AMWD American Woodmark Corp

Fiscal Third Quarter 2025 Financial Highlights:

• Net sales of $397.6 million
• Net income of $16.6 million; 4.2% of net sales
• GAAP EPS of $1.09; adjusted EPS of $1.05
• Adjusted EBITDA of $38.4 million; 9.7% of net sales
• Cash provided by operating activities of $11.0 million; free cash flow of $1.4 million
• Repurchased 132,075 shares for $12.6 million

Fiscal 2025 First Nine Months Financial Highlights:

• Net sales of $1,309.2 million
• Net income of $73.9 million; 5.6% of net sales
• GAAP EPS of $4.79; adjusted EPS of $5.28
• Adjusted EBITDA of $161.5 million; 12.3% of net sales
• Cash provided by operating activities of $63.7 million; free cash flow of $31.5 million
• Repurchased 752,412 shares for $69.1 million

American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its third fiscal quarter ended January 31, 2025.

“Despite performance that was below our expectations for the quarter, our teams continue to execute and have built a platform to deliver profitable growth when macroeconomic conditions improve. The quarter was impacted by softer demand in the remodel market and a decline in new construction single family activity as inventories were reduced,” said Scott Culbreth, President and CEO. “Demand trends are expected to remain challenging, and our outlook is for a mid-single digit decline in net sales for the full fiscal year and an Adjusted EBITDA range of $210 million to $215 million.”

Third Quarter Results

Net sales for the third quarter of fiscal 2025 decreased $24.5 million, or 5.8%, to $397.6 million compared with the same quarter last fiscal year. Net income was $16.6 million ($1.09 per diluted share and 4.2% of net sales) compared with $21.2 million ($1.32 per diluted share and 5.0% of net sales) last fiscal year. Net income decreased $4.7 million due to lower net sales, increasing supply chain costs, and restructuring charges totaling $0.5 million related to a reduction in force implemented during the second quarter and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025, partially offset by the roll-off of acquisition-related intangible asset amortization and lower year-over-year incentive compensation. Adjusted EPS per diluted share was $1.05 for the third quarter of fiscal 2025 compared with $1.561 last fiscal year. Adjusted EBITDA for the third quarter of fiscal 2025 decreased $12.2 million, or 24.0%, to $38.4 million, or 9.7% of net sales, compared with $50.6 million, or 12.0% of net sales, last fiscal year.

During January 2025, the Company's Board approved the closure and eventual disposal of its manufacturing plant located in Orange, Virginia. The Company expects to incur total pre-tax restructuring costs of $6.0 million to $8.5 million related to the closing of the plant. The restructuring costs consist of employee severance and separation costs of approximately $2.0 million to $2.5 million, and charges for relocation and disposal of property and equipment and other administrative costs of approximately $4.0 million to $6.0 million. The Company expects to recognize substantially all of these costs during fiscal 2025.

First Nine Months of Fiscal 2025 Results

Net sales for the first nine months of fiscal 2025 decreased $85.0 million, or 6.1%, to $1,309.2 million compared with the same period of the prior fiscal year. Net income was $73.9 million ($4.79 per diluted share and 5.6% of net sales) compared with $89.4 million ($5.46 per diluted share and 6.4% of net sales) in the same period of the prior fiscal year. Net income for the first nine months of fiscal 2025 decreased $15.5 million due to lower net sales, manufacturing volume deleverage in our new locations in Hamlet, North Carolina, and Monterrey, Mexico, increasing supply chain costs, unfavorable mark-to-market adjustment on our foreign currency hedging instruments, and restructuring charges totaling $1.7 million related to a reduction in force implemented during the second quarter and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025, partially offset by the roll-off of acquisition-related intangible asset amortization, which ended in the third quarter of the prior fiscal year, non-recurring pre-tax charge related to the plywood case last fiscal year, and lower year-over-year incentive compensation. Adjusted EPS per diluted share was $5.28 for the first nine months of fiscal 2025 compared with $6.811 in the same period of the prior fiscal year. Adjusted EBITDA for the first nine months of fiscal 2025 decreased $36.6 million, or 18.5%, to $161.5 million, or 12.3% of net sales, compared to $198.1 million, or 14.2% of net sales, for the same period of the prior fiscal year.

1During the second quarter of fiscal 2025, the Company changed its definition of Adjusted EPS per diluted share to exclude the change in fair value of foreign exchange forward contracts to be consistent with its definition of Adjusted EBITDA. Prior period amounts have been adjusted to conform to current period presentation.

Balance Sheet & Cash Flow

As of January 31, 2025, the Company had $43.5 million in cash plus access to $314.2 million of additional availability under its revolving credit facility. Also, as of January 31, 2025, the Company had $198.8 million in term loan debt and $173.4 million drawn on its revolving credit facility.

Cash provided by operating activities for the first nine months of fiscal 2025 was $63.7 million and free cash flow totaled $31.5 million.

The Company repurchased 132,075 shares, or approximately 1.0% of shares outstanding, for $12.6 million during the third quarter of fiscal 2025, and 752,412 shares, or approximately 5.0% of shares outstanding, for $69.1 million during the first nine months of fiscal 2025. As of January 31, 2025, $145.4 million remained available from the amount authorized by the Board to repurchase the Company's common stock.

Fiscal 2025 Financial Outlook

For fiscal 2025 (which includes the now completed first nine months) the Company expects:

• Mid single-digit decline in net sales year-over-year
• Adjusted EBITDA in the range of $210 million to $215 million

“The Company has delivered resilient performance during this period of declining volumes and macroeconomic headwinds. Our team has laid a solid foundation in all our functions that will position the company for profitable growth once our volumes return,” stated Paul Joachimczyk, Senior Vice President and Chief Financial Officer. “We have been, and continue to remain, committed to our capital investment strategy for the company and will continue driving returns for our shareholders as shown by repurchasing 5.0% of our shares outstanding during the first nine months of fiscal 2025.”

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 8,600 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

 

Nine Months Ended

 

 

January 31,

 

January 31,

 

 

 

2025

 

 

 

2024

 

 

2025

 

 

2024

 

 

 

 

 

 

 

 

 

 

 

Net sales

 

$

397,580

 

 

$

422,102

 

 

$

1,309,190

 

 

$

1,394,224

 

Cost of sales & distribution

 

 

337,816

 

 

 

341,162

 

 

 

1,070,849

 

 

 

1,100,516

 

Gross profit

 

 

59,764

 

 

 

80,940

 

 

 

238,341

 

 

 

293,708

 

Sales & marketing expense

 

 

19,537

 

 

 

21,945

 

 

 

65,612

 

 

 

68,990

 

General & administrative expense

 

 

18,632

 

 

 

31,116

 

 

 

60,371

 

 

 

101,746

 

Restructuring charges, net

 

 

520

 

 

 

—

 

 

 

1,653

 

 

 

(198

)

Operating income

 

 

21,075

 

 

 

27,879

 

 

 

110,705

 

 

 

123,170

 

Interest expense, net

 

 

2,816

 

 

 

1,932

 

 

 

7,554

 

 

 

6,322

 

Other expense (income), net

 

 

(1,457

)

 

 

(2,498

)

 

 

8,485

 

 

 

(523

)

Income tax expense

 

 

3,145

 

 

 

7,218

 

 

 

20,776

 

 

 

27,953

 

Net income

 

$

16,571

 

 

$

21,227

 

 

$

73,890

 

 

$

89,418

 

 

 

 

 

 

 

 

 

 

 

Earnings Per Share:

 

 

 

 

 

 

 

 

 

Weighted average shares outstanding - diluted

 

 

15,159,442

 

 

 

16,124,198

 

 

 

15,430,164

 

 

 

16,380,756

 

 

 

 

 

 

 

 

 

 

 

Net income per diluted share

 

$

1.09

 

 

$

1.32

 

 

$

4.79

 

 

$

5.46

 

Condensed Consolidated Balance Sheet

(Unaudited)

 

 

January 31,

 

April 30,

 

 

2025

 

2024

 

 

 

 

 

Cash & cash equivalents

 

$

43,484

 

$

87,398

Customer receivables, net

 

 

112,759

 

 

117,559

Inventories

 

 

179,138

 

 

159,101

Income taxes receivable

 

 

18,056

 

 

14,548

Prepaid expenses and other

 

 

26,283

 

 

24,104

Total current assets

 

 

379,720

 

 

402,710

Property, plant and equipment, net

 

 

249,660

 

 

272,461

Operating lease right-of-use assets

 

 

135,683

 

 

126,383

Goodwill, net

 

 

767,612

 

 

767,612

Other long-term assets, net

 

 

57,561

 

 

24,699

Total assets

 

$

1,590,236

 

$

1,593,865

 

 

 

 

 

Current maturities of long-term debt

 

$

8,067

 

$

2,722

Short-term lease liability - operating

 

 

33,802

 

 

27,409

Accounts payable & accrued expenses

 

 

147,452

 

 

165,595

Total current liabilities

 

 

189,321

 

 

195,726

Long-term debt, less current maturities

 

 

367,277

 

 

371,761

Deferred income taxes

 

 

—

 

 

5,002

Long-term lease liability - operating

 

 

109,552

 

 

106,573

Other long-term liabilities

 

 

4,522

 

 

4,427

Total liabilities

 

 

670,672

 

 

683,489

Stockholders' equity

 

 

919,564

 

 

910,376

Total liabilities & stockholders' equity

 

$

1,590,236

 

$

1,593,865

Condensed Consolidated Statements of Cash Flows

(Unaudited)

 

 

Nine Months Ended

 

 

January 31,

 

 

 

2025

 

 

 

2024

 

 

 

 

 

 

Net cash provided by operating activities

 

$

63,687

 

 

$

187,433

 

Net cash used by investing activities

 

 

(32,192

)

 

 

(55,713

)

Net cash used by financing activities

 

 

(75,409

)

 

 

(75,623

)

Net (decrease) increase in cash and cash equivalents

 

 

(43,914

)

 

 

56,097

 

Cash and cash equivalents, beginning of period

 

 

87,398

 

 

 

41,732

 

 

 

 

 

 

Cash and cash equivalents, end of period

 

$

43,484

 

 

$

97,829

 

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. Additionally, Adjusted EBITDA is a key measurement used in our Term Loans to determine interest rates and financial covenant compliance.

We define EBITDA as net income (loss) adjusted to exclude (1) income tax expense (benefit), (2) interest expense, net, (3) depreciation and amortization expense, and (4) amortization of customer relationship intangibles. We define Adjusted EBITDA as EBITDA adjusted to exclude (1) expenses related to the acquisition of RSI Home Products, Inc. ("RSI acquisition"), (2) restructuring charges, net, (3) net gain/loss on debt modification, (4) stock-based compensation expense, (5) gain/loss on asset disposals, and (6) change in fair value of foreign exchange forward contracts. 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, (2) restructuring charges, net, (3) the amortization of customer relationship intangibles, (4) net gain/loss on debt modification, (5) change in fair value of foreign exchange forward contracts, and (6) the tax benefit of RSI acquisition expenses, restructuring charges, the net gain/loss on debt modification, the amortization of customer relationship intangibles, and the change in fair value of foreign exchange forward contracts. The amortization of intangible assets is driven by the RSI acquisition. Management has determined that excluding amortization of intangible assets and change in fair value of foreign exchange forward contracts from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability.

During the second quarter of fiscal 2025, the Company changed its definition of Adjusted EPS per diluted share to exclude the change in fair value of foreign exchange forward contracts to be consistent with its definition of Adjusted EBITDA.

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 flows 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

 

Nine Months Ended

 

 

January 31,

 

January 31,

(in thousands)

 

 

2025

 

 

 

2024

 

 

 

2025

 

 

 

2024

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

16,571

 

 

$

21,227

 

 

$

73,890

 

 

$

89,418

 

Add back:

 

 

 

 

 

 

 

 

Income tax expense

 

 

3,145

 

 

 

7,218

 

 

 

20,776

 

 

 

27,953

 

Interest expense, net

 

 

2,816

 

 

 

1,932

 

 

 

7,554

 

 

 

6,322

 

Depreciation and amortization expense

 

 

14,583

 

 

 

12,349

 

 

 

40,851

 

 

 

35,741

 

Amortization of customer relationship intangibles

 

 

—

 

 

 

7,610

 

 

 

—

 

 

 

30,444

 

EBITDA (Non-GAAP)

 

$

37,115

 

 

$

50,336

 

 

$

143,071

 

 

$

189,878

 

Add back:

 

 

 

 

 

 

 

 

Acquisition related expenses (1)

 

 

—

 

 

 

7

 

 

 

—

 

 

 

47

 

Restructuring charges, net (2)

 

 

520

 

 

 

—

 

 

 

1,653

 

 

 

(198

)

Net loss on debt modification

 

 

—

 

 

 

—

 

 

 

364

 

 

 

—

 

Change in fair value of foreign exchange forward contracts (3)

 

 

(1,418

)

 

 

(2,342

)

 

 

8,266

 

 

 

(241

)

Stock-based compensation expense

 

 

2,141

 

 

 

2,784

 

 

 

7,946

 

 

 

7,186

 

Loss on asset disposal

 

 

87

 

 

 

(170

)

 

 

229

 

 

 

1,423

 

Adjusted EBITDA (Non-GAAP)

 

$

38,445

 

 

$

50,615

 

 

$

161,529

 

 

$

198,095

 

 

 

 

 

 

 

 

 

 

Net Sales

 

$

397,580

 

 

$

422,102

 

 

$

1,309,190

 

 

$

1,394,224

 

Net income margin (GAAP)

 

 

4.2

%

 

 

5.0

%

 

 

5.6

%

 

 

6.4

%

Adjusted EBITDA margin (Non-GAAP)

 

 

9.7

%

 

 

12.0

%

 

 

12.3

%

 

 

14.2

%

(1) Acquisition related expenses are comprised of expenses related to the RSI acquisition.

(2) Restructuring charges, net are comprised of expenses incurred related to the nationwide reduction-in-force implemented in the third and fourth quarters of fiscal 2023, the reduction in force implemented in the second quarter of fiscal 2025, and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025.

(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) expense, net in the operating results.

Reconciliation of Net Income to Adjusted Net Income

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

January 31,

 

January 31,

(in thousands, except share data)

 

 

2025

 

 

 

2024

 

 

 

2025

 

 

 

2024

 

 

 

 

 

 

 

 

 

 

Net income (GAAP)

 

$

16,571

 

 

$

21,227

 

 

$

73,890

 

 

$

89,418

 

Add back:

 

 

 

 

 

 

 

 

Acquisition and restructuring related expenses

 

 

—

 

 

 

7

 

 

 

—

 

 

 

47

 

Restructuring charges, net

 

 

520

 

 

 

—

 

 

 

1,653

 

 

 

(198

)

Net loss on debt modification

 

 

—

 

 

 

—

 

 

 

364

 

 

 

—

 

Change in fair value of foreign exchange forward contracts (1)

 

 

(1,418

)

 

 

(2,342

)

 

 

8,266

 

 

 

(241

)

Amortization of customer relationship intangibles

 

 

—

 

 

 

7,610

 

 

 

—

 

 

 

30,444

 

Tax benefit of add backs

 

 

221

 

 

 

(1,402

)

 

 

(2,653

)

 

 

(7,844

)

Adjusted net income (Non-GAAP)

 

$

15,894

 

 

$

25,100

 

 

$

81,520

 

 

$

111,626

 

 

 

 

 

 

 

 

 

 

Weighted average diluted shares (GAAP)

 

 

15,159,442

 

 

 

16,124,198

 

 

 

15,430,164

 

 

 

16,380,756

 

 

 

 

 

 

 

 

 

 

EPS per diluted share (GAAP)

 

$

1.09

 

 

$

1.32

 

 

$

4.79

 

 

$

5.46

 

Adjusted EPS per diluted share (Non-GAAP)

 

$

1.05

 

 

$

1.56

 

 

$

5.28

 

 

$

6.81

 

(1) Change in fair value of foreign exchange forward contracts was excluded from Adjusted EPS per diluted share beginning in the second quarter of fiscal 2025 to be consistent with the Company's definition of Adjusted EBITDA. Prior period amounts have been adjusted to conform to current period presentation.

Free Cash Flow

 

 

 

 

 

Nine Months Ended

 

 

January 31,

 

 

2025

 

2024

 

 

 

 

 

Net cash provided by operating activities

 

$

63,687

 

$

187,433

Less: Capital expenditures (1)

 

 

32,197

 

 

55,736

Free cash flow

 

$

31,490

 

$

131,697

(1) Capital expenditures consist of cash payments for property, plant and equipment and cash payments for investments in displays.

Net Leverage

 

 

 

 

 

Twelve Months Ended

 

 

January 31,

(in thousands)

 

 

2025

 

 

 

 

Net income (GAAP)

 

$

100,689

 

Add back:

 

 

Income tax expense

 

 

28,575

 

Interest expense, net

 

 

9,440

 

Depreciation and amortization expense

 

 

53,448

 

EBITDA (Non-GAAP)

 

$

192,152

 

Add back:

 

 

Restructuring charges, net (1)

 

 

1,653

 

Net loss on debt modification

 

 

364

 

Change in fair value of foreign exchange forward contracts (2)

 

 

10,050

 

Stock-based compensation expense

 

 

11,442

 

Loss on asset disposal

 

 

548

 

Adjusted EBITDA (Non-GAAP)

 

$

216,209

 

 

 

 

 

 

As of

 

 

January 31,

 

 

 

2025

 

Current maturities of long-term debt

 

$

8,067

 

Long-term debt, less current maturities

 

 

367,277

 

Total debt

 

 

375,344

 

Less: cash and cash equivalents

 

 

(43,484

)

Net debt

 

$

331,860

 

 

 

 

Net leverage (3)

 

 

1.53

 

(1) Restructuring charges, net are comprised of expenses incurred related to the nationwide reduction-in-force implemented in the third and fourth quarters of fiscal 2023, the reduction in force implemented in the second quarter of fiscal 2025, and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025.

(2) 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) expense, net in the operating results.

(3) Net debt divided by Adjusted EBITDA for the twelve months ended January 31, 2025.

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20250227838170/en/

Kevin Dunnigan VP & Treasurer 540-665-9100