SECURITIES AND EXCHANGE COMMISSION

Registrant’s telephone number, including area code: (952) 835-1874

(Former name, former address and former fiscal year, if changed since last report)

_________________________________

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common stock, par value $0.33 1/3 per share

APOG

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). x Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). o☐ Yes x No

As of ~~January 10, 2018, 28,417,366~~September 26, 2022, 22,208,074 shares of the registrant’s common stock, par value $0.33 1/3 per share, were outstanding.

~~Table of Contents~~

APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

Table of Contents

PART I. FINANCIAL INFORMATION


~~Item 1.~~	~~Financial Statements~~

Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS

~~(unaudited)~~(Unaudited)


(In thousands, except stock data)	August 27, 2022		February 26, 2022
Assets
Current assets
Cash and cash equivalents	$	22,065	$	37,583
Restricted cash	8,684		—
Receivables, net	231,853		168,592
Inventories	98,046		80,494
Costs and earnings on contracts in excess of billings	29,522		30,403
Other current assets	34,048		20,820
Total current assets	424,218		337,892
Property, plant and equipment, net	232,766		249,995
Operating lease right-of-use assets	42,505		47,912
Goodwill	129,476		130,102
Intangible assets	70,377		72,481
Other non-current assets	49,632		49,481
Total assets	$	948,974	$	887,863
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	86,871	$	92,104
Accrued payroll and related benefits	41,338		50,977

Billings in excess of costs and earnings on uncompleted contracts	29,616		8,659
Operating lease liabilities	11,498		12,744
Current portion long-term debt	—		1,000
Other current liabilities	64,060		67,462
Total current liabilities	233,383		232,946
Long-term debt	250,834		162,000
Non-current operating lease liabilities	34,625		39,591
Non-current self-insurance reserves	23,038		22,544
Other non-current liabilities	50,354		44,583
Commitments and contingent liabilities (Note 8)
Shareholders’ equity
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 22,209,925 and 23,701,491 respectively	7,403		7,901
Additional paid-in capital	141,575		149,713
Retained earnings	240,245		254,825


Accumulated other comprehensive loss	(32,483)		(26,240)
Total shareholders’ equity	356,740		386,199
Total liabilities and shareholders’ equity	$	948,974	$	887,863

(In thousands, except stock data) December 2, 2017 March 4, 2017
Assets
Current assets
Cash and cash equivalents $ 12,845
$ 19,463
Short-term available for sale securities 482
548
Restricted cash —
7,834
Receivables, net of allowance for doubtful accounts 246,863
185,740
Inventories 98,062
73,409
Refundable income taxes —
1,743
Other current assets 16,536
8,724
Total current assets 374,788
297,461
Property, plant and equipment, net 302,904
246,748
Available for sale securities 9,766
9,041
Deferred tax assets 6,128
4,025
Goodwill 152,881
101,334
Intangible assets 173,856
106,686
Other non-current assets 23,445
19,363
Total assets $ 1,043,768
$ 784,658
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable $ 62,655
$ 63,182
Accrued payroll and related benefits 33,769
51,244
Accrued self-insurance reserves 8,834
8,575
Other current liabilities 60,923
34,200
Billings in excess of costs and earnings on uncompleted contracts 38,830
28,857
Accrued income taxes 4,520
—
Total current liabilities 209,531
186,058
Long-term debt 231,276
65,400
Unrecognized tax benefits 4,837
3,980
Long-term self-insurance reserves 17,038
8,831
Deferred tax liabilities 2,910
4,025
Other non-current liabilities 59,481
45,787
Commitments and contingent liabilities (Note 14)

Shareholders’ equity
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 28,641,445 and 28,680,841 respectively 9,547
9,560
Additional paid-in capital 154,357
150,111
Retained earnings 375,280
341,996
Common stock held in trust (908 ) (875 )
Deferred compensation obligations 908
875
Accumulated other comprehensive loss (20,489 ) (31,090 )
Total shareholders’ equity 518,695
470,577
Total liabilities and shareholders’ equity $ 1,043,768
$ 784,658

See accompanying notes to consolidated financial statements.

CONSOLIDATED RESULTS OF OPERATIONS

Three Months Ended Nine Months Ended
(In thousands, except per share data) December 2, 2017 November 26, 2016 December 2,
2017 November 26,
2016
Net sales $ 356,506
$ 274,072
$ 972,721
$ 800,407
Cost of sales 264,947
201,204
724,868
590,581
Gross profit 91,559
72,868
247,853
209,826
Selling, general and administrative expenses 57,024
39,609
161,438
117,269
Operating income 34,535
33,259
86,415
92,557
Interest income 106
271
390
799
Interest expense 1,594
150
3,689
495
Other income (expense), net 303
(158 ) 560
350
Earnings before income taxes 33,350
33,222
83,676
93,211
Income tax expense 9,704
10,670
26,517
30,540
Net earnings $ 23,646
$ 22,552
$ 57,159
$ 62,671

Earnings per share - basic $ 0.82
$ 0.78
$ 1.98
$ 2.18
Earnings per share - diluted $ 0.82
$ 0.78
$ 1.98
$ 2.17
Weighted average basic shares outstanding 28,736
28,828
28,812
28,807
Weighted average diluted shares outstanding 28,818
28,892
28,862
28,916

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016 December 2,
2017 November 26,
2016
Net earnings $ 23,646
$ 22,552
$ 57,159
$ 62,671
Other comprehensive earnings:
Unrealized loss on marketable securities, net of $78, $139, $28 and $105 of tax benefit, respectively (143 ) (258 ) (51 ) (192 )
Foreign currency translation adjustments (3,838 ) (1,783 ) 10,652
2,742
Other comprehensive earnings (3,981 ) (2,041 ) 10,601
2,550
Total comprehensive earnings $ 19,665
$ 20,511
$ 67,760
$ 65,221

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
Operating Activities
Net earnings $ 57,159
$ 62,671
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization 39,774
24,270
Share-based compensation 4,645
4,403
Deferred income taxes (3,339 ) (3,335 )
Gain on disposal of assets (78 ) (287 )
Proceeds from New Markets Tax Credit transaction, net of deferred costs —
5,109
Other, net (1,286 ) (1,281 )
Changes in operating assets and liabilities:
Receivables (16,131 ) (15,235 )
Inventories (1,348 ) (9,555 )
Accounts payable and accrued expenses (27,449 ) 1,897
Billings in excess of costs and earnings on uncompleted contracts 9,869
4,896
Refundable and accrued income taxes 7,108
(1,073 )
Other, net (2,685 ) 335
Net cash provided by operating activities 66,239
72,815
Investing Activities
Capital expenditures (38,946 ) (44,548 )
Proceeds from sales of property, plant and equipment 253
1,716
Acquisition of business, net of cash acquired (184,826 ) —
Change in restricted cash 7,834
(14,884 )
Purchases of marketable securities (10,154 ) (3,021 )
Sales/maturities of marketable securities 9,288
3,703
Other, net 941
(2,168 )
Net cash used in investing activities (215,610 ) (59,202 )
Financing Activities
Borrowings on line of credit 314,700
—
Payments on line of credit (150,700 ) —
Shares withheld for taxes, net of stock issued to employees (1,561 ) (910 )
Repurchase and retirement of common stock (10,833 ) (10,817 )
Dividends paid (11,971 ) (10,687 )
Other 2,039
(408 )
Net cash provided by (used in) financing activities 141,674
(22,822 )
Decrease in cash and cash equivalents (7,697 ) (9,209 )
Effect of exchange rates on cash 1,079
338
Cash and cash equivalents at beginning of year 19,463
60,470
Cash and cash equivalents at end of period $ 12,845
$ 51,599
Noncash Activity
Capital expenditures in accounts payable $ 1,859
$ 6,683
Deferred payments on acquisition of business 7,500
—

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at February 26, 2022	23,701	$	7,901	$	149,713	$	254,825	$	(26,240)	$	386,199
Net earnings	—	—		—		22,731		—		22,731
Unrealized loss on marketable securities, net of $74 tax benefit	—	—		—		—		(276)		(276)
Unrealized loss on derivative instruments, net of $1,317 tax benefit	—	—		—		—		(4,316)		(4,316)
Foreign currency translation adjustments	—	—		—		—		1,732		1,732
Issuance of stock, net of cancellations	100	33		23		—		—		56
Share-based compensation	—	—		1,597		—		—		1,597

Share repurchases	(1,571)	(524)		(10,350)		(63,438)		—		(74,312)
Other share retirements	(30)	(10)		(198)		(1,120)		—		(1,328)
Cash dividends	—	—		—		(4,793)		—		(4,793)
Balance at May 28, 2022	22,200	$	7,400	$	140,785	$	208,205	$	(29,100)	$	327,290
Net earnings	—	—		—		37,389		—		37,389
Unrealized loss on marketable securities, net of $28 tax benefit	—	—		—		—		(106)		(106)
Unrealized loss on derivative instruments, net of $152 tax benefit	—	—		—		—		(500)		(500)
Foreign currency translation adjustments	—	—		—		—		(2,777)		(2,777)
Issuance of stock, net of cancellations	(14)	(5)		61		—		—		56
Share-based compensation	—	—		1,797		—		—		1,797
Exercise of stock options	36	12		(954)		—		—		(942)

Other share retirements	(13)	(4)		(114)		(540)		—		(658)
Cash dividends	—	—		—		(4,809)		—		(4,809)
Balance at August 27, 2022	22,209	$	7,403	$	141,575	$	240,245	$	(32,483)	$	356,740

(In thousands) Common Shares Outstanding Common Stock Additional Paid-In Capital Retained Earnings Common Stock Held in Trust Deferred Compensation Obligation Accumulated Other Comprehensive (Loss) Income
Balance at March 4, 2017 28,680
$ 9,560
$ 150,111
$ 341,996
$ (875 ) $ 875
$ (31,090 )
Net earnings —
—
—
57,159
—
—
—
Unrealized loss on marketable securities, net of $28 tax benefit —
—
—
—
—
—
(51 )
Foreign currency translation adjustments —
—
—
—
—
—
10,652
Issuance of stock, net of cancellations 106
36
147
—
(33 ) 33
—
Share-based compensation —
—
4,645
—
—
—
—
Exercise of stock options 100
33
801
—
—
—
—
Share repurchases (200 ) (67 ) (1,091 ) (9,675 ) —
—
—
Other share retirements (45 ) (15 ) (256 ) (2,229 ) —
—
—
Cash dividends —
—
—
(11,971 ) —
—
—
Balance at December 2, 2017 28,641
$ 9,547
$ 154,357
$ 375,280
$ (908 ) $ 908
$ (20,489 )

Balance at February 27, 2016 28,684
$ 9,561
$ 145,528
$ 282,477
$ (837 ) $ 837
$ (31,371 )
Net earnings —
—
—
62,671
—
—
—
Unrealized loss on marketable securities, net of $105 tax benefit —
—
—
—
—
—
(192 )
Foreign currency translation adjustments —
—
—
—
—
—
2,742
Issuance of stock, net of cancellations 139
46
94
—
(26 ) 26
—
Share-based compensation —
—
4,403
—
—
—
—
Tax deficit associated with stock plans —
—
(1,229 ) —
—
—
—
Exercise of stock options 125
42
1,211
—
—
—
—
Share repurchases (250 ) (83 ) (1,357 ) (9,376 ) —
—
—
Other share retirements (52 ) (17 ) (271 ) (2,015 ) —
—
—
Cash dividends —
—
—
(10,687 ) —
—
—
Balance at November 26, 2016 28,646
$ 9,549
$ 148,379
$ 323,070
$ (863 ) $ 863
$ (28,821 )

See accompanying notes to consolidated financial statements.

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY


(In thousands)	Common Shares Outstanding	Common Stock		Additional Paid-In Capital		Retained Earnings		Accumulated Other Comprehensive (Loss) Income		Total Shareholders' Equity
Balance at February 27, 2021	25,714	$	8,571	$	154,958	$	357,243	$	(28,027)	$	492,745
Net earnings	—	—		—		10,817		—		10,817
Unrealized gain on marketable securities, net of $0 tax expense	—	—		—		—		—		—
Unrealized gain on derivative instruments, net of $211tax expense	—	—		—		—		692		692
Foreign currency translation adjustments	—	—		—		—		5,880		5,880
Issuance of stock, net of cancellations	90	30		(7)		—		—		23
Share-based compensation	—	—		1,674		—		—		1,674
Exercise of stock options	179	60		4,055		—		—		4,115
Share repurchases	(357)	(119)		(2,218)		(10,288)		—		(12,625)
Other share retirements	(20)	(7)		(121)		(607)		—		(735)
Cash dividends	—	—		—		(5,035)		—		(5,035)
Balance at May 29, 2021	25,606	$	8,535	$	158,341	$	352,130	$	(21,455)	$	497,551
Net loss	—	—		—		(2,116)		—		(2,116)
Unrealized gain on marketable securities, net of $2 tax expense	—	—		—		—		4		4
Unrealized loss on derivative instruments, net of $203 tax benefit	—	—		—		—		(666)		(666)
Foreign currency translation adjustments	—	—		—		—		(4,300)		(4,300)
Issuance of stock, net of cancellations	67	22		—		—		—		22
Share-based compensation	—	—		1,587		—		—		1,587

Share repurchases	(249)	(83)		(1,616)		(8,095)		—		(9,794)
Other share retirements	(30)	(9)		(197)		(496)		—		(702)
Cash dividends	—	—		—		(5,025)		—		(5,025)
Balance at August 28, 2021	25,394	$	8,465	$	158,115	$	336,398	$	(26,417)	$	476,561

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1.Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements of Apogee Enterprises, Inc. (we, us, our or the Company) have been prepared in accordance with accounting principles generally accepted in the United States. The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended ~~March 4, 2017~~.February 26, 2022. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly and year to date operating results are reflected herein and are of a normal, recurring nature. The results of operations for the ~~nine-month period~~three- and six-month periods ended ~~December 2, 2017~~August 27, 2022 are not necessarily indicative of the results to be expected for the full year.

~~Subsequent events~~At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The comparative fiscal 2022 segment results for the Architectural Framing Systems and Architectural Services segments have been recast to reflect the move of the Sotawall business into the Architectural Services segment from the Architectural Framing Systems segment, effective at the start of the first quarter of fiscal 2023.

~~In connection with preparing~~

2.Revenue, Receivables and Contract Assets and Liabilities

The following table disaggregates total revenue by timing of recognition (see Note 12 for disclosure of revenue by segment):


	Three Months Ended				Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Recognized at shipment	$	174,693	$	137,783	$	335,857	$	278,066
Recognized over time	197,416		188,014		392,887		373,737
Total	$	372,109	$	325,797	$	728,744	$	651,803

Receivables reflected in the ~~unaudited consolidated~~ financial statements represent the net amount expected to be collected. An allowance for credit losses is established based on expected losses. Expected losses are estimated by reviewing individual accounts, considering aging, financial condition of the ~~nine months ended December 2, 2017, we evaluated subsequent events for potential recognition~~debtor, recent payment history, current and ~~disclosure through~~forecast economic conditions and other relevant factors. Upon billing, aging of receivables is monitored until collection. An account is considered current when it is within agreed upon payment terms. An account is written off when it is determined that the ~~date~~asset is no longer collectible. Retainage on construction contracts represents amounts withheld by our customers on long-term projects until the project reaches a level of ~~this filing. On December 20, 2017,~~completion where amounts are released to us from the ~~Tax Cuts and Jobs Act (the "2017 Act") was signed into law. We are~~customer.


(In thousands)	August 27, 2022		February 26, 2022
Trade accounts	$	146,035	$	129,085
Construction contracts	65,482		12,857
Contract retainage	22,267		28,782
Total receivables	233,784		170,724
Less: allowance for credit losses	1,931		2,132
Receivables, net	$	231,853	$	168,592

The following table summarizes the activity in the ~~process~~allowance for credit losses:


(In thousands)	August 27, 2022		February 26, 2022
Beginning balance	$	2,132	$	1,947
Additions charged to costs and expenses	45		729
Deductions from allowance, net of recoveries	(244)		(514)
Other changes (1)	(2)		(30)
Ending balance	$	1,931	$	2,132
(1) Result of foreign currency effects

Contract assets and ~~analyzing information~~liabilities

Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to ~~determine~~ the ~~impact~~customer. Contract liabilities consist of ~~the 2017 Act~~billings in excess of costs and earnings and other deferred revenue on contracts. Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our ~~accounting for income taxes, including the remeasurement of our deferred tax assets~~consolidated balance sheets.

The time period between when performance obligations are complete and ~~liabilities. The consolidated financial statements presented herein do~~when payment is due is not ~~reflect any impact that may result from completing the accounting for the income tax effects of the 2017 Act.~~

Subsequent to the end of the quarter, in late December 2017 and early January 2018, we purchased 246,299 shares of stock under our authorized share repurchase program, at a total cost of $11.1 million.

On January 5, 2018, we announced a restructuring plan that involves the closure of our St. George, UT architectural glass manufacturing facility in March 2018, enabled by our investments in productivity and increased capabilities, which have led to an increase in capacity. This and other restructuring activities are expected to have an approximately $4.5 million pre-tax impact in our fiscal fourth quarter.

significant. In ~~May 2014, the FASB issued ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~, which outlines a single comprehensive model to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance. Under the new standard, an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This guidance is effective for annual reporting periods beginning after December 15, 2017, our fiscal 2019. We have undertaken a comprehensive assessment process at eachcertain of our businesses ~~and have concluded on the application of the new guidance at nearly all of our businesses. We are in the process of quantifying the impact~~ that ~~this standard will have on our financial statements upon adoption. At this time:~~


(In thousands)	August 27, 2022		February 26, 2022
Contract assets	$	51,789	$	59,185
Contract liabilities	32,022		11,373

The changes in contract assets and contract liabilities were mainly due to timing of ~~revenue recognition.~~project activity within our businesses that operate under long-term contracts.

~~We expect that two~~


Other contract-related disclosures	Three Months Ended				Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Revenue recognized related to contract liabilities from prior year-end	$	4,978	$	2,479	$	33,157	$	16,579
Revenue recognized related to prior satisfaction of performance obligations	4,770		5,354		4,946		7,518

Some of our ~~business units will change from recognizing revenue at~~contracts have an expected duration of longer than a ~~point~~year, with performance obligations extending over that time frame. Generally, these contracts are found in ~~time to recognizing~~our businesses that typically operate with long-term contracts, which recognize revenue over ~~time, to better reflect transfer of control to the customer in line~~time. The transaction prices associated with ~~the new guidance. We are continuing to assess the appropriate measure of progress toward completion, based on the facts and circumstances specific to the~~unsatisfied performance obligations ~~and terms of sale of each business.~~

~~In February 2016, the FASB issued ASU 2016-02,~~ ~~Leases~~, which provides for comprehensive changes to lease accounting. The new standard requires that a lessee recognize a lease obligation liability and a right to use asset for virtually all leases of property, plant and equipment, subsequently amortized over the lease term. The new standard is effective for fiscal years beginning after December 15, 2018, our fiscal year 2020, with a modified retrospective transition. The adoption of this standard will result in reflecting assets and liabilities for the value of our leased property and equipment on our consolidated balance sheet, but we do not currently expect this guidance to have a significant impact on our consolidated results of operations.

~~In August 2016, the FASB issued ASU 2016-15,~~ ~~Statement of Cash Flows, and in November 2016, it issued 2016-18,~~ ~~Restricted Cash. Both standards provide guidance for presentation of certain topics within the statement of cash flows, including presenting~~

restricted cash within cash and cash equivalents, and are intended to improve consistency in presentation. The new classification guidance is effective for fiscal years beginning after December 15, 2017, our fiscal year 2019, and isexpected to be ~~applied retrospectively for comparability across all periods. We do not expect this guidance to have a significant impact on our consolidated financial statements.~~

~~In January 2017,~~satisfied, and the ~~FASB issued ASU 2017-04,~~ ~~Simplifying the Test for Goodwill Impairment~~, which simplifies the accounting for goodwill impairment by requiring impairment charges to be based on the first step in the current two-step impairment test process. The new guidance eliminates the current requirement to calculate a goodwill impairment charge using step 2. The standard is applicable to impairment tests performed in periods beginning after December 15, 2019, our fiscal 2021, with early adoption permitted. We are currently evaluating early adoption of this guidance for our future annual goodwill impairment review process.

~~Total share-based compensation expense included in the results of operations was $4.6 million for the~~ ~~nine-month period ended~~ ~~December 2, 2017~~ ~~and $4.4 million for the nine-month period ended~~ ~~November 26, 2016~~.

~~Stock Options and SARs~~

~~Stock option and SAR activity for the current nine-month period is summarized as follows:~~

~~Cash proceeds from the exercise of stock options were~~ ~~$0.8 million~~ ~~and~~ ~~$1.3 million~~ ~~for the~~ ~~nine~~ ~~months ended~~ ~~December 2, 2017~~ ~~and~~ ~~November 26, 2016, respectively. The aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was~~ ~~$4.8 million~~ ~~during the~~ ~~nine~~ ~~months ended~~ ~~December 2, 2017~~ ~~and~~ ~~$4.5 million~~ ~~during the prior-year period.~~

~~Nonvested Shares and Share Units~~

~~Nonvested share activity for the current nine-month period is summarized as follows:~~

At ~~December 2, 2017, there was~~ ~~$8.5 million~~ ~~of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected~~corresponding revenue to be recognized, over ~~a weighted average period of approximately~~ 21 ~~months. The total fair value of shares vested during~~ the ~~nine~~ ~~months ended December 2, 2017 was $7.0 million.~~following estimated time periods:

~~The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share:~~

3.Supplemental Balance Sheet Information

Other current liabilities

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016 December 2,
2017 November 26,
2016
Basic earnings per share – weighted average common shares outstanding 28,736
28,828
28,812
28,807
Weighted average effect of nonvested share grants and assumed exercise of stock options 82
64
50
109
Diluted earnings per share – weighted average common shares and potential common shares outstanding 28,818
28,892
28,862
28,916

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Other non-current liabilities

There were no anti-dilutive stock options excluded from the calculation of earnings per share for any of the periods presented, as the average market price exceeded the exercise price of options outstanding.


(In thousands)	August 27, 2022		February 26, 2022
Deferred benefit from New Markets Tax Credit transactions	$	9,250	$	9,165
Retirement plan obligations	6,857		7,041
Deferred compensation plan	7,290		9,483
Deferred tax liabilities	7,611		2,296

Other	19,346		16,598
Total other non-current liabilities	$	50,354	$	44,583


5.	~~Inventories~~

(In thousands) December 2, 2017 March 4, 2017
Raw materials $ 35,565
$ 22,761
Work-in-process 24,919
16,154
Finished goods 34,951
29,372
Costs and earnings in excess of billings on uncompleted contracts 2,627
5,122
Total inventories $ 98,062
$ 73,409
4.Financial Instruments


6.	~~Marketable Securities~~

Marketable securities ~~are classified as available for sale:~~

(In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses
Estimated
Fair Value
December 2, 2017
Municipal bonds 10,334
17
(103 ) 10,248
March 4, 2017
Municipal bonds 9,595
91
(97 ) 9,589

~~We have a~~Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), ~~which holds~~we hold the following available-for-sale marketable securities, made up of municipal ~~bonds.~~ and corporate bonds:


(In thousands)	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
August 27, 2022	$	11,344	$	3	$	565	$	10,782
February 26, 2022	11,862		45		123		11,784

Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments ~~which are generally high-quality municipal bonds,~~ for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of ~~municipal~~these bonds at ~~December 2, 2017~~,August 27, 2022, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.


(In thousands)	Amortized Cost		Estimated Fair Value
Due within one year	$	1,430	$	1,419
Due after one year through five years	9,578		9,069
Due after five years through 10 years	336		294


Total	$	11,344	$	10,782

Derivative instruments

We use interest rate swaps, foreign exchange forward contracts, commodity swaps and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance.

In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility and term loan. As of August 27, 2022, the interest rate swap contract had a notional value of $30.0 million.

We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates (primarily related to the Canadian dollar). These contracts generally have an original maturity date of less than one year. As of August 27, 2022, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S. dollar notional values of $3.2 million and $12.2 million, respectively.

These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income.

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(In thousands) Amortized Cost Estimated Fair Value
Due within one year $ 482
$ 482
Due after one year through five years 4,418
4,385
Due after five years through 10 years 4,627
4,578
Due after 10 years through 15 years 141
141
Due beyond 15 years 666
662
Total $ 10,334
$ 10,248


7.	~~Fair Value Measurements~~

Fair value measurements

Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.


(In thousands)	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total Fair Value
August 27, 2022
Assets:
Money market funds	$	15,034	$	—	$	15,034

Municipal and corporate bonds	—		10,782		10,782
Cash surrender value of life insurance	—		16,625		16,625


Interest rate swap contract	—		1,584		1,584
Liabilities:
Deferred compensation	—		10,299		10,299
Foreign currency forward/option contract	—		82		82
Aluminum hedging contract	—		3,515		3,515


February 26, 2022
Assets:
Money market funds	$	19,288	$	—	$	19,288

Municipal and corporate bonds	—		11,784		11,784
Cash surrender value of life insurance	—		17,831		17,831

Aluminum hedging contract	—		2,133		2,133
Interest rate swap contract	—		718		718
Liabilities:
Deferred compensation	—		12,491		12,491
Foreign currency forward/option contract	—		161		161

~~Table of Contents~~

(In thousands)
Quoted Prices in
Active Markets
(Level 1)
Other Observable Inputs (Level 2) Total Fair Value
December 2, 2017
Cash equivalents
Money market funds $ 1,696
$ —
$ 1,696
Commercial paper —
—
—
Total cash equivalents 1,696
—
1,696
Short-term securities
Municipal bonds —
482
482
Long-term securities
Municipal bonds —
9,766
9,766
Total assets at fair value $ 1,696
$ 10,248
$ 11,944
March 4, 2017
Cash equivalents
Money market funds $ 4,423
$ —
$ 4,423
Commercial paper —
5,500
5,500
Total cash equivalents 4,423
5,500
9,923
Short-term securities
Municipal bonds —
548
548
Long-term securities
Municipal bonds —
9,041
9,041
Total assets at fair value $ 4,423
$ 15,089
$ 19,512

~~Cash equivalents~~Money market funds and commercial paper

Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets.

~~Short- and long-term securities~~

Municipal and corporate bonds

Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as ~~short-term~~other current or ~~long-term~~other non-current assets based on maturity date.


8.	~~Acquisitions~~

Cash surrender value of life insurance and deferred compensation

~~EFCO~~Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. Changes in cash surrender value are recorded in other expense. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.

Derivative instruments

The interest rate swap is measured at fair value using other observable market inputs, based off of benchmark interest rates. Forward foreign exchange and fixed/floating aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates, and forward purchase aluminum prices. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates and aluminum prices.

Nonrecurring fair value measurements

We measure certain financial instruments at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair

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value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment, by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In ~~line~~the event any of these assets were to become impaired, we would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with our ~~strategic objectives, on June 12, 2017, we acquired 100 percent~~goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

5.Goodwill and Other Intangible Assets

Goodwill

Goodwill represents the excess of the ~~stock~~cost over the value of ~~EFCO Corporation, a privately held U.S. manufacturer~~net tangible and identified intangible assets of ~~architectural aluminum window, curtainwall, storefront and entrance systems~~acquired businesses. We evaluate goodwill for ~~commercial construction projects, for $192 million in cash. The acquisition was funded through our committed revolving credit facility, with $7.5 million~~impairment annually as of the ~~purchase price payable~~first day of our fiscal fourth quarter, or more frequently if events or changes in ~~equal installments over~~circumstances indicate that the ~~next three years. EFCO's results~~carrying value of ~~operations have been included~~goodwill may not be recoverable.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in ~~our consolidated financial statements~~order to create a single, unified offering for larger custom curtainwall projects which resulted in the combination of the Sotawall and ~~within~~Harmon reporting units into a single reporting unit. We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded that no adjustment to the carrying value of goodwill was necessary. Concurrent with the move of Sotawall from the Architectural Framing Systems segment ~~since the date of acquisition. Those results include $135.3 million of sales and $6.1 million of operating income since the date of acquisition.~~

The assets and liabilities of EFCO were recorded in our consolidated balance sheet as of the acquisition date, at their respective fair values. Fair value is estimated based on one or a combination of income, cost and/or market approaches, as determined based on the nature of the asset or liability, and the level of inputs available. With respect to assets and liabilities, the determination of fair value requires management to make subjective judgments as to projections of future operating performance, the appropriate discount rate to apply, long-term growth rates, etc. (i.e. - unobservable inputs classified as Level 3 inputs under the fair value hierarchy described in Note 7), which affect the amounts recorded in the purchase price allocation. The excess of the consideration transferred over the fair value of the identifiable assets, net of liabilities, is recorded as goodwill, which is indicative of the expected continued growth and development of EFCO. The purchase price allocation is based on these estimated fair values of assets acquired and liabilities assumed, as follows:

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(In thousands)
Net working capital $ 34,156
Property, plant and equipment 43,815
Goodwill 57,460
Other intangible assets 71,500
Less: Long-term liabilities acquired, net 14,605
Net assets acquired $ 192,326

~~Other intangible assets reflect the following:~~

(In thousands) Estimated fair value Estimated useful life (in years)
Customer relationships $ 34,800
16
Tradename 32,400
Indefinite
Backlog 4,300
1.5
$ 71,500

~~These fair values are based on preliminary estimates and are subject to change based on finalization of net working capital items included in the purchase price allocation.~~

~~Sotawall~~

On December 14, 2016, we acquired substantially all the assets of Sotawall, Inc., now operating under the name Sotawall Limited ("Sotawall"). Sotawall specializes in the design, engineering, fabrication, assembly and installation of unitized curtainwall systems for industrial, commercial and institutional buildings, primarily serving the Canadian and northeastern U.S. geographic regions. Sotawall's results of operations have been included in our consolidated financial statements and within the Architectural ~~Framing Systems~~Services segment ~~since~~effective at the ~~date~~start of ~~acquisition. Purchase accounting related to the acquisition of Sotawall was finalized during the the~~our first quarter of fiscal ~~2018.~~2023, goodwill was reallocated to the affected reporting units within each segment, using a relative fair value approach as outlined in ASC 350, Intangibles - Goodwill and Other. In addition, for all reporting units, no qualitative indicators of impairment were identified during the first quarter, and therefore, no interim quantitative goodwill impairment evaluation was performed.

The following table ~~sets forth certain unaudited pro forma consolidated data for~~presents the combined company for the third quarters and first nine-month periods of fiscal 2018 and 2017, as if the EFCO and Sotawall acquisitions were consummated pursuant to each of their respective same terms at the beginning of the fiscal year preceding their respective acquisition dates.

Three Months Ended Nine Months Ended
In thousands, except per share data December 2, 2017 November 26, 2016 December 2, 2017 November 26, 2016
Net sales $ 356,506
$ 368,387
$ 1,044,465
$ 1,083,352
Net earnings 24,453
25,971
59,564
72,171
Earnings per share
Basic 0.85
0.90
2.07
2.50
Diluted 0.85
0.90
2.06
2.50

We have provided this unaudited pro forma information for comparative purposes only. This information does not necessarily reflect what the combined results of operations actually would have been had the acquisitions occurred at the beginning of fiscal year 2017. The information does not reflect the effect of any synergies or integration costs that will result from the acquisitions.

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9.	~~Goodwill and Other Identifiable Intangible Assets~~

~~The~~ carrying amount of goodwill attributable to each reporting segment ~~was:~~ including the amount of goodwill that was reallocated from the Architectural Framing Systems segment to the Architectural Services segment using the relative fair value approach during the first quarter of fiscal 2023:


(In thousands)	Architectural Framing Systems		Architectural Services		Architectural Glass		Large-Scale Optical		Total
Balance at February 27, 2021	$	93,099	$	1,120	$	25,322	$	10,557	$	130,098


Foreign currency translation	82		—		(78)		—		4
Balance at February 26, 2022	93,181		1,120		25,244		10,557		130,102

Reallocation among reporting units (1)	(2,048)		2,048		—		—		—

Foreign currency translation	(644)		(53)		71		—		(626)
Balance at August 27, 2022	$	90,489	$	3,115	$	25,315	$	10,557	$	129,476

(1) Represents the reallocation of goodwill as a result of transitioning Sotawall from the Architectural Framing Systems segment to the Architectural Services segment as of the start of the first quarter of fiscal 2023.

Other intangible assets

Indefinite-lived intangible assets

We have intangible assets for certain acquired trade names and trademarks which are determined to have indefinite useful lives. We test indefinite-lived intangible assets for impairment annually at the same measurement date as goodwill, the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Based on the impairment analysis performed in the fourth quarter of fiscal 2022, the fair value of each of our trade names and trademarks exceeded the carrying amount. However, due to triggering events identified in the fourth quarter of fiscal 2022, resulting from the finalization of our plans for integrating the Sotawall business into the Architectural Services segment, beginning in fiscal 2023, we determined that the carrying value of the Sotawall trade name exceeded fair value by $12.7 million. We determined that Sotawall had an immaterial fair value, resulting in the trade name being fully impaired as of fiscal 2022 year-end. We recognized this amount as impairment expense in the fourth quarter ended February 26, 2022.

Finite-lived intangible assets

Long-lived assets or asset groups, including intangible assets subject to amortization and property and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of those assets may not be

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(In thousands) Architectural Framing Systems Architectural Glass Architectural Services
Large-Scale
Optical
Total
Balance at February 27, 2016 $ 36,680
$ 25,639
$ 1,120
$ 10,557
$ 73,996
Goodwill acquired 27,444
—
—
—
27,444
Foreign currency translation (423 ) 317
—
—
(106 )
Balance at March 4, 2017 63,701
25,956
1,120
10,557
101,334
Goodwill acquired, net 49,256
—
—
—
49,256
Foreign currency translation 2,241
50
—
—
2,291
Balance at December 2, 2017 115,198
$ 26,006
$ 1,120
$ 10,557
$ 152,881
recoverable. We use undiscounted cash flows to determine whether impairment exists and measure any impairment loss using discounted cash flows to determine the fair value of long-lived assets. Due to triggering events identified during the fourth quarter of fiscal 2022, as a result of finalization of our plans for integrating the Sotawall business into the Architectural Services segment, beginning in fiscal 2023, we determined that the finite-lived intangible assets of Sotawall were impaired as of February 26, 2022. As such, we recognized a long-lived asset impairment charge of $36.7 million in finite-lived intangible assets in the fourth quarter of fiscal year 2022, within the Architectural Framing Systems segment.

The gross carrying amount of other intangible assets and related accumulated amortization was:


(In thousands)	Gross Carrying Amount		Accumulated Amortization			Foreign Currency Translation			Net		(In thousands)	Gross Carrying Amount		Accumulated Amortization		Impairment Expense		Foreign Currency Translation		Net
December 2, 2017
August 27, 2022											August 27, 2022
Definite-lived intangible assets:											Definite-lived intangible assets:
Debt issue costs	$	4,516	$	(3,169	)	$	—		$	1,347
Non-compete agreements	6,286		(6,122		)	10			174
Customer relationships	120,273		(18,753		)	3,788			105,308		Customer relationships	$	89,495	$	(48,556)	$	—	$	(997)	$	39,942
Trademarks and other intangibles	30,250		(13,616		)	1,055			17,689
Total definite-lived intangible assets	$	161,325	$	(41,660	)	$	4,853		$	124,518
Other intangibles											Other intangibles	39,347		(35,572)		—		(361)		3,414
Total											Total	128,842		(84,128)		—		(1,358)		43,356
Indefinite-lived intangible assets:											Indefinite-lived intangible assets:
Trademarks	48,461		—			877			49,338		Trademarks	27,129		—		—		(108)		27,021
Total intangible assets	$	209,786	$	(41,660	)	$	5,730		$	173,856	Total intangible assets	$	155,971	$	(84,128)	$	—	$	(1,466)	$	70,377
March 4, 2017
February 26, 2022											February 26, 2022
Definite-lived intangible assets:											Definite-lived intangible assets:
Debt issue costs	$	4,066	$	(2,960	)	$	—		$	1,106
Non-compete agreements	6,286		(6,025		)	(65		)	196
Customer relationships	82,479		(14,013		)	(145		)	68,321		Customer relationships	$	122,961	$	(47,226)	$	(33,608)	$	141	$	42,268
Trademarks and other intangibles	25,950		(4,917		)	(31		)	21,002
Total definite-lived intangible assets	$	118,781	$	(27,915	)	$	(241	)	$	90,625
Other intangibles											Other intangibles	41,838		(35,613)		(3,127)		(14)		3,084
Total											Total	164,799		(82,839)		(36,735)		127		45,352
Indefinite-lived intangible assets:											Indefinite-lived intangible assets:
Trademarks	16,022		—			39			16,061		Trademarks	39,832		—		(12,738)		35		27,129
Total intangible assets	$	134,803	$	(27,915	)	$	(202	)	$	106,686	Total intangible assets	$	204,631	$	(82,839)	$	(49,473)	$	162	$	72,481

Amortization expense on definite-lived intangible assets was ~~$12.8~~$2.1 million and ~~$1.2~~$3.9 million for the ~~nine-month~~six-month periods ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016~~,August 28, 2021, respectively. ~~The amortization~~Amortization expense ~~associated with debt issue costs~~of other identifiable intangible assets is included ~~in interest expense while the remainder is~~ in selling, general and administrative ~~expenses in the consolidated results of operations.~~expenses. At ~~December 2, 2017~~,August 27, 2022, the estimated future amortization expense for definite-lived intangible assets was:


(In thousands)	Remainder of 2023		2024		2025		2026		2027
Estimated amortization expense	$	2,258	$	4,362	$	4,332	$	4,315	$	4,313

(In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022
Estimated amortization expense $ 4,922
$ 13,235
$ 8,219
$ 8,213
$ 7,904

~~We maintain a~~During the second quarter ended August 27, 2022, we amended and extended our committed revolving credit facility ~~with~~to include maximum borrowings of up to ~~$335.0~~$385 million ~~maturing in November 2021. Outstanding~~with a maturity of August 2027. As part of the amendment, we repaid the $150 million term loan with borrowings under the revolving credit facility. As of August 27, 2022, outstanding borrowings under our ~~committed~~ revolving credit facility were ~~$209.0~~$235.0 million,, while there were no outstanding borrowings under the revolving credit facility as of ~~December 2, 2017, and $45.0 million, as of~~ ~~March 4, 2017. Under this~~February 26, 2022.

Our revolving credit facility ~~we are subject to~~contains two financial covenants that require us to stay below a

maximum debt-to-EBITDA ratio and maintain a minimum ratio of ~~interest expense-to-EBITDA.~~EBITDA-to-interest expense. Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis. At ~~December 2, 2017,~~August 27, 2022, we were in compliance with both financial covenants. Additionally, at ~~December 2, 2017,~~August 27, 2022, we had a total of ~~$26.3~~$12.3 million of ongoing letters of credit related to industrial revenue bonds, ~~and~~ construction contracts and insurance collateral that expire in fiscal ~~2018~~years 2023 to 2032 and reduce ~~availability of funds~~borrowing capacity under ~~our committed~~the revolving credit facility.

At ~~December 2, 2017, our~~August 27, 2022, debt ~~also~~ included ~~$20.4~~$12.0 million of industrial revenue bonds that mature in fiscal years ~~2021~~2036 through ~~2043~~2043. In March 2022, a $1.0 million industrial revenue bond matured and ~~$0.4 million of long-term debt in Canada.~~was repaid. The fair value of ~~the~~all industrial revenue bonds approximated carrying value at ~~December 2, 2017,~~August 27, 2022, due to the variable interest rates on these instruments. ~~All debt~~Our credit facility, term loan and industrial revenue bonds would be classified as Level 2 within the fair value hierarchy described in Note 7.4.

We also maintain two Canadian committed, revolving ~~demand~~ credit facilities totaling $~~12.0~~$25.0 million (USD). At August 27, 2022, outstanding borrowings under our Canadian dollars. As of December 2, 2017, $1.5 million was outstanding under these facilities, and no borrowings were outstanding as of March 4, 2017. Borrowings under these facilities are made available at the sole discretion of the lenders and are payable on demand. The Company classifies any outstanding balances under this demand facility as long-term debt, as outstanding amounts can be refinanced through our committed, revolving credit ~~facility.~~facilities were $3.8 million, while there were no outstanding borrowings under the Canadian facilities as of February 26, 2022.

Interest payments were ~~$3.6~~$2.8 million and ~~$0.5~~$1.9 million for the ~~nine~~six months ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016~~August 28, 2021, respectively.

We lease certain of the buildings and equipment used in our operations. We determine if an arrangement contains a lease at inception. Currently, all of our lease arrangements are classified as operating leases. We elected the package of practical expedients permitted under the transition guidance in adopting ASC 842, which among other things, allowed us to carry forward our historical lease classification. Operating lease assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. Lease expense is recognized on a straight-line basis over the lease term. Our leases have remaining lease terms of one to ten years, some of which include renewal options that can extend the lease for up to an additional ten years at our sole discretion. We have made an accounting policy election not to record leases with an original term of 12 months or less on our consolidated balance sheet; such leases are expensed on a straight-line basis over the lease term.

In determining lease asset value, we consider fixed or variable payment terms, prepayments, incentives, and options to extend, terminate or purchase. Renewal, termination or purchase options affect the lease term used for determining lease asset value only if the option is reasonably certain to be exercised. We use a discount rate for each lease based upon an estimated incremental borrowing rate over a similar term. We have elected the practical expedient to account for lease and non lease components (e.g., ~~respectively.~~common-area maintenance costs) as a single lease component. Our lease agreements do not contain any material residual value guarantees or material restrictive covenants. We are not a lessor in any transactions.

The components of lease expense were as follows:


	Three Months Ended				Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Operating lease cost	$	2,954	$	3,518	$	6,005	$	6,899
Short-term lease cost	346		240		660		464
Variable lease cost	857		734		1,763		1,457

Total lease cost	$	4,157	$	4,492	$	8,428	$	8,820

Other supplemental information related to leases was as follows:


	Six Months Ended
(In thousands except weighted-average data)	August 27, 2022			August 28, 2021

Cash paid for amounts included in the measurement of operating lease liabilities	$	7,069		$	7,186
Lease assets obtained in exchange for new operating lease liabilities	$	701		$	1,281
Weighted-average remaining lease term - operating leases	5.0 years			5.7 years
Weighted-average discount rate - operating leases	2.86		%	2.95		%

Future maturities of lease liabilities are as follows:


~~11.~~(In thousands)			~~Employee Benefit Plans~~			August 27, 2022

The Company sponsors two frozen defined-benefit pension plans: an unfunded Officers’ Supplemental Executive Retirement Plan and the Tubelite Inc. Hourly Employees’ Pension Plan. Components of net periodic benefit cost were:

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016 December 2,
2017 November 26,
2016
Interest cost $ 133
$ 139
$ 399
$ 417
Expected return on assets (10 ) (10 ) (30 ) (30 )
Amortization of unrecognized net loss 57
56
171
168
Net periodic benefit cost $ 180
$ 185
$ 540
$ 555

Remainder of Fiscal 2023		$	6,676
~~12.~~Fiscal 2024	~~Income Taxes~~	11,426
Fiscal 2025		10,018
Fiscal 2026		7,975
Fiscal 2027		6,479
Fiscal 2028		2,973
Thereafter		3,786
Total lease payments		49,333
Less: Amounts representing interest		3,210
Present value of lease liabilities		$	46,123

The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, Canada, Brazil and other international jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years prior to fiscal 2015, or U.S. state and local income tax examinations for years prior to fiscal 2011. The Company is not currently under U.S. federal examination for years subsequent to fiscal year 2014, and there is very limited audit activity of the Company’s income tax returns in U.S. state jurisdictions or international jurisdictions.

The total liability for unrecognized tax benefits at December 2, 2017 and March 4, 2017 was approximately $5.4 million and $4.5 million, respectively. Penalties and interest related to unrecognized tax benefits are recorded in income tax expense. The total liability for unrecognized tax benefits is expected to decrease by approximately $0.3 million during the next 12 months due to lapsing of statutes.

~~13. Other Non-Current Liabilities~~

(In thousands) December 2, 2017 March 4, 2017
Deferred benefit from New Market Tax Credit transactions $ 16,708
$ 16,708
Retirement plan obligations 9,635
9,635
Deferred compensation plan 10,104
7,463
Other 23,034
11,981
Total other non-current liabilities $ 59,481
$ 45,787

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~~14.~~

8.Commitments and Contingent Liabilities

~~Operating lease commitments.~~ ~~As of~~ ~~December 2, 2017~~, the Company was obligated under non-cancelable operating leases for buildings and equipment. Certain leases provide for increased rental payments based upon increases in real estate taxes or operating costs. Future minimum rental payments under non-cancelable operating leases are:Bond commitments

(In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Thereafter Total
Total minimum payments $ 3,615
$ 13,546
$ 11,493
$ 8,477
$ 7,626
$ 21,232
$ 65,989

~~Bond commitments.~~In the ordinary course of business, predominantly in our Architectural Services and Architectural Framing Systems segments, we are required to provide surety or performance bonds that commit payments to our customers for any non-performance. At ~~December 2, 2017, $86.4~~August 27, 2022, $1.1 billion of these types of bonds were outstanding, of which $361.1 million ofis in our ~~backlog was bonded by performance bonds with a face value of $310.0 million. Performance~~backlog. These bonds do not have stated expiration ~~dates, as we are generally released from the bonds upon completion of the contract.~~dates. We have never been required to make ~~any~~ payments ~~related to these~~under surety or performance bonds with respect to ~~any of~~ our ~~current portfolio of~~existing businesses.

~~Warranties.~~Warranty and project-related contingencies

We reserve estimated exposures on known claims, as well as on a portion of anticipated claims, for product warranty and rework cost, based on historical product liability claims as a ratio of sales. Claim costs are deducted from the accrual when paid. Factors that could have an impact on ~~the warranty accrual~~these accruals in any given period include the following: changes in manufacturing quality, changes in product mix and any significant changes in sales volume. ~~A warranty rollforward follows:~~


	Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021
Balance at beginning of period	$	13,923	$	14,999
Additional accruals	6,918		4,400

Claims paid	(4,201)		(5,871)
Balance at end of period	$	16,640	$	13,528

Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
Balance at beginning of period $ 21,933
$ 16,340
Additional accruals 3,443
6,082
Claims paid (8,254 ) (4,878 )
Acquired reserves 5,571
—
Balance at end of period $ 22,693
$ 17,544

Additionally, we are subject to project management and installation-related contingencies as a result of our fixed-price material supply and installation service contracts, primarily in our Architectural Services segment and certain of our Architectural Framing Systems businesses. We manage the risk of these exposures through contract negotiations, proactive project management and insurance coverages.

Letters of ~~credit.~~credit

At ~~December 2, 2017~~,August 27, 2022, we had $12.3 million of ongoing letters of credit, ~~related to construction contracts and certain industrial revenue bonds. The total value of letters of credit under which we were obligated as of December 2, 2017 was approximately $26.3 million,~~ all of which have been issued under our committed revolving credit ~~facility. Availability under this~~facility, as discussed in Note 6. We also have a $3.4 million letter of credit which has been issued outside our committed revolving credit facility, ~~is reduced by borrowings under the facility~~with no impact on our borrowing capacity and ~~also by letters of credit issued under the facility.~~debt covenants.

Purchase ~~obligations.~~obligations

Purchase obligations for raw material commitments and capital expenditures totaled ~~$120.9~~$225.2 million as of ~~December 2, 2017.~~August 27, 2022.

~~Litigation.~~New Markets Tax Credit (NMTC) transactions

We have three outstanding NMTC arrangements which help to support operational expansion. Proceeds received from investors on these transactions are included within other current and other non-current liabilities in our consolidated balance sheets. The NMTC arrangements are subject to 100 percent tax credit recapture for a period of seven years from the date of each respective transaction. Upon the termination of each arrangement, these proceeds will be recognized in earnings in exchange for the transfer of tax credits. The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other non-current assets in our consolidated balance sheets. These costs will be recognized in conjunction with the recognition of the related proceeds on each arrangement. During the construction phase or for working capital purposes for each project, we are required to hold cash dedicated to fund each capital project which is classified as restricted cash in our consolidated balance sheets. Variable-interest entities, which have been included within our consolidated financial statements, have been created as a result of the structure of these transactions, as investors in the programs do not have a material interest in their underlying economics.

During the first quarter of fiscal 2023, one NMTC transaction was terminated, and a new NMTC transaction was established as a replacement. As a result of these transactions, $19.5 million in previous proceeds received were repaid and $19.5 million was contributed back to the Company as part of the newly established NMTC transaction. This NMTC transaction will be held for the remainder of the original seven-year term.

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The table below provides a summary of our outstanding NMTC transactions (in millions):


Inception date	Termination date	Deferred Benefit		Deferred costs		Net benefit
June 2016	June 2023	$	6.0	$	1.2	$	4.8
September 2018	September 2025	3.2		1.0		2.2
May 2022	August 2025	6.1		1.6		4.5
Total		$	15.3	$	3.8	$	11.5

Litigation

The Company is a party to various legal proceedings incidental to ~~our~~its normal operating activities. In particular, like others in the construction supply and services industry, ~~our businesses are~~the Company is routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. We have in the past and are currently subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products. The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability ~~employment practices, workers' compensation and automobile claims.~~matters. Although it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no ~~such claims~~matters will result in losses that would have a material adverse effect on ~~our~~the results of operations, cash flows or financial ~~condition.~~condition of the Company.

9.Share-Based Compensation

Total share-based compensation expense included in the results of operations was $3.4 million for the six-month period ended August 27, 2022 and $3.3 million for the six-month period ended August 28, 2021.

Stock options and SARs

Stock option and SAR activity for the current six-month period is summarized as follows:


Stock Options and SARs	Number of Shares	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at beginning of year	370,800	$	23.04

Awards exercised	(145,060)	23.04
Awards canceled/expired	(67,740)	23.04
Outstanding at end of period	158,000	$	23.04	0.9 years	$	2,000,280
Vested or expected to vest at end of period	158,000	$	23.04	0.9 years	$	2,000,280

For the six-months ended August 27, 2022, there were no cash proceeds from the exercise of stock options as all stock options were exercised on a stock for stock basis. The aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $2.7 million. For the six-months ended August 28, 2021, cash proceeds from the exercise of stock options was $4.1 million and the aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $2.3 million.

Executive Compensation Program
In fiscal 2022, the Compensation Committee of the Board of Directors implemented an executive compensation program for certain key employees. In the each of the first quarters of fiscal 2023 and fiscal 2022, we issued performance shares in the form of nonvested share unit awards, which give the recipient the right to receive shares earned at the end of the respective performance periods. The number of share units issued at grant is equal to the target number of performance shares and allows for the right to receive a variable number of shares dependent on achieving a defined performance goal of return on invested capital and being employed at the end of the performance period.

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~~15.~~	~~Segment Information~~

Nonvested share awards and units

Nonvested share activity, including performance share units, for the current six-month period is summarized as follows:


Nonvested shares and units	Number of Shares and Units	Weighted Average Grant Date Fair Value
Nonvested at February 26, 2022 (1)	488,944	$	30.14
Granted (2)	174,393	46.45
Vested	(134,499)	27.94
Canceled (3)	(44,232)	36.00
Nonvested at August 27, 2022(4)	484,606	$	36.09

(1) Includes a total of 50,825 nonvested share units granted and outstanding at target level for the fiscal 2022-2024 performance period.

(2) Includes a total of 38,564 nonvested share units granted and outstanding at target level for the fiscal 2023-2025 performance period.

(3) Includes a total of 9,690 nonvested share units cancelled for the fiscal 2022-2024 and fiscal 2023-2025 performance periods.

(4) Includes a total of 45,207 and 34,492 nonvested share units granted and outstanding at target level for the 2022-2024 and 2023-2025 performance periods, respectively.

At August 27, 2022, there was $12.8 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 27 months. The total fair value of shares vested during the six months ended August 27, 2022 was $3.8 million.

10.Income Taxes

The Company ~~has~~files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, Canada, Brazil and other international jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years prior to fiscal 2019, or state and local income tax examinations for years prior to fiscal 2013. The Company is not currently under U.S. federal examination for years subsequent to fiscal year 2018, and there is very limited audit activity of the Company’s income tax returns in U.S. state jurisdictions or international jurisdictions.

In the second quarter of fiscal 2023, the Company claimed certain tax deductions, including a worthless stock loss deduction, related to its investment in Sotawall Limited, a Canadian subsidiary. These deductions generated a net tax benefit of $13.7 million.

The total liability for unrecognized tax benefits was $5.3 million at August 27, 2022, compared to $3.3 million at February 26, 2022. The increase was primarily related to the tax deductions claimed during the second quarter of fiscal 2023 associated with the Company's investment in Sotawall Limited, a Canadian subsidiary. Penalties and interest related to unrecognized tax benefits are recorded in income tax expense.

11.Earnings per Share

The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share:


	Three Months Ended		Six Months Ended
(In thousands)	August 27, 2022	August 28, 2021	August 27, 2022	August 28, 2021
Basic earnings per share – weighted average common shares outstanding	21,860	25,140	22,129	25,271
Weighted average effect of nonvested share grants and assumed exercise of stock options	385	—	434	366
Diluted earnings per share – weighted average common shares and potential common shares outstanding	22,245	25,140	22,563	25,637
Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares)	120	4	120	8

12.Business Segment Data

We have four reporting segments:

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•The Architectural Framing Systems ~~Architectural Glass, Architectural Services and Large-Scale Optical (LSO).~~

~~The Architectural Framing Systems~~ segment designs, engineers, fabricates and finishes ~~the~~ aluminum ~~frames used in customized aluminum and glass~~ window, curtainwall, storefront and entrance systems ~~comprising~~for the ~~outside skin~~exterior of buildings.

•The Architectural Services segment integrates technical services, project management, and ~~entrances of commercial, institutional~~field installation services to design, engineer, fabricate, and ~~high-end multi-family residential buildings.~~ install building glass and curtainwall systems.

•The ~~Company has aggregated six operating segments into this reporting segment based on their similar products, customers, distribution methods, production processes and economic characteristics.~~

~~The~~ Architectural Glass segment coats and fabricates, ~~coated,~~ high-performance glass used in ~~customized~~custom window and wall systems ~~comprising the outside skin of~~on commercial ~~institutional and high-end multi-family residential~~ buildings.

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•The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings.

~~The LSO~~Large-Scale Optical (LSO) segment manufactures ~~value-added~~high-performance glass and acrylic products ~~primarily~~ for custom framing, museum, and ~~display applications.~~technical glass markets.

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016 December 2, 2017 November 26, 2016
Net sales from operations
Architectural Framing Systems $ 194,157
$ 90,850
$ 493,672
$ 264,212
Architectural Glass 96,940
107,002
292,026
299,567
Architectural Services 49,077
64,380
146,056
204,934
Large-Scale Optical 26,003
22,084
64,897
63,382
Intersegment eliminations (9,671 ) (10,244 ) (23,930 ) (31,688 )
Net sales $ 356,506
$ 274,072
$ 972,721
$ 800,407
Operating income (loss) from operations
Architectural Framing Systems $ 18,452
$ 11,838
$ 46,958
$ 35,070
Architectural Glass 9,107
11,708
28,687
30,855
Architectural Services 2,547
4,918
4,102
14,336
Large-Scale Optical 6,724
5,910
15,022
15,613
Corporate and other (2,295 ) (1,115 ) (8,354 ) (3,317 )
Operating income $ 34,535
$ 33,259
$ 86,415
$ 92,557
At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The fiscal 2022 segment results were recast for comparability.


	Three Months Ended				Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Net sales
Architectural Framing Systems	$	172,867	$	136,973	$	336,159	$	273,741
Architectural Services	106,732		96,370		210,120		187,102
Architectural Glass	77,352		79,373		153,617		162,404
Large-Scale Optical	25,166		23,543		50,328		47,771
Intersegment eliminations	(10,008)		(10,462)		(21,480)		(19,215)
Net sales	$	372,109	$	325,797	$	728,744	$	651,803
Operating income (loss)
Architectural Framing Systems	$	20,512	$	8,381	$	44,177	$	16,752
Architectural Services	5,490		7,139		8,417		11,365
Architectural Glass	6,457		(16,995)		11,626		(14,867)
Large-Scale Optical	5,991		5,483		12,489		11,330
Corporate and other	(6,378)		(7,076)		(11,421)		(11,607)
Operating income (loss)	$	32,072	$	(3,068)	$	65,288	$	12,973

Due to the varying combinations and integration of individual window, storefront and curtainwall systems, it is impractical to report product revenues generated by class of product, beyond the segment revenues currently reported.

13. Restructuring

On August 11, 2021, we announced plans to realign and simplify our business structure. During the first quarter of fiscal 2023, we completed the execution of these plans with the sale of the remaining manufacturing assets at our Architectural Glass location, in Dallas, Texas, for $4.1 million. The remaining assets had a carrying value of $3.4 million, and we recognized a gain on the sale of approximately $0.6 million, net of associated transaction costs, which is included as a reduction of cost of sales within our consolidated statements of operations.

The following table summarizes our restructuring related accrual balances included within accrued payroll and related costs and other current liabilities in the consolidated balance sheets. All balances are expected to be paid within the current fiscal year.


(In thousands)	Architectural Framing		Architectural Glass		Corporate & Other		Total
Balance at February 27, 2021	$	2,872	$	230	$	161	$	3,263
Restructuring expense	2,000		1,036		1,039		4,075
Payments	(3,567)		(529)		(972)		(5,068)
Other adjustments	(865)		—		—		(865)
Balance at February 26, 2022	440		737		228		1,405
Restructuring expense	—		62		—		62
Payments	(171)		(531)		(136)		(838)
Other adjustments	(151)		(17)		—		(168)
Balance at August 27, 2022	$	118	$	251	$	92	$	461

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14. Subsequent Events

We have evaluated subsequent events for potential recognition and disclosure through the date of this filing and determined that there were no subsequent events that required recognition or disclosure in the consolidated financial statements.


~~Item 2.~~	Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-looking statements This Quarterly Report on Form 10-Q, including the section, Management’s Discussion and Analysis of Financial Condition and Results of Operations,

~~Forward-Looking Statements~~

~~This discussion~~ contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements reflect our current views with respect to future events and financial performance. The words “believe,” “expect,” “anticipate,” “intend,” “estimate,” “forecast,” “project,” ~~“should”~~“should,” "will," "continue" and similar expressions are intended to identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All forecasts and projections in this document are “forward-looking statements,” and are based on management’s current expectations or beliefs of the Company’s near-term results, based on current information available pertaining to the Company, including the risk factors noted under Item 1A of the Company’s Annual Report on Form 10-K for the fiscal year ended ~~March 4, 2017~~.beliefs. From time to time, we may also provide oral and written forward-looking statements in other materials we release to the public, such as press releases, presentations to securities analysts or investors, or other communications by the Company. Any or all of our forward-looking statements in this report and in any public statements we make could be materially different from actual results.

Accordingly, we wish to caution investors that any forward-looking statements made by or on behalf of the Company are subject to uncertainties and other factors that could cause actual results to differ materially from such statements. ~~These uncertainties and other risk~~Information about factors ~~include, but are not limited to,~~that could materially affect our results can be found in the ~~risks and uncertainties set forth under Item 1A~~“Risk Factors” section of ~~the Company’s~~our Annual Report on Form 10-K for the ~~fiscal~~ year ended ~~March 4, 2017~~.February 26, 2022 and in subsequent filings with the U.S. Securities and Exchange Commission, including this Quarterly Report on Form 10-Q.

We also wish to caution investors that other factors might in the future prove to be important in affecting the Company’s results of operations. New factors emerge from time to time; it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Overview

We are a ~~world~~ leader in ~~certain technologies involving~~ the design and development of value-added glass and metal products and services. Our four reporting segments are: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical (LSO).

During fiscal 2022, we conducted a strategic review of our business and the markets we serve in order to establish a new enterprise strategy with three key elements, as discussed below:

1.Become the economic leader in our target markets. We will achieve this by developing a deep understanding of our target markets and aligning our businesses with clear go-to-market strategies to drive value for our customers through differentiated product and service offerings. We will also build a relentless focus on operational execution, driving productivity improvements, and maintaining a competitive cost structure, so that we may bring more value to our customers and improve our own profitability.

2.Actively manage our portfolio to drive higher margins and returns. We intend to shift our business mix toward higher operating margin offerings and improve our return on invested capital performance. We will accomplish this by allocating resources to grow our top performing businesses, actively addressing underperforming businesses, and investing to add new differentiated product and service offerings to accelerate our growth.

3.Strengthen our core capabilities. We are shifting from our historical, decentralized operating model, to one with center-led functional expertise that enables us to leverage the scale of the enterprise to better support the needs of the business. We are establishing a Company-wide operating system with common tools and processes that are based on the foundation of Lean and Continuous Improvement. This will be supported by a robust talent management program and a commitment to strong governance to ensure compliance and drive sustainable performance.

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects. The comparative fiscal 2022 segment results for the Architectural Framing Systems and Architectural Services segments have been recast to reflect the move of the Sotawall business into the Architectural Services segment from the Architectural Framing Systems segment, effective at the start of the first quarter of fiscal 2023.

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The following selected financial data should be read in conjunction with the Company’s Form 10-K for the year ended ~~March 4, 2017~~February 26, 2022 and the consolidated financial statements, including the notes to consolidated financial statements, included therein.

Highlights of ~~Third~~Second Quarter ~~and First Nine Months~~ of Fiscal ~~2018~~2023 Compared to ~~Third~~Second Quarter ~~and First Nine Months~~ of Fiscal ~~2017~~2022

Net sales

Consolidated net sales increased ~~30.1~~14.2 percent, or ~~$82.4~~$46.3 million, and 11.8 percent, or $76.9 million, for the ~~third quarter~~three- and six-month periods ended ~~December 2, 2017, and 21.5 percent, or $172.3 million, for the nine-month period ended December 2, 2017,~~August 27, 2022, compared to the same periods in the prior ~~year. Sales growth was~~year, primarily ~~due~~driven by flow-through from pricing actions taken to ~~the addition of EFCO in June 2017 and Sotawall in December 2016~~offset inflation within the Architectural Framing Systems segment ~~partially offset by~~and volume growth within the ~~decline in our~~ Architectural Services segment. ~~Foreign currency did not have a meaningful impact on sales results in the current-year period or the prior-year period.~~

The relationship between various components of operations, as a percentage of net sales, is ~~illustrated~~presented below:


	Three Months Ended				Six Months Ended
	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	77.2		85.3		76.6		82.2
Gross profit	22.8		14.7		23.4		17.8
Selling, general and administrative expenses	14.2		15.7		14.4		15.8
Operating income (loss)	8.6		(0.9)		9.0		2.0
Interest expense, net	0.5		0.3		0.4		0.4
Other expense (income), net	—		—		0.2		—
Earnings (loss) before income taxes	8.1		(1.2)		8.4		1.6
Income tax (benefit) expense	(1.9)		(0.6)		0.1		0.3
Net earnings (loss)	10.0	%	(0.6)	%	8.2	%	1.3	%
Effective tax rate	(23.8)	%	47.6	%	1.3	%	16.8	%

Three Months Ended Nine Months Ended
(Percent of net sales) December 2, 2017 November 26, 2016 December 2,
2017 November 26,
2016
Net sales 100.0 % 100.0 % 100.0 % 100.0 %
Cost of sales 74.3
73.4
74.5
73.8
Gross profit 25.7
26.6
25.5
26.2
Selling, general and administrative expenses 16.0
14.5
16.6
14.7
Operating income 9.7
12.1
8.9
11.5
Interest and other (expense) income, net (0.3 ) —
(0.3 ) —
Earnings before income taxes 9.4
12.1
8.6
11.5
Income tax expense 2.7
3.9
2.7
3.8
Net earnings 6.6 % 8.2 % 5.9 % 7.7 %
Effective tax rate 29.1 % 32.1 % 31.7 % 32.8 %

Gross profit

Gross profit as a percent of sales (gross margin) was ~~25.7~~22.8 percent and ~~25.5~~23.4 percent for the three- and ~~nine-month~~six-month periods ~~respectively,~~ ended ~~December 2, 2017,~~August 27, 2022, compared to ~~26.6~~14.7 percent and ~~26.2~~17.8 percent for the three- and ~~nine-month~~six-month periods ended ~~November 26, 2016. Gross profit as a percent of sales declined from the prior-year periods primarily due to the inclusion of the lower~~August 28, 2021. Both period increases in gross margin ~~EFCO business in the three-month period ended December 2, 2017, and reduced volume leverage~~were driven by inflation-related pricing actions in the Architectural ~~Services~~Framing Systems segment and benefits from restructuring actions completed in ~~both~~ the ~~three-~~second quarter of the prior year in the Architectural Glass and ~~nine-month~~Architectural Framing Systems segments. The prior-year periods ~~ended December 2, 2017.~~included $18.5 million of restructuring charges which were incurred in the second quarter and were recorded in costs of sales.

Selling, general and administrative (SG&A) expenses

SG&A expenses as a percent of sales were ~~16.0~~14.2 percent and ~~16.6~~14.4 percent infor the three- and ~~nine-month~~six-month periods ended ~~December 2, 2017,~~August 27, 2022, compared to ~~14.5~~15.7 percent and 15.8 percent for the prior year three- and six-month periods. SG&A decreased as a percent of sales ~~and 14.7 percent of sales~~compared to the same period in the ~~three- and nine-month periods, respectively, last year. The increases in the current~~prior year ~~periods were~~ primarily due to ~~amortization of~~ the intangible assets acquired in the Sotawall and EFCO transactions and EFCO acquisition-related costs. These two factors combined made up approximately 170 basis points of the increase in each of the three- and nine-month periods of fiscal 2018, compared to the prior-year periods.benefits realized from previously completed restructuring actions.

Income tax expense

The effective income tax rate in the ~~third~~second quarter of fiscal ~~2018~~2023 was ~~29.1~~a benefit of 23.8 percent, compared to ~~32.1~~expense of 47.6 percent in the same period last year, and ~~31.7~~1.3 percent for the first ~~nine~~six months of fiscal ~~2018,~~2023, compared to ~~32.8~~16.8 percent in the ~~prior-year period. The decline~~prior year. In the second quarter of fiscal 2023, the Company claimed certain tax deductions, including a worthless stock loss deduction, related to its investment in ~~both periods was due mainly to~~Sotawall Limited, a Canadian subsidiary. These deductions generated a net tax benefit ~~on the recognition~~ of ~~a foreign currency loss.~~$13.7 million.

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Segment Analysis

Architectural Framing Systems


	Three Months Ended								Six Months Ended
(In thousands)	August 27, 2022			August 28, 2021			% Change		August 27, 2022			August 28, 2021			% Change
Net sales	$	172,867		$	136,973		26.2	%	$	336,159		$	273,741		22.8	%
Operating income	20,512			8,381			144.7	%	44,177			16,752			163.7	%
Operating margin	11.9		%	6.1		%			13.1		%	6.1		%

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Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
%
Change
December 2, 2017 November 26, 2016
%
Change
Net sales $ 194,157
$ 90,850
113.7 % 493,672
264,212
86.8 %
Operating income 18,452
11,838
55.9 % 46,958
35,070
33.9 %
Operating margin 9.5 % 13.0 % 9.5 % 13.3 %

Architectural Framing Systems net sales increased ~~$103.3~~$35.9 million, or ~~113.7~~26.2 percent, and ~~$229.5~~$62.4 million, or ~~86.8~~22.8 percent, for the three- and ~~nine-month~~six-month periods ~~respectively,~~ ended ~~December 2, 2017, over the same periods in~~August 27, 2022, compared to the prior ~~year. The addition of the net~~year periods, primarily driven by inflation-related pricing actions and a more favorable sales ~~of EFCO and Sotawall provided over 80 percent of the growth in both periods. The remaining growth was from share gains and geographic growth in North America within our legacy businesses.~~mix.

Operating margin ~~declined 350~~increased 580 basis points and ~~380~~700 basis points for the three- and ~~nine-month~~six-month periods ~~respectively,~~ of the current year, compared to the same periods in the prior ~~year. The decline in~~year, reflecting improved pricing and mix, and the ~~three-month period resulted~~benefits from 280 basis points of amortization of acquired intangible assets and, for the nine-month period, the amortization of acquired intangible assets resulted in 240 basis points of the decline. Additionally, operating margin in both periods was impacted by the inclusion of EFCO at lower operating margins.

Backlog in this segment, as of December 2, 2017, was approximately $449 million, compared to approximately $245 million at fiscal year-end, with the addition of EFCO contributing over 90 percent of the increase.

~~Architectural Glass~~

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
%
Change
December 2, 2017 November 26, 2016
%
Change
Net sales $ 96,940
$ 107,002
(9.4 )% $ 292,026
$ 299,567
(2.5 )%
Operating income 9,107
11,708
(22.2 )% 28,687
30,855
(7.0 )%
Operating margin 9.4 % 10.9 % 9.8 % 10.3 %

~~Net sales declined $10.1 million, or 9.4 percent, for the quarter-ended December 2, 2017, over the same period~~restructuring actions completed in the prior year, ~~due to delays in~~which further strengthened our competitive position and offset the ~~timing~~impact of ~~certain larger projects in~~cost inflation. The second quarter of the ~~United States, partially as a result~~prior fiscal year included $2.0 million of hurricane-related project delays in Florida. Sales for the nine-month period ended December 2, 2017 decreased $7.5 million, or 2.5 percent, over the prior-year period due to delays in timing of larger projects, partly offsetrestructuring costs, which reduced operating margin by ~~share gains in mid-size projects. Foreign currency impact on sales was nominal in the current-year periods compared to the respective prior-year periods.~~

~~Operating margin declined~~ 150 ~~basis points~~ and 5080 basis points for the three- and ~~nine-month~~six-month periods ~~respectively,~~of the prior fiscal year.

As of August 27, 2022, segment backlog was approximately $286 million, compared to approximately $310 million at the end of the prior quarter of the current fiscal year. Backlog represents the dollar amount of signed contracts or firm orders, generally as a result of a competitive bidding process, which may be expected to be recognized as revenue in the future. Backlog is not a term defined under U.S. GAAP and is not a measure of contract profitability. We view backlog as one indicator of future revenues, particularly in our longer-lead time businesses. In addition to backlog, we have a substantial amount of projects with short lead times that book-and-bill within the same reporting period and are not included in backlog. We have strong visibility beyond backlog, as projects awarded, verbal commitments and bidding activities are not included in backlog.

Architectural Services


	Three Months Ended								Six Months Ended
(In thousands)	August 27, 2022			August 28, 2021			% Change		August 27, 2022			August 28, 2021			% Change
Net sales	$	106,732		$	96,370		10.8	%	$	210,120		$	187,102		12.3	%
Operating income	5,490			7,139			(23.1)	%	8,417			11,365			(25.9)	%
Operating margin	5.1		%	7.4		%			4.0		%	6.1		%

Architectural Services net sales increased $10.4 million, or 10.8 percent, and $23.0 million, or 12.3 percent for the three- and six-month periods ended August 27, 2022, compared to the same periods in the prior year, driven by increased volume from executing projects in backlog.

Operating margin decreased 230 basis points and 210 basis points in the three- and six-month periods of the current year, compared to the same periods in the prior ~~year. The declines in both periods were driven by reduced operating leverage~~year, primarily reflecting increased costs for investments to support future growth and impact of performance write-downs on ~~lower volume, and pricing and mix declines. These negative factors were~~a discrete number of projects, partially offset by ~~improved manufacturing productivity.~~higher volume.

~~Given~~

As of August 27, 2022, segment backlog was approximately $785 million, compared to approximately $681 million at the ~~short lead times~~end of the prior quarter of the current fiscal year, driven by significant new project wins in ~~this segment, we do not consider~~the transportation and healthcare markets. Segment backlog ~~to be~~at the end of the second quarter of fiscal 2022 was approximately $716 million. Backlog, a ~~significant metric.~~non-GAAP financial measure, is described within the Architectural Framing Systems discussion above.

Architectural ~~Services~~Glass


	Three Months Ended								Six Months Ended
(In thousands)	August 27, 2022			August 28, 2021			% Change		August 27, 2022			August 28, 2021			% Change
Net sales	$	77,352		$	79,373		(2.5)	%	$	153,617		$	162,404		(5.4)	%
Operating income (loss)	6,457			(16,995)			138.0	%	11,626			(14,867)			178.2	%
Operating margin	8.3		%	(21.4)		%			7.6		%	(9.2)		%

Three Months Ended Nine Months Ended
(In thousands) December 2,
2017 November 26,
2016
%
Change
December 2,
2017 November 26,
2016
%
Change
Net sales $ 49,077
$ 64,380
(23.8 )% $ 146,056
$ 204,934
(28.7 )%
Operating income 2,547
4,918
(48.2 )% 4,102
14,336
(71.4 )%
Operating margin 5.2 % 7.6 % 2.8 % 7.0 %

~~Architectural Services net~~Net sales decreased ~~$15.3~~$2.0 million, or ~~23.8~~2.5 percent, and ~~$58.9~~$8.8 million, or ~~28.7~~5.4 percent for the three- and ~~nine-month~~six-month periods ~~respectively,~~ ended ~~December 2, 2017, over~~August 27, 2022, compared to the same periods in the prior year, primarily ~~due~~reflecting lower volume, partially offset by improved pricing.

In the current quarter, the segment had operating income of $6.5 million and operating margin of 8.3 percent, compared to ~~year-on-year timing~~operating loss of ~~project activity.~~

$17.0 million and negative operating margin of 21.4 percent in the same period of the prior year. The prior year second quarter included $17.4 million of restructuring costs, while the current year second quarter reflects improved pricing, productivity gains, and the positive impacts of restructuring actions completed during the prior year, all of which offset the impact of inflation. For the six months ended August 27, 2022, the segment had operating income of $11.6 million and operating margin of 7.6 percent, compared to operating loss of $14.9 million and negative operating margin of 9.2 percent in

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the same period of the prior year, primarily related to the restructuring costs incurred during the second quarter of prior fiscal year, as well as productivity gains and improved pricing during the current year period.

~~Operating margin declined 240 basis points~~

Large-Scale Optical (LSO)


	Three Months Ended								Six Months Ended
(In thousands)	August 27, 2022			August 28, 2021			% Change		August 27, 2022			August 28, 2021			% Change
Net sales	$	25,166		$	23,543		6.9	%	$	50,328		$	47,771		5.4	%
Operating income	5,991			5,483			9.3	%	12,489			11,330			10.2	%
Operating margin	23.8		%	23.3		%			24.8		%	23.7		%

LSO net sales increased $1.6 million, or 6.9 percent, and ~~420 basis points~~$2.6 million, or 5.4 percent, for the three- and ~~nine-month~~six-month periods ~~respectively, of the current year, over~~ended August 27, 2022, compared to the same periods in the prior year, ~~due to lower volume leverage on fixed project management, engineering~~primarily driven by higher volume.

Operating margin increased 50 basis points and ~~manufacturing costs.~~

~~As of December 2, 2017, backlog~~110 basis points in ~~this segment grew to approximately $346 million, compared to approximately $255 million at fiscal year-end.~~

~~Large-Scale Optical (LSO)~~

Three Months Ended Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
%
Change
December 2, 2017 November 26, 2016
%
Change
Net sales $ 26,003
$ 22,084
17.7 % $ 64,897
$ 63,382
2.4 %
Operating income 6,724
5,910
13.8 % 15,022
15,613
(3.8 )%
Operating margin 25.9 % 26.8 % 23.1 % 24.6 %

~~LSO net sales increased $3.9 million, or 17.7 percent, and $1.5 million, or 2.4 percent, for~~ the three- and ~~nine-month periods ended December 2, 2017, respectively, over the comparable prior-year periods, as a result of strong customer orders, partly due to timing, and success in new display markets.~~

~~Operating margin declined 90 basis points and 150 basis points for the three- and nine-month~~six-month periods of the current year, ~~respectively, over~~compared to the same periods in the prior year, ~~due to accrual of additional incentive compensation on stronger current-year performance. In the current quarter, this was~~primarily reflecting higher volume and improved pricing, partially offset by ~~improved operating leverage on increased volume.~~cost inflation.

~~Given the short lead times in this segment, we do not consider backlog to be a significant metric.~~

Liquidity and Capital Resources


Selected cash flow data	Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021
Operating Activities
Net cash (used) provided by operating activities	$	(2,643)	$	54,907
Investing Activities
Capital expenditures	(9,255)		(10,121)

Proceeds from sales of property, plant and equipment	4,122		1,292

Financing Activities
Borrowings on line of credit	409,880		—
Repayment on debt	(151,000)		(2,000)
Payments on line of credit	(171,000)		—
Repurchase and retirement of common stock	(74,312)		(22,419)
Dividends paid	(9,602)		(10,060)

Selected cash flow data Nine Months Ended
(In thousands) December 2, 2017 November 26, 2016
Operating Activities
Net cash provided by operating activities $ 66,239
$ 72,815
Investing Activities
Capital expenditures (38,946 ) (44,548 )
Acquisition of business, net of cash acquired (184,826 ) —
Change in restricted cash 7,834
(14,884 )
Financing Activities
Proceeds from issuance of debt 314,700
—
Payments on debt (150,700 ) —
Repurchase and retirement of common stock (10,833 ) (10,817 )
Dividends paid (11,971 ) (10,687 )

Operating Activities. ~~Cash~~Net cash used by operating activities was $2.6 million for the first six months of fiscal 2023, compared to $54.9 million of net cash provided by operating activities in the prior year period, reflecting increased working capital related to revenue growth and inflation.

Investing Activities. Net cash used by investing activities was ~~$66.2~~$4.7 million for the first ~~nine~~six months of fiscal ~~2018, decreasing $6.6~~2023, driven primarily by capital expenditures of $9.3 million, ~~compared to the prior-year period, as a result~~partially offset by proceeds received from sales of ~~increased working capital investment due to reduced accrued expenses.~~

~~Investing Activities.~~ ~~Net cash used in investing activities was $215.6 million~~property, plant and equipment of $4.1 million. In the first ~~nine months of fiscal 2018, primarily due to the cash paid for the acquisition of EFCO, while in the first nine~~six months of the prior year, net cash used by investing activities ~~of $59.2~~was $8.8 million, ~~was~~primarily driven by capital ~~expenditures. Additionally,~~expenditures of $10.1 million.

Financing Activities. Net cash provided by financing activities was $0.5 million for the first six months of fiscal 2023, compared to net cash used by financing activities of $32.2 million in ~~fiscal 2018, we released~~ the ~~remaining $7.8~~prior year period. The current year period was primarily driven by net debt borrowings of $87.9 million, ~~of cash that was restricted for investment~~partially offset by share repurchases totaling $74.3 million, compared to $22.4 million in our oversized glass fabrication project within our Architectural Glass segment. We estimate fiscal 2018 capital expenditures to be $55 to $60 million, as we continue to invest in productivity and capabilities.the prior year period.

We continually review our portfolio of businesses and their assets in comparison to our internal strategic and performance objectives. As part of this review, we may acquire other businesses, pursue geographic expansion, take actions to manage capacity and/or further invest in, fully divest and/or sell parts of our current businesses. As a result, on January 5, 2018 we announced a plan to close the St. George, UT architectural glass manufacturing facility in March 2018, enabled by our investments in productivity and increased capabilities, which have led to an increase in capacity.

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~~Financing Activities.~~ At December 2, 2017, we had outstanding borrowings under our credit facility of $209.0 million. As defined within our amended committed revolving credit facility, we are required to comply with two financial covenants. These financial covenants require us to stay below a maximum leverage ratio and to maintain a minimum interest coverage ratio. At December 2, 2017, we were in compliance with both financial covenants.

We paid dividends totaling ~~$12.0~~$9.6 million ($~~0.42~~0.4400 per share) in the first ~~nine~~six months of fiscal ~~2018. As~~2023, compared to $10.1 million ($0.4000 per share) in the comparable prior year period. During the first six months of ~~December 2, 2017,~~fiscal 2023, we repurchased ~~200,000~~1,571,139 shares under our authorized share repurchase program, for a total cost of ~~$10.8 million; all such repurchases were made in~~$74.3 million. In the ~~second quarter. In~~first six months of fiscal ~~2017,~~2022, we repurchased ~~250,001~~589,533 shares under ~~this~~the share repurchase program, for a total cost of ~~$10.8 million; all such repurchases were made in~~$22.0 million. Since the ~~third quarter. Subsequent to the end~~inception of the ~~quarter, we purchased 246,299 shares under the~~share repurchase program ~~at a total cost of $11.1 million. Including these shares,~~in 2004, we have purchased a total of ~~3,753,932~~10,996,601 shares, at a total cost of ~~$94.2 million, since the fiscal 2004 inception~~$381.6 million. As of ~~this program. In January 2018, our repurchase authority under this program increased by 1,000,000 shares. As a result of both of these actions,~~August 27, 2022, we ~~have~~had remaining authority to repurchase ~~1,496,068 shares.~~an additional 1,253,399 shares under this program. We will continue to evaluate making future share repurchases, considering our cash flow, debt levels and market conditions, in the context of all our capital allocation options, with the goal of maximizing long-term value for our shareholders.

~~Other Financing Activities.~~ ~~The following summarizes our significant contractual obligations that impact~~

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Additional Liquidity Considerations. We periodically evaluate our liquidity asrequirements, capital needs and availability of ~~December 2, 2017~~:resources in view of inventory levels, expansion plans, and other working capital needs.

Payments Due by Fiscal Period
(In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Thereafter Total
Long-term debt obligations $ 597
$ 1,583
$ 108
$ 5,508
$ 211,108
$ 13,022
$ 231,926
Operating leases (undiscounted) 3,615
13,546
11,493
8,477
7,626
21,232
65,989
Purchase obligations 48,572
67,615
2,247
1,230
1,230
—
120,894
Total cash obligations $ 52,784
$ 82,744
$ 13,848
$ 15,215
$ 219,964
$ 34,254
$ 418,809

~~The long-term debt obligations due in fiscal~~During the second quarter ended August 27, 2022, ~~relate primarily to borrowings under~~we amended and extended our committed revolving credit facility to include maximum borrowings of up to $385 million with a maturity of August 2027. As part of the amendment, we repaid the $150 million term loan with borrowings under the revolving credit facility. ~~From time~~As of August 27, 2022, outstanding borrowings under our revolving credit facility were $235.0 million, while there were no outstanding borrowings under the revolving credit facility as of February 26, 2022. We are required to ~~time,~~make periodic interest payments on our outstanding indebtedness, and future interest payments will be determined based on the amount of outstanding borrowings and prevailing interest rates during that time.

Our revolving credit facility contains two financial covenants that require us to stay below a maximum debt-to-EBITDA ratio and maintain a minimum ratio of EBITDA-to-interest expense. Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis. At August 27, 2022, we were in compliance with both financial covenants.

We acquire the use of certain assets through operating leases, such as ~~warehouses,~~property, manufacturing equipment, vehicles ~~forklifts, office equipment, hardware, software~~ and ~~some manufacturing~~other equipment. ~~Many~~Future payments for such leases, excluding leases with initial terms of ~~these operating leases have termination penalties. However, because~~one year or less, were $49.3 million at August 27, 2022, with $6.7 million payable during the ~~assets~~remainder of fiscal 2023.

As of August 27, 2022, we had $225.2 million of open purchase obligations, of which payments totaling $117.8 million are ~~used in~~expected to become due within the ~~conduct~~remainder of our business operations, it is unlikely that any significant portion of these operating leases would be terminated prior to the normal expiration of their lease terms. Therefore, we consider the risk related to termination penalties to be minimal.

~~Purchase~~fiscal 2023. These purchase obligations ~~in the table above~~primarily relate to raw material commitments and capital ~~expenditures.~~expenditures, and are not expected to impact future liquidity as amounts should be recovered through customer billings.

We expect to make contributions of ~~$1.0~~$0.7 million to our defined-benefit pension plans in fiscal ~~2018,~~2023, which will equal or exceed our minimum funding requirements.

As of ~~December 2, 2017~~,August 27, 2022, we had reserves of ~~$5.4 million and $1.4~~$5.3 million for unrecognized tax ~~benefits and environmental liabilities, respectively. We currently expect approximately $0.3 million of the unrecognized tax benefits to lapse during the next 12 months.~~benefits. We are unable to reasonably estimate in which future periods the remaining unrecognized tax benefits ~~and environmental liabilities~~ will ultimately be settled. ~~We are currently in the process of evaluating information to determine the impact the recently enacted Tax Cuts and Jobs Act will have on our accounting for income taxes.~~

At ~~December 2, 2017~~, we had a total of $26.3 million of ongoing letters of credit related to industrial revenue bonds and construction contracts that expire in fiscal 2018 and reduce availability of funds under our committed credit facility.

~~In addition to the above standby letters of credit, we~~We are required, in the ordinary course of business, to provide surety or performance bonds that commit payments to our customers for any ~~non-performance by us.~~non-performance. At ~~December 2, 2017, $86.4~~August 27, 2022, $1.1 billion of these types of bonds were outstanding, of which $361.1 million ofis in our ~~backlog was bonded by performance bonds with a face value of $310.0 million. Performance~~backlog. These bonds do not have stated expiration ~~dates, as we are generally released from the bonds upon completion of the contract.~~dates. We have never been required to make ~~any~~ payments ~~related to these~~under surety or performance bonds with respect to ~~any~~our existing businesses.

During calendar year 2020, we took advantage of the option to defer remittance of the employer portion of Social Security tax as provided in the Coronavirus Aid, Relief, and Economic Security Act. This deferral allowed us to retain cash during calendar year 2020 that would have otherwise been remitted to the federal government. We paid our ~~current portfolio~~first installment of ~~businesses.~~these deferred social security taxes, totaling approximately $6.8 million, in the fourth quarter of fiscal 2022, and expect to pay our second installment of approximately $6.8 million in the fourth quarter of fiscal 2023.

Due to our ability to generate strong cash from operations and our borrowing capability under our committed revolving credit facility, we believe that our sources of liquidity will be adequate to meet our short-term and long-term liquidity and capital expenditure needs. In addition, we believe we have the ability to obtain both short-term and long-term debt to meet our financing needs for the foreseeable future. We also believe we will be able to operate our business so as to continue to be ~~adequate~~in compliance with our existing debt covenants over the next fiscal year.

We have no off-balance sheet arrangements that have or are reasonably likely to ~~fund~~have a current or future effect on our ~~working capital requirements, planned~~financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital resources that is material to investors.

Outlook

Based on our second-quarter results and ~~dividend payments~~increasing confidence in our outlook, we have raised our guidance for ~~at least~~full-year adjusted earnings to a range of $3.75 to $4.05 per diluted* share, up from the ~~next 12 months.~~previously announced range of $3.50 to $3.90. We expect full year revenue growth of 8 to 10 percent, primarily driven by growth in our Architectural Framing Systems segment. The company continues to expect full-year capital expenditures of approximately $40 million.

~~Table~~* A reconciliation of ~~Contents~~

~~Non-GAAP Measures~~

~~We analyze~~ non-GAAP ~~measures for adjusted net earnings,~~guidance on adjusted earnings per diluted ~~common~~ share ~~and adjusted operating income. These measures are used by management~~(“Adjusted EPS”) to ~~evaluate the Company's financial performance~~GAAP guidance is not available on a ~~more consistent~~forward-looking basis ~~and improve comparability of results from period~~without unreasonable effort due to ~~period, because they exclude certain amounts that management does not consider to be part~~the uncertainty of the ~~Company's core operating results. Examples~~magnitude and timing of ~~items excluded to arrive at these adjusted measures~~future adjustments. These adjustments may include the impact of ~~acquisition-related~~such items as impairment charges, restructuring costs, ~~amortization~~acquired

Table of ~~short-lived acquired intangibles associated with backlog~~Contents

project-related charges, and ~~non-recurring restructuring costs. These non-GAAP measures should be viewed in addition~~gains or losses from significant asset sales. Accordingly, the company is unable to ~~and not as an alternative~~provide a reconciliation of Adjusted EPS to the ~~reported~~most directly comparable GAAP financial measure or address the probable significance of the unavailable information, which could be material to the company's future financial results ~~of the company prepared~~computed in accordance with GAAP. ~~The non-GAAP measures presented below may differ from similar measures used by other companies.~~

~~The following table reconciles net earnings to adjusted net earnings and earnings per diluted common share to adjusted earnings per diluted common share.~~

Three Months Ended Nine Months Ended
(In thousands, except per share data) December 2, 2017 November 26, 2016 % Change December 2, 2017 November 26, 2016 % Change
Net earnings $ 23,646
$ 22,552
5 % $ 57,159
$ 62,671
(9 )%
Amortization of short-lived acquired intangibles 2,924
—
N/M
7,608
—
N/M
Acquisition-related costs 423
—
N/M
4,840
—
N/M
Income tax impact on above adjustments⁽¹⁾
(974 ) —
N/M
(4,120 ) —
N/M
Adjusted net earnings $ 26,019
$ 22,552
15 % $ 65,487
$ 62,671
4 %

Earnings per diluted common share $ 0.82
$ 0.78
5 % $ 1.98
$ 2.17
(9 )%
Amortization of short-lived acquired intangibles 0.10
—
N/M
0.26
—
N/M
Acquisition-related costs 0.01
—
N/M
0.17
—
N/M
Income tax impact on above adjustments⁽¹⁾
(0.03 ) —
N/M
(0.14 ) —
N/M
Adjusted earnings per diluted common share $ 0.90
$ 0.78
15 % $ 2.27
$ 2.17
5 %
⁽¹⁾ Income tax impact on adjustments was calculated using the quarterly effective income tax rate of 29.1% and the nine-month period effective income tax rate of 33.1%.

~~The following table reconciles operating income (loss) to adjusted operating income (loss).~~

Framing Systems Segment Corporate Consolidated
(In thousands) Operating income Operating margin Operating income (loss) Operating income Operating margin
Three Months Ended December 2, 2017
Operating income (loss) $ 18,452
9.5 % $ (2,295 ) $ 34,535
9.7 %
Amortization of short-lived acquired intangibles 2,924
1.5
—
2,924
0.8
Acquisition-related costs —
—
423
423
0.1
Adjusted operating income (loss) $ 21,376
11.0 % $ (1,872 ) $ 37,882
10.6 %
Three Months Ended November 26, 2016
Operating income (loss)⁽¹⁾
$ 11,838
13.0 % $ (1,115 ) $ 33,259
12.1 %

Nine Months Ended December 2, 2017
Operating income (loss) $ 46,958
9.5 % $ (8,354 ) $ 86,415
8.9 %
Amortization of short-lived acquired intangibles 7,608
1.5
—
7,608
0.8
Acquisition-related costs —
—
4,840
4,840
0.5
Adjusted operating income (loss) $ 54,566
11.1 % $ (3,514 ) $ 98,863
10.2 %
Nine Months Ended November 26, 2016
Operating income (loss)⁽¹⁾
$ 35,070
13.3 % $ (3,317 ) $ 92,557
11.5 %
(1) Expenses related to amortization of short-lived acquired intangibles and acquisition-related costs are not applicable to the three- and nine-month periods ended November 26, 2016, and therefore no adjustments have been made.

~~Table of Contents~~

~~Outlook~~

The following statements are based on our current expectations for full-year fiscal 2018 results, not including any estimated impact from the 2017 Tax Cuts and Jobs Act. These statements are forward-looking, and actual results may differ materially. We are currently expecting:

~~Revenue growth of approximately 20 percent over fiscal 2017.~~

~~Operating margin of 8.6 percent to 8.9 percent.~~

~~Earnings per diluted share of $2.58 to $2.68.~~


•	~~Adjusted operating margin of 10.1 to 10.4 percentand adjusted earnings per diluted share of $3.04 to $3.14~~⁽¹⁾.

~~Capital expenditures of $55 to $60 million.~~

⁽¹⁾Adjusted operating margin and adjusted earnings per diluted share exclude the impact of amortization of short-lived acquired intangible assets associated with the acquired backlog of Sotawall and EFCO of $7 million (after tax, $0.24 per diluted share) and acquisition-related costs for EFCO of approximately $3.1 million (after tax, $0.11 per diluted share). These two adjustments have a combined approximate 100 basis point negative impact on operating margin. Adjusted operating margin and adjusted earnings per diluted share also exclude the impact of planned fourth-quarter restructuring charges of approximately $4.5 million (after tax, $0.11 per diluted share). These non-GAAP measures are used by management to evaluate the Company's historical and prospective financial performance, measure operational profitability on a more consistent basis, and provide enhanced transparency to the investment community. These non-GAAP measures should be viewed in addition to, and not as an alternative to, the financial results of the company prepared in accordance with GAAP.

Related Party Transactions

No material changes have occurred in the disclosure with respect to our related party transactions set forth in our Annual Report on Form 10-K for the fiscal year ended ~~March 4, 2017.~~February 26, 2022.

Critical Accounting Policies

NoThere have been no material changes ~~have occurred in the disclosure of~~to our critical accounting policies ~~set forth~~from those disclosed in our Annual Report on Form 10-K for the fiscal year ended ~~March 4, 2017.~~February 26, 2022, except as noted below.

Impairment of goodwill, indefinite-lived intangible assets and long-lived assets

Goodwill

At the beginning of the first quarter of fiscal 2023, we began management of the Sotawall and Harmon businesses under the Architectural Services segment in order to create a single, unified offering for larger custom curtainwall projects which resulted in the combination of the Sotawall and Harmon reporting units into a single reporting unit. We evaluated goodwill on a qualitative basis prior to and subsequent to this change for these reporting units and concluded that no adjustment to the carrying value of goodwill was necessary. Concurrent with the move of Sotawall from the Architectural Framing Systems segment to the Architectural Services segment effective at the start of our first quarter of fiscal 2023, goodwill was reallocated to the affected reporting units within each segment, using a relative fair value approach as outlined in ASC 350, Intangibles - Goodwill and Other. In addition, for all reporting units, no qualitative indicators of impairment were identified during the first quarter, and therefore, no interim quantitative goodwill impairment evaluation was performed.


~~Item 3.~~	~~Quantitative and Qualitative Disclosures About Market Risk~~

Item 3.Quantitative and Qualitative Disclosures About Market Risk

~~No material changes have occurred~~

Refer to the ~~disclosures of quantitative and qualitative market risk set forth in our~~Company’s Annual Report on Form 10-K for the fiscal year ended ~~March 4, 2017.~~February 26, 2022 for a discussion of the Company’s market risk. There have been no material changes in market risk since February 26, 2022.


~~Item 4.~~	~~Controls and Procedures~~

Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.


b)	~~Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended~~ ~~December 2, 2017, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.~~

Item 4.Controls and Procedures

a)Evaluation of disclosure controls and procedures: As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Interim Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Interim Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Interim Chief Financial Officer, to allow timely decisions regarding required disclosure.

b)Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended August 27, 2022, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II. OTHER INFORMATION


~~Item 1.~~	~~Legal Proceedings~~

Item 1.Legal Proceedings

The Company ~~has been~~is a party to various legal proceedings incidental to its normal operating activities. In particular, like others in the construction supply and services industry, the ~~Company’s construction supply and services businesses are~~Company is routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. We have in the past and are currently subject to product liability and warranty claims, including certain legal claims related to a commercial sealant product formerly incorporated into our products. The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability ~~and automobile claims.~~matters. Although it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no ~~such claims~~matters will result in losses that would have a material adverse effect on the results of operations, cash flows or financial condition of the Company.

Table of Contents


~~Item 1A.~~	~~Risk Factors~~

Item 1A.Risk Factors

There have been no material changes or additions to our risk factors discussed in our Annual Report on Form 10-K for the fiscal year ended ~~March 4, 2017~~.February 26, 2022.


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

~~Table of Contents~~

The following table provides information with respect to purchases made by the Company of its own stock during the ~~third~~second quarter of fiscal ~~2018:~~2023:


Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b)
May 29, 2022 to June 25, 2022	3,510	$	41.19	—	1,253,399
June 26, 2022 to July 23, 2022	11,199	40.10		—	1,253,399
July 24, 2022 to August 27, 2022	1,606	41.47		—	1,253,399
Total	16,315	$	40.61	—	1,253,399

(a)The shares in this column represent the total number of shares that were surrendered to us by plan participants to satisfy withholding tax obligations related to share-based compensation. We did not purchase any shares pursuant to our publicly announce repurchase program during the fiscal quarter.

(b)In fiscal 2004, announced on April 10, 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock. The Board increased the authorization by 750,000 shares, announced on January 24, 2008; by 1,000,000 shares on each of the announcement dates of October 8, 2008, January 13, 2016, January 9, 2018, January 14, 2020, October 7, 2021, and June 22, 2022; and by 2,000,000 shares, on each of the announcement dates of October 3, 2018 and January 14, 2022. The repurchase program does not have an expiration date.

Period
Total Number
of Shares
Purchased (a)

Average Price
Paid per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)
Maximum
Number of
Shares that May
Yet Be
Purchased
under the Plans
or Programs (b)
September 3, 2017 to September 30, 2017 —
$ —
—
742,367
October 1, 2017 to October 28, 2017 —
—
—
742,367
October 29, 2017 to December 2, 2017 304
46.80
—
742,367
Total 304
$ 46.80
—
742,367


~~(a)~~	The shares in this column represent the total number of shares that were repurchased by us pursuant to our publicly announced repurchase program, plus the shares surrendered to us by plan participants to satisfy stock-for-stock option exercises or withholding tax obligations related to share-based compensation.

~~(b)~~

In fiscal 2004, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock, which was announced on April 10, 2003. Subsequently, the Board of Directors increased the authorization by 750,000 shares, which was announced on January 24, 2008; by 1,000,000 shares, which was announced on October 8, 2008; and by 1,000,000 shares, which was announced on January 13, 2016. The repurchase program does not have an expiration date.

Item 6.Exhibits


~~Item 6.~~	~~Exhibits~~



~~10.1~~3.1		~~Third~~Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Annual Report on Form 10-K for the year-ended February 28, 2004.)
3.2		Articles of Amendment to ~~the~~Restated Articles of Incorporation. (Incorporated by reference to Exhibit 3.1 to Registrant's Current Report on Form 8-K filed on January 16, 2020.)
3.3		Amended and Restated Bylaws of Apogee Enterprises, Inc. ~~2011 Deferred Compensation Plan, dated October 5, 2017.~~(Incorporated by reference to Exhibit 3.3 to the Registrant’s Quarterly Report on Form 10-Q for the quarter-ended May 29, 2021).
10.1		Amendment No. 3 to Third Amended and Restated Credit Agreement dated as of August 5, 2022, by and among Apogee Enterprises, Inc., as the Borrower, the Lenders referred to therein, Wells Fargo Bank, National Association, as Administrative Agent, Swingline Lender and Issuing Lender, and U.S. Bank National Association, as Syndication Agent and Issuing Lender (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K filed on August 11, 2022).
~~31.1~~31.1#		Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

~~31.2~~31.2#	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

~~32.1~~32.1#	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

~~32.2~~32.2#	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101#
~~101~~	The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended ~~December 2, 2017 are furnished herewith,~~August 27, 2022, formatted in ~~XBRL (Extensible~~iXBRL (Inline Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of ~~December 2, 2017~~August 27, 2022 and ~~March 4, 2017,~~February 26, 2022, (ii) the Consolidated Results of Operations for the ~~three~~three- and ~~nine months~~six-months ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016,~~August 28, 2021, (iii) the Consolidated Statements of Comprehensive Earnings for the ~~three~~three- and ~~nine months~~six-months ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016,~~August 28, 2021, (iv) the Consolidated Statements of Cash Flows for the ~~nine months~~six-months ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016,~~August 28, 2021, (v) the Consolidated Statements of Shareholders' Equity for the ~~nine months~~three- and six-months ended ~~December 2, 2017~~August 27, 2022 and ~~November 26, 2016,~~August 28, 2021, and (vi) Notes to Consolidated Financial Statements.
104#		Cover Page Interactive Data File (formatted as iXBRL and contained in Exhibit 101)
		Exhibits marked with a (#) sign are filed herewith.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			APOGEE ENTERPRISES, INC.

Date: September 29, 2022			~~APOGEE ENTERPRISES, INC.~~By: /s/ Ty R. Silberhorn

~~Date: January 11, 2018~~	~~By: /s/ Joseph F. Puishys~~
		~~Joseph F. Puishys~~ Ty R. Silberhorn President and Chief Executive Officer (Principal Executive Officer)



Date: ~~January 11, 2018~~September 29, 2022		By: /s/ ~~James S. Porter~~
	~~James S. Porter~~ ~~Executive Vice President and~~ ~~Chief Financial Officer (Principal Financial and~~ ~~Accounting Officer)~~

~~Table of Contents~~

~~Exhibit Index to Form 10-Q for the Period Ended~~ ~~December 2, 2017~~

Mark R. Augdahl

~~10.1~~	~~Third Amendment to the Apogee Enterprises, Inc. 2011 Deferred Compensation Plan, dated October 5, 2017.~~

~~31.1~~	~~Certification of Chief Executive Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.~~

~~31.2~~	~~Certification of~~Mark R. Augdahl Interim Chief Financial Officer ~~pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.~~

~~32.1~~	~~Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~32.2~~	~~Certification of Chief~~ (Principal Financial ~~Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101~~	The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended December 2, 2017 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of December 2, 2017 and March 4, 2017, (ii) the Consolidated Results of Operations for the three and nine months ended December 2, 2017 and November 26, 2016, (iii) the Consolidated Statements of Comprehensive Earnings for the three and nine months ended December 2, 2017 and November 26, 2016, (iv) the Consolidated Statements of Cash Flows for the nine months ended December 2, 2017 and November 26, 2016, (v) the Consolidated Statements of Shareholders' Equity for the nine months ended December 2, 2017 and November 26, 2016, and (vi) Notes to Consolidated Financial Statements. Accounting Officer)


	Three Months Ended				Six Months Ended
(In thousands)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Net earnings (loss)	$	37,389	$	(2,116)	$	60,120	$	8,701
Other comprehensive (loss) earnings:
Unrealized (loss) gain on marketable securities, net of $(28), $2, $(102) and $1 of tax (benefit) expense, respectively	(106)		4		(382)		4
Unrealized (loss) gain on derivative instruments, net of $(152), $(203), $(1,469) and $8 of tax (benefit) expense, respectively	(500)		(666)		(4,816)		26
Foreign currency translation adjustments	(2,777)		(4,300)		(1,045)		1,580
Other comprehensive (loss) earnings	(3,383)		(4,962)		(6,243)		1,610
Total comprehensive earnings (loss)	$	34,006	$	(7,078)	$	53,877	$	10,311



Stock Options and SARs	Number of Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Aggregate Intrinsic Value
Outstanding at March 4, 2017	229,901		$	9.90
Awards exercised	(100,000	)	8.34
Outstanding and exercisable at December 2, 2017	129,901		$	11.10	3.0 Years	$	4,878,738



Nonvested Shares and Units	Number of Shares and Units		Weighted Average Grant Date Fair Value
Nonvested at March 4, 2017	279,204		$	44.79
Granted	124,416		55.40
Vested	(130,093	)	45.31
Canceled	(7,000	)	55.89
Nonvested at December 2, 2017	266,527		$	49.20


4.(In thousands)	~~Earnings per Share~~	August 27, 2022
Within one year		$	501,856
Within two years		293,561
Beyond two years		117,867
Total		$	913,284


(In thousands)	August 27, 2022		February 26, 2022
Warranties	$	13,482	$	11,786

Income and other taxes	6,519		15,770
Accrued self-insurance reserves	12,471		8,796
Accrued freight	2,410		2,078
Deferred revenue	2,405		2,714
Other	26,773		26,318
Total other current liabilities	$	64,060	$	67,462



x☒			QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



o☐			TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


				Page
PART I		Financial Information

			~~Page~~
~~PART I~~Item 1.	~~Financial Information~~

~~Item 1.~~	Financial Statements (Unaudited):

		Consolidated Balance Sheets		4

		Consolidated Results of Operations		5

		Consolidated Statements of Comprehensive Earnings		6

		Consolidated Statements of Cash Flows		7

		Consolidated Statements of Shareholders' Equity		8

		Notes to Consolidated Financial Statements		910

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations		1721

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		2326

Item 4.		Controls and Procedures		2326

PART II		Other Information

Item 1.		Legal Proceedings		2326

Item 1A.		Risk Factors		2327

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds		2327

Item 6.		Exhibits		2427

Signatures				2528


	Three Months Ended				Six Months Ended
(In thousands, except per share data)	August 27, 2022		August 28, 2021		August 27, 2022		August 28, 2021
Net sales	$	372,109	$	325,797	$	728,744	$	651,803
Cost of sales	287,173		277,795		558,191		536,091
Gross profit	84,936		48,002		170,553		115,712
Selling, general and administrative expenses	52,864		51,070		105,265		102,739
Operating income (loss)	32,072		(3,068)		65,288		12,973

Interest expense, net	1,698		1,072		2,904		2,310
Other expense (income), net	173		(105)		1,483		209
Earnings (loss) before income taxes	30,201		(4,035)		60,901		10,454
Income tax (benefit) expense	(7,188)		(1,919)		781		1,753
Net earnings (loss)	$	37,389	$	(2,116)	$	60,120	$	8,701
Earnings (loss) per share - basic	$	1.71	$	(0.08)	$	2.72	$	0.34
Earnings (loss) per share - diluted	$	1.68	$	(0.08)	$	2.66	$	0.34
Weighted average basic shares outstanding	21,860		25,140		22,129		25,271
Weighted average diluted shares outstanding	22,245		25,140		22,563		25,637



	Three Months Ended					Nine Months Ended
(In thousands, except per share data)	December 2, 2017		November 26, 2016			December 2, 2017		November 26, 2016
Net sales	$	356,506	$	274,072		$	972,721	$	800,407
Cost of sales	264,947		201,204			724,868		590,581
Gross profit	91,559		72,868			247,853		209,826
Selling, general and administrative expenses	57,024		39,609			161,438		117,269
Operating income	34,535		33,259			86,415		92,557
Interest income	106		271			390		799
Interest expense	1,594		150			3,689		495
Other income (expense), net	303		(158		)	560		350
Earnings before income taxes	33,350		33,222			83,676		93,211
Income tax expense	9,704		10,670			26,517		30,540
Net earnings	$	23,646	$	22,552		$	57,159	$	62,671

Earnings per share - basic	$	0.82	$	0.78		$	1.98	$	2.18
Earnings per share - diluted	$	0.82	$	0.78		$	1.98	$	2.17
Weighted average basic shares outstanding	28,736		28,828			28,812		28,807
Weighted average diluted shares outstanding	28,818		28,892			28,862		28,916



(In thousands)
Net working capital	$	34,156
Property, plant and equipment	43,815
Goodwill	57,460
Other intangible assets	71,500
Less: Long-term liabilities acquired, net	14,605
Net assets acquired	$	192,326



(In thousands)	Estimated fair value		Estimated useful life (in years)
Customer relationships	$	34,800	16
Tradename	32,400		Indefinite
Backlog	4,300		1.5
	$	71,500



	Three Months Ended				Nine Months Ended
In thousands, except per share data	December 2, 2017		November 26, 2016		December 2, 2017		November 26, 2016
Net sales	$	356,506	$	368,387	$	1,044,465	$	1,083,352
Net earnings	24,453		25,971		59,564		72,171
Earnings per share
Basic	0.85		0.90		2.07		2.50
Diluted	0.85		0.90		2.06		2.50



(In thousands)	Remainder of Fiscal 2018		Fiscal 2019		Fiscal 2020		Fiscal 2021		Fiscal 2022
Estimated amortization expense	$	4,922	$	13,235	$	8,219	$	8,213	$	7,904



	Three Months Ended				Nine Months Ended
(Percent of net sales)	December 2, 2017		November 26, 2016		December 2, 2017		November 26, 2016
Net sales	100.0	%	100.0	%	100.0	%	100.0	%
Cost of sales	74.3		73.4		74.5		73.8
Gross profit	25.7		26.6		25.5		26.2
Selling, general and administrative expenses	16.0		14.5		16.6		14.7
Operating income	9.7		12.1		8.9		11.5
Interest and other (expense) income, net	(0.3	)	—		(0.3	)	—
Earnings before income taxes	9.4		12.1		8.6		11.5
Income tax expense	2.7		3.9		2.7		3.8
Net earnings	6.6	%	8.2	%	5.9	%	7.7	%
Effective tax rate	29.1	%	32.1	%	31.7	%	32.8	%


1.	~~Basis of Presentation~~


2.	~~New Accounting Standards~~


3.	~~Share-Based Compensation~~



	Payments Due by Fiscal Period
(In thousands)	Remainder of Fiscal 2018		Fiscal 2019		Fiscal 2020		Fiscal 2021		Fiscal 2022		Thereafter		Total
Long-term debt obligations	$	597	$	1,583	$	108	$	5,508	$	211,108	$	13,022	$	231,926
Operating leases (undiscounted)	3,615		13,546		11,493		8,477		7,626		21,232		65,989
Purchase obligations	48,572		67,615		2,247		1,230		1,230		—		120,894
Total cash obligations	$	52,784	$	82,744	$	13,848	$	15,215	$	219,964	$	34,254	$	418,809



	Framing Systems Segment				Corporate			Consolidated
(In thousands)	Operating income		Operating margin		Operating income (loss)			Operating income		Operating margin
Three Months Ended December 2, 2017
Operating income (loss)	$	18,452	9.5	%	$	(2,295	)	$	34,535	9.7	%
Amortization of short-lived acquired intangibles	2,924		1.5		—			2,924		0.8
Acquisition-related costs	—		—		423			423		0.1
Adjusted operating income (loss)	$	21,376	11.0	%	$	(1,872	)	$	37,882	10.6	%
Three Months Ended November 26, 2016
Operating income (loss)⁽¹⁾	$	11,838	13.0	%	$	(1,115	)	$	33,259	12.1	%

Nine Months Ended December 2, 2017
Operating income (loss)	$	46,958	9.5	%	$	(8,354	)	$	86,415	8.9	%
Amortization of short-lived acquired intangibles	7,608		1.5		—			7,608		0.8
Acquisition-related costs	—		—		4,840			4,840		0.5
Adjusted operating income (loss)	$	54,566	11.1	%	$	(3,514	)	$	98,863	10.2	%
Nine Months Ended November 26, 2016
Operating income (loss)⁽¹⁾	$	35,070	13.3	%	$	(3,317	)	$	92,557	11.5	%
(1) Expenses related to amortization of short-lived acquired intangibles and acquisition-related costs are not applicable to the three- and nine-month periods ended November 26, 2016, and therefore no adjustments have been made.



Period	Total Number of Shares Purchased (a)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b)	Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b)
September 3, 2017 to September 30, 2017	—	$	—	—	742,367
October 1, 2017 to October 28, 2017	—	—		—	742,367
October 29, 2017 to December 2, 2017	304	46.80		—	742,367
Total	304	$	46.80	—	742,367