American Woodmark Announces Preliminary Fiscal Fourth Quarter and Fiscal Year Results
American Woodmark Corporation (NASDAQ: AMWD) (the “Company”) today announced preliminary results for its fourth fiscal quarter ended April 30, 2023 and its fiscal year ended April 30, 2023.
“We delivered our anticipated strong financial performance in the fourth quarter of fiscal year 2023,” said Scott Culbreth, President and CEO. “Our free cash flow generation of $153.5 million in fiscal year 2023 is helping fund our internal investments for growth in fiscal year 2024. The strengthening in our operational performance throughout the year combined with the platform changes we began executing in fiscal year 2023, gives us the confidence that we can deliver strong margin performance in the dynamic market conditions.”
Preliminary Fiscal Fourth Quarter 2023 Financial Highlights:
- Net sales decreased 4.1% year-over-year to $481.1 million
- Net income increased 108% year-over-year to $30.1 million
- GAAP EPS of $1.80; Adjusted EPS of $2.21
- Adjusted EBITDA increased 46.7% year-over-year to $65.3 million
- Cash provided by operating activities $85.9 million, free cash flow of $61.9 million
- $65.0 million of term and revolver repayment
Preliminary Fiscal 2023 Financial Highlights:
- Net sales increased 11.3% year-over-year to $2,066.2 million
- GAAP EPS of $5.62; Adjusted EPS of $7.62
- Adjusted EBITDA increased 74.2% year-over-year to $240.4 million
- Cash provided by operating activities $196.7 million, free cash flow of $153.5 million
- $130.5 million of term and revolver repayment
Preliminary Fourth Quarter Results
Net sales for the fourth quarter of fiscal 2023 decreased $20.6 million, or (4.1)%, to $481.1 million compared with the same quarter of the prior fiscal year. Net income was $30.1 million, or ($1.80 per diluted share) compared with $14.5 million or ($0.87 per diluted share) in the same quarter of the prior fiscal year. Net income for the fourth quarter of fiscal 2023 increased $15.6 million due to pricing better matching inflationary impacts, mix, reduced spending, and a pre-tax gain on debt modification of $2.1 million partially offset by a decrease in net sales. Adjusted EPS per diluted share was $2.21 for the fourth quarter of fiscal 2023 compared with $1.38 in the same quarter of the prior fiscal year. Adjusted EBITDA for the fourth quarter of fiscal 2023 increased $20.8 million, or 46.7%, to $65.3 million, or 13.6% of net sales, compared to $44.5 million, or 8.9% of net sales, for the same quarter of the prior fiscal year.
Preliminary Fiscal Year Results
Net sales for the fiscal year ended April 30, 2023, increased 11.3% to $2,066.2 million from the prior fiscal year. Net income for the current fiscal year was $93.7 million ($5.62 per diluted share) compared with net loss of $29.7 million ($1.79 per diluted share) for the prior fiscal year. Net income for fiscal 2023 increased primarily due to an increase in net sales largely as a result of price increases and increased efficiencies, and the absence of onetime pension settlement charges of $68.5 million related to the termination of the Company’s pension plan in the prior year. Adjusted EPS per diluted share was $7.62 for the current fiscal year compared with $3.29 for the prior fiscal year. Adjusted EBITDA for the current fiscal year was $240.4 million, or 11.6% of net sales, compared to $138.0 million, or 7.4% of net sales, for the prior fiscal year.
Balance Sheet & Cash Flow
As of April 30, 2023, the Company had $41.7 million in cash plus access to $323.2 million of additional availability under its revolving credit facility. Also, as of April 30, 2023, 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 $196.7 million and free cash flow totaled $153.5 million. The Company paid down a net of $31.3 million of its term loan and $99.3 million of its revolving credit facility during the current fiscal year.
Preliminary Financial Results
The financial results herein are unaudited, based on information available to management as of the date of this release and deemed preliminary until we file our Annual Report on Form 10-K in late June. One matter that could impact our financial results for the fourth quarter and fiscal year ending April 30, 2023 relates to a final determination around the treatment of antidumping and countervailing duties for imported Vietnamese plywood, which we have previously disclosed. If a final determination is made by the United States Department of Commerce to include two of the Company’s Vietnamese plywood vendors on the ineligible for certification list, it could impact our financial statements for the fiscal fourth quarter and full year results. Net income (and the non-GAAP financial numbers derived from net income) could be impacted and therefore should be considered estimates, however net sales will not change. The Company estimates the maximum potential impact on net income (and the non-GAAP financial numbers derived from net income) for prior purchases related to these duties to be an additional charge of approximately $4.0 million, net of tax. A final determination is currently scheduled to be made prior to the filing of the Company’s Form 10-K and if the Company’s two Vietnamese plywood vendors are included, the Company plans to vigorously appeal such determination.
Fiscal 2024 Financial Outlook
For fiscal 2024 the Company expects:
- Low double digit net sales decline year-over-year
- Adjusted EBITDA in the range of $205 million to $225 million
“Our teams improved Adjusted EBITDA by 46.7% to $65.3 million, or 13.6%, despite the decline in sales of 4.1% during the fourth quarter of fiscal 2023. Our team delivered on the commitment to improving our results and our fiscal year Adjusted EBITDA improved 74.2% to $240.4 million, or 11.6%,” said Paul Joachimczyk, Senior Vice President and Chief Financial Officer. “Given our strong performance in the back half of fiscal year 2023, we are confident in our fiscal year 2024 outlook with EBITDA in the range of $205 million to $225 million.”
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.
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About American Woodmark
American Woodmark celebrates the creativity in all of us. With over 10,000 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.
Kevin Dunnigan – Vice President & Treasury Director – (540) 665-9100
Source: American Woodmark Corporation