American Woodmark Corporation Announces Second Quarter Results and a $125 Million Stock Repurchase Authorization

American Woodmark Corporation (the “Company”) announced results for its second fiscal quarter ended October 31, 2024.

Fiscal Second Quarter 2025 Financial Highlights:

• Net sales of $452.5 million
• Net income of $27.7 million; 6.1% of net sales
• GAAP EPS of $1.79; adjusted EPS of $2.08¹
• Adjusted EBITDA of $60.2 million; 13.3% of net sales
• Cash provided by operating activities of $11.9 million; free cash flow of $0.7 million
• Repurchased 348,877 shares for $32.5 million
• Board approved an additional $125 million authorization for future share repurchases

Fiscal 2025 Year to Date Financial Highlights:

• Net sales of $911.6 million
• Net income of $57.3 million; 6.3% of net sales
• GAAP EPS of $3.68; adjusted EPS of $4.22¹
• Adjusted EBITDA of $123.1 million; 13.5% of net sales
• Cash provided by operating activities of $52.7 million; free cash flow of $30.1 million
• Repurchased 620,337 shares for $56.5 million

“Our team delivered net sales and Adjusted EBITDA performance that was in-line with the expectations we shared last quarter. The quarter was impacted by continued softer demand in the remodel market along with the slowdown in new construction single family starts over the summer,” said Scott Culbreth, President and CEO. “We expect the demand trends to remain challenging but are reaffirming our outlook for a low single-digit decline in net sales for the full fiscal year and have tightened our Adjusted EBITDA range to $225 million to $235 million.”

Second Quarter Results

Net sales for the second quarter of fiscal 2025 decreased $21.4 million, or 4.5%, to $452.5 million compared with the same quarter last fiscal year. Net income was $27.7 million ($1.79 per diluted share and 6.1% of net sales) compared with $30.3 million ($1.85 per diluted share and 6.4% of net sales) last fiscal year. Net income decreased $2.7 million due to lower net sales, increasing supply chain costs, an unfavorable mark-to-market adjustment on our foreign currency hedging instruments, and restructuring charges related to a reduction in force during the quarter, partially offset by the roll-off of acquisition-related intangible asset amortization, which ended in the third quarter of the prior fiscal year, and lower year-over-year incentive compensation. Adjusted EPS per diluted share was $2.08 for the second quarter of fiscal 2025 compared with $2.50 last fiscal year. Adjusted EBITDA for the second quarter of fiscal 2025 decreased $12.1 million, or 16.8%, to $60.2 million, or 13.3% of net sales, compared with $72.3 million, or 15.3% of net sales, last 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.

Fiscal Year to Date Results

Net sales for the first six months of fiscal 2025 decreased $60.5 million, or 6.2%, to $911.6 million compared with the same period of the prior fiscal year. Net income was $57.3 million ($3.68 per diluted share and 6.3% of net sales) compared with $68.2 million ($4.13 per diluted share and 7.0% of net sales) in the same period of the prior fiscal year. Net income for the first six months of fiscal 2025 decreased $10.9 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 related to a reduction in force during the second fiscal quarter, 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 $4.22 for the first six months of fiscal 2025 compared with $5.24 in the same period of the prior fiscal year. Adjusted EBITDA for the first six months of fiscal 2025 decreased $24.4 million, or 16.5%, to $123.1 million, or 13.5% of net sales, compared to $147.5 million, or 15.2% of net sales, for the same period of the prior fiscal year.

Balance Sheet & Cash Flow

As of October 31, 2024, the Company had $56.7 million in cash plus access to $313.2 million of additional availability under its revolving credit facility. Also, as of October 31, 2024, the Company had $200.0 million in term loan debt and $173.4 million drawn on its revolving credit facility. On October 10, 2024, the Company refinanced its senior secured debt facility. The new agreement provides for a $500 million revolving loan facility and a $200 million term loan facility.

Cash provided by operating activities for the first six months of fiscal 2025 was $52.7 million and free cash flow totaled $30.1 million. During the second fiscal quarter, the Company purchased $17.7 million of transferable renewable energy tax credits to offset its corporate income tax liability.These credits will be utilized to offset corporate income tax payments in the fourth fiscal quarter of fiscal 2025. 

The Company repurchased 348,877 shares, or approximately 2.3% of shares outstanding, for $32.5 million during the second quarter of fiscal 2025, and 620,337 shares, or approximately 4.1% of shares outstanding, for $56.5 million during the first six months of fiscal 2025. As of October 31, 2024, $33.0 million remained available from the amount authorized by the Board to repurchase the Company’s common stock.

On November 20, 2024, the Board of Directors authorized an additional stock repurchase program of up to $125 million of the Company’s outstanding common shares. This authorization is in addition to the stock repurchase program authorized on November 29, 2023. 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.

Fiscal 2025 Financial Outlook

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

• Low single-digit decline in net sales year-over-year
• Adjusted EBITDA in the range of $225 million to $235 million

“During the first half of the fiscal year, we achieved an Adjusted EBITDA of $123.1 million, representing 13.5% of net sales. Despite macro-economic housing headwinds, our teams remain dedicated and focused on controlling our discretionary spend and focusing on operational improvements. When the macro-housing conditions improve, we’ll be strongly positioned in the marketplace,” stated Paul Joachimczyk, Senior Vice President and Chief Financial Officer. “We have been, and continue to remain, committed to investment back in the business and continued returns to our shareholders as shown by repurchasing 4.1% of our shares outstanding during the first six 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.

For full results click here.

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.

Contact:

Kevin Dunnigan – VP & Treasury Director – (540) 665-9100

Source: American Woodmark Corporation