Apogee Enterprises Inc. officials announced a major restructuring, which will include the closure of a glass fabrication location and the combination of several business units.
Restructuring actions
Viracon facility in Statesboro, Georgia, to close
According to officials, the company will focus the architectural glass segment to emphasize premium, high-performance products. As a result, the company will close the Viracon facility in Statesboro, Georgia. Work currently performed in Statesboro will be transitioned to the company’s facility in Owatonna, Minnesota, which has adequate capacity to support the additional activity.
The company will also exit the Velocity business and close its facility in Dallas, Texas.
Architectural Framing Systems will become two business units
The purpose of the move is to increase focus on target markets, better serve customers, improve operational execution, and reduce overall costs, according to company officials. The new business units include:
- Storefront and Finishing Solutions, which will offer storefront, entrance, and stick curtain wall solutions, along with coating and related services for architectural products. Primary brands will include Alumicor, Linetec and Tubelite.
- Window and Wall Systems, which will provide window and wall solutions targeting mid-size to large architectural projects. This business will sell under the EFCO and Wausau Window & Wall brands.
Sotawall to become part of Architectural Services segment
The company will move the Sotawall business, which is currently a part of AFS, into the architectural services segment. This will unify Apogee’s market offerings for larger, custom façade projects.
The combined business will primarily focus on the integrated design, manufacture, and installation of curtain wall projects. This transition is expected to be completed in the first quarter of fiscal year 2023. Until that time, Sotawall will continue to report its financial results as a part of AFS.
New enterprise strategy
These actions are the initial steps in executing the company’s new enterprise strategy. According to company officials, the restructuring will allow the company to realign and simplify its business structure, bring a stronger focus to serving customers, enable a more competitive cost model, and better position the company for future growth and improved profitability.
“Through our enterprise strategy work, we are developing a roadmap for Apogee to become the economic leader in our target markets, bringing the best value to our customers,” says Ty R. Silberhorn, chief executive officer. “Our goals are to focus on the most attractive long-term opportunities, while ensuring we have the operating model and capabilities needed to consistently deliver profitable growth. The actions we are announcing today will better align our organization and cost structure to achieve these objectives.”
Next steps
Company workforce to be reduced by 400
The company will begin executing these actions immediately and expects to be substantially completed in the first quarter of fiscal 2023. When completed, the restructuring actions are expected to reduce the company’s workforce by approximately 400 employees. These actions build on the company’s previously announced restructuring and cost savings initiatives. In October 2020, the company announced that it had identified opportunities for $10 to $20 million of annualized cost savings, to be achieved by the end of fiscal 2023. With the announcement, the company now expects to achieve $20 to $30 million of annualized savings by the end of fiscal 2023.
The company expects pre-tax charges between $30 million to $35 million related to the announcement, primarily for asset impairments and severance. The company will record these charges as they are incurred and anticipates the majority will be recorded in the second quarter of fiscal 2022. Excluding these expected charges, the company is maintaining its previous guidance for fiscal 2022 of adjusted earnings between $2.20 to $2.40 per diluted share.
