UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_________________________________ 

FORM 10-Q

 _________________________________

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended November 30, 2019

☐ TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission File Number: 0-6365

_________________________________ 

APOGEE ENTERPRISES, INC.

(Exact name of registrant as specified in its charter)

 _________________________________

Minnesota			41-0919654
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
4400 West 78th Street, Suite 520	Minneapolis	Minnesota	55435
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code: (952) 835-1874

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

_________________________________ 

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.33 1/3 per share	APOG	NASDAQ Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    o  No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     x  Yes    o  No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	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.			☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    ☐  Yes    x  No

As of January 7, 2020, 26,507,935 shares of the registrant’s common stock, par value $0.33 1/3 per share, were outstanding.

APOGEE ENTERPRISES, INC. AND SUBSIDIARIES

		Page
PART I	Financial Information
Item 1.	Financial Statements (Unaudited):
	Consolidated Balance Sheets	4
	Consolidated Results of Operations	5
	Consolidated Statements of Comprehensive Earnings	6
	Consolidated Statements of Cash Flows	7
	Consolidated Statements of Shareholders' Equity	8
	Notes to Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	24
Item 4.	Controls and Procedures	24
PART II	Other Information
Item 1.	Legal Proceedings	24
Item 1A.	Risk Factors	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	25
Item 6.	Exhibits	25
Signatures		26

3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

CONSOLIDATED BALANCE SHEETS

(unaudited)

In thousands, except stock data	November 30, 2019			March 2, 2019
Assets
Current assets
Cash and cash equivalents	$	10,129		$	17,087
Restricted cash	401			12,154
Receivables, net of allowance for doubtful accounts	197,976			192,767
Inventories	75,791			78,344
Costs and earnings on contracts in excess of billings	72,284			55,095
Other current assets	40,335			16,451
Total current assets	396,916			371,898
Property, plant and equipment, net	326,418			315,823
Operating lease right-of-use assets	56,315			—
Goodwill	185,776			185,832
Intangible assets	142,779			148,235
Other non-current assets	41,587			46,380
Total assets	$	1,149,791		$	1,068,168
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable	$	66,557		$	72,219
Accrued payroll and related benefits	33,339			41,119
Billings on contracts in excess of costs and earnings	26,366			21,478
Operating lease liabilities	9,399			—
Current portion of debt	155,400			—
Other current liabilities	108,481			92,696
Total current liabilities	399,542			227,512
Long-term debt	95,856			245,724
Non-current operating lease liabilities	48,509			—
Non-current self-insurance reserves	25,260			21,433
Other non-current liabilities	65,645			77,182
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	8,851			9,005
Additional paid-in capital	153,188			151,842
Retained earnings	385,032			367,597
Common stock held in trust	(675		)	(755		)
Deferred compensation obligations	675			755
Accumulated other comprehensive loss	(32,092		)	(32,127		)
Total shareholders’ equity	514,979			496,317
Total liabilities and shareholders’ equity	$	1,149,791		$	1,068,168

See accompanying notes to consolidated financial statements.

4

CONSOLIDATED RESULTS OF OPERATIONS

(unaudited)

	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	$	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	$	0.58	$	0.79	$	1.89	$	2.06
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

See accompanying notes to consolidated financial statements.

5

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

(unaudited)

	Three Months Ended						Nine Months Ended
In thousands	November 30, 2019			December 1, 2018			November 30, 2019			December 1, 2018
Net earnings	$	15,234		$	21,891		$	49,956		$	57,778
Other comprehensive (loss) earnings:
Unrealized (loss) gain on marketable securities, net of ($11), ($16), $38 and ($25) of tax (benefit) expense, respectively	(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

See accompanying notes to consolidated financial statements.

6

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Nine Months Ended
In thousands	November 30, 2019			December 1, 2018
Operating Activities
Net earnings	$	49,956		$	57,778
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization	34,681			38,378
Share-based compensation	4,617			4,724
Deferred income taxes	10,088			10,600
Gain on disposal of assets	(623		)	(2,499		)
Proceeds from New Markets Tax Credit transaction, net of deferred costs	—			8,850
Noncash lease expense	1,525			—
Other, net	(2,007		)	(799		)
Changes in operating assets and liabilities:
Receivables	(5,288		)	9,291
Inventories	2,474			4,398
Costs and earnings on contracts in excess of billings	(17,156		)	(54,569		)
Accounts payable and accrued expenses	(22,457		)	(20,072		)
Billings on contracts in excess of costs and earnings	4,901			14,558
Refundable and accrued income taxes	(6,159		)	1,831
Other	(951		)	(1,825		)
Net cash provided by operating activities	53,601			70,644
Investing Activities
Capital expenditures	(41,176		)	(33,867		)
Proceeds from sales of property, plant and equipment	591			12,332
Purchases of marketable securities	(4,201		)	(9,006		)
Sales/maturities of marketable securities	4,867			5,813
Other	(1,523		)	(2,209		)
Net cash used by investing activities	(41,442		)	(26,937		)
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		)
Other	(2,584		)	(1,178		)
Net cash used by financing activities	(30,902		)	(21,171		)
(Decrease) increase in cash and cash equivalents	(18,743		)	22,536
Effect of exchange rates on cash	32			(498		)
Cash, cash equivalents and restricted cash at beginning of year	29,241			19,359
Cash, cash equivalents and restricted cash at end of period	$	10,530		$	41,397
Noncash Activity
Capital expenditures in accounts payable	$	1,205		$	5,771

See accompanying notes to consolidated financial statements.

7

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)

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	27,015		$	9,005		$	151,842		$	367,597		$	(755	)	$	755		$	(32,127	)
Net earnings	—		—			—			15,443			—			—			—
Unrealized gain on marketable securities, net of $47 tax expense	—		—			—			—			—			—			181
Unrealized gain on foreign currency hedge, net of $2 tax expense	—		—			—			—			—			—			5
Foreign currency translation adjustments	—		—			—			—			—			—			(2,560		)
Issuance of stock, net of cancellations	79		26			14			—			(12		)	12			—
Share-based compensation	—		—			1,618			—			—			—			—
Share repurchases	(532	)	(177		)	(3,051		)	(16,782		)	—			—			—
Other share retirements	(32	)	(11		)	(183		)	(1,266		)	—			—			—
Cash dividends	—		—			—			(4,598		)	—			—			—
Balance at June 1, 2019	26,530		$	8,843		$	150,240		$	360,394		$	(767	)	$	767		$	(34,501	)
Net earnings	—		—			—			19,279			—			—			—
Unrealized gain on marketable securities, net of $2 tax expense	—		—			—			—			—			—			8
Unrealized gain on foreign currency hedge, net of $25 tax expense	—		—			—			—			—			—			84
Foreign currency translation adjustments	—		—			—			—			—			—			2,465
Issuance of stock, net of cancellations	44		15			27			—			(11		)	11			—
Share-based compensation	—		—			1,582			—			—			—			—
Other share retirements	(20	)	(7		)	(114		)	(629		)	—			—			—
Cash dividends	—		—			—			(4,605		)	—			—			—
Balance at August 31, 2019	26,554		$	8,851		$	151,735		$	374,439		$	(778	)	$	778		$	(31,944	)
Net earnings	—		—			—			15,234			—			—			—
Unrealized loss on marketable securities, net of $11 tax benefit	—		—			—			—			—			—			(44		)
Unrealized gain on foreign currency hedge, net of $119 tax expense	—		—			—			—			—			—			387
Foreign currency translation adjustments	—		—			—			—			—			—			(491		)
Issuance of stock, net of cancellations	(1	)	1			43			—			103			(103		)	—
Share-based compensation	—		—			1,417			—			—			—			—
Other share retirements	—		(1		)	(7		)	(36		)	—			—			—
Cash dividends	—		—			—			(4,605		)	—			—			—
Balance at November 30, 2019	26,553		$	8,851		$	153,188		$	385,032		$	(675	)	$	675		$	(32,092	)

See accompanying notes to consolidated financial statements.

8

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(unaudited)

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	28,158		$	9,386		$	152,763		$	373,259		$	(922	)	$	922		$	(24,053	)
Cumulative effect adjustment	—		—			—			2,999			—			—			—
Reclassification of tax effects	—		—			—			737			—			—			(737		)
Net earnings	—		—			—			15,373			—			—			—
Unrealized gain on marketable securities, net of $2 tax expense	—		—			—			—			—			—			10
Unrealized loss on foreign currency hedge, net of $92 tax benefit	—		—			—			—			—			—			(304		)
Foreign currency translation adjustments	—		—			—			—			—			—			(517		)
Issuance of stock, net of cancellations	90		30			35			—			91			(91		)	—
Share-based compensation	—		—			1,514			—			—			—			—
Exercise of stock options	19		6			177			—			—			—			—
Other share retirements	(41	)	(13		)	(228		)	(1,440		)	—			—			—
Cash dividends	—		—			—			(4,410		)	—			—			—
Balance at June 2, 2018	28,226		$	9,409		$	154,261		$	386,518		$	(831	)	$	831		$	(25,601	)
Net earnings	—		—			—			20,514			—			—			—
Unrealized loss on marketable securities, net of $11 tax benefit	—		—			—			—			—			—			(42		)
Unrealized loss on foreign currency hedge, net of $17 tax benefit	—		—			—			—			—			—			(55		)
Foreign currency translation adjustments	—		—			—			—			—			—			(3,383		)
Issuance of stock, net of cancellations	35		12			37			—			(11		)	11			—
Share-based compensation	—		—			1,605			—			—			—			—
Other share retirements	(1	)	(1		)	(5		)	—			—			—			—
Cash dividends	—		—			—			(4,413		)	—			—			—
Balance at September 1, 2018	28,260		$	9,420		$	155,898		$	402,619		$	(842	)	$	842		$	(29,081	)
Net earnings	—		—			—			21,891			—			—			—
Unrealized loss on marketable securities, net of $16 tax benefit	—		—			—			—			—			—			(58		)
Unrealized gain on foreign currency hedge, net of $10 tax expense	—		—			—			—			—			—			32
Foreign currency translation adjustments	—		—			—			—			—			—			(3,622		)
Issuance of stock, net of cancellations	—		—			54			—			97			(97		)	—
Share-based compensation	—		—			1,605			—			—			—			—
Share repurchases	(600	)	(200		)	(3,436		)	(19,677		)	—			—			—
Other share retirements	(4	)	(1		)	(26		)	(187		)	—			—			—
Cash dividends	—		—			—			(4,357		)	—			—			—
Balance at December 1, 2018	27,656		$	9,219		$	154,095		$	400,289		$	(745	)	$	745		$	(32,729	)

See accompanying notes to consolidated financial statements.

9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. Summary of Significant Accounting Policies

Basis of presentation

The consolidated financial statements of Apogee Enterprises, Inc. (we, us, our or the Company) have been prepared in accordance with accounting principles generally accepted in the United States. The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended March 2, 2019. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly operating results are reflected herein and are of a normal, recurring nature. The results of operations for the nine-month period ended November 30, 2019 are not necessarily indicative of the results to be expected for the full year.

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.

Accounting standards not yet adopted

In June 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments, which revises guidance for the accounting for credit losses on financial instruments within its scope. The new standard introduces an approach based on expected losses, to estimate credit losses on certain types of financial instruments and modifies the impairment model for available-for-sale debt securities. This ASU is effective for our fiscal year 2021. Entities are required to apply the standard's provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. We do not expect the adoption of this ASU to have a significant impact on our consolidated financial statements.

Subsequent events

We have evaluated subsequent events for potential recognition and disclosure through the date of this filing and determined that there were no subsequent events that required recognition or disclosure in the consolidated financial statements.

2. 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):

	Three Months Ended				Nine Months Ended
In thousands	November 30, 2019		December 1, 2018		November 30, 2019		December 1, 2018
Recognized at shipment	$	153,093	$	158,164	$	472,695	$	481,565
Recognized over time	184,823		199,554		577,645		574,817
Total	$	337,916	$	357,718	$	1,050,340	$	1,056,382

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.

In thousands	November 30, 2019			March 2, 2019
Trade accounts	$	141,448		$	145,693
Construction contracts	23,096			19,050
Contract retainage	35,287			32,396
Total receivables	199,831			197,139
Less: allowance for doubtful accounts	(1,855		)	(4,372		)
Net receivables	$	197,976		$	192,767

10

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.

In thousands	November 30, 2019		March 2, 2019
Contract assets	$	107,571	$	87,491
Contract liabilities	28,863		24,083

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.

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	$	4,589	$	—	$	22,044	$	10,398
Revenue recognized related to prior satisfaction of performance obligations	1,776		1,470		5,298		3,798

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:

In thousands	November 30, 2019
Within one year	$	480,803
Within two years	344,827
Beyond	71,044
Total	$	896,674

3. Supplemental Balance Sheet Information

Inventories

In thousands	November 30, 2019		March 2, 2019
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

Other current assets

In thousands	November 30, 2019		March 2, 2019
Prepaid assets	$	11,662	$	11,682
Insurance receivable	15,000		—
Refundable income taxes	4,278		—
Other	9,395		4,769
Total other current assets	$	40,335	$	16,451

11

Other current liabilities

In thousands	November 30, 2019		March 2, 2019
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

Other non-current liabilities

In thousands	November 30, 2019		March 2, 2019
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

4. 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: 

In thousands	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses		Estimated Fair Value
November 30, 2019	$	11,750	$	152	$	18	$	11,884
March 2, 2019	12,481		59		108		12,432

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. 

In thousands	Amortized Cost		Estimated Fair Value
Due within one year	$	835	$	837
Due after one year through five years	8,581		8,710
Due after five years through 10 years	2,259		2,262
Due after 10 years through 15 years	—		—
Due beyond 15 years	75		75
Total	$	11,750	$	11,884

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

12

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.

In thousands	Quoted Prices in Active Markets (Level 1)		Other Observable Inputs (Level 2)		Total Fair Value
November 30, 2019
Assets:
Money market funds	$	2,680	$	—	$	2,680
Commercial paper	—		500		500
Municipal and corporate bonds	—		12,384		12,384
Liabilities:
Foreign currency forward/option contract	—		69		69
Interest rate swap contract	—		16		16
March 2, 2019
Assets:
Money market funds	$	2,015	$	—	$	2,015
Commercial paper	—		300		300
Municipal and corporate bonds	—		12,432		12,432
Liabilities:
Foreign currency forward/option contract	—		470		470

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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5. Goodwill and Other Identifiable Intangible Assets

The carrying amount of goodwill attributable to each reporting segment was:  

In thousands	Architectural Framing Systems			Architectural Glass			Architectural Services		Large-Scale Optical		Total
Balance at March 3, 2018	$	143,308		$	25,971		$	1,120	$	10,557	$	180,956
Goodwill adjustments for purchase accounting	6,267			—			—		—		6,267
Foreign currency translation	(1,129		)	(262		)	—		—		(1,391		)
Balance at March 2, 2019	148,446