Apogee Enterprises Reports Q3 Financial Results with Increased Sales but Declining Profitability

Apogee Enterprises, Inc. reported its financial results for the third quarter and nine months ended November 30, 2024, revealing a slight increase in net sales but a decline in profitability compared to the previous fiscal period. The company achieved net sales of $341.3 million for the third quarter, a 0.5% increase from $339.7 million in the same period last year. However, net earnings fell to $20.99 million, or $0.96 per diluted share, down from $26.97 million, or $1.23 per diluted share, in the prior year. For the nine-month period, net sales decreased by 3.8% to $1.015 billion, while net earnings remained relatively stable at $82.57 million compared to $83.88 million in the previous year.

The financial performance reflects several strategic developments, including the acquisition of UW Solutions for $241.8 million, which contributed $8.8 million in net sales during the quarter. This acquisition is expected to enhance Apogee's capabilities in the Large-Scale Optical segment. The company also reported increased selling, general, and administrative (SG&A) expenses, which rose to 17.7% of net sales, primarily due to acquisition-related costs and restructuring expenses associated with its Project Fortify initiative aimed at streamlining operations.

Operationally, Apogee's Architectural Services segment showed strong growth, with net sales increasing by 10.8% to $104.9 million, driven by a favorable project mix. Conversely, the Architectural Glass segment experienced a significant decline, with net sales dropping 22.8% to $70.2 million due to lower end-market demand. The Architectural Framing Systems segment also faced challenges, with a 1.1% decrease in net sales. The company’s total assets increased to $1.18 billion, up from $884 million, largely due to the acquisition and increased inventories.

Looking ahead, Apogee Enterprises anticipates continued challenges in the market, particularly in the Architectural Glass and Framing Systems segments, but remains optimistic about the integration of UW Solutions and the potential for improved margins through its restructuring efforts. The company expects to realize annualized cost savings of $13 million to $14 million from Project Fortify, which is projected to be completed by the end of the fourth quarter of fiscal 2025. Apogee's management remains focused on enhancing operational efficiency and driving growth through strategic acquisitions and improved product offerings.