WINCHESTER, Va., March 9, 2018 /PRNewswire/ -- American
Woodmark Corporation (NASDAQ: AMWD) (the "Company") today announced
results for its third fiscal quarter ended January 31, 2018.
Fiscal Third Quarter 2018
Net sales for the third fiscal quarter increased 17% to
$293 million compared with the same
quarter of the prior fiscal year. The current third fiscal
quarter results include one month of results from the Company's
acquisition of RSI Home Products, Inc. ("RSI"), which closed
December 29, 2017. Excluding
the impact of the RSI acquisition, net sales for the third fiscal
quarter increased 2% to $254 million
compared with the same quarter of the prior fiscal year.
Excluding the impact of the RSI acquisition, the Company
experienced growth in all sales channels during the third quarter
of fiscal year 2018.
Net income was $2.0 million
($0.12 per diluted share) for the
third quarter of the current fiscal year compared with $14.6 million ($0.89 per diluted share) in the same quarter of
the prior fiscal year. Net income was negatively impacted by
purchase accounting entries of $6.3
million of inventory step-up amortization, acquisition
related costs of $10.2 million, both
offset by associated tax benefit of $4.4
million, and gross margin declines which were partially
offset by additional sales volumes and lower incentive costs.
Adjusted EPS per diluted share was $0.84 for the third quarter of the current fiscal
year compared with $0.92 in the same
quarter of the prior fiscal year.
Adjusted EBITDA was $36.0 million,
or 12.3% of net sales compared to $28.1
million, or 11.3% of net sales for the same quarter of the
prior fiscal year. The increase is primarily due to
additional sales growth in the quarter and the inclusion of one
month of results for RSI.
"Despite the third fiscal quarter being our toughest comp verses
prior year, I am pleased to report that sales grew across all
channels," said Cary Dunston,
Chairman and CEO. "We did see our growth in single family new
construction decline due to a more aggressive market shift towards
first-time buyers than we had planned. However, this shift
towards opening price point homes further supports the strategic
rationale for the RSI acquisition which was successfully completed
in the quarter."
Fiscal Year-to-Date 2018
Net sales for the first nine months of the current fiscal year
increased 9% to $844 million from the
comparable period of the prior fiscal year. Excluding the
impact of the RSI acquisition, net sales for the first nine months
of the current fiscal year increased 4% to $806 million from the comparable period of the
prior fiscal year. Excluding the impact of the RSI
acquisition, the Company experienced growth in both the new
construction and dealer channels during the first nine months of
the current fiscal year.
Net income for the first nine months of the current fiscal year
was $44.0 million ($2.67 per diluted share) compared with
$53.9 million ($3.28 per diluted share) for the same period of
the prior fiscal year. Adjusted EPS per diluted share was
$3.41 for the first nine months of
the current fiscal year compared with $3.31 for the same period of the prior fiscal
year.
Adjusted EBITDA was $110.4
million, or 13.1% of net sales compared to $99.1 million, or 12.9% of net sales for the same
period of the prior fiscal year. The year over year increase
is primarily due to additional sales growth and the inclusion of
one month of results for RSI.
Free cash flow totaled $81.8
million for the first nine months of the current fiscal
year.
"Shortly after the end of the third fiscal quarter, we also took
advantage of the opportunity to refinance RSI's 6½% $575 million senior secured second lien notes due
2023 with $350 million in 4.875%
senior notes due 2026 and $250
million available under a delayed draw term loan facility,"
said Scott Culbreth, CFO.
About American Woodmark
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 eighteen manufacturing facilities and seven service
centers across the country.
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 and the Annual
Report to Shareholders. 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
This press release contains non-GAAP financial measures such
as net sales and percentage change of net sales excluding the RSI
acquisition, Adjusted EPS per diluted share, Adjusted EBITDA,
Adjusted EBITDA margin, and Free Cash Flow, which are measurements
of operational performance that are not prepared and presented in
accordance with GAAP. Accordingly, these measures should not
be considered as a substitute for data prepared and presented in
accordance with GAAP. These non-GAAP financial measures are
used by American Woodmark's management when evaluating results of
operations and cash flow. American Woodmark's management
believes these measures also provide users of the financial
statements with additional and useful comparisons of current
results of operations and cash flows with past and future periods.
Non-GAAP financial measures should not be construed as being
more important than comparable GAAP measures. Please refer to the
Non-GAAP Reconciliations contained in this press release.
AMERICAN WOODMARK
CORPORATION
|
Unaudited
Financial Highlights
|
(in thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
Operating
Results
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
|
January
31
|
|
January
31
|
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
|
$
|
292,791
|
|
|
$
|
249,285
|
|
|
$
|
844,387
|
|
|
$
|
771,511
|
|
Cost of sales &
distribution
|
|
242,412
|
|
|
197,689
|
|
|
678,179
|
|
|
604,446
|
|
|
Gross
profit
|
|
50,379
|
|
|
51,596
|
|
|
166,208
|
|
|
167,065
|
|
Sales & marketing
expense
|
|
19,167
|
|
|
18,519
|
|
|
55,397
|
|
|
52,128
|
|
General &
administrative expense
|
|
23,492
|
|
|
11,476
|
|
|
41,442
|
|
|
33,083
|
|
|
Operating
income
|
|
7,720
|
|
|
21,601
|
|
|
69,369
|
|
|
81,854
|
|
Interest expense
& other income
|
|
3,956
|
|
|
(172)
|
|
|
2,770
|
|
|
(309)
|
|
Income tax
expense
|
|
1,768
|
|
|
7,220
|
|
|
22,567
|
|
|
28,312
|
|
|
Net income
|
|
$
|
1,996
|
|
|
$
|
14,553
|
|
|
$
|
44,032
|
|
|
$
|
53,851
|
|
|
|
|
|
|
|
|
|
|
|
Earnings Per
Share:
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding - diluted
|
|
|
16,690,760
|
|
|
|
16,381,223
|
|
|
|
16,461,509
|
|
|
|
16,400,842
|
|
|
|
|
|
|
|
|
|
|
|
Net income per
diluted share
|
|
$
|
0.12
|
|
|
$
|
0.89
|
|
|
$
|
2.67
|
|
|
$
|
3.28
|
|
Condensed
Consolidated Balance Sheet
|
(Unaudited)
|
|
|
|
|
January
31
|
|
April
30
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Cash & cash
equivalents
|
|
$
|
139,624
|
|
|
$
|
176,978
|
|
Investments -
certificates of deposit
|
|
8,000
|
|
|
51,750
|
|
Customer
receivables
|
|
121,777
|
|
|
63,115
|
|
Inventories
|
|
108,003
|
|
|
42,859
|
|
Other current
assets
|
|
37,665
|
|
|
4,526
|
|
|
Total current
assets
|
|
415,069
|
|
|
339,228
|
|
Property, plant &
equipment
|
|
210,628
|
|
|
107,933
|
|
Investments -
certificates of deposit
|
|
2,500
|
|
|
20,500
|
|
Trademarks
|
|
9,722
|
|
|
—
|
|
Customer relationship
intangibles
|
|
270,194
|
|
|
—
|
|
Goodwill
|
|
765,743
|
|
|
—
|
|
Other
assets
|
|
28,133
|
|
|
33,612
|
|
|
Total
assets
|
|
$
|
1,701,989
|
|
|
$
|
501,273
|
|
|
|
|
|
|
|
Current portion -
long-term debt
|
|
$
|
14,864
|
|
|
$
|
1,598
|
|
Accounts payable
& accrued expenses
|
|
167,832
|
|
|
99,899
|
|
|
Total current
liabilities
|
|
182,696
|
|
|
101,497
|
|
Long-term
debt
|
|
881,585
|
|
|
15,279
|
|
Other
liabilities
|
|
75,062
|
|
|
32,048
|
|
|
Total
liabilities
|
|
1,139,343
|
|
|
148,824
|
|
Stockholders'
equity
|
|
562,646
|
|
|
352,449
|
|
|
Total liabilities
& stockholders' equity
|
|
$
|
1,701,989
|
|
|
$
|
501,273
|
|
Condensed
Consolidated Statements of Cash Flows
|
(Unaudited)
|
|
|
|
|
Nine Months
Ended
|
|
|
|
January
31
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
$
|
48,881
|
|
|
$
|
51,664
|
|
Net cash used by
investing activities
|
|
(28,355)
|
|
|
(51,734)
|
|
Net cash used by
financing activities
|
|
(57,880)
|
|
|
(11,177)
|
|
Net decrease in cash
and cash equivalents
|
|
(37,354)
|
|
|
(11,247)
|
|
Cash and cash
equivalents, beginning of period
|
|
176,978
|
|
|
174,463
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
|
$
|
139,624
|
|
|
$
|
163,216
|
|
Reconciliation of
Net Sales and Percentage of Net Sales Excluding RSI
|
(in
thousands)
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
January
31,
|
|
January
31,
|
|
|
2018
|
|
2017
|
|
Percent
Change
|
|
2018
|
|
2017
|
|
Percent
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales excluding
RSI
|
|
$
|
254,220
|
|
|
$
|
249,285
|
|
|
2
|
%
|
|
$
|
805,816
|
|
|
$
|
771,511
|
|
|
4
|
%
|
RSI sales
|
|
38,571
|
|
|
—
|
|
|
—
|
|
|
38,571
|
|
|
—
|
|
|
—
|
|
Net Sales
|
|
$
|
292,791
|
|
|
$
|
249,285
|
|
|
17
|
%
|
|
844,387
|
|
|
771,511
|
|
|
9
|
%
|
Reconciliation of
Adjusted Non-GAAP Financial Measures to the GAAP
Equivalents
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
January
31,
|
|
January
31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
|
1,996
|
|
|
$
|
14,553
|
|
|
$
|
44,032
|
|
|
$
|
53,851
|
|
Add back:
|
|
|
|
|
|
|
|
|
Income tax
expense
|
|
1,768
|
|
|
7,220
|
|
|
22,567
|
|
|
28,312
|
|
Interest
expense
|
|
4,498
|
|
|
447
|
|
|
4,603
|
|
|
776
|
|
Depreciation and
amortization expense
|
|
6,602
|
|
|
4,846
|
|
|
17,579
|
|
|
13,719
|
|
Amortization of
customer lists and trademarks
|
|
4,083
|
|
|
—
|
|
|
4,083
|
|
|
—
|
|
EBITDA
(Non-GAAP)
|
|
$
|
18,947
|
|
|
$
|
27,066
|
|
|
$
|
92,864
|
|
|
$
|
96,658
|
|
Add back:
|
|
|
|
|
|
|
|
|
Acquisition related
expenses
|
|
10,163
|
|
|
728
|
|
|
10,163
|
|
|
728
|
|
Inventory step-up
amortization (1)
|
|
6,334
|
|
|
—
|
|
|
6,334
|
|
|
—
|
|
Stock compensation
expense
|
|
897
|
|
|
828
|
|
|
2,506
|
|
|
2,477
|
|
Loss on asset
disposal
|
|
147
|
|
|
111
|
|
|
280
|
|
|
286
|
|
Interest
income
|
|
(463)
|
|
|
(614)
|
|
|
(1,716)
|
|
|
(1,001)
|
|
Adjusted EBITDA
(Non-GAAP)
|
|
$
|
36,025
|
|
|
$
|
28,119
|
|
|
$
|
110,431
|
|
|
$
|
99,148
|
|
|
|
|
|
|
|
|
|
|
Net Sales
|
|
$
|
292,791
|
|
|
$
|
249,285
|
|
|
$
|
844,387
|
|
|
$
|
771,511
|
|
Adjusted EBITDA
margin (Non-GAAP)
|
|
12.3
|
%
|
|
11.3
|
%
|
|
13.1
|
%
|
|
12.9
|
%
|
Reconciliation of
Net Income to Adjusted Net Income
|
(in thousands, except
share data)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
January
31,
|
|
January
31,
|
|
|
2018
|
|
2017
|
|
2018
|
|
2017
|
|
|
|
|
|
|
|
|
|
Net income
(GAAP)
|
|
$
|
1,996
|
|
|
$
|
14,553
|
|
|
$
|
44,032
|
|
|
$
|
53,851
|
|
Add back:
|
|
|
|
|
|
|
|
|
Acquisition related
expenses
|
|
10,163
|
|
|
728
|
|
|
10,163
|
|
|
728
|
|
Inventory step-up
amortization (1)
|
|
6,334
|
|
|
—
|
|
|
6,334
|
|
|
—
|
|
Tax benefit of
acquisition expenses and inventory step-up
|
|
(4,438)
|
|
|
(261)
|
|
|
(4,438)
|
|
|
(261)
|
|
Adjusted net income
(Non-GAAP)
|
|
$
|
14,055
|
|
|
$
|
15,020
|
|
|
$
|
56,091
|
|
|
$
|
54,318
|
|
|
|
|
|
|
|
|
|
|
Weighted average
diluted shares
|
|
16,690,760
|
|
|
16,381,223
|
|
|
16,461,509
|
|
|
16,400,842
|
|
Adjusted EPS per
diluted share (Non-GAAP)
|
|
$
|
0.84
|
|
|
$
|
0.92
|
|
|
$
|
3.41
|
|
|
$
|
3.31
|
|
(1) The inventory step-amortization is the increase in the fair
value of inventory acquired through the RSI acquisition that was
fully expensed in the quarter ended January
31, 2018.
Free Cash
Flow
|
|
|
|
|
|
|
|
|
|
Nine Months
Ended
|
|
|
|
January
31,
|
|
|
|
2018
|
|
2017
|
|
|
|
|
|
|
Cash provided by
operating activities
|
|
|
$
|
48,881
|
|
|
$
|
51,664
|
|
Capital expenditures
(2)
|
|
|
32,919
|
|
|
17,521
|
|
Free cash
flow
|
|
|
$
|
81,800
|
|
|
$
|
69,185
|
|
(2) Capital expenditures consist of cash payments for property,
plant and equipment and cash payments for investments in
displays.
View original
content:http://www.prnewswire.com/news-releases/american-woodmark-corporation-announces-third-quarter-results-300611255.html
SOURCE American Woodmark Corporation