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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________________________ 
FORM 10-Q
 _________________________________
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended August 28, 2021
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from             to             
Commission File Number: 0-6365
_________________________________ 
APOGEE ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
 _________________________________
Minnesota41-0919654
(State or other jurisdiction of incorporation or organization)(I.R.S. Employer Identification No.)
4400 West 78th Street, Suite 520MinneapolisMinnesota55435
(Address of principal executive offices)(Zip Code)
Registrant’s telephone number, including area code: (952835-1874
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
_________________________________ 
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common stock, par value $0.33 1/3 per shareAPOGThe Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    x  Yes    o  No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).     x  Yes    o  No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
o
  Accelerated filer
x
Non-accelerated filero  Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.



Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).      Yes    x  No
As of September 27, 2021, 25,334,664 shares of the registrant’s common stock, par value $0.33 1/3 per share, were outstanding.


Table of Contents
APOGEE ENTERPRISES, INC. AND SUBSIDIARIES
 
  
 Page
PART I
Item 1.
Item 2.
Item 3.
Item 4.
PART II
Item 1.
Item 1A.
Item 2.
Item 6.
3

Table of Contents
PART I. FINANCIAL INFORMATION
Item 1.Financial Statements

CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except stock data)August 28, 2021February 27, 2021
Assets
Current assets
Cash and cash equivalents$61,821 $47,277 
Receivables, net160,858 175,917 
Inventories76,601 72,823 
Costs and earnings on contracts in excess of billings26,303 29,497 
Other current assets18,311 25,160 
Total current assets343,894 350,674 
Property, plant and equipment, net272,994 298,443 
Operating lease right-of-use assets52,087 58,864 
Goodwill130,388 130,098 
Intangible assets126,642 130,053 
Other non-current assets50,448 46,967 
Total assets$976,453 $1,015,099 
Liabilities and Shareholders’ Equity
Current liabilities
Accounts payable$79,166 $76,204 
Accrued payroll and related benefits38,492 50,125 
Billings on contracts in excess of costs and earnings20,825 22,789 
Operating lease liabilities11,466 13,251 
Current portion of debt1,000 2,000 
Other current liabilities48,700 53,183 
Total current liabilities199,649 217,552 
Long-term debt162,000 163,000 
Non-current operating lease liabilities45,387 48,439 
Non-current self-insurance reserves26,194 24,880 
Other non-current liabilities66,662 68,483 
Commitments and contingent liabilities (Note 8)
Shareholders’ equity
Common stock of $0.33-1/3 par value; authorized 50,000,000 shares; issued and outstanding 25,394,275 and 25,713,688 respectively
8,465 8,571 
Additional paid-in capital158,115 154,958 
Retained earnings336,398 357,243 
Accumulated other comprehensive loss(26,417)(28,027)
Total shareholders’ equity476,561 492,745 
Total liabilities and shareholders’ equity$976,453 $1,015,099 
See accompanying notes to consolidated financial statements.

4

Table of Contents
CONSOLIDATED RESULTS OF OPERATIONS
(Unaudited)
Three Months EndedSix Months Ended
(In thousands, except per share data)August 28, 2021August 29, 2020August 28, 2021August 29, 2020
Net sales$325,797 $319,483 $651,803 $608,578 
Cost of sales277,795 243,296 536,091 472,141 
Gross profit48,002 76,187 115,712 136,437 
Selling, general and administrative expenses51,070 52,972 102,739 106,754 
Operating (loss) income(3,068)23,215 12,973 29,683 
Interest expense, net1,072 1,324 2,310 2,739 
Other income (expense), net105 1,260 (209)213 
(Loss) earnings before income taxes(4,035)23,151 10,454 27,157 
Income tax (benefit) expense(1,919)5,493 1,753 6,623 
Net (loss) earnings$(2,116)$17,658 $8,701 $20,534 
(Loss) earnings per share - basic $(0.08)$0.68 $0.34 $0.78 
(Loss) earnings per share - diluted$(0.08)$0.67 $0.34 $0.77 
Weighted average basic shares outstanding25,140 26,156 25,271 26,162 
Weighted average diluted shares outstanding25,140 26,525 25,637 26,507 
See accompanying notes to consolidated financial statements.

5

Table of Contents
CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS
(Unaudited)
Three Months EndedSix Months Ended
(In thousands)August 28, 2021August 29, 2020August 28, 2021August 29, 2020
Net (loss) earnings$(2,116)$17,658 $8,701 $20,534 
Other comprehensive earnings (loss):
Unrealized gain on marketable securities, net of $2, $13, $1 and $39 of tax expense, respectively
4 50 4 147 
Unrealized (loss) gain on derivative instruments, net of $(203), $404, $8 and $215 of tax (benefit) expense, respectively
(666)1,319 26 703 
Foreign currency translation adjustments(4,300)6,139 1,580 (12)
Other comprehensive (loss) earnings(4,962)7,508 1,610 838 
Total comprehensive (loss) earnings$(7,078)$25,166 $10,311 $21,372 

See accompanying notes to consolidated financial statements.

6

Table of Contents
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
(In thousands)August 28, 2021August 29, 2020
Operating Activities
Net earnings$8,701 $20,534 
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization25,808 25,284 
Share-based compensation3,261 3,662 
Deferred income taxes(4,560)7,966 
Asset impairment15,403  
(Gain) loss on disposal of assets(1,355)18 
Noncash lease expense6,216 6,032 
Other, net578  
Changes in operating assets and liabilities:
Receivables15,520 31,212 
Inventories(3,607)846 
Costs and earnings on contracts in excess of billings3,212 43,091 
Accounts payable and accrued expenses(10,895)(36,922)
Billings on contracts in excess of costs and earnings(2,144)(9,105)
Refundable and accrued income taxes1,981 (1,793)
Operating lease liability(6,240)(5,857)
Other3,028 362 
Net cash provided by operating activities54,907 85,330 
Investing Activities
Capital expenditures(10,121)(14,224)
Proceeds from sales of property, plant and equipment1,292  
Other66 (993)
Net cash used by investing activities(8,763)(15,217)
Financing Activities
Borrowings on line of credit 192,581 
Repayments on debt(2,000)(5,400)
Payments on line of credit (237,500)
Proceeds from exercise of stock options4,115  
Repurchase and retirement of common stock(22,419)(4,731)
Dividends paid(10,060)(9,751)
Other (1,853)(1,261)
Net cash used by financing activities(32,217)(66,062)
Increase in cash and cash equivalents13,927 4,051 
Effect of exchange rates on cash617 (2)
Cash, cash equivalents and restricted cash at beginning of year47,277 14,952 
Cash, cash equivalents and restricted cash at end of period$61,821 $19,001 
Noncash Activity
Capital expenditures in accounts payable$374 $657 
See accompanying notes to consolidated financial statements.

7

Table of Contents
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)
(In thousands)Common Shares OutstandingCommon StockAdditional Paid-In CapitalRetained EarningsCommon Stock Held in TrustDeferred Compensation ObligationAccumulated Other Comprehensive (Loss) IncomeTotal Shareholders' Equity
Balance at February 27, 202125,714 $8,571 $154,958 $357,243 $(186)$186 $(28,027)$492,745 
Net earnings— — — 10,817 — — — 10,817 
Unrealized gain on marketable securities, net of $ tax expense
— — — — — — — — 
Unrealized gain on foreign currency hedge, net of $211 tax expense
— — — — — — 692 692 
Foreign currency translation adjustments— — — — — — 5,880 5,880 
Issuance of stock, net of cancellations90 30 (7)— (3)3 — 23 
Share-based compensation— — 1,674 — — — — 1,674 
Exercise of stock options179 60 4,055 — — — — 4,115 
Share repurchases(357)(119)(2,218)(10,288)— — — (12,625)
Other share retirements(20)(7)(121)(607)— — — (735)
Cash dividends— — — (5,035)— — — (5,035)
Balance at May 29, 202125,606 $8,535 $158,341 $352,130 $(189)$189 $(21,455)$497,551 
Net loss— — — (2,116)— — — (2,116)
Unrealized gain on marketable securities, net of $2 tax expense
— — — — — — 4 4 
Unrealized loss on foreign currency hedge, net of $203 tax benefit
— — — — — — (666)(666)
Foreign currency translation adjustments— — — — — — (4,300)(4,300)
Issuance of stock, net of cancellations67 22  — (3)3 — 22 
Share-based compensation— — 1,587 — — — — 1,587 
Share repurchases(249)(83)(1,616)(8,095)— — — (9,794)
Other share retirements(30)(9)(197)(496)— — — (702)
Cash dividends— — — (5,025)— — — (5,025)
Balance at August 28, 202125,394 $8,465 $158,115 $336,398 $(192)$192 $(26,417)$476,561 
















See accompanying notes to consolidated financial statements.

8

Table of Contents
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Unaudited)

(In thousands)Common Shares OutstandingCommon StockAdditional Paid-In CapitalRetained EarningsCommon Stock Held in TrustDeferred Compensation ObligationAccumulated Other Comprehensive (Loss) IncomeTotal Shareholders' Equity
Balance at February 29, 202026,443 $8,814 $154,016 $388,010 $(685)$685 $(34,062)$516,778 
Net earnings— — — 2,876 — — — 2,876 
Unrealized gain on marketable securities, net of $26 tax expense
— — — — — — 97 97 
Unrealized loss on foreign currency hedge, net of $189 tax benefit
— — — — — — (617)(617)
Foreign currency translation adjustments— — — — — — (6,151)(6,151)
Issuance of stock, net of cancellations183 62 (39)— (11)11 — 23 
Share-based compensation— — 1,406 — — — — 1,406 
Share repurchases(231)(77)(1,370)(3,284)— — — (4,731)
Other share retirements(26)(9)(151)(505)— — — (665)
Cash dividends— — — (4,872)— — — (4,872)
Balance at May 30, 202026,369 $8,790 $153,862 $382,225 $(696)$696 $(40,733)$504,144 
Net earnings— — — 17,658 — — — 17,658 
Unrealized gain on marketable securities, net of $13 tax expense
— — — — — — 50 50 
Unrealized gain on foreign currency hedge, net of $404 tax expense
— — — — — — 1,319 1,319 
Foreign currency translation adjustments— — — — — — 6,139 6,139 
Issuance of stock, net of cancellations121 41 (23)— (11)11 — 18 
Share-based compensation— — 2,256 — — — — 2,256 
Other share retirements(23)(8)(139)(390)— — — (537)
Cash dividends— — — (4,879)— — — (4,879)
Balance at August 29, 202026,467 $8,823 $155,956 $394,614 $(707)$707 $(33,225)$526,168 



See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1.Summary of Significant Accounting Policies

Basis of presentation
The consolidated financial statements of Apogee Enterprises, Inc. (we, us, our or the Company) have been prepared in accordance with accounting principles generally accepted in the United States. The information included in this Form 10-Q should be read in conjunction with the Company’s Form 10-K for the year ended February 27, 2021. We use the same accounting policies in preparing quarterly and annual financial statements. All adjustments necessary for a fair presentation of quarterly and year to date operating results are reflected herein and are of a normal, recurring nature. The results of operations for the three- and six-month periods ended August 28, 2021 are not necessarily indicative of the results to be expected for the full year.

COVID-19 update
During fiscal 2021, as a result of the global COVID-19 pandemic, we experienced some delays in commercial construction projects and orders and other disruptions to our business, including various physical distancing and health-related precautions, and we were required to close operations at two facilities in our Large-Scale Optical (LSO) segment for a portion of fiscal 2021 due to governmental orders. We were also impacted by quarantine-related absenteeism among our production workforce, resulting in labor constraints at some of our facilities. In the first two quarters of fiscal 2022, the negative impacts on our business directly due to the COVID-19 pandemic have moderated. The extent to which COVID-19 will continue to impact our businesses in the future will depend on numerous evolving factors including, but not limited to, the emergence of new variants of the coronavirus, such as the Delta variant, and the effectiveness of ongoing public health initiatives, which have been boosted by vaccine production and distribution.

Adoption of new accounting standards
At the beginning of fiscal 2022, we adopted the guidance in ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. The amendments in this ASU removed exceptions on intra-period tax allocations and reporting and provided simplification on accounting for franchise taxes, tax basis goodwill and tax law changes. The adoption of this ASU did not have a significant impact on the consolidated financial statements.

At the beginning of fiscal 2022, we adopted the guidance in ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. The amendments in this ASU apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The adoption of this ASU did not have a significant impact on the consolidated financial statements.

Subsequent events
We have evaluated subsequent events for potential recognition and disclosure through the date of this filing and determined that there were no subsequent events that required recognition or disclosure in the consolidated financial statements.

2.Revenue, Receivables and Contract Assets and Liabilities

Revenue
The following table disaggregates total revenue by timing of recognition (see Note 12 for disclosure of revenue by segment):
Three Months EndedSix Months Ended
(In thousands)August 28, 2021August 29, 2020August 28, 2021August 29, 2020
Recognized at shipment$137,783 $133,997 $278,066 $250,160 
Recognized over time188,014 185,486 373,737 358,418 
Total$325,797 $319,483 $651,803 $608,578 

Receivables
Receivables reflected in the financial statements represent the net amount expected to be collected. An allowance for credit losses is established based on expected losses. Expected losses are estimated by reviewing individual accounts, considering aging, financial condition of the debtor, recent payment history, current and forecast economic conditions and other relevant factors. Upon billing, aging of receivables is monitored until collection. An account is considered current when it is within agreed upon payment terms. An account is written off when it is determined that the asset is no longer collectible. Retainage on construction contracts represents amounts withheld by our customers on long-term projects until the project reaches a level of completion where amounts are released.
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(In thousands)August 28, 2021February 27, 2021
Trade accounts$123,658 $120,534 
Construction contracts5,584 12,163 
Contract retainage33,719 45,167 
Total receivables162,961 177,864 
Less: allowance for credit losses2,103 1,947 
Net receivables$160,858 $175,917 

The following table summarizes the activity in the allowance for credit losses:
(In thousands)August 28, 2021February 27, 2021
Beginning balance$1,947 $2,469 
Additions charged to costs and expenses239 389 
Deductions from allowance, net of recoveries(75)(887)
Other changes (1)
(8)(24)
Ending balance$2,103 $1,947 
      (1) Result of foreign currency effects

Contract assets and liabilities
Contract assets consist of retainage, costs and earnings in excess of billings and other unbilled amounts typically generated when revenue recognized exceeds the amount billed to the customer. Contract liabilities consist of billings in excess of costs and earnings and other deferred revenue on contracts. Retainage is classified within receivables and deferred revenue is classified within other current liabilities on our consolidated balance sheets.

The time period between when performance obligations are complete and when payment is due is not significant. In certain of our businesses that recognize revenue over time, progress billings follow an agreed-upon schedule of values, and retainage is withheld by the customer until the project reaches a level of completion where amounts are released.
(In thousands)August 28, 2021February 27, 2021
Contract assets$60,022 $74,664 
Contract liabilities24,096 25,000 

The change in contract assets and contract liabilities was mainly due to timing of project activity within our businesses that operate under long-term contracts.
Other contract-related disclosuresThree Months EndedSix Months Ended
(In thousands)August 28, 2021August 29, 2020August 28, 2021August 29, 2020
Revenue recognized related to contract liabilities from prior year-end$2,479 $1,184 $16,579 $14,195 
Revenue recognized related to prior satisfaction of performance obligations5,354 3,652 7,518 6,529 

Some of our contracts have an expected duration of longer than a year, with performance obligations extending over that timeframe. Generally, these contracts are in our businesses with long-term contracts which recognize revenue over time. As of August 28, 2021, the transaction price associated with unsatisfied performance obligations was approximately $857.2 million. The performance obligations are expected to be satisfied, and the corresponding revenue to be recognized, over the following estimated time periods:
(In thousands)August 28, 2021
Within one year
$500,758 
Within two years
341,749 
Beyond14,674 
Total$857,181 


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3.Supplemental Balance Sheet Information

Inventories
(In thousands)August 28, 2021February 27, 2021
Raw materials$41,730 $36,681 
Work-in-process18,314 18,932 
Finished goods16,557 17,210 
Total inventories$76,601 $72,823 

Other current liabilities
(In thousands)August 28, 2021February 27, 2021
Warranties$11,234 $12,298 
Accrued project losses1,260 4,572 
Property and other taxes7,388 7,459 
Accrued self-insurance reserves5,500 6,482 
Accrued freight1,837 1,477 
Other21,481 20,895 
Total other current liabilities$48,700 $53,183 

Other non-current liabilities
(In thousands)August 28, 2021February 27, 2021
Deferred benefit from New Market Tax Credit transactions$15,717 $15,717 
Retirement plan obligations7,640 7,730 
Deferred compensation plan13,811 13,507 
Deferred tax liabilities5,850 8,310 
Deferred payroll taxes6,789 6,789 
Other16,855 16,430 
Total other non-current liabilities$66,662 $68,483 

4.Financial Instruments

Marketable securities
Through our wholly-owned insurance subsidiary, Prism Assurance, Ltd. (Prism), we hold the following available-for-sale marketable securities, made up of municipal and corporate bonds: 
(In thousands)Amortized CostGross Unrealized GainsGross Unrealized LossesEstimated
Fair Value
August 28, 2021$12,399 $385 $2 $12,782 
February 27, 202112,517 386 10 12,893 

Prism insures a portion of our general liability, workers’ compensation and automobile liability risks using reinsurance agreements to meet statutory requirements. The reinsurance carrier requires Prism to maintain fixed-maturity investments for the purpose of providing collateral for Prism’s obligations under the reinsurance agreements.

The amortized cost and estimated fair values of these bonds at August 28, 2021, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities, as borrowers may have the right to call or prepay obligations with or without penalty.
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(In thousands)Amortized CostEstimated Fair Value
Due within one year$889 $896 
Due after one year through five years8,614 8,908 
Due after five years through 10 years2,096 2,149 
Due beyond 15 years800 829 
Total$12,399 $12,782 

Derivative instruments
We use interest rate swaps, foreign exchange forward contracts, commodity swaps and forward purchase contracts to manage risks generally associated with foreign exchange rate, interest rate and commodity price fluctuations. The information that follows explains the various types of derivatives and financial instruments we use, how such instruments are accounted for, and how such instruments impact our financial position and performance.

In fiscal 2020, we entered into an interest rate swap to hedge exposure to variability in cash flows from interest payments on our floating-rate revolving credit facility and term loan. As of August 28, 2021, the interest rate swap contract had a notional value of $37.5 million.

We periodically enter into forward purchase contracts and/or fixed/floating swaps to manage the risk associated with fluctuations in aluminum prices and fluctuations in foreign exchange rates (primarily related to the Canadian dollar). These contracts generally have an original maturity date of less than one year. As of August 28, 2021, we held foreign exchange forward contracts and aluminum fixed/floating swaps with U.S. dollar notional values of $9.0 million and $6.9 million, respectively.

These derivative instruments are recorded within our consolidated balance sheets within other current assets and liabilities. Gains or losses associated with these instruments are recorded as a component of accumulated other comprehensive income.

Fair value measurements
Financial assets and liabilities are classified in the fair value hierarchy based on the lowest level input that is significant to the fair value measurement: Level 1 (unadjusted quoted prices in active markets for identical assets or liabilities); Level 2 (observable market inputs, other than quoted prices included in Level 1); and Level 3 (unobservable inputs that cannot be corroborated by observable market data). We do not have any Level 3 financial assets or liabilities.
(In thousands)Quoted Prices in
Active Markets
(Level 1)
Other Observable Inputs (Level 2)Total Fair Value
August 28, 2021
Assets:
Money market funds$42,003 $ $42,003 
Municipal and corporate bonds— 12,782 12,782 
Cash surrender value of life insurance— 18,750 18,750 
Aluminum hedge contracts— 1,200 1,200 
Liabilities:
Deferred compensation— 13,811 13,811 
Foreign currency forward/option contracts— 269 269 
Interest rate swap contract— 319 319 
February 27, 2021
Assets:
Money market funds$26,034 $ $26,034 
Municipal and corporate bonds— 12,893 12,893 
Cash surrender value of life insurance— 18,632 18,632 
Foreign currency forward/option contracts— 606 606 
Aluminum hedge contracts— 363 363 
Liabilities:
Deferred compensation— 13,507 13,507 
Interest rate swap contract— 504 504 
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Money market funds and commercial paper
Fair value of money market funds was determined based on quoted prices for identical assets in active markets. Commercial paper was measured at fair value using inputs based on quoted prices for similar securities in active markets. These assets are included within cash and cash equivalents on our consolidated balance sheets.

Municipal and corporate bonds
Municipal and corporate bonds were measured at fair value based on market prices from recent trades of similar securities and are classified within our consolidated balance sheets as other current or other non-current assets based on maturity date.

Cash surrender value of life insurance and deferred compensation
Contracts insuring the lives of certain employees who are eligible to participate in certain non-qualified pension and deferred compensation plans are held in trust. Cash surrender value of the contracts is based on performance measurement funds that shadow the deferral investment allocations made by participants in certain deferred compensation plans. Changes in cash surrender value are recorded in other expense. The deferred compensation liability balances are valued based on amounts allocated by participants to the underlying performance measurement funds.

Derivative instruments
The interest rate swap is measured at fair value using other observable market inputs, based off of benchmark interest rates. Forward foreign exchange and fixed/floating aluminum contracts are measured at fair value using other observable market inputs, such as quotations on forward foreign exchange points, foreign currency exchange rates, and forward purchase aluminum prices. Derivative positions are primarily valued using standard calculations and models that use as their basis readily observable market parameters. Industry standard data providers are our primary source for forward and spot rate information for both interest and currency rates and aluminum prices.

Nonrecurring fair value measurements
We measure certain financial instruments at fair value on a nonrecurring basis including goodwill, intangible assets, property and equipment and right-of-use lease assets. These assets were initially measured and recognized at amounts equal to the fair value determined as of the date of acquisition or purchase subject to changes in value only for foreign currency translation. Periodically, these assets are tested for impairment, by comparing their respective carrying values to the estimated fair value of the reporting unit or asset group in which they reside. In the event any of these assets were to become impaired, we would recognize an impairment expense equal to the amount by which the carrying value of the reporting unit, impaired asset or asset group exceeds its estimated fair value. Fair value measurements of reporting units are estimated using an income approach involving discounted cash flow models that contain certain Level 3 inputs requiring significant management judgment, including projections of economic conditions, customer demand and changes in competition, revenue growth rates, gross profit margins, operating margins, capital expenditures, working capital requirements, terminal growth rates and discount rates. Fair value measurements of the reporting units associated with our goodwill balances and our indefinite-lived intangible assets are estimated at least annually in the fourth quarter of each fiscal year for purposes of impairment testing if a quantitative analysis is performed.

See Note 13 for additional information on the impairment charges recorded to fixed assets and right-of-use lease assets during the second quarter of fiscal 2022.

5.Goodwill and Other Intangible Assets

Goodwill
Goodwill represents the excess of the cost over the net tangible and identified intangible assets of acquired businesses. We evaluate goodwill for impairment annually as of the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that the carrying value of goodwill may not be recoverable.

Based on the impairment analysis performed in the fourth quarter of fiscal 2021, estimated fair value was in excess of carrying value at six of our eight reporting units. However, estimated fair value did not exceed carrying value for two reporting units within the Architectural Framing Systems segment, EFCO and Sotawall. As a result, as of February 27, 2021, we incurred goodwill impairment expense of $46.7 million and $17.1 million in our EFCO and Sotawall reporting units, respectively. The goodwill impairment expense recorded during the year ended February 27, 2021, as reflected in the table below, represents the total accumulated goodwill impairment expenses recorded.

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The carrying amount of goodwill attributable to each reporting segment was:  
(In thousands)Architectural Framing SystemsArchitectural GlassArchitectural ServicesLarge-Scale
Optical
Total
Balance at February 29, 2020$148,183 $25,656 $1,120 $10,557 $185,516 
Adjustment (1)
6,315 — — — 6,315 
Impairment expense(63,769)— — — (63,769)
Foreign currency translation2,370 (334)  2,036 
Balance at February 27, 202193,099 25,322 1,120 10,557 130,098 
Foreign currency translation248 42   290 
Balance at August 28, 2021$93,347 $25,364 $1,120 $10,557 $130,388 
(1) During the first quarter of fiscal 2021, we recorded a $6.3 million increase to goodwill and corresponding increase to deferred tax liabilities to correct an immaterial error related to prior periods. The error was not material to any previously reported annual or interim consolidated financial statements.

Other intangible assets
We have intangible assets for certain acquired trade names and trademarks which are determined to have indefinite useful lives. We test indefinite-lived intangible assets for impairment annually at the same measurement date as goodwill, the first day of our fiscal fourth quarter, or more frequently if events or changes in circumstances indicate that it is more likely than not that the asset is impaired. Based on our analysis, the fair value of each of our trade names and trademarks exceeded carrying amount, except for the EFCO tradename, within our Architectural Framing Systems segment. The fair value determined for the EFCO tradename was less than its carrying value by $6.3 million; this amount was recognized as impairment expense in the fourth quarter ended February 27, 2021, as reflected in the table below.

The gross carrying amount of other intangible assets and related accumulated amortization was:

(In thousands)Gross
Carrying
Amount
Accumulated
Amortization
Impairment ExpenseForeign
Currency
Translation
Net
August 28, 2021
Definite-lived intangible assets:
Customer relationships$122,961 $(44,042)$— $742 $79,661 
Other intangibles41,838 (35,068)— 222 6,992 
Total definite-lived intangible assets164,799 (79,110)— 964 86,653 
Indefinite-lived intangible assets:
Trademarks39,832 — — 157 39,989 
Total intangible assets$204,631 $(79,110)$— $1,121 $126,642 
February 27, 2021
Definite-lived intangible assets:
Customer relationships$119,647 $(40,443)$— $3,315 $82,519 
Other intangibles41,293 (34,234)