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Net sales for the first fiscal quarter decreased 8.7% to $390.1 million compared with the same quarter of the prior fiscal year. The Company experienced declines in all sales channels during the first quarter of fiscal 2021 as both the remodel and new construction markets were negatively impacted by the COVID-19 pandemic.

Net income was $16.5 million ($0.97 per diluted share) for the first quarter of fiscal 2021 compared with $26.9 million ($1.59 per diluted share) in the same quarter of the prior fiscal year. Net income for the first quarter of fiscal 2021 was negatively impacted by lower sales due to COVID-19, deleveraging of fixed costs across the Company and a decline in efficiency. The Company incurred pre-tax restructuring costs totaling $3.5 million during the first quarter of fiscal 2021 related to the permanent layoffs due to COVID-19 announced in the fourth quarter of fiscal 2020 and the first quarter of fiscal 2021 and the closure of its Humboldt, Tennessee manufacturing plant announced in June 2020. Adjusted EPS per diluted share was $1.66 for the first quarter of fiscal 2021 compared with $2.13 in the same quarter of the prior fiscal year.

“Our sales and net income were negatively impacted by COVID-19 during our first fiscal quarter, but our teams performed well and drove results that exceeded our initial expectations," said Scott Culbreth, President and CEO. "I want to personally thank all of our employees and suppliers for helping the Company navigate this difficult situation."

Cash provided by operating activities for the first fiscal quarter was $40.0 million and free cash flow totaled $32.2 million. As of July 31, 2020, the Company had $128.1 million of cash on hand with no term loan debt maturities until December 2022 plus access to $93.6 million of additional availability under its revolving credit facility.

American Woodmark Corporation manufactures and distributes 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. At July 31, 2020, the Company operated seventeen manufacturing facilities in the United States and Mexico and eight primary service centers located throughout the United States.

We have presented certain financial measures in this press release which have not been prepared in accordance with U.S. generally accepted accounting principles (GAAP). Definitions of our non-GAAP financial measures and a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP are provided below following the financial highlights under the heading "Non-GAAP Financial Measures."

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, including our Annual Report on Form 10-K. 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.


AMERICAN WOODMARK CORPORATION

Unaudited Financial Highlights

(in thousands, except share data)

Operating Results

		Three Months Ended
		July 31
		2020				2019

Net sales				$	390,087			$	427,365
Cost of sales & distribution				309,949				332,846
	Gross profit	80,138				94,519
Sales & marketing expense				19,898				20,687
General & administrative expense				29,983				29,432
Restructuring charges				3,460				(19)

	Operating income	26,797				44,419
Interest expense, net				6,030				8,088
Other income, net				(1,688)				(7)
Income tax expense				5,970				9,457
	Net income	$	16,485			$	26,881

Earnings Per Share:
Weighted average shares outstanding - diluted				17,013,444				16,907,463

Net income per diluted share				$	0.97			$	1.59


Condensed Consolidated Balance Sheet
(Unaudited)
		July 31				April 30
		2020				2020

Cash & cash equivalents				$	128,055			$	97,059

Customer receivables				123,301				106,344
Inventories				126,700				111,836

Other current assets				9,913				9,933
	Total current assets	387,969				325,172
Property, plant & equipment, net				199,088				203,824
Operating lease assets, net				126,409				127,668

Trademarks, net				1,389				2,222
Customer relationship intangibles, net				156,028				167,444
Goodwill				767,612				767,612
Other assets				28,942				28,864
	Total assets	$	1,667,437			$	1,622,806

Current portion - long-term debt				$	2,087			$	2,216
Short-term operating lease liabilities				19,566				18,896
Accounts payable & accrued expenses				156,412				134,494
	Total current liabilities	178,065				155,606
Long-term debt				595,248				594,921
Deferred income taxes				50,151				52,935
Long-term operating lease liabilities				111,090				112,454
Other liabilities				11,363				6,352
	Total liabilities	945,917				922,268
Stockholders' equity				721,520				700,538
	Total liabilities & stockholders' equity	$	1,667,437			$	1,622,806


Condensed Consolidated Statements of Cash Flows
(Unaudited)
	Three Months Ended
	July 31
	2020			2019

Net cash provided by operating activities		$	40,000		$	62,612
Net cash used by investing activities		(7,836)			(5,580)
Net cash used by financing activities		(1,168)			(43,639)
Net increase in cash and cash equivalents		30,996			13,393
Cash and cash equivalents, beginning of period		97,059			57,656

Cash and cash equivalents, end of period		$	128,055		$	71,049

Management believes all of these non-GAAP financial measures provide an additional means of analyzing the current period’s results against the corresponding prior period’s results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability. Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company’s results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items. We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the acquisition of RSI Home Products, Inc. ("RSI acquisition") and the subsequent restructuring charges that the Company incurred related to the acquisition, (2) non-recurring restructuring charges, (3) the amortization of customer relationship intangibles and trademarks, (4) net gain on debt forgiveness and modification and (5) the tax benefit of RSI acquisition expenses and subsequent restructuring charges, the net gain on debt forgiveness and modification and the amortization of customer relationship intangibles and trademarks. The amortization of intangible assets is driven by the RSI acquisition and will recur in future periods. Management has determined that excluding amortization of intangible assets from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability and we have also received similar feedback from some of our investors.

We use Adjusted EBITDA and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability. We believe Adjusted EBITDA and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.

We define Adjusted EBITDA as net income adjusted to exclude (1) income tax expense, (2) interest expense, net, (3) depreciation and amortization expense, (4) amortization of customer relationship intangibles and trademarks, (5) expenses related to the RSI acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition, (6) non-recurring restructuring charges, (7) stock-based compensation expense, (8) gain/loss on asset disposals, (9) change in fair value of foreign exchange forward contracts and (10) net gain on debt forgiveness and modification. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.

To better understand trends in our business, we believe that it is helpful to subtract amounts for capital expenditures consisting of cash payments for property, plant and equipment and cash payments for investments in displays from cash flows from continuing operations which is how we define free cash flow. Management believes this measure gives investors an additional perspective on cash flow from operating activities in excess of amounts required for reinvestment. It also provides a measure of our ability to repay our debt obligations.


Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents

	Three Months Ended
	July 31
(in thousands)	2020			2019

Net income (GAAP)	$	16,485		$	26,881
Add back:
Income tax expense	5,970			9,457
Interest expense, net	6,030			8,088
Depreciation and amortization expense	12,959			11,863
Amortization of customer relationship intangibles and trademarks	12,250			12,250
EBITDA (Non-GAAP)	$	53,694		$	68,539
Add back:
Acquisition and restructuring related expenses (1)	60			41
Non-recurring restructuring charges (2)	3,460			—
Change in fair value of foreign exchange forward contracts (3)	(1,255)			56
Stock-based compensation expense	961			897
Loss on asset disposal	46			66
Adjusted EBITDA (Non-GAAP)	$	56,966		$	69,599

Net Sales	$	390,087		$	427,365
Adjusted EBITDA margin (Non-GAAP)	14.6		%	16.3		%

(2) Nonrecurring restructuring charges are comprised of expenses incurred related to the permanent layoffs due to COVID-19 and the closure of the manufacturing plant in Humboldt, Tennessee. The three months ended July 31, 2020 includes accelerated depreciation expense of $1.1 million related to Humboldt.

(3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other income in the operating results.


Reconciliation of Net Income to Adjusted Net Income

	Three Months Ended
	July 31
(in thousands, except share data)	2020		2019

Net income (GAAP)	$	16,485	$	26,881
Add back:
Acquisition and restructuring related expenses	60		41
Non-recurring restructuring charges	3,460		—
Amortization of customer relationship intangibles and trademarks	12,250		12,250
Tax benefit of add backs	(4,053)		(3,097)
Adjusted net income (Non-GAAP)	$	28,202	$	36,075

Weighted average diluted shares	17,013,444		16,907,463
Adjusted EPS per diluted share (Non-GAAP)	$	1.66	$	2.13


Net Leverage

	Twelve Months Ended
	July 31
(in thousands)	2020

Net income (GAAP)	$	64,465
Add back:
Income tax expense	22,200
Interest expense, net	26,968
Depreciation and amortization expense	50,610
Amortization of customer relationship intangibles and trademarks	49,000
EBITDA (Non-GAAP)	213,243
Add back:
Acquisition and restructuring related expenses (1)	52
Non-recurring restructuring charges (2)	3,649
Change in fair value of foreign exchange forward contracts (3)	(209)
Stock-based compensation expense	4,053
Loss on asset disposal	2,609
Adjusted EBITDA (Non-GAAP)	$	223,397

	As of
	July 31
	2020
Current maturities of long-term debt	$	2,087
Long-term debt, less current maturities	595,248
Total debt	597,335
Less: cash and cash equivalents	(128,055)
Net debt	$	469,280

Net leverage (4)	2.10



AMERICAN WOODMARK CORPORATION ANNOUNCES FIRST QUARTER RESULTS


Free Cash Flow

	Three Months Ended
	July 31
	2020		2019

Cash provided by operating activities	$	40,000	$	62,612
Less: Capital expenditures (1)	7,842		6,593
Free cash flow	$	32,158	$	56,019



P. O. Box 1980
Winchester, VA 22604-8090



Contact:			Kevin Dunnigan Treasury Director 540-665-9100