Huttig Building Products 8-K Huttig Building Products, Inc. 2008 Fourth Quarter and Full Year Preliminary Results

Huttig Building Products, Inc. 2008 Fourth Quarter and Full Year Preliminary Results

ST. LOUIS, MO, February 9, 2009 — Set forth below are preliminary results for the fourth quarter and year ended December 31, 2008 for Huttig Building Products, Inc. (OTC: HBPI), a leading domestic distributor of millwork, building materials and wood products.

Fourth Quarter Results

Due to the continued decline in housing starts, the Company reported a net loss from continuing operations of $15.3 million, or ($.73) per diluted share, in the 2008 fourth quarter compared to a net loss of $5.8 million, or ($.28) per diluted share, in the corresponding year ago quarter. Net sales declined 30% to $126.0 million compared to $179.9 million in the year-ago period.

Full Year Results

For the year ended December 31, 2008, the Company’s net loss from continuing operations of $35.2 million, or ($1.68) per diluted share, compares to a net loss from continuing operations of $8.0 million, or ($.39) per diluted share, in the prior year. Net sales declined 23% to $671.0 million compared to $874.8 million in 2007.

Operating results for 2008 and 2007 were impacted by $11.0 million and $3.8 million, respectively, of shut down costs, charges for inventory impairments and liquidations at closed branches and goodwill impairment charges, net of gains on the sale of facilities.

“During 2008, we continued our programs aimed at reducing our cost structure, managing inventories, generating cash, improving working capital and reducing debt,” said Jon Vrabely, President & CEO. “While we are not satisfied with our financial performance in 2008, these are unprecedented times and we will continue to focus on cost controls, preserving our liquidity and maintaining the integrity of our balance sheet to best position the Company for the future.”

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Inventories declined 33% to $59.4 million at December 31, 2008 from $88.7 million at December 31, 2007. For the full year, net cash provided from operating activities was $3.6 million compared to $13.8 million in 2007. Working capital at the end of December 2008 was 13.7% of annualized net sales for the fourth quarter compared to 13.2% in the prior year period. Bank debt, net of cash, decreased 10% to $20.7 million at December 31, 2008 from $23.0 million a year ago. At December 31, 2008, the Company had $44.5 million of availability under its revolving credit facility in addition to outstanding borrowings

About Huttig

Huttig Building Products, Inc., currently in its 124^th 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 30 distribution centers serving 45 states. The Company’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

The information included herein contains forward-looking information as defined by the 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 herein, except to the extent that they contain historical facts, are forward-looking and accordingly involve estimates, assumptions, judgments and uncertainties. There are known and unknown factors that could cause actual results or outcomes to differ materially from those addressed in the forward-looking information. Such known factors are detailed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007 filed with the Securities and Exchange Commission and in other reports filed by the Company with the Securities and Exchange Commission from time to time.

Contact:Kenneth Young - (314)-216-2648 —kyoung@huttig.com

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Millions, Except Share and Per Share Data)

	December 31,		December 31,
	2008		2007
			Audited
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	2.8	$	1.8
Trade accounts receivable, net		33.0		56.1
Inventories, net		59.4		88.7
Other current assets		5.5		13.6
Total current assets		100.7		160.2
PROPERTY, PLANT AND EQUIPMENT
Land		5.6		5.6
Building and improvements		29.4		30.2
Machinery and equipment		29.5		30.0
Gross property, plant and equipment		64.5		65.8
Less accumulated depreciation		40.1		39.2
Property, plant and equipment, net		24.4		26.6
OTHER ASSETS:
Goodwill, net		9.6		18.3
Other		3.3		5.1
Deferred income taxes		8.0		2.5
Total other assets		20.9		25.9
TOTAL ASSETS	$	146.0	$	212.7
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	0.4	$	1.2
Trade accounts payable		23.5		50.1
Deferred income taxes		6.9		5.3
Accrued compensation		4.3		6.3
Other accrued liabilities		14.4		15.9
Total current liabilities		49.5		78.8
NON-CURRENT LIABILITIES:
Long-term debt, less current maturities		23.7		25.4
Other non-current liabilities		2.5		4.2
Total non-current liabilities		26.2		29.6
SHAREHOLDERS’ EQUITY
Preferred shares; $.01 par (5,000,000 shares authorized)		—		—
Common shares; $.01 par (50,000,000 shares authorized:
21,478,631 and 20,968,445 shares issued at December 31, 2008 and December 31, 2007, respectively)		0.2		0.2
Additional paid-in capital		37.3		36.1
Retained earnings		32.8		68.2
Less: Treasury shares, at cost (0 and 32,219 shares at December 31, 2008 and 2007, respectively		—		(0.2	)
Total shareholders’ equity		70.3		104.3
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	146.0	$	212.7

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In Millions, Except Share and Per Share Data)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2008			2007			2008			2007
										Audited
Net sales	$	126.0		$	179.9		$	671.0		$	874.8
Cost of sales		105.4			145.8			548.6			709.8
Gross margin		20.6			34.1			122.4			165.0
Operating expenses		34.1			41.8			151.3			174.1
Goodwill impairment		1.6			0.8			8.7			0.8
Gain on disposal of capital assets		(0.8	)		(0.9	)		(1.0	)		(2.4	)
Operating loss		(14.3	)		(7.6	)		(36.6	)		(7.5	)
Interest expense, net		0.6			0.8			2.6			4.2
Loss from continuing operations before income taxes		(14.9	)		(8.4	)		(39.2	)		(11.7	)
Provision (benefit) for income taxes		0.4			(2.6	)		(4.0	)		(3.7	)
Loss from continuing operations		(15.3	)		(5.8	)		(35.2	)		(8.0	)
Loss from discontinued operations, net of taxes		(0.1	)		—			(0.2	)		(0.2	)
Net loss	$	(15.4	)	$	(5.8	)	$	(35.4	)	$	(8.2	)
Net loss from continuing operations per share - basic and diluted	$	(0.73	)	$	(0.28	)	$	(1.68	)	$	(0.39	)
Net loss from discontinued operations per share - basic and diluted		—			—			(0.01	)		(0.01	)
Net loss per share — basic and diluted	$	(0.73	)	$	(0.28	)	$	(1.69	)	$	(0.40	)
Basic and diluted shares outstanding		20,980,795			20,657,846			20,922,502			20,570,125

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Millions)

	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2008			2007			2008			2007
										Audited
Cash Flows From Operating Activities:
Net loss	$	(15.4	)	$	(5.8	)	$	(35.4	)	$	(8.2	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Net loss from discontinued operations		0.1			—			0.2			0.2
Depreciation and amortization		1.1			1.0			4.5			4.8
Stock compensation		0.1			0.3			1.3			1.6
Impairment of long-lived assets		1.4			0.8			8.7			1.3
Gain on disposal of capital assets		(0.8	)		(0.9	)		(1.0	)		(2.4	)
Other adjustments		1.3			0.7			(3.2	)		1.3
Changes in operating assets and liabilities:
Trade accounts receivable		31.8			27.9			23.1			18.0
Inventories		11.4			9.4			29.3			8.6
Trade accounts payable		(25.7	)		(20.5	)		(26.6	)		(12.0	)
Other		(1.1	)		(2.7	)		2.7			0.6
Total net cash provided by operating activities		4.2			10.2			3.6			13.8
Cash Flows From Investing Activities:
Capital expenditures		(0.3	)		(0.4	)		(2.0	)		(3.0	)
Proceeds from disposition of capital assets		0.9			1.0			1.5			4.0
Total cash provided by (used in) investing activities		0.6			0.6			(0.5	)		1.0
Cash Flows From Financing Activities:
Borrowings and payments of debt, net		(8.6	)		(21.1	)		(2.5	)		(20.2	)
Debt issuance costs		(0.5	)		—			(0.5	)		—
Exercise of stock options		—			0.1			0.9			1.1
Total cash used in financing activities		(9.1	)		(21.0	)		(2.1	)		(19.1	)
Net increase (decrease) in cash and equivalents		(4.3	)		(10.2	)		1.0			(4.3	)
Cash and equivalents, beginning of period		7.1			12.0			1.8			6.1
Cash and equivalents, end of period	$	2.8		$	1.8		$	2.8		$	1.8
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	0.5		$	1.0		$	2.3		$	4.3
Income taxes refunded		0.1			0.4			5.3			4.4
Cash received from exercise of stock options		—			—			0.4			0.6
Assets acquired with debt obiligations		—			1.0			—			1.1

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS WORKSHEET
(UNAUDITED)
(In Millions)

	Three Months Ended									Twelve Months Ended
	December 31, 2008									December 31, 2008
	As Reported			Charges/Gain			Adjusted			As Reported			Charges/Gain			Adjusted
Net sales	$	126.0					$	126.0		$	671.0					$	671.0
Gross margin		20.6			(0.1	)		20.5			122.4			1.0			123.4
Operating expenses		34.1			—			34.1			151.3			(2.1	)		149.2
Goodwill impairment		1.6			(1.6	)		—			8.7			(8.7	)		—
Gain on disposal of capital assets		(0.8	)		0.8			—			(1.0	)		0.8			(0.2	)
Operating loss		(14.3	)		0.7			(13.6	)		(36.6	)		11.0			(25.6	)
Gross margin		16.3	%					16.3	%		18.2	%					18.4	%
Operating expenses margin		27.1	%					27.1	%		22.5	%					22.2	%
Operating loss margin		-11.3	%					-10.8	%		-5.5	%					-3.8	%

	Three Months Ended									Twelve Months Ended
	December 31, 2007									December 31, 2007
	As Reported			Charges/Gain			Adjusted			As Reported			Charges/Gain			Adjusted
Net sales	$	179.9					$	179.9		$	874.8					$	874.8
Gross margin		34.1			0.5			34.6			165.0			1.5			166.5
Operating expenses		41.8			(1.1	)		40.7			174.1			(3.8	)		170.3
Goodwill impairment		0.8			(0.8	)		—			0.8			(0.8	)		—
Gain on disposal of capital assets		(0.9	)		0.9			—			(2.4	)		2.3			(0.1	)
Operating profit (loss)		(7.6	)		1.5			(6.1	)		(7.5	)		3.8			(3.7	)
Gross margin		19.0	%					19.2	%		18.9	%					19.0	%
Operating expenses margin		23.2	%					22.6	%		19.9	%					19.5	%
Operating loss margin		-4.2	%					-3.4	%		-0.9	%					-0.4	%