AMERICAN WOODMARK CORP Q3 FY2024 earnings call

• Growth pillars: Launch of low-skew, high-value offering in Home Center targeting pros and new brand 1951 Cabinetry; made-to-order business summer launch with new styles. - Digital transformation: Go-live of ERP and Monterrey, WMS in Hamlet, NC, and website enhancements for Home Center. - Platform design: First shipments from Monterrey, Mexico and Hamlet, NC; continuing equipment installations, training, and hiring to support ramp plan.

Net sales were $422.1 million, a decline of 12.2% vs prior year. New Construction net sales declined 11% vs prior year. Remodel (including Home Center and Independent Dealer and Distributor) revenue declined 13.1% vs prior year, with Home Center down 14.1% and Dealer and Distributor down 10.3%. Adjusted EBITDA decreased 0.7% to $50.6 million, with adjusted EBITDA margin increasing 140 basis points to 12% for the quarter. New Construction contributed a portion of the net sales, and Remodel segments had their respective declines in revenue.

• Net sales: Expect low double-digit decline in fiscal year 2024, with high single-digit decline in Q4. - Adjusted EBITDA: Increased and narrowed to range of $247 million to $253 million for full fiscal year 2024. - Startup costs: Approximately $8 million to $9 million in full fiscal year 2024, more than half in Q4.

• Factors like industry, economic growth, material constraints, labor impacts, interest rates, consumer behaviors can affect performance. - Startup and ramp costs for new facilities in Hamlet, NC and Monterrey, Mexico may impact results if not fully utilized.

Q: Garik Shmois asked about Remodel details, product mix, and market view.

A: Scott Culbreth responded on Remodel performance, product mix being favorable, and market view with New Construction expected to grow mid-single and Remodel down low to mid-single.

Q: Steven Ramsey asked about adaptability of new facilities, Repair & Remodel signals, margin outlook.

A: Scott Culbreth and Paul Joachimczyk responded on adaptability of operations, looking at external factors for Remodel, and margin outlook including year-to-date performance.

Q: Tim Wojs asked about 1951 brand, startup costs, mix.

A: Scott Culbreth responded on 1951 brand strategy, startup costs not a tail but fixed costs, and portfolio being at value price points benefiting from market shift.

Q: Collin Verron asked about R&R market, unit costs, price mix.

A: Scott Culbreth responded on R&R market indicators, unit costs including input costs and labor, and pricing not volume-driven but considering deflation and promotional activity.