Huttig Building Products Inc. announced today a $1 million net loss in the third quarter, improving markedly from the $7.7 million net loss in the same period last year. The reduced loss came despite a 28% fall in net sales from continuing operations to $131.4 million.
In its SEC filing, St. Louis-based Huttig said that sales in the third quarter of general building products dropped 22% from the July-September 2008 period to $64.4 million, while millwork sales decreased 30% to $55.2 million, engineered wood sales slid 42% to $3.1 million, and sales of commodity and other wood products decreased 45% to $8.7 million. As a result, millwork now provides 42% of sales vs. 43% a year ago, general building products' share of total sales rose to 49% from 45%, and sales of other wood products shrank to 9% from 12%.
The gross margin improved slightly to 19.3% of sales vs. 18.1% a year earlier, though in dollar terms the margin fell by about one-quarter to $25.3 million. In addition, operating expenses were 34% lower at $25.9 million. In September, Huttig announced it was cutting by 10% the annual base salaries of its headquarters and regional office employees.
"Third quarter 2009 results were impacted by an approximate 32% decline in housing starts to an average annualized rate of approximately 0.6 million, compared to an average annualized rate of approximately 0.9 million in the third quarter of 2008," Huttig's SEC filing said. "We continue to anticipate decreased housing starts for the balance of 2009 vs. 2008 based on the current level of housing activity and industry forecasts."
Huttig incurred $800,000 of costs for the writedown and liquidation of inventory. It has 27 distribution centers serving 45 states.
"From the second quarter of 2006 through the third quarter of 2009, the company closed, consolidated, or sold 20 distribution centers, including three during the first nine months of 2009," Huttig said. "In addition, the company has reduced its workforce by approximately 1,200 during the same time frame, employing approximately 1,000 people at Sept. 30. Further, we continue to review our operating expenses and implement cost saving actions. We believe that through our aggressive restructuring and cost control activities, we have mitigated the impact of the severe downturn in the housing market while providing a more scalable cost structure to support future growth opportunities."
