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Income Taxes
 12 Months Ended
Feb. 28, 2026
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
Earnings before income taxes consisted of the following:
(In thousands)202620252024
United States$83,038 $111,029 $133,185 
International(5,582)1,545 (3,932)
Earnings before income taxes$77,456 $112,574 $129,253 
The components of income tax expense (benefit) for each of the last three fiscal years are as follows:
(In thousands)202620252024
Current
Federal$5,966 $19,979 $32,900 
State and local752 3,546 6,172 
International1,550 (586)286 
Total current8,268 22,939 39,358 
Deferred
Federal13,611 3,190 (8,361)
State and local3,224 691 (1,387)
International(1,352)(45)— 
Total deferred15,483 3,836 (9,748)
Total non-current tax expense
(426)747 30 
Total income tax expense$23,325 $27,522 $29,640 
Income tax payments, net of refunds, were $4.1 million, $29.6 million and $33.0 million in fiscal 2026, 2025 and 2024, respectively.
2026
Federal$2,000 
State and local
    New York352 
    Texas349 
    New York City279 
    Other state and local848 
International
    Brazil318 
    Other international— 
Total$4,146 
In accordance with our prospective adoption of ASU 2023-09, the following presents a reconciliation of the U.S. federal statutory income tax rate to Apogee's worldwide effective income tax rate for fiscal year ended February 28, 2026:
2026
(In thousands)AmountPercent
 Federal statutory income tax rate$16,266 21.0 %
State and local income taxes, net of federal tax benefit (1)
3,005 3.9 
Foreign tax effects (Canada):
Cancellation of debt income1,135 1.5 
Other235 0.3 
Effect of cross border tax laws (598)(0.8)
Tax credits(427)(0.6)
Changes in valuation allowance350 0.5 
Nontaxable or non-deductible items885 1.1 
Changes in unrecognized tax benefits(427)(0.6)
Other adjustments:
Return to provision2,140 2.8 
Other761 1.0 
Consolidated effective tax rate$23,325 30.1 %
(1)
State and local taxes in Illinois, New York, and New York City made up the majority (greater than 50 percent) of the tax effect in this category.
For the fiscal years ended March 1, 2025, and March 2, 2024, a reconciliation of the federal statutory income tax rate to Apogee's worldwide effective income tax rate is provided below:
20252024
Federal statutory income tax rate21.0 %21.0 %
State and local income taxes, net of federal tax benefit2.9 2.4 
Foreign tax rate differential(0.8)(0.2)
Valuation allowance(0.3)1.0 
Deduction for foreign derived intangible income(0.4)(0.3)
Research & development tax credit(1.5)(1.3)
§162(m) Executive Compensation Limitation3.4 0.8 
Tax benefit of share based awards(1.0)(0.6)
Other, net1.1 0.1 
Consolidated effective income tax rate24.4 %22.9 %
The consolidated effective tax rate for fiscal 2026 increased 5.7 percentage points from fiscal 2025, primarily due to an increase in tax expense on discrete items in fiscal 2026. The consolidated effective tax rate for fiscal 2025 increased 1.5 percentage points from fiscal 2024, primarily due to an increase in taxes for nondeductible executive compensation. On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law in the United States, introducing a wide array of tax reform measures. These include extensions and modifications to certain provisions originally enacted under the Tax Cuts and Jobs Act. OBBBA did not have a material effect on the Company’s effective tax rate for fiscal year 2026.
Deferred tax assets and deferred tax liabilities at February 28, 2026 and March 1, 2025 were:
(In thousands)20262025
Deferred tax assets
Accrued expenses$4,316 $3,743 
Deferred compensation5,629 9,794 
Section 174 capitalized costs— 15,675 
Operating lease liabilities11,356 14,898 
Net operating losses and tax credits6,470 11,679 
Other12,712 10,443 
(In thousands)20262025
Total deferred tax assets40,483 66,232 
Less: valuation allowance(9,115)(9,582)
Deferred tax assets, net of valuation allowance31,368 56,650 
Deferred tax liabilities
Depreciation25,033 22,401 
Operating lease, right-of-use assets10,289 13,605 
Other10,487 13,405 
Total deferred tax liabilities45,809 49,411 
Net deferred tax (liabilities) assets$(14,441)$7,239 
The Company has state and foreign net operating loss carryforwards with a tax effect of $6.4 million. A valuation allowance of $3.6 million has been established for these net operating loss carryforwards due to the uncertainty of the use of the tax benefits in future periods.
Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing Deferred Tax Assets (DTAs). This has resulted in valuation allowances being recorded against DTAs in prior years in Brazil, Canada and various states.
The Company files income tax returns in the U.S. (federal and certain states), Canada, Brazil and other international jurisdictions and is generally subject to limited audit activity. The Internal Revenue Service is in the process of conducting a U.S. federal examination for fiscal year 2023.
The Company considers the earnings of its non-U.S. subsidiaries to be indefinitely invested outside of the United States on the basis of estimates that future domestic cash generation will be sufficient to meet future domestic cash needs and specific plans for reinvestment of those subsidiary earnings. Should the Company decide to repatriate the foreign earnings, it would need to adjust the income tax provision in the period it was determined that the earnings will no longer be indefinitely invested outside the U.S.
If we were to prevail on all unrecognized tax benefits recorded, $3.4 million, $3.8 million and $3.3 million for fiscal 2026, 2025 and 2024, respectively, would benefit the effective tax rate. Also included in the balance of unrecognized tax benefits for fiscal 2026, 2025 and 2024 are $0.7 million, $2.2 million, and $1.8 million, respectively, of tax benefits that, if recognized, would result in decreases to deferred taxes.
Penalties and interest related to unrecognized tax benefits are recorded in income tax expense. For fiscal 2026, 2025 and 2024, we accrued penalties and interest related to unrecognized tax benefits of $0.8 million, $1.0 million, and $0.6 million, respectively.
The following table provides a reconciliation of the total amounts of gross unrecognized tax benefits:
(In thousands)202620252024
Gross unrecognized tax benefits at beginning of year$5,967 $5,053 $5,312 
Gross increases in tax positions for prior years4 347 91 
Gross decreases in tax positions for prior years(260)(11)(65)
Gross increases based on tax positions related to the current year212 886 579 
Settlements— — (354)
Statute of limitations expiration(1,844)(308)(510)
Gross unrecognized tax benefits at end of year$4,079 $5,967 $5,053