Apogee Enterprises, Inc.

Good day and thank you for standing by. Welcome to the Q2 2025 Apogee Enterprises Earnings Conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. Please be advised today's conference is being recorded. I would like to turn the call over to your speaker today, Jeff Hibshan, Vice President of Investor Relations. Please go ahead.

Thank you, Kevin. Good morning, everyone, and welcome to Apogee Enterprises' fiscal 2025 second quarter earnings call. With me today are Ty Silberhorn, Apogee's chief executive officer, and Matt Osberg, chief financial officer. I'd like to remind everyone that there are slides to accompany today's remarks. These are available in the investor relations section of Apogee's website. During this call, we will reference certain non-GAAP financial measures. Definitions of these measures and a reconciliation to the nearest gap measures are provided in the earnings release and slide deck we issued this morning. I'd also like to remind everyone that our call will contain forward-looking statements. These reflect management's expectations based on currently available information. Actual results may differ materially. More information about factors that could affect Apogee's business and financial results can be found in today's press release and in our SEC filings. And with that, I will turn the call over to you, Ty.

Thanks, Jeff. Good morning, everyone. I'm very excited to share the highlights from another solid quarter and provide further insights into our recently announced acquisition of UW Solutions. I'll then hand it over to Matt to provide more details on the quarter and our outlook. Let's start with the quarter highlights on page five of our presentation. As we expected, revenue declined compared to last year. Similar to the first quarter, this was partly due to our strategic shift away from less differentiated, lower margin product lines and a reflection of the continued softness in some of the end markets that we serve, particularly non-residential construction. Even with the lower volume, Our team continued to drive strong adjusted operating margin expansion and delivered adjusted EPS growth. Adjusted operating margin was 12.6%, our second consecutive quarter with margins above 12%. And we had exceptionally strong cash flow from operations in the quarter. As you'll see on page seven of our presentation, Results in the quarter were once again led by outperformance from Architectural Glass. The Glass team continues to exceed our expectations due to strong pricing and mix, despite pressure on volume. Architectural Services was also a meaningful contributor to our year-over-year profit gains. Services delivered double-digit sales growth and achieved their sixth consecutive quarter of sequential adjusted operating margin expansion, moving closer to the 7% to 9% target range. Framing Systems and Large Scale Optical both continued to deliver solid profitability despite lower sales volume. And importantly, both segments made progress on key strategic initiatives. Framing Systems made further progress executing Project Fortify, keeping us on track to deliver our cost savings targets. They also continue to improve their service levels while positioning the business to outgrow the market. In LSO, we made continued progress on our capacity expansion project, which we expect to come online during the second half of the fiscal year. Given the strong earnings results in the second quarter, we are increasing our adjusted EPS outlook for the full year as shown on page nine, to a range of $4.90 to $5.20. Our results continue to demonstrate the sustainable operating improvements we've achieved through the execution of our three pillar strategy. Following on the heels of this solid quarter, we were excited to announce our agreement to acquire UW Solutions, which we highlight starting on page 11 of our presentation. Before I get into the specifics of the transaction, I'd like to recognize the team at Apigee that has been directly involved in this process and to bring it across the finish line. UW Solutions is a strong strategic fit for Apigee, and this deal is an example of the focus, patience, and diligence of our M&A process and the supporting teams. This is a business we identified some time ago as a potential fit with our strategy. Our team worked directly with the seller, Heartwood Partners, to find a win-win path that will benefit everyone involved, most importantly, UW's employees and their customers. This deal checks all the boxes we are looking for in an ideal acquisition. It brings differentiated solutions with leading positions in attractive markets. It complements our portfolio while expanding and diversifying our growth opportunities. And it is a strong performing business that will be accretive to our long-term financial profile. UW Solutions operates around three product lines. HD printable materials, which has many similarities to our LSO segment, applies high performance coatings to create premium products for the graphic arts market. Industrial flooring, which applies high-performance coatings to engineered wood used primarily in warehouses, distribution centers, and industrial facilities, and engineered coatings, which formulates and produces a variety of high-performance coatings that are used internally as well as sold to third-party customers for other applications. This acquisition is very well aligned with our strategy to create peak value. UW Solutions is an economic leader in their target markets. They bring differentiated capabilities, well established brands, and leading market positions. They also have an impressive record of execution and profitability with strong EBITDA margins. Adding UW Solutions will complement our current portfolio and expand our offerings into new segments. The Resindeck brand expands our offerings for non-residential construction, providing a meaningful entry into manufacturing, warehousing, and distribution projects with significant exposure to R&R versus new construction. The HD printable materials business accelerates our efforts to grow and diversify LSL's core business. And RDC Coatings brings in R&D capability to drive new product development and enable expansion into new applications and markets. Importantly, the deal will leverage Apigee's core capabilities to drive value through the integration. We will enable cost synergies by leveraging areas like HR, procurement, IT, and finance. And we will deploy the Apigee management system to further enhance the manufacturing operations. As shown on page 17 of our presentation, UW Solutions brings unique capabilities and process technology that are a strong complement to what we do in our LSL segment. Both businesses have expertise in developing and applying high-performance coatings to a variety of substrates. LSL's current capabilities are centered around deposition and roll coating for glass and acrylic substrates. UW Solutions will add complementary capabilities in roll coating, curtain coating, and spray coating used on metals, wood, plastic, and other substrates. Together, these businesses will offer a broad range of manufacturing process capabilities that can provide a wide variety of coating types and high performance substrates for a diverse set of market applications. We plan to fully integrate the business into our LSO segment. The combined strength of these businesses will create a powerful new engine for growth. We will bring together a portfolio of leading brands that will serve a diverse set of customers and applications. The deal will also provide cross-selling opportunities and will accelerate growth drivers in both businesses. And as I described earlier, we will leverage the Apigee management system and our back office capabilities to drive meaningful cost synergies. We expect the acquisition to close sometime in our fiscal third quarter, and we plan to move quickly to execute a rigorous and comprehensive integration plan. This is a great business that strongly complements our strategy. We are excited for the opportunity to welcome UW Solutions employees to Apigee and look forward to working together to build a powerful new growth engine for the company. With that, I will turn it over to Matt to comment about the quarter, our outlook, and the acquisition.