WINCHESTER, Virginia (February 19, 2008) -- American Woodmark Corporation (NASDAQ: AMWD) today announced results for its third quarter of fiscal year 2008, that ended on January 31, 2008.
Net sales declined 18% as compared with the third quarter of the prior fiscal year to $132,837,000. Sales of core products declined 14% in the third quarter, as remodeling sales declined by a low single-digit percentage and new construction sales declined more than 25% as compared with the third quarter of the prior year. Net sales for the nine-month period ended January 31, 2008, declined 23% to $459,124,000 as compared with the comparable nine-month period of the prior fiscal year.
Net income for the third quarter of fiscal 2008 was a loss of ($2,021,000), or ($0.14) per diluted share, compared with net income of $3,779,000, or $0.24 per diluted share, in the prior year. Net income for the first nine months of fiscal 2008 was $4,235,000, or $0.29 per diluted share, down 84% from the prior year's $26,380,000, or $1.64 per diluted share.
Gross profit for the third quarter of fiscal 2008 was 13.3% of sales, as compared with 18.0% in the previous year. Gross profit for the first nine months of fiscal 2008 was 17.4% of sales, down from 20.4% in the prior year. Gross profit was adversely impacted during the third quarter by one-time severance and separation costs associated with headcount reductions across the Company's 15 manufacturing plants, as well as by costs associated with the Company's decision to close its smallest plant. These charges aggregated 1.0% of net sales in the third quarter of fiscal 2008. The remainder of the decline in gross profit margin experienced during the third quarter primarily reflected the unfavorable impact of inefficiencies in labor, overhead and freight costs stemming from lower sales volumes, as well as rising fuel costs. These inefficiencies more than offset favorability related to an improved sales mix that resulted from the prior completion of the Company's low-margin products transition.
Selling, general and administrative costs were 16.9% of net sales in the third quarter of fiscal 2008, up from 15.1% of net sales in the prior year. Selling, general and administrative costs were 16.5% of net sales in the first nine months of fiscal 2008, up from 13.6% in the comparable period of the prior year. The Company reduced its operating expenses 7% as compared with the third quarter of the prior fiscal year, driven primarily by reduced performance-based compensation. This cost reduction was more than offset by the Company's sales decline.
The Company generated operating cash flows of $20.6 million in the third quarter of fiscal 2008 and used $4.8 million for capital expenditures and investments in promotional displays, generating $15.8 million in free cash flow. The Company repurchased $4.9 million of its common stock and paid $1.3 million in dividends during the third quarter. The Company generated $23.9 million of free cash flow, repurchased $22.7 million of its common stock and paid $3.5 million in dividends during the nine month period ended January 31, 2008.
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 fifteen 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.
Vice President and Treasurer