What changed in this filing

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Item 1. Financial Statements

2025-01-07 compared with 2024-10-04 · 157 added, 85 removed, 404 unchanged (37% of the section changed)

1 unchanged sentence

CONSOLIDATED BALANCE SHEETS

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

(In thousands, except stock data) November 30, 2024 March 2, 2024

Current assets

40 unchanged sentences

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands, except per share data) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Net sales $ 341,344 $ 339,714 $ 1,015,300 $ 1,055,102

4 unchanged sentences

Interest expense, net 1,044 1,454 2,634 5,720

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

Other (income) expense, net ( 60 ) 890 ( 493 ) ( 3,722 )

Earnings before income taxes 27,645 35,303 109,834 109,969

7 unchanged sentences

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Net earnings $ 20,989 $ 26,974 $ 82,566 $ 83,877

Other comprehensive earnings (loss):

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

Other comprehensive (loss) earnings:

Unrealized (loss) gain on marketable securities, net of $( 13 ), $( 2 ), $ 16 and $ 23 of tax (benefit) expense, respectively

( 48 ) ( 7 ) 60 86

6 unchanged sentences

CONSOLIDATED STATEMENTS OF CASH FLOWS

Six Months Ended

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

Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023

Operating Activities

24 unchanged sentences

Sales/maturities of marketable securities 2,370 1,370

Acquisition of business, net of cash acquired ( 233,125 ) —

Net cash used by investing activities ( 257,101 ) ( 26,308 )

1 unchanged sentence

Proceeds from revolving credit facilities 95,201 195,851

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

Repayment on revolving credit facilities ( 115,201 ) ( 265,000 )

Proceeds from term loans 250,000 —

Repayment of term loans ( 20,000 ) —

Payments of debt issuance costs ( 3,798 ) —

2 unchanged sentences

Other, net ( 5,884 ) ( 3,781 )

Net cash used by financing activities ( 34,633 ) ( 50,140 )

Net cash provided (used) by financing activities 169,019 ( 100,441 )

Effect of exchange rates on cash ( 409 ) ( 569 )

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

Increase in cash and cash equivalents 6,639 1,934

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

22 unchanged sentences

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

Net earnings — — — 20,989 — 20,989

Other comprehensive loss, net of tax — — — — ( 1,736 ) ( 1,736 )

Issuance of stock, net of cancellations 1 — — — — —

Share-based compensation — — 2,425 — — 2,425

Other share retirements ( 8 ) ( 2 ) ( 60 ) ( 552 ) — ( 614 )

Cash dividends — — — ( 5,417 ) — ( 5,417 )

Balance at November 30, 2024 21,939 $ 7,313 $ 158,248 $ 388,478 $ ( 31,970 ) $ 522,069

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

18 unchanged sentences

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

Net earnings — — — 26,974 — 26,974

Other comprehensive loss, net of tax — — — — ( 424 ) ( 424 )

Issuance of stock, net of cancellations 15 6 ( 5 ) — — 1

Share-based compensation — — 2,161 — — 2,161

Other share retirements ( 2 ) ( 1 ) ( 12 ) ( 64 ) — ( 77 )

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

Balance at November 25, 2023 22,085 $ 7,362 $ 149,557 $ 329,936 $ ( 31,124 ) $ 455,731

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

The results of operations for the three- and nine-month periods ended November 30, 2024 are not necessarily indicative of the results to be expected for the full year.

New accounting standards

9 unchanged sentences

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.

In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses.

This guidance requires entities to disclose more detailed information about the types of expenses, including purchases of inventory, employee compensation, depreciation, amortization, and depletion in commonly presented expense captions such as cost of sales and selling, general and administrative (SG&A) expenses.

Such guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, although early adoption is permitted.

This guidance should be applied either prospectively to financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the financial statements.

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 this ASU may have on our consolidated financial statement 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 12 for disclosure of revenue by segment):

Three Months Ended Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Recognized at shipment $ 150,704 $ 144,910 $ 427,945 $ 449,805

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

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

(In thousands) November 30, 2024 March 2, 2024

Trade accounts $ 121,329 $ 115,061

3 unchanged sentences

Receivables, net $ 187,799 $ 173,557

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

(In thousands) August 31, 2024

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

(In thousands) November 30, 2024

Beginning balance $ 3,383

1 unchanged sentence

Deductions from allowance, net of recoveries ( 72 )

Allowance for credit losses from acquisitions 607

Other adjustments ( 23 )

7 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 Six Months Ended

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

Other contract-related disclosures Three Months Ended Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Revenue recognized related to contract liabilities from prior year-end $ 399 $ 191 $ 30,760 $ 25,147

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 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

The transaction prices associated with unsatisfied performance obligations at November 30, 2024 are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:

(In thousands) November 30, 2024

Within one year

2 unchanged sentences

Total $ 880,327

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

(In thousands) November 30, 2024 March 2, 2024

Raw materials $ 37,871 $ 31,363

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

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

November 30, 2024 $ 11,444 $ 43 $ 389 $ 11,098

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 August 31, 2024, by contractual maturity, are shown below.

The amortized cost and estimated fair values of these investments at November 30, 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.

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In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on 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.

As of November 30, 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 August 31, 2024, we held aluminum purchase contracts and foreign exchange option contracts with U.S.

As of November 30, 2024, we held aluminum purchase contracts and foreign exchange option contracts with U.S.

dollar notional values of $ 0.2 million and $ 0.8 million, respectively.

10 unchanged sentences

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

August 31, 2024

November 30, 2024

Money market funds $ 25,010 $ — $ 25,010

6 unchanged sentences

Municipal and corporate bonds — 10,905 10,905

Foreign currency forward/option contract — 3 3

Foreign currency option contract — 3 3

Interest rate swap contract — 1,292 1,292

1 unchanged sentence

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.

The Credit Agreement provides for an unsecured senior credit facility in an aggregate principal amount of up to $ 700.0 million, in which commitments were made 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 term loan facility may be utilized 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.

1 unchanged sentence

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.

As a result of the execution of the Credit Agreement, 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 $ 0.8 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.

At November 30, 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.

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

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

On November 4, 2024, as part of the acquisition of UW Interco, LLC (UW Solutions), and for working capital and general corporate purposes, we executed a drawdown against the delayed draw term loan facility for $ 250.0 million.

Outstanding borrowings under the term loan facility were $ 230.0 million as of November 30, 2024.

Outstanding borrowings under the revolving credit facility were $ 30.0 million as of November 30, 2024.

At November 30, 2024, we had a total of $ 27.3 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 November 30, 2024, the amount available for revolving borrowings was $ 405.0 million.

At November 30, 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 November 30, 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 Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Interest on debt $ 2,077 $ 2,000 $ 4,590 $ 7,171

4 unchanged sentences

$ 1,044 $ 1,454 $ 2,634 $ 5,720

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.

Interest payments under the credit facilities were $ 3.5 million and $ 7.5 million for the nine months ended November 30, 2024 and November 25, 2023, respectively.

The weighted average interest rates on borrowings outstanding, inclusive of the impact of our interest rate swap as of November 30, 2024 and March 2, 2024 were 5.6 % and 4.9 %, 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 August 31, 2024, $ 1.2 billion of these types of bonds were outstanding, of which $ 366.0 million is in our backlog.

At November 30, 2024, $ 1.2 billion of these types of bonds were outstanding, of which $ 307.2 million is in our backlog.

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

4 unchanged sentences

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

Nine Months Ended

(In thousands) November 30, 2024

Balance at beginning of period $ 21,362

5 unchanged sentences

Letters of credit

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

At November 30, 2024, we had $ 27.3 million of ongoing letters of credit as discussed in Note 5.

Purchase obligations

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

Purchase obligations for raw material commitments and capital expenditures totaled $ 20.0 million as of November 30, 2024.

New Markets Tax Credit (NMTC) transactions

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 in our consolidated balance sheets.

Proceeds received from investors on these transactions are included within other current liabilities in our consolidated balance sheets.

The NMTC arrangements are subject to 100 percent tax credit recapture for a period of seven years from the date of each respective transaction.

Upon the termination of each arrangement, these proceeds will be recognized in earnings in exchange for the transfer of tax credits.

The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other non-current assets in our consolidated balance sheets.

The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other current assets in our consolidated balance sheets.

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

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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

The following table summarizes the obligation activity for the nine months ended November 30, 2024 and outstanding balance as of November 30, 2024 that we have confirmed as valid to the administrators of our program:

(In thousands) November 30, 2024

Balance at beginning of period $ 6,527

3 unchanged sentences

Shareholders' Equity

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.

We paid dividends totaling $ 16.2 million ($ 0.75 per share) in the first nine months of fiscal 2025, compared to dividends paid of $ 15.7 million ($ 0.72 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 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.

During the nine-months ended November 30, 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 nine-months ended November 25, 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.

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As part of our compensation structure, we grant stock-based compensation awards to certain employees and non-employee directors during the fiscal year.

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 six-months ended August 31, 2024, along with the weighted average grant date fair value:

These awards may be in the form of incentive stock options (to employees only), restricted stock awards and restricted stock units, and performance share unit awards, 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 nine-months ended November 30, 2024, along with the weighted average grant date fair value:

Awards Number of Awards Weighted Average Grant Date Fair Value

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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 $ 2.9 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.

Total share-based compensation expense included in the results of operations was $ 2.4 million and $ 2.2 million for the three-month periods ended November 30, 2024 and November 25, 2023, respectively and $ 8.1 million and $ 6.6 million for the nine-month periods ended November 30, 2024 and November 25, 2023, respectively.

At November 30, 2024, there was $ 14.2 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 24 months.

The total fair value of shares vested during the nine-months ended November 30, 2024 was $ 9.5 million.

We file income tax returns in the U.S.

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We are not currently under 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.

federal examination for years subsequent to fiscal year 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.

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.

For the three-months ended November 30, 2024, income tax expense as a percentage of earnings before income tax was 24.1 %, compared to 23.6 % for the same period last year.

For the nine-months ended November 30, 2024, income tax expense as a percentage of earnings before income tax was 24.8 %, compared to 23.7 % for the same period last year.

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

The total liability for unrecognized tax benefits was $ 5.7 million at November 30, 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 Six Months Ended

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

Three Months Ended Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Basic earnings per share – weighted average common shares outstanding

10 unchanged sentences

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

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

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, selling, general and administrative expenses, and any asset impairment charges associated with the segment.

Segment operating income is equal to net sales, less cost of goods sold, SG&A expenses, 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.

1 unchanged sentence

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

Three Months Ended Nine Months Ended

(In thousands) November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Segment net sales

13 unchanged sentences

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.

On November 4, 2024, we completed the acquisition of UW Solutions for $ 241.8 million in cash.

UW Solutions is a U.S.

based, vertically integrated manufacturer of high-performance coated substrates with a portfolio of well-known brands, including ResinDEK®, ChromaLuxe®, RDC Coatings™, and Unisub®, each known as a leader in its specified applications.

The UW Solutions business activity is included in our Large-Scale Optical Segment.

The total purchase consideration was $ 233.1 million in cash, net of a preliminary net working capital adjustment of $ 1.8 million and cash acquired of $ 8.7 million.

The acquisition was funded with cash on hand and borrowings under our existing credit agreement.

During the third quarter of fiscal 2025, we incurred pre-tax acquisition-related expenses of $ 5.9 million associated with the UW Solutions acquisition.

We incurred $ 0.4 million for inventory step-up expense which was included in costs of sales as well as $ 3.7 million of transaction costs, $ 0.9 million of integration costs, and $ 0.8 million of amortization of acquired backlog, which was included in SG&A within our consolidated results of operations.

We accounted for the acquisition as a purchase of a business and recorded the excess of the purchase price over the estimated fair value of the assets acquired and liabilities assumed as goodwill of $ 106.3 million.

The goodwill recognized is attributable primarily to expected synergies by integrating UW Solutions into our Large-Scale Optical Segment and by creating a scalable growth platform in the specialty coatings and materials market.

The goodwill is expected to be amortized and deductible for income tax purposes.

We have provisionally determined the appropriate fair values of the acquired intangible assets and completed our analysis of the economic lives of the assets acquired.

We assigned $ 21.0 million to tradenames and are amortizing over a 15-year expected life.

We assigned $ 3.2 million to contract backlog and are amortizing over a 4-month expected life.

We assigned $ 47.4 million to customer relationships and are amortizing a portion over a 10-year expected life and the remainder over a 15-year expected life, based on historical customer attrition rates.

We assigned $ 7.8 million to developed technology and are amortizing over a 7.5-year expected life.

The following table presents the preliminary estimated fair values of assets acquired and liabilities assumed at the acquisition date:

(In thousands)

Cash and cash equivalents $ 8,703

Receivables, net 12,673

Inventories, net 19,805

Other current assets 1,335

Property, plant, and equipment 27,701

Operating lease right-of-use assets 14,268

Intangible assets 79,420

Goodwill 106,264

Other non-current assets 166

Total Assets $ 270,335

Accounts payable 5,032

Accrued compensation and benefits 6,767

Operating lease liabilities 1,447

Other current liabilities 1,287

Non-current operating lease liabilities 14,030

Total Liabilities $ 28,563

Net assets recorded $ 241,772

The impact of the acquisition of UW Solutions on our consolidated results of operations for the three and nine-month periods ended on November 30, 2024 was $ 8.8 million of net sales and $ 4.2 million net loss, respectively.

The net sales and net loss represent approximately four weeks of operating results, transaction and integration-related costs, interest and the net tax effect.

The following supplemental unaudited pro forma information presents our financial results as if the acquisition of UW Solutions had occurred on February 26, 2023.

This supplemental pro forma information has been prepared for comparative purposes and would not necessarily indicate what may have occurred if the acquisition had been completed on February 26, 2023, and this information is not intended to be indicative of future results.

(in thousands, except earnings per share data)

Three Months Ended

Nine Months Ended

November 30, 2024 November 25, 2023 November 30, 2024 November 25, 2023

Net sales $ 359,904 $ 368,243 $ 1,077,941 $ 1,131,489

Net earnings 25,364 26,951 84,804 71,890

Earnings per share:

Basic 1.16 1.24 3.89 3.28

Diluted 1.16 1.22 3.86 3.25

Nonrecurring charges of $ 3.7 million of transaction costs, $ 0.9 million of integration costs, $ 0.8 million of amortization of acquired backlog, and $ 0.4 million of inventory step-up expense incurred in the third quarter of fiscal 2025 are reflected as if those charges were incurred in the first quarter of fiscal 2024 supplemental pro forma earnings.

These amounts have been calculated after applying our accounting policies and adjusting the results of UW Solutions to reflect the effect of definite-lived intangible assets recognized as part of the business combination on amortization expense as if the acquisition had occurred on February 26, 2023.

Restructuring

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• 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 has implemented actions to optimize processes and streamline resources in its Architectural Services Segment and Corporate.

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.

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

During the third quarter of fiscal 2025, we incurred $ 0.9 million of pre-tax costs associated with Project Fortify, which included $( 0.1 ) million within cost of sales and $ 1.0 million included within SG&A expenses.

During the first nine-months of fiscal 2025, we incurred $ 3.2 million of pre-tax costs associated with Project Fortify, of which $ 1.3 million was included within cost of sales and $ 1.9 million was included within SG&A expenses.

Since announcing Project Fortify, we have incurred $ 15.6 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.

The Company now expects these restructuring actions to be substantially complete by the end of the fourth quarter of fiscal 2025 and expects to incur total pre-tax charges of approximately $ 16.0 million to $ 17.0 million.

Total Project Fortify restructuring charges are expected to include:

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

• Approximately $ 7.0 million of severance and employee related costs;

• Approximately$ 1.7 million of contract termination costs;

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

Three Months Ended August 31, 2024

Three Months Ended November 30, 2024

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

Termination benefits $ 387 $ ( 764 ) $ 787 $ 410

Contract termination costs

Other restructuring charges 455 47 — 502

Total restructuring charges $ 842 $ ( 717 ) $ 787 $ 912

Six Months Ended August 31, 2024

Nine Months Ended November 30, 2024

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

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Other adjustments 778 — — 778

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.

Balance at November 30, 2024 $ 853 $ 785 $ 788 $ 2,426

The charges presented in the roll forward 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.

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