Apogee Enterprises Announces Restructuring and Cost Reduction Actions
Actions are the first steps in executing the company’s new business strategy
These changes will strengthen customer focus, simplify operations, improve execution and enable a more competitive cost structure.
MINNEAPOLIS, August 11, 2021– (BUSINESS WIRE) –Apogee Enterprises, Inc. (Nasdaq: APOG) today announced plans to realign and simplify its business structure, place more emphasis on customer service, enable a more competitive cost model and better position the business for future growth and improved profitability. These actions are the first steps in executing the company’s new corporate strategy, which include:
Focus on the architectural glass segment to focus on premium and high performance products. As a result, the company will close the Viracon plant in Statesboro, Georgia. Work currently performed at Statesboro will be transferred to the company’s facilities in Owatonna, Minnesota, which has adequate capacity to support the additional activity. The company will also be pulling out of the Velocity business and shutting down its Dallas, Texas plant.
Align Architectural Framing Systems (AFS) into two business units, to focus more on target markets, better serve customers, improve operational execution and reduce overall costs:
Storefront and Finishing Solutions will provide storefront, entrance and curtain wall solutions, as well as cladding and related services for architectural products. The main brands will include Alumicor, Linetec and Tubelite.
Window and Wall Systems, will provide window and wall solutions targeting medium to large architectural projects. This company will sell under the EFCO and Wausau Window & Wall brands.
Relocation of the Sotawall business, which is currently part of AFS, to the architectural services segment. This will unify Apogee’s market offerings for larger custom facade projects. The combined business will primarily focus on the integrated design, manufacture and installation of curtain wall projects. This transition is expected to be completed in the first quarter of fiscal 2023. Until then, Sotawall will continue to report its financial results as part of AFS.
“Through our corporate strategy work, we are developing a roadmap for Apogee to become the economic leader in our target markets, delivering the best value to our customers,” said Ty R. Silberhorn, CEO. “Our goals are to focus on the most attractive long-term opportunities, while ensuring that we have the operating model and capabilities necessary to generate profitable growth on a consistent basis. The actions we are announcing today will better align our organization and our cost structure to achieve these goals. “
The company will immediately begin implementing these measures and expects them to be substantially completed in the first quarter of fiscal 2023. When completed, the restructuring measures announced today are expected to reduce the workforce of the company of about 400 employees. These actions build on the restructuring and cost reduction initiatives previously announced by the company. In October 2020, the company announced that it had identified opportunities of $ 10 million to $ 20 million in annualized cost savings, to be achieved by the end of fiscal 2023. With today’s announcement Today, the company now expects to achieve $ 20 million to $ 30 million in annualized savings by the end of fiscal 2023.
The company expects pre-tax charges of between $ 30 million and $ 35 million related to today’s announcement, primarily for asset write-downs and severance pay. The company will record these charges as they are incurred and expects the majority to be recorded in the second quarter of fiscal 2022. Excluding these expected charges, the company maintains its previous guidance for fiscal 2022 of profit. adjusted between $ 2.20 and $ 2.40 per diluted share. .
About Apogee Enterprises, Inc.
Apogee Enterprises, Inc. (Nasdaq: APOG) offers distinctive solutions for fencing commercial buildings and framing works of art. Based in Minneapolis, Minnesota, we are a leader in architectural products and services, providing architectural glass, aluminum framing systems and installation services for buildings, as well as glass and acrylic value-added for framing and personalized displays. For more information, visit www.apog.com.
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. The words “believe”, “expect”, “anticipate”, “intend”, “estimate” “,” Forecast “,” “project”, “plans”, “objectives”, “should” and similar expressions are intended to identify “forward-looking statements”. These statements reflect the expectations or beliefs of Apogee management as of the date of this press release. The company assumes no obligation to publicly update or revise forward-looking statements, whether as a result of new information, future events or otherwise. In particular, the statements regarding the Company’s restructuring and savings plans disclosed in this press release constitute forward-looking statements. These forward-looking statements are subject to significant risks which could cause actual results to differ materially from the expectations reflected in the forward-looking statements. Such risks include, but are not limited to, that: we may be unable to achieve the expected results of corporate restructuring initiatives; the implementation of cost reduction and corporate restructuring initiatives may take longer or cost more than expected; anticipated cost savings initiatives may not be realized, or they may be significantly less than expected; and the restructuring may result in an interruption in the provision of services to our clients. Further information regarding potential factors that could affect future financial results is included in the Company’s Annual Report on Form 10-K for the year ended February 27, 2021 and in subsequent filings with the Securities and Exchange. United States Commission.
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