Winchester, VA—American Woodmark Corporation (NASDAQ: AMWD) announced results for its first quarter of fiscal 2022 which ended July 31, 2021.
Net sales for the first quarter of fiscal 2022 increased $52.5 million, or 13.5%, to $442.6 million compared with the same quarter of the prior fiscal year. The Company experienced growth across all channels, with high-teens growth in our repair and remodel sales channel and upper single digit growth in our new construction sales channel during the first quarter of fiscal 2022 versus the prior year period as market demand continued at a strong pace.
Net income was $3.0 million ($0.18 per diluted share) for the first quarter of fiscal 2022 compared with $16.1 million ($0.94 per diluted share) in the same quarter of the prior fiscal year. Net income for the first quarter of fiscal 2022 decreased $13.1 million due to the rapidly evolving inflationary pressures outpacing our pricing actions taken across all our channels. This was approximately 220 basis points of sequential pressure from the Company’s fourth quarter of fiscal 2021 to the first quarter of fiscal 2022, related primarily to materials and logistics costs. Given the increased backlog of our products there is an inherent lag in the realization of our pricing actions. Net income margin was 0.7% for the first quarter of fiscal 2022 compared to 4.1% for the same period in the prior fiscal year. Adjusted EPS per diluted share was $0.70 for the first quarter of fiscal 2022 compared with $1.63 in the same quarter of the prior fiscal year.
Adjusted EBITDA for the first quarter of fiscal 2022 decreased $24.3 million, or 43.1%, to $32.1 million, or 7.3% of net sales, compared to $56.4 million, or 14.5% of net sales, for the same quarter of the prior fiscal year.
“While delivering sales growth across all channels our adjusted EBITDA margins of 7.3% were below expectations. Although we have and are also in the process of implementing significant pricing actions due to the increasing inflationary pressures we are facing, we only realized approximately $3 million of impact in the first quarter of fiscal 2022. Assuming our current sales level, we expect the impact of confirmed pricing actions to increase in the second half of fiscal 2022 to over $25 million per quarter,” said Scott Culbreth, President and CEO. “Looking forward our focus remains on increasing production to match a strong demand environment and reducing backlog and realizing additional pricing actions to mitigate inflationary pressures in materials, logistics, and labor.”
Cash provided by operating activities for the first fiscal quarter was $6.6 million and free cash flow totaled $(8.1) million. Cash flows were negatively impacted due to the higher inventory levels, timing of accounts payable, and lower accrued compensation expenses. As of July 31, 2021, the Company had $27.8 million of cash on hand with no term loan debt maturities until July 2023 plus access to $243.0 million of additional availability under its revolving facility. The Company paid down $29.1 million of its debt and repurchased shares valued at $25 million during the first three months of the current fiscal year.
Effective May 1, 2021, the Company changed its accounting method for inventory costing for inventories which previously utilized a last-in, first-out (“LIFO”) basis to a first-in, first-out (“FIFO”) basis. All prior periods presented have been retrospectively adjusted to apply the effects of the change.
American Woodmark celebrates the creativity in all of us. With over 10,000 employees and more than a dozen brands, we’re one of the nation’s largest cabinet manufacturers. From inspiration to installation, we help people find their unique style and turn their home into a space for self-expression. By partnering with major home centers, builders, and independent dealers and distributors, we spark the imagination of homeowners and designers and bring their vision to life. Across our service and distribution centers, our corporate office, and manufacturing facilities, you’ll always find the same commitment to customer satisfaction, integrity, teamwork, and excellence. Visit americanwoodmark.com to learn more and start building something distinctly your own.