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Posted April 30, 2019

Huttig Building Products announces Q1 2019 results

Company tallies net sales of $197.4 million for quarter.


Huttig Building Products, Inc. today reported financial results for the first quarter ended March 31, 2019.

“Our sales performance in the quarter was consistent with our results in the prior year despite lower residential construction activity and severe weather across the majority of our service areas,” said Jon Vrabely, Huttig President and Chief Executive Officer.

“Sales from our strategic growth initiatives increased nearly 14%, and while core product sales declined, they declined at a lower rate than the market, resulting in estimated combined growth above the market of more than 4% in the quarter. Operationally, we are making progress in improving the balance sheet, but need to expedite the improvement in our margins and expense structure to achieve greater profitability.”

Results of Operations

Three Months Ended March 31, 2019 Compared to Three Months Ended March 31, 2018

Net sales were $197.4 million in the first quarter of 2019, which was $0.6 million, or 0.3%, lower than the first quarter of 2018. The decrease in net sales was primarily attributed to a modest softening in the markets we serve coupled with adverse winter weather in much of the Midwest and Northern Coastal regions which negatively impacted construction activity.

Millwork product sales remained consistent in the first quarter of 2019 as compared to the first quarter of 2018 at $95.3 million.

Building products sales increased 2.9% in the first quarter of 2019 to $88.1 million, compared to $85.5 million in the first quarter of 2018, and wood product sales decreased 18.6% in the first quarter of 2019 to $14.0 million, compared to $17.2 million in the first quarter of 2018. The proportionate increase in sales of building products is generally consistent with our strategic growth initiatives.

Gross margin was $37.4 million in the first quarter of 2019, compared to $38.7 million in the first quarter of 2018. As a percentage of sales, gross margin was 18.9% in the first quarter of 2019, compared to 19.5% in the first quarter of 2018. The reduction in gross margin percent was primarily attributed to a higher proportional increase in building product sales as compared to other higher margin product categories as well as a competitive pricing environment and incremental costs from customer programs.

Operating expenses increased $0.4 million to $39.6 million in the first quarter of 2019, compared to $39.2 million in the first quarter of 2018. Personnel costs decreased approximately $0.2 million, primarily as a result of lower wages from cost reductions offset in part by higher medical costs. Non-personnel costs increased approximately $0.6 million, primarily as a result of higher equipment and facility costs and an increase in contract hauling costs.

As a percentage of sales, operating expenses were 20.1% in the first quarter of 2019, compared to 19.8% in the first quarter of 2018.

Net interest expense was $1.7 million in the first quarter of 2019 compared to $1.1 million in the first quarter of 2018. The increase was primarily due to higher average outstanding borrowings on our credit facility as well as higher interest rates in the first quarter of 2019 compared to the first quarter of 2018.

Income tax benefit was $0.7 million for the quarter ended March 31, 2019, as compared to $1.1 million for the first quarter of 2018.

As a result of the foregoing factors, Huttig reported a loss from continuing operations of $3.2 million for the quarter ended March 31, 2019, compared to a loss from continuing operations of $0.5 million for the quarter ended March 31, 2018.

Adjusted EBITDA was $(0.3) million for the first quarter of 2019 compared to $1.4 million for the first quarter of 2018. 

Learn more about Huttig Building Products at www.huttig.com.

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