Apogee Enterprises, Inc.

Apogee reported first-quarter net sales of $343 million, down 1.1% year over year, adjusted diluted EPS of $0.57, and adjusted EBITDA margin of 9.4% versus 9.9% a year ago. Metals net sales fell 4.8% to $122 million and margin expanded to 11.2%; services net sales grew 8.2% and backlog ended at $735 million, up 8% year over year; glass net sales fell 7.6% to $67.7 million and margin declined to 8.7%; performance surfaces sales rose about 5%. Management reiterated full-year fiscal 2027 guidance for net sales of $1.38 billion to $1.43 billion and adjusted EPS of $2.70 to $3.25, with second-quarter net sales expected to be slightly lower and EPS lower year over year. Excluding Kalwall, they expect interest expense of about $10 million, an adjusted tax rate of 26% to 27%, and capital expenditures of $35 million to $40 million; including Kalwall if it closes in early July, sales guidance would move to $1.43 billion to $1.48 billion and interest expense to about $14 million.

Donald Nolan said the quarter reflected strong execution in a difficult backdrop, with higher aluminum costs, macro uncertainty, and elevated rates offset by pricing actions and cost control. He emphasized that metals, services, and performance surfaces all showed momentum, while glass remains pressured and is being addressed with a performance improvement plan focused on order rates, productivity, and cost management. Nolan framed Kalwall as a strategic step toward a more differentiated, higher-margin, specification-driven portfolio and said M&A remains active.

Mark Augdahl said consolidated sales declined because of lower volume in metals and glass, partly offset by pricing and mix, while adjusted EBITDA margin slipped to 9.4% due to higher material and freight costs and lower volume. He noted adjusted EPS of $0.57 was above expectations and aided by lower interest expense, and he highlighted operating cash flow of $7.4 million versus $19.8 million of cash use a year ago. He also said Apogee repurchased $9.7 million of stock, paid $5.6 million in dividends, ended with leverage of 1.3x, and has no near-term debt maturities. On Kalwall, he said the deal fits the capital allocation framework, should contribute about $85 million of revenue at roughly a 15% adjusted EBITDA margin in the first 12 months, and is expected to be accretive in year one.

Analysts focused on pricing realization, Kalwall’s synergy potential, and exposure to government-funded projects, with management saying pricing and surcharges are being used across the portfolio to offset volatile input costs. On Kalwall, management said the acquisition complements Viracon, creates cross-selling opportunities across the architectural portfolio, and offers about $4 million of operational synergies by fiscal 2029, with margins expected to rise from roughly 15% to 20%. On glass, management said the weakness is mainly due to fewer jobs and lower volume rather than a stated pricing war, and they also announced a new glass segment president to sharpen execution.