Huttig Building Products reported a net loss of $3.2 million in the first quarter of 2019, an increase from the net loss of $0.5 million from the same quarter last year. The distributor announced that net sales decreased slightly year over year, from $198 million in the first quarter of 2018 to $197.4 million in the first quarter of 2019. According to St. Louis-based Huttig, the decrease in net sales came as a result of modest market softening and adverse winter weather in the Midwest and northern coastal regions.
Net sales for millwork products remained constant year over year at $95.3 million and building product sales increased 2.9% from the year earlier period to $88.1 million. Wood product sales for Huttig decreased by 18.6% year over year, dropping to $14.0 million.
“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,” Jon Vrabely, Huttig’s president and CEO said. “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.”
Huttig’s gross margin decreased 3.4% year over year to $37.4 million in the first quarter of 2019. Gross margin as a percentage of sales also ticked down year over year, falling to 18.9% of sales from 19.5% of sales in the first quarter of 2018. The distributor attributed the reduction in its gross margin to a higher proportional increase in building product sales as compared to other higher margin product categories and a competitive pricing environment and incremental costs from customer programs.
The distributor’s operating expenses increased $0.4 million from $39.2 million in the first quarter of 2018 and its net interest expense was up $0.6 million year over year to $1.7 million in the first quarter of 2019. Huttig attributed its higher net interest expense to “higher average outstanding borrowings” on the company’s credit facility and higher interest rates compared to the year earlier period.
The company’s adjusted EBITDA for the first quarter of 2019 was a loss of $0.3 million, down $0.9 million from the first quarter of 2018.
