WINCHESTER, Va. (August 24, 2005) -- American Woodmark Corporation (NASDAQ/NM: AMWD) today announced results for the first quarter ended July 31, 2005.
Net sales increased 15% over the prior year to $215,564,000. The Company had previously issued forward guidance that anticipated net sales growth of 10% to 15%. The increased sales for the quarter reflected strong demand in both the remodel and new construction sectors as well as improved product mix.
Net income for the quarter was $7,455,000, or $0.45 per diluted share, compared with $9,701,000, or $0.58 per diluted share, in the same period of the prior year. Net income was above the Company's forward guidance of $0.30 to $0.40 per diluted share.
Gross profit was 17.1% of sales, down from 20.7% the previous year. Inflationary pressure increased the acquisition cost of certain raw materials and transportation expense increased due to the combination of higher fuel costs, limitations on the availability of driver hours and overall carrier capacity constraints. Labor costs rose as the Company invested direct hours early in the quarter to address backorders and other operational issues relating to material flows. Manufacturing overhead costs also increased as a percentage of sales, reflecting the addition of two new manufacturing facilities in the third quarter of fiscal 2005.
Selling, general and administrative costs decreased to 11.5% of net sales from 12.3% the previous year due to the impact of cost management efforts and lower costs associated with the Company's pay-for-performance incentive plans.
Looking forward to the Company's second fiscal quarter ending October 31, 2005, the Company expects continued healthy demand in both the new construction and remodeling markets. The Company expects net sales will increase by 8% to 12% over the prior year. The Company has resolved its significant operating difficulties and expects gross profit to show sequential improvement throughout the remainder of the fiscal year. The Company expects that net income for the second quarter will be in the range of $0.50 to $0.60 per diluted share.
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 ten 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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