American Woodmark Corporation Annual Report 2013

FY2013 Annual Report · American Woodmark Corporation
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American
Woodmark
2013

A n n u a l   R e p o r t

tm

table ofcontents

1 Mission Statement
2 Company Profile
3 Financial Highlights
3 Market Information
4 Letter from the Chief Executive Officer
11 Five-Year Selected Financial Information
12 Management’s Discussion and Analysis
23 Consolidated Financial Statements
27 Notes to Consolidated Financial Statements
45 Report of Independent Registered Public Accounting Firm
46 Management’s Report on Internal Control 

over Financial Reporting

47 Report of Independent Registered Public Accounting Firm —

Internal Control over Financial Reporting

48 Stock Performance Graph
49 Directors and Executive Officers
49 Corporate Information

mission statement

creating value

through people

WHO WE ARE
American Woodmark is an organization of employees and shareholders who have
combined their resources to pursue a common goal.
WHAT WE DO
Our common goal is to create value by providing kitchens and baths “of pride” for
the American family.
WHY WE DO IT
We pursue this goal to earn a profit, which allows us to reward our shareholders and
employees and to make a contribution to our society.
HOW WE DO IT
Four principles guide our actions:

CUSTOMER SATISFACTION Providing the best possible quality, service and value 
to the greatest number of people. Doing whatever is reasonable, and sometimes unrea-
sonable, to make certain that each customer’s needs are met each and every day.

INTEGRITY Doing what is right. Caring about the dignity and rights of each 
individual. Acting fairly and responsibly with all parties. Being a good citizen 
in the communities in which we operate.

TEAMWORK Understanding that we must all work together if we are to be success-
ful. Realizing that each individual must contribute to the team to remain a member
of the team.

EXCELLENCE Striving to perform every job or action in a superior way. Being 
innovative, seeking new and better ways to get things done. Helping all individuals to
become the best that they can be in their jobs and careers.
ONCE WE’VE DONE IT
When we achieve our goal good things happen: sales increase, profits are made,
shareholders and employees are rewarded, jobs are created, our communities 
benefit, we have fun and our customers are happy and proud—with a new kitchen 
or bath from American Woodmark.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 1

 
 
 
companyproﬁle

American Woodmark Corporation manufactures and distributes

kitchen cabinets and vanities for the remodeling and new home con-

struction markets. The Company operates 9 manufacturing facilities

located in Arizona, Georgia, Indiana, Kentucky, Maryland, Tennessee,

Virginia and West Virginia and 9 service centers across the country.

American Woodmark Corporation was incorporated in 1980 and

became a public company through a common stock offering in 1986.

The Company offers approximately 550 cabinet lines in a wide variety

of designs, materials and finishes. Products are sold across the

United States through a network of independent dealers and distrib-

utors and directly to home centers and major builders. The Com-

pany’s remodeling sales comprised 63% of sales during fiscal 2013,

with the remaining 37% sold to the new home market. References 

in this annual report to fiscal years mean the Company’s fiscal year,

which ends on April 30.

The Company believes it is one of the three largest manufacturers

of kitchen cabinets in the United States.

2

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

market

information

American Woodmark Corporation common
stock is quoted on The NASDAQ Global Select
Market under the “AMWD” symbol. Common
stock per share market prices and cash divi-
dends declared during the last two fiscal years
were as follows:

MARKET PRICE DIVIDENDS
DECLARED
High

Low

(in dollars)

FISCAL 2013

First quarter

$18.95

$15.46

$0.00

Second quarter

Third quarter

Fourth quarter

23.30

29.28

36.68

16.45

21.66

27.63

0.00

0.00

0.00

FISCAL 2012

First quarter

$22.51

$15.73

$0.09

Second quarter

Third quarter

Fourth quarter

19.87

17.99

19.52

11.53

10.88

13.19

0.00

0.00

0.00

As of May 16, 2013, there were approximately
6,500 shareholders of record of the Company’s
common stock. Included are approximately 
52% of the Company’s employees, who are
shareholders through the American Woodmark
Stock Ownership Plan. The Company paid 
dividends on its common stock during the first
quarter of 2012 and then its quarterly dividend
was suspended. The determination as to the
payment and the amount of any future dividends
will be made by the Board of Directors from time
to time and will depend on the Company’s then-
current financial condition, capital requirements,
results of operations and any other factors then
deemed relevant by the Board of Directors.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 3

ﬁnancial

highlights

(in thousands, except per share data)

20131

20121,2

20112

FISCAL YEARS ENDED APRIL 30

OPERATIONS

Net sales  
Operating income (loss)
Net income (loss)
Earnings (loss) per share

Basic 
Diluted

Average shares outstanding

Basic
Diluted

FINANCIAL POSITION

Working capital
Total assets
Long-term debt, less current maturities
Shareholders’ equity
Long-term debt to capital ratio3

$ 630,437
17,221
9,758

$

0.67
0.66

14,563
14,833

$ 108,810
293,993
23,594
146,195
13.9%

$ 515,814
(33,446)
(20,786)

$452,589
(31,054)
(20,018)

$

(1.45)
(1.45)

$

(1.40)
(1.40)

14,344
14,344

14,252
14,252

$ 71,881
265,121
23,790
130,020
15.5%

$ 69,572
268,370
24,655
153,965
13.8%

1 The Company announced plans to realign its manufacturing network during fiscal 2012.
The Company recorded restructuring charges related to these initiatives in fiscal 2012 that
increased operating loss, net loss and loss per share by $15,917,000, $9,710,000 and $0.68,
respectively. During fiscal 2013, the charges related to these initiatives decreased operating
income, net income and earnings per share by $1,433,000, $874,000 and $0.06, respectively.

2 The Company performed a reduction-in-force of salaried personnel and announced plans
to realign its manufacturing network during fiscal 2009. The impact of these initiatives in
fiscal 2011 increased operating loss, net loss and loss per share by $62,000, $39,000 and
$0.00, respectively. During fiscal 2012, these initiatives increased operating loss, net loss
and loss per share by $404,000, $246,000 and $0.01, respectively.

3 Defined as long-term debt, less current maturities, divided by the sum of long-term
debt and shareholders’ equity.

to our

shareholders

KENT B. GUICHARD
Chairman and CEO

Our goal as we began ﬁscal 2013 was to return the Company to proﬁtability while con-

tinuing our commitment to build the strength of the organization, protect our market

position, and invest in delivering a superior customer experience. The year was not

without challenges, some of our own making. But as we look back over the last twelve

months, I am pleased to report that we were ultimately successful on all fronts.

We entered our ﬁscal year last spring trying to make some sense of a complicated 

and often contradictory mix of market indicators. Supporting an optimistic outlook 

was an improvement in builder sentiment based on increased trafﬁc through model

homes and improved sales contract activity. Permits, construction starts, and home

completions were trending upward. Foreclosures and mortgage delinquencies were 

at multiple year lows. Sales of existing homes were showing signs of life and prices

were slowly rising. On the side of pessimism, consumers were showing signs of 

additional stress. Savings rates were dropping. Debt was increasing. Gas prices rising. 

And consumer conﬁdence wavering.

As I shared in this letter last year, most worrisome was the employment outlook. The

generally cited government unemployment rate was declining, but real unemployment

4

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

remained painfully high. Adding discouraged workers no longer

actively seeking a job, part-time workers that would rather have 

a full-time position, and underemployed full-time workers to the

ofﬁcial unemployment number painted a less than encouraging

picture. Our ultimate view was that the ﬁnancial pressure on both

unemployed and underemployed families, combined with gen-

eral nervousness about the future, would continue to suppress

demand for big ticket, discretionary spending. This would be 

particularly true for projects related to the battered and bruised

housing sector. As a result, we began our ﬁscal 2013 anticipat-

ing a modest increase in revenue based on ﬂat unit demand

and some improvement in product mix driven by new products.

As we entered the summer, it became clear that the upward trend

in new construction activity was not only continuing, but strength-

ening. By the time calendar 2012 ended, total housing starts had

increased 30%. Single family starts, more relevant to our business,

increased 25%. In this environment our new construction related

revenue increased more than 40%, signiﬁcantly outpacing the

industry. Our performance was the result of gaining share with

builders who were in turn gaining share. Aligning with select

national, regional and local builders intent on offering upgraded

features also allowed us to increase our average revenue per job.

increase. As we began the year, our manufacturing organization

Unlike the new construction market, remodel demand

remained tepid throughout the year. Private Residential Invest-

ment at 2.7% of Gross Domestic Product was slightly improved

from the 2.5% in the prior year, but still well below the histori-

cal average. The lack of homeowner enthusiasm in making 

signiﬁcant capital investments in their property was clearly 

the dominant factor in our category. Despite this headwind,

our remodel business grew at a high single digit rate during

the year based on our long standing partnerships with the 

big box home centers and our developing dealer business. 

Our Waypoint brand, launched three years ago and designed

to meet the unique needs of the dealer channel, accounted 

for almost half of our overall growth rate in remodel.

Combined net sales for the ﬁscal year increased over 20%, 

our third consecutive year of double digit growth. Gross margin

rose by over 50%. The leverage on incremental volume, however,

was below our expectations given the magnitude of the revenue

had just completed two plant closures announced in the fall 

of 2011 and was in the midst of reﬁning new material ﬂows and

absorbing the production volume into our remaining facilities. 

At the same time, we were presented with the unanticipated

ramp up in demand from our new construction customers. We

did not handle the combination with the efﬁciency or effective-

ness that we expect of ourselves. We responded by absorbing

signiﬁcant excess costs to protect our customers. As a result, 

our incremental margins suffered during the ﬁrst half of the year.

We completed our corrective actions during the third ﬁscal 

quarter and returned to our standard of operating performance

during the fourth ﬁscal quarter. Leverage on incremental volume

during the last quarter was more acceptable with gross margin

as a percent of sales reaching almost 19%. 

The combination of additional volume, leverage in cost of goods

sold, and continued cost management in our sales, general 

and administrative accounts resulted in net income of $10 million

excluding restructuring charges and net insurance proceeds.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 5

Our employees did an outstanding job during the entire year,

delivering a remarkable turnaround in a difﬁcult on-going 

environment. Operating income before charges and proceeds

improved by almost $35 million from the prior year and the

Company posted a net proﬁt for the ﬁrst time since the depths

of the housing cycle began in 2009. 

While our focus during the year was the return to proﬁtability, 

we remained cognizant of the importance of maintaining ﬁnan-

cial strength. Cash, including restricted cash, increased by

almost $23 million to a record $97 million at year end. For the

foreseeable future, we will continue to be cautious in the man-

agement of the balance sheet. While ﬁscal 2013 was encour-

aging, we are by no means out of the woods with regard to the

economic environment. Many risks remain. We will make sure

that we retain our ﬁnancial strength. As we gain more comfort

with the path ahead, we will ﬁrst and foremost look to reinvest

in the business as the industry rebuilds to historically normal

levels of activity. To the extent that we determine excess cash

exists above and beyond prudent reserves and capital require-

may not satisfy all in the short term, we believe it is in the best

interests of the long term Shareholder.

In 2007, we launched the 2013 Vision with a goal to provide 

a superior customer experience. Over the last six years, we

have changed the conversation from simply price and product

to the total experience. Service and support have become 

the third leg of the stool, in many cases even surpassing the

importance of product and price to our customers. Our ability

to not only weather the economic storm, but to consistently

generate revenue growth in excess of the market, is a direct

result of pursuing our Vision. Customers ultimately vote with 

their wallets and our ability to gain share is a direct reﬂection 

of providing a total experience and value that others are not.

ments, we will look to return this amount to shareholders

As we look forward to our next six year vision, we will challenge

under our stock repurchase authorization when the opportu-

ourselves to think on a much bigger stage. The goal is no longer

nity arises to enhance Shareholder value. While this approach

to be a great cabinet company. Or even a great building materials

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 7

company. But a great company on par with other great companies.

A world class company regardless of industry. By 2019 we will:

dCreate long term competitive advantage through a self-

sustaining culture based on individual accountability for 

making choices consistent with our Mission Statement 

and core values and shared responsibility to insist on similar

dExhibit outstanding citizenship through deep involvement 

in the overall betterment of the communities in which we live

behavior from each other;

and work.

dDemonstrate constant innovation through which we challenge

our views of the world, seeking out and adopting new ideas,

new concepts, and new tools to keep pace with the ever

changing reality of our world;

As we look to the year ahead, many obstacles remain in our path.

In the larger context, worldwide growth continues to slow with

particularly troublesome on-going social, economic, and political

issues in the extended Eurozone. Domestic uncertainty also

dEstablish exceptional customer care in which we make a

remains a concern. Government budget battles are left largely

promise and keep that promise…every day, every customer,

unresolved with the potential for negative impacts across a 

every time;

dBuild an overall operating system based on integrated 

value streams that deliver quality products and services

quickly, reliably, and at a cost that offers compelling value 

in the market place;

wide variety of services and programs including Medicare and

Social Security. Credit availability on Main Street is still restricted.

Most of all, the overriding challenge of both unemployment 

and underemployment hangs around the neck of a recovery like

an albatross. Consumer conﬁdence remains largely stuck.

dOffer solutions when and where required through the practi-

Despite these macro concerns, we enter ﬁscal 2014 cautiously

cal application of technology; and 

optimistic about our industry and prospects for continued

8

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

movement upwards, back towards normal levels of activity. 

recession, we must recapture returns on capital that justify

We anticipate another double digit increase in revenue driven

continued reinvestment in the business and that support the

primarily by new construction demand. While remodeling is

creation of value for you, our Shareholders. 

likely to remain relatively weak, we expect to generate growth 

in the channel as our dealer business adds incremental busi-

ness on top of stable big box demand. 

None of what we have accomplished, or will accomplish, would

be possible without the men and women of our Company.

Their attitude and commitment, even in the most trying of 

Cost control will undoubtedly be a challenge all year. While easing,

circumstances, is a reﬂection of their outstanding character.

promotional activity is likely to remain elevated by historical stan-

They have earned my ultimate respect for their achievements.

dards in a highly competitive remodel market. Raw material inﬂa-

There are things from time to time that keep me awake at

tion has begun to impact critical inputs and we will need to ﬁnd

night. The organization is not one of them. I know that these

both internal offsets and, ultimately, to secure price increases from

ﬁne individuals will always answer the call. I offer them my 

the consumer as this trend continues. The rate of new construc-

sincerest appreciation. 

tion growth will continue to put pressure on operations as we add

resources in an environment constrained by an absence of skilled

labor. Despite these and other cost pressures, we expect to gener-

ate leverage on incremental volume and improve proﬁtability.

As gratifying as ﬁscal 2013 was in terms of improving perform-

On behalf of the Board of Directors, the Leadership Team, and

the entire Company, we thank you for your continuing support.

ance, our work is not done. Simply returning to proﬁtability is

not enough. As the market recovers from the long housing

Kent B. Guichard
Chairman and Chief Executive Ofﬁcer

10

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

FIVE-YEAR SELECTED FINANCIAL INFORMATION

(in millions, except per share data)

FINANCIAL STATEMENT DATA
Net sales
Operating income (loss) 
Net income (loss)
Earnings (loss) per share: 

Basic
Diluted

Depreciation and amortization expense
Total assets
Long-term debt, less current maturities
Total shareholders’ equity
Cash dividends declared per share 
Average shares outstanding

Basic
Diluted

PERCENT OF SALES
Gross proﬁt
Selling, general and administrative expenses
Income (loss) before income taxes 
Net income (loss)

RATIO ANALYSIS
Current ratio
Inventory turnover3
Collection period—days4
Percentage of capital (long-term debt plus equity):
Long-term debt, less current maturities
Equity

Return on equity (average %)

20131

$630.4 
17.2
9.8 

0.67
0.66
14.4
294.0
23.6
146.2
0.00

14.6
14.8

16.3%
13.5
2.7
1.5

2.6
20.4
31.4

13.9%
86.1
7.1

FISCAL YEARS ENDED APRIL 30
20112

20121,2

20102

$515.8
(33.4)
(20.8)

(1.45)
(1.45)
23.4
265.1
23.8
130.0
0.09

14.3
14.3

12.9%
16.2
(6.4)
(4.0)

2.2
19.2
30.0

15.5%
84.5
(14.6)

$452.6
(31.1)
(20.0)

(1.40)
(1.40)
26.7
268.4
24.7
154.0
0.36

14.3
14.3

11.7%
18.5
(6.6)
(4.4)

2.4
16.1
30.1

13.8%
86.2
(12.2)

$ 406.5
(37.3)
(22.3)

(1.58)
(1.58)
30.9
282.4
25.6
175.3
0.36

14.1
14.1

12.0%
20.5
(9.1)
(5.5)

2.5
12.3
32.9

12.7%
87.3
(11.8)

20092

$545.9
(7.2)
(3.2)

(0.23)
(0.23)
35.1
303.7
26.5
203.7
0.36

14.1
14.1

16.4%
15.9
(1.1)
(0.6)

2.6
11.5
33.5

11.5%
88.5
(1.5)

1 The Company announced plans to realign its manufacturing network during fiscal 2012. The impact of these initiatives in fiscal 2012 increased operat-
ing loss, net loss and loss per share by $15,917,000, $9,710,000 and $0.68, respectively. During fiscal 2013, the charges related to these initiatives
decreased operating income, net income and earnings per share by $1,433,000, $874,000 and $0.06, respectively.

2 The Company performed a reduction-in-force of salaried personnel and announced plans to realign its manufacturing network during fiscal 2009. 
The impact of these initiatives in fiscal 2009 reduced operating income (loss), net income (loss) and earnings (loss) per share by $9,743,000, $6,050,000
and $0.43, respectively. During fiscal 2010, these initiatives increased operating loss, net loss and loss per share by $2,808,000, $1,722,000 and $0.12,
respectively. During fiscal 2011, these initiatives increased operating loss, net loss and loss per share by $62,000, $39,000 and $0.00, respectively. During
fiscal 2012, these initiatives increased operating loss, net loss and loss per share by $404,000, $246,000 and $0.01, respectively.

3 Based on the average of beginning and ending inventory.

4 Based on the ratio of average monthly customer receivables to average sales per day.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 11

ﬁnancial review 2013

management’s

discussion and analysis

RESULTS OF OPERATIONS
The following table sets forth certain income and expense items as a percentage of net sales:

Net sales
Cost of sales and distribution
Gross proﬁt
Selling and marketing expenses
General and administrative expenses
Restructuring charges
Insurance recovery
Operating income (loss)
Interest expense/other (income) expense
Income (loss) before income taxes
Income tax expense (beneﬁt)
Net income (loss)

2013

100.0%
83.7
16.3
9.1
4.4
0.2
(0.1)
2.7
0.1
2.7
1.1
1.5

PERCENTAGE OF NET SALES
FISCAL YEARS ENDED APRIL 30
2012

100.0%
87.1
12.9
11.3
4.9
3.2
0.0
(6.5)
(0.1)
(6.4)
(2.4)
(4.0)

2011

100.0%
88.3
11.7
13.5
5.0
0.0
0.0
(6.8)
(0.2)
(6.6)
(2.2)
(4.4)

The following discussion should be read in conjunction with the Five-Year Selected Financial Information and the 

Consolidated Financial Statements and the related notes contained elsewhere herein.

FORWARD-LOOKING STATEMENTS
This annual report contains statements concerning the Com-

pany’s expectations, plans, objectives, future ﬁnancial perform-

ance and other statements that are not historical facts. These

statements are “forward-looking statements” within the mean-

ing of the Private Securities Litigation Reform Act of 1995. 

In most cases, the reader can identify these forward-looking

statements by words such as “anticipate,” “estimate,” “forecast,”

“expect,” “believe,” “should,” “could,” “would,” “plan,” “may,” or

other similar words. Forward-looking statements contained in 

this annual report, including in Management’s Discussion and

Analysis, are based on current expectations and our actual

results may differ materially from those projected in any forward-

looking statements. In addition, the Company participates in an

industry that is subject to rapidly changing conditions and there

are numerous factors that could cause the Company to experience

a decline in sales and/or earnings or deterioration in ﬁnancial

condition. These include but are not limited to: (1) general 

economic or business conditions and instability in the ﬁnancial

and credit markets, including their potential impact on our

(i) sales and operating costs and access to ﬁnancing, and

(ii) customers and suppliers and their ability to obtain ﬁnancing

or generate the cash necessary to conduct their respective busi-

nesses; (2) the cyclical nature of the Company’s industry, which 

is particularly sensitive to changes in consumer conﬁdence, 

the amount of consumers’ income available for discretionary

purchases, and the availability and terms of consumer credit;

(3) economic weakness in a speciﬁc channel of distribution; 

12

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

(4) the loss of sales from speciﬁc customers due to their loss 

During the Company’s ﬁscal year that ended on April 30, 2013

of market share, bankruptcy or switching to a competitor;

(ﬁscal 2013), the Company experienced improving housing 

(5) risks associated with domestic manufacturing operations,

market conditions for the ﬁrst time since the housing market

including ﬂuctuations in capacity utilization and the prices 

downturn that began in 2007. 

and availability of key raw materials as well as fuel, transpor -

tation, warehousing and labor costs and environmental compli-

ance and remediation costs; (6) the need to respond to price 

A number of positive factors evidenced the improving housing

market, including: 

or product initiatives launched by a competitor; (7) the Com-

dCreation of approximately 2 million private sector jobs 

pany’s ability to successfully implement initiatives related 

in the U.S. during the Company’s ﬁscal years 2012 and 2013

to increasing market share, new products, main taining and

(according to the U.S. Department of Labor);

increasing its sales force and new product displays; and

(8) sales growth at a rate that outpaces the Company’s ability 

to install new capacity or a sales decline that requires reduc -

tion or realignment of the Company’s manufacturing capacity.

Additional information concerning the factors that could cause

actual results to differ materially from those in forward-looking

statements is contained in this annual report,  including elsewhere 

in “Management’s Discussion and Analysis” and also in the

Company’s most recent annual report on Form 10-K for the 

ﬁscal year ended April 30, 2013, ﬁled with the U.S. Securities

dA 15% improvement in Gross Private Residential Fixed Invest-

ment reported by the U.S. Department of Commerce during

the most recent four quarters through the ﬁrst quarter of cal-

endar 2013, as compared with the same period one year ago; 

dIncreases in total housing starts and single family housing

starts during the Company’s ﬁscal 2013 of 32% and 28%,

respectively, as compared to the Company’s ﬁscal 2012,

according to the U.S. Department of Commerce;

dThe median price of existing homes sold in the U.S. improved

and Exchange Commission (SEC), including under Item 1A, “Risk 

for the ﬁrst time in 7 years, rising by 10% during the Company’s

Factors”, and Item 7A, “Quantitative and Qualitative Disclosures

ﬁscal 2013, according to data provided by the National Associ-

about Market Risk”. While the Company believes that these

ation of Realtors;

risks are manageable and will not adversely impact the long-

dConsumer conﬁdence, as reported by the University of

term performance of the Company, these risks could, under 

certain circumstances, have a material adverse impact on its

operating results and ﬁnancial condition. 

Michigan, averaged 10% higher during the Company’s ﬁs-

cal 2013 than in its prior ﬁscal year; and

dCabinet sales, as reported by members of the Kitchen Cabinet

Any forward-looking statement that the Company makes speaks

Manufacturers Association (KCMA), increased by 11% during

only as of the date of this annual report. The Company undertakes

ﬁscal 2013, suggesting an increase in both new construction

no obligation to publicly update or revise any forward-looking

and remodeling sales of cabinets.

statements or cautionary factors, as a result of new information,

future events or otherwise, except as required by law.

OVERVIEW
American Woodmark Corporation manufactures and distributes

kitchen cabinets and vanities for the remodeling and new

home construction markets. Its products are sold on a national

basis directly to home centers, major builders and home manu-

facturers and through a network of independent dealers and

distributors. At April 30, 2013, the Company operated 9 manu-

facturing facilities and 9 service centers across the country. 

Faced with an improving but still relatively subdued remodeling

market, the Company’s largest remodeling customers and com-

petitors continued to utilize an elevated level of sales promo-

tions in the Company’s product category during ﬁscal 2013

to boost sales, although a noticeable easing occurred in the

second half of ﬁscal 2013. The Company strives to maintain 

its promotional levels in line with market activity, with a goal 

of remaining competitive. The Company experienced promo-

tional levels during ﬁscal 2013 that were lower than those 

experienced in its prior ﬁscal year. The Company’s remodeling

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 13

 
 
sales increased at a high-single digit pace during ﬁscal 2013

The Company regularly considers the need for a valuation

in a remodeling market that appears to have improved by a bit

allowance against its deferred tax assets. The Company 

less than that level.

The Company increased its net sales by 22% during ﬁscal 2013. The

Company realized strong sales gains in its new construction channel

during ﬁscal 2013, where sales increased by more than 40%, signif-

icantly outpacing the improvement in single-family housing starts.

Management believes this result, combined with the Com-

pany’s increased remodeling sales, indicates the Company realized

market share gains in both of its sales channels during ﬁscal 2013. 

had a history of proﬁtable operations for 16 consecutive years,

from 1994 to 2009, followed by losses that coincided with the

industry downturn from 2010 to 2012. As of April 30, 2013, 

the Company had total deferred tax assets of $38.7 million,

down from $42.1 million at April 30, 2012. Growth in the Com-

pany’s deferred tax assets in recent ﬁscal years resulted primarily

from growth in its deﬁned beneﬁt pension liabilities and the

impact of its recent losses prior to ﬁscal 2013. The Company

earned sufﬁcient net income during ﬁscal 2013 to fully utilize

During the third quarter of ﬁscal 2012, the Company announced

its Federal net operating loss carryforward. To fully realize

several initiatives designed to reduce its cost base (the 2012

Restructuring), including the permanent closure of two manu-

facturing plants, the decision to sell a previously closed manu-

these net deferred tax assets, the Company will need to, among

other things, substantially reduce its net unfunded pension

obligation of $53.7 million at April 30, 2013. The Company took

facturing facility, and the realignment of its retirement program,

deﬁnitive actions when it froze its pension plans as part 

including the freezing of its pension plans. All of these initia-

of the 2012 Restructuring to enhance the probability that this

tives were completed either prior to or just after the beginning

objective is achieved in the future.

of the Company’s ﬁscal 2013, and restructuring charges related

to these actions have been reﬂected in the Company’s results

during both years. 

Gross margin for ﬁscal 2013 was 16.3%, signiﬁcantly improved

from 12.9% in ﬁscal 2012. The increase in the Company’s gross

margin rate was driven by reductions in the labor and overhead

costs associated with the Company’s restructuring activities, 

the beneﬁcial impact of increased sales volume and the

absence of the prior year’s inventory write down, which more

than offset the impact of rising materials costs. 

The Company recorded restructuring charges of $15.9 million

(pre-tax) and $10.0 million (after-tax) during ﬁscal 2012 and

$1.4 million (pre-tax) and $0.9 million (after-tax) during ﬁs-

cal 2013 in connection with these initiatives. Because the bulk 

of these restructuring efforts have been completed, the Com-

pany expects that its future out-of-pocket costs will be nominal. 

The Company sold a previously closed plant during ﬁscal 2013

and continues to include in “Other Assets” at an aggregate

$2.7 million book value the other two plants held for sale that

were included in the 2012 Restructuring. 

The Company resumed the funding of its pension plans during

ﬁscal year 2012, and expects to continue funding these plans 

for the foreseeable future, which will reduce both its unfunded

pension plan obligation and its deferred tax asset. These

actions, coupled with the recent improvement in the U.S. housing

market and the Company’s continued ability to grow its sales 

at a faster rate than its competitors, have enabled the Company

to generate net income and reduce its deferred tax assets and

unfunded pension obligation during ﬁscal 2013. The Company

believes that the positive evidence of the housing industry

improvement, coupled with the beneﬁts from the Company’s

successful restructuring and continued market share gains have

already driven a return to proﬁtability that is expected to con-

tinue, and that the combined impact of these positive factors

outweighs the negative factor of the Company’s previous 

losses. Accordingly, Management has concluded it is more likely

than not that the Company will realize its deferred tax assets.

The Company also regularly assesses its long-lived assets 

to determine if any impairment has occurred. The Company 

has concluded that none of the long-lived assets pertaining 

to its 9 manufacturing plants or any of its other long-lived

assets were impaired as of April 30, 2013.

14

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

RESULTS OF OPERATIONS

(in thousands)

Net sales 
Gross proﬁt
Selling and marketing expenses
General and administrative expenses
Interest expense

FISCAL YEARS ENDED APRIL 30

2013 VS. 2012

2012 VS. 2011

2013

2012

2011

PERCENT CHANGE PERCENT CHANGE

$ 630,437
102,656
57,402
27,575
643

$515,814
66,475
58,271
25,329
527

$ 452,589
52,751
61,034
22,709
572

22%
54
(1)
9
22

14%
26
(5)
12
(8)

NET SALES
Net sales were $630.4 million in ﬁscal 2013, an increase of

$114.6 million, or 22%, compared with ﬁscal 2012. Overall unit vol-

ume for ﬁscal 2013 was 17% higher than in ﬁscal 2012, which man-

driven primarily by inﬂationary pressures in ﬁnishing materials,

lumber, cartons, plywood, particleboard and paint, as well as

from increased levels of outsourcing following the recent plant

closures; and

agement believes was driven primarily by the Company’s increased

d Sales promotion costs improved by 1.4% of net sales during

market share. Average revenue per unit increased 4% in ﬁs-

ﬁscal 2013 compared with the prior year, as a result of both 

cal 2013, driven by improvements in the Company’s product mix.

an increased proportion of new construction sales to the 

Net sales for ﬁscal 2012 increased 14% to $515.8 million from

$452.6 million in ﬁscal 2011. Overall unit volume for ﬁscal 2012

was 9% higher than in ﬁscal 2011, which management believes

was driven primarily by the Company’s increased market share.

Average revenue per unit increased 5% during ﬁscal 2012,

driven primarily by improvements in product mix.

GROSS PROFIT
Gross proﬁt as a percentage of sales increased to 16.3% in ﬁs-

Company’s total sales and reduced promotional activity.

Sales promotions that involved the use of free products or 

cash reimbursements back to the Company’s large remodeling 

customers were deducted from gross margin as opposed 

to being classiﬁed as operating expenses.  

During ﬁscal 2012, the Company’s gross proﬁt increased as 

a percentage of net sales to 12.9% from 11.7% in ﬁscal 2011.

Increased sales volume in ﬁscal 2012 created improved labor

efﬁciencies and more favorable absorption of manufacturing

cal 2013 as compared with 12.9% in ﬁscal 2012. The improvement

overhead costs, which were partially offset by increased 

in gross proﬁt margin was due primarily to the beneﬁcial impact of

sales promotion costs, material costs and diesel fuel. Speciﬁc

higher sales volume and labor and overhead cost savings asso-

changes and additional information included:

ciated with the Company’s two plant closures in April and May of

2012. This favorability was partially offset by an increase in mate-

rial costs. Speciﬁc changes and additional information included:

dLabor and overhead costs improved by 3.6% as a percentage

of net sales compared with the prior ﬁscal year, as the combi-

nation of the increased sales volume and the plant closures

caused both a decrease in overhead costs and improved

absorption of ﬁxed overhead costs, while labor costs became

increasingly more efﬁcient throughout ﬁscal 2013 as 

d Labor and overhead costs improved by 3.7% as a percentage

of net sales during ﬁscal 2012 compared with the prior ﬁscal

year, as increased sales volume caused increased productiv-

ity of direct labor and absorption of ﬁxed overhead costs;

d Materials and freight costs increased as a percentage of net

sales by 1.8% during ﬁscal 2012 as compared with ﬁscal 2011,

driven primarily by inﬂationary pressures in ﬁnishing materials,

lumber, cartons, imported components, and diesel fuel; and

productivity gains were realized following the plant closures; 

d Sales promotion costs increased by 0.7% of net sales during

d Materials and freight costs increased as a percentage of net

sales by 1.6% during ﬁscal 2013 as compared with ﬁscal 2012,

ﬁscal 2012, as the Company chose to remain competitive with

competitors’ promotional offerings to drive sales growth in a

challenging market. 

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 15

SELLING AND MARKETING EXPENSES
Selling and marketing expenses in ﬁscal 2013 were 9.1% of net

OUTLOOK FOR FISCAL 2014
The Company tracks several metrics, including but not limited 

sales, compared with 11.3% of net sales in ﬁscal 2012. Selling and

to housing starts, existing home sales, mortgage interest 

marketing costs decreased by 1% despite a 22% increase in net

rates, new jobs growth, GDP growth and consumer conﬁdence, 

sales. The improvement in sales and marketing costs in relation 

which it believes are leading indicators of overall demand 

to net sales was due to reduced spending on product launch costs

for kitchen and bath cabinetry. The Company believes that

and cost reductions related to the Company’s retirement plan

housing prices ﬁnally bottomed during its ﬁscal 2012 and

changes, which were offset in part by increased sales compensation

have begun what it expects will be a multi-year improvement,

and stafﬁng costs related to the Company’s increased sales levels.

driven by employment growth and a resumption of growth 

Selling and marketing expenses were 11.3% of net sales 

in ﬁscal 2012 compared with 13.5% in ﬁscal 2011. Cost savings

from lower marketing collateral and branding costs, as well 

as reductions in product display costs more than offset the

increases in employee compensation and travel costs incurred

by the Company in ﬁscal 2012.

GENERAL & ADMINISTRATIVE
EXPENSES
General and administrative expenses increased by $2.2 million

or 9% during ﬁscal 2013. The increase in cost was entirely

related to increased pay-for-performance compensation. How-

ever, G&A costs declined to 4.4% of net sales in ﬁscal 2013

compared with 4.9% of net sales in ﬁscal 2012.  

General and administrative expenses in ﬁscal 2012 increased

by $2.6 million, or 12%, compared with ﬁscal 2011 and repre-

sented 4.9% of net sales, compared with 5.0% of net sales 

for ﬁscal 2011. The majority of the cost increase was related 

to increased pay-for-performance compensation. 

EFFECTIVE INCOME TAX RATES
The Company generated pre-tax income of $16.7 million 

during ﬁscal 2013, including $1.4 million of restructuring

charges. The Company’s effective tax rate increased from

37.6% in ﬁscal 2012 to 41.7% in ﬁscal 2013. The higher 

effective tax rate was the result of relatively consistent

amounts of permanent tax differences in relation to the 

net income generated in ﬁscal 2013 compared with the 

net loss generated in the prior year.

in new household formation. However, because the number 

of homeowners still owing more than what their homes are

worth remains at historically high levels, the Company expects

that while the cabinet remodeling market will show modest

improvement it will continue to be well below the historic

highs reached in the previous decade.

Driven by an improving housing market, the Company expects

that industry-wide cabinet remodeling sales will continue 

a trend that began during ﬁscal 2013 and improve at roughly 

a mid-single digit rate during its ﬁscal 2014. The Company

expects that its home center market share will be relatively 

stable in ﬁscal 2014 and it will continue to gain market share

in its growing dealer business. This combination is expected 

to result in remodeling sales growth that outpaces the market

by several percentage points.

The Company agrees with the consensus estimate that new

construction starts will continue to grow at a mid-20% rate 

during its ﬁscal 2014. The Company’s new construction sales

growth outperformed the new construction market by approxi-

mately 20 points during ﬁscal 2013, and expects that it will

again outperform the new construction market during ﬁscal

2014 but by a signiﬁcantly lesser rate, as its comparable prior

year sales levels become more challenging.

Inclusive of the potential for modest sales mix and pricing

improvements, the Company expects that it will grow its total

sales at a mid-teen rate in ﬁscal 2014. The Company experi-

enced production inefﬁciencies during the ﬁrst half of its ﬁscal

2013 driven by the combination of work transition issues from 

its closed plants, coupled with production volume increases that

were driven by unexpectedly high sales levels. These issues were

resolved during the third quarter of the Company’s ﬁscal 2013,

16

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

enabling the Company’s gross margin rate to improve in the

impairments related to the 2012 Restructuring. This improvement

fourth quarter of ﬁscal 2013. The Company expects that its gross

was offset in part by a $13.6 million net working capital invest-

margin rate and net income for ﬁscal 2014 will improve com-

ment in its operating assets and liabilities to fund growth and

pared with its ﬁscal 2013 performance.

increased contributions to its pension plans of $2.0 million.

The Company had gross outlays for capital expenditures and

Cash provided by operating activities in ﬁscal 2012 was

customer display units of $13.5 million during ﬁscal 2013, and

$16.1 million, compared with $13.2 million in ﬁscal 2011. 

plans to increase this spending level modestly during ﬁscal 2014.

The $2.9 million improvement was primarily attributable 

However, the Company is undertaking a multi-year review of 

to the reduction in the Company’s operating loss exclusive 

its manufacturing capacity and capital expenditure plans which

of restructuring charges of $13.9 million. This improvement 

could cause its capital expenditures to exceed this level.

was offset in part by reductions in proceeds from income tax

Additional risks and uncertainties that could affect the 

Company’s results of operations and ﬁnancial condition are 

discussed elsewhere in this annual report, including under 

“Forward-Looking Statements,” and elsewhere in “Manage-

ment’s Discussion and Analysis,” as well as in the Company’s

annual report on Form 10-K for the ﬁscal year ended April 30,

2013 ﬁled with the SEC, including under Item 1A, “Risk Factors”

and Item 7A, “Quantitative and Qualitative Disclosures about

Market Risk.”

LIQUIDITY AND CAPITAL RESOURCES
The Company’s cash, cash equivalents and restricted cash totaled

$97.0 million at April 30, 2013, which represented an increase 

of $23.3 million from April 30, 2012. Total debt was $24.7 million

at April 30, 2013, virtually unchanged from the prior ﬁscal year

refunds of $7.1 million, from increasing funding to its pension

plans of $2.9 million, and from funding restructuring costs 

of $1.2 million. 

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 2013 was $6.1 million,

compared with $9.9 million in ﬁscal 2012 and $5.5 million 

in ﬁscal 2011. Investments in property, plant and equipment 

for ﬁscal 2013 were $8.9 million, compared with $6.7 million 

in ﬁscal 2012 and $5.0 million in ﬁscal 2011. Investments 

in promotional displays were $4.8 million in ﬁscal 2013, com-

pared with $3.3 million in ﬁscal 2012 and $3.5 million in ﬁs-

cal 2011. The increased level of investment during ﬁscal 2013

primarily represents machinery and equipment enhancements

and long-term debt, excluding current maturities, to capital was

to enable production volume to increase and an increase in the

13.9% at April 30, 2013, down from 15.5% at April 30, 2012.

number of display units deployed with customers. 

The Company’s main source of liquidity is its cash and cash

equivalents on hand and cash generated from its operating

activities. During ﬁscal 2013 the Company renegotiated its

revolving credit agreement with its primary lender and is no

longer required to hold restricted cash to secure borrowings

under that agreement.

During ﬁscal 2013, the Company’s reduced net cash used for

investing activities was driven by the receipt of $6.4 million 

in proceeds from the sales of assets from closed plants and

insurance proceeds of $1.0 million, which more than offset the

aggregate $3.6 million increase in outﬂows for capital expendi-

tures and promotional displays. 

OPERATING ACTIVITIES  
Cash provided by operating activities in ﬁscal 2013 was $24.5 mil-

lion, compared with $16.1 million in ﬁscal 2012. The $8.4 million

improvement was primarily attributable to the Company’s

$22.9 million improvement in net income and reduction in asset 

The Company generated positive free cash ﬂow (deﬁned as

cash provided by operating activities less cash used for invest-

ing activities) of $18.4 million during ﬁscal 2013, compared

with $6.1 million in ﬁscal 2012 and $7.7 million in ﬁscal 2011.

The increase in ﬁscal 2013 was driven by the net improve-

ments in both cash provided by operating activities and

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 17

decreased net outﬂows used for investing activities. The reduc-

outstanding indebtedness and other obligations to Wells Fargo

tion in ﬁscal 2012 was driven by increased net outﬂows used

be secured by cash and securities held in certain of the Com-

for investing activities that more than offset net improvements

pany’s accounts with Wells Fargo. The Company’s outstanding

in cash provided by operating activities. 

indebtedness and other obligations to Wells Fargo are secured

by substantially all of the Company’s assets. The Company can

FINANCING ACTIVITIES
The Company realized a net inﬂow of $11.9 million from ﬁnanc-

borrow under the revolving credit facility up to the lesser of

$35 million or the maximum borrowing base (which equals

ing activities in ﬁscal 2013, compared with a $5.1 million inﬂow 

75% of eligible accounts receivable, 50% of eligible pre bill

in ﬁscal 2012, and a net outﬂow of $5.5 million in ﬁscal 2011.

reserves and up to $20 million for equipment value, each as

Reductions in the amount of restricted cash drove inﬂows 

deﬁned in the agreement) less any outstanding loan balance.

of approximately $7 million in both ﬁscal 2013 and 2012. 

Any outstanding loan balance bears interest at the London

Additional proceeds of $5.9 million were generated during 

Interbank Offered Rate (LIBOR) (0.25% at April 30, 2013) plus

ﬁscal 2013 from the exercise of stock options. Approximately

2.625%. Under the terms of the revolving credit facility, the

$1 million was used to repay long-term debt in each of the

Company must: (1) maintain at the end of each ﬁscal quarter 

years in the three-year period ended in ﬁscal 2013, while ﬁs-

a ratio of total liabilities to tangible net worth of not greater

cal 2012 and 2011 was further impacted by dividend payments

than 1.4 to 1.0; (2) maintain at the end of each ﬁscal quarter 

to shareholders of $1.3 million and $5.1 million, respectively.

a ratio of cash ﬂow to ﬁxed charges of not less than 1.25 to 1.0

The Company elected to suspend its quarterly dividend during

ﬁscal 2012. The Company ended ﬁscal 2013 with a record level 

of nearly $97 million in cash and cash equivalents. The Company

is authorized to repurchase up to $93.3 million of its stock under

an authorization approved by its Board of Directors in 2007. 

measured on a rolling four-quarter basis; (3) maintain at least

$1.00 in net income for the ﬁscal quarter ending April 30, 2013

and at least $1.00 in net income on a rolling four-quarter basis

for the ﬁscal quarter ending July 31, 2013; and comply with other

customary afﬁrmative and negative covenants. 

The Company continues to evaluate its cash on hand and

The Company was in compliance with all covenants speciﬁed 

prospects for future cash generation, and compare these against

in the amended credit facility as of April 30, 2013, as follows:

its go-forward reinvestment plans for future capital expenditures.

(1) the Company’s ratio of total liabilities to tangible net worth at

Although the evaluation of its future capital expenditures is

April 30, 2013 was 1.0 to 1.0; (2) cash ﬂow to ﬁxed charges for its

ongoing, the Company expects that it will make repurchases 

most recent four quarters was 2.72 to 1.0; and (3) its net income

of its common stock from time to time during ﬁscal 2014.

for the ﬁscal quarter ended April 30, 2013 was $5.2 million.

The Company can borrow up to $35 million under the Wells Fargo

The revolving credit facility does not limit the Company’s ability 

credit facility, subject to a maximum borrowing base equal to 

to pay dividends or repurchase its common stock as long as

75% of eligible accounts receivable, 50% of eligible pre bill reserves

the Company is in compliance with these covenants. 

and up to $20 million for equipment value (each as deﬁned in the

agreement). At April 30, 2013, $10 million of loans and $3.7 million

of letters of credit were outstanding under the Wells Fargo facility. 

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,

An amendment to the revolving credit facility and modiﬁca-

service existing debt obligations and fund capital expenditures

tions to related security arrangements completed on March 18,

for ﬁscal 2014. 

2013 eliminated the requirement that 50% of the Company’s 

18

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

The timing of the Company’s contractual obligations as of April 30, 2013 is summarized in the table below:

(in thousands)

Revolving credit facility
Economic development loans
Term loans
Capital lease obligations
Interest on long-term debt1
Operating lease obligations
Pension contributions2

Total 

TOTAL 
AMOUNTS

$ 10,000
3,480
3,530
7,739
2,622
10,926
33,208

$ 71,505

2014

$ —
—
349
806
659
3,411
2,258

$ 7,483

FISCAL YEARS ENDED APRIL 30

2015–2016

2017–2018

2019 AND
THEREAFTER                  

$10,000
—
763
1,689
1,113
5,870
10,020

$ 29,455

$

—
—
2,418
1,356
488
1,553
15,700

$ 

—
3,480
—
3,888
362
92
5,230

$ 21,515

$ 13,052

1 Interest commitments under interest bearing debt consist of interest under the Company’s primary loan agreement, term loans and capitalized lease
agreements. Amounts outstanding under the Company’s revolving credit facility, $10 million at April 30, 2013, bear a variable interest rate determined
by the London Interbank Offered Rate (LIBOR) plus 2.625%. Interest under the Company’s term loans and capitalized lease agreements is fixed 
at rates between 2% and 6.5%. Interest commitments under interest bearing debt for the Company’s revolving credit facility are at LIBOR plus 
the spread as of April 30, 2013, throughout the remaining term of the facility.

2 The estimated cost of the Company’s two defined benefit pension plans is determined annually based upon the discount rate and other assumptions
at fiscal year end. Future pension funding contributions beyond fiscal 2019 have not been determined at this time.

MARKET RISKS 
The Company’s business has historically been subjected 

CRITICAL ACCOUNTING POLICIES
Management has chosen accounting policies that are necessary

to seasonal inﬂuences, with higher sales typically realized 

to give reasonable assurance that the Company’s operational

in the second and fourth ﬁscal quarters. 

results and ﬁnancial position are accurately and fairly reported.

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. 

On April 30, 2013, the Company had no material exposure 

to changes in interest rates for its debt agreements. 

The signiﬁcant accounting policies of the Company are disclosed

in Note A to the Consolidated Financial Statements included 

in this annual report. The following discussion addresses the

accounting policies that management believes have the greatest

potential impact on the presentation of the ﬁnancial condition

and operating results of the Company for the periods being

reported and that require the most judgment. 

The Company does not currently use commodity or interest

rate derivatives or similar ﬁnancial instruments to manage 

Management regularly reviews these critical accounting policies

and estimates with the Audit Committee of the Board of Directors. 

its commodity price or interest rate risks.

For additional discussion of risks that could affect the Com-

pany and its business, see “Forward-Looking Statements”

LONG-LIVED ASSET IMPAIRMENT. The Company reviews its
long-lived assets for impairment whenever events or changes 

in circumstances indicate that the related carrying amounts may

above and “Risk Factors” in the Company’s most recent annual

not be recoverable. For purposes of assessing if impairment

report on Form 10-K ﬁled with the SEC.

OFF-BALANCE SHEET ARRANGEMENTS
As of April 30, 2013 and 2012, the Company had no off-balance

sheet arrangements.

exists, assets are grouped at the lowest level for which there are

identiﬁable cash ﬂows that are largely independent of the cash

ﬂows of other groups of assets. To determine whether an impair-

ment has occurred, the Company compares estimates of the

future undiscounted net cash ﬂows of groups of assets to their

carrying values. The Company has not recognized impairments

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 19

of long-lived assets in the last three years other than the impair-

The estimated expense, beneﬁts and pension obligations of

ments related to restructuring activities.

these plans are determined using various assumptions. The most

REVENUE RECOGNITION. The Company utilizes signed sales
agreements that provide for transfer of title to the customer upon

delivery. The Company must estimate the amount of sales that

have been transferred to third-party carriers but not delivered 

to customers. The estimate is calculated using a lag factor deter-

mined by analyzing the actual difference between shipment date

and delivery date of orders over the past 12 months. Revenue is

only recognized on those shipments which the Company believes

have been delivered to the customer. 

The Company recognizes revenue based on the invoice price less

allowances for sales returns, cash discounts and other deductions

as required under U.S. generally accepted accounting principles

signiﬁcant assumptions are the long-term expected rate of return

on plan assets and the discount rate used to determine the pres-

ent value of the pension obligations. In ﬁscal 2013 and 2012, the

Company determined the discount rate by referencing the Aon

Hewitt AA Bond Universe Yield Curve. In ﬁscal 2011, the Company

referred to the Hewitt Above Median Yield Curve in establishing

the discount rate. This change was caused by the merger of 

Aon and Hewitt and the corresponding elimination of the Hewitt

Above Median Yield Curve. The Company believes that using 

a yield curve approach accurately reﬂects changes in the present

value of liabilities over time since each cash ﬂow is discounted 

at the rate at which it could effectively be settled. The long-term

expected rate of return on plan assets reﬂects the current mix 

(GAAP). Collection is reasonably assured as determined through

of the plan assets invested in equities and bonds. 

an analysis of accounts receivable data, including historical prod-

uct returns and the evaluation of each customer’s ability to pay.

Allowances for sales returns are based on the historical relation-

ship between shipments and returns. The Company believes that

its historical experience is an accurate reﬂection of future returns. 

SELF INSURANCE. The Company is self-insured for certain
costs related to employee medical coverage and workers’ com-

pensation liability. The Company maintains stop-loss coverage

with third-party insurers to limit total exposure. The Company

The following is a summary of the potential impact of a hypo-

thetical 1% change in actuarial assumptions for the discount

rate, expected return on plan assets and consumer price index:

(in millions)

(decrease) increase

IMPACT OF 1% IMPACT OF 1%

INCREASE

DECREASE

Effect on annual pension expense

$ (1.1)

Effect on projected pension

beneﬁt obligation

$ (21.1)

$ 1.1

$26.9

establishes a liability at each balance sheet date based on esti-

Pension expense for ﬁscal 2013 and the assumptions used in that

mates for a variety of factors that inﬂuence the Company’s ulti-

calculation are presented in Note H of the Consolidated Financial

mate cost. In the event that actual experience is substantially

Statements. At April 30, 2013, the discount rate was 4.21% com-

different from the estimates, the ﬁnancial results for the period

pared with 4.66% at April 30, 2012. The expected return on plan

could be adversely affected. The Company believes that the

assets was 7.5% at both April 30, 2013 and April 30, 2012. The

methodologies used to estimate all factors related to employee

assumed rate of increase in compensation levels was 4.0% for 

medical coverage and workers’ compensation are an accurate

the ﬁscal years ended April 30, 2012 and 2011. The rate of compen-

reﬂection of the liability as of the date of the balance sheet. 

sation increase is not applicable for periods beyond April 30, 2012

PENSIONS. The Company has two non-contributory deﬁned
beneﬁt pension plans covering many of the Company’s employ-

ees hired prior to April 30, 2012. 

Effective April 30, 2012, the Company froze all future beneﬁt

accruals under the Company’s hourly and salary deﬁned 

beneﬁt pension plans.

because the Company froze its pension plans as of that date. 

The projected performance of the Company’s pension plans is

largely dependent on the assumptions used to measure the obli-

gations of the plans and to estimate future performance of the

plans’ invested assets. Over the past two measurement periods,

the most material deviations between results based on assump-

tions and the actual plan performance have resulted from

changes to the discount rate used to measure the plans’ beneﬁt

20

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

obligations and the actual return on plan assets. Accounting

guidelines require the discount rate to be set to market at each

PRODUCT WARRANTY. The Company estimates outstanding
warranty costs based on the historical relationship between 

annual measurement date. From the ﬁscal 2011 to ﬁscal 2012

warranty claims and revenues. The warranty accrual is reviewed

measurement dates, the discount rate decreased from 5.66% 

monthly to verify that it properly reﬂects the Company’s remaining

at April 30, 2011 to 4.66% at April 30, 2012, which caused an 

obligation based on anticipated expenditures over the balance 

actuarial loss of $26.3 million. From the ﬁscal 2012 to ﬁscal 2013

of the obligation period. Adjustments are made when actual war-

measurement dates, the discount rate decreased from 4.66% 

ranty claim experience differs from estimates. Warranty claims are

to 4.21% which caused an actuarial loss of $10.8 million.

generally made within two months of the original shipment date. 

The Company strives to balance expected long-term returns and

short-term volatility of pension plan assets. Favorable and unfa-

STOCK-BASED COMPENSATION EXPENSE. The calculation 
of stock-based compensation expense involves estimates that

vorable differences between the assumed and actual returns on

require management’s judgment. These estimates include the 

plan assets are generally amortized over a period no longer than

fair value of each stock option and restricted stock unit award

the average life expectancy of the plans’ active participants. The

granted. Stock option awards are estimated on the date of grant

actual rates of return on plan assets realized, net of investment

using a Black-Scholes option pricing model. There are two signiﬁ-

manager fees, were 10.2%, 3.1% and 11.9% for ﬁscal 2013, 2012

cant inputs into the Black-Scholes option pricing model: expected

and 2011, respectively. 

The fair value of plan assets at April 30, 2013 was $95.7 million

compared with $85.7 million at April 30, 2012. The Company’s 

projected beneﬁt obligation exceeded plan assets by $53.7 mil-

lion in ﬁscal 2013 and by $50.5 million in ﬁscal 2012. The $3.2 mil-

lion increase in the Company’s net under-funded position during

ﬁscal 2013 was primarily driven by the Company’s $10.8 million

volatility and expected term. The Company estimates expected

volatility based on the historical volatility of the Company’s stock

over a term equal to the expected term of the option granted. 

The expected term of stock option awards granted is derived from

historical exercise experience under the Company’s stock option

plans and represents the period of time that stock option awards

granted are expected to be outstanding. 

actuarial losses, offset in part by a higher return on plan assets

For performance-based restricted stock units, the Company 

and Company contributions. The Company expects its pension

estimates the number of shares that will be granted upon 

expense to decrease from $0.6 million in ﬁscal 2013 to $0.2 mil-

satisfaction of the performance conditions, based upon actual

lion in ﬁscal 2014, due primarily to a higher expected return on

and expected future operating results. The assumptions used 

plan assets. The Company expects to contribute $2.3 million to 

in calculating the fair value of stock-based payment awards repre-

its pension plans in ﬁscal 2014, which represents required fund-

sent management’s best estimates, but these estimates involve

ing. The Company made contributions of $4.9 million to its pen-

inherent uncertainties and the application of signiﬁcant manage-

sion plans in ﬁscal 2013. 

PROMOTIONAL DISPLAYS. The Company invests in promotional
displays in retail stores to demonstrate product features, product

and quality speciﬁcations and serve as a training tool for design-

ers. The investment is carried at cost less applicable amortization.

Amortization is provided by the straight-line method on an indi-

vidual display basis over the estimated period of economic bene-

ﬁt, approximately 30 to 36 months. The Company believes that

the estimated period of economic beneﬁt provides an accurate

reﬂection of the value of displays as of the date of the balance

sheet based on historical experience.  

ment judgment. As a result, if factors change or the Company

uses different assumptions, stock-based compensation expense

could be materially different in the future. In addition, the

Company is required to estimate the expected forfeiture rate and 

only recognize expense for those shares expected to vest. If the

Company’s actual forfeiture rate is materially different from 

its estimate, the stock-based compensation expense could be

signiﬁcantly different from what the Company has recorded 

in the current period. See Note G to the Consolidated Financial

Statements for further discussion on stock-based compensation. 

VALUATION OF DEFERRED TAX ASSETS. The Company regularly
considers the need for a valuation allowance against its deferred

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 21

tax assets. Based upon the Company’s analysis at April 30, 2013

statement of comprehensive income, or in two separate but

and 2012, the Company determined in each case that a valuation

consecutive statements. Additionally, ASU 2011-05 eliminates

allowance was not required. The Company considered all available

the option to present comprehensive income and its compo-

evidence, both positive and negative, in determining the need 

nents as part of the statement of shareholders’ equity. The 

for a valuation allowance. Based upon this analysis, management

ASU does not change the items that must be reported in other 

determined that it is more likely than not that the Company’s

comprehensive income. The Company adopted this guidance

deferred tax assets will be realized through expected future income

effective May 1, 2012 and now includes Statements of Compre-

and the reversal of taxable temporary differences. The Company

hensive Income (Loss) in its ﬁnancial statements.

will continue to update this analysis on a periodic basis and

changes in expectations about future income or the timing 

of the reversal of taxable temporary differences could cause 

the Company to record a valuation allowance in a future period. 

RECENT ACCOUNTING 
PRONOUNCEMENTS 
In February 2013, the Financial Accounting Standards Board

(FASB) issued Accounting Standards Update (ASU) No. 2013-02,

“Comprehensive Income (Topic 220): Reporting Amounts

Reclassiﬁed Out of Accumulated Other Comprehensive Income,”

which requires an entity to provide information about the

amounts reclassiﬁed out of accumulated other comprehensive

income by component. In addition, an entity is required to pres-

ent, either on the face of the statement where net income is

presented or in the notes, signiﬁcant amounts reclassiﬁed out

of accumulated other comprehensive income by the respective

line items of net income if the amount reclassiﬁed is required

under U.S. GAAP to be reclassiﬁed to net income in its entirety 

in the same reporting period. The ASU does not change the 

current requirements for reporting net income or other compre-

hensive income in ﬁnancial statements. The ASU is effective

prospectively for ﬁscal years and interim periods within those

years beginning after December 15, 2012. The adoption of

ASU 2013-02 is not expected to have a signiﬁcant impact 

on the Company’s results of operations or ﬁnancial position.

In December 2011, the FASB issued ASU No. 2011-12, “Compre -

hensive Income (Topic 220): Deferral of the Effective Date 

of Amendments to the Presentation of Reclassiﬁcations 

of Items Out of Accumulated Other Comprehensive Income 

in ASU No. 2011-05.” The amendments were made to allow 

FASB time to redeliberate whether to present on the face 

of the ﬁnancial statements the effects of reclassiﬁcations 

out of accumulated other comprehensive income on the 

components of net income and other comprehensive income. 

LEGAL MATTERS 
The Company is involved in suits and claims in the normal course

of business, including without limitation product liability and gen-

eral liability claims and claims pending before the Equal Employ-

ment Opportunity Commission. On at least a quarterly basis, the

Company consults with its legal counsel to ascertain the reason-

able likelihood that such claims may result in a loss. As required

by ASC Topic 450, “Contingencies” (ASC 450), the Company cat-

egorizes the various suits and claims into three categories accord-

ing 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. Where losses are deemed to be prob-

able and estimable, accruals are made. Where losses are deemed 

to be reasonably possible or remote, a range of loss estimates is

determined and considered for disclosure. Where no loss estimate

range can be made, the Company and its counsel perform a worst-

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive

case estimate. In determining these loss range estimates, the

Income (Topic 220): Presentation of Comprehensive Income,”

Company considers known values of similar claims and consul-

which requires an entity to present the total of comprehensive

tation with independent counsel.

income, the components of net income, and the components 

of other comprehensive income either in a single continuous 

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, 2013. 

22

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

ASSETS
Current Assets

Cash and cash equivalents
Customer receivables, net
Inventories
Prepaid expenses and other
Deferred income taxes

Total Current Assets

Property, plant and equipment, net
Restricted cash
Promotional displays, net
Deferred income taxes
Other assets

TOTAL ASSETS

LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities

Accounts payable
Current maturities of long-term debt
Accrued compensation and related expenses
Accrued marketing expenses
Other accrued expenses

Total Current Liabilities

Long-term debt, less current maturities
Deﬁned beneﬁt pension liabilities
Other long-term liabilities

Shareholders’ Equity

Preferred stock, $1.00 par value; 2,000,000 shares authorized, none issued
Common stock, no par value; 40,000,000 shares authorized; issued and  

outstanding shares: at April 30, 2013: 14,822,580, at April 30, 2012: 14,395,273  

Retained earnings
Accumulated other comprehensive loss—

Deﬁned beneﬁt pension plans

Total Shareholders’ Equity

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY

See notes to consolidated financial statements.

APRIL 30

2013

2012

$ 96,971
39,044
29,338
3,084
9,481

177,918

74,064
—
5,811
29,262
6,938

$293,993

$  23,306
1,155
26,213
10,159
8,275

69,108

23,594
53,696
1,400

—

107,165
71,180

(32,150)

146,195

$293,993

$ 66,620
32,533
22,340
2,523
7,086

131,102

75,375
7,064
5,073
34,969
11,538

$265,121

$ 19,492
875
21,963
8,756
8,135

59,221

23,790
50,547
1,543

—

96,205
61,422

(27,607)

130,020

$265,121

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 23

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

Net sales
Cost of sales and distribution

Gross Proﬁt

Selling and marketing expenses
General and administrative expenses
Restructuring charges 
Insurance proceeds

Operating Income (Loss)

Interest expense
Other income

Income (Loss) Before Income Taxes

Income tax expense (beneﬁt)

Net Income (Loss)

SHARE INFORMATION
Earnings (loss) per share

Basic
Diluted

Cash dividends per share

See notes to consolidated financial statements.

2013

$ 630,437
527,781

102,656

57,402
27,575
1,433
(975)

17,221

643
(162)

16,740

6,982

$

9,758

$

0.67
0.66
0.00

FISCAL YEARS ENDED APRIL 30
2012

$515,814
449,339

66,475

58,271
25,329
16,321
—

(33,446)

527
(685)

(33,288)

(12,502)

$ (20,786)

$

(1.45)
(1.45)
0.09

2011

$ 452,589
399,838

52,751

61,034
22,709
62
—

(31,054)

572 
(1,666)

(29,960)

(9,942)

$ (20,018)

$

(1.40)
(1.40)
0.36

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(in thousands)

Net income (loss)

Other comprehensive loss net of tax:

Change in pension beneﬁts, net of deferred taxes of $2,905, $3,624
and $294, respectively

Total Comprehensive Income (Loss)

See notes to consolidated financial statements.

2013

$ 9,758

(4,543)

$

5,215

FISCAL YEARS ENDED APRIL 30
2012

2011

$(20,786)

$ (20,018)

(5,669)

$(26,455)

(460)

$ (20,478)

24

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

COMMON STOCK

SHARES

14,205,462

AMOUNT

$ 88,153

(in thousands, except share data)

Balance, May 1, 2010

Net loss
Other comprehensive loss, net of tax
Stock-based compensation
Adjustments to excess tax beneﬁt

from stock-based compensation

Cash dividends
Exercise of stock-based compensation awards
Employee beneﬁt plan contributions

27,401
62,677

RETAINED
EARNINGS

$108,643

(20,018)

(5,130)

ACCUMULATED
OTHER
COMPREHENSIVE
LOSS

TOTAL
SHAREHOLDERS’
EQUITY

$(21,478)

$175,318

(460)

(20,018)
(460)
3,995

(1,347)
(5,130)
394
1,213

3,995

(1,347)

394
1,213

Balance, April 30, 2011

14,295,540

$ 92,408

$ 83,495

$(21,938)

$153,965

Net loss
Other comprehensive loss, net of tax
Stock-based compensation
Adjustments to excess tax beneﬁt

from stock-based compensation

Cash dividends
Exercise of stock-based compensation awards
Employee beneﬁt plan contributions

19,410
80,323

3,413

(859)

12
1,231

(5,669)

(20,786)

(1,287)

(20,786)
(5,669)
3,413

(859)
(1,287)
12
1,231

Balance, April 30, 2012

14,395,273

$ 96,205

$ 61,422

$(27,607)

$130,020

Net income
Other comprehensive loss, net of tax
Stock-based compensation
Adjustments to excess tax beneﬁt 
from stock-based compensation

Exercise of stock-based compensation awards
Employee beneﬁt plan contributions

328,490
98,817

3,509

(650)
5,768
2,333

9,758

(4,543)

9,758
(4,543)
3,509

(650)
5,768
2,333

Balance, April 30, 2013

14,822,580

$107,165

$ 71,180

$(32,150)

$146,195

See notes to consolidated financial statements.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 25

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

OPERATING ACTIVITIES
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided 

by operating activities:

Depreciation and amortization
Net loss on disposal of property, plant and equipment
Impairment loss related to restructuring activities
(Gain) loss on sales of assets held for sale
Gain on insurance recoveries
Stock-based compensation expense
Deferred income taxes
Pension contributions (in excess of) less than expense
Tax beneﬁt from stock-based compensation
Other non-cash items
Changes in operating assets and liabilities:

Customer receivables
Inventories
Prepaid expenses and other assets
Accounts payable
Accrued compensation, marketing and other accrued expenses

Net Cash Provided by Operating Activities

INVESTING ACTIVITIES
Payments to acquire property, plant and equipment
Proceeds from sales of property, plant and equipment
Proceeds from sales of assets held for sale
Proceeds from insurance recoveries
Investment in promotional displays

Net Cash Used by Investing Activities

FINANCING ACTIVITIES
Payments of long-term debt
Change in restricted cash
Tax beneﬁt from stock-based compensation
Proceeds from issuance of common stock and other
Payment of dividends

Net Cash Provided (Used) by Financing Activities

Net Increase in Cash and Cash Equivalents

Cash and Cash Equivalents, Beginning of Year

2013

FISCAL YEARS ENDED APRIL 30
2012

2011

$ 9,758

$ (20,786)

$(20,018)

14,431
231
270
(481)
(975)
3,509
5,789
(4,299)
(18)
944

(6,825)
(7,068)
(1,669)
3,814
7,116

24,527

(8,860)
80
6,447
975
(4,759)

(6,117)

(1,019)
7,064
18
5,878
—

11,941

30,351

66,620

23,387
180
7,913
111
—
3,413
(12,290)
4,528
—
867

(1,533)
115
(320)
923
9,545

16,053

(6,679)
15
56
—
(3,310)

(9,918)

(1,021)
7,355
—
18
(1,287)

5,065

11,200

55,420

26,703
209
—
(982)
—
3,995
(8,185)
6,907
(80)
(971)

(3,514)
331
5,709
4,534
(1,442)

13,196

(4,952)
3
2,939
—
(3,456)

(5,466)

(892)
—
80
399
(5,130)

(5,543)

2,187

53,233

Cash and Cash Equivalents, End of Year

$ 96,971

$ 66,620

$ 55,420

See notes to consolidated financial statements.

26

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

notes

to consolidated ﬁnancial statements

NOTE A—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company manufactures and distributes kitchen cabinets

and vanities for the remodeling and new home construction

ADVERTISING COSTS: Advertising costs are expensed as incurred.
Advertising expenses for ﬁscal years 2013, 2012 and 2011 were

markets. The Company's products are sold across the United

$36.5 million, $37.4 million and $30.0 million, respectively.

States through a network of independent dealers and distribu-

tors and directly to home centers and major builders.

CASH AND CASH EQUIVALENTS: Cash in excess of operating
requirements is invested in money market accounts which are

The following is a description of the Company’s signiﬁcant

carried at cost (which approximates fair value). The Company

accounting policies:

PRINCIPLES OF CONSOLIDATION AND BASIS OF 
PRESENTATION: The consolidated ﬁnancial statements
include the accounts of the Company and its wholly-owned

subsidiary. Signiﬁcant inter-company accounts and transac-

tions have been eliminated in consolidation.

REVENUE RECOGNITION: The Company recognizes revenue
when product is delivered to the customer and title has passed.

considers all highly liquid short-term investments with an origi-

nal maturity of three months or less when purchased to be cash

equivalents. Cash equivalents were $38.9 million and $31.8 mil-

lion at April 30, 2013 and 2012, respectively.

INVENTORIES: Inventories are stated at lower of cost 
or market. Inventory costs are determined by the last-in, 

ﬁrst-out (LIFO) method.

The LIFO cost reserve is determined in the aggregate for inventory

Revenue is based on invoice price less allowances for sales

and is applied as a reduction to inventories determined on the

returns, cash discounts and other deductions.

ﬁrst-in, ﬁrst-out method (FIFO). FIFO inventory cost approximates

COST OF SALES AND DISTRIBUTION: Cost of sales and 
distribution includes all costs associated with the manufacture

and distribution of the Company’s products including the costs

of shipping and handling. 

replacement cost.

PROPERTY, PLANT AND EQUIPMENT: Property, plant and
equipment is stated on the basis of cost less accumulated

depreciation. Depreciation is provided by the straight-line method

over the estimated useful lives of the related assets, which range

from 15 to 30 years for buildings and improvements and 3 to 10

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 27

years for machinery and equipment. Assets under capital leases

of plan assets and the beneﬁt obligation, in its consolidated bal-

are amortized over the shorter of their estimated useful lives

ance sheets. The Company also recognizes the actuarial gains

or the term of the related lease.

and losses and the prior service costs, credits and transition costs

IMPAIRMENT OF LONG-LIVED ASSETS: The Company reviews
its long-lived assets for impairment when events or changes 

in circumstances indicate that the carrying amount of an asset

as a component of other comprehensive income (loss), net of tax.  

STOCK-BASED COMPENSATION: The Company recognizes
stock-based compensation expense based on the grant date

may not be recoverable. During ﬁscal years 2013, 2012 and

fair value over the requisite service period.   

2011, the Company concluded no impairment existed, except

for impairments related to restructuring activities.

RECENT ACCOUNTING PRONOUNCEMENTS: In February 2013,
the Financial Accounting Standards Board (FASB) issued

PROMOTIONAL DISPLAYS: The Company invests in promo-
tional displays in retail stores to demonstrate product features,

Accounting Standards Update (ASU) No. 2013-02, “Comprehen-

sive Income (Topic 220): Reporting Amounts Reclassiﬁed Out 

product and quality speciﬁcations and serve as a training tool

of Accumulated Other Comprehensive Income,” which requires

for retail kitchen designers. The Company invests in these long-

an entity to provide information about the amounts reclassiﬁed

lived productive assets to provide the aforementioned beneﬁts.

out of accumulated other comprehensive income by component.

The Company's investment in promotional displays is carried 

In addition, an entity is required to present, either on the face 

at cost less applicable amortization. Amortization is provided

of the statement where net income is presented or in the notes,

by the straight-line method on an individual display basis over

signiﬁcant amounts reclassiﬁed out of accumulated other com-

periods of 30 to 36 months (the estimated period of beneﬁt).

prehensive income by the respective line items of net income 

Promotional display amortization expense for ﬁscal years 2013,

if the amount reclassiﬁed is required under U.S. GAAP to be

2012 and 2011 was $4.0 million, $5.6 million and $7.9 million,

reclassiﬁed to net income in its entirety in the same reporting

respectively, and is included in selling and marketing expenses.

period. The ASU does not change the current requirements for

INCOME TAXES: The Company accounts for deferred income
taxes utilizing the asset and liability method, whereby deferred

tax assets and liabilities are recognized based on the tax effects

of temporary differences between the ﬁnancial statement

amounts and the tax basis of assets and liabilities, using enacted

tax rates in effect for the year in which these items are expected

reporting net income or other comprehensive income in ﬁnan-

cial statements. The ASU is effective prospectively for ﬁscal years

and interim periods within those years beginning after Decem-

ber 15, 2012. The adoption of ASU 2013-02, is not expected to

have a signiﬁcant impact on the Company’s results of operations

or ﬁnancial position.

to reverse. At each reporting date, the Company evaluates the

In June 2011, the FASB issued ASU No. 2011-05, “Comprehensive

need for a valuation allowance to adjust deferred tax assets and

Income (Topic 220): Presentation of Comprehensive Income,”

liabilities to an amount that more likely than not will be realized.

which requires an entity to present the total of comprehensive

PENSIONS: The Company has two non-contributory deﬁned 
beneﬁt pension plans covering many of the Company’s employ-

ees hired before April 30, 2012. Both deﬁned beneﬁt pension

plans were frozen effective April 30, 2012. The Company recog-

nizes the overfunded or underfunded status of its deﬁned beneﬁt

pension plans, measured as the difference between the fair value 

income, the components of net income, and the components 

of other comprehensive income either in a single continuous

statement of comprehensive income, or in two separate but

consecutive statements. Additionally, ASU 2011-05, eliminates

the option to present comprehensive income and its compo-

nents as part of the statement of shareholders’ equity. The ASU

does not change the items that must be reported in other 

comprehensive income. The Company adopted this guidance

effective May 1, 2012 and now includes Statements of Compre-

hensive Income (Loss) in its ﬁnancial statements.

28

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

In December 2011, the FASB issued ASU No. 2011-12, “Compre-

hensive Income (Topic 220): Deferral of the Effective Date 

USE OF ESTIMATES: The preparation of consolidated ﬁnancial
statements in conformity with U.S. generally accepted account-

of Amendments to the Presentation of Reclassiﬁcations 

ing principles requires management to make estimates and

of Items Out of Accumulated Other Comprehensive Income 

assumptions that affect the reported amounts of assets and

in ASU No. 2011-05.” The amendments were made to allow 

liabilities and disclosure of contingent assets and liabilities 

FASB time to redeliberate whether to present on the face 

at the date of the consolidated ﬁnancial statements and the

of the ﬁnancial statements the effects of reclassiﬁcations out

reported amounts of revenues and expenses during each

of accumulated other comprehensive income on the compo-

reporting period. Actual results could differ from those estimates.

nents of net income and other comprehensive income. 

NOTE B—CUSTOMER RECEIVABLES

The components of customer receivables were:

(in thousands)

Gross customer receivables
Less:

Allowance for doubtful accounts
Allowance for returns and discounts

Net customer receivables

NOTE C—INVENTORIES

The components of inventories were:

(in thousands)

Raw materials
Work-in-process
Finished goods

Total FIFO inventories
Reserve to adjust inventories to LIFO value

Total LIFO inventories

APRIL 30

APRIL 30

2013

$ 41,397

(148)
(2,205)

$ 39,044

2013

$ 11,823
17,170
11,318

40,311
(10,973)

$ 29,338

2012

$ 34,572

(93)
(1,946)

$ 32,533

2012

$ 9,412
14,543
8,734

32,689
(10,349)

$ 22,340

There was no liquidation of LIFO based inventories in ﬁscal 2013 to impact net income. After tax losses were impacted 

by $125,000 and $34,000 in ﬁscal years 2012 and 2011, respectively, as a result of liquidation of LIFO based inventories.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 29

NOTE D—PROPERTY, PLANT AND EQUIPMENT

The components of property, plant and equipment were:

(in thousands)

Land
Buildings and improvements
Buildings and improvements—capital leases
Machinery and equipment
Machinery and equipment—capital leases
Construction in progress

Less accumulated amortization and depreciation

Total

$

2013

5,929
65,245
11,202
177,393
26,966
1,494

288,229
(214,165)

$ 74,064

APRIL 30

$

2012

5,929
65,750
11,202
169,406
26,685
2,908

281,880
(206,505)

$ 75,375

Amortization and depreciation expense on property, plant and equipment amounted to $9.2 million, $16.8 million and $18.1 million

in ﬁscal years 2013, 2012 and 2011, respectively. Accumulated amortization on capital leases included in the above table amounted

to $26.6 million as of both April 30, 2013 and 2012.

NOTE E—LOANS PAYABLE AND LONG-TERM DEBT 

Maturities of long-term debt are as follows:

FISCAL YEARS ENDING APRIL 30

(in thousands)

2014

2015

2016

2017

2018

2019 AND

TOTAL

THEREAFTER OUTSTANDING

Revolving credit facility
Economic development loans
Term loans
Capital lease obligations

Total

Less current maturities

Total long-term debt

$ —
—
349
806

$1,155

$ —
—
370
835

$1,205

$10,000
—
393
854

$ 11,247

$ —
—
411
763

$ 1,174

$ —
—
2,007
593

$2,600

$ —
3,480
—
3,888

$7,368

$10,000
3,480
3,530
7,739

$ 224,749

$ 1,155

$$ 223,594

The Company’s primary loan agreement is a $35 million secured

An amendment to the revolving credit facility and modiﬁcations

revolving credit facility which expires on December 31, 2015 

to related security arrangements completed on March 18, 2013

with Wells Fargo Bank, N.A. (Wells Fargo). The Company incurs 

eliminated the requirement that 50% of the Company’s out-

a fee for amounts not used under the revolving credit facility.

standing indebtedness and other obligations to Wells Fargo be

Fees paid by the Company related to non-usage of its current

secured by cash and securities held in certain of the Company’s

and former credit facilities have been included in interest

accounts with Wells Fargo. The Company’s outstanding indebt-

expense and were $61,000, $54,158 and $54,002 for ﬁscal

edness and other obligations to Wells Fargo are secured by

years 2013, 2012 and 2011, respectively. 

substantially all of the Company’s assets. The Company can

borrow under the revolving credit facility up to the lesser of

$35 million or the maximum borrowing base (which equals

75% of eligible accounts receivable, 50% of eligible pre bill

30

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

reserves and up to $20 million for equipment value, each as

Company’s capital investment and operations at the Allegany

deﬁned in the agreement) less any outstanding loan balance.

County, Maryland site. These loan agreements were amended 

Any outstanding loan balance bears interest at the London

in 2013 and 2008. The aggregate balance of these loan agree-

Interbank Offered Rate (LIBOR) (0.25% at April 30, 2013) plus

ments was $2,190,000 and $2,234,000 for ﬁscal years ended

2.625%. Under the terms of the revolving credit facility, the

April 30, 2013 and 2012, respectively. The loan agreements expire

Company must: (1) maintain at the end of each ﬁscal quarter 

at December 31,2018 and bear interest at a ﬁxed rate of 3% per

a ratio of total liabilities to tangible net worth of not greater

annum. These loan agreements are secured by mortgages on the

than 1.4 to 1.0; (2) maintain at the end of each ﬁscal quarter 

manufacturing facility constructed in Allegany County, Maryland. 

a ratio of cash ﬂow to ﬁxed charges of not less than 1.25 to 1.0

These loan agreements defer principal and interest during 

measured on a rolling four-quarter basis; (3) maintain at least

the term of the obligation and forgive any outstanding balance 

$1.00 in net income for the ﬁscal quarter ending April 30, 2013

at December 31, 2018, if the Company complies with certain

and at least $1.00 in net income on a rolling four-quarter basis

employment levels at the facility. 

for the ﬁscal quarter ending July 31, 2013; and comply with other

customary afﬁrmative and negative covenants. 

In 2002, the Company entered into a loan agreement with the

Perry, Harlan, Leslie, Breathitt Regional Industrial Authority

The Company was in compliance with all covenants speciﬁed 

(a.k.a. Coalﬁelds Regional Industrial Authority, Inc.) as part of 

in the amended revolving credit facility as of April 30, 2013, 

the Company’s capital investment and operations at the Hazard,

as follows: (1) the Company’s ratio of total liabilities to tangible

Kentucky site. This debt facility is a $6 million term loan, which

net worth at April 30, 2013 was 1.0 to 1.0; (2) cash ﬂow to ﬁxed

expires November 13,2017, bearing interest at a ﬁxed rate of 

charges for its most recent four quarters was 2.72 to 1.0; and

2% per annum. It is secured by a mortgage on the manufactur-

(3) its net income for the ﬁscal quarter ended April 30, 2013 

ing facility constructed in Hazard, Kentucky. The loan requires

was $5.2 million.

The revolving credit facility does not limit the Company’s ability 

to pay dividends or repurchase its common stock as long as the

Company is in compliance with these covenants. 

In 2009, the Company entered into a loan agreement with 

the Board of County Commissioners of Garrett County as 

part of the Company’s capital investment in land located 

in Garrett County, Maryland. This loan agreement is secured 

by a Deed of Trust on the property and bears interest at 

a ﬁxed rate of 3%. The agreement defers principal and interest

during the term of the obligation and forgives any outstanding 

balance at December 31, 2019, if the Company complies 

annual debt service payments consisting of principal and inter-

est with a ﬁxed balloon payment of $1.6 million at loan expira-

tion. The outstanding amounts owed as of April 30, 2013 and

2012 were $3,530,000 and $3,858,000, respectively.

In 2013 and 2012, the Company entered into a total of six 

capitalized lease agreements in the aggregate amount of

$639,000 with First American Financial Bancorp related 

to ﬁnancing computer equipment. Each lease has a term 

of 48 months and an interest rate of 6.5%. The leases require

quarterly rental payments. The aggregate outstanding amount

under all of these leases as of April 30, 2013 and 2012 was

$545,000 and $95,000, respectively.

with certain employment levels. The outstanding balance 

During 2013, the Company entered into ﬁve capitalized lease

as of April 30, 2013 and 2012 was $1,290,000.

agreements in the aggregate amount of $568,000 with e-Plus

In 2005, the Company entered into two separate loan agree-

ments with the Maryland Economic Development Corporation

and the County Commissioners of Allegany County as part of the 

Group related to ﬁnancing computer equipment. Each lease 

has a term of 51 months and an interest rate of 6.5%. The 

leases require monthly rental payments. The aggregate out-

standing amount under all of these leases as of April 30, 2013

was $529,000. 

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 31

In 2004, the Company entered into a lease agreement with 

Certain of the Company’s loan agreements limit the amount and

the West Virginia Economic Development Authority as part 

type of indebtedness the Company can incur and require the

of the Company’s capital investment and operations at the

Company to maintain speciﬁed ﬁnancial ratios measured on 

South Branch plant located in Hardy County, West Virginia. 

a quarterly basis. In addition to the assets previously discussed,

This capital lease agreement is a $10 million term obligation,

certain of the Company’s property, plant and equipment are pledged

which expires June 30, 2024, bearing interest at a ﬁxed rate 

as collateral under term loan agreements and capital lease

of 2% per annum. The lease requires monthly rental payments.

arrangements. The Company was in compliance with all covenants

The outstanding amounts owed as of April 30, 2013 and 2012

contained in its loan agreements and capital leases at April30,2013.

were $6,665,000 and $7,188,000, respectively.

Interest paid under the Company’s loan agreements and capital

leases during ﬁscal years 2013, 2012 and 2011 was $576,000,

$453,000 and $467,000, respectively.

NOTE F—EARNINGS (LOSS) PER SHARE

The following table summarizes the computations of basic and diluted earnings (loss) per share:

(in thousands, except per share amounts)

Numerator used in basic and diluted earnings (loss) per common share:

Net income (loss)

Denominator:

Denominator for basic earnings (loss) per common share—

weighted-average shares
Effect of dilutive securities:

Stock options and restricted stock units

Denominator for diluted earnings (loss) per common share—
weighted-average shares and assumed conversions

Net earnings (loss) per share

Basic
Diluted

2013

$ 9,758

14,563

270

14,833

$ 0.67
$ 0.66

FISCAL YEARS ENDED APRIL 30
2012

2011

$(20,786)

$(20,018)

14,344

—

14,344

14,252

—

14,252

$
$

(1.45)
(1.45)

$
$

(1.40)
(1.40)

Potentially dilutive shares of 1.0 million, 1.8 million and 1.7 million issuable under the Company’s stock incentive plans have 

been excluded from the calculation of net earnings (loss) per share for the ﬁscal years ended April 30, 2013, 2012 and 2011,

respectively, as the effect would be anti-dilutive.

32

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

NOTE G—STOCK-BASED COMPENSATION

The Company has two types of stock-based compensation

stock option awards is expensed on a straight-line basis over 

awards in effect for its employees and directors. The Company

the vesting period of the stock options. The expected volatility

has issued stock options since 1986 and restricted stock units

assumption is based on the historical volatility of the Company’s

(RSUs) since ﬁscal 2010. Total compensation expense related

stock over a term equal to the expected term of the option

to stock-based awards for the ﬁscal years ended April 30, 2013,

granted. The expected term of stock option awards granted 

2012 and 2011 was $3.5 million, $3.4 million and $4.0 million,

is derived from the Company’s historical exercise experience 

respectively. The Company recognizes stock-based compensa-

and represents the period of time that stock option awards

tion costs net of an estimated forfeiture rate for those shares

granted are expected to be outstanding for each of the three

expected to vest on a straight-line basis over the requisite

identiﬁed groups. The expected term assumption incorporates

service period of the award. The Company estimates the forfei-

the contractual term of an option grant, which is generally ten

ture rates based upon its historical experience. 

years for employees and from four to ten years for non-employee

STOCK INCENTIVE PLANS 
At April 30, 2013, the Company had stock option and RSU awards

directors, as well as the vesting period of an award, which 

is typically three years. The risk-free interest rate is based on 

the implied yield on a U.S. Treasury constant maturity with a

outstanding under four different plans: (1) 1999 stock option 

remaining term equal to the expected term of the option granted.

plan for employees; (2) amended and restated 2004 stock incen-

tive plan for employees; (3) 2006 non-employee directors equity

ownership plan; and (4) 2011 non-employee directors equity

ownership plan. As of April 30, 2013, there were 1,133,999 shares

of common stock available for future stock-based compensation

awards under the Company’s stock incentive plans.

METHODOLOGY ASSUMPTIONS 
For purposes of valuing stock option grants, the Company has

identiﬁed two employee groups and one non-employee director

group, based upon observed option exercise patterns. The Com-

pany uses the Black-Scholes option-pricing model to value the

Company’s stock options for each of the three groups. Using this

option-pricing model, the fair value of each stock option award 

is estimated on the date of grant. The fair value of the Company’s

For purposes of determining the fair value of RSUs, the Company

uses the closing stock price of its common stock as reported 

on the NASDAQ Global Select Market on the date of grant,

reduced by the discounted value of future expected dividend

payments during the vesting period, since the recipients are 

not entitled to dividends during the vesting period. The fair value

of the Company’s RSU awards is expensed on a straight-line basis

over the vesting period of the RSUs to the extent the Company

believes it is probable the related performance criteria, if any, will

be met. The risk-free interest rate is based on the implied yield

on a U.S. Treasury constant maturity with a remaining term equal

to the vesting period of the RSU grant.

The weighted-average assumptions and valuation of the Company’s stock options were as follows:

Weighted-average fair value of grants
Expected volatility
Expected term in years
Risk-free interest rate
Expected dividend yield

2013

$ 7.39
42.5%
6.1
1.09%
0.0%

FISCAL YEARS ENDED APRIL 30
2012

$ 5.43
35.1%
6.0
2.24%
2.0%

2011

$ 8.87
49.1%
6.2
2.64%
1.7%

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 33

STOCK OPTION ACTIVITY 
Stock options granted and outstanding under each of the Company’s plans vest evenly over a three-year period and have 

contractual terms of ten years. The exercise price of all stock options granted is equal to the fair market value of the Company’s

common stock on the option grant date.

The following table presents a summary of the Company’s stock option activity for the ﬁscal years ended April 30, 2013, 2012 

and 2011 (remaining contractual term in years and exercise prices are weighted-averages): 

Outstanding at April 30, 2010

Granted
Exercised
Cancelled or expired

Outstanding at April 30, 2011

Granted
Exercised
Cancelled or expired

Outstanding at April 30, 2012

Granted
Exercised
Cancelled or expired

Outstanding at April 30, 2013

NUMBER
OF
OPTIONS

2,105,515

115,000
(27,000)
(588,159)

1,605,356

130,000
(1,200)
(109,396)

1,624,760

125,000
(251,799)
(96,148)

1,401,813

Vested and expected to vest in the future at April 30, 2013
Exercisable at April 30, 2013

1,375,039
1,156,809

REMAINING
CONTRACTUAL
TERM

WEIGHTED
AVERAGE
EXERCISE
PRICE

AGGREGATE
INTRINSIC
VALUE
(in thousands)

5.6

9.1
—
—

5.7

9.1
—
—

5.1

9.1
—
—

4.8

4.7
4.0

$29.03

20.87
14.80
29.58

$28.48

18.16
14.93
28.82

$27.64

17.62
23.35
31.03

$27.27

$27.43
$29.17

$ 295

—
216
—

$

29

—
6
—

$ —

—
1,868
—

$9,272

$8,871
$5,509

The aggregate intrinsic value in the previous table of the 

As of April 30, 2013, there was $0.9 million of total unrecog-

outstanding options on April 30, 2013 represents the total 

nized compensation expense related to unvested stock options

pre-tax intrinsic value (the excess, if any, of the Company’s 

granted under the Company’s stock-based compensation plans.

closing stock price on the last trading day of ﬁscal 2013 over

This expense is expected to be recognized over a weighted-

the exercise price, multiplied by the number of in-the-money

average period of 1.8 years. 

options) of the shares of the Company’s common stock that

would have been received by the option holders had all option

holders exercised their options on April 30, 2013. This amount

changes based upon the fair market value of the Company’s

common stock. The total fair value of options vested for the 

ﬁscal years ended April 30, 2013, 2012 and 2011 was $1.2 mil-

lion, $2.4 million and $3.3 million, respectively. 

Cash received from option exercises for the ﬁscal years ended

April 30, 2013, 2012 and 2011, was an aggregate of $5.9 mil-

lion, $0.0 million and $0.4 million, respectively. The actual 

tax beneﬁt realized for the tax deduction from option exercises

of stock option awards totaled $729,000, $3,000 and

$84,000 for the ﬁscal years ended April 30, 2013, 2012 

and 2011, respectively.

34

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

The following table summarizes information about stock options outstanding at April 30, 2013 (remaining lives in years and exercise

prices are weighted-averages):

OPTION PRICE
PER SHARE

$17.62–$18.16
$20.87–$26.85
$28.97–$34.63
$38.37–$42.17

OPTIONS

223,334
497,467
658,400
22,612
1,401,813

OPTIONS OUTSTANDING
REMAINING LIFE

EXERCISE PRICE

OPTIONS EXERCISABLE

OPTIONS

EXERCISE PRICE

8.7
5.0
3.4
1.5

$17.86
24.05
32.39
41.73

14,998
460,799
658,400
22,612
1,156,809

$ 18.16
24.30
32.39
41.73

RESTRICTED STOCK UNIT ACTIVITY:
The Company’s RSUs granted to employees cliff-vest over 

and 2011. The PBRSUs granted in ﬁscal 2013 are earned 

based on achievement of a number of goals pertaining to 

a three-year period from date of grant, while RSUs granted 

the Company’s operational and ﬁnancial performance during

to non-employee directors vest daily over a two-year period

the performance period of ﬁscal 2013. Employees who satisfy

from date of grant. Directors were granted service-based RSUs

the vesting criteria will receive a proportional amount of 

only, while employees were awarded both service-based and

PBRSUs based upon the Compensation Committee’s assessment 

performance-based RSUs (PBRSUs) in ﬁscal years 2013, 2012

of the Company’s achievement of the performance criteria.  

The following table contains a summary of the Company’s RSU activity for the ﬁscal years ended April 30, 2013, 2012 and 2011:

PERFORMANCE-BASED
RSUs

SERVICE-BASED
RSUs

Issued and outstanding, April 30, 2010

Granted
Cancelled due to non-achievement 
of performance goals
Settled in common stock
Forfeited

Issued and outstanding, April 30, 2011

Granted
Cancelled due to non-achievement 
of performance goals
Settled in common stock
Forfeited

Issued and outstanding, April 30, 2012

Granted
Cancelled due to non-achievement 
of performance goals
Settled in common stock
Forfeited

Issued and outstanding, April 30, 2013

117,900

125,475

(63,145)
(364)
(5,296)

174,570

134,250

(48,870)
(666)
(22,208)

237,076

129,075

(24,311)
(49,546)
(13,189)

279,105

60,500

61,825

—
(260)
(2,965)

119,100

64,750

—
(17,951)
(10,171)

155,728

63,025

—
(58,328)
(5,425)

155,000

TOTAL
RSUs

178,400

187,300

(63,145)
(624)
(8,261)

293,670

199,000

(48,870)
(18,617)
(32,379)

392,804

192,100

(24,311)
(107,874)
(18,614)

434,105

WEIGHTED
AVERAGE
GRANT DATE
FAIR VALUE

$ 21.99

$ 19.25

$ 22.10
$ 22.10
$ 21.96

$20.25

$ 17.00

$ 19.81
$ 21.15
$ 19.30

$ 18.75

$ 17.76

$ 17.09
$20.66
$ 17.91

$ 17.96

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 35

As of April 30, 2013, there was $2.7 million of total unrecognized compensation expense related to unvested RSUs granted under the

Company’s stock-based compensation plans. This expense is expected to be recognized over a weighted-average period of 1.7 years.

For the ﬁscal years ended April 30, 2013, 2012 and 2011 stock-based compensation expense was allocated as follows:

(in thousands)

Cost of sales and distribution
Selling and marketing expenses
General and administrative expenses

Stock-based compensation expense, before income taxes

2013

$ 606
859
2,044

$ 3,509

2012

$ 531
715
2,167

$ 3,413

2011

$ 735
842
2,418

$ 3,995

NOTE H—EMPLOYEE BENEFIT AND RETIREMENT PLANS
EMPLOYEE STOCK OWNERSHIP PLAN
In ﬁscal 1990, the Company instituted the American Woodmark

stock to 100% of an employee’s annual contribution to the plan

up to 4% of base earnings. The expense for 401(k) matching

Investment Savings Stock Ownership Plan. Under this plan, 

contributions for this plan was $2,547,000, $1,284,000 and

all employees who are at least 18 years old and have been

$1,272,000, in ﬁscal years 2013, 2012 and 2011, respectively.

employed by the Company for at least six consecutive months

are eligible to receive Company stock through a discretionary

proﬁt-sharing contribution and a 401(k) matching contribution

based upon the employee's contribution to the plan.

Beginning in ﬁscal 2013, discretionary proﬁt-sharing contribu-

tions in the form of Company stock may be made annually. 

Prior to ﬁscal 2013, proﬁt-sharing contributions in the form 

of Company stock were 3% of after-tax earnings, calculated 

on a quarterly basis. The Company recognized expenses 

PENSION BENEFITS
The Company has two deﬁned beneﬁt pension plans covering

many of the Company’s employees hired prior to April 30, 2012.

These plans provide deﬁned beneﬁts based on years of service

and ﬁnal average earnings (for salaried employees) or beneﬁt

rate (for hourly employees).

Effective April 30, 2012, the Company froze all future beneﬁt

accruals under the Company’s hourly and salary deﬁned bene-

for proﬁt-sharing contributions of $293,000 in ﬁscal 2013. 

ﬁt pension plans.

The Company did not make, or recognize any expenses for, 

discretionary proﬁt-sharing contributions in ﬁscal years 2012

and 2011.

Prior to ﬁscal 2013, the Company matched 401(k) contribu-

tions in the form of Company stock at 50% of an employee’s

annual contribution to the plan up to 4% of base earnings 

for an effective maximum Company contribution of 2% 

of base earnings. Beginning in ﬁscal 2013, as part of the 

realignment of its retirement plans, the Company increased

the match on 401(k) contributions in the form of Company

Included in accumulated other comprehensive loss at April 30,

2013 is $52.7 million ($32.1 million net of tax) related to net

unrecognized actuarial losses and unrecognized prior service

costs that have not yet been recognized in net periodic pension

beneﬁt costs. The Company expects to recognize $1.1 million

($0.7 million net of tax) in net actuarial losses in net periodic

pension beneﬁt costs during ﬁscal 2014. The Company uses 

an April 30 measurement date for its beneﬁt plans.

36

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

The following provides a reconciliation of beneﬁt obligations, plan assets and funded status of the Company’s non-contributory

deﬁned beneﬁt pension plans as of April 30:

(in thousands)

CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected beneﬁt obligation at beginning of year
Service cost
Interest cost
Actuarial losses
Beneﬁts paid
Curtailments

Projected beneﬁt obligation at end of year

CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year
Actual return on plan assets
Company contributions
Beneﬁts paid

Fair value of plan assets at end of year

Funded status of the plans
Unamortized prior service cost
Unrecognized net actuarial loss

Accrued beneﬁt cost

AMOUNTS RECOGNIZED IN 
THE CONSOLIDATED BALANCE SHEETS
Deﬁned beneﬁt pension liabilities
Accumulated other comprehensive loss

Net amount recognized

PENSION BENEFITS

2013

2012

$136,264
—
6,261
10,801
(3,897)
—

$149,429

$ 85,717
8,993
4,920
(3,897)

$ 95,733

$ (53,696)
—
52,703

$

(993)

$ (53,696)
52,703

$

(993)

$120,059
5,305
6,533
26,318
(3,293)
(18,658)

$136,264

$ 83,334
2,805
2,871
(3,293)

$ 85,717

$ (50,547)
—
45,255

$ (5,292)

$ (50,547)
45,255

$ (5,292)

The accumulated beneﬁt obligation for both pension plans was $149,429,000 and $136,264,000 at April 30, 2013 and 2012, respectively.

(in thousands)

2013

PENSION BENEFITS
2012

COMPONENTS OF NET PERIODIC PENSION BENEFIT COST
Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Curtailment loss
Recognized net actuarial loss

Pension beneﬁt cost

$

—
6,261
(6,563)
—
—
923

$

621

$ 5,305
6,533
(6,533)
53
331
1,710

$ 7,399

2011

$ 4,717
6,268
(6,159)
85
—
1,996

$ 6,907

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 37

ACTUARIAL ASSUMPTIONS: The discount rate at April 30 was used to measure the year-end beneﬁt obligations and 

the earnings effects for the subsequent year. Actuarial assumptions used to determine beneﬁt obligations and earnings 

effects for the pension plans follow:

WEIGHTED-AVERAGE ASSUMPTIONS 
TO DETERMINE BENEFIT OBLIGATIONS
Discount rate

WEIGHTED-AVERAGE ASSUMPTIONS 
TO DETERMINE NET PERIODIC PENSION BENEFIT COST
Discount rate
Expected return on plan assets
Rate of compensation increase

FISCAL YEARS ENDED APRIL 30
2012

2013

4.21%

2013

4.66%
7.5%
*

4.66%

FISCAL YEARS ENDED APRIL 30
2012

2011

5.66%/4.76%1
8.0%
4.0%

5.91%
8.0%
4.0%

1 The discount rate was 5.66% from May 1, 2011 to December 31, 2011 and 4.76% from January 1, 2012 to April 30, 2012. The rate changed 
during fiscal 2012 as a result of the required re-measurement of the Company’s pension liability upon its decision to freeze its pension plans.

* The rate of compensation increase is not applicable for periods beyond April 30, 2012 because the Company froze its pension plans effective 

as of that date.

In ﬁscal 2013 and 2012, the Company determined the discount

rate by referencing the Aon Hewitt AA Bond Universe Yield

CONTRIBUTIONS: The Company funds the pension plans in
amounts sufﬁcient to meet minimum funding requirements set

Curve. In ﬁscal 2011, the Company referred to the Hewitt 

forth in employee beneﬁt and tax laws plus additional amounts

Above Median Yield Curve in establishing the discount rate.

the Company deems appropriate.

This change was caused by the merger of Aon and Hewitt 

and the corresponding elimination of the Hewitt Above

Median Yield Curve. The Company believes that using a yield

curve approach accurately reﬂects changes in the present

value of liabilities over time since each cash ﬂow is discounted

at the rate at which it could effectively be settled. 

In developing the expected long-term rate of return assumption

for the assets of the deﬁned beneﬁt pension plans, the Company

evaluated input from its third party pension plan asset managers,

including their review of asset class return expectations and long-

term inﬂation assumptions. The Company also considered the

related historical ten-year average asset returns at April 30, 2013.

The Company amortizes experience gains and losses, as well as 

the effects of changes in actuarial assumptions and plan provisions,

over the average remaining lifetime of the active participants.

The Company expects to contribute $2.3 million to its pension

plans in ﬁscal 2014. The Company made contributions of 

$4.9 million and $2.9 million to its pension plans in ﬁscal 2013

and 2012, respectively. 

ESTIMATED FUTURE BENEFIT PAYMENTS: The following 
beneﬁt payments, which reﬂect expected future service, are

expected to be paid:

FISCAL YEAR

2014
2015
2016
2017
2018
Years 2019–2023

BENEFIT PAYMENTS
(in thousands)

$ 4,247
4,698
5,156
5,511
5,888
35,710

38

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

PLAN ASSETS: Pension assets by major category and the type of fair value measurement as of April 30, 2013 and 2012 are 

presented in the following tables: 

(in thousands)

Cash Equivalents
Equity Collective Funds:1

    Equity Index Value Fund
    Equity Index Growth Fund
    Small Cap Index Fund
    International Equity Fund
Fixed Income Collective Funds:1

    Core Fixed Income Fund
    Capital Preservation Fund

Total   

(in thousands)

Cash Equivalents
Equity Collective Funds:1

    Equity Index Value Fund
    Equity Index Growth Fund
    Small Cap Index Fund
    International Equity Fund
Fixed Income Collective Funds:1

    Core Fixed Income Fund
    Capital Preservation Fund

Total   

FAIR VALUE MEASUREMENTS AT APRIL 30, 2013

QUOTED 

SIGNIFICANT
PRICES IN ACTIVE  OBSERVABLE

MARKETS
(LEVEL 1)

$ 315

—
—
—
—

—
—

$315

INPUTS
(LEVEL 2)

$

—

19,202
19,245
5,632
3,932

17,407
30,000

$ 95,418

SIGNIFICANT
UNOBSERVABLE 
INPUTS
(LEVEL 3)

$ —

—
—
—
—

—
—

$ —

FAIR VALUE MEASUREMENTS AT APRIL 30, 2012

QUOTED 

SIGNIFICANT
PRICES IN ACTIVE  OBSERVABLE

MARKETS
(LEVEL 1)

$ 273

—
—
—
—

—
—

$273

INPUTS
(LEVEL 2)

$

—

16,850
17,094
5,002
3,315

25,824
17,359

$85,444

SIGNIFICANT
UNOBSERVABLE 
INPUTS
(LEVEL 3)

$ —

—
—
—
—

—
—

$ —

TOTAL

$

315

19,202
19,245
5,632
3,932

17,407
30,000

$95,733

TOTAL

$

273

16,850
17,094
5,002
3,315

25,824
17,359

$85,717

1 The Collective Trust Funds are valued by applying each plan’s ownership percentage in the fund to the fund’s net assets at fair value 
at the valuation date.

INVESTMENT STRATEGY: The Company has established formal
investment policies for the assets associated with its pension

plans. The objectives of the investment strategies include

preservation of capital and long-term growth of capital while

avoiding excessive risk. Target allocation percentages are estab-

lished at an asset class level by the Company’s Pension Commit-

tee. Target allocation ranges are guidelines, not limitations, and

occasionally the Pension Committee will approve allocations

above or below a target range.

During a period of uncertainty in the equity and ﬁxed income 

markets, the Pension Committee may suspend the Target Asset

Allocation and manage the investment mix as it sees reasonable,

prudent and in the best interest of the plans to better protect the

value of the plan assets.

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 39

The Company’s pension plans’ weighted-average asset allocations

Within the broad categories outlined in the preceding table, 

at April 30, 2013 and 2012, by asset category, were as follows:

the Company has targeted the following speciﬁc allocations 

APRIL 30

Equity Funds
Fixed Income Funds

Total

PLAN ASSET ALLOCATION
2013
ACTUAL 

2013
TARGET 

2012
ACTUAL 

50.0%
50.0%

50.2%
49.8%

100.0%

100.0%

49.5%
50.5%

100.0%

NOTE I—INCOME TAXES
Income tax expense was comprised of the following:

(in thousands)

CURRENT EXPENSE (BENEFIT)

Federal
State

Total current expense (beneﬁt)

DEFERRED EXPENSE (BENEFIT)

Federal
State

Total deferred  expense (beneﬁt)

Total expense (beneﬁt)
Other comprehensive loss

Total comprehensive income tax expense (beneﬁt)

as a percentage of total funds invested: 19% Capital Preserva-

tion, 31% Bond, 20% Large Capital Growth, 20% Large Capital

Value, 6% Small Capital and 4% International. 

2013

FISCAL YEARS ENDED APRIL 30
2012

2011

$ 1,031
162

1,193

4,859
930

5,789

6,982
(2,905)

$ 4,077

$

(36)
(176)

(212)

(10,115)
(2,175)

(12,290)

(12,502)
(3,624)

$(16,126)

The Company’s effective income tax rate varied from the federal statutory rate as follows:

Federal statutory rate
Effect of:
    Tax basis adjustment
    Meals and entertainment
    Other

        Total

Effective federal income tax rate
State income taxes, net of federal tax effect

Effective income tax rate

2013

35.0%

0.0%
1.5
1.1

2.6%

37.6%
4.1

41.7%

FISCAL YEARS ENDED APRIL 30
2012

35.0%

(1.7)%
(0.8)
0.0

(2.5)%

32.5%
5.1

37.6%

Income taxes paid were $1,219,000, $229,000 and $235,000 for ﬁscal years 2013, 2012 and 2011, respectively.

40

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

$ (2,368)
611

(1,757)

(6,065)
(2,120)

(8,185)

(9,942)
(294)

$(10,236)

2011

35.0%

(3.3)%
(0.8)
(0.8)

(4.9)%

30.1%
3.1

33.2%

The signiﬁcant components of deferred tax assets and liabilities were as follows:

(in thousands)

Deferred tax assets:
Pension beneﬁts
Accounts receivable
Product liability
Employee beneﬁts
Net operating loss carryforward  
Income tax credits 
Depreciation
Other

Total

Deferred tax liabilities:

Inventory

Net deferred tax asset

APRIL 30

2013

2012

$20,563
3,983
700
11,243
1,099
1,088
73
496

39,245

502

$38,743

$ 18,238
3,103
735
10,878
6,686
747
896
772

42,055

—

$42,055

The net operating loss carryforward value for April 30, 2013 contained in the above table includes amounts pertaining to various

state net operating loss carryforwards with various expiration dates.

Management believes it is more likely than not that the Company will realize its gross deferred tax assets due to expected future

taxable income and the reversal of taxable temporary differences. 

NOTE J—ACCOUNTING FOR
UNCERTAINTY IN INCOME TAXES
The Company accounts for its income tax uncertainties in 

accordance with ASC Topic 740, “Income Taxes.” The Company

had no liability relating to uncertain tax positions for the years

ended April 30, 2013 and 2012.

result in a loss. 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. Where losses are deemed to be probable and

estimable, accruals are made. Where losses are deemed to 

With minor exceptions, the Company is currently open to audit 

be reasonably possible or remote, a range of loss estimates 

by tax authorities for tax years ending April 30, 2010 through

is determined and considered for disclosure. Where no loss

April 30, 2013. The Company is currently not under federal audit.

estimate range can be made, the Company and its counsel 

NOTE K—COMMITMENTS AND
CONTINGENCIES
LEGAL MATTERS
The Company is involved in suits and claims in the normal

perform a worst-case estimate. In determining these loss 

range estimates, the Company considers known values 

of similar claims and consultation with independent counsel.

The Company believes that the aggregate range of loss stemming

from the various suits and asserted and unasserted claims which

course of business, including without limitation product liability

were deemed to be either probable or reasonably possible was

and general liability claims, and claims pending before 

not material as of April 30, 2013. 

the Equal Employment Opportunity Commission. On at least 

a quarterly basis, the Company consults with its legal counsel 

to ascertain the reasonable likelihood that such claims may

PRODUCT WARRANTY
The Company estimates outstanding warranty costs based 

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 41

on the historical relationship between warranty claims and 

is owned by the partnership. The Company has subsequently

revenues. The warranty accrual is reviewed monthly to verify

renewed this lease in accordance with Company policy and

that it properly reﬂects the remaining obligation based on 

procedures which includes approval by the Board of Directors.

the anticipated expenditures over the balance of the obligation

As of April 30, 2013, the Company is in the third year of the 

period. Adjustments are made when actual warranty claim

latest ﬁve-year renewal period, which expires in 2016. Under

experience differs from estimates. Warranty claims are gener-

this agreement, rental expense was $461,000, $460,000 

ally made within two months of the original shipment date.

and $460,000, in ﬁscal years 2013, 2012 and 2011, respectively. 

The following is a reconciliation of the Company’s warranty liability:

Rent during the remaining term of approximately $1,397,000

(included in the preceding table) is subject to annual increases

(in thousands)

2013

2012

of 2% through the remaining term of the lease.

PRODUCT WARRANTY RESERVE
Beginning balance

Accrual for warranties 
Settlements 

Ending balance at ﬁscal year end

$ 1,885
9,839
(9,929)

$ 1,795

$ 1,738
8,605
(8,458)

$ 1,885

LEASE AGREEMENTS
The Company leases certain ofﬁce buildings, manufacturing

buildings, service centers and equipment. Total rental 

expenses under operating leases amounted to approximately

$7,378,000, $7,206,000 and $7,518,000, in ﬁscal years 2013,

2012 and 2011, respectively. Minimum rental commitments 

as of April 30, 2013, under noncancelable leases with terms 

in excess of one year are as follows:

NOTE L—CREDIT CONCENTRATION

Credit is extended to customers based on an evaluation of each

customer’s ﬁnancial condition and generally collateral is not

required. The Company’s customers operate in the new home

construction and home remodeling markets. 

The Company maintains an allowance for bad debt based upon

management’s evaluation and judgment of potential net loss.

The allowance is estimated based upon historical experience,

the effects of current developments and economic conditions

and of each customer’s current and anticipated ﬁnancial con-

dition. Estimates and assumptions are periodically reviewed 

and updated. Any resulting adjustments to the allowance are

FISCAL YEAR

2014
2015
2016
2017
2018
2019 (and thereafter)

Less amounts representing interest (2%)

Total obligations under capital leases

OPERATING
(in thousands)

CAPITAL
(in thousands)

reﬂected in current operating results.

$ 3,411
3,102
2,768
1,336
217
92

$10,926

$ 997
997
986
866
678
4,140

$ 8,664

(925)

$ 7,739

At April 30, 2013, the Company’s two largest customers, 

Customers A and B, represented 21.1% and 21.1% of the 

Company’s gross customer receivables, respectively. At April 30,

2012, Customers A and B represented 26.5% and 30.7% of the

Company’s gross customer receivables, respectively.

The following table summarizes the percentage of sales to the

Company’s two largest customers for the last three ﬁscal years:

PERCENT OF ANNUAL GROSS SALES
2012

2011

2013

Customer A
Customer B

35.7
22.8

41.5
26.0

38.7
34.2

RELATED PARTIES
During ﬁscal 1985, prior to becoming a publicly held corpora-

tion, the Company entered into an agreement with a partnership

which includes certain former executive ofﬁcers and current

signiﬁcant shareholders of the Company, including one current

member of the Board of Directors of the Company, to lease the

Company’s headquarters building which was constructed and

42

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

NOTE M—FAIR VALUE MEASUREMENTS

The Company utilizes the hierarchy of fair value measurements

to classify certain of its assets and liabilities based upon the

LEVEL 2—Investments with observable inputs other than Level 1
prices such as quoted prices for similar assets or liabilities;

following deﬁnitions:

LEVEL 1— Investments with quoted prices in active markets for
identical assets or liabilities. The Company’s cash equivalents are

invested in money market funds, mutual funds and United States

quoted prices in markets that are not active; or other inputs 

that are observable or can be corroborated by observable market

data for substantially the full term of the assets or liabilities. 

The Company has no Level 2 assets or liabilities.

Treasury instruments. The Company’s mutual fund investment

assets represent contributions made and invested on behalf 

LEVEL 3—Investments with unobservable inputs that are 
supported by little or no market activity and that are signiﬁcant

of the Company’s named executive ofﬁcers in a supplementary

to the fair value of the assets or liabilities. The Company has

employee retirement plan.

no Level 3 assets or liabilities.

The following table summarizes the fair value of assets that are recorded in the Company’s consolidated ﬁnancial statements 

as of April 30, 2013 and 2012 at fair value on a recurring basis:

(in thousands)

ASSETS:
Money market funds
Mutual funds

Total assets at fair value

(in thousands)

ASSETS:
Money market funds
Mutual funds

Total assets at fair value

FAIR VALUE MEASUREMENTS AS OF APRIL 30, 2013
LEVEL 2

LEVEL 3

LEVEL 1

$ 38,875
1,311

$ 40,186

$ —
—

$ —

$ —
—

$ —

FAIR VALUE MEASUREMENTS AS OF APRIL 30, 2012
LEVEL 2

LEVEL 3

LEVEL 1

$ 38,874
1,357

$ 40,231

$ —
—

$ —

$ —
—

$ —

The fair value measurement of assets held by the Company’s deﬁned beneﬁt pension plans is discussed in Note H.

NOTE N—RESTRUCTURING CHARGES

In the third quarter of ﬁscal 2012, the continuing impact of the

housing economy’s lengthy downturn caused the Company to

announce a restructuring initiative (“2012 Restructuring Plan”) that

committed to the closing of two of the Company’s manufacturing

plants located in Hardy County, West Virginia and Hazard, Kentucky,

offering its previously idled plant in Tahlequah, Oklahoma for sale,

and realigning its retirement program, including freezing the 

Company’s deﬁned beneﬁt pension plans. Operations ceased 

at the Hazard plant in April 2012 and at the Hardy County plant 

in May 2012. The 2012 Restructuring Plan was adopted to reduce

costs and increase the Company’s capacity utilization rates. 

During ﬁscal 2012, the Company recognized pre-tax restructuring

charges of $15.9 million related to the 2012 Restructuring Plan.

During ﬁscal 2013, the Company recognized pre-tax restructuring

charges of $1.4 million related to the 2012 Restructuring Plan,

including severance and separation costs of $0.2 million, 

building impairment charges of $0.3 million, facilities-related

expenses of $0.7 million and professional fees of $0.2 million. 

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 43

A reserve for restructuring charges in the amount of $13 thousand

During ﬁscal years 2013, 2012 and 2011, the Company 

is included in the Company’s consolidated balance sheet as 

recognized total pre-tax restructuring charges for both the

of April 30, 2013 which relates to employee termination costs

2012 Restructuring Plan and the 2009 Restructuring Plan 

accrued but not yet paid. Below is the summary of the restruc-

of $1.4 million, $16.3 million and $62,000, respectively. The

turing reserve balance as of April 30, 2013:

Company recognized recurring operating costs for the facilities

(in thousands)

2012 RESTRUCTURING PLAN
Restructuring reserve balance as of April 30, 2012

Additions 
Payments 

Reserve balance as of April 30, 2013

$ 2,817
196
(3,000)

$

13

In the fourth quarter of ﬁscal 2009, the Company announced 

a restructuring plan (“2009 Restructuring Plan”) to close two 

of its manufacturing plants, located in Berryville, Virginia and

Mooreﬁeld, West Virginia and suspend operations in a third

manufacturing plant located in Tahlequah, Oklahoma. These

actions were completed during the ﬁrst quarter of ﬁscal 2010.

These initiatives were intended to increase the Company’s

capacity utilization rates and decrease overhead costs. In

addition to these initiatives, the Company made other stafﬁng

reductions during the fourth quarter of ﬁscal 2009. 

closed as part of the 2012 Restructuring Plan of $0.9 million 

in ﬁscal 2013. The Company will continue to incur costs related

to its closed and unsold plants until they are sold.

The Company has a total of two manufacturing plants 

classiﬁed as held for sale, which were closed in the 2012

Restructuring Plan. During the second quarter of ﬁscal 2013, 

the Company sold its closed plant located in Tahlequah, 

Oklahoma and recognized a gain of $0.3 million on the sale.

The gain was included in restructuring charges on the Company’s

statements of operations. During ﬁscal 2013, the Company

recorded impairment charges of $0.3 million relating to one 

of the plants that is included as held for sale. The Company

believes that the remaining $2.7 million net book value of the

properties classiﬁed as held for sale is fully recoverable. These

assets are included in Other Assets on the Company’s balance

sheet at April 30, 2013.

NOTE O—QUARTERLY FINANCIAL DATA (UNAUDITED)

FISCAL 2013

(in thousands, except per share amounts)

Net sales
Gross proﬁt
Income before income taxes
Net income
Earnings per share

Basic
Diluted

FISCAL 2012

(in thousands, except per share amounts)

Net sales
Gross proﬁt
Loss before income taxes
Net loss
Loss per share

Basic
Diluted

7/31/12

10/31/12

1/31/13

4/30/13

$148,252
22,043
1,015
561

$
$

0.04
0.04

$159,760
24,794
3,371
1,950

$
$

0.13
0.13

$ 151,346
23,507
3,476
2,057

$
$

0.14
0.14

$171,079
32,312
8,878
5,190

$
$

0.36
0.35

7/31/11

10/31/11

1/31/12

4/30/12

$ 131,199
18,407
(3,908)
(2,716)

$
$

(0.19)
(0.19)

$ 128,418
16,114
(4,523)
(2,976)

$
$

(0.21)
(0.21)

$ 119,976
14,588
(15,653)
(9,114)

$
$

(0.63)
(0.63)

$ 136,221
17,366
(9,204)
(5,980)

$
$

(0.42)
(0.42)

44

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

report of independent registered public

accounting ﬁrm

THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AMERICAN WOODMARK CORPORATION:

We have audited the accompanying consolidated balance sheets

In our opinion, the consolidated ﬁnancial statements referred

of American Woodmark Corporation and subsidiary (the Com-

to above present fairly, in all material respects the ﬁnancial

pany), as of April 30, 2013 and 2012, and the related consoli-

position of American Woodmark Corporation and subsidiary 

dated statements of operations, comprehensive income (loss),

as of April 30, 2013 and 2012, and the results of their operations

shareholders’ equity, and cash ﬂows for each of the years in 

and their cash ﬂows for each of the years in the three year

the three year period ended April 30, 2013. These consolidated

period ended April 30, 2013, in conformity with U.S. generally

ﬁnancial statements are the responsibility of the Company’s

accepted accounting principles.

management. Our responsibility is to express an opinion on

these consolidated ﬁnancial statements based on our audits.

We also have audited, in accordance with the standards of the

Public Company Accounting Oversight Board (United States), 

We conducted our audits in accordance with the standards of 

the Company’s internal control over ﬁnancial reporting as of

the Public Company Accounting Oversight Board (United States).

April 30, 2013, based on criteria established in Internal Control—

Those standards require that we plan and perform the audit 

Integrated Framework issued by the Committee of Sponsoring

to obtain reasonable assurance about whether the ﬁnancial 

Organizations of the Treadway Commission (COSO), and our

statements are free of material misstatement. An audit includes

report dated June 28, 2013 expressed an unqualiﬁed opinion 

examining, on a test basis, evidence supporting the amounts 

on the effectiveness of the Company’s internal control over

and disclosures in the ﬁnancial statements. An audit also includes

ﬁnancial reporting.

assessing the accounting principles used and signiﬁcant 

estimates made by management, as well as evaluating the 

overall ﬁnancial statement presentation. We believe that our

audits provide a reasonable basis for our opinion.

Richmond, Virginia
June 28, 2013

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 45

management’s

report on internal control over ﬁnancial reporting 

Management has responsibility for establishing and maintaining

adequate internal control over ﬁnancial reporting. Internal control

over ﬁnancial reporting is a process designed to provide reason-

able assurance regarding the reliability of ﬁnancial reporting 

and the preparation of ﬁnancial statements for external reporting

purposes in accordance with U.S. generally accepted accounting

principles. Because of its inherent limitations, internal control

over ﬁnancial reporting may not prevent or detect misstatements.

Management has assessed the effectiveness of the Company’s

internal control over ﬁnancial reporting as of April 30, 2013. 

In making its assessment, Management has utilized the criteria 

set forth by the Committee of Sponsoring Organizations of 

the Treadway Commission (COSO) in Internal Control—Integrated

Framework. Management concluded that based on its assess-

ment, American Woodmark Corporation’s internal control over

ﬁnancial reporting was effective as of April 30, 2013. The 

Company’s internal control over ﬁnancial reporting as of April 30,

2013, has been audited by KPMG LLP, an independent registered

public accounting ﬁrm, as stated in their report, which appears 

in this Annual Report to Shareholders. 

Kent B. Guichard
Chairman and Chief Executive Ofﬁcer

Jonathan H. Wolk
Senior Vice President and Chief Financial Ofﬁcer

46

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

report

of independent registered public accounting firm— 
internal control over financial reporting

THE BOARD OF DIRECTORS AND SHAREHOLDERS OF AMERICAN WOODMARK CORPORATION:

We have audited American Woodmark Corporation’s internal

transactions are recorded as necessary to permit preparation 

control over ﬁnancial reporting as of April 30, 2013, based on

of ﬁnancial statements in accordance with generally accepted

criteria established in Internal Control—Integrated Framework,

account ing principles, and that receipts and expenditures of the

issued by the Committee of Sponsoring Organizations of the

company are being made only in accordance with authorizations

Treadway Commission (COSO). The Company’s management is

of management and directors of the company; and (3) provide

responsible for maintaining effective internal control over ﬁnan-

reasonable assurance regarding prevention or timely detection 

cial reporting and for its assessment of the effectiveness of inter-

of unauthorized acquisition, use, or disposition of the company’s

nal control over ﬁnancial reporting, included in the accompanying

assets that could have a material effect on the ﬁnancial statements.

Management’s Report on Internal Control over Financial Report-

ing. Our responsibility is to express an opinion on the Company’s

internal control over ﬁnancial reporting based on our audit.

Because of its inherent limitations, internal control over ﬁnan-

cial reporting may not prevent or detect misstatements. Also,

projections of any evaluation of effectiveness to future periods

We conducted our audit in accordance with the standards of 

are subject to the risk that controls may become inadequate

the Public Company Accounting Oversight Board (United States).

because of changes in conditions, or that the degree of compli-

Those standards require that we plan and perform the audit 

ance with the policies or procedures may deteriorate.

to obtain reasonable assurance about whether effective internal

control over ﬁnancial reporting was maintained in all material

respects. Our audit included obtaining an understanding of inter-

nal control over ﬁnancial reporting, assessing the risk that a mate-

rial weakness exists, and testing and evaluating the design and

operating effectiveness of internal control based on the assessed

risk. Our audit also included performing such other procedures 

In our opinion, American Woodmark Corporation maintained, 

in all material respects, effective internal control over ﬁnancial

reporting as of April 30, 2013, based on criteria established in

Internal Control—Integrated Framework issued by the Committee

of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the

as we considered necessary in the circumstances. We believe that

Public Company Accounting Oversight Board (United States), the

our audit provides a reasonable basis for our opinion.

A company’s internal control over ﬁnancial reporting is a process

designed to provide reasonable assurance regarding the reliability

of ﬁnancial reporting and the preparation of ﬁnancial statements

for external purposes in accordance with generally accepted

accounting principles. A company’s internal control over ﬁnancial

reporting includes those policies and procedures that (1) pertain

to the maintenance of records that, in reasonable detail, accu-

rately and fairly reﬂect the transactions and dispositions of the

assets of the company; (2) provide reasonable assurance that

consolidated balance sheets of American Woodmark Corporation

and subsidiary as of April 30, 2013 and 2012, and the related con-

solidated statements of operations, comprehensive income (loss),

shareholders’ equity, and cash ﬂows for each of the years in the

three-year period ended April 30, 2013 and our report dated

June 28, 2013 expressed an unqaliﬁed opinion on those consol-

idated ﬁnancial statements.

Richmond, Virginia
June 28, 2013

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT 47

 
 
 
 
 
 
 
stock

performance graph

Set forth below is a graph comparing the ﬁve-year cumulative

total shareholder return, including reinvestment of dividends,

from investing $100 on May 1, 2008 through April 30, 2013 

in American Woodmark Corporation common stock, the 

Russell 2000 Index and the S&P Household Durables Index:

COMPARATIVE FIVE-YEAR CUMULATIVE TOTAL SHAREHOLDER RETURNS

$200.00

$150.00

$100.00

$50.00

$0.00

American Woodmark Corporation
Russell 2000 Index
S&P Household Durables Index

2008

2009

2010

2011

2012

2013

FISCAL YEARS ENDED APRIL 30

48

AMERICAN WOODMARK CORPORATION ® 2013 ANNUAL REPORT

DIRECTORS AND EXECUTIVE OFFICERS

CORPORATE INFORMATION

ANNUAL MEETING
The Annual Meeting of Shareholders
of American Woodmark Corporation will be held 
on Thursday, August 22, 2013, at 9:00 a.m. at the 
Holiday Inn, 333 Front Royal Pike in Winchester, 
Virginia.

ANNUAL REPORT ON FORM 10-K
A copy of the Company’s Annual Report on
Form 10-K for the fiscal year ended April 30, 2013,
may be obtained free of charge on the Company’s
Web site at www.americanwoodmark.com 
or by writing:

Glenn Eanes
Vice President & Treasurer
American Woodmark Corporation
PO Box 1980
Winchester, VA 22604-8090

CORPORATE HEADQUARTERS
American Woodmark Corporation
3102 Shawnee Drive
Winchester, VA 22601-4208
(540) 665-9100

MAILING ADDRESS
PO Box 1980
Winchester, VA 22604-8090

TRANSFER AGENT
Registrar and Transfer Company
Investor Relations
(800) 368-5948

SHAREHOLDER INQUIRES
Investor Relations
American Woodmark Corporation
3102 Shawnee Drive
Winchester, VA 22601-4208
(540) 665-9100
www.americanwoodmark.com

Bradley S. Boyer
Senior Vice President, Sales and Marketing Remodel

William F. Brandt, Jr.
Director;
Former Chairman and Chief Executive Officer

Andrew B. Cogan
Director;
Member of the Audit Committee
Chief Executive Officer of Knoll, Inc.

Martha M. Dally
Director;
Chair of the Governance Committee and
Member of the Compensation Committee
Retired Vice President Customer Development of Sara Lee Corporation

James G. Davis, Jr.
Director;
Member of the Audit Committee and 
Member of the Governance Committee
President and Chief Executive Officer of James G. Davis Construction Corporation

S. Cary Dunston
Executive Vice President, Operations

Kent B. Guichard
Director;
Chairman and Chief Executive Officer

Daniel T. Hendrix
Director;
Chair of the Compensation Committee
Chairman and Chief Executive Officer of Interface, Inc.

Kent J. Hussey
Director;
Member of the Audit Committee and 
Member of the Governance Committee
Retired Chairman, President and Chief Executive Officer of Spectrum Brands, Inc.

Carol B. Moerdyk
Director;
Chair of the Audit Committee and
Member of the Governance Committee
Retired Senior Vice President, International, OfficeMax Incorporated

Vance W. Tang
Director;
Member of the Compensation Committee
Retired President and Chief Executive Officer of KONE Inc.

Jonathan H. Wolk
Senior Vice President and Chief Financial Officer; 
Corporate Secretary

American Woodmark™ is a trademark of American Woodmark Corporation.®
Printed in U.S.A. ©2013 American Woodmark Corporation®

Printed on recycled paper

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3102 Shawnee Drive

Winchester, Virginia 22601-4208

(540) 665-9100 
(540) 665-9176 Fax

www.americanwoodmark.com