Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Sep. 02, 2017 | Oct. 11, 2017 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | APOGEE ENTERPRISES, INC. | |
Entity Central Index Key | 6,845 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 2, 2017 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q2 | |
Current Fiscal Year End Date | --03-03 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 28,642,749 |
Consolidated Balance Sheets (un
Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Current assets | ||
Cash and cash equivalents | $ 29,528 | $ 19,463 |
Short-term available for sale securities | 464 | 548 |
Restricted cash | 0 | 7,834 |
Receivables, net of allowance for doubtful accounts | 222,583 | 185,740 |
Inventories | 103,673 | 73,409 |
Refundable income taxes | 0 | 1,743 |
Other current assets | 12,498 | 8,724 |
Total current assets | 368,746 | 297,461 |
Property, plant and equipment, net | 299,974 | 246,748 |
Available for sale securities | 10,357 | 9,041 |
Deferred tax assets | 2,232 | 4,025 |
Goodwill | 153,483 | 101,334 |
Intangible assets | 181,124 | 106,686 |
Other assets | 23,460 | 19,363 |
Total assets | 1,039,376 | 784,658 |
Current liabilities | ||
Accounts payable | 63,619 | 63,182 |
Accrued payroll and related benefits | 30,632 | 51,244 |
Accrued self-insurance reserves | 8,461 | 8,575 |
Other current liabilities | 56,378 | 34,200 |
Billings in excess of costs and earnings on uncompleted contracts | 33,864 | 28,857 |
Accrued income taxes | 4,854 | 0 |
Total current liabilities | 197,808 | 186,058 |
Long-term debt | 257,806 | 65,400 |
Unrecognized tax benefits | 4,465 | 3,980 |
Long-term self-insurance reserves | 17,001 | 8,831 |
Deferred tax liabilities | 1,836 | 4,025 |
Other non-current liabilities | 59,086 | 45,787 |
Commitments and contingent liabilities (Note 13) | ||
Shareholders' equity | ||
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 28,996,209 and 28,958,119, respectively | 9,548 | 9,560 |
Additional paid-in capital | 152,711 | 150,111 |
Retained earnings | 355,623 | 341,996 |
Common stock held in trust | (897) | (875) |
Deferred compensation obligations | 897 | 875 |
Accumulated other comprehensive loss | (16,508) | (31,090) |
Total shareholders’ equity | 501,374 | 470,577 |
Total liabilities and shareholders' equity | $ 1,039,376 | $ 784,658 |
Consolidated Balance Sheets (u3
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares | Sep. 02, 2017 | Mar. 04, 2017 |
Statement of Financial Position [Abstract] | ||
Common stock, par value | $ 0.33 | $ 0.33 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 28,642,749 | 28,680,841 |
Common stock, shares outstanding | 28,642,749 | 28,680,841 |
Consolidated Results of Operati
Consolidated Results of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Income Statement [Abstract] | ||||
Net sales | $ 343,907 | $ 278,455 | $ 616,214 | $ 526,335 |
Cost of sales | 257,906 | 205,924 | 459,919 | 389,377 |
Gross profit | 86,001 | 72,531 | 156,295 | 136,958 |
Selling, general and administrative expenses | 58,227 | 39,483 | 104,415 | 77,661 |
Operating income | 27,774 | 33,048 | 51,880 | 59,297 |
Interest income | 117 | 252 | 284 | 528 |
Interest expense | 1,650 | 188 | 2,095 | 345 |
Other income (expense), net | 77 | 254 | 256 | 509 |
Earnings before income taxes | 26,318 | 33,366 | 50,325 | 59,989 |
Income tax expense (benefit) | 8,909 | 10,969 | 16,813 | 19,870 |
Net earnings | $ 17,409 | $ 22,397 | $ 33,512 | $ 40,119 |
Earnings per share - basic | ||||
Net earnings | $ 0.60 | $ 0.78 | $ 1.16 | $ 1.39 |
Earnings per share - diluted | ||||
Net earnings | $ 0.60 | $ 0.77 | $ 1.16 | $ 1.39 |
Weighted average basic shares outstanding | 28,850 | 28,891 | 28,850 | 28,797 |
Weighted average diluted shares outstanding | 28,908 | 28,960 | 28,885 | 28,927 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Net earnings | $ 17,409 | $ 22,397 | $ 33,512 | $ 40,119 |
Other comprehensive earnings: | ||||
Unrealized gain on marketable securities, net of $17, $43, $50 and $35 of tax expense, respectively | 30 | 79 | 92 | 65 |
Foreign currency translation adjustments | 15,207 | 1,632 | 14,490 | 4,525 |
Other comprehensive earnings (loss) | 15,237 | 1,711 | 14,582 | 4,590 |
Total comprehensive earnings | $ 32,646 | $ 24,108 | $ 48,094 | $ 44,709 |
Consolidated Statements of Com6
Consolidated Statements of Comprehensive Earnings (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax expense (benefit) on marketable securities | $ 17 | $ 43 | $ 50 | $ 35 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 02, 2017 | Aug. 27, 2016 | |
Operating Activities | ||
Net earnings | $ 33,512 | $ 40,119 |
Adjustments to reconcile net earnings to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 25,062 | 15,955 |
Stock-based compensation | 3,063 | 2,935 |
Deferred income taxes | (751) | (1,320) |
Gain on disposal of assets | 37 | 183 |
Proceeds from New Markets Tax Credit transaction, net of deferred costs | 0 | 5,109 |
Other, net | (1,168) | (1,424) |
Changes in operating assets and liabilities: | ||
Receivables | 8,683 | (14,297) |
Inventories | (6,837) | (4,876) |
Accounts payable and accrued expenses | (33,982) | (7,511) |
Billings in excess of costs and earnings on uncompleted contracts | 4,819 | 10,711 |
Refundable and accrued income taxes | 7,079 | (1,310) |
Other, net | 1,366 | (366) |
Net cash provided by (used in) operating activities | 40,809 | 43,542 |
Investing Activities | ||
Capital expenditures | (26,825) | (31,474) |
Proceeds from sales of property, plant and equipment | 64 | 1,713 |
Acquisition of business, net of cash acquired | 184,826 | 0 |
Change in restricted cash | (7,834) | 16,949 |
Purchases of marketable securities | (5,436) | (2,845) |
Sales/maturities of marketable securities | 4,271 | 2,294 |
Other, net | 1,099 | (2,044) |
Net cash provided by (used in) investing activities | (203,819) | (49,305) |
Financing Activities | ||
Borrowings on line of credit | 284,200 | 0 |
Payments on line of credit | 94,000 | 0 |
Shares withheld for taxes, net of stock issued to employees | (1,612) | (956) |
Repurchase and retirement of common stock | 10,833 | 0 |
Dividends paid | (7,994) | (7,133) |
Proceeds from (Payments for) Other Financing Activities | (1,759) | 16 |
Net cash provided by (used in) financing activities | 171,520 | (8,105) |
Decrease in cash and cash equivalents | 8,510 | (13,868) |
Effect of exchange rates on cash | 1,555 | 374 |
Cash and cash equivalents at beginning of year | 19,463 | 60,470 |
Cash and cash equivalents at end of period | 29,528 | 46,976 |
Noncash Activity | ||
Capital expenditures in accounts payable | 1,196 | 2,520 |
Deferred payments on acquisition of business | $ 7,500 | $ 0 |
Consolidated Statement of Share
Consolidated Statement of Shareholders Equity (unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Common Stock Held In Trust [Member] | Deferred Compensation Obligation [Member] | Accumulated Other Comprehensive Income (Loss) [Member] |
Beginning balance (in shares) at Feb. 27, 2016 | 28,684 | ||||||
Beginning balance at Feb. 27, 2016 | $ 9,561 | $ 145,528 | $ 282,477 | $ (837) | $ 837 | $ (31,371) | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | $ 40,119 | 40,119 | |||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | $ 65 | 65 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 0 | 4,525 | |||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 139 | ||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 46 | 49 | (16) | 16 | |||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 2,935 | ||||||
Adjustment to Additional Paid in Capital, Income Tax Effect from Share-based Compensation, Net | 506 | ||||||
Outstanding shares awards exercised | 125 | ||||||
Stock Issued During Period, Value, Stock Options Exercised | 42 | 1,211 | |||||
Stock Repurchased and Retired During Period, Shares | (52) | ||||||
Stock Repurchased and Retired During Period, Value | (17) | (273) | (2,014) | ||||
Dividends, Common Stock, Cash | (7,133) | ||||||
Ending balance (in shares) at Aug. 27, 2016 | 28,896 | ||||||
Ending balance at Aug. 27, 2016 | 9,632 | 149,956 | 313,449 | (853) | 853 | (26,781) | |
Beginning balance (in shares) at Mar. 04, 2017 | 28,680 | ||||||
Beginning balance at Mar. 04, 2017 | $ 470,577 | 9,560 | 150,111 | 341,996 | (875) | 875 | (31,090) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||
Net earnings | 33,512 | 33,512 | |||||
Other Comprehensive Income (Loss), Unrealized Holding Gain (Loss) on Securities Arising During Period, Net of Tax | $ 92 | 92 | |||||
Other Comprehensive Income (Loss), Foreign Currency Transaction and Translation Adjustment, Net of Tax, Portion Attributable to Parent | 0 | 14,490 | |||||
Stock Issued During Period, Shares, Share-based Compensation, Net of Forfeitures | 107 | ||||||
Stock Issued During Period, Value, Share-based Compensation, Net of Forfeitures | 36 | 83 | (22) | 22 | |||
Adjustments to Additional Paid in Capital, Share-based Compensation, Requisite Service Period Recognition | 3,063 | ||||||
Outstanding shares awards exercised | 100 | ||||||
Stock Issued During Period, Value, Stock Options Exercised | 34 | 801 | |||||
Share repurchases (in shares) | (200) | ||||||
Share repurchases | (67) | (1,091) | (9,675) | 0 | 0 | 0 | |
Stock Repurchased and Retired During Period, Shares | (45) | ||||||
Stock Repurchased and Retired During Period, Value | (15) | (256) | (2,216) | ||||
Dividends, Common Stock, Cash | (7,994) | ||||||
Ending balance (in shares) at Sep. 02, 2017 | 28,642 | ||||||
Ending balance at Sep. 02, 2017 | $ 501,374 | $ 9,548 | $ 152,711 | $ 355,623 | $ (897) | $ 897 | $ (16,508) |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Sep. 02, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 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 . We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. The results of operations for the six -month period ended September 2, 2017 are not necessarily indicative of the results to be expected for the full year. In connection with preparing the unaudited consolidated financial statements for the six months ended September 2, 2017 , we evaluated subsequent events for potential recognition and disclosure through the date of this filing and determined there were no items to recognize or disclose. |
New Accounting Standards
New Accounting Standards | 6 Months Ended |
Sep. 02, 2017 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | New Accounting Standards 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 are currently undertaking a process to quantify the impact that this standard will have on our consolidated financial statements and will provide further analysis and discussion as we progress in this quantification process. At this time: • We are in the process of evaluating the significance of the guidance to our operations and as we proceed, we will finalize our determination of adoption method. • We expect to have business units that will continue to recognize revenue at the point in time when goods are shipped, as that represents when control is transferred to the customer, and business units that will continue to recognize revenue over time, following a cost-to-cost percentage of completion method of revenue recognition. Additionally, we expect that at least one of our business units will change from recognizing revenue at a point in time to recognizing revenue over time, to better reflect transfer of control to the customer in line 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 performance obligations and terms of sale of each business. • We are also in the process of evaluating how the revenue recognition guidance applies to our recently acquired businesses, Sotawall and EFCO. 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 is to be applied retrospectively for comparability across all periods. We may adopt these standards early, and we are considering the timing of adoption. We do not expect this guidance to have a significant impact on our consolidated financial statements. In January 2017, 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. |
Share-Based Compensation
Share-Based Compensation | 6 Months Ended |
Sep. 02, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-Based Compensation | Share-Based Compensation Total share-based compensation expense included in the results of operations was $3.1 million for the six -month period ended September 2, 2017 and 2.9 million for the six-month period ended August 27, 2016 . Stock Options and SARs There were no stock options or SARs issued in months of either period presented. Activity for the current 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 March 4, 2017 229,901 $ 9.90 Awards exercised (100,000 ) 8.34 Outstanding and exercisable at September 2, 2017 129,901 $ 11.10 3.3 Years $ 4,191,562 Cash proceeds from the exercise of stock options were $0.8 million and $1.3 million for the six months ended September 2, 2017 and August 27, 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 six months ended September 2, 2017 and $4.5 million during the prior-year period. Nonvested Shares and Share Units Nonvested share activity for the current period is summarized as follows: Nonvested Shares and Units Number of Shares and Units Weighted Average Grant Date Fair Value Nonvested at March 4, 2017 279,204 $ 44.80 Granted 124,416 55.40 Vested (128,643 ) 45.24 Canceled (6,000 ) 55.84 Nonvested at September 2, 2017 268,977 $ 49.24 At September 2, 2017 , there was $10.1 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 23 months. The total fair value of shares vested during the six months ended September 2, 2017 was $6.9 million . |
Earnings per Share
Earnings per Share | 6 Months Ended |
Sep. 02, 2017 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 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) September 2, 2017 August 27, 2016 September 2, August 27, Basic earnings per share – weighted average common shares outstanding 28,850 28,891 28,850 28,797 Weighted average effect of nonvested share grants and assumed exercise of stock options 58 69 35 130 Diluted earnings per share – weighted average common shares and potential common shares outstanding 28,908 28,960 28,885 28,927 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. |
Inventories
Inventories | 6 Months Ended |
Sep. 02, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories (In thousands) September 2, 2017 March 4, 2017 Raw materials $ 35,737 $ 22,761 Work-in-process 25,904 16,154 Finished goods 38,296 29,372 Costs and earnings in excess of billings on uncompleted contracts 3,736 5,122 Total inventories $ 103,673 $ 73,409 |
Marketable Securities
Marketable Securities | 6 Months Ended |
Sep. 02, 2017 | |
Marketable Securities [Abstract] | |
Marketable Securities | Marketable Securities Marketable securities are classified as available for sale: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 2, 2017 Municipal bonds 10,686 185 (50 ) 10,821 March 4, 2017 Municipal bonds 9,595 91 (97 ) 9,589 We have a wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), which holds municipal bonds. 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 agreement. As of September 2, 2017 , marketable securities with a fair value of $1.2 million have been in a continuous unrealized loss position for more than 12 months with unrea lized losses of $0.1 million . We consider these unrealized losses to be temporary in nature. We intend to hold our investments until the full principal amount can be recovered, and we have the ability to do so based on other sources of liquidity. Gross realized gains and losses were not significant during the first six months of fiscal 2018 or fiscal 2017 . The amortized cost and estimated fair values of municipal bonds at September 2, 2017 , 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 $ 463 $ 464 Due after one year through five years 3,453 3,511 Due after five years through 10 years 5,129 5,253 Due after 10 years through 15 years 1,291 1,242 Due beyond 15 years 350 351 Total $ 10,686 $ 10,821 |
Fair Value Measurements
Fair Value Measurements | 6 Months Ended |
Sep. 02, 2017 | |
Fair Value Disclosures [Abstract] | |
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 assets or liabilities. (In thousands) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Total Fair Value September 2, 2017 Cash equivalents Money market funds $ 1,888 $ — $ 1,888 Commercial paper — 2,000 2,000 Total cash equivalents 1,888 2,000 3,888 Short-term securities Municipal bonds — 464 464 Long-term securities Municipal bonds — 10,357 10,357 Total assets at fair value $ 1,888 $ 12,821 $ 14,709 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 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. Short- and long-term securities Municipal bonds were measured at fair value based on market prices from recent trades of similar securities and are classified as short-term or long-term based on maturity date. |
Acquisitions
Acquisitions | 6 Months Ended |
Sep. 02, 2017 | |
Business Combinations [Abstract] | |
Acquisition | Acquisitions EFCO In line with our overall strategic objectives, on June 12, 2017, we acquired 100 percent of the stock of EFCO Corporation, a privately held U.S. manufacturer of architectural aluminum window, curtainwall, storefront and entrance systems for commercial construction projects, for $192 million in cash, funded through our committed revolving credit facility, with $7.5 million of that amount payable in equal installments over the next three years. EFCO's results of operations have been included in our consolidated financial statements and within the Architectural Framing Systems segment since the date of acquisition. Those results include $63.7 million of sales and $1.3 million of operating income for the quarter ended September 2, 2017. 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: (In thousands) Net working capital $ 36,182 Property, plant and equipment 43,961 Goodwill 55,288 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 and other liability values, intangible asset valuation and other purchase price adjustments. Sotawall On December 14, 2016, we acquired substantially all the assets of Sotawall, Inc. (now operating under the name Sotawall Limited or "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 segment since the date of acquisition. Purchase accounting related to the acquisition of Sotawall was finalized during the the first quarter of fiscal 2018. The following table sets forth certain unaudited pro forma consolidated data for the first three- and six-month periods of fiscal 2018 and 2017 as if the two acquisitions discussed previously were consummated on each of their respective same terms at the beginning of the fiscal year preceding their respective acquisition dates. Three Months Ended Six Months Ended In thousands, except per share data September 2, 2017 August 27, 2016 September 2, 2017 August 27, 2016 Net sales $ 351,988 $ 372,770 $ 696,039 $ 714,965 Net earnings 20,312 25,792 37,528 46,201 Earnings per share Basic 0.70 0.89 1.30 1.60 Diluted 0.70 0.89 1.30 1.60 We have provided this unaudited pro forma information for comparative purposes only. This information does not necessarily reflect what the combined company's results of operations actually would have been had the acquisition occurred at the beginning of fiscal year 2017. The information does not reflect the effect of any synergies or integration costs that may result from the acquisition. |
Goodwill and Other Identifiable
Goodwill and Other Identifiable Intangible Assets | 6 Months Ended |
Sep. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Identifiable Intangible Assets | Goodwill and Other Identifiable Intangible Assets The carrying amount of goodwill attributable to each reporting segment was: (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 48,914 — — — 48,914 Foreign currency translation 3,263 (28 ) — — 3,235 Balance at September 2, 2017 115,878 $ 25,928 $ 1,120 $ 10,557 $ 153,483 The gross carrying amount of other intangible assets and related accumulated amortization was: (In thousands) Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net September 2, 2017 Definite-lived intangible assets: Debt issue costs $ 4,513 $ (3,091 ) $ — $ 1,422 Non-compete agreements 6,286 (6,101 ) (6 ) 179 Customer relationships 120,344 (17,083 ) 5,400 108,661 Trademarks and other intangibles 30,250 (10,582 ) 1,457 21,125 Total definite-lived intangible assets $ 161,393 $ (36,857 ) $ 6,851 $ 131,387 Indefinite-lived intangible assets: Trademarks 48,461 — 1,276 49,737 Total intangible assets $ 209,854 $ (36,857 ) $ 8,127 $ 181,124 March 4, 2017 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 Trademarks and other intangibles 25,950 (4,917 ) (31 ) 21,002 Total definite-lived intangible assets $ 118,781 $ (27,915 ) $ (241 ) $ 90,625 Indefinite-lived intangible assets: Trademarks 16,022 — 39 16,061 Total intangible assets $ 134,803 $ (27,915 ) $ (202 ) $ 106,686 Amortization expense on definite-lived intangible assets was $7.9 million and $0.8 million for the six -month periods ended September 2, 2017 and August 27, 2016 , respectively. The amortization expense associated with debt issue costs is included in interest expense while the remainder is in selling, general and administrative expenses in the consolidated results of operations. At September 2, 2017 , the estimated future amortization expense for definite-lived intangible assets was: (In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Estimated amortization expense $ 9,651 $ 13,265 $ 7,974 $ 7,964 $ 7,744 |
Debt
Debt | 6 Months Ended |
Sep. 02, 2017 | |
Debt Disclosure [Abstract] | |
Debt | Debt During the quarter, we expanded our maximum borrowing under our committed revolving credit facility to $335.0 million , maturing in November 2021 . There were no significant changes to terms associated with the expansion. Outstanding borrowings under this facility were $235.2 million , as of September 2, 2017 , and $45.0 million , as of March 4, 2017 . Under this facility, we are subject to 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. Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis. At September 2, 2017 , we were in compliance with both financial covenants. Additionally, at September 2, 2017 , we had a total of $24.9 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. At September 2, 2017 , our debt also included $20.4 million of industrial revenue bonds that mature in fiscal years 2021 through 2043 and $0.4 million of long-term debt in Canada. The fair value of the industrial revenue bonds approximated carrying value at September 2, 2017 , due to the variable interest rates on these instruments. All debt would be classified as Level 2 within the fair value hierarchy described in Note 7. We also maintain two Canadian revolving demand credit facilities totaling $ 12.0 million Canadian dollars. As of September 2, 2017 , $1.8 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. Interest payments were $1.9 million and $0.3 million for the six months ended September 2, 2017 and August 27, 2016 , respectively. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended |
Sep. 02, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans 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 Six Months Ended (In thousands) September 2, 2017 August 27, 2016 September 2, August 27, Interest cost $ 133 $ 139 $ 266 $ 278 Expected return on assets (10 ) (10 ) (20 ) (20 ) Amortization of unrecognized net loss 57 56 114 112 Net periodic benefit cost $ 180 $ 185 $ 360 $ 370 |
Income Taxes
Income Taxes | 6 Months Ended |
Sep. 02, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes 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 2014, 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 2013, 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 September 2, 2017 and March 4, 2017 was approximately $5.0 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 $0.5 million during the next 12 months due to lapsing of statutes. |
Other Non-Current Liabilities (
Other Non-Current Liabilities (Notes) | 6 Months Ended |
Sep. 02, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Non-Current Liabilities | Other Non-Current Liabilities (In thousands) September 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 9,710 7,463 Other 23,033 11,981 Total other non-current liabilities $ 59,086 $ 45,787 |
Commitments and Contingent Liab
Commitments and Contingent Liabilities | 6 Months Ended |
Sep. 02, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Operating lease commitments. As of September 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: (In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Thereafter Total Total minimum payments $ 7,171 $ 13,371 $ 11,324 $ 8,322 $ 7,520 $ 20,820 $ 68,528 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 September 2, 2017 , $63.7 million of our backlog was bonded by performance bonds with a face value of $293.6 million . Performance bonds do not have stated expiration dates, as we are released from the bonds upon completion of the contract. We have never been required to make any payments related to these performance bonds with respect to any of our current portfolio of businesses. Warranties. 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 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) September 2, 2017 August 27, 2016 Balance at beginning of period $ 21,933 $ 16,340 Additional accruals 2,588 2,577 Claims paid (6,800 ) (3,014 ) Acquired reserves 5,571 — Balance at end of period $ 23,292 $ 15,903 Letters of credit. At September 2, 2017 , we had 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 September 2, 2017 was approximately $24.9 million , all of which have been issued under our committed revolving credit facility. Availability under this credit facility is reduced by borrowings under the facility and also by letters of credit issued under the facility. Purchase obligations. Purchase obligations for raw material commitments and capital expenditures totaled $110.0 million as of September 2, 2017 . Litigation. We are a party to various legal proceedings incidental to our normal operating activities. In particular, like others in the construction supply and services industry, our businesses are routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. We are also subject to litigation arising out of general liability, employment practices, workers' compensation and automobile claims. Although it is very difficult to accurately predict the outcome of such proceedings, facts currently available indicate that no such claims will result in losses that would have a material adverse effect on our results of operations, cash flows or financial condition. |
Segment Information
Segment Information | 6 Months Ended |
Sep. 02, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The Company has four reporting segments: 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 the outside skin and entrances of commercial, institutional and high-end multi-family residential buildings. 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 fabricates coated, high-performance glass used in customized window and wall systems comprising the outside skin of commercial, institutional and high-end multi-family residential buildings. • 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 segment manufactures value-added glass and acrylic products primarily for framing and display applications. Three Months Ended Six Months Ended (In thousands) September 2, 2017 August 27, 2016 September 2, 2017 August 27, 2016 Net sales from operations Architectural Framing Systems $ 189,023 $ 92,229 $ 299,515 $ 173,362 Architectural Glass 97,351 99,205 195,086 192,565 Architectural Services 46,829 77,734 96,979 140,554 Large-Scale Optical 20,291 21,270 38,894 41,298 Intersegment eliminations (9,587 ) (11,983 ) (14,260 ) (21,444 ) Net sales $ 343,907 $ 278,455 $ 616,214 $ 526,335 Operating income (loss) from operations Architectural Framing Systems $ 16,542 $ 13,001 $ 28,506 $ 23,232 Architectural Glass 10,258 9,616 19,581 19,147 Architectural Services 774 6,236 1,555 9,418 Large-Scale Optical 4,248 5,051 8,298 9,703 Corporate and other (4,048 ) (856 ) (6,060 ) (2,203 ) Operating income $ 27,774 $ 33,048 $ 51,880 $ 59,297 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. |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Award transactions on stock options | Activity for the current 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 March 4, 2017 229,901 $ 9.90 Awards exercised (100,000 ) 8.34 Outstanding and exercisable at September 2, 2017 129,901 $ 11.10 3.3 Years $ 4,191,562 |
Nonvested share award transactions | Nonvested share activity for the current period is summarized as follows: Nonvested Shares and Units Number of Shares and Units Weighted Average Grant Date Fair Value Nonvested at March 4, 2017 279,204 $ 44.80 Granted 124,416 55.40 Vested (128,643 ) 45.24 Canceled (6,000 ) 55.84 Nonvested at September 2, 2017 268,977 $ 49.24 |
Earnings per Share (Tables)
Earnings per Share (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of basic and diluted 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) September 2, 2017 August 27, 2016 September 2, August 27, Basic earnings per share – weighted average common shares outstanding 28,850 28,891 28,850 28,797 Weighted average effect of nonvested share grants and assumed exercise of stock options 58 69 35 130 Diluted earnings per share – weighted average common shares and potential common shares outstanding 28,908 28,960 28,885 28,927 |
Inventories (Tables)
Inventories (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Inventory Disclosure [Abstract] | |
Components of inventories | (In thousands) September 2, 2017 March 4, 2017 Raw materials $ 35,737 $ 22,761 Work-in-process 25,904 16,154 Finished goods 38,296 29,372 Costs and earnings in excess of billings on uncompleted contracts 3,736 5,122 Total inventories $ 103,673 $ 73,409 |
Marketable Securities (Tables)
Marketable Securities (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Marketable Securities [Abstract] | |
Amortized cost, gross unrealized gains and losses, and estimated fair values of investments available for sale | arketable securities are classified as available for sale: (In thousands) Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Estimated Fair Value September 2, 2017 Municipal bonds 10,686 185 (50 ) 10,821 March 4, 2017 Municipal bonds 9,595 91 (97 ) 9,589 |
Schedule of amortized cost and estimated fair values of investments by contractual maturity | The amortized cost and estimated fair values of municipal bonds at September 2, 2017 , 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 $ 463 $ 464 Due after one year through five years 3,453 3,511 Due after five years through 10 years 5,129 5,253 Due after 10 years through 15 years 1,291 1,242 Due beyond 15 years 350 351 Total $ 10,686 $ 10,821 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Fair Value Disclosures [Abstract] | |
Financial assets and liabilities measured at fair value | (In thousands) Quoted Prices in Active Markets (Level 1) Other Observable Inputs (Level 2) Total Fair Value September 2, 2017 Cash equivalents Money market funds $ 1,888 $ — $ 1,888 Commercial paper — 2,000 2,000 Total cash equivalents 1,888 2,000 3,888 Short-term securities Municipal bonds — 464 464 Long-term securities Municipal bonds — 10,357 10,357 Total assets at fair value $ 1,888 $ 12,821 $ 14,709 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 |
Acquisitions Acquisition (Table
Acquisitions Acquisition (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Business Combinations [Abstract] | |
Schedule of Recognized Identified Assets Acquired | The purchase price allocation is based on these estimated fair values of assets acquired and liabilities assumed, as follows: (In thousands) Net working capital $ 36,182 Property, plant and equipment 43,961 Goodwill 55,288 Other intangible assets 71,500 Less: Long-term liabilities acquired, net 14,605 Net assets acquired $ 192,326 |
Finite-Lived and Indefinite-Lived Intangible Assets Acquired as Part of Business Combination | 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 |
Business Acquisition, Pro Forma Information | The following table sets forth certain unaudited pro forma consolidated data for the first three- and six-month periods of fiscal 2018 and 2017 as if the two acquisitions discussed previously were consummated on each of their respective same terms at the beginning of the fiscal year preceding their respective acquisition dates. Three Months Ended Six Months Ended In thousands, except per share data September 2, 2017 August 27, 2016 September 2, 2017 August 27, 2016 Net sales $ 351,988 $ 372,770 $ 696,039 $ 714,965 Net earnings 20,312 25,792 37,528 46,201 Earnings per share Basic 0.70 0.89 1.30 1.60 Diluted 0.70 0.89 1.30 1.60 |
Goodwill and Other Identifiab30
Goodwill and Other Identifiable Intangible Assets (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of goodwill attributable to each business segment | The carrying amount of goodwill attributable to each reporting segment was: (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 48,914 — — — 48,914 Foreign currency translation 3,263 (28 ) — — 3,235 Balance at September 2, 2017 115,878 $ 25,928 $ 1,120 $ 10,557 $ 153,483 |
Schedule of finite lived intangible assets | e gross carrying amount of other intangible assets and related accumulated amortization was: (In thousands) Gross Carrying Amount Accumulated Amortization Foreign Currency Translation Net September 2, 2017 Definite-lived intangible assets: Debt issue costs $ 4,513 $ (3,091 ) $ — $ 1,422 Non-compete agreements 6,286 (6,101 ) (6 ) 179 Customer relationships 120,344 (17,083 ) 5,400 108,661 Trademarks and other intangibles 30,250 (10,582 ) 1,457 21,125 Total definite-lived intangible assets $ 161,393 $ (36,857 ) $ 6,851 $ 131,387 Indefinite-lived intangible assets: Trademarks 48,461 — 1,276 49,737 Total intangible assets $ 209,854 $ (36,857 ) $ 8,127 $ 181,124 March 4, 2017 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 Trademarks and other intangibles 25,950 (4,917 ) (31 ) 21,002 Total definite-lived intangible assets $ 118,781 $ (27,915 ) $ (241 ) $ 90,625 Indefinite-lived intangible assets: Trademarks 16,022 — 39 16,061 Total intangible assets $ 134,803 $ (27,915 ) $ (202 ) $ 106,686 |
Schedule of estimated future amortization expense for identifiable intangible assets | At September 2, 2017 , the estimated future amortization expense for definite-lived intangible assets was: (In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Estimated amortization expense $ 9,651 $ 13,265 $ 7,974 $ 7,964 $ 7,744 |
Employee Benefit Plans (Tables)
Employee Benefit Plans (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Compensation and Retirement Disclosure [Abstract] | |
Components of net periodic benefit cost | Components of net periodic benefit cost were: Three Months Ended Six Months Ended (In thousands) September 2, 2017 August 27, 2016 September 2, August 27, Interest cost $ 133 $ 139 $ 266 $ 278 Expected return on assets (10 ) (10 ) (20 ) (20 ) Amortization of unrecognized net loss 57 56 114 112 Net periodic benefit cost $ 180 $ 185 $ 360 $ 370 |
Other Non-Current Liabilities32
Other Non-Current Liabilities (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Other Liabilities Disclosure [Abstract] | |
Other Non-current Liabilities | (In thousands) September 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 9,710 7,463 Other 23,033 11,981 Total other non-current liabilities $ 59,086 $ 45,787 |
Commitments and Contingent Li33
Commitments and Contingent Liabilities (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future minimum rental payments under noncancelable operating leases | Future minimum rental payments under non-cancelable operating leases are: (In thousands) Remainder of Fiscal 2018 Fiscal 2019 Fiscal 2020 Fiscal 2021 Fiscal 2022 Thereafter Total Total minimum payments $ 7,171 $ 13,371 $ 11,324 $ 8,322 $ 7,520 $ 20,820 $ 68,528 |
Guarantees and warranties | A warranty rollforward follows: Six Months Ended (In thousands) September 2, 2017 August 27, 2016 Balance at beginning of period $ 21,933 $ 16,340 Additional accruals 2,588 2,577 Claims paid (6,800 ) (3,014 ) Acquired reserves 5,571 — Balance at end of period $ 23,292 $ 15,903 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Sep. 02, 2017 | |
Segment Reporting [Abstract] | |
Sales and operating income data | Three Months Ended Six Months Ended (In thousands) September 2, 2017 August 27, 2016 September 2, 2017 August 27, 2016 Net sales from operations Architectural Framing Systems $ 189,023 $ 92,229 $ 299,515 $ 173,362 Architectural Glass 97,351 99,205 195,086 192,565 Architectural Services 46,829 77,734 96,979 140,554 Large-Scale Optical 20,291 21,270 38,894 41,298 Intersegment eliminations (9,587 ) (11,983 ) (14,260 ) (21,444 ) Net sales $ 343,907 $ 278,455 $ 616,214 $ 526,335 Operating income (loss) from operations Architectural Framing Systems $ 16,542 $ 13,001 $ 28,506 $ 23,232 Architectural Glass 10,258 9,616 19,581 19,147 Architectural Services 774 6,236 1,555 9,418 Large-Scale Optical 4,248 5,051 8,298 9,703 Corporate and other (4,048 ) (856 ) (6,060 ) (2,203 ) Operating income $ 27,774 $ 33,048 $ 51,880 $ 59,297 |
Basis of Presentation Subsequen
Basis of Presentation Subsequent event (Details) | Jun. 12, 2017 |
EFCO Corporation | |
Business Acquisition [Line Items] | |
Percentage of voting interests acquired | 100.00% |
Share-Based Compensation (Detai
Share-Based Compensation (Details 1) - USD ($) | 3 Months Ended | 6 Months Ended | |
Sep. 02, 2017 | Sep. 02, 2017 | Aug. 27, 2016 | |
Award transactions on stock options | |||
Outstanding, Beginning | 229,901 | ||
Outstanding shares awards exercised | (100,000) | (125,000) | |
Outstanding, Ending | 129,901 | 129,901 | |
Award transactions on stock options, Weighted Average Exercise Price [Roll Forward] | |||
Weighted average exercise price, Beginning | $ 9.90 | ||
Weighted average exercise price, Awards exercised | 8.34 | ||
Weighted average exercise price, Ending | $ 11.10 | $ 11.10 | |
Weighted average remaining contractual life, Outstanding | 3 years 3 months | ||
Aggregate intrinsic value, Outstanding | $ 4,191,562 | $ 4,191,562 | |
Deferred Compensation, Share-based Payments [Member] | |||
Award transactions on stock options | |||
Outstanding shares awards exercised | (100,000) |
Share-Based Compensation (Det37
Share-Based Compensation (Details 2) | 6 Months Ended |
Sep. 02, 2017$ / sharesshares | |
Nonvested share award transactions | |
Nonvested Number, Beginning | shares | 279,204 |
Number of shares, Granted | shares | 124,416 |
Number of shares, Vested | shares | (128,643) |
Number of shares, Canceled | shares | (6,000) |
Nonvested Number, Ending | shares | 268,977 |
Nonvested share award transactions, Weighted Average Grant Date Fair Value [Roll Forward] | |
Weighted average grant date fair value, Beginning | $ / shares | $ 44.80 |
Weighted average grant date fair value, Granted | $ / shares | 55.40 |
Weighted average grant date fair value, Vested | $ / shares | 45.24 |
Weighted average grant date fair value, Canceled | $ / shares | 55.84 |
Weighted average grant date fair value, Ending | $ / shares | $ 49.24 |
Share-Based Compensation (Det38
Share-Based Compensation (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based Compensation | $ 3,063 | $ 2,935 | ||
Cash proceeds from exercise of stock options | $ 800 | $ 1,300 | ||
Aggregate intrinsic value of securities | 4,800 | $ 4,500 | ||
Total unrecognized compensation cost related to nonvested share | $ 10,100 | $ 10,100 | ||
Document Period End Date | Sep. 2, 2017 | |||
Restricted Stock [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average period, Nonvested | 23 months | |||
Total fair value of shares vested | $ 6,900 |
Earnings per Share (Details)
Earnings per Share (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Reconciliation of basic and diluted earnings per share | ||||
Basic earnings per share - weighted common shares outstanding | 28,850,000 | 28,891,000 | 28,850,000 | 28,797,000 |
Incremental Common Shares Attributable to Share-based Payment Arrangements | 58,000 | 69,000 | 35,000 | 130,000 |
Weighted Average Number of Shares Outstanding, Diluted | 28,908,000 | 28,960,000 | 28,885,000 | 28,927,000 |
Stock options excluded from the calculation of earnings per share because the exercise price was greater than the average market price of the common shares | 0 | 0 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Components of inventories | ||
Raw materials | $ 35,737 | $ 22,761 |
Work-in-process | 25,904 | 16,154 |
Finished goods | 38,296 | 29,372 |
Costs and earnings in excess of billings on uncompleted contracts | 3,736 | 5,122 |
Total inventories | $ 103,673 | $ 73,409 |
Marketable Securities (Details)
Marketable Securities (Details) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | $ 10,686 | |
Estimated Fair Value | 10,821 | |
Municipal bonds | ||
Schedule of Available-for-sale Securities [Line Items] | ||
Amortized Cost | 10,686 | $ 9,595 |
Gross Unrealized Gains | 185 | 91 |
Gross Unrealized Losses | 50 | 97 |
Estimated Fair Value | $ 10,821 | $ 9,589 |
Marketable Securities (Details
Marketable Securities (Details 2) $ in Thousands | Sep. 02, 2017USD ($) |
Amortized Cost | |
Due within one year | $ 463 |
Due after one year through five years | 3,453 |
Due after five years through 10 years | 5,129 |
Due after 10 years through 15 years | 1,291 |
Due beyond 15 years | 350 |
Total | 10,686 |
Estimated Fair Value | |
Due within one year | 464 |
Due after one year through five years | 3,511 |
Due after five years through 10 years | 5,253 |
Due after 10 years through 15 years | 1,242 |
Due beyond 15 years | 351 |
Total | $ 10,821 |
Marketable Securities (Detail43
Marketable Securities (Details Textual) $ in Millions | Sep. 02, 2017USD ($) |
Marketable Securities [Abstract] | |
Greater Than or Equal to 12 Months, Fair Value | $ 1.2 |
Available-for-sale Securities, Continuous Unrealized Loss Position, 12 Months or Longer, Accumulated Loss | $ (0.1) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Cash equivalents | ||
Total cash equivalents | $ 3,888 | $ 9,923 |
Total assets at fair value | 14,709 | 19,512 |
Money market funds | ||
Cash equivalents | ||
Total cash equivalents | 4,423 | |
Commercial paper | ||
Cash equivalents | ||
Total cash equivalents | 2,000 | 5,500 |
Quoted Prices in Active Markets (Level 1) | ||
Cash equivalents | ||
Total cash equivalents | 1,888 | 4,423 |
Total assets at fair value | 1,888 | 4,423 |
Quoted Prices in Active Markets (Level 1) | Money market funds | ||
Cash equivalents | ||
Total cash equivalents | 4,423 | |
Quoted Prices in Active Markets (Level 1) | Commercial paper | ||
Cash equivalents | ||
Total cash equivalents | 0 | 0 |
Quoted Prices in Active Markets (Level 1) | Municipal bonds | ||
Cash equivalents | ||
Available-for-sale Securities, Current | 0 | |
Other Observable Inputs (Level 2) | ||
Cash equivalents | ||
Total cash equivalents | 2,000 | 5,500 |
Total assets at fair value | 12,821 | 15,089 |
Other Observable Inputs (Level 2) | Money market funds | ||
Cash equivalents | ||
Total cash equivalents | 0 | |
Other Observable Inputs (Level 2) | Commercial paper | ||
Cash equivalents | ||
Total cash equivalents | 2,000 | |
Money market funds | ||
Cash equivalents | ||
Total cash equivalents | 1,888 | |
Money market funds | Quoted Prices in Active Markets (Level 1) | ||
Cash equivalents | ||
Total cash equivalents | 1,888 | |
Money market funds | Other Observable Inputs (Level 2) | ||
Cash equivalents | ||
Total cash equivalents | 0 | |
Municipal bonds | ||
Cash equivalents | ||
Available-for-sale Securities, Current | 464 | 548 |
Available-for-sale Securities, Noncurrent | 10,357 | 9,041 |
Municipal bonds | Quoted Prices in Active Markets (Level 1) | ||
Cash equivalents | ||
Available-for-sale Securities, Current | 0 | |
Available-for-sale Securities, Noncurrent | 0 | 0 |
Municipal bonds | Other Observable Inputs (Level 2) | ||
Cash equivalents | ||
Available-for-sale Securities, Current | 464 | 548 |
Available-for-sale Securities, Noncurrent | $ 10,357 | $ 9,041 |
Acquisition (Details)
Acquisition (Details) - EFCO Corporation - USD ($) $ in Millions | Jun. 12, 2017 | Sep. 02, 2017 |
Business Acquisition [Line Items] | ||
Percentage of voting interests acquired | 100.00% | |
Sales | $ 63.7 | |
Operating income | $ 1.3 | |
Revolving credit facility | ||
Business Acquisition [Line Items] | ||
Debt payment to acquire business | $ 192 | |
Payable installment | $ 7.5 | |
Payment period | 3 years |
Acquisition (Details 1)
Acquisition (Details 1) - USD ($) $ in Thousands | Sep. 02, 2017 | Jun. 12, 2017 | Mar. 04, 2017 | Feb. 27, 2016 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 153,483 | $ 101,334 | $ 73,996 | |
EFCO Corporation | ||||
Business Acquisition [Line Items] | ||||
Net working capital | $ 36,182 | |||
Property, plant and equipment | 43,961 | |||
Goodwill | 55,288 | |||
Other intangible assets | 71,500 | |||
Less: Long-term liabilities acquired, net | 14,605 | |||
Net assets acquired | $ 192,326 |
Acquisition (Details 2)
Acquisition (Details 2) - EFCO Corporation $ in Thousands | Jun. 12, 2017USD ($) |
Business Acquisition [Line Items] | |
Other intangible assets | $ 71,500 |
Customer relationships | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 34,800 |
Estimated useful life (in years) | 16 years |
Backlog | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 4,300 |
Estimated useful life (in years) | 1 year 6 months |
Tradename | |
Business Acquisition [Line Items] | |
Other intangible assets | $ 32,400 |
Acquisitions (Details 3)
Acquisitions (Details 3) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Business Combinations [Abstract] | ||||
Net sales | $ 351,988 | $ 372,770 | $ 696,039 | $ 714,965 |
Net earnings | $ 20,312 | $ 25,792 | $ 37,528 | $ 46,201 |
Earnings per share | ||||
Basic (USD per share) | $ 0.70 | $ 0.89 | $ 1.30 | $ 1.60 |
Diluted (USD per share) | $ 0.70 | $ 0.89 | $ 1.30 | $ 1.60 |
Goodwill and Other Identifiab49
Goodwill and Other Identifiable Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Sep. 02, 2017 | Mar. 04, 2017 | |
Schedule of goodwill attributable to each business segment | ||
Goodwill, Beginning | $ 101,334 | $ 73,996 |
Goodwill acquired | 27,444 | |
Goodwill acquired, net | 48,914 | |
Foreign currency translation | 3,235 | (106) |
Goodwill, Ending | 153,483 | 101,334 |
Architectural Glass | ||
Schedule of goodwill attributable to each business segment | ||
Goodwill, Beginning | 25,956 | 25,639 |
Goodwill acquired | 0 | |
Goodwill acquired, net | 0 | |
Foreign currency translation | (28) | 317 |
Goodwill, Ending | 25,928 | 25,956 |
Architectural Framing Systems | ||
Schedule of goodwill attributable to each business segment | ||
Goodwill, Beginning | 63,701 | 36,680 |
Goodwill acquired | 27,444 | |
Goodwill acquired, net | 48,914 | |
Foreign currency translation | 3,263 | (423) |
Goodwill, Ending | 115,878 | 63,701 |
Architectural Services | ||
Schedule of goodwill attributable to each business segment | ||
Goodwill, Beginning | 1,120 | 1,120 |
Goodwill acquired | 0 | |
Goodwill acquired, net | 0 | |
Foreign currency translation | 0 | 0 |
Goodwill, Ending | 1,120 | 1,120 |
Large-Scale Optical | ||
Schedule of goodwill attributable to each business segment | ||
Goodwill, Beginning | 10,557 | 10,557 |
Goodwill acquired | 0 | |
Goodwill acquired, net | 0 | |
Foreign currency translation | 0 | 0 |
Goodwill, Ending | $ 10,557 | $ 10,557 |
Goodwill and Other Identifiab50
Goodwill and Other Identifiable Intangible Assets (Details 1) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Schedule of finite lived identifiable intangible assets | ||
Gross Carrying Amount | $ 161,393 | $ 118,781 |
Accumulated Amortization | (36,857) | (27,915) |
Foreign Currency Translation | 6,851 | (241) |
Net | 131,387 | 90,625 |
Intangible Assets, Gross (Excluding Goodwill) | 209,854 | 134,803 |
Intangible Assets Accumulated Amortization | (36,857) | (27,915) |
Intangible Assets Foreign Currency Translation | 8,127 | (202) |
Intangible Assets, Net (Excluding Goodwill) | 181,124 | 106,686 |
Debt issue costs | ||
Schedule of finite lived identifiable intangible assets | ||
Gross Carrying Amount | 4,513 | 4,066 |
Accumulated Amortization | (3,091) | (2,960) |
Foreign Currency Translation | 0 | 0 |
Net | 1,422 | 1,106 |
Non-compete agreements | ||
Schedule of finite lived identifiable intangible assets | ||
Gross Carrying Amount | 6,286 | 6,286 |
Accumulated Amortization | (6,101) | (6,025) |
Foreign Currency Translation | (6) | (65) |
Net | 179 | 196 |
Customer relationships | ||
Schedule of finite lived identifiable intangible assets | ||
Gross Carrying Amount | 120,344 | 82,479 |
Accumulated Amortization | (17,083) | (14,013) |
Foreign Currency Translation | 5,400 | (145) |
Net | 108,661 | 68,321 |
Trademarks and other intangibles | ||
Schedule of finite lived identifiable intangible assets | ||
Gross Carrying Amount | 30,250 | 25,950 |
Accumulated Amortization | (10,582) | (4,917) |
Foreign Currency Translation | 1,457 | (31) |
Net | 21,125 | 21,002 |
Indefinite-Lived Intangible Assets (Excluding Goodwill) | 48,461 | 16,022 |
Indefinite Lived Identifiable Intangible Assets, Foreign Currency Translation Adjustments | 1,276 | 39 |
Indefinite-lived Intangible Assets (Excluding Goodwill), Net of translation adjustments | $ 49,737 | $ 16,061 |
Goodwill and Other Identifiab51
Goodwill and Other Identifiable Intangible Assets (Details 2) $ in Thousands | Sep. 02, 2017USD ($) |
Schedule of estimated future amortization expense for identifiable intangible assets | |
Estimated amortization expense, Remainder of Fiscal 2018 | $ 9,651 |
Estimated amortization expense, Fiscal 2019 | 13,265 |
Estimated amortization expense, Fiscal 2020 | 7,974 |
Estimated amortization expense, Fiscal 2021 | 7,964 |
Estimated amortization expense, Fiscal 2022 | $ 7,744 |
Goodwill and Other Identifiab52
Goodwill and Other Identifiable Intangible Assets (Details Textual) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended |
Sep. 02, 2017 | Aug. 27, 2016 | |
Goodwill and Other Identifiable Intangible Assets (Textual) [Abstract] | ||
Amortization expense on identifiable intangible assets | $ 7.9 | $ 0.8 |
Debt (Details)
Debt (Details) | 3 Months Ended | 6 Months Ended | ||||
Sep. 02, 2017USD ($) | Sep. 02, 2017CAD | Aug. 27, 2016USD ($) | Sep. 02, 2017USD ($) | Mar. 04, 2017CAD | Mar. 04, 2017USD ($) | |
Line of Credit Facility [Line Items] | ||||||
Document Period End Date | Sep. 2, 2017 | |||||
Interest payments | $ 1,900,000 | $ 300,000 | ||||
Revolving credit facility | ||||||
Line of Credit Facility [Line Items] | ||||||
Maximum borrowing capacity | CAD 12,000,000 | $ 335,000,000 | ||||
Outstanding borrowings | CAD 1,800,000 | 235,200,000 | CAD 0 | $ 45,000,000 | ||
Industrial Revenue Bonds | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt | 20,400,000 | |||||
Industrial Revenue Bonds | Letter of credit | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt | 24,900,000 | |||||
Canada | Industrial Revenue Bonds | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt | $ 400,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Components of net periodic benefit cost | ||||
Interest cost | $ 133 | $ 139 | $ 266 | $ 278 |
Expected return on assets | (10) | (10) | (20) | (20) |
Amortization of unrecognized net loss | 57 | 56 | 114 | 112 |
Net periodic benefit cost | $ 180 | $ 185 | $ 360 | $ 370 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | Sep. 02, 2017 | Mar. 04, 2017 |
Income Tax Disclosure [Abstract] | ||
Liability for uncertain tax positions, current and noncurrent | $ 5 | $ 4.5 |
Liability for unrecognized tax benefit, expected decrease | $ 0.5 |
Other Non-Current Liabilities O
Other Non-Current Liabilities Other non-current liabilities (Details) - USD ($) $ in Thousands | Sep. 02, 2017 | Mar. 04, 2017 |
Other Liabilities Disclosure [Abstract] | ||
Deferred benefit from New Market Tax Credit transactions | $ 16,708 | $ 16,708 |
Retirement plan obligations | 9,635 | 9,635 |
Deferred compensation plan | 9,710 | 7,463 |
Other | 23,033 | 11,981 |
Total other non-current liabilities | $ 59,086 | $ 45,787 |
Commitments and Contingent Li57
Commitments and Contingent Liabilities (Details) $ in Thousands | Sep. 02, 2017USD ($) |
Future minimum rental payments under noncancelable operating leases | |
Total minimum payments, Remainder of Fiscal 2018 | $ 7,171 |
Total minimum payments, Fiscal 2019 | 13,371 |
Total minimum payments, Fiscal 2020 | 11,324 |
Total minimum payments, Fiscal 2021 | 8,322 |
Total minimum payments, Fiscal 2022 | 7,520 |
Total minimum payments, Thereafter | 20,820 |
Total | $ 68,528 |
Commitments and Contingent Li58
Commitments and Contingent Liabilities (Details 1) - USD ($) $ in Thousands | 6 Months Ended | |
Sep. 02, 2017 | Aug. 27, 2016 | |
Guarantees and warranties | ||
Balance at beginning of period | $ 21,933 | $ 16,340 |
Additional accruals | 2,588 | 2,577 |
Claims paid | (6,800) | (3,014) |
Acquired reserves | 5,571 | 0 |
Balance at end of period | $ 23,292 | $ 15,903 |
Commitments and Contingent Li59
Commitments and Contingent Liabilities (Details Textual) $ in Millions | Sep. 02, 2017USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
Company's backlog bonded by performance bonds | $ 63.7 |
Face value of performance bonds | 293.6 |
Line of Credit Facility [Line Items] | |
Purchase obligations | 110 |
Industrial Revenue Bonds | |
Line of Credit Facility [Line Items] | |
Debt | 20.4 |
Letter of credit | Industrial Revenue Bonds | |
Line of Credit Facility [Line Items] | |
Debt | $ 24.9 |
Segment Information Segment Inf
Segment Information Segment Information (Details Textual) | 3 Months Ended | 6 Months Ended |
Sep. 02, 2017Segment | Sep. 02, 2017Reportable_Segment | |
Segment Reporting [Abstract] | ||
Number of Reportable Segments | Segment | 4 | |
Number of Operating Segments | Reportable_Segment | 6 |
Segment Information (Details)
Segment Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Sep. 02, 2017 | Aug. 27, 2016 | Sep. 02, 2017 | Aug. 27, 2016 | |
Sales and operating income data | ||||
Net sales | $ 343,907 | $ 278,455 | $ 616,214 | $ 526,335 |
Operating income (loss) | 27,774 | 33,048 | 51,880 | 59,297 |
Architectural Glass | ||||
Sales and operating income data | ||||
Net sales | 97,351 | 99,205 | 195,086 | 192,565 |
Operating income (loss) | 10,258 | 9,616 | 19,581 | 19,147 |
Architectural Services | ||||
Sales and operating income data | ||||
Net sales | 46,829 | 77,734 | 96,979 | 140,554 |
Operating income (loss) | 774 | 6,236 | 1,555 | 9,418 |
Architectural Framing Systems | ||||
Sales and operating income data | ||||
Net sales | 189,023 | 92,229 | 299,515 | 173,362 |
Operating income (loss) | 16,542 | 13,001 | 28,506 | 23,232 |
Large-Scale Optical | ||||
Sales and operating income data | ||||
Net sales | 20,291 | 21,270 | 38,894 | 41,298 |
Operating income (loss) | 4,248 | 5,051 | 8,298 | 9,703 |
Intersegment eliminations | ||||
Sales and operating income data | ||||
Net sales | (9,587) | (11,983) | (14,260) | (21,444) |
Corporate and other | ||||
Sales and operating income data | ||||
Operating income (loss) | $ (4,048) | $ (856) | $ (6,060) | $ (2,203) |