Loading...
01/11 18:47
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals mixed signals: financial performance is weak with declining sales and margins, but there is optimism in the integration of UW Solutions and potential M&A activity. The Q&A highlights concerns over tariffs and cash flow, but management shows confidence in growth prospects. The market cap indicates moderate sensitivity. Overall, the stock is likely to remain stable, with positive shareholder returns and strategic plans balancing out financial challenges.
Net Sales $346 million, down 4.5% year-over-year; impacted by a 7.9% negative effect from an extra week in the previous year and lower volume in metals and glass, partially offset by $23 million from UW Solutions acquisition.
Adjusted Operating Margin 8.3%, down 120 basis points year-over-year; primarily driven by unfavorable sales leverage from lower volume and a less favorable product mix.
Adjusted Diluted EPS $0.89, down 22% year-over-year; primarily driven by lower adjusted operating income and higher interest expense.
Metals Segment Net Sales $112 million, down 19% year-over-year; 7.8% decline due to the extra week last year, with the remainder driven by lower volume from operational disruptions.
Metals Segment Adjusted Operating Margin 2.8%, down from previous year; impacted by unfavorable sales leverage from lower volume and less favorable mix.
Services Segment Net Sales Increased 10.9% year-over-year; benefited from increased volume and a favorable mix of projects.
Services Segment Adjusted Operating Margin 7.2%, improved by 140 basis points year-over-year; driven by a more favorable mix of projects.
Glass Segment Adjusted Operating Margin 14.6%, down from 19.7% year-over-year; primarily driven by unfavorable leverage from lower volume.
Performance Surfaces Segment Net Sales $47.9 million, up 77% year-over-year; primarily due to inorganic sales from UW Solutions.
Performance Surfaces Segment Adjusted Operating Margin 19.5%, reflecting the dilutive impact from UW Solutions and unfavorable sales leverage from lower organic volume.
Full Year Net Sales Declined 3.9%; included a 2% unfavorable impact from an extra week last year and 2.3% inorganic growth from UW Solutions.
Full Year Adjusted Operating Margin Improved 70 basis points to 11%; driven by improved operating margin in services and lower quality and insurance-related costs.
Full Year Adjusted Diluted EPS $4.97, up 4.2% year-over-year; primarily driven by higher adjusted operating margin and lower non-operating expenses.
Cash Flow from Operations (Q4) $30 million; year-to-date total of $125 million.
Capital Expenditures (CapEx) $36 million for the year; included investments for capacity expansion and productivity enhancements.
Shareholder Returns $67 million returned through dividends and share buybacks for the full year.
Consolidated Leverage Ratio 1.3; indicates a strong balance sheet with no near-term debt maturities.
Acquisition of UW Solutions: The acquisition of UW Solutions is expected to provide a strong growth platform and has already contributed $23 million in revenue.
Performance Surfaces Segment Growth: The Performance Surfaces segment is anticipated to deliver high single-digit organic growth, supported by increased distribution at a key retail customer.
Market Outlook for Nonresidential Construction: Forecasts indicate a slight decline in nonresidential construction, with specific sectors like office and commercial projected to decline, while education and healthcare show pockets of growth.
Impact of Tariffs: New tariffs are expected to impact operations, with an estimated unfavorable adjusted EPS impact of $0.45 to $0.55.
Project Fortify Phase 2: The second phase of Project Fortify aims to drive further efficiencies, with expected annualized pre-tax cost savings of $13 million to $15 million.
Operational Improvements: Sustainable operating improvements have been achieved, with adjusted operating margins reaching 11%.
Focus on Higher-Margin Offerings: The company is refocusing on differentiated higher-margin offerings, having exited less profitable business lines.
M&A Strategy: Apogee is actively pursuing M&A opportunities to diversify its business and enhance growth potential.
Market Headwinds: The company anticipates continued headwinds in nonresidential construction during calendar year 2025, with leading indicators suggesting slowing conditions and a cautious outlook for market growth.
Tariff Exposure: The company faces direct and indirect tariff impacts, particularly from Section 232 tariffs on aluminum products, which could affect costs and overall inflation, thus impacting demand.
Operational Challenges in Metals Segment: The Metals segment experienced operational disruptions due to the launch of standardized product lines, leading to production delays and increased costs.
Economic Factors: Interest rate-sensitive sectors such as office, commercial, lodging, and multifamily are projected to decline, while growth is expected in education, health care, and transportation.
Supply Chain Challenges: The company is managing supply chain disruptions and raw material cost inflation, particularly concerning aluminum, paint, chemicals, and lumber.
Project Fortify Phase 2: The second phase of Project Fortify is expected to incur $24 million to $26 million in pre-tax restructuring charges, with anticipated annualized savings of $13 million to $15 million.
Earnings Guidance Impact: The company estimates an unfavorable adjusted EPS impact of $0.45 to $0.55 due to tariffs, primarily affecting the first half of fiscal 2026.
Strategic Transformation: Over the past four years, Apogee has executed a 3-pillar strategy leading to sustainable operating improvements, including facility consolidation, supply chain integration, and a focus on higher-margin offerings.
Acquisition of UW Solutions: The acquisition is expected to provide a strong growth platform, with significant progress on integration and anticipated double-digit organic growth in fiscal 2026.
Project Fortify Phase 2: This initiative aims to drive further efficiencies, with expected pre-tax restructuring charges of $24 million to $26 million and annualized savings of $13 million to $15 million.
M&A Pipeline: Apogee continues to actively pursue M&A opportunities to diversify its business and enhance growth potential.
Fiscal 2026 Revenue Guidance: Expected net sales between $1.37 billion to $1.43 billion.
Fiscal 2026 EPS Guidance: Adjusted diluted EPS expected in the range of $3.55 to $4.10, including an estimated unfavorable impact from tariffs of $0.45 to $0.55.
Tariff Impact: Approximately 60% of the tariff impact will affect the Services segment, with 30% in Metals and the remainder in Glass and Surfaces.
Capital Expenditures: Expected capital expenditures between $35 million to $40 million.
Operating Cash Flow: Expected decline year-over-year due to arbitration award payment and higher interest expense.
Dividend Increase: We have steadily increased our dividend.
Share Buybacks: During the year, we repurchased $30 million of stock.
Total Capital Returned to Shareholders: For the full year, we returned $67 million to shareholders through dividends and share buybacks.
The earnings call reveals mixed signals. While there are positive elements like the strong performance of the Performance Surfaces segment and a robust M&A pipeline, challenges such as rising aluminum costs, margin pressures, and unclear management responses on key issues temper optimism. The stable guidance and strategic consistency prevent a negative outlook, but the lack of strong catalysts keeps the sentiment neutral. Given the market cap of $1.4 billion, the stock is likely to see minor fluctuations in the short term, resulting in a neutral prediction.
The earnings call reveals strong organic growth in Performance Surfaces, a growing services backlog, and strategic cost management to maintain margins despite competitive pressures. The company raised fiscal 2026 guidance, indicating confidence in future performance. However, concerns exist regarding the Metals segment due to rising costs and tariffs. Overall, the positive aspects outweigh the negatives, suggesting a likely positive stock price movement, especially for a small-cap company.
The earnings call presents a mixed picture: while Services and Performance Surfaces segments show growth, Metals and Glass face challenges. The Q&A reveals management's cautious optimism but highlights tariff impacts and operational challenges. Despite strong guidance, the market might focus on immediate headwinds, leading to a neutral sentiment. The market cap suggests moderate reaction.
The earnings call reveals mixed signals: financial performance is weak with declining sales and margins, but there is optimism in the integration of UW Solutions and potential M&A activity. The Q&A highlights concerns over tariffs and cash flow, but management shows confidence in growth prospects. The market cap indicates moderate sensitivity. Overall, the stock is likely to remain stable, with positive shareholder returns and strategic plans balancing out financial challenges.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
