QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||
(Address of principal executive offices) | (Zip Code) | |||
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
x | Accelerated filer | o | ||||
Non-accelerated filer | o | Smaller reporting company | ||||
Emerging growth company | ||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | |||||
Page | ||
PART I | ||
Item 1. | ||
Item 2. | ||
Item 3. | ||
Item 4. | ||
PART II | ||
Item 1. | ||
Item 1A. | ||
Item 2. | ||
Item 6. | ||
Item 1. | Financial Statements |
In thousands, except stock data | November 30, 2019 | March 2, 2019 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | $ | ||||||
Restricted cash | ||||||||
Receivables, net of allowance for doubtful accounts | ||||||||
Inventories | ||||||||
Costs and earnings on contracts in excess of billings | ||||||||
Other current assets | ||||||||
Total current assets | ||||||||
Property, plant and equipment, net | ||||||||
Operating lease right-of-use assets | ||||||||
Goodwill | ||||||||
Intangible assets | ||||||||
Other non-current assets | ||||||||
Total assets | $ | $ | ||||||
Liabilities and Shareholders’ Equity | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | $ | ||||||
Accrued payroll and related benefits | ||||||||
Billings on contracts in excess of costs and earnings | ||||||||
Operating lease liabilities | ||||||||
Current portion of debt | ||||||||
Other current liabilities | ||||||||
Total current liabilities | ||||||||
Long-term debt | ||||||||
Non-current operating lease liabilities | ||||||||
Non-current self-insurance reserves | ||||||||
Other non-current liabilities | ||||||||
Commitments and contingent liabilities (Note 8) | ||||||||
Shareholders’ equity | ||||||||
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 26,552,935 and 27,015,127 respectively | ||||||||
Additional paid-in capital | ||||||||
Retained earnings | ||||||||
Common stock held in trust | ( | ) | ( | ) | ||||
Deferred compensation obligations | ||||||||
Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
Total shareholders’ equity | ||||||||
Total liabilities and shareholders’ equity | $ | $ | ||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
In thousands, except per share data | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Net sales | $ | $ | $ | $ | ||||||||||||
Cost of sales | ||||||||||||||||
Gross profit | ||||||||||||||||
Selling, general and administrative expenses | ||||||||||||||||
Operating income | ||||||||||||||||
Interest and other expense, net | ||||||||||||||||
Earnings before income taxes | ||||||||||||||||
Income tax expense | ||||||||||||||||
Net earnings | $ | $ | $ | $ | ||||||||||||
Earnings per share - basic | $ | $ | $ | $ | ||||||||||||
Earnings per share - diluted | $ | $ | $ | $ | ||||||||||||
Weighted average basic shares outstanding | ||||||||||||||||
Weighted average diluted shares outstanding | ||||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Net earnings | $ | $ | $ | $ | ||||||||||||
Other comprehensive (loss) earnings: | ||||||||||||||||
Unrealized (loss) gain on marketable securities, net of ($11), ($16), $38 and ($25) of tax (benefit) expense, respectively | ( | ) | ( | ) | ( | ) | ||||||||||
Unrealized gain (loss) on derivative instruments, net of $119, $10, $146 and ($99) of tax expense (benefit), respectively | ( | ) | ||||||||||||||
Foreign currency translation adjustments | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Other comprehensive (loss) earnings | ( | ) | ( | ) | ( | ) | ||||||||||
Total comprehensive earnings | $ | $ | $ | $ | ||||||||||||
Nine Months Ended | ||||||||
In thousands | November 30, 2019 | December 1, 2018 | ||||||
Operating Activities | ||||||||
Net earnings | $ | $ | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||
Depreciation and amortization | ||||||||
Share-based compensation | ||||||||
Deferred income taxes | ||||||||
Gain on disposal of assets | ( | ) | ( | ) | ||||
Proceeds from New Markets Tax Credit transaction, net of deferred costs | ||||||||
Noncash lease expense | ||||||||
Other, net | ( | ) | ( | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Receivables | ( | ) | ||||||
Inventories | ||||||||
Costs and earnings on contracts in excess of billings | ( | ) | ( | ) | ||||
Accounts payable and accrued expenses | ( | ) | ( | ) | ||||
Billings on contracts in excess of costs and earnings | ||||||||
Refundable and accrued income taxes | ( | ) | ||||||
Other | ( | ) | ( | ) | ||||
Net cash provided by operating activities | ||||||||
Investing Activities | ||||||||
Capital expenditures | ( | ) | ( | ) | ||||
Proceeds from sales of property, plant and equipment | ||||||||
Purchases of marketable securities | ( | ) | ( | ) | ||||
Sales/maturities of marketable securities | ||||||||
Other | ( | ) | ( | ) | ||||
Net cash used by investing activities | ( | ) | ( | ) | ||||
Financing Activities | ||||||||
Borrowings on line of credit | ||||||||
Proceeds from issuance of term debt | ||||||||
Payments on line of credit | ( | ) | ( | ) | ||||
Repurchase and retirement of common stock | ( | ) | ( | ) | ||||
Dividends paid | ( | ) | ( | ) | ||||
Other | ( | ) | ( | ) | ||||
Net cash used by financing activities | ( | ) | ( | ) | ||||
(Decrease) increase in cash and cash equivalents | ( | ) | ||||||
Effect of exchange rates on cash | ( | ) | ||||||
Cash, cash equivalents and restricted cash at beginning of year | ||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | ||||||
Noncash Activity | ||||||||
Capital expenditures in accounts payable | $ | $ | ||||||
In thousands | Common Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Common Stock Held in Trust | Deferred Compensation Obligation | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||||
Balance at March 2, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized gain on marketable securities, net of $47 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized gain on foreign currency hedge, net of $2 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Issuance of stock, net of cancellations | — | ( | ) | — | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Share repurchases | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at June 1, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized gain on marketable securities, net of $2 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized gain on foreign currency hedge, net of $25 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of stock, net of cancellations | — | ( | ) | — | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at August 31, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized loss on marketable securities, net of $11 tax benefit | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Unrealized gain on foreign currency hedge, net of $119 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Issuance of stock, net of cancellations | ( | ) | — | ( | ) | — | |||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at November 30, 2019 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
In thousands | Common Shares Outstanding | Common Stock | Additional Paid-In Capital | Retained Earnings | Common Stock Held in Trust | Deferred Compensation Obligation | Accumulated Other Comprehensive (Loss) Income | ||||||||||||||||||||
Balance at March 3, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Cumulative effect adjustment | — | — | — | — | — | — | |||||||||||||||||||||
Reclassification of tax effects | — | — | — | — | — | ( | ) | ||||||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized gain on marketable securities, net of $2 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized loss on foreign currency hedge, net of $92 tax benefit | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Issuance of stock, net of cancellations | — | ( | ) | — | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Exercise of stock options | — | — | — | — | |||||||||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at June 2, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized loss on marketable securities, net of $11 tax benefit | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Unrealized loss on foreign currency hedge, net of $17 tax benefit | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Issuance of stock, net of cancellations | — | ( | ) | — | |||||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | — | — | — | — | |||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at September 1, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
Net earnings | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized loss on marketable securities, net of $16 tax benefit | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Unrealized gain on foreign currency hedge, net of $10 tax expense | — | — | — | — | — | — | |||||||||||||||||||||
Foreign currency translation adjustments | — | — | — | — | — | — | ( | ) | |||||||||||||||||||
Issuance of stock, net of cancellations | — | — | — | ( | ) | — | |||||||||||||||||||||
Share-based compensation | — | — | — | — | — | — | |||||||||||||||||||||
Share repurchases | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Other share retirements | ( | ) | ( | ) | ( | ) | ( | ) | — | — | — | ||||||||||||||||
Cash dividends | — | — | — | ( | ) | — | — | — | |||||||||||||||||||
Balance at December 1, 2018 | $ | $ | $ | $ | ( | ) | $ | $ | ( | ) | |||||||||||||||||
1. | Summary of Significant Accounting Policies |
2. | Revenue, Receivables and Contract Assets and Liabilities |
Three Months Ended | Nine Months Ended | |||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Recognized at shipment | $ | $ | $ | $ | ||||||||||||
Recognized over time | ||||||||||||||||
Total | $ | $ | $ | $ | ||||||||||||
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Trade accounts | $ | $ | ||||||
Construction contracts | ||||||||
Contract retainage | ||||||||
Total receivables | ||||||||
Less: allowance for doubtful accounts | ( | ) | ( | ) | ||||
Net receivables | $ | $ | ||||||
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Contract assets | $ | $ | ||||||
Contract liabilities | ||||||||
Other contract-related disclosures | Three Months Ended | Nine Months Ended | ||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Revenue recognized related to contract liabilities from prior year-end | $ | $ | $ | $ | ||||||||||||
Revenue recognized related to prior satisfaction of performance obligations | ||||||||||||||||
In thousands | November 30, 2019 | |||
Within one year | $ | |||
Within two years | ||||
Beyond | ||||
Total | $ | |||
3. | Supplemental Balance Sheet Information |
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Raw materials | $ | $ | ||||||
Work-in-process | ||||||||
Finished goods | ||||||||
Total inventories | $ | $ | ||||||
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Prepaid assets | $ | $ | ||||||
Insurance receivable | ||||||||
Refundable income taxes | ||||||||
Other | ||||||||
Total other current assets | $ | $ | ||||||
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Warranties | $ | $ | ||||||
Accrued project losses | ||||||||
Property and other taxes | ||||||||
Accrued self-insurance reserves | ||||||||
Other | ||||||||
Total other current liabilities | $ | $ | ||||||
In thousands | November 30, 2019 | March 2, 2019 | ||||||
Deferred benefit from New Market Tax Credit transactions | $ | $ | ||||||
Retirement plan obligations | ||||||||
Deferred compensation plan | ||||||||
Other | ||||||||
Total other non-current liabilities | $ | $ | ||||||
4. | Financial Instruments |
In thousands | Amortized Cost | Gross Unrealized Gains | Gross Unrealized Losses | Estimated Fair Value | ||||||||||||
November 30, 2019 | $ | $ | $ | $ | ||||||||||||
March 2, 2019 | ||||||||||||||||
In thousands | Amortized Cost | Estimated Fair Value | ||||||
Due within one year | $ | $ | ||||||
Due after one year through five years | ||||||||
Due after five years through 10 years | ||||||||
Due after 10 years through 15 years | ||||||||
Due beyond 15 years | ||||||||
Total | $ | $ | ||||||
In thousands | Quoted Prices in Active Markets (Level 1) | Other Observable Inputs (Level 2) | Total Fair Value | |||||||||
November 30, 2019 | ||||||||||||
Assets: | ||||||||||||
Money market funds | $ | $ | $ | |||||||||
Commercial paper | ||||||||||||
Municipal and corporate bonds | ||||||||||||
Liabilities: | ||||||||||||
Foreign currency forward/option contract | — | |||||||||||
Interest rate swap contract | — | |||||||||||
March 2, 2019 | ||||||||||||
Assets: | ||||||||||||
Money market funds | $ | $ | $ | |||||||||
Commercial paper | ||||||||||||
Municipal and corporate bonds | ||||||||||||
Liabilities: | ||||||||||||
Foreign currency forward/option contract | — | |||||||||||
5. | Goodwill and Other Identifiable Intangible Assets |
In thousands | Architectural Framing Systems | Architectural Glass | Architectural Services | Large-Scale Optical | Total | |||||||||||||||
Balance at March 3, 2018 | $ | $ | $ | $ | $ | |||||||||||||||
Goodwill adjustments for purchase accounting | ||||||||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ( | ) | ||||||||||||||
Balance at March 2, 2019 | ||||||||||||||||||||
Foreign currency translation | ( | ) | ( | ) | ||||||||||||||||
Balance at November 30, 2019 | $ | $ | $ | $ | $ | |||||||||||||||
In thousands | Gross Carrying Amount | Accumulated Amortization | Impairment | Foreign Currency Translation | Net | |||||||||||||||
November 30, 2019 | ||||||||||||||||||||
Definite-lived intangible assets: | ||||||||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | ||||||||||
Other intangibles | ( | ) | — | ( | ) | |||||||||||||||
Total definite-lived intangible assets | ( | ) | — | ( | ) | |||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||
Trademarks | — | — | ||||||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | ||||||||||
March 2, 2019 | ||||||||||||||||||||
Definite-lived intangible assets: | ||||||||||||||||||||
Customer relationships | $ | $ | ( | ) | $ | — | $ | ( | ) | $ | ||||||||||
Other intangibles | ( | ) | — | ( | ) | |||||||||||||||
Total definite-lived intangible assets | ( | ) | — | ( | ) | |||||||||||||||
Indefinite-lived intangible assets: | ||||||||||||||||||||
Trademarks | — | ( | ) | ( | ) | |||||||||||||||
Total intangible assets | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | $ | |||||||||
In thousands | Remainder of Fiscal 2020 | Fiscal 2021 | Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | |||||||||||||||
Estimated amortization expense | $ | $ | $ | $ | $ | |||||||||||||||
6. | Debt |
Three Months Ended | Nine Months Ended | |||||||
In thousands | November 30, 2019 | November 30, 2019 | ||||||
Operating lease cost | $ | $ | ||||||
Short-term lease cost | ||||||||
Variable lease cost | ||||||||
Total lease cost | $ | $ | ||||||
Nine Months Ended | ||||
In thousands except weighted-average data | November 30, 2019 | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ | |||
Lease assets obtained in exchange for new operating lease liabilities | $ | |||
Weighted-average remaining lease term - operating leases | ||||
Weighted-average discount rate - operating leases | % | |||
In thousands | November 30, 2019 | |||
Remainder of Fiscal 2020 | $ | |||
Fiscal 2021 | ||||
Fiscal 2022 | ||||
Fiscal 2023 | ||||
Fiscal 2024 | ||||
Fiscal 2025 | ||||
Thereafter | ||||
Total lease payments | ||||
Less: Amounts representing interest | ( | ) | ||
Present value of lease liabilities | $ | |||
In thousands | 2020 | 2021 | 2022 | 2023 | 2024 | Thereafter | Total | ||||||||||||||||
Total minimum payments | $ | $ | |||||||||||||||||||||
8. | Commitments and Contingent Liabilities |
Nine Months Ended | ||||||||
In thousands | November 30, 2019 | December 1, 2018 | ||||||
Balance at beginning of period | $ | $ | ||||||
Additional accruals | ||||||||
Claims paid | ( | ) | ( | ) | ||||
Balance at end of period | $ | $ | ||||||
Inception date | Termination date | Proceeds received | Deferred costs | Net benefit | |||||||||
November 2013 | October 2020 | $ | $ | $ | |||||||||
June 2016 | May 2023 | ||||||||||||
August 2018 | July 2025 | ||||||||||||
September 2018 | August 2025 | ||||||||||||
Total | $ | $ | $ | ||||||||||
9. | Share-Based Compensation |
Stock options and SARs | Number of Shares | Weighted Average Exercise Price | Weighted Average Remaining Contractual Life | Aggregate Intrinsic Value | |||||||||
Outstanding at March 2, 2019 | $ | ||||||||||||
Awards exercised | |||||||||||||
Outstanding and exercisable at November 30, 2019 | $ | ||||||||||||
Nonvested shares and units | Number of Shares and Units | Weighted Average Grant Date Fair Value | |||||
Nonvested at March 2, 2019 | $ | ||||||
Granted | |||||||
Vested | ( | ) | |||||
Canceled | ( | ) | |||||
Nonvested at November 30, 2019 | |||||||
10. | Employee Benefit Plans |
Three Months Ended | Nine Months Ended | |||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Interest cost | $ | $ | $ | $ | ||||||||||||
Expected return on assets | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Amortization of unrecognized net loss | ||||||||||||||||
Net periodic benefit cost | $ | $ | $ | $ | ||||||||||||
11. | Income Taxes |
12. | Earnings per Share |
Three Months Ended | Nine Months Ended | |||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||
Basic earnings per share – weighted average common shares outstanding | ||||||||||||
Weighted average effect of nonvested share grants and assumed exercise of stock options | ||||||||||||
Diluted earnings per share – weighted average common shares and potential common shares outstanding | ||||||||||||
Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares) | ||||||||||||
13. | Segment Information |
• | The Architectural Framing Systems segment designs, engineers, fabricates and finishes the aluminum frames used in customized aluminum and glass window, curtainwall, storefront and entrance systems comprising the outside skin and entrances of commercial, institutional and high-end multi-family residential buildings. The Company has aggregated |
• | The Architectural Glass segment fabricates coated, high-performance glass used in customized window and wall systems comprising the outside skin of commercial, institutional and high-end multi-family residential buildings. |
• | The Architectural Services segment designs, engineers, fabricates and installs the walls of glass, windows and other curtainwall products making up the outside skin of commercial and institutional buildings. |
• | The LSO segment manufactures value-added glass and acrylic products primarily for framing and display applications. |
Three Months Ended | Nine Months Ended | |||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||||||
Net sales from operations | ||||||||||||||||
Architectural Framing Systems | $ | $ | $ | $ | ||||||||||||
Architectural Glass | ||||||||||||||||
Architectural Services | ||||||||||||||||
Large-Scale Optical | ||||||||||||||||
Intersegment eliminations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Net sales | $ | $ | $ | $ | ||||||||||||
Operating income (loss) from operations | ||||||||||||||||
Architectural Framing Systems | $ | $ | $ | $ | ||||||||||||
Architectural Glass | ||||||||||||||||
Architectural Services | ||||||||||||||||
Large-Scale Optical | ||||||||||||||||
Corporate and other | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
Operating income | $ | $ | $ | $ | ||||||||||||
Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
Three Months Ended | Nine Months Ended | ||||||||||
November 30, 2019 | December 1, 2018 | November 30, 2019 | December 1, 2018 | ||||||||
Net sales | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | |||
Cost of sales | 78.0 | 76.5 | 77.0 | 76.4 | |||||||
Gross profit | 22.0 | 23.5 | 23.0 | 23.6 | |||||||
Selling, general and administrative expenses | 15.6 | 14.7 | 16.1 | 15.8 | |||||||
Operating income | 6.4 | 8.8 | 6.9 | 7.8 | |||||||
Interest and other expense, net | 0.5 | 0.8 | 0.6 | 0.6 | |||||||
Earnings before income taxes | 5.9 | 8.0 | 6.3 | 7.2 | |||||||
Income tax expense | 1.4 | 1.9 | 1.5 | 1.7 | |||||||
Net earnings | 4.5 | % | 6.1 | % | 4.8 | % | 5.5 | % | |||
Effective tax rate | 23.2 | % | 23.5 | % | 23.9 | % | 23.8 | % | |||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | % Change | November 30, 2019 | December 1, 2018 | % Change | ||||||||||||||||
Net sales | $ | 165,517 | $ | 181,306 | (8.7 | )% | $ | 533,432 | $ | 550,193 | (3.0 | )% | ||||||||||
Operating income | 6,345 | 12,903 | (50.8 | )% | 34,141 | 43,554 | (21.6 | )% | ||||||||||||||
Operating margin | 3.8 | % | 7.1 | % | 6.4 | % | 7.9 | % | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | % Change | November 30, 2019 | December 1, 2018 | % Change | ||||||||||||||||
Net sales | $ | 89,433 | $ | 98,524 | (9.2 | )% | $ | 288,862 | $ | 263,533 | 9.6 | % | ||||||||||
Operating income | 4,092 | 5,851 | (30.1 | )% | 16,951 | 9,168 | 84.9 | % | ||||||||||||||
Operating margin | 4.6 | % | 5.9 | % | 5.9 | % | 3.5 | % | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | % Change | November 30, 2019 | December 1, 2018 | % Change | ||||||||||||||||
Net sales | $ | 69,043 | $ | 72,828 | (5.2 | )% | $ | 195,787 | $ | 220,051 | (11.0 | )% | ||||||||||
Operating income | 6,533 | 8,659 | (24.6 | )% | 15,082 | 21,435 | (29.6 | )% | ||||||||||||||
Operating margin | 9.5 | % | 11.9 | % | 7.7 | % | 9.7 | % | ||||||||||||||
Three Months Ended | Nine Months Ended | |||||||||||||||||||||
In thousands | November 30, 2019 | December 1, 2018 | % Change | November 30, 2019 | December 1, 2018 | % Change | ||||||||||||||||
Net sales | $ | 24,405 | $ | 23,377 | 4.4 | % | $ | 66,449 | $ | 64,522 | 3.0 | % | ||||||||||
Operating income | 6,754 | 6,628 | 1.9 | % | 15,561 | 15,845 | (1.8 | )% | ||||||||||||||
Operating margin | 27.7 | % | 28.4 | % | 23.4 | % | 24.6 | % | ||||||||||||||
Selected cash flow data | Nine Months Ended | |||||||
In thousands | November 30, 2019 | December 1, 2018 | ||||||
Operating Activities | ||||||||
Net cash provided by operating activities | $ | 53,601 | $ | 70,644 | ||||
Investing Activities | ||||||||
Capital expenditures | (41,176 | ) | (33,867 | ) | ||||
Financing Activities | ||||||||
Borrowings on line of credit | 108,000 | 294,500 | ||||||
Proceeds from issuance of term debt | 150,000 | — | ||||||
Payments on line of credit | (252,500 | ) | (278,000 | ) | ||||
Repurchase and retirement of common stock | (20,010 | ) | (23,313 | ) | ||||
Dividends paid | (13,808 | ) | (13,180 | ) | ||||
Payments Due by Fiscal Period | ||||||||||||||||||||||||||||
In thousands | Remainder of Fiscal 2020 | Fiscal 2021 | Fiscal 2022 | Fiscal 2023 | Fiscal 2024 | Thereafter | Total | |||||||||||||||||||||
Debt obligations | $ | — | $ | 155,400 | $ | 82,770 | $ | 1,085 | $ | — | $ | 12,000 | $ | 251,255 | ||||||||||||||
Operating leases (undiscounted) | 3,366 | 12,880 | 11,256 | 10,307 | 8,147 | 18,647 | 64,603 | |||||||||||||||||||||
Purchase obligations | 59,463 | 84,960 | 1,306 | 127 | 127 | — | 145,983 | |||||||||||||||||||||
Total cash obligations | $ | 62,829 | $ | 253,240 | $ | 95,332 | $ | 11,519 | $ | 8,274 | $ | 30,647 | $ | 461,841 | ||||||||||||||
• | Revenue flat to down 1 percent over fiscal 2019. |
• | Earnings per diluted share in the range of $2.15 to 2.30. |
• | Capital expenditures of approximately $55 million. |
Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Item 4. | Controls and Procedures |
a) | Evaluation of disclosure controls and procedures: As of the end of the period covered by this report (the Evaluation Date), we carried out an evaluation, under the supervision and with the participation of management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) or 15d-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that, as of the Evaluation Date, our disclosure controls and procedures were effective to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in applicable rules and forms, and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. |
b) | Changes in internal controls: There was no change in the Company’s internal control over financial reporting that occurred during the fiscal quarter ended November 30, 2019, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting. |
Item 1. | Legal Proceedings |
Item 1A. | Risk Factors |
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
Period | Total Number of Shares Purchased (a) | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (b) | Maximum Number of Shares that May Yet Be Purchased under the Plans or Programs (b) | |||||||||
September 1, 2019 to September 28, 2019 | — | $ | — | — | 1,450,088 | ||||||||
September 29, 2019 to October 26, 2019 | 1,162 | 37.65 | — | 1,450,088 | |||||||||
October 27, 2019 to November 30, 2019 | — | — | — | 1,450,088 | |||||||||
Total | 1,162 | $ | 37.65 | — | 1,450,088 | ||||||||
(a) | The shares in this column represent the total number of shares that were surrendered to us by plan participants to satisfy stock-for-stock option exercises or withholding tax obligations related to share-based compensation. We did not purchase any shares pursuant to our publicly announced repurchase program during the fiscal quarter. |
(b) | In fiscal 2004, announced on April 10, 2003, the Board of Directors authorized the repurchase of 1,500,000 shares of Company stock. The Board increased the authorization by 750,000 shares, announced on January 24, 2008; by 1,000,000 shares on each of the announcement dates of October 8, 2008, January 13, 2016 and January 9, 2018; and by 2,000,000 shares, announced on October 3, 2018. The repurchase program does not have an expiration date. |
Item 6. | Exhibits |
101 | The following materials from Apogee Enterprises, Inc.’s Quarterly Report on Form 10-Q for the quarter ended November 30, 2019 are furnished herewith, formatted in XBRL (Extensible Business Reporting Language): (i) the Consolidated Balance Sheets as of November 30, 2019 and March 2, 2019, (ii) the Consolidated Results of Operations for the three- and nine-months ended November 30, 2019 and December 1, 2018, (iii) the Consolidated Statements of Comprehensive Earnings for the three- and nine-months ended November 30, 2019 and December 1, 2018, (iv) the Consolidated Statements of Cash Flows for the nine-months ended November 30, 2019 and December 1, 2018, (v) the Consolidated Statements of Shareholders' Equity for the three- and nine-months ended November 30, 2019 and December 1, 2018, and (vi) Notes to Consolidated Financial Statements. |
104 | Cover Page, formatted as Inline Extensible Business Reporting Language and contained in Exhibit 101. |
APOGEE ENTERPRISES, INC. | |||
Date: January 9, 2020 | By: /s/ Joseph F. Puishys | ||
Joseph F. Puishys President and Chief Executive Officer (Principal Executive Officer) | |||
Date: January 9, 2020 | By: /s/ James S. Porter | ||
James S. Porter Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer) | |||
1. | I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ Joseph F. Puishys | |
Joseph F. Puishys President and Chief Executive Officer | |
1. | I have reviewed this quarterly report on Form 10-Q of Apogee Enterprises, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
5. | The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
/s/ James S. Porter | |
James S. Porter Executive Vice President and Chief Financial Officer | |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Joseph F. Puishys | |
Joseph F. Puishys President and Chief Executive Officer | |
January 9, 2020 | |
(1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ James S. Porter | |
James S. Porter Executive Vice President and Chief Financial Officer | |
January 9, 2020 | |
Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended |
|---|---|---|
Nov. 30, 2019 |
Nov. 30, 2019 |
|
| Leases [Abstract] | ||
| Operating lease cost | $ 3,445 | $ 10,308 |
| Short-term lease cost | 427 | 1,606 |
| Variable lease cost | 843 | 2,223 |
| Total lease cost | $ 4,715 | $ 14,137 |
Income Taxes (Details) - USD ($) $ in Millions |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Income Tax Disclosure [Abstract] | ||
| Liability for uncertain tax positions, current and noncurrent | $ 5.2 | $ 5.1 |
| Liability for unrecognized tax benefit, expected decrease | $ 0.4 |
Supplemental Balance Sheet Information - Other non-current liabilities (Details) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Deferred benefit from New Market Tax Credit transactions | $ 15,717 | $ 26,458 |
| Retirement plan obligations | 7,633 | 7,633 |
| Deferred compensation plan | 11,743 | 10,408 |
| Other | 30,552 | 32,683 |
| Total other non-current liabilities | $ 65,645 | $ 77,182 |
Financial Instruments (Details Textual) - Designated as Hedging Instrument $ in Millions |
Nov. 30, 2019
USD ($)
|
|---|---|
| Interest Rate Swap [Member] | |
| Derivatives, Fair Value [Line Items] | |
| Derivative, Notional Amount | $ 85.0 |
| Foreign Exchange Forward | |
| Derivatives, Fair Value [Line Items] | |
| Derivative, Notional Amount | $ 24.7 |
Commitments and Contingent Liabilities (Tables) - USD ($) $ in Thousands |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
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| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Guarantees and warranties | A warranty rollforward follows:
|
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| Proceeds from New Markets Tax Credit transaction, net of deferred costs | $ 0 | $ 8,850 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue, Receivables and Contract Assets and Liabilities (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Disaggregated revenue data | The following table disaggregates total revenue by timing of recognition (see Note 13 for disclosure of revenue by segment):
|
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| Net receivables |
|
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| Contract assets and liabilities |
|
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| Performance obligations expected to be satisfied | The performance obligations are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:
|
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Earnings per Share |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share | Earnings per Share The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share:
|
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Consolidated Results of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Income Statement [Abstract] | ||||
| Net sales | $ 337,916 | $ 357,718 | $ 1,050,340 | $ 1,056,382 |
| Cost of sales | 263,606 | 273,628 | 808,856 | 807,096 |
| Gross profit | 74,310 | 84,090 | 241,484 | 249,286 |
| Selling, general and administrative expenses | 52,716 | 52,682 | 169,274 | 167,224 |
| Operating income | 21,594 | 31,408 | 72,210 | 82,062 |
| Interest and other expense, net | 1,764 | 2,787 | 6,577 | 6,254 |
| Earnings before income taxes | 19,830 | 28,621 | 65,633 | 75,808 |
| Income tax expense | 4,596 | 6,730 | 15,677 | 18,030 |
| Net earnings | $ 15,234 | $ 21,891 | $ 49,956 | $ 57,778 |
| Earnings per share - basic | ||||
| Earnings per share - basic | $ 0.58 | $ 0.79 | $ 1.89 | $ 2.06 |
| Earnings per share - diluted | ||||
| Earnings per share - diluted | $ 0.57 | $ 0.78 | $ 1.87 | $ 2.04 |
| Weighted average basic shares outstanding | 26,432 | 27,836 | 26,481 | 28,030 |
| Weighted average diluted shares outstanding | 26,750 | 28,156 | 26,776 | 28,304 |
Earnings per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Reconciliation of basic and diluted earnings per share | The following table presents a reconciliation of the share amounts used in the computation of basic and diluted earnings per share:
|
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Summary of Significant Accounting Policies (Details 2) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 03, 2019 |
Mar. 02, 2019 |
|---|---|---|---|
| New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
| Operating lease right-of-use assets | $ 56,315 | $ 50,000 | $ 0 |
Revenue, Receivables and Contract Assets and Liabilities (Details 3) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Revenue from Contract with Customer [Abstract] | ||
| Contract assets | $ 107,571 | $ 87,491 |
| Contract liabilities | $ 28,863 | $ 24,083 |
Commitments and Contingent Liabilities |
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Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingent Liabilities | Commitments and Contingent Liabilities Bond commitments In the ordinary course of business, predominantly in our Architectural Services and Architectural Framing Systems segments, we are required to provide surety or performance bonds that commit payments to our customers for any non-performance. At November 30, 2019, $833.9 million of these types of bonds were outstanding, of which $432.6 million is on our backlog. These bonds do not have stated expiration dates. We have never been required to make payments under surety or performance bonds with respect to our existing businesses. Warranty and project-related contingencies We reserve estimated exposures on known claims, as well as on a portion of anticipated claims, for product warranty and rework cost, based on historical product liability claims as a ratio of sales. Claim costs are deducted from the accrual when paid. Factors that could have an impact on the warranty accrual in any given period include the following: changes in manufacturing quality, changes in product mix and any significant changes in sales volume. A warranty rollforward follows:
Additionally, we are subject to project management and installation-related contingencies as a result of our fixed-price material supply and installation service contracts, primarily in our Architectural Services segment and certain of our Architectural Framing Systems businesses. We manage the risk of these exposures through contract negotiations, proactive project management and insurance coverages. We have recorded an estimated liability related to a legacy EFCO project of $47.6 million and $42.8 million as of November 30, 2019 and March 2, 2019, respectively. This includes approximately $14.7 million recorded in the third quarter for estimated costs associated with project dispute resolution and other additional project costs. In the third quarter, upon confirmation of coverage by an insurer, we also recorded an insurance receivable of $15.0 million, included within other current assets on the consolidated balance sheets and within cost of sales on the consolidated results of operations. We received this payment subsequent to quarter-end. Letters of credit At November 30, 2019, we had $24.7 million of ongoing letters of credit, all of which have been issued under our committed revolving credit facility, as discussed in Note 6. Purchase obligations Purchase obligations for raw material commitments and capital expenditures totaled $146.0 million as of November 30, 2019. New Markets Tax Credit (NMTC) transactions We have entered into four separate NMTC programs to support our operational expansion, including two transactions completed in fiscal 2019. Proceeds received from investors on these transactions are included within other current and non-current liabilities on our consolidated balance sheets. The NMTC arrangements are subject to 100 percent tax recapture for a period of seven years from the date of each respective transaction. Therefore, upon the termination of each arrangement, these proceeds will be recognized in earnings in exchange for the transfer of tax credits. The direct and incremental costs incurred in structuring these arrangements have been deferred and are included in other current and non-current assets on our consolidated balance sheets. These costs will be recognized in conjunction with the recognition of the related proceeds on each arrangement. During the construction phase, we are required to hold cash dedicated to fund each capital project which is classified as restricted cash on our consolidated balance sheets. Variable-interest entities, which have been included within our consolidated financial statements, have been created as a result of the structure of these transactions, as investors in the programs do not have a material interest in their underlying economics. The table below provides a summary of our outstanding NMTC transactions (in millions):
Litigation On November 5, 2018, a shareholder filed a purported securities class action against the Company and certain named executive officers. On April 26, 2019, the new lead plaintiff filed an amended complaint, alleging that, during the purported class period of May 1, 2017 to April 10, 2019, the Company and the named executive officers made materially false or misleading statements or omissions about the Company's acquisition of EFCO Corporation on June 12, 2017, and about the Company's Architectural Glass business segment, in violation of the federal securities laws. We intend to vigorously defend this matter. On December 17, 2018, a different shareholder filed a derivative lawsuit, purportedly on behalf of the Company, against certain of our executive officers and directors claiming breaches of fiduciary duty, waste of corporate assets and unjust enrichment. This complaint alleges that the officers and directors allegedly made materially false or misleading statements or omissions about the Company's business, operations and prospects, particularly with respect to our Architectural Glass business segment, during the period between June 28, 2018 and September 17, 2018. This matter has been stayed, pending resolution of a motion to dismiss the foregoing matter. We intend to vigorously defend this matter. In addition to the foregoing, the Company is a party to various legal proceedings incidental to its normal operating activities. In particular, like others in the construction supply and services industry, the Company is routinely involved in various disputes and claims arising out of construction projects, sometimes involving significant monetary damages or product replacement. The Company is also subject to litigation arising out of areas such as employment practices, workers compensation and general liability matters. Although it is very difficult to accurately predict the outcome of any such proceedings, facts currently available indicate that no matters will result in losses that would have a material adverse effect on the results of operations, cash flows or financial condition of the Company.
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Supplemental Balance Sheet Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Balance Sheet Information | Supplemental Balance Sheet Information Inventories
Other current assets
Other current liabilities
Other non-current liabilities
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Share-Based Compensation (Details 1) - USD ($) |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Nov. 30, 2019 |
Jun. 02, 2018 |
Nov. 30, 2019 |
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| Award transactions on stock options | |||
| Outstanding, Beginning | 100,341 | ||
| Outstanding shares awards exercised | (19,000) | ||
| Outstanding, Ending | 100,341 | 100,341 | |
| Award transactions on stock options, Weighted Average Exercise Price [Roll Forward] | |||
| Weighted average exercise price, Beginning | $ 8.34 | ||
| Weighted average exercise price, Awards exercised | 0 | ||
| Weighted average exercise price, Ending | $ 8.34 | $ 8.34 | |
| Weighted average remaining contractual life, Outstanding | 1 year 9 months 18 days | ||
| Aggregate intrinsic value, Outstanding | $ 3,000,196 | $ 3,000,196 | |
| Deferred Compensation, Share-based Payments [Member] | |||
| Award transactions on stock options | |||
| Outstanding shares awards exercised | 0 | ||
Debt (Details) $ in Millions |
3 Months Ended | 9 Months Ended | |||
|---|---|---|---|---|---|
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Nov. 30, 2019
USD ($)
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Dec. 01, 2018
USD ($)
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Nov. 30, 2019
CAD ($)
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Nov. 30, 2019
USD ($)
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Mar. 02, 2019
USD ($)
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| Line of Credit Facility [Line Items] | |||||
| Term Loan | $ 150,000,000 | ||||
| Interest payments | $ 7,300,000 | $ 7,200,000 | |||
| Letter of credit | |||||
| Line of Credit Facility [Line Items] | |||||
| Debt | 24,700,000 | ||||
| Revolving credit facility | |||||
| Line of Credit Facility [Line Items] | |||||
| Total debt outstanding | 251,300,000 | $ 245,800,000 | |||
| Maximum borrowing capacity | $ 12.0 | 235,000,000 | |||
| Outstanding borrowings | $ 0.0 | 80,500,000 | $ 225,000,000.0 | ||
| Industrial Revenue Bonds | |||||
| Line of Credit Facility [Line Items] | |||||
| Debt | 20,400,000 | ||||
| Canada | Industrial Revenue Bonds | |||||
| Line of Credit Facility [Line Items] | |||||
| Debt | $ 400,000 | ||||
Revenue, Receivables and Contract Assets and Liabilities (Details 2) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total receivables | $ 199,831 | $ 197,139 |
| Less: allowance for doubtful accounts | (1,855) | (4,372) |
| Net receivables | 197,976 | 192,767 |
| Trade accounts | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total receivables | 141,448 | 145,693 |
| Construction contracts | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total receivables | 23,096 | 19,050 |
| Contract retainage | ||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
| Total receivables | $ 35,287 | $ 32,396 |
Employee Benefit Plans (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Retirement Benefits [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of net periodic benefit cost | Components of net periodic benefit cost were:
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Acquisition (Details 1) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
Mar. 03, 2018 |
|---|---|---|---|
| Business Acquisition [Line Items] | |||
| Goodwill | $ 185,776 | $ 185,832 | $ 180,956 |
Share-Based Compensation |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation | Share-Based Compensation Total share-based compensation expense included in the results of operations was $4.6 million for the nine-month period ended November 30, 2019 and $4.7 million for the nine-month period ended December 1, 2018. Stock options and SARs Stock option and SAR activity for the current nine-month period is summarized as follows:
No awards were exercised for the nine-months ended November 30, 2019. For the nine-months ended December 1, 2018, cash proceeds from the exercise of stock options were $0.2 million and the aggregate intrinsic value of securities exercised (the amount by which the stock price on the date of exercise exceeded the stock price of the award on the date of grant) was $0.6 million. Nonvested shares and share units Nonvested share activity for the current nine-month period is summarized as follows:
At November 30, 2019, there was $6.9 million of total unrecognized compensation cost related to nonvested share and nonvested share unit awards, which is expected to be recognized over a weighted average period of approximately 20 months. The total fair value of shares vested during the nine months ended November 30, 2019 was $5.1 million.
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Financial Instruments |
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| Marketable Securities [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Financial Instruments | Financial Instruments Marketable securities Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), we hold the following available-for-sale marketable securities, made up of municipal and corporate bonds:
Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements. The amortized cost and estimated fair values of these bonds at November 30, 2019, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.
Derivative instruments In August 2019, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility. As of November 30, 2019, the interest rate swap contract had a notional value of $85 million. We periodically enter into forward purchase foreign currency cash flow hedge contracts, generally with an original maturity date of less than one year, to hedge foreign currency exchange rate risk. As of November 30, 2019, we held foreign exchange forward contracts with a U.S. dollar notional value of $24.7 million, with the objective of reducing the exposure to fluctuations in the Canadian dollar and the Euro. These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income. Fair value measurements Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.
Money market funds and commercial paper Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets. Municipal and corporate bonds Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as other current or other non-current assets based on maturity date. Derivative instruments The interest rate swap is measured at fair value using unobservable market inputs, based off of benchmark interest rates. Forward foreign exchange contracts are measured at fair value using unobservable market inputs, such as quotations on forward foreign exchange points and foreign currency exchange rates. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates.
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Commitments and Contingent Liabilities (Details 1) - USD ($) $ in Thousands |
9 Months Ended | |
|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Guarantees and warranties | ||
| Balance at beginning of period | $ 16,737 | $ 22,517 |
| Additional accruals | 5,996 | 3,437 |
| Claims paid | (7,807) | (8,398) |
| Balance at end of period | $ 14,926 | $ 17,556 |
Share-Based Compensation (Details 2) |
9 Months Ended |
|---|---|
|
Nov. 30, 2019
$ / shares
shares
| |
| Nonvested share award transactions | |
| Nonvested Number, Beginning | shares | 286,613 |
| Number of shares, Granted | shares | 125,571 |
| Number of shares, Vested | shares | (128,333) |
| Number of shares, Canceled | shares | (3,000) |
| Nonvested Number, Ending | shares | 280,851 |
| Nonvested share award transactions, Weighted Average Grant Date Fair Value [Roll Forward] | |
| Weighted average grant date fair value, Beginning | $ / shares | $ 47.00 |
| Weighted average grant date fair value, Granted | $ / shares | 39.53 |
| Weighted average grant date fair value, Vested | $ / shares | 49.00 |
| Weighted average grant date fair value, Canceled | $ / shares | 43.08 |
| Weighted average grant date fair value, Ending | $ / shares | $ 42.78 |
Leases (Details 1) $ in Thousands |
9 Months Ended |
|---|---|
|
Nov. 30, 2019
USD ($)
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| Leases [Abstract] | |
| Cash paid for amounts included in the measurement of operating lease liabilities | $ 10,335 |
| Lease assets obtained in exchange for new operating lease liabilities | $ 15,948 |
| Weighted-average remaining lease term - operating leases | 5 years 10 months 24 days |
| Weighted-average discount rate - operating leases | 3.57% |
Earnings per Share (Details) - shares shares in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
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| Reconciliation of basic and diluted earnings per share | ||||
| Basic earnings per share – weighted average common shares outstanding | 26,432 | 27,836 | 26,481 | 28,030 |
| Weighted average effect of nonvested share grants and assumed exercise of stock options | 318 | 320 | 295 | 274 |
| Diluted earnings per share – weighted average common shares and potential common shares outstanding | 26,750 | 28,156 | 26,776 | 28,304 |
| Stock awards excluded from the calculation of earnings per share because the effect was anti-dilutive (award price greater than average market price of the shares) | 152 | 170 | 152 | 92 |
Financial Instruments (Details 3) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Money market funds | $ 2,680 | $ 2,015 |
| Commercial paper | 500 | 300 |
| Municipal and corporate bonds | 12,384 | 12,432 |
| Foreign currency forward/option contract | 69 | 470 |
| Interest rate swap contract | 16 | |
| Quoted Prices in Active Markets (Level 1) | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Money market funds | 2,680 | 2,015 |
| Commercial paper | 0 | 0 |
| Municipal and corporate bonds | 0 | 0 |
| Other Observable Inputs (Level 2) | ||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
| Money market funds | 0 | 0 |
| Commercial paper | 500 | 300 |
| Municipal and corporate bonds | 12,384 | 12,432 |
| Foreign currency forward/option contract | 69 | $ 470 |
| Interest rate swap contract | $ 16 |
Revenue, Receivables and Contract Assets and Liabilities (Details 4) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
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| Revenue from Contract with Customer [Abstract] | ||||
| Revenue recognized related to contract liabilities from prior year-end | $ 4,589 | $ 0 | $ 22,044 | $ 10,398 |
| Revenue recognized related to prior satisfaction of performance obligations | $ 1,776 | $ 1,470 | $ 5,298 | $ 3,798 |
Supplemental Balance Sheet Information - Other current liabilities (Details) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Warranties | $ 10,601 | $ 12,475 |
| Accrued project losses | 47,562 | 37,085 |
| Property and other taxes | 7,156 | 8,026 |
| Accrued self-insurance reserves | 9,297 | 9,537 |
| Other | 33,865 | 25,573 |
| Total other current liabilities | $ 108,481 | $ 92,696 |
Supplemental Balance Sheet Information (Tables) |
9 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Inventory Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Components of inventories | Inventories
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| Other current assets | Other current assets
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| Other non-current liabilities | Other non-current liabilities
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Segment Information |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Information | Segment Information The Company has four reporting segments: Architectural Framing Systems, Architectural Glass, Architectural Services and Large-Scale Optical (LSO).
Due to the varying combinations and integration of individual window, storefront and curtainwall systems, it is impractical to report product revenues generated by class of product, beyond the segment revenues currently reported.
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Share-Based Compensation (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Award transactions on stock options | Stock option and SAR activity for the current nine-month period is summarized as follows:
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| Nonvested share award transactions | Nonvested share activity for the current nine-month period is summarized as follows:
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Consolidated Statement of Shareholders Equity (unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 |
Aug. 31, 2019 |
Jun. 01, 2019 |
Dec. 01, 2018 |
Sep. 01, 2018 |
Jun. 02, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Statement of Stockholders' Equity [Abstract] | ||||||||
| Tax expense (benefit) on marketable securities | $ (11) | $ 2 | $ 47 | $ (16) | $ (11) | $ 2 | $ 38 | $ (25) |
| Tax expense (benefit) on foreign currency hedge | $ (119) | $ (25) | $ (2) | $ (10) | $ 17 | $ 92 | $ (146) | $ 99 |
Consolidated Statements of Comprehensive Earnings (unaudited) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Statement of Comprehensive Income [Abstract] | ||||
| Net earnings | $ 15,234 | $ 21,891 | $ 49,956 | $ 57,778 |
| Other comprehensive (loss) earnings: | ||||
| Unrealized gain (loss) on marketable securities, net of tax expense (benefit) | (44) | (58) | 145 | (90) |
| Unrealized gain (loss) on derivative instruments, net of $119, $10, $146 and ($99) of tax expense (benefit), respectively | 387 | 32 | 476 | (327) |
| Foreign currency translation adjustments | (491) | (3,621) | (586) | (7,518) |
| Other comprehensive (loss) earnings | (148) | (3,647) | 35 | (7,935) |
| Total comprehensive earnings | $ 15,086 | $ 18,244 | $ 49,991 | $ 49,843 |
Income Taxes |
9 Months Ended |
|---|---|
Nov. 30, 2019 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | Income Taxes The Company files income tax returns in the U.S. federal jurisdiction, various U.S. state jurisdictions, Canada, Brazil and other international jurisdictions. The Company is no longer subject to U.S. federal tax examinations for years prior to fiscal 2017, or state and local income tax examinations for years prior to fiscal 2013. The Company is not currently under U.S. federal examination for years subsequent to fiscal year 2016, and there is limited audit activity of the Company’s income tax returns in U.S. state jurisdictions or international jurisdictions. The total liability for unrecognized tax benefits was approximately $5.2 million at November 30, 2019 and $5.1 million at March 2, 2019. Penalties and interest related to unrecognized tax benefits are recorded in income tax expense. The total liability for unrecognized tax benefits is expected to decrease by approximately $0.4 million during the next 12 months due to lapsing of statutes.
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Debt |
9 Months Ended |
|---|---|
Nov. 30, 2019 | |
| Debt Disclosure [Abstract] | |
| Debt | Debt As of November 30, 2019, our total debt outstanding was $251.3 million, compared to $245.8 million as of March 2, 2019. During the second quarter of fiscal 2020, we amended the borrowing capacity of our prior credit facility to $235 million with a maturity of June 2024 and we established a $150 million term loan with a maturity of June 2020. Outstanding borrowings under the revolving credit facility were $80.5 million, as of November 30, 2019, and $225.0 million, as of March 2, 2019. Our revolving credit facility and term loan contains two financial covenants that require us to stay below a maximum debt-to-EBITDA ratio and maintain a minimum ratio of interest expense-to-EBITDA. Both ratios are computed quarterly, with EBITDA calculated on a rolling four-quarter basis. At November 30, 2019, we were in compliance with both financial covenants. Additionally, at November 30, 2019, we had a total of $24.7 million of ongoing letters of credit related to industrial revenue bonds, construction contracts and insurance collateral that expire in fiscal years 2021 to 2032 and reduce borrowing capacity under the revolving credit facility. At November 30, 2019, debt included $20.4 million of industrial revenue bonds that mature in fiscal years 2021 through 2043 and $0.4 million of long-term debt in Canada. The fair value of the industrial revenue bonds approximated carrying value at November 30, 2019, due to the variable interest rates on these instruments. All debt would be classified as Level 2 within the fair value hierarchy described in Note 4. We also maintain two Canadian demand credit facilities totaling $12.0 million Canadian dollars. As of November 30, 2019 and March 2, 2019, no borrowings were outstanding under the facilities. Borrowings under these facilities are made available at the sole discretion of the lenders and are payable on demand. Interest payments were $7.3 million and $7.2 million for the nine months ended November 30, 2019 and December 1, 2018, respectively.
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Revenue, Receivables and Contract Assets and Liabilities |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue, Receivables and Contract Assets and Liabilities | Revenue, Receivables and Contract Assets and Liabilities Revenue The following table disaggregates total revenue by timing of recognition (see Note 13 for disclosure of revenue by segment):
Receivables Trade and construction accounts receivable consist of amounts billed and due from customers. The amounts due are stated at their estimated net realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. This allowance is based on an assessment of customer creditworthiness, historical payment experience and the age of outstanding receivables. Retainage on construction contracts represents amounts withheld by our customers on long-term projects until the project reaches a level of completion where amounts are released.
Contract assets and liabilities Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to the customer. Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts. Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our consolidated balance sheets. The time period between when performance obligations are complete and when payment is due is not significant. In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values, and retainage is withheld by the customer until the project reaches a level of completion where amounts are released.
The increase in contract assets was due to timing of costs incurred in advance of billings, primarily on a legacy EFCO project. The change in contract liabilities was due to timing of project activity within our businesses that operate under long-term contracts.
Some of our contracts have an expected duration of longer than a year, with performance obligations extending over that timeframe. Generally these contracts are in our businesses with long-term contracts which recognize revenue over time. As of November 30, 2019, the transaction price associated with unsatisfied performance obligations was approximately $896.7 million. The performance obligations are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:
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Segment Information (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Nov. 30, 2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Sales and operating income data |
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Summary of Significant Accounting Policies (Details 3) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 03, 2019 |
Mar. 02, 2019 |
|---|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
| Operating lease assets | $ 56,315 | $ 50,000 | $ 0 |
| Operating lease liabilities | $ 57,908 | $ 50,000 |
Commitments and Contingent Liabilities (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Nov. 30, 2019 |
Mar. 02, 2019 |
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Face value of performance bonds | $ 833,900 | |
| Companies Backlog Related to Sales | 432,600 | |
| Line of Credit Facility [Line Items] | ||
| Project related liability | 47,600 | $ 42,800 |
| Project Related Liability QTD | 14,700 | |
| Insurance receivable | 15,000 | $ 0 |
| Purchase obligations | 146,000 | |
| Industrial Revenue Bonds | ||
| Line of Credit Facility [Line Items] | ||
| Debt | $ 20,400 |
Goodwill and Other Identifiable Intangible Assets (Details Textual) - USD ($) $ in Millions |
9 Months Ended | |
|---|---|---|
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Goodwill and Other Identifiable Intangible Assets (Textual) [Abstract] | ||
| Amortization expense on identifiable intangible assets | $ 5.7 | $ 10.5 |
Leases (Details 4) $ in Thousands |
Mar. 02, 2019
USD ($)
|
|---|---|
| Leases [Abstract] | |
| 2020 | $ 14,888 |
| 2021 | 11,787 |
| 2022 | 9,669 |
| 2023 | 8,772 |
| 2024 | 6,735 |
| Thereafter | 16,806 |
| Total | $ 68,657 |
Supplemental Balance Sheet Information - Components of inventories (Details) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Raw materials | $ 39,746 | $ 43,890 |
| Work-in-process | 19,255 | 15,533 |
| Finished goods | 16,790 | 18,921 |
| Total inventories | $ 75,791 | $ 78,344 |
Financial Instruments (Details) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Debt Securities, Available-for-sale [Line Items] | ||
| Amortized Cost | $ 11,750 | |
| Estimated Fair Value | 11,884 | |
| Municipal and Corporate Bonds | ||
| Debt Securities, Available-for-sale [Line Items] | ||
| Amortized Cost | 11,750 | $ 12,481 |
| Gross Unrealized Gains | 152 | 59 |
| Gross Unrealized Losses | 18 | 108 |
| Estimated Fair Value | $ 11,884 | $ 12,432 |
Leases (Details 3) $ in Thousands |
3 Months Ended | 9 Months Ended |
|---|---|---|
|
Nov. 30, 2019
USD ($)
|
Nov. 30, 2019
USD ($)
|
|
| Lessee, Lease, Description [Line Items] | ||
| Lease cost | $ 4,715 | $ 14,137 |
| Lease payments | $ 64,603 | $ 64,603 |
Employee Benefit Plans (Details) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
|---|---|---|---|---|
|
Nov. 30, 2019
USD ($)
|
Dec. 01, 2018
USD ($)
|
Nov. 30, 2019
USD ($)
plan
|
Dec. 01, 2018
USD ($)
|
|
| Retirement Benefits [Abstract] | ||||
| Number of defined-benefit pension plans | plan | 2 | |||
| Components of net periodic benefit cost | ||||
| Interest cost | $ 123 | $ 127 | $ 369 | $ 381 |
| Expected return on assets | (46) | (10) | (138) | (30) |
| Amortization of unrecognized net loss | 55 | 57 | 165 | 171 |
| Net periodic benefit cost | $ 132 | $ 174 | $ 396 | $ 522 |
Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Statement of Financial Position [Abstract] | ||
| Common stock, par value | $ 0.33 | $ 0.33 |
| Common stock, shares authorized | 50,000,000 | 50,000,000 |
| Common stock, shares issued | 26,552,935 | 27,015,127 |
| Common stock, shares outstanding | 26,552,935 | 27,015,127 |
Goodwill and Other Identifiable Intangible Assets (Tables) |
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| Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of goodwill attributable to each business segment | The carrying amount of goodwill attributable to each reporting segment was:
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| Schedule of finite lived intangible assets | The gross carrying amount of other intangible assets and related accumulated amortization was:
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| Schedule of estimated future amortization expense for identifiable intangible assets | At November 30, 2019, the estimated future amortization expense for definite-lived intangible assets was:
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Summary of Significant Accounting Policies (Tables) |
9 Months Ended |
|---|---|
Nov. 30, 2019 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Impact of new accounting guidance | Adoption of new accounting standards At the beginning of fiscal 2020, we adopted the guidance in ASC 842, Leases, following a modified retrospective approach and elected not to restate prior periods. Adoption of the new standard resulted in recording operating lease assets and liabilities of approximately $50 million as of March 3, 2019 and did not materially impact our consolidated net earnings and cash flows. Refer to additional information in Note 7.
|
Supplemental Balance Sheet Information - Other current assets (Details) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 02, 2019 |
|---|---|---|
| Inventory Disclosure [Abstract] | ||
| Prepaid assets | $ 11,662 | $ 11,682 |
| Insurance receivable | 15,000 | 0 |
| Refundable income taxes | 4,278 | 0 |
| Other | 9,395 | 4,769 |
| Total other current assets | $ 40,335 | $ 16,451 |
Financial Instruments (Details 2) $ in Thousands |
Nov. 30, 2019
USD ($)
|
|---|---|
| Amortized Cost | |
| Due within one year | $ 835 |
| Due after one year through five years | 8,581 |
| Due after five years through 10 years | 2,259 |
| Due after 10 years through 15 years | 0 |
| Due beyond 15 years | 75 |
| Total | 11,750 |
| Estimated Fair Value | |
| Due within one year | 837 |
| Due after one year through five years | 8,710 |
| Due after five years through 10 years | 2,262 |
| Due after 10 years through 15 years | 0 |
| Due beyond 15 years | 75 |
| Total | $ 11,884 |
Segment Information Segment Information (Details Textual) |
9 Months Ended |
|---|---|
|
Nov. 30, 2019
Segment
Reportable_Segment
| |
| Segment Reporting [Abstract] | |
| Number of Reportable Segments | Segment | 4 |
| Number of Operating Segments | Reportable_Segment | 6 |
Share-Based Compensation (Details Textual) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | |
|---|---|---|---|
Nov. 30, 2019 |
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Share-based Payment Arrangement, Noncash Expense | $ 4,617 | $ 4,724 | |
| Cash proceeds from exercise of stock options | 200 | ||
| Aggregate intrinsic value of securities | $ 600 | ||
| Total unrecognized compensation cost related to nonvested share | $ 6,900 | 6,900 | |
| Restricted Stock [Member] | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Weighted average period, Nonvested | 20 months | ||
| Total fair value of shares vested | $ 5,100 | ||
Leases (Details 2) - USD ($) $ in Thousands |
Nov. 30, 2019 |
Mar. 03, 2019 |
|---|---|---|
| Leases [Abstract] | ||
| Remainder of Fiscal 2020 | $ 3,366 | |
| Fiscal 2021 | 12,880 | |
| Fiscal 2022 | 11,256 | |
| Fiscal 2023 | 10,307 | |
| Fiscal 2024 | 8,147 | |
| Fiscal 2025 | 6,290 | |
| Thereafter | 12,357 | |
| Total lease payments | 64,603 | |
| Less: Amounts representing interest | (6,695) | |
| Present value of lease liabilities | $ 57,908 | $ 50,000 |
Consolidated Statements of Comprehensive Earnings (Unaudited) (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||||||
|---|---|---|---|---|---|---|---|---|
Nov. 30, 2019 |
Aug. 31, 2019 |
Jun. 01, 2019 |
Dec. 01, 2018 |
Sep. 01, 2018 |
Jun. 02, 2018 |
Nov. 30, 2019 |
Dec. 01, 2018 |
|
| Statement of Comprehensive Income [Abstract] | ||||||||
| Tax (benefit) expense on marketable securities | $ (11) | $ 2 | $ 47 | $ (16) | $ (11) | $ 2 | $ 38 | $ (25) |
| Tax expense (benefit) on foreign currency hedge | $ (119) | $ (25) | $ (2) | $ (10) | $ 17 | $ 92 | $ (146) | $ 99 |
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