Huttig pleased with Q3 growth
Building products distributor sees double-digit revenue gains.
Pointing to growth that outpaced the LBM market, St. Louis-based Huttig Building Products reported third quarter sales of $220.0 million, up 11.2% over the prior year.
Net income declined slightly to $1.2 million, compared to $1.4 million in the third quarter of 2017.
Residential construction activity was cited as one reason for sales gains. Another factor, according to the company, was the execution of its strategic growth initiatives.
“Our sales performance in the quarter clearly demonstrates that our growth and diversification strategy is working,” said Jon Vrabely, Huttig’s president and CEO. “While our total growth in the quarter far outpaced that of the market, of which a considerable amount was derived from outside our traditional customer segments, we need to continue to improve our margin and operating leverage to achieve our working capital targets. As such, we are taking measures to right-size our inventory and expense structure to be more aligned with our current and future projected growth.”
The company’s growth initiatives included an emphasis on building products, which saw the biggest percent gains in Q3. Huttig’s sales by category were reported like this:
- Building products sales increased 17.3% in the third quarter of 2018 to $96.9 million, compared to $82.6 million in the third quarter of 2017;
- Millwork product sales increased 7.4% in the third quarter of 2018 to $104.8 million, compared to $97.6 million in the third quarter of 2017; and
- Wood product sales increased 4.6% in the third quarter of 2018 to $20.3 million, compared to $19.4 million in the third quarter of 2017.
For the nine-month period, net sales were $643.4 million, which was $69.4 million, or 12.1%, higher than 2017. Here again, the company cited an increase in residential construction activity as compared to 2017 levels and organic growth derived from the execution of strategic growth initiatives.
Operating expenses increased $2.9 million to $41.1 million in the third quarter of 2018, compared to $38.2 million in the third quarter of 2017. Personnel costs increased approximately $1.5 million, primarily as a result of wage increases, increased variable compensation, higher healthcare costs, and hiring additional sales and warehouse personnel related to the execution of our strategic growth initiatives.
Non-personnel costs increased approximately $1.4 million, primarily as a result of higher fuel prices, increased contract hauling costs, and higher facilities costs.
Promotions at Do it Best Corp.
Executive moves include the promotion of Steve Markley to executive VP of operations.
Fort Wayne, Ind.-based Do it Best Corp. promoted one of its senior leaders while also transitioning another manager into an executive leadership role. Vice President of Merchandising Steve Markley will serve as the company’s new executive VP of operations while William “Dent” Johnson, previously a divisional merchandise manager, will advance into the role of VP of merchandising.
The moves are effective immediately.
Markley has built on more than 30 years of industry experience, beginning his career in what was the company’s original distribution center in Fort Wayne. He came back to the company in the mid-80s, and then moved on to work in the vendor community and also served as a manufacturer’s representative. In 1998 he returned to develop the company’s global sourcing capabilities and vendor export programs. He assumed additional responsibilities as the divisional merchandise manager for electrical, hardware, industrial/commercial, global sourcing and export before advancing to the role of VP of merchandising in 2007.
“We are fortunate to have someone of Steve’s caliber and extensive abilities ready to lead our teams forward as we drive growth for our member-owners through our supply chain excellence,” said Do it Best CEO Dan Starr.
“I’m both humbled and excited to have the opportunity to work with our very talented and strong teams in IT, LBM, logistics, marketing, merchandising, and sales,” said Markley. “Our combined members-first mentality continues to deliver outstanding results and we look forward to driving additional value to Do it Best members across the country and around the world.”
With Markley’s promotion, Johnson moves into the open role of vice president where he will now oversee hardware products purchasing, global sourcing, inventory control, category management, content management, Alliance partner activities, and pricing teams. He joined Do it Best in March 2018 where he worked with numerous product category teams on strategic program development, vendor negotiations, promotional opportunities and supply chain enhancements. He previously served for more than 20 years in senior roles with Michelin Tire Corporation, both in the United States and abroad. Most recently, he was the site manager for Michelin’s BFGoodrich factory, overseeing all facets of operations for the 1,700-employee tire manufacturing facility.
“Already in my time at Do it Best I’ve been very impressed by the intense commitment our team has to serve our member-owners,” said Johnson. “I’m honored to carry on the great work already underway as we further our initiatives to ensure that Do it Best is the first and best choice for independent home improvement businesses.”
At Orgill, a shifting at the top
New responsibilities for veteran leaders and the naming of a new president.
Orgill, Inc. announced that members of its veteran executive team will have new responsibilities beginning January 2019. Ron Beal, Orgill’s long-time chairman, president and CEO, will drop the president title, but will remain the company’s chairman and chief executive officer.
Boyden Moore, who currently serves as Orgill’s general manager of retail, as well as president of the company’s subsidiary, Tyndale Advisors, will assume the position of Orgill president.
Brett Hammers, will become Orgill’s executive VP of worldwide sales and supply chain. He will be responsible for all sales and product sourcing in support of Orgill’s U.S., Canadian, and international customer base. Eric Divelbiss will become executive vice president of finance and administration in addition to his current role as Orgill’s CFO.
“I’m very proud of what our team has achieved, and these changes will ensure a customer-focused continuity of leadership well into the future,” Beal says. “Boyden brings an extensive understanding of the challenges and opportunities facing independent retailers, and will add fresh ideas as to how we can best assist our customers to help them be successful. Brett and Eric add their years of experience in finding the best ways to support these efforts.”
Beal adds that this plan has been in the works for several years, and is part of an ongoing process designed to both provide for an orderly succession among Orgill’s management team and to maintain the company’s tradition of innovation, according to the Monday announcement.
“I am extremely humbled to be part of Orgill’s dynamic and dedicated team in this new role.” Moore says. “I look forward to continuing to work closely with Ron, Eric, Brett and the entire Orgill team to carry on Orgill’s long history of customer-centric service to independent home improvement retailers.”
“Orgill has always focused on the future, and these changes provide tangible evidence that our customers can rest assured that the company will continue to evolve while providing them with the same levels of quality, service and innovation they have come to expect,” Hammers added.