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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

OR

Commission file number 0-14798

American Woodmark Corporation

(Exact name of registrant as specified in its charter)

(540) 665-9100

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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.

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AMERICAN WOODMARK CORPORATION

FORM 10-Q

INDEX

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Item 1.

PART I. FINANCIAL INFORMATION

AMERICAN WOODMARK CORPORATION

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

See notes to consolidated financial statements

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AMERICAN WOODMARK CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

(in thousands, except share data)

(Unaudited)

See notes to consolidated financial statements

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AMERICAN WOODMARK CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

See notes to consolidated financial statements

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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 nine-month period ended January 31, 2003 are not necessarily indicative of the results that may be expected for the year ended April 30, 2003. 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, 2002.

NOTE B—NEW ACCOUNTING PRONOUNCEMENTS

In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” which addresses the financial accounting and reporting for the impairment or disposal of long-lived assets. The Company was required to adopt SFAS No. 144 as of May 1, 2002. The adoption of this statement had no impact on the Company’s financial position or results of operations.

In June 2002, the Financial Accounting Standards Board issued SFAS No. 146, “Accounting for Costs from Exit or Disposal Activities,” which requires, among other things, that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. The provisions of this statement shall be effective for exit or disposal activities initiated after December 31, 2002. The adoption of this statement had no impact on the Company’s financial position or results of operations.

In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees and other types of guarantees that are not subject to the initial recognition and measurement provisions, such as product warranties. The Company adopted the disclosure provisions of Interpretation No. 45 during the third quarter of fiscal 2003. The adoption of Interpretation No. 45 had no impact on the Company’s financial position or results of operations. The only guarantees that the Company presently holds are product warranties. The Company estimates outstanding warranty costs based on the historical relationship between warranty claims and revenues. The warranty accrual is reviewed monthly to verify that it properly reflects the remaining obligation based on the anticipated expenditures over the balance of the obligation period. Adjustments are made when actual warranty claim experience differs from estimates. Warranty claims are generally made within three months of the original shipment date. The product warranty reserve had a beginning balance of $3,026,000 at May 1, 2002, and an ending balance of $3,279,000 at January 31, 2003.

NOTE C—COMPREHENSIVE INCOME

The Company’s comprehensive income was $6.2 million and $24.6 million for the three months and nine months ended January 31, 2003, respectively, compared to $7.4 million and $22.8 million for the three months and nine months ended January 31, 2002, respectively. Comprehensive income differs from net income for the quarter and nine months ending January 2002 due to an increase in the unrealized loss on the Company’s interest rate swap agreements.

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NOTE D—EARNINGS PER SHARE

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

NOTE E—CUSTOMER RECEIVABLES

The components of customer receivables were:

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NOTE F—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 G—CASH FLOW

Supplemental disclosures of cash flow information:

NOTE H—LONG TERM DEBT

In November 2002, the Company entered into a loan agreement with the Perry, Harlan, Leslie, Breathitt Regional Industrial Authority (a.k.a. Hazard, KY Regional Authority) as part of the Company’s capital investment and operations at the Hazard, Kentucky site. This debt facility is a $6 million term loan, which expires November 13, 2017 bearing interest at a fixed rate of 2%. It is secured by a mortgage on the manufacturing facility constructed in Hazard, Kentucky. The loan requires annual debt service payments consisting of principle and interest with a fixed balloon payment of $1.6 million at loan completion, November 13, 2017.

NOTE I—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.

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Item 2.

Management’s Discussion and Analysis of Financial Condition

and Results of Operations

Results of Operations

Net Sales for the third quarter of fiscal 2003 were $136.7 million, an increase of 10.5% over the same period in fiscal 2002. Net sales of $419.1 million for the nine-month period ended January 31, 2003 were 14.3% higher than the same period of the prior year. Improved sales for the quarter and nine-month period were the result of unit growth in both the remodel and new construction markets. Unit volume for the third quarter and nine-month period grew 11% due to the combination of new outlets and new products. The average revenue per unit decreased 0.8% for the third quarter of fiscal 2003 while the revenue per unit increased 2.7% for the nine months compared to the same period in the prior year. Both period changes primarily were the result of shifts in product mix.

In fiscal 2003, third quarter gross profit was 22.2%, down from the fiscal 2002 third quarter gross profit of 25.8%. For the first nine months of fiscal 2003, gross profit was 24.2%, down from the previous year nine-month profit margin of 25.5%. Lower gross profit was the result of the combination of temporary operating inefficiencies at the beginning of the third quarter, higher labor and benefit costs, higher fixed costs associated with new capacity and higher distribution costs. The Company experienced operating inefficiencies during the first month of the quarter due to a temporary imbalance in material flows with the addition of new capacity. Labor costs increased due to higher crewing at the newer facilities and at the finishing operation in the Kingman, Arizona facility to support increased volumes. Benefit costs increased due to higher head count and general healthcare inflation. Overhead costs were higher due to depreciation and other fixed costs associated with the recent capital expansion program. Higher distribution costs were realized as favorable leverage on increased volume was more than offset by inefficiencies created by the imbalance in material flows during the first month of the quarter and rising fuel costs.

Selling and marketing expenses for the third quarter of fiscal 2003 were $13.3 million or 9.7% of net sales compared to $12.4 million or 10.1% of net sales for the third quarter of fiscal 2002. For the first nine months of fiscal 2003 selling and marketing expenses were $41.0 million or 9.8% of net sales, compared to $37.2 million or 10.2% over sales for the first nine months of fiscal 2002. The decrease as a percentage of sales in both periods was attributable to favorable leverage gained in merchandising and promotional expenses due to product mix and to cost containment efforts.

General and administrative expenses for the third quarter of fiscal 2003 were $5.8 million or 4.2% of net sales compared to $6.7 million or 5.4% of net sales for the third quarter of fiscal 2002. For the first nine months of fiscal 2003 general and administrative expenses were $18.7 million or 4.5% of net sales compared to $17.5 million or 4.8% of net sales in the first nine months of fiscal 2002. The decrease as a percentage of sales in both periods is due to favorable cost leverage created from increased sales dollars and decreases in expenses for certain pay-for-performance employee incentive programs.

Interest expense for the third quarter of fiscal 2003 was $222 thousand, and for the first nine months of fiscal 2003 was $305 thousand, compared to $102 thousand and $587 thousand for the respective prior periods of fiscal 2002. For the third quarter, the increase is due to additional interest expense on increased debt and a decrease in quarterly interest capitalized on construction projects. For the nine-month period, the decrease in interest expense is due to the higher capitalized interest realized as a result of the Company’s capital expansion program.

The Company’s combined federal and state effective income tax rate for the third quarter and first nine months of fiscal 2003 was 39.2% and 39.4%, respectively. For the same periods of fiscal 2002, the combined federal and state effective income tax rates were 39.5%.

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The Company has two defined pension benefit plans. An actuarial valuation is prepared each fiscal year end to calculate the proper expense and liability of each plan. Taking into consideration the declining market value of the pension plan assets along with the anticipated lower discount rates to be used in the actuarial valuation, the Company may need to record an additional minimum pension liability at fiscal year end. An adjustment to the additional minimum pension liability would be shown in other comprehensive loss as a direct charge to stockholders’ equity with no effect on the results of operations.

Diluted earnings per share were $0.80 and $2.98 for the third quarter and first nine months of fiscal 2003, respectively, compared to $0.91 and $2.75 for the third quarter and first nine months of fiscal 2002, respectively.

New Accounting Pronouncements

In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting of the Impairment or Disposal of Long-Lived Assets,” which addresses the financial accounting and reporting for the impairment or disposal of long-lived assets. The Company was required to adopt SFAS No. 144 as of May 1, 2002. The adoption of this statement had no impact on the Company’s financial position or results of operations.

In June 2002, the Financial Accounting Standards Board issued SFAS No. 146, “Accounting for Costs from Exit or Disposal Activities,” which requires, among other things, that a liability for costs associated with an exit or disposal activity be recognized when the liability is incurred. The provisions of this statement shall be effective for exit or disposal activities initiated after December 31, 2002. The adoption of this statement had no impact on the Company’s financial position or results of operations.

In November 2002, the Financial Accounting Standards Board issued Interpretation No. 45 (FIN 45), “Guarantor’s Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others,” which addresses the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under guarantees and other types of guarantees that are not subject to the initial recognition and measurement provisions, such as product warranties. The Company adopted the disclosure provisions of Interpretation No. 45 during the third quarter of fiscal 2003. The adoption of Interpretation No. 45 had no impact on the Company’s financial position or results of operations.

Liquidity and Capital Resources

The Company’s operating activities generated $26.8 million in net cash during the first nine months of fiscal 2003 compared to $29.2 million net cash generated in the same period of fiscal 2002. The decrease in cash generated from operations over prior year was due primarily to the reduction in comparable cash provided from the change in inventories, a greater consumption of cash required for accounts payable and accrued compensation and related expenses, which were only partially offset by increases in net income and the provision for depreciation and amortization, an increase in deferred income taxes, as well as lower consumption of cash required for customer receivables and other assets. Changes in cash flow from accounts payable and customer receivables were due to seasonal activity and timing. Inventory changes are primarily due to new capacity. The change in other assets was due to lower promotional display activity. Depreciation and amortization expense increased as a result of the Company’s capital investment initiatives.

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Capital spending during the first nine months of fiscal 2003 was $26.2 million as compared to $21.2 million in the same period of fiscal 2002, an increase of $5.0 million. Capital spending for fiscal 2003 was greater than fiscal 2002 as the Company completed its recent capacity expansion program. During the first nine months of fiscal 2003 the Company completed the new assembly facility in Tahlequah, Oklahoma and the new lumber processing facility in Hazard, Kentucky. Additionally, the expansion projects were completed at the assembly facility in Kingman, Arizona and at the lumber processing facility in Monticello, Kentucky. The Company expects that in order to support continued sales growth, it will be necessary to make nominal investments in plant, property and equipment during the remainder of fiscal 2003. The Company expects that its capital investment spending in the last quarter of fiscal year 2003 will be between $4 and $5 million.

Net cash used for financing activities was $2.7 million for the first nine months of fiscal 2003. The proceeds from long-term borrowings and the issuance of Common Stock were more than offset by scheduled payments of long term debt, repurchases of Common Stock and payments of dividends. In November 2002, the Company received a 15-year, $6.0 million loan from the Hazard, Kentucky Regional Authority in connection with the completion of the Hazard, Kentucky lumber processing facility. The loan bears a fixed 2% interest rate, requires annual principle and interest payments, and carries a $1.6 million payment due upon loan termination on November 13, 2017. The Company repurchased $5.7 million in common stock during the first nine months of fiscal 2003 compared to $3.2 million in the same period of fiscal 2002. All share repurchases were conducted under the authorizations granted by the Board of Directors in January 2001 and August 2002. Each authorization was for the repurchase of up to $10 million of company stock from time-to-time when, in the opinion of management, it presented an attractive return on investment for the shareholders. Cash dividends of $1.2 million were paid during the first nine months of fiscal 2003.

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 for the remainder of fiscal 2003.

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Legal Matters

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.

Dividends Declared

On February 20, 2003, the Board of Directors approved a $.05 per share cash dividend on its Common Stock. The cash dividend will be paid on March 20, 2003, to shareholders of record on March 6, 2003.

Item 3. Quantitative and Qualitative Disclosures 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. The Company has generally been able over time to recover the effects of inflation and commodity price fluctuations through sales price increases.

On January 31, 2003, the Company had no material exposure to changes in interest rates for its debt agreements. All significant borrowings of the Company carry a fixed interest rate between 2% and 6%.

We participate in an industry that is subject to rapidly changing conditions. Forward-looking statements, contained in this Management’s Discussion and Analysis 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) 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.

Item 4. Controls and Procedures

During the 90-day period prior to the date of this report, an evaluation was performed under the supervision and with the participation of Company management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures as defined in Rules 13a-14(c) and 15d-14(c) under the Securities and Exchange Act of 1934, as amended. Based upon that evaluation, the Chief Executive Officer and the Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective. Subsequent to the date of this evaluation, there have been no significant changes in the Company’s internal controls or in other factors that could significantly affect these controls, and no corrective actions taken with regard to significant deficiencies or material weaknesses in such controls.

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PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits.

(b) Reports on Form 8-K.

The Company filed one Form 8-K on January 30, 2003 announcing updated third quarter earnings expectations.

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SIGNATURES

Pursuant to the requirements 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.

CERTIFICATION UNDER SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

CERTIFICATIONS

I, James J. Gosa, certify that:

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I, Kent B. Guichard, certify that:

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