AMWD - Earnings call transcript Q4 2024 | American Woodmark Corporation

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Operator

Good day, and welcome to the American Woodmark Corporation Fourth Fiscal Quarter 2024 Conference Call. Today's call is being recorded, May 23, 2024.

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 a reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures.

We also use our website to publish other information that may be 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 and may be All involve the company's to by made beyond based uncertainties risks change that forward-looking subject and factors the on control. are statements material company differ any the statements. such Accordingly, may future expressed those and performance from company's forward-looking or results financial materially implied in

therein and described update Securities undertake not include, realized. factors but Commission annual Such changes and clear any the the will even filings with to any make limited shareholders. those are to that future be statements company's projected in to, not Exchange experience implied The or the report does expressed or results if it forward-looking not company revise publicly or

like call ahead, go Paul I over CFO. President turn sir. Vice would the to and now Senior Joachimczyk, Please to

Paul Joachimczyk

welcome and taking afternoon, Conference for Fiscal Fourth you Good Thank today American Call. to participate. time Quarter the Woodmark's to

Scott our CEO. I'll add President is to and regarding financial our Joining and details Scott? we'll quarter, begin After be questions. performance. Scott with review answer happy the additional me Culbreth, comments, a of your will

M. Culbreth

earnings today Paul, everyone you, to fiscal for call. quarter joining our Thank thanks fourth us and for

new million, year. our delivered better prior prior Within of year. last net teams than during versus representing This sales X.X% the sales Our construction, of X.X% net call. $XXX.X quarter's was decline declined a versus the range provided

to our builders confidence aligned best-in-class single-family XX XX improving driving the realizing service existing benefit increasing top from demand is partners with the starts. builders' of and to We as strategy in see customers, all demand. new customers grow marketplace. regional down strategically is our to we with buy rates share with momentum plan direct and see are their to share markets in and builders, gains growth We our with key our national continue model, housing continue consistent year-over-year We remain with in the

at distributor Within center versus home lower X.X% independent dealer and X% year. and business prior which Looking under choosing our prior our the we Demand year. was XX% trends remodel, traffic this, center declined dealer revenue the were distributor businesses, home includes to smaller-sized due our versus rates the consumers business, With projects. in-store prior year. regards down pressure and versus remain to down

Our adjusted were drive costs associated $X.XX quarter. start-up to of with Hamlet Reported million and the Operational XX.X% our EPS $X.XX. results EBITDA the enterprise, the was were $XX.X offset EPS the onetime across by for was adjusted excellence but Monterrey efforts and quarter in or continue progress facilities.

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

the Leverage was at EBITDA, X.XXx company shares and repurchased XXX,XXX the quarter. in adjusted

market in industry new 'XX the the for outlook be remodel repair Our be assumes fiscal to construction digits. down mid-single the will low to mid-single year and digits up

make EBITDA investments million to ERP is engineering and in CRM automation, Our additional resources through digits execute $XXX million, company's single for projects. near growth sales low transformation design increase term range with in to to expectation the and from we as $XXX all those Adjusted channels. to net for platform along expectations with digital continue expansion

CAGR we and we the a over demand, on grow next appropriate X% that is net Our in slowdown a remains over to million. believe view in financial performance adjusted Despite will EBITDA X% years unchanged. near-term sales $XXX X to

fiscal dollars We realized ahead stronger with XXXX. in EBITDA currently margin of goals our are long-term

targeting centers I'd the key expanded high-value low launched network. home highlight. PROs fiscal a to Our a past execute our the our we team continues SKU for to year, this like with X distribution offering pillars: and of accomplishments year, calendar platform growth, program main ask digital and Under design strategy to dealer and to transformation nationally over growth, number earlier

In launched our to digital channels. transformation, cabinetry. our serve sales new we Under all in launched the XXXX customers distribution solution a brand across in addition, fall we our CRM

went new next cloud fiscal also on West live Monterrey facility will planning for occur facilities, our we've and begun of ERP our implementation at We which Coast our the XXXX. made-to-stock in solution,

Excellence Under the platform component capacity. facility. Mexico our U.S. and Mexico, the Kitchen that Stock new design, established North delivers footprint Eastern and opened facility a we a in Eastern Center and in Carolina investments [indiscernible] Hamlet operation expanded Monterrey, of additional for These

is growth forward, all year across expected channels our 'XX. Looking in fiscal

expand distribution will sites for the live design fiscal will next summer installed this efforts year And also service to the across and the we Platform our Hamlet go as planning continue and and will distribution as of progress deliver CRM again through will our Automation new noted. previously for launch Mexico continue opportunities to the mill component year. to ramp brand our our through construction ramp will kitchen Monterrey, organization win first We assembly efforts grow Carolina work introduction as in both for our which Mill facilities. later Digital and continue continues bath made-tock continues service to and our this equipment customer will be upcoming presence work our result. modules, operations. and half facilities, care core, of North operations. phase leverage the supporting the new our ERP center transformation stock

on closing, additional I to I fiscal year their results turn fiscal this accomplished Paul the prouder during the call be XXXX, And look I'll quarter. over in financial In the couldn't 'XX. forward now back team and contributions for continuing details for what to

Paul Joachimczyk

centers and with million dealer X.X% sales, and and distributors respectively. prior will transition prior home and for the home $XXX.X $XX.X I decreasing versus year Remodel net dealer outlook with sales both versus fiscal and for then our XX% our and 'XX. decreased combines fourth or full year performance quarter decrease our million, results independent of about Net centers close finally a which year. quarter distributors X.X% out talk first to fiscal representing Scott. fourth year, X%, you, were Thank

sales construction net the decreased last quarter compared New X.X% to for year.

basis of net in and costs improvements supply quarter sales impacted margin same for for our with year Gross points was startup margin locations Monterrey in in partially profit manufacturing by stability chain. the reported XXX of year. decreased fiscal XXXX our fourth onetime our by combined the operational period XX.X% versus facilities, Hamlet last XX.X% gross the our to offset Our the

fiscal excluding Total decrease basis cost the increases in sharing year fourth for any same We point quarter by net were our all period costs The operating to expenses, versus due XXXX XX.X% XXX of with amortization our and of profit -- incentives sales charges of XXXX. is sales. deal XX.X% in employees, last year. lower restructuring the for combined ending our December offset for our

of was year-over-year. Adjusted $XX.X $XX.X $XX.X of diluted period of versus Adjusted million million last diluted or $X.XX the last per fiscal XX.X% million sales year the $XX.X was per quarter XXXX in the or basis year, million net in fourth quarter year. reported EBITDA same share versus income net XXXX representing of share year first or or net $X.XX point decline for XX.X% fiscal XXX sales a

fiscal million fiscal distributor year, net XX.X% net were independent for distributors decreasing $X.X double-digit decrease The low home or decreased home Our the QX from combined declines. and sales X.X%. billion, our sales XX.X% of $XXX full dealer outlook with performance XX.X%, of the a center centers aligning with dealer year representing and decreasing

last New reported the XX.X% compared The year, sales the year. XX.X% gross year improvement. net versus representing for construction fiscal to X.X% was sales XXX decreased profit point net for of prior a basis fiscal margin company's year

improved leverage base In cost the first due observed of we half our year, volumes. the higher of to the fixed

Additionally, matching contributed to operational alignment input of enhancements pricing and better positive this trend. costs,

prior of lower The across digital year XXX start-up alongside sales year. offset for in expenses reduced half with increases by exclusive sales, charges functions. faced lower our the to the year, net any with compared basis point sales onetime were XX.X% in second due XX.X% the costs of operating volumes. during deleverage was incentives the current and our in However, the of increase created restructuring net our we spending spend, of Total fiscal SG&A fiscal

our Adjusted and Adjusted net XXXX fiscal net $XXX.X year-over-year, million year was achieving improvement $XXX.X XXXX for million sales to improvements prior in increased for net offset our income expenses. fiscal in XX.X% operations, to basis for due expected or increases of incentives profit-sharing EBITDA million high XXX compared the year $XX.X XX.X% of end point or a the our sales fiscal of year, representing by range.

profit incentive earnings is partially year put supply balances. compensation, into overall positive transformation all year million million the Despite to million chain headwinds, spending. in reestablishing our expenditures, team primarily fiscal cash compared offset to decrease stabilizing Free increased sharing $XX offset our result in due $XXX.X of work and gains efficiencies, and The for flow and digital increased operating and cash have and changes increases the earnings lower the continued a this by maintaining accrued operating flows, capital specifically These strong in year-to-date a our costs. was $XXX.X inventory current direct our our our are facing by efforts prior year. performance controlling totaled volume hard

adjusted quarter from improvement of the last X.XXx the of year the of end XXXX, X.XXx fourth EBITDA at X.XXx Net representing year. leverage a was as fiscal

company Under X.X% additional XX, $XX.X the cash, million revolving share about representing plus its retired. access of program, of being million shares availability or quarter, the to had in in shares purchased outstanding $XX.X XXXX, XXX,XXX the million of As the company facility. $XXX.X repurchase current April under fourth

have repurchased company's For the representing full X.X% and remaining. of million year, authorization we million the repurchase common share of $XX.X have shares $XX.X

from sales behaviors. change to constraints, XXXX. year overall economic trends, total Our highly dependent company low perspective, industry, all single-digit rates channels, impacts, in XXXX with The grow across versus we the year fiscal growth material fiscal increases upon outlook a consumer labor and for sales net being is interest net expect

cost fiscal falls longer-term range, primarily million Our projected year-over-year higher base to $XXX volume increase capacity $XXX growth. year our of facilities for margin to driven operating within our in million EBITDA with anticipation by fixed decisions the new on XXXX

margins. for automation, operational to commitment us maintaining improvement positions Our excellence, and continuous well competitive

with remain sales Our growth growth year X% expectations fiscal million to EBITDA annual by unchanged $XXX compounded XXXX. X% rate and exceeding long-term a

automation. ERP back year focused our in continuing our on Our in of capital CRM in the path investments and with allocation will business by priorities first transformation digital for investing fiscal XXXX investing and be

lastly, we share And deprioritized. to opportunistic repayments will repurchasing. be achieve, position we ratio be a in at our debt leverage will Next, wanted debt with our

financials will One and year. achieved the earnings over year our testament fiscal in gratitude Eastern additional be prior next be daily. accomplishments, This the to in fiscal hours it Time. strides commitment, team In They will our diligence business our my our we timing of positively and are of occur enhancements a.m. trading member the success these will capitalize the calls past a employees, the stands X:XX at the through contributions anticipate I that every driving happen to continues with GDP year. our adjusting behind Standard American item to closing, the XXXX, for on call are We at our who the force as strategy. daily ones dedicated heartfelt unwavering all they the Woodmark. to and make alignment to extend impact

remarks, we'll our answer any prepared happy and This have questions this to at be you time. concludes

Operator

Instructions] [Operator

Today's Ramsey with Research first question Group. from Steven comes Thompson

Brian Biros

there comps ramping actually us the the the kind the revenue Can start fourth just Steven. throughout Maybe that how on of forward, kind is are Biros through This Brian quarters help of cadence year? channels expected you going different with for of out you on to see the the kind given and with guidance.

M. Culbreth

we several We that doing ago. really want guidance. to years into get a providing So we're quarterly where stopped don't situation

already do outlook have is our peer as consistent I from with first half, that Paul year you what seen and our is the expect So I I to stronger focus we've would than think previously base half, which the we that set. our customer be tell on well second full as the pretty shared.

Brian Biros

of just of where helpful, least, outlook past you over kind even directionally. given has That's new months, your level, touch the rates And are at maybe reacting. are, in can changed activity, R&R internally regards on builders higher construction, to how I few guess, maybe a how kind at

down mentioned day. and every all industry You buying in and rates flux changing almost

seeing going. wherever directionally currently how you're how about thinking just we're of months guess I ago would kind maybe you're X versus gauge help it So

M. Culbreth

a as a new tell our timeframe, on inside held expectations started each. haven't data ultimately you Sure. for and versus day-to-day you pretty Directors same back too half swing we'll That's we too softer, process up It's expect theme. other. consistent in back can't We consistently has our try in from really been and that points We that take To been little bit the see and one timeframe January, would perspective to in it that Repair point, altered far pretty the your get to frame. direction a in outlook the the in wrap budget construction. caught channel the the our February our to Board perform and up our a I in think time approval. April May of to message remodel of that and the year. stronger better view sales from certainly viewpoint growth in

Operator

comes Garik The from Capital. next with question Shmois Loop

Zack Pacheco

for lower I guide, the EBITDA despite margin on start Garik. you growth. on single-digit to Pacheco talking Zack a full guess actually are year sales low It's guys

the you any color and you could So decrease I initiatives. was mentioned more know the this on digital provide in I margin. tech wondering,

how costs these much really of guess, I impacting 'XX. fiscal So

M. Culbreth

into go bit little We there. more Sure. can depth a

looking taking and did grow that execution -- a there result say Yes, $XXX million. demand XXXX, was of on EBITDA such a what's experience of we in by that am I a this So fiscal team's when environment. just year it sales step almost recognized, I'll and pause we at difficult X%, proud decline year almost million. fiscal $XXX back, delivering did

we our in look significant to start grow profitability. in doing each we Despite said As we don't that to impact course, that, we've, 'XX, on channel. overall a there's think of expect

for We've our decision. we'll ERP our added would capacity that after to to A bear examples Coast invest are as we'll continue We're those of hypercare the we're back associated manage and and to such certainly fixed kitchen operating go implement due Now in investments, that to teams future there the commercial actively of couple be bath costs any with capacity. that. That's East have We those for utilize. making get of to our to costs our company have on why view on out Coast making way. platform. capacity come our it's our the incremental share And in choice X gain also That, that There's to of stock, a until that are utilize choices to business. takes be? will West live, some able working be well costs as and to time, business. right, inefficiencies that operations. issues a clearly There course,

engineering resources help periods. for our We also facilities, our help efforts chose across us to which drive invest to in the going to is automation reduce demand future labor in

would our main many on companies. which those I the question are of contributors. our calendar as prior share of the election year around day-to-day There's So still final an I That also marketplace There's impact impending in in may times. the is at opposed middle the uncertainty. an election, uncertainty lot fiscal occurs guess year to thought economy. a have other

to us led together outlook variables those all the around guide So EBITDA.

Zack Pacheco

pricing you're seeing and that more speak can That's just on? on you Awesome. then color. Any really promotion. here it. And I one appreciate maybe great change

M. Culbreth

in has space, a been which change positive. real that No Yes.

cadence us was So repair for year-over-year. remodel and promotional consistent pretty activity

Operator

[Operator Instructions]

The Collin from Jefferies. next comes Verron with question

Collin Verron

beginning guess environment I the sort Can continued seasonally? see what sales to wanted little perspective would color that up May? just improve. you of drives you ahead that just into how more the demand saw of see you pick that to provide like trends within And within out quarter called normally quarter the a what and as you comment bit optimism? you is sort Did any those on

M. Culbreth

the year new construction, the the be the pick about year, began us look expect when a activity home Yes. actual season. into spring first typically of calendar this part start. of you delay the out the cabinets of to opposed the end into going that of The to year-on-year to is and Collin, that continuing actually for go even to as recognizing to the summer selling starts back tied at coming strong as up bulk comment see as that to would We think

activity that up. seen we've pick So

new data it order to see demand translating the in starts construction in You as business. our

Collin Verron

expected the then because color. Just comment? your seen you're category. as talked in you those introductions? Or that something helpful Have That's is of stock expecting some curious I already? wins about to was what that wins think And driving you product

M. Culbreth

cycle was back function the we to coming of challenges, supplier or last actually our Yes, in labor the demand go demand of all of to I cetera, so was would networks. et a whether high the marketplace, capacity it add over past into years get we that couple wanted to in some and to challenges where were limited the ability COVID and able be our achieve

that's to the Until capacity led we last marketplace year very were that aggressive to So not play. had take what the on to trying in that, share. project we put in

and in that to capacity, commercial aggressive, categories more out working have both there teams for are those much being we're Now the we share business. our our gain of

Brian Biros

color. It's just in that last your M&A? announced. And Great. for your I priorities. really one, didn't know capital about there a was allocation Can on you you [indiscernible] recently talk guess the helpful was list I gross appetite my transaction

So just Woodmark. any on for I guess, M&A commentary American

M. Culbreth

Sure. It's great a question.

focus and overall. product channel interesting, as you're that mentioning just not points price fit assets available. didn't outside are was tell But the fit with In And they around to we're years the cycle next focused of at few continues deck our strategic primarily participate case, that in well been business you, over around higher a the that particular last organic even line. has in the got strategic acquisitions dealer we've going growth. plan X which not the aspect strategic but become we out Our look throughout that are said, see years. a and I'll a we a certainly the over range priority. The

Operator

with Tim question Baird. next Wojs is The from

Timothy Wojs

on -- piece. live that of last of get Scott, West, system the kind piece the that? is guess I this is on out start, of just kind more Is ERP once do. some kind Maybe we X everything conversions there's that you after or

M. Culbreth

fantastic a question, That's Tim.

is you start would I a from So the tell manufacturing standpoint. this

a to couple back and first go journey, you of If when turned procurement. were finance we ago years this on we down started

area tackled. we So the first that was that

the It the basically we're facility of that treat solution manufacturing a great risk. pilot, had moving in on the went opportunity Monterrey. into we our Now opening We in lower to live Monterrey so a with as was much footprint.

been team the Our in planning phase. has

continue calendar Coast we those forward, go next. hit this year, will and it of as we'll All West operations

then and that will sequence remaining We the operations, a journey. beyond have and it's a through that beyond cycle to multiyear

So to the end effort. that we're start to at the it as when opposed comes

Timothy Wojs

Okay.

got I of a would long-term benefits just I And that Is the from push you. seamlessly guys Okay. don't today? guess like it then be off plants? to you what perspective, ability between the kind have

M. Culbreth

our I be we in the should having because say business on it would platforms across multiple of every of actually still that businesses acquisition. different aspect complexities efficiencies have post

allowing of to up better information to onto reporting, decision-making. having date, get system, So integrated those to be lead those us all X should better better systems

into You could margin. translate that

and we're translate that When labor inclusive efficiency, sheet. SIOP into of of we to benefits are flow network, as expect see types areas forecasting can the and benefits in You cash it how would et much Those comes capital some well. expect inventory to holding the working cetera. we balance

Timothy Wojs

Okay.

of price of and kind costs it's it explicitly, of are an in material fiscal how thinking sound guys you raw about guess, much like But I then And Great. Okay. 'XX? impact. doesn't kind

M. Culbreth

to appropriate the were seen down to it's in got Yes. with and And in inflation conversations it's justified, of change in we've our check of message have balance indices. things that. Most if we'll be no and couple deflation. accounts around But our over quarters. actions tied that Really with and in space move from last

Timothy Wojs

Okay.

for mix space the guess I a see last your the that's Okay. you position And guess, we've of the that second, marketplace. benefit guess, kind guys of in do then, you first, down? I one and heard kind price about down, in given if I mix just, especially could And instances ticket across happening? technically points be then categories. bigger just

M. Culbreth

with end we value the there participate. points be should benefit that's a because start the So down conclusion into I'll in which price rotation

what specifically, So other offer new mix you're that we've business construction not building perhaps from call you our I in Within seen players the we highlighting products. there. out would what business, degradation overall though, our think level about of and

That then Origins of by We have have the do Timberlake of choices as we to Origins. Timberlake out We strategy we acquisition X put see years ago. well. brand, part move over our place was in and builders brand that an making Timberlake into

that we expected So come. to

of some seeing that. we're So

result? will or box acceptable the is cabinet Well, better. price be be lower percentage the the margin What per but should

for price inside better. little down always I'd had been the better, also construction making is their So as We is move our business that bit builders around good, a little Most impact line offering. strategy. bit we us. in seen that the new equation the best are start a choice one the of middle to and best in has top top a of seeing that And We've of business, a even category. there little other sitting on points are mention bit

haven't model a but in new mixed So bit acquisition. repair really seen comes when it much in we little to construction,

Timothy Wojs

one I'll more. Okay. as add

or content with homes on like per content. smaller mean, been you seen the Or if -- cabinets a job? guys? of the you Just mean, have I or has know number I been that is big you jobs, big seen smaller cabinets cabinet of deal I of, not have impact spare on a has kind have kind but don't for have word, the right

M. Culbreth

as consumers homes us. really space. big the deal builders that are as protect trying though Even okay Yes, are to with for going we're smaller, that's not count. kitchen been still cabinet well Typically, a

what small a looking also maybe So storage. and Even to a lot is plenty we're if consumers seeing nice shrink, kitchen of was of for a area wanting still but they're house the are feature-rich.

are that the showing room. up now have you may cabinets in So laundry

you garage. may come have drop a when in off the room You

per pretty with count the comfortable overall been still cabinet home. we've So

Operator

Instructions] [Operator

the anyone back to ask As in I to question, call remarks. Mr. Joachimczyk not for I a turn like line to see would closing over do else

Paul Joachimczyk

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

Operator

The conference Thank you your has participation. for concluded. now

You may disconnect your lines. now

American Woodmark (AMWD) 23 May 242024 Q4 Earnings call transcript