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Posted June 6, 2009 | Copyright © The Northern Virginia Daily
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Cabinet maker's cuts end in a loss
WINCHESTER — American Woodmark’s decision to close two plants and shutter a third wiped out its fourth-quarter earnings.
The cabinet maker reported a loss of $2.9 million, or 21 cents a share, for the three months ended April 30, after posting break-even results for the same quarter a year ago.
On March 31, American Woodmark announced it would be closing its Berryville plant, along with one of its production facilities in Moorefield, W.Va., by August. Its Talequah, Okla., plant will be idled until consumer demand for the company’s products improves.
Approximately 600 workers affected by the decision were offered severance packages based on their years of service with the company.
The compensation, together with write-offs of property, equipment and inventory at the three plants, cost American Woodmark a little more than $6 million in the fourth quarter. Excluding those one-time charges, the company posted earnings of $3.1 million, or 22 cents a share, which beat Wall Street’s expectations.
American Woodmark manufactures and distributes kitchen cabinets and vanities for the remodeling and new-home construction markets. Its cabinets are sold nationwide directly to home centers and major builders and through a network of independent distributors.
In a statement in March, President and CEO Kent Guichard said the company is focused long-term on maintaining a strong financial position in the midst of difficult market conditions.
Sales were off 2 percent in the fourth quarter compared to the same quarter a year ago. The company saw an increase in remodeling sales due to certain retail promotional incentives, but new construction sales remain weak, it said.
For all of fiscal 2009, American Woodmark reported a loss of $3.2 million, or 23 cents a share, on a 9 percent drop in sales. In fiscal 2008, the company turned a profit of $4.3 million, or 29 cents a share, on sales of $602.4 million.
Shares of American Woodmark (Nasdaq: AMWD) closed at $22.58 Friday, up $2.99.
— Daily Staff Report
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