WINCHESTER, VA - Kitchen and bath cabinetry maker American Woodmark Corp. (NASDAQ: AMWD), convinced the housing slump is unlikely to change soon, says it will close two manufacturing plants in April 2012.
In addition it will sell an assembly plant, shuttered since 2009. That leaves American Woodmark with nine operating plants from which it supplies four cabinetry channels: Home Depot, with the American Woodmark label; Loew's, which sells Shenandoah and Potomac Cabinetry; Timberlake for new construction; and Waypoint for kitchen and bath designers.
"Although we have consistently gained market share, the overall drop in consumer activity has created excess capacity that is simply too expensive to maintain," said CEO Kent Guichard in a announcing the closures. Guichard says the move will utilization rates and decrease overhead costs.
"Our remaining network of nine manufacturing facilities will be more efficient, while retaining the ability to increase production by approximately 50% before requiring significant capital investment,"he said. American Woodmark sales jumped 19 percent in the latest quarter, although profits dipped.
The Hardy County, WV plant to be closed is an aging building with outdated equipment.
"Changes to our product line will require significant retooling," to keep it operational Guichard said.
Plants to be closed by April 30, 2012 are a wood component operations in Hardy County, WV and the lumber milling center in Hazard, KY. It also plans to sell a Tahlequah, OK assembly plant that has been idled since 2009.
Have something to say? Share your thoughts with us in the comments below.