Apogee Updates FY18 Outlook for EFCO Acquisition Impact

– Apogee remains confident in longer-term growth outlook for U.S.
commercial construction markets, has positive outlook for FY19

– Apogee to host investor conference call today at 8 a.m. CT/9
a.m. ET

MINNEAPOLIS–(BUSINESS WIRE)–$APOG–Apogee Enterprises, Inc. (Nasdaq:APOG) today announced revisions to its
fiscal 2018 outlook primarily related to the acquisition of EFCO, which
closed early in the second quarter that ends September 2.

“We continue to feel good about the North American non-residential
construction markets. Based on second-quarter growth in our reported
segment backlogs, our bidding activity and external metrics, we see
continued market growth for three years and feel especially good about
Apogee’s growth and profit prospects for fiscal 2019,” said Joseph F.
Puishys, Apogee chief executive officer. “Our recent acquisitions of
Sotawall and EFCO are helping us build a more diversified portfolio,
which offers greater long-term growth opportunities while contributing
to more stable performance throughout an economic cycle.”

Apogee estimates that EFCO revenues and margins will be slightly lower
than initially anticipated due to revised cost estimates made post
closing on some projects that EFCO will be delivering in the second half
of fiscal 2018. Fiscal 2018 revenues for EFCO are now expected to be
approximately $200 million, compared to the previous outlook of $200 to
$220 million, and the operating margin is expected to be 2 to 3 percent,
compared to mid-single digit.

“EFCO is a great acquisition with significant long-term potential. With
a concentration in mid-size to smaller commercial construction projects,
EFCO supports our efforts to diversify future revenue streams. At the
same time, it complements and accelerates our strategies to grow through
new products and new geographies,” said Puishys. “In three years, we
expect to improve EFCO operating margins to double-digits and to achieve
annual synergies of $10 to $15 million.”

Additional impacts to outlook include growing competitive pressures in
the architectural glass mid-size project market that are expected to
reduce full-year growth to low single-digits as ongoing productivity
improvements drive increases in operating margin. The longer-term
outlook related to European competition on larger projects is
brightening with strengthening of the Euro. Relative to foreign
exchange, Apogee expects an approximate $2 million non-cash, negative
impact in the second quarter from the architectural framing systems
segment Sotawall business, which fabricates in Canada and currently is
primarily executing projects in the United States.

“Looking ahead, for fiscal 2019 we expect double-digit revenue growth
and triple-digit operating margin improvement, based on our order
pipeline, bidding and backlog already booked for fiscal 2019,” said
Puishys.

Updated fiscal 2018 full-year guidance, compared to earlier guidance,
includes:

• Revenue growth of 24 to 26 percent, compared to 26 to 28 percent.
• Operating margin of 10.0 to 10.5 percent, compared to 10.5 to 11.0
  percent.
  • Adjusted operating margin of 11.0 to 11.5 percent, compared to
    11.5 to 12.0 percent.
• Earnings per share of $3.05 to $3.25, compared to $3.31 to $3.51.
  • Adjusted EPS of $3.40 to $3.60, up at least 12 percent from the
    prior year; this compares to prior adjusted EPS guidance of $3.65
    to $3.85.
• Adjusted earnings guidance excludes the after-tax impact of:
  • Amortization of short-lived acquired intangibles associated with
    the acquired backlog of Sotawall and EFCO of $7 million ($0.24 per
    diluted share).
  • Acquisition-related costs for Sotawall and EFCO of approximately
    $3 million ($0.11 per diluted share).

CONFERENCE CALL TODAY
Apogee will host a teleconference and
webcast at 8 a.m. Central Time/9 a.m. Eastern Time today, August 23. To
participate in the teleconference, call (866) 525-3151 toll free or
(330) 863-3393 international, access code 75298290. To listen to the
live conference call over the internet, go to the Apogee web site at http://www.apog.com
and click on investors, then overview and then the webcast link on that
page. The webcast also will be archived for replay on the company’s web
site.

ABOUT APOGEE ENTERPRISES
Apogee Enterprises, Inc.,
headquartered in Minneapolis, is a leader in technologies involving the
design and development of value-added glass products and services. The
company is organized in four segments, with three of the segments
serving the commercial construction market:

• Architectural Glass segment consists of Viracon, the leading
  fabricator of coated, high-performance architectural glass for global
  markets.
• Architectural Framing Systems segment businesses design, engineer,
  fabricate and finish the aluminum frames for window, curtainwall and
  storefront systems that comprise the outside skin of buildings.
  Businesses in this segment are: Wausau, a manufacturer of custom
  aluminum window systems and curtainwall; Sotawall, a manufacturer of
  unitized curtainwall systems; EFCO, a manufacturer of aluminum window,
  curtainwall, storefront and entrance systems; Tubelite, a manufacturer
  of aluminum storefront, entrance and curtainwall products; Alumicor, a
  manufacturer of aluminum storefront, entrance, curtainwall and window
  products for Canadian markets; and Linetec, a paint and anodizing
  finisher of window frames and PVC shutters.
• Architectural Services segment consists of Harmon, one of the largest
  U.S. full-service building glass installation companies.
• Large-Scale Optical segment consists of Tru Vue, a value-added glass
  and acrylic manufacturer primarily for framing and display
  applications.

USE OF NON-GAAP FINANCIAL MEASURES
This news release and
other financial communications may contain the following non-GAAP
measures:

• Adjusted operating income, adjusted operating margin, adjusted net
  earnings and adjusted earnings per diluted share (“adjusted earnings
  per share or adjusted EPS”) are used by the company to provide
  meaningful supplemental information about its operating performance by
  excluding amounts that are not considered part of core operating
  results when assessing performance to improve comparability of results
  from period to period. Examples of items excluded to arrive at these
  adjusted measures include the impact of acquisition-related costs and
  amortization of short-lived acquired intangibles associated with
  backlog.
• Backlog represents the dollar amount of revenues Apogee expects to
  recognize in the near-term from firm contracts or orders. The company
  uses backlog as one of the metrics to evaluate near-term sales trends
  in its business.

Management uses these non-GAAP measures to evaluate the company’s
historical and prospective financial performance, measure operational
profitability on a consistent basis, and provide enhanced transparency
to the investment community. These non-GAAP measures should be viewed in
addition to, and not as an alternative to, the reported financial
results of the company prepared in accordance with GAAP. Other companies
may calculate these measures differently, limiting the usefulness of the
measure for comparison with other companies.

FORWARD-LOOKING STATEMENTS
The discussion above contains
“forward-looking statements” within the meaning of the Private
Securities Litigation Reform Act of 1995. These statements reflect
Apogee management’s expectations or beliefs as of the date of this
release. The company undertakes no obligation to publicly update or
revise any forward-looking statements, whether as a result of new
information, future events or otherwise. All forward-looking statements
are qualified by factors that may affect the operating results of the
company, including the following: (A) global economic conditions and the
cyclical nature of the North American and Latin American commercial
construction industries, which impact our three architectural segments,
and consumer confidence and the conditions of the U.S. economy, which
impact our large-scale optical segment; (B) fluctuations in foreign
currency exchange rates; (C) actions of new and existing competitors;
(D) ability to effectively utilize and increase production capacity;
(E) product performance, reliability and quality issues; (F) project
management and installation issues that could result in losses on
individual contracts; (G) changes in consumer and customer preference,
or architectural trends and building codes; (H) dependence on a
relatively small number of customers in certain business segments; (I)
revenue and operating results that could differ from market
expectations; (J) self-insurance risk related to a material product
liability or other event for which the company is liable; (K) dependence
on information technology systems and information security threats; (L)
cost of compliance with and changes in environmental regulations; (M)
interruptions in glass supply; (N) loss of key personnel and inability
to source sufficient labor; and (O) integration of recent acquisitions.
The company cautions investors that actual future results could differ
materially from those described in the forward-looking statements, and
that other factors may in the future prove to be important in affecting
the company’s results of operations. New factors emerge from time to
time and it is not possible for management to predict all such factors,
nor can it assess the impact of each factor on the business or the
extent to which any factor, or a combination of factors, may cause
actual results to differ materially from those contained in any
forward-looking statements. For a more detailed explanation of the
foregoing and other risks and uncertainties, see Item 1A of the
company’s Annual Report on Form 10-K for the fiscal year ended March 4,
2017.

Contacts

Apogee Enterprises, Inc.
Mary Ann Jackson, 952-487-7538
Investor
Relations
[email protected]