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American Woodmark Corporation (NASDAQ:AMWD), a leading manufacturer and distributor of kitchen, bath, and home organization products, has reported its financial results for the first quarter of fiscal 2025, which ended on July 31, 2024. The company faced a challenging quarter, marked by a notable decline in sales and profitability.
First Quarter Financial Performance
For the first quarter of fiscal 2025, American Woodmark's net sales reached $459.1 million, reflecting a decrease of $39.1 million or 7.9% compared to the same quarter in the previous fiscal year. This decline underscores the broader economic challenges impacting consumer demand in the home improvement and construction sectors, which are key markets for the company.
Net income for the quarter stood at $29.6 million, translating to $1.89 per diluted share, representing 6.5% of net sales. This marks a significant drop from the $37.9 million or $2.28 per diluted share, which constituted 7.6% of net sales in the same period last year. The decline in net income, amounting to $8.2 million, can be attributed to several factors, including the reduction in net sales and an unfavorable mark-to-market adjustment on the company’s foreign currency hedging instruments, which amounted to $6.3 million.
However, the financial results were partially bolstered by the cessation of acquisition-related intangible asset amortization, which ended in the third quarter of the previous fiscal year, saving the company $11.4 million. Additionally, the absence of a non-recurring pre-tax charge related to the plywood case from the prior fiscal year, which amounted to $4.9 million, and lower year-over-year incentive compensation, contributed positively to the quarter’s performance.
Adjusted earnings per share (EPS) for the first quarter came in at $1.89, down from $2.78 in the previous fiscal year, highlighting the ongoing pressure on the company's margins. Furthermore, the adjusted EBITDA for the quarter fell by $12.3 million or 16.3% to $62.9 million, accounting for 13.7% of net sales, compared to $75.2 million or 15.1% of net sales in the same period last year.
Balance Sheet and Liquidity Position
As of July 31, 2024, American Woodmark reported a cash balance of $89.3 million, with additional access to $322.9 million through its revolving credit facility, ensuring a robust liquidity position. The company also had $206.3 million in term loan debt and $163.8 million drawn on its revolving credit facility.
Outlook for Fiscal 2025
Looking ahead, American Woodmark has provided its financial outlook for the remainder of fiscal 2025. The company expects a low single-digit decline in net sales year-over-year, reflecting continued uncertainty in the market. Additionally, adjusted EBITDA is projected to be in the range of $225 million to $245 million, signaling cautious optimism amidst the challenging economic environment.
