American Woodmark (AMWD) - 2025 Q3 - Quarterly Report

Financial Performance - The Company reported net income of $16.6 million, or 4.2% of net sales, for the third quarter of fiscal 2025, down from $21.2 million, or 5.0% of net sales, in the same period of the prior year[88]. - Net sales for the third quarter of fiscal 2025 were $397.6 million, a decrease of $24.5 million or 5.8% compared to the same period of fiscal 2024[93]. - Gross profit margin for the third quarter of fiscal 2025 was 15.0%, down from 19.2% in the same period of fiscal 2024, representing a 420 basis point decrease[95]. - Adjusted EBITDA for the third quarter of fiscal 2025 was $38.4 million, representing 9.7% of net sales, down from $50.6 million or 12.0% of net sales in the same quarter of the prior fiscal year[112]. - 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 the prior fiscal year[113]. - Net income for the three months ended January 31, 2025, was $16.6 million, a decrease of 22.5% compared to $21.2 million for the same period in 2024[108]. Sales and Market Trends - Builder sales decreased by 10.4% in the third quarter of fiscal 2025 compared to the same period of fiscal 2024[94]. - Remodeling sales decreased 2.3% during the third quarter of fiscal 2025 compared to the same prior year period[93]. - The company expects a mid-single digit decline in net sales for fiscal 2025 compared to fiscal 2024 due to a softer repair and remodel market[114]. Expenses and Cost Management - General and administrative expenses decreased by $12.5 million or 40.1% during the third quarter of fiscal 2025 compared to the same period of the prior year[98]. - The effective income tax rate for the three-month period ended January 31, 2025, was 16.0%, down from 25.4% in the comparable prior year period[99]. - The Company expects to incur total pre-tax restructuring costs of $6.0 million to $8.5 million related to the closure of its manufacturing plant in Orange, Virginia[91]. Cash Flow and Debt - Cash and cash equivalents totaled $43.5 million as of January 31, 2025, a decrease of $43.9 million from April 30, 2024, primarily due to significant stock repurchases[117]. - Total long-term debt was $375.3 million as of January 31, 2025, with approximately $314.2 million available under the Revolving Facility[119]. - The company repurchased $12.6 million of its common shares during Q3 of fiscal 2025, with $145.4 million remaining available for repurchases as of January 31, 2025[126]. Strategic Initiatives - The company plans to continue investing in digital transformation and automation while being opportunistic in share repurchases[115]. - The company plans to continue investing in digital transformation and automation while deprioritizing debt repayments[115]. - A stock repurchase program of up to $125 million was authorized by the Board of Directors on November 29, 2023[124]. - The Company authorized an additional stock repurchase program of up to $125 million, supplementing the previous program authorized on November 29, 2023[125]. Economic Indicators - The unemployment rate increased to 4.0% as of January 2025 compared to 3.7% as of January 2024[89]. - Mortgage interest rates increased to approximately 7.0% in January 2025, an increase of approximately 25 basis points compared to the same period in the prior year[89]. Accounting Policies and Estimates - The Company has not made significant changes to its critical accounting policies since the last Annual Report on Form 10-K for the fiscal year ended April 30, 2024[128]. - Estimates are based on historical experience and reasonable assumptions, which may lead to differences in actual results under varying conditions[128]. - The carrying values of assets and liabilities are determined through judgments that may not be apparent from other sources[128]. - Actual results may differ from estimates due to different assumptions or conditions[128]. - The Company continues to monitor its accounting policies to ensure they remain relevant and accurate[128]. - Historical experience plays a crucial role in forming the basis for estimates[128]. - The Company emphasizes the importance of reasonable assumptions in its financial reporting[128]. - The results of the estimates are critical for understanding the financial position of the Company[128].