American Woodmark Corporation · NASDAQ:AMWD
American Woodmark — Investor Presentation (January 2023)
37 slides from American Woodmark's investor presentation, Jan 26, 2023
Slide 1: Investor Presentation Updated: January 2023
Investor Presentation Updated: January 2023 Exhibit 99.1
Slide 2: Legal Disclosure
Legal Disclosure Forward-Looking Statements This presentation contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including statements as to expected future financial and operating results. These forward-looking statements may be
Slide 3: Table of Contents
Table of Contents American Woodmark at a Glance 5 Long-Term Strategy 12 Competitive Advantages 20 Financial Overview 28
Slide 4: Key Messages: Why Invest With Us?
Key Messages: Why Invest With Us? Value-Oriented Portfolio And Operational Excellence Mindset Provides Resilience And Strong Cash Generation 3 2 5 4 1 Our culture and connections deliver profitability through our Growth, Digital Transformation and Platform Design (“GDP”) strategy Superior Service Pl
Slide 5: American Woodmark: At a Glance
American Woodmark: At a Glance Founded in 1951, We Have Remained Highly Focused on Growing Our Core Cabinet Business and Serving Our Customers American Woodmark is a U.S. based pure play cabinet manufacturer highly focused on the resilient value segment of the U.S. market From inspiration to design
Slide 6: Our Purpose Driven Culture Sustains Our Competitive Advantage
Our Purpose Driven Culture Sustains Our Competitive Advantage Our CITE principles: Customer Satisfaction Integrity Teamwork Excellence Uncover and celebrate the unique potential in every individual: Community Connections Customer Experience Interconnected Individuals Disruptive Innovation Systems Th
Slide 7: Our Leadership Team
Strong leadership with decades of experience and industry expertise Our Leadership Team Mark Vierling Vice President & Chief Supply Chain Officer Paul Joachimczyk Senior Vice President & Chief Financial Officer Rob Adams Senior Vice President, Manufacturing & Technical Operations Scott Culbreth Pres
Slide 8: Steady Evolution Has Strengthened Our Scale And Market Position
Steady Evolution Has Strengthened Our Scale And Market Position $ Sales Growth; 1 LTM Sales as of 10/31/22 1989 1986 1980 2022 1951 2017 2010 2008 1971 LTM Net Sales: $2,066M1 A vision emerges to refine our channel strategy by launching the Timberlake Brand for the new construction market Formation
Slide 9: Tailwinds From Demographic Shifts and Undersupplied Housing
Tailwinds From Demographic Shifts and Undersupplied Housing Support Higher Levels of Future Residential Investment U.S. Population Age 41-56 Annual U.S. Housing Starts (thousands)1 Demographics and past underinvestment, combined with mobility and migration trends, provide strong multi-year tailwinds
Slide 10: Aging U.S. Housing Stock Is An Important Repair & Remodeling Leading Indicator
Aging U.S. Housing Stock Is An Important Repair & Remodeling Leading Indicator Increasing Age in Years of U.S. Housing Stock: 2009 vs 20191 Historically Stable Growth in U.S. Repair & Remodel (R&R) Expenditures ($B)2,3 27-year CAGR of ~5% Past Underinvestment: Homes under 9 years old fell to just 7%
Slide 11: Long Term Target: Accelerate Adjusted EBITDA Growth Efficiently
Long Term Target Building On a Solid Foundation to Accelerate Adjusted EBITDA1 Growth Efficiently aligning our scaled platform with a favorable long-term growth outlook by providing quality solutions and executing our “GDP” strategy Targeting growth in excess of market as we execute against our stra
Slide 12: Long-term Strategy: GDP
7 q »~ > > y Long-term Strategy: “GDP” American Woodmark
Slide 13: GDP: Our Economic Engine To Drive Growth & Margin Expansion
“GDP”: Our Economic Engine To Drive Growth & Margin Expansion Our “GDP” Strategy is the lens we view long-term decision-making through, enabling growth and profitability through the cycle Growth Digital Transformation Platform Design Product Innovation Targeted launches of opening price point brands
Slide 14: Growth: Maximize Our Market Opportunity Through Key Initiatives
Our Initiatives Are Focused on Delivering Growth in Excess of Our Underlying Market Growth Rate Growth: Maximize Our Market Opportunity Through Key Initiatives Key Growth Drivers Expand Channel Opportunities Simple Trends brand to compete with low-cost imports Growth opportunity in Dealer/Distributo
Slide 15: Case Study: Adapting Our Offerings To Add Value And Accelerate Growth
Case Study: Adapting Our Offerings To Add Value And Accelerate Growth Achieved goal of lowering costs and improving affordability, especially for growing first time homebuyer market Origins is our fastest growing brand three years in a row Outcome Gain share with Origins brand and expand offerings a
Slide 16: Digital Transformation: Customer Experience and Drive Efficiencies
Digital Transformation: Customer Experience and Drive Efficiencies Strengthening Our Competitive Advantage and Profitability by Leveraging Digital Capabilities Increase Consumer Centric Approach to Digital Marketing Enterprise Resource Planning and Customer Relationship Management systems to help re
Slide 17: Digital Transformation Case Study: Digital Marketing Platform
Digital Transformation Case Study: Digital Marketing Platform We bring a digital brand presence with a nationwide marketing toolkit to help consumers connect with local dealers Through a dealer locator and contact application, customers seamlessly connect with a Waypoint Living Spaces retail locatio
Slide 18: Platform Design: Complexity Reduction and Operational Excellence
Platform Design: Leverage Complexity Reduction and Operational Excellence to Drive Margin Improvement Localize capacity needs and position near skilled labor Establish both Kitchen & Bath Manufacturing Centers of Excellence Facility enhancements to improve reliability and service Improve customer ex
Slide 19: Creating Manufacturing Centers of Excellence to Meet Growing Demand
Creating Manufacturing Centers of Excellence to Meet Growing Demand Highlights: Strategically located components capacity Strengthens Made-to-Stock Kitchen & Bath supply chain Labor availability and talent pool enhancements Lowers average cost of production across our footprint Lead time and logisti
Slide 20: Competitive Advantages
Competitive Advantages
Slide 21: How We Win: Superior Customer Experience Across Targeted Product Offerings
How We Win: By Providing a Superior Customer Experience Across Our Targeted Product Offerings with a Focus on Value Objective Strategic Rationale Market Be the preeminent kitchen and bath cabinet value player that serves all market channels Product Innovation focus on a relevant, lean, value-oriente
Slide 22: U.S. Centric Revenue Profile with Significant Scale and Operational Capabilities
U.S. Centric Revenue Profile with Significant Scale and Operational Capabilities in Key Growth Regions Invested Presence in Attractive Regions of Opportunity, with Efficient, Low-Cost Manufacturing Across U.S. and Mexico Proximity to customers enhances our service capabilities and improves overall s
Slide 23: Positioned to Capture Outsized Growth Towards Affordable Offerings
Positioned to Capture Outsized Growth Towards Affordable Offerings Market Size $5.1 B New Construction1 Direct-to-Builder sales model offers turnkey solutions Target first time buyers and mid-level housing Simplified selection process with ongoing service and engagement Market Size $4.1 B Home Cente
Slide 24: Made-to-Stock: Market Shifting to Value Offering
Made-to-Stock Off the shelf, ready to install cabinets with limited door styles and colors Market Shifting to Value Offering Plays into Our Core Competency American Woodmark Focus Area Represents ~60% of the ~$18B Market,1 which Provides Significant Opportunity To Grow Sales From ~$2.1B2 Today Conte
Slide 25: Leading Brands Reinforce Long-Term Customer Relationships
40+ year relationships Relationships with 19 of top 20 builders ~1,800+ customers Our Leading Brands Reinforce Long-Term Customer Relationships and Allow Us To Capitalize On Emerging Trends Leading Brands Builders Home Centers Dealer/Distributor
Slide 26: Case Study: Superior Service Platform
Case Study: Superior Service Platform Builders experience increased accuracy with Timberlake, removing over 300,000 service tasks every year Our unique model to support the Top National Home Builders has helped grow share by more than 50% over the last ten years Outcome Streamlined Quote-to-Order sy
Slide 27: Commitment to Sustainability Supports Our People and Our Brand
Commitment to Sustainability Supports Our People and Our Brand Three Main Focus Areas Guide Our Path to Sustainability 2030 Our Team Members Leveraging Our Greatest Resource Elevate already impressive safety record and provide sustainability training Employee Health and Safety Goal to further improv
Slide 28: Financial Overview
Financial Overview
Slide 29: Leveraging Our Strategy And Housing Tailwinds To Drive Adjusted EBITDA And FCF Growth
Leveraging Our Strategy And Long-Term Housing Tailwinds To Drive Double-Digit Adjusted EBITDA And FCF Growth Focused on Above-Market Revenue Growth, FCF Generation, and Returning Long Range Adj. EBITDA Margins1 to ~14-15% 1 Note the FY2028 projected financial numbers presented above reflect the curr
Slide 30: Powerful Cash Engine Supports Our Capital Deployment Priorities
Powerful Cash Engine Supports Our Capital Deployment Priorities And Fuels Our Strategy Capital allocation priorities are reinvesting for growth, debt paydown, and returning excess cash to shareholders via buybacks ~75% of Capex earmarked for growth through FY28, providing substantial flexibility Tar
Slide 31: Key Takeaways
Key Takeaways Unwavering Commitment to a Value-Oriented Approach and Operational Excellence Provides Resilience Through the Cycle 1 2 3 4 5 Investments in supply chain, production capabilities, and digital build upon our strong foundation for expected profitable growth A track record of attractive g
Slide 32: Appendix
Appendix
Slide 33: Additional Disclosures
Additional Disclosures 1 The projections herein are based on a number of assumptions and estimates that are inherently subject to business, economic and competitive uncertainties and contingencies, many of which are beyond our control. See page 2 of this presentation for a discussion of the risks an
Slide 34: Appendix A: Adjusted EBITDA and Adjusted EBITDA margin Definition
Appendix A Adjusted EBITDA, and Adjusted EBITDA margin Definition We use EBITDA, Adjusted EBITDA, and Adjusted EBITDA margin in evaluating the performance of our business, and we use each in the preparation of our annual operating budgets and as indicators of business performance and profitability.
Slide 35: Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents
Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents A reconciliation of Adjusted EBITDA and Adjusted EBITDA Margin as projected is not provided because we do not forecast Net Income as we cannot, without unreasonable effort, estimate or predict with certainty various compo
Slide 36: Additional Definitions
Additional Definitions Free cash flow To better understand trends in our business, we believe that it is helpful to subtract amounts for capital expenditures consisting of cash payments for property, plant and equipment and cash payments for investments in displays from cash flows from continuing op
Slide 37: Reconciliation of Adjusted Non-GAAP Financial Measures: Free Cash Flow
Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents Free Cash Flow (in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Cash provided by operating activities $ 24,527 $ 40,535 $ 58,737 $ 71,778 $ 77,080 $ 86,775 $ 190,845 $ 177,542 $ 151,763 $ 24,445 Less: Capi
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