What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-10-06 compared with 2026-06-30 · 178 added, 72 removed, 158 unchanged (61% of the section changed)

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Recent Developments

On May 27, 2026, we entered into a definitive agreement to acquire Keller Companies, Inc.

(“KCI”), the controlling shareholder of Kalwall Corporation and Structures Unlimited Inc., for approximately $105 million in cash, subject to certain customary purchase price adjustments.

The sellers may also receive up to $10 million in additional earn‑out consideration based on achieving certain financial objectives as defined in the agreement.

We expect to fund the transaction with cash on hand and borrowings under our existing credit facility, and closing is anticipated in early July, subject to customary conditions.

Upon closing, the acquired business is expected to be integrated into our Architectural Glass Segment and its results will be included in our consolidated results of operations from the date of acquisition.

On July 1, 2026, we completed the acquisition of Keller Companies, Inc.

("Kalwall"), the controlling shareholder of Kalwall Corporation and Structures Unlimited Inc.

The total purchase consideration was $112.2 million, including contingent earn-out consideration of $7.5 million.

The acquisition was funded with borrowings under our existing credit facility.

The acquired business is reported within our Architectural Glass Segment, and its results of operations have been included in our consolidated financial statements since the acquisition date.

On September 18, 2026, we completed the acquisition of SIA “Alzette”, the parent company of SIA “GroGlass” (“Groglass”), a Latvia-based provider of high-performance glass surface solutions specializing in anti-reflective and other advanced coating technologies, for up to €62.5 million on a cash-free, debt-free basis, subject to certain customary purchase price adjustments.

For additional information regarding this acquisition, see Note 15, Subsequent Events, in our consolidated financial statements.

The following selected financial data should be read in conjunction with the Company’s Form 10-K for the year ended February 28, 2026, and the consolidated financial statements, including the notes to consolidated financial statements, included therein.

Results of Operations

The following is a discussion of our financial condition and results of operations during the three months ended May 30, 2026 and the three months ended May 31, 2025.

The following is a discussion of our financial condition and results of operations during the three and six months ended August 29, 2026 and August 30, 2025.

Three Months Ended % of Net Sales

(in thousands, except percentages) May 30, 2026 May 31, 2025 May 30, 2026 May 31, 2025

(in thousands, except percentages) August 29, 2026 August 30, 2025 August 29, 2026 August 30, 2025

Net sales $ 391,135 $ 358,194 100.0 % 100.0 %

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Interest expense, net 3,554 4,075 0.9 % 1.1 %

Other expense, net 73 682 — % 0.2 %

Other income, net 485 5,140 0.1 % 1.4 %

Earnings before income taxes 30,417 27,953 7.8 % 7.8 %

Income tax expense 8,037 4,304 2.1 % 1.2 %

Net earnings (loss) $ 11,535 $ (2,688) 3.4 % (0.8) %

Net earnings $ 22,380 $ 23,649 5.7 % 6.6 %

Effective tax rate 26.4 % 15.4 %

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Adjusted net earnings $ 24,401 $ 21,098 6.2 % 5.9 %

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

• Consolidated net sales decreased 1.1%, to $342.7 million, driven by lower volume within our Architectural Metals and Glass Segments, partially offset by volume improvement within our Architectural Services Segment.

Improved pricing and mix within the Architectural Metals Segment offset part of the volume decline.

• Gross margin increased 20 basis to 21.9%, compared to 21.7%, primarily due to price, productivity improvements including savings from Project Fortify Phase 2, and favorable mix, partially offset by higher material and freight costs and impacts from lower volume.

• Selling, general, and administrative (SG&A) expense as a percent of net sales decreased to 16.4%, compared to 19.7%.

This improvement was primarily driven by the benefits from cost savings included in Project Fortify Phase 2.

Six Months Ended % of Net Sales

(in thousands, except percentages) August 29, 2026 August 30, 2025 August 29, 2026 August 30, 2025

Net sales $ 733,820 $ 704,816 100.0 % 100.0 %

Cost of sales 562,624 547,084 76.7 % 77.6 %

Gross profit 171,196 157,732 23.3 % 22.4 %

Selling, general and administrative expenses 118,870 123,913 16.2 % 17.6 %

Operating income 52,326 33,819 7.1 % 4.8 %

Interest expense, net 6,388 7,921 0.9 % 1.1 %

Other income, net 412 4,458 0.1 % 0.6 %

Earnings before income taxes 46,350 30,356 6.3 % 4.3 %

Income tax expense 12,433 9,394 1.7 % 1.3 %

Net earnings $ 33,917 $ 20,962 4.6 % 3.0 %

Effective tax rate 26.8 % 30.9 %

Non-GAAP Measures

Adjusted EBITDA $ 81,653 $ 78,752 11.1 % 11.2 %

Adjusted net earnings $ 36,520 $ 32,948 5.0 % 4.7 %

The following table summarizes the changes in net sales from Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026:

Components of Changes in Net Sales

Three Months Ended August 29, 2026

(In thousands, except percentages) Architectural Metals

Architectural Services Architectural Glass

Performance Surfaces Intersegment eliminations

Fiscal 2026 net sales $ 140,935 $ 100,490 $ 72,181 $ 48,390 $ (3,802) $ 358,194

Organic business (1)

2,585 7,974 (1,120) 6,867 273 16,579

Acquisition (2)

— — 16,362 — — 16,362

Fiscal 2027 net sales $ 143,520 $ 108,464 $ 87,423 $ 55,257 $ (3,529) $ 391,135

Total net sales growth (decline) 1.8 % 7.9 % 21.1 % 14.2 % 7.2 % 9.2 %

Organic business (1)

1.8 % 7.9 % (1.6) % 14.2 % 7.2 % 4.6 %

Acquisition (2)

— % — % 22.7 % — % — % 4.6 %

Six Months Ended August 29, 2026

(In thousands, except percentages) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Intersegment eliminations Consolidated

Fiscal 2026 net sales $ 269,559 $ 206,995 $ 145,454 $ 90,640 $ (7,832) $ 704,816

Organic business (1)

(3,596) 16,705 (6,679) 8,941 (2,729) 12,642

Acquisition (2)

— — 16,362 — — 16,362

Fiscal 2027 net sales $ 265,963 $ 223,700 $ 155,137 $ 99,581 $ (10,561) $ 733,820

Total net sales (decline) growth (1.3) % 8.1 % 6.7 % 9.9 % (34.8) % 4.1 %

Organic business (1)

(1.3) % 8.1 % (4.6) % 9.9 % (34.8) % 1.8 %

Acquisition (2)

— % — % 11.2 % — % — % 2.3 %

(1) Organic business is defined as growth (decline) in net sales from legacy businesses and from acquired businesses, twelve months after the acquisition date.

(2) Kalwall was acquired on July 1, 2026.

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Consolidated net sales increased 9.2%, to $391.1 million, driven by a $16.4 million contribution from the Kalwall acquisition, price, and favorable mix, partially offset by lower volume.

• Gross margin increased 150 basis points to 24.6%, compared to 23.1%, primarily due to price, and productivity improvements including the net benefit from Project Fortify 2, and the accretive impact of the Kalwall acquisition, partially offset by higher material and manufacturing costs and impacts from lower volume.

• Selling, general, and administrative (SG&A) expense as a percent of net sales increased to 16.0%, compared to 15.6%, primarily due to higher incentive compensation expense, partially offset by cost savings from Fortify Phase 2.

• Operating income increased to $33.5 million from $26.9 million, and operating margin increased 110 basis points to 8.6%.

• Interest expense decreased to $2.8 million, due to a lower average debt balance in the first quarter of fiscal 2027 compared to the prior year.

• Other expense was $0.1 million compared to $0.7 million due to a decline in value of company-owned life insurance assets.

• Interest expense decreased to $3.6 million, primarily due to lower average debt balance.

• Other income was $0.5 million compared to $5.1 million.

The prior year included a $4.6 million gain related to a New Markets Tax Credit.

• Income tax expense as a percentage of earnings before income tax was 26.4%, compared to 15.4%.

The decline in the effective tax rate was primarily due to generating greater earnings before income taxes compared to the first quarter of last year.

• Net earnings were $11.5 million compared to net loss of $2.7 million.

• Adjusted EBITDA decreased to $32.1 million, compared to $34.4 million, and adjusted EBITDA margin decreased to 9.4%, compared to 9.9%.

The decrease in adjusted EBITDA margin was primarily driven by higher material and freight costs and the impacts from lower volume, partially offset by productivity improvements and benefits from cost savings of Fortify Phase 2.

• Adjusted net earnings were $12.1 million compared to $11.9 million.

The increase in the effective tax rate was primarily attributable to non-recurring favorable discrete tax items recognized in the prior year.

• Net earnings were $22.4 million compared to $23.6 million in the prior year.

• Adjusted EBITDA increased to $49.5 million, compared to $44.4 million, and adjusted EBITDA margin increased to 12.7%, compared to 12.4%.

Comparison of First Six Months Fiscal 2027 to First Six Months Fiscal 2026

• Consolidated net sales increased 4.1%, to $733.8 million, primarily driven by price and mix favorability, in addition to the $16.4 million contribution from the Kalwall acquisition, partially offset by lower volume.

• Gross margin increased to 23.3%, compared to 22.4%, primarily due to price and productivity improvements, including the net benefit from Fortify Phase 2, and favorable mix, partially offset by higher material and manufacturing costs and impacts from lower volume.

• SG&A expenses as a percent of net sales decreased to 16.2%, compared to 17.6%.

The decrease was driven by the net cost savings from Fortify Phase 2, partially offset by higher incentive expense.

• Operating income increased to $52.3 million from $33.8 million, and operating margin increased 230 basis points to 7.1%.

• Interest expense, net decreased to $6.4 million, due to a lower average debt balance compared to the prior year.

• Other income was $0.4 million compared to $4.5 million.

The prior year included a $4.6 million gain related to a New Markets Tax Credit.

• Income tax expense as a percentage of earnings before income tax was 26.8%, compared to 30.9% for the same period last year, as a result of the similar value of discrete tax items on higher earnings before income tax in the current year.

• Net earnings were $33.9 million compared to $21.0 million.

• Adjusted EBITDA increased to $81.7 million compared to $78.8 million and adjusted EBITDA margin remained consistent at 11.1% compared to 11.2% in the prior year.

Use and Reconciliation of Non-GAAP Financial Measures

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Non-GAAP measures include:

• Adjusted net earnings and adjusted earnings per diluted share (adjusted diluted EPS), used by the Company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered part of core operating results, to enhance comparability from period-to-period.

• Adjusted net earnings and adjusted earnings per diluted share (adjusted diluted EPS), is used by the Company to provide meaningful supplemental information about its operating performance by excluding amounts that are not considered part of core operating results, to enhance comparability from period-to-period.

• Adjusted EBITDA, defined as adjusted net earnings before interest, taxes, depreciation, and amortization, and adjusted EBITDA margin, defined as adjusted EBITDA as a percentage of net sales.

We use adjusted EBITDA and adjusted EBITDA margin to assess segment performance and make decisions about the allocation of operating and capital resources by analyzing recent results, trends, and variances of each segment in relation to forecasts and historical performance.

Apogee Enterprises, Inc.

Reconciliation of Non-GAAP Financial Measures

Adjusted EBITDA and Adjusted EBITDA Margin

Three Months Ended May 30, 2026

Three Months Ended August 29, 2026

(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated

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Adjusted EBITDA margin 15.4 % 5.8 % 15.5 % 22.5 % N/M 12.6 %

Three Months Ended May 31, 2025

Three Months Ended August 30, 2025

(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated

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355 2,758 — — 10 3,123

NMTC settlement gain (3)

(4,597) — — — — (4,597)

Adjusted EBITDA $ 20,828 $ 5,016 $ 11,647 $ 11,221 $ (4,344) $ 44,368

EBITDA margin 6.1 % (4.9) % 18.3 % 18.2 % (1.5) % 5.4 %

Adjusted EBITDA margin 7.3 % 5.7 % 18.3 % 18.8 % (0.7) % 9.9 %

Acquisition-related costs associated with the pending Keller Companies, Inc.

acquisition in fiscal 2027 and UW Solutions acquisition in fiscal 2026, respectively, which management does not consider reflective of core operating performance for the periods presented.

Restructuring costs related to Project Fortify Phase 2, including $7.4 million of asset impairment charges in fiscal 2026.

EBITDA margin 17.8 % 2.2 % 16.1 % 20.7 % N/M 12.4 %

Adjusted EBITDA margin 14.8 % 5.0 % 16.1 % 23.2 % N/M 12.4 %

Six Months Ended August 29, 2026

(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated

Net earnings (loss) $ 27,981 $ 10,860 $ 10,300 $ 10,976 $ (26,200) $ 33,917

Interest expense (income), net 770 (74) (422) — 6,114 6,388

Income tax expense — — 396 — 12,037 12,433

Depreciation and amortization 7,065 1,599 7,705 7,879 1,521 25,769

EBITDA 35,816 12,385 17,979 18,855 (6,528) 78,507

Acquisition-related costs (1)

— — 906 132 2,108 3,146

Adjusted EBITDA $ 35,816 $ 12,385 $ 18,885 $ 18,987 $ (4,420) $ 81,653

EBITDA margin 13.5 % 5.5 % 12.4 % 18.9 % N/M 10.7 %

Adjusted EBITDA margin 13.5 % 5.5 % 13.1 % 19.1 % N/M 11.0 %

Six Months Ended August 30, 2025

(In thousands) Architectural Metals Architectural Services Architectural Glass Performance Surfaces Corporate and Other Consolidated

Net earnings (loss) $ 24,543 $ (4,759) $ 18,631 $ 10,377 $ (27,830) $ 20,962

Interest expense (income), net 901 (138) (276) — 7,434 7,921

Income tax (benefit) expense (43) (8) 116 — 9,329 9,394

Depreciation and amortization 7,566 1,983 6,593 7,338 1,463 24,943

EBITDA 32,967 (2,922) 25,064 17,715 (9,604) 63,220

Acquisition-related costs (1)

— — — 1,464 193 1,657

Restructuring costs (2)

1,825 14,006 — — 2,641 18,472

NMTC settlement gain (3)

(4,597) — — — — (4,597)

Adjusted EBITDA $ 30,195 $ 11,084 $ 25,064 $ 19,179 $ (6,770) $ 78,752

EBITDA margin 12.2 % (1.4) % 17.2 % 19.5 % N/M 9.0 %

Adjusted EBITDA margin 11.2 % 5.4 % 17.2 % 21.2 % N/M 11.2 %

Acquisition-related costs for the Kalwall acquisition in fiscal 2027 and UW Solutions acquisition in fiscal 2026, respectively, which management does not consider reflective of core operating performance for the periods presented.

Restructuring costs related to Project Fortify Phase 2 in fiscal 2026.

(3) Settlement of a New Markets Tax Credit transactions.

Reconciliation of Non-GAAP Financial Measures

Adjusted Net Earnings

Three Months Ended

(In thousands) May 30, 2026 May 31, 2025

Three Months Ended Six Months Ended

(In thousands) August 29, 2026 August 30, 2025 August 29, 2026 August 30, 2025

Net earnings $ 22,380 $ 23,649 $ 33,917 $ 20,962

Acquisition-related costs (1)

2,376 1,307 3,146 1,657

Restructuring costs (2)

— 3,123 — 18,472

NMTC settlement gain (3)

— (4,597) — (4,597)

Income tax impact on above adjustments (4)

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Adjusted net earnings $ 24,401 $ 21,098 $ 36,520 $ 32,948

Acquisition-related costs associated with the pending Keller Companies, Inc.

acquisition in fiscal 2027 and UW Solutions acquisition in fiscal 2026, respectively, which management does not consider reflective of core operating performance for the periods presented.

Restructuring costs related to Project Fortify Phase 2, including $7.4 million of asset impairment charges in fiscal 2026.

Restructuring costs related to Project Fortify Phase 2 in fiscal 2026.

(3) Settlement of a New Markets Tax Credit transactions.

(4) Income tax impact reflects the estimated blended statutory tax rate for the jurisdictions in which the charge or income occurred.

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The following table presents net sales, adjusted EBITDA and adjusted EBITDA margin by segment and the consolidated total.

Three Months Ended

(In thousands, except percentages) May 30, 2026 May 31, 2025 % Change

Three Months Ended Six Months Ended

(In thousands, except percentages) August 29, 2026 August 30, 2025 % Change August 29, 2026 August 30, 2025 % Change

Segment net sales

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Performance Surfaces 55,257 48,390 14.2% 99,581 90,640 9.9%

Total segment sales 349,716 350,652 (0.3)%

Intersegment eliminations (3,529) (3,802) (7.2)% (10,561) (7,832) 34.8%

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Performance Surfaces 22.5 % 23.2 % 19.1 % 21.2 %

Corporate and Other N/A N/A

Corporate and Other N/A N/A N/M N/M

Adjusted EBITDA margin 12.7 % 12.4 % 11.1 % 11.2 %

Architectural Metals

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

• Net sales were $122.4 million, compared to $128.6 million, primarily due to lower volume, partially offset by favorable price and product mix.

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Net sales were $143.5 million, compared to $140.9 million, driven by favorable price, partially offset by lower volume.

• Adjusted EBITDA was $22.1 million, or 15.4% of net sales, compared to $20.8 million, or 14.8% of net sales, driven by price, improved productivity and cost savings from Fortify Phase 2, and favorable mix, partially offset by the net impact from higher aluminum costs and lower volume.

Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026

• Net sales were $266.0 million, compared to $269.6 million, driven by lower volume offsetting favorable price and mix.

• Adjusted EBITDA was $35.8 million, or 13.5% of net sales, compared to $30.2 million, or 11.2% of net sales.

The higher adjusted EBITDA margin was primarily driven by improved mix and favorable productivity including cost savings related to Project Fortify Phase 2, partially offset by the impact of lower volume and the impact from higher aluminum costs.

The improvement in adjusted EBITDA margin was primarily driven by price, improved productivity and cost savings from Fortify Phase 2, and favorable mix, partially offset by the net impact from higher aluminum costs and lower volume.

Architectural Services

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Net sales were $108.5 million, compared to $100.5 million, primarily due to increased volume.

• Adjusted EBITDA increased to $6.2 million, or 5.8% of net sales, compared to $5.0 million, or 5.0% of net sales, primarily driven by project mix and higher volume.

Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026

• Net sales were $223.7 million, compared to $207.0 million, driven by increased volume.

• Adjusted EBITDA remained relatively consistent at $6.1 million, or 5.3% of net sales, compared to $6.1 million, or 5.7% of net sales.

The decline in adjusted EBITDA margin was driven by unfavorable project mix, mostly offset by benefits from the actions of Project Fortify Phase 2 to reduce the impact of tariffs, and the impact from increased volume.

• Adjusted EBITDA increased to $12.4 million, or 5.5% of net sales, compared to $11.1 million, or 5.4% of net sales, driven by increased volume, partially offset by unfavorable mix and price.

Cumulative catch-up adjustments on our longer-term contracts for changes in estimates were as follows:

Three Months Ended

(in thousands) May 30, 2026 May 31, 2025

Three Months Ended Six Months Ended

(in thousands) August 29, 2026 August 30, 2025 August 29, 2026 August 30, 2025

Gross favorable adjustments $ 4,949 $ 9,454 $ 9,250 $ 14,747

$ 4,301 $ 5,293

Gross unfavorable adjustments (3,416) (8,722) (8,386) (13,948)

(4,970) (5,226)

Net adjustments

$ 1,532 $ 731 $ 863 $ 799

Architectural Glass

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

• Net sales were $67.7 million, compared to $73.3 million, driven by lower price and volume due to continued end market softness, partially offset by favorable mix.

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Net sales were $87.4 million compared to $72.2 million, driven by the $16.4 million contribution from the Kalwall acquisition and favorable mix, partially offset by lower volume and price.

• Adjusted EBITDA was $13.0 million, or 14.9% of net sales, compared to $11.6 million, or 16.1% of net sales.

The decrease in adjusted EBITDA margin was primarily driven by price, higher manufacturing and freight costs, and lower volume, partially offset by the accretive contribution of the Kalwall acquisition and favorable mix.

Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026

• Net sales were $155.1 million compared to $145.5 million, driven by the $16.4 million contribution from the Kalwall acquisition and favorable mix, partially offset by lower volume and price.

• Adjusted EBITDA decreased to $18.9 million, or 13.1% of net sales, compared to $25.1 million, or 17.2% of net sales.

The decrease in adjusted EBITDA margin was primarily driven by lower price, reduced volume, and material inflation.

The decrease in adjusted EBITDA margin was primarily driven by price, lower volume and higher manufacturing and freight costs, partially offset by the accretive contribution of the Kalwall acquisition and favorable mix.

Performance Surfaces

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

• Net sales were $44.3 million, compared to $42.3 million, driven by increased volume and favorable price.

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Net sales were $55.3 million, compared to $48.4 million, due to higher volume and price.

• Adjusted EBITDA was $12.4 million, or 22.5% of net sales, compared to $11.2 million, or 23.2% of net sales.

The decrease in adjusted EBITDA margin was primarily driven by the net impact of higher material and freight costs, partially offset by productivity.

The decrease in adjusted EBITDA margin was primarily driven by the impact of higher material costs, partially offset by price and increased volume.

Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026

• Net sales were $99.6 million, compared to $90.6 million, due to higher volume and price.

• Adjusted EBITDA was $19.0 million, or 19.1% of net sales, compared to $19.2 million, or 21.2% of net sales.

The decrease in adjusted EBITDA margin was primarily driven by the impact of higher material costs, partially offset by favorable price and increased volume.

Corporate and Other

Comparison of First Quarter Fiscal 2027 to First Quarter Fiscal 2026

• Corporate and Other adjusted EBITDA expense was $0.2 million, compared to $2.4 million, primarily due to an insurance-related benefit.

Comparison of Second Quarter Fiscal 2027 to Second Quarter Fiscal 2026

• Corporate and Other adjusted EBITDA expense was $4.2 million, compared to $4.3 million in the prior year.

The improvement was primarily due to the benefits from cost savings related to Fortify Phase 2 and lower health insurance costs, partially offset by higher incentive compensation expense.

Comparison of First Six Months of Fiscal 2027 to First Six Months of Fiscal 2026

• Corporate and Other adjusted EBITDA expense was $4.4 million, compared to $6.8 million in the prior year driven by net cost savings related to Fortify Phase 2 and lower health insurance costs, partially offset by higher incentive compensation expense.

Backlog is defined as the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which is expected to be recognized as revenue.

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It is most meaningful for the Architectural Services segment, due to the long-term nature of their projects.

As of May 30, 2026, segment backlog in the Architectural Services Segment was approximately $734.5 million, compared to approximately $682.9 million at the end of the first quarter of fiscal 2026.

As of August 29, 2026, segment backlog in the Architectural Services Segment was approximately $833.0 million, compared to approximately $792.3 million at the end of the second quarter of fiscal 2026.

Liquidity and Capital Resources

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Operating Activities.

Net cash provided by operating activities was $7.4 million for the first three months of fiscal 2027, compared to a use of $19.8 million in the prior year period.

The increase in net cash provided by operating activities was driven by higher net earnings and an arbitration settlement payment in the prior year that did not recur.

Net cash provided by operating activities was $43.3 million for the first six months of fiscal 2027, compared to $37.3 million in the prior year period.

The increase in cash provided by operating activities is driven by higher net earnings, partially offset by increased cash used for working capital.

Investing Activities.

Net cash used in investing activities was $9.8 million for the first three months of fiscal 2027, compared to $7.0 million in the prior-year period.

The increase net cash used in investing activities was primarily related purchases of marketable securities.

Net cash used in investing activities was $121.8 million for the first six months of fiscal 2027, compared to $10.9 million in the prior-year period.

The increase net cash used in investing activities was primarily related to the acquisition of Kalwall.

Financing Activities.

Net cash used in financing activities was $11.1 million for the first three months of fiscal 2027, compared to $17.6 million of cash provided by financing activities in the prior year period.

The change in net cash provided by financing activities was driven by lower net proceeds received from our revolving credit facility, partially offset by $9.7 million of repurchases of common stock.

Net cash provided by financing activities was $74.9 million for the first six months of fiscal 2027, compared to $29.1 million of cash used in financing activities in the prior year period.

The increase primarily relates to additional proceeds from our revolving credit facility used to fund the Kalwall acquisition, as well as lower debt payments compared to the prior year.

Additional Liquidity Considerations.

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See Note 5 to our Consolidated Financial Statements for more information related to our debt agreements.

Outstanding borrowings under the term loan facility were $209.4 million as of May 30, 2026.

Outstanding borrowings under the revolving credit facility were $28.0 million as of May 30, 2026.

At May 30, 2026, we had a total of $2.6 million of ongoing letters of credit related to the senior credit facility, construction contracts and insurance collateral that expire in fiscal 2027 and reduce borrowing capacity under the revolving credit facility.

As of May 30, 2026, the amount available for revolving borrowings was $419.4 million.

Outstanding borrowings under the term loan facility were $206.5 million as of August 29, 2026.

Outstanding borrowings under the revolving credit facility were $129.0 million as of August 29, 2026.

At August 29, 2026, we had a total of $2.6 million of ongoing letters of credit related to the senior credit facility, construction contracts and insurance collateral that expire in fiscal 2027 and reduce borrowing capacity under the revolving credit facility.

As of August 29, 2026, the amount available for revolving borrowings was $318.4 million.

We acquire the use of certain assets through operating leases, such as property, manufacturing equipment, vehicles and other equipment.

Future payments for such leases, excluding leases with initial terms of one year or less, were $56.8 million at May 30, 2026, with $11.8 million payable during the remainder of fiscal 2027.

As of May 30, 2026, we had $14.9 million of open purchase obligations, of which payments totaling $7.4 million are expected to become due during the remainder of fiscal 2027.

Future payments for such leases, excluding leases with initial terms of one year or less, were $53.0 million at August 29, 2026, with $7.9 million payable during the remainder of fiscal 2027.

As of August 29, 2026, we had $33.5 million of open purchase obligations, of which payments totaling $10.6 million are expected to become due during the remainder of fiscal 2027.

We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any non-performance.

At May 30, 2026, $1.1 billion of these types of bonds were outstanding, of which $239.8 million is in our backlog.

At August 29, 2026, $1.2 billion of these types of bonds were outstanding, of which $264.3 million is in our backlog.

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

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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 2. Management’s Discussion and Analysis