AMWD - Earnings call transcript Q3 2025 | American Woodmark Corporation

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the American Woodmark Corporation Third Fiscal Quarter 2025 Conference Call. Today's call is being recorded, February 27, 2025.

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 the non-GAAP financial measures to the most comparable GAAP financial measures.

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

the the Reform uncertainties and begin harbor the company forward-looking from will call implied risks the by reading We and material company's statements to based on statement made financial the under of Private Act Litigation any the are involve Securities Accordingly, XXXX. All control. by performance statements. change factors and beyond or subject company's may results those such forward-looking materially differ company's in that safe may expressed future be

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

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

Paul Joachimczyk

to welcome and participate. taking quarter to third time Woodmark's you all morning, Good for conference call. the today fiscal Thank American

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

M. Culbreth

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

demand market decline we construction continue activity prior were Our last as expectation This experience as our representing builders. new decline softer was shared by delivered a of X.X% teams sales year. in in versus and the of reduced net single-family million, remodel $XXX.X quarter inventories solid the to below

lowest demand higher Association rates REALTORS remodels. the projects reported to ticket slowed finished the such XX as has recently existing of National existing bath for The for kitchen XXXX affordability home at rate years and which annualized in clearly and sales Interest that new homebuyers. almost continue challenge remodel

made-to-order flat business. stock kitchen comps business storage business and negative the offset stock our For bath was center the by the prior year, in This and versus home roughly mid-single was was digits. up quarter, our

was business also but experienced prior negative down as prior new double Our the starts activity versus year and the housing dealer quarter, flat in our roughly quarter. with year January. was business construction November slowed in distribution Single-family comps digits

double-digit delivered and For teams but growth this our California and declines California. in Southern direct by Northeast Florida Northern new construction business, was markets, our the Atlanta, than offset in more

a business. in rotation a navigated continue our made-to-order new We impact to see lower construction down Within on mix unfavorable the our business, teams resulting made-to-order in overall our had backlog. an offering,

backlog. maintain appropriate As pressures To the within schedules teams this, our unscheduled the took the demand quarter slowed down to production adjusted deleverage. an several production creating days within margin from around accomplish we quarter, holidays,

consumer confidence business new Longer the and also belief term, the consumers home home Mortgage decline, increase confidence remains and enter existing that as will higher sales market. increase projects consumer buying interest rate single-family increases. ticket mortgage rates more potential the construction as increases, home for our relief benefit

win, this will as products tailwind to and the our for and serve have a We platforms business.

than benefits costs. $X.XX. and labor material sales were EBITDA million excellence Operational EPS the more adjusted for Our Reported quarter X.X% offset and in was results lower the were by $XX.X spending quarter. improvements or SG&A higher

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

that the in decline X% challenging the term. an year the repurchased near to trends sentiment million and full fiscal relief outstanding outlook mid-single-digit and in adjusted inflation $XXX EBITDA include sales interest year remainder for the shares shares risk XXX,XXX fiscal EBITDA, rate of approximately Leverage don't the concerns growing, X.XXx consumer is remain range our for declines, of are adjusted $XXX a million. was company at Macroeconomic Demand and and is quarter. the to for or we in of expected net see

future January single-family slower concern become few Recent activity improvement. a also spring a amount data to the indicates weeks. policies. start for tremendous the there's be for Tariffs continues selling still uncertainty past there have new season, but of Unfortunately, construction a to time regarding over

in our Given over team the the sourcing significantly has imports the exposure past, our X focus on reduced past Chinese years.

the million, evaluate supply Our $XX and chain we is purchased overall continue than those now for to items. spend less

Regarding will any supply include not work pricing chain and would consider in as place time, to for larger of our beyond to in Should Mexico, we approximately tariffs an our current revenue. be our support need global facilities of our that considerably in exposure period those tariffs team the Note XX% place for extended actions. China. outlook risk our does is optimize those

adapted past and have changes in and to teams the adjustments. will settles, I tariff necessary the quickly the once that optimistic make Our remain we regulatory landscape

our continues to new Our brand and business XXXX Conversion with platform is customers growth, past has number design the Cabinetry. our our distribution that to transformation a execute activity strategy of accomplishments quarter. digital team pillars: converted X complete now over main with

pursuing number actively that within of accounts channel. Our teams a new are

and Our made-to-order a warmer are launching stain underway existing upcoming paint summer with to finishes. launches finish complement

finishes and business. and in trend also stay that our stock launching New styles kitchen are frameless on

category testing gains. new bath within to share stock we're further Finally, drive the collections

Digital during the within closure with week efforts our Platform continues of our May. made-to-stock with transformation work design announcement a ERP targeted network. plant first recent Go at our Live of continue West Coast the facility

for efficiency team us over been and into key Moorefield, a Monticello, Virginia production Product West network, and namely company allowed XX that in contributor Kentucky Our this to has consolidate to Orange, other have overall facilities Virginia. years. our mix gains

team plan third of look and Our our everyone members impact transition for to does this goods all forward their and In will accomplished continuing what that be closing, I is to I finished their a remind service. I'm our of thank completed not quarter many want of assembly capacity. next fiscal years proud component also contributions. in wanted month, this team and the to

turn the results the over Paul back now on for quarter. call details financial the I'll additional to for

Paul Joachimczyk

net with Thank channel down sales you, home follows: distributors X.X%. our down repair were by being The discussing by change representing decrease X.X%; million centers begin construction net sales Scott. dealer independent year. of I'll outlook versus XX.X%; is $XX.X and new were X.X% third $XXX.X prior of remodel and results down fiscal our the rest Net or quarter a net down as sales million, the sales and for provide year. X.X%; then the were

consumer long-term we ticket current results. confidence the spending While primarily believe on still higher sound, and are the industry projects housing current is impacted remodel and that lower, fundamentals has our of adversely

quarter of facilities as freight leverage labor net our product versus the third decreased combined with last input sales for reported volumes XX.X% sales XXX profit costs to in impacted a points Gross consumer rates. and percent around XX% materials, our increased manufacturing basis year. Lower raw

operational partially efforts. our However, sustained by offset these impacts were excellence

of and acquisition-related sales spending controlled decline. point lead restructuring functions and general versus including administrative all roll-off XXX our December asset any decrease XXXX. across helped charges, intangible to that Selling, basis the last amortization XX.X% to of The net incentive X.X% were compensation that ended due year. is expenses, Lower

or point or million was $XX.X sales or $X.XX last net Adjusted third $X.XX Adjusted net $XX.X XX% diluted of net last share representing versus income per XXX decline X.X% quarter share per basis $XX.X versus EBITDA $XX.X sales the was year, or million in a diluted million year. year-over-year. million of

the But earlier, are we have dimensional move was easy as as efficiencies, of Scott specifically we stated operations our Within this within the a location. decisions manufacturing strategic lightly. did never ones the our Virginia or quarter, take that closure for improved. announce organization Orange, operational These

and trends will market are platform moves alternative towards to us more current addition, moving materials align and enable those trends. help In our

in fiscal totaled cash the balances, our for The and positive changes current lower $XXX.X in specifically million $XXX due compared capital to transformation inventory, cash million operating higher expenditures. offset was Free million by to costs compensation year. accrued decrease lower prior a related approximate higher digital year-to-date and primarily flows, flows the $XX.X expenses

at leverage the last the with end year. adjusted EBITDA of X.XXx third was quarter compared X.XXx Net

company our revolving As under $XX.X additional million XX, facility. cash had of in XXXX, the plus availability million of January $XXX.X access to

being Under first the retired. the purchased share shares repurchase current X months $XX.X year, representing in company fiscal the XXX,XXX program, of million outstanding the shares the about X% of or

authorization have $XXX.X repurchase million of remaining. share We

from the as Shifting to across our year the down for as lower down be the remodel by XXXX. and higher-ticket mid-single This a expected driven digits are repair to Net is slowing new well fiscal resulting market fiscal retailers. market, year softening remodel versus construction XXXX. projects sales sustained outlook

overall constraints, and upon trends, these and However, labor dependent assumptions consumer behaviors. industry economic highly growth impacts, rates are interest material

margin Our million, being for of deleverage to primarily $XXX facilities. year million driven range softening $XXX is of projected EBITDA increased sales manufacturing to the revised and a by our XXXX fiscal the volumes targeted

that We to contemplating tariff monthly Please to policy continue environment. to potential materials, impact this for current evaluate pricing impacts given mitigate include inflationary the the new actions the note are any changes raw does on pricing our impacts. and and labor the help tariffs outlook not logistics,

Any unchanged. start the investing We business automation allocation repurchase priorities to XXXX digital since capital efforts. have million be And $XXX.X Our in into we year excess capital a repurchased reminder, of will fiscal year XXXX. remain as and for to used shares. fiscal remain back committed the

to of our continue In am resilience market conclusion, proud as change. conditions the I team's

lows and at new rates sales markets. historic existing We slower currently in are construction growth in home maintaining

are footprint choice at doing customers making to product. right at job of mind keep and our flexing help the our while all top platforms, leaders operational operational Our great quality our making sound, keeping a

is targets. and all that committed gains our automation challenges, macroeconomic happen team growth operational and strategy it making help around We efficiency remain long-term every profitability to the dedicated Throughout the to day. our support long-term will

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

Operator

with The comes [Operator Instructions] question first Trevor Wolfe from Allinson Research.

Paul Przybylski

you on of I and first, guess, Przybylski R&R builders what components? talk the Paul those actually of is portion reduced about inventory. is to This slower reducing Trevor. environment attributed you a each guide discussed Can your for

M. Culbreth

our full That's comp both going we're quarter. Those to overall drove you that QX a in year comp of it outlook, from look mid-single if operating contributors. what a at the for assumes we similar basically posted standpoint. guide the have rate environment digits, And key were

Paul Przybylski

in being fires needle in Have potentially begun see Southern last hurricanes the all. to Okay. And or talked the any fall the guess I you hurricanes about from mover past, positive impacts for you then you've California? a potential

M. Culbreth

were impacted we But the comp there California. would overall rates comps the in Nothing say material quarter positive positive the Southern in some there. I but that last from in in some fires specific stores result, the to seen Florida, on hurricanes areas the not quarter, have was

Operator

Ramsey comes with Group. The next question Steven Research from Thompson

Steven Ramsey

start to different actual or work thinking price anything. on and pricing just not through But you're curious, the the of as about you surcharge to maybe options with contemplating. I you're environment? the committing I'm considerations. considerations part route know how you're thinking moves just Maybe just that you're

M. Culbreth

Yes.

is I action. of approach taken to to and we're mitigate, pricing going result do be if tariffs come fully think regardless able not there's the likely through the end

you channel. it As know, by varies

just our channel, basically change. inside a So do distributor price list it's dealer

just think So roll we that would it through way. I

and Do process you around a it there's have. justification through some to the you've regards the had seen cost and notice. home a have our provide go be surcharge. justification of increase whether should a typically process, we've then cost center that With follow retailers discussion accounts, to each internal When

That be in example. the heard price a increase. to justify the past surcharges the as term is the You've go an same which that mechanism, you get could going to for to process in but used still fuel have actual be

I'd as be builder in the environment home we in similar see center a that well. it'd say channel the channel would

going term we're So as environment have or to solid to what it be because and we term. a we see don't have a actually path need market long answer first going on a to final short is

specifically having likely certainly some That's I first conversations that. can mitigate with take. on we Mexico, that, want can't discussions our we yes, pricing So with But the if fully say, of we'd think customers. route to lots we're have don't I'd we mitigate not and

Steven Ramsey

that that back, there you would maybe world? part right. dealer flattish, that That's think bottoming dealer called I very you helpful. stabilization on of distributor But is being maybe And sense big channel, you than then say was confirm tough, which generally or could that then Okay. that ticket bottoming out demand the R&R in any different to I be pulling the first but get heard remains do demand

M. Culbreth

going it's say, So more ratio, specifically is more a and to a business is distribution not to I to new I'm our to an dealer bit on would provide performance exact R&R dealer tied you. distributor, I typically, But know tied bit construction.

So and that's those to about talk want delineate I did why them.

hope Are would we Certainly so. bottoming?

I we've attribute a dealer the in message think in of just the over channel. that's I that to been not R&R couple would demand. that move centers well. as last the our pullback both a also seen quarters home in They similar fashion. That's

And have this a our in building out. going of then off a The it certainly, trigger the about floor. accelerate an increase recovery. space, And forward. of is is, the that's second specifically to yes, is increase talked we bottoming belief products players would is we're lot 'XX So and half what going question that expectation see

have going second regulatory demand a and There term. half. certainly, this seem doesn't that's a some perhaps loose get in the through of we then stage environment to could the similar marketplace anything things we in half, But lift to of think if can near uncertainty surge break sentiment. be I in back

Operator

[Operator next Baird. question Instructions] Wojs from comes Tim The with

Timothy Wojs

new maybe different of the little talk of just bit is just lines? a you a headwinds quantify within like offering? Is -- so Just what of smaller that impact sounds about Can seeing kind to mentioned construction then down construction what you mix way little is? square the -- bit kind it the to homes? trade there in And a new you're side is the product footage of on business, Scott, that type that mix a some

M. Culbreth

Tim. of both, Yes, a bit

So rotation we down product a definitely in offering the see itself.

from better, are our made-to-order you good. good, best we we classify So seeing product what approach, and a better about do to move to Timberlake better think if you have offering, just sometimes as best a and

out as trying to we've price consumers. get attract that So and points impact new play seen to down builders are affordability

we're the shrink seeing To square on your certainly, around homes, footage point houses.

cabs say, would we We going I the would also cabinets number are be? cost a are trend equation. go It's seeing a of homes. in Why number into a sequentially, monitoring downward the of that And that to home.

over do And as builders So way that the the trying to one ways improve attract the find of to they design let's to an are is consumers. the pull affordability may cabinets example. refrigerator out

an be So impact out. that plays that could

We are marketplace. see that to some of starting the in

Timothy Wojs

Okay.

quantify headwind, in Okay. guess, cost And kind then I is input is there a the what of guess, was the year? the or to just expectation for I way quarter what the

M. Culbreth

around call action we continue timing there. around haven't trigger rolled Nothing on pressure ready to see input than been we that. because and to margins, frankly, other pricing That's impact specific any the some costs the to quite through our we're to ascertain trying tariffs, out

And considerations would if incorporate well. where as So take action. if we topic inflationary not to we'd for do, and like we pricing any or to appropriate, get whether closed that need out we

Timothy Wojs

Okay.

like So to you'd but sounds out you dribble want price, to mean I take the want into it it market. don't

want with to You one increase Is opposed message? of go of of as kind kind to out several. kind the that really

M. Culbreth

exactly That's the message.

it said You well.

Timothy Wojs

Okay.

margins, Great. those the guess just gross in benefit EBITDA, would What things? Okay. of closing types closing annual from just terms I of And be on Orange. the of facility then kind

M. Culbreth

that cycle year have a is 'XX. outlook companies We'll more challenging I versus follow. incorporated fiscal of bit Yes. always you other our the our into some in know

gains incorporate inside be we the our also give sales, in market budget our on business. cycles wrapping now. all call, year impact on 'XX expect guide So year would certainly we'll around that a certainly of outlook, net Orange and would full EBITDA up would that next for fiscal and our share And a but we're the consideration

Operator

As any Instructions] Mr. over that there Joachimczyk to a to is anyone question. would waiting for Please to [Operator ahead, do I not line I go like comments. else sir. ask the turn closing see

Paul Joachimczyk

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

Operator

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

disconnect. now may You

American Woodmark (AMWD) 27 Feb 252025 Q3 Earnings call transcript