American Woodmark Corporation Announces Fourth Quarter Results and Authorization of a $100 Million Stock Buyback Program

Rhea-AI Summary

American Woodmark Corporation (NASDAQ: AMWD) reported a fourth fiscal quarter net sales increase of 18.6% to $473.4 million, driven by strong demand across all channels. Despite the growth, net income dropped to $2.8 million from $13.0 million in the same quarter last year, impacted by a $13.8 million pre-tax loss on debt modification and rising material costs. For the fiscal year, net income was $58.8 million, down from $74.9 million. The Board authorized a $100 million stock repurchase program to enhance shareholder value.

Positive

• Net sales for Q4 increased 18.6% to $473.4 million, showing strong demand recovery.
• Annual net sales grew by $93.7 million, or 5.7%, to $1,744.0 million.
• Cash provided by operating activities was $151.8 million, with free cash flow at $105.4 million.
• Board authorized a $100 million stock repurchase program, enhancing shareholder value.

Negative

• Net income decreased to $2.8 million in Q4 from $13.0 million YoY due to a significant pre-tax loss.
• Fiscal year net income declined to $58.8 million from $74.9 million, mainly due to debt modification losses.
• Adjusted EBITDA for Q4 fell to 10.0% of net sales from 13.4% YoY, indicating declining profitability.

American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its fourth fiscal quarter ended April 30, 2021.

Net sales for the fourth fiscal quarter increased $74.2 million, or 18.6%, to $473.4 million compared with the same quarter of the prior fiscal year. The Company experienced double-digit growth across all channels (repair and remodel and new construction) during the fourth quarter of fiscal 2021 as market demand recovered with consumer confidence remaining strong. Net sales for the current fiscal year increased $93.7 million, or 5.7%, to $1,744.0 million from the prior fiscal year.

Net income was $2.8 million ($0.17 per diluted share) for the fourth quarter of fiscal 2021 compared with $13.0 million ($0.77 per diluted share) in the same quarter of the prior fiscal year. Net income for the fourth quarter of fiscal 2021 decreased $10.2 million due to a pre-tax loss on debt modification of $13.8 million and higher material and logistics costs, offset by an increase in net sales. Net income for the current fiscal year was $58.8 million ($3.45 per diluted share) compared with $74.9 million ($4.42 per diluted share) for the prior fiscal year. Net income for fiscal 2021 decreased primarily due to a pre-tax loss on debt modification of $13.8 million. The Company also incurred net pre-tax restructuring costs of $5.8 million during fiscal 2021 related to the permanent layoffs due to COVID-19 announced in the fourth quarter of fiscal 2020 and the first quarter of fiscal 2021 and the closure of its Humboldt, Tennessee manufacturing plant announced in June 2020. Adjusted EPS per diluted share was $1.28 for the fourth quarter of fiscal 2021 compared with $1.33 in the same quarter of the prior fiscal year and $6.40 for the current fiscal year compared with $6.59 for the prior fiscal year.

Adjusted EBITDA for the fourth fiscal quarter was $47.2 million, or 10.0% of net sales, compared to $53.4 million, or 13.4% of net sales, for the same quarter of the prior fiscal year. Adjusted EBITDA for the current fiscal year was $223.2 million, or 12.8% of net sales, compared to $236.0 million, or 14.3% of net sales, for the prior fiscal year.

"During the fourth quarter of fiscal 2021, our teams delivered exceptional sales growth across all channels and were able to restructure our debt to increase liquidity and reduce interest expense," said Scott Culbreth, President and CEO. "Our focus remains on increasing production to match the strong demand environment and mitigate inflationary pressures in material, logistics and labor through pricing and productivity."

Cash provided by operating activities for the current fiscal year was $151.8 million and free cash flow totaled $105.4 million. As of April 30, 2021, the Company had $91.1 million of cash on hand with $243.8 million term loan debt and $264 million drawn on the revolving credit facility plus access to $236 million of additional availability under its revolving credit facility. The Company paid down $80 million of its term loan facility during the current fiscal year and completed $20.0 million of share repurchases.

On May 25, 2021, the Board of Directors authorized a stock repurchase program of up to $100 million of the Company's outstanding common shares. In conjunction with this authorization the Board of Directors cancelled the $50 million existing authorization, of which the Company had repurchased $20 million in the fourth quarter of fiscal 2021. Any repurchases under the stock repurchase program are subject to market conditions, the Company’s cash requirements for other purposes, compliance with applicable laws and regulations and contractual covenants and any other factors management may deem relevant at the time of such repurchases. The Company is not obligated to make any stock repurchases in the future.

About American Woodmark

American Woodmark Corporation manufactures and distributes kitchen, bath and home organization products for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, builders and through a network of independent dealers and distributors. At April 30, 2021, the Company operated seventeen manufacturing facilities in the United States and Mexico and eight primary service centers and one distribution center located throughout the United States.

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.

(AMWD-ER)

AMERICAN WOODMARK CORPORATION
Unaudited Financial Highlights
(in thousands, except share data)
Operating Results
		Three Months Ended								Twelve Months Ended
		April 30								April 30
		2021				2020				2021				2020
Net sales		$	473,390			$	399,197			$	1,744,014			$	1,650,333
Cost of sales & distribution		399,584				323,928				1,424,739				1,321,147
Gross profit		73,806				75,269				319,275				329,186
Sales & marketing expense		26,096				21,069				89,464				83,608
General & administrative expense		25,869				27,088				112,283				113,334
Restructuring charges, net		444				189				5,848				(18		)
Operating income		21,397				26,923				111,680				132,262
Interest expense, net		5,371				6,579				23,128				29,027
Other expense, net		14,045				3,386				11,117				2,687
Income tax (benefit) expense		(846		)		3,945				18,672				25,687
Net income		$	2,827			$	13,013			$	58,763			$	74,861
Earnings Per Share:
Weighted average shares outstanding - diluted

FAQ

What were American Woodmark's Q4 net sales results for fiscal 2021?

American Woodmark reported Q4 net sales of $473.4 million, an increase of 18.6% compared to the previous year.

How much did American Woodmark's net income decrease in Q4 fiscal 2021?

Net income for Q4 fiscal 2021 decreased to $2.8 million from $13.0 million in the same quarter last year.

What is the adjusted EPS for American Woodmark for fiscal 2021?

The adjusted EPS for fiscal 2021 was $6.40, compared to $6.59 for the prior fiscal year.

What is the purpose of the $100 million stock repurchase program authorized by American Woodmark?

The stock repurchase program aims to enhance shareholder value and is contingent on market conditions and liquidity.

What impact did the debt modification have on American Woodmark's financial results?

The debt modification resulted in a pre-tax loss of $13.8 million, significantly impacting net income.