Apogee Enterprises, Inc. (NASDAQ:APOG) Q1 2024 Earnings Call Transcript

Eric Stine: Got it. And maybe one other thing is, seeing more talk of, kind of the market non-res, splitting into a little bit from the standpoint of public sector quite strong, lots of investment there for obvious reasons, but private sector, again challenging for the reasons you just discussed. So, maybe thoughts on that dynamic and how it – how that would apply to your backlog? So, maybe current state of your backlog mix, that sort of thing?

Ty Silberhorn: Yes. Well, so while there was sequential small drop, year-over-year we’re still up. And if you look at the services backlog, it’s still very strong near record highs. We have been working to diversify our mix since we launched our strategic plan two years ago, and that is showing up in that backlog. We don’t present or share that specific data. I think I’d commented a couple of times now in these quarterly calls, our percent of office in our backlog, whether you look at our services business or our Glass business, it’s down significantly. That’s a reflection, yes, that market is softer, although we do continue to see owner occupied Class A office space. We still are seeing projects be let and awarded and go given the green light.

But that has been an effort to diversify our mix, knowing there’s a question over what’s the sustainability for our office being a driver for non-res construction. So, the teams have been working to specifically target other areas in healthcare, institutional, transportation, so airport terminals has been a heavy focus, which has government funding behind it for both Glass and Services. And it is showing up in that backlog mix.

Eric Stine: Got it. That’s helpful. Maybe last one for me, I’ll just sneak it in. I know you’ve talked about kind of taking the portfolio approach on the M&A and certainly as continue to make progress on some of the operational initiatives and feeling more and more confident there, maybe just an update on not that process, whether there are some things you feel like you can fill in or just how we should think about that?

Ty Silberhorn: Yes. I mean, as we’ve said, that is part of our growth levers. It will be a meaningful growth lever for us as we move forward. So, we want to grow organically, obviously. with the right mix. Inorganic is the way that we will obviously drive accelerated growth. So, we put the processes in place. We have the team in place. We have active pipeline from an M&A perspective. So, part of that active portfolio management, that is a regular part of our operating rhythm. So…

Eric Stine: Okay. Thank you.

Operator: [Operator Instructions] Our next question comes from Julio Romero with Sidoti.

Julio Romero: Great. Thanks. Good morning Ty, and welcome Matt. I appreciate the segment commentary regarding the outlook. You guys said regarding Glass that 17% is likely not sustainable, but should still end up in that 10% to 15% range for the year. Just can you speak to maybe how the Glass margin trends over the next few quarters? Do you maybe expect more of a stronger margin in the second quarter? And then relative – maybe a [glide down] [ph] sequentially in the third or fourth, just talk about how that Glass margin should trend?