Net sales rose by 24% compared with the second quarter of the prior fiscal year to $159.8 million. Net sales rose by 19% during the six-month period ended October 31, 2012, compared with the comparable period of the prior fiscal year, to $308.0 million. The Company experienced double-digit sales gains in each of its sales channels during the second quarter of fiscal year 2013, led by new construction sales growth of more than 40%.
The Company generated net income excluding restructuring charges of $2.0 million, or $0.14 per diluted share during the second quarter of fiscal year 2013, compared with a net loss of ($3.0 million) or ($0.21) per diluted share in the second quarter of its prior fiscal year. The Company generated net income excluding restructuring charges of $3.0 million or $0.21 per diluted share in the six-month period ended October 31, 2012, compared with a net loss of ($5.7 million) or ($0.40) per diluted share in the comparable period of the prior fiscal year. Results in fiscal year 2013 included net-of-tax restructuring costs of $0.1 million, or $0.01 per diluted share in the second quarter, and $0.5 million, or $0.04 per diluted share in the first six months, related to the permanent closure of two manufacturing plants in April 2012 and May 2012. Net income inclusive of these charges for the second quarter and first six months of fiscal year 2013 was $2.0 million, or $0.13 per diluted share, and $2.5 million, or $0.17 per diluted share, respectively.
Gross profit for the second quarter of fiscal year 2013 was 15.5% of net sales, compared with 12.5% of net sales in the prior year's second quarter. Gross profit was 15.2% of net sales during the first six months of fiscal year 2013, compared with 13.3% of net sales during the comparable period of the prior fiscal year. Gross profit was favorably impacted by reductions in fixed overhead costs associated with the plant closures and by the beneficial impact of higher sales volume. This favorability was partially offset by the impact of operational inefficiencies connected with the transition of production related to the plant closures during a period of rising sales, as well as rising materials costs.
Selling, general and administrative costs were 13.5% of net sales in the second quarter of fiscal year 2013, improved from 16.1% of net sales in the prior year's second quarter. Selling, general and administrative costs improved to 13.6% of net sales in the first six months of fiscal year 2013, down from 16.6% of net sales in the comparable period of the prior fiscal year. The improvement in the Company's operating expense ratio was driven by increased sales levels that enabled favorable leverage, combined with cost savings from modifications to the Company's retirement programs.
The Company generated free cash flow (defined as cash provided by operating activities net of cash used for investing $1.1 million in the prior year's second quarter. The net improvement in the Company's free cash flow was driven by proceeds received from asset sales that more than offset the impact of payments related to its restructuring activities and the resumption of contributions to its pension plans.
American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, major builders and through a network of independent distributors. The Company presently operates nine manufacturing facilities and nine service centers across the country.
Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission and the Annual Report to Shareholders. The Company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
| AMERICAN WOODMARK CORPORATION | ||||
| Unaudited Financial Highlights | ||||
| (in thousands, except share data) | ||||
| Operating Results | ||||
| Three Months Ended | Six Months Ended | |||
| October 31 | October 31 | |||
| 2012 | 2011 | 2012 | 2011 | |
| Net Sales | $ 159,760 | $ 128,418 | $ 308,012 | $ 259,617 |
| Cost of Sales & Distribution | 134,966 | 112,304 | 261,175 | 225,096 |
Gross Profit | 24,794 | 16,114 | 46,837 | 34,521 |
| Sales & Marketing Expense | 14,973 | 14,508 | 29,493 | 30,484 |
| G&A Expense | 6,624 | 6,166 | 12,263 | 12,507 |
| Restructuring Charges | 84 | - | 861 | 15 |
| Insurance Proceeds | (399) | - | (399) | - |
Operating Income (Loss) | 3,512 | (4,560) | 4,619 | (8,485) |
| Interest & Other (Income) Expense | 141 | (37) | 233 | (54) |
| Income Tax Expense | 1,421 | (1,547) | 1,875 | (2,739) |
Net Income (Loss) | $ 1,950 | $ (2,976) | $ 2,511 | $ (5,692) |
| Earnings Per Share: | ||||
| Weighted Average Shares | 14,677,640 | 14,330,954 | 14,626,899 | 14,315,318 |
| Income (Loss) Per Diluted Share | $ 0.13 | $ (0.21) | $ 0.17 | $ (0.40) |
| Net income (loss), as reported | $ 1,950 | $ (2,976) | $ 2,511 | $ (5,692) |
| Restructuring Charges, net of tax | 51 | - | 525 | 9 |
| Net income (loss), excluding restructuring charges | $ 2,001 | $ (2,976) | $ 3,036 | $ (5,683) |
| Income (Loss) Per Diluted Share, excluding restructuring charges | $ 0.14 | $ (0.21) | $ 0.21 | $ (0.40) |
| Condensed Consolidated Balance Sheet | ||
| October 31 | April 30 | |
| 2012 | 2012 | |
| Cash & Cash Equivalents | $ 63,050 | $ 66,620 |
| Customer Receivables | 41,172 | 32,533 |
| Inventories | 28,092 | 22,340 |
| Other Current Assets | 13,551 | 9,609 |
Total Current Assets | 145,865 | 131,102 |
| Property, Plant & Equipment | 74,231 | 75,375 |
| Restricted Cash | 7,064 | 7,064 |
| Other Assets | 41,986 | 51,580 |
Total Assets | $ 269,146 | $ 265,121 |
| Current Portion - Long-Term Debt | $ 959 | $ 875 |
| Accounts Payable & Accrued Expenses | 60,301 | 58,346 |
Total Current Liabilities | 61,260 | 59,221 |
| Long-Term Debt | 23,721 | 23,790 |
| Other Liabilities | 49,162 | 52,090 |
Total Liabilities | 134,143 | 135,101 |
| Stockholders' Equity | 135,003 | 130,020 |
Total Liabilities & Stockholders' Equity | $ 269,146 | $ 265,121 |
| Condensed Consolidated Statements of Cash Flows | ||
| Six Months Ended | ||
| October 31 | ||
| 2012 | 2011 | |
| Net Cash Provided by Operating Activities | $ (1,754) | $ 7,879 |
| Net Cash Used by Investing Activities | (1,480) | (4,640) |
| Free Cash Flow | (3,234) | 3,239 |
| Net Cash Provided by Financing Activities | (336) | (1,578) |
| Net Increase (Decrease) in Cash and Cash Equivalents | (3,570) | 1,661 |
| Cash and Cash Equivalents, Beginning of Period | 66,620 | 55,420 |
| Cash and Cash Equivalents, End of Period | $ 63,050 | $ 57,081 |
SOURCE American Woodmark Corporation
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