Huttig Building Products Inc. reported late Thursday that its net loss deepened to $7.7 million in the third quarter from a $100,000 loss in the year-earlier period. Net sales from July through September fell 22% to $182.8 million from $233 million in the same quarter of 2007. The operating loss also deepened, to $6.2 million from $1 million, in part because of the $2 million it incurred in costs for closing branches in Springfield, Mo., and Fredericksburg, Va. The gross profit margin held steady--18.5% in the third quarter vs. 18.6% a year ago.
The losses came even though St. Louis-based Huttig cut its operating expenses 10% year-over-year and the value of its inventory was 28% lower than in the third quarter of 2007.
The latest results bring the company's net loss from continuing operations to $19.9 million; its loss was $2.2 million in January-September 2007. Net sales are down 22% to $545. million from $694.9 million, and the operating revenue swung to a loss of $22.3 million from a $100,000 profit the prior year.
Huttig took heart in noting that its decline in sales was smaller than the 34% drop in housing starts for the same period, and it said it "believes it now holds the number 1 or 2 market share position for the products its sells in a significant portion of the markets it services." Huttig distributes millwork, building materials and wood products through 31 distribution centers serving 44 states.
"Despite the tremendously challenging market in the 2008 third quarter, we continued to make progress strengthening the balance sheet and enhancing our ability to weather this downturn," Huttig president and CEO Jon Vrabely said. "Survival and liquidity are the immediate challenges facing many in the industry today. Fortunately, due to our aggressive actions over the past two years, we feel that we are better positioned than many in the building industry. We continue to balance the short-term need to aggressively manage the cost structure with our long-term desire to preserve our value proposition."