FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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

For the quarterly period ended October 31, 2000

OR

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

Commission file number 0-14798

American Woodmark Corporation
(Exact name of registrant as specified in its charter)

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, and (2) has been subject to such filing requirements for the past 90 days. Yes X No

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

AMERICAN WOODMARK CORPORATION
FORM 10-Q

INDEX

PART I. FINANCIAL INFORMATION

AMERICAN WOODMARK CORPORATION
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)

AMERICAN WOODMARK CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except share data)
(Unaudited)

AMERICAN WOODMARK CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)

AMERICAN WOODMARK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A--BASIS OF PRESENTATION

The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles 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 generally accepted accounting principles for complete 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, 2000 are not necessarily indicative of the results that may be expected for the year ended April 30, 2001. The unaudited financial statements should be read in conjunction with the financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended April 30, 2000.

NOTE B--NEW ACCOUNTING PRONOUNCEMENTS

In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities," (SFAS No. 133), which the Company will be required to adopt in fiscal 2002. SFAS No. 133 establishes new accounting and reporting standards for derivative instruments and hedging activities. The adoption of SFAS No. 133 is not expected to have a material impact on the Company's financial position or results of operations.

In December 1999, the Securities and Exchange Commission issued Staff Accounting Bulletin (SAB) No. 101, "Revenue Recognition in Financial Statements." The Company will be required to adopt this SAB in the fourth quarter of fiscal 2001. The Company is currently evaluating the impact of the SAB on its revenue recognition practices and has not yet determined the impact that the adoption of this SAB will have on the Company's financial position or results of operations.

NOTE C--EARNINGS PER SHARE

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

NOTE D--CUSTOMER RECEIVABLES

The components of customer receivables were:

NOTE E--INVENTORIES

The components of inventories were:

An actual valuation of inventory under the LIFO method can be made only at the end of each year based on the inventory levels and costs at that time. Accordingly, interim LIFO calculations must necessarily be based on management's estimates of expected year-end inventory levels and costs. Since they are subject to many forces beyond management's control, interim results are subject to the final year-end LIFO inventory valuation.

NOTE F--CASH FLOW

Supplemental disclosures of cash flow information:

NOTE G--OTHER INFORMATION

The Company is involved in various suits and claims in the normal course of business. Included therein are claims against the Company pending before the Equal Employment Opportunity Commission. Although management believes that such claims are without merit and intends to vigorously contest them, the ultimate outcome of these matters cannot be determined at this time. In the opinion of management, after consultation with counsel, the ultimate liabilities and losses, if any, that may result from suits and claims involving the Company will not have a material adverse effect on the Company's results of operations or financial position.

The Company is voluntarily participating with a group of companies which is cleaning up a waste facility site at the direction of a state environmental authority.

The Company records liabilities for all probable and reasonably estimable loss contingencies on an undiscounted basis. For loss contingencies related to environmental matters, liabilities are based on the Company's proportional share of the contamination obligation of a site since management believes it probable that the other parties, which are financially solvent, will fulfill their proportional contamination obligations. There are no probable insurance or other indemnification receivables recorded. The Company has accrued for all known environmental remediation costs which are probable and can be reasonably estimated, and such amounts are not material.

Net Sales for the second quarter of fiscal 2001 were $107.2 million, an increase of 8.0% over the same period in fiscal 2000. Excluding the impact of the Company's exit from the custom cabinet and original equipment markets since the prior year, sales growth in the second quarter was 14%. Net sales of $213.7 million for the six-month period ended October 31, 2000 were 10.5% higher than the same period of the prior year. Improved sales for both the quarter and six-month period were the result of growth in the home center and builder direct channels of distribution, along with an increase in per unit revenue. The average revenue per unit in the second quarter of fiscal 2001 increased 11.5%, and the six month average in fiscal 2001 increased 10.4% over the comparable prior year periods due to a general price increase announced in January 2000, new products introduced over the past year and a shift in mix to higher-end products.

In fiscal 2001, second quarter gross margin was 25.6%, down slightly from the fiscal 2000 second quarter gross margin of 25.7%. For the first six months of fiscal 2001, gross margin was 26.5%, down from the previous year six-month gross margin of 26.7%. Anticipated improvements in gross margin were not realized due to higher manufacturing overhead and distribution costs. Higher overhead costs were the result of expenses related to underutilized production capacity. Higher distribution costs were the result of increases in freight charges from third-party carriers and rising fuel surcharges.

Selling and marketing expenses for the second quarter of fiscal 2001 were $17.9 million or 16.7% of net sales, an increase of $2.9 million over fiscal 2000. For the first six months of fiscal 2001 selling and marketing expenses were $34.1 million or 15.9% of net sales, an increase of $4.9 million from the same period of the prior fiscal year. The increased expenses for both periods were primarily attributable to an increase in performance based marketing programs, promotional expense to support merchandizing efforts and training expense associated with the introduction of the new Thomasville product line.

General and administrative expenses, as a percent of net sales, declined to 3.0% in the second quarter of fiscal 2001, a decrease of $849 thousand from the second quarter of fiscal 2000. For the first six months of fiscal 2001 general and administrative expenses were 3.5% of net sales, a decrease of $780 thousand from the first six months of fiscal 2000. Both period decreases are due to lower accruals for performance based employee bonuses and reductions in the Company's bad debt expense.

Interest expense for the second quarter of fiscal 2001 was $357 thousand, and for the first six months of fiscal 2001 was $607 thousand, representing increases of $334 thousand and $455 thousand, from the respective prior periods of fiscal 2000. For both periods, additional interest expense on increased debt was only partially offset by capitalized interest.

In the first quarter of fiscal 2001 the Company substantially completed its restructuring activities relating to the conversion of its Ham Lake, Minnesota facility from custom cabinet manufacturing to manufacturing of components and accessories.

The Company's operating activities generated $7.0 million in net cash during the first six months of fiscal 2001 compared to $4.5 million net cash generated in the same period of fiscal 2000. The increase in cash generated from operations over prior year was due primarily to an increase in the provision for depreciation and amortization as well lower consumption of cash required for inventories and accounts payable. Depreciation and amortization expense increased as a result of the Company's capital investment initiatives. Changes in cash flow from investment in inventory and promotional display activity were due to seasonal activity and timing. The period over period favorable impacts to cash were only partially offset by the cash impact of increased customer receivables and increased cash consumption for investment in promotional displays.

Capital spending during the first six months of fiscal 2001 was $14.9 million as compared to $16.7 million in the same period of fiscal 2000, a decrease of $1.7 million. Capital spending for fiscal 2001 was lower than fiscal 2000 as the Company nears completion of its recent capacity expansion program. During the first six months of fiscal 2001 the Company completed the building construction and first phase of production equipment installation for its new flat-stock facility in Humboldt, Tennessee. Additional investments made during the first six months included funding for the continued ramp up of the Company's assembly facility in Gas City, Indiana, expanded capacity for the Company's lumber facility in Monticello, Kentucky and other minor projects intended to expand production capacity. The Company expects that in order to support continued sales growth, it will be necessary to make additional investments in plant, property and equipment during the remainder of fiscal 2001. The Company expects that its capital investment spending in the second half of fiscal year 2001 will be less than that experienced in the first six months of fiscal 2001.

Net cash provided by financing activities was $4.7 million for the first six months of fiscal 2001 as proceeds from borrowings offset payments. For the same period of fiscal 2000 the Company received $1.6 million from financing activities. During the first six months of fiscal 2001 the Company continued to borrow against its $45 million credit facility as cash on-hand combined with cash generated from operations was insufficient to support payments to acquire plant, property and equipment. The outstanding balance on the revolving credit facility was $17.8 million on October 31, 2000. Cash dividends of $804 thousand were paid during the first six months of fiscal 2001.

Cash flow from operations combined with accumulated cash on hand and available borrowing capacity is expected to be sufficient to meet forecasted working capital requirements, service existing debt obligations and fund capital expenditures of the remainder of fiscal 2001.

The Company is involved in various suits and claims in the normal course of business that includes claims against the Company pending before the Equal Employment Opportunity Commission. Although management believes that such suits and EEOC claims are without merit and intends to vigorously contest them, the ultimate outcome of these matters cannot be determined at this time. In the opinion of management, after consultation with counsel, the ultimate liabilities and losses, if any, that may result from suits and claims involving the Company will not have any material adverse effect on the Company's operating results or financial position.

On November 29, 2000, the Board of Directors approved a $.05 per share cash dividend on its Common Stock. The cash dividend will be paid on December 27, 2000, to shareholders of record on December 13, 2000.

Item 3. Quantitative and Qualitative Disclosure of Market Risk

The Company's business has historically been subjected to seasonal influences, with higher sales typically realized in the second and fourth fiscal quarters.

The costs of the Company's products are subject to inflationary pressures and commodity price fluctuations. Inflationary pressure and commodity price increases have been relatively modest over the past five years, except for lumber prices which rose significantly during fiscal 1997. The Company has generally been able over time to recover the effects of inflation and commodity price fluctuations through sales price increases.

The Company is also exposed to changes in interest rates primarily from its long-term debt arrangements. The Company uses interest rate swap agreements to manage exposure to interest rate changes on certain long-term borrowings. The Company has variable-rate debt instruments representing approximately 71% of its total long-term debt at October 31, 2000. If interest rates average 25 basis points (.25%) more in fiscal 2001 than during fiscal 2000, the Company's interest expense would be increased by approximately $50,000. These amounts are determined by considering the impact of the hypothetical interest rates on the Company's variable-rate, long-term debt at October 31, 2000.

While the Company is not currently aware of any other events that would result in a material decline in earnings from fiscal 2000, we participate in an industry that is subject to rapidly changing conditions. The preceding forward-looking statements are based on current expectations, but there are numerous factors that could cause the Company to experience a decline in sales and/or earnings. These include (1) overall industry demand at reduced levels, (2) economic weakness in a specific channel of distribution, especially the home center industry, (3) the loss of sales from specific customers due to their loss of market share, bankruptcy or switching to a competitor, (4) a sudden and significant rise in basic raw material costs, (5) a dramatic increase to the cost of diesel fuel, and/or transportation related services, (6) the need to respond to price or product initiatives launched by a competitor, (7) a significant investment which provides a substantial opportunity to increase long-term performance, and (8) sales growth at a rate that outpaces the Company's ability to install new capacity. 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 materially adverse impact on short-term operating results.

PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Reports on Form 8-K

The Company did not file any reports on Form 8-K during the three months ended October 31, 2000.