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]

[Fiscal First Quarter 2025 Financial Highlights](index=1&type=section&id=Fiscal%20First%20Quarter%202025%20Financial%20Highlights) American Woodmark reported first-quarter fiscal 2025 results with net sales of $459.1 million and net income of $29.6 million, or $1.89 per share, generating $62.9 million in Adjusted EBITDA and $29.4 million in free cash flow, while repurchasing $24.0 million of common stock Q1 FY2025 Key Financial Metrics | Metric | Value (million USD) | | :--- | :--- | | Net Sales | $459.1 | | Net Income | $29.6 | | GAAP EPS (USD) | $1.89 | | Adjusted EBITDA | $62.9 | | Cash from Operations | $40.8 | | Free Cash Flow | $29.4 | - The company repurchased **271,460 shares** for **$24.0 million** during the first quarter[2](index=2&type=chunk)[5](index=5&type=chunk) [Management Commentary](index=1&type=section&id=Management%20Commentary) Management noted new construction market sales growth was offset by weaker remodel market demand, a softness expected to persist, while focusing on market share gains, platform optimization, and operational improvements for future recovery - CEO Scott Culbreth stated that net sales growth in the new construction market was more than offset by weaker demand in the remodel market[3](index=3&type=chunk) - The company aims to achieve share gains in all channels to ensure its performance surpasses market demand for the fiscal year[3](index=3&type=chunk) - CFO Paul Joachimczyk noted that despite weaker sales, teams are focused on optimizing platform expansion investments and making operational improvements[7](index=7&type=chunk) [Financial Performance](index=1&type=section&id=Financial%20Performance) For Q1 FY2025, net sales decreased 7.9% year-over-year to $459.1 million, with net income falling to $29.6 million from $37.9 million due to lower sales and a $6.3 million unfavorable mark-to-market adjustment on currency hedges, partially offset by the conclusion of an $11.4 million acquisition-related amortization expense, leading to a 16.3% decrease in Adjusted EBITDA to $62.9 million and a margin contraction to 13.7% Q1 FY2025 vs Q1 FY2024 Performance | Metric | Q1 FY2025 (million USD) | Q1 FY2024 (million USD) | Change (%) | | :--- | :--- | :--- | :--- | | Net Sales | $459.1 | $498.3 | -7.9 | | Net Income | $29.6 | $37.9 | -21.9 | | Diluted EPS (USD) | $1.89 | $2.28 | -17.1 | | Adjusted EBITDA | $62.9 | $75.2 | -16.3 | | Adjusted EBITDA Margin (%) | 13.7 | 15.1 | -1.4 p.p. | - The decrease in net income was primarily due to lower net sales and a **$6.3 million** unfavorable mark-to-market adjustment on foreign currency hedging instruments[4](index=4&type=chunk) - The decline was partly offset by the roll-off of **$11.4 million** in acquisition-related intangible asset amortization, which ended in Q3 of the prior fiscal year[4](index=4&type=chunk) Unaudited Operating Results (in thousands) | Description | Three Months Ended July 31, 2024 (thousand USD) | Three Months Ended July 31, 2023 (thousand USD) | | :--- | :--- | :--- | | Net Sales | $459,128 | $498,255 | | Gross Profit | $92,866 | $109,609 | | Operating Income | $47,027 | $49,827 | | Net Income | $29,633 | $37,850 | | Net Income per Diluted Share (USD) | $1.89 | $2.28 | [Balance Sheet and Cash Flow](index=1&type=section&id=Balance%20Sheet%20and%20Cash%20Flow) As of July 31, 2024, American Woodmark held $89.3 million in cash and had access to an additional $322.9 million under its revolving credit facility, with total debt including a $206.3 million term loan and $163.8 million drawn on its revolver, while generating $40.8 million in operating cash flow and $29.4 million in free cash flow, and returning $24.0 million to shareholders via buybacks - As of July 31, 2024, the company had **$89.3 million** in cash and access to **$322.9 million** of additional availability under its revolving credit facility[5](index=5&type=chunk) Condensed Consolidated Balance Sheet (in thousands) | Account | July 31, 2024 (thousand USD) | April 30, 2024 (thousand USD) | | :--- | :--- | :--- | | Cash & Cash Equivalents | $89,265 | $87,398 | | Total Current Assets | $415,222 | $402,710 | | Total Assets | $1,623,423 | $1,593,865 | | Total Current Liabilities | $209,356 | $195,726 | | Total Liabilities | $709,584 | $683,489 | | Stockholders' Equity | $913,839 | $910,376 | Condensed Cash Flow Statement (in thousands) | Description | Three Months Ended July 31, 2024 (thousand USD) | Three Months Ended July 31, 2023 (thousand USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $40,811 | $86,721 | | Net Cash Used by Investing Activities | ($11,394) | ($14,223) | | Net Cash Used by Financing Activities | ($27,550) | ($24,580) | | Net Increase in Cash | $1,867 | $47,918 | - The company repurchased **271,460 shares** (approx. **1.8%** of shares outstanding) for **$24.0 million**, with **$65.4 million** remaining available for future repurchases[5](index=5&type=chunk) [Fiscal 2025 Financial Outlook](index=1&type=section&id=Fiscal%202025%20Financial%20Outlook) For the full fiscal year 2025, the company anticipates a low single-digit decline in net sales compared to the prior year, with Adjusted EBITDA projected to be in the range of $225 million to $245 million - Expects a low single-digit decline in net sales year-over-year for fiscal 2025[6](index=6&type=chunk) - Forecasts Adjusted EBITDA to be in the range of **$225 million** to **$245 million** for fiscal 2025[7](index=7&type=chunk) [Non-GAAP Financial Measures](index=3&type=section&id=Non-GAAP%20Financial%20Measures) The company uses non-GAAP financial measures such as EBITDA, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, and Net Leverage to evaluate business performance, adjusting for items like acquisition-related expenses, restructuring charges, stock-based compensation, and changes in fair value of derivatives to provide a clearer view of underlying operations, with detailed reconciliations included for each measure to its closest GAAP equivalent - The company uses non-GAAP measures like **EBITDA**, **Adjusted EBITDA**, **Adjusted EPS**, **Free Cash Flow**, and **Net Leverage** to analyze performance[14](index=14&type=chunk)[15](index=15&type=chunk)[18](index=18&type=chunk) - Adjusted EBITDA excludes items such as restructuring costs, stock-based compensation expense, and changes in fair value of foreign exchange forward contracts[16](index=16&type=chunk) - Adjusted EPS per diluted share excludes items such as non-recurring restructuring charges and the amortization of customer relationship intangibles[18](index=18&type=chunk) [Reconciliation of EBITDA and Adjusted EBITDA](index=6&type=section&id=Reconciliation%20of%20EBITDA%2C%20Adjusted%20EBITDA%20and%20Adjusted%20EBITDA%20margin) In Q1 FY2025, Adjusted EBITDA was $62.9 million (13.7% margin), down from $75.2 million (15.1% margin) in Q1 FY2024, with the reconciliation from GAAP Net Income of $29.6 million including add-backs for taxes, interest, D&A, and a $5.3 million unfavorable change in the fair value of foreign exchange contracts Reconciliation of Net Income to Adjusted EBITDA (in thousands) | Description | Three Months Ended July 31, 2024 (thousand USD) | Three Months Ended July 31, 2023 (thousand USD) | | :--- | :--- | :--- | | **Net Income (GAAP)** | **$29,633** | **$37,850** | | Income Tax Expense | $9,864 | $10,615 | | Interest Expense, Net | $2,290 | $2,437 | | Depreciation and Amortization | $12,802 | $11,745 | | Amortization of Customer Relationship Intangibles | — | $11,417 | | **EBITDA (Non-GAAP)** | **$54,589** | **$74,064** | | Change in Fair Value of Foreign Exchange Forward Contracts | $5,309 | ($1,015) | | Stock-Based Compensation Expense | $2,941 | $2,247 | | Other Adjustments | $58 | ($145) | | **Adjusted EBITDA (Non-GAAP)** | **$62,897** | **$75,151** | [Reconciliation of Adjusted EPS](index=8&type=section&id=Reconciliation%20of%20Net%20Income%20to%20Adjusted%20Net%20Income) For Q1 FY2025, both GAAP EPS and Adjusted EPS were $1.89 per diluted share, compared to the prior-year quarter where GAAP EPS was $2.28 and Adjusted EPS was $2.78, with the prior-year adjustment primarily excluding the amortization of customer relationship intangibles Reconciliation of Net Income to Adjusted Net Income (in thousands, except share data) | Description | Three Months Ended July 31, 2024 (thousand USD) | Three Months Ended July 31, 2023 (thousand USD) | | :--- | :--- | :--- | | **Net Income (GAAP)** | **$29,633** | **$37,850** | | Amortization of Customer Relationship Intangibles | — | $11,417 | | Other Adjustments & Tax Benefit | — | ($3,112) | | **Adjusted Net Income (Non-GAAP)** | **$29,633** | **$46,175** | | **EPS per Diluted Share (GAAP) (USD)** | **$1.89** | **$2.28** | | **Adjusted EPS per Diluted Share (Non-GAAP) (USD)** | **$1.89** | **$2.78** | [Reconciliation of Free Cash Flow](index=8&type=section&id=Free%20Cash%20Flow) The company's free cash flow for Q1 FY2025 was $29.4 million, a significant decrease from $72.5 million in the same period last year, derived by subtracting capital expenditures of $11.4 million from $40.8 million of net cash provided by operating activities Free Cash Flow Calculation (in thousands) | Description | Three Months Ended July 31, 2024 (thousand USD) | Three Months Ended July 31, 2023 (thousand USD) | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $40,811 | $86,721 | | Less: Capital Expenditures | $11,399 | $14,227 | | **Free Cash Flow** | **$29,412** | **$72,494** | [Net Leverage](index=9&type=section&id=Net%20Leverage) As of July 31, 2024, the company's net leverage ratio was 1.19x, based on net debt of $285.6 million (total debt of $374.9 million less $89.3 million cash) and a trailing twelve-month Adjusted EBITDA of $240.5 million Net Leverage Calculation (as of July 31, 2024) | Component | Value (thousand USD) | | :--- | :--- | | Total Debt | $374,879 | | Less: Cash and Cash Equivalents | ($89,265) | | **Net Debt** | **$285,614** | | | | | Trailing 12 Months Adjusted EBITDA | $240,519 | | **Net Leverage (x)** | **1.19** |

Joe Hendrickson Introduction American Woodmark (NASDAQ:AMWD) has seen their share price decline ~16% on a year-to-date basis and nearly 25% since the high reached in March, prompting me to swing around. Simply put, this is a business that should grow over time, being levered toward residential (and some commercial) construction. However, a number of questionable moves by management over the past few years - and respective underperformance - in addition to potential pricing pressure from capacity growth ...

American Woodmark (AMWD) is a Zacks Rank #5 (Strong Sell) as earnings estimates have tracked lower after a recent earnings miss.  The company is the third largest manufacture of kitchen and bath cabinets. This article will look at why this stock is a Zacks Rank #5 (Strong Sell) as it is the Bear of the Day.DescriptionAmerican Woodmark Corp. engages in the manufacture and distribution of kitchen cabinets and vanities for the remodeling and new home construction markets. The company was founded by William F. ...

Sales and Market Share - For the fiscal year ended April 30, 2024, Home Depot and Lowe's combined accounted for approximately 41.6% of net sales[14] - Approximately 41.6% of total net sales during fiscal year 2024 came from Home Depot and Lowe's, indicating a significant reliance on these two customers[38] - Builders represented approximately 42.4% of net sales during fiscal 2024, highlighting the importance of this channel[15] - Independent dealers and distributors accounted for approximately 16.0% of net sales in fiscal 2024, indicating a strong growth opportunity[16] - The company holds an estimated 10% market share in the U.S. cabinet market, ranking as the second or third largest player[31] Manufacturing and Operations - The company operates 18 manufacturing facilities across the U.S. and Mexico, enhancing production capacity and efficiency[17] - A new manufacturing facility in Monterrey, Mexico, began operations in the third quarter of fiscal 2024, expanding production capabilities[17] - The company operates 18 manufacturing facilities in the U.S. and Mexico, enhancing productivity and efficiency through vertical integration and automation[34] - The company has made significant investments in automation to improve productivity and reduce manufacturing costs[17] - Manufacturing expansions and realignments may lead to short-term earnings decreases until capacity and cost savings are realized[52] Financial Performance and Risks - Fluctuating raw material and energy costs could materially impact manufacturing costs and overall financial performance[41] - Economic downturns could lead to longer periods of recession in the cabinetry industry, adversely affecting sales and earnings[44] - The company's consolidated indebtedness could increase vulnerability to economic conditions and reduce liquidity, impacting operations and capital expenditures[61] - Future acquisitions may result in dilution to existing shareholders and could adversely affect financial condition if integration is unsuccessful[74] - Environmental compliance costs and liabilities could materially impact the company's financial condition and operations[69] Customer Relationships and Market Dynamics - The company has an average relationship length of over 20 years with its top 10 customers, indicating strong customer loyalty[33] - Increased buying power of large customers due to consolidation may limit the company's ability to maintain or raise prices, adversely affecting sales and financial position[60] - The company faces competition from both domestic and international manufacturers, which may affect market share and pricing strategies[45] Operational Challenges - The company is exposed to risks associated with global operations, including political, economic, and regulatory changes in the markets where it operates[53] - The company faces risks related to the timely procurement of raw materials, which could adversely affect manufacturing and marketing capabilities[57] - The company does not enter into long-term contracts with suppliers, relying instead on purchase orders, which may lead to sourcing interruptions and inefficiencies[59] - The company is implementing an Enterprise Resource Planning (ERP) system, which may disrupt operations and incur significant costs[67] - The company relies on information technology systems, which are vulnerable to cybersecurity threats that could disrupt operations and harm reputation[68] - The company may face challenges in attracting and retaining qualified personnel, which could impair growth potential and increase costs[75] - Natural disasters or terrorist acts could disrupt manufacturing and distribution, adversely affecting business operations and financial results[78] Strategic Initiatives - The company’s GDP strategy focuses on Growth, Digital Transformation, and Platform Design to drive long-term profitability[10] - The company has established a commitment to operational excellence to manage cost inflation and enhance quality[18] - The company has implemented Right Environment Councils to promote diversity and inclusion across all locations[29] - The OSHA recordable rate was 1.42 during fiscal 2024, which is 57% better than the industry average of 3.3[27]

Investors in American Woodmark Corporation (AMWD) need to pay close attention to the stock based on moves in the options market lately. That is because the Jul 19, 2024 $40 Call had some of the highest implied volatility of all equity options today.What is Implied Volatility?Implied volatility shows how much movement the market is expecting in the future. Options with high levels of implied volatility suggest that investors in the underlying stocks are expecting a big move in one direction or the other. It ...

American Woodmark Corporation (NASDAQ:AMWD) Q4 2024 Results Conference Call May 23, 2024 4:30 PM ET Company Participants Paul Joachimczyk - Senior Vice President and Chief Financial Officer Scott Culbreth - President and Chief Executive Officer Conference Call Participants Brian Biros - Thompson Research Group Zack Pacheco - Loop Capital Collin Verron - Jefferies Tim Wojs - Baird Operator Good day, and welcome to the American Woodmark Corporation Fourth Fiscal Quarter 2024 Conference Call. Today's call is b ...

American Woodmark (AMWD) came out with quarterly earnings of $1.70 per share, missing the Zacks Consensus Estimate of $1.75 per share. This compares to earnings of $2.21 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -2.86%. A quarter ago, it was expected that this cabinet maker would post earnings of $1.13 per share when it actually produced earnings of $1.66, delivering a surprise of 46.90%.Over the last four quarters, the ...

[Executive Summary & Financial Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Financial%20Highlights) [Fiscal Fourth Quarter 2024 Highlights](index=1&type=section&id=Fiscal%20Fourth%20Quarter%202024%20Highlights) American Woodmark reported a decrease in net sales and net income for Q4 FY2024 compared to the prior year, with Adjusted EBITDA also declining, while generating positive cash flow from operations and free cash flow, and repurchasing shares Q4 FY2024 Financial Highlights | Metric | Q4 FY2024 | YoY Change (%) | | :-------------------------------- | :---------- | :--------- | | Net sales | $453.3 million | -5.8% | | Net income | $26.8 million | -11.1% | | GAAP EPS | $1.69 | | | Adjusted EPS | $1.70 | | | Adjusted EBITDA | $54.7 million | -16.2% | | Cash provided by operating activities | $43.3 million | | | Free cash flow | $6.8 million | | | Repurchased shares | 170,571 shares | | | Value of shares repurchased | $15.9 million | | [Fiscal Year 2024 Highlights](index=1&type=section&id=Fiscal%20Year%202024%20Highlights) For the full fiscal year 2024, American Woodmark experienced a decrease in net sales but achieved a significant increase in net income and Adjusted EBITDA, generating strong cash flow and executing substantial share repurchases FY2024 Financial Highlights | Metric | FY2024 | YoY Change (%) | | :-------------------------------- | :----------- | :--------- | | Net sales | $1,847.5 million | -10.6% | | Net income | $116.2 million | +24.0% | | GAAP EPS | $7.15 | | | Adjusted EPS | $8.53 | | | Adjusted EBITDA | $252.8 million | +5.2% | | Cash provided by operating activities | $230.8 million | | | Free cash flow | $138.5 million | | | Repurchased shares | 1,108,715 shares | | | Value of shares repurchased | $87.7 million | | [Management Commentary & FY2025 Outlook](index=1&type=section&id=Management%20Commentary%20%26%20FY2025%20Outlook) CEO Scott Culbreth highlighted strong Q4 performance, exceeding expectations for net sales and Adjusted EBITDA due to an improving demand environment and strategic focus on operational excellence, while projecting low single-digit net sales growth for FY2025 - CEO Scott Culbreth noted strong Q4 performance, exceeding expectations for **net sales** and **Adjusted EBITDA**, attributing it to an improving demand environment and strategic focus on automation and operational excellence[3](index=3&type=chunk) - Despite a **10.6%** reduction in **net sales** for the full fiscal year, **Adjusted EBITDA** grew to **$252.8 million**, and **Adjusted EBITDA margin** improved by over **200 basis points**[3](index=3&type=chunk) - The company plans to continue investing in automation, capacity, and digital transformation to achieve long-term targets[3](index=3&type=chunk) - For fiscal year **2025**, the **net sales** outlook is for **low single-digit growth** across all channels[3](index=3&type=chunk) [Detailed Financial Results](index=1&type=section&id=Detailed%20Financial%20Results) [Fourth Quarter Operating Results](index=1&type=section&id=Fourth%20Quarter%20Operating%20Results) Net sales for Q4 FY2024 decreased by 5.8% year-over-year to $453.3 million, with net income declining by $3.3 million primarily due to lower net sales and one-time startup costs for new locations, and Adjusted EPS also decreased Q4 FY2024 Operating Results | Metric | Q4 FY2024 (USD Million) | Q4 FY2023 (USD Million) | Change (USD Million) | % Change (%) | | :-------------------- | :---------- | :---------- | :------- | :------- | | Net sales | $453.278 | $481.095 | -$27.817 | -5.8% | | Net income | $26.798 | $30.141 | -$3.343 | -11.1% | | GAAP EPS (diluted) | $1.69 | $1.80 | | | | Adjusted EPS (diluted) | $1.70 | $2.21 | | | | Adjusted EBITDA | $54.678 | $65.274 | -$10.596 | -16.2% | | Adjusted EBITDA margin | 12.1% | 13.6% | | | - The decrease in **net income** was primarily due to a decrease in **net sales** and one-time startup costs for new locations in Hamlet, North Carolina, and Monterrey, Mexico[4](index=4&type=chunk) [Fiscal Year Operating Results](index=1&type=section&id=Fiscal%20Year%20Operating%20Results) For FY2024, net sales decreased by 10.6% to $1,847.5 million, yet net income increased significantly to $116.2 million, driven by improved pricing and operational efficiencies, with Adjusted EBITDA also rising and its margin notably improving FY2024 Operating Results | Metric | FY2024 (USD Million) | FY2023 (USD Million) | Change (USD Million) | % Change (%) | | :-------------------- | :----------- | :----------- | :-------- | :-------- | | Net sales | $1,847.502 | $2,066.200 | -$218.698 | -10.6% | | Net income | $116.216 | $93.723 | +$22.493 | +24.0% | | GAAP EPS (diluted) | $7.15 | $5.62 | | | | Adjusted EPS (diluted) | $8.53 | $7.62 | | | | Adjusted EBITDA | $252.773 | $240.379 | +$12.394 | +5.2% | | Adjusted EBITDA margin | 13.7% | 11.6% | | | - The increase in **net income** for fiscal **2024** was primarily due to pricing better matching inflationary pressures and overall increased efficiencies across existing operating locations[5](index=5&type=chunk) - These benefits were partially offset by one-time startup costs and inefficiencies from new locations in Hamlet, North Carolina, and Monterrey, Mexico, which are expected to ramp up production throughout the calendar year[5](index=5&type=chunk) [Balance Sheet & Cash Flow](index=3&type=section&id=Balance%20Sheet%20%26%20Cash%20Flow) As of April 30, 2024, the company maintained a healthy cash position and significant revolving credit facility availability, generating strong cash from operating activities and free cash flow for the fiscal year, and continuing its share repurchase program Balance Sheet & Cash Flow Highlights (as of April 30, 2024) | Metric | Amount | | :------------------------------------ | :----------- | | Cash & cash equivalents | $87.4 million | | Revolving credit facility availability | $322.9 million | | Term loan debt | $206.3 million | | Revolving credit facility drawn | $163.8 million | | Cash provided by operating activities (FY2024) | $230.8 million | | Free cash flow (FY2024) | $138.5 million | | Shares repurchased (Q4 FY2024) | 170,571 shares | | Value of shares repurchased (Q4 FY2024) | $15.9 million | | Shares repurchased (FY2024) | 1,108,715 shares | | Value of shares repurchased (FY2024) | $87.7 million | | Remaining share repurchase authorization | $89.5 million | [Fiscal 2025 Financial Outlook](index=3&type=section&id=Fiscal%202025%20Financial%20Outlook) [Fiscal 2025 Financial Outlook Details](index=3&type=section&id=Fiscal%202025%20Financial%20Outlook%20Details) For fiscal year 2025, American Woodmark anticipates low single-digit net sales growth and projects Adjusted EBITDA between $235 million and $255 million, excluding certain non-operating income and expense items for which a GAAP reconciliation is not provided due to estimation difficulties FY2025 Financial Outlook | Metric | Outlook | | :---------------- | :-------------------------------- | | Net sales | Low single digit increase year-over-year | | Adjusted EBITDA | $235 million to $255 million | - The **Adjusted EBITDA** outlook excludes certain income and expense items (e.g., restructuring costs, interest expense, stock-based compensation, tax items) that management believes are not part of underlying operations, and a reconciliation to GAAP net income is not provided due to the difficulty in estimating these highly variable items[9](index=9&type=chunk) [Company Overview](index=3&type=section&id=Company%20Overview) [About American Woodmark](index=3&type=section&id=About%20American%20Woodmark) American Woodmark Corporation is one of the nation's largest cabinet manufacturers, employing over 8,800 individuals across more than a dozen brands, partnering with major home centers, builders, and independent dealers to provide cabinet solutions while upholding core values of customer satisfaction, integrity, teamwork, and excellence - American Woodmark is one of the nation's largest cabinet manufacturers, with over **8,800 employees** and more than a **dozen brands**[10](index=10&type=chunk) - The company partners with major home centers, builders, and independent dealers and distributors to help customers find their unique style and transform their homes[10](index=10&type=chunk) - Core values across all operations (service, distribution, corporate, manufacturing) include commitment to customer satisfaction, integrity, teamwork, and excellence[10](index=10&type=chunk) [Non-GAAP Financial Measures](index=6&type=section&id=Non-GAAP%20Financial%20Measures) [Use and Definitions of Non-GAAP Measures](index=6&type=section&id=Use%20and%20Definitions%20of%20Non-GAAP%20Measures) American Woodmark presents non-GAAP financial measures like EBITDA, Adjusted EBITDA, Adjusted EPS, Free Cash Flow, and Net Leverage, which management uses for performance analysis and strategy identification, emphasizing they are supplementary to, not substitutes for, GAAP results - Non-GAAP financial measures are used by management to evaluate business performance, prepare annual operating budgets, view operating trends, perform analytical comparisons, and identify strategies for improvement[17](index=17&type=chunk)[18](index=18&type=chunk)[21](index=21&type=chunk) - These non-GAAP measures are intended to provide additional means of analyzing results and should be viewed in addition to, not as a substitute for, GAAP results[17](index=17&type=chunk) - **Adjusted EBITDA** is defined as net income adjusted for income tax, interest, depreciation & amortization, amortization of customer relationship intangibles, acquisition/restructuring expenses, non-recurring restructuring charges, stock-based compensation, asset disposals, foreign exchange changes, debt modification, and pension settlement charges[19](index=19&type=chunk) - **Adjusted EPS per diluted share** excludes the per share impact of acquisition/restructuring expenses, non-recurring restructuring charges, amortization of customer relationship intangibles, debt modification, pension settlement charges, and the tax benefit of these add-backs[21](index=21&type=chunk) - **Free cash flow** is defined as cash from continuing operations minus capital expenditures (cash payments for property, plant & equipment, and investments in displays)[22](index=22&type=chunk) - **Net leverage** is defined as net debt (**total debt** less **cash and cash equivalents**) divided by the trailing **12 months Adjusted EBITDA**[23](index=23&type=chunk)[24](index=24&type=chunk) [Reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin](index=7&type=section&id=Reconciliation%20of%20EBITDA%2C%20Adjusted%20EBITDA%2C%20and%20Adjusted%20EBITDA%20Margin) This section provides a detailed reconciliation of net income (GAAP) to EBITDA and Adjusted EBITDA for the three and twelve months ended April 30, 2024, and 2023, including corresponding net income and Adjusted EBITDA margins Reconciliation of EBITDA, Adjusted EBITDA, and Adjusted EBITDA Margin (USD Thousands) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | Twelve Months Ended April 30, 2024 | Twelve Months Ended April 30, 2023 | | :----------------------------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------------- | :--------------------------------- | | Net income (GAAP) | $26,798 | $30,141 | $116,216 | $93,723 | | Add back: | | | | | | Income tax expense | 7,799 | 7,688 | 35,752 | 28,963 | | Interest expense, net | 1,885 | 3,216 | 8,207 | 15,994 | | Depreciation and amortization expense | 12,596 | 11,499 | 48,337 | 48,077 | | Amortization of customer relationship intangibles and trademarks | — | 11,417 | 30,444 | 45,667 | | **EBITDA (Non-GAAP)** | **$49,078** | **$63,961** | **$238,956** | **$232,424** | | Add back: | | | | | | Acquisition and restructuring related expenses | — | 20 | 47 | 80 | | Non-recurring restructuring charges, net | — | 215 | (198) | 1,525 | | Pension settlement, net | — | (55) | — | (7) | | Net gain on debt modification | — | (2,089) | — | (2,089) | | Change in fair value of foreign exchange forward contracts | 1,785 | 904 | 1,544 | — | | Stock-based compensation expense | 3,496 | 2,147 | 10,682 | 7,396 | | Loss on asset disposal | 319 | 171 | 1,742 | 1,050 | | **Adjusted EBITDA (Non-GAAP)** | **$54,678** | **$65,274** | **$252,773** | **$240,379** | | Net Sales | $453,278 | $481,095 | $1,847,502 | $2,066,200 | | Net income margin (GAAP) | 5.9 % | 6.3 % | 6.3 % | 4.5 % | | Adjusted EBITDA margin (Non-GAAP) | 12.1 % | 13.6 % | 13.7 % | 11.6 % | [Reconciliation of Adjusted EPS per Diluted Share](index=8&type=section&id=Reconciliation%20of%20Adjusted%20EPS%20per%20Diluted%20Share) This section provides a reconciliation of net income (GAAP) to Adjusted net income and GAAP EPS per diluted share to Adjusted EPS per diluted share for the three and twelve months ended April 30, 2024, and 2023 Reconciliation of Adjusted EPS per Diluted Share (USD Thousands, except share data) | Metric | Three Months Ended April 30, 2024 | Three Months Ended April 30, 2023 | Twelve Months Ended April 30, 2024 | Twelve Months Ended April 30, 2023 | | :----------------------------------------------------- | :-------------------------------- | :-------------------------------- | :--------------------------------- | :--------------------------------- | | Net income (GAAP) | $26,798 | $30,141 | $116,216 | $93,723 | | Add back: | | | | | | Acquisition and restructuring related expenses | — | 20 | 47 | 80 | | Non-recurring restructuring charges, net | — | 215 | (198) | 1,525 | | Pension settlement, net | — | (55) | — | (7) | | Amortization of customer relationship intangibles and trademarks | — | 11,417 | 30,444 | 45,667 | | Net gain on debt modification | — | (2,089) | — | (2,089) | | Tax benefit of add backs | 121 | (2,589) | (7,785) | (11,791) | | **Adjusted net income (Non-GAAP)** | **$26,919** | **$37,060** | **$138,724** | **$127,108** | | Weighted average diluted shares (GAAP) | 15,881,015 | 16,735,892 | 16,260,222 | 16,685,359 | | **EPS per diluted share (GAAP)** | **$1.69** | **$1.80** | **$7.15** | **$5.62** | | **Adjusted EPS per diluted share (Non-GAAP)** | **$1.70** | **$2.21** | **$8.53** | **$7.62** | [Reconciliation of Free Cash Flow](index=8&type=section&id=Reconciliation%20of%20Free%20Cash%20Flow) This section reconciles cash provided by operating activities to free cash flow for the twelve months ended April 30, 2024, and 2023 Reconciliation of Free Cash Flow (USD Thousands) | Metric | Twelve Months Ended April 30, 2024 | Twelve Months Ended April 30, 2023 | | :------------------------------------ | :--------------------------------- | :--------------------------------- | | Cash provided by operating activities | $230,750 | $198,837 | | Less: Capital expenditures | 92,241 | 45,380 | | **Free cash flow** | **$138,509** | **$153,457** | [Net Leverage Calculation](index=9&type=section&id=Net%20Leverage%20Calculation) This section details the calculation of net debt and the net leverage ratio as of April 30, 2024, which is 1.14 Net Leverage Calculation (as of April 30, 2024) (USD Thousands) | Metric | Amount | | :------------------------------------ | :-------------------- | | Current maturities of long-term debt | $2,722 | | Long-term debt, less current maturities | 371,761 | | **Total debt** | **$374,483** | | Less: cash and cash equivalents | (87,398) | | **Net debt** | **$287,085** | | Adjusted EBITDA (trailing 12 months) | $252,773 | | **Net leverage** | **1.14** |