AMWD - Earnings call transcript Q4 2021 | American Woodmark Corporation

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Operator

Good day and welcome to the American Woodmark Corporation Fourth Fiscal Quarter 2021 Conference Call. Today’s call is being recorded May 27, 2021.

During this call, the company may discuss certain non-GAAP financial measures included in our earnings release such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net leverage and adjusted EPS per diluted share. The earnings release, which can be found on our website, americanwoodmark.com, includes definitions of each of these non-GAAP financial measures, the company’s rationale for their usage and reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures.

We also use our website to publish other information that maybe important to investors, such as investor presentations.

call Private the of Securities the statement Safe XXXX. begin the under Litigation will by company’s reading Harbor We Reform Act risks maybe beyond All – company’s control. subject on made the change and material to that forward-looking are uncertainties on the based and statements involve company’s Accordingly, future statements. financial performance results from differ materially forward-looking the expressed – or any company’s those implied and may in such and in the but are report and not the described company’s include, those Securities filings factors Such Exchange shareholders. to, Commission annual to the with limited The not forward-looking be clear not or does changes experience undertake company expressed or to will it revise statements or realized. publicly its that make the results therein update any projected even if implied future Joachimczyk, and Vice And President the I now, like Paul to CFO. would turn to call over ahead, go sir. Please

Paul Joachimczyk

and ladies Scott and of answer your fiscal and the time American CEO. Scott Woodmark’s and our call. you to will joining morning, happy And Culbreth, will quarter performance. is today. be to gentlemen me financial regarding for comments, fourth Thank welcome begin today add review we After President questions. with to the taking details our conference quarter additional I a Good Scott? participate will

Scott Culbreth

joining Paul to reopen. you call. us Thank everyone as quarter begins country ones safe the your for to and continue fiscal you, loved I our fourth thanks and today that for earnings hope to remain

but our inflation. to an did labor growth continue job the of margins team exceptional quarter, pressured sales Our logistics by delivering be and material, in

are our been our first new have and to now and adjustments the deliver the We focused to XXXX. not availability approximately adjustments safe $X.X access. issuance also for vaccine million inventory quarter efforts pandemic half critical has in our employees were in year actions and and working EBITDA fiscal will been incurred Pricing additional our the that related obsolescence. announced costs improvement some on margin debt of Proactively throughout keep

locations a among we to across our held continue of number network events have of see onsite increasing teams Our in vaccination employees. rates and our

again in all XX.X%. up Our fourth production once sales quarter were across Demand to continued outpace quarter platforms. the

to Our to the by two ability ability the to with Backlog job efficiency retain production. unplanned availability. led be to March, factors: loss when openings record. substitutions made shortages soared rates employees attract the Labor to made-to-order our were XXX,XXX employees. new labor incoming downtime Rescue material impacted plus. across and XX% available Material and continues was in Plan to by negatively Reported as main and match platform and available over of American order a pool manufacturing impacted continued increased limited the

we incremental new the a quarter which shipments make levels. backlog. orders platform. would the our fourth in exceeded production level As shipments not construction order fiscal last as again reducing we that made-to-order mentioned did incoming production fiscal increasing drive teams quarter Incoming our and quarter on our and levels, were we fourth as quarter in sales improve planned progress backlog in businesses rates reminder, our for and I the across remodel our load exceeded both

In by increased fact, XX%. backlog over

As will next sales and to result, quarters. a few incremental increase production continue drive levels over the

prior Our additions staffing Within business outsourcing, improvements. production new teams invest will productivity XX.X% grew construction, capability to continue and in versus our via year.

have Our low quarter, stabilized return Last our mid QX. Timberlake shared PCS single-digit comped fiscal in comped direct I business would negatively. and while business high-teens, to PCS or business frameless positive growth the we that

and ability Our million. to material availability did incoming produce limited in shipments our of growth, rate delivered prior year short $X fell fact by we but order approximately

build and markets. continue keep rising base order these growth increased and with future a of up by factors trade time. rates cycle is expected from to overall across our grew backlog slow manufacturing larger the have However, and the Capacity demand Strong to quarter the prices prior build already could amount.

monitoring We community closely. supply lot growth count and are

sales place have to put caps builders in to reduced begun in markets backlogs. to allow in Some production up catch

our and year. prior Within businesses XX.X% revenue, dealer distributor center our independent Looking home XX.X%. at was business up business, home and includes this, remodel center up which to our was

remodel business made-to-order XX% comps. continued improve with Our to

as stock plus DIY Our well. business comps well as performed demand Pro increased with and of XX%

channel, our experienced With storm. for Our value the the experience frameless dealer/distributor Backlog regards construction to we remained were business, Demand with XX.X% days up winter and within grew did distributors operations the we we were our offering has and remodel negative segment. both Texas due double-digit the comps comps. quarter several stock down for quarter. to and across especially new strong how as shipped, dealers

with margins EBITDA EPS of adjusted quarter, million, $X.XX EPS and XX% was $XX.X of for reported $X.XX. the at Our EBITDA adjusted

Our to has access credit was additional end balance the at quarter million company cash an fourth million the fiscal and $XX.X of under its revolving the new facility. $XXX

the providing in during debt our expense significant reduction and flexibility Our increased interest quarter. teams restructured

repurchased shares was also We of leverage in adjusted the Net or quarter. million XXX,XXX stock $XX EBITDA. approximately X.XXx

projected remodel and the fiscal markets construction Regarding new we to anticipate strong XXXX, growth remain are and to continue.

rates X.X% in positioned of and on but inflation long-term additional may realized in includes in Cost construction as consumers goods overall market of to growth strong advantage was for their expectations of X% remains FY take homes single-family top price sales remain sold early ‘XX. and appreciation calendar XXXX, Lot demand supply, home what material invest impact to strong. We the approximately starts an and and year new interest existing solid. are logistics

inflation lag note there will recover a increases, between able to We be price pricing. inflation via incurred and realized but is

ongoing closely additional pricing in case We will monitoring needed. actions inflation be

price our we the the vision. building SKUs, and investment by the marketing strategy for We accelerate following and digital link adding have digital believe and online into in growth on capabilities, simplifying for this online SKU opening new line future, for dealer frameless value low this team offering, our Timberlake expanding region buying line nationally communicated and regionally May to resourcing in our SKU origins orders taking company across can content low further Northeast market finalized point our high incremental by and internally with Looking new The continuing we then Southern rates count, product network and business on firmly channels. areas: began our XX to grow and the growing our by the Phoenix construction. those California A+ expanding beyond cabinet launching experience, the –

with and enablers platform a We must vision. experience be also key have customer our identified the is design, focus several ratings lead ESG. times and gain are leverage time. XXXX packaging, Consistent damages, these also our growing star to will our we attributes We and years response believe Those we exceed support Customer our X enablers required customer including key experience, expectations with differentiator. can next are respect and to over of pros. presence help share, overall talent that all

and respect our a for focused will to needs commitment and includes chain develop our platform the as additional our sets additional our growth meet commercial Our our pay ESG employees, With with build our which competitive to continue right the and and commitment to investments for programs future. stakeholders communities capacity, must to supply with other needs to improving and of needs stronger company hire we overall us lowering the we cost. Talent resiliency resources efforts, remain skill benefits. grow, meet design will require

will year. enhancing We disclosures website proxy and in this our to later be updates this year’s made our will begin

this for will reset to to inflation. our As Growth of work, normal margins part leverage fixed of will and EBITDA a our of have XX% offset we long-term XX%. range drive goal cost

logistics material Incremental offset the inflation. to long-term, lead will underway and pricing should gains. Over that are investments efficiency

in our margin for generation impacts believe our of an and and our is concern industry. labor cash Our in business the expectations and debt, remain labor shares. costs shortages will increasing availability extended period Free negatively issue primary we wages. reduce further are repurchase that us strong, I to be allowing flow will overall an labor invest

we positively reduced per to debt, reminder, that over overall Xx EBITDA Due our million fallen net from roughly have position by acquisition $XXX approximately $X.XX a and impacts were per EPS approximately reduces our which leverage adjusted interest by we able X.XXx. share. year overall since and our by to de-leveraging, restructure the $XX has our net million to expense As

authorized now Investor this this week their potential the ‘XX. financial will next repurchases our as all quarter. year for employees summarizing for and week call for additional Board deck An I work. earlier proud fiscal our I our the additional they back on year the fiscal this turn I for Relations long-term the have share closing, details what Paul over for to accomplished will company. In contributions Finally, support million forward am the for look in to results website be $XXX posted on of of

Paul Joachimczyk

year the sales was sales year Adjusted lines. made-to-order investing $XXX share diluted or million, costs, our current were share quarter higher the Adjusted fiscal their the quarter, million, home year. increasing demand or Thank million million, fiscal customers. remained to income year. million in People continued which was the fiscal versus XX.X% $XX.X XX% Shifting partially for due offset of million was XX.X% combined $XX.X increased net the Financial million headlines million, year million XX.X% sales. the by net with DIY confident quarter Adjusted and for the an of increased year. sales and fiscal sales recovery per and in Pro current or for diluted the net The channel share you, of signs the net $X.X prior or to net or for fiscal was $X.XXX XX.X% EBITDA for the for the into logistics for sales for year. period dealer/distributor share income business material increasing the Adjusted made-to-stock to center XXXX or net year fiscal quarter same the net XX.X%. of demonstrated compared of sales the $X.XX compared for last of or fourth by was year. the an $XXX diluted $XXX fourth to versus an for or XX.X% the channels increase EBITDA results decreased back net from remodel $X.XX current fiscal Scott. sales the prior net fiscal about million the of year. quarter, homes increase the net our quarter dealer/distributor of in income last year $X.XX per $XXX.X diluted fiscal XX.X% Adjusted per in prior representing $XX.X strong in $XX.X same quarter, $XX.X million per and $X.XX representing for as or and centers $XXX.X X.X% both billion, from independent were fiscal increase home Financial net April, prior of ended the showing fiscal sales current over the

business Timberlake occurring with New positively as products construction quarter, a line comping net market. sales fourth XX.X% as mix for the still towards in shift the gain is in continues increased to lower-priced origin units fiscal there momentum our

and built Coast. due Our and on quarter frameless is orders the during the a recovering backlog supply of business West to constraints has logistic

New lag quarter. construction of to overall XX in sales channel a XX.X% recognizing the while starts installation, and fourth matched start during was for market cabinet fiscal the the market quarter up single-family demand the fourth XXXX, homes XX-day between fiscal

flow XXXX. for our was as higher net XXXX. the sales in savings. our fourth higher negatively year. year our points, sales resulting XXXX the were creating higher net our in increased created customer XX.X% $X.X in sales, sales This fourth quarter costs offset the position by $XX quarter in fiscal which loan of in impacted costs an net operating of net primarily of our the XX% for quarter, of in million fourth due lower same and million charges Selling higher operating to and advantage to for of of fiscal to was million in in take expenses of of which The quarter by XXXX. XXXX lead General operating will fixed million. fourth ratio sales facility in increased during sales fourth a decrease million interest profit were year and the fourth supports the a in leverage decrease to leverage the was of the adjusted in quarter changes taken X.X% in expenses year the partially net The by receivables margins and of logistics compared year successfully term of obsolete These the material launch the fiscal X.X% $XXX.X the quarter quarter XXXX sales margin X.XXx sales costs was result fiscal leverage period administrative fiscal sales, the offset inventory fiscal the impacts the were Total and XX% during expenses company’s $XXX.X X.X% current balances increase to fiscal by expenses current of down roughly period XXXX. the sales completions Free to specifically sales continued and of actions of our of the further Gross the compared driven compared last in with fiscal The cash paid by and annual primarily at Looking year. prior ratio debt the were from from at of our same first increase The The XX.X% impacts. quarter. to year-over-year, X.X% the same from higher Net of the XX.X% the net of company period compared for offset partially of lower of spending same related accrued platforms. marketing fiscal the the the $XX partially rates. totaled and of XX the of saw payable we fourth the of costs fiscal increased reported fourth were gross net was net timing for restructured in XXXX. the versus cash quarter fiscal to end flows, fiscal inventory sales quarter basis leverage EBITDA demand. fiscal the XXXX accounts of

consumer ever-changing quarter of The is impact year the labor fiscal QX dependent XXXX. During teens highly repurchased mid growth environment. XXXX, expect net including constraints, growth overall the our we of upon COVID-XX versus to growth in Shifting focus fiscal shares. year and million $XX XXXX, trends, to material the we fiscal rate industry, of impacts sales year fourth economic behaviors, upper

channels, effect Our new our realized first price in increases construction the will dealer/distributor take pricing stages being then throughout fiscal and our centers. various at XXXX, with by followed home

adjusted QX our the fiscal from pressures improve EBITDA margins year that XXXX. fiscal mentioned, previously we our will sequentially Given outlook is year XXXX QX for

company, approximately investments continue to to dependencies, experience reduce flow capacity. back choosing year. the business in our to investments This and business in from capital to enhance EBITDA cloud, and investment increase reinvesting We increasing impact our our improve rate our additional X% to the will our a our These manufacturing expectation normal into core core of XX% digital facilities of net ERP of range cash these free of journey to our get target return flow for by will fiscal investment customer we are XX%. Strong the in the remains margins and the will of labor range the future our quality make free strength into long and investments help continuation sales. on our to cash

the replace program, In that will million $XX which repurchase remaining. had $XX approved million a Board $XXX new addition, original share repurchase program share the million

concludes back grateful Achieving the our for team this impressive at our the additional and all all put happen of recognizing fiscal business. prepared the continued make are Woodmark investing it continually want accomplished. ones impressed year, in efforts growth the teams and top daily. the And am to of continuously the into They line have for efforts. I entire company, what This sacrifices American members team who our are We their thank remarks. members have

happy questions have this any at We to will be you time. answer

Operator

with come Instructions] Wolfe from Research. ahead. today Truman go will Our [Operator question Please Patterson first

Trevor Allinson

Trevor Thank question. This for my is Hi. Truman. for you Allinson on taking

bridge decline in us gross the just First, for margins the quarter. in can you year-over-year

wage inflation, material raw logistical inflation, You inflation. mentioned

each Just also them different the can those bucket order categories rank quarter? out in hoping or some leverage of for us? maybe And maybe from then you maybe benefit

Scott Culbreth

face. think that pricing Yes. freight that third. put margin. if the #X would what stack I I But range is level And done labor I ranking and put the quarter XX% would we I is we then material don’t at say finished tell certainly that that’s detail, pricing away, want to about elements. way challenge break inside The we had to we that far into the might will you and would the perhaps have quarter, would XX% it the look in without it out likely I but and have inflation the fully in the by I of EBITDA can had realized place, give inflation our actions secondary I and would to on that. our you

Trevor Allinson

over Okay. fiscal expected can the give of have able you through us XQ you Got kind XQ, you flowing of maybe idea you throughout start pricing then, for in full then, think realize Thank it. you what pricing that. And then and XXXX? an in you to year be mentioned jumping yes, to for just to might

Paul Joachimczyk

say will to – pricing get that just offset the to material year. our I inflation within to both we the logistics going and are expectation is

accomplish think first I be take half able to assumes to keep to that. fully that doesn’t us the baseline the moving. And going it’s

We inflation. inside the factor fourth outlook to quarter and the provided increasing didn’t we have see meet we why that That continued predominantly marketplace. have was to our our

be be there going think enterprise. that multiple an I So, actions will taken to as is

So, complete. our round first about

actually be some bit coming to that recruit new today. in. We start dollars further will with to it in channels Others, realize where a are starting those little orders we out,

may second time. that So that with at complete, we be I in dealing by be round the to second would the of end expect point quarter, the but

Trevor Allinson

XQ? back quickly, you raw how Okay, material XQ Can your trended us to for idea got it. And then an inflation. just that really another just to give just fiscal jumping from

Paul Joachimczyk

accelerated it QX from say just would I QX. to

Trevor Allinson

very it. Thank much. got you Okay,

Operator

Please question our with ahead. go Shmois from will Garik come next Loop Capital. And

Garik Shmois

Hi, thanks.

is that first to on the the continue is or in by the at this you And second margin just to pricing question. of reasonable will to expect there too the follow-up the Is year? year be it assume actions, then point half the it year-on-year call? make margin half that a moving parts to in depressed expansion of many get fair time the margins Just

Scott Culbreth

Yes.

year I first think the for there commitment why didn’t Paul to is walked go around too That’s make parts many expectations and we half. our and that full quarter. the provide second moving fiscal today through ahead outlook,

challenges uncertainty the is there we about. talked think as well already availability around and too just much transportation have labor, I shortages material as

So at a of going your quarters of couple recover, us expectation stable improving expected. in is I though, trajectory take than this things point an of in to trends time, think to It’s sound. thesis, if obviously are margin the half second as a

Garik Shmois

tough you Thanks for well. in a are given capacity. recognizing that. be might new And exceeding just But capabilities backlog production is Okay. and answer then this as your the investing

is If challenge it this to problem good might going catch be to backlogs to how year? you to able you long speak think take your but can a to have, the for of challenge, guess, balance I or the a for maybe to production be up a

Scott Culbreth

a it often tell to a it’s problem good but ourselves, nonetheless. We is problem Yes. have,

and to mitigate can able that. do what we offset be So, to

going over think we are I be looking And still now months quarters. out saying X of X months time. we ago, couple this are we next we to at be thought and challenged in the past would forward point

going modeling fiscal So the certainly, of the challenging. see are to to if we be year. second as I couple it’s know in a of don’t things today, quarters, yet our continue improvement half first backlog significant we Again, in

labor throughout and our it looks well will gain on all next the few as like able the demand the levels. to So, to quarters production needed as needed, environment be material depend ability gain what increase situation the

Garik Shmois

Okay. then Thanks. last my And question.

just given of is at? and kind and step-up growth increase the the of the what initiatives, or the growth initiatives. some kind digital But touched any looking to CapEx as beyond are looking outlook with can upon to you opportunities like You little Just what this a color what year other CapEx? you more in speak in payback bit the

Scott Culbreth

Yes.

of a So, outlook couple you questions. that longer maybe apart there term. the into maybe let’s in that had is peel different One

week. in that we Relations see will Investor the deck that will release You next

you a digit standpoint, give growth particular mid the those next X years sort from over EBITDA will perspective of a sales components. We to high-single think around of both

questions. the of one was that So,

in And I forgot respect. think one. apologize, with second had wedged the you there I

in You the there. other had that weighted was X I one. X am that or was sorry, Capital.

are have as capital modeling manufacturing planning, That’s our off to been model pass much strong respect we choose in payback At our that. And we But typically overall. focused expectations on have strategic back year into that with spend drive that the X.X% both X% inside core to So, range. We payback comes may we be to there with capital, will as maybe facilities. a pursue. the Yes, threshold. times, that type investment we of could put the capital very positive investments. we the our NPV doesn’t we cycle savings that well that

a standpoint sort from the and look just outlets be The would other be centers, that so area can that. lumpy. capital of available product selling That our at having and consumers displays can

do new a put that the sales you you to generate bit be store, and spend have the you the for that into a of can that So, dollars lag. as to launches

different digital. bucket So, dynamic pick a would is that’s sort around there. The I next of big

around investments in solution, also our over the I an X calls So, think, Salesforce.com. ERP have in last, we talked

So and you And the model do in the the conversion an of similarly, you you that put make go to forward. the efficiencies investment, systems place. make expectation of backside you on as then have

standpoint. is from potential but of choices a setting us for it have as both cycle So, it’s of do we as those longer frame growth term the a standpoint I investment around way would growth as company, from a an sales well some bit up margin the

Garik Shmois

it. Got

of and luck. again Thanks best Okay.

Operator

And will go ahead. Please Jefferies. Verron Collin from come with our next question

Collin Verron

impact the bit and up over investing and they for production dive question. prepared remarks, you constraints. in the margin little the In long-term? alleviate in ramp you you to Thanks are such how Can out that will near-term as your outsourcing, and initiatives, my the taking a guys. Hi called into more quickly just these

Scott Culbreth

Yes.

outsourcing, around activity as So that’s underway we that’s speak. specifically

the past quarters. working for facilities several have more dimension been months. on for of We will and provide some relief component next the few That our that over

place. respect in manufacturing be it are in at to on With where processes. will that capacity, depends you So, the

it vary might bottlenecks So, be. the capacity does where

Specifically, of get that us we stock we out will flat some outsourcing. have are to making investments capacity able that be

bring we facilities, to in-house our product to to think and equipment on It’s in not back machine When investment we And about capacity it’s some have assembly can we be to labor. able actually question. got. able So, operations. supply quite frankly, assembly more our and a be I typically identify focused operations run capacity capture and enough the to labor sales the our

So, But it and in made-to-stock. we analysis have around where and made-to-order what manufacturing we process perform different our run on the are it’s sensitivity varies capacity, work depending through from a versus overall platforms, materials where overall we attack we of we we are years we looks to plan From bottlenecks, multiyear that, today. next plan, these on like. think the going employing all X are and demand on where our that a it’s we a platforms build strategy team, and

Collin Verron

believe prepared and – do more start these when you a these helpful to start when Can just – to seeing Great. you where pinch your will you And very That’s are see remarks. points, in highlighted you those then things chain when start issues improve? some supply of dive some you into little color. to you bit

Paul Joachimczyk

there. outside this The lumber really Paul. is the Collin, really supply Yes. constraints space existed in

of got particle hardwoods, a the the around bit little plywoods, You resources have board.

there. it’s across shortages the across a were that multitude glue seeing of Really, Texas with issues there are areas. You

constraints assuming of still to some realistic expect up halfway We be could that kind by year as that’s the at too. through of now state could lifted kind that we There return those should interrupted things of normal. But be out well, to that be there. is kind

Scott Culbreth

Yes.

team for same It’s framed sourcing – that have the you, right. to of to going just next be continue we challenge couple our believes we Our will highlighted have the suppliers quarters challenging. and

we product have the need So, be produce able labor that able from then them They challenges, to well. to be availability to the parts. are and as purchasing they got supply

Collin Verron

Thank Alright. good and you luck.

Scott Culbreth

Thanks.

Operator

go And question Research Steven next Ramsey will Thompson ahead. our Please with come from Group.

Steven Ramsey

Hi, is than quarters? good good morning. driving next the this What closing dealer/distributor couple this the growth less And delta think between bit anticipate delta? center of being to a you Maybe in do growth. about home

Scott Culbreth

Yes.

more stock I been platform. strength in the think have seen we expectations platform there here exceeded has Pro. significantly made-to-order our the that our And as near-term. It center just well growth inside home around on as

So, be – or pre-COVID. why back me post-COVID would I think let that happening? sorry, talk step and

I to pre-COVID, especially their centers you assumption when might the gaining new So into was doing going normalize, of We there on things sort and back that up. the center we I of about going to of hang believe stores, home to think an a customers COVID some the sort challenges believe seeing pursue those to bath question, and think, big centers. we’ve home a shifted consumers their that and and we’ve had. And centers home struggle ability is as been all in now kitchen I open of forward the start The consumers were to project. home jobs consumer seen ages, economy mark, especially younger customers, what post that past COVID, seen starts that those is in we’re question paradigm back get adjusted. has flock the for the

So real can marketplace. a the forward. the the over seen they the that overall, is quarters. question that, follow-up that’s growth centers, POS the have going highlighted share four you’ve have if gained of in they you’ve seen maintain some home They strong And last I been either factor, you and think that

feel dealer around still we for Specifically really business. distributor, good about that our sector

footprint. of XX% it’s course, total our Of than less

mix bigger that’s to to But the that centers want home be back than disproportionate have see we space this behavioral a growth don’t and last year. push continue I just drive other So, organization. any driving for that in big of overall the into differences percentage the over anything

Steven Ramsey

ramp And eased being year if great. seeing maybe yet up? so back during the I’m on, I start to kind mark, had tougher pressures the past retailers good. demand any sure Are then discussed to comps the not pandemic. you Okay, this that follow discounting seemed like in hit or missed but of It as already,

Paul Joachimczyk

the it the Woodmark, manufacturers Yes. be I’m able say lower same advocate are being match an in to should not slightly still than American I’d we’re but that just strong, lower. most It’s recent environment been demand overall most struggling demand. very is the periods. place. The

heavily is promote all even why we’ve environment, that worth at think, down question in year-over-year. challenging. continued and that or I to asking But see So a

Steven Ramsey

Okay, great. Thank you.

Operator

Please will from And Zelman. go Justin with Speer next come question our ahead.

Justin Speer

should margin fiscal Appreciate for it, quarter, pro guys. XQ, that we ‘XX. that on if for quarter in or that for had suggesting that you’ll range your EBITDA me XX% to in for gross how is first be XX% maybe about whole is pricing EBITDA hand fiscal this in think comment the you’d the that One question forma margin quarter? Is for

Scott Culbreth

on earlier back to of I got is think yet to make earlier year. the the not a question adjusting full ready the we analysts call one from

too like. what I you the At much first that on gave certainly But a think in so then this price-recapture up the I first think there there half point time, is period, questions improvement think going assuming is an many to be still second is framed perspective still We uncertainty quarter half, we be should would there in today. things looks the normalize. that, unfair. and be Paul the

Justin Speer

range like hand. I it the if – guess, you price – guess I X% get maybe low what in – quarter, would the the I’m you that question something in – the is you you guess X% is Or had Is in that, that roughly, for what already would or percentage for is, my that but trying that’s – hand? to have that motion guess if in I implies of teens quarter. stuff still? is, year, don’t pricing so be you’d or for kind that Well, I that know I full mean full I

Scott Culbreth

pricing would back longer The the pricing third next hand pick very three is channels. channel, action. complete. that the if of accelerates, having inflation XX the about close go another a And well, two And think term, to period, our you to and we then when have issue we’re go days, be in the through for

you’re our you lag always this a channels. have So chasing in couple that of

commit the to second number. why hesitation that’s that to So half

Justin Speer

attention now, to Malaysia at pricing that of import tough illegal I some glean let’s dynamics been Is know guess, it’s in particularly is know that know something is there for you? but some I competitors affect at paying and data. pointing, allegations circumvention, how that potentially kind some are doing case, things. look your all we pointing I guys the of power of industry I And Right. does if say right one illegal you that potentially there the is a to? maybe in And

Scott Culbreth

Yes.

do we monitor So this. closely

and an have close team topics. on is trade our issues from various that sits KCMA very and We the executive the to case

for with pressure a us creating challenges, domestic then have We will, felt imports from any the some of not and an to if standpoint standpoint. you concerns share pricing inflationary that’s respect the from

and So don’t concerns in yes, of And notion specifically to there that some investigate. I place. know I yet see circumvention, pursue around are filings there, the

comes sometimes as up Vietnam You I mentioned well. in think that particular Malaysia discussion

of closely antidumping do know up it. duties and this year. come some review countervailing we do So monitor for I the

review an it closely don’t well. but cycle. change, and a We monitor will sort is there expect we of is in as that annual So process,

Justin Speer

or to be be things we there to be to go quarters the are you unwind year really Would maybe Okay. way, a And in look strategies may more may these you able talked other think on alluded vision, that – that comparisons. the a started on spend? those in your back know how ratchet ongoing? some XXXX should that the the be investments lastly, where P&L to going CapEx maybe as difficult little then of coming I tough comparisons maybe some of investments, some if And but then if out we bit and about

Scott Culbreth

flex is So into outside up And I we that. We’ve if do in started think can down we’ve happen both the If demonstrated of spending. we and I’ll a question your had. control, or historically manage SG&A can’t our either ability to we at of yes, to manage cases. ability to get or things we’ve say, somewhat got cycle, difficult those pricing our the conversation

Justin Speer

guys. Thanks,

Paul Joachimczyk

I can little bit that, Justin, a And to add too.

something, at ability have there It the out. flex Scott We it area as and control focus. ability goes really kind look we’ve the that of that year-over-year. the mentioned, our and of to can monitor SG&A is much we is as spend and do that to have spend extreme closely And well. how leveraged an You very way

Justin Speer

Perfect. Thank you, guys.

Operator

question Chan from with our Please And Baird. come Josh will next go ahead.

Josh Chan

Hi, good morning, and Scott Paul.

Scott Culbreth

good morning. Hey,

Josh Chan

morning. for Thanks Good impact. breaking out the inflation

wanted completely price to productivity? a So or for it I guess, kind that? color that just combination on is price and thinking of headwind offsetting Just are about with you, inflation you

Scott Culbreth

It’s Josh. Yes. those, of a both combination always of

Josh Chan

Okay.

some it? thinking only a price is about the of is how So inflation offsetting component, you’re

Scott Culbreth

think all Labor, productivity about via conversation Yes. material mean, freight, a to that buckets, I expecting conversation. somewhat and and that typically I’m becomes I a price more When the be price.

Josh Chan

on the year have in you out place? you at start in of beginning that QX? Okay, as you the those actions, Or that timing the price just gradually in price alright. on channels hand. of the three are the for talked having realizing And two about channels the fiscal of kind then go of two Does we

Scott Culbreth

Yes.

So gradually the throughout you you it go realize quarter. as

Josh Chan

alright. Okay,

into as we by lines hopefully, the cut I into the you the And to slightly in XXX mean there? way more headwind is no so half? mentioned and points between guess you’re go in that then parity read we saw you to second you mean that right the so that of with that and into QX, on QX basis the price. cut that at I margins, that headwind XXX Does QX

Scott Culbreth

way a that don’t the certainly, the about know lot to-date, know but I if talked we’ve half. the half you I That’s second stated yet think QX to right I as Yes. yet about second frame the correct. way is it. and haven’t you about think QX, parity in

Josh Chan

for the and Okay, that’s year. fair. Thanks luck time next good in your

Scott Culbreth

Alright. Josh. Thanks,

Operator

question come next with will our And from Please Julio go ahead. Romero Sidoti.

Julio Romero

Hey, morning, morning, good Scott. Good Paul.

Scott Culbreth

morning. Good

Paul Joachimczyk

morning. Good

Julio Romero

guess here. could questions asked but my been other here, have maybe some if talk most of I subjects I about So

On the not of is as Is inclusive you announced an authorization did the that QX. in you correct? $XXX – did authorization, you a new million repurchase $XX million repurchases of

Scott Culbreth

Correct. Yes.

that the think we way there, the Julio, $XX is used million. was out to $XX of of million that million So we had original $XX authorized it

repurchase So for whole out $XX that expired $XXX there share new remaining it’s – that share left going authorization effect is a forward. We and then million on the that repurchase an issued that. million

Julio Romero

the Got it. to in offset you up dilution what of next terms or of any in sets And I quarter you fourth assume the did of couple so. over years repurchases kind

going more guess about more be $XXX or how in the repurchases the is authorization, that just given to to even than been opportunistic you’re new aggressive have past inference I you that? the million So just think or in

Scott Culbreth

to and We Yes. and will look be at our Julio, best we out make we give that there. that really approach shareholders key are opportunistic the back investors that sure want we it. to way our in our return

would would go-forward that basis. stance So be the on a take that we

Paul Joachimczyk

manage do We to want – want offset do though. we to dilution

So we that in opportunistic place. that, an of And it’s each want then more year, beyond to have play.

Julio Romero

But dilutive X of in the over say fair impacts million care that to the takes next it is any Got $XX it. or years? the of X quarter you fourth did kind

Paul Joachimczyk

more hadn’t prior back the throughout that the done year. looking any repurchases of I think we because dilution

sure are to we’re grants future. as etcetera, effect year the offsetting want So issued, stock we make in each that going forward, just

Julio Romero

gears Okay, out cash some of kind that got the thing And to switching stuck me just your receivables. commentary. was of it. to flow One

last additional your fiscal to receivables? expected that a that you some I how sequentially, to in on think ‘XX? think and quarter maybe dollar about I flat commentary trend regarding DSOs on your any just basis, mentioned improvement know you it was

Scott Culbreth

from our risk good our question. bad actually and to accounts bigger customers about When of a any get came it actually channels. of or you Julio, little out some Yes, default of there. None or has you reserves of our in think for down bit customers, receivable, lot the at payments do we with timings debt some a those are

position, really collected So of had to cash just actually the of strong timing the the with it end year. we do at really when the

Julio Romero

I the fiscal they current level your of mean think are DSO they do now? revert kind it. XXXX towards Or DSOs range. Got you at stay

that should Just thinking and ‘XX, trend. about fiscal how

Scott Culbreth

target or around down different little it’s Because really a there. DSO And little Actually, bit channels, the as bit. That’s a will move those DSO up that, have complicated a there. flex each Yes. out more channels our the in that’s of then too. sales

our to in that targets the customers there. But our our though, any holistically, are volatile putting really, we increase don’t improve teams always. So DSO Probably actually we or see pressure each of it’s are channels. on issues our highly with of mix

Julio Romero

commentary. very makes the Thanks much. Got sense. That it. Appreciate

Scott Culbreth

Yes. Thanks.

Operator

the to any see And closing would I for back further questions, are turn as like there Joachimczyk over to I remarks. no Mr. conference

Paul Joachimczyk

the Since this taking today. additional you Thank questions, all call. for participate are time no there concludes to our

Operator

has conference now you attending for Thank The today’s concluded. presentation.

your disconnect now this lines may You time. at

American Woodmark (AMWD) 27 May 212021 Q4 Earnings call transcript