Press release

American Woodmark Corporation announces first quarter results

August 25, 2020

WINCHESTER, Va., Aug. 25, 2020 /PRNewswire/ -- American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its first fiscal quarter ended July 31, 2020.

Net sales for the first fiscal quarter decreased 8.7% to $390.1 million compared with the same quarter of the prior fiscal year.  The Company experienced declines in all sales channels during the first quarter of fiscal 2021 as both the remodel and new construction markets were negatively impacted by the COVID-19 pandemic.

Net income was $16.5 million ($0.97 per diluted share) for the first quarter of fiscal 2021 compared with $26.9 million ($1.59 per diluted share) in the same quarter of the prior fiscal year.  Net income for the first quarter of fiscal 2021 was negatively impacted by lower sales due to COVID-19, deleveraging of fixed costs across the Company and a decline in efficiency.  The Company incurred pre-tax restructuring costs totaling $3.5 million during the first quarter of fiscal 2021 related to the permanent layoffs due to COVID-19 announced in the fourth quarter of fiscal 2020 and the first quarter of fiscal 2021 and the closure of its Humboldt, Tennessee manufacturing plant announced in June 2020.  Adjusted EPS per diluted share was $1.66 for the first quarter of fiscal 2021 compared with $2.13 in the same quarter of the prior fiscal year.

Adjusted EBITDA for the first fiscal quarter was $57.0 million, or 14.6% of net sales, compared to $69.6 million, or 16.3% of net sales, for the same quarter of the prior fiscal year.

"Our sales and net income were negatively impacted by COVID-19 during our first fiscal quarter, but our teams performed well and drove results that exceeded our initial expectations," said Scott Culbreth, President and CEO.  "I want to personally thank all of our employees and suppliers for helping the Company navigate this difficult situation."

Cash provided by operating activities for the first fiscal quarter was $40.0 million and free cash flow totaled $32.2 million.  As of July 31, 2020, the Company had $128.1 million of cash on hand with no term loan debt maturities until December 2022 plus access to $93.6 million of additional availability under its revolving credit facility.

About American Woodmark

American Woodmark Corporation manufactures and distributes kitchen, bath and home organization products for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, builders and through a network of independent dealers and distributors. At July 31, 2020, the Company operated seventeen manufacturing facilities in the United States and Mexico and eight primary service centers located throughout the United States.

Use of Non-GAAP Financial Measures

We have presented certain financial measures in this press release which have not been prepared in accordance with U.S. generally accepted accounting principles (GAAP).  Definitions of our non-GAAP financial measures and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP are provided below following the financial highlights under the heading "Non-GAAP Financial Measures." 

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, including our Annual Report on Form 10-K.  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.

(AMWD – ER)

 

AMERICAN WOODMARK CORPORATION

           

Unaudited Financial Highlights

           

(in thousands, except share data)

           

Operating Results

           
     

Three Months Ended

     

July 31

     

2020

 

2019

           

Net sales

 

$

390,087

   

$

427,365

 

Cost of sales & distribution

 

309,949

   

332,846

 
 

Gross profit

 

80,138

   

94,519

 

Sales & marketing expense

 

19,898

   

20,687

 

General & administrative expense

 

29,983

   

29,432

 

Restructuring charges

 

3,460

   

(19)

 
 

Operating income

 

26,797

   

44,419

 

Interest expense, net

 

6,030

   

8,088

 

Other income, net

 

(1,688)

   

(7)

 

Income tax expense

 

5,970

   

9,457

 
 

Net income

 

$

16,485

   

$

26,881

 
           

Earnings Per Share:

       

Weighted average shares outstanding - diluted

 

17,013,444

   

16,907,463

 
           

Net income per diluted share

 

$

0.97

   

$

1.59

 

 

Condensed Consolidated Balance Sheet

(Unaudited)

     

July 31

 

 April 30

     

2020

 

2020

           

Cash & cash equivalents

 

$

128,055

   

$

97,059

 

Customer receivables

 

123,301

   

106,344

 

Inventories

 

126,700

   

111,836

 

Other current assets

 

9,913

   

9,933

 
 

Total current assets

 

387,969

   

325,172

 

Property, plant & equipment, net

 

199,088

   

203,824

 

Operating lease assets, net

 

126,409

   

127,668

 

Trademarks, net

 

1,389

   

2,222

 

Customer relationship intangibles, net

 

156,028

   

167,444

 

Goodwill

 

767,612

   

767,612

 

Other assets

 

28,942

   

28,864

 
 

Total assets

 

$

1,667,437

   

$

1,622,806

 
           

Current portion - long-term debt

 

$

2,087

   

$

2,216

 

Short-term operating lease liabilities

 

19,566

   

18,896

 

Accounts payable & accrued expenses

 

156,412

   

134,494

 
 

Total current liabilities

 

178,065

   

155,606

 

Long-term debt

 

595,248

   

594,921

 

Deferred income taxes

 

50,151

   

52,935

 

Long-term operating lease liabilities

 

111,090

   

112,454

 

Other liabilities

 

11,363

   

6,352

 
 

Total liabilities

 

945,917

   

922,268

 

Stockholders' equity

 

721,520

   

700,538

 
 

Total liabilities & stockholders' equity

 

$

1,667,437

   

$

1,622,806

 

 

Condensed Consolidated Statements of Cash Flows

(Unaudited)

     

Three Months Ended

     

July 31

     

2020

 

2019

           

Net cash provided by operating activities

 

$

40,000

   

$

62,612

 

Net cash used by investing activities

 

(7,836)

   

(5,580)

 

Net cash used by financing activities

 

(1,168)

   

(43,639)

 

Net increase in cash and cash equivalents

 

30,996

   

13,393

 

Cash and cash equivalents, beginning of period

 

97,059

   

57,656

 
           

Cash and cash equivalents, end of period

 

$

128,055

   

$

71,049

 

 

Non-GAAP Financial Measures

We have reported our financial results in accordance with generally accepted accounting principles (GAAP).  In addition, we have discussed our financial results using the non-GAAP measures described below.

Management believes all of these non-GAAP financial measures provide an additional means of analyzing the current period's results against the corresponding prior period's results.  However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP.  Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Adjusted EPS per diluted share

We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability.  Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company's results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items.  We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the acquisition of RSI Home Products, Inc. ("RSI acquisition") and the subsequent restructuring charges that the Company incurred related to the acquisition, (2) non-recurring restructuring charges, (3) the amortization of customer relationship intangibles and trademarks, (4) net gain on debt forgiveness and modification and (5) the tax benefit of RSI acquisition expenses and subsequent restructuring charges, the net gain on debt forgiveness and modification and the amortization of customer relationship intangibles and trademarks.  The amortization of intangible assets is driven by the RSI acquisition and will recur in future periods.  Management has determined that excluding amortization of intangible assets from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability and we have also received similar feedback from some of our investors.

Adjusted EBITDA and Adjusted EBITDA margin

We use Adjusted EBITDA and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability.  We believe Adjusted EBITDA and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.

We define Adjusted EBITDA as net income adjusted to exclude (1) income tax expense, (2) interest expense, net, (3) depreciation and amortization expense, (4) amortization of customer relationship intangibles and trademarks, (5) expenses related to the RSI acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition, (6) non-recurring restructuring charges, (7) stock-based compensation expense, (8) gain/loss on asset disposals, (9) change in fair value of foreign exchange forward contracts and (10) net gain on debt forgiveness and modification.  We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.

We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.

Free cash flow

To better understand trends in our business, we believe that it is helpful to subtract amounts for capital expenditures consisting of cash payments for property, plant and equipment and cash payments for investments in displays from cash flows from continuing operations which is how we define free cash flow.  Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment.  It also provides a measure of our ability to repay our debt obligations.

Net leverage

Net leverage is a performance measure that we believe provides investors a more complete understanding of our leverage position and borrowing capacity after factoring in cash and cash equivalents that eventually could be used to repay outstanding debt.

We define net leverage as net debt (total debt less cash and cash equivalents) divided by the trailing 12 months Adjusted EBITDA.

A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth on the following tables:

 

Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents

     
   

Three Months Ended

   

July 31

(in thousands)

 

2020

 

2019

         

Net income (GAAP)

 

$

16,485

   

$

26,881

 

Add back:

       

Income tax expense

 

5,970

   

9,457

 

Interest expense, net

 

6,030

   

8,088

 

Depreciation and amortization expense

 

12,959

   

11,863

 

Amortization of customer relationship intangibles and trademarks

 

12,250

   

12,250

 

EBITDA (Non-GAAP)

 

$

53,694

   

$

68,539

 

Add back:

       

Acquisition and restructuring related expenses (1)

 

60

   

41

 

Non-recurring restructuring charges (2)

 

3,460

   

 

Change in fair value of foreign exchange forward contracts (3)

 

(1,255)

   

56

 

Stock-based compensation expense

 

961

   

897

 

Loss on asset disposal

 

46

   

66

 

Adjusted EBITDA (Non-GAAP)

 

$

56,966

   

$

69,599

 
         

Net Sales

 

$

390,087

   

$

427,365

 

Adjusted EBITDA margin (Non-GAAP)

 

14.6

%

 

16.3

%

 

(1) Acquisition and restructuring related expenses are comprised of expenses related to the acquisition of RSI Home Products, Inc. and the subsequent restructuring charges that the Company incurred related to the acquisition.

(2) Nonrecurring restructuring charges are comprised of expenses incurred related to the permanent layoffs due to COVID-19 and the closure of the manufacturing plant in Humboldt, Tennessee.  The three months ended July 31, 2020, includes accelerated depreciation expense of $1.1 million related to Humboldt.

(3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts.  The changes in the fair value of the forward contracts are recorded in other income in the operating results.

 

Reconciliation of Net Income to Adjusted Net Income

     
   

Three Months Ended

   

July 31

(in thousands, except share data)

 

2020

 

2019

         

Net income (GAAP)

 

$

16,485

   

$

26,881

 

Add back:

       

Acquisition and restructuring related expenses

 

60

   

41

 

Non-recurring restructuring charges

 

3,460

   

 

Amortization of customer relationship intangibles and trademarks

 

12,250

   

12,250

 

Tax benefit of add backs

 

(4,053)

   

(3,097)

 

Adjusted net income (Non-GAAP)

 

$

28,202

   

$

36,075

 
         

Weighted average diluted shares

 

17,013,444

   

16,907,463

 

Adjusted EPS per diluted share (Non-GAAP)

 

$

1.66

   

$

2.13

 

 

Free Cash Flow

     
   

Three Months Ended

   

July 31

   

2020

 

2019

         

Cash provided by operating activities

 

$

40,000

   

$

62,612

 

Less: Capital expenditures (1)

 

7,842

   

6,593

 

Free cash flow

 

$

32,158

   

$

56,019

 

 

(1) Capital expenditures consist of cash payments for property, plant and equipment and cash payments for investments in displays.

 

Net Leverage

     
   

Twelve Months
Ended

   

July 31

(in thousands)

 

2020

     

Net income (GAAP)

 

$

64,465

 

Add back:

   

Income tax expense

 

22,200

 

Interest expense, net

 

26,968

 

Depreciation and amortization expense

 

50,610

 

Amortization of customer relationship intangibles and trademarks

 

49,000

 

EBITDA (Non-GAAP)

 

213,243

 

Add back:

   

Acquisition and restructuring related expenses (1)

 

52

 

Non-recurring restructuring charges (2)

 

3,649

 

Change in fair value of foreign exchange forward contracts (3)

 

(209)

 

Stock-based compensation expense

 

4,053

 

Loss on asset disposal

 

2,609

 

Adjusted EBITDA (Non-GAAP)

 

$

223,397

 
     
   

As of

   

July 31

   

2020

Current maturities of long-term debt

 

$

2,087

 

Long-term debt, less current maturities

 

595,248

 

Total debt

 

597,335

 

Less: cash and cash equivalents

 

(128,055)

 

Net debt

 

$

469,280

 
     

Net leverage (4)

 

2.10

 

 

(1) Acquisition and restructuring related expenses are comprised of expenses related to the acquisition of RSI Home Products, Inc. and the subsequent restructuring charges that the Company incurred related to the acquisition.

(2) Nonrecurring restructuring charges are comprised of expenses incurred related to the permanent layoffs due to COVID-19 and the closure of the manufacturing plant in Humboldt, Tennessee.

(3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates.  The Company manages these risks through the use of foreign exchange forward contracts.  The changes in the fair value of the forward contracts are recorded in other income in the operating results.

(4) Net debt divided by Adjusted EBITDA for the twelve months ended July 31, 2020.



View original content: http://www.prnewswire.com/news-releases/american-woodmark-corporation-announces-first-quarter-results-301117441.html

SOURCE American Woodmark Corporation

Related press releases

  • American Woodmark Corporation announces second quarter results
    American Woodmark Corporation announces second quarter results Nov 29, 2018 American Woodmark Corporation (NASDAQ: AMWD) today announced results for its second fiscal quarter ended October 31, 2018. Net sales for the second fiscal quarter increased 55% to $424.9 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces fourth quarter results
    American Woodmark Corporation announces fourth quarter results Jun 02, 2015 Company Release - 6/2/2015 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its fourth fiscal quarter ended April 30, 2015. Read article
  • American Woodmark Corporation announces third quarter results
    American Woodmark Corporation announces third quarter results Feb 24, 2022 American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its third quarter of fiscal 2022 which ended January 31, 2022. Net sales for the third quarter of fiscal 2022 increased $27.8 million, or 6.4%, to $459.7 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces fourth quarter results
    American Woodmark Corporation announces fourth quarter results Jun 02, 2016 Company Release - 6/2/2016 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its fourth fiscal quarter ended April 30, 2016. Net sales for the fourth fiscal quarter increased 16% to $240.9 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces second quarter results
    American Woodmark Corporation announces second quarter results Nov 22, 2016 Company Release - 11/22/2016 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its second fiscal quarter ended October 31, 2016. Net sales for the second fiscal quarter increased 3% to $264.1 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces second quarter results
    American Woodmark Corporation announces second quarter results Nov 24, 2015 Authorizes Stock Repurchase Company Release - 11/24/2015 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its second fiscal quarter ended October 31, 2015. Read article
  • American Woodmark Corporation announces fourth quarter results
    American Woodmark Corporation announces fourth quarter results May 30, 2017 Company Release - 5/30/2017 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its fourth fiscal quarter ended April 30, 2017. Net sales for the fourth fiscal quarter increased 7% to $258.7 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces third quarter results
    American Woodmark Corporation announces third quarter results Feb 25, 2016 Company Release - 2/25/2016 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its third fiscal quarter ended January 31, 2016. Net sales for the third fiscal quarter increased 16% to $218.6 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces first quarter results
    American Woodmark Corporation announces first quarter results Aug 23, 2016 Company Release - 8/23/2016 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its first fiscal quarter ended July 31, 2016. Net sales for the first fiscal quarter increased 12% to $258.2 million compared with the same quarter of the prior fiscal year. Read article
  • American Woodmark Corporation announces third quarter results
    American Woodmark Corporation announces third quarter results Feb 27, 2017 Company Release - 2/27/2017 6:30 AM ET American Woodmark Corporation (NASDAQ: AMWD) today announced results for its third fiscal quarter ended January 31, 2017. Net sales for the third fiscal quarter increased 14% to $249.3 million compared with the same quarter of the prior fiscal year. Read article