Huttig swings to a profit
Huttig Building Products posted second quarter net sales of $192 million, a 12.1% drop from second quarter 2019 net sales of $218.5 million.
But the St. Louis, Mo.-based building products distributor posted a net income of $1.6 million compared to a net loss of $10.3 million for the same period a year ago.
Revenues were lower in all three of Huttig’s product categories, with varying levels of pandemic-related supply chain disruption across product lines.
Millwork product sales decreased 17.9% in the second quarter of 2020 to $81.7 million, building products sales were down 3.6% to $97.5 million, and wood product sales declined 28.5% in the $12.8 million.
Millwork sales were most impacted by the disruption of its supply chain, according to Huttig.
Building product sales were more resilient as certain product lines within the category retained high levels of demand. The decline in wood product sales was partially caused by Huttig’s decision to deemphasize certain product lines within the category.
Operating expenses, excluding restructuring charges of $1.5 million, decreased $6.3 million to $34.7 million in the second quarter of 2020, compared to $41 million in the second quarter of 2019.
Personnel costs decreased $4.7 million, or 19.3%, as a result of expense reduction actions taken in response to the COVID-19 pandemic, including the closing of two branches.
Workforce reductions, wage reductions and suspension of company matching contributions under an employee benefit plan, as well as reduced medical claims, also contributed to lower personnel costs.
Huttig announced that it is in the process of closing its Columbus, Ohio and Selkirk, N.Y. locations as part of a restructuring effort. The branches are expected to be closed by the end of the third quarter, the company said.
As of Aug. 3, Huttig said that it distributes building products to 41 states through 27 branches.
The Bottom Line: Sales fall 12.1% in the second quarter but the distributor swings to a profit of $1.6 million.
What the CEO said: “We acted early, decisively, and aggressively to adjust our cost structure and inventory levels to mitigate the threat to the company posed by the pandemic,” said Huttig President and CEO John Vrabely. “I am very proud of all of our associates for the dedication, hard work, and personal sacrifices that have been made on behalf of our stakeholders. Moving forward, we remain committed to continuing to take the necessary actions to protect our associates and diligently manage the business as the external environment continues to change.”
Company info: The full second quarter 2020 financial report from Huttig is available here.