Sales declined 7.6% Y/Y to $339.71 million, missing the consensus of $360.98 million, reflecting lower volumes.

Revenue by segments: Architectural Framing Systems $139.59 million (-15.4% Y/Y), Architectural Services $94.7 million (-7.2% Y/Y), Architectural Glass $91.0 million (+11.6% Y/Y) and Large-Scale Optical $26.0 million (-2.4% Y/Y).

Gross profit increased 4.3% Y/Y to $90.3 million, and gross margin improvement of 310 bps to 26.6%, led by higher pricing, improved product mix, lower short-term incentive compensation expense, and lower insurance-related expense.

Adjusted EBITDA rose 5.8% to $47.3 million. Adjusted EPS increased 15.0% Y/Y to $1.23, above the consensus of $1.10.

Quarter-end total long-term debt was $100.7 million, compared to $169.8 million at the end of fiscal 2023. 

The company exited the quarter with cash and cash equivalents worth $23.4 million.

"Our team continued to deliver strong results, with another quarter of year-over-year margin expansion, double-digit adjusted EPS growth, and significantly improved cash flow, despite lower revenue. Execution of our strategy continues to drive improved performance, enabling us to achieve operating margin above our 10% target for the second consecutive quarter," said Ty R. Silberhorn, CEO. 

Outlook: Apogee raised FY24 adjusted EPS to $4.35-$4.65 from $4.55-$4.70 vs. consensus of $4.50. 

The company now expects net sales to decline around 3% (vs. flat to slightly declining net sales projected earlier).

The company continues to expect a long-term average tax rate of approximately 24.5% and now targets capital expenditures of $40 million-$50 million (vs. $50 million-$60 million prior) in FY24. 

Price Action: APOG shares are trading higher by 4.00% to $53.86 on the last check Thursday.

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