Apogee Enterprises Inc. has announced major changes to its business structure.
In an announcement released yesterday, the company said that in an effort to focus the architectural glass segment on emphasizing premium, high-performance products, it will close the Viracon facility in Statesboro, Ga. Work currently performed in Statesboro will be transitioned to the facility in Owatonna, Minn.
Viracon had previously operated a third production facility in Utah, which it closed in 2018.
In addition to closing the Statesboro location, Apogee announced that the Velocity facility in Dallas will also close after only having been in operation for about a year and a half.
In its announcement, Apogee also said the Architectural Framing Systems (AFS) segment will be made into two business units. The first will be Storefront and Finishing Solutions, which will offer storefront, entrance and stick curtainwall solutions, along with coating and related services for architectural products. Primary brands will include Alumicor, Linetec and Tubelite.
The second is Window and Wall Systems, which will provide window and wall solutions targeting mid-size to large architectural projects. According to a press release, this business will sell under the EFCO and Wausau Window & Wall brands.
In a letter sent to customers and business partners, Chad Hoffman, president of Wausau Window and Wall Systems, said that the decision to align the two business units into a single entity was due to the similarities in product offerings, customers and go-to-market approaches.
Apogee also announced it will move the Sotawall business into the architectural services segment, which is currently a part of AFS. This transition is expected to be completed in the first quarter of the fiscal year 2023. Until then, Sotawall will continue to report its financial results as a part of AFS, according to the press release.
The company will begin executing these actions immediately and expects to be substantially completed in the first quarter of fiscal 2023. When the restructuring actions are completed, the company’s workforce is expected to be reduced by about 400 employees.
“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,” said Ty R. Silberhorn, Apogee CEO. “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.”
According to the announcement, 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 this announcement, the company expects to reach $20 to $30 million of annualized savings by the end of fiscal 2023.
According to the release, Apogee 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 incurred and anticipates the majority will be recorded in the second quarter of fiscal 2022. Excluding these expected charges, Apogee is maintaining its previous guidance for fiscal 2022 of adjusted earnings between $2.20 to $2.40 per diluted share.
This story is developing. Stay tuned to usglassmag.com for updates as they are made available.