Q4 2024 Apogee Enterprises Inc Earnings Call

Operator: Good day, and thank you for standing by. Welcome to the Q4 2024 Apogee Enterprises Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode.

Good day, and thank you for standing by and welcome to Q4 2020 for Apogee Enterprises, Inc. Earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question answer session.

Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

To ask a question during the session you will need to press star one one on your telephone you will then hear an automated message advising your hand is raised to withdraw your question. Please press star one one again.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Huebschen, Vice President, Investor Relations. Please go ahead.

Please be advised that today's conference is being recorded.

I'd now like to hand, the conference over to your Speaker today, Jeff Hutchins, Vice President Investor Relations. Please go ahead.

Jeff Huebschen: Thank you, Gigi. Good morning, everyone, and welcome to Apogee Enterprises' fiscal 2024 fourth quarter earnings call. With me today are Ty Silberhorn, Apogee's Chief Executive Officer, and Matt Osberg, Chief Financial Officer. I'd like to remind everyone that there are slides to accompany today's remarks, and these are available in the Investor Relations section of Apogee's website. During this call, we will reference certain non-GAAP financial measures.

Jeff Huebschen: Thank you Gigi good morning, everyone and welcome to Apogee enterprises fiscal 2020 for fourth quarter earnings call with me today are tie silver Horn, Apogees, Chief Executive Officer, and Matt Osborne Chief Financial Officer.

Speaker Change: I'd like to remind everyone that there are slides to accompany today's remarks and these are available in the Investor Relations section of Apogees website.

Speaker Change: During this call we will reference certain non-GAAP financial measures definitions of these measures and a reconciliation to the nearest GAAP measures are provided in the earnings release and slide deck, we issued this morning.

Jeff Huebschen: Definitions of these measures and a reconciliation to the nearest GAAP measures are provided in the earnings release and slide deck we issued this morning. I'd also like to remind everyone that our call will contain forward-looking statements. These reflect management's expectations based on currently available information, but actual results may differ materially. More information about factors that could affect Apogee's business and financial results can be found in today's press release and in our SEC filings. With that, I'll turn the call over to you, Ty.

Speaker Change: I'd also like to remind everyone that our call will contain forward looking statements.

Speaker Change: These reflect management's expectations based on currently available information.

Speaker Change: Actual results may differ materially.

Speaker Change: More information about factors that could affect apogees business and financial results can be found in today's press release.

Speaker Change: And in our SEC filings.

Speaker Change: With that I'll turn the call over to Utah.

Ty R. Silberhorn: Thank you, Jeff. Good morning, everyone, and thanks for joining us today. The fourth quarter was a strong finish to another great year for Apogee. Our team achieved tremendous success through executing our strategy, strengthening our operational foundation, and driving record financial results. Today, I'll comment on our key accomplishments in Fiscal 24, how our strategy is driving sustainable improvements in our business, and our priorities as we move into the new fiscal year. Then I'll turn it over to Matt for more details on the quarter and our Fiscal 25 Outlook. Three years ago, we embarked on a new strategic direction with the goal of building a stronger foundation for long-term profitable growth. An overview of that strategy is shown on page four of today's presentation.

Utah: Thank you, Jeff Good morning, everyone and thanks for joining us today.

Utah: Fourth quarter was a strong finish to another great year for apogee.

Utah: Our team achieved tremendous success through executing our strategy strengthening our operational foundation and driving record financial results.

Utah: Today I'll comment on our key accomplishments in fiscal 'twenty for how our strategy is driving sustainable improvements in our business and our priorities as we move into the new fiscal year.

Utah: Then I'll turn it over to Matt for more details on the quarter and our fiscal 'twenty five outlook.

Matthew J. Osberg: Three years ago, we embarked on a new strategic direction with the goal of building a stronger foundation for long term profitable growth and.

Matthew J. Osberg: An overview of that strategy as shown on page four in today's presentation.

Ty R. Silberhorn: At its core, our strategy is focused on building differentiated businesses that provide compelling value for our customers and improving operational execution across our entire company. During the past year, our team made strong progress on both fronts, as highlighted in slide five. We delivered significant productivity gains through the continued deployment of the Apogee Management System, or AMS.

Matthew J. Osberg: At its core our strategy is focused on building differentiated businesses that provide compelling value for our customers.

Matthew J. Osberg: And improving operational execution across our entire company.

Matthew J. Osberg: During the past year, our team made strong progress on both fronts as highlighted on slide five.

Matthew J. Osberg: We delivered significant productivity gains through the continued deployment of the apogee management system or Ams.

Ty R. Silberhorn: As a reminder, AMS is our operating framework based on the foundations of lean and continuous improvement. Our deployment of AMS has led to meaningful cost and productivity improvements while enabling us to meet or exceed customer expectations for quality, service, and delivery. We also continue to grow our mix of differentiated products and services. For example, in Architectural Glass, we have advanced our shift toward premium, higher value-added offers. In Framing Systems, we further rationalized our product portfolio, completing our move away from less differentiated, lower margin products. And in large-scale optical, we increased the mix of our highest-performing products.

Matthew J. Osberg: As a reminder, Ams as our operating framework based on the foundations of lean and continuous improvement.

Matthew J. Osberg: Our deployment of Ams has led to meaningful cost and productivity improvements, while enabling us to meet or exceed customer expectations to improve quality.

Matthew J. Osberg: Service and delivery.

Matthew J. Osberg: We also continued to grow our mix of differentiated products and services.

Matthew J. Osberg: In architectural glass, we advanced our shift towards premium higher value added offerings.

Matthew J. Osberg: In framing systems, we further rationalized our product portfolio, completing our move away from less differentiated lower margin products.

Matthew J. Osberg: And in large scale optical we increase the mix of our highest performing products.

Ty R. Silberhorn: We also made progress towards strengthening our core capabilities. We continue to build out center-led functional expertise to better support the needs of the business. We added to our talent management program, and we further strengthened our approach to governance and sustainability. These efforts were evident in our Fiscal 24 financial results. Full-year adjusted operating income increased 16% to a record $146 million.

We also made progress towards strengthening our core capabilities.

Matthew J. Osberg: We continue to build out center led functional expertise to better support the needs of the business.

Matthew J. Osberg: We added to our talent management programs.

Matthew J. Osberg: And we further strengthened our approach to governance and sustainability.

Matthew J. Osberg: These efforts were evident in our fiscal 'twenty four financial results.

Matthew J. Osberg: Full year, adjusted operating income increased 16% to a record $146 million.

Ty R. Silberhorn: Adjusted EPS grew 20% to a record $4.77, and cash flow from operations nearly doubled, to a record $204 million. These results are particularly impressive given some of the headwinds we faced on the top line during the year, with net sales declining by 2%. Throughout the year, our improved results were led by exceptional performance in architectural glass. The Glass segment delivered double-digit sales growth every quarter this year, and its segment operating margin doubled compared to last year.

Matthew J. Osberg: Adjusted EPS grew 20% to a record $4 77.

Matthew J. Osberg: And cash flow from operations nearly doubled to a record $204 million.

Matthew J. Osberg: These results were particularly impressive given some of the headwinds we faced on the top line during the year with net sales declining by 2%.

Matthew J. Osberg: Throughout the year, our improved results were led by exceptional performance in architectural glass.

Matthew J. Osberg: The glass segment delivered double digit sales growth every quarter this year.

Matthew J. Osberg: And segment operating margin doubled compared to last year.

Ty R. Silberhorn: These terrific results reflect the strategic transformation of our glass industry. We've significantly improved our cost structure, delivered meaningful productivity gains through AMS, and driven our sales mix toward higher value-added premium products. We made strong progress in Fiscal 24 toward achieving the financial targets we set out in November of 2021, as shown on page 6. Adjusted ROIC improved to 16.5%, well above our 12% target. Adjusted operating margin also exceeded our target, coming in at 10.3%.

Matthew J. Osberg: These terrific results reflect the strategic transformation of our glass segment.

Matthew J. Osberg: We've significantly improved our cost structure.

Matthew J. Osberg: Delivered meaningful productivity gains through Ams.

Matthew J. Osberg: And drove our sales mix towards higher value added premium products.

Matthew J. Osberg: We made strong progress in fiscal 'twenty four to achieving the financial targets. We set out in November of 2021 as shown on page six.

Matthew J. Osberg: Adjusted ROIC improved to 16, 5% well above our 12% target.

Matthew J. Osberg: Adjusted operating margin also exceeded our target coming in at 10, 3%.

Ty R. Silberhorn: A 160 basis point improvement compared to last year. On revenue growth, we fell short of our goal of outgrowing our industry. Some of this was a function of our purposeful strategy. At the outset of our strategic plan, we emphasized that our initial focus was to improve ROIC and operating margins while growing our overall profit dollar. We've had great success with all three of these goals.

Matthew J. Osberg: 160 basis point improvement compared to last year.

Matthew J. Osberg: On revenue growth, we fell short of our goal of outgrowing our industry.

Matthew J. Osberg: Some of this was a function of our purposeful strategy at.

Matthew J. Osberg: At the outset of our strategic plan, we emphasized that our initial focus was to improve ROIC.

Matthew J. Osberg: And operating margins, while growing our overall profit dollars.

Matthew J. Osberg: We've had great success with all three of these goals.

Ty R. Silberhorn: As part of our strategy, we've moved away from some lower-return product and service offerings and are doing so again with Project Fortify, all of which created a headwind for revenue. However, revenue was also impacted by the dynamics in our end market. Overall growth in non-residential construction was very strong last year; however, much of this growth was driven by megaprojects in infrastructure and manufacturing along with warehouse and data center build-out. These are sectors of the market where Apogee has a relatively low participation with our current product offering.

Matthew J. Osberg: As part of our strategy, we moved away from some lower return product and service offerings and are doing so again with project fortify all of which created a headwind for revenue.

Matthew J. Osberg: Revenue was also impacted by the dynamics in our end markets.

Matthew J. Osberg: Overall growth in non residential construction was very strong last year. However, much of this growth was driven by mega projects in infrastructure and manufacturing along with warehouse and data center build outs.

Matthew J. Osberg: These are sectors of the market, where apogee has a relatively low participation with our current product offerings.

Ty R. Silberhorn: Many parts of the market where we play saw decelerating growth rates, which impacted the shorter cycle parts of our business. However, we remain committed to our target of outgrowing the market. And this is the primary focus for our team as we move forward. In addition to our enterprise financial targets for November 2021, we established margin targets for each of our segments, which are shown on page seven. Three of our four segments performed within or above the target-adjusted margin ranges this year. Earlier in the fiscal year, we increased the target range for architectural glass from 7% to 10% to a new range of 10% to 15%.

Matthew J. Osberg: Many parts of the market, where we play saw decelerating growth rates, which impacted the shorter cycle parts of our business.

Matthew J. Osberg: Yes.

Matthew J. Osberg: We remain committed to our target of outgrowing the market.

Matthew J. Osberg: And this is the primary focus for our team as we move forward.

Matthew J. Osberg: In addition to our enterprise financial targets in November 2021, we established margin targets for each of our segments, which are shown on page seven.

Matthew J. Osberg: Three of our four segments performed within or above the target adjusted margin ranges this year.

Matthew J. Osberg: Earlier in the fiscal year, we increased the target range for architectural glass from 7% to 10% to a new range of 10% to 15%.

Ty R. Silberhorn: With the strong performance of framing systems the past two years, along with the strategic actions we announced in January, we are also increasing framing's target range to 10 to 15 percent. The architectural services margin level was below the target range, but did improve sequentially throughout the year. We see the opportunity for further progress in services this fiscal year. As we move into fiscal 2025, we intend to build on the gains we've achieved while positioning the company for stronger long-term growth.

Matthew J. Osberg: With the strong performance of framing systems, the past two years, along with the strategic actions, we announced in January we are also increasing framing target range to 10% to 15%.

Matthew J. Osberg: Architectural services margin level was below the target range, but did improve sequentially throughout the year.

Matthew J. Osberg: We see the opportunity for further progress in services this fiscal year.

Matthew J. Osberg: As we move into fiscal 2025, we intend to build on the gains we've achieved while positioning the company for stronger long term growth.

Ty R. Silberhorn: Over the next 12 months, we see a mixed picture for our end markets, as shown on slide 8. We do see some headwinds in the market, as do the leading market research firms, especially in some of the key segments in which we play. Most industry forecasts call for further deceleration in non-residential construction over the next year, even if the overall growth level remains in positive territory. The commercial segment of the non-residential construction market has been impacted by higher interest rates, tighter lending standards, and increased costs.

Matthew J. Osberg: Over the next 12 months, we see a mixed picture for our end markets as shown on slide eight.

Matthew J. Osberg: Yes.

Matthew J. Osberg: We do see some headwinds in the market as do the leading market research firms, especially in some of the key segments in which we play.

Matthew J. Osberg: Most industry forecast call for further deceleration in nonresidential construction over the next year, even if the overall growth level remains in positive territory.

The commercial segment of the nonresidential construction market has been impacted by higher interest rates tighter lending standards and increased costs.

Ty R. Silberhorn: This includes sectors such as office and retail. On a more positive note, institutional and infrastructure projects appear poised for continued growth over the next year. These include sectors such as healthcare, education, and transportation.

Matthew J. Osberg: This includes sectors, such as office and retail.

Matthew J. Osberg: On a more positive note institutional and infrastructure projects appear poised for continued growth over the next year.

Matthew J. Osberg: This include sectors, such as healthcare education and transportation.

Ty R. Silberhorn: Our team has had good success diversifying our business into these and other market verticals. This will remain a focus in the coming year as we mitigate those larger segment headwinds and position ourselves for a strong revenue rebound in fiscal 26. Regardless of the macro environment, we have driven sustainable improvements across our business that put us on a solid foundation. Our company is well positioned to continue delivering strong results as we move forward. I'd like to elaborate on a few of our priorities for the coming year. Let me start by discussing Project Fortify on page 9.

Matthew J. Osberg: Our team has had good success diversifying our business into these end market verticals.

This will remain a focus in the coming year as we mitigate those larger segment headwinds and position ourselves for a strong revenue rebound in fiscal 'twenty six.

Matthew J. Osberg: Regardless of the macro environment, we have driven sustainable improvements across our business that puts us on a solid foundation.

Matthew J. Osberg: Our company is well positioned to continue delivering strong results as we move forward.

Matthew J. Osberg: I'd like to elaborate on a few of our priorities in the coming year.

Speaker Change: Let me start by discussing project fortify on page nine.

Ty R. Silberhorn: Project Fortify further advances our company's strategy. It builds on the success we've achieved, further improving our cost structure, enabling productivity gains, and allowing our team to focus on higher growth, higher return opportunities. These actions were primarily focused on framing systems.

Speaker Change: Project fortify further advances our company strategy.

Speaker Change: It builds on the success, we've achieved further improving our cost structure, enabling productivity gains and allowing our teams to focus on higher growth higher return opportunities.

Speaker Change: These actions were primarily focused on framing systems.

Ty R. Silberhorn: Framing has achieved strong performance gains, moving from a mid-single-digit operating margin in fiscal 21 to a 12 percent range over the past two years. Project 4 to 5 positions Framing for further margin gains, which is reflected in our increased margin target for the segment. It also brings more clarity to our go-to-market strategy, positioning the business for future growth. I spoke earlier about Apogee management. Driving further productivity gains through the deployment of AMS will remain a focus in Fiscal 25.

Speaker Change: Framing has achieved strong performance gains moving from mid single digit operating margin in fiscal 'twenty, 1% to 12% range over the past two years.

Speaker Change: Project, 4% to five positions framing for further margin gains, which was reflected in our increased margin target for the segment.

Speaker Change: It also brings more clarity to our go to market strategy positioning the business for future growth.

Speaker Change: I spoke earlier about the apogee management system.

Speaker Change: Driving further productivity gains through the deployment of Ams will remain a focus in fiscal 'twenty five.

Ty R. Silberhorn: We view AMS as a multi-year journey building a culture of operational excellence, as outlined on page 10. In fiscal 25, we will continue to broaden the scope of AMS across our company. We believe AMS will generate incremental costs and productivity gains, improving margins and helping us offset potential market headwinds. Next, I'd like to address our increased focus on growth, which is outlined on page 11. We are driving a growth mindset in everything we do, given that we serve a very large and diverse set of end markets. That means there are always opportunities for growth.

Speaker Change: We view Ams as a multi year journey building a culture of operational excellence as outlined on page 10.

Speaker Change: In fiscal 'twenty five we will continue to broaden the scope of Ams across our company.

Speaker Change: We believe Ams will generate incremental costs and productivity gains improving margins and helping us offset potential market headwinds.

Speaker Change: Next I'd like to address our increased focus on growth, which is outlined on page 11.

Speaker Change: We are driving a growth mindset in everything we do given that we serve a very large and diverse set of end markets.

Speaker Change: That means there are always opportunities for growth.

Ty R. Silberhorn: We are focused on seizing those opportunities to outperform the overall market. Our combination of leading brands, deep customer relationships, and differentiated offerings positions us to gain share in a fragmented industry. We are pursuing geographic expansions, particularly in services and in framing systems, expanding our reach to portions of the U.S. and Canada where we are underrepresented today. We also see opportunities for share gains by continuing to improve our service levels and our product performance.

We are focused on seizing those opportunities to outperform the overall market.

Speaker Change: Our combination of leading brands deep customer relationships and differentiated offerings positions us to gain share in a fragmented industry.

Speaker Change: We are pursuing geographic expansions, particularly in services and in framing systems, expanding our reach supports portions of the U S and Canada, where we are underrepresented today.

Speaker Change: We also see opportunities for share gains by continuing to improve our service levels and our product performance.

Ty R. Silberhorn: With the recent growth in services backlog, we may already be seeing some flight to quality, with customers seeking to de-risk their projects by working with industry-leading suppliers like our Harman brand. We will also continue to diversify our sales, focusing on higher-growth sectors of the market. This includes expansion into attractive adjacencies, particularly within large-scale optical.

Speaker Change: With the recent growth in services backlog, we may already be seeing some flight to quality with customers seeking to derisk their projects by working with industry, leading suppliers like our Harman brands.

Speaker Change: We will also continue to diversify our sales mix focusing on higher growth sectors of the market.

This includes expansion into attractive adjacencies, particularly within large scale optical.

Ty R. Silberhorn: Finally, we will continue to evaluate investment opportunities that will accelerate our growth, including both organic investments and acquisitions. To wrap up, we are very proud of the progress that we've achieved. We have established a stronger foundation for our company, and we have significantly improved our financial performance. Our team is focused on building on these gains, driving organic and inorganic growth opportunities, and furtheraccelerating our earnings and margins in the years ahead. With that, let me turn it over to Matt. Thanks, Ty, and good morning, everyone.

Speaker Change: Finally, we will continue to evaluate investment opportunities that will accelerate our growth, including both organic investments.

Speaker Change: And acquisitions.

Speaker Change: To wrap up we are very proud of the progress that we've achieved we have established a stronger foundation for our company and we have significantly improved our financial performance.

Speaker Change: Our team is focused on building on these gains driving organic and inorganic growth opportunities to further accelerate our earnings and margins in the years ahead.

Speaker Change: With that let me turn it over to Matt.

Matthew J. Osberg: Thanks, Todd and good morning, everyone first I'll begin with a review of our results in the quarter, then I will summarize some of the highlights of the full year finally, I'll discuss our outlook for fiscal 'twenty five.

Matthew J. Osberg: First, I'll begin with a review of our results for the quarter, then I will summarize some of the highlights of the full year, and finally, I'll discuss our outlook for Fiscal 25. The fourth quarter was a strong close to Fiscal 24, as we delivered Adjusted Operating Margin Expansion.

The fourth quarter was a strong close to fiscal 'twenty four as we delivered adjusted operating margin expansion adjusted EPS growth and continued to generate exceptionally strong cash flow.

Matthew J. Osberg: Adjusted EPS growth and continued to generate exceptionally strong cash flow. We also achieved meaningful backlog growth in the longer lead time parts of our business. As a reminder, the fourth quarter and the full year included an extra week of operations compared to fiscal 2019. Looking at the results for the fourth quarter, net sales grew 5% to $362 million. This growth was driven by improved pricing and mix, especially in glass. However, this was partially offset by lower volumes, primarily in frame.

Matthew J. Osberg: We also achieved meaningful backlog growth in the longer lead time parts of our business.

Matthew J. Osberg: As a reminder, the fourth quarter and the full year included an extra week of operations compared to fiscal 'twenty three.

Matthew J. Osberg: Looking at the results for the fourth quarter net sales grew 5% to $362 million. This growth was driven by improved pricing and mix, especially in glass.

This was partially offset by lower volumes primarily in framing.

Matthew J. Osberg: Fourth quarter results included $12.4 million of restructuring charges related to Project Fortify, of which $5.5 million was included in Cost of Goods Sold, and $6.9 million was included in Netscape, including these charges. Fourth quarter gross profit increased 13% and gross margin improved by 170 basis points, driven by improved pricing and mix and the benefits from cost savings. SG&A expense increased $14.2 million to 18.4% of net sales, compared to 15.2% of net sales in last year's fourth quarter. The increase was primarily due to restructuring charges associated with Project Fortify, along with higher compensation-related costs. Operating income was $21.9 million, or 6% of net sales, excluding the impact of restructuring.

Matthew J. Osberg: Fourth quarter results included $12 4 million of restructuring charges related to project fortify of which $5 $5 million was included in cost of goods sold and $6 $9 million was included in SG&A.

Matthew J. Osberg: Including these charges fourth quarter gross profit increased 13% and gross margin improved by 170 basis points, driven by improved pricing and mix and the benefits from cost saving initiatives.

Matthew J. Osberg: SG&A expense increased $14 2 million to 18, 4% of net sales compared to 15, 2% of net sales in last year's fourth quarter. The.

Matthew J. Osberg: The increase was primarily due to restructuring charges associated with project fortify along with higher compensation related costs.

Matthew J. Osberg: Operating income was $21 9 million or 6% of net sales excluding.

Matthew J. Osberg: Excluding the impact of restructuring adjusted.

Matthew J. Osberg: Adjusted Operating Income grew 33%, and Adjusted Operating Margin expanded 200 basis points to 9.5%. This was primarily driven by improved segment operating margin in glass. Diluted EPS was $0.71, and Adjusted Diluted EPS grew 33% to $1.14.

Matthew J. Osberg: Operating income grew 33% and adjusted operating margin expanded 200 basis points to nine 5%.

Matthew J. Osberg: This was primarily driven by improved segment operating margin in glass.

Matthew J. Osberg: Diluted EPS was <unk> 71.

Matthew J. Osberg: And adjusted diluted EPS grew 33% to $1 14.

Matthew J. Osberg: This was primarily driven by higher adjusted operating income. Turning to the segment results for the quarter, framing net sales declined 6.3% due to lower volumes reflecting the deceleration in commercial construction activity that Ty described. Framing results included $6 million of restructuring charges related to Project Fortify. Excluding these charges, Adjusted Operating Margin for Framing contracted $130,000 to 9.2%, primarily due to the impact of lower sales volume and a less favorable mix of products.

Matthew J. Osberg: This was primarily driven by higher adjusted operating income.

Matthew J. Osberg: Turning to the segment results for the quarter framing net sales declined six 3% due to lower volumes, reflecting the deceleration in commercial construction activity that tie described.

Matthew J. Osberg: Framing results included $6 million of restructuring charges related to project fortify.

Matthew J. Osberg: Excluding these charges adjusted operating margin for framing contracted 130 basis points to nine 2%, primarily due to the impact of lower sales volume and a less favorable mix of projects.

Matthew J. Osberg: Framing backlog increased 9% compared to the third quarter to $201 million. As part of Project Fortify, we are phasing out some of the longer lead time work within the framing segment. Going forward, most of the projects and framing will be completed in six months or less, making backlog a less relevant measure.

Matthew J. Osberg: Framing backlog increased 9% compared to the third quarter to $201 million.

Matthew J. Osberg: As part of project fortify, we are phasing out some of the longer lead time work within the framing segment.

Going forward most of the projects in framing will be completed in six months or less making backlog a less relevant measure for the segment.

Matthew J. Osberg: As a result, beginning next quarter, we will no longer report backlog for the frame. The Glass segment continued to outperform our expectations. Net sales for Glass grew 18%, and segment operating income nearly doubled to $18.9 million, while segment operating margin expanded 800 basis points to 19.7%. Services sales grew 8% to $106 million, and adjusted operating margin increased by 210 basis points to 5.8%, primarily driven by a more favorable mix of projects, partially offset by higher compensation.

Matthew J. Osberg: As a result, beginning next quarter, we will no longer report backlog for the framing segment.

Matthew J. Osberg: The glass segment continued to outperform our expectations driven by improved pricing and mix.

Matthew J. Osberg: Net sales for glass grew 18% and segment operating income nearly doubled to $18 9 million while segment operating margin expanded 800 basis points to 19, 7%.

Matthew J. Osberg: Services sales grew 8% to $106 million and.

Matthew J. Osberg: <unk> operating margin increased by 210 basis points to five 8%, primarily driven by a more favorable mix of projects, partially offset by higher compensation costs.

Matthew J. Osberg: Services backlog ended the quarter at $808 million. This is 4% higher than the third quarter and 11% above last year. This reflects our strong market position as we've significantly increased backlog even in a more challenging market environment. Importantly, the backlog growth in services reflects our continued efforts to diversify our project portfolio, and significant wins in the hospitality, healthcare, and transportation sectors. LSO sales were essentially flat year over year, with improved mix offsetting lower volume.

Matthew J. Osberg: Services backlog ended the quarter at $808 million. This is 4% higher than the third quarter and 11% above last year.

Matthew J. Osberg: This reflects our strong market position as we have significantly increased backlog, even in a more challenging market environment importantly.

Matthew J. Osberg: Importantly, the backlog growth in services reflects our continued efforts to diversify our project mix with significant wins in hospitality health care and transportation sectors.

Matthew J. Osberg: <unk> sales were essentially flat year over year with improved mix offsetting lower volume.

Matthew J. Osberg: However, operating margin improved by 450 basis points to 25.6%, reflecting the improvement. Corporate expenses increased primarily due to $3.9 million of restructuring charges related to Project Fortify and higher compensation-related costs. Turning to cash flow, we had another strong result, generating $75 million of cash from operations in the quarter compared to $52 million in last year's fourth quarter. Our primary use of cash in the quarter was debt reduction, as we paid down $39 million of debt.

Matthew J. Osberg: However, operating margin improved by 450 basis points to 25, 6%, reflecting the improvement in mix.

Matthew J. Osberg: Corporate expenses increased primarily due to $3 9 million of restructuring charges related to project fortify and higher compensation related costs.

Matthew J. Osberg: Turning to cash flow, we had another strong result, generating $75 million of cash from operations in the quarter compared to $52 million in last year's fourth quarter.

Matthew J. Osberg: Our primary use of cash in the quarter was debt reduction as we paid down $39 million of debt. This brought our net leverage ratio down to 0.1 times trailing 12 month adjusted EBITDA.

Matthew J. Osberg: This brought our net leverage ratio down to 0.1 times trailing 12-month adjusted interest. Looking at the full fiscal year, we are very proud of the results we delivered. Adjusted operating margin increased 160 basis points to 10.3%. Adjusted diluted EPS grew 20% to a record $4.77, and cash flow from operations nearly doubled to $204 million. During the year, we paid down our debt by $108 million and invested $43 million in capital expenditures, funded a capacity expansion in LSO, and other projects to enhance productivity through automation. We also returned $33 million of cash to shareholders through dividends and share repurchase.

Matthew J. Osberg: Looking at the full fiscal year, we are very proud of the results we delivered adjusted.

Matthew J. Osberg: Operating margin increased 160 basis points to 10, 3%.

Matthew J. Osberg: Adjusted diluted EPS grew 20% to a record $4 77.

Matthew J. Osberg: Cash flow from operations nearly doubled to $204 million.

Matthew J. Osberg: First cash flow in the company's history.

Matthew J. Osberg: During the year, we paid down our debt by $108 million and invested $43 million in capital expenditures, which funded a capacity expansion in lso in other projects to enhance productivity through automation.

Matthew J. Osberg: We also returned $33 million of cash to shareholders through dividends and share repurchases.

Matthew J. Osberg: Adjusted ROIC continued to improve as well, reaching 16.5% for the segment. Glass grew net sales by 20% and operating income by almost 140%, while doubling operating margins. Despite lower sales and framing, the segment delivered adjusted operating margin at the top of the 9-12% target. Services sales declined, and margins remain below our 7-9% target, but we expect both top and bottom line improvements and Fiscal 25. LSO sales declined, but margins remained very strong at over $25,000.

Matthew J. Osberg: Adjusted ROIC continued to improve as well, reaching 16, 5%.

Matthew J. Osberg: For the segments.

Matthew J. Osberg: Glass grew net sales by 20% and adjusted operating income by almost 140%, while doubling operating margin.

Matthew J. Osberg: Despite lower sales and framing the segment delivered adjusted operating margin at the top of the 9% to 12% target range.

Matthew J. Osberg: Services sales decline and margins remained below our 7% to 9% target range, but we expect both top and bottom line improvements in fiscal 'twenty five.

Matthew J. Osberg: <unk> sales decline, but margins remained very strong at over 24%.

Matthew J. Osberg: Moving to our outlook for fiscal 25, we expect net sales to decline 4% to 7%. This range includes approximately two percentage points of decline related to fiscal 25 reverting to a 52-week year and approximately one percentage point of decline related to the actions of Project Fortify to eliminate certain lower-margin product and service offerings. Also, as Ty discussed, we expect decelerating end-market growth this year to put pressure on volume and pricing in the framing and glass segment. Additionally, we expect sales declines in framing and glass.

Moving to our outlook for fiscal 'twenty, five we expect net sales to decline 4% to 7%.

Matthew J. Osberg: This range includes approximately two percentage points of decline related to fiscal 'twenty five reverting to a 52 week year and approximately one percentage point of decline related to the actions of project fortify to eliminate certain lower margin product and service offerings.

Matthew J. Osberg: Also as Ty discussed, we expect decelerating end market growth this year to put pressure on volume and pricing in the framing and glass segments.

Matthew J. Osberg: We expect sales declines in framing and glass to be partially offset by growth in services as we execute a strong pipeline of projects in our backlog.

Matthew J. Osberg: We've been partially offset by growth in services as we execute a strong pipeline of projects in our backlog, with LSO sales approximately flat as retail channel headwinds offset new channel adjacency growth. Looking at Adjusted Operating Margin trends, we expect our Fiscal 25 consolidated margin to remain approximately flat to Fiscal 24.

With <unk> sales approximately flat as a retail channel headwinds offset new channel adjacency growth.

Matthew J. Osberg: Looking at adjusted operating margin trends, we expect our fiscal 'twenty five consolidated margin to remain approximately flat to fiscal 'twenty four.

Matthew J. Osberg: We expect framing margins to improve and be within the new elevated target range of 10 to 15 percent. We expect the glass segment to moderate compared to fiscal 24 and move back into the 10 to 15 percent target, with higher margins expected in the first half of the year, sequentially declining as the year progresses. We expect services margins to improve and move closer to $7.9 billion. We expect LSO margins to decline as we expand into new adjacent markets and begin to depreciate the capital assets for our capacity expansion.

Matthew J. Osberg: We expect framing margins to improve and be within the new elevated target range of 10% to 15%.

Matthew J. Osberg: We expect the glass segment will moderate compared to fiscal 'twenty, four and move back into the 10% to 15% target range with higher margins expected in the first half of the year and sequentially declining as the year progresses.

Matthew J. Osberg: We expect services margins will improve and move closer to the seven nine to 72, 9% target range.

Matthew J. Osberg: We expect <unk> margin margins to decline as we expand into new Adjacencies and begin to depreciate the capital assets for our capacity expansion, but still be above the 20% target range.

Matthew J. Osberg: Finally, we expect corporate costs to return to levels approximating what we incurred in. We are forecasting adjusted diluted EPS in a range of $4.35 to $4.75, with the impact of the reversion to a 52-week year expected to reduce adjusted diluted EPS by approximately 20%. With no expected material EPS impacts related to the adverse net sales impact of Project Fortify, we expect an average tax rate of approximately 24.5% and anticipate $40-$50 million of capital expenditures during the year.

Matthew J. Osberg: Finally, we expect corporate costs to return to levels approximating, what we incurred in fiscal 'twenty three.

Matthew J. Osberg: We are forecasting adjusted diluted EPS in a range of $4 35.

Matthew J. Osberg: To $4 75.

Matthew J. Osberg: With the impact of the reversion to a 52 week year expected to reduce adjusted diluted EPS by approximately <unk> <unk>.

Matthew J. Osberg: With no expected material EPS impact related to the adverse net sales impact of project fortify.

Matthew J. Osberg: We expect an average tax rate of approximately 24, 5% and anticipate $40 million to $50 million of capital expenditures during the year.

Matthew J. Osberg: Finally, we expect lower cash flow from operations, as the working capital changes that impacted the past two years begin to... Looking at the quarterly cadence of the year, we expect the first quarter to be our lowest level of sales and EPS for the year. This is a fourth quarter comparison to the prior year being impacted by the additional week. In closing, this was another strong quarter to finish a great year. Over the past three years, we have built a stronger financial and operational foundation for the company.

Matthew J. Osberg: Finally, we expect lower cash flow from operations as the working capital changes that impacted the past two years begin to normalize.

Matthew J. Osberg: Looking at the quarterly cadence of the year, we expect the first quarter to be our lowest level of sales and EPS for the year with the fourth quarter comparison to prior year being impacted by the additional week in fiscal 'twenty four.

Matthew J. Osberg: In closing this was another strong quarter to finish a great year over.

Matthew J. Osberg: Over the past three years, we have built a stronger financial and operational foundation for the company and we believe there are opportunities to continue to make organic and inorganic investments in the business to build on what we have already achieved.

Matthew J. Osberg: And we believe there are opportunities to continue to make organic and inorganic investments in the business to build on what we have already achieved. With that, I'll turn it back over to Ty for some concluding remarks. Thanks, Matt.

Matthew J. Osberg: With that I'll turn it back over to Todd for some concluding remarks.

Todd: Thanks, Matt to wrap up I want to thank our team for delivering another strong quarter I'm really proud of what we've accomplished and more importantly, I am excited about the opportunities ahead for our business as we focus on growth.

Ty R. Silberhorn: To wrap up, I want to thank our team for delivering another strong quarter. I'm really proud of what we accomplished. And more importantly, I'm excited about the opportunities ahead for our business as we focus on growth. Execution of our strategy has driven sustainable operating improvements across our business. We've achieved meaningful cost and productivity improvements, grown in a mix of differentiated products, and built a stronger set of core processes and systems. These operational improvements have led to a step change in financial performance and created a solid foundation for us to weather any slowdown and create strong profit leverage as volume increases, as we saw with class in fiscal 24.

Speaker Change: Execution of our strategy has driven sustainable operating improvements across our business we've.

Speaker Change: We've achieved meaningful cost and productivity improvements grown our mix of differentiated products and build a stronger set of core processes and systems.

Speaker Change: These operational improvements have led to a step change in financial performance and created a solid foundation for us to weather any slowdown and creating a strong profit leverage as volume increases as we saw with glass in fiscal 'twenty four.

Ty R. Silberhorn: Our team is focused on building on these improvements and delivering another successful year in Fiscal 25 while positioning us for a strong Fiscal 26. With that, we're ready to take your questions. Thank you. As a reminder, to ask a question, please press star 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Our team is focused on building on these improvements and delivering another successful year in fiscal 'twenty five while positioning us for a strong fiscal 'twenty six.

Speaker Change: With that we're ready to take your questions.

Speaker Change: Thank you as a reminder to ask a question. Please press star one one on your telephone.

Speaker Change: And wait for your name to be announced to withdraw your question. Please press star one one again please.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Julio Romero from Sidotian Company, LLC. Thanks. Hey, good morning, Ty. Good morning, Matt. Jeff.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: Our first question comes from the line of Julio Romero from Sidoti <unk> Company LLC.

Julio Alberto Romero: Thanks, Hey, good morning, Todd Good morning, Matt Jeff.

Julio Alberto Romero: Morning, Julio. Hey guys, I wanted to talk about Project Fortify for a second. And some of the things you're doing within framing, can you maybe give us a quick refresher of what the current sales mix is within framing between shorter cycle work and the longer lead time work and maybe ballpark what that looks like post the phasing out of some of the longer lead time stuff within framing? Yeah, maybe Julio, let me start by just kind of talking about the product lines and kind of the services that we're moving away from with Project Fortify.

Julio Alberto Romero: Leo.

Julio Alberto Romero: Sure.

Julio Alberto Romero: Hey, guys I wanted to talk about project qualify for a second.

Julio Alberto Romero: And some of the things Youre doing within framing can you maybe give us a quick refresher of what the current sales mixes within framing between shorter cycle working and the longer lead time work and maybe ballpark what that looks like post the phasing out of some of the longer lead time stuff within.

Julio Alberto Romero: Framing.

Julio Alberto Romero: Yes.

Speaker Change: I'll start by just kind of talking about the product lines and kind of the services that we're moving away from with project fortify within that so.

Julio Alberto Romero: So if you remember in the strategy we laid out at the end of calendar 21, we consolidated a lot of those separate business units, but we kept kind of a two business unit structure from a commercial go-to-market. So our storefront and finishing business, and then our window and wall business. A part of our window and wall business included what would look like a supply of manufactured curtain wall and window wall for small projects.

Speaker Change: If you remember in the strategy, we laid out in at the end of calendar 'twenty one.

Speaker Change: We consolidated a lot of those separate business units, but we kept kind of two business unit structure from a commercial go to market. So our storefront and finishing business and then our window and wall business.

Speaker Change: A part of our window and wall business included.

Speaker Change: What would look like a supply of manufactured curtain wall and window wall for small projects. So our services segment is typically doing 25% to $45 million type of projects and that's all encompassing end to end including installation.

Ty R. Silberhorn: So our services segment is typically doing $25 to $45 million type of projects, and that's all encompassing end to end, including installation. We were doing, let's call it $5 to $7, $5 to $8 million type of supply side projects for window wall and some lower end curtain wall in that business. That is a part of the product line that was underperforming margin-wise, but we saw a path that we felt we could improve those margins. We have been working on that. They have made some improvements.

Speaker Change: We were doing let's call. It five to seven 5 million to $8 million type of supply side projects for window wall, and some lower and curtain wall in that business.

Speaker Change: That is a part of the product line that was underperforming margin wise, but we saw a path that we felt we could improve those margins. We have been working on that they have made some improvements but at the same time, we saw we're going to have to get more price on those offerings to really make that business sustainable.

Ty R. Silberhorn: But at the same time, we saw we're going to have to get more price on those offerings to really make that business sustainable and get it closer to being accretive to our overall margins and our margin goals. As we see the market slowing down, and as we've tended to be more aggressive on that pricing, we saw those volumes start to erode throughout fiscal 24, and so we made the decision that that's part of the business that we will move away from.

Speaker Change: And get it closer to being accretive to our overall margins and our margin goals.

Speaker Change: As we see the market is slowing down and as we've tended to be more aggressive on their pricing we saw those volumes start to erode.

Speaker Change: Fiscal 'twenty four and so we've made the decision that that's part of the business that we will move away from.

Ty R. Silberhorn: In doing that, it also allowed us to kind of revisit our footprint and look at some consolidation. We had already been working to basically run framing systems from a manufacturing operations and supply chain side as a single entity. But this allows us to really do that completely, and it allowed us to leverage some open capacity with the exit of some of those products from one of our Wausau, Wisconsin facilities and take some cost synergies opportunities as a result of that. And yeah, Julio. This is Matt.

Speaker Change: In doing that it also allowed us to kind of revisit footprint and look at some consolidation we had already been working to basically run framing systems from our manufacturing operations and supply chain side as a single entity, but this allows us to really do that completely and it allowed us to lead.

Speaker Change: Average some open capacity with the exit of some of those products in one of our Wausau, Wisconsin facilities and take some cost synergy opportunity as a result of that and yeah. Julio. This is Matt I would just add onto that in terms of kind of how to size that we called out this year that there is about a one percentage point.

Matthew J. Osberg: When as we start to step away from some of that longer term project Unitize curtain wall business that Tom mentioned and as you think about it.

Ty R. Silberhorn: I'd just add on to that in terms of how to size that. We called out this year that there is about a 1 percentage point headwind as we start to step away from some of that longer term project, unitized curtain wall business that Ty mentioned. And as you think about continuing to phase out, those are longer-term projects. So some of that will span into fiscal 26. But it would be less than the headwind that we've got this year as we continue to phase that out. By the end of fiscal 26, that project flow would be out of our control. I got it.

Matthew J. Osberg: Continuing to phase out those are longer term projects. So some of that will span into fiscal 'twenty six but it would be.

Matthew J. Osberg: Less than the headwind that we've got this year as we kind of continue to phase that out by the end of fiscal 'twenty six that project flow would be out of our revenue.

Matthew J. Osberg: Got it that's really helpful. The color you gave there and then maybe earlier you guys spoke about diversifying the end market mix.

Matthew J. Osberg: I Love what you showed on slide eight I believe.

Matthew J. Osberg: The work you've done moving the mix towards health care education transportation et cetera.

Matthew J. Osberg: Any way you can kind of help us think about.

Julio Alberto Romero: That's really helpful, the caller you gave there. And then maybe, you know, earlier you guys spoke about diversifying the in-market mix. I love what you showed on slide eight. I believe you know, the work you've done moving the mix towards health care, education, transportation, etc., any way you can kind of help us think about where the in-market exposure stands today, just in the name of helping us kind of track the sales diversification and where the portfolio is moving.

Matthew J. Osberg: Where the end market exposure stands today, just in the name of helping us kind of track.

Matthew J. Osberg: The sale is the perfect diversification and where where the portfolio is moving.

Matthew J. Osberg: Maybe you want to tell us like how much health care education.

Matthew J. Osberg: We will make up X number of years from now.

Ray: Ray you could.

Ray: Can you help us yes.

Speaker Change: Overall. This is yeah. This is Tyler let me give a little bit of color. So that data. We just chose to use some of the most recent data from F&I.

Speaker Change: Because I think it's important to highlight is if you look at the market research firms and the projections for calendar 'twenty for non resi construction.

Speaker Change: It's actually a pretty wide range from anything from down 1% to up 11.

Julio Alberto Romero: Maybe you want to tell us like how much healthcare education will make up, you know, X number of years from now, just any way you could, to help us get out of this overall. Yeah, this is Ty. Although, let me give you a little bit of color.

Speaker Change: For the current calendar year, that's the widest range I've seen.

Speaker Change: Since I've been at apogee, three and a half years now so I think that bodes for a little bit of uncertainty in the market and it's.

Ty R. Silberhorn: So that data, we just chose to use some of the most recent data from FMI. One of the things I think it's important to highlight is if you look at the market research firms and the projections for calendar 24 non-resi construction, there is actually a pretty wide range, anything from down one percent to up 11, for the current calendar year. That's the widest range I've seen since, you know, I've been at Apogee for three and a half years now.

Speaker Change: It's probably from a broader market perspective is probably a back half of the calendar year more than it is the front half, although as Matt said, we've got some puts and takes in framing and some other businesses that I think first quarter will be our toughest toughest quarter just from a topline perspective.

Speaker Change: When you look at those segments one of the things we wanted to hide those highlight is those building types.

Speaker Change: We have been working to get more health care to get more education to get more recreation transportation really for us is airports.

Speaker Change: So those are segments that are building types that we have been focused on for almost three years now to really diversify and we've made nice step change in that.

Ty R. Silberhorn: So I think that bodes for a little bit of uncertainty in the market. It's probably, from a broader market perspective, it's probably the back half of the calendar year more than it is the front half, although, as Matt said, we've got some puts and takes and framing and some other businesses that, you know, I think the first quarter will be our toughest, toughest quarter just from a top line perspective. When you look at those segments, one of the things we wanted to highlight is those building types. We have been working to get more health care, to get more education, and to get more recreation. Transportation, really, for us, is airports.

Speaker Change: If you look at and kind of pull the full <unk> report and you looked at if you want to define as addressable market of the building types that we currently plan and supply <unk>.

Speaker Change: I would still say that our addressable market is probably going to grow a little bit maybe call. It a couple percentage points and then we have to deal with our 50 <unk> week, the exit of some of that supply curtain wall and window wall, which kind of puts us to just being slightly negative.

Speaker Change: And then kind of the further end of that downside range. So ex the 50 <unk> week were kind of looking at a minus one to minus 4%. That's just us kind of with that uncertainty we're seeing in some of these forecasts hedging a little bit on how that might play out through the course of the year.

Ty R. Silberhorn: So those are segments of building types that we have been focused on for almost three years now to really diversify And we've made a nice step change in that, If you look at and kind of pull the full FMI report, and you looked at if you want to define as addressable market of the building types that we currently plan and supply, FMI would still say that our addressable markets probably going to grow a little bit, maybe call it a couple percentage And then we have to deal with our 53rd week, the exit of some of that supply curtain wall and window wall, which kind of puts us, you know, to just being slightly negative. And then kind of the further end of that downside range.

Speaker Change: And really the only thing I would add to it is we really tried to call out in Q3 and in this quarter services. In particular has made improvements in their backlog and the mix of projects that we've been winning there has been very diverse. So I think there is theres, obviously lots of stuff in that backlog.

Speaker Change: But I see as we continue to focus on these.

Speaker Change: All segments of the market that are growing and helping us diversify we're seeing that show up in our more recent project wins.

Speaker Change: Again, we don't share that a big reason is for competitive reasons, but as we've commented before office, which was a huge part of our backlog reports across our businesses or our award mix three years ago is down significantly and it was down again sequentially in the quarter and for this fiscal.

Ty R. Silberhorn: So X, the 53rd week, we're kind of looking at minus one to minus 4%. That's just us kind of with that uncertainty; we're seeing in some of these forecasts hedging a little bit on how that might play out through the course. And Julio, the only thing I would add to it is that, in Q3 and in this quarter, services, in particular, have made improvements in their backlog. And the mix of projects that we've been winning there has been very diverse. So I think that there's obviously lots of stuff in that backlog.

Speaker Change: Year compared to last fiscal year, yet if you look at services and that's the easy one to point to there. The backlog is actually up so that that for US is a positive signal, we're getting the diversification and it still will allow us to grow the business both in the medium and long term.

Speaker Change: Got it really helpful and I appreciate the last comment tie on office being down sequentially I think that really helps us.

Speaker Change: Think about things maybe just.

Matthew J. Osberg: But I see, as we continue to focus on these [inaudible] three years ago, the backlog is down significantly. And it was down again sequentially in the quarter and for this fiscal year compared to last fiscal year. Yet if you look at services, and that's an easy one to point to, the backlog is actually up.

Speaker Change: The last one for me would be one of the things you're talking about in terms of diversifying the end market mix is the geographic.

Speaker Change: Expansion in services can you just give us a quick.

Speaker Change: Date on how Thats progressing.

Speaker Change: In terms of the westward expansion there yes.

Speaker Change: Yes, so they continue to be very active on pursuing projects west of the Rockies. They have had we talked last quarter. They had a nice win there is some other things that came through in the current backlog. There was some addition of work out west as well, we'll be making some investments kind of.

Ty R. Silberhorn: So that, for us, is a positive signal. We're getting diversification, and it will still allow us to grow the business, both in the medium and long-term.

Julio Alberto Romero: Really helpful. And I appreciate the last comment, Ty, on, you know, the office being down sequentially. I think that really helps us. Think about things.

Speaker Change: Expanding an existing facility in the Texas market to help us create some additional.

Ty R. Silberhorn: Maybe just the last one for me would be, you know, one of the things you talked about in terms of diversifying the market mix is the geographic expansion of services. Can you just give us a quick update on how that's progressing? in terms of the Westward expansion there. Yeah, so they continue to be very active in pursuing projects west of the Rockies. They have had, we talked last quarter, they had a nice win.

Speaker Change: Additional capacity to supply that and then one of the things. We started working on is what do we want to do from a footprint perspective west of the Rockies, both for services and for framing and when we look at those addressable building types. That's one of the challenges we have with framing the southwest and the west had some nice growth last year our framing.

Speaker Change: Business.

Speaker Change: Really has difficulty reaching those markets without having a footprint out there so.

Speaker Change: We have been working on building a plan that has kind of both an organic and an inorganic.

Speaker Change: Either buy or build to get our footprint. There are likely some combination of those two things to really look at how we can allow framing to truly play across all of North America, which today, where they are pretty limited to.

Ty R. Silberhorn: There are some other things that came through in the current backlog. There was some addition of work out west as well. We'll be making some investments, kind of expanding an existing facility in the Texas market to help us create some additional capacity to supply that. And then one of the things we started working on is, what do we want to do from a footprint perspective west of the Rockies? both for services and for framing. And when we look at those addressable building types, that's one of the challenges we have with framing. I mean, the Southwest and the West had some nice growth last year.

Speaker Change: East of the Rockies and even when we look at Canada, there are pretty limited to the greater Toronto area today with their footprint. So that's an area we're looking to make.

Speaker Change: Some additional investment in both again organic and Inorganically.

Speaker Change: Very helpful. I'll pass it on thank you very much. Thanks.

Speaker Change: Thanks Julio.

Speaker Change: Thank you one moment far next question.

Speaker Change: Our next question comes from the line of Brent Thielman from D. A Davidson.

Brent Edward Thielman: Good morning, Brian.

Brent Edward Thielman: Hey, good morning, guys and congrats on a great year.

Ty R. Silberhorn: Our framing business really has difficulty reaching those markets without having a footprint out there. So, we have been working on building a plan that has kind of both an organic and an inorganic. It's, you know, either buy or build to get a footprint there, or likely some combination of those two things to really look at how we can allow framing to truly play across all of North America, which they're pretty limited to east of the Rockies. And even when we look at Canada, they're pretty limited to the greater Toronto area today with their footprint.

Brent Edward Thielman: I guess first would just be.

Brent Edward Thielman: Hi.

The slide in here around objected to outgrow the market.

Speaker Change: Kind of moving forward and I guess my question is just.

Speaker Change: The three categories that you have in the slide deck for to capture share focused on high growth opportunities and investments.

Speaker Change: No low hanging fruit in your view what do you think is going to be most impactful in terms of your ability to sort of accelerate growth regardless.

Ty R. Silberhorn: So, that's an area we're looking to make some additional investment in, both, again, organic and inorganic. Very helpful. I'll pass it on.

Speaker Change: Market conditions.

Speaker Change: Yes, it's great question Brent.

Speaker Change: I would say as we see the market softening I'd like to say Theres a lot of low hanging fruit, there, but I think it's going to take.

Julio Alberto Romero: Thank you very much. Thanks, Julio. Thank you. One moment for our next question. Our next question comes from the line of Brent Thielman from DA Davidson. Hey, good morning, guys.

Speaker Change: Good effort because as you know as the market softens competition gets a little bit stiffer in tighter with respect to that now we have seen like we commented on in the.

Speaker Change: Script.

Speaker Change: That we've seen services they are picking up some business and what we're seeing we believe is maybe a little bit of a flight to quality to make sure that okay.

Brent Edward Thielman: Hey, congrats on a great year. I guess the first would just be, Ty, you have the slide in here around objectives to outgrow the market, kind of moving forward. And I guess my question is just, among the three categories that you have in the slide deck, capture, share, focus on high growth opportunities and investments, where is the low hanging fruit in your view, and what do you think is going to be most impactful in terms of your ability to sort of accelerate growth regardless of? Yeah, it's a great question, Brent.

Speaker Change: If I'm a developer contractor and I've got a limited number of projects I want to make sure. They go really well.

Speaker Change: And so we're seeing some signals of that that we think that plays well for frankly, all of our businesses for glass services and framing.

Speaker Change: So we're digging to understand that better and how we might promote that more strongly and that becomes a share gain opportunity for services and for framing in particular, so I think that's the one area that we're focused in that we potentially could see some short term benefits with.

Speaker Change: Respect to that I think really being able to reach more deeply geographically that's a bit more of a medium long term thats going to take.

Ty R. Silberhorn: I would say, as we see the market softening, I'd like to say there's a lot of low-hanging fruit there. But I think it's going to take a good effort because, as you know, as the market softens, competition gets a little bit stiffer and tighter with respect to that. Now, we have seen, like we commented on in the script, that we've seen services picking up some business. And what we're seeing, we believe, is maybe a little bit of a flight to quality to make sure that, OK. If I'm a developer and contractor and I've got a limited number of projects, I want to make sure they go really well.

Speaker Change: Either or combination of build buy.

Speaker Change: To get us the footprint that we that we can step into that and as we've talked about we're very active M&A pipeline.

Speaker Change: We were very active in the fiscal year, even though that market for for acquisitions has been relatively slow you can see and read that data.

Speaker Change: Does have interest rates because of private equity being a bit sidelined.

Speaker Change: That doesn't mean, we didn't engage and look at a number of opportunities and we'll continue to do that but as part of that we're also being very diligent.

Ty R. Silberhorn: And so we're seeing some signals of that that we think that plays well for, frankly, all of our businesses for glass services and framing. So we're digging to understand that better and how we might promote that more strongly, and that becomes a share gain opportunity for services and for framing, in particular. So I think that's the one area that we're focused on that could potentially see some short-term benefits with respect to that.

Speaker Change: And strategic in our focus so we want something that as a great strategic fit that we're confident we can add value and generate more value owning that asset and thats going to help us accomplish our financial goals, including our growth objectives over the long term.

Speaker Change: Okay. That's helpful and then I guess with some indications.

Speaker Change: Indications, it's murky medicine corners of the market.

Ty R. Silberhorn: I think really being able to reach more deeply geographically is a bit more of a medium and long term that's going to take either-or or a combination of build-buy to get us the footprint that we can step into that. And as we've talked about, we have a very active M&A pipeline. We've worked very actively in the fiscal year, even though the market for acquisitions has been relatively slow. You can see and read that data.

Today.

Speaker Change: Same time, you guys are looking at potentially deploying some capital and you're clearly under Levered right now, but any views around <unk>.

Speaker Change: Leverage changed at all as you continue to kind of monitor the macro picture.

Speaker Change: What you can see coming down the pipeline.

Speaker Change: No I think you're right, Brian I mean, obviously, we'd like to be able to invest more to and growth initiatives like Todd said, we've we've made some investments in growth both in fiscal 'twenty four as we invested in some capacity for lso that should come online this year.

Ty R. Silberhorn: Because of interest rates, because of private equity being a bit sidelined, that doesn't mean we didn't engage and look at a number of opportunities. And we'll continue to do that. But as part of that, we're also being very diligent and strategic in our focus. So we want something that has a great strategic fit, that we're confident we can add value to and generate more value by owning that asset. And that's going to help us accomplish, you know, our financial goals, including our growth objectives over the long term. Okay, that's helpful.

Speaker Change: As Todd mentioned, expanding some of our services capabilities to help them continue to move west and.

Speaker Change: And like Todd said were very active in the M&A market.

Speaker Change: We'd love to find an opportunity to invest there. So we're looking to try and make some investments that are going to help put us in a good path from a growth perspective, and that would definitely add some leverage in <unk>.

Speaker Change: We'd like to be able to do that with the right with the right asset yes, we've got I mean, 16% ROIC I mean thats the <unk>.

Ty R. Silberhorn: And then I, you know, I guess with some indications of murkiness and corners of the market. Today, at the same time you guys are, you know, looking, you know, potentially to deploy some capital. You're clearly under levered right now, but if you've used around, has leverage changed at all as you continue to kind of monitor the macro picture? What you can see coming in the pipeline. No, I think you're right

Speaker Change: <unk> three years ago was at 7% well below our cost of capital.

Speaker Change: So we're looking for those investment opportunities to drive value for our shareholders.

Speaker Change: And we do see those opportunities. So so that's the area of focus that we're really going to drive the organization to that's not to say, we're going to take our eye off the ball in terms of managing our margin profile and generating cash, but it's especially with fortify kind of cleaning up the last tail of some of the product offerings were.

Brent Edward Thielman: I mean, obviously, we'd like to be able to invest more in growth initiatives. We, like Ty said, have made some investments in growth, both in fiscal 24 as well as investing in some capacity for LSO that should come online this year and, as Ty mentioned, expanding some of our services capabilities to help them continue to move west. And like Ty said, we're very active in the M&A market, looking to find an opportunity to invest there. So we're looking to try and make some investments that are gonna help put us on a good path, definitely add some leverage. Yeah, we've got, I mean, 16% ROIC.

Speaker Change: Really in growth mode, and that regardless of what the market is doing so both organic and acquisition wise that has been the message to the team in the last couple of months as we stepped into fiscal 'twenty five.

Speaker Change: Get growth go outperformed the market. So if the market does end up being down we got to be down less or find a path to grow open of the market is up we've got to find a path to outgrow that market and so that is the message and the focus for the team for our fiscal 'twenty five.

Speaker Change: Okay. Okay, great. That's it for me thank you.

Speaker Change: Thank you.

One moment for our next question.

Speaker Change: Our next question comes from the line of Vijay Cook from singular research.

Good morning Vijay.

Matthew J. Osberg: I mean, the business three years ago was at seven, well below our cost of capital. So, you know, we're looking for those investment opportunities to drive value for our shareholders. And we do see those opportunities, so that's the area of focus that we're really going to drive the organization in. But that doesn't mean we're going to take our eye off the ball in terms of managing our margin profile and generating cash.

Good morning, Thanks, Nick.

Vijay Cook: Thanks for taking my call good morning.

Vijay Cook: Now from higher pricing in Q4.

Vijay Cook: I'm just wondering if there is.

Vijay Cook: And indicator of some pricing power or is it more correlated to eliminating some lower margin projects.

Nick: Yes, I think some of the benefits we got in Q4 Vijay were from some of the pricing initiatives that we've put in place earlier in the year and as well as especially in glass. The way we have tried to shift to higher value add strategy. So just improving the mix and the price we didn't we didn't take any.

Ty R. Silberhorn: But it's especially with Fortify kind of cleaning up the last tail of some of the product offerings, we're really in growth mode, and that regardless of what the markets, so both organic and acquisition-wise, that has been the message to the team the last couple of months as we stepped into fiscal 25. It's to get growth, to outperform the market. So if the market does end up being down, we've got to be down less or find a path to growth.

Nick: Pricing actions in Q4, I think it is a carryforward a lot of things that were put in place earlier in the year and then as we looked at fiscal 'twenty five we do see some pressure coming in both glass and framing on volumes and you will have to have some pressure on price probably as well and that's why we look.

Ty R. Silberhorn: And as the market is up, we've got to find a path to outgrow that market. And so that is the message and the focus for the team for our fiscal 25. Okay, okay, great. That's it for me.

Nick: Called down those two.

Nick: From a revenue perspective in fiscal 'twenty five so no new pricing initiatives that we put in place in Q4.

Speaker Change: Got it thanks for the concerns you appreciate it.

Speaker Change: You mentioned.

Speaker Change: Extending in some adjacent markets. So just wondering if you could talk a bit.

Brent Edward Thielman: Thank you. Thank you. One moment for our next question. Our next question comes from the line of B.J. Cook from Singular Research.

Speaker Change: About your strategy.

Speaker Change: Significant changes to what you guys are doing currently.

Speaker Change: Or any additional investment there.

B.J. Cook: Morning, BJ. Good morning. Thanks for taking my call. Good morning.

Speaker Change: Yes, I'd start.

Speaker Change: On the immediate front is with large scale optical with a new quota coming online later this year that will allow them to be more aggressive about pursuing some adjacent applications, where they can leverage the coding capabilities that they have for both glass and acrylic.

B.J. Cook: You guys announced some higher pricing in Q4. I was just wondering if that's an indicator of some pricing power, or is it more correlated to eliminating some lower margin projects? Yeah, I think that some of the benefits we got in Q4, BJ, were from some of the pricing initiatives that we'd put in place earlier in the year and, especially in Glass, the way we tried to shift to higher value-add strategies. So, you know, just improving the mix and the price. We didn't take any specific pricing actions in Q4.

Speaker Change: For different market applications.

Speaker Change: That we see our ability to offer some really strong differentiated product offerings in those markets. So that's not going to move the needle in fiscal 'twenty five but it will set us up as we go into fiscal 'twenty, six and beyond but we got a nice healthy pipeline that theyre starting to build as they look at those Adjacencies and then we've talked.

Matthew J. Osberg: I think it's to carry forward a lot of things that were put in place earlier in the year. And then, as we looked at Fiscal 25, you know, we do see some pressure coming in both glass and framing on volumes, and, you know, we'll have to have some pressure on price probably as well, and that's why we looked at and called down those. I'm out, rep.

Speaker Change: About just trying to further diversify the building types in our in our project backlogs that the team has done and will continue to focus on that.

And then geographic right that becomes another avenue for us to further diversify and strengthen our reach out west.

B.J. Cook: So, no new pricing initiatives that we put in place. I got it. Thanks for the conservancy. I appreciate it. Um, you mentioned standing in some adjacent markets. I just wondered if you could talk a bit about your strategy, if maybe there are any significant changes to what you guys are doing currently, or any additional investment there. Yeah, I'd start, you know, on the immediate front with large-scale optical, with a new coder coming online later this year, that will allow them to be more aggressive if they're pursuing some adjacent applications, where they can leverage the coding capabilities that they have for both glass and acrylic for different market applications, and we see our ability to offer some really strong differentiated product offerings in those markets. So that's not going to move the needle in fiscal 25, but it will set us up as we go into fiscal 26 and beyond.

Speaker Change: And again that can be organic or inorganic and how we how we approach that.

Speaker Change: And then certainly as we look at our acquisition pipeline. We are looking at different products materials that allow us to move into some adjacencies.

Speaker Change: For our business as well that kind of expands our product portfolio, our service offering, but again doing so in a way that's accretive to our current and long term margin goals as well.

Speaker Change: Great. Thanks, guys I appreciate it.

Speaker Change: For me.

Speaker Change: Thanks Vijay.

Vijay Cook: Thank you.

Speaker Change: One moment for our next question.

Yeah.

Speaker Change: Our next question comes from the line of Jon Braatz from K CCA.

Jonathan Paul Braatz: Good morning, everyone.

Jonathan Paul Braatz: John John.

Jonathan Paul Braatz: A question regarding project quantify.

Jonathan Paul Braatz: All of the actions you are taking things youre doing especially within the architectural framing segment.

Jonathan Paul Braatz: How will that or how will that will you be able to level out the margins in that cycle in that segment across the cycle.

Ty R. Silberhorn: But we've got a nice healthy pipeline that they're starting to build as they look at those adjacencies. And then we've talked about just trying to, you know, further diversify the building types in our project backlogs that the team has done, and we'll continue to focus on that. And then geography, right; that becomes another avenue for us to further diversify and kind of strengthen our reach out west. And again, that can be organic or inorganic and how we approach that.

Jonathan Paul Braatz: Some of the things Youre doing that.

Jonathan Paul Braatz: I guess, what help help achieve that goal.

Speaker Change: Well thanks for the question, John I'd say Theres, a couple of things so one we.

Speaker Change: Being fully transparent we had some products in there that we took a hard look at it three years ago and decided to keep in the portfolio. Because we felt we saw path that we could we'd get it where we wanted it from a margin perspective, and we haven't been able to achieve that.

Speaker Change: Think that just demonstrates good leadership from our business teams to say, yes that path isn't really there and if the market softens. It makes it even more difficult. So so let's kind of peel that bandage off and move forward that for me is kind of the last piece of what we had to do in the portfolio to kind of clean up where we want to be.

Ty R. Silberhorn: And then certainly, as we look at our acquisition pipeline, we are looking at different products and materials that allow us to move into some adjacencies for our business as well. That kind of expands our product portfolio, our service offering, but again, doing so in a way that's accretive to our current and long-term margin goals.

Speaker Change: And put us on solid ground to kind of reset our margin floor.

Speaker Change: At the same time, then it allows us to take cost out so framing has had.

B.J. Cook: Thanks, guys. I appreciate it. That's it for me.

Speaker Change: We would have if not for 50 <unk> week in some some order pull through in Q4, probably would have been down double digit in Q4, and so that's something we're looking at kind of setting them up for probably a bit of a rough Q1, and we're going to look at it is how did framing perform over Q4 and Q1 together.

B.J. Cook: Thanks, Vijay. Thank you. One moment for our next question. Our next question comes from the line of John Braatz from KCCA. Good morning, everyone. Morning, John. Hey, John.

Jonathan Paul Braatz: Ty, a question regarding Project Fortify. All the actions you're taking and things you're doing, especially within the architectural framing segment, how will that, or how will that, will you be able to level out the margins in that cycle, in that segment across the cycle? What are some of the things you're doing that, I guess, would help achieve that goal? Well, thanks for the question, John. I'd say there are a couple things.

Speaker Change: But by taking those actions it gives us some additional cost opportunities to manage even with some softer volumes that still gives us confidence theyre going to stay in that 10% to 15% range.

Speaker Change: And then are we feel confident we are positioning that business much in the same way as glass that as we get volume starting to flow through there.

Speaker Change: We expect we're going to see a fair amount of leverage.

Speaker Change: Which pushes us to the top end of that new 10% to 15% range and yes.

Speaker Change: And then maybe in a great quarter or something like we saw in glass they might even exceed that but we feel really good about where that business is and as they consolidate that footprint, which they expect to be done by the summer that puts them in a strong position to have volume flow through and really start to drop some meaningful dollars.

Ty R. Silberhorn: So one, you know, we're being fully transparent; we had some products in there that we took a hard look at three years ago and decided to keep in the portfolio because we felt we saw a path that we could get them where we wanted them from a margin perspective, and we haven't been able to achieve that. And I think that just demonstrates good leadership from our business teams to say, "Yeah, that path isn't really there." And if the market softens, it makes it even more difficult. So, let's kind of peel that bandage off and move forward.

Speaker Change: The bottom line as a result.

Speaker Change: Okay, Okay, and secondly, when you when you announced back in January.

Speaker Change: These actions.

Speaker Change: Project for us.

Speaker Change: You talked a little bit about annualized cost savings of $12 million to $14 million, 60% and 25%.

Speaker Change: And the remainder in 2006.

Ty R. Silberhorn: That, for me, is kind of the last piece of what we had to do in the portfolio to kind of clean up where we want to be and put us on solid ground to kind of reset our margin. At the same time, it allows us to take costs out. So, you know, framing has had, probably would have, if not for 53rd week and some orders pulled through in Q4, probably would have been down double digits in Q4.

Speaker Change: Can you talk a little bit about weather.

Speaker Change: Youre ahead of schedule, you think you could do more than that where you stand on.

Speaker Change: Those are annualized cost savings.

Speaker Change: Hey, John It's Matt Yes, we're on track for for both kind of the total amount of charges related to fortify and the amount of annualized cost savings.

Matthew J. Osberg: Okay, Okay perfect alright, thank you very much.

Speaker Change: Thank you thanks John.

Speaker Change: Thank you at this time I would now like to turn the conference back over to Ty Silver Horn CEO for closing remarks.

Ty R. Silberhorn: And so that's something we're looking at, kind of setting them up for probably a bit of a rougher Q1, and we're going to look at how framing performed over Q4 and Q1 together. But by taking those actions, it gives us some additional cost opportunities to manage, even with some softer volumes, that still gives us confidence they're going to stay in that 10 to 15 percent range. And then we feel confident we're positioning that business much in the same way as glass, that as we get volume starting to flow through there.

Speaker Change: Alright, well thanks for joining us today, we look forward to connecting at an upcoming Investor conference or at our next earnings call everyone have a great day.

Speaker Change: This concludes today's conference call. Thank you for participating you may now disconnect.

Speaker Change: Okay.

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Ty R. Silberhorn: We expect we're going to see a fair amount of leverage, which pushes us to the top end of that new 10% to 15% range, and yeah, then maybe in a great quarter or something like we saw in Glass, they might even exceed that. But we feel really good about where that business is, and as they consolidate that footprint, which they expect to be done by the summer, that puts them in a strong position to have volume flow through and really start to drop some meaningful dollars to the bottom line. Okay, okay.

Speaker Change: Yes.

Speaker Change: Yes.

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Speaker Change: Sure.

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Jonathan Paul Braatz: And secondly, when you announced back in January these actions, Project 4FY, you talked a little bit about annualized cost savings of 12 to 14 million dollars, 60 percent and 25, and a remainder in 26. Can you talk a little bit about whether... You're ahead of schedule, you think you can do more than that, where do you stand on those annualized cost savings? Hey, John, it's Matt.

Speaker Change: Okay.

Speaker Change: Okay.

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Speaker Change: Yeah.

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Matthew J. Osberg: Yeah, we're on track for both kinds of the total amount of charges related to Fortify and the amount of annualized costs. Okay, okay, perfect. All right. Thank you very much. Thank you. Thanks, John. Thank you. At this time, I would now like to turn the conference back over to Ty Silberhorn, CEO, for closing remarks. All right.

Speaker Change: Okay.

Okay.

Speaker Change: Okay.

Speaker Change: Thanks.

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Speaker Change: Yes.

Speaker Change: No.

Speaker Change: Okay.

Ty R. Silberhorn: Well, thanks for joining us today. We look forward to connecting at an upcoming investor conference or at our next earnings call. Everyone have a great day.

Speaker Change: Yes.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Good day and thank you for standing by. Welcome to Q4 2024 Apogee Enterprises Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode.

Speaker Change: Okay.

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Operator: After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising that your hand is raised.

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Sure.

Speaker Change: Yes.

Sure.

Operator: To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Jeff Huebschen, Vice President, Investor Relations. Please go ahead.

Speaker Change: Okay.

Jeff Huebschen: Thank you, Gigi. Good morning, everyone, and welcome to Apogee Enterprises' fiscal 2024 fourth quarter earnings call. With me today are Ty Silberhorn, Apogee's Chief Executive Officer, and Matt Osberg, Chief Financial Officer. I'd like to remind everyone that there are slides to accompany today's remarks, and these are available in the Investor Relations section of Apogee's website. During this call, we will reference certain non-GAAP financial measures.

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Jeff Huebschen: Definitions of these measures and a reconciliation to the nearest GAAP measures are provided in the earnings release and slide deck we issued this morning. I'd also like to remind everyone that our call will contain forward-looking statements. These reflect management's expectations based on currently available information, but actual results may differ materially. More information about factors that could affect Apogee's business and financial results can be found in today's press release and in our SEC filings. With that, I'll turn the call over to you, Ty.

Speaker Change: Good day and thank you for standing by welcome to Q4 2020 for Apogee Enterprises, Inc. Earnings Conference call. At this time all participants are in a listen only mode. After the speaker's presentation. There will be a question answer session.

Speaker Change: Ill ask a question. During this session you will need to press star one one on your telephone.

Speaker Change: Then here an automated message advising your hand is raised to withdraw your question. Please press star one one again.

Ty R. Silberhorn: Thank you, Jeff. Good morning, everyone, and thanks for joining us today. The fourth quarter was a strong finish to another great year for Apogee. Our team achieved tremendous success through executing our strategy. Strengthening our operational foundation and driving record financial results. Today, I'll comment on our key accomplishments in Fiscal 24, how our strategy is driving sustainable improvements in our business, and our priorities as we move into the new fiscal year. Then I'll turn it over to Matt for more details on the quarter and our fiscal 25 outline. Three years ago, we embarked on a new strategic direction with the goal of building a stronger foundation for long-term profitable growth. An overview of that strategy is shown on page four of today's presentation.

Speaker Change: Please be advised that today's conference is being recorded.

Speaker Change: I would now like to hand, the conference over to your Speaker today, Jeff Hutchins, Vice President Investor Relations. Please go ahead.

Jeff Huebschen: Thank you Gigi good morning, everyone and welcome to Apogee enterprises fiscal 2020 for fourth quarter earnings call with me today are <unk>, Chief Executive Officer, and Matt Osborne, Chief Financial Officer, I'd like to remind everyone that there are slides to accompany today's remarks and these are.

Jeff Huebschen: Are available in the Investor Relations section of Apogees website.

Jeff Huebschen: During this call we will reference certain non-GAAP financial measures definitions of these measures and a reconciliation to the nearest GAAP measures are provided in the earnings release and slide deck, we issued this morning.

Jeff Huebschen: I'd also like to remind everyone that our call will contain forward looking statements.

Jeff Huebschen: These reflect management's expectations based on currently available information.

Ty R. Silberhorn: At its core, our strategy is focused on building differentiated businesses that provide compelling value for our customers and improving operational execution across our entire company. During the past year, our team made strong progress on both fronts, as highlighted in slide 5. We delivered significant productivity gains through the continued deployment of the Apogee Management System, or AMS.

Jeff Huebschen: Actual results may differ materially.

Jeff Huebschen: More information about factors that could affect apogees business and financial results can be found in today's press release and in our SEC filings.

Jeff Huebschen: With that I'll turn the call over to Utah.

Utah: Thank you, Jeff Good morning, everyone and thanks for joining us today.

Utah: Fourth quarter was a strong finish to another great year for apogee.

Ty R. Silberhorn: As a reminder, AMS is our operating framework based on the foundations of lean and continuous improvement. Our deployment of AMS has led to meaningful cost and productivity improvements while enabling us to meet or exceed customer expectations for quality, service, and delivery. We also continue to grow our mix of differentiated products and services. In architectural glass, we have advanced our shift toward premium, higher value-added offers. In Framing Systems, we further rationalized our product portfolio, completing our move away from less differentiated, lower-margin products. And in large-scale optical, we increased the mix of our highest-performing products.

Utah: Our team achieved tremendous success through executing our strategy strengthening our operational foundation and driving record financial results.

Utah: Today I'll comment on our key accomplishments in fiscal 'twenty for how our strategy is driving sustainable improvements in our business and our priorities as we move into the new fiscal year.

Utah: Then I'll turn it over to Matt for more details on the quarter and our fiscal 'twenty five outlook.

Matthew J. Osberg: Three years ago, we embarked on a new strategic direction with the goal of building a stronger foundation for long term profitable growth and.

Matthew J. Osberg: An overview of that strategy as shown on page four in today's presentation.

Ty R. Silberhorn: We also made progress towards strengthening our core capabilities. We continue to build out center-led functional expertise to better support the needs of the business, and we added to our talent management program. And we further strengthen our approach to governance and sustainability. These efforts were evident in our Fiscal 24 financial results. Full year adjusted operating income increased 16% to a record $146 million, adjusted EPS increased 20% to a record $4.77, and cash flow from operations nearly doubled to a record $204 million.

Matthew J. Osberg: At its core our strategy is focused on building differentiated businesses that provide compelling value for our customers.

Matthew J. Osberg: And improving operational execution across our entire company.

Matthew J. Osberg: During the past year, our team made strong progress on both fronts as highlighted on slide five.

Matthew J. Osberg: We delivered significant productivity gains through the continued deployment of the apogee management system or Ams.

Matthew J. Osberg: As a reminder, Ams as our operating framework based on the foundations of lean and continuous improvement.

Ty R. Silberhorn: These results were particularly impressive, given some of the headwinds we faced on the top line during the year, with net sales declining by 2%. Throughout the year, our improved results were led by exceptional performance in architectural glass. The Glass segment delivered double-digit sales growth every quarter this year, and its segment operating margin doubled compared to last year. These terrific results reflect the strategic transformation of our glass industry. We've significantly improved our cost structure, delivered meaningful productivity gains through AMS, and driven our sales mix toward higher-value-added premium products.

Matthew J. Osberg: Our deployment of Ams has led to meaningful cost and productivity improvements, while enabling us to meet or exceed customer expectations through improved quality.

Matthew J. Osberg: Service and delivery.

Matthew J. Osberg: We also continued to grow our mix of differentiated products and services.

Matthew J. Osberg: In architectural glass, we advanced our shift towards premium higher value added offerings.

In framing systems, we further rationalized our product portfolio, completing our move from less differentiated lower margin products.

Matthew J. Osberg: And in large scale optical we increase the mix of our highest performing products.

Ty R. Silberhorn: We made strong progress in Fiscal 24 toward achieving the financial targets we set out in November of 2021, as shown on page 6. Adjusted ROIC improved to 16.5%, well above our 12% target. The adjusted operating margin also exceeded our target, coming in at 10.3%.

Matthew J. Osberg: We also made progress towards strengthening our core capabilities.

Matthew J. Osberg: We continued to build out center led functional expertise to better support the needs of the business we.

Matthew J. Osberg: We added to our talent management programs.

Ty R. Silberhorn: A 160 basis point improvement compared to last year. However, on revenue growth, we fell short of our goal of outgrowing our industry. Some of this was a function of our purposeful strategy. At the outset of our strategic plan, we emphasized that our initial focus was to improve ROIC and operating margins while growing our overall profit dollar. We've had great success with all three of these goals. As part of our strategy, we've moved away from some lower-return product and service offerings and are doing so again with Project Fortify, all of which create a headwind for revenue. Revenue was also impacted by the dynamics in our end market. Overall growth in non-residential construction was very strong last year.

Matthew J. Osberg: And we further strengthened our approach to governance and sustainability.

Matthew J. Osberg: These efforts were evident in our fiscal 'twenty four financial results.

Matthew J. Osberg: Full year, adjusted operating income increased 16% to a record $146 million.

Matthew J. Osberg: Adjusted EPS grew 20% to a record $4 77.

Matthew J. Osberg: And cash flow from operations nearly doubled to a record $204 million.

Matthew J. Osberg: These results were particularly impressive given some of the headwinds we faced on the top line during the year with net sales declining by 2%.

Ty R. Silberhorn: However, much of this growth was driven by megaprojects in infrastructure and manufacturing, along with warehouse and data center build-out. These are sectors of the market where Apogee has relatively low participation with our current product options. Many parts of the market where we play saw decelerating growth rates, which impacted the shorter cycle parts of our business. However, we remain committed to our target of outgrowing the market. And this is the primary focus for our team as we move forward.

Matthew J. Osberg: Throughout the year, our improved results were led by exceptional performance in architectural glass.

The glass segment delivered double digit sales growth every quarter this year.

Matthew J. Osberg: And segment operating margin doubled compared to last year.

Matthew J. Osberg: These terrific results reflect the strategic transformation of our glass segment.

Matthew J. Osberg: We've significantly improved our cost structure delay.

Matthew J. Osberg: <unk> delivered meaningful productivity gains through Ams and drove our sales mix toward higher value added premium products.

Matthew J. Osberg: We made strong progress in fiscal 'twenty four to achieving the financial targets. We set out in November of 2021 as shown on page six.

Ty R. Silberhorn: In addition to our enterprise financial targets for November 2021, we established margin targets for each of our segments, which are shown on page 7. Three of our four segments performed within or above the target-adjusted margin ranges this year. Earlier in the fiscal year, we increased the target range for architectural glass from 7% to 10% to a new range of 10% to 15%.

Matthew J. Osberg: Adjusted ROIC improved to 16, 5% well above our 12% target.

Matthew J. Osberg: Adjusted operating margin also exceeded our target coming in at 10, 3%.

160 basis point improvement compared to last year.

Matthew J. Osberg: On revenue growth, we fell short of our goal of outgrowing our industry.

Ty R. Silberhorn: With the strong performance of framing systems over the past two years, along with the strategic actions we announced in January, we are also increasing framing's target range to 10 to 15 percent. The architectural services margin level was below the target range but did improve sequentially throughout the year. We see the opportunity for further progress in services this fiscal year. As we move into fiscal 2025, we intend to build on the gains we've achieved while positioning the company for stronger long-term growth.

Matthew J. Osberg: Some of this was a function of our purposeful strategy at.

Matthew J. Osberg: At the outset of our strategic plan, we emphasized that our initial focus was to improve ROIC.

Matthew J. Osberg: And operating margins, while growing our overall profit dollars.

Matthew J. Osberg: We've had great success with all three of these goals.

Matthew J. Osberg: As part of our strategy, we moved away from some lower return product and service offerings and are doing so again with project fortify all of which created a headwind for revenue.

Ty R. Silberhorn: Over the next 12 months, we see a mixed picture for our end markets, as shown on slide 8. We do see some headwinds in the market, as do the leading market research firms, especially in some of the key segments in which we play. Most industry forecasts call for further deceleration in non-residential construction over the next year, even if the overall growth level remains in positive territory. The commercial segment of the non-residential construction market has been impacted by higher interest rates, tighter lending standards, and increased costs.

Matthew J. Osberg: Revenue was also impacted by the dynamics in our end markets.

Matthew J. Osberg: Overall growth in non residential construction was very strong last year. However, much of this growth was driven by mega projects in infrastructure and manufacturing along with warehouse and data center build outs.

Matthew J. Osberg: These are sectors of the market, where apogee has a relatively low participation with our current product offerings.

Matthew J. Osberg: Many parts of the market, where we play saw decelerating growth rates, which impacted the shorter cycle parts of our business.

Ty R. Silberhorn: This includes sectors such as office and retail. On a more positive note, institutional and infrastructure projects appear poised for continued growth over the next year. These include sectors such as healthcare, education, and transportation.

Matthew J. Osberg: Yes.

Matthew J. Osberg: We remain committed to our target of outgrowing the market.

Speaker Change: And this is the primary focus for our team as we move forward.

Speaker Change: In addition to our enterprise financial targets in November 2021, we established margin targets for each of our segments, which are shown on page seven.

Ty R. Silberhorn: Our team has had good success diversifying our business into these and other market verticals. This will remain a focus in the coming year as we mitigate those larger segment headwinds and position ourselves for a strong revenue rebound in fiscal 26. Regardless of the macro environment, we have driven sustainable improvements across our business that put us on a solid foundation. Our company is well positioned to continue delivering strong results as we move forward. I'd like to elaborate on a few of our priorities for the coming year. Let me start by discussing Project Fortify on page 9.

Speaker Change: Three of our four segments performed within or above the target adjusted margin ranges this year.

Speaker Change: Earlier in the fiscal year, we increased the target range for architectural glass from 7% to 10% to a new range of 10% to 15%.

Speaker Change: With the strong performance of framing systems, the past two years, along with the strategic actions, we announced in January we are also increasing framing target range to 10% to 15%.

Ty R. Silberhorn: Project Fortify further advances our company's strategy. It builds on the success we've achieved, further improving our cost structure, enabling productivity gains, and allowing our team to focus on higher growth, higher return opportunities. These actions were primarily focused on framing systems.

Speaker Change: Architectural services margin level was below the target range, but did improve sequentially throughout the year.

Speaker Change: We see the opportunity for further progress in services this fiscal year.

Ty R. Silberhorn: Framing has achieved strong performance gains, moving from a mid-single-digit operating margin in fiscal 21 to a 12% range over the past two years. Project Fortify positions Framing for further margin gains, which is reflected in our increased margin target for the segment. It also brings more clarity to our go-to-market strategy, positioning the business for future growth. I spoke earlier about Apogee management. Driving further productivity gains through the deployment of AMS will remain a focus in Fiscal 25.

Speaker Change: As we move into fiscal 2025, we intend to build on the gains we've achieved while positioning the company for stronger long term growth.

Speaker Change: Over the next 12 months, we see a mixed picture for our end markets as shown on slide eight.

Speaker Change: Yes.

Speaker Change: We do see some headwinds in the market as do the leading market research firms, especially in some of the key segments in which we play.

Speaker Change: Most industry forecast call for further deceleration in nonresidential construction over the next year, even if the overall growth level remains in positive territory.

Ty R. Silberhorn: We view AMS as a multi-year journey building a culture of operational excellence, as outlined on page 10. In fiscal 25, we will continue to broaden the scope of AMS across our company. We believe AMS will generate incremental costs and productivity gains, improving margins and helping us offset potential market headwinds. Next, I'd like to address our increased focus on growth, which is outlined on page 11. We are driving a growth mindset in everything we do, given that we serve a very large and diverse set of end markets. That means there are always opportunities for growth.

Speaker Change: The commercial segment of the non <unk> construction market has been impacted by higher interest rates tighter lending standards and increased costs.

Speaker Change: This includes sectors, such as office and retail.

Speaker Change: On a more positive note institutional and infrastructure projects appear poised for continued growth over the next year.

Speaker Change: This include sectors, such as healthcare education and transportation.

Speaker Change: Our team has had good success diversifying our business into these end market verticals.

Speaker Change: This will remain a focus in the coming year as we mitigate those larger segment headwinds and position ourselves for a strong revenue rebound in fiscal 'twenty six.

Ty R. Silberhorn: We are focused on seizing those opportunities to outperform the overall market. Our combination of leading brands, deep customer relationships, and differentiated offerings positions us to gain share in a fragmented industry. We are pursuing geographic expansions, particularly in services and in framing systems, expanding our reach to portions of the U.S. and Canada where we are underrepresented today. We also see opportunities for share gains by continuing to improve our service levels and our product performance.

Speaker Change: Regardless of the macro environment, we have driven sustainable improvements across our business that puts us on a solid foundation.

Speaker Change: Our company is well positioned to continue delivering strong results as we move forward.

Speaker Change: I'd like to elaborate on a few of our priorities in the coming year.

Speaker Change: Let me start by discussing project fortify on page nine.

Speaker Change: Project fortify further advances our company strategy. It builds on the success, we've achieved further improving our cost structure, enabling productivity gains and allowing our teams to focus on higher growth higher return opportunities.

Ty R. Silberhorn: With the recent growth in services backlog, we may already be seeing some flight to quality, with customers seeking to de-risk their projects by working with industry-leading suppliers like our Harman brand. We will also continue to diversify our sales, focusing on higher-growth sectors of the market. This includes expansion into attractive adjacencies, particularly within large-scale optical.

Speaker Change: These actions were primarily focused on framing systems.

Speaker Change: Framing has achieved strong performance gains moving from mid single digit operating margin in fiscal 'twenty, 1% to 12% range over the past two years.

Speaker Change: Project, 4% to five positions framing for further margin gains, which is reflected in our increased margin target for the segment.

Ty R. Silberhorn: Finally, we will continue to evaluate investment opportunities that will accelerate our growth, including both organic investments and acquisitions. To wrap up, we are very proud of the progress that we've achieved. We have established a stronger foundation for our company, and we have significantly improved our financial performance. Our team is focused on building on these gains, driving organic and inorganic growth opportunities, and furtheraccelerating our earnings and margins in the years ahead. With that, let me turn it over to Matt. Thanks, Ty, and good morning, everyone.

Speaker Change: It also brings more clarity to our go to market strategy positioning the business for future growth.

Speaker Change: I spoke earlier about the apogee management system.

Speaker Change: Driving further productivity gains through the deployment of Ams will remain a focus in fiscal 'twenty five.

We view Ams as a multi year journey building a culture of operational excellence as outlined on page 10.

Speaker Change: In fiscal 'twenty five we will continue to broaden the scope of Ams across our company.

Speaker Change: We believe Ams will generate incremental costs and productivity gains improving margins and helping us offset potential market headwinds.

Speaker Change: Next I'd like to address our increased focus on growth, which is outlined on page 11.

Matthew J. Osberg: First, I'll begin with a review of our results for the quarter, then I will summarize some of the highlights of the full year, and finally, I'll discuss our outlook for Fiscal 25. The fourth quarter was a strong close to Fiscal 24, as we delivered Adjusted Operating Margin expansion and Adjusted EPS growth and continued to generate exceptionally strong cash. We also achieved meaningful backlog growth in the longer lead time parts of our business. As a reminder, the fourth quarter and the full year included an extra week of operations compared to fiscal 2020. Looking at the results for the fourth quarter, net sales grew 5% to $362 million. This growth was driven by improved pricing and mix, especially in glass. This was partially offset by lower volumes, primarily in print.

Speaker Change: We are driving a growth mindset in everything we do given that we serve a very large and diverse set of end markets.

Speaker Change: That means there are always opportunities for growth.

Speaker Change: We are focused on seizing those opportunities to outperform the overall market.

Speaker Change: Our combination of leading brands deep customer relationships and differentiated offerings positions us to gain share in a fragmented industry.

Speaker Change: We are pursuing geographic expansions, particularly in services and in framing systems, expanding our reach supports portions of the U S and Canada, where we are underrepresented today.

Speaker Change: We also see opportunities for share gains by continuing to improve our service levels and our product performance.

Speaker Change: With the recent growth in services backlog, we may already be seeing some flight to quality with customers seeking to derisk their projects by working with industry, leading suppliers like our Harman brands.

Matthew J. Osberg: Fourth quarter results included $12.4 million of restructuring charges related to Project Fortify, of which $5.5 million was included in Cost of Goods Sold, and $6.9 million was included in SBA. Fourth quarter gross profit increased 13% and gross margin improved by 170 basis points, driven by improved pricing and mix and the benefits from cost savings. SG&A expense increased $14.2 million to 18.4% of net sales, compared to 15.2% of net sales in last year's fourth quarter. The increase was primarily due to restructuring charges associated with Project Fortify, along with higher compensation-related costs. Operating income was $21.9 million, or 6% of net sales.

Speaker Change: We will also continue to diversify our sales mix focusing on higher growth sectors of the market. This includes expansion into attractive adjacencies, particularly within large scale optical.

Speaker Change: Finally, we will continue to evaluate investment opportunities that will accelerate our growth, including both organic investments.

Speaker Change: And acquisitions.

Speaker Change: To wrap up we are very proud of the progress that we've achieved we've established a stronger foundation for our company and we have significantly improved our financial performance.

Speaker Change: Our team is focused on building on these gains driving organic and inorganic growth opportunities to further accelerate our earnings and margins in the years ahead.

Speaker Change: With that let me turn it over to Matt.

Matthew J. Osberg: Thanks, Todd and good morning, everyone first I'll begin with a review of our results in the quarter, then I will summarize some of the highlights of the full year finally, I'll discuss our outlook for fiscal 'twenty five.

Matthew J. Osberg: The fourth quarter was a strong close to fiscal 'twenty four as we delivered adjusted operating margin expansion adjusted EPS growth and continued to generate exceptionally strong cash flow. We also achieved meaningful backlog growth in the longer lead time parts of our business.

Matthew J. Osberg: Adjusted Operating Income grew 33%, and Adjusted Operating Margin expanded 200 basis points to 9.5%. This was primarily driven by improved segment operating margin in glass. Diluted EPS was $0.71, and Adjusted Diluted EPS grew 33% to $1.14.

Matthew J. Osberg: As a reminder, the fourth quarter and the full year included an extra week of operations compared to fiscal 'twenty three.

Matthew J. Osberg: Looking at the results for the fourth quarter net sales grew 5% to $362 million. This growth was driven by improved pricing and mix, especially in glass.

Matthew J. Osberg: This was primarily driven by higher adjusted operating income. Turning to the segment results for the quarter, framing net sales declined 6.3% due to lower volumes reflecting the deceleration in commercial construction activity that Ty described. Framing results included $6 million of restructuring charges related to Project Fortify. Excluding these charges, Adjusted Operating Margin for Framing contracted $130,000 to 9.2% primarily due to the impact of lower sales volume and a less favorable mix of products. Framing backlog increased 9% compared to the third quarter to $201 million.

Matthew J. Osberg: This was partially offset by lower volumes primarily in framing.

Matthew J. Osberg: Fourth quarter results included $12 4 million of restructuring charges related to project fortify of which $5 $5 million was included in cost of goods sold and $6 $9 million was included in SG&A.

Matthew J. Osberg: Including these charges.

Matthew J. Osberg: Fourth quarter gross profit increased 13% and gross margin improved by 170 basis points, driven by improved pricing and mix and the benefits from cost saving initiatives.

Matthew J. Osberg: Yeah.

Matthew J. Osberg: SG&A expense increased $14 2 million to 18, 4% of net sales compared to 15, 2% of net sales in last year's fourth quarter.

Matthew J. Osberg: The increase was primarily due to restructuring charges associated with project fortify along with higher compensation related costs.

Matthew J. Osberg: As part of Project Fortify, we are phasing out some of the longer lead time work within the framing segment. Going forward, most projects and framing will be completed in six months or less, making backlog a less relevant measure. As a result, beginning next quarter, we will no longer report backlog for the framework. The Glass segment continued to outperform our expectations. Net sales for Glass grew 18%, and segment operating income nearly doubled to $18.9 million, while segment operating margin expanded 800 basis points to 19.7%.

Matthew J. Osberg: Operating income was $21 9 million or 6% of net sales excluding.

Matthew J. Osberg: The impact of restructuring adjusted.

Matthew J. Osberg: Operating income grew 33% and adjusted operating margin expanded 200 basis points to nine 5%.

Matthew J. Osberg: This was primarily driven by improved segment operating margin in glass.

Matthew J. Osberg: Diluted EPS was <unk> 71.

Matthew J. Osberg: And adjusted diluted EPS grew 33% to $1 14.

Matthew J. Osberg: This was primarily driven by higher adjusted operating income.

Matthew J. Osberg: Turning to the segment results for the quarter framing net sales declined six 3% due to lower volumes, reflecting the deceleration in commercial construction activity that tie described.

Matthew J. Osberg: Services sales grew 8% to $106 million, and adjusted operating margin increased by 210 basis points to 5.8%, primarily driven by a more favorable mix of projects, partially offset by higher compensation. Services backlog ended the quarter at $808 million.

Matthew J. Osberg: Framing results included $6 million of restructuring charges related to project fortify.

Matthew J. Osberg: Excluding these charges adjusted operating margin for framing contracted 130 basis points to nine 2%, primarily due to the impact of lower sales volume and a less favorable mix of projects.

Matthew J. Osberg: Framing backlog increased 9% compared to the third quarter to $201 million.

Matthew J. Osberg: This is 4% higher than the third quarter and 11% above last year. This reflects our strong market position as we've significantly increased backlog even in a more challenging market environment. Importantly, the backlog growth in services reflects our continued efforts to diversify our project, and significant wins in the hospitality, healthcare, and transportation sectors. LSO sales were essentially flat year over year, with improved mix offsetting lower volume.

Matthew J. Osberg: As a part of project fortify we are phasing out some of the longer lead time work within the framing segment.

Matthew J. Osberg: Going forward most of the projects in framing will be completed in six months or less making backlog a less relevant measure for the segment as.

Matthew J. Osberg: As a result, beginning next quarter, we will no longer report backlog for the framing segment.

Matthew J. Osberg: The glass segment continued to outperform our expectations driven by improved pricing and mix.

Matthew J. Osberg: However, operating margin improved by 450 basis points to 25.6%, reflecting the improvement. Corporate expenses increased primarily due to $3.9 million of restructuring charges related to Project Fortify and higher compensation-related costs. Turning to cash flow, we had another strong result, generating $75 million of cash from operations in the quarter, compared to $52 million in last year's fourth quarter. Our primary use of cash in the quarter was debt reduction, as we paid down $39 million of debt.

Matthew J. Osberg: Net sales for glass grew 18% and segment operating income nearly doubled to $18 9 million while segment operating margin expanded 800 basis points to 19, 7%.

Matthew J. Osberg: Services sales grew 8% to $106 million and.

Matthew J. Osberg: <unk> operating margin increased by 210 basis points to five 8%, primarily driven by a more favorable mix of projects, partially offset by higher compensation costs.

Matthew J. Osberg: This brought our net leverage ratio down to 0.1 times trailing 12-month adjusted interest. Looking at the full fiscal year, we are very proud of the results we delivered. Adjusted operating margin increased 160 basis points to 10.3%, and adjusted diluted EPS grew 20% to a record $4.77. Cash flow from operations nearly doubled to $204 million, the best cash flow in the industry. During the year, we paid down our debt by $108 million and invested $43 million in capital expenditures, which funded a capacity expansion in LSO and other projects to enhance productivity through automation. We also returned $33 million of cash to shareholders through dividends and share repurchase.

Matthew J. Osberg: Services backlog ended the quarter at $808 million. This is 4% higher than the third quarter and 11% above last year.

Matthew J. Osberg: This reflects our strong market position as we have significantly increased backlog even in a more challenging market environment importantly, the backlog growth in services reflects our continued efforts to diversify our project mix with significant wins in hospitality health care and transportation sectors.

Matthew J. Osberg: <unk> sales were essentially flat year over year with improved mix offsetting lower volume.

Matthew J. Osberg: However, operating margin improved by 450 basis points to 25, 6%, reflecting the improvement in mix.

Matthew J. Osberg: Yeah.

Corporate expenses increased primarily due to $3 9 million of restructuring charges related to project fortify and higher compensation related costs.

Turning to cash flow, we had another strong result, generating $75 million of cash from operations in the quarter.

Matthew J. Osberg: Adjusted ROIC continued to improve as well, reaching 16.5% for the segment. Glass grew net sales by 20% and operating income by almost 140%. Despite lower sales and framing, the segment delivered adjusted operating margin at the top of the 9-12% target. Services sales declined, and margins remain below our 7 to 9 percent target, but we expect both top and bottom line improvements in fiscal 25. LSO sales declined, but margins remained very strong at over $25,000.

Matthew J. Osberg: Third to $52 million in last year's fourth quarter.

Matthew J. Osberg: Our primary use of cash in the quarter was debt reduction as we paid down $39 million of debt. This brought our net leverage ratio down to 0.1 times trailing 12 month adjusted EBITDA.

Matthew J. Osberg: Looking at the full fiscal year, we are very proud of the results we delivered adjusted.

Matthew J. Osberg: Operating margin increased 160 basis points to 10, 3%.

Matthew J. Osberg: Adjusted diluted EPS grew 20% to a record $4 77.

Matthew J. Osberg: Cash flow from operations nearly doubled to $204 million the best cash flow in the Companys history.

Matthew J. Osberg: During the year, we paid down our debt by $108 million and invested $43 million in capital expenditures, which funded a capacity expansion in lso in other projects to enhance productivity through automation.

Matthew J. Osberg: Moving to our outlook for fiscal 25, we expect net sales to decline 4% to 7%. This range includes approximately two percentage points of decline related to fiscal 25 reverting to a 52-week year and approximately one percentage point of decline related to the actions of Project Fortify to eliminate certain lower-margin product and service offerings. Also, as Ty discussed, we expect decelerating end-market growth this year to put pressure on volume and pricing in the framing and glass segment. Additionally, we expect sales declines in framing and glass.

Matthew J. Osberg: We also returned $33 million of cash to shareholders through dividends and share repurchases.

Matthew J. Osberg: Adjusted ROIC continued to improve as well, reaching 16, 5%.

Matthew J. Osberg: For the segments.

Matthew J. Osberg: Glass grew net sales by 20% and adjusted operating income by almost 140%, while doubling operating margin.

Matthew J. Osberg: Despite lower sales and framing the segment delivered adjusted operating margin at the top of the 9% to 12% target range.

Services sales decline and margins remained below our 7% to 9% target range, but we expect both top and bottom line improvements in fiscal 'twenty five.

Matthew J. Osberg: We are partially offset by growth in services as we execute a strong pipeline of projects in our backlog, with LSO sales approximately flat as retail channel headwinds offset new channel adjacency growth. Looking at Adjusted Operating Margin trends, we expect our Fiscal 25 consolidated margin to remain approximately flat to Fiscal 24.

Matthew J. Osberg: <unk> sales decline, but margins remained very strong at over 24%.

Matthew J. Osberg: Moving to our outlook for fiscal 'twenty, five we expect net sales to decline 4% to 7%.

Matthew J. Osberg: This range includes approximately two percentage points of decline related to fiscal 'twenty five reverting to a 52 week year and approximately one percentage point of decline related to the actions of project fortify to eliminate certain lower margin product and service offerings.

Matthew J. Osberg: We expect framing margins to improve and be within the new elevated target range of 10 to 15 percent. We expect the glass segment to moderate compared to Fiscal 24 and move back into the 10 to 15 percent target range, with higher margins expected in the first half of the year, sequentially declining as the year progresses. We expect services margins to improve and move closer to 7.9. We expect LSO margins to decline as we expand into new adjacencies and begin to depreciate capital assets for our capacity expansion but still be above the 20% target.

Matthew J. Osberg: Also as Ty discussed, we expect decelerating end market growth this year to put pressure on volume and pricing in the framing and glass segments.

Matthew J. Osberg: We expect sales declines in framing and glass to be partially offset by growth in services as we execute a strong pipeline of projects in our backlog.

Matthew J. Osberg: With <unk> sales approximately flat as a retail channel headwinds offset new channel adjacency growth.

Matthew J. Osberg: Finally, we expect corporate costs to return to levels approximating what we incurred in the past. We are forecasting adjusted diluted EPS in a range of $4.35 to $4.75. The impact of the reversion to a 52-week year is expected to reduce adjusted diluted EPS by approximately 20%, with no expected material EPS impacts related to the adverse net sales impact of Project Fortify. We expect an average tax rate of approximately 24.5% and anticipate $40 to $50 million of capital expenditures during the year.

Matthew J. Osberg: Looking at adjusted operating margin trends, we expect our fiscal 'twenty five consolidated margin to remain approximately flat to fiscal 'twenty four.

Matthew J. Osberg: We expect framing margins to improve and be within the new elevated target range of 10% to 15%.

Matthew J. Osberg: We expect the glass segment will moderate compared to fiscal 'twenty, four and move back into the 10% to 15% target range with higher margins expected in the first half of the year and sequentially declining as the year progresses.

Matthew J. Osberg: We expect services margins will improve and move closer to the seven nine to 7% to 9% target range.

Matthew J. Osberg: Finally, we expect lower cash flow from operations, as the working capital changes that impacted the past two years begin to... Looking at the quarterly cadence of the year, we expect the first quarter to be our lowest level of sales and EPS for the year. This is the fourth quarter comparison to the prior year being impacted by the additional week. In closing, this was another strong quarter to finish a great year. Over the past three years, we have built a stronger financial and operational foundation for the company.

Matthew J. Osberg: We expect <unk> margins to decline as we expand into new Adjacencies and begin to depreciate the capital assets for our capacity expansion.

Matthew J. Osberg: But still be above the 20% target range.

Matthew J. Osberg: Finally, we expect corporate costs to return to levels approximating, what we incurred in fiscal 'twenty three.

Matthew J. Osberg: We are forecasting adjusted diluted EPS in a range of $4 35.

Matthew J. Osberg: To $4 75.

Matthew J. Osberg: With the impact of the reversion to a 52 week year expected to reduce adjusted diluted EPS by approximately <unk> 20.

Matthew J. Osberg: And we believe there are opportunities to continue to make organic and inorganic investments in the business to build on what we have already achieved. With that, I'll turn it back over to Ty for some concluding remarks. Thanks, Matt.

Matthew J. Osberg: With no expected material EPS impact related to the adverse net sales impact of project fortify.

Matthew J. Osberg: We expect an average tax rate of approximately 24, 5% and anticipate $40 million to $50 million of capital expenditures during the year.

Ty R. Silberhorn: To wrap up, I want to thank our team for delivering another strong quarter. I'm really proud of what we've accomplished, and, more importantly, I'm excited about the opportunities ahead for our business as we focus on growth. Execution of our strategy has driven sustainable operating improvements across our business. We've achieved meaningful cost and productivity improvements, grown in our mix of differentiated products, and built a stronger set of core processes and systems. These operational improvements have led to a step change in financial performance and created a solid foundation for us to weather any slowdown in creating strong profit leverage as volume increases, as we saw with class in fiscal 24.

Matthew J. Osberg: Finally, we expect lower cash flow from operations as the working capital changes that impacted the past two years to begin to normalize.

Matthew J. Osberg: Looking at the quarterly cadence of the year, we expect the first quarter to be our lowest level of sales and EPS for the year with the fourth quarter comparison to prior year being impacted by the additional week in fiscal 'twenty four.

Matthew J. Osberg: In closing this was another strong quarter to finish a great year over.

Matthew J. Osberg: Over the past three years, we have built a stronger financial and operational foundation for the company and we believe there are opportunities to continue to make organic and inorganic investments in the business to build on what we have already achieved with.

Matthew J. Osberg: With that I'll turn it back over to Ty for some concluding remarks.

Ty R. Silberhorn: Our team is focused on building on these improvements and delivering another successful year in Fiscal 25 while positioning us for a strong Fiscal 26. With that, we're ready to take your questions. Thank you. As a reminder, to ask a question, please press star 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 11 again.

Ty: Thanks, Matt to wrap up I want to thank our team for delivering another strong quarter.

Ty: Im really proud of what we've accomplished and more importantly, I am excited about the opportunities ahead for our business as we focus on growth.

Ty: Execution of our strategy has driven sustainable operating improvements across our business.

We've achieved meaningful cost and productivity improvements grown our mix of differentiated products and build a stronger set of core processes and systems.

Ty: These operational improvements have led to a step change in financial performance and created a solid foundation for us to weather any slowdown and creating a strong profit leverage as volume increases as we saw with glass in fiscal 'twenty four.

Operator: Please stand by while we compile the Q&A roster. Our first question comes from the line of Julio Romero from Sidotian Company, LLC. Thanks. Hey, good morning, Ty. Good morning, Matt. Jeff.

Julio Alberto Romero: Good morning, Julio. Hey guys, I wanted to talk about Project Fortify for a second. And some of the things you're doing within framing, can you maybe give us a quick refresher of what the current sales mix is within framing between shorter cycle work and the longer lead time work and maybe ballpark what that looks like post the phasing out of some of the longer lead time stuff within framing? Yeah, Julio, let me start by just kind of talking about the product lines and kind of the services that we're moving away from with Project Fortify.

Ty: Our team is focused on building on these improvements and delivering another successful year in fiscal 'twenty five while positioning us for a strong fiscal 'twenty six.

Speaker Change: With that we're ready to take your questions.

Speaker Change: Thank you as a reminder to ask a question. Please press star one one on your telephone.

Speaker Change: And wait for your name to be announced towards the draw. Your question. Please press star one one again please.

Speaker Change: Please standby, while we compile the Q&A roster.

Speaker Change: Okay.

Speaker Change: Our first question comes from the line of Julio Romero from Sidoti <unk> Company LLC.

Julio Alberto Romero: So if you remember in the strategy we laid out at the end of calendar 21, we consolidated a lot of those separate business units, but we kept kind of a two business unit structure from a commercial go-to-market. So our storefront and finishing business, and then our window and wall business. A part of our window and wall business included what would look like a supply of manufactured curtain wall and window wall for small projects. So our services segment is typically doing $25 to $45 million type projects. And that's all encompassing, end to end, including installation.

Julio Alberto Romero: Thanks, Hey, good morning, Todd Good morning, Matt Jeff.

Julio Alberto Romero: Leo.

Julio Alberto Romero: Hey, guys I wanted to talk about project fortify for a second.

Julio Alberto Romero: And some of the things you are doing within framing can you maybe give us a quick refresher of what the current sales mixes within framing between shorter cycle work in and the longer lead time work and maybe ballpark what that looks like post the phasing out of some of the longer lead time stuff within.

Julio Alberto Romero: Framing.

Julio Alberto Romero: Yes.

Julio Alberto Romero: Start by just kind of talking about the product lines and kind of the services that we're moving away from with project fortify within that so.

Julio Alberto Romero: If you remember in the strategy, we laid out in at the end of calendar 'twenty one.

Julio Alberto Romero: We consolidated a lot of those separate business units, but we kept kind of two business unit structure from a commercial go to market. So our storefront and finishing business and then our window and wall business.

Ty R. Silberhorn: We were doing, let's call it $5 to $7, $5 to $8 million type of supply side projects for window wall and some lower end curtain wall in that business. That is a part of the product line that was underperforming margin-wise, but we saw a path that we felt we could improve those margins. We have been working on that, and they have made some improvements.

Julio Alberto Romero: A part of our window and wall business included.

Julio Alberto Romero: What would look like a supply of manufactured curtain wall and window wall for small projects. So our services segment is typically doing 25% to $45 million type of projects and that's all encompassing end to end including installation.

Ty R. Silberhorn: But at the same time, we saw we're going to have to get more price on those offerings to really make that business sustainable and get it closer to being accretive to our overall margins and our margin goals. As we see the market slowing down, and as we've tended to be more aggressive on that pricing, we saw those volumes start to erode throughout fiscal 24, and so we made the decision that that's part of the business that we will move away from.

Julio Alberto Romero: We were doing let's call it 5% to seven 5 million to $8 million type of supply side projects for window wall and some lower end curtain wall in that business.

Julio Alberto Romero: That is a part of the product line that was underperforming margin wise, but we saw a path that we felt we could improve those margins. We have been working on that they have made some improvements but at the same time, we saw we're going to have to get more price on those offerings to really make that business sustainable.

Ty R. Silberhorn: In doing that, it also allowed us to kind of revisit Footprint and look at some consolidation. We had already been working to basically run framing systems from a manufacturing operations and supply chain side as a single entity. But this allows us to really do that completely, and it allowed us to leverage some open capacity with the exit of some of those products from one of our Wausau, Wisconsin facilities and take some cost synergies opportunities as a result of that. And yeah, Julio. This is Matt.

Julio Alberto Romero: And get it closer to being accretive to our overall margins and our margin goals.

Julio Alberto Romero: As we see the market slowing down and as we've tended to be more aggressive on their pricing. We saw those volumes start to erode through.

Fiscal 'twenty four and so we've made the decision that's part of the business that we will move away from.

Julio Alberto Romero: In doing that it also allowed us to kind of revisit footprint and look at some consolidations. We had already been working to basically run framing systems from our manufacturing operations and supply chain side as a single entity, but this allows us to really do that completely and it allowed us to let.

Matthew J. Osberg: I'd just add on to that in terms of how to size that. We called out this year that there is about a 1 percentage point headwind as we start to step away from some of that longer term project, unitized curtain wall business that Ty mentioned. And as you think about continuing to phase out, those are longer-term projects. So some of that will span into fiscal 26. But it would be less than the headwind that we've got this year as we continue to phase that out. By the end of fiscal 26, that project flow would be out of our control. I got it.

Julio Alberto Romero: Average some open capacity with the exit of some of those products in one of our Wausau, Wisconsin facilities and take some cost synergy opportunity as a result of that and yes. Julio. This is Matt I'd just add on to that in terms of kind of how to size that we called out this year that theres about a one percentage point.

When as we start to step away from some of that longer term project Unitize curtain wall business that Tom mentioned and as you think about it.

Matthew J. Osberg: Continuing to phase out those are longer term projects with some of that will span into fiscal 'twenty six but it would be.

Julio Alberto Romero: That's really helpful, the caller you gave there. And then maybe, you know, earlier you guys spoke about diversifying the in-market mix. I love what you showed on slide eight. I believe you know, the work you've done moving the mix towards health care, education, transportation, etc., any way you can kind of help us think about where the in-market exposure stands today, just in the name of helping us kind of track the sales diversification and where the portfolio is moving.

Matthew J. Osberg: Less than the headwind that we've got this year as we kind of continue to phase that out by the end of fiscal 'twenty six that project flow would be out of our revenue.

Matthew J. Osberg: Got it that's really helpful. The color you gave there and then maybe earlier you guys spoke about diversifying the end market mix.

Matthew J. Osberg: I Love what you showed on slide eight I believe.

Matthew J. Osberg: The work you've done moving the mix towards healthcare education transportation et cetera.

Matthew J. Osberg: Any way you can kind of help us think about.

Matthew J. Osberg: Where the end market exposure stands today, just in the name of helping us kind of track.

Matthew J. Osberg: The sale is the perfect diversification and where where the portfolio is moving.

Julio Alberto Romero: Maybe you want to tell us like how much health care education will make up, you know, X number of years from now, any way you could, and to help us figure out that overall. Yeah, this is Ty.

Matthew J. Osberg: Maybe you want to tell us like how much health care education.

Matthew J. Osberg: We will make up X number of years from now just any way you could.

Speaker Change: Maybe help us yes.

Speaker Change: That overall this is yeah. This is Tyler let me give a little bit of color. So that data. We just chose to use some of the most recent data from <unk>.

Ty R. Silberhorn: Let me give you a little bit of color. So for that data, we just chose to use some of the most recent data from FMI. One of the things I think it's important to highlight is if you look at the market research firms and the projections for calendar 24 non-RESI construction, there is actually a pretty wide range, from anything from down 1% to up 11% for the current calendar year. That's the widest range I've seen since, you know, I've been at Apogee three and a half years now.

Tyler: The things I think it's important to highlight is if you look at the market research firms and the projections for calendar 'twenty for nonresident construction is actually a pretty wide range from anything from down 1% to up 11.

Tyler: For the current calendar year, that's the widest range I've seen.

Since I've been at apogee, three and a half years now so I think that bodes for a little bit of uncertainty in the market and it's.

Ty R. Silberhorn: So I think that bodes for a little bit of uncertainty in the market and it's probably, from a broader market perspective, it's probably the back half of the calendar year more than it is the front half, although, as Matt said, we've got some puts and takes and framing and some other businesses that, you know, I think the first quarter will be our toughest, toughest quarter just from a top line perspective. When you look at those segments, one of the things we wanted to highlight is those building types. We have been working to get more health care, to get more education, and to get more recreation. Transportation, really, for us, is airports.

Tyler: It's probably from a broader market perspective, it's probably a back half of the calendar year more than it is the front half, although as Matt said, we've got some puts and takes in framing and some other businesses that I think first quarter will be our toughest toughest quarter just from a topline perspective.

Tyler: When you look at those segments one of the things we wanted to hide those highlight is those building types.

Tyler: We have been working to get more health care to get more education to get more recreation transportation really for us is airports.

Ty R. Silberhorn: So those are segments of building types that we have been focused on for almost three years now to really diversify, and we've made a nice step change in that. If you look at and kind of pull out the full FMI report, and you define the addressable market for the building types that we currently plan and supply, FMI would still say that our addressable markets are probably going to grow a little bit, maybe call it a couple of percentage points. And then we have to deal with our 53rd week, the exit of some of that supply curtain wall and window wall, which kind of puts us, you know, to just And then kind of the further end of that downside range.

Tyler: So those are segments of building types that we have been focused on for almost three years now to really diversify and we've made nice step change in that.

Tyler: If you look at and kind of pull the full <unk> report and you looked at if you want to define as addressable market of the building types that we currently plan and supply <unk>.

Tyler: I would still say that our addressable market is probably going to grow a little bit maybe call. It a couple of percentage points and then we have to deal with our 50 <unk> week, the exit of some of that supply curtain wall and window wall, which kind of puts us to just being slightly negative.

Tyler: And then kind of the further end of that downside range. So ex the 50 <unk> week were kind of looking at a minus one to minus 4%. That's just us kind of with that uncertainty we're seeing in some of these forecasts hedging a little bit on how that might play out through the course of the year.

Matthew J. Osberg: So X, the 53rd week, we're kind of looking at minus one to minus 4%. That's just us kind of with that uncertainty we're seeing in some of these forecasts, hedging a little bit on how that might play out through the course. And Julio, the only thing I would add to it is that, in Q3 and in this quarter, services, in particular, have made improvements in their backlog.

Tyler: And really the only thing I would add to it is we really tried to call out in Q3 and in this quarter services in particular as <unk>.

Tyler: Improvements in their backlog and the mix of projects that we've been winning there has been very diverse. So I think that there is there is obviously lots of stuff in that backlog, but I see as we continue to focus on these.

Matthew J. Osberg: And the mix of projects that we've been winning there has been very diverse. So I think that there's obviously lots of stuff in that backlog. But I see, as we continue to focus on these, the number of projects that were in the backlog three years ago is down significantly, and it was down again sequentially in the quarter and for this fiscal year compared to last fiscal year.

Tyler: Segments of the market that are growing and helping us diversify we're seeing that show up in our more recent project wins I mean again, we don't share that a big reason is for competitive reasons, but as we've commented before office, which was a huge part of our backlog reports across our businesses or our award mix three years ago.

Ty R. Silberhorn: Yet if you look at services, and that's an easy one to point to, the backlog is actually up. So that, for us, is a positive signal. We're getting the diversification, and it will still allow us to grow the business, both in the medium and long term.

Tyler: Is down significantly and it was down again sequentially in the quarter and for this fiscal year compared to last fiscal year, yet if you look at services and that's the easy one to point to there. The backlog is actually up so that that for US is a positive signal, we're getting the diversification and.

Tyler: It still will allow us to grow the business both in the medium and long term.

Got it really helpful and I appreciate the last comment tie on office being down sequentially I think that really helps us.

Julio Alberto Romero: And I appreciate the last comment, Ty, on, you know, the office being down sequentially. I think that really helps us think about things.

Speaker Change: Think about things maybe just.

Ty R. Silberhorn: Maybe just the last one for me would be, you know, one of the things you talked about in terms of diversifying the in-market mix is the geographic expansion of services. Can you just give us a quick update on how that's progressing? in terms of the Westward expansion there. Yeah, so they continue to be very active in pursuing projects west of the Rockies. They have had, we talked last quarter, they had a nice win.

Speaker Change: Last one for me would be one of the things you're talking about in terms of diversifying the end market makes us be the geographic.

Speaker Change: Expansion in services can you just give us a quick update on how thats progressing.

In terms of the westward expansion there.

Speaker Change: So they continue to be very active on pursuing projects west of the Rockies. They have had we talked last quarter. They had a nice win there is some other things that came through in the current backlog. There was some addition of work.

Ty R. Silberhorn: There are some other things that came through in the current backlog. There was some addition of work out west as well. We'll be making some investments, kind of expanding an existing facility in the Texas market to help us create some additional capacity to supply that. And then one of the things we started working on is, what do we want to do from a footprint perspective west of the Rockies? both for services and for framing. And when we look at those addressable building types, that's one of the challenges we have with framing. I mean, the Southwest and the West had some nice growth last year.

Speaker Change: Out west as well, we will be making some investments.

Speaker Change: Kind of expanding an existing facility in the Texas market to help us create.

Speaker Change: Create some additional capacity to supply that and then one of the things. We started working on is what do we want to do from a footprint perspective west of the Rockies, both for services and for framing and when we look at those addressable building types. That's one of the challenges we have with framing the southwest and the West had some nice growth last year our.

Ty R. Silberhorn: Our framing business really has difficulty reaching those markets without having a footprint out there. So, we have been working on building a plan that has kind of both an organic and an inorganic. It's, you know, either buy or build to get a footprint there, or likely some combination of those two things to really look at how we can allow framing to truly play across all of North America, which they're pretty limited to east of the Rockies. And even when we look at Canada, they're pretty limited to the greater Toronto area today with their footprint.

Framing business.

Speaker Change: Really has difficulty reaching those markets without having a footprint out there so.

Speaker Change: We have been working on building a plan that has kind of both an organic and an inorganic.

Speaker Change: Either buy or build to get a footprint there are likely some combination of those two things to really look at how we can allow framing to truly play across all of North America, which today, where they are pretty limited to.

Speaker Change: East of the Rockies and even when we look at Canada. They are pretty limited to the greater Toronto area today with their footprint. So that's an area we're looking to make.

Julio Alberto Romero: So, that's an area we're looking to make some additional investment in, both, again, organic and inorganic. Very helpful. I'll pass it on.

Speaker Change: Some additional investment in both again organic and Inorganically.

Speaker Change: Very helpful.

Speaker Change: I'll pass it on thank you very much.

Brent Edward Thielman: Thank you very much. Thanks, Julio. Thank you. One moment for our next question. Our next question comes from Brent Thielman from DA Davidson. Hey, good morning, guys. Hey, congrats on a great year.

Speaker Change: Julio.

Julio Alberto Romero: Thank you one moment far next question.

Julio Alberto Romero: Our next question comes from the line of Brent Thielman from D. A Davidson.

Brent Edward Thielman: Good morning, Brian.

Brent Edward Thielman: Hey, good morning, guys.

Brent Edward Thielman: And congrats on a great year.

Ty R. Silberhorn: I guess the first would just be, Ty, you have the slide here around objectives to outgrow the market, kind of moving forward. And I guess my question is just, among the three categories that you have in the slide deck, capture, share, focus on high growth opportunities and investments, where's the low-hanging fruit, in your view? And what do you think is going to be most impactful in terms of your ability to sort of accelerate growth regardless of... Yeah, it's a great question, Brent.

Brent Edward Thielman: I guess first would just be.

Brent Edward Thielman: You have that.

Brent Edward Thielman: Slide in here around objected to outgrow the market.

Brent Edward Thielman: Moving forward and I guess my question is just.

Brent Edward Thielman: The three categories that you have in the slide deck for to capture share and focus on high growth opportunities and investments.

Brent Edward Thielman: Where's the low hanging fruit in your view and what do you think is going to be most impactful in terms of your ability to sort of accelerate growth regardless.

Brent Edward Thielman: Market conditions.

Speaker Change: Yes, it's great question Brent.

Ty R. Silberhorn: I would say, as we see the market softening, I'd like to say there's a lot of low-hanging fruit there. But I think it's, it's going to take a good effort because, as you know, as the market softens, competition gets a little bit stiffer and tighter with respect to that. Now, we have seen, like we commented on in the script, that we've seen services picking up some business. And what we're seeing, we believe, is maybe a little bit of a flight to quality to make sure that, okay, If I'm a developer contractor and I've got a limited number of projects, I want to make sure they go really well.

Speaker Change: I would say as we see the market softening I'd like to say Theres a lot of low hanging fruit, there, but I think it's going to take.

Speaker Change: Good effort because as you know as the market softens competition gets a little bit stiffer in tighter with respect to that now we have seen like we commented on in the script that we've seen services. They are picking up some business and what we're seeing we believe is maybe a little bit of a flight to quality to make sure.

Speaker Change: Sure that okay.

Speaker Change: Developer contractor and I've got a limited number of projects I want to make sure. They go really well.

Ty R. Silberhorn: And so we're seeing some signals of that that we think that plays well for, frankly, all of our businesses for glass services and framing. So we're digging to understand that better and how we might promote that more strongly, and that becomes a share gain opportunity for services and for framing, in particular. So I think that's the one area that we're focused on that could potentially see some short-term benefits with respect to that.

And so we're seeing some signals of that that we think that plays well for frankly, all of our businesses for glass services and framing.

Speaker Change: So we're digging to understand that better and how we might promote that more strongly and that becomes a share gain opportunity for services and for framing in particular.

Speaker Change: So I think that's the one area that we're focused in that we potentially could see some short term benefits with respect to that.

Ty R. Silberhorn: I think really being able to reach more deeply geographically is a bit more of a medium-long term that's going to take either-or or a combination of build-buy to get us the footprint that we can step into that. And as we've talked about, we have a very active M&A pipeline, and we work very actively during the fiscal year, even though the market for acquisitions has been relatively slow. You can see and read that data.

Speaker Change: I think really being able to reach more deeply geographically that's a bit more of a medium long term thats going to take.

Speaker Change: Either or combination of build buy.

Speaker Change: Do you get us the footprint that we that we can step into that and as we've talked about.

Speaker Change: A very active M&A pipeline.

Speaker Change: We were very active in the fiscal year, even though the market for for acquisitions has been relatively slow you can see and read that data.

Ty R. Silberhorn: Because of interest rates, because of private equity being a bit sidelined, that doesn't mean we didn't engage and look at a number of opportunities, and we'll continue to do that. But as part of that, we're also being very diligent and strategic in our focus. So we want something that has a great strategic fit, that we're confident we can add value and generate more value owning that asset. And that's going to help us accomplish our financial goals, including our growth objectives over the long term. Okay, that's helpful.

Speaker Change: Because of interest rates because of private equity being a bit sidelined.

Speaker Change: That doesn't mean, we didn't.

Speaker Change: <unk> and look at a number of opportunities and we'll continue to do that but as part of that we're also being very diligent and strategic in our focus so we want something that as a great strategic fit that we're confident we can add value and generate more value owning that asset and thats going to help us accomplish our finance.

Speaker Change: Goals, including our growth objectives over the long term.

Speaker Change: Okay. That's helpful and then.

Ty R. Silberhorn: And then I, you know, I guess with some indications of murkiness and corners of the market. Today, at the same time you guys are looking, you know, potentially for poison capital, you're clearly under levered right now, but if you've used around, has leverage changed at all as you continue to kind of monitor the macro picture? What you can see coming in the pipeline. No, I think you're right, Brent.

Speaker Change: With some.

Speaker Change: Indications murkiness in corners of the market.

Today the.

Speaker Change: The same time you guys are looking at potentially deploying some capital and you're clearly under Levered right now, but any views around.

Speaker Change: Leverage changed at all as you continue to kind of monitor the macro picture.

Speaker Change: You can see coming down the pipeline.

Speaker Change: No I think you're right, Brian I mean, obviously, we'd like to be able to invest more to and growth initiatives like Todd said, we've we've made some investments in growth both in fiscal 'twenty four as we invested in some capacity for lso that should come online this year.

Brent Edward Thielman: I mean, obviously, we'd like to be able to invest more in growth initiatives. We, like Ty said, we've made some investments in growth, both in fiscal 24, invested in some capacity for LSO that should come online this year, and, as Ty mentioned, expanded some of our services capabilities to help them continue to move west. And like Ty said, we're very active in the M&A market to find an opportunity to invest there.

Speaker Change: As Tom mentioned, expanding some of our services capabilities to help them continue to move west and like Todd said were very active in the M&A market and we'd love to find an opportunity to invest there. So we're looking to try and make some investments that are going to help us.

Brent Edward Thielman: So we're looking to try and make some investments that are gonna help put us on a good path, http://TheBusinessProfessor.com definitely add some leverage, and, you know, we'd like Yeah, we've got, I mean, 16% ROIC. I mean, this is a business three years ago that was at seven, well below our cost of capital.

Speaker Change: And a good path from a growth perspective, and that would definitely add some leverage and we'd like to be able to do that with the right with the right asset yes, we've got I mean, 16% ROIC I mean thats the business three years ago was at 7% well below our cost of capital.

Matthew J. Osberg: So, you know, we're looking for those investment opportunities to drive value for our shareholders, and we do see those opportunities, so that's the area of focus that we're really going to drive the organization in. That's not to say we're going to take our eye off the ball in terms of managing our margin profile and generating cash, but it's, especially with Fortify, kind of cleaning up the last tail of some of the product offerings.

Speaker Change: So we're looking for those investment opportunities to drive value for our shareholders.

Speaker Change: And we do see those opportunities. So so that's the area of focus that we're really going to drive the organization to that's not to say, we're going to take our eye off the ball in terms of managing our margin profile and generating cash, but it's especially with fortify kind of cleaning up the last tail of some of the product offerings.

Ty R. Silberhorn: We're really in growth mode, and regardless of what the market is doing, so both organically and acquisition wise, that has been the message to the team the last couple of months as we stepped into fiscal 25. It's go get growth, outperform the market. So if the market does end up being down, we gotta be down less or find a path to growth.

Speaker Change: We're really in growth mode, and that regardless of what the market's doing so both organic and acquisition wise that has been the message to the team in the last couple of months as we stepped into fiscal 'twenty five. It's go get growth go outperformed the market. So if the market does end up being down we've got to be down less or find a path to growth in the market is up.

Ty R. Silberhorn: And as the market is up, we've gotta find a path to outgrow that market. And so that is the message and the focus for the team for our fiscal 25. Okay, okay, great. That's it for me.

Speaker Change: We've got to find a path to outgrow that market and so that is the message and the focus for the team for our fiscal 'twenty five.

Speaker Change: Okay. Okay, great. That's it for me thank you.

Brent Edward Thielman: Thank you. Thank you. One moment for our next question. Our next question comes from the line of B.J. Cook from Singular Research.

Speaker Change: Thank you.

Speaker Change: One moment for our next question.

Speaker Change: Our next question comes from the line of Vijay Cook from singular research.

B.J. Cook: Morning, BJ. Good morning. Thanks for taking my call. Good morning.

Vijay Cook: Good morning VJ.

Vijay Cook: Good morning, Thanks, Nick.

B.J. Cook: You guys announced some higher pricing in Q4. I'm just wondering if there's the... indicator is pricing power, or is it more correlated to eliminating some lower margin projects? Yeah, I think that some of the benefits we got in Q4, BJ, were from some of the pricing initiatives that we'd put in place earlier in the year and, especially in glass, the way we tried to shift to a higher value add strategy.

Vijay Cook: Thanks for taking my call good morning.

You guys announced some higher pricing in Q4.

Vijay Cook: I'm just wondering if there is.

Vijay Cook: And indicator of some pricing power or is it more correlated to eliminating some lower margin projects.

Nick: Yes, I think some of the benefits we got in Q4 Vijay from some of the pricing initiatives that we've put in place earlier in the year and as well as especially in glass. The way we have tried to shift to higher value add strategy. So just improving the mix and the price we didn't we didn't take any.

B.J. Cook: So, you know, just improving the mix and the price. We didn't take any specific pricing actions in Q4. I think it's to carry forward a lot of things that were put in place earlier in the year. And then, as we looked at fiscal 25, you know, we do see some pressure coming in both glass and framing on volumes, and we'll probably have to have some pressure on price, probably as well. And that's why we looked for and called down those.

Nick: Pricing actions in Q4, I think it's just a carry forward a lot of things that were put in place earlier in the year and then as we looked at fiscal 'twenty five we do see some pressure coming in both glass and framing on volumes and you will have to have some pressure on price probably as well and that's why we looked.

Matthew J. Osberg: I'm out. So, no new pricing initiatives that we put in place. Got it. Thanks for the conservancy. I appreciate it.

Speaker Change: Called down those two.

Speaker Change: From a revenue perspective in fiscal 'twenty five so no new pricing initiatives that we put in place in Q4.

Speaker Change: Got it thanks for the concerns we appreciate it.

B.J. Cook: You mentioned, um, expanding into some adjacent markets. I just wondered if you could talk a bit about your strategy, if maybe there are any significant changes to what you guys are doing currently or any additional investment there. Yeah, I'd start, you know, on the immediate front with large-scale optical, with a new coder coming online later this year. That will allow them to be more aggressive if they pursue some adjacent applications.

Speaker Change: You mentioned.

Speaker Change: Extending and then some.

Speaker Change: Jason market. So just wondering if you could talk a bit.

Speaker Change: About your strategy.

Speaker Change: Any significant changes to what you guys are doing currently.

Speaker Change: Or any additional investment there.

Yes, I'd start.

Speaker Change: On the immediate front is with large scale optical with the new quota coming online later this year that will allow them to be more aggressive about pursuing some adjacent applications.