American Woodmark (AMWD) - 2026 Q1 - Quarterly Report

Financial Performance - Net sales for the first quarter of fiscal 2026 were $403.0 million, a decrease of $56.1 million or 12.2% compared to the same period in fiscal 2025[98]. - Gross profit for the first quarter of fiscal 2026 was $67.5 million, with a gross profit margin of 16.7%, down from 20.2% in the same period of fiscal 2025, representing a 350 basis point decrease[100]. - The Company earned net income of $14.6 million, or 3.6% of net sales, compared to $29.6 million, or 6.5% of net sales, in the same period of the prior year[95]. - Adjusted EBITDA for the first quarter of fiscal 2026 was $42.2 million, representing 10.5% of net sales, down from $62.9 million or 13.7% of net sales in the prior year[118]. - For the first quarter of fiscal 2026, net income (GAAP) was $14.6 million, a decrease of 50.7% from $29.6 million in the same quarter of the prior year[115]. Sales and Market Trends - Builder sales decreased by 18.6% in the first quarter of fiscal 2026 compared to the same period in fiscal 2025, influenced by an 8.1% decrease in single-family housing starts[99]. - The company expects a softer repair and remodel market and a decline in larger ticket remodel purchases, alongside macroeconomic concerns such as declining consumer sentiment and growing inflation risk[121]. - The Company expects a softer repair and remodel market and a decline in larger ticket remodel purchases for the remainder of fiscal 2026[121]. Expenses and Costs - General and administrative expenses increased by $1.4 million or 6.6% during the first quarter of fiscal 2026, primarily due to $2.8 million of merger-related expenses[103]. - The effective income tax rate for Q1 fiscal 2026 was 25.8%, compared to 25.0% in the same period of the prior fiscal year[104]. Cash Flow and Debt - Cash and cash equivalents totaled $54.9 million as of July 31, 2025, reflecting a $6.7 million increase from April 30, 2025, primarily due to $33.1 million of cash provided by operations[125]. - Total long-term debt was $372.3 million as of July 31, 2025[125]. - The Company has a $500 million revolving loan facility and a $200 million term loan facility, with approximately $315.2 million available under the revolving facility as of July 31, 2025[127]. - The Company expects cash flow from operations and accumulated cash to be sufficient to support working capital requirements and service existing debt obligations for the remainder of fiscal 2026[133]. Mergers and Acquisitions - The Company entered into a Merger Agreement with MasterBrand, Inc. on August 5, 2025, which will result in the Company becoming a wholly owned subsidiary of MasterBrand[91]. - The company will not be providing or updating previously issued financial guidance due to the proposed merger with MasterBrand[123]. Investment and Future Plans - The company plans to continue investing in digital transformation and automation throughout fiscal 2026[122]. - The Company reported net cash used by investing activities was $8.1 million in the first three months of fiscal 2026, compared to $11.4 million in the same period of fiscal 2025[130]. - Net cash used by financing activities was $18.2 million in the first three months of fiscal 2026, down from $27.6 million in the comparable period of the prior fiscal year[131]. Other Economic Indicators - The unemployment rate remained consistent at 4.2% as of July 2025, compared to 4.3% in July 2024[93]. - Mortgage interest rates were unchanged at approximately 6.7% in July 2025 compared to the same period in the prior year[93]. - The inflation rate as of July 2025 was 2.7%, down from 2.9% in July 2024[94].