First Quarter 2017
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 first quarter
ended March 31, 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.”
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SUMMARY OF FIRST QUARTER 2017
RESULTS |
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(unaudited) |
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(In Millions, Except Per Share
Data) |
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Three Months Ended March 31, |
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2017 |
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2016 |
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Net sales |
|
$ |
175.7 |
|
|
100.0 |
% |
|
$ |
158.8 |
|
100.0 |
% |
|
|
Gross margin |
|
|
35.5 |
|
|
20.2 |
% |
|
|
32.0 |
|
20.2 |
% |
|
|
Operating
expenses |
|
|
37.0 |
|
|
21.1 |
% |
|
|
28.9 |
|
18.2 |
% |
|
|
Operating (loss)
income |
|
|
(1.5 |
) |
|
-0.9 |
% |
|
|
3.1 |
|
2.0 |
% |
|
|
(Loss) income from
continuing operations before taxes |
|
|
(2.1 |
) |
|
-1.2 |
% |
|
|
2.6 |
|
1.6 |
% |
|
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Net (loss) income |
|
|
(0.9 |
) |
|
-0.5 |
% |
|
|
1.4 |
|
0.9 |
% |
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|
(Loss) income from
continuing operations per share - |
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basic and
diluted |
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(0.04 |
) |
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|
0.06 |
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Net (loss) income per
share - basic and diluted |
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(0.04 |
) |
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0.06 |
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Results of Operations
Three Months Ended March 31, 2017
Compared to Three Months Ended March 31, 2016
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.
Gross margin increased 11 percent to
$35.5 million in 2017 compared to $32.0 million in
2016. As a percentage of sales, gross margin was 20.2 percent
in both 2017 and 2016. We continue to focus on our
operational initiatives as well as improved product mix as we
expand our value-add capabilities to serve the repair/remodel
construction segment to advance long-term growth.
Operating expenses increased $8.1 million
to $37.0 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.
Vrabely added, “The increase in our operating
expenses is the result of continued investments in our people, as
well as the expansion of our value-add service capabilities and the
Huttig-Grip product line, which present significant,
intermediate-term growth opportunities.”
Net interest expense was $0.6 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.
Income tax benefit of $1.2 million was
recognized for the quarter ended March 31, 2017. Income tax
expense of $1.1 million was recognized in the first quarter of
2016.
As a result of the foregoing factors, we
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.
Adjusted EBITDA was $0.1 million in the first
quarter of 2017 compared to $4.2 million in the first quarter of
2016. Adjusted EBITDA is a non-GAAP measurement. See attached
reconciliation of Non-GAAP Financial Measures.
Balance Sheet
Total available liquidity was $81.8 million at
March 31, 2017, representing a 1 percent decrease over total
liquidity of $82.6 million at March 31, 2016. At March 31,
2017, total available liquidity included $1.1 million of cash plus
$80.7 million of availability under the credit facility, while at
March 31, 2016, total available liquidity included $2.8 million of
cash plus $79.8 million of availability under the credit
facility.
Conference Call
Huttig Building Products, Inc. will host a
conference call Tuesday, May 2, 2017 at 10:00 a.m. Central Time.
Participants can listen to the call live via webcast by going to
the investor portion of Huttig’s website at www.huttig.com.
Participants can also access the live conference call via telephone
at (800) 230-1074 or (612) 288-0329 (international). The conference
ID for this call is 422409.
Following the live webcast, a replay will be
available approximately two hours after the webcast on our website
for at least 30 days.
About Huttig
Huttig, currently in its 132nd 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 the historical average of total housing
starts; the cyclical nature of our industry; the uncertainties
resulting from the changes to policies and laws following the U.S.
election in November 2016; 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; risks associated with our private
brands; termination of key supplier relationships; risks of
international suppliers; 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; funding requirements for multi-employer pension
plans for our unionized employees; the integration of any
businesses we acquire and the liabilities of such businesses; and
product liability claims and other legal proceedings and
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, 2016 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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Three Months Ended |
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Trailing Twelve Months |
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March 31, |
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Ended March 31, |
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2017 |
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2016 |
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2017 |
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Net (loss) income |
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$ |
(0.9 |
) |
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$ |
1.4 |
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$ |
14.0 |
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Discontinued
operations |
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- |
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0.1 |
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(3.1 |
) |
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Interest expense,
net |
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0.6 |
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0.5 |
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2.3 |
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Income tax expense
(benefit) |
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(1.2 |
) |
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1.1 |
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4.9 |
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Depreciation and
amortization |
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1.1 |
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0.7 |
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4.3 |
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Stock compensation
expense |
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0.5 |
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0.4 |
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1.8 |
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Adjusted
EBITDA |
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$ |
0.1 |
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$ |
4.2 |
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$ |
24.2 |
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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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March 31, |
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2017 |
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2016 |
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Net
sales |
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$ |
175.7 |
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$ |
158.8 |
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Cost of
sales |
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140.2 |
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126.8 |
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Gross
margin |
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35.5 |
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32.0 |
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Operating expenses |
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37.0 |
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28.9 |
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Operating
(loss) income |
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(1.5 |
) |
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3.1 |
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Interest
expense, net |
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0.6 |
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|
0.5 |
|
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(Loss)
income from continuing operations before income taxes |
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(2.1 |
) |
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2.6 |
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Income
tax (benefit) expense |
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(1.2 |
) |
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1.1 |
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(Loss)
income from continuing operations |
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(0.9 |
) |
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1.5 |
|
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Loss
from discontinued operations, net of taxes |
|
|
— |
|
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(0.1 |
) |
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Net
(loss) income |
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$ |
(0.9 |
) |
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$ |
1.4 |
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(Loss)
income from continuing operations per share - basic and
diluted |
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$ |
(0.04 |
) |
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$ |
0.06 |
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Loss
from discontinued operations per share - basic and
diluted |
|
$ |
0.00 |
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$ |
0.00 |
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Net
(loss) income per share - basic and diluted |
|
$ |
(0.04 |
) |
|
$ |
0.06 |
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Weighted
average shares outstanding: |
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Basic and
diluted shares outstanding |
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24.7 |
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24.4 |
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HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
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CONDENSED CONSOLIDATED BALANCE
SHEETS |
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(unaudited) |
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(In Millions) |
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March 31, |
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December 31, |
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March 31, |
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2017 |
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2016 |
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2016 |
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ASSETS |
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CURRENT
ASSETS: |
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Cash and
equivalents |
|
$ |
1.1 |
|
$ |
0.3 |
|
$ |
2.8 |
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|
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Trade
accounts receivable, net |
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|
88.4 |
|
|
59.3 |
|
|
74.9 |
|
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|
Net
inventories |
|
|
88.2 |
|
|
81.0 |
|
|
74.5 |
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Other
current assets |
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7.2 |
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9.5 |
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7.4 |
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Total
current assets |
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|
184.9 |
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150.1 |
|
|
159.6 |
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PROPERTY, PLANT AND EQUIPMENT: |
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Land |
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5.0 |
|
|
5.0 |
|
|
4.3 |
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Buildings
and improvements |
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29.8 |
|
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29.7 |
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26.5 |
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Machinery
and equipment |
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45.4 |
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43.5 |
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|
37.9 |
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Gross
property, plant and equipment |
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80.2 |
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|
78.2 |
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68.7 |
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Less
accumulated depreciation |
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54.1 |
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53.3 |
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51.3 |
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Property,
plant and equipment, net |
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26.1 |
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24.9 |
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17.4 |
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OTHER
ASSETS: |
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Goodwill |
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9.5 |
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9.5 |
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6.3 |
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Other |
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7.1 |
|
|
7.5 |
|
|
1.6 |
|
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Deferred
income taxes |
|
|
13.4 |
|
|
10.3 |
|
|
23.7 |
|
|
|
Total
other assets |
|
|
30.0 |
|
|
27.3 |
|
|
31.6 |
|
|
|
TOTAL
ASSETS |
|
$ |
241.0 |
|
$ |
202.3 |
|
$ |
208.6 |
|
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HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
|
CONDENSED CONSOLIDATED BALANCE
SHEETS |
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(unaudited) |
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(In Millions, Except Share Data) |
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March 31, |
|
December 31, |
|
March 31, |
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|
2017 |
|
2016 |
|
2016 |
|
LIABILITIES AND SHAREHOLDERS' EQUITY |
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CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
Current
maturities of long-term debt |
|
$ |
1.0 |
|
$ |
1.0 |
|
$ |
1.0 |
|
Trade
accounts payable |
|
|
68.2 |
|
|
47.2 |
|
|
60.9 |
|
Deferred
income taxes |
|
|
— |
|
|
— |
|
|
5.6 |
|
Accrued
compensation |
|
|
3.2 |
|
|
6.8 |
|
|
4.4 |
|
Other
accrued liabilities |
|
|
12.1 |
|
|
15.1 |
|
|
10.3 |
|
Total
current liabilities |
|
|
84.5 |
|
|
70.1 |
|
|
82.2 |
|
NON-CURRENT LIABILITIES: |
|
|
|
|
|
|
|
Long-term
debt, less current maturities |
|
|
78.5 |
|
|
54.5 |
|
|
64.3 |
|
Other
non-current liabilities |
|
|
6.8 |
|
|
7.2 |
|
|
7.8 |
|
Total
non-current liabilities |
|
|
85.3 |
|
|
61.7 |
|
|
72.1 |
|
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SHAREHOLDERS' EQUITY: |
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|
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Preferred
shares: $.01 par (5,000,000 shares authorized) |
|
|
— |
|
|
— |
|
|
— |
|
Common
shares: $.01 par (50,000,000 shares authorized: 25,880,851;
25,638,862; and 25,143,005 shares issued at March 31, 2017,
December 31, 2016 and March 31, 2016, respectively) |
|
|
0.3 |
|
|
0.3 |
|
|
0.3 |
|
Additional paid-in capital |
|
|
42.6 |
|
|
42.8 |
|
|
41.5 |
|
Retained
earnings |
|
|
28.3 |
|
|
27.4 |
|
|
12.5 |
|
Total
shareholders' equity |
|
|
71.2 |
|
|
70.5 |
|
|
54.3 |
|
|
|
|
|
|
|
|
|
TOTAL
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
$ |
241.0 |
|
$ |
202.3 |
|
$ |
208.6 |
|
|
|
|
|
|
|
|
|
HUTTIG BUILDING PRODUCTS, INC. AND
SUBSIDIARY |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS |
|
(unaudited) |
|
(In
Millions) |
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
March 31, |
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Cash
Flows From Operating Activities: |
|
|
|
|
|
Net
(loss) income |
|
$ |
(0.9 |
) |
|
$ |
1.4 |
|
|
Adjustments to reconcile net (loss) income to net cash used in
operating activities: |
|
|
|
|
|
Loss from
discontinued operations |
|
|
— |
|
|
|
0.1 |
|
|
Depreciation and amortization |
|
|
1.1 |
|
|
|
0.7 |
|
|
Non-cash
interest expense |
|
|
0.1 |
|
|
|
0.1 |
|
|
Stock-based compensation |
|
|
0.5 |
|
|
|
0.4 |
|
|
Deferred
taxes |
|
|
(1.3 |
) |
|
|
1.0 |
|
|
Changes
in operating assets and liabilities: |
|
|
|
|
|
Trade
accounts receivable |
|
|
(29.1 |
) |
|
|
(18.6 |
) |
|
Net
inventories |
|
|
(7.2 |
) |
|
|
(10.2 |
) |
|
Trade
accounts payable |
|
|
21.0 |
|
|
|
17.3 |
|
|
Other |
|
|
(4.3 |
) |
|
|
(4.7 |
) |
|
Cash used
in continuing operating activities |
|
|
(20.1 |
) |
|
|
(12.5 |
) |
|
Cash used
in discontinued operating activities |
|
|
(0.3 |
) |
|
|
(0.3 |
) |
|
Total
cash used in operating activities |
|
|
(20.4 |
) |
|
|
(12.8 |
) |
|
Cash
Flows From Investing Activities: |
|
|
|
|
|
Capital
expenditures |
|
|
(1.7 |
) |
|
|
(0.6 |
) |
|
Total
cash used in investing activities |
|
|
(1.7 |
) |
|
|
(0.6 |
) |
|
Cash
Flows From Financing Activities: |
|
|
|
|
|
Borrowings of debt, net |
|
|
23.6 |
|
|
|
16.3 |
|
|
Repurchase shares of common stock |
|
|
(0.7 |
) |
|
|
(0.4 |
) |
|
Total
cash provided by financing activities |
|
|
22.9 |
|
|
|
15.9 |
|
|
Net
increase in cash and equivalents |
|
|
0.8 |
|
|
|
2.5 |
|
|
Cash and
equivalents, beginning of period |
|
|
0.3 |
|
|
|
0.3 |
|
|
Cash and
equivalents, end of period |
|
$ |
1.1 |
|
|
$ |
2.8 |
|
|
|
|
|
|
|
|
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)
Historical Stock Chart
From Jul 2023 to Jul 2024