NASDAQ:AMWD American Woodmark Q4 2024 Earnings Report $59.61 -0.88 (-1.45%) Closing price 04:00 PM EasternExtended Trading$59.64 +0.03 (+0.05%) As of 04:20 PM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast American Woodmark EPS ResultsActual EPS$1.70Consensus EPS $1.75Beat/MissMissed by -$0.05One Year Ago EPSN/AAmerican Woodmark Revenue ResultsActual Revenue$453.28 millionExpected Revenue$437.80 millionBeat/MissBeat by +$15.48 millionYoY Revenue GrowthN/AAmerican Woodmark Announcement DetailsQuarterQ4 2024Date5/23/2024TimeN/AConference Call DateThursday, May 23, 2024Conference Call Time4:30PM ETUpcoming EarningsAmerican Woodmark's Q4 2025 earnings is scheduled for Thursday, May 22, 2025, with a conference call scheduled on Tuesday, May 20, 2025 at 7:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Conference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Annual Report (10-K)Earnings HistoryCompany ProfilePowered by American Woodmark Q4 2024 Earnings Call TranscriptProvided by QuartrMay 23, 2024 ShareLink copied to clipboard.There are 7 speakers on the call. Operator00:00:00Good day, and welcome to the American Woodmark Corporation 4th Fiscal Quarter 2024 Conference Call. Today's call is being recorded, May 23, 2024. During this call, the company may discuss certain non GAAP financial measures included in our earnings release such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net leverage and adjusted EPS per diluted share. The earnings release, which can be found on our website, americanwoodmark.com, includes definitions of each of these non GAAP financial measures, the company's rationale for their usage and a reconciliation of these non GAAP financial measures to the most comparable GAAP financial measures. We also use our website to publish other information that may be important to investors such as investor presentations. Operator00:00:56We will begin the call by reading the company's Safe Harbor 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 and the Annual Report to shareholders. The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Operator00:01:52I would now like to turn the call over to Paul Johimchak, Senior Vice President and CFO. Please go ahead, sir. Speaker 100:02:00Good afternoon, and welcome to American Woodmark's 4th fiscal quarter conference call. Thank you for taking the time today to participate. Joining me is Scott Culbreth, President and CEO. Scott will begin with a review of the quarter and I will add additional details regarding our financial performance. After our comments, we'll be happy to answer your questions. Speaker 100:02:22Scott? Speaker 200:02:23Thank you, Paul, and thanks to everyone for joining us today for our 4th fiscal quarter earnings call. Our teams delivered net sales of $453,300,000 representing a decline of 5.8% versus the prior year. This was better than the range provided during last quarter's call. Within new construction, our net sales declined 1.5% versus prior year. We continue to see improving demand with our customers consistent with year over year growth in single family housing starts. Speaker 200:02:53We remain strategically aligned with 19 of the top 20 national builders, key regional builders with our best in class direct service model, we plan to continue to grow our share with new and existing customers and benefit from the share gains our partners are realizing in the marketplace. We see momentum in all markets as builders' confidence is increasing and their strategy to buy down rates is driving demand. Looking at remodel, which includes our home center and independent dealer and distributor businesses, revenue declined 8.6% versus the prior year. Within this, our home center business was down 10% versus the prior year. Demand trends remain under pressure due to lower in store traffic rates and consumers choosing smaller sized projects. Speaker 200:03:40With regards to our dealer distributor business, we were down 5% versus the prior year. Our adjusted EBITDA results were $54,700,000 or 12.1 percent for the quarter. Reported EPS was $1.69 and adjusted EPS was $1.70 Operational excellence efforts continue to drive progress across the enterprise, but were offset in the quarter by one time costs associated with the start up of our Monterrey and Hamlet facilities. Our cash balance was $87,400,000 at the end of the 4th fiscal quarter, The company has access to an additional $322,900,000 under its revolving credit facility. Leverage was at 1.14x adjusted EBITDA and the company repurchased 171,000 shares in the quarter. Speaker 200:04:28Our outlook for the industry in fiscal year 'twenty five assumes the repair and remodel market will be down low to mid single digits and the new construction to be up mid single digits. Our expectation is for the company's net sales to increase low single digits with growth in all channels. Adjusted EBITDA expectations range from $235,000,000 to $255,000,000 as we continue to make investments near term in digital transformation for ERP and CRM expansion and platform design through automation along with additional engineering resources to execute those projects. Our view on financial performance over the next 5 years remains unchanged. Despite a near term slowdown in demand, we believe a 5% to 6% CAGR in net sales is appropriate and that we will grow adjusted EBITDA to over $350,000,000 We are currently ahead of our long term goals with stronger EBITDA margin dollars realized in fiscal 2024. Speaker 200:05:25Our team continues to execute our strategy to ask 3 main pillars: growth, digital transformation and platform design. With a number of key accomplishments over the past fiscal year, I'd like to highlight. Under growth, we launched a low SKU high value offering in the home centers earlier this calendar year targeting PROs and expanded the program nationally for our dealer and distribution network. In addition, we launched a new brand to serve our distribution customers in 1951 Cabinetry. Under digital transformation, we launched our CRM sales solution in the fall across all our channels. Speaker 200:06:00We also went live in our new Monterey facility on our ERP cloud solution and we've begun planning for the next implementation of our Made to Stock West Coast facilities, which will occur in fiscal 2025. Under platform design, we opened a new facility in Monterrey, Mexico and expanded our Hamlet, North Carolina facility. These investments established a component operation in Eastern Mexico and a stock and kitchen bath center of excellence footprint for the Eastern U. S. That delivers additional capacity. Speaker 200:06:28Looking forward, growth is expected across all our channels in fiscal year 'twenty five. We will leverage our upcoming summer launch to grow our core, expand our distribution presence through our new distribution brand introduction and win stock bath and kitchen opportunities to deliver this result. Digital transformation efforts will progress as the planning for the next phase of work continues for the CRM service modules, supporting our customer care organization new construction service center operations and ERP for our major stock facilities, which again will go live later this fiscal year as previously noted. Platform design work will continue as we ramp our Monterrey, Mexico and Hamlet, North Carolina facilities. Mill equipment continues to be installed in both sites and will continue to ramp through the first half of the year. Speaker 200:07:15Automation efforts will also continue across our mill component and assembly operations. In closing, I couldn't be prouder what this team accomplished in fiscal 2024 and I look forward to their continuing contributions during fiscal year 'twenty five. Now turn the call back over to Paul for additional details on the financial results for the quarter. Speaker 100:07:36Thank you, Scott. I'll first talk about our Q4 fiscal results and then transition to our full year performance and finally close out with our outlook for fiscal year 'twenty five. Net sales were $453,300,000 representing a decrease of $27,800,000 or 5.8% versus prior year. Remodel net sales, which combines home centers and independent dealer and distributors, decreased 8.6% for the Q4 versus prior year, with both home centers and dealer distributors decreasing 10% and 5% respectively. New construction net sales decreased 1.5% for the quarter compared to last year. Speaker 100:08:18Our gross profit margin for the Q4 of fiscal year 2024 decreased 150 basis points to 18.6 percent of net sales versus 20.1% reported in the same period last year. Gross margin was impacted by the one time startup costs for our Monterey and Hamlet locations, partially offset by our operational improvements in our manufacturing facilities, combined with the stability in our supply chain. Total operating expenses excluding any restructuring charges for the Q4 of fiscal year 2024 were 10.1 percent of net sales versus 11.8 percent for the same period last year. The 170 basis point decrease is due to our deal costs, amortization costs ending in December 2023, offset by increases in our incentives and profit sharing for all of our employees combined with our lower sales. Adjusted net income was $26,900,000 or 1 point $7.0 per diluted share in the Q1 of fiscal year 2024 versus $37,100,000 or $2.21 per diluted share last year. Speaker 100:09:28Adjusted EBITDA for the Q1 of fiscal year 2024 was $54,700,000 or 12.1 percent of net sales versus $65,300,000 or 13.6 percent of net sales reported in the same period last year, representing a 150 basis point decline year over year. Our full year performance, net sales were $1,800,000,000 representing a decrease of $219,000,000 or 10.6 percent, aligning with our outlook from fiscal Q3 of the low double digit declines. The combined home center and independent dealer distributor net sales decreased 12.6% for the fiscal year, with home centers decreasing 13.9% and dealer distributors decreasing 9.1%. New construction net sales decreased 7.7% for the fiscal year compared to the prior year. The company's gross profit margin for fiscal year was 20.4 percent of net sales versus 17.3% reported last year, representing a 310 basis point improvement. Speaker 100:10:37In the first half of the year, we observed improved leverage of our fixed cost base due to higher volumes. Additionally, operational enhancements and better alignment of input costs matching pricing contributed to this positive trend. However, during the second half of the year, we faced our one time start up cost alongside with lower volumes. Total operating expenses, exclusive of any restructuring charges were 11.7% of net sales in the current fiscal year compared with 10.6% of net sales in the prior fiscal year. The 110 basis point increase was due to increases in our incentives and digital spend, deleverage created for the lower sales offset by reduced spending across our SG and A functions. Speaker 100:11:23Adjusted net income for fiscal year 2024 increased $11,600,000 due to improvements in our operations offset by increases in our incentives and profit sharing expenses. Adjusted EBITDA for fiscal year 2024 was $252,800,000 or 13.7 percent of net sales compared to $240,400,000 or 11.6 percent of net sales for the prior fiscal year, representing a 210 basis point improvement year over year, achieving the high end of our expected range. Despite facing year to date volume headwinds, continued strong earnings performance this year is a direct result of all the hard work and efforts our team have put into reestablishing and maintaining our operating efficiencies, stabilizing our supply chain and controlling our overall spending. These earnings gains are partially offset by increases compensation, profit sharing and digital transformation costs. Free cash flow totaled a positive 138 point $5,000,000 for the current fiscal year compared to $153,500,000 in the prior year. Speaker 100:12:34The $15,000,000 decrease is primarily due to increased capital expenditures offset by changes in our operating cash flows, specifically lower inventory and increased accrued balances. Net leverage was 1.14 times adjusted EBITDA at the end of the 4th quarter of fiscal year 2024, representing a 0.23x improvement from the 1.37x as of last year. As of April 30, 2024, the company had $87,400,000 in cash plus access to $322,900,000 of additional availability under its revolving facility. Under the current share repurchase program, the company purchased $15,900,000 or 171,000 shares in the 4th quarter, representing about 1.1% of outstanding shares being retired. For the full year, we have repurchased 87,700,000 of the company's common shares representing 7.1% and have $89,500,000 of share repurchase authorization remaining. Speaker 100:13:42Our outlook for fiscal year 2025 from a net sales perspective, we expect to grow across all channels, with the total company being low single digit increases versus fiscal year 2024. The change in net sales is highly dependent upon overall industry, economic growth trends, material constraints, labor impacts, interest rates and consumer behaviors. Our projected EBITDA margin for fiscal year 2025 falls within the $235,000,000 to $255,000,000 range, driven primarily by higher year over year fixed operating cost base on our decisions to increase capacity with our new facilities in anticipation of longer term volume growth. Our commitment to operational excellence, automation and continuous improvement positions us well for maintaining competitive margins. Our long term expectations remain unchanged with a 5% to 6% sales compounded annual growth rate and EBITDA growth exceeding $350,000,000 by fiscal year 2028. Speaker 100:14:48Our capital allocation priorities for fiscal year 2025 will first be focused on investing back in the business by continuing our path of our digital transformation with investments in ERP and CRM and investing in automation. Next, we will be opportunistic in our share repurchasing. And lastly, with our debt position at a leverage ratio we wanted to achieve, debt repayments will be deprioritized. One additional item for our earnings calls in fiscal year 2025, we will be adjusting the timing of the call to be prior to the trading hours and will occur at 8:30 am Eastern Standard Time. In closing, our business continues to capitalize on the strides achieved over the past year. Speaker 100:15:35We anticipate that these enhancements will positively impact our financials through the next fiscal year. This success stands as testament to the unwavering commitment, diligence and contributions of our dedicated employees, all in alignment with our GDP strategy. I extend my heartfelt gratitude to every team member at American Woodmark. They are the driving force behind our daily accomplishments and they are the ones who make it happen daily. This concludes our prepared remarks and we'll be happy to answer any questions you have at this time. Operator00:16:26Today's first question comes from Steven Ramsey with Thompson Research Group. Please go ahead. Speaker 300:16:33Hey, good morning. This is actually Brian Biros on for Steven. Thank you for taking my questions. Speaker 200:16:38Yes, good afternoon. Speaker 300:16:40Afternoon. Maybe to start with on the revenue guidance, can you just help us with the kind of expected cadence through the 4th quarters going forward, kind of given the comps that are out there and how you see the different channels kind of ramping throughout the year? Speaker 200:16:54So we don't really want to get into a situation where we're providing quarterly guidance. We stopped doing that several years ago. So our focus is on the full year outlook that Paul and I have already previously shared. I would tell you that the second half, we do expect to be stronger than the first half, which I think is pretty consistent with what we've seen from our customer base as well as our peer set. Speaker 300:17:15That's up at least directionally. Thank you. And maybe at higher level, I guess, can you maybe touch on how your outlook has changed over the past few months, even internally kind of just in regards to new construction, R and R activity, kind of given where rates are, how builders are reacting? You mentioned buying down rates and all of this industry influx and changing almost every day. So I guess just how you're currently seeing it versus maybe how you're thinking about 3 months ago would help kind of directionally gauge where we're going? Speaker 300:17:45Thank you. Speaker 200:17:47Sure. To your point, you can't get too caught up in the day to day data points and swing too far in one direction versus the other. We start our budget process back in January, February timeframe, ultimately try to wrap that up in the April time frame and take it to our Board of Directors in May for approval. I would tell you that our outlook from a sales perspective and our expectations from a channel view really haven't altered inside that same timeframe. It's held pretty consistently our viewpoint on each. Speaker 200:18:20We think we'll see stronger growth in new construction. That's been pretty consistent as a message and a theme. Repair and model has certainly been softer and we expect that to perform a little bit better in the back half of the year. Speaker 400:18:35Thank you. Operator00:18:38Thank you. The next question comes from Garik Shmois with Loop Capital. Please go ahead. Speaker 500:18:44Good afternoon. It's actually Zach Pacheco on for Garik. Thanks for taking my question. I guess to start on the full year guide, you guys are talking a lower EBITDA margin despite low single digit sales growth. So I was wondering, could you provide any more color on this decrease in the margin? Speaker 500:19:01I know you mentioned the tech and digital initiatives. So I guess really how much of these costs impacting the fiscal 2025? Speaker 200:19:08Sure. We can go into a little bit more depth there. So just taking a step back looking at fiscal year 2024, what's recognized, we did experience a sales decline of almost $220,000,000 yet we did grow EBITDA in that fiscal year by 5%, almost $253,000,000 dollars I'll pause there and say I'm proud of this team's execution and delivering on that result when it was such a difficult demand environment. As we start to look in 2025, we've of course said that we expect to grow in each channel. Despite doing that, we don't think there's a significant impact overall on our profitability. Speaker 200:19:41Now why would that be? That's due to choices we're actively making to continue to invest in the future of our business. A couple of examples of that. We've certainly added capacity on the East Coast for our stock bath and kitchen business and our commercial teams are out there working to gain that share back and utilize the capacity. That of course takes time and we'll have to bear those incremental fixed costs for that capacity until it's utilized. Speaker 200:20:05We're also making a choice to implement ERP in our West Coast operations. There's costs clearly that are associated with such a decision. There'll be some inefficiencies after go live. We'll have hypercare as well to be able to manage any issues that come our way. We view those costs as investments, right, to get our company on one operating platform. Speaker 200:20:24We also chose to invest in engineering resources to help us drive our automation efforts across our facilities, which is going to help reduce the demand for labor in future periods. So those are main contributors. I guess the final thought I would share is the prior question around uncertainty. There's still a lot of uncertainty in the marketplace day to day at times. There's also an impending election which may have an impact on our economy. Speaker 200:20:49That election occurs in the middle of our fiscal year as opposed to many other calendar year companies. So all those variables together led us to the outlook guide around EBITDA. Speaker 500:20:59Awesome. That's great color. I really appreciate it. And then maybe one more on just pricing and promotion. Any change you're seeing here that you can speak on? Speaker 500:21:08Thanks. Speaker 200:21:09Yes. No real change in that space, which has been a positive. So promotional activity and cadence, our parent model was pretty consistent for us year over year. Speaker 500:21:19Okay, makes sense. I'll pass it on. Thanks. Speaker 200:21:22Okay, thank you. Operator00:21:24Thank you. The next question comes from Colin Barron with Jefferies. Please go ahead. Speaker 600:21:35Hi. Yes, thanks for taking my questions. I guess just want to show you called out the demand environment is beginning to improve. Can you just provide a little bit more color and perspective on what you saw within the quarter that drives that optimism? Did you see sales trends sort of pick up within the quarter ahead of what you would normally see seasonally? Speaker 600:21:52And any comment as to like how those continued into May? Speaker 200:21:57The bulk of that comment is going to be tied to new construction, Collin. As you look back and think about the starts activity that began to pick up year on year, even at the end of the calendar year continuing into the 1st part of this year, recognizing the delay for us as to when the cabinets actually go into the home as opposed to the actual start. We would typically expect to see a strong summer coming out of that spring selling season. So we've seen that activity pick up. You see it in the starts data as translating to order demand in our new construction business. Speaker 600:22:31That's helpful color. And I think you talked about some expected wins in the stock category. Have you seen those wins already? Or is that something you're expecting because of your product introductions? Just curious as to what was driving that comment. Speaker 200:22:43Yes. I would go back over the last couple of years coming into the COVID cycle where demand was so high and we were limited in our ability to actually be able to achieve all of the demand in the marketplace, whether it was a function of supplier challenges or labor challenges, etcetera, we wanted to get past that and add some capacity to our network. So that's what led to the project last year to put that capacity in play. Until we had that, we were not very aggressive in the marketplace when trying to take share. Now that we have the capacity, we're being much more aggressive and our commercial teams are out there working to gain share in both of those categories for our business. Speaker 600:23:25Great. It's really helpful color. And I guess my last one. There was a transaction in the space that was recently announced. Can you just talk about your guys' appetite for M and A? Speaker 600:23:32I know you didn't list it under capital allocation priority. So I guess just any commentary on M and A for American Woodmark? Speaker 200:23:40Sure. It's a great question. Our strategic focus over the last few years has been certainly focused around organic growth and that continues throughout the strategic plan and cycle that we've even got out on our higher deck over the next 5 years. I'd tell you acquisitions are not a priority. But with that said, we're going to look at assets as they become available. Speaker 200:23:59In a particular case, you're mentioning we didn't see a strategic fit primarily around the product line. The dealer channel aspect of that business was interesting, but the price points are well outside the range in which we participate and just not a fit overall. Speaker 600:24:16Great. Thank you and good luck. Speaker 200:24:18Thank you. Operator00:24:20Thank you. The next question is from Tim Wojs with Baird. Please go ahead. Speaker 400:24:27Hey, good afternoon guys. Maybe just to start, Scott, on the ERP piece. Is that once you get that live out west, is everything kind of on one system after that? I guess this is kind of the last piece or they're kind of more conversions on the new deal? Speaker 200:24:45That's a fantastic question, Tim. So I would tell you this is the start from a manufacturing standpoint. If you were to go back a couple of years ago when we first started down this journey, we turned on finance and procurement. So that was the first area that we tackled. Now we're moving into the manufacturing footprint. Speaker 200:25:03We had a great opportunity with the opening of our facility in Monterrey to treat that basically as a pilot. So we went live on the solution in Monterey. It was much lower risk. Our team has been in the planning phase all of this calendar year. It will continue as we go forward and we'll hit those West Coast operations next. Speaker 200:25:22We will then have a sequence beyond that and beyond that to cycle through the remaining operations and it's a multi year journey. So we're at the start as opposed to the end when it comes to that effort. Speaker 400:25:34Okay. Okay. I got you. And then I guess from a long term perspective like what would the benefits be that you guys have today? Speaker 600:25:42Is it just the ability Speaker 400:25:43to kind of seamlessly push stuff between plants? Speaker 200:25:47I would actually say that it should be efficiencies in every aspect of our business, because of the complexities we have on still having multiple platforms across different businesses post acquisition. So allowing us to get all of those systems on the one integrated system, having those be up to date, better reporting, better information should lead to better decision making. You could translate that into margin. You can translate that into labor efficiency, etcetera. Those are the types of areas we expect to see benefits inclusive of balance sheet. Speaker 200:26:19When it comes to forecasting and SIOP and how much inventory we're holding in the network, we would expect some cash flow working capital benefits as well. Okay. Speaker 400:26:29Okay, great. And then, I guess explicitly, it doesn't sound like it's much of an impact, but how are you guys kind of thinking about price and kind of raw material costs in fiscal 'twenty five? Speaker 200:26:42Yes, really no change from our message over the last couple of quarters. Most of our actions in that space were tied to inflation and indices. And if we've seen things move down and it's appropriate justified, we'll have conversations with accounts around that. But it's got to be in check and in balance with deflation. Speaker 400:27:02Okay. And then I guess the last one just we've heard instances across the space about mix down especially in bigger ticket categories. I guess just given kind of your price points and kind of position in the marketplace, I guess, first, do you see mix down? And then second, is that could that technically be a benefit for you guys if that's happening? Speaker 200:27:29So I would I'll start with the in conclusion there. It should be a benefit because that's rotation down into the value price points in which we participate. Right. So we've not seen the level of mix degradation that you're highlighting perhaps from other players in building products. Within our business though, what I would call out specifically, you think about our new construction business overall and what we offer there. Speaker 200:27:53We have our Timberlake brand and then we have Origins by Timberlake brand as well. We do see builders making choices to move out of Timberlake into Origins. That was part of the acquisition strategy that we put in place over 6 years ago. So we expected that to come. So we're seeing some of that. Speaker 200:28:09What is the result? Well, the cabinet price per box will be lower, but the margin percentage should be acceptable or better. So we are seeing a little bit of that impact top line equation for us. And also the other one I'd mention is even inside our new construction business, there is a good better best strategy. Most of that business has always been in the middle and the better. Speaker 200:28:31We had a little bit sitting up top in the best category. We've seen that start to move down a little bit as builders are making choice around price points of their offering. So a little bit in new construction, but we really haven't seen much in repair and model when it comes to mix mix and acquisition. Speaker 400:28:49Okay. I lied. I have one more. Just on content, I mean, have you seen with smaller homes or smaller jobs, I mean, have you seen a big impact on like the number of cabinets or the content per job? Or has cabinet have cabinets been kind of, I don't know, spared is the right word, but has that kind of been not a big deal for you guys? Speaker 200:29:13Yes, that's not really been a big deal for us. Even though the homes are going smaller, we're still okay with cabinet count. Typically, builders as well as consumers are trying to protect that kitchen space. So they're still looking for a nice area and plenty of storage. Even if the kitchen was to shrink, what we're also seeing is a lot of consumers are maybe wanting a small house, but feature rich. Speaker 200:29:36So now you may have cabinets that are showing up in the laundry room, you may have a drop room when you come in off the garage. So we've still been pretty comfortable with the overall cabinet count per home. Speaker 400:29:49Okay, great. Well, good luck on the year guys. See you next week. Great. Speaker 200:29:52Thank you. AppreciateRead morePowered by Conference Call Audio Live Call not available Earnings Conference CallAmerican Woodmark Q4 202400:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K)Annual report(10-K) American Woodmark Earnings HeadlinesAt US$60.49, Is It Time To Put American Woodmark Corporation (NASDAQ:AMWD) On Your Watch List?May 3 at 5:07 PM | finance.yahoo.comAmerican Woodmark (NASDAQ:AMWD) Price Target Lowered to $75.00 at Loop CapitalApril 30, 2025 | americanbankingnews.comElon’s Terrifying Warning Forces Trump To Take ActionElon Musk has avoided two major financial crises before. He pulled Tesla and SpaceX back from the brink of collapse and built two of the most valuable companies in history. Now, he's sounding the alarm about America's $36 trillion debt time bomb that could destroy the fabric of our society.As head of the Department of Government Efficiency (DOGE) under President Trump, Musk is exposing just how bad things are...May 5, 2025 | American Hartford Gold (Ad)American Woodmark Corp (AMWD) Q3 2025 Earnings Call Highlights: Navigating Market Challenges ...April 21, 2025 | uk.finance.yahoo.com3 Reasons to Avoid AMWD and 1 Stock to Buy InsteadApril 14, 2025 | msn.comHome Construction Materials Stocks Q4 Highlights: American Woodmark (NASDAQ:AMWD)March 28, 2025 | finance.yahoo.comSee More American Woodmark Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like American Woodmark? Sign up for Earnings360's daily newsletter to receive timely earnings updates on American Woodmark and other key companies, straight to your email. Email Address About American WoodmarkAmerican Woodmark (NASDAQ:AMWD) manufactures and distributes kitchen, bath, office, home organization, and hardware products for the remodelling and new home construction markets in the United States. The company offers made-to-order and cash and carry products. It also provides turnkey installation services to its direct builder customers through a network of eight service centers. The company sells its products under the American Woodmark, Timberlake, Shenandoah Cabinetry, Waypoint Living Spaces, Estate, Stor-It-All, and Professional Cabinet Solutions brands, as well as Hampton Bay, Glacier Bay, Style Selections, Allen + Roth, Home Decorators Collection, and Project Source. It markets its products directly to home centers and builders, as well as through independent dealers and distributors. The company was incorporated in 1980 and is based in Winchester, Virginia.View American Woodmark ProfileRead more More Earnings Resources from MarketBeat Earnings Tools Today's Earnings Tomorrow's Earnings Next Week's Earnings Upcoming Earnings Calls Earnings Newsletter Earnings Call Transcripts Earnings Beats & Misses Corporate Guidance Earnings Screener Earnings By Country U.S. Earnings Reports Canadian Earnings Reports U.K. Earnings Reports Latest Articles Is Reddit Stock a Buy, Sell, or Hold After Earnings Release?Warning or Opportunity After Super Micro Computer's EarningsAmazon Earnings: 2 Reasons to Love It, 1 Reason to Be CautiousRocket Lab Braces for Q1 Earnings Amid Soaring ExpectationsMeta Takes A Bow With Q1 Earnings - Watch For Tariff Impact in Q2Palantir Earnings: 1 Bullish Signal and 1 Area of ConcernVisa Q2 Earnings Top Forecasts, Adds $30B Buyback Plan Upcoming Earnings American Electric Power (5/6/2025)Advanced Micro Devices (5/6/2025)Marriott International (5/6/2025)Constellation Energy (5/6/2025)Arista Networks (5/6/2025)Brookfield Asset Management (5/6/2025)Duke Energy (5/6/2025)Energy Transfer (5/6/2025)Mplx (5/6/2025)Ferrari (5/6/2025) Get 30 Days of MarketBeat All Access for Free Sign up for MarketBeat All Access to gain access to MarketBeat's full suite of research tools. 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There are 7 speakers on the call. Operator00:00:00Good day, and welcome to the American Woodmark Corporation 4th Fiscal Quarter 2024 Conference Call. Today's call is being recorded, May 23, 2024. During this call, the company may discuss certain non GAAP financial measures included in our earnings release such as adjusted net income, adjusted EBITDA, adjusted EBITDA margin, free cash flow, net leverage and adjusted EPS per diluted share. The earnings release, which can be found on our website, americanwoodmark.com, includes definitions of each of these non GAAP financial measures, the company's rationale for their usage and a reconciliation of these non GAAP financial measures to the most comparable GAAP financial measures. We also use our website to publish other information that may be important to investors such as investor presentations. Operator00:00:56We will begin the call by reading the company's Safe Harbor 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 and the Annual Report to shareholders. The company does not undertake to publicly update or revise any forward looking statements, even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. Operator00:01:52I would now like to turn the call over to Paul Johimchak, Senior Vice President and CFO. Please go ahead, sir. Speaker 100:02:00Good afternoon, and welcome to American Woodmark's 4th fiscal quarter conference call. Thank you for taking the time today to participate. Joining me is Scott Culbreth, President and CEO. Scott will begin with a review of the quarter and I will add additional details regarding our financial performance. After our comments, we'll be happy to answer your questions. Speaker 100:02:22Scott? Speaker 200:02:23Thank you, Paul, and thanks to everyone for joining us today for our 4th fiscal quarter earnings call. Our teams delivered net sales of $453,300,000 representing a decline of 5.8% versus the prior year. This was better than the range provided during last quarter's call. Within new construction, our net sales declined 1.5% versus prior year. We continue to see improving demand with our customers consistent with year over year growth in single family housing starts. Speaker 200:02:53We remain strategically aligned with 19 of the top 20 national builders, key regional builders with our best in class direct service model, we plan to continue to grow our share with new and existing customers and benefit from the share gains our partners are realizing in the marketplace. We see momentum in all markets as builders' confidence is increasing and their strategy to buy down rates is driving demand. Looking at remodel, which includes our home center and independent dealer and distributor businesses, revenue declined 8.6% versus the prior year. Within this, our home center business was down 10% versus the prior year. Demand trends remain under pressure due to lower in store traffic rates and consumers choosing smaller sized projects. Speaker 200:03:40With regards to our dealer distributor business, we were down 5% versus the prior year. Our adjusted EBITDA results were $54,700,000 or 12.1 percent for the quarter. Reported EPS was $1.69 and adjusted EPS was $1.70 Operational excellence efforts continue to drive progress across the enterprise, but were offset in the quarter by one time costs associated with the start up of our Monterrey and Hamlet facilities. Our cash balance was $87,400,000 at the end of the 4th fiscal quarter, The company has access to an additional $322,900,000 under its revolving credit facility. Leverage was at 1.14x adjusted EBITDA and the company repurchased 171,000 shares in the quarter. Speaker 200:04:28Our outlook for the industry in fiscal year 'twenty five assumes the repair and remodel market will be down low to mid single digits and the new construction to be up mid single digits. Our expectation is for the company's net sales to increase low single digits with growth in all channels. Adjusted EBITDA expectations range from $235,000,000 to $255,000,000 as we continue to make investments near term in digital transformation for ERP and CRM expansion and platform design through automation along with additional engineering resources to execute those projects. Our view on financial performance over the next 5 years remains unchanged. Despite a near term slowdown in demand, we believe a 5% to 6% CAGR in net sales is appropriate and that we will grow adjusted EBITDA to over $350,000,000 We are currently ahead of our long term goals with stronger EBITDA margin dollars realized in fiscal 2024. Speaker 200:05:25Our team continues to execute our strategy to ask 3 main pillars: growth, digital transformation and platform design. With a number of key accomplishments over the past fiscal year, I'd like to highlight. Under growth, we launched a low SKU high value offering in the home centers earlier this calendar year targeting PROs and expanded the program nationally for our dealer and distribution network. In addition, we launched a new brand to serve our distribution customers in 1951 Cabinetry. Under digital transformation, we launched our CRM sales solution in the fall across all our channels. Speaker 200:06:00We also went live in our new Monterey facility on our ERP cloud solution and we've begun planning for the next implementation of our Made to Stock West Coast facilities, which will occur in fiscal 2025. Under platform design, we opened a new facility in Monterrey, Mexico and expanded our Hamlet, North Carolina facility. These investments established a component operation in Eastern Mexico and a stock and kitchen bath center of excellence footprint for the Eastern U. S. That delivers additional capacity. Speaker 200:06:28Looking forward, growth is expected across all our channels in fiscal year 'twenty five. We will leverage our upcoming summer launch to grow our core, expand our distribution presence through our new distribution brand introduction and win stock bath and kitchen opportunities to deliver this result. Digital transformation efforts will progress as the planning for the next phase of work continues for the CRM service modules, supporting our customer care organization new construction service center operations and ERP for our major stock facilities, which again will go live later this fiscal year as previously noted. Platform design work will continue as we ramp our Monterrey, Mexico and Hamlet, North Carolina facilities. Mill equipment continues to be installed in both sites and will continue to ramp through the first half of the year. Speaker 200:07:15Automation efforts will also continue across our mill component and assembly operations. In closing, I couldn't be prouder what this team accomplished in fiscal 2024 and I look forward to their continuing contributions during fiscal year 'twenty five. Now turn the call back over to Paul for additional details on the financial results for the quarter. Speaker 100:07:36Thank you, Scott. I'll first talk about our Q4 fiscal results and then transition to our full year performance and finally close out with our outlook for fiscal year 'twenty five. Net sales were $453,300,000 representing a decrease of $27,800,000 or 5.8% versus prior year. Remodel net sales, which combines home centers and independent dealer and distributors, decreased 8.6% for the Q4 versus prior year, with both home centers and dealer distributors decreasing 10% and 5% respectively. New construction net sales decreased 1.5% for the quarter compared to last year. Speaker 100:08:18Our gross profit margin for the Q4 of fiscal year 2024 decreased 150 basis points to 18.6 percent of net sales versus 20.1% reported in the same period last year. Gross margin was impacted by the one time startup costs for our Monterey and Hamlet locations, partially offset by our operational improvements in our manufacturing facilities, combined with the stability in our supply chain. Total operating expenses excluding any restructuring charges for the Q4 of fiscal year 2024 were 10.1 percent of net sales versus 11.8 percent for the same period last year. The 170 basis point decrease is due to our deal costs, amortization costs ending in December 2023, offset by increases in our incentives and profit sharing for all of our employees combined with our lower sales. Adjusted net income was $26,900,000 or 1 point $7.0 per diluted share in the Q1 of fiscal year 2024 versus $37,100,000 or $2.21 per diluted share last year. Speaker 100:09:28Adjusted EBITDA for the Q1 of fiscal year 2024 was $54,700,000 or 12.1 percent of net sales versus $65,300,000 or 13.6 percent of net sales reported in the same period last year, representing a 150 basis point decline year over year. Our full year performance, net sales were $1,800,000,000 representing a decrease of $219,000,000 or 10.6 percent, aligning with our outlook from fiscal Q3 of the low double digit declines. The combined home center and independent dealer distributor net sales decreased 12.6% for the fiscal year, with home centers decreasing 13.9% and dealer distributors decreasing 9.1%. New construction net sales decreased 7.7% for the fiscal year compared to the prior year. The company's gross profit margin for fiscal year was 20.4 percent of net sales versus 17.3% reported last year, representing a 310 basis point improvement. Speaker 100:10:37In the first half of the year, we observed improved leverage of our fixed cost base due to higher volumes. Additionally, operational enhancements and better alignment of input costs matching pricing contributed to this positive trend. However, during the second half of the year, we faced our one time start up cost alongside with lower volumes. Total operating expenses, exclusive of any restructuring charges were 11.7% of net sales in the current fiscal year compared with 10.6% of net sales in the prior fiscal year. The 110 basis point increase was due to increases in our incentives and digital spend, deleverage created for the lower sales offset by reduced spending across our SG and A functions. Speaker 100:11:23Adjusted net income for fiscal year 2024 increased $11,600,000 due to improvements in our operations offset by increases in our incentives and profit sharing expenses. Adjusted EBITDA for fiscal year 2024 was $252,800,000 or 13.7 percent of net sales compared to $240,400,000 or 11.6 percent of net sales for the prior fiscal year, representing a 210 basis point improvement year over year, achieving the high end of our expected range. Despite facing year to date volume headwinds, continued strong earnings performance this year is a direct result of all the hard work and efforts our team have put into reestablishing and maintaining our operating efficiencies, stabilizing our supply chain and controlling our overall spending. These earnings gains are partially offset by increases compensation, profit sharing and digital transformation costs. Free cash flow totaled a positive 138 point $5,000,000 for the current fiscal year compared to $153,500,000 in the prior year. Speaker 100:12:34The $15,000,000 decrease is primarily due to increased capital expenditures offset by changes in our operating cash flows, specifically lower inventory and increased accrued balances. Net leverage was 1.14 times adjusted EBITDA at the end of the 4th quarter of fiscal year 2024, representing a 0.23x improvement from the 1.37x as of last year. As of April 30, 2024, the company had $87,400,000 in cash plus access to $322,900,000 of additional availability under its revolving facility. Under the current share repurchase program, the company purchased $15,900,000 or 171,000 shares in the 4th quarter, representing about 1.1% of outstanding shares being retired. For the full year, we have repurchased 87,700,000 of the company's common shares representing 7.1% and have $89,500,000 of share repurchase authorization remaining. Speaker 100:13:42Our outlook for fiscal year 2025 from a net sales perspective, we expect to grow across all channels, with the total company being low single digit increases versus fiscal year 2024. The change in net sales is highly dependent upon overall industry, economic growth trends, material constraints, labor impacts, interest rates and consumer behaviors. Our projected EBITDA margin for fiscal year 2025 falls within the $235,000,000 to $255,000,000 range, driven primarily by higher year over year fixed operating cost base on our decisions to increase capacity with our new facilities in anticipation of longer term volume growth. Our commitment to operational excellence, automation and continuous improvement positions us well for maintaining competitive margins. Our long term expectations remain unchanged with a 5% to 6% sales compounded annual growth rate and EBITDA growth exceeding $350,000,000 by fiscal year 2028. Speaker 100:14:48Our capital allocation priorities for fiscal year 2025 will first be focused on investing back in the business by continuing our path of our digital transformation with investments in ERP and CRM and investing in automation. Next, we will be opportunistic in our share repurchasing. And lastly, with our debt position at a leverage ratio we wanted to achieve, debt repayments will be deprioritized. One additional item for our earnings calls in fiscal year 2025, we will be adjusting the timing of the call to be prior to the trading hours and will occur at 8:30 am Eastern Standard Time. In closing, our business continues to capitalize on the strides achieved over the past year. Speaker 100:15:35We anticipate that these enhancements will positively impact our financials through the next fiscal year. This success stands as testament to the unwavering commitment, diligence and contributions of our dedicated employees, all in alignment with our GDP strategy. I extend my heartfelt gratitude to every team member at American Woodmark. They are the driving force behind our daily accomplishments and they are the ones who make it happen daily. This concludes our prepared remarks and we'll be happy to answer any questions you have at this time. Operator00:16:26Today's first question comes from Steven Ramsey with Thompson Research Group. Please go ahead. Speaker 300:16:33Hey, good morning. This is actually Brian Biros on for Steven. Thank you for taking my questions. Speaker 200:16:38Yes, good afternoon. Speaker 300:16:40Afternoon. Maybe to start with on the revenue guidance, can you just help us with the kind of expected cadence through the 4th quarters going forward, kind of given the comps that are out there and how you see the different channels kind of ramping throughout the year? Speaker 200:16:54So we don't really want to get into a situation where we're providing quarterly guidance. We stopped doing that several years ago. So our focus is on the full year outlook that Paul and I have already previously shared. I would tell you that the second half, we do expect to be stronger than the first half, which I think is pretty consistent with what we've seen from our customer base as well as our peer set. Speaker 300:17:15That's up at least directionally. Thank you. And maybe at higher level, I guess, can you maybe touch on how your outlook has changed over the past few months, even internally kind of just in regards to new construction, R and R activity, kind of given where rates are, how builders are reacting? You mentioned buying down rates and all of this industry influx and changing almost every day. So I guess just how you're currently seeing it versus maybe how you're thinking about 3 months ago would help kind of directionally gauge where we're going? Speaker 300:17:45Thank you. Speaker 200:17:47Sure. To your point, you can't get too caught up in the day to day data points and swing too far in one direction versus the other. We start our budget process back in January, February timeframe, ultimately try to wrap that up in the April time frame and take it to our Board of Directors in May for approval. I would tell you that our outlook from a sales perspective and our expectations from a channel view really haven't altered inside that same timeframe. It's held pretty consistently our viewpoint on each. Speaker 200:18:20We think we'll see stronger growth in new construction. That's been pretty consistent as a message and a theme. Repair and model has certainly been softer and we expect that to perform a little bit better in the back half of the year. Speaker 400:18:35Thank you. Operator00:18:38Thank you. The next question comes from Garik Shmois with Loop Capital. Please go ahead. Speaker 500:18:44Good afternoon. It's actually Zach Pacheco on for Garik. Thanks for taking my question. I guess to start on the full year guide, you guys are talking a lower EBITDA margin despite low single digit sales growth. So I was wondering, could you provide any more color on this decrease in the margin? Speaker 500:19:01I know you mentioned the tech and digital initiatives. So I guess really how much of these costs impacting the fiscal 2025? Speaker 200:19:08Sure. We can go into a little bit more depth there. So just taking a step back looking at fiscal year 2024, what's recognized, we did experience a sales decline of almost $220,000,000 yet we did grow EBITDA in that fiscal year by 5%, almost $253,000,000 dollars I'll pause there and say I'm proud of this team's execution and delivering on that result when it was such a difficult demand environment. As we start to look in 2025, we've of course said that we expect to grow in each channel. Despite doing that, we don't think there's a significant impact overall on our profitability. Speaker 200:19:41Now why would that be? That's due to choices we're actively making to continue to invest in the future of our business. A couple of examples of that. We've certainly added capacity on the East Coast for our stock bath and kitchen business and our commercial teams are out there working to gain that share back and utilize the capacity. That of course takes time and we'll have to bear those incremental fixed costs for that capacity until it's utilized. Speaker 200:20:05We're also making a choice to implement ERP in our West Coast operations. There's costs clearly that are associated with such a decision. There'll be some inefficiencies after go live. We'll have hypercare as well to be able to manage any issues that come our way. We view those costs as investments, right, to get our company on one operating platform. Speaker 200:20:24We also chose to invest in engineering resources to help us drive our automation efforts across our facilities, which is going to help reduce the demand for labor in future periods. So those are main contributors. I guess the final thought I would share is the prior question around uncertainty. There's still a lot of uncertainty in the marketplace day to day at times. There's also an impending election which may have an impact on our economy. Speaker 200:20:49That election occurs in the middle of our fiscal year as opposed to many other calendar year companies. So all those variables together led us to the outlook guide around EBITDA. Speaker 500:20:59Awesome. That's great color. I really appreciate it. And then maybe one more on just pricing and promotion. Any change you're seeing here that you can speak on? Speaker 500:21:08Thanks. Speaker 200:21:09Yes. No real change in that space, which has been a positive. So promotional activity and cadence, our parent model was pretty consistent for us year over year. Speaker 500:21:19Okay, makes sense. I'll pass it on. Thanks. Speaker 200:21:22Okay, thank you. Operator00:21:24Thank you. The next question comes from Colin Barron with Jefferies. Please go ahead. Speaker 600:21:35Hi. Yes, thanks for taking my questions. I guess just want to show you called out the demand environment is beginning to improve. Can you just provide a little bit more color and perspective on what you saw within the quarter that drives that optimism? Did you see sales trends sort of pick up within the quarter ahead of what you would normally see seasonally? Speaker 600:21:52And any comment as to like how those continued into May? Speaker 200:21:57The bulk of that comment is going to be tied to new construction, Collin. As you look back and think about the starts activity that began to pick up year on year, even at the end of the calendar year continuing into the 1st part of this year, recognizing the delay for us as to when the cabinets actually go into the home as opposed to the actual start. We would typically expect to see a strong summer coming out of that spring selling season. So we've seen that activity pick up. You see it in the starts data as translating to order demand in our new construction business. Speaker 600:22:31That's helpful color. And I think you talked about some expected wins in the stock category. Have you seen those wins already? Or is that something you're expecting because of your product introductions? Just curious as to what was driving that comment. Speaker 200:22:43Yes. I would go back over the last couple of years coming into the COVID cycle where demand was so high and we were limited in our ability to actually be able to achieve all of the demand in the marketplace, whether it was a function of supplier challenges or labor challenges, etcetera, we wanted to get past that and add some capacity to our network. So that's what led to the project last year to put that capacity in play. Until we had that, we were not very aggressive in the marketplace when trying to take share. Now that we have the capacity, we're being much more aggressive and our commercial teams are out there working to gain share in both of those categories for our business. Speaker 600:23:25Great. It's really helpful color. And I guess my last one. There was a transaction in the space that was recently announced. Can you just talk about your guys' appetite for M and A? Speaker 600:23:32I know you didn't list it under capital allocation priority. So I guess just any commentary on M and A for American Woodmark? Speaker 200:23:40Sure. It's a great question. Our strategic focus over the last few years has been certainly focused around organic growth and that continues throughout the strategic plan and cycle that we've even got out on our higher deck over the next 5 years. I'd tell you acquisitions are not a priority. But with that said, we're going to look at assets as they become available. Speaker 200:23:59In a particular case, you're mentioning we didn't see a strategic fit primarily around the product line. The dealer channel aspect of that business was interesting, but the price points are well outside the range in which we participate and just not a fit overall. Speaker 600:24:16Great. Thank you and good luck. Speaker 200:24:18Thank you. Operator00:24:20Thank you. The next question is from Tim Wojs with Baird. Please go ahead. Speaker 400:24:27Hey, good afternoon guys. Maybe just to start, Scott, on the ERP piece. Is that once you get that live out west, is everything kind of on one system after that? I guess this is kind of the last piece or they're kind of more conversions on the new deal? Speaker 200:24:45That's a fantastic question, Tim. So I would tell you this is the start from a manufacturing standpoint. If you were to go back a couple of years ago when we first started down this journey, we turned on finance and procurement. So that was the first area that we tackled. Now we're moving into the manufacturing footprint. Speaker 200:25:03We had a great opportunity with the opening of our facility in Monterrey to treat that basically as a pilot. So we went live on the solution in Monterey. It was much lower risk. Our team has been in the planning phase all of this calendar year. It will continue as we go forward and we'll hit those West Coast operations next. Speaker 200:25:22We will then have a sequence beyond that and beyond that to cycle through the remaining operations and it's a multi year journey. So we're at the start as opposed to the end when it comes to that effort. Speaker 400:25:34Okay. Okay. I got you. And then I guess from a long term perspective like what would the benefits be that you guys have today? Speaker 600:25:42Is it just the ability Speaker 400:25:43to kind of seamlessly push stuff between plants? Speaker 200:25:47I would actually say that it should be efficiencies in every aspect of our business, because of the complexities we have on still having multiple platforms across different businesses post acquisition. So allowing us to get all of those systems on the one integrated system, having those be up to date, better reporting, better information should lead to better decision making. You could translate that into margin. You can translate that into labor efficiency, etcetera. Those are the types of areas we expect to see benefits inclusive of balance sheet. Speaker 200:26:19When it comes to forecasting and SIOP and how much inventory we're holding in the network, we would expect some cash flow working capital benefits as well. Okay. Speaker 400:26:29Okay, great. And then, I guess explicitly, it doesn't sound like it's much of an impact, but how are you guys kind of thinking about price and kind of raw material costs in fiscal 'twenty five? Speaker 200:26:42Yes, really no change from our message over the last couple of quarters. Most of our actions in that space were tied to inflation and indices. And if we've seen things move down and it's appropriate justified, we'll have conversations with accounts around that. But it's got to be in check and in balance with deflation. Speaker 400:27:02Okay. And then I guess the last one just we've heard instances across the space about mix down especially in bigger ticket categories. I guess just given kind of your price points and kind of position in the marketplace, I guess, first, do you see mix down? And then second, is that could that technically be a benefit for you guys if that's happening? Speaker 200:27:29So I would I'll start with the in conclusion there. It should be a benefit because that's rotation down into the value price points in which we participate. Right. So we've not seen the level of mix degradation that you're highlighting perhaps from other players in building products. Within our business though, what I would call out specifically, you think about our new construction business overall and what we offer there. Speaker 200:27:53We have our Timberlake brand and then we have Origins by Timberlake brand as well. We do see builders making choices to move out of Timberlake into Origins. That was part of the acquisition strategy that we put in place over 6 years ago. So we expected that to come. So we're seeing some of that. Speaker 200:28:09What is the result? Well, the cabinet price per box will be lower, but the margin percentage should be acceptable or better. So we are seeing a little bit of that impact top line equation for us. And also the other one I'd mention is even inside our new construction business, there is a good better best strategy. Most of that business has always been in the middle and the better. Speaker 200:28:31We had a little bit sitting up top in the best category. We've seen that start to move down a little bit as builders are making choice around price points of their offering. So a little bit in new construction, but we really haven't seen much in repair and model when it comes to mix mix and acquisition. Speaker 400:28:49Okay. I lied. I have one more. Just on content, I mean, have you seen with smaller homes or smaller jobs, I mean, have you seen a big impact on like the number of cabinets or the content per job? Or has cabinet have cabinets been kind of, I don't know, spared is the right word, but has that kind of been not a big deal for you guys? Speaker 200:29:13Yes, that's not really been a big deal for us. Even though the homes are going smaller, we're still okay with cabinet count. Typically, builders as well as consumers are trying to protect that kitchen space. So they're still looking for a nice area and plenty of storage. Even if the kitchen was to shrink, what we're also seeing is a lot of consumers are maybe wanting a small house, but feature rich. Speaker 200:29:36So now you may have cabinets that are showing up in the laundry room, you may have a drop room when you come in off the garage. So we've still been pretty comfortable with the overall cabinet count per home. Speaker 400:29:49Okay, great. Well, good luck on the year guys. See you next week. Great. Speaker 200:29:52Thank you. AppreciateRead morePowered by