AMERICAN WOODMARK CORP Q1 FY2024 earnings call

• Net sales: $498.3 million, down 8.2% y-o-y. New construction down 6.4%, remodel down 9.5% (home center down 12.8%, dealer/distributor up 0.1%). - Adjusted EBITDA increased 33% to $75.2 million (15.1% of net sales). - Digital transformation: CRM tool went live in August for remodel channel, to go live in September for new construction; global design workshops for ERP concluded. - Platform design: Over 70% of wall panels installed in Monterrey, Mexico; all wall panels installed in Hamlet, NC; expect both sites on roof in 60 days. - Capital allocation: Focus on plant expansions, digital transformation, automation, share repurchasing, and deprioritizing net debt paydown.

Net sales for the first quarter of fiscal year 2024 were $498.3 million, a decline of 8.2% vs prior year. New construction net sales declined 6.4% vs prior year. Remodel (including home center and independent dealer/distributor) revenue declined 9.5% vs prior year, with home center down 12.8% and dealer/distributor up 0.1%. Gross profit margin improved to 22% of net sales (vs 16% last year) due to pricing, inflation matching, operational improvements, and supply chain stability, offset by a $4.9 million tariff charge.

• Net sales: Expect low double-digit decline vs fiscal year 2023. - Adjusted EBITDA: Expectation increased to $225 million to $245 million from prior outlook. - New facilities cost: ~$8.1 million impact in full fiscal year 2024 due to ramp-up and start-up costs of Monterrey, Mexico and Hamlet, NC expansions.

• Material risks and uncertainties from factors including industry seasonality, supply chain disruptions, tariffs, labor shortages, interest rate fluctuations, and consumer behavior changes.

Q: Julio Romero on repair and remodel, smaller projects, in-store traffic.

A: Scott Culbreth on sales decline expectations in both channels, traffic slowing and smaller jobs impacting home center performance.

Q: Adam Baumgarten on input costs, promo activity.

A: Scott Culbreth on inflation relief in hardwood lumber, but upward pressure on plywood, paint, hardware; promo activity below historic norm in remodel channel.

Q: Steven Ramsey on gross margin drivers, new facilities cost.

A: Paul Joachimczyk on pricing, operational efficiencies, supply chain stability driving gross margin; Scott Culbreth on new facilities cost as ramp-up/start-up impact with expectation of better utilization going forward.

Q: Collin Verron on EBITDA margin guide, margin drivers, home center inventory.

A: Scott Culbreth on first quarter outperformance, pricing and factory operations driving margin improvement; Scott Culbreth on home center inventory with opportunity for in-store inventory increases.

Q: Tim Wojs on builder business differences, lead times.

A: Scott Culbreth on builder differences by region, lead times not back to historic norms due to labor challenges and weather disruptions.