WINCHESTER, Va.--(BUSINESS WIRE)--American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its fourth fiscal quarter ended April 30, 2024 and its fiscal year ended April 30, 2024.
“Our teams delivered another strong quarter despite the soft remodel market demand environment,” said Scott Culbreth, President and CEO. “Net sales and Adjusted EBITDA exceeded our expectations for the quarter as the demand environment began to improve. For the full fiscal year, our teams grew Adjusted EBITDA to $252.8 million and improved Adjusted EBITDA margin by over 200 bps despite a 10.6% reduction in net sales, which demonstrated our strategic focus on automation and operational excellence is working. Our net sales outlook for fiscal year 2025 is for low single digit growth as we look to grow across all channels. We will continue to invest in the business through automation, capacity and digital transformation to operate as one company allowing us to achieve our long-term targets.”
Fourth Quarter Results
Net sales for the fourth quarter of fiscal 2024 decreased $27.8 million, or 5.8%, to $453.3 million compared with the same quarter of the prior fiscal year. Net income was $26.8 million ($1.69 per diluted share) compared with $30.1 million ($1.80 per diluted share) in the same quarter of the prior fiscal year. Net income for the fourth quarter of fiscal 2024 decreased $3.3 million due primarily to a decrease in net sales and the one-time startup costs for our new locations in Hamlet, North Carolina and Monterrey, Mexico. Adjusted EPS per diluted share was $1.70 for the fourth quarter of fiscal 2024 compared with $2.21 in the same quarter of the prior fiscal year. Adjusted EBITDA for the fourth quarter of fiscal 2024 decreased $10.6 million, or 16.2%, to $54.7 million, or 12.1% of net sales, compared to $65.3 million, or 13.6% of net sales, for the same quarter of the prior fiscal year.
Fiscal Year Results
Net sales for the fiscal year ended April 30, 2024 decreased 10.6% to $1,847.5 million from the prior fiscal year. Net income for the current fiscal year was $116.2 million ($7.15 per diluted share) compared with net income of $93.7 million ($5.62 per diluted share) for the prior fiscal year. Net income for fiscal 2024 increased primarily due to the result of pricing better matching inflationary pressures and overall increased efficiencies across our existing operating locations. These benefits were partially offset by one time startup costs and inefficiencies driven by our new locations in Hamlet, North Carolina and Monterrey, Mexico, which will continue to ramp up production throughout the calendar year. Adjusted EPS per diluted share was $8.53 for the current fiscal year compared with $7.62 for the prior fiscal year. Adjusted EBITDA for the current fiscal year was $252.8 million, or 13.7% of net sales, compared to $240.4 million, or 11.6% of net sales, for the prior fiscal year.
Balance Sheet & Cash Flow
As of April 30, 2024, the Company had $87.4 million in cash plus access to $322.9 million of additional availability under its revolving credit facility. Also, as of April 30, 2024, the Company had $206.3 million in term loan debt and $163.8 million drawn on its revolving credit facility.
Cash provided by operating activities for the current fiscal year was $230.8 million and free cash flow totaled $138.5 million. The Company repurchased 170,571 shares, or approximately 1.1% of shares outstanding, for $15.9 million during the fourth quarter of fiscal 2024, and 1,108,715 shares, or approximately 7.1% of shares outstanding, for $87.7 million during fiscal 2024. As of April 30, 2024, $89.5 million of funds remained available from the amounts authorized by the Board to repurchase the Company's common stock.
Fiscal 2025 Financial Outlook
For fiscal 2025 the Company expects:
- Low single digit net sales increase year-over-year
- Adjusted EBITDA in the range of $235 million to $255 million
“Given the strong operational and commercial performance that our teams delivered in our fiscal year 2024, we are projecting our fiscal 2025 net sales to increase low single digits and deliver Adjusted EBITDA in the range of $235 to $255 million,” said Paul Joachimczyk, Senior Vice President and Chief Financial Officer.
Our Adjusted EBITDA outlook excludes the impact of certain income and expense items that management believes are not part of underlying operations. These items may include restructuring costs, interest expense, stock-based compensation expense, and certain tax items. Our management cannot estimate on a forward-looking basis the impact of these income and expense items on its reported net income, which could be significant, are difficult to predict, and may be highly variable. As a result, the Company does not provide a reconciliation to the closest corresponding GAAP financial measure for its Adjusted EBITDA outlook.
About American Woodmark
American Woodmark celebrates the creativity in all of us. With over 8,800 employees and more than a dozen brands, we’re one of the nation’s largest cabinet manufacturers. From inspiration to installation, we help people find their unique style and turn their home into a space for self-expression. By partnering with major home centers, builders, and independent dealers and distributors, we spark the imagination of homeowners and designers and bring their vision to life. Across our service and distribution centers, our corporate office, and manufacturing facilities, you’ll always find the same commitment to customer satisfaction, integrity, teamwork, and excellence. Visit americanwoodmark.com to learn more and start building something distinctly your own.
Use of Non-GAAP Financial Measures
We have presented certain financial measures in this press release which have not been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Definitions of our non-GAAP financial measures and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP are provided below following the financial highlights under the heading "Non-GAAP Financial Measures."
Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K. The Company does not undertake to publicly update or revise its forward looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
AMERICAN WOODMARK CORPORATION |
|||||||||||||||
Unaudited Financial Highlights |
|||||||||||||||
(in thousands, except share data) |
|||||||||||||||
Operating Results |
|||||||||||||||
|
|
|
|
|
|
|
|
|
|||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||
|
|
April 30, |
|
April 30, |
|||||||||||
|
|
2024 |
|
2023 |
|
2024 |
|
2023 |
|||||||
|
|
|
|
|
|
|
|
|
|||||||
Net sales |
|
$ |
453,278 |
|
$ |
481,095 |
|
|
$ |
1,847,502 |
|
|
$ |
2,066,200 |
|
Cost of sales & distribution |
|
|
369,179 |
|
|
384,392 |
|
|
|
1,469,695 |
|
|
|
1,708,676 |
|
Gross profit |
|
|
84,099 |
|
|
96,703 |
|
|
|
377,807 |
|
|
|
357,524 |
|
Sales & marketing expense |
|
|
23,613 |
|
|
22,821 |
|
|
|
92,603 |
|
|
|
94,602 |
|
General & administrative expense |
|
|
22,262 |
|
|
33,916 |
|
|
|
124,008 |
|
|
|
125,045 |
|
Restructuring charges, net |
|
|
— |
|
|
215 |
|
|
|
(198 |
) |
|
|
1,525 |
|
Operating income |
|
|
38,224 |
|
|
39,751 |
|
|
|
161,394 |
|
|
|
136,352 |
|
Interest expense, net |
|
|
1,885 |
|
|
3,216 |
|
|
|
8,207 |
|
|
|
15,994 |
|
Pension settlement, net |
|
|
— |
|
|
(55 |
) |
|
|
— |
|
|
|
(7 |
) |
Other expense (income), net |
|
|
1,742 |
|
|
850 |
|
|
|
1,219 |
|
|
|
(232 |
) |
Net gain on debt modification |
|
|
— |
|
|
(2,089 |
) |
|
|
— |
|
|
|
(2,089 |
) |
Income tax expense |
|
|
7,799 |
|
|
7,688 |
|
|
|
35,752 |
|
|
|
28,963 |
|
Net income |
|
$ |
26,798 |
|
$ |
30,141 |
|
|
$ |
116,216 |
|
|
$ |
93,723 |
|
|
|
|
|
|
|
|
|
|
|||||||
Earnings Per Share: |
|
|
|
|
|
|
|
|
|||||||
Weighted average shares outstanding - diluted |
|
|
15,881,015 |
|
|
16,735,892 |
|
|
|
16,260,222 |
|
|
|
16,685,359 |
|
|
|
|
|
|
|
|
|
|
|||||||
Net income per diluted share |
|
$ |
1.69 |
|
$ |
1.80 |
|
|
$ |
7.15 |
|
|
$ |
5.62 |
|
Condensed Consolidated Balance Sheet |
||||||
(Unaudited) |
||||||
|
|
April 30, |
||||
|
|
2024 |
|
2023 |
||
|
|
|
|
|
||
Cash & cash equivalents |
|
$ |
87,398 |
|
$ |
41,732 |
Customer receivables |
|
|
117,559 |
|
|
119,163 |
Inventories |
|
|
159,101 |
|
|
190,699 |
Income taxes receivable |
|
|
14,548 |
|
|
— |
Other current assets |
|
|
24,104 |
|
|
16,661 |
Total current assets |
|
|
402,710 |
|
|
368,255 |
Property, plant & equipment, net |
|
|
272,461 |
|
|
219,415 |
Operating lease assets, net |
|
|
126,383 |
|
|
99,526 |
Customer relationship intangibles, net |
|
|
— |
|
|
30,444 |
Goodwill |
|
|
767,612 |
|
|
767,612 |
Other assets |
|
|
24,699 |
|
|
33,546 |
Total assets |
|
$ |
1,593,865 |
|
$ |
1,518,798 |
|
|
|
|
|
||
Current portion - long-term debt |
|
$ |
2,722 |
|
$ |
2,263 |
Short-term operating lease liabilities |
|
|
27,409 |
|
|
24,778 |
Accounts payable & accrued expenses |
|
|
165,595 |
|
|
151,083 |
Total current liabilities |
|
|
195,726 |
|
|
178,124 |
Long-term debt |
|
|
371,761 |
|
|
369,396 |
Deferred income taxes |
|
|
5,002 |
|
|
11,930 |
Long-term operating lease liabilities |
|
|
106,573 |
|
|
81,370 |
Other liabilities |
|
|
4,427 |
|
|
4,190 |
Total liabilities |
|
|
683,489 |
|
|
645,010 |
Stockholders' equity |
|
|
910,376 |
|
|
873,788 |
Total liabilities & stockholders' equity |
|
$ |
1,593,865 |
|
$ |
1,518,798 |
Condensed Consolidated Statements of Cash Flows |
||||||||
(Unaudited) |
||||||||
|
|
Twelve Months Ended |
||||||
|
|
April 30, |
||||||
|
|
2024 |
|
2023 |
||||
|
|
|
|
|
||||
Net cash provided by operating activities |
|
$ |
230,750 |
|
|
$ |
198,837 |
|
Net cash used by investing activities |
|
|
(92,191 |
) |
|
|
(45,337 |
) |
Net cash used by financing activities |
|
|
(92,893 |
) |
|
|
(134,093 |
) |
Net increase in cash and cash equivalents |
|
|
45,666 |
|
|
|
19,407 |
|
Cash and cash equivalents, beginning of period |
|
|
41,732 |
|
|
|
22,325 |
|
|
|
|
|
|
||||
Cash and cash equivalents, end of period |
|
$ |
87,398 |
|
|
$ |
41,732 |
|
Non-GAAP Financial Measures
We have reported our financial results in accordance with U.S. generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below.
Management believes all of these non-GAAP financial measures provide an additional means of analyzing the current period’s results against the corresponding prior period’s results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.
EBITDA, Adjusted EBITDA and Adjusted EBITDA margin
We use EBITDA, Adjusted EBITDA and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability. We believe EBITDA, Adjusted EBITDA and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.
We define Adjusted EBITDA as net income adjusted to exclude (1) income tax expense, (2) interest expense, net, (3) depreciation and amortization expense, (4) amortization of customer relationship intangibles and trademarks, (5) expenses related to the acquisition of RSI Home Products, Inc. ("RSI acquisition") and the subsequent restructuring charges that the Company incurred related to the acquisition, (6) non-recurring restructuring charges, (7) stock-based compensation expense, (8) gain/loss on asset disposals, (9) change in fair value of foreign exchange forward contracts, (10) net gain/loss on debt forgiveness and modification, and (11) pension settlement charges. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.
We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.
Adjusted EPS per diluted share
We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability. Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company’s results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items. We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the RSI acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition, (2) non-recurring restructuring charges, (3) the amortization of customer relationship intangibles and trademarks, (4) net gain/loss on debt forgiveness and modification, (5) pension settlement charges, and (6) the tax benefit of RSI acquisition expenses and subsequent restructuring charges, the net gain/loss on debt forgiveness and modification and the amortization of customer relationship intangibles and trademarks. Management has determined that excluding amortization of intangible assets from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability.
Free cash flow
To better understand trends in our business, we believe that it is helpful to subtract amounts for capital expenditures consisting of cash payments for property, plant and equipment and cash payments for investments in displays from cash from continuing operations which is how we define free cash flow. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It also provides a measure of our ability to repay our debt obligations.
Net leverage
Net leverage is a performance measure that we believe provides investors a more complete understanding of our leverage position and borrowing capacity after factoring in cash and cash equivalents that eventually could be used to repay outstanding debt.
We define net leverage as net debt (total debt less cash and cash equivalents) divided by the trailing 12 months Adjusted EBITDA.
A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth on the following tables:
Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
||||||||||||
|
|
April 30, |
|
April 30, |
||||||||||||
(in thousands) |
|
2024 |
|
2023 |
|
2024 |
|
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 (1) |
|
|
— |
|
|
|
20 |
|
|
|
47 |
|
|
|
80 |
|
Non-recurring restructuring charges, net (2) |
|
|
— |
|
|
|
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 (3) |
|
|
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 |
% |
(1) Acquisition and restructuring related expenses are comprised of expenses related to the RSI acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition.
(2) Non-recurring restructuring charges are comprised of expenses incurred related to the permanent layoffs that occurred during the third and fourth quarters of fiscal 2023 and the closure of the manufacturing plant in Humboldt, Tennessee.
(3) In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other income in the operating results.
Reconciliation of Net Income to Adjusted Net Income |
|||||||||||||||
|
|
|
|
|
|||||||||||
|
|
Three Months Ended |
|
Twelve Months Ended |
|||||||||||
|
|
April 30, |
|
April 30, |
|||||||||||
(in thousands, except share data) |
|
2024 |
|
2023 |
|
2024 |
|
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 |
|
Free Cash Flow |
||||||
|
|
|
||||
|
|
Twelve Months Ended |
||||
|
|
April 30, |
||||
|
|
2024 |
|
2023 |
||
|
|
|
|
|
||
Cash provided by operating activities |
|
$ |
230,750 |
|
$ |
198,837 |
Less: Capital expenditures (1) |
|
|
92,241 |
|
|
45,380 |
Free cash flow |
|
$ |
138,509 |
|
$ |
153,457 |
(1) Capital expenditures consist of cash payments for property, plant and equipment and cash payments for investments in displays.
Net Leverage |
||||
|
|
|
||
|
|
Twelve Months
|
||
|
|
April 30, |
||
(in thousands) |
|
2024 |
||
|
|
|
||
Net income (GAAP) |
|
$ |
116,216 |
|
Add back: |
|
|
||
Income tax expense |
|
|
35,752 |
|
Interest expense, net |
|
|
8,207 |
|
Depreciation and amortization expense |
|
|
48,337 |
|
Amortization of customer relationship intangibles and trademarks |
|
|
30,444 |
|
EBITDA (Non-GAAP) |
|
$ |
238,956 |
|
Add back: |
|
|
||
Acquisition and restructuring related expenses (1) |
|
|
47 |
|
Non-recurring restructuring charges, net (2) |
|
|
(198 |
) |
Change in fair value of foreign exchange forward contracts (3) |
|
|
1,544 |
|
Stock-based compensation expense |
|
|
10,682 |
|
Loss on asset disposal |
|
|
1,742 |
|
Adjusted EBITDA (Non-GAAP) |
|
$ |
252,773 |
|
|
|
|
||
|
|
As of |
||
|
|
April 30, |
||
|
|
2024 |
||
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 |
|
|
|
|
||
Net leverage (3) |
|
|
1.14 |
|
(1) Acquisition and restructuring related expenses are comprised of expenses related to the RSI acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition.
(2) Non-recurring restructuring charges are comprised of expenses incurred related to the permanent layoffs that occurred during the third and fourth quarters of fiscal 2023.
(3) Net debt divided by Adjusted EBITDA for the twelve months ended April 30, 2024.
