Split of structural price vs surcharges and any give-back embedded in guidance

Aluminum increases are built into pricing, not surcharges; no give-back quantification. Productivity and Fortify Phase 2 also key; pricing may have pulled some volume forward. “as aluminum prices go up, we build those actually into our pricing structure, not our surcharges.”

Leverage above 1.5x target; priorities and M&A pipeline

Confident in leverage; expects decline absent new deals; pipeline active but selective; focus on cash flow. “we're going to be very selective at this point.”

Are margins recovering as costs are passed through or are customers pushing back?

Pricing implemented for a couple of quarters to recover margin, combined with productivity and cost-out; not all pricing. No explicit customer pushback discussed. “it's not all pricing.”

APOG

Apogee Enterprises (APOG) Q2 FY27 earnings call: guidance and Q&A

Earnings call· Aug 2026 (Q2 FY27)· Materials· Oct 6, 2026

Source: earnings call transcript

Executive summary

Apogee Enterprises Q2 FY27 — Beat and raise on pricing, productivity and CalWall

A beat-and-raise quarter where self-help (pricing, Fortify Phase 2, productivity) and acquisitions offset soft end-market volumes. Management frames the legacy glass turnaround as improving but unfinished, and is shifting the mix toward higher-growth, higher-margin businesses while leaning on cash generation to delever.

Highlights

Net sales rose 9.2% to $391.1M, driven by CalWall, price and mix
Adjusted diluted EPS (non-GAAP) up over 19% to $1.17, ahead of company expectations; adjusted EBITDA margin 12.7% vs 12.4%
Services backlog $833M, up 5% YoY and 13% sequentially; 10th consecutive quarter of sales growth
Glass adjusted EBITDA margin recovered to 14.9% from 8.7% in Q1
FY27 net sales and adjusted EPS guidance raised

Concerns

Volume was lower in Metals and Glass amid persistent weak market demand
Glass net sales ex-CalWall were pressured by lower price and higher manufacturing and freight costs; margin fell to 14.9% YoY
Performance Surfaces adjusted EBITDA margin fell to 22.5% on higher material costs
Leverage of 1.7x is above the historical 1.5x target (analyst-cited) after two acquisitions
Higher aluminum costs and material inflation weigh on margins

Guidance & targets

Category	Target	Timeline	Confidence
Full-year net sales	$1.46B-$1.5B high materiality	FY27	High
Full-year adjusted diluted EPS (non-GAAP)	$3.00-$3.40 high materiality	FY27	High
Full-year interest expense	approximately $15M low materiality	FY27	High
Full-year adjusted effective tax rate	approximately 26% low materiality	FY27	High
Full-year capital expenditures	$35M-$40M medium materiality	FY27	High
H2 phasing of net sales and adjusted EPS	Relatively balanced between Q3 and Q4 low materiality	H2 FY27	Medium
CalWall first 12-month financial targets	~$85M revenue and ~15% adjusted EBITDA margin medium materiality	First 12 months post-acquisition	High
GroGlass first 12-month financial expectations	~$30M revenue and ~25% adjusted EBITDA margin medium materiality	First 12 months post-acquisition	Medium
Leverage reduction	Leverage expected to decline through remainder of FY27 absent another acquisition medium materiality	FY27	Medium

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Metals Price favorable; volume lower; Fortify Phase 2 savings, productivity and mix helped; higher aluminum cost.	~$144M	1.8%	—	Adjusted EBITDA margin 15.4% (non-GAAP)
Services Growth primarily volume; margin on project mix and volume. Backlog: $833M, +5% YoY, +13% sequentiallyConsecutive quarters of net sales growth: 10	—	almost 8%	—	Adjusted EBITDA margin 5.8% (non-GAAP)
Glass Lower price, higher manufacturing and freight costs and lower volume offset by CalWall and mix. CalWall contribution: $16.4M	$87.4M	over 21%	—	Adjusted EBITDA margin 14.9% (non-GAAP), vs 8.7% in Q1
Performance Surfaces Higher volume and price; higher material costs reduced margin.	~$55M	over 14%	—	Adjusted EBITDA margin 22.5% (non-GAAP)

Orderbook & backlog

Services backlog $833M 2026-08-31

+5% YoY, +13% sequentially

Reflects project awards in a highly competitive environment; no book-to-bill stated.

Deals & partnerships

CalWall Acquisition of daylighting solutions business, in Glass segment

Integration on plan; in line with expectations.

GroGlass Acquisition announced September, joining Performance Surfaces; strengthens European presence

Funded from available capital; purchase price not stated. Close status unclear from call.

UW Solutions Prior acquisition in Performance Surfaces

Successful integration cited.

Capital programs

Fortify Phase 2 cost savings underway

Benefit:Cost savings supporting Metals margin; dollar target not stated

Cited as a driver of Metals margin and consolidated adjusted EBITDA margin.

Risks & headwinds

Weak legacy glass end-market demand Ongoing

Fewer jobs, project delays; lower volume and price in Glass; margin 14.9%

Mitigation:Action plan: commercial initiatives, productivity, cost discipline

Material and aluminum cost inflation Ongoing

Performance Surfaces margin 22.5%; Metals faced higher aluminum cost

Mitigation:Pricing actions, productivity, Fortify Phase 2

Leverage above target after acquisitions Remainder of FY27

1.7x vs 1.5x historical target (analyst-cited)

Mitigation:Cash generation; selective M&A

Possible volume pull-forward from pricing in Metals H2 FY27

Not quantified; Metals volume already lower

What to watch in Q3 FY27

Glass adjusted EBITDA margin

Q3 FY27

Current 14.9% (8.7% in Q1)

Target Sustain or improve

Why it matters

Legacy glass turnaround credibility amid weak demand

we made meaningful progress during the quarter against the action plan we outlined previously.

Find out whether APOG delivers this. Inve re-checks your case every morning.

Q&A highlights

What drove better-than-expected glass results?

Market unchanged and soft with fewer jobs and delays; improvement attributed to execution under the action plan: increased order rates, productivity and cost management.

“I would attribute this to significantly improved execution.”

asked by Julio Romero · answered by Donald Nolan

1 min read 6 chapters

Detailed narrative

Consolidated results and guidance raise

Net sales rose 9.2% to $391.1M on CalWall, price and mix, offset by lower Metals and Glass volume. Adjusted EBITDA margin (non-GAAP) was 12.7% vs 12.4%. Adjusted EPS (non-GAAP) improved over 19% to $1.17, helped by lower interest expense. FY27 sales and adjusted EPS guidance were raised, with H2 balanced between Q3 and Q4.

Metals

Sales grew 1.8% to about $144M on price, partly offset by lower volume. Margin expanded to 15.4% on price, productivity, Fortify Phase 2 savings and mix, against higher aluminum cost. Management said aluminum cost is built into structural pricing rather than surcharges, and that pricing may have pulled forward some volume.

Services

Sales rose almost 8% on volume for a 10th straight quarter of growth. Margin was 5.8% on project mix and volume. Backlog reached $833M, reflecting awards in a highly competitive environment.

Glass and CalWall

Glass sales rose over 21% to $87.4M, including $16.4M from CalWall; ex-CalWall demand remained soft with lower volume and price. Margin of 14.9% recovered sharply from 8.7% in Q1 after an action plan lifting order rates, productivity and cost control. CalWall integration is on plan.

Performance Surfaces and GroGlass

Sales rose over 14% to about $55M on volume and price; margin fell to 22.5% on higher material costs. GroGlass, announced in September, adds European presence and higher-value technology, with ~$30M revenue and ~25% margin expected in its first 12 months.

Balance sheet and capital allocation

YTD operating cash flow was $43.3M vs $37.3M. Leverage was 1.7x with no near-term maturities and capacity for GroGlass. M&A funnel remains full but management will be selective, prioritizing cash flow and deleveraging.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.