American Woodmark Corporation (AMWD, Financial) is a leading manufacturer and distributor of kitchen and bath cabinets for the remodeling and new home construction markets.
AWC manufactures cabinets under five major brands: American Woodmark, Shenandoah Cabinetry, Timberlake, etc., selling more than 613 cabinet lines in a wide variety of design materials and finishes. Its products are sold through a network of independent dealers and distributors, and directly to major builders, Lowe's (LOW, Financial) and The Home Depot (HD, Financial). The company operates 9 manufacturing facilities located in Arizona, Georgia, Indiana, Kentucky, Maryland, Tennessee, Virginia, and West Virginia, and 9 builder service centers across the country.
Third-quarter results
Net sales for the third fiscal quarter increased 12% to $189.0 million compared with the same quarter of the prior fiscal year. Net sales for the first nine months of the current fiscal year increased 15% to $618.6 million from the comparable period of the prior fiscal year. The company experienced growth in both the remodeling and new construction channels during the third quarter of fiscal year 2015, with new construction growth exceeding 15%.
Net income was $7.3 million ($0.45 per diluted share) for the third quarter of the current fiscal year compared with $2.9 million ($0.18 per diluted share) for the third quarter of the prior fiscal year. Exclusive of one-time tax credits, the company generated $7.1 million ($0.44 per diluted share) of net income for the third quarter of the current fiscal year compared with $2.9 million ($0.18 per diluted share) for the same period of the prior fiscal year.
Net income for the first nine months of fiscal year 2015 was $24.2 million ($1.52 per diluted share) compared with $14.8 million ($0.95 per diluted share) for the same period of the prior fiscal year. Exclusive of one-time tax credits, the company generated $23.0 million ($1.44 per diluted share) of net income for the first nine months of the current fiscal year compared with $14.8 million ($0.95 per diluted share) for the same period of the prior fiscal year.
Gross profit for the third quarter of the current fiscal year was 18.6% of net sales compared with 15.4% in the same quarter of the prior year. Gross profit for the first nine months of the current fiscal year was 17.7% of net sales compared with 17.1% for the same period in the prior year. Gross profit in the current quarter was favorably impacted by higher sales volume and improved operating efficiency. Gross profit for the first nine months of the current fiscal year was favorably impacted by higher sales volume and improved operating efficiency that was partially offset by material inflation and costs associated with crewing and infrastructure to support higher levels of sales and installation activity.
Selling, general and administrative costs for the third quarter of fiscal year 2015 were 12.8% of net sales compared with 12.4% in the same quarter of the prior year. Selling, general and administrative costs for the first nine months of the current fiscal year were 11.7% of net sales compared with 12.5% for the same period in the prior year. The increase in the company's operating expense ratio in the current quarter was driven by higher performance based compensation costs. The improvement in the company's operating expense ratio for the nine-month period was driven by favorable leverage from increased sales and on-going expense control.
The company generated net cash from operating activities of $36.0 million during the first nine months of fiscal year 2015 compared with $23.5 million during the same period in the prior year. The improvement in the company's cash from operating activities was driven primarily by higher operating profitability and lower increases in customer receivables, which was partially offset by increases in inventory levels to support higher sales. Net cash used by investing activities was $43.5 million during the first nine months of the current fiscal year compared with $8.3 million during the same period of the prior year due primarily to a $29.5 million investment in short-term certificates of deposit and increased investment in property, plant and equipment. Net cash provided by financing activities decreased $9.5 million during the first nine months of the current fiscal year compared to the same period in the prior year, as the company repurchased 163,326 shares of common stock at a cost of $5.1 million and proceeds from the exercise of stock options decreased $4.4 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.
To end
American Woodmark has been named to Forbes' 200 Best Small Companies List for 2001, 2002 and 2003, and Business Week's 100 Hot Growth Companies for 2002. American Woodmark is proud of its growth, but it's even more proud of the underlying performance principles that have made it all possible: being the best value to consumers; the best supplier to home centers, builders and distributors; the best workplace for employees; and the best investment for shareholders. Balancing these objectives is an ongoing challenge, but it's a challenge embraced by the company as a whole. It's just one more reason why today American Woodmark is renowned as an industry leader.
(Source: Company’s Website)
