Huttig Building Products Announces Q2 Results
Q2 sales hit $218.5 million and operating income increases 57% to $3.3 million.
Huttig Building Products, Inc. a leading domestic distributor of millwork, building materials and wood products, today reported financial results for the second quarter ended June 30, 2019.
“Our sales are slightly behind last year’s pace due to some market softening caused in part by inclement weather across many parts of the country in the first half of the year,” said Jon Vrabely, Huttig’s President and Chief Executive Officer. “While we made a significant investment in, and successfully executed a major ERP upgrade, we experienced temporary disruption which impacted our sales.
"Meanwhile, our cost management initiatives have begun to improve operating income, and our cash management has significantly reduced our borrowing needs. We continue to focus on achieving efficient working capital levels.”
Results of Operations
Three Months Ended June 30, 2019 Compared to Three Months Ended June 30, 2018
Net sales were $218.5 million in the second quarter of 2019, which were $4.9 million, or 2.2%, lower than the second quarter of 2018. The decrease in net sales was primarily attributed to a modest softening in the markets we serve coupled with prolonged adverse weather conditions in many parts of the country which negatively impacted construction activity.
Millwork product sales decreased 3.9% in the second quarter of 2019 to $99.5 million, compared to $103.5 million in the second quarter of 2018, building products sales increased 1.7% in the second quarter of 2019 to $101.1 million, compared to $99.4 million in the second quarter of 2018, and wood product sales decreased 12.7% in the second quarter of 2019 to $17.9 million, compared to $20.5 million in the second quarter of 2018.
The proportionate increase in sales of building products is generally consistent with our strategic growth initiatives.
Gross margin was $44.3 million in the second quarter of 2019, compared to $45.1 million in the second quarter of 2018. As a percentage of sales, gross margin was 20.3% in the second quarter of 2019, compared to 20.2% in the second quarter of 2018. Gross margins were generally commensurate with sales activity.
Operating expenses decreased $2.0 million to $41.0 million in the second quarter of 2019, compared to $43.0 million in the second quarter of 2018.
Personnel costs decreased $0.3 million as lower wages and variable compensation costs were partially offset by higher medical costs. Non-personnel costs decreased $1.7 million for the quarter primarily due to non-recurring litigation and settlement costs of approximately $2.5 million in 2018.
Other decreases in non-personnel expenses were offset by higher rent from our operating facilities, including expansion efforts.
As a percentage of sales, operating expenses were 18.8% in the second quarter of 2019 compared to 19.2% in 2018. Adjusted for non-recurring litigation and settlement costs, our operating expenses were 18.1% in 2018.
Net interest expense was $1.8 million in the second quarter of 2019 and $1.7 million in the second quarter of 2018 as the impact of lower average borrowing was offset by higher interest rates.
Adjusted EBITDA was $5.2 million for the second quarter of 2019 compared to $6.5 million for the second quarter of 2018. Adjusted EBITDA is a non-GAAP measurement.
For more infomration, visit www.huttig.com.
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