Huttig Building Products, Inc., a distributor of millwork, building materials and wood products, recently reported financial results for the second quarter, and provided a business update on its response to the COVID-19 pandemic.

“In light of all of the economic uncertainty caused by the COVID-19 pandemic, I am pleased with our financial performance in the second quarter,” said Jon Vrabely, Huttig’s president and CEO. “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. 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.”

As anticipated, the impact of the COVID-19 pandemic negatively affected the company’s net sales, although company representatives say the company’s COVID-19 readiness and response plan has driven an overall improvement in operating results relative to its initial pandemic forecasts.

Net sales were $192.0 million in the second quarter of 2020, which was $26.5 million (12.1%), lower than the second quarter of 2019. Huttig says the decline was caused primarily by the changes to the operating environment resulting from the pandemic. While some large markets were significantly impacted by the pandemic early in the second quarter, the company reports that demand has improved as construction activity has rebounded. Revenues were lower in all three of the company’s product classifications, with varying levels of pandemic-related supply chain disruption across product lines.

Millwork product sales decreased 17.9% in the second quarter of 2020, dropping to $81.7 million, from the $99.5 million in the second quarter of 2019. Building products sales decreased 3.6% to $97.5 million in second quarter of the year, compared to $101.1 million in the second quarter of 2019; and wood product sales decreased 28.5% in the second quarter of 2020 to $12.8 million, compared to $17.9 million for the same time last year. Millwork sales were most impacted by the disruption of Huttig’s supply chain, while building product sales were more resilient as certain product lines within this category retained relatively consistent high levels of demand. The decline in wood product sales also reflected the company’s decision to de-emphasize certain product lines within the category.

Gross margin was $38.7 million in the second quarter of 2020, compared to $44.3 million in the second quarter of last year. As a percentage of sales, gross margin was 20.2% in the second quarter of 2020, remaining steady from the 20.3% of the same time frame in 2019. Gross margins were negatively impacted by a shift in sales mix reflecting higher proportionate sales of lower margin categories and direct sales.

The company is closing its Columbus, Ohio and Selkirk, N.Y., branch locations as part of restructuring efforts and expect the efforts to be substantially complete by the end of the third quarter this year. During the second quarter of 2020, Huttig recorded a restructuring charge of $1.5 million for closure-related costs for personnel, facility, equipment and working capital related costs.

As a result of all the preceding factors, the company reported net income of $1.6 million for the quarter ended June 30, 2020, compared to a net loss of $10.3 million for the quarter ended June 30, 2019. Adjusted for the $1.5 million restructuring charge in 2020 and the $11.8 million tax charge in 2019, net income was $3.1 million and $1.5 million in 2020 and 2019, respectively.