American Woodmark (AMWD) - 2026 Q2 - Quarterly Report

Financial Performance - The Company reported net sales of $394.6 million for Q2 fiscal 2026, a decrease of 12.8% compared to $452.5 million in Q2 fiscal 2025[99] - Gross profit for Q2 fiscal 2026 was $59.9 million, representing a gross profit margin of 15.2%, down from 18.9% in the same period last year[102] - Adjusted EBITDA for the second quarter of fiscal 2026 was $39.6 million, or 10.0% of net sales, down from $60.2 million, or 13.3% of net sales, in the same quarter of the prior fiscal year[117] - Net income for the three months ended October 31, 2025, was $6.1 million, compared to $27.7 million for the same period in the prior year[119] - Adjusted EPS per diluted share for the three months ended October 31, 2025, was $0.76, compared to $2.08 for the same period in the prior year[119] - Adjusted EBITDA for the first six months of fiscal 2026 was $81.9 million, or 10.3% of net sales, down from $123.1 million, or 13.5% of net sales, in the same period of the prior fiscal year[117] Expenses and Charges - The Company incurred $1.5 million in pre-tax restructuring charges during Q2 fiscal 2026, related to workforce reductions and facility closures[97] - General and administrative expenses increased by 20.4% in Q2 fiscal 2026, primarily due to expenses associated with the pending Merger and digital transformation initiatives[104] - The effective income tax rates for the three- and six-month periods ended October 31, 2025, were 31.5% and 27.6%, compared to 21.9% and 23.5% in the prior year periods[105] Market Conditions - Builder sales decreased by 19.7% in Q2 fiscal 2026 compared to the same period last year, reflecting challenges in the new construction market[100] - Remodeling sales decreased by 7.0% in Q2 fiscal 2026, driven by lower in-store traffic and a shift towards more affordable products[99] - The unemployment rate increased to 4.4% as of September 2025, impacting consumer sentiment and spending[101] - The company expects a softer repair and remodel market and a decline in larger ticket remodel purchases for the remainder of fiscal 2026[120] Cash Flow and Debt - Cash and cash equivalents totaled $52.1 million at October 31, 2025, representing a $3.9 million increase from April 30, 2025[125] - Total long-term debt (including current maturities) was $370.8 million as of October 31, 2025[125] - Cash provided by operations in the first six months of fiscal 2026 was $44.3 million, down from $52.7 million in the same period of the prior year[125] - Cash flow from operations and accumulated cash are expected to be sufficient to support working capital requirements and fund capital expenditures for the remainder of fiscal 2026[133] - Cash flow from operations is expected to be sufficient to support working capital requirements and service existing debt obligations for the remainder of fiscal 2026[133] Strategic Initiatives - The Company entered into a Merger Agreement with MasterBrand on August 5, 2025, which is expected to affect its operational focus[91] - The company will continue to invest in digital transformation and automation during fiscal 2026[121] - The company will not be providing or updating previously issued financial guidance due to the proposed merger[122] - The company has authorized an additional stock repurchase program of up to $125 million, although it does not currently expect to repurchase additional shares due to the terms of the merger agreement[132] Tariff Impact - The Company estimates that the unmitigated tariff impact represents approximately 4-4.5% of annualized net sales, with variations by product category[92]