亞普奇企業 (APOG) 2027 財年第二季財報電話會議：上調財測指引

重點提要

• 2027 財年第二季淨銷售額年增 9.2% 至 3.911 億美元，得益於 CalWall、定價與有利的產品組合，但部分被金屬與玻璃銷量下滑所抵銷。
• 調整後稀釋每股盈餘 (EPS) 成長超過 19% 至 1.17 美元，調整後 EBITDA 利潤率則擴增 30 個基點至 12.7%。
• Apogee 上調 2027 財年展望，預計淨銷售額為 14.6 億至 15.0 億美元，調整後稀釋每股盈餘為 3.00 至 3.40 美元。
• 服務事業群連續第 10 個季度實現銷售成長。在手訂單達 8.33 億美元，年增 5%，季增 13%。
• 玻璃事業群銷售額成長超過 21% 至 8,740 萬美元，其中包括來自 CalWall 的 1,640 萬美元。部門利潤率較上一季改善，但仍低於去年同期水準。
• 管理層表示，定價、生產力提升以及 Fortify 第二階段節約成本支撐了業績，而原料通膨、製造成本與疲軟的市場需求仍帶來壓力。

關鍵財務數據

業務與營運表現

金屬：淨銷售額成長 1.8% 至約 1.44 億美元。有利的定價彌補了銷量下降。在定價、生產力、有利的產品組合以及 Fortify 第二階段成本節約的支撐下，調整後 EBITDA 利潤率擴增至 15.4%。鋁成本上升與銷量下降則抵銷了部分利好。

服務：淨銷售額成長近 8%，主要得益於銷量增加。受到專案組合和銷量的推動，調整後 EBITDA 利潤率上升至 5.8%。本季末在手訂單達 8.33 億美元，反映出儘管競爭環境激烈，仍持續獲得專案合約。

玻璃：淨銷售額成長超過 21% 至 8,740 萬美元，其中包含 CalWall 貢獻的 1,640 萬美元以及有利的產品組合。銷量與價格偏低反映出需求持續軟化。調整後 EBITDA 利潤率為 14.9%，高於第一季的 8.7%，但低於去年同期。管理層將季增表現歸功於更強的執行力、接單率上升、生產力提升以及更嚴格的成本管理。

高效能表面：在銷量增加和有利定價的帶動下，淨銷售額成長超過 14% 至約 5,500 萬美元。由於原料成本上升抵銷了部分優勢，調整後 EBITDA 利潤率下降至 22.5%。

CalWall 的表現持續符合管理層收購時的預期。Apogee 仍朝著前 12 個月實現約 8,500 萬美元營收以及 15% 調整後 EBITDA 利潤率的目標前進。

Apogee 還收購了 GroGlass，引進差異化技術並擴大在歐洲及高價值終端市場的布局。管理層目前預計 GroGlass 在前 12 個月將產生約 3,000 萬美元的營收與 25% 的調整後 EBITDA 利潤率。

管理層展望

基於上半年的表現、各業務的執行狀況以及 CalWall 與 GroGlass 的預期貢獻，Apogee 上調了 2027 財年的財務展望。

管理層預計第三季和第四季的淨銷售額與調整後稀釋 EPS 將相對平衡。CalWall 和 GroGlass 預計將對營收成長做出實質貢獻，但對 2027 財年調整後 EPS 的貢獻預計較小。

風險與關注領域

• 玻璃市場狀況依然軟化，可承接專案減少、銷量下滑且專案出現延期。
• 金屬和玻璃銷量下降拖累了本季的合併業績。
• 鋁、原料、製造與運費成本上升持續壓迫部門利潤率。
• 高效能表面的調價措施旨在抵銷投入成本通膨，但管理層強調利潤率恢復仍取決於生產力提升與成本削減。
• 該公司在整合兩項收購的同時保持 1.7 倍的槓桿比率。管理層預計若無額外收購，現金生成將有助於降低槓桿率。

分析師問答亮點

在玻璃業務方面，管理層表示市場環境並未實質改善。業績好轉主要反映了第一季後採取的行動計畫之執行成效，包括接單率提升、生產力改善以及更強的成本控制。

在金屬定價方面，公司解釋稱鋁成本上升通常已納入整體定價結構中，而非主要透過附加費處理。管理層亦將生產力與 Fortify 第二階段的成本節約視為推動利潤率的主要因素。

關於資本配置，管理層對資產負債表及預期現金生成表達了信心。收購管道依然活躍，但公司表示將保持謹慎選擇，並專注於整合、營運結果與現金流。

法說會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Thank you. Good day and thank you for standing by. Welcome to Apogee Enterprises' second quarter earnings conference call. [Operator Instructions] A reminder, this conference is being recorded for replay purposes. I will now turn the conference over to Jeremy Steffan, Vice President, Investor Relations and Communications, to begin. Jeremy, please go ahead.

Jeremy Steffan

Thank you. Good morning and welcome to Apogee Enterprises' fiscal 2027 second quarter earnings call. On call today are Donald Nolan, Apogee's Chief Executive Officer, and Mark A. Augdahl, our Chief Financial Officer. During this call, the team will reference certain non-GAAP financial measures. Definitions of these measures and a reconciliation to the nearest GAAP measures are provided in the earnings release and slide deck, which are available in the investor relations section of our website. As a reminder, today's call will contain forward-looking statements. These reflect management's expectations based on currently available information. Actual results may differ materially from those expressed today. More information about factors that could affect Apogee's business and financial results can be found in our press release and in the company's SEC filings. With that, I'll turn the call over to Don.

Donald Nolan

Thanks, Jeremy, and good morning, everyone. We appreciate you joining us today. I'm pleased to report strong second quarter results that exceeded our expectations and continued the momentum we established in the first quarter. Revenue was $391 million, up more than 9%, and adjusted EPS was $1.17, reflecting disciplined execution across the business. We benefited from swift pricing actions, productivity improvements, and the favorable contribution from our recent acquisition of CalWall. Based on our stronger than expected first half performance, we are raising our fiscal 2027 outlook for both net sales and adjusted diluted earnings per share. Across our segments, we continue to make meaningful progress on pricing disciplines, productivity, and operating improvements, demonstrating our ability to execute effectively despite evolving macroeconomic conditions.

We are advancing our strategic priorities through the acquisitions of CalWall and GroGlass, expanding our differentiated product offerings and technical capabilities while increasing our exposure to attractive end markets. We are also building on the successful integration of UW Solutions and the first-year performance as Apogee delivered on our deal model targets. This proven execution strengthens our confidence in successfully integrating these businesses and achieving their first-year financial objectives. In metals, revenue and profitability improved year over year as pricing actions, productivity initiatives, and Fortify Phase 2 cost savings continued to gain traction. We also continue to enhance operational execution through improvements in quality, on-time delivery, and customer engagement. Services delivered their 10th consecutive quarter of top-line growth while increasing their backlog again this fiscal year. Strong award activity resulting in continued backlog expansion demonstrates our ability to consistently win new business and support our confidence in the segment's long-term growth potential.

Performance services delivered another strong quarter of revenue growth, reflecting continued demand for our differentiated products and reflects positively on our strategic initiative to acquire businesses that have a greater growth profile. As material inflation increased, we maintained pricing discipline and realized the benefits of pricing actions implemented earlier this year. We will continue to actively manage pricing to preserve margins and offset inflationary pressures. In our legacy glass business, while market conditions remain challenging, we made meaningful progress during the quarter against the action plan we outlined previously. We have advanced several commercial initiatives aimed at increasing demand, implemented productivity improvements across our operations, and remained disciplined on cost. While we still have work to do and the broader market remains pressured, we are encouraged by the progress achieved to date and believe the actions underway are helping position the business for improved performance and stronger profitability over time. Across the company, we are seeing the benefits of the actions we've taken over the last year reflected in our results.

While market conditions remain mixed, our focus on pricing, productivity, operational execution, and disciplined cost management continues to strengthen the business and supports our confidence in the increased outlook we announced today. In September, we announced our second acquisition of the fiscal year as we continue to execute our growth strategy while maintaining a disciplined approach to capital allocation. With GroGlass, we are adding a highly differentiated business with leading technology, strong customer relationships, and compelling growth opportunities. Acquisition supports our strategy of investing in higher value products and capabilities that improve the quality and durability of our portfolio, and we are excited about the opportunities ahead as we welcome the GroGlass team to Apogee. As part of performance services, GroGlass will expand our technical capabilities and further increase our exposure to attractive, higher value end markets. This will strengthen our presence in Europe while supporting broader global opportunities. We believe the business will enhance our profitability profile and accelerate value creation over time.

As we begin integrating GroGlass, our focus will be on disciplined execution and delivering the strategic and financial benefits that supported our investment thesis. Turning to CalWall, I continue to be pleased with our progress following the acquisition. As discussed last quarter, our focus has been on preserving the strengths that made CalWall successful while thoughtfully integrating the business into Apogee. Integration activities across finance, human resources, sales and marketing, and other key functions are progressing as planned, and collaboration between CalWall and Apogee teams has been very strong. Importantly, our confidence in the strategic and financial rationale remains high. CalWall continues to perform in line with our expectations, and we remain on track to achieve the first 12-month financial targets. We continue to see opportunities to leverage CalWall's differentiated daylighting solutions and specification-driven business model, while expanding relationships with architects, designers, and glazing contractors across the broader Apogee portfolio.

Overall, I'm encouraged by the progress we're making across the organization. Strong execution, continued advancement of our strategic priorities, and disciplined capital allocation are strengthening Apogee's growth and profitability profile and positioning us well to create long-term shareholder value. With that, I'll turn the call over to Mark to provide additional detail on our financial results and outlook.

Unknown Speaker

Thanks, Don, and good morning, everyone. Let me begin with a review of our second quarter performance and then discuss our updated outlook for the remainder of fiscal 2027, which reflects our strong first half performance and confidence in the business. Beginning with our consolidated results, net sales increased 9.2% to $391.1 million. Improvement was primarily driven by inorganic growth from the CalWall acquisition, price across most segments, and positive mix. This was partially offset by lower volume in metals and glass as challenging market conditions persisted during the quarter. Adjusted EBITDA margin increased to 12.7% from 12.4% a year ago, driven by favorable price, productivity improvements, Fortify Phase 2 cost savings, and the accretive impact of the CalWall acquisition. Those were partially offset by higher material and manufacturing costs and the impacts from lower volume. Adjusted diluted EPS improved over 19% to $1.17, exceeding our own expectations, and reflecting improved operating performance across the business along with lower interest expense.

Turning to our segment results, metals net sales increased 1.8% to approximately $144 million, largely due to favorable price partially offset by lower volume. Adjusted EBITDA margin expanded to 15.4%, driven by favorable price, increased productivity, cost savings from Fortify Phase 2, and favorable mix. Offsetting these benefits were higher aluminum costs and lower volume. The services segment delivered its 10th consecutive quarter of net sales growth, improving by almost 8%, primarily driven by volume. Adjusted EBITDA margin increased to 5.8% due to project mix and higher volume. Backlog ended the quarter at $833 million, up 5% year-over-year and 13% sequentially, reflecting continued success with project awards in a highly competitive environment. Glass net sales increased over 21% to $87.4 million, primarily driven by a $16.4 million contribution from the CalWall acquisition and favorable mix. That was partially offset by lower volume and price as in-market demand softness persisted. Adjusted EBITDA margin declined to 14.9%, but greatly improved sequentially from 8.7% in the first quarter. The year-over-year change was due to lower price, higher manufacturing and freight costs, and lower volume, partially offset by the accretive contribution of the CalWall acquisition and favorable mix.

As Don mentioned, we are pleased with the progress of the CalWall integration and the business continues to perform in line with our acquisition expectations. We remain on track to deliver the first 12-month financial targets of approximately $85 million in revenue and a 15% adjusted EBITDA margin. Turning to performance surfaces, the segment delivered another strong quarter with net sales increasing by over 14% to approximately $55 million, driven by higher volume and favorable price. Adjusted EBITDA margin decreased to 22.5% due to higher material costs partially offset by price and higher volume. Looking at cash flow in the balance sheet. Year to date net cash provided by operating activities was $43.3 million compared to $37.3 million a year ago. In the second quarter, we repurchased $6.4 million of stock and returned $5.5 million to shareholders through dividends. Our balance sheet at the end of the quarter was strong, with consolidated leverage ratio of 1.7 times, no near-term debt maturities, and significant capital available for the GroGlass acquisition and other future deployments.

Before turning to the outlook, I'd like to briefly comment on our recent acquisition of GroGlass. We are excited about the opportunities this acquisition creates for Apogee, adding highly differentiated technology, broadening our reach into attractive end markets, and further expanding the capabilities of our performance surfaces segment. Based on our current expectations, we anticipate approximately $30 million in revenue and a 25% adjusted EBITDA margin in the first 12 months. We believe GroGlass is a highly complimentary addition that will enhance our long-term growth and profitability profile of both performance surfaces and Apogee as a whole. Turning to our outlook, we are raising our fiscal 2027 net sales and adjusted diluted EPS guidance. These revised expectations reflect our strong first half performance, continued execution across the business, the anticipated contributions from CalWall and GroGlass, and current market conditions. We now expect net sales between $1.46 billion and $1.5 billion and adjusted diluted EPS in the range of $3 to $3.40.

CalWall and GroGlass are expected to contribute meaningfully to revenue growth. While their impact on adjusted diluted EPS is expected to be modest in fiscal 2027, we anticipate both businesses will further strengthen Apogee's strong cash flow generation profile this year and beyond. Additionally, we now expect interest expense of approximately $15 million, an adjusted effective tax rate of approximately 26%, with capital expenditures between $35 million and $40 million. Looking ahead to the second half, we expect both net sales and adjusted diluted EPS to be relatively balanced across the third and fourth quarters. Overall, we are pleased with our first half performance and the progress we continue to make across the business. The momentum we have built together with the continued execution of our strategic priorities, reinforces our confidence in the increased fiscal 2027 outlook we are providing today. We will now open the call to questions. Operator, please go ahead.

Operator

Thank you. [Operator Instructions] Please stand by while we compile the Q&A roster. Our first question coming from the line of Julio Romero with Sidoti & Company. Your line is now open.

分析師問答

Julio Romero

Good morning, Don, Mark, and Jeremy. To start, maybe on the glass segment, it held up a little bit better than we expected. The organic sales declined to a much lesser degree than the previous two quarters. Can you speak to how that segment's performing? You know, some of that related to the new segment president that I believe installed a couple of months ago, you know, how much is related to improving mix or any other segment initiatives there?

Donald Nolan

Yeah, sure. Yes. The conditions haven't changed, quite frankly, in the marketplace. We continue to see soft conditions out there. And, you know, there's fewer jobs at lower volumes, you know, to chase. So, and we're also seeing some delay in projects, but, you know, I would attribute this to significantly improved execution. At the end of Q1, we talked a little bit about an action plan that we put in place. Well, as a result of that, we are seeing increased order rates, enhanced operational productivity, and certainly strengthened cost management. And all those contributed to the improved performance in the segment. I mean, don't get me wrong. We have some work to do yet, but we're making progress. I'm happy with that progress.

Julio Romero

Excellent, very helpful there. And on the metals segment, can you help us think about the split between structural price increases and the surcharges you've implemented to date and then how much does the updated adjusted guidance range embed any give back as some of those surcharges unwind?

Unknown Speaker

We'll start off. So first of all, within the metal segment, the impact of surcharges is probably a little bit less. What we typically do from a pricing perspective is as aluminum prices go up, we build those actually into our pricing structure, not our surcharges. So it is built into the overall price. I would tell you that metals performed well in the quarter. We were really pleased with their operational performance. And then if you kind of look at it from a year-over-year perspective, certainly the impact of Project Fortify Phase 2 has had a significant impact on its overall, uh, on the overall cost structure.

Donald Nolan

Yes, I mean, just to emphasize, look, very happy with the pricing actions that they took. Contributed significantly to the quarter. Productivity improvement, though, is also a big part of the story. And as Mark mentioned, Fortify Phase 2 cost actions. The other thing we think we had as a result of the pricing actions, we think we pulled some of the volume. So that's also a contributor.

Julio Romero

Great, that's helpful there. And then, you know, just thinking about where you are in the leverage here. A little bit above, I think, your historical, your 1.5 times target. You've been active with the portfolio here. You've repurchased some shares, I believe $16 million year to date. Just help us think about how you rank your capital allocation priorities. And does the M&A pipeline remain active here?

Unknown Speaker

You had a couple of points there, Julio. I'll start off. You know, first and foremost, we feel really confident about where we're at from a leverage perspective. I don't think there's any issues there yet. We might be a little bit higher, but obviously that came with a couple of acquisitions in the quarter. We're confident in the amount of cash that we're going to be able to derive over the remainder of the year. To the extent that we don't identify another acquisition, we feel like that's going to be coming down throughout the remainder of the year. To the M&A point, you know, our pipeline remains active and we believe there's still a very full funnel to do any kind of acquisition, but obviously we're going to be very selective at this point. If the right acquisition comes around at the right price, we'll have to consider executing on that. But as of right now, we're really focused on delivering our results, delivering that cash flow.

Julio Romero

Excellent.

Operator

Thank you. Our next question coming from the line of Bhargav Joshi with Singular Research. Your line is now open.

Unknown Speaker

Hi, I'm Bhargav with Anthony Gikas, from Singular Research. My question is on the performance surfaces segment, just trying to understand the margin trajectory here. Are you seeing sort of margins recover as you pass on the input costs or are the customers pushing back?

Unknown Speaker

Joshi, would you mind repeating the question? Maybe we didn't, I'm not sure we caught the whole thing.

Unknown Speaker

All right. I was just trying to understand the price increases that have taken in services segment. So are you seeing sort of margins recover as you pass on the input costs or are the customers pushing back?

Donald Nolan

Yes, so we have been implementing pricing now for a couple of quarters, and I would say doing what we needed to do in order to recover margins. So it's a balance, though. We mentioned in metals, for instance, it's a combination of productivity, cost out and pricing, and between the three, using that to drive margin recovery. But it's not all pricing.

Unknown Speaker

Understood. Okay.

Operator

Thank you. And I'm showing no further questions in the queue at this time. I will now turn the call back over to Mr. Nolan for any closing comments.

Donald Nolan

Thank you, everybody. In closing, I continue to be encouraged by the progress we are making across the business. Our strong first half performance reflects the dedication of our employees, whose commitment to our customers and operational excellence drives our success every day. We're delivering strong results in the current environment while continuing to strengthen our business through digital and strategic investments. The progress we've made this year, including the acquisitions of CalWall and GroGlass and the continued execution of our strategic priorities, reinforces our confidence in the path ahead and our ability to create sustainable, long-term value for shareholders. Thank you for your continued interest and support.

Operator

This concludes today's conference call. Thank you for your participation and you may now disconnect.

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