UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

~~FORM~~
~~10-Q~~

(Mark One)


	~~QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended October 31, ~~2019~~2020


	~~TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934~~

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission File Number: 000-14798

American Woodmark ~~Corporation~~Corporation

(Exact name of registrant as specified in its charter)

Virginia

54-1138147

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

561 Shady Elm Road,

Winchester,

Virginia

22602

(Address of principal executive offices)

(Zip Code)

(~~540~~)(540) 665-9100

(Registrant's telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	AMWD	NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☒

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

As of November ~~25, 2019, 16,921,547~~23, 2020, 16,993,260 shares of the Registrant’s Common Stock were outstanding.

AMERICAN WOODMARK CORPORATION

FORM 10-Q

INDEX


PART I.		FINANCIAL INFORMATION		PAGE NUMBER

~~PART I.~~		~~FINANCIAL INFORMATION~~	~~PAGE~~ ~~NUMBER~~

Item 1.	Financial Statements (unaudited)

		Condensed Consolidated Balance ~~Sheets--October~~Sheets as of October 31, ~~2019~~2020 and April 30, ~~2019~~2020		3

		Condensed Consolidated Statements of Income--Three months ended October 31, ~~2019~~2020 and ~~2018;~~2019; Six months ended October 31, ~~2019~~2020 and ~~2018~~2019		4

		Condensed Consolidated Statements of Comprehensive Income--Three months ended October 31, ~~2019~~2020 and ~~2018;~~2019; Six months ended October 31, ~~2019~~2020 and ~~2018~~2019		5

		Condensed Consolidated Statements of Shareholders' Equity--Three months ended October 31, ~~2019~~2020 and ~~2018;~~2019; Six months ended October 31, ~~2019~~2020 and ~~2018~~2019		6

		Condensed Consolidated Statements of Cash ~~Flows--Six~~Flows--Six months ended October 31, ~~2019~~2020 and ~~2018~~2019		87

		Notes to Condensed Consolidated Financial ~~Statements--October~~Statements--October 31, ~~2019~~2020		~~10-19~~9-19

Item 2.		Management's Discussion and Analysis of Financial Condition and Results of Operations		19-26

Item 3.		Quantitative and Qualitative Disclosures About Market Risk		26

Item 4.		Controls and Procedures		26

PART II.		OTHER INFORMATION

Item 1.		Legal Proceedings		2726

Item 1A.		Risk Factors		2726

~~Item 6.~~		~~Exhibits~~		27



Item 6.		Exhibits		27

SIGNATURES				28

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

AMERICAN WOODMARK CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)

(Unaudited)


	October 31, 2020		April 30, 2020
ASSETS
Current assets
Cash and cash equivalents	$	112,560	$	97,059

Customer receivables, net	149,165		106,344
Inventories	127,715		111,836

Prepaid expenses and other	14,913		9,933

Total current assets	404,353		325,172
Property, plant and equipment, net	198,895		203,824
Operating lease right-of-use assets	128,125		127,668

Customer relationship intangibles, net	144,611		167,444
Trademarks, net	556		2,222
Goodwill	767,612		767,612
Promotional displays, net	13,965		13,966
Deferred income taxes	1,044		915
Other assets	13,717		13,983
TOTAL ASSETS	$	1,672,878	$	1,622,806
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	78,401	$	56,342
Current maturities of long-term debt	2,096		2,216
Short-term lease liability - operating	19,519		18,896
Accrued compensation and related expenses	56,270		49,064
Accrued marketing expenses	16,958		12,361

Other accrued expenses	21,904		16,727
Total current liabilities	195,148		155,606
Long-term debt, less current maturities	555,911		594,921
Deferred income taxes	47,701		52,935

Long-term lease liability - operating	113,511		112,454
Other long-term liabilities	15,413		6,352
Shareholders' equity
Preferred stock, $1.00 par value; 2,000,000 shares authorized, none issued	0		0
Common stock, no par value; 40,000,000 shares authorized; issued and
outstanding shares: at October 31, 2020: 16,993,260; at April 30, 2020: 16,926,537	364,689		359,430
Retained earnings	431,022		392,281
Accumulated other comprehensive loss - Defined benefit pension plans	(50,517)		(51,173)
Total shareholders' equity	745,194		700,538
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,672,878	$	1,622,806
See notes to unaudited condensed consolidated financial statements.

October 31,
2019 April 30,
2019
ASSETS
Current assets
Cash and cash equivalents $ 51,435
$ 57,656
Investments - certificates of deposit —
1,500
Customer receivables, net 120,118
125,901
Inventories 119,758
108,528
Income taxes receivable 2,704

1,009
Prepaid expenses and other 15,009
11,441
Total current assets 309,024
306,035
Property, plant and equipment, net 206,899
208,263
Operating lease right-of-use assets 89,662

—
Customer relationship intangibles, net 190,278

213,111
Trademarks, net 3,889

5,555
Goodwill 767,612

767,612
Promotional displays, net 13,599
13,058
Deferred income taxes 766
773
Other assets 16,935
15,524
TOTAL ASSETS $ 1,598,664
$ 1,529,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable $ 62,850
$ 61,277
Current maturities of long-term debt 2,320
2,286
Short-term lease liability - operating 19,453

—
Accrued compensation and related expenses 50,528
54,906
Accrued marketing expenses 16,002
12,979
Other accrued expenses 18,256
18,142
Total current liabilities 169,409
149,590
Long-term debt, less current maturities 617,930
689,205
Deferred income taxes 59,636

64,749
Long-term lease liability - operating 72,067

—
Other long-term liabilities 4,714
6,034
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 October 31, 2019: 16,921,547; at April 30, 2019: 16,849,026
357,304
352,424
Retained earnings 366,464
317,420
Accumulated other comprehensive loss - Defined benefit pension plans (48,860 ) (49,491 )
Total shareholders' equity 674,908
620,353
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,598,664
$ 1,529,931
See notes to unaudited condensed consolidated financial statements.

AMERICAN WOODMARK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share and per share data)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 31,				October 31,
	2020		2019		2020		2019

Net sales	$	448,583	$	428,016	$	838,670	$	855,381
Cost of sales and distribution	359,072		340,966		669,021		673,812
Gross Profit	89,511		87,050		169,649		181,569

Selling and marketing expenses	21,608		20,451		41,506		41,138
General and administrative expenses	30,229		29,900		60,212		59,332
Restructuring charges, net	2,791		(188)		6,251		(207)

Operating Income	34,883		36,887		61,680		81,306

Interest expense, net	5,981		7,436		12,011		15,524
Other income, net	(981)		(527)		(2,669)		(534)
Income Before Income Taxes	29,883		29,978		52,338		66,316

Income tax expense	7,627		7,815		13,597		17,272

Net Income	$	22,256	$	22,163	$	38,741	$	49,044



Weighted Average Shares Outstanding
Basic	16,992,297		16,919,664		16,964,565		16,892,267
Diluted	17,047,296		16,955,835		17,036,652		16,932,236

Net earnings per share
Basic	$	1.31	$	1.31	$	2.28	$	2.90
Diluted	$	1.31	$	1.31	$	2.27	$	2.90

See notes to unaudited condensed consolidated financial statements.

Three Months Ended Six Months Ended
October 31, October 31,
2019 2018 2019 2018

Net sales $ 428,016
$ 424,878
$ 855,381
$ 853,840
Cost of sales and distribution 340,966
338,116
673,812
671,342
Gross Profit 87,050
86,762
181,569
182,498

Selling and marketing expenses 20,451
22,986
41,138
45,924
General and administrative expenses 29,900
28,718
59,332
58,548
Restructuring charges, net (188 ) (406 ) (207 ) 2,035
Operating Income 36,887
35,464
81,306
75,991

Interest expense, net 7,436
8,943
15,524
18,368
Other (income) expense, net (527 ) 1,112
(534 ) (325 )
Income Before Income Taxes 29,978
25,409
66,316
57,948

Income tax expense 7,815
6,921
17,272
14,693

Net Income $ 22,163
$ 18,488
$ 49,044
$ 43,255

Weighted Average Shares Outstanding
Basic 16,919,664
17,555,584
16,892,267
17,544,849
Diluted 16,955,835
17,588,449
16,932,236
17,589,767

Net earnings per share
Basic $ 1.31
$ 1.05
$ 2.90
$ 2.47
Diluted $ 1.31
$ 1.05
$ 2.90
$ 2.46

See notes to unaudited condensed consolidated financial statements.

AMERICAN WOODMARK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(in thousands)

(Unaudited)


	Three Months Ended				Six Months Ended
	October 31,				October 31,
	2020		2019		2020		2019

Net income	$	22,256	$	22,163	$	38,741	$	49,044

Other comprehensive income, net of tax:
Change in pension benefits, net of deferred taxes of $111 and $108, and $224 and $215 for the three and six months ended October 31, 2020 and 2019, respectively	329		316		656		631

Total Comprehensive Income	$	22,585	$	22,479	$	39,397	$	49,675

See notes to unaudited condensed consolidated financial statements.

Three Months Ended Six Months Ended
October 31, October 31,
2019 2018 2019 2018

Net income $ 22,163
$ 18,488
$ 49,044
$ 43,255

Other comprehensive income, net of tax:
Change in pension benefits, net of deferred taxes of $108 and $105, and $215 and $210 for the three and six months ended October 31, 2019 and 2018, respectively 316
307
631
614

Total Comprehensive Income $ 22,479
$ 18,795
$ 49,675
$ 43,869

See notes to unaudited condensed consolidated financial statements.

AMERICAN WOODMARK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

(in thousands)

(Unaudited)


						ACCUMULATED
						OTHER		TOTAL
	COMMON STOCK			RETAINED		COMPREHENSIVE		SHAREHOLDERS'
(in thousands, except share data)	SHARES	AMOUNT		EARNINGS		LOSS		EQUITY
Balance, April 30, 2019	16,849,026	$	352,424	$	317,420	$	(49,491)	$	620,353

Net income	—	—		26,881		—		26,881
Other comprehensive income,
net of tax	—	—		—		315		315
Stock-based compensation	—	897		—		—		897
Exercise of stock-based
compensation awards, net of amounts
withheld for taxes	20,923	(1,050)		—		—		(1,050)

Employee benefit plan
contributions	45,721	3,772		—		—		3,772
Balance, July 31, 2019	16,915,670	$	356,043	$	344,301	$	(49,176)	$	651,168

Net income	—	—		22,163		—		22,163
Other comprehensive income,
net of tax	—	—		—		316		316
Stock-based compensation	—	1,178		—		—		1,178
Exercise of stock-based
compensation awards, net of amounts
withheld for taxes	5,877	83		—		—		83
Stock repurchases	—	—		—		—		0
Balance, October 31, 2019	16,921,547	$	357,304	$	366,464	$	(48,860)	$	674,908


									ACCUMULATED												ACCUMULATED
									OTHER			TOTAL									OTHER		TOTAL
	COMMON STOCK					RETAINED			COMPREHENSIVE			SHAREHOLDERS'				COMMON STOCK			RETAINED		COMPREHENSIVE		SHAREHOLDERS'
(in thousands, except share data)	SHARES		AMOUNT			EARNINGS			LOSS			EQUITY			(in thousands, except share data)	SHARES	AMOUNT		EARNINGS		LOSS		EQUITY
Balance, May 1, 2018	17,503,922		$	361,158		$	269,576		$	(49,069	)	$	581,665
Balance, April 30, 2020															Balance, April 30, 2020	16,926,537	$	359,430	$	392,281	$	(51,173)	$	700,538

Net income	—		—			24,767			—			24,767			Net income	—	—		16,485		—		16,485
Other comprehensive income,															Other comprehensive income,
net of tax	—		—			—			307			307			net of tax	—	—		—		327		327
Stock-based compensation	—		786			—			—			786			Stock-based compensation	—	961		—		—		961
Exercise of stock-based															Exercise of stock-based
compensation awards, net of amounts															compensation awards, net of amounts
withheld for taxes	43,048		(1,241		)	—			—			(1,241		)	withheld for taxes	16,212	(534)		—		—		(534)

Employee benefit plan															Employee benefit plan
contributions	41,408		3,623			—			—			3,623			contributions	45,591	3,743		—		—		3,743
Balance, July 31, 2018	17,588,378		$	364,326		$	294,343		$	(48,762	)	$	609,907
Balance, July 31, 2020															Balance, July 31, 2020	16,988,340	$	363,600	$	408,766	$	(50,846)	$	721,520

Net income	—		—			18,488			—			18,488			Net income	—	—		22,256		—		22,256
Other comprehensive income,															Other comprehensive income,
net of tax	—		—			—			307			307			net of tax	—	—		—		329		329
Stock-based compensation	—		836			—			—			836			Stock-based compensation	—	1,266		—		—		1,266
Exercise of stock-based															Exercise of stock-based
compensation awards, net of amounts															compensation awards, net of amounts
withheld for taxes	5,880		—			—			—			—			withheld for taxes	4,920	(177)		—		—		(177)
Stock repurchases	(189,633	)	(3,602		)	(9,597		)	—			(13,199		)
Balance, October 31, 2018	17,404,625		$	361,560		$	303,234		$	(48,455	)	$	616,339

Balance, May 1, 2019	16,849,026		$	352,424		$	317,420		$	(49,491	)	$	620,353

Net income	—		—			26,881			—			26,881
Other comprehensive income,
net of tax	—		—			—			315			315
Stock-based compensation	—		897			—			—			897
Exercise of stock-based
compensation awards, net of amounts
withheld for taxes	20,923		(1,050		)	—			—			(1,050		)
Employee benefit plan
contributions	45,721		3,772			—			—			3,772
Balance, July 31, 2019	16,915,670		$	356,043		$	344,301		$	(49,176	)	$	651,168
Balance, October 31, 2020															Balance, October 31, 2020	16,993,260	$	364,689	$	431,022	$	(50,517)	$	745,194




See notes to unaudited condensed consolidated financial statements.															See notes to unaudited condensed consolidated financial statements.

Net income —

—

22,163

—

22,163
Other comprehensive income,

net of tax —

—

—

316

316
Stock-based compensation —

1,178

—

—

1,178
Exercise of stock-based

compensation awards, net of amounts

withheld for taxes 5,877

83

—

—

83
Balance, October 31, 2019 16,921,547

$ 357,304

$ 366,464

$ (48,860 )
$ 674,908

See notes to unaudited condensed consolidated financial statements.

AMERICAN WOODMARK CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Six Months Ended
	October 31,
	2020		2019
OPERATING ACTIVITIES
Net income	$	38,741	$	49,044
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	51,779		48,527
Net loss on disposal of property, plant and equipment	332		217
Reduction in the carrying amount of operating lease right-of-use assets	13,366		12,768
Amortization of debt issuance costs	1,263		1,316
Unrealized gain on foreign exchange forward contracts	(1,821)		(96)

Stock-based compensation expense	2,227		2,075
Deferred income taxes	(6,927)		(5,464)
Pension contributions in excess of expense	(1,004)		(626)

Contributions of employer stock to employee benefit plan	3,743		3,772
Other non-cash items	2,299		951
Changes in operating assets and liabilities:
Customer receivables	(45,071)		5,026
Income taxes receivable	2,003		(1,695)
Inventories	(16,805)		(12,123)
Prepaid expenses and other assets	(4,825)		(5,634)
Accounts payable	21,575		673
Accrued compensation and related expenses	7,206		(4,379)

Operating lease liabilities	(12,144)		(11,783)
Marketing and other accrued expenses	20,631		3,663
Net cash provided by operating activities	76,568		86,232

INVESTING ACTIVITIES
Payments to acquire property, plant and equipment	(14,142)		(15,918)
Proceeds from sales of property, plant and equipment	194		313



Maturities of certificates of deposit	0		1,500
Investment in promotional displays	(4,982)		(4,183)
Net cash used by investing activities	(18,930)		(18,288)

FINANCING ACTIVITIES
Payments of long-term debt	(41,255)		(73,198)

Proceeds from issuance of common stock	0		83


Withholding of employee taxes related to stock-based compensation	(710)		(1,050)
Debt issuance cost	(172)		0
Net cash used by financing activities	(42,137)		(74,165)

Net increase (decrease) in cash and cash equivalents	15,501		(6,221)

~~(Unaudited)~~

Six Months Ended
October 31,
2019
2018
OPERATING ACTIVITIES

Net income $ 49,044

$ 43,255
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 48,527

46,726
Net loss on disposal of property, plant and equipment 217

584
Amortization of operating lease right-of-use assets 12,768

—
Amortization of debt issuance costs 1,316

1,356
Unrealized (gain) loss on foreign exchange forward contracts (96 )
199
Gain on insurance recoveries —

(580 )
Stock-based compensation expense 2,075

1,622
Deferred income taxes (5,464 )
(4,899 )
Pension contributions in excess of expense (626 )
(1,989 )
Contributions of employer stock to employee benefit plan 3,772
3,623
Other non-cash items 951

(971 )
Changes in operating assets and liabilities:

Customer receivables 5,026

5,434
Income taxes receivable (1,695 )
22,108
Inventories (12,123 )
(10,835 )
Prepaid expenses and other assets (5,634 )
(2,130 )
Accounts payable 673

(2,901 )
Accrued compensation and related expenses (4,379 ) 9,101
Operating lease liabilities (11,783 )
—
Marketing and other accrued expenses 3,663

(2,036 )
Net cash provided by operating activities 86,232

107,667

INVESTING ACTIVITIES

Payments to acquire property, plant and equipment (15,918 )
(14,755 )
Proceeds from sales of property, plant and equipment 313

35
Proceeds from insurance recoveries —

580
Acquisition of business, net of cash acquired —

(7,182 )
Maturities of certificates of deposit 1,500

5,000
Investment in promotional displays (4,183 )
(3,395 )
Net cash used by investing activities (18,288 )
(19,717 )

FINANCING ACTIVITIES

Payments of long-term debt (73,198 )
(94,060 )
Proceeds from issuance of common stock 83

500
Repurchase of common stock —

(13,199 )
Withholding of employee taxes related to stock-based compensation (1,050 )
(1,739 )
Net cash used by financing activities (74,165 )
(108,498 )

Net decrease in cash and cash equivalents (6,221 )
(20,548 )

Cash and cash equivalents, beginning of period 57,656

78,410


	Six Months Ended
	October 31,
	2020		2019
Cash and cash equivalents, beginning of period	97,059		57,656

Cash and cash equivalents, end of period	$	112,560	$	51,435

Supplemental cash flow information:
Non-cash investing and financing activities:


Property, plant and equipment included in accounts payable at period end	$	484	$	901


Cash paid during the period for:
Interest	$	10,848	$	15,025
Income taxes	$	18,119	$	24,573

See notes to unaudited condensed consolidated financial statements.

Cash and cash equivalents, end of period $ 51,435

$ 57,862

Supplemental cash flow information:
     Non-cash investing and financing activities:

          Property, plant and equipment included in accounts payable at period end $ 901
$ 2,619

    Cash paid during the period for:

         Interest $ 15,025

$ 19,131
       Income taxes $ 24,573

$ 9,976

See notes to unaudited condensed consolidated financial statements.

AMERICAN WOODMARK CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note A--Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete consolidated financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six-month period ended October 31, ~~2019~~2020 are not necessarily indicative of the results that may be expected for the fiscal year ending April 30, ~~2020.~~2021. The unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes in the Company's Annual Report on Form 10-K for the fiscal year ended April 30, ~~2019~~2020 filed with the U.S. Securities and Exchange Commission (“SEC”).

COVID-19: The COVID-19 pandemic impacted our business operations and financial results beginning in the fourth quarter of fiscal 2020 and continues to impact us in fiscal 2021. Although the financial impact on our overall fiscal 2020 results was limited due to the timing of the outbreak, we saw more material impacts on our results for the first quarter of fiscal 2021. We continue to face numerous uncertainties in estimating the direct and indirect effects of COVID-19 on our present and future business operations, financial condition, results of operations and liquidity. Due to several rapidly changing variables related to the COVID-19 pandemic, we cannot reasonably estimate future economic trends and the timing of when stability will return.

Goodwill and Intangible Assets: Goodwill represents the excess of purchase price over the net amount of identifiable assets acquired and liabilities assumed in a business combination measured at fair value. The Company does not amortize goodwill but evaluates for impairment annually, or whenever events or changes in circumstances indicate that the carrying value may not be recoverable.

In accordance with accounting standards, when evaluating goodwill, an entity has the option first to assess qualitative factors to determine whether events and circumstances indicate that it is more likely than not that goodwill is impaired. If after such assessment an entity concludes that the asset is not impaired, then the entity is not required to take further action. However, if an entity concludes otherwise, then it is required to determine the fair value of the asset using a quantitative impairment test, and if impaired, the associated assets must be written down to fair value. There were 0 impairment charges related to goodwill for the three- and six-month periods ended October 31, ~~2019~~2020 and ~~2018.~~2019.

Intangible assets consist of customer relationship intangibles and trademarks. The Company amortizes the cost of intangible assets over their estimated useful lives, which range from 3 to 6 years, unless such lives are deemed indefinite. There were 0 impairment charges related to intangible assets for the three- and six-month periods ended October 31, ~~2019~~2020 and ~~2018.~~2019.

Foreign Exchange Forward Contracts: In the normal course of business, the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts. The Company recognizes its outstanding forward contracts in the condensed consolidated balance sheets at their fair values. The Company does not designate the forward contracts as accounting hedges. The changes in the fair value of the forward contracts are recorded in other income, net in the condensed consolidated statements of income.

At October 31, ~~2019,~~2020, the Company held forward contracts maturing from November ~~2019~~2020 to April ~~2020~~2021 to purchase ~~228.1~~300.6 million Mexican pesos at exchange rates ranging from ~~19.45~~21.89 to ~~19.91~~23.42 Mexican pesos to one U.S. dollar. An asset of ~~$0.1~~$0.7 million is recorded in prepaid expenses and other on the condensed consolidated balance ~~sheets.~~sheet.

Note B--New Accounting Pronouncements

In ~~February 2016,~~March 2020, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. ~~2016-02, which requires lessees~~2020-04 “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting.” These amendments provide temporary optional guidance to ~~recognize almost all leases on their balance sheet as a right-of-use ("ROU") asset~~ease the potential burden in accounting for reference rate reform. ASU 2020-04 provides optional expedients and ~~lease liability.~~exceptions for applying generally accepted accounting principles to contract modifications and hedging relationships, subject to meeting certain criteria, that reference LIBOR or another reference rate expected to be discontinued. It is intended to help stakeholders during the global market-wide reference rate transition period. The ~~standard~~guidance is effective for ~~annual periods~~all entities as of March 12, 2020 through December 31, 2022 and can be adopted as of any date from the beginning ~~after~~of an interim period that includes or is subsequent to March 12, 2020. The Company has identified loans

and other financial instruments that are directly or indirectly influenced by LIBOR and does not expect the adoption of ASU 2020-04 to have a material impact on its consolidated financial statements.

In December ~~15, 2018.~~2019, the FASB issued ASU No. 2019-12, "Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes," which simplifies the accounting for income taxes by removing certain exceptions for recognizing investments, performing intraperiod tax allocations and calculating income taxes in interim periods. The ~~standard provides~~amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. ASU 2019-12 is effective for the ~~option to elect a package of practical expedients upon adoption.~~Company beginning May 1, 2021. Early adoption is permitted. The Company ~~adopted~~is currently reviewing the ~~standard~~provisions of this new pronouncement and the impact, if any, the adoption of this guidance may have on financial position and results of operations.

In June 2016, the FASB issued Accounting Standards Update ("ASU") No. 2016-13, "Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments," which modifies the methodology for recognizing loss impairments on certain types of financial instruments, including receivables. The new methodology requires an entity to estimate the credit losses expected over the life of an exposure. ASU 2016-13 was effective for the Company beginning May 1, 2019 using the modified retrospective transition approach and elected the package of practical expedients that allows it to forgo reassessment of lease classification for leases that have already commenced.2020. The Company also elected the practical expedients to the new standard without restating comparative prior period financial information and to not recognize ROU assets and liabilities for operating leases with shorter than 12-month terms. On May 1, 2019, the Company recognized operating lease assets and operating lease liabilities of $80.4 million. The new standardadoption did not have a material impact on the Company's results of operations or cash flows, or on its debt covenant calculations. ASU 2016-02 also requires entities to disclose certain qualitative and quantitative information regarding the amount, timing, and uncertainty of cash flows arising from leases. Such disclosures are included in Note P--our consolidated financial statements.

~~Leases~~.

Note C--Net Earnings Per Share

The following table sets forth the computation of basic and diluted net earnings per share:


	Three Months Ended				Six Months Ended
	October 31,				October 31,
(in thousands, except per share amounts)	2020		2019		2020		2019
Numerator used in basic and diluted net earnings
per common share:
Net income	$	22,256	$	22,163	$	38,741	$	49,044
Denominator:
Denominator for basic net earnings per common
share - weighted-average shares	16,992		16,920		16,965		16,892
Effect of dilutive securities:
Stock options and restricted stock units	55		36		72		40
Denominator for diluted net earnings per common
share - weighted-average shares and assumed
conversions	17,047		16,956		17,037		16,932
Net earnings per share
Basic	$	1.31	$	1.31	$	2.28	$	2.90
Diluted	$	1.31	$	1.31	$	2.27	$	2.90

Three Months Ended Six Months Ended
October 31, October 31,
(in thousands, except per share amounts) 2019 2018 2019 2018
Numerator used in basic and diluted net earnings
per common share:
Net income $ 22,163
$ 18,488
$ 49,044
$ 43,255
Denominator:
Denominator for basic net earnings per common
share - weighted-average shares 16,920
17,556
16,892
17,545
Effect of dilutive securities:
Stock options and restricted stock units 36
32
40
45
Denominator for diluted net earnings per common
share - weighted-average shares and assumed
conversions 16,956
17,588
16,932
17,590
Net earnings per share
Basic $ 1.31
$ 1.05
$ 2.90
$ 2.47
Diluted $ 1.31
$ 1.05
$ 2.90
$ 2.46

The Company repurchased a total of 189,633 shares of its common stock during the three- and six-month periods ended October 31, 2018, respectively. There were 0 shares repurchased during the three- and six-month periods ended October 31, 2019. There were 0 potentially dilutive securities for the three- and six-month periods ended October 31, 2020 and 2019, which were excluded from the calculation of net earnings per diluted share. ~~An immaterial amount of potentially dilutive securities for the three- and six-month periods ended October 31, 2018 were excluded from the calculation of net earnings per diluted share.~~

Note D--Stock-Based Compensation

The Company has various stock-based compensation plans. During the ~~three months~~three-months ended October 31, ~~2019,~~2020, the Board of Directors of the Company approved grants of ~~9,600~~8,200 service-based restricted stock units ("RSUs") to non-employee directors. ~~The~~These service-based RSUs (i) vest daily through the end of the two-year vesting period as long as the recipient continuously remains a member of the Board and (ii) entitle the recipient to receive one share of the Company's common stock per unit vested. During the six-months ended October 31, ~~2019,~~2020, the Board of Directors of the Company also approved grants of service-based RSUs and performance-based RSUs to key employees. The employee performance-based RSUs totaled ~~61,379~~124,374 units and the employee service-based RSUs totaled ~~33,091~~67,006 units. The performance-based RSUs entitle the recipients to receive 1 share of the Company’s common stock per unit granted if applicable performance conditions are met and the recipient remains continuously employed with the Company until the units vest. The service-based RSUs entitle the

recipients to receive 1 share of the Company’s common stock per unit granted if they remain continuously employed with the Company until the units vest. All of the Company’s RSUs granted to employees cliff-vest three years from the grant date.

For the ~~three-~~three and six-month periods ended October 31, ~~2019~~2020 and ~~2018,~~2019, stock-based compensation expense was allocated as follows:

Three Months Ended
October 31,
Six Months Ended
October 31,
(in thousands) 2019
2018
2019
2018
Cost of sales and distribution $ 277
$ 185
$ 492
$ 344
Selling and marketing expenses 265
217
473
385
General and administrative expenses 636
434
1,110
893
Stock-based compensation expense $ 1,178
$ 836
$ 2,075
$ 1,622


	Three Months Ended October 31,				Six Months Ended October 31,
(in thousands)	2020		2019		2020		2019
Cost of sales and distribution	$	409	$	277	$	708	$	492
Selling and marketing expenses	354		265		333		473
General and administrative expenses	503		636		1,186		1,110
Stock-based compensation expense	$	1,266	$	1,178	$	2,227	$	2,075

During the six months ended October 31, ~~2019,~~2020, the Company also approved grants of ~~6,483~~11,456 cash-settled performance-based restricted stock tracking units ("RSTUs") and ~~3,482~~6,229 cash-settled service-based RSTUs for more junior level employees. Each performance-based RSTU entitles the recipient to receive a payment in cash equal to the fair market value of aone share of the

Company's common stock as of the payment date if applicable performance conditions are met and the recipient remains continuously employed with the Company until the units vest. The service-based RSTUs entitle the recipients to receive a payment in cash equal to the fair market value of aone share of the Company's common stock as of the payment date if they remain continuously employed with the Company until the units vest. All of the RSTUs cliff-vest three years from the grant date. Since the RSTUs will be settled in cash, the grant date fair value of these awards is recorded as a liability until the date of payment. The fair value of each cash-settled RSTU award is remeasured at the end of each reporting period and the liability is adjusted, and related expense recorded, based on the new fair value. The Company recognized expense of $0.2 million and ~~$(0.1)~~$0.2 million for the three-month periods ended October 31, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$0.2~~$0.4 million and $0.2 million for the six-month periods ended October 31, ~~2019~~2020 and ~~2018,~~2019, respectively. A liability for payment of the RSTUs is included in the condensed consolidated balance sheets in the amount of $0.6 million and ~~$0.7~~$0.4 million as of October 31, ~~2019~~2020 and April 30, ~~2019,~~2020, respectively.

Note E--Customer Receivables

The components of customer receivables were:


	October 31,		April 30,
(in thousands)	2020		2020
Gross customer receivables	$	158,156	$	112,528
Less:
Allowance for doubtful accounts	(448)		(472)
Allowance for returns and discounts	(8,543)		(5,712)

Net customer receivables	$	149,165	$	106,344

October 31,
April 30,
(in thousands)
2019
2019
Gross customer receivables
$ 127,245

$ 132,145
Less:

Allowance for doubtful accounts
(471 )
(249 )
Allowance for returns and discounts
(6,656 )
(5,995 )

Net customer receivables
$ 120,118

$ 125,901

Note F--Inventories

The components of inventories were:

October 31,
April 30,
(in thousands)
2019
2019
Raw materials
$ 50,891

$ 46,054
Work-in-process
46,151

43,794
Finished goods
38,909

34,873

Total FIFO inventories
135,951

124,721

Reserve to adjust inventories to LIFO value
(16,193 )
(16,193 )

Total inventories
$ 119,758

$ 108,528


	October 31,		April 30,
(in thousands)	2020		2020
Raw materials	$	51,500	$	51,460
Work-in-process	50,007		42,381
Finished goods	41,247		32,572

Total FIFO inventories	142,754		126,413

Reserve to adjust inventories to LIFO value	(15,039)		(14,577)

Total inventories	$	127,715	$	111,836

Of the total inventory of ~~$119.8~~$127.7 million at October 31, ~~2019, $69.5~~2020, $78.0 million is carried under the FIFO method of accounting and ~~$50.3~~$49.7 million is carried under the LIFO method. Of the total inventory of ~~$108.5~~$111.8 million at April 30, ~~2019, $58.6~~2020, $66.0 million is carried under the FIFO method and ~~$49.9~~$45.8 million is carried under the LIFO method.

Note G--Property, Plant and Equipment

The components of property, plant and equipment were:


	October 31,		April 30,
(in thousands)	2020		2020
Land	$	4,431	$	4,431
Buildings and improvements	121,743		120,819
Buildings and improvements - finance leases	11,636		11,636
Machinery and equipment	305,692		312,806
Machinery and equipment - finance leases	30,870		30,911
Construction in progress	13,313		8,164
	487,685		488,767
Less accumulated amortization and depreciation	(288,790)		(284,943)

Total	$	198,895	$	203,824

October 31,
April 30,
(in thousands) 2019
2019
Land $ 4,431

$ 4,751
Buildings and improvements 114,794

114,421
Buildings and improvements - finance leases 11,202

11,202
Machinery and equipment 304,075

294,993
Machinery and equipment - finance leases 30,649

30,574
Construction in progress 12,641

7,002

477,792

462,943
Less accumulated amortization and depreciation (270,893 )
(254,680 )

Total $ 206,899

$ 208,263

Amortization and depreciation expense on property, plant and equipment amounted to ~~$9.2~~$10.6 million and ~~$9.0~~$9.2 million for the three months ended October 31, ~~2019~~2020 and ~~2018,~~2019, respectively, and ~~$18.3~~$22.2 million and ~~$17.8~~$18.3 million for the six months ended October 31, 2020 and 2019, respectively. The three and ~~2018, respectively.~~six months ended October 31, 2020 includes accelerated depreciation expense of $0.2 million and $1.3 million, respectively, related to the closure of the plant located in Humboldt, Tennessee. Accumulated amortization on finance leases included in the above table amounted to ~~$31.4~~$32.5 million and ~~$30.8~~$32.3 million as of October 31, ~~2019~~2020 and April 30, ~~2019,~~2020, respectively.

Note H--Intangibles

The components of customer relationship intangibles were:


	October 31,			April 30,				October 31,		April 30,
(in thousands)	2019			2019			(in thousands)	2020		2020
Customer relationship intangibles	$	274,000		$	274,000		Customer relationship intangibles	$	274,000	$	274,000
Less accumulated amortization	(83,722		)	(60,889		)	Less accumulated amortization	(129,389)		(106,556)

Total	$	190,278		$	213,111		Total	$	144,611	$	167,444

The components of trademarks were:


	October 31,		April 30,
(in thousands)	2020		2020
Trademarks	$	10,000	$	10,000
Less accumulated amortization	(9,444)		(7,778)

Total	$	556	$	2,222

October 31,
April 30,
(in thousands) 2019
2019
Trademarks $ 10,000

$ 10,000
Less accumulated amortization (6,111 )
(4,445 )

Total $ 3,889

$ 5,555

Customer relationship intangibles and trademarks are amortized over the estimated useful lives on a straight-line basis over six and three years, respectively. Amortization expense for each of the three ~~months~~month periods ended October 31, ~~2019~~2020 and ~~2018~~2019 was $12.3 ~~million and $12.2 million, respectively, and $24.5~~ million, and $24.5 million for each of the six ~~months~~month periods ended October 31, ~~2019~~2020 and ~~2018, respectively.~~2019.

Note I--Product Warranty

The Company estimates outstanding warranty costs based on the historical relationship between warranty claims and revenues. The warranty accrual is reviewed monthly to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation period. Adjustments are made when actual warranty claim experience differs from estimates. Warranty claims are generally made within two months of the original shipment date.

The following is a reconciliation of the Company’s warranty liability, which is included in other accrued expenses on the unaudited condensed consolidated balance ~~sheet:~~sheets:

Six Months Ended

October 31,
(in thousands)
2019
2018
Beginning balance at May 1
$ 4,616

$ 4,045
Accrual
12,539

13,205
Settlements
(12,294 )
(12,604 )

Ending balance at October 31
$ 4,861

$ 4,646

Note J--Pension Benefits

Prior to April 30, 2020, the Company had 2 defined benefit pension plans covering many of the Company's employees 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.~~plan. Effective April 30, 2020, these plans were merged into 1 plan.

On November 16, 2020 the Company filed an application with the Internal Revenue Service to terminate the American Woodmark Corporation Employee Pension Plan (the “Plan”) with a proposed effective date of December 31, 2020 (the “Plan Termination Date”), in a standard termination and the Company expects to incur approximately $1.6 million to terminate the Plan. In connection with the Plan termination and in addition to the Plan termination costs, the Company may be required to make an additional funding contribution to the Plan in order to ensure the Plan is fully funded on a termination basis as of the Benefit Distribution Date, with the amount of such contribution still to be determined. The Benefit Distribution Date will be determined once the Company receives approval from certain regulatory agencies. The additional funding contribution is expected to be funded from cash on hand and the amount will vary depending on the lump sum distribution take rate and the interest rate on the Benefit Distribution Date.

Net periodic pension benefit cost consisted of the following for the three- and six-month periods ended October 31, ~~2019~~2020 and ~~2018:~~2019:

The Company ~~expects~~did not contribute to its pension plan in the first three and six months of fiscal 2021 and does not expect to contribute ~~a total~~any funds during the remainder of fiscal 2021. The Company made contributions of $0.5 million to its pension plans in fiscal ~~2020, which represents discretionary funding. As of October 31, 2019, $0.3 million of contributions had been made. The Company made contributions of $7.3 million to its pension plans in fiscal 2019.~~2020.

Note K--Fair Value Measurements

The Company utilizes the hierarchy of fair value measurements to classify certain of its assets and liabilities based upon the 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 certificates of deposit. The Company’s mutual fund investment assets represent contributions made and invested on behalf of the Company’s named executive officers in a supplementary employee retirement plan.

Level 2- Investments with observable inputs other than Level 1 prices, such as: quoted prices for similar assets or liabilities; 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.

Level 3- Investments with unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The Company has no Level 3 assets or liabilities measured on a recurring basis.

The Company's financial instruments include cash and equivalents, marketable securities and other investments; accounts receivable and accounts payable; and short- and long-term debt. The carrying values of cash and equivalents, ~~certificates of deposit,~~ accounts receivable and payable and short-term debt on the condensed consolidated balance sheets approximate their fair value due to the short maturities of these items. The forward contracts were marked to market and therefore represent fair value. The fair values of these contracts are determined based on inputs that are readily available in public markets or can be derived from

information available in publicly quoted markets. The following table summarizes the fair value of assets and liabilities that are recorded in the Company’s consolidated financial statements as of October 31, ~~2019~~2020 and April 30, ~~2019~~2020 at fair value on a recurring basis (in thousands):

Fair Value Measurements

As of October 31, 2019

Level 1
Level 2
Level 3
ASSETS:

Mutual funds
$ 790

$ —

$ —
Foreign exchange forward contracts
—

96

—
Total assets at fair value
$ 790

$ 96

$ —

As of April 30, 2019

Level 1
Level 2
Level 3
ASSETS:

Certificates of deposit
$ 1,500

$ —

$ —
Mutual funds
1,604

—

—
Total assets at fair value
$ 3,104

$ —

$ —


	Fair Value Measurements
	As of October 31, 2020
	Level 1		Level 2		Level 3
ASSETS:

Mutual funds	$	827	$	0	$	0
Foreign exchange forward contracts	0		719		0
Total assets at fair value	$	827	$	719	$	0





	As of April 30, 2020
	Level 1		Level 2		Level 3
ASSETS:
Mutual funds	$	773	$	0	$	0



LIABILITIES:
Foreign exchange forward contracts	$	0	$	(1,102)	$	0

There were no transfers between Level 1, Level 2 or Level 3 for assets measured at fair value on a recurring basis.

Note L--Loans Payable and Long-Term Debt

On December 29, 2017, the Company entered into a credit agreement (as subsequently amended, the "Credit Agreement") with a syndicate of lenders and Wells Fargo Bank, National Association, as administrative agent, providing for a $100 million, 5-year revolving loan facility with a $25 million sub-facility for the issuance of letters of credit (the “Revolving Facility”), a $250 million, 5-year initial term loan facility (the "Initial Term Loan") and a $250 million delayed draw term loan facility (the "Delayed Draw Term Loan" and, together with the Revolving Facility and the Initial Term Loan, the "Credit Facilities"). The Company borrowed the entire $250 million available under each of the Initial Term Loan and the Delayed Draw Term Loan on December 29, 2017 and February 12, 2018, respectively, in connection with its acquisition of RSI Home Products, Inc. (“RSI”) and subsequent refinancing of RSI’s debt. The Company is required to make specified quarterly installments on both the Initial Term Loan and the Delayed Draw Loan. As of October 31, ~~2019, $134~~2020, $102 million was outstanding on each of the Initial Term Loan and the Delayed Draw Loan for a total of ~~$268~~$204 million. As of April 30, ~~2019, $170~~2020, $122 million was outstanding on each of the Initial Term Loan and the Delayed Draw Loan for a total of ~~$340~~$244 million. The outstanding balance approximates fair value as the Initial Term Loan and Delayed Draw Term Loan have a floating interest rate. There were 0 amounts outstanding on the Revolving Facility as of October 31, ~~2019~~2020 or April 30, ~~2019.~~2020. The Credit Facilities mature on December 29, 2022.

Amounts outstanding under the Credit Facilities bear interest based on a fluctuating rate measured by reference to either, at the Company’s option, a base rate plus an applicable margin or LIBOR plus an applicable margin, with the applicable margin being determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” The Company also incurs a quarterly commitment fee on the average daily unused portion of the Revolving Facility during the applicable quarter at a rate per annum also determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” In addition, a letter of credit fee will accrue on the face amount of any outstanding letters of credit at a per annum rate equal to the applicable margin on LIBOR loans, payable quarterly in arrears. As of October 31, ~~2019,~~2020, the applicable margin with respect to base rate loans and LIBOR loans was 0.50% and 1.50%, respectively, and the commitment fee was ~~0.18%~~0.175%. As of December 31, 2021, the Company will transition to the Secured Overnight Financial Rate ("SOFR") as required by the Credit Facilities. The Company expects the transition to SOFR to be materially similar to LIBOR.

The Credit Agreement includes certain financial ~~covenants, including a maximum~~covenants. On September 16, 2020 the “Total Funded Debt to EBITDA Ratio” ~~as of~~was amended to a “Total Net Funded Debt to EBITDA Ratio” to include Unrestricted Cash in the ~~last day of any fiscal quarter ending through January 31, 2020 of no more than 3.50~~aggregate amount not to ~~1.00 and thereafter, of~~exceed $100 million. The maximum “Total Net Funded Debt to EBITDA Ratio” can be no more than 3.25 to 1.00 (with an increase to 3.75 to 1.00 for a certain period upon the consummation of a “Qualified Acquisition”). The Company is also required to maintain a “Fixed Charge Coverage Ratio” of no less than 1.25 to 1.00.

The Credit Agreement includes certain additional covenants, including negative covenants that restrict the ability of the Company and certain of its subsidiaries to incur additional indebtedness, create additional liens on its assets, dispose of its assets or engage in a merger or another similar transaction or engage in transactions with affiliates, subject, in each case, to the

various exceptions and conditions described in the Credit Agreement. The negative covenants also restrict the Company’s ability to make certain

investments and to make certain restricted payments, including the payment of dividends and repurchase of common stock, in certain limited circumstances. The Company is, however, permitted to make unlimited investments so long as the ~~“Total~~"Total Net Funded Debt to EBITDA ~~Ratio”~~Ratio" is less than or equal to 3.00 to 1.00 after giving effect to any such investment and no default or event of default has occurred and is continuing or would result from any such investment. The Company is also permitted to make (i) unlimited restricted payments so long as the “Total Net Funded Debt to EBITDA Ratio” would be less than or equal to 2.75 to 1.00 after giving effect to any such payment and no default or event of default has occurred and is continuing or would result from any such payment and (ii) up to an aggregate of $50 million in restricted payments not otherwise permitted under the Credit Agreement so long as no default or event of default has occurred and is continuing or would result from any such payment.

As of October 31, ~~2019,~~2020, the Company's Total Net Funded Debt to EBITDA Ratio was 2.08 and the Fixed Charge Coverage Ratio was 5.34. As of October 31, 2020, the Company was in compliance with the covenants included in the Credit Agreement.

The Company’s obligations under the Credit Agreement are guaranteed by the Company’s subsidiaries and the obligations of the Company and its subsidiaries are secured by a pledge of substantially all of their respective personal property.

On February 12, 2018, the Company issued $350 million in aggregate principal amount of 4.875% Senior Notes due 2026 (the “Senior Notes”). The Senior Notes mature on March 15, 2026 and interest on the Senior Notes is payable semi-annually in arrears on March 15 and September 15 of each year. The Senior Notes are fully and unconditionally guaranteed by each of the Company’s current and future wholly-owned domestic subsidiaries that guarantee the Company’s obligations under the Credit Agreement. The indenture governing the Senior Notes restricts the ability of the Company and the Company’s “restricted subsidiaries” to, as applicable, (i) incur additional indebtedness or issue certain preferred shares, (ii) create liens, (iii) pay dividends, redeem or repurchase stock or make other distributions or restricted payments, (iv) make certain investments, (v) create restrictions on the ability of the “restricted subsidiaries” to pay dividends to the Company or make other intercompany transfers, (vi) transfer or sell assets, (vii) merge or consolidate with a third party and (viii) enter into certain transactions with affiliates of the Company, subject, in each case, to certain qualifications and exceptions as described in the indenture. As of October 31, ~~2019,~~2020, the Company and its restricted subsidiaries were in compliance with all covenants under the indenture governing the Senior Notes.

At October 31, ~~2019,~~2020, the book value of the Senior Notes was $350 million and the fair value was ~~$357~~$356.6 million, based on Level 1 inputs.

Note M--Income Taxes

The effective income tax rate for the three- and six-month periods ended October 31, ~~2019~~2020 was ~~26.1%~~25.5% and 26.0%, respectively, compared with ~~27.2%~~26.1% and ~~25.4%~~26.0% in the comparable periods in the prior fiscal year. The decrease in the effective tax rate for the second quarter of fiscal 2021 as compared to the comparable period in the prior fiscal year was primarily due to less unfavorable permanent tax items. The overall increase in the effective tax rate for the first half of fiscal 2020 as compared to the comparable period in the prior year was primarily due to a decrease in the benefit from stock-based compensation transactions. During the first ~~half~~six months of fiscal ~~2020~~2021 and ~~2019,~~2020, the Company recognized ~~an excess~~a tax ~~benefit~~detriment related to stock-based compensation transactions of ~~$0.1~~$0.2 million and ~~$0.7~~a tax benefit of $0.1 million, respectively.

Note N--Revenue Recognition

The Company disaggregates revenue from contracts with customers into major sales distribution channels as these categories depict the nature, amount, timing and uncertainty of revenues and cash flows that are affected by economic factors. The following table disaggregates our consolidated revenue by major sales distribution channels for the three- and six-months ended October 31, ~~2019~~2020 and ~~2018:~~2019:

Three Months Ended
Six months ended

October 31,
October 31,
(in thousands)
2019
2018
2019
2018
Home center retailers
$ 189,148

$ 196,542

$ 387,899

$ 401,591
Builders
184,755

169,596

357,344

334,680
Independent dealers and distributors
54,113

58,740

110,138

117,569
Net Sales
$ 428,016

$ 424,878

$ 855,381

$ 853,840

Note O--Concentration of Risks

Financial instruments that potentially subject the Company to concentrations of risk consist primarily of cash and cash equivalents and accounts receivable. The Company maintains its cash and cash equivalents with major financial institutions and such balances may, at times, exceed Federal Deposit Insurance Corporation insurance limits. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant risk onwith respect to cash.

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 condition. Estimates and assumptions are periodically reviewed and updated. Any resulting adjustments to the allowance are reflected in current operating results.

At October 31, ~~2019,~~2020, the Company's two largest customers, Customers A and B, represented ~~25.5%~~31.5% and ~~19.7%~~25.5% of the Company's gross customer receivables, respectively. At October 31, ~~2018,~~2019, Customers A and B represented ~~26.9%~~25.5% and ~~22.0%~~19.7% of the Company’s gross customer receivables, respectively.

The following table summarizes the percentage of net sales attributable to the Company's two largest customers for the three- and six-months ended October 31, ~~2019~~2020 and ~~2018:~~2019:

Three Months Ended
Six months ended

October 31,
October 31,
2019
2018
2019
2018
Customer A 28.7%
28.7%
28.7%
28.9%
Customer B 15.5%
17.5%
16.6%
18.1%

~~On May 1, 2019, the Company adopted ASC 842, Leases. Changes to the Company’s accounting policy as a result of adoption are discussed below.~~

Operating Leases - ROU assets related to operating leases are presented as “Operating lease right-of-use assets” on the unaudited ~~Condensed Consolidated Balance Sheet.~~condensed consolidated balance sheets. Lease liabilities related to ~~operating leases that are subject to the ASC 842 measurement requirements such as~~ operating leases with lease terms greater than twelve months are presented in “Short-term lease liability - operating” and “Long-term lease liability - operating” on the unaudited condensed consolidated balance ~~sheet.~~sheets.

Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment. Operating lease ROU assets may also include any cumulative prepaid or accrued rent when the lease payments are uneven throughout the lease term. The ROU assets and lease liabilities may also include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. The ROU asset includes any lease payments made and lease incentives received prior to the commencement date. The Company has lease arrangements with lease and non-lease components which are accounted for separately. Non-lease components of the lease payments are expensed as incurred and are not included in determining the present value.

Finance Leases - ROU assets related to finance leases are presented in "Property, plant and equipment, net” on the unaudited condensed consolidated balance sheet. Lease liabilities related to finance leases are presented in “Current maturities of long-term debt” and “Long-term debt, less current maturities” on the unaudited condensed consolidated balance ~~sheet.~~sheets.

Finance lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of the future lease payments over the lease term. The discount rate used to determine the present value of the lease payments is the rate implicit in the lease unless that rate cannot be readily determined, in which case, the Company utilizes its incremental borrowing rate in determining the present value of the future lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

The components of lease costs were as follows:

Six Months Ended

October 31,
(in thousands)
2019
Finance lease cost:

Amortization of right-of-use assets
$ 1,239
Interest on lease liabilities
105
Operating lease cost
12,768

Additional information related to leases was as follows:

Six Months Ended

October 31,
(in thousands)
2019
Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows for finance leases
$ 105
Operating cash flows for operating leases
11,783
Financing cash flows for financing leases
1,203
Right-of-use assets obtained in exchange for new finance lease liabilities
643
Right-of-use assets obtained in exchange for new operating lease liabilities
24,178

Weighted average remaining lease term (years)

Weighted average remaining lease term - finance leases
3.36
Weighted average remaining lease term - operating leases
6.51

Weighted average discount rate

Weighted average discount rate - finance leases
3.20 %
Weighted average discount rate - operating leases
4.26 %

The following is a reconciliation of future undiscounted cash flows to the operating and finance lease liabilities, and the related ROU assets, presented on the unaudited condensed consolidated balance sheet as of October 31, ~~2019:~~2020:

(in thousands)
Operating leases
Financing leases
Year ending April 30,

2020
$ 11,866

$ 1,300
2021
21,887

2,142
2022
15,758

1,205
2023
11,384

803
2024
10,227

763
Thereafter
34,047

176
Total lease payments
105,169

6,389
Less imputed interest
(13,649 )
(302 )
Total lease liability
$ 91,520

$ 6,087
Current maturities
(19,453 )
(2,320 )
Lease liability - long-term
$ 72,067

$ 3,767
Lease assets
$ 89,662

$ 10,431

As we have not restated prior-year information for our adoption of ASC Topic 842, the following presents our future minimum lease payments for operating leases and capital leases under ASC Topic 840 on April 30, 2019:

Fiscal Year Operating (in thousands)
Capital (in thousands)
2020 $ 17,943

2,456
2021 17,649

1,953
2022 12,435

1,013
2023 10,636

705
2024 9,854

701
2025 (and thereafter) 38,871

166
$ 107,388

$ 6,994
Less amounts representing interest (2% - 6.5%)
(349 )
Total obligations under capital leases
$ 6,645

Note ~~Q--Other~~Q--Restructuring

In the fourth quarter of fiscal 2020 and first quarter of fiscal 2021, the Company implemented nationwide reductions in force, which were substantially completed in the fourth quarter of fiscal 2020 and first quarter of fiscal 2021, respectively. During the second quarter and first half of fiscal 2021, the Company recognized pre-tax restructuring charges, net of $(0.1) million and $1.6 million, respectively, related to these reductions in force, which were primarily severance and separation costs.

During June 2020, the Company's Board of Directors approved the closure and eventual disposal of its manufacturing plant located in Humboldt, Tennessee. The Company expects to incur total pre-tax restructuring costs of $3.0 million to $5.0 million related to the closing of the plant, net of building proceeds. The restructuring costs consist of employee severance and separation costs of approximately $0.5 million to $1.0 million, and charges for accelerated depreciation and relocation of property and equipment and inventory write-offs of approximately $2.5 million to $4.0 million. The Company expects to recognize substantially all of these costs during fiscal 2021. Operations ceased at the Humboldt plant in July 2020. During the second quarter and first half of fiscal 2021, the Company recognized pre-tax restructuring charges of $2.9 million and $4.7 million, respectively, related to the closure of the plant. Included in the $4.7 million of restructuring charges for the first half of fiscal 2021 were $0.8 million of severance and separation costs and $3.9 million for equipment, inventory and facilities-related expenses.

A reserve for restructuring charges is included in accrued compensation and related expenses in the condensed consolidated balance sheets as of October 31, 2020 which relates to employee termination costs accrued but not yet paid as follows:


	October 31,
(in thousands)	2020
Restructuring reserve balance at May 1	$	189
Expense	1,736
Payments and adjustments	(1,502)

Restructuring reserve balance at October 31	$	423

Note R--Other Information

The Company is involved in suits and claims in the normal course of business, including without limitation product liability and general liability claims, and claims pending before 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 result in a loss. As required by FASB Accounting Standards Codification Topic 450, ~~“Contingencies”,~~“Contingencies,” 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 be reasonably possible, a range of loss estimates is determined and considered for disclosure. In determining these loss range estimates, the Company considers known values of similar claims and consults with outside counsel.

The Company believes that the aggregate range of loss stemming from the various suits and asserted and unasserted claims that were deemed to be either probable or reasonably possible was not material as of October 31, ~~2019.~~2020.

The Company’s second quarter of fiscal 2021 results were negatively impacted by an accrual of $1.5 million related to a proposed legal settlement of a putative class action brought on behalf of certain hourly-paid current and former employees of our subsidiaries, RSI Home Products, Inc. and RSI Professional Cabinet Solutions, asserting several claims including violations of California wage and hour laws.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes, both of which are included in Part I, Item 1 of this report. The Company’s critical accounting policies are included in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, ~~2019.~~2020.

Forward-Looking Statements

This report contains statements concerning the Company’s expectations, plans, objectives, future financial performance, and other statements that are not historical facts. These statements may be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. In most cases, the reader can identify forward-looking statements by words such as “anticipate,” “estimate,” “forecast,” “expect,” “believe,” “should,” “could,” “would,” “plan,” “may,” “intend,” “estimate,” “prospect,” “goal,” “will,” “predict,” “potential” or other similar words. Forward-looking statements contained in this report, including elsewhere in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” 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. Factors that could cause actual results to differ materially from those in forward-looking statements made in this report include but are not limited to:

•the impact of COVID-19 on our business, the global and U.S. economy and our customers and suppliers;

•the loss of or a reduction in business from one or more of our key customers;

•negative developments in the macro-economic factors that impact our performance such as the U.S. housing market, or general economy, unemployment rates and consumer sentiment and the impact of such developments on our and our customers’ business, operations and access to financing;

•competition from other manufacturers and the impact of such competition on pricing and promotional levels;

•an inability to develop new products or respond to changing consumer preferences and purchasing practices;

•a failure to effectively manage manufacturing operations, alignment and capacity or an inability to maintain the quality of our products;

•an inability to obtain raw materials in a timely manner or fluctuations in raw material and energy costs;

•information systems interruptions or intrusions or the unauthorized release of confidential information concerning customers, employees or other third parties;

•the cost of compliance with, or liabilities related to, environmental or other governmental regulations or changes in governmental or industry regulatory standards, especially with respect to health and safety and the environment;

•a failure to attract and retain certain members of management or other key hourly and salary employees or other negative labor developments, including increases in the cost of labor;

•risks associated with the implementation of our growth strategy;

•risks related to sourcing and selling products internationally and doing business globally, including the imposition of or increases in tariffs or duties on those products;

•unexpected costs resulting from a failure to maintain acceptable quality standards;

•changes in tax laws or the interpretations of existing tax laws;

•the occurrence of significant natural disasters, including earthquakes, fires, floods, and hurricanes or tropical storms;

•the unavailability of adequate capital for our business to grow and compete;

•increased buying power of large customers and the impact on our ability to maintain or raise prices;

•our ability to successfully integrate RSI into our business and operations and the risk that the anticipated economic benefits, costs savings and other synergies in connection with our acquisition of RSI are not fully realized or take longer to realize than expected; and

•limitations on operating our business as a result of covenant restrictions under our indebtedness, and our ability to pay amounts due under the Credit Facilities, the Senior Notes and our other indebtedness.

Additional information concerning factors that could cause actual results to differ materially from those in forward-looking statements is contained in this report, including elsewhere in "Management’s Discussion and Analysis of Financial Condition and Results of ~~Operations,"~~Operations" and also in the Company's most recent Annual Report on Form 10-K for the fiscal year ended April 30, ~~2019,~~2020, filed with the SEC, including under Item 1A, "Risk Factors," Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” and Item 7A, "Quantitative and Qualitative Disclosures about Market Risk." While the Company believes that these risks are manageable and will not adversely impact the long-term performance of the Company, these risks could, under certain circumstances, have a material adverse impact on its operating results and financial condition.

Any forward-looking statement that the Company makes speaks only as of the date of this report. The Company undertakes no obligation to publicly update or revise any forward-looking statements or cautionary factors as a result of new information, future events or otherwise, except as required by law.

American Woodmark Corporation manufactures and distributes kitchen, bath and home organization products for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers and builders and through a network of independent dealers and distributors. On October 31, ~~2019,~~2020, the Company operated ~~eighteen~~seventeen manufacturing facilities in the United States and Mexico and eight primary service centers located throughout the United States.

The three-month period ended October 31, ~~2019~~2020 was the Company’s second quarter of its fiscal year that ends on April 30, ~~2020~~2021 (“fiscal ~~2020”~~2021”).

The pandemic caused by COVID-19 was first reported in Wuhan, China in December 2019 and has since spread throughout the world. Financial markets have been volatile in 2020, primarily due to uncertainty with respect to the severity and duration of the pandemic.

As the spread of the virus began to be identified within the United States in March 2020, we acted by imposing travel restrictions, transitioning large meetings from in-person to virtual formats, assessing our information technology infrastructure to ensure readiness for a remote workforce, staying connected to customers, suppliers and business partners, planning for return to the workplace and making operational adjustments as needed to ensure continued safety of our workforce.

The pandemic has resulted in federal, state and local governments around the world implementing stringent measures to help control the spread of the virus, including quarantines, “shelter in place” and “stay at home” orders, travel restrictions or bans, business curtailments, school closures, and other protective measures, some of which have been recently reinstated.

All of our U.S. manufacturing facilities currently qualify as essential operations (or the equivalent) under applicable federal and state orders. Operations in our component plants in Mexico were temporarily suspended for a period of time in April 2020, however, all of our manufacturing facilities and service centers are currently open and operating. We are enforcing social distancing and enhanced health, safety and sanitization measures in accordance with guidelines from the Center for Disease Control. We have also implemented necessary procedures and support to enable a significant portion of our office personnel to work remotely.

The COVID-19 pandemic impacted our business operations and financial results beginning in the fourth quarter of fiscal 2020 and continues to impact us in fiscal 2021. Although the financial impact on our overall fiscal 2020 results was limited due to the timing of the outbreak, we saw more material impacts on our results for the first quarter of fiscal 2021. We continue to face numerous uncertainties in estimating the direct and indirect effects of COVID-19 on our present and future business operations, financial condition, results of operations, and liquidity. Due to several rapidly changing variables related to the COVID-19 pandemic including recent rises in case counts, we cannot reasonably estimate future economic trends and the timing of when stability will return. Refer to Item 1A. "Risk Factors" in our Annual Report on Form 10-K for the fiscal year ended April 30, 2020 for a disclosure of risk factors related to COVID-19.

The Company’s remodeling-based business was impacted by the following trends during the second quarter of ~~the Company’s~~ fiscal ~~2020:~~2021:

•The median price per existing home sold rose during the third calendar quarter of ~~2019~~2020 compared to the same period one year ago by ~~5.0%~~11.7% according to data provided by the National Association of Realtors, and existing home sales increased ~~2.3%~~13.3% during the third calendar quarter of ~~2019~~2020 compared to the same period in the prior year;

•The unemployment rate ~~improved~~increased to 6.9% as of October 2020 compared to 3.6% as of October 2019 ~~compared to 3.8% as of October 2018~~ according to data provided by the U.S. Department of Labor; however, the unemployment rate decreased from 14.7% in April 2020;

•Mortgage interest rates decreased with a thirty-year fixed mortgage rate of approximately ~~3.69%~~2.81% in October ~~2019,~~2020, a decrease of approximately ~~114~~88 basis points compared to the same period in the prior year, according to Freddie Mac; and

•Consumer sentiment as tracked by Thomson Reuters/University of Michigan decreased from ~~98.6 in October 2018 to~~ 95.5 in October ~~2019.~~2019 to 81.8 in October 2020.

The Company believes there is no single indicator that directly correlates with cabinet remodeling market activity. For this reason, the Company considers other factors in addition to those discussed above as indicators of overall market activity including credit availability, housing affordability and sales reported by the Kitchen Cabinet Manufacturers Association (“KCMA”), a trade

organization that issues the aggregate sales that have been reported by its members including the largest

cabinet manufacturers in the United States. Based on the totality of factors listed above, the Company believes that the cabinet remodeling market ~~decreased~~increased in the ~~low-single~~low to mid-single digits during the second quarter of fiscal ~~2020.~~2021.

The Company’s remodeling sales, which consist of our independent dealer and distributor channel sales and home center retail sales, ~~decreased 4.7%~~increased 14.1% during the second quarter and ~~4.1%~~1.1% during the first half of fiscal ~~2020~~2021 compared to the same prior-year ~~periods.~~period. Our independent dealer and distributor channel ~~decreased~~increased by ~~7.9%~~0.6% during the second quarter and ~~6.3%~~decreased 3.6% during the first half of fiscal ~~2020 when~~2021 compared to the comparable prior-year ~~periods.~~period. Our home center channel ~~decreased~~increased by ~~3.8%~~18.0% during the second quarter and ~~3.4%~~2.4% during the first half of fiscal ~~2020 when~~2021 compared to the comparable prior-year ~~periods.~~period.

New construction sales ~~increased 8.9%~~decreased 7.4% in the second quarter and ~~6.8%~~6.1% in the first half of fiscal ~~2020, when~~2021, compared to the same ~~periods~~period of fiscal ~~2019.~~2020. The Company believes that fluctuations in single-family housing starts are the best indicator of new construction cabinet activity. Assuming a sixty to ninety day lag between housing starts and the installation of cabinetry, single-family housing starts increased ~~1.6%~~9.5% during the second quarter of ~~the Company’s~~ fiscal ~~2020~~2021 over the comparable prior year period. The Company believes ~~it over indexed~~we are seeing a shift to the upper side of the sixty to ninety day lag and that we are tracking to market ~~due to~~demand on a unit basis within made-to-order framed builder direct, which was offset by price, mix and ~~share gains with existing customers.~~declines in our frameless business.

The Company’s total net sales increased ~~0.7%~~4.8% during the second quarter and ~~0.2%~~decreased 2.0% during the first half of fiscal ~~2020~~2021 compared to the same prior-year ~~periods,~~period, which was driven primarily by growth in the ~~builder channel.~~home center channel offset by declines in our new construction channel, primarily within our frameless business.

In the fourth quarter of fiscal 2020 and first quarter of fiscal 2021, the Company implemented nationwide reductions in force, which were substantially completed in the fourth quarter of fiscal 2020 and first quarter of fiscal 2021, respectively. During June 2020, the Company's Board of Directors approved the closure and eventual disposal of its manufacturing plant located in Humboldt, Tennessee. The Company expects to recognize substantially all of the costs related to the closure of the Humboldt facility during fiscal 2021. The Company recorded restructuring charges, net related to these two actions for the three- and six-months ended October 31, 2020 of $2.8 million and $6.3 million, respectively.

The Company earned net income of ~~$22.2~~$22.3 million for the second quarter of fiscal ~~2020,~~2021, compared with ~~$18.5~~$22.2 million in the second quarter of its prior fiscal year, and earned net income of ~~$49.0~~$38.7 million for the first half of fiscal ~~2020,~~2021, compared with ~~$43.3~~$49.0 million in the same period of the prior year.

Results of Operations

Net Sales. Net sales were ~~$428.0~~$448.6 million for the second quarter of fiscal ~~2020,~~2021, an increase of ~~0.7%~~4.8% compared with the second quarter of fiscal ~~2019.~~2020. For the first six months of fiscal ~~2020,~~2021, net sales were ~~$855.4~~$838.7 million, reflecting a ~~0.2% increase~~2.0% decrease compared to the same period of fiscal ~~2019.~~2020. The Company experienced double digit growth in the ~~builder~~repair and remodel sales channel ~~and stock home center business, which was~~during the second quarter of fiscal 2021 offset by declines in the ~~made-to-order home center and independent dealers and distributors channels during the second quarter and~~new construction markets, which were negatively impacted by COVID-19. The first half of fiscal ~~year 2020.~~2021 experienced single digit growth in our home center sales offset by declines in our dealer distributor and new construction sales channels.

Gross Profit. Gross profit margin for the second quarter of fiscal ~~2020~~2021 was ~~20.3%,~~20.0% compared with ~~20.4%~~20.3% for the same period of fiscal ~~2019.~~2020. Gross profit margin ~~was 21.2%~~ for the first half of fiscal ~~2020,~~2021 was 20.2%, compared with ~~21.4% in~~21.2% for the ~~first half~~same period of fiscal ~~2019.~~

2020. Gross profit margin in the second quarter ~~and first half~~ of the current fiscal year was ~~favorably~~negatively impacted by higher ~~sales volumes~~material and ~~improved operating efficiencies. These favorable impacts were partially~~logistics costs, and increases related to wage and retention programs. This was offset by ~~increased tariffs,~~the leverage of our fixed expenses and a one-time benefit received in the quarter related to Employee Retention Credit of $0.8 million. Gross profit margin in the first

half of fiscal 2021 was impacted by higher material and logistics costs, with costs related to wage and retention programs and the deleveraging of our ~~particleboard supply disruption (see discussion below) and duplicate rent~~fixed costs ~~related~~due to ~~our California facility move of $0.4 million and $0.8 million for the three- and six-month periods ended October 31, 2019, respectively.~~lower sales.

Selling and Marketing Expenses. Selling and marketing expenses were 4.8% of net sales in the second quarter and 4.9% of net sales in the first half of fiscal ~~2020,~~2021, compared with ~~5.4%~~4.8% of net sales for each of the same periods in fiscal ~~2019.~~2020. Selling and marketing expenses as a percentage of net sales ~~decreased~~remained flat during the second quarter and first half of fiscal ~~2020~~2021 as a result of ~~ongoing expense controls~~higher launch costs and ~~lower personnel costs.~~incentive expenses offset with a one-time benefit received in the quarter related to Employee Retention Credit of $1.7 million, and leverage created from higher sales in the second quarter of fiscal 2021.

General and Administrative Expenses. General and administrative expenses were 6.7% of net sales in the second quarter of fiscal 2021, compared with 7.0% of net sales in the second quarter of fiscal ~~2020, compared with 6.8%~~2020. General and administrative expenses were 7.2% of net sales in the ~~second quarter~~first half of fiscal ~~2019 and~~2021, compared with 6.9% of net sales in ~~both~~ the ~~first half~~same period of fiscal ~~2020 and 2019.~~2020. The ~~increase~~decrease in general and administrative expenses as a percentage of net sales during the second quarter was driven by the leverage from higher sales, lower spending, impacts of our actions taken in the first quarter of fiscal 2021 and an Employee Retention Credit of $0.4 million, offset by a one-time legal charge of $1.5 million (more fully described in Note R). The increase in general and administrative expenses for the first half of fiscal 2021 was a result of the deleveraging from lower sales, higher incentive ~~compensation costs.~~costs, severance costs that were not part of the previously announced restructurings and a one-time legal charge of $1.5 million offset by lower spending, the impacts of our actions taken in the first fiscal quarter and an Employee Retention Credit of $0.4 million.

Effective Income Tax Rates. The Company’s effective income tax rate for the three- and six-month periods ended October 31, ~~2019 and 2018~~2020 was ~~26.1%~~25.5% and 26.0%, respectively, compared with ~~27.2%~~26.1% and ~~25.4%~~26.0% in the comparable periods in the prior fiscal year. The decrease in the effective tax rate for the second quarter of fiscal 2021 as compared to the comparable period in the prior fiscal year was primarily due to less unfavorable permanent tax items. The overall increase in the effective tax rate for the first half of fiscal 2020 as compared to the comparable period in the prior year was primarily due to a decrease in the benefit from stock-based compensation transactions.

Non-GAAP Financial Measures. We have reported our financial results in accordance with generally accepted accounting principles (GAAP). In addition, we have discussed our financial results using the non-GAAP measures described below.

A reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP is set forth below.

Management believes that these non-GAAP financial measures provide an additional means of analyzing the current period’s results against the corresponding prior period’s results. However, these non-GAAP financial measures should be viewed in addition to, and not as a substitute for, the Company’s reported results prepared in accordance with GAAP. Our non-GAAP financial measures are not meant to be considered in isolation or as a substitute for comparable GAAP measures and should be read only in conjunction with our consolidated financial statements prepared in accordance with GAAP.

Adjusted EPS per diluted share

We use Adjusted EPS per diluted share in evaluating the performance of our business and profitability. Management believes that this measure provides useful information to investors by offering additional ways of viewing the Company’s results by providing an indication of performance and profitability excluding the impact of unusual and/or non-cash items. We define Adjusted EPS per diluted share as diluted earnings per share excluding the per share impact of (1) expenses related to the RSI acquisition and subsequent restructuring charges, (2) non-recurring restructuring charges, (3) the amortization of customer relationship intangibles and trademarks, ~~(3)~~(4) net gain on debt forgiveness and modification and ~~(4)~~(5) the tax benefit of RSI acquisition expenses and subsequent restructuring charges, the net gain on debt forgiveness and modification and the amortization of customer relationship intangibles and trademarks. The amortization of intangible assets is driven by the RSI acquisition and will recur in future periods. Management has determined that excluding amortization of intangible assets from our definition of Adjusted EPS per diluted share will better help it evaluate the performance of our business and profitability and we have also received similar feedback from some of our investors regarding the same.

Adjusted EBITDA and Adjusted EBITDA margin

We use 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. We believe Adjusted EBITDA and Adjusted EBITDA margin allow us to readily view operating trends, perform analytical comparisons and identify strategies to improve operating performance.

We define Adjusted EBITDA as net income adjusted to exclude (1) income tax expense, (2) interest ~~(income)~~ expense, net, (3) depreciation and amortization expense, (4) amortization of customer relationship intangibles and trademarks, (5) expenses related to the RSI acquisition and subsequent restructuring charges, (6) non-recurring restructuring charges, (7) stock-based compensation expense, ~~(7)~~(8) gain/loss on asset disposals, ~~(8) unrealized gain/loss on~~(9) change in fair value of foreign exchange forward contracts and ~~(9)~~(10) net gain on debt forgiveness and modification. We believe Adjusted EBITDA, when presented in conjunction with comparable GAAP measures, is useful for investors because management uses Adjusted EBITDA in evaluating the performance of our business.

We define Adjusted EBITDA margin as Adjusted EBITDA as a percentage of net sales.

(1) Acquisition and restructuring related expenses are comprised of expenses related to the acquisition of RSI ~~acquisition and~~Home Products, Inc., the subsequent restructuring charges that the Company ~~incurred.~~incurred related to the acquisition.

(2) Nonrecurring restructuring charges are comprised of expenses incurred related to the permanent layoffs due to COVID-19 and the closure of the manufacturing plant in Humboldt, Tennessee. The three- six-months ended October 31, 2020 includes accelerated depreciation expense of $0.2 million and $1.3 million, respectively, related to Humboldt.

(3) In the normal course of business the Company is subject to risk from adverse fluctuations in foreign exchange rates. The Company manages these risks through the use of foreign exchange forward contracts. The changes in the fair value of the forward contracts are recorded in other (income) expense in the operating results.

A reconciliation of Adjusted EBITDA and Adjusted EBITDA margin as projected for fiscal ~~2020~~2021 is not provided because we do not forecast net income as we cannot, without unreasonable effort, estimate or predict with certainty various components of net income.

Adjusted EBITDA. Adjusted EBITDA for the second quarter of fiscal ~~2020~~2021 was ~~$62.9~~$65.0 million or ~~14.7%~~14.5% of net sales compared to ~~$60.8~~$62.9 million or ~~14.3%~~14.7% of net sales for the same quarter of the prior fiscal year. Adjusted EBITDA for the first ~~six months~~half of ~~the~~ fiscal ~~year~~2021 was ~~$132.5~~$121.9 million or ~~15.5%~~14.5% of net sales compared to ~~$128.9~~$132.5 million or ~~15.1%~~15.5% of net sales for the same period of the prior fiscal year. The increase in Adjusted EBITDA for the second quarter of fiscal 2021 is primarily due to increased sales, ~~growth, improved operating efficiencies~~leveraging of fixed costs across the Company, lower spending and ~~lower selling~~positive impacts of the actions taken in the first fiscal quarter of 2021.The decrease in Adjusted EBITDA for the first half of fiscal 2021 is primarily due to a decrease in sales due to COVID-19 and ~~marketing expenses.~~deleveraging of our fixed costs.

Outlook. The impact on our fiscal 2021 financial results as a result of the COVID-19 pandemic are uncertain.The Company’s net sales were up 4.8% during the second quarter of fiscal 2021.The Company ~~tracks~~currently expects that sales will reflect mid to upper single digit growth in the third quarter of fiscal 2021 versus the same period of the prior year.This growth rate is very dependent upon overall industry and economic growth, both of which are subject to the ever-changing COVID-19 environment. Margins will be challenged with increases in labor costs and product launch costs.The Company expects adjusted EBITDA margins for the third quarter of fiscal 2021 to increase compared to the same period of the prior year.The Company has taken actions to improve its cash position and as of October 31, 2020 had $112.6 million of cash on hand and access to $93.0 million of additional availability under its revolver.We will continue to monitor the situation closely and may implement further measures to provide additional financial flexibility as we work to protect our cash position and liquidity.

The Company continues to track several metrics, including but not limited to housing starts, existing home sales, mortgage interest rates, new jobs growth, GDP growth and consumer confidence, which it believes are leading indicators of overall demand for kitchen and bath cabinetry. The Company believes that housing starts will ~~remain~~continue to show positive growth, driven by, low ~~unemployment rates, low~~ mortgage rates, ~~and~~ growth in new household ~~formation. However,~~formation and expansion into rural areas, although the ~~Company expects~~current high unemployment rates and the unknown impacts for COVID-19 are cause for concern.

Additional risks and uncertainties that ~~while the cabinet remodeling market will show modest improvement during fiscal 2020, it will continue to be below historical averages.~~

The Company expects that industry-wide cabinet remodeling sales will continue to be challenged until economic trends remain consistently favorable. Growth is expected at a low single digit rate duringcould affect the Company’s ~~fiscal 2020. The Company’s home center market share is expected to remain at normalized levels for fiscal 2020, however~~results of operations and financial condition are discussed elsewhere in this ~~is heavily dependent upon competitive promotional activity. The Company expects to gain market share~~report, including under “Forward-Looking Statements,” and elsewhere in ~~its growing independent dealer~~“Management’s Discussion and ~~distributor channel, however we believe the overall market will continue to soften with relatively flat growth.~~

~~Based~~Analysis of Financial Condition and Results of Operations,” and in our Annual Report on available information, it is expected that new residential construction starts will grow approximately low single digits during fiscal 2020. The Company’s new residential construction direct business is expected to increase at a faster rate than the market rate for single family housing starts due to continued market share gains.

In total, the Company expects that it will grow sales at a low single digit rate in fiscal 2020. This growth rate is very dependent upon overall industry and economic growth. Margins will be challenged with increases in labor costs, raw materials, tariffs and transportation rates. The Company will be negatively impacted by the move of one of our California facilities and incremental merchandising expenses and particle board supply disruption costs. The Company expects adjusted EBITDA margins for fiscal 2020 to remain flat with prior year results.

~~Particleboard Supply~~

Due to a catastrophic fire at a key Southeast supplier plant in May 2019 and the supplier’s subsequent decision to shutter operations at two additional plants, the Company is currently experiencing higher costsin the supply of particleboard, a key input component to the build of our cabinetry. The Company has worked diligently to qualify additional suppliers, and our product engineering team has successfully transitioned to acceptable substitutions with a performance level that meets or exceeds that of particleboard.

We expect stable supply lines for particleboard will once again be established during the third quarter of fiscal 2020. The Company has recognized costs in excess of insurance reimbursements related to our particleboard supply disruption of $0.9 million and $2.4 millionForm 10-K for the ~~three-~~fiscal year ended April 30, 2020, including under Item 1A. “Risk Factors,” Item 7. “Management’s Discussion and ~~six-month periods ended October 31, 2019. Management currently expects that these events will have a negative impact on at least our third quarter~~Analysis of ~~fiscal 2020 as the continued use~~Financial Condition and Results of ~~substituted materials will increase our costs. Our results could continue to be negatively impacted by product substitution costs~~Operations,” and ~~incremental transportation costs of $1.0 to $2.0 million per quarter until fully resolved.~~Item 7A. “Quantitative and Qualitative Disclosures about Market Risk.”

The Company maintains property insurance, including business interruption/dependent property coverage with a limit of $5 million. The company has realized a $2.9 million reimbursement to date on the $5 million limit. The Company is working with

its insurance carrier to determine the applicability of the coverage for the event. We expect the level of insurance proceeds will cover approximately 60% of the losses we incur due to these events, but there can be no assurance that we will ultimately be able to collect such amounts and such collection may occur in a different reporting period from the reporting period where we experience losses due to these events.

Liquidity and Capital Resources

The Company’s cash and cash equivalents ~~and investments in certificates of deposit~~ totaled ~~$51.4~~$112.6 million at October 31, ~~2019,~~2020, representing a ~~$7.7~~$15.5 million ~~decrease~~increase from its April 30, ~~2019~~2020 levels. At October 31, ~~2019,~~2020, total long-term debt (including current maturities) was ~~$ 620.3~~$558.0 million, a decrease of ~~$71.2~~$39.1 million from its balance at April 30, ~~2019.~~2020. The Company’s ratio of long-term debt to total capital was ~~47.8%~~42.7% at October 31, ~~2019,~~2020, compared with ~~52.6%~~45.9% at April 30, ~~2019.~~2020.

The Company’s main source of liquidity is its cash and cash equivalents on hand and cash generated from its operating activities. The Company can also borrow up to $100 million under the Revolving Facility. Approximately ~~$94.5~~$93.0 million was available under this facility as of October 31, ~~2019.~~2020.

As of October 31, ~~2019, $134~~2020, $102.0 million was outstanding on each of the Initial Term Loan and the Delayed Draw Term Loan for a total of ~~$268.0~~$204.0 million. Amounts outstanding under the Credit Facilities bear interest based on a fluctuating rate measured by reference to either, at the Company’s option, a base rate plus an applicable margin ranging between 0.00% and 1.00% or

LIBOR plus an applicable margin ranging between 1.00% and 2.00%, with the applicable margin being determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” The Company also incurs a quarterly commitment fee on the average daily unused portion of the Revolving Facility during the applicable quarter at a rate per annum also determined by reference to the Company’s then-current “Total Funded Debt to EBITDA Ratio.” As of October 31, ~~2019,~~2020, the applicable margin with respect to base rate loans and LIBOR loans was 0.50% and 1.50%, respectively, and the commitment fee was ~~0.18%~~0.175%.

The Company is required to repay the aggregate outstanding amounts under the Initial Term Loan and the Delayed Draw Term Loan in certain specified quarterly installments that began on April 30, 2018. The Credit Facilities mature on December 29, 2022.

As of October 31, ~~2019,~~2020, the Company’s previously issued $350 million in aggregate principal amount of Senior Notes remained outstanding. Interest on the Senior Notes accrues at an annual rate of 4.875% and is payable semi-annually in arrears on March 15 and September 15 of each year. The Senior Notes mature on March 15, 2026.

The Credit Agreement and the indenture governing the Senior Notes restrict the ability of the Company and certain of the Company’s subsidiaries to, among other things, incur additional indebtedness, create additional liens, make certain investments, dispose of assets or engage in a merger or consolidation, engage in certain transactions with affiliates, and make certain restricted payments, including the payment of dividends or the repurchase or redemption of stock, subject, in each case, to the various exceptions and conditions described in the Credit Agreement and the indenture governing the Senior Notes.

See Note L--Loans Payable and Long-Term Debt for additional information about the Credit Facilities and Senior Notes and a discussion of our compliance with the covenants in the Credit Agreement and the indenture.

Cash provided by operating activities in the first six months of fiscal ~~2020~~2021 was ~~$86.2~~$76.6 million, compared with ~~$107.7~~$86.2 million in the comparable period of fiscal ~~2019.~~2020. The decrease in the Company’s cash from operating activities was driven primarily by a decrease in net income and cash outflows from customer receivables and inventories, offset by cash inflows from ~~income taxes and accrued compensation and related expenses.~~accounts payable.

The Company’s investing activities primarily consist of ~~purchases and maturities of certificates of deposit,~~ investment in property, plant and equipment and promotional displays. Net cash used for investing activities was ~~$18.3~~$18.9 million in the first six months of fiscal ~~2020,~~2021, compared with ~~$19.7~~$18.3 million in the comparable period of fiscal ~~2019.~~2020. The ~~decrease~~increase in cash used was due to a decrease in cash received from maturities of certificates of ~~deposit, offset by the prior year payment of the working capital adjustment related to the acquisition of RSI.~~deposit.

During the first six months of fiscal ~~2020,~~2021, net cash used by financing activities was ~~$74.2~~$42.1 million, compared with ~~$108.5~~$74.2 million in the comparable period of the prior fiscal year. The decrease in cash used was primarily driven by the Company’s payments of long-term debt of $41.3 million in the first half of fiscal 2021 compared with $73.2 million ~~a decrease of $20.9 million, and no stock repurchases~~ in the ~~current year, a decrease of $13.2 million.~~prior year.

On August 22, 2019, the Company’s Board of Directors (the “Board”) authorized a stock repurchase program of up to $50 million of the Company’s common shares. Repurchases may be made from time to time in the open market, or through privately negotiated transactions or otherwise, in compliance with applicable laws, rules and regulations, at prices and on terms the Company deems

appropriate and subject to the Company's cash requirements for other purposes, compliance with the covenants under the Credit Agreement and the indenture governing the Senior Notes, and other factors management deems relevant. The authorization does not obligate the Company to acquire a specific number of shares during any period, and the authorization may be modified, suspended or discontinued at any time at the discretion of the Board. Management expects to fund any share repurchases using available cash and cash generated from operations. Repurchased shares will become authorized but unissued common shares. The Company did not repurchase any of its shares during the fiscal quarter ended October 31, ~~2019.~~2020.

Cash flow from operations combined with accumulated cash and cash equivalents on hand are expected to be more than sufficient to support forecasted working capital requirements, service existing debt obligations and fund capital expenditures for the remainder of fiscal ~~2020.~~2021.

Seasonal and Inflationary Factors

Our business has been subject to seasonal influences, with higher sales typically realized in our first and fourth fiscal quarters. General economic forces and changes in our customer mix have reduced seasonal fluctuations in revenue over the past few years. The costs of the Company’s products are subject to inflationary pressures and commodity price fluctuations. The

Company has generally been able over time to recover the effects of inflation and commodity price fluctuations through sales price increases.

Critical Accounting Policies

The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. There have been no significant changes to the Company’s critical accounting policies as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, ~~2019.~~2020.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The costs of the Company’s products are subject to inflationary pressures and commodity price fluctuations. The Company has generally been able, over time, to recover the effects of inflation and commodity price fluctuations through sales price increases.

The Revolving Facility, Initial Term Loan and Delayed Draw Term Loan include a variable interest rate component. As a result, we are subject to interest rate risk with respect to such floating-rate debt. A 100 basis point increase in the variable interest rate component of our borrowings as of October 31, ~~2019~~2020 would increase our annual interest expense by approximately ~~$2.7~~$2.0 million.

The Company enters into foreign exchange forward contracts principally to offset currency fluctuations in transactions denominated in certain foreign currencies, thereby limiting our exposure to risk that would otherwise result from changes in exchange rates. The periods of the foreign exchange forward contracts correspond to the periods of the transactions denominated in foreign currencies.

The Company does not currently use commodity or interest rate derivatives or similar financial instruments to manage its commodity price or interest rate risks.

Item 4. Controls and Procedures

Senior management, including the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as of October 31, ~~2019.~~2020. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that the Company's disclosure controls and procedures are not effective as of October 31, 2019 due to the material weakness in internal control over financial reporting involving ineffective general information technology controls ("GITCs") related to RSI that was disclosed in Part II, Item 9A of our Annual Report on Form 10-K for the fiscal year ended April 30, 2019 (our "2019 Annual Report"). effective.

During the quarter ended October 31, 2019, we continued to implement our remediation plan described in Part II, Item 9A of our 2019 Annual Report, which includes establishing additional training for certain RSI personnel to ensure a clear understanding of risk assessment and monitoring activities related to automated processes and IT systems and GITCs, documenting and executing robust policies and procedures over the GITC environment with a focus on user and privileged access controls and their impact on program change and computer operation controls, defining and documenting clear roles and responsibilities for certain departments to perform complete and timely user access reviews, and implementing consistent documentation requirements and retention to evidence the operation of GITC access controls. We are committed to maintaining a strong internal control environment

and implementing measures designed to help ensure that control deficiencies contributing to the material weakness are remediated as soon as possible. The weakness will not be considered remediated until the applicable controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. We expect that the remediation of this material weakness will be completed prior to the end of fiscal 2020.

~~Except as described above, there~~There has been no change in the Company's internal control over financial reporting that occurred during the quarter ended October 31, ~~2019~~2020 that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

The Company is involved in various suits and claims in the normal course of business all of which constitute ordinary, routine litigation incidental to the Company’s business. The Company is not party to any material litigation that does not constitute ordinary, routine litigation incidental to its business.

Item 1A. Risk Factors

Risk factors that may affect the Company’s business, results of operations and financial condition are described in Part I, Item 1A, “Risk Factors” of the Company’s Annual Report on Form 10-K for the fiscal year ended April 30, ~~2019~~2020 and there have been no material changes from the risk factors disclosed. Additional risks are discussed elsewhere in this report, including in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the headings “Forward-Looking Statements” and “Outlook.”

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	Three Months Ended						Six Months Ended
	October 31,						October 31,
(in thousands)	2019			2018			2019			2018
Interest cost	$	1,494		$	1,568		$	2,987		$	3,135
Expected return on plan assets	(2,082		)	(2,128		)	(4,163		)	(4,255		)
Recognized net actuarial loss	423			412			846			824

Net periodic pension benefit	$	(165	)	$	(148	)	$	(330	)	$	(296	)


	Three Months Ended				Six Months Ended
	October 31,				October 31,
(in thousands)	2020		2019		2020		2019
Interest cost	$	1,166	$	1,494	$	2,331	$	2,987
Expected return on plan assets	(2,108)		(2,082)		(4,215)		(4,163)
Recognized net actuarial loss	440		423		880		846

Net periodic pension benefit	$	(502)	$	(165)	$	(1,004)	$	(330)


Reconciliation of Net Income to Adjusted Net Income	Reconciliation of Net Income to Adjusted Net Income													Reconciliation of Net Income to Adjusted Net Income
		Three Months Ended						Six Months Ended							Three Months Ended				Six Months Ended
		October 31,						October 31,							October 31,				October 31,
(in thousands, except share data)		2019			2018			2019			2018			(in thousands, except share data)	2020		2019		2020		2019

Net income (GAAP)		$	22,163		$	18,488		$	49,044		$	43,255		Net income (GAAP)	$	22,256	$	22,163	$	38,741	$	49,044
Add back:														Add back:
Acquisition related expenses		(130		)	649			(89		)	3,410
Amortization of customer relationship intangibles and
trademarks		12,250			12,250			24,500			24,500
Acquisition and restructuring related expenses														Acquisition and restructuring related expenses	61		$	(130)	121		(89)

Non-recurring restructuring charges														Non-recurring restructuring charges	2,791		$	—	6,251		—
Amortization of customer relationship intangibles and trademarks														Amortization of customer relationship intangibles and trademarks	12,250		$	12,250	24,500		24,500

Tax benefit of add backs		(3,103		)	(3,291		)	(6,200		)	(7,089		)	Tax benefit of add backs	(3,850)		$	(3,103)	(7,903)		(6,200)
Adjusted net income (Non-GAAP)		$	31,180		$	28,096		$	67,255		$	64,076		Adjusted net income (Non-GAAP)	$	33,508	$	31,180	$	61,710	$	67,255

Weighted average diluted shares		16,955,835			17,588,449			16,932,236			17,589,767			Weighted average diluted shares	17,047,296		16,955,835		17,036,652		16,932,236
Adjusted EPS per diluted share (Non-GAAP)		$	1.84		$	1.60		$	3.97		$	3.64		Adjusted EPS per diluted share (Non-GAAP)	$	1.97	$	1.84	$	3.62	$	3.97



Exhibit Number			Description

3.1 (a)			Articles of Incorporation as amended effective August 12, 1987 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 10-Q for the quarter ended January 31, 2003; Commission File No. 000-14798).

3.1 (b)			Articles of Amendment to the Articles of Incorporation effective September 10, 2004 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K as filed on August 31, 2004; Commission File No. 000-14798).

3.2			Bylaws – as amended and restated ~~November 27, 2018~~August 20, 2020 (incorporated by reference to Exhibit 3.1 to the Registrant’s Form 8-K as filed on ~~November 28, 2018;~~August 21, 2020; Commission File No. 000-14798).

10.1(g)			Amendment No. 3, dated as of September 16, 2020, to the Credit Agreement, dated as of December 29, 2017, among American Woodmark Corporation, the lenders from time to time party thereto and Wells Fargo Bank, National Association, as administrative agent (filed herewith).

10.8(a)			Employment Agreement for Mr. M. Scott Culbreth (incorporated by reference to Exhibit 10.1 to the Registrant's Form 8-K/A filed on August 25, 2020; Commission File No. 000-14798).

10.8(b)			Employment Agreement for Mr. Paul Joachimczyk (incorporated by reference to Exhibit 10.2 to the Registrant's Form 8-K/A filed on August 25, 2020; Commission File No. 000-14798).

10.8(c)			Employment Agreement for Ms. Teresa M. May (incorporated by reference to Exhibit 10.8(c) to the Registrant’s Form 10-Q filed on August 26, 2020; Commission File No. 000-14798).

31.1			Certification of the Chief Executive Officer Pursuant to Rule 13a-14(a) of the Exchange Act (Filed Herewith).

31.2			Certification of the Chief Financial Officer Pursuant to Rule 13a-14(a) of the Exchange Act (Filed Herewith).

32.1			Certification of the Chief Executive Officer and Chief Financial Officer Pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (Furnished Herewith).

101			Interactive Data File for the Registrant’s Quarterly Report on Form 10-Q for the quarter ended October 31, ~~2019~~2020 formatted in Inline XBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Income, (iii) Condensed Consolidated Statements of Comprehensive Income, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements (Filed Herewith).

104			Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101).



	October 31, 2019			April 30, 2019
ASSETS
Current assets
Cash and cash equivalents	$	51,435		$	57,656
Investments - certificates of deposit	—			1,500
Customer receivables, net	120,118			125,901
Inventories	119,758			108,528
Income taxes receivable	2,704			1,009
Prepaid expenses and other	15,009			11,441
Total current assets	309,024			306,035
Property, plant and equipment, net	206,899			208,263
Operating lease right-of-use assets	89,662			—
Customer relationship intangibles, net	190,278			213,111
Trademarks, net	3,889			5,555
Goodwill	767,612			767,612
Promotional displays, net	13,599			13,058
Deferred income taxes	766			773
Other assets	16,935			15,524
TOTAL ASSETS	$	1,598,664		$	1,529,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	62,850		$	61,277
Current maturities of long-term debt	2,320			2,286
Short-term lease liability - operating	19,453			—
Accrued compensation and related expenses	50,528			54,906
Accrued marketing expenses	16,002			12,979
Other accrued expenses	18,256			18,142
Total current liabilities	169,409			149,590
Long-term debt, less current maturities	617,930			689,205
Deferred income taxes	59,636			64,749
Long-term lease liability - operating	72,067			—
Other long-term liabilities	4,714			6,034
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 October 31, 2019: 16,921,547; at April 30, 2019: 16,849,026	357,304			352,424
Retained earnings	366,464			317,420
Accumulated other comprehensive loss - Defined benefit pension plans	(48,860		)	(49,491		)
Total shareholders' equity	674,908			620,353
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	1,598,664		$	1,529,931
See notes to unaudited condensed consolidated financial statements.



Cash and cash equivalents, end of period	$	51,435	$	57,862

Supplemental cash flow information:
Non-cash investing and financing activities:
Property, plant and equipment included in accounts payable at period end	$	901	$	2,619

Cash paid during the period for:
Interest	$	15,025	$	19,131
Income taxes	$	24,573	$	9,976

See notes to unaudited condensed consolidated financial statements.



	Three Months Ended October 31,				Six Months Ended October 31,
(in thousands)	2019		2018		2019		2018
Cost of sales and distribution	$	277	$	185	$	492	$	344
Selling and marketing expenses	265		217		473		385
General and administrative expenses	636		434		1,110		893
Stock-based compensation expense	$	1,178	$	836	$	2,075	$	1,622



	Fair Value Measurements
	As of October 31, 2019
	Level 1		Level 2		Level 3
ASSETS:
Mutual funds	$	790	$	—	$	—
Foreign exchange forward contracts	—		96		—
Total assets at fair value	$	790	$	96	$	—

	As of April 30, 2019
	Level 1		Level 2		Level 3
ASSETS:
Certificates of deposit	$	1,500	$	—	$	—
Mutual funds	1,604		—		—
Total assets at fair value	$	3,104	$	—	$	—


(in thousands)	Operating leases		Financing leases
Year ending April 30,
2021	$	12,157	$	1,247
2022	21,928		1,766
2023	21,250		1,300
2024	19,345		1,001
2025	17,157		318
Thereafter	57,709		92
Total lease payments	149,546		5,724
Less imputed interest	(16,516)		(259)
Total lease liability	133,030		5,465
Current maturities	(19,519)		(2,140)
Lease liability - long-term	$	113,511	$	3,325
Lease assets	$	128,125	$	10,013



Fiscal Year	Operating (in thousands)		Capital (in thousands)
2020	$	17,943	2,456
2021	17,649		1,953
2022	12,435		1,013
2023	10,636		705
2024	9,854		701
2025 (and thereafter)	38,871		166
	$	107,388	$	6,994
Less amounts representing interest (2% - 6.5%)			(349		)
Total obligations under capital leases			$	6,645


Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents	Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents													Reconciliation of Adjusted Non-GAAP Financial Measures to the GAAP Equivalents
		Three Months Ended						Six Months Ended							Three Months Ended						Six Months Ended
		October 31,						October 31,							October 31,						October 31,
(in thousands)		2019			2018			2019			2018			(in thousands)	2020			2019			2020			2019

Net income (GAAP)		$	22,163		$	18,488		$	49,044		$	43,255		Net income (GAAP)	$	22,256		$	22,163		$	38,741		$	49,044
Add back:														Add back:
Income tax expense		7,815			6,921			17,272			14,693			Income tax expense	7,627			7,815			13,597			17,272
Interest expense, net		7,436			8,943			15,524			18,368			Interest expense, net	5,981			7,436			12,011			15,524
Depreciation and amortization expense		12,164			11,458			24,027			22,226			Depreciation and amortization expense	13,019			12,164			25,978			24,027
Amortization of customer relationship intangibles and trademarks		12,250			12,250			24,500			24,500
Amortization of customer relationship intangibles and														Amortization of customer relationship intangibles and
trademarks														trademarks	12,250			12,250			24,500			24,500
EBITDA (Non-GAAP)		$	61,828		$	58,060		$	130,367		$	123,042		EBITDA (Non-GAAP)	$	61,133		$	61,828		114,827			130,367
Add back:														Add back:
Acquisition related expenses (1)		(130		)	649			(89		)	3,410
Change in foreign exchange forward contracts (2)		(152		)	993			(96		)	199
Acquisition and restructuring related expenses (1)														Acquisition and restructuring related expenses (1)	61			(130)			121			(89)
Non-recurring restructuring charges (2)														Non-recurring restructuring charges (2)	2,791			—			6,251			—

Change in fair value of foreign exchange forward contracts (3)														Change in fair value of foreign exchange forward contracts (3)	(566)			(152)			(1,821)			(96)

Stock-based compensation expense		1,178			836			2,075			1,622			Stock-based compensation expense	1,266			1,178			2,227			2,075
Loss on asset disposal		151			230			217			584			Loss on asset disposal	286			151			332			217
Adjusted EBITDA (Non-GAAP)		$	62,875		$	60,768		$	132,474		$	128,857		Adjusted EBITDA (Non-GAAP)	$	64,971		$	62,875		121,937			132,474

Net Sales		$	428,016		$	424,878		$	855,381		$	853,840		Net Sales	$	448,583		$	428,016		$	838,670		$	855,381
Adjusted EBITDA margin (Non-GAAP)		14.7		%	14.3		%	15.5		%	15.1		%	Adjusted EBITDA margin (Non-GAAP)	14.5		%	14.7		%	14.5		%	15.5		%



			/s/ ~~M. Scott Culbreth~~Paul Joachimczyk
			~~M. Scott Culbreth~~Paul Joachimczyk
			~~Senior~~ Vice President and Chief Financial Officer

			Date: November ~~26, 2019~~24, 2020
			Signing on behalf of the registrant and
			as principal financial and accounting officer