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American Woodmark Sees One Percent Decline in Net Sales
Kitchen Cabinet and Bath Vanity Manufacturer Has Increase in Remodeling Sales.
American Woodmark Corporation (Nasdaq: AMWD) announced results for the third quarter of its fiscal year 2009, ended January 31, 2009.
Net sales declined 1% as compared with the third quarter of the prior fiscal year, to $131,153,000. Net sales declined 12% during the nine-month period ended January 31, 2009, compared with the comparable period of the prior fiscal year. The Company experienced an increase in its remodeling sales during the three-month period, as the Company benefited from consumers rotating to the Company's value price point, driven in part by retail promotional incentives. The Company experienced continued weakness in its new construction sales, which declined to a greater extent than earlier in the Company's fiscal year.
The Company generated net income of $23,000, or $0.00 per diluted share during its third quarter of fiscal year 2009, compared with a net loss of $2.0 million, or $0.14 per diluted share, in the third quarter of the prior fiscal year. The Company generated a net loss of $301,000, or $0.02 per diluted share during the nine-month period ended January 31, 2009, compared with net income of $4,235,000, or $0.29 per diluted share, during the comparable nine-month period of the prior fiscal year.
Gross profit for the third quarter of fiscal year 2009 was 15.5% of net sales, compared with 13.3% of net sales in the third quarter of the prior fiscal year. Gross profit was 15.3% of net sales during the first nine months of fiscal year 2009, as compared with 17.4% of net sales during the comparable period of the prior fiscal year. The improvement in gross profit margin during the three-month period primarily reflected the absence of severance and separation costs that aggregated 1.0% of net sales in the prior year's third quarter, as well as lower headcount-related and fuel costs. The beneficial impact of these improvements was partially offset by the continued inflationary impact upon materials costs. The decline in gross margin during the nine-month period reflected the unfavorable impact of inefficiencies in overhead and freight costs stemming from lower sales volumes, as well as the impact of higher fuel and petroleum-related costs upon both freight and materials costs.
Selling, general and administrative costs were 15.9% of net sales in the third quarter of fiscal 2009, down from 16.9% of net sales in the third quarter of the prior fiscal year. Selling, general and administrative costs were 15.7% of net sales in the first nine months of fiscal year 2009, down from 16.5% in the comparable period of the prior fiscal year. The Company's operating expenses during the third quarter of fiscal year 2009 continued to be lower than in the prior fiscal year, driven primarily by reductions in headcount and other volume-related costs.
The Company generated free cash flow of $5.3 million in the third quarter of fiscal 2009 (defined as cash provided by operating activities net of cash used for investing activities), and used this cash to return $1.3 million to its shareholders primarily through maintenance of the Company's regular quarterly dividend.
American Woodmark Corporation manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, major builders and through a network of independent distributors. The Company presently operates fourteen manufacturing facilities and nine service centers across the country.
Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward-looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission and the Annual Report to Shareholders. The Company does not undertake to publicly update or revise its forward looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.
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