Apogee Enterprises Reports Mixed Q2 and H1 Fiscal 2025 Results, Despite Revenue Decline

Apogee Enterprises, Inc. reported its financial results for the second quarter and first half of fiscal 2025, revealing a mixed performance in revenue and profitability compared to the previous fiscal period. For the three months ended August 31, 2024, net sales totaled $342.4 million, a decrease of 3.2% from $353.7 million in the same period last year. For the six months, net sales were $674.0 million, down 5.8% from $715.4 million. The decline in revenue was primarily attributed to lower volume across several product lines, particularly in the Architectural Framing Systems segment, which saw a 11.0% drop in sales for the quarter.

Despite the revenue decline, Apogee reported an increase in gross profit for both the three-month and six-month periods. Gross profit for the quarter was $97.3 million, up from $95.4 million, while for the six months, it rose to $196.2 million from $188.4 million. This improvement in gross profit was driven by enhanced pricing strategies and a favorable project mix, resulting in a gross margin increase to 28.4% for the quarter and 29.1% for the six months.

Operating income also showed positive growth, with $42.0 million for the quarter, up from $40.6 million, and $83.3 million for the six months, compared to $74.3 million in the prior year. The operating margin improved to 12.3% for the quarter and 12.4% for the six months. However, net earnings for the quarter decreased to $30.6 million from $33.3 million, while for the six months, net earnings increased to $61.6 million from $56.9 million.

Strategically, Apogee has been active in restructuring efforts through its "Project Fortify," incurring pre-tax costs of $2.3 million in the second quarter, with expected total charges of approximately $15.0 million to $16.0 million. The project aims to yield annualized cost savings of $13 million to $14 million. Additionally, the company announced the acquisition of UW Interco, LLC for $240 million, which will be funded through cash and existing credit facilities.

As of August 31, 2024, Apogee's total assets increased to $917.1 million from $884.1 million, while total shareholders' equity rose to $506.4 million from $471.0 million. The company also reported a significant increase in cash and cash equivalents, reaching $51.0 million compared to $37.2 million at the end of the previous fiscal period. The company remains compliant with its financial covenants under a new $700 million credit agreement established in July 2024, which includes provisions for acquisitions.