On this page of StockholderLetter.com we present the latest annual shareholder letter from APOGEE ENTERPRISES, INC. — ticker symbol APOG. Reading current and past APOG letters to shareholders can bring important insights into the investment thesis.

 •  5/13/2025 Letter Continued (Full PDF)
 •  5/12/2023 APOG Stockholder Letter
 •  5/9/2024 APOG Stockholder Letter
 •  More "Construction Materials & Machinery" Category Stockholder Letters
 •  APOG Benford's Law Stock Score = 98

APOG Shareholder/Stockholder Letter Transcript:

Apogee Enterprises, Inc.
Fiscal 2025 Annual Report


   I am proud of the results our team delivered in fiscal 2025,
capping a tremendous three-year transformation, while
embracing new challenges and positioning the company
for our next chapter of growth.   
Ty R. Silberhorn, Chief Executive Officer
Fellow shareholders,
We completed another successful year in fiscal 2025, as our
team continued to execute our strategy. We were able to deliver
increased adjusted operating margins and record adjusted
diluted EPS i. These results capped three years of substantial
improvements in our operating and financial performance since
we introduced our new strategic direction. I want to thank the
entire Apogee team for continuing to build on our track record
of success.
Executing Our Strategy
In November 2021, we introduced our three-pillar strategy with
the goal of building a stronger foundation for long-term
profitable growth. We   ve improved our cost structure through
facility consolidation, organizational realignment, and better
leveraging the scale of our enterprise. We   ve achieved
meaningful
productivity
improvements
through
the
deployment of the Apogee Management System. We   ve
reshaped our portfolio, focusing on more differentiated, higher
margin offerings. We   ve also made several strategic
investments, both organic and inorganic, that position the
company for improved growth. All of this has been
underpinned by a focus on talent management and people
development, which has strengthened our team. Through these
efforts, we   ve built a much stronger operating foundation, one
that will support continued performance throughout the ups
and downs of the market cycle.
One of the highlights of the year was our acquisition of UW
Solutions. This adds a differentiated business to our portfolio
that is well positioned in attractive market segments. This
includes an industrial flooring solution that diversifies our
business by providing exposure to repair and remodel activity
in distribution centers and manufacturing facilities. Most
importantly, we   ve added a talented team of employees that
has established a strong record of profitable growth.
We are integrating UW Solutions with our legacy Large Scale
Optical business to create the newly renamed Performance
Surfaces segment. The combined business brings together a
strong set of brands, and expanded manufacturing and process
technology capabilities, to create a scalable platform for
growth. This business has a strong financial profile, and we see
a long runway for above market growth at attractive margins.
Since closing the acquisition in November 2024, we   ve made
significant progress on our integration plan, and we   re on track
to deliver the financial targets we set for the deal.
Fiscal 2025 Results
When we introduced our strategy, we set three financial targets
that we planned to achieve by fiscal 2025:
1.
2.
3.
Adjusted ROIC above 12%,
adjusted operating margin over 10%,
and outgrowing the non-residential construction
market by 1.2 times.
This year, we exceed both the ROIC and margin targets.
Adjusted ROIC was 14.9%, exceeding our 12% target for the
third consecutive year. We   ve steadily improved our adjusted
operating margin, reaching 11.0% this year, a 470-basis point
gain from fiscal 2022. Notably, we   ve achieved margin gains
across our business, with all our segments at or above their
targeted margin levels for the year.
We fell short of our growth goal. Some of this was a function of
our purposeful strategy to move away from less differentiated,
lower margin offerings. And some was driven by the dynamics
of our end markets, as industrial facilities, data centers, and
warehouses have been the primary drivers of non-residential
construction growth over the past few years. These are parts of
the market where we have historically had less presence. We are
excited that the UW Solutions acquisition expands our
opportunity to serve those market segments. As we move
forward, we will strive to sustain the ROIC and margin gains
we   ve achieved, while shifting more focus to growth.
Execution of our strategy has also driven significant growth in
operating profit and earnings per share. Adjusted operating
income increased by over 80% from fiscal 2022 to 2025, and we
more than doubled adjusted diluted EPS over that period,
achieving a record $4.97 this year.

Our business has also continued to generate strong, consistent
cash flow. Over the past three years, we   ve delivered $432
million of cash flow from operations, an average of $144 million
per year. We   ve used this cash flow to pursue a balanced
approach to capital deployment. Since fiscal 2023, we   ve
returned $194 million of cash to our shareholders, by steadily
increasing our dividend and opportunistically repurchasing our
stock. We   ve invested $124 million in capital expenditures,
making investments to enable growth and profitability
improvements, and we completed the strategic acquisition of
UW Solutions. With our strong balance sheet, we see more
opportunities for value creating capital deployment in the
future.
In addition to these strong financial results, our team also
achieved significantly improved safety performance. Our
accident incident rate in calendar year 2024 was 34% lower than
the previous year, and well below industry benchmarks. These
results reflect our commitment to promote a culture of safety
across our company. Nothing we do is more important than
working safely, and we will continue to strive toward achieving
an accident-free workplace.
Looking Ahead
Leading indicators and industry forecasts point to slowing
conditions and a cautious outlook for non-residential
construction. Declining consumer sentiment may put pressure
on the consumer-facing parts of our business, and recent
developments with tariffs create additional uncertainty. Over
the past several years, our team has established a strong track
record of successfully managing through difficult market
conditions. I am confident that we will navigate through the
current situation as well.
growth opportunities. We will work to manage what we can
control, creating some certainty in an uncertain environment. A
key part of this will be maintaining our focus on execution,
productivity, and cost management. These have been central to
everything we   ve accomplished over the past few years. This will
include changes to further optimize our footprint and better
align our operations and cost structure with current market
conditions.
While we take actions to ensure near-term performance, we
also remain focused on positioning the company for growth.
We will leverage the acquisition of UW Solutions to develop
new growth opportunities, as well as leverage recent capacity
investments in Performance Surfaces and Architectural Services
to drive organic growth. Finally, we will continue to actively
pursue our M&A pipeline, looking for opportunities to add
offerings and capabilities that further diversify our business and
increase our growth potential.
I am proud of the results our team delivered in fiscal 2025,
capping a tremendous three-year transformation, while
embracing new challenges and positioning the company for our
next chapter of growth. On behalf of our entire team and Board
of Directors, I want to thank you for your continued support of
Apogee Enterprises.
Ty Silberhorn
Chief Executive Officer and President
We are approaching fiscal 2026 by balancing the imperative for
near-term performance with continuing to invest in long-term
i
This letter includes measures of financial performance that are not defined by GAAP, including adjusted diluted EPS, adjusted operating income,
adjusted operating margin, and adjusted return on invested capital (ROIC). We provide a reconciliation of the differences between these historical nonGAAP measures and the most directly comparable GAAP measures in Item 7 of our Annual Report on Form 10-K for the fiscal year ended March 1, 2025.



 5/13/2025 Letter Continued (Full PDF)