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American Woodmark Announces Fiscal Fourth Quarter and Fiscal Year Results

1. AMWD reported lower fourth quarter net sales, down 11.7%. 2. Adjusted EBITDA margins fell to 11.8%, reflecting operational challenges. 3. Fiscal 2026 sales outlook projects low-single digit fluctuations. 4. Tariff policies and consumer confidence are major uncertainties for AMWD. 5. Free cash flow was $65.7 million, highlighting operational efficiencies.

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FAQ

Why Bearish?

The decrease in net sales and income emphasizes ongoing operational challenges. Previous historical trends show that significant deceleration in sales can lead to bearish stock performance.

How important is it?

Factors such as declining sales, consumer confidence, and tariffs directly affect AMWD's performance. The uncertainty in projections makes the situation critical to investors.

Why Short Term?

Immediate declines in sales and uncertain outlook are likely to impact market sentiment. Similar past events caused rapid stock declines as investor confidence shook.

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SHWMASDHI
WINCHESTER, Va.--(BUSINESS WIRE)--American Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced results for its fourth fiscal quarter ended April 30, 2025 and its fiscal year ended April 30, 2025. “Demand for our products in the new construction and remodel market were weaker than expected as uncertainty regarding tariff policies and declining consumer confidence slowed foot traffic with builders and retailers. However, our teams continued to execute well and delivered Adjusted EBITDA margins of 11.8% for the fourth fiscal quarter,” said Scott Culbreth, President and CEO. “Demand trends are expected to remain challenging and our outlook for fiscal year 2026 ranges from low-single digit declines to low-single digit increases in net sales for the full fiscal year. We expect to outperform market growth rates but have widened our outlook due to uncertainty related to tariffs with net sales declines expected throughout the first half of the fiscal year.” Fourth Quarter Results Net sales for the fourth quarter of fiscal 2025 decreased $52.9 million, or 11.7%, to $400.4 million compared with the same quarter of the prior fiscal year. Net income was $25.6 million ($1.71 per diluted share and 6.4% of net sales) compared with $26.8 million ($1.69 per diluted share) in the same quarter of the prior fiscal year. Net income for the fourth quarter of fiscal 2025 decreased $1.2 million. This was due to a decrease in net sales combined with increases in material and transportation costs. These increases were partially offset by operational efficiencies and reductions in our incentive compensation costs and controlled spending across all functions. Adjusted EPS per diluted share was $1.61 for the fourth quarter of fiscal 2025 compared with $1.781 in the same quarter of the prior fiscal year. Adjusted EBITDA for the fourth quarter of fiscal 2025 decreased $7.6 million, or 13.9%, to $47.1 million, or 11.8% of net sales, compared to $54.7 million, or 12.1% of net sales, for the same quarter of the prior fiscal year. Fiscal Year Results Net sales for the fiscal year ended April 30, 2025 decreased 7.5% to $1,709.6 million from the prior fiscal year. Net income for the current fiscal year was $99.5 million ($6.50 per diluted share and 5.8% of net sales) compared with net income of $116.2 million ($7.15 per diluted share) for the prior fiscal year. Net income for fiscal 2025 decreased due to lower net sales and fixed cost deleverage and rising input costs, partially offset by the roll-off of acquisition-related intangible asset amortization, which ended in the third quarter of the prior fiscal year, operational efficiencies, lower incentive compensation and controlled spending across all functions. Adjusted EPS per diluted share was $6.90 for the current fiscal year compared with $8.601 for the prior fiscal year. Adjusted EBITDA for the current fiscal year was $208.6 million, or 12.2% of net sales, compared to $252.8 million, or 13.7% of net sales, for the prior fiscal year. Balance Sheet & Cash Flow As of April 30, 2025, the Company had $48.2 million in cash plus access to $314.2 million of additional availability under its revolving credit facility. Also, as of April 30, 2025, the Company had $197.5 million in term loan debt and $173.4 million drawn on its revolving credit facility. Cash provided by operating activities for the current fiscal year was $108.4 million and free cash flow totaled $65.7 million. The Company repurchased 417,298 shares, or approximately 2.8% of shares outstanding, for $27.6 million during the fourth quarter of fiscal 2025, and 1,169,710 shares, or approximately 7.5% of shares outstanding, for $96.7 million during fiscal 2025. As of April 30, 2025, $117.8 million of funds remained available from the amounts authorized by the Board to repurchase the Company's common stock. Fiscal 2026 Financial Outlook For fiscal 2026 the Company expects: Low-single digit declines to low-single digit increases in net sales for fiscal 2026 Adjusted EBITDA in the range of $175 million to $200 million “In response to the decline in sales attributable to macroeconomic factors, the teams successfully achieved a solid fourth fiscal quarter performance through operational enhancements and prudent spending measures across all functions,” stated Paul Joachimczyk, Senior Vice President and Chief Financial Officer. “For fiscal year 2026, given the wider range expected on net sales and economic uncertainty, our targeted Adjusted EBITDA range is set at $175 million to $200 million.” Our Adjusted EBITDA outlook excludes the impact of certain income and expense items that management believes are not part of underlying operations. Other items may include restructuring costs, interest expense, stock-based compensation expense, and certain tax items. Our outlook includes the known impact related to tariffs as of the release date. It does not reflect any other potential tariff impacts on Company expenses or market demand. The Company believes the dynamic nature of the tariffs, particularly related to the uncertainty of implementation, potential timing, and duration, limits its ability to estimate this information. We do not undertake to update this outlook as circumstances evolve. 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 7,800 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. 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 adjusted to exclude (1) income tax expense, (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 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:

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