American Woodmark Corporation Announces Second Quarter Results

WINCHESTER, Va., Nov. 22, 2016

Net sales for the second fiscal quarter increased 3% to $264.1 million compared with the same quarter of the prior fiscal year.  Net sales for the first six months of the current fiscal year increased 7% to $522.2 million from the comparable period of the prior fiscal year.  The Company experienced growth in both the new construction and dealer channels during the second quarter of fiscal year 2017.

Net income was $17.6 million ($1.07 per diluted share) for the second quarter of the current fiscal year compared with $18.2 million ($1.10 per diluted share) in the same quarter of the prior fiscal year.  The Company was negatively impacted $0.03 per diluted share from a higher tax rate in the quarter due to a reduction in the domestic production deduction benefit.  Net income for the first six months of the current fiscal year was $39.3 million ($2.39 per diluted share) compared with $33.3 million ($2.03 per diluted share) for the same period of the prior fiscal year.

Gross profit for the second quarter of the current fiscal year was 21.3% of net sales compared with 21.9% in the same quarter of the prior fiscal year.  Gross profit for the first six months of the current fiscal year was 22.1% of net sales compared with 21.8% for the same period in the prior year.  Gross profit in the current quarter was impacted by higher labor benefit costs and depreciation costs.  Gross profit for the first six months of the current fiscal year was favorably impacted by higher sales volume, lower labor benefit costs and improved operating efficiency.  

Selling, general and administrative costs for the second quarter of the fiscal year 2017 were 10.5% of net sales compared with 10.7% in the same quarter of the prior fiscal year.  Selling, general and administrative costs for the first six months of the current fiscal year were 10.6% of net sales compared with 11.1% for the same period in the prior year.  The improvement in the Company's operating expense ratio in the current quarter and the first six months of the current fiscal year was driven by favorable leverage from increased sales, lower commissions and on-going expense control.

The Company generated net cash from operating activities of $40.1 million during the first half of fiscal year 2017 compared with $42.0 million during the same period in the prior year.  The decrease in the Company's cash from operating activities was driven primarily by lower increases in accounts payables and accrued expenses which was partially offset by lower increases in customer receivables and higher operating profitability.  Net cash used by investing activities was $50.4 million during the first half of the current fiscal year compared with $25.8 million during the same period of the prior year due to an increased investment of $36.5 million in certificates of deposit which was partially offset by decreased investment in property, plant and equipment.  Net cash used by financing activities of $8.5 million increased $7.8 million during the first half of the current fiscal year compared to the same period in the prior year as the company repurchased 139,800 shares of common stock at a cost of $10.4 million, a $3.4 million increase from the prior year, and proceeds from the exercise of stock options decreased $3.7 million.

American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets.  Its products are sold on a national basis directly to home centers, major builders and through a network of independent distributors.  The Company presently operates nine manufacturing facilities and seven service centers across the country.