American Woodmark (AMWD) - 2025 Q1 - Quarterly Results

Fiscal First Quarter 2025 Financial Highlights 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][5] Management Commentary 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] - The company aims to achieve share gains in all channels to ensure its performance surpasses market demand for the fiscal year[3] - CFO Paul Joachimczyk noted that despite weaker sales, teams are focused on optimizing platform expansion investments and making operational improvements[7] Financial Performance 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] - 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] 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 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] 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] Fiscal 2025 Financial Outlook 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] - Forecasts Adjusted EBITDA to be in the range of $225 million to $245 million for fiscal 2025[7] Non-GAAP Financial Measures 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][15][18] - Adjusted EBITDA excludes items such as restructuring costs, stock-based compensation expense, and changes in fair value of foreign exchange forward contracts[16] - Adjusted EPS per diluted share excludes items such as non-recurring restructuring charges and the amortization of customer relationship intangibles[18] Reconciliation of EBITDA and Adjusted EBITDA 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 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 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 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 |