Cabinet maker swings into red

Woodmark posts $6.4 million loss

By James Heffernan -- jheffernan@nvdaily.com

WINCHESTER -- Cabinet maker American Woodmark posted a $6.4 million loss for its fiscal first quarter ended July 31, citing weak sales and restructuring charges from the closing of two of its plants and the idling of a third facility earlier this year.

The company's net sales for the quarter declined 28 percent compared with the first quarter of the prior fiscal year to $100.8 million. Sales were down more than 20 percent in both the remodeling and new construction markets.

In a conference call with investors Tuesday morning, Chief Financial Officer Jonathan Wolk said both markets continue to suffer under the umbrella of soft home sales, wavering consumer confidence, high unemployment and tight lending.

The recent closing of American Woodmark's plants in Berryville and Moorefield, W.Va., along with the suspension of operations in Talequah, Okla., and a reduction of salaried personnel contributed about $1.6 million to the company's first-quarter loss. Approximately 600 workers affected by the decision were offered severance packages.

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 previous quarter.

In a statement, President and CEO Kent Guichard called the first-quarter results disappointing, but in line with the company's expectations given the difficult market conditions facing the industry.

"Our Company had been somewhat insulated against these difficult conditions in our two previous quarters by a favorable retail promotional environment, but that impact ended during the fourth quarter of our last fiscal year," Guichard said.

Shares of American Woodmark (Nasdaq: AMWD) closed at $23.24 Tuesday, down $1.04.