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Jan 31, 2022
American Woodmark Q3 2022 Earnings Report
Reported sales growth across all channels but experienced a net loss due to one-time pension settlement charges and supply chain challenges.
Key Takeaways
American Woodmark Corporation reported a 6.4% increase in net sales for the third quarter of fiscal 2022, reaching $459.7 million. However, the company experienced a net loss of $49.3 million, or $2.97 per diluted share, primarily due to one-time pension settlement charges of $69.5 million. Adjusted EPS per diluted share was $0.60, and Adjusted EBITDA decreased by 45.2% to $30.6 million.
Net sales increased by 6.4% to $459.7 million compared to the same quarter of the prior fiscal year.
Net loss was $49.3 million ($2.97 per diluted share) compared to net income of $18.4 million ($1.08 per diluted share) in the prior year.
Adjusted EPS per diluted share was $0.60 compared to $1.57 in the same quarter of the prior fiscal year.
Adjusted EBITDA decreased by 45.2% to $30.6 million, or 6.6% of net sales.
American Woodmark
American Woodmark
Forward Guidance
The company expects significant Adjusted EBITDA margin improvement versus current levels as price realization better matches inflationary impacts, they improve costs through productivity initiatives, and increase their production levels as staffing improves.
Positive Outlook
- Confirmed pricing actions to increase in the fourth fiscal quarter of 2022 by an additional $25 million versus the third quarter's realized pricing actions, to over approximately $55 million per quarter
- Staffing levels continue to improve
- New made-to-order assembly line in our Gas City facility in February which will result in incremental production capacity to reduce our backlog.
- Expect significant Adjusted EBITDA margin improvement versus current levels as price realization better matches inflationary impacts
- Improve costs through productivity initiatives
Challenges Ahead
- Sales were negatively impacted by labor absenteeism as COVID cases increased due to the Omicron variant
- Supply chain shortages in the later part of December and early January.
- Adjusted EBITDA margins of 6.6% for the fiscal third quarter were below expectations
- Current quarter results include $30 million plus of pricing impacts that we realized in the third quarter of fiscal 2022
- Pension settlement charges of $69.5 million related to the termination of the Company's pension plan