Huttig Building Products Inc., a distributor of millwork, building materials and wood products, recently reported its earnings for the first quarter of 2017.

“Our first quarter results show the continued growth of our business and an increase in operating expenses resulting from the continued, meaningful investments we are making in our accelerated growth strategy,” said Jon Vrabely, president and CEO of Huttig Building Products.  “While these investments are negatively impacting our short-term results, they are truly transformational in nature and provide the best opportunity to generate significant, sustained, profitable growth in the intermediate term.”

Net sales were $175.7 million in 2017, which was $16.9 million, or 11 percent, higher than in 2016.  The increase was primarily due to higher levels of construction activity, the BenBilt Building Systems acquisition that we completed during the second quarter of 2016 and the effect of our special promotional winter buy sales occurring in the first quarter of 2017 compared to our special promotional winter buy sales occurring in the second quarter of 2016.

Millwork sales increased 15 percent in 2017 to $91.9 million, primarily due to increased construction activity and the acquisition. Building products sales increased 10 percent in 2017 to $68.1 million primarily due to our special promotional winter buy sales.  Wood product sales decreased 4 percent in 2017 to $15.7 million.

Operating expenses increased $8.1 million to $37 million in 2017, compared to $28.9 million in 2016.  The increase was primarily due to higher personnel costs as a result of hiring additional personnel and expenses attributable to higher variable costs associated with increased sales, investment in the Huttig-Grip division and the acquisition.  As a percentage of sales, operating expenses increased to 21.1 percent in 2017 compared to 18.2 percent in 2016, reflecting increased headcount to service anticipated sales growth.

As a result of these factors, Huttig reported a loss from continuing operations of $0.9 million in the first quarter of 2017 compared to income of $1.5 million in the first quarter of 2016.