American Woodmark To Cut Jobs, Raise Prices
|
TOOLBOX
   Resize
COMMENT
 Discussion Policy
 CLOSE
Comments that include profanity or personal attacks or other inappropriate comments or material will be removed from the site. Additionally, entries that are unsigned or contain "signatures" by someone other than the actual author will be removed. Finally, we will take steps to block users who violate any of our posting standards, terms of use or privacy policies or any other policies governing this site. Please review the full rules governing commentaries and discussions. You are fully responsible for the content that you post.
Who's Blogging  |
Wednesday, November 30, 2005
American Woodmark Corp., one of the nation's largest kitchen and bathroom cabinet makers, said yesterday that it will cut staff and raise prices on some products to combat continued weak financial performance.
Shares of the Winchester company fell 15.5 percent after it announced that its second-quarter profit fell 46 percent from the comparable period last year. The company said home remodeling slowed as labor, transportation and manufacturing costs jumped. About two-thirds of the cabinet maker's sales are to homeowners who are remodeling; the rest are to home builders.
Sales rose 8 percent, to $214.5 million, in the quarter ended Oct. 31; the company had predicted an increase of 8 to 12 percent.
"Higher interest rates, higher energy costs and uncertainty over jobs have contributed to a consumer that's not spending on big-ticket items as robustly as last spring and summer," James J. "Jake" Gosa, American Woodmark's chief executive, told Wall Street analysts.
American Woodmark said it had a profit of $6.2 million (37 cents per share) in the quarter, down from $11.4 million (67 cents). The company's profit has dropped from the previous year for four consecutive quarters.
The company's chief financial officer, Jonathan H. Wolk, told analysts that there are mixed signals about the future. While new-home sales have been strong, mortgage rates have been climbing, and several large builders have lowered expectations for 2006, he said. Wolk also speculated that "record-high fuel costs as we approach the winter heating season" may discourage spending on remodeling.
About 1,000 of the company's 6,500 employees are in Virginia and Maryland. Company Treasurer Glenn Eanes said the workforce will be cut "mostly through attrition" but with "minor layoffs." He declined to elaborate.
American Woodmark shares closed at $25.50, down $4.66.
