American Woodmark (AMWD) 26 Nov 242025 Q2 Earnings call transcript

Good day, everyone, and welcome to the American Woodmark Corporation's Second Fiscal Quarter 2025 Conference Call. Today's call is being recorded, November 26, 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. by Securities company's XXXX. Litigation call under Harbor today's Private the Reform begin reading Safe the statement We'll Act of forward-looking to the uncertainties by the company's that statements material beyond All and risks may company be and based change involve subject control. on factors are made 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 its 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

and morning, for good Quarter you Second Woodmark's Thank Hey, Call. participate. time to Conference welcome to the Fiscal taking American today

President will Scott additional me CEO. quarter, financial regarding I will begin of review performance. and the our Joining with details add a and are Culbreth, Scott

After our happy comments, questions. answer we'll Scott? your be to

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

with representing net continued softer with This demand in a delivered $XXX.X slowdown decline over remodel prior to new due the shared along the year-over-year in family was expectations starts of sales teams last the of we was X.X% versus Our the construction decline line million, summer. year. in quarter. single market, The the

activity. and September, which on put from were XX points late low cuts, existing new the achieved pressure rates rate in to mortgage construction up Fed home sales Despite continues basis

October, last the fell existing low XX-year according Realtors, demand Association for addition, sales of home month of to projects. the slowing In to remodel a National sales in

future comped in quarters. Southeast Southeast positively months September, but starts in and that will weather. was in slowdown the the impacted activity that in the should favorable impacts in October future We installations from to believe cabinet rebound due August starts a and Single-family that by declined housing benefit

were growth construction net offset was more the mix. for versus quarter new was positive the than year, but unit Although channel sales by negative prior price for

rates that impacted to Our home by weaker for interest spending customers lead to macroeconomic This remains significant pressures continue on be our bath. higher-priced and like projects and projects. center more kitchen discretionary

of We share on and loss with teams customers, are our experiencing not remain share our a to our growing focused accounts.

a as the existing This that is belief mortgage increases. increase confidence potential sales and should Our serve consumer tailwind home as the projects our decline, for business increases, for home in rates future.

Our more rightsize were the adjusted lower $XX.X will benefits EPS or and Reported restructuring than costs remarks. to for in costs debt our operations, a and offset the million refinancing excellence cover EBITDA was entry mark-to-market were in $X.XX. results by improvements Operational peso Paul sales, XX.X% SG&A that spending for quarter. quarter his hedging

X.Xx to adjusted under at shares balance shares the X.X% quarter. Our the fiscal million credit million second XXX,XXX EBITDA, and the the repurchased in of and additional the end cash $XX.X or $XXX.X Leverage facility. revolving company access has its at was outstanding an quarter, company was of

job Our rate with a interest slight excellent debt refinancing to teams company's the our of did an exposure. increase

down be fiscal high R&R, discretionary mid-single digits in assumes industry digits. will and Within new larger to digits. low be down the remodel and repair the than market for and outlook up market be are trend Our single projects worse to will year 'XX projected single overall the construction

$XXX $XXX in expectations range the Our XXXX. the expectation unchanged is company's million. of year to million sales for versus EBITDA are and at a low net fiscal decrease single-digit targeted Adjusted

the XXXX past a new to of Our pillars: customers X growth, brand, distribution platform with accomplishments activity transformation moved with XX% digital Conversion design number main team has our quarter. and over that have Cabinetry. continues almost strategy continues to business of execute our our as key

the also I are last efforts are and the actively for Load-ins teams kitchen bath within with our planning stock next teams of number pursuing teams Salesforce our Our Coast the optimizing transformation stock shared Go a the made quarter. for of year. Digital new in wins at for continue use our complete West almost completing accounts and sales our ERP Live facility to channel.

Carolina efforts with mill, component continued progressing continues ramp well the are in and assembly facilities work our North and operations. design automation Mexico of Monterrey, Platform Hamlet, our and

to financial second the In results I'll closing, call details contributions forward during over the for additional and Paul I'm on fiscal fiscal proud of look team year to quarter. accomplished the the back continuing quarter in 'XX. turn their what this for now

Scott. our and by I'll year. results provide outlook then the for discussing our rest you, second Thank the begin quarter fiscal of

housing currently are million industry in but decrease the Net lower sound, fundamentals primarily are large $XX.X still ticket remodel believe interest purchases, $XXX.X to prior of sales We they were our X.X% confidence. persistently dampened high representing rates or and softness the long-term continued million, a the consumer versus the led year. business. of by This the impacting

volumes and a net sales in our for with versus impacting combined our increasing rates. costs around percent freight of the XX.X% customer to as input second reported labor year. XX.X% materials, XXX last basis profit facilities, manufacture raw Lower quarter Gross decreased product sales leverage

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

spending restructuring lower of and Operating due The XX.X% were point functions, that year. expenses by is incentive ended basis X.X% net across in decrease versus acquisition-related last our intangible roll-off XXXX, include all sales. -- the XXX excluding amortization sales December to our compensation offset of charges, controlled any lower

exclusions. diluted for definition our was the million Within our or million hedging year. to with versus income aligned adjusted per mark-to-market our share in diluted changed our exclude per foreign EPS on last of be $XX the and $XX.X $X.XX share currency quarter, adjustments or $X.XX second this we net industry adjusted Adjusted to quarter definition match EBITDA

prior net XX.X% was decline Adjusted a totaled versus in million The year, cash decrease flow changes point balances. net specifically accrued compared basis the Free $XX.X sales of lower current expense cash primarily XXX sales representing $XXX.X a the XX.X% or EBITDA flows, year-over-year. operating million million $XX.X million to and last to $XX.X positive year. for of our higher due in or inventory fiscal million $XX.X year-to-date was

Net loan new leverage and X.XXx $XXX on secured was XXXX. X.Xx facility entered adjusted EBITDA compared million year. senior that note with end last revolving provides we new at the loan the XX, debt facility. million term a for quarter October The agreement second $XXX Please facility into a of

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

old additional We have quarter. $XXX Board the million plus our $XX an million on that approved share remaining authorization, repurchase authorization of this

by growth ticket remodel result digits. remodel single a of in offset continued back new outlook softer and Reiterating year and Net assumes larger half up remodel single Scott in during repair retailers, a partially Our is market construction construction low sales what be year said market digits be will digits, purchases and fiscal repair unchanged. before, the new fiscal XXXX low for this across year. the to the down decline XXXX. be remains This versus the are expected mid-single of down the will and

lowest I the quarterly provide and by did the within, don't our fewer due we number sales to fall of fiscal remind sales Although sales that QX within want be will to are the that the year. holidays guidance, you days impacted quarter, of quarter

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

and projected primarily $XXX by the to being to a increased so sales inflationary EBITDA on a million, deleverage our we'll impacts continue do labor. raw go-forward monthly pricing to driven -- We and fiscal XXXX year Our revised evaluate logistics, volumes for retracting mitigate on margin range $XXX basis materials manufacturing of targeted of our our facilities. million to is and monthly

Our year priorities remain allocation XXXX fiscal unchanged. for capital

transformation continuing and investments for We back the with investing focused will by ERP in in be investing first business path our on our digital into automation.

the deprioritized. repayments Next, achieve, our continue with our place repurchasing. share to lastly, ratio be want debt debt and leverage in we'll will agreement And we

In conclusion, every day. happen making dedicated is it to our team

in future the Our past housing the I'm it with industry. efficiencies, automation improvements growth are plus long-term the and mitigate that recovers. investments that excited is operational both volume us in enable been positioned we'll will strong still helped and when place in over be and declines we from have remodel that thesis year operational have drive broader and perspective. very long-term repair margin put a nicely the the affecting market targets The our making

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

Allinson Trevor from comes today question Wolfe first Our Instructions] [Operator from Research.

imports just tariffs from Mexico night given couple there? of calling from guys the appreciating of post to a for all exposure Mexico. you last Can your facilities quantify XX% First, as Trump supply chain on

Trevor, uncertainty start just it guess could be tone a quite the that. tweet on there's change future saying that could a or I of frankly, daily lot regarding Yes, by I'd tariffs. on And policies weekly

I on guess previously Looking back, point I'd Chinese focus imports. to the

is regulatory the things those our our the able last noted, reduce price way. And also look in just place, or any put to purchases other I teams other the final policy shifting offset. our of Canada it's those say change come was recently And whether that's tariff potential That be will Our over have impacts to that import to mitigate now necessary our exposures, markets. to the I be able that. that's to be sourcing able whatever X resourcing or to It for and that exposure could kind years. make could that belief -- marketplace, are team would could significantly like lead to Mexico teams adapted is potential our in adjustments the

still uncertainty what Yes, happening. of lot up appreciate a it of makes there's ends lot actually I a sense. about

pricing your last question announced dealer had a your any addition you in incremental first monthly. increase you you your the guys. In indicated on in prepared call, you remarks pricing guys Second you today, dealer get channel the then talked announced It's Have channel. to other to any typically channels, the pricing reviewing for about price channel?

at nothing this in time. Yes, additional point

in went effective XX/X. You're quarter last channel, increase that dealer an right. We the did announce

in that's So place.

we and believe Keep of as actions we to we Paul trigger channels. last an basis. increase our mentioned, may depends a As on frame mind those when would future is a negotiations in and appropriate time had reach increase our we point, monthly those and it what start input And the that in evaluate channel necessary. once costs when all the on be

Markets. Garik from comes Our Capital next question from Loop Shmois

if commentary, outlook. the single-digit I sales you're of the But observations. end low of your sales I your at moderate question you looks correctly, your for just First remember if is did new declines some you year. view market It kept on like fiscal looking construction think

So just or the the additional Is any wondering stronger in sales pricing actions? kind maybe is fully baked maintained gains offset Just of would what great. color be it share guidance.

When standpoint. go into Why do comp look performance channel Sure. second the versus points. be half. at half the would second one just clearly that you first would the a from hit in tailwind expect of better half, sales Pricing You the we we a the be? as

will other We areas partial that, business. second that wins kitchen is the benefit our in for the half. the half the bath that experienced first half. some The signaled our got year. And have only is than center look to the of business. would in last benefit we home I had quarter other that We We I at some and the in stock there comps would specifically, back then half first made-to-order do in business one our easier point

our for into year. outlook guidance goes that the So

year? And then the you're was speak you of helpful. I the wondering what half seeing aside, on cost I That's second side Okay. but to if the tariffs guess, could for

were Yes. call If we seeing specifically increases Paul's out. planned board. particle increases continues, and as final in We labor had mentioned in last some a quarter shared that continued remarks, he that delivery, mile

move in those areas. So costs we see to input particular continue

recent inflation. I out would think some I'd we've other the be where call one linerboard seen

from Our Research Thompson comes Steven from question Group. next Ramsey

pretty or the hovering quarters few despite $X.X I staying kind if month was trailing pressure bottoming? any in weak could aside pontificating sales range you sales that this look Or risks as curious issues incremental midst of looking the of you that zone weakening you from a at Are in billion macro? of driven I'm or it's on as the think this market, do the last it further, incrementally at rates. you at XX macro point? in said,

think I still pretty it's macro driven.

even our other election. be baked perhaps could negatively lot gotten there Certainly, there Could a the that We've outlook? remark. had past things You into impact that are.

that. there as it to So for quite some uncertainty of relates lot time, a was

we've that policy uncertainty. that now and there's gotten Now past

this to see policies employment, do what building Immigration of specifically our on tariffs? building. couple of and times that a we We've respect already So to means expect overall with industry in with call. home products especially that remarked and what

variables on are mandates some sure consumers exactly what So spending. out impact there we're there will that and what will the not an be, from consumer do those and policy

helpful. I secondly, And thinking volume. was down X.X%. That's then about Sales Okay.

the You've got through dealer sense of how half. for expect in retail the on half. second some a second better in pricing in a I'm All curious get you the to bit flowing trying volumes channel. directional expectations the unfold quarter promotions and to little

and behavior prior The news Yes. promos, on continue we activity the consistent with years. see good to

promotional pretty decline. activity year-over-year. a we've in not nor consistent substantial seen ramp-up been So It's any

expect don't impacts any there. additional So

question [Operator Zelman. Instructions] from Our Baumgarten Adam next comes from

the sales X.X%. main you channels X guys Just break down Maybe out if that by quarter, in that curious serve? the you end could

don't breakout, specific the I negative but one I of Yes, a was thing have slightly construction Adam, on channels. quarter. quarter, in were shifted period. note have each new I'll of the channels the unit tell growth that the just in just The the down you, for each did to mix price the for

new construction, price down? in up are units mix So was but

Correct.

it. Got

of It the Okay. back And thinking then the the just trends implies of maintained in about guidance. kind year. half flattish

guess, trends of seeing assume continuation you comparisons? the across I markets? I does you're Scott, a current pickup end you assuming think, of the kind mentioned are of some the easier outlook outside of Or that some tailwinds.

any substantial to assuming improvement not lead we're or change macro an in consumer Yes, kind major would of any demand. rates in increase that

of we steady quarters. quarter as think kind X So this about goes it recent the as next outlook with most

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

a Scott. to guess you and as top the a the the just year, of But get guess least, about would you're of there. range I fiscal when implications kind at turn year, of single kind little quarter? Maybe question, the last given on guide? kind thinking low there's digits just positives, the I for that fourth down expect comps the you kind in of line This of back into bit

think for to too positive. that will I declare it's it early me absolutely go

down still slightly think in I QX. we modeled

that and through get the our 'XX, to here a of 'XX, point Certainly, think of claiming at are that these the December we about into I then year Fed will fiscal go of think a as is in get start what -- we the business see policy January, to and 'XX. in be actions year positions need positive some quarter. the growth for view would calendar year in before should we positive

Okay.

modest the mean, of in kind on of reduction the Okay. lower the cost just And midpoint? that that is guess, is of it Is a EBITDA EBITDA of I what's the just of guide? kind lower little volume? drivers are kind -- tweak what price I the

through with the we're year. line To now We've overall better wanted where on We tighten us the inflationary that of performance. of impacts up up to those see volume the to some the as inside picked halfway of it then got last sight and impacts, quarter point, your we overall. specifically some Yes.

being to "Look, versus we range we said, up. year is model that This half a a as as better So spread million let's tighten out, this $XX open."

Okay.

or just idea kind maybe for any flow year? free any expectations, then And the Good. Okay. on relative guidance EBITDA of cash to

with how we'll still on Tim, We're to be it, cash flows we repurchasing. free Yes. relative the perform. consistent

out I'll call So excess of, cash got we've that's there. it, a lot

inventory, Year. had Chinese we there, to that there. goods New wanted port the sure are available saw strikes the our around along make the with constraints the We and have will out all pressures We

So of if capital that's on have anything, working pressure there. inventory bit we to our just little out a related

Southeast business quarter? then kind And hurricane second the new new guys any in just experience the you in or last construction Did Okay. the one. of the -- impacts in

weekends Yes, job make time. over where there. and get to up typically down there out days some sites. the we we're saw actively able were We some those with impacts to Certainly,

question stores there material is there in in respect But of which a that? But no, going in see stock work explore do our impact new demand. for the -- we think had with the hurricanes, any Specifically around just levels kitchen to with a increase we've QX. an largest to to timing appropriate inventory I business, we think when sometimes, to The our construction, we we anything customers benefit the see benefit for issue. that. the our little about forward material expect sure maybe like we impact it's is, we'll got don't bit expect case make

And no I'm ahead, back gentlemen, to to Please additional questions. closing for floor ladies seeing turn go sir. at and this the comments. Joachimczyk like time, Mr. I'd over

for concludes you conference today, our and Thank again. This you your for we thank participation.

that, And with We you thank conference be for gentlemen, do presentation. we'll and concluding ladies and joining. today's call

may You lines. your disconnect now