Apogee Enterprises : Q1 FY2025 Conference Call Accompanying Slides

Apogee Enterprises, Inc.

Fiscal 2025 First Quarter Earnings Call

June 27, 2024

Taxation Building - Trenton, NJ © Greg West Photography

Non-GAAP measures & forward-looking statements

This presentation contains non-GAAP financial measures which the Company uses to evaluate its historical and prospective financial performance, measure operational profitability on a consistent basis, as a factor in determining executive compensation, and to provide enhanced transparency to the investment community. Definitions for these non-GAAP financial measures are included in today's press release and reconciliations to the most directly comparable GAAP measures are included at the end of this presentation.

This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. The words "believe," "expect," "anticipate," "intend," "estimate," "forecast," "project," "should" and similar expressions are intended to identify "forward-looking statements". These statements reflect Apogee management's expectations or beliefs as of the date of this presentation. The company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. These forward-looking statements are subject to significant risks that could cause actual results to differ materially from the expectations reflected in the forward-looking statements. More information concerning potential factors that could affect future financial results is included in today's press release, the company's Annual Report on Form 10-K for the fiscal year ended March 2, 2024, and in subsequent filings with the U.S. Securities and Exchange Commission.

Q1 FY2025 Earnings | June 27, 2024

Apogee Enterprises, Inc.

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Agenda

Introductory remarks

Ty Silberhorn

Chief Executive Officer

Financial results and outlook

Matt Osberg

Chief Financial Officer

Q&A

		Brooklyn Health Center, New York
Q1 FY2025 Earnings | June 27, 2024	Apogee Enterprises, Inc.	Photo courtesy of Terry Wieckert

FY2025 First Quarter Highlights

• Lower sales volume driven by softening end markets
• Solid execution, cost management, and productivity gains drove significant adjusted margin improvement, offsetting lower net sales
• Improved margin performance & strong backlog growth in Services
• Strong adjusted diluted EPS growth
• Raising our full year adjusted diluted EPS outlook

Net sales	$332 M
	(8)% year-over-year

Adjusted	$42.5 M
operating
income*	+26% year-over-year

Adjusted	12.8%
operating
margin*	+350 bps year-over-year

Adjusted	$1.44
diluted EPS*	+37% year-over-year

Strong execution more than offsetting lower volumes

Q1 FY2025 Earnings | June 27, 2024	Apogee Enterprises, Inc.	*Non-GAAP metrics, see reconciliation table
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Executing our Enterprise Strategy

Create Peak Value by

building

differentiated

businesses with

strong

operational execution

ECONOMIC		ACTIVELY		STRENGTHEN
LEADER		MANAGE		CORE
IN TARGET		THE PORTFOLIO		CAPABILITIES &
MARKETS				PLATFORMS

	F O U N D A T I O N A L E N A B L E R S
•	Results-driven Culture	• Apogee Management System (AMS)
•	Talent Development	• Best-in-class Governance

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Market Outlook

FMI forecast for construction put in place in the U.S. by building type

Building Type	Forecasted 2024	Forecasted Put-in-Place
Growth Rate	Spend ($ billions)
Multifamily residential	-8%	$133
Office (excluding data centers)	-2%	$74
Commercial	-2%	$130
Health care	+8%	$69
Educational	+9%	$127
Lodging	+14%	$27
Amusement & recreation	+7%	$35
Transportation	+10%	$70

Source: FMI 2024 North American Engineering and Construction Outlook, April 2024

Shifting market dynamics driving continued focus on diversifying our project mix

Q1 FY2025 Earnings | June 27, 2024	Apogee Enterprises, Inc.	6

Increasing our focus on growth

Embedding

1. Growth Mindset

Capture share

• Geographic expansion
• Improved product & service performance

Focus on higher growth opportunities

• Architectural product diversification
• Expansion into adjacent markets

Invest to accelerate growth

• Organic investments
• Acquisitions that complement our strategy

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Apogee Enterprises, Inc.

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Consolidated Results

$ in millions, except EPS	Q1 FY25	Q1 FY24	Change
Net sales	$331.5	$361.7	(8.3)%
Adjusted operating income*	$42.5	$33.8	25.9%
Adjusted operating margin*	12.8%	9.3%	350 bps
Adjusted EBITDA*	$52.6	$43.8	20.2%
Adjusted EBITDA margin*	15.9%	12.1%	380 bps
Adjusted diluted EPS*	$1.44	$1.05	37.1%

*Non-GAAP metric, see reconciliation table

Commentary

• Net sales declined due to lower volumes in Framing Systems, Glass, and LSO, partially offset by growth in Services.
• Adjusted operating margin expansion driven by:
• • Improved project mix in Services
  • Favorable material costs
  • Lower insurance-related costs
  • Productivity gains
  • and lower bad debt expense
  • Partially offset by the impact of lower volume
• Adjusted diluted EPS growth driven by higher adjusted operating income and lower interest expense

Q1 FY2025 Earnings | June 27, 2024

Apogee Enterprises, Inc.

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Segment Results

First Quarter FY2025

	Segment	Adjusted
	net sales	operating
	$M	margin* %
Architectural Framing Systems	$133.2	14.5%
Year-over-year change	(18.9)%	240 bps
Architectural Glass	$86.7	19.7%
Year-over-year change	(10.8)%	270 bps
Architectural Services	$99.0	5.7%
Year-over-year change	10.7%	640 bps
Large-Scale Optical	$21.2	22.9%
Year-over-year change	(5.6)%	(170) bps

Q1 FY2025 Earnings | June 27, 2024

•	*Adjusted operating margin is a non-GAAP metric, see reconciliation table
•	Segment net sales is defined as net sales for a certain segment and includes revenue related to intersegment transactions.
•	Net sales intersegment eliminations are reported separately to exclude these sales from our consolidated total.
•	Segment operating income is equal to net sales, less cost of goods sold, SG&A, and any asset impairment charges associated with the segment.
•	Segment operating income includes operating income related to intersegment sales transactions and excludes certain corporate costs that are not
	allocated at a segment level. We report these unallocated corporate costs in Corporate and Other.	9
•	Operating income does not include any other income or expense, interest expense or a provision for income taxes.

Cash Flow and Balance Sheet

$ in millions	Q1 FY2025	Q1 FY2024
Cash flow from operations	$5.5	$21.3
Capital expenditures	$7.2	$7.4
Free cash flow*	$(1.7)	$13.9
Share repurchases	$15.1	$5.2
Dividends	$0	$5.2
	Jun 1, 2024	Mar 2, 2024
Total debt	$77.0	$62.0
Cash & equivalents	$30.4	$37.2
Net debt**	$46.6	$24.8
Net leverage**	0.2x	0.1x

*Free cash flow is a non-GAAP metric which the Company defines as cash flow from operations less capital expenditures. **Net debt and net leverage are non-GAAP metrics. See reconciliation table.

Tables may not foot due to rounding

Commentary

• Lower cash from operations primarily driven by increased working capital requirements compared to last year's Q1
• Q1 cash flow is typically the lowest of the year due to the timing of incentive and tax payments
• Net leverage remains low at 0.2x
• No significant debt maturities until 2027
• Repurchased $15.1 million of stock in the quarter

Strong financial position - Deploying capital to drive value

Q1 FY2025 Earnings | June 27, 2024

Apogee Enterprises, Inc.

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