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What changed in AMERICAN WOODMARK CORP's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of AMERICAN WOODMARK CORP's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+187 added−176 removedSource: 10-K (2025-06-25) vs 10-K (2024-06-26)

Top changes in AMERICAN WOODMARK CORP's 2025 10-K

187 paragraphs added · 176 removed · 156 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeRaw Materials and Suppliers The primary raw materials used in our products include various wood species, including hard maple, cherry, and beech, particle board, medium density fiberboard, high density fiberboard, and plywood. Additional raw materials include paint, manufactured components, and hardware.
Biggest changeDuring the third quarter of fiscal 2025, the Company's Board of Directors (the "Board") approved the closure and eventual disposal of our manufacturing plant located in Orange, Virginia. Raw Materials and Suppliers The primary raw materials used in our products are various wood species, including hard maple, cherry, and beech, particle board, medium density fiberboard, high density fiberboard, and plywood.
To that end, we have, among other things, established policies under which we strive to: • Engage with our key stakeholders, including employees, to ensure their needs and concerns are heard and addressed, and if appropriate, incorporated into our strategy; • Maintain a safe and enriching working environment where all employees are treated with respect and are able to achieve their full potential; • Encourage employees to volunteer in our communities through internally or externally organized events; • Fund the American Woodmark Foundation and the AWCares Fund, which serve as vehicles for our employees to serve the community and receive financial assistance for unforeseen personal disaster or tragedy; and • Provide scholarship opportunities to family members for our employees.
To that end, we have, among other things, established policies under which we strive to: • Engage with our key stakeholders, including employees, to ensure their needs and concerns are heard and addressed, and if appropriate, incorporated into our strategy; • Maintain a safe and enriching working environment where all employees are treated with respect and are able to achieve their full potential; • Encourage employees to volunteer in our communities through internally or externally organized events; • Fund the American Woodmark Foundation and the AWCares Fund, which serve as vehicles for our employees to serve the community and receive financial assistance for unforeseen personal disaster or tragedy; and • Provide scholarship opportunities to family members of our employees.
We have standardized our raw material inputs and a number of our production processes, which reduces logistical requirements and provides increased economies of scale in sourcing these inputs. Our labor-intensive manufacturing and fabrication processes in Mexico offer a low cost alternative to Asian based manufacturers, while providing a quality product with lower transportation costs.
We have standardized our raw material inputs and a number of our production processes, which reduces logistical requirements and provides increased economies of scale in sourcing these inputs. Our labor-intensive manufacturing and fabrication processes in Mexico offer a low cost alternative to Asian manufacturers, while providing a quality product with lower transportation costs.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments to those reports are available free of charge on our website, americanwoodmark.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission.
Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and all amendments to those reports are available free of charge on our website, americanwoodmark.com, as soon as reasonably practicable after such material is electronically filed with, or furnished to, the Securities and Exchange Commission ("SEC").
If we must litigate to protect our rights, we may incur significant expenses and divert significant attention from our business operations. To date, we have not relied on material patents in operating our business. Seasonality Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters.
If we must litigate to protect our rights, we may incur significant expenses and divert significant attention from our business operations. To date, we have not relied on material patents in operating our business. 5 Seasonality Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters.
Experienced Management Team We have assembled an executive team from leading organizations with a deep base of management experience within industrial manufacturing companies. Our President and Chief Executive Officer, M. Scott Culbreth, joined our team in 2014 as the Chief Financial Officer and was named Chief Executive Officer in 2020. Mr.
Experienced Management Team We have assembled an executive team from leading organizations with a deep base of management experience within industrial manufacturing companies. Our President and Chief Executive Officer, M. Scott Culbreth, joined our team in 2014 as the Chief 7 Financial Officer and was named Chief Executive Officer in 2020. Mr.
Today, we sell this brand to over 1,500 regional and local dealers across the country. The independent dealer and distributor channel is the largest by volume, characterized by a high degree of entrepreneurship and one that rewards suppliers that deliver great service.
Today, we sell this brand to over 1,500 regional and local dealers across the country. The independent dealer and distributor channel is the largest by participant volume, characterized by a high degree of entrepreneurship and one that rewards suppliers that deliver great service.
Alongside the launch of 1951 Cabinetry comes 1951 Foundations and 1951 Progressions. 1951 Foundations and 1951 Progressions utilize American Woodmark’s Made-to-Stock options to address the market demand for high-quality craftsmanship at an affordable price point with their focused selections of the most popular styles and finishes.
Alongside the launch of 1951 Cabinetry TM comes 1951 Foundations TM and 1951 Progressions TM . 1951 Foundations TM and 1951 Progressions TM utilize American Woodmark’s Made-to-Stock options to address the market demand for high-quality craftsmanship at an affordable price point with their focused selections of the most popular styles and finishes.
Their styles and finishes will blend both timeless and on-trend designs that are curated to favor individual preferences for a traditional or contemporary feel. The brand maintains a commitment to longevity without compromising the excitement surrounding modern flair.
Their styles and finishes blend both timeless and on-trend designs that are curated to favor individual preferences for a traditional or contemporary feel. The brand maintains a commitment to longevity without compromising the excitement surrounding modern flair.
We believe that our employee relations and relationship with the union representing the employees in Anaheim are good. Culture and Core Values At American Woodmark, our mission to create value through people remains unchanged.
We believe that our employee relations and relationship with the union representing the employees in Anaheim are in good standing. Culture and Core Values At American Woodmark, our mission to create value through people remains unchanged.
The loss of either Home Depot or Lowe's as a customer would have a material adverse effect on us. Builders The builder business represents a large portion of our overall revenue and has historically been a strategic component of our go-to-market strategy.
The loss of either Home Depot or Lowe's as a customer would have a material adverse effect on us. Builders The builder channel represents a large portion of our overall revenue and has historically been a strategic component of our go-to-market strategy.
Best-in-Class Manufacturing Capabilities We operate 18 manufacturing facilities across the United States and Mexico. Our vertically-integrated production and assembly lines, standardized product construction, and investments in automation, have allowed us to continuously improve productivity and efficiency.
Best-in-Class Manufacturing Capabilities We operate 17 manufacturing facilities across the United States and Mexico. Our vertically-integrated production and assembly lines, standardized product construction, and investments in automation, have allowed us to continuously improve productivity and efficiency.
We serve 19 of the top 20 U.S. builders with a high degree of geographic concentration around major metro areas where single family starts are most robust. We also serve multi-family builders, primarily in the Southwest region of the U.S.
We serve 17 of the top 20 U.S. builders with a high degree of geographic concentration around major metro areas where single family starts are most robust. We also serve multi-family builders, primarily in the Southwest region of the U.S.
Our ability to provide superior value delivered with exceptional service has helped drive our expansion into this channel which will continue to be a strong growth and market share opportunity for us.
Our ability to provide superior value delivered with exceptional service has helped drive our expansion into this channel which we expect will continue to be a strong growth and market share opportunity for us.
We are one of a select number of market participants with a national manufacturing and distribution footprint, which includes 18 manufacturing facilities in the United States and Mexico, and eight primary service centers and one distribution center located throughout the United States.
We are one of a select number of market participants with a national manufacturing and distribution footprint, which includes 17 manufacturing facilities in the United States and Mexico, and eight primary service centers and one distribution center located throughout the United States.
We manufacture our products across 18 facilities located in Maryland, Indiana, West Virginia, Georgia, Arizona, Kentucky, Virginia, California, Texas, and North Carolina in the United States, and Tijuana and Monterrey, Mexico. We built a new manufacturing facility in Monterrey, Mexico, which began operations in the third quarter of fiscal 2024, and expanded our Hamlet, North Carolina facility.
We manufacture our products across 17 facilities located in Maryland, Indiana, West Virginia, Georgia, Arizona, Kentucky, California, Texas, and North Carolina in the United States, and Tijuana and Monterrey, Mexico. We recently built a new manufacturing facility in Monterrey, Mexico, which began operations in the third quarter of fiscal 2024, and expanded our Hamlet, North Carolina facility.
The contents of our website are not, however, part of, or incorporated by reference into, this report. Our Business American Woodmark celebrates the creativity in all of us. With over 8,600 employees and more than a dozen brands, we're one of the nation's largest cabinet manufacturers.
The contents of our website are not, however, part of, or incorporated by reference into, this report. Our Business American Woodmark celebrates the creativity in all of us. With over 7,800 employees and more than a dozen brands, we're one of the nation's largest cabinet manufacturers.
Within our distributor channel we also sell our newly launched 1951 Cabinetry TM brand through a network of regional distributors who are focused on selling a complete variety of building materials to small and midsized builders and contractors within their local markets. 1951 Cabinetry will be sold directly to distributors with a wide range of product offerings.
Within our distributor channel we also sell our recently launched 1951 Cabinetry TM brand through a network of regional distributors who are focused on selling a complete variety of building materials to small and midsized builders and contractors within their local markets. 1951 Cabinetry TM is sold directly to distributors with a wide range of product offerings.
Due to the market presence, store network and customer reach of these large home centers, our strategy has been to develop long-term strategic relationships with both Home Depot and Lowe's to distribute our products. During the fiscal year ended April 30, 2024 ("fiscal 2024"), Home Depot and Lowe's combined accounted for approximately 41.6% of net sales of the Company.
Due to the market presence, store network and customer reach of these large home centers, our strategy has been to develop long-term strategic relationships with both Home Depot and Lowe's to distribute our products. During the fiscal year ended April 30, 2025 ("fiscal 2025"), Home Depot and Lowe's combined accounted for approximately 40.8% of net sales of the Company.
Our various service center locations are close to these builders and enable us to deliver exceptional service to our builder partners. During fiscal 2024, builders accounted for approximately 42.4% of net sales of the Company. Independent Dealers & Distributors In 2010, we expanded our business into the independent dealers channel with the launch of the Waypoint Living Spaces® brand.
Our various service center locations are close to these builders and enable us to deliver exceptional service to our builder partners. During fiscal 2025, builders accounted for approximately 43.5% of net sales of the Company. Independent Dealers & Distributors In 2010, we expanded our business into the independent dealers channel with the launch of the Waypoint Living Spaces® brand.
Our rate of incidents recordable under the standards of the Occupational Safety and Health Administration (“OSHA”) per one hundred employees per year, also known as the OSHA recordable rate, was 1.42 during fiscal 2024, which is 57% better than the industry average of 3.3 according to the U.S. Department of Labor.
Our rate of incidents recordable under the standards of the Occupational Safety and Health Administration (“OSHA”) per one hundred employees per year, also known as the OSHA recordable rate, was 1.48 during fiscal 2025, which is 53% better than the industry average of 3.1 according to the U.S. Department of Labor.
During fiscal 2024, independent dealers and distributors accounted for approximately 16.0% of net sales of the Company. Manufacturing, Distribution and Service Our manufacturing facilities are strategically located to serve our customers, which enhances our ability to provide high quality, value priced products with low production costs.
During fiscal 2025, independent dealers and distributors accounted for approximately 15.8% of net sales of the Company. Manufacturing, Distribution and Service Our manufacturing facilities are strategically located to serve our customers, which enhances our ability to provide high quality, value priced products with low production costs.
Depending on the course, our training and development opportunities are offered through a variety of platforms and frequencies, such as on an on-demand, semi-annual, annual, or biannual basis.
Depending on the course, our training and development opportunities are offered through a variety of platforms and frequencies, such as in person vs. online and on-demand, semi-annual, annual, or biannual basis.
Competitive factors within the industry include pricing, quality, product availability, service, delivery time, and relationships with customers. Our principal means for competition is our breadth and variety of product offerings, expanded service capabilities, geographic reach, competitive price points for our products, and affordable quality.
Moreover, companies in other building products industries may compete with us. Competitive factors within the industry include pricing, quality, product availability, service, delivery time, and relationships with customers. Our principal means for competition is our breadth and variety of product offerings, expanded service capabilities, geographic reach, competitive price points for our products, and affordable quality.
We purchase these, and other raw materials, from more than one source and generally believe them to be readily available. We rely on outside suppliers for some of our key components and do not typically enter into long-term contracts with our suppliers or sourcing partners. We source a portion of our components from third parties in Asia and Europe.
Additional raw materials include paint, manufactured components, and hardware. We purchase these, and other raw materials, from more than one source and generally believe them to be readily available. We rely on outside suppliers for some of our key components and do not typically enter into long-term contracts with our suppliers or sourcing partners.
Our dedication to diversity and inclusion is not only rooted in our values but also vital to our organization's success. 6 Our Competitive Strengths Market Leader with North American Manufacturing and Distribution Network We believe our company holds the number two or three market position in the United States cabinet market with an estimated 10% market share based on publicly available information.
Our Competitive Strengths Market Leader with North American Manufacturing and Distribution Network We believe our company holds the number two or three market position in the United States cabinet market with approximately 11% market share based on publicly available information.
Most of our competitors compete on a local or regional basis, but others, like us, compete on a national basis as well. Our competitors include importers and large consolidated operations as well as relatively small, local cabinet manufacturers. Moreover, companies in other building products industries may compete with us.
Competition We operate in a highly fragmented industry that is composed of several thousand local, regional, and national manufacturers. Most of our competitors compete on a local or regional basis, but others, like us, compete on a national basis as well. Our competitors include importers and large consolidated operations as well as relatively small, local cabinet manufacturers.
The distances involved in these arrangements, together with the differences in business practices, shipping and delivery requirements, and laws and regulations add complexity to our supply chain logistics and increase the potential for interruptions in our production scheduling. Competition We operate in a highly fragmented industry that is composed of several thousand local, regional, and national manufacturers.
We source a portion of our components from third parties in Asia and Europe. The distances involved in these arrangements, together with the differences in business practices, shipping and delivery requirements, and laws regulations, and tariffs add complexity to our supply chain logistics and increase the potential for interruptions in our production scheduling.
General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years and this trend is expected to continue. The costs of the Company's products are subject to inflationary pressures and commodity price fluctuations.
General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years and this trend is expected to continue. Human Capital Resources Employees As of April 30, 2025, we employed over 7,800 full-time employees, with approximately 228 unionized employees in Anaheim, California.
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The Company has generally been able, over time, to recover the effects of inflation and commodity price fluctuations through sales price increases. 5 Human Capital Resources Employees As of April 30, 2024, we employed over 8,600 full-time employees, with approximately 228 unionized employees in Anaheim, California.
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The costs of the Company's products are subject to inflationary pressures, commodity price fluctuations, and importation tariffs. The Company has generally been able, over time, to recover the effects of inflation, commodity price fluctuations, and tariffs on imports through sales price increases. The uncertainty around tariffs is further discussed in Item 1A. " Risk Factors".
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Diversity and Inclusion American Woodmark is an equal opportunity employer, and we strive to create an opportunity that is free from discrimination and harassment. That commitment extends to cultivating an inclusive environment where every individual is respected, valued, appreciated, and empowered to contribute their unique perspectives.
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Employee Experience American Woodmark is an equal opportunity employer committed to fostering an inclusive workplace where individuals are treated with dignity and respect and have the opportunity to succeed. We believe a culture built on trust, collaboration, and shared values enhances engagement, encourages innovation, and supports long-term business success.
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We believe that embracing inclusion, not only results in increased diversity but also contributes to more robust solutions through learning and innovation. In recent years, we have made significant progress in promoting diversity and inclusion throughout our organization.
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Our employee experience strategy integrates inclusive leadership, continuous development, and structured feedback into how we operate, lead, and support our workforce. It is designed to promote belonging, connection, and growth throughout the employee lifecycle. In recent years, we have strengthened our efforts to build a self-sustaining, intentional culture that aligns with our mission of Creating Value Through People .
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We have implemented Right Environment Councils across all our locations, ensuring meaningful engagement with employees at all levels and within the communities we serve.
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These efforts include: 6 • Facilitating local engagement through our Right Environment Councils, employee-led teams which help reinforce our culture and core values across all locations; • Delivering interactive, leader-led training that emphasizes inclusive leadership, servant leadership, effective interpersonal communication, and high-performing team behaviors; • Capturing employee feedback through multiple channels—including exit surveys, engagement surveys, and other touchpoints—to guide improvement plans at the functional and enterprise level; and • Expanding access to development and leadership readiness programs that support internal mobility and career progression through transparent, role-aligned pathways.
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Moreover, we have placed a strong emphasis on educating our leaders and staff through comprehensive training on diversity and inclusion topics across our hourly and salaried employees, bolstering awareness and actionable insights through initiatives like our employee engagement survey, which now includes categorized diversity and inclusion questions, developed a Women in Operations mentorship program, and launched a quarterly series podcast committed to discussing topics around inclusion to the organization.
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We are committed to cultivating a workplace where every individual can thrive. By embedding employee experience into the fabric of our culture, we strengthen organizational alignment, reinforce our core principles, and position American Woodmark for sustainable growth.
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We have elevated our efforts and continue pursuing strategic initiatives led by our Inclusion, Diversity, Equity, and Alignment (IDEA) team. Our enterprise-wide social strategic roadmap guides our ongoing endeavors, incorporating representation metrics into our organizational scorecards. Looking ahead, we are unwavering in our commitment to deepen our culture of inclusion and leverage the voices and perspectives within our company.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeWe cannot assure you that we will be able to maintain compliance with these existing covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants. 11 Our failure to comply with the restrictive covenants described above as well as other terms of our indebtedness and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in us being required to repay these borrowings before their due date.
Biggest changeOur failure to comply with the restrictive covenants described above as well as other terms of our indebtedness and/or the terms of any future indebtedness from time to time could result in an event of default, which, if not cured or waived, could result in us being required to repay these borrowings before their due date.
These restrictions limit our ability and the ability of our subsidiaries to, among other things, to incur additional indebtedness, create additional liens on its assets, make certain investments, dispose of assets, or engage in a merger or other similar transaction or engage in transactions with affiliates, subject, in each case, to the various exceptions and conditions described in the credit agreement.
These restrictions limit our ability and the ability of our subsidiaries to, among other things, incur additional indebtedness, create additional liens on its assets, make certain investments, dispose of assets, or engage in a merger or other similar transaction or engage in transactions with affiliates, subject, in each case, to the various exceptions and conditions described in the credit agreement.
These costs and risks could include, but are not limited to: • significant capital and operating expenditures; • disruptions to our domestic and international supply chains; • inability to fill customer orders accurately and on a timely basis, or at all; • inability to process payments to suppliers, vendors and associates accurately and in a timely manner; • disruption to our system of internal controls; • inability to fulfill our SEC or other governmental reporting requirements in a timely or accurate manner; • inability to fulfill federal, state, or local tax filing requirements in a timely or accurate manner; and • increased demands on management and staff time to the detriment of other corporate initiatives.
These costs and risks could include, but are not limited to: • significant capital and operating expenditures; • disruptions to our domestic and international supply chains; • inability to fill customer orders accurately and on a timely basis, or at all; 11 • inability to process payments to suppliers, vendors and associates accurately and in a timely manner; • disruption to our system of internal controls; • inability to fulfill our SEC or other governmental reporting requirements in a timely or accurate manner; • inability to fulfill federal, state, or local tax filing requirements in a timely or accurate manner; and • increased demands on management and staff time to the detriment of other corporate initiatives.
Conversely, when raw materials or energy prices decline, we may receive customer pressure to reduce our sales prices. 8 These prices are market-based and fluctuate based on factors beyond our control. We do not have long-term fixed supply agreements and do not hedge against price fluctuations. We, therefore, cannot predict our raw materials or energy costs for the coming year.
Conversely, when raw materials or energy prices decline, we may receive customer pressure to reduce our sales prices. These prices are market-based and fluctuate based on factors beyond our control. We do not have long-term fixed supply agreements and do not hedge against price fluctuations. We, therefore, cannot predict our raw materials or energy costs for the coming year.
These large retailers also impose strict logistics and performance criteria and fines. Failure to comply with these obligations may result in these customers reducing or stopping their purchase of our products. We could also experience delays or defaults in payment from Home Depot or Lowe's, which could adversely affect our business, financial condition or results of operations.
These large retailers also impose strict logistics and performance criteria and fines. Failure to comply with these obligations may result in these customers reducing or stopping their purchase of our products. 9 We could also experience delays or defaults in payment from Home Depot or Lowe's, which could adversely affect our business, financial condition or results of operations.
We cannot provide assurance that we will be successful in integrating an acquired business or that an internally developed project will perform at the levels we anticipate. We may pay for future acquisitions using cash, stock, the assumption of debt, or a combination of these. Future acquisitions could result in dilution to existing shareholders and to earnings per share.
We cannot provide assurance that we will be successful in integrating an acquired business or that an internally developed project will perform at the levels we anticipate. We may pay for future acquisitions using cash, stock, the assumption of debt, or a combination of 12 these. Future acquisitions could result in dilution to existing shareholders and to earnings per share.
Further, the volatile and challenging economic environment of recent years has caused shifts in consumer trends, demands, preferences and purchasing practices, and changes in the business models and strategies of our customers. Shifts in consumer preferences, which may or may not be long-term, have altered the quantity, type, and prices of products demanded by the end-consumer and our customers.
Further, the volatile and challenging economic environment of recent years has caused shifts in consumer trends, demands, 10 preferences and purchasing practices, and changes in the business models and strategies of our customers. Shifts in consumer preferences, which may or may not be long-term, have altered the quantity, type, and prices of products demanded by the end-consumer and our customers.
Additional risks and uncertainties not presently known to the Company or currently believed to be immaterial also may adversely impact the Company's business. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the Company's business, financial condition, and results of 7 operations.
Additional risks and uncertainties not presently known to the Company or currently believed to be immaterial also may adversely impact the Company's business. Should any risks or uncertainties develop into actual events, these developments could have material adverse effects on the Company's business, financial condition, and results of operations.
Such manufacturing expansions, realignments, and programs involve substantial planning, often require capital investments, and may result in charges for fixed asset impairments or obsolescence and substantial severance costs. We also cannot provide assurance that we will achieve all of the intended cost savings.
Such manufacturing expansions or reductions, realignments, and programs involve substantial planning, often require capital investments, and may result in charges for fixed asset impairments or obsolescence and substantial severance costs. We also cannot provide assurance that we will achieve all of the intended cost savings.
In addition, we source raw materials and components from Asia where we have recently experienced higher manufacturing costs and longer lead times due to currency fluctuations, higher wage rates, labor shortages, and higher raw material costs, and we have also experienced higher shipping costs and shipping delays.
In addition, we source raw materials and components from Asia where we have recently experienced higher manufacturing costs and longer lead times due to currency fluctuations, higher wage rates, labor shortages, and higher raw material costs, and we have also experienced higher shipping costs, shipping delays, and higher tariff costs.
Liability for environmental 12 contamination or a release of hazardous materials may be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire share.
Liability for environmental contamination or a release of hazardous materials may be joint and several, so that we may be held responsible for more than our share of the contamination or other damages, or even for the entire share.
If our products do not keep up with consumer trends, demands, and preference, we could lose market share, which could have a material adverse effect on our business, financial condition, or results of operations. Changes to consumer shopping habits and potential trends toward "online" purchases could also impact our ability to compete.
If our products do not keep up with consumer trends, demands, and preferences, we could lose market share, which could have a material adverse effect on our business, financial condition, or results of operations. Changes to consumer shopping habits and potential trends toward "online" purchases could also impact our ability to compete.
Combined with increased demand, such consolidation could increase the price of our supplies and raw materials. We also may be unwilling or unable to pass on to customers commensurate cost increases. Competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices.
Combined with increased demand, such consolidation could increase the price of our supplies and raw materials. We also may be unwilling or unable to pass these cost increases on to our customers. Competitive considerations and customer resistance to price increases may delay or make us unable to adjust selling prices.
In addition, we believe that our success depends in part on our ability to quickly and effectively train additional workforce to handle the increased volume and production while minimizing labor inefficiencies and maintaining product quality in a housing market recovery.
In addition, we believe that our success depends in part on our ability to quickly and effectively train additional workforce to handle increased volume and production while minimizing labor inefficiencies and maintaining product quality during a housing market recovery.
These risks and uncertainties, which the Company considers to be most relevant to specific business activities, include, but are not limited to, the following. Additional risks and uncertainties that may affect the Company's business, results of operations, and financial condition are discussed elsewhere in this report, including in Item 7.
These risks and uncertainties, which the Company considers to be most relevant to specific business activities, include, but are not limited to, the factors identified below. Additional risks and uncertainties that may affect the Company's business, results of operations, and financial condition are discussed elsewhere in this report, including in Item 7.
We believe that our success depends upon our ability to attract, employ, train, and retain qualified personnel with the ability to design, manufacture, and assemble these products. In addition, our ability to expand our operations depends in part on our ability to increase our skilled labor force as the housing market continues to recover in the United States.
We believe that our success depends upon our ability to attract, employ, train, and retain qualified personnel with the ability to design, manufacture, and assemble these products. In addition, our ability to expand our operations depends in part on our ability to increase our skilled labor force when the housing market recovers in the United States.
Manufacturing expansion to add capacity, manufacturing realignments, and other cost savings programs could result in a decrease in our near-term earnings. We continually review our manufacturing operations. These reviews could result in the expansion of capacity, manufacturing realignments, and various cost savings programs.
Manufacturing expansion or reduction of capacity, manufacturing realignments, and other cost savings programs could result in a decrease in our near-term earnings. We continually review our manufacturing operations. These reviews could result in the expansion or reduction of capacity, manufacturing realignments, and various cost savings programs.
Our consolidated indebtedness level could have important consequences to us, including, among other things, increasing our vulnerability to general economic and industry conditions; requiring a portion of our cash flow used in operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our liquidity and our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; exposing us to the risk of increased interest rates, and corresponding increased interest expense, because borrowings under our credit facilities are at variable rates of interest; reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes, due to the costs, and expenses associated with such debt; limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate, or other purposes; and limiting our ability to adjust to changing marketplace conditions and placing us at a competitive disadvantage compared to our competitors who may have less debt.
Our consolidated indebtedness level could have important consequences to us, including, among other things, increasing our vulnerability to general economic and industry conditions; requiring a portion of our cash flow used in operations to be dedicated to the payment of principal and interest on our indebtedness, therefore reducing our liquidity and our ability to use our cash flow to fund our operations, capital expenditures and future business opportunities; exposing us to the risk of increased interest rates, and corresponding increased interest expense, because borrowings under our credit facilities are at variable rates of interest; reducing funds available for working capital, capital expenditures, acquisitions, and other general corporate purposes, due to the costs, and expenses associated with such debt; limiting our ability to obtain additional financing for working capital, capital expenditures, debt service requirements, acquisitions, and general corporate, or other purposes; and limiting our ability to adjust to changing marketplace conditions and placing us at a competitive disadvantage compared to our competitors who may have less debt. 13 If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, or restructure or refinance our indebtedness.
Further, if a natural disaster occurs in a region from which we derive a significant portion of our revenue, end-user customers in that region may delay or forego purchases of our products, which may materially and adversely impact our operating results for a particular period. Item 1B. UNRESOLVED STAFF COMMENTS None.
Further, if a natural disaster occurs in a region from which we derive a significant portion of our revenue, end-user customers in that region may delay or forego purchases of our products, which may materially and adversely impact our operating results for a particular period.
Accordingly, we are subject to risks associated with potential disruption caused by changes in political, monetary, economic, and social environments, including civil and political unrest, terrorism, possible expropriation, local labor conditions, changes in laws, regulations, and policies of foreign governments and trade disputes with the United States (including tariffs), and compliance with U.S. laws affecting activities of U.S. companies abroad, including tax laws, economic sanctions, and enforcement of contract and intellectual property rights.
Accordingly, we are subject to risks associated with potential disruption caused by changes in political, monetary, economic, and social environments, including civil and political unrest, terrorism, possible expropriation, local labor conditions, changes in laws, regulations, and policies of foreign governments and trade disputes with the United States, and compliance with U.S. laws affecting activities of U.S. companies abroad.
Consistent with our fiscal 2024 net sales volume decrease, adverse changes in any of these conditions generally, or in any of the markets where we operate, could decrease demand and could adversely impact our businesses by: • causing consumers to delay or decrease homeownership; • making consumers more price conscious resulting in a shift in demand to smaller, less expensive homes; • making consumers more reluctant to make investments in their existing homes, including kitchen and bath repair and remodel projects; or • making it more difficult to secure loans for major renovations.
Net sales volume decreases combined with adverse changes in any of these conditions generally, or in any of the markets where we operate, could decrease demand and could adversely impact our businesses by: • causing consumers to delay or decrease homeownership or relocation; • making consumers more price conscious resulting in a shift in demand to smaller, less expensive homes; • making consumers more reluctant to make investments in their existing homes, including kitchen and bath repair and remodel projects; • making consumers more price conscious resulting in a shift in demand to less expensive, more value-based product offerings when making investments in their homes; or • making it more difficult to secure loans for major renovations.
If a determination is made that a significant impairment in value of goodwill or long-lived assets has occurred, such determination could require us to impair a substantial portion of our assets. Asset impairments could have a material adverse effect on our financial condition and results of operations. The implementation of our Enterprise Resource Planning system could disrupt our business.
If a determination is made that a significant impairment in value of goodwill or long-lived assets has occurred, such determination could require us to impair a substantial portion of our assets. Asset impairments could have a material adverse effect on our financial condition and results of operations.
Our international operations and sourcing of materials (including from Asia and Mexico) could be harmed by a variety of factors including, but not limited to: • increases in transportation costs or transportation delays; • work stoppages and labor strikes; • introduction of non-native invasive organisms into new environments; • recessionary trends in international markets; • legal and regulatory changes and the burdens and costs of our compliance with a variety of laws, including export controls, import and customs trade restrictions, tariffs and other regulations; • fluctuations in exchange rates, particularly the value of the U.S. dollar relative to other currencies; and • political unrest, terrorism, and economic instability.
Our international operations and sourcing of materials (including from Asia and Mexico) could be harmed by a variety of factors including, but not limited to: • increases in transportation costs or transportation delays; • work stoppages and labor strikes; • introduction of non-native invasive organisms into new environments; • recessionary trends in international markets; • legal and regulatory changes and the burdens and costs of our compliance with a variety of laws, including export controls, import and customs trade restrictions, tariffs and other regulations; • fluctuations in exchange rates, particularly the value of the U.S. dollar relative to other currencies; and • political unrest, terrorism, and economic instability. 8 If any of these or other factors were to render the conduct of our business in a particular country undesirable or impractical, our business, financial condition, or results of operations could be materially adversely affected.
If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected.
If we are forced to refinance these borrowings on less favorable terms or cannot refinance these borrowings, our results of operations and financial condition could be adversely affected. Item 1B. UNRESOLVED STAFF COMMENTS None.
Effects of manufacturing expansion, realignments, or cost savings programs could result in a decrease in our short-term earnings until the additional capacity is in place, cost reductions are achieved, and/or production volumes stabilize, such as our expansion of stock kitchen and bath capacity in North Carolina and Mexico, which was completed during the fiscal year.
Effects of manufacturing expansion or reduction, realignments, or cost savings programs could result in a decrease in our short-term earnings until the capacity is right-sized, cost reductions are achieved, and/or production volumes stabilize, such as our expansion of stock kitchen and bath capacity in North Carolina and Mexico, which was completed during the prior fiscal year and the closing of our manufacturing facility in Orange, Virginia during this fiscal year.
Other general risks applicable to us and our business We may incur future goodwill impairment charges or other asset impairment charges which could negatively impact our future results of operations and financial condition. We recorded significant goodwill as a result of the acquisition of RSI Home Products, Inc. (the "RSI Acquisition" or "RSI") in fiscal 2018.
We may incur future goodwill impairment charges or other long-lived asset impairment charges which could negatively impact our future results of operations and financial condition. We recorded significant goodwill as a result of the acquisition of RSI Home Products, Inc. (the "RSI Acquisition" or "RSI") in fiscal 2018. Goodwill represents a substantial portion of our assets.
We have begun planning for the next implementation in our Anaheim and Riverside, California facilities in fiscal 2025. Although we currently expect the ERP implementation to increase efficiencies by leveraging a common, cloud-based system throughout the Company and standardizing processes and reporting, our ERP system implementation may not result in improvements that outweigh its costs and may disrupt our operations.
We have begun planning for the next implementation in our Lincolnton and Hamlet, North Carolina facilities later in fiscal 2026. Although we currently expect the ERP implementation to increase efficiencies by leveraging a common, cloud-based system throughout the Company and standardizing processes and reporting, it may not result in improvements outweighing its costs and may disrupt our operations.
Goodwill represents a substantial portion of our assets. We also have long-lived assets consisting of property and equipment and other identifiable intangible assets which we review both on an annual basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable.
We also have long-lived assets consisting of property and equipment, capitalized internal use software, and certain prepaid customer incentives, as well as other identifiable intangible assets which we review both on an annual basis as well as when events or circumstances indicate that the carrying amount of an asset may not be recoverable.
Instead, most raw materials and sourced goods are obtained on a "purchase order" basis. Although these components are generally obtainable in sufficient quantities from other sources, resourcing them from another supplier could take time.
We typically do not enter into long-term contracts with our suppliers or sourcing partners. Instead, most raw materials and sourced goods are obtained on a "purchase order" basis. Although these components are generally obtainable in sufficient quantities from other sources, resourcing them from another supplier could take time.
While we do not rely exclusively on any one supplier for any particular raw materials, the loss of a major supplier could increase our costs to obtain raw materials until we obtain an adequate alternative source. We typically do not enter into long-term contracts with our suppliers or sourcing partners.
Furthermore, we rely heavily or, in certain cases, exclusively, on outside suppliers for some of our key components. While we do not rely exclusively on any one supplier for any particular raw materials, the loss of a major supplier could increase our costs to obtain raw materials until we obtain an adequate alternative source.
In addition, the continued threat of terrorism and heightened security 13 and military action in response to this threat, or any future acts of terrorism, may cause further disruptions to the economies of the United States and other countries.
In addition, the continued threat of terrorism and heightened security and military action in response to this threat, or any future acts of terrorism, may cause further disruptions to the economies of the United States and other countries. Our redundant, multiple site capacity may not be sufficient in the event of a natural disaster, terrorist act or other catastrophic event.
We are in the process of implementing a common Enterprise Resource Planning (ERP) platform over several fiscal years. The first wave (including the procurement, general ledger, accounts payable, projects, and fixed asset modules) went live in the second half of fiscal 2022. During fiscal 2024, our new Monterrey, Mexico facility went live.
The first wave (including the procurement, general ledger, accounts payable, projects, and fixed asset modules) went live in the second half of fiscal 2022. During fiscal 2024, our new Monterrey, Mexico facility went live. Our Anaheim facility went live in May 2025.
Our customers can make significant changes in their purchase volumes and can seek to significantly affect the prices we receive for our products and services and the other terms and conditions on which we do business.
We do not typically enter into long-term sales contracts with Home Depot or Lowe's and our sales usually occur on a "purchase order" basis. Our customers can make significant changes in their purchase volumes and can seek to significantly affect the prices we receive for our products and services and the other terms and conditions on which we do business.
If our management is unable to effectively manage growth, our business, financial condition, or results of operations could be adversely affected. If our growth strategy is not successful then our revenue and earnings may not grow as anticipated or may decline, we may not be profitable, or our reputation and brand 9 may be damaged.
If our growth strategy is not successful then our revenue and earnings may not grow as anticipated or may decline, we may not be profitable, or our reputation and brand may be damaged.
Our ability to offer a wide variety of products depends on our ability to obtain an adequate supply of components from manufacturers and other suppliers, particularly wood-based and resin products. Transportation and container delays may adversely impact our supply chain.
The inability to obtain raw materials from suppliers in a timely manner would adversely affect our ability to manufacture and market our products. Our ability to offer a wide variety of products depends on our ability to obtain an adequate supply of components from manufacturers and other suppliers, particularly wood-based and resin products.
Additionally, failure by our suppliers to provide us with quality products on 10 commercially reasonable terms, and to comply with legal requirements for business practices, could have a material adverse effect on our business, financial condition, or results of operations. Furthermore, we rely heavily or, in certain cases, exclusively, on outside suppliers for some of our key components.
Transportation and container delays may adversely impact our supply chain. Additionally, failure by our suppliers to provide us with quality products on commercially reasonable terms, potential cybersecurity attacks on our suppliers, and failure to comply with legal requirements for business practices, could have a material adverse effect on our business, financial condition, or results of operations.
We manufacture our products internationally and are exposed to risks associated with doing business globally. We manufacture our products in the United States and Mexico and sell our products in the United States and Canada.
We manufacture our products in the United States and Mexico and sell our products in the United States and Canada.
"Quantitative and Qualitative Disclosures about Market Risk." Risks related to our business and industry Because of the concentration of our sales to our two largest customers, the loss of either customer or a significant reduction in orders from either customer could adversely affect our financial results.
Because of the concentration of our sales to our two largest customers, the loss of either customer or a significant reduction in orders from either customer could adversely affect our financial results. Home Depot and Lowe's collectively accounted for approximately 40.8% of total net sales during the fiscal year 2025.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" under the headings "Forward-Looking Statements," "Seasonality," and "Outlook for Fiscal 2025" and Item 7A.
"Management's Discussion and Analysis of Financial Condition and Results of Operations" under the headings "Forward-Looking Statements," "Seasonality," and "Outlook for Fiscal 2026" and Item 7A. "Quantitative and Qualitative Disclosures about Market Risk." Risks related to our business and industry We manufacture our products internationally and are exposed to risks associated with doing business globally.
In addition, we may not accurately gauge consumer preferences and successfully develop, manufacture, and market our products at a national level. Further, the implementation of our growth strategy may place additional demands on our administrative, operational, and financial resources and may divert management's attention away from our existing business and increase the demands on our financial systems and controls.
Further, the implementation of our growth strategy may place additional demands on our administrative, operational, and financial resources and may divert management's attention away from our existing business and increase the demands on our financial systems and controls. If our management is unable to effectively manage growth, our business, financial condition, or results of operations could be adversely affected.
The terms of any future indebtedness we may incur could include more restrictive covenants.
The terms of any future indebtedness we may incur could include more restrictive covenants. We cannot assure you that we will be able to maintain compliance with these existing covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.
Removed
Home Depot and Lowe's collectively accounted for approximately 41.6% of total net sales during the fiscal year 2024. We do not typically enter into long-term sales contracts with Home Depot or Lowe's and our sales usually occur on a "purchase order" basis.
Added
We have been and could be further adversely affected by international trade regulations, including the imposition of sanctions, duties, new or increased tariffs and anti-dumping penalties. Risks inherent to international operations include: tax laws, economic sanctions, and enforcement of contract and intellectual property rights. We are also subject to the Foreign Corrupt Practices Act and other anti-bribery laws.
Removed
We are also subject to the Foreign Corrupt Practices Act and other anti-bribery laws.
Added
There is currently uncertainty about the future relationship between the U.S. and various other countries with respect to trade practices.
Removed
If any of these or other factors were to render the conduct of our business in a particular country undesirable or impractical, our business, financial condition, or results of operations could be materially adversely affected. The inability to obtain raw materials from suppliers in a timely manner would adversely affect our ability to manufacture and market our products.
Added
The U.S. government has imposed significant tariffs or other restrictions on certain foreign imports and has raised the possibility of imposing additional tariff increases or expanding the tariffs to capture other countries and types of foreign imports, which have increased and could further increase the cost of certain raw materials and components imported into the U.S.
Removed
If our cash flows and capital resources are insufficient to fund our debt service obligations, we may be forced to reduce or delay capital expenditures, sell assets, seek additional capital, or restructure or refinance our indebtedness.
Added
Import tariffs or other adverse trade actions have led to increases in prices of raw materials and components which are critical to our business, and additional tariffs or other adverse trade actions could result in further price increases.
Removed
Our redundant, multiple site capacity may not be sufficient in the event of a natural disaster, terrorist act or other catastrophic event.
Added
The ultimate impact of such adverse trade actions remains uncertain as it is subject to a number of factors including the effective date and duration of tariffs, changes in amount, scope and nature of tariffs in the future, any countermeasures that countries subject to the tariffs may take and our ability to mitigate the impact of tariffs.
Added
Other general risks applicable to us and our business The implementation of our Enterprise Resource Planning system could disrupt our business. We are in the process of implementing a common Enterprise Resource Planning ("ERP") platform over several fiscal years.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeRisk Assessment and Threat Intelligence: Under the oversight of the Chief Information Officer (CIO), we conduct periodic risk assessments to pinpoint potential cybersecurity vulnerabilities and threats. These assessments entail evaluating the security posture of critical systems, networks, and applications, as well as analyzing the potential impact of cybersecurity threats on our business operations, financial condition, and reputation.
Biggest changeThese assessments entail evaluating the security posture of critical systems, networks, and applications, as well as analyzing the potential impact of cybersecurity threats on our business operations, financial condition, and reputation. Additionally, we perform continuous threat monitoring and deployed monitoring systems, encompassing 14 technologies such as intrusion detection systems, security information and event management tools, and threat intelligence programs.
We also conduct regular security patching to mitigate emerging cyber threats proactively. Incident Response: We have implemented an incident response plan and playbook, encompassing procedures designed to respond to and recover from cybersecurity incidents.
We also conduct regular security patching to mitigate emerging cyber threats proactively. Incident Response: We have implemented an incident response plan and playbook, encompassing procedures designed to respond to and recover from internal cybersecurity incidents.
Our CIO presents to the Board at least annually and to our Audit Committee at least quarterly, covering a broad range of topics, such as recent and potential cybersecurity threats and incidents across our industry, best practices and policies, emerging trends, vulnerability assessments, and management's ongoing efforts to prevent, detect, and address internal and external cybersecurity threats specific to our organization.
Our CISO presents to the Board at least annually and to our Audit Committee at least quarterly, covering a broad range of topics, such as recent and potential cybersecurity threats and incidents across our industry, best practices and policies, emerging trends, vulnerability assessments, and management's ongoing efforts to prevent, detect, and address internal and external cybersecurity threats specific to our organization.
Additionally, our Cybersecurity Steering Committee is co-chaired by our CIO and Cybersecurity, Governance Risk and Compliance manager along with other key leaders, including the Chief Human Resources Officer, Vice President of Finance, Corporate Controller, Senior Corporate Risk Manager, Director of Enterprise Infrastructure and Senior Director of Internal Audit, all overseeing the management of key cybersecurity risks and strategy for the organization.
Additionally, our Cybersecurity Steering Committee is co-chaired by our CISO and Cybersecurity, Governance Risk and Compliance manager along with other key leaders, including the Chief Human Resources Officer, Vice President of Finance, Corporate Controller, Senior Corporate Risk Manager, Director of Enterprise Infrastructure and Vice President of Internal Audit, all overseeing the management of key cybersecurity risks and strategy for the organization.
These briefings also include periodic third-party cybersecurity program assessments, benchmarks, and updates from our cybersecurity incident management exercises. Cybersecurity risks are documented and shared with our Audit Committee and the Board quarterly. While our Board and Audit Committee oversees cybersecurity risk, senior management is responsible for actively managing cybersecurity risk, including overseeing and executing the risk management strategies discussed above.
These briefings also include periodic third-party cybersecurity program assessments, benchmarks, and updates from our cybersecurity incident management exercises. Cybersecurity risks are documented and shared with our Audit Committee and the Board quarterly. While our Board and Audit Committee oversee cybersecurity risk, senior management is responsible for actively managing cybersecurity risk, including overseeing and executing the risk management strategies discussed above.
Senior management reports to the Board semi-annually on our enterprise risk management processes, ensuring transparency and accountability.
Senior management reports to the Board annually on our enterprise risk management processes, ensuring transparency and accountability.
This program relies on key elements, including risk assessment, due diligence, contractual provisions, and ongoing monitoring, to identify and mitigate impacts from high-risk third parties and specific risks. We utilize security risk assessment questionnaire tools to identify high-risk third parties, enabling us to proactively and effectively assess and mitigate potential security vulnerabilities.
This program will rely on key elements, including risk assessment, due diligence, contractual provisions, and ongoing monitoring, to identify and mitigate impacts from high-risk third parties and specific risks. We will utilize security risk assessment questionnaire tools to identify high-risk third parties, enabling us to proactively and effectively assess and mitigate potential security vulnerabilities.
Third-Party Risk Management: We recognize the potential cybersecurity risks inherent in our relationships with third parties. To address this, we have implemented a comprehensive third-party risk management program designed to identify and oversee such risks.
Third-Party Risk Management: We recognize the potential cybersecurity risks inherent in our relationships with third parties. To address this, we are implementing a comprehensive third-party risk management program designed to identify and oversee such risks.
The foundation of our framework rests on these key principles: (i) risk assessment and threat intelligence gathering; (ii) implementing robust security controls; (iii) maintaining effective incident response capabilities; (iv) promoting employee awareness and providing cybersecurity training; and (v) managing third-party risks.
The foundation of our framework rests on these key principles: (i) risk assessment and threat intelligence gathering; (ii) implementing robust security controls; (iii) maintaining effective incident response capabilities; (iv) promoting employee awareness and providing cybersecurity training; (v) managing third-party risks; and (vi) providing governance aligning with business objectives and ensuring senior leadership accountability for cyber security risk management.
Our Information Security Policy Framework outlines the requirements for employee conduct concerning company information and company-managed devices, encompassing relevant privacy, data security, and data retention policies. We believe our Information Security Policy Framework aligns with industry best practices and applicable legal and regulatory requirements.
Employee Awareness and Training: Our employees play a pivotal role in maintaining a strong cybersecurity posture. Our Information Security Policy Framework outlines the requirements for employee conduct concerning company information and company-managed devices, encompassing relevant privacy, data security, and data retention policies. We believe our Information Security Policy Framework aligns with industry best practices and applicable legal and regulatory requirements.
The procedures also outline guidelines for escalating incident information to our Cybersecurity Steering Committee, senior management, our Audit Committee (which, as discussed below, has been delegated the responsibility for our Board of Directors (the "Board") cybersecurity risk oversight function), our full Board, and for providing timely public disclosure when necessary. 14 Employee Awareness and Training: Our employees play a pivotal role in maintaining a strong cybersecurity posture.
The procedures also outline guidelines for escalating incident information to our Cybersecurity Steering Committee, senior management, our Audit Committee (which, as discussed below, has been delegated the responsibility for our Board cybersecurity risk oversight function), our full Board, and for providing timely public disclosure when necessary.
As of the date of this filing, we are not aware of any current cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition. For further discussion of the risks related to cybersecurity, see Item 1A. Risk Factors.
Through this robust governance structure, involving Board oversight, senior management leadership, and a cross-functional committee, we maintain a proactive and comprehensive approach to managing cybersecurity risks across the organization. 15 As of the date of this filing, we are not aware of any current cybersecurity threats or cybersecurity incidents that have materially affected or are reasonably likely to materially affect our business, results of operations or financial condition.
Removed
Additionally, we perform continuous threat monitoring and deployed monitoring systems, encompassing technologies such as intrusion detection systems, security information and event management tools, and threat intelligence programs.
Added
Risk Assessment and Threat Intelligence: Under the oversight of the Vice President of Information Security who operates as our Chief Information Security Officer ("CISO"), we conduct periodic risk assessments to pinpoint potential cybersecurity vulnerabilities and threats.
Removed
The Cybersecurity Steering Committee meets and receives bi-monthly updates, which provide ongoing visibility into cybersecurity risks and mitigation efforts. Through this robust governance structure, involving Board oversight, senior management leadership, and a cross-functional committee, we maintain a proactive and comprehensive approach to managing cybersecurity risks across the organization.
Added
Our CISO has over 25 years of cybersecurity and corporate risk management experience. The Cybersecurity Steering Committee meets and receives quarterly updates, which provide ongoing visibility into cybersecurity risks and mitigation efforts.
Added
For further discussion of the risks related to cybersecurity, see Item 1A. " Risk Factors".

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

2 edited+1 added−0 removed3 unchanged
Biggest changeOn at least a quarterly basis, the Company consults with its legal counsel to ascertain the reasonable likelihood that such claims may result in a loss. 15 As required by ASC Topic 450, "Contingencies" ("ASC 450"), the Company categorizes the various suits and claims into three categories according to their likelihood for resulting in potential loss: those that are probable, those that are reasonably possible, and those that are deemed to be remote.
Biggest changeAs required by the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 450, "Contingencies" ("ASC 450"), the Company categorizes the various suits and claims into three categories according to their likelihood for resulting in potential loss: those that are probable, those that are reasonably possible, and those that are deemed to be remote.
The Company believes that the aggregate range of estimated loss stemming from the various suits and asserted and unasserted claims which were deemed to be either probable or reasonably possible was not material as of April 30, 2024, with the exception of the Antidumping and Countervailing Duties Investigation discussed in Note L — Commitments and Contingencies in the Notes to the Consolidated Financial Statements herein.
The Company believes that the aggregate range of estimated loss stemming from the various suits and asserted and unasserted claims which were deemed to be either probable or reasonably possible was not material as of April 30, 2025, with the exception of the Antidumping and Countervailing Duties Investigation discussed in Note K — Commitments and Contingencies in the Notes to the Consolidated Financial Statements herein.
Added
On at least a quarterly basis, the Company consults with its legal counsel to ascertain the reasonable likelihood that such claims may result in a loss.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

6 edited+1 added−0 removed1 unchanged
Biggest changeAdams, Jr. 58 Company Senior Vice President, Manufacturing and Technical Operations from August 2015 to present; Company Vice President of Value Stream Operations from September 2012 to August 2015; Company Vice President of Manufacturing and Engineering from April 2012 to September 2012. Dwayne L.
Biggest changeAdams, Jr. 59 Company Senior Vice President, Chief Manufacturing and Supply Chain Officer from May 2025 to present; Company Senior Vice President Manufacturing and Technical Operations from August 2015 to May 2025; Company Vice President of Value Stream Operations from September 2012 to August 2015; Company Vice President of Manufacturing and Engineering from April 2012 to September 2012. 16 Name Age Position(s) Held During Past Five Years and at the Company Dwayne L.
Item 4. MINE SAFETY DISCLOSURES None. EXECUTIVE OFFICERS OF THE REGISTRANT Executive officers of the Company are elected by the Board of Directors and generally hold office until the next annual election of officers.
Item 4. MINE SAFETY DISCLOSURES None. EXECUTIVE OFFICERS OF THE REGISTRANT Executive officers of the Company are elected by the Board and generally hold office until the next annual election of officers.
Paul Joachimczyk 52 Company Senior Vice President and Chief Financial Officer from August 2022 to present; Company Vice President and Chief Financial Officer from July 2020 to August 2022; Vice President, Financial Planning and Analysis, from February 2019 to July 2020. Robert J.
Paul Joachimczyk 53 Company Senior Vice President and Chief Financial Officer from August 2022 to present; Company Vice President and Chief Financial Officer from July 2020 to August 2022; Vice President, Financial Planning and Analysis, from February 2019 to July 2020. Robert J.
Scott Culbreth 53 Company President and Chief Executive Officer from July 2020 to present; Company Senior Vice President and Chief Financial Officer from February 2014 to July 2020.
Scott Culbreth 54 Company President and Chief Executive Officer from July 2020 to present; Company Senior Vice President and Chief Financial Officer from February 2014 to July 2020.
Medlin 56 Company Senior Vice President, Remodel Sales from August 2023 to present; Company Vice President, Remodel Sales from May 2021 to August 2023; Company Vice President Home Center Sales from June 2018 to May 2021. Kimberly G.
Medlin 57 Company Senior Vice President, Remodel Sales from August 2023 to present; Company Vice President, Remodel Sales from May 2021 to August 2023; Company Vice President Home Center Sales from June 2018 to May 2021. Kimberly G. Pascarella (formerly Kimberly G.
Coldiron 45 Company Senior Vice President, Chief Human Resources Officer from August 2023 to present; Company Vice President, Chief Human Resources Officer from February 2021 to August 2023; Executive Vice President, Chief Human Resources Officer at OmniMax, International from 2019 to February 2021. PART II
Coldiron) 46 Company Senior Vice President, Chief Human Resources Officer from August 2023 to present; Company Vice President, Chief Human Resources Officer from February 2021 to August 2023; Executive Vice President, Chief Human Resources Officer at OmniMax, International from 2019 to February 2021. William L.
Added
Waszak 64 Company Senior Vice President, Chief Information Officer from August 2024 to present; Company Vice President, Chief Information Officer from May 2019 to August 2024. PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe determination as to the payment of future dividends will be made by the Board of Directors (the "Board") from time to time and will depend on the Company's then current financial 16 condition, capital requirements, and results of operations, as well as any other factors then deemed relevant by the Board, and will be subject to applicable restrictions in the credit agreement governing the Company's credit facility Purchase of Equity Securities by the Issuer The following table details share repurchases by the Company during the fourth quarter of fiscal 2024: Share Repurchases Total Number of Shares Purchased Average Price Paid Total Number of Shares Purchased as Part of Publicly Announced Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (000) (1) Per Share Programs (1) February 1 - 29, 2024 77,542 $ 92.59 77,542 $ 98,206 March 1 - 31, 2024 — N/A — $ — April 1 - 30, 2024 93,029 $ 94.64 93,029 $ 89,476 Quarter ended April 30, 2024 170,571 $ 93.74 170,571 $ 89,476 (1) Under a stock repurchase authorization approved by its Board on November 29, 2023, the Company was authorized to purchase up to $125 million of the Company's common shares.
Biggest changePurchase of Equity Securities by the Issuer The following table details share repurchases by the Company during the fourth quarter of fiscal 2025: Share Repurchases Total Number of Shares Purchased Average Price Paid Total Number of Shares Purchased as Part of Publicly Announced Approximate Dollar Value of Shares That May Yet Be Purchased Under the Programs (000) (1) Per Share Programs (1) February 1 - 28, 2025 195,339 $ 76.57 195,339 $ 130,358 March 1 - 31, 2025 — $ — — $ 130,358 April 1 - 30, 2025 221,959 $ 56.75 221,959 $ 117,765 Quarter ended April 30, 2025 417,298 $ 64.33 417,298 $ 117,765 (1) Under a stock repurchase authorization approved by the Board on November 29, 2023, the Company was authorized to purchase up to $125 million of the Company's common shares.
The Company's shareholders also include approximately 70% of the Company's employees who are eligible to participate in the American Woodmark Corporation Retirement Savings Plan. The Company does not currently pay cash dividends and has no current intention to do so in the near future.
The Company's shareholders also include approximately 73% of the Company's employees who are eligible to participate in the American Woodmark Corporation Retirement Savings Plan. The Company does not currently pay cash dividends and has no current intention to do so in the near future.
As of June 17, 2024 there were approximately 27,500 total shareholders of the Company's common stock, including 6,300 shareholders of record and 21,100 beneficial owners whose shares are held in "street" name by securities broker-dealers or other nominees.
As of June 17, 2025 there were approximately 24,600 total shareholders of the Company's common stock, including 6,000shareholders of record and 18,600 beneficial owners whose shares are held in "street" name by securities broker-dealers or other nominees.
The graph is based on historical data and is not intended to be a forecast or indication of future performance of American Woodmark common stock. 2019 2020 2021 2022 2023 2024 American Woodmark Corporation $100.00 $57.17 $110.60 $52.10 $56.18 $102.39 Russell 2000 Index $100.00 $83.61 $146.25 $121.57 $117.14 $132.75 S&P Household Durables Index $100.00 $93.86 $184.57 $140.73 $173.24 $230.33 The graph and related information above are not deemed to be "filed" with the Securities and Exchange ("SEC") for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any future filing made by us with the SEC, except to the extent that we specifically incorporate it by reference into any such filing.
The graph is based on historical data and is not intended to be a forecast or indication of future performance of American Woodmark common stock. 2020 2021 2022 2023 2024 2025 American Woodmark Corporation $100.00 $196.80 $92.70 $100.00 $182.20 $116.80 Russell 2000 Index $100.00 $181.90 $151.20 $145.70 $165.10 $166.50 S&P Household Durables Index $100.00 $201.80 $153.90 $189.40 $251.90 $239.30 The graph and related information above are not deemed to be "filed" with the SEC for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or incorporated by reference into any future filing made by us with the SEC, except to the extent that we specifically incorporate it by reference into any such filing.
The Company purchased a total of 170,571 common shares, for an aggregate purchase price of $15.9 million, during the fourth quarter of fiscal 2024 under the authorization pursuant to a repurchase plan intended to comply with the requirements of Rule 10b5-1 and Rule 10b-18 under the Securities Exchange Act of 1934, as amended. 17 Stock Performance Graph The performance graph shown below compares the percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of the Russell 2000 Index and Standard & Poor's Household Durables Index for the period from May 1, 2019 through April 30, 2024.
Stock Performance Graph The performance graph shown below compares the percentage change in the cumulative total shareholder return on our common stock against the cumulative total return of the Russell 2000 Index and Standard & Poor's Household Durables Index for the period from May 1, 2020 through April 30, 2025.
Removed
Management funded these share repurchases using available cash and cash generated from operations. Repurchased shares became authorized but unissued common shares. At April 30, 2024, $89.5 million of funds remained from the amounts authorized by the Board to repurchase the Company's common shares.
Added
The determination as to the payment of future dividends will be made by the Board from time to time and will depend on the Company's then current financial condition, capital requirements, and results of operations, as well as any other factors then deemed relevant, and will be subject to applicable restrictions in the credit agreement governing the Company's credit facility.
Added
On November 20, 2024, the Board authorized an additional stock repurchase program of up to $125 million of the Company's outstanding common shares. This authorization is in addition to the stock repurchase program authorized on November 29, 2023.
Added
Repurchases may be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms the Company deems appropriate and subject to the Company's cash requirements for other purposes, compliance with the covenants under the October 10, 2024 amended and restated credit agreement ("A&R Credit Agreement"), and other factors management deems relevant.
Added
The authorization does not obligate the Company to acquire a specific number of shares during any period, and the authorization may be modified, suspended or discontinued at any time at the discretion of the Board. Management generally expects to fund any share repurchases using available cash and cash equivalents, as well as cash generated from operating activities.
Added
Repurchased shares will become authorized but unissued common shares. The Company 17 repurchased $27.6 million of its common shares during the fourth quarter of fiscal 2025. As of April 30, 2025, $117.8 million of funds remained available from the amounts previously authorized.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeFactors that could cause actual results to differ materially from those in forward-looking statements made in this report include but are not limited to: • the loss of or a reduction in business from one or more of our key customers; • negative developments in the macro-economic factors that impact our performance such as the U.S. housing market, general economy, unemployment rates, and consumer sentiment and the impact of such developments on our and our customers' business, operations, and access to financing; • an inability to obtain raw materials in a timely manner or fluctuations in raw material, transportation, and energy costs due to inflation or otherwise; • a failure to attract and retain certain members of management or other key employees or other negative labor developments, including increases in the cost of labor; competition from other manufacturers and the impact of such competition on pricing and promotional levels; • an inability to develop new products or respond to changing consumer preferences and purchasing practices; • increased buying power of large customers and the impact on our ability to maintain or raise prices; • a failure to effectively manage manufacturing operations, alignment, and capacity or an inability to maintain the quality of our products; • the impairment of goodwill or our long-lived assets; 19 • information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees, or other third parties; • the cost of compliance with, or liabilities related to, environmental or other governmental regulations or changes in governmental or industry regulatory standards, especially with respect to health and safety and the environment; • risks associated with the implementation of our growth strategy; • risks related to sourcing and selling products internationally and doing business globally, including the imposition of tariffs or duties on those products; • unexpected costs resulting from a failure to maintain acceptable quality standards; • changes in tax laws or the interpretations of existing tax laws; • the impact of another pandemic on our business, the global and U.S. economy, and our employees, customers, suppliers, and logistics system; • the occurrence of significant natural disasters, including earthquakes, fires, floods, hurricanes, or tropical storms; • the unavailability of adequate capital for our business to grow and compete; and • limitations on operating our business as a result of covenant restrictions under our indebtedness, our ability to pay amounts due under our credit facilities and our other indebtedness, and interest rate increases.
Biggest changeFactors that could cause actual results to differ materially from those in forward-looking statements made in this report include but are not limited to: • risks related to sourcing and selling products internationally and doing business globally, especially due to our significant operations in Mexico, including the imposition of tariffs or duties on those products, and increased transportation costs and delays; • an inability to obtain raw materials in a timely manner or fluctuations in raw material, transportation, and energy costs due to inflation or otherwise; • the loss of or a reduction in business from one or more of our key customers; • negative developments in the macro-economic factors that impact our performance such as the U.S. housing market, mortgage interest rates, general economy, unemployment rates, and consumer sentiment and the impact of such developments on our and our customers' business, operations, and access to financing; • a failure to attract and retain certain members of management or other key employees or other negative labor developments, including increases in the cost of labor; • competition from other manufacturers and the impact of such competition on pricing and promotional levels; • an inability to develop new products or respond to changing consumer preferences and purchasing practices; • increased buying power of large customers and the impact on our ability to maintain or raise prices; • a failure to effectively manage manufacturing operations, alignment, and capacity or an inability to maintain the quality of our products; 19 • information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees, or other third parties; • the cost of compliance with, or liabilities related to, environmental or other governmental regulations or changes in governmental or industry regulatory standards, especially with respect to health and safety and the environment; • risks associated with the implementation of our growth, digital transformation, and platform design strategies; • unexpected costs resulting from a failure to maintain acceptable quality standards; • changes in tax laws or the interpretations of existing tax laws; • the impact of another pandemic on our business, the global and U.S. economy, and our employees, customers, suppliers, and logistics system; • the occurrence of significant natural disasters, including earthquakes, fires, floods, hurricanes, or tropical storms; • the unavailability of adequate capital for our business to grow and compete; • limitations on operating our business as a result of covenant restrictions under our indebtedness, our ability to pay amounts due under our credit facilities and our other indebtedness, and interest rate increases; and • the impairment of goodwill or our long-lived assets.
In accordance with the accounting standards, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action.
In accordance with the accounting standards, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If after such assessment an entity 27 concludes that the asset is not impaired, then the entity is not required to take further action.
We believe EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. Additionally, Adjusted EBITDA is a key measurement used in our Term Loans to determine interest rates and financial covenant compliance.
We believe EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons, and identify strategies to improve operating performance. Additionally, Adjusted EBITDA is a key measurement used in our Term Loans Facility to determine interest rates and financial covenant compliance.
Allowances for sales returns are based on the historical relationship between shipments and returns. The Company believes that its historical experience is an accurate reflection of future returns. 26 Goodwill. Goodwill represents the excess of purchase price over the fair value of net assets acquired.
Allowances for sales returns are based on the historical relationship between shipments and returns. The Company believes that its historical experience is an accurate reflection of future returns. Goodwill. Goodwill represents the excess of purchase price over the fair value of net assets acquired.
We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.
We believe Adjusted EBITDA, when presented in conjunction 22 with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business. We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.
However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value. There were no impairment charges related to goodwill for the fiscal years 2024, 2023, and 2022.
However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value. There were no impairment charges related to goodwill for the fiscal years 2025, 2024, and 2023.
The Company has concluded that none of its long-lived assets were impaired as of April 30, 2024. Fiscal Year Ended April 30, 2023 Compared to the Fiscal Year Ended April 30, 2022 For a comparison of our performance and financial metrics for the fiscal years ended April 30, 2023 and April 30 2022, see “Part II, Item 7.
The Company has concluded that none of its long-lived assets were impaired as of April 30, 2025. Fiscal Year Ended April 30, 2024 Compared to the Fiscal Year Ended April 30, 2023 For a comparison of our performance and financial metrics for the fiscal years ended April 30, 2024 and April 30, 2023, see “Part II, Item 7.
Cash flow from operations combined with accumulated cash and cash equivalents on hand are expected to be more than sufficient to support forecasted working capital requirements, service existing debt obligations, and fund capital expenditures for fiscal 2025.
Cash flow from operations combined with accumulated cash and cash equivalents on hand are expected to be more than sufficient to support forecasted working capital requirements, service existing debt obligations, and fund capital expenditures for fiscal 2026.
The Company believes based on positive evidence of the housing industry improvement, along with 12 consecutive years of operating profitability, that the Company will more likely than not realize all other remaining deferred tax assets. The Company also regularly assesses its long-lived assets to determine if any impairment has occurred.
The Company believes based on positive evidence of the housing industry improvement, along with 13 consecutive years of operating profitability, that we will more likely than not realize all other remaining deferred tax assets. The Company also regularly assesses its long-lived assets to determine if any impairment has occurred.
We define EBITDA as net income (loss) adjusted to exclude (1) income tax expense (benefit), (2) interest expense, net, (3) depreciation and amortization expense, and (4) amortization of customer relationship intangibles.
We define EBITDA as net income adjusted to exclude (1) income tax expense, (2) interest expense, net, (3) depreciation and amortization expense, and (4) amortization of customer relationship intangibles.
See Note F — Loans Payable and Long-Term Debt for a discussion of interest rates under the new A&R Credit Agreement and our compliance with the covenants in the credit agreement. We were in compliance with each of the covenants under the A&R Credit Agreement during fiscal 2024 and expect to remain in compliance throughout fiscal 2025.
See Note E — Loans Payable and Long-Term Debt for a discussion of interest rates under the new A&R Credit Agreement and our compliance with the covenants in the A&R Credit Agreement. We were in compliance with each of the covenants under the A&R Credit Agreement during fiscal 2025 and expect to remain in compliance throughout fiscal 2026.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth certain income and expense items as a percentage of net sales: PERCENTAGE OF NET SALES FISCAL YEARS ENDED APRIL 30, 2024 2023 2022 Net sales 100.0 % 100.0 % 100.0 % Cost of sales and distribution 79.6 82.7 87.8 Gross profit 20.4 17.3 12.2 Selling and marketing expenses 5.0 4.6 5.0 General and administrative expenses 6.7 6.1 5.3 Restructuring charges, net — 0.1 — Operating income 8.7 6.5 1.9 Pension settlement, net — — 3.7 Interest expense/other (income) expense, net 0.4 0.7 0.5 Income (loss) before income taxes 8.3 5.8 (2.3) Income tax expense (benefit) 1.9 1.4 (0.7) Net income (loss) 6.4 4.4 (1.6) The following discussion should be read in conjunction with the Consolidated Financial Statements and the related notes contained elsewhere in this report.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations The following table sets forth certain income and expense items as a percentage of net sales: PERCENTAGE OF NET SALES FISCAL YEARS ENDED APRIL 30, 2025 2024 2023 Net sales 100.0 % 100.0 % 100.0 % Cost of sales and distribution 82.1 79.6 82.7 Gross profit 17.9 20.4 17.3 Selling and marketing expenses 5.0 5.0 4.6 General and administrative expenses 4.4 6.7 6.1 Restructuring charges, net 0.3 — 0.1 Operating income 8.2 8.7 6.5 Interest expense/other (income) expense, net 0.8 0.4 0.7 Income before income taxes 7.4 8.3 5.8 Income tax expense 1.6 1.9 1.4 Net income 5.8 6.4 4.4 The following discussion should be read in conjunction with the Consolidated Financial Statements and the related Notes to Consolidated Financial Statements contained elsewhere in this report.
The Company's ratio of long-term debt to total capital was 29.0% at April 30, 2024, compared with 29.7% at April 30, 2023. The Company's main source of liquidity is its cash and cash equivalents on hand and cash generated from its operating activities, which we expect to continue into fiscal 2025.
The Company's ratio of long-term debt to total capital was 28.5% at April 30, 2025, compared with 29.0% at April 30, 2024. The Company's main source of liquidity is its cash and cash equivalents on hand and cash generated from its operating activities, which we expect to continue into fiscal 2026.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2023, filed with the SEC on June 27, 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our Annual Report on Form 10-K for the fiscal year ended April 30, 2024, filed with the SEC on June 26, 2024.
We define Adjusted EBITDA as EBITDA adjusted to exclude (1) expenses related to the RSI Acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition, (2) non-recurring restructuring charges, (3) net gain/loss on debt forgiveness and modification, (4) stock-based compensation expense, (5) gain/loss on asset disposals, (6) change in fair value of foreign exchange forward contracts, and (7) pension settlement charges.
We define Adjusted EBITDA as EBITDA adjusted to exclude (1) expenses related to the RSI Acquisition, (2) restructuring charges, net (3) net gain/loss on debt modification, (4) stock-based compensation expense, (5) gain/loss on asset disposals, (6) change in fair value of foreign exchange forward contracts, and (7) pension settlement, net.
As of April 30, 2024, the Company had total deferred tax assets of $59.5 million net of valuation allowance, up from $47.9 million of deferred tax assets net of valuation allowance at April 30, 2023.
As of April 30, 2025, the Company had total deferred tax assets of $68.9 million net of valuation allowance, up from $59.5 million of deferred tax assets net of valuation allowance at April 30, 2024.
As of April 30, 2024 and 2023, the Company had no off-balance sheet arrangements. OPERATING ACTIVITIES Cash provided by operating activities in fiscal 2024 was $230.8 million, compared with $198.8 million in fiscal 2023.
As of April 30, 2025 and 2024, the Company had no off-balance sheet arrangements. OPERATING ACTIVITIES Cash provided by operating activities in fiscal 2025 was $108.4 million, compared with $230.8 million in fiscal 2024.
The amended and restated credit agreement (the "A&R Credit Agreement") provides for a $500 million revolving loan facility with a $50 million sub-facility for the issuance of letters of credit (the "Revolving Facility") and a $250 million term loan facility (the "Term Loan Facility").
The A&R Credit Agreement provides for a $500 million revolving loan facility with a $50 million sub-facility for the issuance of letters of credit (the "Revolving Facility") and a $200 million term loan facility (the "Term Loan Facility").
INVESTING ACTIVITIES The Company's investing activities primarily consist of capital expenditures and investments in promotional displays. Net cash used by investing activities in fiscal 2024 was $92.2 million, compared with $45.3 million in fiscal 2023.
INVESTING ACTIVITIES The Company's investing activities primarily consist of capital expenditures and investments in promotional displays. Net cash used by investing activities in fiscal 2025 was $42.7 million, compared with $92.2 million in fiscal 2024.
At April 30, 2024, the Company operated 18 manufacturing facilities in the United States and Mexico and eight primary service centers and one distribution center located throughout the United States.
At April 30, 2025, the Company operated 17 manufacturing facilities located throughout the United States and Mexico and eight primary service centers and one distribution center located throughout the United States.
Financial Overview A number of general market factors impacted the Company's business in fiscal 2024, some positive and some negative, including: • The unemployment rate increased by 15% compared to April 2023, to 3.9% as of April 2024 according to data provided by the U.S.
Financial Overview A number of general market factors impacted the Company's business in fiscal 2025, some positive and some negative, including: • The unemployment rate increased by 7.7% compared to April 2024, to 4.2% as of April 2025 according to data provided by the U.S.
The amortization of intangible assets is driven by the RSI Acquisition and will recur in future periods. Management has determined that excluding amortization of intangible assets from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability.
The amortization of intangible assets is driven by the RSI Acquisition. Management has determined that excluding amortization of intangible assets and change in fair value of foreign exchange forward contracts from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability.
During fiscal 2025, we will continue our investment back into the business by continuing our path for our digital transformation with investments in our cloud-based ERP and CRM platforms and investing in automation.
During fiscal 2026, we will continue our investment back into the business by continuing our path for our digital transformation with investments in our cloud-based ERP and customer relationship management platforms and investing in automation at our manufacturing locations.
A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following tables: Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2024 2023 2022 Net income (loss) (GAAP) $ 116,216 $ 93,723 $ (29,722) Add back: Income tax expense (benefit) 35,752 28,963 (13,257) Interest expense, net 8,207 15,994 10,189 Depreciation and amortization expense 48,337 48,077 50,939 Amortization of customer relationship intangibles 30,444 45,667 45,667 EBITDA (Non-GAAP) $ 238,956 $ 232,424 $ 63,816 Add back: Acquisition and restructuring related expenses (1) 47 80 80 Non-recurring restructuring charges, net (2) (198) 1,525 183 Pension settlement, net — (7) 68,473 Net gain on debt modification (4) — (2,089) — Change in fair value of foreign exchange forward contracts (3) 1,544 — — Stock-based compensation expense 10,682 7,396 4,708 Loss on asset disposal 1,742 1,050 697 Adjusted EBITDA (Non-GAAP) $ 252,773 $ 240,379 $ 137,957 Net Sales $ 1,847,502 $ 2,066,200 $ 1,857,186 Net income (loss) margin (GAAP) 6.3 % 4.5 % (1.6) % Adjusted EBITDA margin (Non-GAAP) 13.7 % 11.6 % 7.4 % (1) Acquisition and restructuring related expenses are comprised of expenses related to the RSI Acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition.
A reconciliation of these non-GAAP financial measures and the most directly comparable measures calculated and presented in accordance with GAAP are set forth in the following tables: 23 Reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2025 2024 2023 Net income (GAAP) $ 99,456 $ 116,216 $ 93,723 Add back: Income tax expense 27,082 35,752 28,963 Interest expense, net 10,341 8,207 15,994 Depreciation and amortization expense 55,165 48,337 48,077 Amortization of customer relationship intangibles — 30,444 45,667 EBITDA (Non-GAAP) $ 192,044 $ 238,956 $ 232,424 Add back: Acquisition related expenses (1) — 47 80 Restructuring charges, net (2) 4,609 (198) 1,525 Pension settlement, net — — (7) Net gain on debt modification (4) (10) — (2,089) Change in fair value of foreign exchange forward contracts (3) 3,535 1,544 — Stock-based compensation expense 7,989 10,682 7,396 Loss on asset disposal 463 1,742 1,050 Adjusted EBITDA (Non-GAAP) $ 208,630 $ 252,773 $ 240,379 Net Sales $ 1,709,585 $ 1,847,502 $ 2,066,200 Net income margin (GAAP) 5.8 % 6.3 % 4.5 % Adjusted EBITDA margin (Non-GAAP) 12.2 % 13.7 % 11.6 % (1) Acquisition related expenses are comprised of expenses related to the RSI Acquisition.
The Company's largest remodeling customers and competitors continued to utilize sales promotions in the Company's product category during fiscal 2024. The Company strives to maintain its promotional levels in line with market activity, with a goal of remaining competitive. 20 The Company's net sales decreased by 10.6% during fiscal 2024, which was driven by declines in all sales channels.
Department of Labor. 20 Our largest remodeling customers and competitors continued to utilize sales promotions in the Company's product category during fiscal 2025. We strive to maintain promotional levels in line with market activity, with a goal of remaining competitive. Net sales decreased by 7.5% during fiscal 2025, which was driven by declines in all sales channels.
Free cash flow FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2024 2023 2022 Cash provided by operating activities $ 230,750 $ 198,837 $ 24,445 Less: Capital expenditures (1) 92,241 45,380 51,582 Free cash flow $ 138,509 $ 153,457 $ (27,137) (1) Capital expenditures consist of cash payments for property, plant and equipment and cash payments for investments in displays.
Free cash flow FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2025 2024 2023 Cash provided by operating activities $ 108,447 $ 230,750 $ 198,837 Less: Capital expenditures (1) 42,763 92,241 45,380 Free cash flow (Non-GAAP) $ 65,684 $ 138,509 $ 153,457 (1) Capital expenditures consist of cash payments for property, plant and equipment and cash payments for investments in displays.
Results of Operations FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2024 2023 2022 2024 vs. 2023 PERCENT CHANGE 2023 vs. 2022 PERCENT CHANGE Net sales $ 1,847,502 $ 2,066,200 $ 1,857,186 (10.6) % 11.3 % Gross profit 377,807 357,524 226,444 5.7 % 57.9 % Selling and marketing expenses 92,603 94,602 92,555 (2.1) % 2.2 % General and administrative expenses 124,008 125,045 97,547 (0.8) % 28.2 % Interest expense, net 8,207 15,994 10,189 (48.7) % 57.0 % Net Sales Net sales for fiscal 2024 decreased 10.6% to $1,847.5 million from the prior fiscal year.
Results of Operations FISCAL YEARS ENDED APRIL 30, (Dollars in thousands) 2025 2024 2023 2025 vs. 2024 PERCENT CHANGE 2024 vs. 2023 PERCENT CHANGE Net sales $ 1,709,585 $ 1,847,502 $ 2,066,200 (7.5) % (10.6) % Gross profit 306,550 377,807 357,524 (18.9) % 5.7 % Selling and marketing expenses 86,238 92,603 94,602 (6.9) % (2.1) % General and administrative expenses 75,464 124,008 125,045 (39.1) % (0.8) % Interest expense, net 10,341 8,207 15,994 26.0 % (48.7) % Net Sales Net sales for fiscal 2025 decreased 7.5% to $1,709.6 million from the prior fiscal year.
Department of Labor; • There was an increase in single family housing starts during the Company's fiscal 2024 of 3.8%, as compared to the Company's fiscal 2023, and a decrease in housing completions during the Company's fiscal 2024 of 2.3%, as compared to the Company's fiscal 2023, according to the U.S.
Department of Labor; • There was an increase in single family housing starts during the Company's fiscal 2025 of 2.0%, as compared to the Company's fiscal 2024, assuming a 60 day lag, and an increase in housing completions during the Company's fiscal 2025 of 1.2%, as compared to the Company's fiscal 2024, according to the U.S.
See Note F — Loans Payable and Long-Term Debt for further discussion on our indebtedness. On April 22, 2021, the Company amended and restated the Prior Credit Agreement.
See Note E — Loans Payable and Long-Term Debt for further discussion on our indebtedness. On October 10, 2024, the Company amended and restated its prior credit agreement.
"Quantitative and Qualitative Disclosures about Market Risk." Liquidity and Capital Resources The Company's cash and cash equivalents totaled $87.4 million at April 30, 2024, representing a $45.7 million increase from its April 30, 2023 levels. At April 30, 2024, total long-term debt (including current maturities) was $374.5 million, an increase of $2.8 million from the balance at April 30, 2023.
"Quantitative and Qualitative Disclosures about Market Risk." Liquidity and Capital Resources The Company's cash and cash equivalents totaled $48.2 million at April 30, 2025, representing a $39.2 million decrease from its April 30, 2024 levels. At April 30, 2025, total long-term debt (including current maturities) was $373.5 million, a decrease of $1.0 million from the balance at April 30, 2024.
We define 22 Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the RSI Acquisition and the subsequent restructuring charges that the Company incurred related to the acquisition, (2) non-recurring restructuring charges, (3) the amortization of customer relationship intangibles, (4) net gain/loss on debt forgiveness and modification, (5) pension settlement charges, and (6) the tax benefit of RSI Acquisition expenses and subsequent restructuring charges, the net gain/loss on debt forgiveness and modification, and the amortization of customer relationship intangibles.
We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the RSI acquisition, (2) restructuring charges, net (3) the amortization of customer relationship intangibles, (4) net gain/loss on debt modification, (5) change in fair value of foreign exchange forward contracts, (6) pension settlement, net, and (7) the tax benefit of items (1) - (6).
Estimated required interest payments based on rates as of April 30, 2024 would be $14.7 million in fiscal 2025, $21.0 million in fiscal 2026-27, $6.2 million in fiscal 2028-29, and $5.0 million in fiscal 2030 and thereafter. SEASONALITY Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters.
Estimated required interest payments based on rates as of April 30, 2025 would be $24.3 million in fiscal 2026, $46.0 million in fiscal 2027-28, $31.5 million in fiscal 2029-30, and $2.1 million in fiscal 2031 and thereafter. SEASONALITY Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters.
Investments in property, plant and equipment for fiscal 2024 were $91.0 million, compared with $42.6 million in fiscal 2023, primarily due to 25 our plant expansions in Monterrey, Mexico and Hamlet, North Carolina. Investments in promotional displays were $1.2 million in fiscal 2024, compared with $2.8 million in fiscal 2023.
Investments in property, plant and equipment for fiscal 2025 were $39.7 million, compared with $91.0 million in fiscal 2024, primarily due to our plant expansions in Monterrey, Mexico and Hamlet, North Carolina in fiscal 2024.
The Company manages these risks through the use of foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other expense (income), net in the operating results.
(3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other expense (income), net in the operating results.
However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP.
Management believes these non-GAAP financial measures provide an additional means of analyzing the current period's results against the corresponding prior period's results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company's reported results prepared in accordance with GAAP.
The Company repurchased $87.7 million during fiscal 2024. The Company did not repurchase any of its shares during the fiscal year ended April 30, 2023, and as of April 30, 2024 the current stock repurchase program has a remaining authorization of $89.5 million.
The Company repurchased $96.7 million and $87.7 million of its common shares during fiscal 2025 and 2024, respectively. As of April 30, 2025, the current stock repurchase program has a remaining authorization of $117.8 million.
Department of Commerce; • Mortgage interest rates increased with a 30-year fixed mortgage rate of 7.17% in April 2024, an increase of approximately 74 basis points compared to April 2023; • The median price of existing homes sold in the U.S. rose by 2.2% during the Company's fiscal 2024, according to data provided by the National Association of Realtors; and • Consumer sentiment, as reported by the University of Michigan, averaged 21.6% higher during the Company's fiscal 2024 than in its prior fiscal year.
Department of Commerce; • Mortgage interest rates decreased with a 30-year fixed mortgage rate of 6.76% in April 2025, a decrease of approximately 41 basis points compared to April 2024, according to Freddie Mac; • While existing home sales remain at thirty-year lows, the median price of existing homes sold in the U.S. rose by 4.1% during the Company's fiscal 2025, according to data provided by the National Association of Realtors; and existing home sales decreased 0.6% during the Company's fiscal 2025 compared to the same period in the prior year; • Consumer sentiment, as reported by Thomson Reuters/University of Michigan, averaged 32.4% lower during the Company's fiscal 2025 than in its prior fiscal year; and • The inflation rate as of April 2025 was 2.3%, compared to 3.4% in April 2024 according to data provided by the U.S.
For additional discussion of risks that could affect the Company and its business, see "Forward-Looking Statements" above, as well as Item 1A. "Risk Factors" and Item 7A.
General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years. For additional discussion of risks that could affect the Company and its business, see "Forward-Looking Statements" above, as well as Item 1A. "Risk Factors" and Item 7A.
The increase in the Company's cash from operating activities was driven primarily by an increase in net income, decreased amortization of customer relationship intangibles and increased cash flows from accounts payable, accrued marketing expenses, and accrued compensation and related expenses, which were partially offset by a decrease in cash flows from income taxes, inventories, and customer receivables.
The decrease in the Company's cash from operating activities was driven primarily by decreases in net income of $16.8 million and amortization of customer relationship intangibles of $30.4 million and increased cash outflows from inventories of $51.2, prepaid expenses and other assets of $12.0 million, accounts payable of $18.8 million, accrued marketing expenses of $8.1 million, and accrued compensation and related expenses of $21.0 million, which were partially offset by a decrease in cash outflows from income taxes of $27.9 million.
The Company is required to repay the Term Loan Facility in specified quarterly installments. The Revolving Facility and Term Loan Facility mature on April 22, 2026. Approximately $322.9 million was available under this facility as of April 30, 2024.
The Company began repaying the Term Loan Facility in specified quarterly installments on January 31, 2025. The Revolving Facility and Term Loan Facility mature on October 10, 2029. Approximately $314.2 million was available under this facility as of April 30, 2025.
A reconciliation of EBITDA, Adjusted EBITDA and Adjusted EBITDA margin as projected for fiscal 2025 is not provided because we do not forecast net income (loss) as we cannot, without unreasonable effort, estimate or predict with certainty various components of net income.
We also expect our depreciation and amortization to increase approximately $11 million due to our cloud-based ERP efforts, automation and platform changes. 25 A reconciliation of EBITDA and Adjusted EBITDA is not provided for fiscal 2026 because we do not forecast net income as we cannot, without unreasonable effort, estimate or predict with certainty various components of net income.
The change in net sales and Adjusted EBITDA is highly dependent upon overall industry, economic growth trends, material constraints, labor impacts, interest rates and consumer behaviors. Adjusted EBITDA will also be impacted as we continue to ramp up production from our plant expansions in Monterrey, Mexico and Hamlet, North Carolina.
The change in net sales and Adjusted EBITDA is highly dependent upon overall industry, economic growth trends, material constraints, labor impacts, interest rates, tariff rate changes and consumer behaviors.
Future minimum annual commitments for contractual obligations under term loans, the Revolving Facility, capital and operating lease obligations, and other long-term debt amount to $35.1 million in fiscal 2025, $426.0 million in fiscal 2026-27, $36.9 million in fiscal 2028-29, and $31.1 million in fiscal 2030 and thereafter.
Future minimum annual commitments for contractual obligations under the Term Loan Facility, the Revolving Facility, capital and operating lease obligations, and other long-term debt amount to $46.6 million in fiscal 2026, $84.2 million in fiscal 2027-28, $375.6 million in fiscal 2029-30, and $24.2 million in fiscal 2031 and thereafter.
General and Administrative Expenses General and administrative expenses decreased by $1.0 million or 0.8% during fiscal 2024 versus the prior fiscal year. General and administrative costs increased to 6.7% of net sales in fiscal 2024 compared with 6.1% of net sales in fiscal 2023.
General and administrative costs decreased to 4.4% of net sales in fiscal 2025 compared with 6.7% of net sales in fiscal 2024.
The Company's effective tax rate remained relatively flat from 23.6% in fiscal 2023 to 23.5% in fiscal 2024. Non-GAAP Financial Measures We have reported our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). In addition, we have presented in this report the non-GAAP measures described below.
Non-GAAP Financial Measures We have reported our financial results in accordance with U.S. generally accepted accounting principles ("GAAP"). In addition, we have presented in this report the non-GAAP measures described below. A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is set forth below.
FINANCING ACTIVITIES The Company realized a net outflow of $92.9 million from financing activities in fiscal 2024 compared with a net outflow of $134.1 million in fiscal 2023. During fiscal 2024, $2.7 million, net, was used to repay long-term debt, compared with approximately $132.9 million in fiscal 2023.
Investments in promotional displays were $3.0 million in fiscal 2025, compared with $1.2 million in fiscal 2024. 26 FINANCING ACTIVITIES The Company realized a net outflow of $105.0 million from financing activities in fiscal 2025 compared with a net outflow of $92.9 million in fiscal 2024.
Sales in the home center channel decreased 13.9% and the independent dealer and distributor channel decreased 9.1%, primarily due to lower in-store traffic rates and consumers choosing smaller sized projects. Sales in the builder channel decreased 7.7%, primarily due to a decrease in housing completions, which declined 2.3% year over year according to data provided by the U.S.
Sales in the home center channel decreased 9.3% and the independent dealer and distributor channel decreased 8.9%, primarily due to lower in-store traffic rates and consumers prioritizing smaller sized projects and more value-based product offerings.
Selling and marketing expenses in fiscal 2024 were 5.0% of net sales, compared with 4.6% of net sales in fiscal 2023. The decrease in selling and marketing expenses was due to controlled discretionary spending within the function, partially offset by static fixed costs within the function and increased digital spend.
The decrease in selling and marketing expenses was due to the decrease in sales and controlled discretionary spending within the function, partially offset by static fixed costs within the functions. General and Administrative Expenses General and administrative expenses decreased by $48.5 million or 39.1% during fiscal 2025 versus the prior fiscal year.
The decrease in general and administrative expenses was primarily due to controlled discretionary spending and reduced amortization of customer relationship intangibles, partially offset by increased incentive and profit sharing costs, digital spend, and deleverage created from lower sales. Effective Income Tax Rates The Company generated pre-tax income of $152.0 million during fiscal 2024.
The decrease in general and administrative expenses was primarily due to reduced amortization of customer relationship intangibles of $30.4 million which ended in the third quarter of the prior fiscal year, decreased incentive and profit sharing costs of $13.4 million, and controlled discretionary spending, partially offset by increases in digital spend related to our ERP cloud strategy and cybersecurity readiness.
Adjusted EPS per diluted share FISCAL YEARS ENDED APRIL 30, (Dollars in thousands, except share and per share data) 2024 2023 2022 Net income (loss) (GAAP) $ 116,216 $ 93,723 $ (29,722) Add back: Acquisition and restructuring related expenses 47 80 80 Non-recurring restructuring charges, net (198) 1,525 183 Pension settlement, net — (7) 68,473 Amortization of customer relationship intangibles 30,444 45,667 45,667 Net gain on debt modification — (2,089) — Tax benefit of add backs (7,785) (11,791) (29,859) Adjusted net income (Non-GAAP) $ 138,724 $ 127,108 $ 54,822 Weighted average diluted shares (GAAP) 16,260,222 16,685,359 16,592,358 Add back: potentially anti-dilutive shares (1) — — 48,379 Weighted average diluted shares (Non-GAAP) 16,260,222 16,685,359 16,640,737 EPS per diluted share (GAAP) $ 7.15 $ 5.62 $ (1.79) Adjusted EPS per diluted share (Non-GAAP) $ 8.53 $ 7.62 $ 3.29 (1) Potentially dilutive securities for the twelve-month period ended April 30, 2022 have not been considered in the GAAP calculation of net loss per shares as effect would be anti-dilutive.
(4) The Company recognized net gain on debt modification totaling $2.1 million in fiscal 2023 related to certain New Market Tax Credits. 24 Reconciliation of Net Income to Adjusted Net Income FISCAL YEARS ENDED APRIL 30, (Dollars in thousands, except share and per share data) 2025 2024 2023 Net income (GAAP) $ 99,456 $ 116,216 $ 93,723 Add back: Acquisition related expenses — 47 80 Restructuring charges, net 4,609 (198) 1,525 Pension settlement, net — — (7) Amortization of customer relationship intangibles — 30,444 45,667 Net gain on debt modification (10) — (2,089) Change in fair value of foreign exchange forward contracts (1) 3,535 1,544 — Tax benefit of add backs (2,082) (8,182) (11,791) Adjusted net income (Non-GAAP) $ 105,508 $ 139,871 $ 127,108 Weighted average diluted shares (GAAP) 15,299,261 16,260,222 16,685,359 EPS per diluted share (GAAP) $ 6.50 $ 7.15 $ 5.62 Adjusted EPS per diluted share (Non-GAAP) $ 6.90 $ 8.60 $ 7.62 (1) Change in fair value of foreign exchange forward contracts was excluded from Adjusted EPS per diluted share beginning in the second quarter of fiscal 2025 to be consistent with the Company's definition of Adjusted EBITDA.
We will be opportunistic in our 24 share repurchasing and lastly, we have our debt position at a leverage ratio we wanted to achieve and will continue to deprioritize paying down debt in fiscal 2025.
We will be opportunistic in our share repurchasing and lastly, we have our debt optimally positioned at a leverage ratio we set to achieve, enabling us to deprioritize debt repayments in fiscal 2026. We expect our interest expense to increase approximately $7 million due to our A&R Credit Agreement.
Gross profit for fiscal 2024 was 20.4%, an increase from 17.3% in fiscal 2023. The Company had net income of $116.2 million in fiscal 2024 and net income of $93.7 million in fiscal 2023.
Gross profit for fiscal 2025 was 17.9%, a decrease from 20.4% in fiscal 2024. Net income decreased $16.8 million from $116.2 million in fiscal 2024 to $99.5 million in fiscal 2025.
Also on April 22, 2021, the Company borrowed the entire $250 million under the Term Loan Facility and approximately $264 million under the Revolving Facility to fund, in part, the repayment in full of the amounts then outstanding under the Prior Credit Agreement and the redemption of the Senior Notes.
Also on October 10, 2024, the Company borrowed the entire $200 million under the Term Loan Facility and approximately $173 million under the Revolving Facility to repay in full the approximately $370 million then outstanding under its prior credit agreement, plus accrued and unpaid interest, and to pay related fees and expenses.
These benefits were partially offset by one-time startup costs and inefficiencies driven by our new locations in Hamlet, North Carolina and Monterrey, Mexico. 21 Selling and Marketing Expenses Selling and marketing costs decreased by $2.0 million or 2.1% during fiscal 2024 versus the prior year.
These decreases were partially offset by our operational enhancements and controlled variable spending. Selling and Marketing Expenses Selling and marketing costs decreased by $6.4 million or 6.9% during fiscal 2025 versus the prior year. Selling and marketing expenses were 5.0% of net sales in both fiscal 2025 and 2024.
Department of Commerce. Gross Profit Gross profit as a percentage of sales increased to 20.4% in fiscal 2024 as compared with 17.3% in fiscal 2023, representing a 310 basis point improvement. The increase in gross profit was primarily due to the result of pricing better matching inflationary pressures and overall increased efficiencies across our existing operating locations.
Gross Profit Gross profit as a percentage of sales decreased to 17.9% in fiscal 2025 as compared with 20.4% in fiscal 2024, representing a 250 basis point decrease. The decrease in gross profit was primarily the result of lower volumes due to macroeconomic conditions causing fixed cost deleverage, and rising product input costs.
(2) Non-recurring restructuring charges are comprised of expenses incurred related to the nationwide reduction-in-force implemented in fiscal 2023 and the closure of the manufacturing plant in Humboldt, Tennessee in July 2020. 23 (3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates.
(2) Restructuring charges, net are comprised of expenses incurred related to the nationwide reduction-in-force implemented in fiscal 2023, the reductions in force implemented in the second quarter of fiscal 2025, and the closure of the manufacturing facility located in Orange, Virginia, which was announced in January 2025.
On November 29, 2023 the Board of Directors authorized a stock repurchase program of up to $125 million of the Company's outstanding common shares. In conjunction with this authorization the Board of Directors cancelled the remaining $22.9 million that had yet to be repurchased under the $100 million existing authorization from May 25, 2021.
During fiscal 2025, $5.3 million, net, was used to repay long-term debt, compared with approximately $2.7 million in fiscal 2024. On November 20, 2024, the Board authorized an additional stock repurchase program of up to $125 million of the Company's outstanding common shares. This authorization is in addition to the $125 million stock repurchase program authorized on November 29, 2023.
Removed
Net income and gross profit for fiscal 2024 increased primarily due to the result of pricing better matching inflationary pressures and overall increased efficiencies across our existing operating locations.
Added
Net income and gross profit for fiscal 2025 decreased primarily due to the result of lower net sales, fixed cost deleverage, and rising product input costs, partially offset by the roll-off of acquisition-related intangible asset amortization of $30.4 million, which ended in the third quarter of the prior fiscal year, operational efficiencies, lower incentive compensation and controlled spending across all functions.
Removed
These benefits were partially offset by one-time startup costs and inefficiencies driven by our new locations in Hamlet, North Carolina and Monterrey, Mexico, which will continue to ramp up production throughout the calendar year. The Company regularly considers the need for a valuation allowance against its deferred tax assets. The Company has generated operating profits for the past 12 years.
Added
The Company recognized total pre-tax restructuring charges, net of $4.6 million and $(0.2) million during fiscal 2025 and 2024 respectively. The fiscal 2025 charges are the result of a reduction in force implemented in the second quarter and the closure of the manufacturing plant in Orange, Virginia approved in the third quarter of the fiscal year.
Removed
A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is set forth below. Management believes these non-GAAP financial measures provide an additional means of analyzing the current period's results against the corresponding prior period's results.
Added
See Note O — Restructuring Charges, Net for further discussion. The Company regularly considers the need for a valuation allowance against its deferred tax assets as we have generated operating profits for the past 13 years.
Removed
(4) The Company recognized net gain on debt modification totaling $2.1 million in fiscal 2023 related to the New Market Tax Credits more fully described in Note F — Loans Payable and Long-Term Debt in the Notes to the Consolidated Financial Statements herein.
Added
Sa 21 les in the builder channel decreased 5.1%, primarily due to weaker housing completions throughout the second half of the fiscal year, as home builders continue to be impacted by high mortgage rates, weaker consumer confidence, and government policy related uncertainty.
Removed
Outlook for Fiscal 2025 We expect low single-digit increases in net sales for fiscal 2025 versus fiscal 2024 with growth expected in all channels. Our outlook for Adjusted EBITDA for fiscal 2025 will range from $235 million to $255 million.
Added
Effective Income Tax Rates The Company generated pre-tax income of $126.5 million during fiscal 2025. The Company's effective tax rate decreased from 23.5% in fiscal 2024 to 21.4% in fiscal 2025. The effective tax rate was lower in fiscal 2025 than fiscal 2024 due to favorability from reductions in uncertain tax positions of prior years and additional income tax credits.
Removed
General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years. The costs of the Company's products are subject to inflationary pressures and commodity price fluctuations. The Company has generally been able over time to recover the effects of inflation and commodity price fluctuations through sales price increases.
Added
During the second quarter of fiscal 2025, the Company changed its definition of Adjusted EPS per diluted share to exclude the change in fair value of foreign exchange forward contracts to be consistent with its definition of Adjusted EBITDA. Prior period amounts have been adjusted to conform to current period presentation.
Added
Prior period amounts have been adjusted to conform to current period presentation.
Added
Outlook for Fiscal 2026 We expect a range between low single-digit declines to low-single digit increases in net sales for fiscal 2026 versus fiscal 2025. While the first half of the fiscal year remains challenged by the current macroeconomic environment, we are expecting recovery and growth in the second half of fiscal 2026.
Added
Our outlook for Adjusted EBITDA for fiscal 2026 will range from $175 million to $200 million, driven primarily by higher selling and marketing and general and administrative costs, increases in input costs and fixed cost inflationary items, partially offset by our commitment to operational excellence and automation.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The costs of the Company's products are subject to inflationary pressures and commodity price fluctuations. The Company has generally been able, over time, to recover the effects of inflation and commodity price fluctuations through sales price increases although there may be a lag in the recovery.
Biggest changeItem 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The costs of the Company's products are subject to inflationary pressures, commodity price fluctuations, and changing tariffs on imports. The Company has generally been able, over time, to recover these effects through sales price increases although there may be a lag in the recovery.
The A&R Credit Agreement includes a variable interest rate component. As a result, we are subject to interest rate risk with respect to such floating-rate debt. A 100 basis point increase in the variable interest rate component of our borrowings as of April 30, 2024 would increase our annual interest expense by approximately $1.7 million.
The A&R Credit Agreement includes a variable interest rate component. As a result, we are subject to interest rate risk with respect to such floating-rate debt. A 100 basis point increase in the variable interest rate component of our borrowings as of April 30, 2025 would increase our annual interest expense by approximately $1.7 million.
See Note F — Loans Payable and Long-Term Debt Financial Instruments for further discussion. In May 2021, we entered into interest rate swaps to hedge approximately $200 million of our variable interest rate debt. See Note J — Derivative Financial Instruments for further discussion.
See Note E — Loans Payable and Long-Term Debt for further discussion. In May 2021, we entered into interest rate swaps to hedge approximately $200 million of our variable interest rate debt.
The Company does not currently use commodity or similar financial instruments to manage its commodity price risks. 27
See Note I — Derivative Financial Instruments for further discussion. The Company does not currently use commodity or similar financial instruments to manage its commodity price risks. 28
Added
In April 2025, we entered into interest rate swaps to hedge approximately $200 million in year one and $150 million in year two of our variable interest rate debt. See Note I — Derivative Financial Instruments for further discussion.

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