Third Quarter 2016 Highlights:
Huttig Building Products, Inc. (“Huttig”) (NASDAQ:HBP), a leading
domestic distributor of millwork, building materials and wood
products, today reported financial results for the third quarter
ended September 30, 2016.
“We are pleased with our performance in the
third quarter, especially in light of the sluggish growth in the
single family new construction segment in recent months,” said Jon
Vrabely, Huttig’s President and CEO. “We expect to see
continued growth and profitability as we execute on our strategies
to accelerate our growth, and invest in our people and in our
technology platform.”
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SUMMARY OF THIRD QUARTER 2016
RESULTS |
(unaudited) |
(In Millions, Except Per Share
Data) |
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Three Months Ended September 30, |
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2016 |
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|
2015 |
|
Net sales |
|
|
$ |
192.8 |
|
|
100.0 |
% |
|
$ |
181.7 |
|
|
100.0 |
% |
Gross margin |
|
|
|
41.4 |
|
|
21.5 |
% |
|
|
37.2 |
|
|
20.5 |
% |
Operating expenses |
|
|
|
33.6 |
|
|
17.4 |
% |
|
|
30.8 |
|
|
17.0 |
% |
Operating income |
|
|
|
7.8 |
|
|
4.0 |
% |
|
|
6.4 |
|
|
3.5 |
% |
Income from continuing operations before
taxes |
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|
|
7.3 |
|
|
3.8 |
% |
|
|
5.8 |
|
|
3.2 |
% |
Net income |
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|
4.7 |
|
|
2.4 |
% |
|
|
20.5 |
|
|
11.3 |
% |
Income from continuing operations per share
- |
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|
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basic and diluted |
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|
0.19 |
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|
0.92 |
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Net income per share - basic and
diluted |
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0.19 |
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0.82 |
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Results of Operations
Three Months Ended September 30, 2016
Compared to Three Months Ended September 30, 2015
Net sales were $192.8 million in 2016,
which was $11.1 million, or 6%, higher than in 2015. The
increase was primarily due to higher levels of construction
activity, the addition of a new product line and the acquisition
that was completed during the second quarter of 2016.
Sales increased in all product categories in
2016 compared to 2015. Millwork sales increased 10% in 2016 to
$97.4 million, primarily due to increased construction
activity and the acquisition. Building products sales increased 2%
in 2016 to $76.9 million. Wood product sales increased 8% in
2016 to $18.5 million.
Gross margin increased 11% to $41.4 million
in 2016 compared to $37.2 million in 2015. As a
percentage of sales, gross margin increased to 21.5% in 2016 from
20.5% in 2015. The increase in gross margin percentage was
primarily due to our operational initiatives as well as improved
product mix as we continue to expand our value-add capabilities to
serve the repair/remodel construction segment.
Operating expenses increased $2.8 million
to $33.6 million in 2016, compared to $30.8 million in
2015. 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 and profitability. As a percentage of sales, operating
expenses were 17.4% in 2016 and 17.0% in 2015.
Net interest expense was $0.5 million in 2016
and $0.6 million in 2015. The decrease was primarily due to
lower average debt and lower borrowing rates in 2016 compared to
2015.
Income tax expense of $2.5 million was
recognized for the quarter ended September 30, 2016. An
income tax benefit of $17.4 million was recognized in the third
quarter of 2015 as the Company released a significant portion of
its valuation allowance related to federal and certain state net
operating loss carryforwards.
As a result of the foregoing factors, we
reported income from continuing operations of $4.8 million in
the third quarter of 2016 compared to $23.2 million in the third
quarter of 2015.
Adjusted EBITDA was $9.2 million in 2016,
representing a 21% increase over Adjusted EBITDA of $7.6 million
for the prior year. Adjusted EBITDA is a non-GAAP measurement. See
attached reconciliation of Non-GAAP Financial Measures.
Balance Sheet
Total available liquidity was $84.3 million at
September 30, 2016, representing an 18% increase over total
liquidity of $71.2 million at September 30, 2015. At
September 30, 2016, total available liquidity included $1.1 million
of cash plus $83.2 million of availability under the credit
facility, while at September 30, 2015, total available liquidity
included $2.8 million of cash plus $68.4 million of availability
under the credit facility.
Conference Call
Huttig Building Products, Inc. will host a conference call
Thursday, October 27, 2016 at 10:00 a.m. Central Time. Participants
can listen to the call live via webcast by going to Huttig’s
website at www.huttig.com and selecting the “Investors” tab.
Participants can also access the live conference call via telephone
at (800) 230-1093 or (612) 234-9959 (international).
Participants need to state they are calling into the
“Huttig Building Products Third Quarter 2016 Earnings
Call.”
A replay of the conference call will be
available approximately two hours after the webcast on our website
for at least 30 days.
About Huttig
Huttig, currently in its 131st year of business,
is one of the largest domestic distributors of millwork, building
materials and wood products used principally in new residential
construction and in home improvement, remodeling and repair work.
Huttig distributes its products through 27 distribution centers
serving 41 states. Huttig's wholesale distribution centers sell
principally to building materials dealers, national buying groups,
home centers and industrial users, including makers of manufactured
homes.
Forward-Looking Statements
This press release contains forward-looking
information as defined by the United States Private Securities
Litigation Reform Act of 1995. This information presents
management's expectations, beliefs, plans and objectives regarding
future financial performance, and assumptions or judgments
concerning such performance. Any discussions contained in this
press release, except to the extent that they contain historical
facts, are forward-looking and accordingly involve estimates,
assumptions, judgments and uncertainties. Factors that could cause
actual results or outcomes to differ materially from those
addressed in the forward-looking information, include, but are not
limited to, the strength of construction, home improvement and
remodeling markets and the recovery of the homebuilding industry to
levels consistent with historical averages; the cyclical nature of
our industry; the cost of environmental compliance, including
actual expenses we may incur to resolve proceedings we are involved
in arising out of a formerly owned facility in Montana; any
limitations on our ability to utilize our deferred tax assets to
reduce future taxable income and tax liabilities; our ability to
comply with, and the restrictive effect of, the financial covenant
under our credit facility; the loss of a significant
customer; deterioration of our customers’ creditworthiness or our
inability to forecast such deteriorations; changes in commodity
prices; termination of key supplier relationships; competition with
existing or new industry participants; goodwill impairment; the
seasonality of our operations; significant uninsured claims;
federal and state transportation regulations; fuel cost increases;
our failure to attract and retain key personnel;
deterioration in our relationship with our unionized
employees, including work stoppages or other disputes; and the
financial impact of litigation or contingencies. Other important
factors that could cause actual results or outcomes to differ
materially from those addressed in the forward-looking information,
include, but are not limited to, those detailed in Huttig's Annual
Report on Form 10-K for the year ended December 31, 2015 filed with
the Securities and Exchange Commission and in other reports filed
by Huttig with the Securities and Exchange Commission from time to
time.
Non-GAAP Financial Measures
Huttig supplements its reporting of net income
with non-GAAP measurement of Adjusted EBITDA. This supplemental
information should not be considered in isolation or as a
substitute for GAAP measures.
Huttig defines Adjusted EBITDA as net income
adjusted for interest, income taxes, depreciation and amortization
and other special significant items as listed in the table
below.
Huttig presents Adjusted EBITDA because it is a
primary measure used by management, and by similar companies in the
industry, to evaluate operating performance and Huttig believes it
enhances investors’ overall understanding of the financial
performance of our business. Adjusted EBITDA is not a
recognized term under GAAP and does not purport to be an
alternative to net income as a measure of operating
performance. Huttig compensates for the limitations of using
non-GAAP financial measures by using them to supplement GAAP
results to provide a more complete understanding of the factors
affecting the business. Because not all companies use
identical calculations, Huttig’s presentation of Adjusted EBITDA
may not be comparable to other similarly titled measures of other
companies.
Adjusted EBITDA (unaudited)
The following table presents a reconciliation of
net income, the most directly comparable financial measure under
GAAP, to Adjusted EBITDA for the periods presented (in
millions):
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Trailing 12Months
Ended |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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September 30, |
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2016 |
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2015 |
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2016 |
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2015 |
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2016 |
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Net income |
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$ |
4.7 |
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$ |
20.5 |
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$ |
16.5 |
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$ |
25.6 |
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$ |
16.9 |
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Discontinued
operations |
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0.1 |
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2.7 |
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(4.3 |
) |
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3.1 |
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(4.0 |
) |
Interest expense,
net |
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0.5 |
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0.6 |
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1.6 |
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1.7 |
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2.2 |
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Income tax expense
(benefit) |
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2.5 |
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(17.4 |
) |
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7.1 |
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(17.4 |
) |
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7.3 |
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Depreciation and
amortization |
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1.0 |
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0.7 |
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2.8 |
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2.2 |
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3.6 |
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Stock compensation
expense |
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0.4 |
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0.5 |
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1.2 |
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1.3 |
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1.7 |
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Gain on disposal of
assets |
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- |
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- |
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- |
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(0.4 |
) |
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- |
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Adjusted
EBITDA |
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$ |
9.2 |
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$ |
7.6 |
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$ |
24.9 |
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$ |
16.1 |
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$ |
27.7 |
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HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
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CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS |
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(unaudited) |
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(In Millions, Except Per Share
Data) |
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Three Months Ended |
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Nine Months Ended |
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September 30, |
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September 30, |
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2016 |
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2015 |
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2016 |
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2015 |
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Net
sales |
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$ |
192.8 |
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$ |
181.7 |
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$ |
549.5 |
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$ |
504.2 |
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Cost of
sales |
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151.4 |
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144.5 |
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433.9 |
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|
402.9 |
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Gross
margin |
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41.4 |
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37.2 |
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|
115.6 |
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101.3 |
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Operating expenses |
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33.6 |
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30.8 |
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94.7 |
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|
88.7 |
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Gain on
disposal of assets |
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— |
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— |
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— |
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(0.4 |
) |
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Operating
income |
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|
7.8 |
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6.4 |
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20.9 |
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13.0 |
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Interest
expense, net |
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|
0.5 |
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0.6 |
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1.6 |
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1.7 |
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Income
from continuing operations before income taxes |
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7.3 |
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5.8 |
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19.3 |
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11.3 |
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Income
tax expense (benefit) |
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2.5 |
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(17.4 |
) |
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7.1 |
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(17.4 |
) |
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Income
from continuing operations |
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4.8 |
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23.2 |
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12.2 |
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28.7 |
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(Loss)
income from discontinued operations, net of taxes |
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(0.1 |
) |
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(2.7 |
) |
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4.3 |
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(3.1 |
) |
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Net
income |
|
|
$ |
4.7 |
|
|
$ |
20.5 |
|
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|
$ |
16.5 |
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$ |
25.6 |
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Income
from continuing operations per share - basic and diluted |
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$ |
0.19 |
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$ |
0.92 |
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$ |
0.48 |
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$ |
1.14 |
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Income
(loss) from discontinued operations per share - basic and
diluted |
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$ |
— |
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$ |
(0.11 |
) |
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$ |
0.17 |
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$ |
(0.13 |
) |
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Net
income per share - basic and diluted |
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$ |
0.19 |
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$ |
0.82 |
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$ |
0.65 |
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$ |
1.02 |
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Weighted
average shares outstanding: |
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Basic and
diluted shares outstanding |
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24.6 |
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24.1 |
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24.5 |
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24.1 |
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HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
CONDENSED CONSOLIDATED BALANCE
SHEETS |
(unaudited) |
(In Millions) |
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September 30, |
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December 31, |
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September 30, |
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2016 |
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2015 |
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2015 |
ASSETS |
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CURRENT ASSETS: |
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Cash and equivalents |
|
$ |
1.1 |
|
$ |
0.3 |
|
$ |
2.8 |
Trade accounts receivable, net |
|
|
78.7 |
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56.3 |
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|
74.1 |
Net inventories |
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|
84.4 |
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|
64.3 |
|
|
71.0 |
Other current assets |
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|
7.2 |
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7.3 |
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6.2 |
Total current assets |
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|
171.4 |
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128.2 |
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154.1 |
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PROPERTY, PLANT AND EQUIPMENT: |
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Land |
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5.0 |
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4.3 |
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4.3 |
Buildings and improvements |
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29.5 |
|
|
26.5 |
|
|
26.4 |
Machinery and equipment |
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41.5 |
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|
37.3 |
|
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37.2 |
Gross property, plant and
equipment |
|
|
76.0 |
|
|
68.1 |
|
|
67.9 |
Less accumulated depreciation |
|
|
52.6 |
|
|
50.9 |
|
|
50.2 |
Property, plant and equipment,
net |
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|
23.4 |
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17.2 |
|
|
17.7 |
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OTHER ASSETS: |
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Goodwill |
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|
9.5 |
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6.3 |
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6.3 |
Other |
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7.8 |
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|
1.7 |
|
|
1.8 |
Deferred income taxes |
|
|
14.8 |
|
|
24.0 |
|
|
24.5 |
Total other assets |
|
|
32.1 |
|
|
32.0 |
|
|
32.6 |
TOTAL ASSETS |
|
$ |
226.9 |
|
$ |
177.4 |
|
$ |
204.4 |
|
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HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
|
(unaudited) |
|
(In Millions, Except Share Data) |
|
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|
|
September 30, |
|
December 31, |
|
September 30, |
|
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2016 |
|
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|
2015 |
|
|
|
2015 |
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
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CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Current
maturities of long-term debt |
|
$ |
0.8 |
|
|
$ |
1.2 |
|
|
$ |
0.7 |
|
|
Trade
accounts payable |
|
|
57.2 |
|
|
|
43.6 |
|
|
|
52.0 |
|
|
Deferred
income taxes |
|
|
5.0 |
|
|
|
4.9 |
|
|
|
5.2 |
|
|
Accrued
compensation |
|
|
5.2 |
|
|
|
5.5 |
|
|
|
6.0 |
|
|
Other
accrued liabilities |
|
|
13.0 |
|
|
|
13.8 |
|
|
|
13.0 |
|
|
Total
current liabilities |
|
|
81.2 |
|
|
|
69.0 |
|
|
|
76.9 |
|
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Long-term
debt, less current maturities |
|
|
68.1 |
|
|
|
47.4 |
|
|
|
67.2 |
|
|
Other
non-current liabilities |
|
|
7.3 |
|
|
|
8.1 |
|
|
|
8.2 |
|
|
Total
non-current liabilities |
|
|
75.4 |
|
|
|
55.5 |
|
|
|
75.4 |
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
Preferred
shares: $.01 par (5,000,000 shares authorized) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
Common
shares: $.01 par (50,000,000 shares authorized: 25,466,252;
24,977,208; and 24,879,750 shares issued at September 30, 2016,
December 31, 2015 and September 30, 2015, respectively) |
|
|
0.3 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
Additional paid-in capital |
|
|
42.4 |
|
|
|
41.6 |
|
|
|
41.2 |
|
|
Retained
earnings |
|
|
27.6 |
|
|
|
11.1 |
|
|
|
10.7 |
|
|
Total
shareholders' equity |
|
|
70.3 |
|
|
|
52.9 |
|
|
|
52.1 |
|
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
226.9 |
|
|
$ |
177.4 |
|
|
$ |
204.4 |
|
|
|
|
|
|
|
|
|
|
HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(unaudited) |
(In
Millions) |
|
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|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
September 30, |
|
September 30, |
|
|
|
2016 |
|
|
|
2015 |
|
|
|
2016 |
|
|
|
2015 |
|
Cash Flows From Operating Activities: |
|
|
|
|
|
|
|
|
Net income |
|
$ |
4.7 |
|
|
$ |
20.5 |
|
|
$ |
16.5 |
|
|
$ |
25.6 |
|
Adjustments to reconcile net income
to net cash provided by (used in) operating activities: |
|
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|
|
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|
|
Loss (income) from discontinued
operations |
|
|
0.1 |
|
|
|
2.7 |
|
|
|
(4.3 |
) |
|
|
3.1 |
|
Depreciation and amortization |
|
|
1.0 |
|
|
|
0.7 |
|
|
|
2.8 |
|
|
|
2.2 |
|
Non-cash interest expense |
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.3 |
|
|
|
0.3 |
|
Stock-based compensation |
|
|
0.4 |
|
|
|
0.5 |
|
|
|
1.2 |
|
|
|
1.3 |
|
Deferred taxes |
|
|
2.4 |
|
|
|
(19.3 |
) |
|
|
9.3 |
|
|
|
(19.3 |
) |
Gain on disposal of assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(0.4 |
) |
Changes in operating assets and
liabilities: |
|
|
|
|
|
|
|
|
Trade accounts receivable |
|
|
4.1 |
|
|
|
(2.1 |
) |
|
|
(20.9 |
) |
|
|
(25.6 |
) |
Net inventories |
|
|
(6.0 |
) |
|
|
5.2 |
|
|
|
(18.0 |
) |
|
|
(5.2 |
) |
Trade accounts payable |
|
|
1.0 |
|
|
|
(1.7 |
) |
|
|
12.7 |
|
|
|
12.6 |
|
Other |
|
|
2.5 |
|
|
|
4.0 |
|
|
|
(1.1 |
) |
|
|
3.2 |
|
Cash provided by (used in)
continuing operating activities |
|
|
10.3 |
|
|
|
10.6 |
|
|
|
(1.5 |
) |
|
|
(2.2 |
) |
Cash provided by (used in)
discontinued operating activities |
|
|
(0.8 |
) |
|
|
1.7 |
|
|
|
3.6 |
|
|
|
1.3 |
|
Total cash provided by (used in)
operating activities |
|
|
9.5 |
|
|
|
12.3 |
|
|
|
2.1 |
|
|
|
(0.9 |
) |
Cash Flows From Investing Activities: |
|
|
|
|
|
|
|
|
Capital expenditures |
|
|
(1.5 |
) |
|
|
(1.7 |
) |
|
|
(2.7 |
) |
|
|
(2.6 |
) |
Acquisition |
|
|
— |
|
|
|
— |
|
|
|
(17.3 |
) |
|
|
— |
|
Proceeds from disposition of
capital assets |
|
|
— |
|
|
|
0.1 |
|
|
|
— |
|
|
|
2.5 |
|
Total cash used in investing
activities |
|
|
(1.5 |
) |
|
|
(1.6 |
) |
|
|
(20.0 |
) |
|
|
(0.1 |
) |
Cash Flows From Financing Activities: |
|
|
|
|
|
|
|
|
Borrowings of debt, net |
|
|
(7.7 |
) |
|
|
(10.4 |
) |
|
|
19.1 |
|
|
|
3.9 |
|
Repurchase shares of common
stock |
|
|
— |
|
|
|
— |
|
|
|
(0.4 |
) |
|
|
(0.6 |
) |
Total cash (used in) provided by
financing activities |
|
|
(7.7 |
) |
|
|
(10.4 |
) |
|
|
18.7 |
|
|
|
3.3 |
|
Net increase in cash and equivalents |
|
|
0.3 |
|
|
|
0.3 |
|
|
|
0.8 |
|
|
|
2.3 |
|
Cash and equivalents, beginning of
period |
|
|
0.8 |
|
|
|
2.5 |
|
|
|
0.3 |
|
|
|
0.5 |
|
Cash and equivalents, end of
period |
|
$ |
1.1 |
|
|
$ |
2.8 |
|
|
$ |
1.1 |
|
|
$ |
2.8 |
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosure of Cash Flow
Information: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
0.5 |
|
|
$ |
0.4 |
|
|
$ |
1.4 |
|
|
$ |
1.3 |
|
Income taxes paid |
|
|
— |
|
|
|
— |
|
|
|
0.4 |
|
|
|
0.1 |
|
|
|
|
|
|
|
|
|
|
For more information, contact:
Don Hake
investor@huttig.com
Huttig Building Products (NASDAQ:HBP)
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From Jun 2024 to Jul 2024
Huttig Building Products (NASDAQ:HBP)
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From Jul 2023 to Jul 2024