WINCHESTER, Va., April 16, 2020 /PRNewswire/ -- American Woodmark
Corporation (NASDAQ: AMWD) (the "Company"), a leading supplier of
cabinetry to the new construction and remodeling industries,
announced today that operations at its component plants in
Mexico have been suspended through
April 30, 2020. These plants
manufacture important components used by certain of our US
manufacturing plants largely for our home center and builder
channel and to a lesser extent our independent dealer and
distributor channel. The Company is seeking to get these
orders lifted by having the plants identified as essential to
operate by the Mexican government. Cabinet manufacturing was
identified as essential to the critical infrastructure within the
U.S. by the Cybersecurity and Infrastructure Security Agency.
As a critical supplier to the Company's U.S. operations, we are
working with the Mexican government to achieve a similar
identification for our plants in Mexico. As a contingency,
the Company is evaluating all options, including shifting some
production to its other plants, but expects at least some delays to
impact its supply chain, especially if the suspension is extended
past April 30, 2020.
All other Company manufacturing plants remain open and
operational. "The safety and well-being of our teams has been
our number one priority from day one," stated Cary Dunston, Chairman and CEO. "Since
early March we have aggressively and proactively worked to create
an environment that is safe and mitigates the risk of exposure to
the COVID-19 virus by meeting or exceeding the recommendations and
guidelines provided by the U.S. Centers for Disease Control and
Prevention ("CDC"), as well as local and state health
departments. Our locations have enhanced cleaning processes,
established health screening procedures, added remote working
options where possible, modified work centers and material flows
with established social distancing practices, and prohibited all
non-critical visitors to any site."
Increasing Financial Flexibility
American Woodmark has taken proactive steps to further enhance
our financial flexibility, liquidity and cash flow, including:
- A 50% reduction in the base salary of the CEO and 25% reduction
in the base salary of senior vice-presidents effective April 27, 2020 through July 31, 2020
- Deferring any earned fiscal year 2020 short term incentive
payments to the CEO and senior vice-presidents for six
months
- Delaying capital expenditures that do not impact near-term
initiatives
- Suspending any current activities under its stock repurchase
program
- Deferring or limiting non-essential operating expenses
- Deferring 401-k matches until the end of the calendar year
- Freezing hiring and taking other cost actions to protect
existing jobs
- Adding 4-5 weeks to lead times for impacted customers
The Company currently has approximately $80 million of cash on hand with no term loan
debt maturities until December 2022.
This is an increase in cash on hand from the approximately
$47 million the Company had as of
January 31, 2020 (end of third
quarter of fiscal 2020). We believe our current cash balance
plus access to an estimated $94
million of additional availability under our revolver
provides the financial flexibility to operate our business with a
continued focus on safety.
Withdraws Fiscal 2020 Outlook
Due to the evolving macro-economic uncertainty in the current
remodeling and homebuilding environment, we are withdrawing our
previous fiscal year 2020 outlook, which did not contemplate the
impacts of COVID-19, and not providing an update at this time.
Management will provide a business update as part of its
fourth quarter of fiscal 2020 and full year fiscal 2020 earnings
results, currently scheduled for May 26,
2020.
Management Comment
Chairman and CEO Cary Dunston
remarked, "I am extremely proud of how all of our teammates have
responded in this difficult time. Although near-term demand
will be volatile given the macro impact of the economy, we remain
confident in the longer-term view of our industry and our ability
to quickly recover as the economy reopens."
About American Woodmark
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
January 31, 2020, the Company
operated eighteen manufacturing facilities in the United States and Mexico and eight primary service centers
located throughout the United
States.
Safe harbor statement under the Private Securities Litigation
Reform Act of 1995: All forward-looking statements made by the
Company involve material risks and uncertainties and are subject to
change based on factors that may be beyond the 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.
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SOURCE American Woodmark Corporation