Huttig Building Products Inc. recently higher net sales for the third quarter, which ended on September 30.

“We continued to make significant progress in implementing our strategic plan during the third quarter and are rapidly approaching the sales execution stage of our growth initiatives,” said Jon P. Vrabely, president and CEO of Huttig Building Products. “While 2017 has been an investment year for Huttig, these investments position us to fundamentally transform and diversify our business to consistently deliver profitable growth.”

Net sales were $199.6 million in 2017, which was $6.8 million, or 4 percent, higher than in 2016.  The increase in net sales was due to the general increase in housing activity, which was up 1 percent over the prior year.

Millwork sales were flat in 2017 at $97.6 million, compared to 2016. Building products sales increased 7 percent in 2017 to $82.6 million primarily due to increases in sales of the Huttig-Grip products. Wood product sales increased 5 percent in 2017 to $19.4 million.

Gross margin was $41.3 million in 2017, compared to $41.4 million in 2016.  As a percentage of sales, gross margin was 20.7 percent in 2017, compared to 21.5 percent in 2016. The gross margin percentage decrease was primarily due to increased production variances on lower production millwork sales during the three months ended September 30, 2017. Production variances occur when there is a mismatch between planned and actual number of units produced.

Operating expenses increased $4.6 million to $38.2 million in 2017, compared to $33.6 million in 2016.  The increase was primarily due to higher costs as a result of hiring additional sales and warehouse personnel related to the Huttig-Grip Division and repair and remodel growth initiatives.  The increase was also impacted by legal fees incurred defending the Huttig-Grip Division’s right to compete in the fastener market. As a percentage of sales, operating expenses increased to 19.1 percent in 2017 compared to 17.4 percent in 2016.

Net interest expense was $0.9 million in 2017 and $0.5 million in 2016.  The increase was primarily due to higher average debt and higher borrowing rates in 2017 compared to 2016.

Huttig reported income from continuing operations of $1.3 million in the third quarter of 2017 compared to $4.8 million in the third quarter of 2016.

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