Employee Benefit and Retirement Plans

12 Months Ended

Apr. 30, 2023

Retirement Benefits [Abstract]

Employee Benefit and Retirement Plans

Employee Benefit and Retirement Plans

Retirement Savings Plan

Under the American Woodmark Corporation Retirement Savings Plan (the "Plan"), essentially all employees are immediately eligible to participate in the Plan. Participants are eligible for 401(k) matching contributions based upon the employee’s contribution to the Plan. All participants employed at the end of the fiscal year and hired prior to November 2 of the fiscal year are eligible for a discretionary profit-sharing contribution.

Discretionary profit-sharing contributions ranging from 0-5% of net income, based on predetermined net income levels of the Company, may be made annually in the form of Company stock. The Company recognized expenses for profit-sharing contributions of $4.7 million, $0.8 million, and $2.9 million in fiscal years 2023, 2022, and 2021, respectively.

The Company matches 100% of an employee's annual 401(k) contributions to the Plan up to 4% of annual compensation.

The expense for 401(k) matching contributions for the plan was $12.4 million, $11.7 million, and $11.9 million, in fiscal years 2023, 2022, and 2021, respectively.

Pension Benefits

Prior to April 30, 2020, the Company had two defined benefit pension plans covering many of the Company's employees hired prior to April 30, 2012. Effective April 30, 2012, the Company froze all future benefit accruals under the Company's defined benefit pension plans.

Effective April 30, 2020, these plans were merged into one plan (the "Pension Plan"). The Pension Plan provided defined benefits based on years of service and final average earnings (for salaried employees) or benefit rate (for hourly employees). Effective December 31, 2020 (the "Plan Termination Date"), the Pension Plan was terminated in a standard termination and benefits were distributed on December 2, 2021.

The following provides a reconciliation of benefit obligations, plan assets and funded status of the Company's non-contributory Pension Plan as of:

	APRIL 30,
(in thousands)	2023		2022
CHANGE IN PROJECTED BENEFIT OBLIGATION
Projected benefit obligation at beginning of year	$	—	$	196,537
Interest cost	—		3,147
Actuarial gains (losses)	—		(3,738)
Benefits paid	—		(4,214)
Settlements	—		(191,732)
Projected benefit obligation at end of year	$	—	$	—
CHANGE IN PLAN ASSETS
Fair value of plan assets at beginning of year	$	979	$	193,552
Actual return on plan assets	27		3,373
Benefits paid	—		(4,214)
Settlements	—		(191,732)
Transfer to defined contribution plan	(1,006)		—
Fair value of plan assets at end of year	$	—	$	979
Funded status of the plan	$	—	$	979

	APRIL 30,
(in thousands)	2022		2021
COMPONENTS OF NET PERIODIC PENSION BENEFIT COST
Interest cost	$	3,147	$	4,662
Expected return on plan assets	(3,601)		(8,430)
Recognized net actuarial loss	—		1,761
Amortization of net loss from prior years	1,164		—
Settlement charge	68,473		—
Pension benefit cost	$	69,183	$	(2,007)

The components of net periodic pension benefit cost do not include service costs or prior service costs due to the Pension Plan being frozen.

Actuarial Assumptions: The discount rate at April 30 was used to measure the year-end benefit obligations and the earnings effects for the subsequent year. Actuarial assumptions used to determine benefit obligations and earnings effects for the Pension Plan follows:

	FISCAL YEARS ENDED APRIL 30,
	2022	2021
WEIGHTED-AVERAGE ASSUMPTIONS TO DETERMINE NET PERIODIC PENSION BENEFIT COST
Discount rate	2.80 %	3.16%
Expected return on plan assets	— %	3.3 %

The Company based the discount rate on a current yield curve developed from a portfolio of high-quality fixed-income investments with maturities consistent with the projected benefit payout period. The long-term rate of return on assets was determined based on consideration of historical and forward-looking returns and the current and expected asset allocation strategy.

The method used to determine the service and interest costs is known as the spot rate approach, under which individual spot rates along the yield curve that correspond with the timing of each benefit payment are used.

In developing the expected long-term rate of return assumption for the assets of the Pension Plan, the Company evaluated input from its third party pension plan asset managers, including their review of asset class return expectations and long-term inflation assumptions.

The Company amortized experience gains and losses, as well as the effects of changes in actuarial assumptions and plan provisions, over the average remaining lifetime of employees expected to receive benefits under the Pension Plan.

Contributions: The Company funded the Pension Plan in amounts sufficient to meet minimum funding requirements under applicable employee benefit and tax laws plus additional amounts the Company deemed appropriate.

The Company made no contributions to its Pension Plan in fiscal 2022.

Plan Assets: Pension assets by major category and the type of fair value measurement as of April 30, 2022 are presented in the following table:

FAIR VALUE MEASUREMENTS AT APRIL 30, 2022
(in thousands)	TOTAL		QUOTED PRICES IN ACTIVE MARKETS (LEVEL 1)		SIGNIFICANT OBSERVABLE INPUTS (LEVEL 2)		SIGNIFICANT UNOBSERVABLE INPUTS         (LEVEL 3)
Cash Equivalents	$	979	$	979	$	—	$	—
Total plan assets	$	979	$	979	$	—	$	—