Apogee Enterprises, Inc. Embarks on Project Fortify to Streamline Operations and Foster Profitable Growth
In a move aimed at fortifying its position for sustainable and profitable growth, Apogee Enterprises, Inc. has announced Project Fortify—a strategic initiative to optimize business operations and instill a more efficient cost model. Focused on the Architectural Framing Systems (AFS) segment, Project Fortify encompasses a series of impactful measures to enhance organizational efficiency and flexibility.
Under Project Fortify, Apogee Enterprises plans to eliminate certain lower-margin product and service offerings within the AFS segment, consolidating it into a single operating entity. Furthermore, production operations at the Walker, Michigan facility will be transferred to facilities in Monett, Missouri, and Wausau, Wisconsin. The segment’s brand portfolio and commercial model will undergo simplification to better leverage the company’s capabilities and elevate customer service.
Ty R. Silberhorn, Chief Executive Officer of Apogee Enterprises, expressed confidence in the strategic actions, stating, “Project Fortify will further improve our cost structure, enhance organizational efficiency, and enable our team to focus on higher growth, higher margin opportunities.”
In addition to the changes in the AFS segment, Apogee Enterprises will implement measures to optimize processes and streamline resources in its Architectural Services and Corporate segments. These comprehensive actions are aligned with the company’s enterprise strategy and are designed to build upon the achievements of the past two years.
The execution of Project Fortify will commence immediately, with expectations of substantial completion in the third quarter of fiscal 2025. Apogee Enterprises anticipates pre-tax charges of approximately $16 million to $18 million associated with Project Fortify, covering severance and employee-related costs, contract termination costs, and other expenses. The company emphasizes that restructuring charges related to the project will be adjusted out of GAAP earnings, thus not impacting adjusted diluted earnings per share for fiscal 2024 or 2025.
These strategic initiatives are projected to result in annualized cost savings of $12 million to $14 million, accompanied by a reduction in the workforce by approximately 250 employees. The company anticipates realizing around 60% of the savings in fiscal 2025, with the remainder in fiscal 2026. The majority of the savings are expected in the AFS segment (70%), followed by the Architectural Services segment (20%), and the Corporate segment (10%).
Source: www.apog.com with additional information added by GlassBalkan
