Exhibit 99.1
News Release
P. O. Box 1980
Winchester, VA 22604-8090
FOR IMMEDIATE RELEASE
Contact: Glenn Eanes
Vice President and Treasurer
540-665-9100
AMERICAN WOODMARK CORPORATION
ANNOUNCES FIRST QUARTER RESULTS
Winchester, Virginia (August 23, 2006) — American Woodmark Corporation (NASDAQ: AMWD) today announced results for its first quarter of fiscal year 2007 ended July 31, 2006.
Net sales increased 3% from the prior year to $222,752,000. Sales of core products grew at a rate of 7%, at the high end of the Company's previous forward guidance of 3% to 7%. During the first quarter, the Company continued its previously announced transition out of certain low margin products. The Company had previously issued forward guidance that anticipated an overall net sales increase of 0% to 4%, inclusive of the transition impact.
Net income for the quarter was $13,414,000 or $0.82 per diluted share, compared with net income of $7,455,000, or $0.45 per diluted share, in the prior year. Net income for the first quarter of fiscal 2007 is inclusive of non-cash share-based compensation expense of $947,000, or $0.06 per share. Net income was well above the Company’s previous forward guidance of $0.60 to $0.65 per diluted share.
Gross profit was 22.0% of sales, up from 17.1% in the previous year. The improved gross profit margin reflected favorable impacts from operational initiatives taken in the previous fiscal year, improved sales mix from the Company’s low-margin products transition, delayed impact of previously announced raw materials cost increases, and higher than expected core products sales growth. Material, labor and freight costs each improved as a percentage of sales.
Selling, general and administrative costs increased to 12.5% of net sales from 11.5% of net sales in the prior year’s first quarter, due to the inclusion of share-based compensation expense, as well as additional cost relating to the Company’s pay-for-performance incentive plans.
Looking ahead to the second fiscal quarter of 2007, the Company continues to expect a mixed environment for remodeling and new construction demand that will support core product sales growth of 1% to 5% over prior year. The impact of the Company’s continued transition out of low-margin products is expected to cause total sales to be lower than the prior year’s total sales, with a likely range of a decline of from 1% to 5%. The Company expects its gross margin rate to continue to remain above 20% and significantly exceed the prior year’s 15.7%. Inclusive of share-based compensation expense, the Company expects net income to be in the range of $0.55 to $0.60 per diluted share, as compared with $0.37 in the second quarter of last year.
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 fifteen manufacturing facilities and ten 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.
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AMERICAN WOODMARK CORPORATION
Unaudited Financial Highlights
(in thousands, except share data)
Operating Results
| Three Months Ended | |||||||
July 31 2006 | July 31 2005 | ||||||
Net Sales | $ | 222,752 | $ | 215,564 | |||
Cost of Sales & Distribution | 173,641 | 178,674 | |||||
Gross Profit | 49,111 | 36,890 | |||||
Sales & Marketing Expense | 17,924 | 17,813 | |||||
G & A Expense | 10,006 | 6,926 | |||||
Operating Income | 21,181 | 12,151 | |||||
Interest & Other (Income) Expense | (454 | ) | (9 | ) | |||
Income Tax Expense | 8,221 | 4,705 | |||||
Net Income | $ | 13,414 | $ | 7,455 | |||
Earnings Per Share: | |||||||
Weighted Average Shares Outstanding – Diluted | 16,272,458 | 16,723,521 | |||||
Diluted Earnings Per Share | $ | 0.82 | $ | 0.45 | |||
Balance Sheet | |||||||
July 31 2006 | April 30 2006 | ||||||
Cash & Cash Equivalents | $ | 70,685 | $ | 47,955 | |||
Customer Receivables | 44,172 | 53,514 | |||||
Inventories | 64,641 | 68,522 | |||||
Other Current Assets | 12,306 | 13,608 | |||||
Total Current Assets | 191,804 | 183,599 | |||||
Property, Plant & Equipment | 171,355 | 175,384 | |||||
Other Assets | 19,297 | 18,560 | |||||
Total Assets | $ | 382,456 | $ | 377,543 | |||
Current Portion – Long-Term Debt | $ | 1,575 | $ | 1,456 | |||
Accounts Payable & Accrued Expenses | 80,867 | 81,617 | |||||
Total Current Liabilities | 82,442 | 83,073 | |||||
Long-Term Debt | 27,608 | 27,761 | |||||
Other Liabilities | 22,934 | 25,048 | |||||
Total Liabilities | 132,984 | 135,882 | |||||
Stockholders’ Equity | 249,472 | 241,661 | |||||
Total Liabilities & Stockholders’ Equity | $ | 382,456 | $ | 377,543 | |||