SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Form 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended April 30, 1999 Commission File Number 0-14798 AMERICAN WOODMARK CORPORATION (Exact name of the registrant as specified in its charter) VIRGINIA 54-1138147 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3102 Shawnee Drive, Winchester, Virginia 22601 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (540) 665-9100 Securities registered pursuant to Section 12(b) of the Act: Name of each exchange on Title of each class which registered ------------------- ------------------------ None None Securities registered pursuant to section 12(g) of the Act: Common Stock (no par value) (Title of class) 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 [X] No [ ] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [X] The aggregate market value of the registrant's Common Stock, no par value, held by non-affiliates of the registrant at June 28, 1999 was $281,272,393 based on the closing price on that date on the Nasdaq National Market. As of June 28, 1999, 7,923,166 shares of the Registrant's Common Stock were outstanding. DOCUMENTS INCORPORATED BY REFERENCE Portions of Registrant's the Annual Report to Shareholders for the fiscal year ended April 30, 1999 ("1999 Annual Report") are incorporated by reference into Parts I and II of this Form 10-K. Portions of the Registrant's definitive Proxy Statement for the Annual Meeting of Shareholders to be held on August 24, 1999 (Proxy Statement) are incorporated by reference into Part III of this Form 10-K.
PART I Item 1. BUSINESS The Company manufactures and distributes kitchen cabinets and vanities for the remodeling and new home construction markets. The Company was formed in 1980 by the four principal managers of the Boise Cascade Cabinet Division through a leveraged buyout of that division. The Company was operated privately until 1986 when it became a public company through a common stock offering. The Company currently offers custom cabinetry and framed stock cabinets. The Company's framed stock cabinets are available in approximately 130 different cabinet lines, ranging in price from relatively inexpensive to medium-priced styles. Styles vary by design and color from natural wood finishes to low- pressure laminate surfaces. The Company's entire product offering of stock cabinets includes 40 door designs and seven colors. Stock cabinets consist of a common box with standard interior components and an oak, cherry, maple or hickory front frame. The Company's custom cabinetry is available in approximately 50 door styles with 20 basic colors, 8 glazes and two sheens to choose from, although we offer to match any color. The Company has approximately 6,000 sku's but will make almost any product a kitchen designer can create. The Company sells the Company's products under the brand names of American Woodmarkr, Crestwoodr, Timberlaker, Scots Prider, Coventry and Caser cabinets and Knappr. The Company's products are sold on a national basis through three market channels: independent dealer/distributors, home centers and major builders. The Company distributes its products to each market channel directly from the Company's four assembly plants and through a logistics network consisting of five service centers located in key areas throughout the United States. The primary raw materials the Company uses include oak, maple, cherry and hickory lumber. Additional raw materials include paint, particleboard, manufactured components and hardware. The Company currently purchases paint from one supplier; however, other sources are available. The Company's other raw materials are purchased from more than one source and are readily available. The Company operates in a highly fragmented industry that is composed of several thousand local, regional and national manufacturers. The Company believes that no other company in the industry has more than a 15% share of the market. The Company also believes that American Woodmark is one of the five largest manufacturers of kitchen cabinets in the United States. 2
The Company's business has historically been subjected to seasonal influences, with higher sales typically realized in the second and fourth fiscal quarters. General economic forces and changes in the Company's customer mix have reduced seasonal fluctuations in the Company's revenue over the past few years. During the last fiscal year, the Company had two customers, The Home Depot and Lowe's Companies, Inc., which each accounted for more than 10% of The Company's sales. As of April 30, 1999, the Company had 3,087 employees. Approximately 29% of the Company's employees are represented by labor unions. The Company believes that the Company's employee relations are good. Item 2. PROPERTIES The Company leases its Corporate Office that is located in Winchester, Virginia. In addition, the Company leases one and owns eight manufacturing facilities located primarily in the eastern United States. The Company also leases eleven office centers located throughout the United States that support the distribution of products to each market channel. Item 3. LEGAL PROCEEDINGS In response to this Item, the information under "Legal Matters" under Note I to the Financial Statements in the 1999 Annual Report is incorporated herein by reference. Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS No matters were submitted to a vote of security holders during the fourth quarter of fiscal 1999. 3
EXECUTIVE OFFICERS OF THE REGISTRANT The executive officers of the Registrant as of April 30, 1999 are as follows: Name Age Position(s) Held During Past Five Years William F. Brandt, Jr. 53 Chairman of the Board from August 1996 to present; Chairman and Chief Executive Officer from 1995 to 1996; Chairman and President from 1980 to 1995 James J. Gosa 51 President and Chief Executive Officer from August 1996 to present; President and Chief Operating Officer from 1995 to 1996; Executive Vice President from 1993 to 1995 David L. Blount 51 Senior Vice President, Manufacturing from May 1999 to Present; Vice President, Manufacturing from May 1995 to April 1999; Vice President, Component Manufacturing from 1994 to 1995 Kent B. Guichard 43 Senior Vice President, Finance and Chief Financial Officer from May 1999 to present; Vice President, Finance and Chief Financial Officer from November 1995 to April 1999; Vice President, Finance from 1993 to 1995 Philip S. Walter 48 Senior Vice President and General Manager, New Business Development from May 1999 to present; Vice President and General Manager, New Business Development from August 1997 to April 1999; President, Professional Turf Products, Inc. and Managing Director, National Support Network, Inc. (subsidiaries of The Toro Company) from January 1996 to December 1996; Director, Marketing and Sales, The Toro Company, Irrigation Division, from 1990 to 1996 4
Name Age Position(s) Held During Past Five Years Ian J. Sole 43 Senior Vice President, Sales and Marketing from May 1999 to present; Vice President, Sales and Marketing from October 1997 to April 1999; Vice President, International, Hamilton Beach Proctor-Silex from 1996 to 1997; Vice President, Marketing, Hamilton Beach Proctor-Silex from 1991 to 1995 PART II Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDERS MATTERS In response to this Item, the information under "Market Information" in the 1999 Annual Report is incorporated herein by reference. Item 6. SELECTED FINANCIAL DATA In response to this Item, the information under "Five Year Selected Financial Information" in the 1999 Annual Report is incorporated herein by reference. Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In response to this Item, the information under "Management's Discussion and Analysis" in the 1999 Annual Report is incorporated herein by reference. Item 7a. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK: In respect to this item, the information under the caption "Other Comments" in "Management's Discussion and Analysis" in the 1999 Annual Report is incorporated herein by reference in Item 7. Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA In response to this Item, the Consolidated Financial Statements, Notes to the Consolidated Financial Statements, the information under "Quarterly Results of Operations," and the Report of Ernst & Young LLP, Independent Auditors, in the 1999 Annual Report are incorporated herein by reference. Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. 5
PART III Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT In accordance with general instruction G(3) of Form 10-K, the information called for by Item 10 of Part III is incorporated by reference to the Proxy Statement, except for information concerning the executive officers of the Registrant which is included in Part I of this report under the caption "Executive Officers of the Registrant." Item 11. EXECUTIVE COMPENSATION In response to this Item, and in accordance with Instruction G(3) of Form 10-K, the information under "Compensation of Executive Officers" in the Proxy Statement is incorporated herein by reference. Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT In response to this Item, and in accordance with Instruction G(3) of Form 10-K, the information under "Principal Shareholders of the Company" in the Proxy Statement is incorporated herein by reference. Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS In response to this Item, and in accordance with Instruction G(3) of Form 10-K, the information under "Certain Transactions" in the Proxy Statement is incorporated herein by reference. Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K (a) 1. Financial Statements The following financial statements of American Woodmark Corporation are incorporated in this form 10-K by reference in Item 8: Consolidated Balance Sheets as of April 30, 1999 and 1998 Consolidated Statement of Income and Retained Earnings - for each year of the three-year period ended April 30, 1999 Consolidated Statement of Cash Flows - for each year of the three-year period ended April 30, 1999 Notes to Consolidated Financial Statements Report of Independent Auditors 6
(a) 2. Financial Statement Schedules The following financial statement schedule is filed as a part of this Form 10-K: Schedule II - Valuation of Qualifying Accounts for each year of the three-year period ended April 30, 1999 (a) 3. Exhibits Exhibit No. Description - ------------ ------------ 3.1 - Articles of Incorporation as amended effective August 12, 1987 (3) 3.2 (a) - Bylaws (1) 3.2 (b) - Amendment to Bylaws on June 22, 1994 (7) 3.2 (c) - Amendment to Bylaws on June 17, 1999 The Articles of Incorporation and Bylaws of the [Registrant] as currently in effect (incorporated by reference to Exhibits 3.1, 3.2(a), 3.2(b) and 3.2(c) hereto) 4.2 - Amended and Restated Stockholders' Agreement (1) Pursuant to Regulation S-K, Item 601(b)(4)(iii), instruments that define the rights of holders of the Registrant's long-term debt securities, where the long-term debt securities authorized under each such instrument do not exceed 10% of the Registrant's total assets, have been omitted and will be furnished to the Securities and Exchange Commission upon request. 10.1 (a) - Amended and Restated Loan Agreement between the Company and NationsBank of North Carolina as of March 23, 1992 (5) 10.1 (b) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of September 8, 1992 (6) 10.1 (c) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of June 25, 1993 (6) 10.1 (d) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of March 15, 1993 (6) 10.1 (e) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of August 31, 1993 (7) 10.1 (f) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of March 15, 1994 (7) 7
10.1 (g) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of July 27, 1994 (8) 10.1 (h) - Amendment to Amended and Restated Loan Agreement and to Reimbursement Agreements as of July 8, 1996 (12) 10.1 (i) - Amendment to Amended and Restated Loan Agreement as of August 31, 1996 (12) 10.2 (a) - Security Agreement between the Company and NationsBank of North Carolina as of March 23, 1992(5) 10.2 (b) - Amendment to Security Agreement as of August 31, 1993 (7) 10.2 (c) - Second Amendment to Security Agreement as of August 31, 1996 (12) 10.3 (a) - Bond Purchase Agreement and Agreement of Sale - The Industrial Development Authority of the County of Mohave, Arizona (2) 10.3 (b) - Bond Purchase Agreement and Agreement of Sales - Stephens County Development Authority (3) 10.3 (c) - Loan Agreement between the Company and the County Commission of Hardy County, West Virginia as of December 1, 1991, relating to bond financing (5) 10.3 (d) - Promissory Note between the Company and County Commission of Hardy County, West Virginia as of December 18, 1991 (5) 10.3 (e) - Reimbursement Agreement between the Company and NationsBank as of December 1, 1991 (5) 10.3 (f) - Amendment to Reimbursement Agreements as of June 15, 1992 (5) 10.4 (a) - Deed of Trust and Security Agreement - Hardy County, West Virginia, as amended (1) 10.5 (a) - Security Agreement between the Company and the West Virginia Economic Development Authority (1) 10.5 (b) - Deed of Trust - Hardy County, West Virginia (1) 10.6 (a) - Lease between the Company and Amwood Associates (1) 10.6 (b) - Lease between the Company and the West Virginia Industrial and Trade Jobs Development Corporation (3) 10.6 (c) - Lease between the Company and the West Virginia Industrial and Trade Jobs Development Corporation (3) 8
10.7 (a) - 1986 Employee Stock Option Plan (1) 10.7 (b) - Form of Option Agreement and Stock Purchase Agreement (1) 10.7 (c) - 1995 Non-Employee Directors Stock Option Plan (9) 10.7 (d) - 1996 Stock Option Plan (10) 10.8 (a) - 1999 Annual Incentive Plan for Chairman and President/CEO 10.8 (b) - 1999 Annual Incentive Plan for Vice Presidents 10.9 - ISDA Master Agreement between NationsBank, N.A. and American Woodmark Corporation as of May 29, 1998 (13) 10.10 (a) - Loan Agreement between the Company and the West Virginia Economic Development Authority as of November 20, 1998 Relating to equipment financing. 10.10 (b) - Promissory Note between the Company and the West Virginia Economic Development Authority as of November 20, 1998. 10.10 (c) - Security Agreement between the Company and the West Virginia Economic Development Authority as of November 20, 1998. 10.10 (d) - Amendment of Deed of Lease between the Company and the West Virginia Economic Development Authority as of November 20, 1998. 10.10 (e) - Promissory Note between the Company and the Wayne County EZ Industrial Development Authority of Kentucky as of July 22, 1998. 10.10 (f) - Promissory Note between the Company and Amende Cabinet Corporation, a wholly owned subsidiary of the Company, as of July 30, 1998. 10.10 (g) - Credit Agreement between the Company and NationsBank, N. A. as of September 1, 1998. 10.10 (h) - Loan Agreement between the Company and Wells Fargo Bank, N. A. as of March 23, 1999. 10.10 (i) - Promissory Note between the Company and NationsBank, N. A. as of July 31, 1989 13 - 1999 Annual Report to Shareholders 23 - Consent of Ernst & Young LLP, Independent Auditors 27 - Financial Data Schedule 9
(b) Reports on Form 8-K None. _________________________________________________________________________ (1) - Incorporated by reference to exhibits filed with Form S-1, No. 33-6245. (2) - Incorporated by reference to exhibits filed with the 1987 Form 10-K. (3) - Incorporated by reference to exhibits filed with the 1988 Form 10-K. (4) - Incorporated by reference to exhibits filed with the 1989 Form 10-K. (5) - Incorporated by reference to exhibits filed with the 1992 Form 10-K. (6) - Incorporated by reference to exhibits filed with the 1993 Form 10-K. (7) - Incorporated by reference to exhibits filed with the 1994 Form 10-K. (8) - Incorporated by reference to exhibits filed with the 1995 Form 10-K. (9) - Incorporated by reference to exhibits filed with Form S-8, No. 333-12631. (10) - Incorporated by reference to exhibits filed with Form S-8, No. 333-12623. (11) - Incorporated by reference to exhibits filed with the 1996 Form 10-K. (12) - Incorporated by reference to exhibits filed with the 1997 Form 10-K. (13) - Incorporated by reference to exhibits filed with the 1998 Form 10-K. 10
Schedule II - Valuation and Qualifying Accounts AMERICAN WOODMARK CORPORATION (In Thousands) Additions Balance at Charged to Balance Beginning Cost and Deduc- at End Description(a) of Period Expenses Other tions of Period ---------- ---------- -------- --------- --------- Year ended April 30, 1999: Allowance for doubtful accounts $ 123 $ 185 $ 320(e) $ (206)(b) $ 422 ------ ------ ------ ------- ------ Reserve for cash discounts $ 365 $5,415(c) $ -- $(5,235)(d) $ 545 ------ ------ ------ ------- ------ Reserve for sales returns and allowances $1,269 $7,303(c) $ -- $(6,976) $1,596 ------ ------ ------ ------- ------ Year ended April 30, 1998: Allowance for doubtful accounts $ 210 $ -- $ -- $ (87)(b) $ 123 ------ ------ ----- ------- ------ Reserve for cash discounts $ 303 $3,883(c) $ -- $(3,821)(d) $ 365 ------ ------ ----- ------- ------ Reserve for sales returns and allowances $ 868 $5,051(c) $ -- $(4,650) $1,269 ------ ------ ----- ------- ------ Year ended April 30, 1997: Allowance for doubtful accounts $ 629 $ 830 $ -- $(1,249)(b) $ 210 ------ ------ ----- ------- ------ Reserve for cash discounts $ 250 $3,236(c) $ -- $(3,183)(d) $ 303 ------ ------ ----- ------- ------ Reserve for sales returns and allowances $ 627 $4,492(c) $ -- $(4,251) $ 868 ------ ------ ------ ------- ------ (a) All reserves relate to accounts receivable. (b) Principally write-offs, net of collections. (c) Reduction of gross sales. (d) Cash discounts granted. (e) Adjustments resulting from the acquisition of Knapp Woodworking, Inc. 11
SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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. American Woodmark Corporation (Registrant) July 15, 1999 /s/ JAMES J. GOSA ----------------- James J. Gosa President and Chief Executive Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. July 15, 1999 /s/ JAMES J. GOSA ----------------- James J. Gosa President and Chief Executive Officer (Principal Executive Officer) Director July 15, 1999 /s/ KENT B. GUICHARD -------------------- Kent B. Guichard Senior Vice President, Finance and Chief Financial Officer (Principal Financial Officer) Director July 15, 1999 /S/ WILLIAM A. ARMSTRONG ------------------------ William A. Armstrong Corporate Controller (Principal Accounting Officer) July 15, 1999 /s/ WILLIAM F. BRANDT, JR. -------------------------- William F. Brandt, Jr. Chairman of the Board Director July 15, 1999 /s/ DANIEL T. CARROLL --------------------- Daniel T. Carroll Director July 15, 1999 /s/ C. ANTHONY WAINWRIGHT ------------------------- C. Anthony Wainwright Director 12
July 15, 1999 /s/ MARTHA M. DALLY ------------------- Martha M. Dally Director July 15, 1999 /s/ FRED S. GRUNEWALD --------------------- Fred S. Grunewald Director 13
In accordance with Securities and Exchange Commission requirements, the Company will furnish copies of all exhibits to its Form 10-K not contained herein upon receipt of a written request and payment of $.10 (10 cents) per page to: Mr. Kent Guichard Senior Vice President, Finance and Chief Financial Officer American Woodmark Corporation P.O. Box 1980 Winchester, Virginia 22604-8090 14