-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, HC7bYJmZl9hfHQ7a9VhhuTphWNf/tNk1ThtSRj5Fgu4+AsFRBmfjPMHQrBQyTgFA QVcDEveTBzmJd7rN7QV4sA== 0000794619-97-000018.txt : 19970912 0000794619-97-000018.hdr.sgml : 19970912 ACCESSION NUMBER: 0000794619-97-000018 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970731 FILED AS OF DATE: 19970908 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN WOODMARK CORP CENTRAL INDEX KEY: 0000794619 STANDARD INDUSTRIAL CLASSIFICATION: MILLWOOD, VENEER, PLYWOOD & STRUCTURAL WOOD MEMBERS [2430] IRS NUMBER: 541138147 STATE OF INCORPORATION: VA FISCAL YEAR END: 0430 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-14798 FILM NUMBER: 97676824 BUSINESS ADDRESS: STREET 1: 3102 SHAWNEE DR CITY: WINCHESTER STATE: VA ZIP: 22601 BUSINESS PHONE: 5406659100 MAIL ADDRESS: STREET 1: PO BOX 1980 CITY: WINCHESTER STATE: VA ZIP: 22604-8090 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1997 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________ to _______ Commission file number 0-14798 American Woodmark Corporation (Exact name of registrant as specified in its charter) Virginia 54-1138147 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3102 Shawnee Drive, Winchester, Virginia 22601 (Address of principal executive offices) (Zip Code) (540) 665-9100 (Registrant's telephone number, including area code) Not Applicable (Former name, former address and former fiscal year, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes (X) No Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. Common Stock, no par value 7,743,788 shares outstanding Class as of September 4, 1997 AMERICAN WOODMARK CORPORATION FORM 10-Q INDEX PAGE PART I. FINANCIAL INFORMATION NUMBER Item 1. Financial Statements Balance Sheets--July 31, 1997 and April 30, 1997 3 Statements of Income--Three months ended July 31, 1997 and 1996 4 Statements of Cash Flows--Three months ended July 31, 1997 and 1996 5 Notes to Financial Statements--July 31, 1997 6-8 Item 2. Management's Discussion and Analysis 9-11 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders 12 Item 6. Exhibits and Reports on Form 8-K 12-13 SIGNATURE 14 2 PART I. FINANCIAL INFORMATION AMERICAN WOODMARK CORPORATION BALANCE SHEETS (in thousands, except share data) July 31 April 30 1997 1997 ----------- --------- ASSETS (Unaudited) (Audited) Current Assets Cash and cash equivalents $20,952 $17,339 Customer receivables 21,595 20,488 Inventories 10,841 10,356 Prepaid expenses and other 711 940 Deferred income taxes 956 720 -------- -------- Total Current Assets 55,055 49,843 Property, Plant and Equipment 32,694 32,252 Deferred Costs and Other Assets 4,491 4,335 Intangible Pension Assets 727 727 -------- -------- $92,967 $87,157 ======== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable $ 9,900 $ 9,312 Accrued compensation and related expenses 10,182 11,180 Current maturities of long-term debt 2,101 2,229 Other accrued expenses 7,414 3,680 ------- -------- Total Current Liabilities 29,597 26,401 Long-Term Debt, less current maturities 10,505 10,637 Deferred Income Taxes 2,539 2,328 Long-Term Pension Liabilities 1,493 1,493 Commitments and Contingencies -- -- Stockholders' Equity Preferred Stock, $1.00 par value; 2,000,000 shares authorized, none issued Common Stock, no par value; 20,000,000 shares authorized; issued and outstanding 7,740,789 shares at July 31, 1997; 7,722,656 shares at April 30, 1997 18,112 18,043 Retained earnings 30,721 28,255 -------- ------- Total Stockholders' Equity 48,833 46,298 -------- ------- $92,967 $87,157 ======== ======= See notes to financial statements 3 AMERICAN WOODMARK CORPORATION STATEMENTS OF INCOME (in thousands, except share data) (Unaudited) Quarter Ended July 31 1997 1996 ------- ------- Net sales $55,970 $53,362 Cost of sales and distribution 39,639 39,810 ------- ------- Gross Profit 16,331 13,552 Selling and marketing expenses 8,656 6,688 General and administrative expenses 3,406 3,443 ------- ------- Operating Income 4,269 3,421 Interest expense 224 199 Other income (210) (125) ------- ------- Income Before Income Taxes 4,255 3,347 Provision for income taxes 1,634 1,247 ------- ------- Net Income $ 2,621 $2,100 ======= ======= Earnings Per Share Average shares outstanding 7,730,318 7,627,179 Net income per share $0.34 $0.28 ========= ========= Cash dividends per share $0.02 -- ========= ========= See notes to financial statements 4 AMERICAN WOODMARK CORPORATION STATEMENTS OF CASH FLOWS (in thousands) (Unaudited) Quarter Ended July 31 1997 1996 Operating Activities ------- ------ Net income $ 2,621 $2,100 Adjustments to reconcile net income to net cash provided by operating activities: Provision for depreciation and amortization 1,902 1,911 Net (gain) loss on disposal of property, plant and equipment (3) 1 Deferred income taxes (25) (190) Other non-cash items 90 908 Changes in operating assets and liabilities: Customer receivables (1,195) 113 Inventories (520) 87 Other assets (808) (690) Accounts payable 588 551 Accrued compensation and related expenses (998) (78) Other 3,996 (662) ----- ----- Net Cash Provided by Operating Activities 5,648 4,051 ----- ----- Investing Activities Payments to acquire property, plant and equipment (1,702) (748) Proceeds from sales of property, plant and equipment 13 5 ----- ----- Net Cash Used by Investing Activities (1,689) (743) ----- ----- Financing Activities Payments of long-term debt (260) (261) Proceeds from the issuance of Common Stock 69 79 Payment of dividends (155) -- ------ ------ Net Cash Used by Financing Activities (346) (182) ------ ------ Increase In Cash And Cash Equivalents 3,613 3,126 Cash And Cash Equivalents, Beginning Of Period 17,339 7,201 ------ ------ Cash And Cash Equivalents, End Of Period $20,952 $10,327 ====== ====== See notes to financial statements 5 AMERICAN WOODMARK CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three-month period ended July 31, 1997 are not necessarily indicative of the results that may be expected for the year ended April 30, 1998. The unaudited financial statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended April 30, 1997. Certain fiscal 1997 amounts have been reclassified to conform to fiscal 1998 presentation. NOTE B--NEW ACCOUNTING PRONOUNCEMENTS In February 1997, FASB issued SFAS No. 128, "Earnings per Share," which the company will be required to adopt for the fiscal quarter ending January 31, 1998. At that time, the Company will be required to change the method currently used to compute earnings per share and to restate all prior periods. Under the new requirements for calculating basic earnings per share, the dilutive effect of common stock equivalents will be excluded. The Company does not expect the adoption of SFAS No. 128 to have a material impact on the determination of earnings per share. In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive Income," which the Company will be required to adopt for the fiscal quarter ending July 31, 1998. SFAS No. 130 establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income generally represents all changes in shareholders' equity except those resulting from investments by or distributions to shareholders. The Company does not expect the adoption of SFAS No. 130 to have a material impact on the financial statements. NOTE C--EARNINGS PER SHARE Earnings per share are based on the weighted average common shares outstanding. The dilutive effect of stock options on earnings per share is not significant and has been excluded for all periods presented. 6 NOTE D--CUSTOMER RECEIVABLES The components of customer receivables were: July 31 April 30 (in thousands) 1997 1997 ------ ------ Gross customer receivables $23,069 $21,869 Less: Allowance for bad debt (215) (210) Allowance for returns and discounts (1,259) (1,171) ------ ------ Net customer receivables $21,595 $20,488 NOTE E--INVENTORIES The components of inventories were: July 31 April 30 (in thousands) 1997 1997 ----- ----- Raw materials $ 6,067 $ 6,270 Work-in-process 10,830 9,684 Finished goods 1,493 1,115 ------ ------ Total FIFO inventories $18,390 $17,069 Reserve to adjust inventories to LIFO value (7,549) (6,713) ------ ------ Total LIFO inventories $10,841 $10,356 An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. Since they are subject to many forces beyond management's control, interim results are subject to the final year-end LIFO inventory valuation. NOTE F--CASH FLOW Supplemental disclosures of cash flow information: Three Months Ended July 31 ------------------ (in thousands) 1997 1996 Cash paid during the period for: ------- -------- Interest $ 165 $ 193 Income taxes $ 77 $ 1,145 7 NOTE G--OTHER INFORMATION The Company is involved in various suits and claims in the normal course of business. Included therein are claims against the Company pending before the Equal Employment Opportunity Commission. Although management believes that such claims are without merit and intends to vigorously contest them, the ultimate outcome of these matters cannot be determined at this time. In the opinion of management, after consultation with counsel, the ultimate liabilities and losses, if any, that may result from suits and claims involving the Company will not have a material adverse effect on the Company's results of operations or financial position. The Company is voluntarily participating with a group of companies which is cleaning up a waste facility site at the direction of a state environmental authority. The Company records liabilities for all probable and reasonably estimable loss contingencies on an undiscounted basis. For loss contingencies related to environmental matters, liabilities are based on the Company's proportional share of the contamination obligation of a site since management believes it probable that the other parties, which are financially solvent, will fulfill their proportional contamination obligations. There are no probable insurance or other indemnification receivables recorded. The Company has accrued for all known environmental remediation costs which are probable and can be reasonably estimated, and such amounts are not material. Due to factors such as the continuing evolution of environmental laws and regulatory requirements, technological changes, and the allocation of costs among potentially responsible parties, estimation of future remediation costs is necessarily imprecise. It is possible that the ultimate cost, which cannot be determined at this time, could exceed the Company's recorded liability. As a result, charges to income for environmental liabilities could have a material effect on results of operations in a particular quarter or year as assessments and remediation efforts proceed. However, management is not aware of any matters which would be expected to have a material adverse effect on the Company's results of operations or financial position. 8 MANAGEMENT'S DISCUSSION AND ANALYSIS THREE MONTHS ENDED JULY 31, 1997 AND 1996 RESULTS OF OPERATIONS Net sales for the first quarter of fiscal 1998 were $55.9 million, an increase of 4.9% over the prior year. Sales increased as a result of higher unit volume with key home center accounts. Current year average unit prices rose due to a general price increase implemented during the third quarter of the prior fiscal year and sales in the current year of a richer product mix. Gross Margin increased to 29.2% in the first quarter of fiscal 1998 from 25.4% in the first quarter of the prior year. The increase was primarily attributable to improved labor productivity, the impact of favorable leverage with higher volume on fixed and semi- fixed costs and better material utilization. An increase in material cost per unit resulting from increased lumber prices was partially offset by a decrease in particleboard prices and improved material utilization. Continued increases in labor productivity more than offset normal rate increases and higher incentive pay expenses. General and administrative expenses remained flat compared to the prior year as increases in expenses associated with the Company's performance incentive program were offset by a reduction in bad debt expense. Sales and marketing expenses rose $1.9 million compared to the first quarter of the prior fiscal year. The increase was primarily attributed to increased promotional costs. LIQUIDITY AND CAPITAL RESOURCES The Company's operating activities generated $5.6 million in net cash in the first quarter of fiscal 1998 compared to $4.1 million net cash generated the same period of the prior fiscal year. Increased profits and an increase in other operating liabilities relating to accrued promotional costs and income taxes payable were the primary contributors to the current period increase in cash. Partially offsetting this increase in cash was an increase in customer receivables of $1.2 million during the current period. Capital spending in the first quarter of fiscal 1998 increased $954,000 over the prior year to $1.7 million as the Company continued its capital spending program designed to lower overall cost and improve the Company's competitive position. The capital spending in the current period was primarily attributable to the expansion of the Jackson, Georgia facility to increase production capacity. 9 Net cash used by financing activities increased $164,000 over the prior year to $346,000, primarily due to the payment of cash dividends in the current period. Long-term debt to total equity declined from 23.0% at April 30, 1997 to 21.5% at July 31, 1997. There were no borrowings against the Company's short-term revolving credit facility during the period. Cash flow from operations, combined with available borrowing capacity, is expected to be sufficient to meet forecasted working capital requirements, service existing debt obligations and fund capital expenditures for the remainder of fiscal 1998. OTHER On August 27, 1997 the Company's Stockholders elected Fred S. Grunewald, President and Chief Operating Officer of Overhead Door Corporation, to the Board of Directors. On August 27, 1997 the Board of Directors approved a $.03 per share cash dividend on its Common Stock. The cash dividend will be paid on October 1, 1997 to shareholders of record on September 17, 1997. The Company is involved in various suits and claims in the normal course of business. Included therein are claims against the Company pending before the Equal Employment Opportunity Commission. Although management believes that such claims are without merit and intends to vigorously contest them, the ultimate outcome of these matters cannot be determined at this time. In the opinion of management, after consultation with counsel, the ultimate liabilities and losses, if any, that may result from suits and claims involving the Company will not have any material adverse effect on the Company's operating results or financial position. The Company is voluntarily participating with a group of companies which is cleaning up a waste facility site at the direction of a state environmental authority. The Company records liabilities for all probable and reasonably estimable loss contingencies on an undiscounted basis. For loss contingencies related to environmental matter, liabilities are based on the Company's proportional contamination of a site since management believes it "probable" that the other parties, which are financially solvent, will fulfill their proportional share of the contamination obligation of a site. There are no probable insurance or other indemnification receivables recorded. The Company has accrued for all known environmental remediation costs which are probable and can be reasonably estimated, and such amounts are not material. The Company anticipates continued underlying strength in the domestic economy through the remainder of fiscal 1998. Under normal conditions, this strength would result in the continued growth and expansion of the relevant markets for the Company. The Company also expects, however, that there is a significant 10 likelihood that either anticipated or actual increases in interest rates will dampen this growth. The adverse impact of higher interest rates on the new housing and remodeling sectors could result in periods of low growth in the Company's primary markets and overall growth for the remainder of fiscal 1998 that is below the rate experienced during fiscal 1997. In this environment, the Company expects to continue to gain market share based on its position with major customers, its broad stock product offering and its ability to deliver quality products with superior service. During a period of growth in the housing and remodeling sectors, the Company expects to continue to generate higher sales. The Company expects to further enhance sales growth during the second half of fiscal 1998 through the addition of new products and new markets. The Company expects to maintain or increase recent profitability performance while investing resources in future products, facilities and markets. Additional volume and improved efficiencies should be sufficient to offset the anticipated rise in other costs. The Company currently maintains sufficient overall capacity to meet projected growth. Identified capital projects include expansion to remove specific capacity limitations in certain processes, productivity improvements, cost savings initiatives and replacement of aging equipment. The Company is also considering investment opportunities to increase the Company's business base, to acquire new products, and to gain access to new markets. The Company establishes debt to equity targets in order to maintain the financial health of the Company and is prepared to trim investment plans to maintain financial strength. While the Company is not currently aware of any events that would result in a material decline in earnings from fiscal 1997, we participate in an industry that is subject to rapidly changing conditions. The preceding forward looking statements are based on current expectations, but there are numerous factors that could cause the Company to experience a decline in sales and/or earnings including (1) overall industry demand at reduced levels, (2) economic weakness in a specific channel of distribution, especially the home center industry, (3) the loss of sales from specific customers due to their loss of market share, bankruptcy or switching to a competitor, (4) a sudden and significant rise in basic raw material costs, (5) the need to respond to price or product initiatives launched by a competitor, and (6) a significant investment which provides a substantial opportunity to increase long-term performance. While the Company believes that these risks are manageable and will not adversely impact the long-term performance of the Company, these risks could, under certain circumstances, have a materially adverse impact on short-term operating results. 11 PART II. OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders At the Annual Meeting of Shareholders of American Woodmark Corporation held on August 27, 1997, the holders of 7,596,410 of the total 7,737,089 shares of Common Stock outstanding and eligible to vote duly executed and delivered valid proxies. The shareholders approved the two items outlined within the Company's Proxy Statement that was solicited to shareholders and reported to the Commission pursuant to Regulation 14A under the Act. The following items were approved at the Company's Annual Meeting: Negative/ Affirmative Withheld Abstentions/ Votes Votes Non-Votes ----------- -------- ----------- 1. Election of the 7,585,205 18,105 -- Board of Directors. 7,578,305 11,205 -- 2. Ratification of 7,590,829 4,286 1,295 Selection of Independent Certified Public Accountants. As the members of the Board of Directors were elected individually, the aforementioned tallies pertaining to re-election represent a range of affirmative and negative votes. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits 11--Earnings Per Share Computation Page 13 (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the three months ended July 31, 1997. 12 AMERICAN WOODMARK CORPORATION Exhibit 11 Computation of Earnings per Share (in thousands, except per share amounts) Quarter Ended July 31 1997 1996 ----- ----- Net income $2,621 $2,100 Divided by weighted average common shares outstanding 7,730 7,627 ----- ----- Earnings per share $ 0.34 $ 0.28 ====== ====== 13 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. AMERICAN WOODMARK CORPORATION (Registrant) Date: September 8, 1997 /s/ Kent B. Guichard Kent B. Guichard Vice President, Finance and Chief Financial Officer Signing on behalf of the registrant and as principal financial officer 14 EX-27 2
5 1,000 3-MOS APR-30-1998 JUL-31-1997 20,952 0 23,069 1,474 10,841 55,055 76,934 44,240 92,967 29,597 10,505 0 0 18,112 30,721 92,967 55,970 55,970 39,639 39,639 0 0 224 4,255 1,634 2,621 0 0 0 2,621 0.34 0.34
-----END PRIVACY-ENHANCED MESSAGE-----