Huttig Building Products reported net income of $1.6 million for the third quarter of 2019, an increase of $0.4 million compared to the same period in 2018. While profit ticked up year over year (YOY), net sales decreased YOY in the third quarter, according to the St. Louis-based distributor’s third quarter earnings report.

The distributor’s net sales decreased 2.8% YOY to $215.7 million in the third quarter. Huttig attributed the dip in net sales to a modest softening in market segments and competitive pricing, particularly among commodity products. The distributor also continued to experience carryover effects of the temporary disruption that affected sales after Huttig’s enterprise system upgrade during the second quarter.

Net sales for millwork products decreased 5.0% YOY in the third quarter to $99.6 million and wood product sales decreased 22.7% to $15.7 million in the quarter. Net sales for building products increased 3.6% YOY to $100.4 million in the third quarter. Millwork product sales were most affected by the temporary disruption from the system upgrade, according to Huttig. Wood sales were negatively impacted by underlying market segment softening, a competitive market, and commodity pricing.

“Our sales for the third quarter were slightly below last year’s pace as a result of our continued focus on higher margin, strategic product categories and our de-emphasis of more commoditized, lower margin categories,” Jon Vrabely, Huttig’s president and CEO, said in a news release. “We believe the challenges of our enterprise resource planning system upgrade, which caused some temporary sales erosion in our second and third quarters, are now behind us.”

Huttig’s gross margin increased to $44.7 million from $44.6 million in the year earlier period. As a percentage of sales, gross margin was 60 basis points higher YOY at 20.7%. Huttig attributed the gross margin improvement to product mix and a concentrated effort to focus on higher margin opportunities. Vrabely said a specific focus on growing higher margin fastener product sales also contributed to the improvement in gross margin during the quarter.

The company’s adjusted EBITDA was $5.3 million in the third quarter, down slightly from $5.5 million in the third quarter of 2018. Vrabely said capital and cost management efforts allowed the company to reduce debt by approximately $15 million and improve available liquidity by over $9 million compared to the third quarter in 2018.