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Posted June 6, 2013 | comments Leave a comment

American Woodmark posts gain, rebounds from last year's losses

By Ryan Cornell

Winchester-based cabinet maker American Woodmark Corporation (NASDAQ: AMWD) posted a net income of $5.2 million for its fiscal fourth quarter that ended April 30.

A year ago the company reported a quarterly net income loss of $6 million with revenue poised at $136.2 million. Since then, gross profits and stock prices have more than doubled and sales have risen by 26 percent to increase the quarterly revenue to $171.1 million. This is its first profitable year since 2009.

The third largest manufacturer of kitchen and bath cabinets in the U.S., American Woodmark sells its products for newly constructed and remodeled houses to The Home Depot, Lowe's and major builders - builders, who company chief financial officer Jon Wolk said have plenty of work cut out for them as the housing market improves.

"There's a cycle in housing," Wolk said. "For about three of four years now, the economy in total has produced far less housing starts than families being created in the U.S. So during that time, people either rented or they bought distressed or existing homes.

"But it finally got to the point where households are growing, jobs are being created and there's just not enough listed for sale in existing homes. The desirable distressed homes have been snapped up. So builders are building and people are buying because there's demand and there's not very much supply."

A reflection of that demand, new construction sales have grown by 44 percent. Phoenix and Central Florida, where the housing market is hotter than the temperatures, are two areas with a concoction of low-inventory listings, an influx of homeowners and new houses being constructed and sold. Wolk said they have especially contributed to American Woodmark's gain in market share.

The Investor's Business Daily reported that other construction supply stocks have reached multiyear highs, including cabinet makers Masco and Fortune Brands, which saw their earnings nearly double and profits triple, respectively.

Contact staff writer Ryan Cornell at 540-465-5137 ext. 164, or rcornell@nvdaily.com


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