American Woodmark : 2023 Annual Report

Annual

Report

2023

At American Woodmark, we do more than make cabinets. We champion your unique style. We inspire fresh designs and bold possibilities, and celebrate the perfect union of creativity, reliable function, and value.

At our core is a shared goal - a commitment to help customers build beautiful, comfortable spaces that reflect their idea of home. With our portfolio of brands, we can meet your ambition and bring your vision to life.

Our purpose may seem simple, but the rewards it brings are immeasurable. We're over 10,000 strong, with a proud heritage, a thriving culture, and sustainable growth. Our employees are like family to us, and our products bring joy and peace of mind to homes across the country.

American Woodmark stands for more than making cabinets - we make brighter futures.

Creating Value Through People

Our CITE principles help create the culture that sets us apart.

Customer Satisfaction Provide the best quality, service, and value to the greatest number of people by doing whatever is reasonable and sometimes unreasonable.

Integrity Do what is right: act fairly and responsibly, care about the dignity of each person and be a good citizen in the community.

Teamwork Understand that we must all work together in order to succeed. Realize that each person must contribute to the team to be a part of the team.

Excellence Strive to perform every job or action in a superior way. Be innovative, always helping others become the best they can be.

Dear Fellow Shareholders,

Our commitment in fiscal 2023 was to improve profitability and our team delivered. Net Sales grew 11.3% to $2,066 million and Adjusted EBITDA grew 74.2% to $240 million. The improvement in performance is due to pricing better matching inflationary impacts, mix and improved efficiencies in the manufacturing platforms. Stability in our labor and supply chain enabled higher platform efficiencies and our teams continue to drive excellence throughout the business.

We remain committed to executing our strategy in fiscal year 2024 which is built on three pillars - Growth, Digital Transformation and Platform Design or "GDP". We are delivering the strategy by leveraging American Woodmark's culture and connection with our employees, customers, suppliers, and communities.

Growth for our business will be realized via product and channel expansion as we continue to evolve our offerings to meet customer needs while ensuring we maintain a relevant and lean product line.

Our upcoming summer launch, the expansion of brands and availability of existing product into additional channels will help enable our Growth. Despite a near-term slowdown in demand we believe a 4-5% CAGR in net sales is an appropriate long-term target and that we will grow Adjusted EBITDA to over $350 million in fiscal 2028. The tailwinds from demographic shifts and undersupplied housing support higher levels of future residential investment in new construction while remodel will benefit with the median age of a U.S. home at approximately 40 years old, up from a median age of 31 years in 2005.

Digital Transformation will bring our company together driving efficiency gains across the enterprise via an ERP cloud solution provider and customer relationship management ("CRM") tool. Our teams are working through the global design phase for ERP and we will be piloting the use of the ERP when our newest location in Monterrey, Mexico goes live later this calendar year. Our CRM tool goes live this summer across all channels. We continue to invest in our online capabilities driving traffic and conversion through our remodel partners.

Platform Design includes our overall manufacturing and distribution footprint, operational excellence and automation efforts with an emphasis to improve margins and positively impact our customer's overall experience. As previously announced, we are investing in our stock kitchen and bath business by adding a facility in Monterrey, Mexico and expanding our operations in Hamlet, NC. Both locations will go live in late fiscal 2024. Automation efforts will continue, we have targeted $75 million in spending over the next five years with near term projects focused on material handling, loading, unloading, inspection, and process automation.

Our commitment to ESG continues and our teams made several new disclosures available on our website that highlights our path to sustainability, environmental management system, sources of electricity, energy efficiency investments, conflict minerals policy and climate risks and opportunities. These efforts will enhance our commitment to employees, communities, and key stakeholders.

In addition, the American Woodmark Foundation made over 240 grants totaling over $400,000 in the prior fiscal year and continues to do impactful work supporting the communities where we live and work.

In closing, I would like to thank each and every one of our teammates for their commitment and dedication to the success of our business. On behalf of our Chair, the Board of Directors, the leadership team, and the entire Company, we thank you for your continued support.

M. Scott Culbreth President & Chief Executive Officer

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

• ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended April 30, 2023

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: 000-14798
American Woodmark Corporation
(Exact name of registrant as specified in its charter)
Virginia	54-1138147
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
561 Shady Elm Road, Winchester, Virginia	22602
(Address of principal executive offices)			(Zip Code)
[phone]
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AMWD	NASDAQ

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange

Act. ☐

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to Section 240.10D-1(b).☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).

Yes ☐ No ☒

The aggregate market value of the registrant's Common Stock, no par value, held by non-affiliates of the registrant as of October 31, 2022, the last business day of the Company's most recent second quarter was $745,881,155.

As of June 20, 2023, 16,376,579 shares of the Registrant's Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August 24, 2023 ("Proxy Statement") are incorporated by reference into Part III of this Form 10-K.