February 28, 2021 | Bill Esler
Winchester, VA – American Woodmark Corporation (NASDAQ: AMWD) net sales for the third fiscal quarter (the period ended January 31) increased $36.2M, or 9.1%, to $432M, compared to the year ago period. The cabinetry manufacturer experienced growth across all channels, with 12.6% gains in its repair and remodel sales channel and 3.8% growth in its new construction sales channel as market demand recovered.
Net income rose 34% to $17.2M, a number that would have been higher except for rising costs. “Our teams once again did an exceptional job of delivering sales growth in the quarter. But our margins were pressured by material, logistics and labor inflation,” says Scott Culbreth, CEO of American Woodmark. “We expect demand trends to remain strong and margin pressures to continue with recent increases in hardwood lumber, plywood and particleboard, packaging materials, components and freight.”
Culbreth says an order backlog has been growing for two quarters. “Incoming orders again exceeded shipments in our third fiscal quarter, and we did not make progress as planned in reducing backlog,” according to Culbreth. Implementation of a new ERP to integrate operations, as well as a the new Dallas distribution center, now online, are expected to improve things.
The company incurred $5.4M in costs related to permanent layoffs due to COVID-19, and for establishing its new Dallas distribution center. But it also earned $2.3M on the closure and sale of its Humboldt, TN plant.
American Woodmark operates 17 manufacturing facilities in the U.S. and Mexico, eight primary service centers, and one distribution center manufacturing and distributing kitchen, bath, and home organization products for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, builders and through a network of independent dealers and distributors.
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