Financial Data and Key Metrics Changes - The company reported net sales of $397.6 million, a decline of 5.8% compared to the prior year, which was below expectations due to softer demand in the remodel market and a significant decline in new construction activity [7][23] - Adjusted EBITDA was $38.4 million, representing 9.7% of net sales, down from 12% in the previous year, indicating a 230 basis point decline year-over-year [12][26] - Adjusted net income was $15.9 million or $1.05 per diluted share, compared to $25.1 million or $1.56 per diluted share last year [26] Business Line Data and Key Metrics Changes - New construction net sales decreased by 10.4%, while repair and remodel net sales were down 2.3% [24] - The home center made-to-order business remained flat year-over-year, while the stock kitchen business saw mid-single-digit growth [8] - The distribution business experienced a decline of double digits due to reduced new construction activity [9] Market Data and Key Metrics Changes - Single-family housing starts showed negative comparisons versus the prior year, particularly in markets like Atlanta, Florida, and Southern California [10] - The company noted a rotation down in made-to-order new construction offerings, leading to an unfavorable mix impact [10] Company Strategy and Development Direction - The company is focused on three main strategic pillars: growth, digital transformation, and platform design [17] - Recent initiatives include the conversion of distribution business customers to the new brand 1951 Cabinetry and the launch of new finishes and styles [18][19] - The company is also evaluating pricing strategies to mitigate inflationary impacts and potential new tariffs [32] Management's Comments on Operating Environment and Future Outlook - Management expressed concerns about ongoing macroeconomic challenges, including declining consumer sentiment and inflation risks, with expectations of a mid-single-digit decline in net sales for the full fiscal year [14][30] - The outlook for adjusted EBITDA is revised to a range of $210 million to $215 million, driven by softening sales volumes and increased manufacturing deleverage [31] Other Important Information - The company announced the closure of its Orange, Virginia manufacturing location, which is expected to improve operational efficiencies [27] - Free cash flows totaled $31.5 million year-to-date, a decrease from $131.7 million in the prior year, primarily due to changes in operating cash flows [28] Q&A Session Summary Question: What portion of your reduced guide is attributed to the slower R&R environment and builders reducing inventory? - Management indicated that both factors were key contributors to the overall comp rate for the quarter and that the full-year outlook assumes a similar operating environment in Q4 [38] Question: Have you begun to see any positive impacts from the hurricanes last fall or potentially the fires in Southern California? - Management noted some positive comps in Florida from hurricane-impacted stores, but nothing material for the overall quarter [40] Question: Can you discuss pricing considerations and the options you're contemplating? - Management stated that if tariffs are implemented and cannot be fully mitigated, pricing action will likely be necessary, with discussions ongoing about potential surcharges [44][47] Question: Is dealer demand bottoming, and what is the outlook for R&R? - Management expressed hope that demand is bottoming out, with expectations for an increase in the future, particularly in the second half of 2025 [50][51] Question: Can you quantify the impact of mix headwinds within the new construction business? - Management confirmed a rotation down in product offerings, with builders trying to lower price points to improve affordability [55] Question: What would be the annual benefit from closing the Orange facility in terms of EBITDA and gross margins? - Management indicated that the impact would be incorporated into the fiscal year '26 outlook, with further details to be provided in the next call [63]

Financial Data and Key Metrics Changes - The company reported net sales of $397.6 million, a decline of 5.8% compared to the prior year, which was below expectations due to softer demand in the remodel market and a significant decline in new construction activity [7][23] - Adjusted EBITDA was $38.4 million, representing 9.7% of net sales, down from 12% the previous year, indicating a 230 basis point decline [12][26] - Gross profit as a percentage of net sales decreased by 420 basis points to 15% from 19.2% reported last year [24] - Adjusted net income was $15.9 million or $1.05 per diluted share, down from $25.1 million or $1.56 per diluted share last year [26] Business Line Data and Key Metrics Changes - New construction net sales decreased by 10.4%, while repair and remodel net sales were down 2.3% [24] - The home center made-to-order business was roughly flat year-over-year, while the stock kitchen business saw mid-single-digit growth [8] - The distribution business experienced a double-digit decline due to slowed new construction activity [9] Market Data and Key Metrics Changes - Single-family housing starts showed negative comparisons versus the prior year, indicating a slowdown in the market [9] - The company noted a rotation down in its made-to-order new construction offerings, leading to an unfavorable mix impact [10] Company Strategy and Development Direction - The company is focused on three main strategic pillars: growth, digital transformation, and platform design [17] - Recent initiatives include the conversion of distribution business customers to the new brand 1951 Cabinetry and the launch of new finishes and styles [18][19] - The company announced the closure of its Orange, Virginia manufacturing location to consolidate production and improve operational efficiencies [20][27] Management's Comments on Operating Environment and Future Outlook - Management expressed that demand trends are expected to remain challenging, with a projected mid-single-digit decline in net sales for the full fiscal year [14] - Concerns regarding consumer sentiment, inflation risks, and interest rates were highlighted as macroeconomic challenges [14] - Management remains optimistic that mortgage rate relief and increased consumer confidence could benefit the business in the long term [11] Other Important Information - The company had a cash balance of $43.5 million at the end of the third fiscal quarter, with access to an additional $314.2 million under its revolving credit facility [13] - Free cash flows totaled $31.5 million year-to-date, a decrease from $131.7 million in the prior year, primarily due to changes in operating cash flows [28] Q&A Session Summary Question: What portion of your reduced guide is attributed to the slower R&R environment and builders reducing inventory? - Management indicated that both factors were key contributors to the overall comp rate for the quarter and that the full-year outlook assumes a similar operating environment in Q4 [38] Question: Have you begun to see any positive impacts from the hurricanes last fall or potentially the fires in Southern California? - Management noted some positive comps in Florida from hurricane-impacted stores, but nothing material for the overall quarter [40] Question: Can you discuss pricing considerations and the options you're contemplating? - Management stated that if tariffs come through and cannot be fully mitigated, pricing action will likely be necessary, with discussions ongoing about potential surcharges or list price changes [44][47] Question: Is dealer demand bottoming, and is there a sense of stabilization in that part of the demand world? - Management expressed hope that demand is bottoming out, with expectations for an increase in the future, particularly in the second half of 2025 [50][51] Question: Can you quantify the impact of mix headwinds within the new construction business? - Management confirmed a rotation down in product offerings, with builders trying to lower price points to improve affordability, leading to a decrease in the number of cabinets going into homes [55][56]

Financial Performance - Net sales for the third quarter of fiscal 2025 decreased by $24.5 million, or 5.8%, to $397.6 million compared to the same quarter last fiscal year[3]. - Net income for the third quarter was $16.6 million, or $1.09 per diluted share, representing 4.2% of net sales, down from $21.2 million, or $1.32 per diluted share, in the same quarter last year[3]. - Adjusted EBITDA for the third quarter decreased by $12.2 million, or 24.0%, to $38.4 million, or 9.7% of net sales, compared to $50.6 million, or 12.0% of net sales, last fiscal year[3]. - For the first nine months of fiscal 2025, net sales decreased by $85.0 million, or 6.1%, to $1,309.2 million compared to the same period of the prior fiscal year[6]. - Adjusted EPS per diluted share for the first nine months of fiscal 2025 was $5.28, down from $6.81 in the same period of the prior fiscal year[6]. - For the three months ended January 31, 2025, net income was $16,571,000, a decrease of 22.5% compared to $21,227,000 for the same period in 2024[28]. - Adjusted EBITDA for the three months ended January 31, 2025, was $38,445,000, down 24% from $50,615,000 in the prior year[28]. - Adjusted EBITDA margin for the three months ended January 31, 2025, was 9.7%, compared to 12.0% for the same period in 2024[28]. - Adjusted EPS per diluted share for the three months ended January 31, 2025, was $1.05, down from $1.56 in the same period of 2024[31]. - Net sales for the three months ended January 31, 2025, were $397,580,000, a decrease of 5.5% from $422,102,000 in the prior year[28]. - The company reported a net income margin of 4.2% for the three months ended January 31, 2025, compared to 5.0% for the same period in 2024[28]. Cash Flow and Capital Management - Cash provided by operating activities for the first nine months was $63.7 million, with free cash flow totaling $31.5 million[7]. - The company repurchased 132,075 shares for $12.6 million during the third quarter and 752,412 shares for $69.1 million during the first nine months of fiscal 2025[8]. - Free cash flow for the nine months ended January 31, 2025, was $31,490,000, a decline of 76% from $131,697,000 in the same period of 2024[33]. - As of January 31, 2025, the company had $43.5 million in cash and access to $314.2 million under its revolving credit facility[7]. Restructuring and Costs - Total pre-tax restructuring costs related to the closure of the Orange, Virginia manufacturing plant are expected to be between $6.0 million and $8.5 million[3]. - The company incurred restructuring charges of $520,000 in the three months ended January 31, 2025, related to workforce reductions and facility closures[29]. Future Outlook - The company expects a mid-single digit decline in net sales for the full fiscal year and an Adjusted EBITDA range of $210 million to $215 million[2][11]. - Net leverage as of January 31, 2025, was 1.53, calculated as net debt of $331,860,000 divided by trailing 12 months Adjusted EBITDA of $216,209,000[35]. Adjustments in Reporting - The company adjusted its definition of Adjusted EPS per diluted share to exclude changes in fair value of foreign exchange forward contracts starting in the second quarter of fiscal 2025[25].

Financial Data and Key Metrics Changes - The company reported net sales of $452.5 million, a decline of 4.5% year-over-year, which was in line with previous expectations [5][14] - Adjusted EBITDA was $60.2 million, representing 13.3% of net sales, down from 15.3% the previous year [8][18] - Gross profit margin decreased by 290 basis points to 18.9% compared to 21.8% last year, primarily due to lower sales volumes and rising input costs [15] - Adjusted net income was $32 million or $2.08 per diluted share, down from $41.1 million or $2.50 per diluted share last year [17] - Free cash flow totaled $30.1 million year-to-date, a decrease from $109.9 million in the prior year [18] - Net leverage increased to 1.4 times adjusted EBITDA from 1.05 times last year [19] Business Line Data and Key Metrics Changes - The new construction channel experienced positive unit growth, but this was offset by a negative price mix [7][48] - All channels reported declines in sales during the quarter, with specific impacts noted in the remodel market due to macroeconomic pressures [14][48] Market Data and Key Metrics Changes - Existing home sales fell to a 14-year low, impacting demand for remodel projects [6] - The company expects the repair and remodel market to decline mid-single digits, while new construction is projected to increase low single digits [10][20] Company Strategy and Development Direction - The company is focused on three main strategic pillars: growth, digital transformation, and platform design [11] - Investments in digital transformation include optimizing Salesforce and planning for ERP implementation [12] - The company aims to continue share repurchases while prioritizing investments in automation and digital transformation [23] Management's Comments on Operating Environment and Future Outlook - Management noted that high interest rates and lower consumer confidence are dampening demand, particularly for larger discretionary projects [14][24] - The outlook for fiscal year 2025 remains unchanged, with expectations of low single-digit sales declines [20] - Management expressed confidence in the long-term fundamentals of the housing market, anticipating a recovery in the future [24] Other Important Information - The company repurchased 349,000 shares, representing 2.3% of shares outstanding during the quarter [9] - The company has access to an additional $313.2 million under its revolving credit facility [9] Q&A Session Summary Question: Supply chain exposure to Mexico due to potential tariffs - Management acknowledged uncertainty regarding future tariffs but expressed confidence in their ability to adapt and mitigate impacts through resourcing and pricing adjustments [27][28] Question: Pricing actions in other channels beyond the dealer channel - Management confirmed no additional pricing increases have been announced beyond the dealer channel, which had an increase effective October 1 [30] Question: Sales outlook and maintained guidance - Management indicated that the maintained sales guidance reflects expectations of better performance in the second half, driven by pricing and easier comparisons [35][36] Question: Cost side expectations for the second half - Management noted continued increases in input costs, particularly in particle board, labor, and delivery [37] Question: Risks to sales and volume outlook - Management believes current sales trends are primarily macro-driven, with potential risks from policy uncertainties [42] Question: Retail promotions and volume expectations - Management reported consistent promotional activity year-over-year, with no significant changes expected [45] Question: Breakdown of sales decline by channels - Management stated that all channels experienced declines, with new construction showing unit growth but a negative price mix [48] Question: Expectations for free cash flow relative to EBITDA - Management indicated that free cash flow expectations remain consistent, with some pressure on working capital due to inventory constraints [56] Question: Impact of hurricanes on new construction in the Southeast - Management confirmed some impacts from hurricanes but does not expect material effects on Q3 performance [57]

Financial Performance - Net sales for the three months ended October 31, 2024, were $452,482,000, a decrease of 4.5% compared to $473,867,000 for the same period in 2023[14] - Gross profit for the three months ended October 31, 2024, was $85,711,000, down 16.9% from $103,159,000 in the prior year[14] - Operating income for the three months ended October 31, 2024, was $42,603,000, a decrease of 6.5% compared to $45,464,000 in the same period of 2023[14] - Net income for the three months ended October 31, 2024, was $27,686,000, down 8.7% from $30,341,000 in the prior year[14] - The company reported a total comprehensive income of $25,783,000 for the three months ended October 31, 2024, down from $29,355,000 in the prior year[17] - Net income for the six months ended October 31, 2024, was $57,319,000, a decrease of 16% compared to $68,191,000 for the same period in 2023[23] - Basic net earnings per share for the three months ended October 31, 2024, were $1.81, compared to $1.86 for the same period in 2023[14] - Basic earnings per share for the six months ended October 31, 2024, was $3.71, compared to $4.16 for the same period in 2023, reflecting a decrease of 10.8%[43] - Adjusted EPS per diluted share for Q2 fiscal 2025 was $2.08, down from $2.50 in Q2 fiscal 2024[124] Assets and Liabilities - Total assets increased to $1,609,875,000 as of October 31, 2024, compared to $1,593,865,000 as of April 30, 2024[11] - Total current liabilities rose to $208,568,000 as of October 31, 2024, compared to $195,726,000 in the previous period[11] - Shareholders' equity increased to $915,062,000 as of October 31, 2024, from $910,376,000 as of April 30, 2024[11] - The company’s total outstanding debt under the Term Loan Facility was approximately $200 million as of October 31, 2024[60] - Total long-term debt as of October 31, 2024, was $367.981 million[66] - Cash and cash equivalents at the end of the period on October 31, 2024, were $87,398,000, compared to $41,732,000 at the end of the same period in 2023[26] Cash Flow and Financing Activities - Operating cash flow for the six months ended October 31, 2024, was $52,733,000, down from $143,722,000 in the prior year, reflecting a significant decline[23] - The company reported cash provided by operations of $52.7 million in the first six months of fiscal 2025, a decrease from $143.7 million in the same period of fiscal 2024[128] - During the first six months of fiscal 2025, net cash used by financing activities was $60.8 million, an increase from $55.2 million in the same period of the prior fiscal year, primarily due to $56.5 million in common stock repurchases, which increased by $4.4 million year-over-year[135] - The company repurchased $56,493,000 worth of common stock during the financing activities for the six months ended October 31, 2024[23] - A total of $32.5 million of common shares were repurchased during the second quarter of fiscal 2025, with $33.0 million remaining available for repurchases as of October 31, 2024[154] Expenses and Charges - The company incurred restructuring charges of $1,133,000 for the three months ended October 31, 2024, compared to a net gain of $(26,000) in the same period of 2023[14] - Total stock-based compensation expense for the six months ended October 31, 2024, was $5,805,000, compared to $4,402,000 in the same period of 2023, indicating an increase of 31.8%[23] - The company’s stock-based compensation expense for the six months ended October 31, 2024, was $5.805 million, compared to $4.402 million for the same period in 2023, reflecting an increase of 31.9%[46] - General and administrative expenses decreased by $14.8 million or 42.2% during the second quarter of fiscal 2025 compared to the same period of the prior year[106] Market and Economic Conditions - The unemployment rate increased to 4.1% as of October 2024 compared to 3.9% as of October 2023[96] - Mortgage interest rates decreased to approximately 6.7% in October 2024, a decrease of approximately 107 basis points compared to the same period in the prior year[96] - The inflation rate as of October 2024 was 2.6%, compared to 3.2% in October 2023[96] Future Outlook - The company expects a low single-digit decline in net sales for fiscal 2025 due to a softer repair and remodel market, partially offset by growth in the new construction market[125] - Adjusted EBITDA guidance for fiscal 2025 is set between $225 million and $235 million, impacted by manufacturing deleverage due to lower sales[125] - The company plans to continue investing in digital transformation and automation while being opportunistic in share repurchases[126] Compliance and Legal Matters - As of October 31, 2024, the Company was in compliance with all covenants included in the A&R Credit Agreement[64] - The company is involved in ordinary litigation incidental to its business but is not party to any material litigation[149]

Financial Performance - Net sales for Q2 FY2025 were $452.5 million, a decrease of $21.4 million or 4.5% compared to the same quarter last fiscal year[5]. - Net income for Q2 FY2025 was $27.7 million, representing 6.1% of net sales, down from $30.3 million or 6.4% of net sales in the same quarter last year[5]. - Adjusted EBITDA for Q2 FY2025 decreased by $12.1 million, or 16.8%, to $60.2 million, which is 13.3% of net sales[5]. - For the first six months of FY2025, net sales totaled $911.6 million, a decline of $60.5 million or 6.2% year-over-year[6]. - Adjusted EPS for Q2 FY2025 was $2.08, down from $2.50 in the same quarter last fiscal year[5]. - Adjusted EBITDA for the second quarter of fiscal 2025 was $60,187 thousand, compared to $72,329 thousand in the same quarter of 2024, reflecting a decline of approximately 16.8%[33]. - Net sales for the second quarter of fiscal 2025 were $452,482 thousand, down from $473,867 thousand in the same quarter of 2024, a decrease of about 4.4%[33]. - Adjusted EPS per diluted share for the second quarter of fiscal 2025 was $2.08, compared to $2.50 in the same quarter of 2024, a decline of approximately 16.8%[34]. - Net income margin (GAAP) for the second quarter of fiscal 2025 was 6.1%, slightly down from 6.4% in the same quarter of 2024[33]. Cash Flow and Liquidity - As of October 31, 2024, the company had $56.7 million in cash and access to $313.2 million under its revolving credit facility[9]. - Net cash provided by operating activities decreased to $52,733 thousand in 2024 from $143,722 thousand in 2023, representing a decline of approximately 63.3%[22]. - Free cash flow for the six months ended October 2024 was $30,141 thousand, down from $109,880 thousand in the same period of 2023, a decrease of about 72.6%[35]. - Cash and cash equivalents at the end of the period were $56,717 thousand in 2024, down from $96,381 thousand in 2023, a decrease of approximately 41.2%[22]. Debt and Financing - The company refinanced its senior secured debt facility, establishing a $500 million revolving loan facility and a $200 million term loan facility[9]. - Current maturities of long-term debt amount to $7,831 million[38]. - Long-term debt, less current maturities, totals $367,981 million[38]. - Total debt stands at $375,812 million[38]. - Net debt is $319,095 million[38]. - Net leverage as of October 31, 2024, was calculated based on net debt divided by trailing 12 months Adjusted EBITDA, providing insight into the company's leverage position[31]. - Net leverage ratio is 1.40[38]. Shareholder Actions - The company repurchased 348,877 shares for $32.5 million during Q2 FY2025, and a total of 620,337 shares for $56.5 million in the first six months of FY2025[11]. - The board authorized an additional stock repurchase program of up to $125 million on November 20, 2024[12]. Restructuring and Charges - The company reported a net loss on debt modification of $364 thousand for the second quarter of fiscal 2025, indicating ongoing financial adjustments[34]. - The company incurred restructuring charges of $1,133 thousand in the second quarter of fiscal 2025, reflecting costs associated with workforce reductions[34]. - Restructuring charges are related to workforce reductions in fiscal 2023 and 2025[38]. Foreign Exchange and Acquisitions - The company manages foreign exchange risks through forward contracts[38]. - Acquisition-related expenses include costs from the RSI acquisition[38].

Financial Performance - Net sales for the first quarter of fiscal 2025 were $459.1 million, a decrease of $39.1 million or 7.9% compared to the same period in fiscal 2024[82]. - The company reported a net income of $29.6 million, or 6.5% of net sales, down from $37.9 million, or 7.6% of net sales in the prior year[80]. - Gross profit margin decreased to 20.2% in the first quarter of fiscal 2025 from 22.0% in the same period of fiscal 2024, a decline of 180 basis points[85]. - Net income for the first quarter of fiscal 2025 was $29.6 million, down from $37.9 million in the same quarter of the prior year, representing a decline of 21.5%[95]. - Adjusted EBITDA for the first quarter of fiscal 2025 was $62.9 million, or 13.7% of net sales, compared to $75.2 million, or 15.1% of net sales for the same quarter of the prior year, indicating a decrease of 16.5%[97]. Sales Performance - Remodeling sales decreased by 15.6% during the first quarter of fiscal 2025 compared to the same prior year period[82]. - Builder sales increased by 3.3% in the first quarter of fiscal 2025 compared to the same period of fiscal 2024[83]. - The Company expects a low single-digit decline in net sales for fiscal 2025 due to a softer repair and remodel market, partially offset by an increase in new construction[99]. Expenses and Income Tax - General and administrative expenses decreased by $14.1 million or 39.6% year-over-year, representing 4.7% of net sales in the first quarter of fiscal 2025[87]. - The effective income tax rate for the three-month period ended July 31, 2024, was 25.0%, up from 21.9% in the comparable prior year period[88]. Cash and Debt Management - Cash and cash equivalents totaled $89.3 million as of July 31, 2024, an increase of $1.9 million from April 30, 2024, primarily due to $40.8 million cash provided by operations[102]. - Total long-term debt was $374.9 million as of July 31, 2024[102]. - The Company has a $500 million revolving loan facility and a $250 million term loan facility, with approximately $322.9 million available under the Revolving Facility as of July 31, 2024[104]. - Cash flow from operations and accumulated cash are expected to be sufficient to support working capital requirements and service existing debt obligations for the remainder of fiscal 2025[109]. Share Repurchase and Investment - The company repurchased $24.0 million of its common shares during the first quarter of fiscal 2025, with $65.4 million remaining available for future repurchases[108]. - The Board of Directors authorized a stock repurchase program of up to $125 million, canceling the remaining $22.1 million from a previous authorization[108]. - Net cash used for investing activities was $11.4 million in the first three months of fiscal 2025, compared to $14.2 million in the same period of fiscal 2024[107]. Market Conditions - The unemployment rate increased to 4.3% as of July 2024, compared to 3.5% in July 2023[79]. - Consumer sentiment decreased from 71.6 in July 2023 to 66.4 in July 2024[79]. - The median price per existing home sold increased by 4.9% during the second calendar quarter of 2024 compared to the same period one year ago[79]. Operational Insights - The Company has experienced seasonal influences, with higher sales typically in the first and fourth fiscal quarters, although seasonal fluctuations have reduced in recent years[110]. - The Company has been able to recover the effects of inflation and commodity price fluctuations through sales price increases over time[110]. - The Company had no off-balance sheet arrangements as of July 31, 2024[107].

Market Performance - U.S. stocks showed mixed trading results, with the S&P 500 gaining approximately 0.2% [1] - The Dow increased by 0.01% to 41,242.33, while the NASDAQ rose by 0.24% to 17,768.84 [1] - Information technology shares rose by 0.7%, while energy shares fell by 1% [1] Notable Stock Movements - Ensysce Biosciences, Inc. shares surged 37% to $0.5899 after receiving a $14 million grant from the NIH [2] - Addex Therapeutics Ltd shares increased by 49% to $11.18 due to milestone and royalty opportunities from a collaboration with Indivior [2] - VOXX International Corporation shares rose 74% to $4.9710 following the announcement of a strategic alternatives process [2] Declining Stocks - Altisource Asset Management Corporation shares dropped 41% to $1.3890 after announcing plans to delist from the NYSE [3] - COSCIENS Biopharma Inc. shares fell 33% to $3.9501 after Phase 3 trial results [3] - American Woodmark Corporation shares decreased by 11% to $89.23 due to worse-than-expected financial results [3] Commodity Prices - Oil prices fell by 2.2% to $75.69, while gold prices increased by 0.1% to $2,556.30 [4] - Silver and copper prices rose by 0.1% to $30.05 and 0.5% to $4.3035, respectively [4] European Market Overview - European shares were mostly higher, with the eurozone's STOXX 600 gaining 0.16% [4] - Germany's DAX rose by 0.35%, while France's CAC 40 fell by 0.32% [4] - The German economy contracted by 0.1% quarter-over-quarter in Q2, following a 0.2% growth in Q1 [4] Asian Market Performance - Asian markets closed mostly higher, with Japan's Nikkei 225 gaining 0.47% and Hong Kong's Hang Seng Index rising 0.43% [5] - China's Shanghai Composite Index fell by 0.24%, while India's BSE Sensex rose by 0.02% [5] - Hong Kong's trade deficit narrowed to $21.8 billion in July from a $30 billion gap a year ago [5] Economic Indicators - The S&P CoreLogic Case-Shiller home price index increased by 6.5% year-over-year in June, down from a revised 6.9% in the previous month [6] - The FHFA house price index fell by 0.1% in June, contrary to market expectations of a 0.2% gain [6]

Core Viewpoint - American Woodmark reported a significant earnings miss for fiscal Q1 2025, leading to a sharp decline in stock price, indicating potential challenges in the housing market and company performance [1][2]. Financial Performance - The company reported earnings of $1.89 per share and sales of $459.1 million, missing analyst expectations of $2.40 per share and $476.6 million in sales, respectively [1]. - Sales declined by 8% year-over-year, primarily due to weak demand from home remodelers, although sales to homebuilders increased during the quarter [2]. - Earnings experienced a 32% decline, which was four times greater than the sales decline, attributed to a $6.3 million unfavorable mark-to-market adjustment on foreign currency hedging instruments [2]. Cash Flow Concerns - Operating cash flow fell by more than half to $40.8 million, suggesting that free cash flow may decline even more sharply than net income when full data is released [3]. Valuation and Market Outlook - Following the sell-off, American Woodmark's price-to-earnings ratio stands at 12.8, appearing cheap at first glance; however, the estimated price-to-free-cash-flow ratio may rise to 17.3 once full cash flow data is available [4]. - Management has indicated a slowdown in new construction single-family starts and revenue is expected to decline by at least single-digit percentages this year, warranting caution for potential investors [4].

Financial Data and Key Metrics Changes - Net sales for the first fiscal quarter were $459.1 million, a decline of 7.9% year-over-year, attributed to weaker demand in the remodel channel [7][12] - Adjusted EBITDA was $62.9 million, or 13.7% of net sales, down from 15.1% the previous year [9][14] - Adjusted net income decreased to $29.6 million, or $1.89 per diluted share, compared to $46.2 million, or $2.78 per diluted share last year [14] - Gross profit margin decreased by 180 basis points to 20.2% from 22% year-over-year [12] - Free cash flow was $29.4 million year-to-date, down from $72.5 million in the prior year [14] Business Line Data and Key Metrics Changes - New construction sales were up single-digits, while repair and remodel sales were down double-digits [21] - The company expects larger discretionary projects in the remodel market to trend worse than the overall market, projected to decline by high-single-digits [10] Market Data and Key Metrics Changes - Year-over-year growth in single-family housing starts has slowed, impacting future cabinet installations [8] - The outlook for the repair and remodel market is expected to decline in mid-single digits, while new construction is anticipated to be flat [10][16] Company Strategy and Development Direction - The company’s strategy focuses on three main pillars: growth, digital transformation, and platform design [10] - Investments in automation and digital transformation are prioritized, with ongoing efforts in ERP and CRM systems [17] - The company aims to optimize manufacturing and service platforms while managing pricing to mitigate inflationary impacts [17] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer confidence is expected to improve with potential interest rate cuts, which could drive demand in calendar 2025 [8][9] - The company remains confident in the long-term fundamentals of the housing industry despite current challenges [12] - Management described the current demand environment as a "beach ball being held underwater," indicating pent-up demand that could surface with improved economic conditions [43] Other Important Information - The company repurchased 271,000 shares during the quarter, representing about 1.8% of outstanding shares [9][15] - Net leverage was reported at 1.19 times adjusted EBITDA, compared to 1.09 times the previous year [15] Q&A Session Summary Question: Revenue trends by channel in the fiscal first quarter - New construction was up single-digits, while repair remodel was down double-digits [21] Question: Updated outlook for the year - Management refrained from providing quarterly forecasts but expressed confidence in the full-year projection [23] Question: Input costs and pricing strategies - Pricing actions vary by channel, with recent increases announced in the dealer channel [25] Question: New construction outlook amidst housing-start environment - Initial demand exceeded expectations, but concerns arose for the second half due to declining starts [29] Question: Share gains and financial benefits timing - Timing for realizing financial benefits from share gains varies, with new construction typically taking longer [51] Question: M&A market activity - No current M&A activities are being pursued [53]