On this page of StockholderLetter.com we present the 5/12/2023 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.

 •  5/12/2023 Letter Continued (Full PDF)
 •  5/9/2024 APOG Stockholder Letter
 •  5/13/2025 APOG Stockholder Letter
 •  More "Construction Materials & Machinery" Category Stockholder Letters
 •  APOG Benford's Law Stock Score = 89

APOG 5/12/2023 Shareholder/Stockholder Letter Transcript:

Apogee Enterprises, Inc.
Fiscal 2023 Annual Report


   Through our team   s efforts, we are transforming
Apogee into a higher performing, more resilient
company.   
Ty R. Silberhorn, Chief Executive Officer
Fellow shareholders,
Last year we set our company on a path to create peak value
for all our stakeholders, embarking on a new strategy to
build differentiated businesses with stronger operational
execution. Our team made terrific progress on this journey
in fiscal 2023, delivering record revenue and earnings per
share and making considerable progress toward achieving
our three-year financial targets. I want to thank the entire
Apogee team for their contributions to our success.
Advancing Our Strategy
In late fiscal 2022, we introduced our three-pillar strategy to
drive long-term profitable growth. First, we are striving to
become the economic leader in our target markets. Second,
we will actively manage our portfolio, to drive higher
margins and returns. Finally, we are strengthening our core
capabilities to enable more efficient operations with greater
scalability, delivering sustained profitable growth.
Over the past year, we took steps to advance each element
of our strategy. To become an economic leader, we needed
to improve our execution and build a more competitive cost
structure. We made great strides towards this during fiscal
2023. Through our Lean and Continuous Improvement
efforts, we drove significant productivity gains across our
business, especially in the Architectural Glass segment. This
work will form the foundation of the Apogee Management
System, a standard operating framework for how we will run
our business. Our team also maintained a strong focus on
cost management, fully capturing the expected cost-savings
from the restructuring we undertook last year. Additionally,
we improved our approach to pricing, allowing us to stay
competitive in the market and share in the value we create
for our customers.
We also worked to increase our mix of differentiated
products and services. In Architectural Glass, we continued
to shift our selling strategies toward premium, higher valueadded offerings. In Framing Systems, we rationalized our
offerings, moving away from lower-margin products. And in
Large-Scale Optical, we continued to emphasize our highest
performing products.
To support the second pillar of our strategy, active portfolio
management, we strengthened our merger and acquisition
capabilities, improving processes for selecting and
integrating future acquisitions. We also made progress with
combining our Sotawall and Harmon brands into a single
business to serve the market for custom curtainwall projects.
This combination brings together operational excellence
with world-class engineering capabilities, better positioning
us to create value as we move forward.
For strengthening core capabilities, our top focus in fiscal
2023 was to improve our talent development programs. This
is a key enabler for every part of our strategy. We upgraded
training and development programs across the company, to
ensure we have the right mix of skills to meet the needs of
our business. Additionally, after taking a pause during the
pandemic, we relaunched our in-person leadership
development programs to nurture the next generation of
leaders for our company.
Fiscal 2023 Results
The progress we   ve made with executing our strategy was
evident in our financial results. Revenue grew 10 percent, to
a record $1.44 billion. All four of our business segments
increased their revenue for the year. Operating income
increased to $126 million, and earnings reached a record

$4.64 per diluted share. Adjusted earnings per share grew 60
percent compared to last year to $3.98, also a record.
We were particularly pleased with results in Architectural
Framing Systems and Architectural Glass. As we began to
implement our new strategy, we acknowledged that these
segments were underperforming their potential. Much of
our focus over the past two years has been to position these
businesses for long-term success. We made organizational
changes, improved our cost structure, and increased focus
on our target markets. The results were impressive, with both
segments delivering significant profitability improvements.
Both are now performing within their targeted margin
ranges, and we expect continued strong results in the years
to come.
At our investor day in November 2021, we set three-year
financial targets for return on invested capital (ROIC),
operating margin, and revenue growth.
We are well on our way to reaching each of these goals. In
fiscal 2023, ROIC exceeded our 12 percent target. Operating
margin improved to 8.7 percent, great progress toward our
10 percent plus target. Finally, revenue growth of 10 percent
surpassed the growth rate for the U.S. non-residential
construction market.
We also continued to generate strong cash flow. Cash from
operations increased to $103 million, up from $100 million
last year. We used this cash to invest in our business,
increasing capital spending to $45 million. We made
investments to expand capacity, enhance productivity
through automation, and deploy information systems to
better meet the needs of our business. We also returned
capital to shareholders. This included increasing our
dividend for the tenth consecutive year. We returned a total
of $94 million of cash to shareholders through dividend
payments and share repurchases and we did this while
maintaining a healthy financial position. Importantly, we
extended the maturity of our primary credit facility to 2027,
providing more favorable borrowing terms and increased
financial flexibility as we execute our strategy.
Looking Ahead
As we move into fiscal 2024, we are well positioned to drive
further progress toward our financial targets. We will do this
against a backdrop of economic uncertainty which may drive
changes in our end markets. As I write this letter, nonresidential construction activity in the U.S. and Canada
remains healthy. We are closely watching how inflation,
rising rates, and a potential recession might affect our end
markets. We are also monitoring shifting market dynamics,
with slowing demand for some types of commercial
construction projects, offset by growth in institutional and
infrastructure related work.
Regardless of what happens in the broader economy and
our markets, we are staying focused on our strategy and
managing what we can control. Through our team   s efforts,
we are transforming Apogee into a higher performing, more
resilient company. A company that can outperform our
industry in any economic environment.
In fiscal 2024, we expect to further advance each pillar of our
strategy. We will continue to invest in organic growth
initiatives, increasing our capabilities to deliver differentiated
products and services in our target markets. We will also
build on our success with the Apogee Management System,
expanding our toolkit and broadening our scope to other
parts of the company. We will further strengthen our
mergers and acquisitions capabilities and build our pipeline
of potential opportunities. Finally, we will expand our efforts
to strengthen core capabilities, by deploying standardized
processes and systems, and sustaining our investments in
talent development. As we focus on these priorities, I am
confident we will advance our strategy and move closer to
achieving our financial targets.
I am exceptionally proud of our team and what we achieved
together in fiscal 2023. We improved our execution, made
meaningful productivity gains, and established a stronger
foundation for long-term profitable growth. We built strong
momentum toward achieving our financial targets, while
delivering record revenue and earnings per share. My fellow
Board members and I are confident Apogee will drive further
progress in fiscal 2024, positioning the company to create
peak value for all our stakeholders for years to come. Thank
you for your continued trust and support of Apogee
Enterprises!
Ty Silberhorn
Chief Executive Officer and President



 5/12/2023 Letter Continued (Full PDF)