American Woodmark Corporation Announces Third Quarter Earnings Expectations.

Business Editors

WINCHESTER, Va.--(BUSINESS WIRE)--Jan. 27, 2000

American Woodmark Corporation (Nasdaq/NM:AMWD) today indicated that it expects earnings for the third quarter ending January 31, 2000, to be below both analyst expectations and results in the same quarter of the prior year. The Company currently expects earnings for the third quarter of the current fiscal year to be approximately $0.28 to $0.30 per diluted share compared with analyst expectations of $0.46 to $0.48 per diluted share and prior year results of $0.44 per diluted share.

Commenting on the announcement, Jake Gosa, president and chief executive officer, stated, &uot;The Company announced several initiatives last November to rebalance our operations by continuing the expansion of capacity and by reducing revenue growth to a manageable level of 15% to 20%. Restoring this balance will allow the Company to regain the efficiencies and cost structure achieved during both fiscal 1998 and 1999.&uot;

Continuing, Gosa added, &uot;The Company has made significant progress over the past 60 days on many of these initiatives. Our exit from certain non-strategic businesses has substantially reduced the overall growth rate without compromising our position in strategic channels with key customers. In addition, we have continued to aggressively pursue our capital investment plan and are on schedule to increase manufacturing capacities throughout the Company. By late January, we will be running our facilities at approximately 90% of capacity. This will be the first time in almost two years that the Company will be operating below 100% of our practical capacity.&uot;

Specifically relating to the third fiscal quarter, Gosa noted, &uot;While we have now established enough raw capacity to service demand, our efficiencies in operating this capacity have lagged behind due to the combination of the learning curve for the hundreds of new employees and the need to refine material flows to and from the new facilities.&uot;

Looking forward, Gosa added, &uot;Our financial results for the third quarter are clearly disappointing. We remain, however, very confident about the long-term position of the Company. Our markets remain strong and we continue to improve our position with all our strategic customers. The Company has expanded gross capacity, which is now greater than still increasing demand. Our most immediate task is to refine material flows from the new facilities and to regain operating efficiencies. Our current expectation is that by the end of the fourth quarter of this fiscal year, the Company will have substantially restored our efficiencies and will enter fiscal 2001 with a rebalanced company that will once again deliver consistent improvement in year-over-year earnings.&uot;

American Woodmark Corporation is one of the leading manufacturers of kitchen cabinets and vanities for the remodeling and new home construction markets. Its products are sold on a national basis directly to home centers, major builders and home manufacturers and through a network of independent distributors.

Safe harbor statement under the Private Securities Litigation Reform Act of 1995: All forward looking statements made by the Company involve material risks and uncertainties and are subject to change based on factors that may be beyond the Company's control. Accordingly, the Company's future performance and financial results may differ materially from those expressed or implied in any such forward looking statements. Such factors include, but are not limited to, those described in the Company's filings with the Securities and Exchange Commission and the Annual Report to Shareholders. The Company does not undertake to publicly update or revise its forward looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized.