Apogee Enterprises, Inc. Q1 FY2026 earnings call

• Q1 results exceeded expectations with revenues stronger than expected, led by Glass and Services. - Tariffs impacted Metals and Services, but mitigation plans in place; expect to substantially mitigate tariff impact in second half. - Took aggressive actions under Project Fortify Phase 2 to drive $13M-$15M annualized savings. - Raised fiscal year outlook for revenue and earnings due to momentum in Metals (sequential improvement), Glass (revenue pipeline picking up), and Performance Surfaces (organic and inorganic growth). - Investments in capacity expansion and UW Solutions acquisition to expand market reach and product offerings.

Consolidated net sales increased 4.6% to $346.6 million. Metals: net sales declined 3.4%, adjusted EBITDA margin 7.3% (less favorable mix, higher aluminum costs, etc.). Services: net sales grew 7.6% (fifth consecutive quarter), adjusted EBITDA margin 5.7% (higher tariff expense). Glass: net sales declined, adjusted EBITDA margin moderated. Performance Surfaces: net sales increased due to UW Solutions acquisition, adjusted EBITDA margin 18.8% (dilutive impact from UW Solutions, etc.). Revenue contributions: Glass and Services led Q1 revenues, Metals gained momentum, Performance Surfaces benefited from UW Solutions acquisition.

• Raised net sales outlook to $1.40 billion to $1.44 billion and adjusted diluted EPS to $3.80 to $4.20. - Second quarter expected to sequentially improve, with year-over-year net sales and adjusted EPS growth in second half. - Adjusted effective tax rate approximately 27.5%, capital expenditures between $35 million to $40 million. - Expect Metals to continue sequential improvement, Glass revenue growth in Q3/Q4, and Performance Surfaces strong inorganic and organic growth.

• Tariffs impacting Metals and Services' financial results. - Market challenges and potential material changes in trade policy affecting business and financial results.

Q: Elaborate on the Glass business revenue pipeline.

A: Ty mentions good visibility 6 months out, team built rigor in opportunity pipeline, pivoted to smaller jobs to fill market gaps, and monthly/quarterly deep dives on sales opportunity pipelines. Matt adds working with team to titrate price and opportunities to generate EBITDA dollars.

Q: Talk about the Metals segment momentum.

A: Ty and Matt discuss month-to-month sequential improvement due to operational improvements, better lead times and on-time completeness, regaining customer confidence. Matt notes sequential improvement in sales and EBITDA margin from Q4 to Q1, expecting further sequential improvement in Q2.

Q: Quantify the EPS impact from tariffs.

A: Matt states the annual range for tariff impact was revised to $0.35 to $0.45, with primary impact in first half, some favorable trends in Q1 and expected in Q2, due to a mix of operational shifts and commodity price factors.

Q: Discuss the M&A pipeline.

A: Ty says M&A pipeline is active but cautious sellers due to macro issues, still focused on strategic targets identified, no step down in multiples but reasonableness in valuations, private equity sidelined to some extent.