Huttig Building Products cut its net loss to $500,000 in the first quarter from a $900,000 loss in the year-earlier period on a 13% rise in sales that the distributor credited to its strategic investments.
St. Louis-based Huttig is a hybrid, with roughly half its sales coming from millwork products ($95.3 million in the first quarter, up 4%) and half from building products ($85.5 million, up 26%). The recently created Huttig-Grip product line helped drive those sales, the company said.
But while Huttig-Grip boosted sales, it also was credited with damping gross margins a bit, to 19.5% from 20.2.%. Operating expenses rose to $39.2 million from $37 million, helping lead to an operating loss of $500,000. That’s an improvement from the operating loss of $1.5 million in 2017’s January-to-March period.
Huttig also noted that interest expense nearly doubled to $1.1 million from $600,000. Higher average borrowings on the company’s credit facility plus higher interest rates caused the increase, Huttig said. The company’s balance sheet shows long-term debt less current maturities totaled $145.4 million as of March 31, while assets totaled $309.6 million.
Huttig cited the continuing expansion of Huttig-Grip plus seasonal working capital needs for causing it to tally $40.1 million worth of cash in operating activities, nearly double the $20.4 million it used a year earlier. Most of the additional cash funded an increase in inventory.
Adjusted EBITDA–earnings before interest, taxes, depreciation, amortization, and stock-based compensation–improved dramatically to $1.4 million from $100,000 the previous year.
“I am pleased with the continued progress we made in executing our strategic growth initiatives in the quarter,” said Jon Vrabely, Huttig’s president and CEO. “We are seeing the results of our strategic investments as our first quarter revenues increased 13% over the prior year quarter. Looking forward, we will continue to focus on executing our growth plans, improving our gross margins, and managing our working capital.”
