About Huttig Building Products

Huttig Building Products, Inc. operates as a domestic distributor of millwork, building materials, and wood products used principally in new residential construction and in-home improvement, remodeling, and repair work. The company purchases from leading manufacturers and distribute its products through 25 wholesale distribution centers serving 41 states. Its distribution centers sell principally to building materials dealers, national buying groups, home centers, and industrial users, including the makers of manufactured homes. The company conducts its business through a two-step distribution model. This means the company purchases from manufacturers and resells the products to its customers, who then sell the products to end users, who are typically professional builders and independent contractors engaged in residential construction and remodeling projects, or consumers engaged in do-it-yourself remodeling projects. The company’s products fall into three categories: millwork, which includes doors, windows, moulding, stair parts and columns; general building products, which include connectors, fasteners, composite decking, housewrap, roofing products and insulation; and wood products, which include engineered wood products, such as flooring systems, as well as wood panels and lumber. Doors and engineered wood products often require the company’s value-added service before they are delivered to its customers. Such services include pre-finishing exterior door units, pre-hanging exterior and interior door units, and cutting engineered wood products from standard lengths to job-specific requirements. In addition, with respect to the majority of the company’s products, it has the capability to buy in bulk and disaggregate these large shipments to meet individual customer stocking requirements. The company serves its customers, whether they are a local dealer or national account, through its wholesale distribution centers. The company services large local, regional and national independent building products dealers, specialty dealers, and home centers who in turn sell to contractors, professional builders, and consumers. These large local, regional and national building products dealers, often referred to as ‘pro dealers’, continue to distribute a significant portion of the residential building materials sold in the United States. The company services national home centers through special order programs of branded products in both millwork and building products. Strategy The company’s strategy is to increase stockholder value. To accomplish this, it has developed strategic initiatives that prioritize the growth and diversification of its business. These initiatives require investments in its infrastructure, its people and technology platform. To accelerate the company’s growth and diversification, it has made strategic capital and operating investments to execute its product line expansion and market segment penetration organic growth initiatives. Products The company’s products can be classified into three main categories: Millwork, including exterior and interior doors, pre-hung and factory-finished door units, windows, patio doors, mouldings, frames, stair parts and columns. Key brands in this product category include Therma-Tru, Masonite, Woodgrain, HB&G, Simpson Door, Final Frame, BrasPine, Arauco, Windsor Windows and Rogue Valley Door. General building products, such as fasteners and connectors, roofing, siding, insulation, flashing, housewrap, decking, railing and other miscellaneous building products. Key brands in this product category include Huttig-Grip, Louisiana-Pacific, Simpson Strong-Tie, TimberTech, AZEK, RDI, GAF Roofing, Maibec, Knauf, GCP Technologies, Fiberon, Alpha Protech, MFM, Lomanco and Fortifiber. Wood products, including engineered wood used in floor systems, wood panels and lumber. The engineered wood product line offers the company the ability to provide its customers with value-added services, such as floor system take-offs, cut-to-length packages and just-in-time, cross-dock delivery capabilities. As such, engineered wood is the company’s primary focus within this category. Key brands in this product category include Louisiana-Pacific and Rosboro. Customers During 2021, the company served approximately 2,800 customers, with one customer, Lumbermen’s Merchandising Corporation (LMC) accounting for 14% of its sales in 2021. LMC is a buying group representing multiple building material dealers. The company also sells to short line specialty dealers that focus on specific segments of the building industry, national retail home centers, and manufactured housing. Sales Sales responsibility principally lies with general managers at the company’s distribution centers. The sales function is generally divided into two channels: outside sales and inside sales. Due to COVID-19 (novel strain of coronavirus) restrictions, the company’s outside field representatives have been limited in terms of their ability to make on-site calls to local and regional customers. The company’s inside sales people generally receive and enter orders from customers and support the company’s outside sales function. In addition, the company maintains a national account sales team to serve national customers. Distribution Strategy and Operations The company purchased products from over 500 different suppliers in 2021. The company markets and offers certain products under its private label brands, including Huttig-Grip. The company distributes products for some manufacturers who also engage in direct sales. Seasonality The company’s results of operations are affected by new housing activity in the United States. The company’s results in the first and fourth quarters (year ended December 2021) are generally adversely affected by winter weather patterns in the Northeast, the Midwest, and Northwest regions of the United States, typically due to seasonal decreases in levels of construction activity in these areas. Because much of the company’s overhead and expenses remain relatively fixed throughout the year, its operating profits also tend to be lower during the first and fourth quarters. Typically, the company’s working capital requirements are greatest in the second and third quarters, due to the seasonal nature of its business. The second and third quarters also tend to be the company’s strongest operating quarters, largely due to more favorable weather throughout many of the company’s markets compared to the first and fourth quarters. The company typically generates cash from working capital reductions in the fourth quarter of the year and builds working capital during the first quarter in preparation for the company’s second and third quarters. This year the company generated cash from operations in the second, third and fourth quarters due to improved operational performance and working capital management. In 2021, the company’s working capital benefitted from product line rationalization intended to strengthen its focus on core and strategic products, including Huttig-Grip. Trade Names All of the company’s distribution centers operate under the primary trade name ‘Huttig Building Products’ with the exception of BenBilt. Huttig has no material patents, trademarks, licenses, franchises or concessions other than BenBilt, Endocote Finishing System, the Huttig Building Products name and logo, Huttiguard, Huttig-Guard, Huttig-Guard Pro, Huttig-Guard Premium, Huttig-Guard Platinum, No-Split, Huttig-Grip, and Huttig-Spin, which are registered trademarks. History Huttig Building Products, Inc. a Delaware corporation, was founded in 1865. The company was incorporated in 1913.