings of $ 13 million to $ 14 million.

Three Months Ended August 31, 2024

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

Termination benefits $ 271 $ 172 $ 5 $ 448

Contract termination costs

Other restructuring charges 537 86 — 623

Total restructuring charges $ 916 $ 258 $ 5 $ 1,179

Six Months Ended August 31, 2024

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

Termination benefits $ 573 $ 172 $ 129 $ 874

Contract termination costs 108 — — 108

Other restructuring charges 1,233 86 — 1,319

Total restructuring charges $ 1,914 $ 258 $ 129 $ 2,301

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.

5 unchanged sentences

Other adjustments 778 — — 778

Balance at June 1, 2024 $ 1,852 $ 1,719 $ 130 $ 3,701

Balance at August 31, 2024 $ 1,133 $ 1,719 $ 63 $ 2,915

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.

Subsequent Events

On September 23, 2024, we entered into a purchase agreement for the acquisition of UW Interco, LLC (UW Solutions), a leading developer and manufacturer of high-performance coated materials.

The total initial purchase price was $ 240.0 million, which is subject to customary closing adjustments.

We intend to fund the acquisition with cash on hand and borrowings under our existing credit facility.

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

What changed 10-Q

Item 1. Financial Statements