10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2004

Commission file number 1-14982

HUTTIG BUILDING PRODUCTS, INC.

(Exact name of registrant as specified in its charter)

Delaware	43-0334550
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

555 Maryville University Drive Suite 240 St. Louis, Missouri	63141
(Address of principal executive offices)	(Zip code)

(314) 216-2600

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).    Yes  ¨    No  x

The number of shares of Common Stock outstanding on March 31, 2004 was 19,435,701 shares.

		Page No.
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements
	Consolidated Balance Sheets as of March 31, 2004 (unaudited) and December 31, 2003	3-4
	Consolidated Statements of Operations for the three months ended March 31, 2004 and 2003 (unaudited)	5
	Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2004 and 2003 (unaudited)	6
	Consolidated Statements of Cash Flows for the three months ended March 31, 2004 and 2003 (unaudited)	7
	Notes to Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
Item 4.	Controls and Procedures	18
PART II.	OTHER INFORMATION
Item 6.	Exhibits and Reports on Form 8-K	19
Signatures		20
Exhibit Index		21

-2-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2004 AND DECEMBER 31, 2003

(UNAUDITED)

(In Millions)

	March 31, 2004		December 31, 2003
ASSETS
Current Assets:
Cash and equivalents	$	2.4	$	5.0
Trade accounts receivable, net		104.6		70.9
Inventories, net		99.2		79.6
Other current assets		4.8		7.0
Total current assets		211.0		162.5
Property, Plant and Equipment:
Land		6.5		6.5
Building and improvments		33.0		32.9
Machinery and equipment		36.9		37.3
Gross property, plant and equipment		76.4		76.7
Less accumulated depreciation		38.5		37.4
Property, plant and equipment, net		37.9		39.3
Other Assets:
Goodwill, net		13.6		13.6
Other		3.0		3.0
Deferred income taxes		7.2		7.6
Total other assets		23.8		24.2
Total Assets	$	272.7	$	226.0

see notes to consolidated financial statements

-3-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2004 AND DECEMBER 31, 2003

(UNAUDITED)

(In Millions, Except Share and Per Share Data)

	March 31, 2004			December 31, 2003
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Current portion of debt	$	1.4		$	1.4
Trade accounts payable		80.8			63.6
Deferred income taxes		4.6			4.4
Accrued compensation		7.7			9.4
Other accrued liabilities		7.7			7.0
Total current liabilities		102.2			85.8
Non-current Liabilities:
Debt		93.9			66.4
Other non-current liabilities		1.7			1.6
Total non-current liabilities		95.6			68.0
Shareholders’ Equity:
Preferred shares; $.01 par (5,000,000 shares authorized)		—			—
Common shares; $.01 par (50,000,000 shares authorized; at March 31, 2004 and December 31, 2003—20,896,145 shares issued)		0.2			0.2
Additional paid-in capital		33.4			33.4
Retained earnings		49.1			46.4
Unearned compensation—restricted stock		(0.1	)		(0.1	)
Less: Treasury shares, at cost (1,460,444 shares at March 31, 2004 and December 31, 2003)		(7.7	)		(7.7	)
Total shareholders’ equity		74.9			72.2
Total Liabilities and Shareholders’ Equity	$	272.7		$	226.0

see notes to consolidated financial statements

-4-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

(UNAUDITED)

(In Millions, Except Per Share Data)

	Three Months Ended March 31,
	2004			2003
Net Sales	$	243.1		$	196.5
Cost of Sales and Operating Expenses:
Cost of sales		194.7			161.4
Operating expenses		41.3			39.8
Depreciation and amortization		1.6			1.6
Total cost of sales and operating expenses		237.6			202.8
Operating Profit (Loss)		5.5			(6.3	)
Other Income (Expense):
Interest expense, net		(1.1	)		(2.2	)
Unrealized gain on derivatives		—			0.5
Total other expense, net		(1.1	)		(1.7	)
Income (Loss) Before Income Taxes		4.4			(8.0	)
Provision (Benefit) for Income Taxes		1.7			(3.0	)
Net Income (Loss)	$	2.7		$	(5.0	)
Net Income (Loss) Per Basic Share	$	0.14		$	(0.25	)
Weighted Average Basic Shares Outstanding		19.4			19.6
Net Income (Loss) Per Dilutive Share	$	0.14		$	(0.25	)
Weighted Average Diluted Shares Outstanding		19.6			19.6

see notes to consolidated financial statements

-5-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

(UNAUDITED)

(In Millions)

	Common Shares Outstanding, at Par Value		Additional Paid-In Capital			Retained Earnings			Unearned Compensation- Restricted Stock			Accumulated Other Comprehensive Loss			Treasury Shares, at Cost			Total Shareholders’ Equity
Balance at January 1, 2003	$	0.2	$	33.5		$	43.0		$	(0.4	)	$	(0.6	)	$	(7.5	)	$	68.2
Net loss							(5.0	)											(5.0	)
Fair market value adjustment of derivatives, net of tax													0.4						0.4
Comprehensive (loss) income							(5.0	)					0.4						(4.6	)
Restricted stock issued, net of forfeitures and amortization expense				(0.1	)					0.3						(0.4	)		(0.2	)
Balance at March 31, 2003	$	0.2	$	33.4		$	38.0		$	(0.1	)	$	(0.2	)	$	(7.9	)	$	63.4
Balance at January 1, 2004	$	0.2	$	33.4		$	46.4		$	(0.1	)	$	—		$	(7.7	)	$	72.2
Net income							2.7												2.7
Balance at March 31, 2004	$	0.2	$	33.4		$	49.1		$	(0.1	)	$	—		$	(7.7	)	$	74.9

see notes to consolidated financial statements

-6-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003

(UNAUDITED)

(In Millions)

	Three Months Ended March 31,
	2004			2003
Cash Flows From Operating Activities:
Net income (loss)	$	2.7		$	(5.0	)
Depreciation and amortization		1.8			1.8
Deferred income taxes		0.6			0.2
Unrealized gain on derivatives, net		—			(0.5	)
Accrued postretirement benefits		(0.1	)		(0.1	)
Changes in operating assets and liabilities:
Trade accounts receivable		(33.7	)		(16.8	)
Inventories		(19.6	)		(6.5	)
Other current assets		2.2			(0.5	)
Trade accounts payable		17.2			2.2
Accrued liabilities		(1.0	)		1.0
Other		(0.1	)		(0.1	)
Total cash from operating activities		(30.0	)		(24.3	)
Cash Flows From Investing Activities:
Capital expenditures		(0.1	)		(1.0	)
Total cash from investing activities		(0.1	)		(1.0	)
Cash Flows From Financing Activities:
Repayment of capital lease obligations		(0.4	)		(0.4	)
Borrowings of debt on revolving debt agreements, net		27.9			25.9
Proceeds from sale-leaseback of equipment		—			1.0
Total cash from financing activities		27.5			26.5
Net Increase (Decrease) in Cash and Equivalents		(2.6	)		1.2
Cash and Equivalents, Beginning of Period		5.0			3.4
Cash and Equivalents, End of Period	$	2.4		$	4.6
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	0.7		$	1.9
Income taxes received-net of taxes paid	$	(0.1	)	$	(0.3	)

see notes to consolidated financial statements

-7-

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

1. BASIS OF PRESENTATION

The consolidated financial statements included herein have been prepared by Huttig Building Products, Inc. (the “Company” or “Huttig”) on a consolidated basis, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The Company believes that the necessary disclosures have been made for a fair statement of the results for the interim period presented. It is recommended that these consolidated financial statements be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s latest Annual Report on Form 10-K. The financial information contained herein reflects, in the opinion of management, all adjustments necessary to present fairly, consisting of normal recurring items and the results for the interim periods presented. Certain amounts in the prior period consolidated financial statements have been reclassified to be consistent with the current period’s presentation.

The consolidated results of operations and resulting cash flows for the interim periods presented are not necessarily indicative of the results that might be expected for the full year. Due to the seasonal nature of Huttig’s business, operating profitability is usually lower in the Company’s first and fourth quarters than in the second and third quarters.

2. STOCK-BASED EMPLOYEE COMPENSATION

The Company accounts for its stock-based employee compensation plans under the recognition and measurement principles of Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to Employees, and related interpretations. No stock-based employee compensation cost is reflected in net income, as all options granted under those plans had an exercise price equal to the market value of the underlying common stock on the date of grant. The following table illustrates the effect on net income and earnings per share if the Company had applied the fair value recognition provisions of Statement of Financial Accounting Standards (“SFAS”) No. 123, Accounting for Stock-Based Compensation, to stock-based employee compensation.

In December 2002, the Financial Accounting Standards Board issued SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure, which is required to be adopted in fiscal years beginning after December 15, 2002. SFAS No. 148, which provides alternative methods of transition for a voluntary change to the fair value method of accounting for stock-based employee compensation as required by SFAS No. 123. In addition, SFAS No. 148 amends the disclosure requirements of SFAS No. 123 to require more prominent and more frequent disclosures in financial statements about the effects of stock-based compensation. The Company’s disclosure regarding the effects of stock-based compensation is included below in compliance with SFAS No. 148.

-8-

Had the compensation cost for these plans been determined according to SFAS No. 123, the Company’s net income (loss) and earnings (loss) per share would have been the following pro forma amounts for the quarter ended March 31, 2004 and 2003:

	Quarter Ended
	(In millions, except per share amount)
	March 31, 2004			March 31, 2003
Net income (loss), as reported	$	2.7		$	(5.0	)
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		—			—
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects		(0.1	)		(0.1	)
Net income (loss), pro forma	$	2.6		$	(5.1	)
Basic income (loss) per share:
As reported	$	0.14		$	(0.25	)
Pro Forma	$	0.14		$	(0.26	)
Diluted income (loss) per share:
As reported	$	0.14		$	(0.25	)
Pro Forma	$	0.13		$	(0.26	)

3. DEBT

Debt consisted of the following at March 31, 2004 and December 31, 2003 (in millions):

	March 31, 2004		December 31, 2003
Revolving Credit agreement	$	91.4	$	63.5
Capital lease obligations		3.9		4.3
Total debt		95.3		67.8
Less: current portion		1.4		1.4
Long-term debt	$	93.9	$	66.4

Credit Agreement—The Company has a $150.0 million Senior Secured Revolving Credit Facility, as amended, (the “Credit Facility”) which expires in August 2005. On February 13, 2004, the Company and the agent and lenders amended the credit agreement to provide for a “springing” lock-box arrangement. Under this arrangement, the Company now maintains a lock-box from which it may apply cash receipts to any corporate purpose so long as its monthly average availability does not fall below $20 million and it is not in default under its credit agreement. The agent and the lenders maintain a security interest in the Company’s lock-box and, upon the occurrence of either of the foregoing triggering events, may redirect funds from the lock-box to a loan account in the name of the lenders on a daily basis and applied against the revolving loan balance. Effective with the amendment, the Company classified the outstanding borrowings under the credit facility as long-term liabilities at March 31, 2004 and December 31, 2003.

As of March 31, 2004, the Company had revolving credit borrowings of $91.4 million with $53.4 million of excess credit available under the Credit Facility, which includes the daily minimum amount of $10.0 million. During the quarter ended March 31, 2004, the Company’s monthly average collateral availability exceeded the required monthly minimum average, and the Company’s daily revolving availability was in excess of $10.0 million each day. At March 31, 2004, the Company had letters of credit outstanding under the Credit Facility totaling $7.2 million, primarily for health and workers compensation insurance.

4. COMMITMENTS AND CONTINGENCIES

In April 2002, the Company filed a lawsuit in the Supreme Court of the State of New York against The Rugby Group Ltd., the Company’s principal stockholder, and Rugby IPD Corp., a subsidiary of The Rugby Group Ltd., alleging that they breached their contractual obligations to indemnify and defend Huttig against asbestos-related liabilities and claims arising out of the business that was acquired in 1994 by Rugby Building Products, Inc. The Company acquired Rugby Building Products, Inc., a distributor of building materials, in December 1999, when it acquired the stock of its parent,

-9-

Rugby USA, Inc., from The Rugby Group Ltd. In the Company’s lawsuit, it seeks to recover sums it has spent to defend and, with respect to one lawsuit, settle its asbestos lawsuits, as well as a declaratory judgment that Rugby Group and Rugby IPD indemnify and defend the Company for these lawsuits and any similarly situated claims that may be asserted against the Company in the future. Rugby Group has denied any obligation to defend or indemnify the Company, for any of these cases. While the Company believes that its factual allegations and legal claims are meritorious, there can be no assurance at this time that Huttig will recover any of its costs related to past or future asbestos-related claims from insurance carriers or from The Rugby Group or Rugby IPD Corp. or that such costs will not have a material adverse effect on Huttig’s business or financial condition.

In January 2004, Huttig, individually and as a successor-in-interest to Rugby Building Products, Inc., was named in an action filed in Superior Court of California, County of Alameda, by an individual alleging that he suffered personal injury as a result of exposure to asbestos-containing products distributed by Huttig and/or Rugby Building Products. The plaintiff seeks unspecified damages from Huttig and many other defendants named in this pending action. The Company believes that this lawsuit also relates to products distributed by a business acquired by Rugby Building Products and expects to seek indemnification for this lawsuit as part of our action against The Rugby Group and Rugby IPD Corp. While the Company believes that the factual allegations and legal claims asserted against the Company in this action are without merit, there can be no assurance at this time that the Company will recover any costs relating to these claims from insurance carriers or from The Rugby Group or Rugby IPD Corp., or that such costs will not have a material adverse effect on Huttig’s business or financial condition.

The Company is subject to federal, state and local environmental protection laws and regulations. The Company’s management believes the Company is in compliance, or is taking action aimed at assuring compliance, with applicable environmental protection laws and regulations. However, there can be no assurance that future environmental liabilities will not have a material adverse effect on the consolidated financial condition or results of operations.

In 1995, Huttig was identified as a potentially responsible party in connection with the clean up of contamination at a formerly owned property in Montana that was used for the manufacture of wood windows. Huttig is voluntarily remediating this property under the oversight of and in cooperation with the Montana Department of Environmental Quality (“DEQ”), and is complying with a 1995 unilateral administrative order of the DEQ to complete a remedial investigation and feasibility study. The remedial investigation has been completed and approved by the DEQ, which has issued its final risk assessment of this property. The DEQ has also approved Huttig’s work plan for conducting a feasibility study to evaluate alternatives for cleanup. Huttig expects to submit the feasibility study, which will evaluate several potential remedies, including continuation or enhancement of remedial measures already in place and operating, in 2004. The DEQ then will select a final remedy, publish a record of decision and negotiate with Huttig for an administrative order of consent on the implementation of the final remedy. Management currently believes that the DEQ will select the final remedy in late 2004 or early 2005 and that the remediation will take several more years to complete. During remediation, Huttig intends to continue monitoring the site, evaluating and improving upon the selected remedy, and reporting regularly to the DEQ. Based on our experience to date in remediating this site, Huttig does not believe that the scope of remediation that the DEQ ultimately determines will have a material adverse effect on its results of operations or financial condition. The Company spent less than $0.1 million on remediation costs at this site in the three months ended March 31, 2004. The annual level of future remediation expenditures is difficult to estimate because of the uncertainty relating to the final remedy to be selected. The Company has accrued $0.8 million for costs of remediating this site and believes this accrual represents management’s best estimate, based on current facts and circumstances, of the currently expected costs of continued remediation. Until the DEQ selects a final remedy, however, management can give no assurance as to the scope or cost to Huttig of the final remediation order.

In addition, some of the Company’s current and former distribution centers are located in areas of current or former industrial activity where environmental contamination may have occurred, and for which the Company, among others, could be held responsible. There have been no contacts with any environmental agency regarding any potential site cleanup or remediation related to any current or former properties. The Company’s management currently believes that there are no material environmental liabilities at any of its distribution center locations.

The Company carries insurance policies on insurable risks with coverages and other terms that management believes are appropriate. The Company has self-insured retention limits and has obtained fully insured layers of coverage above such self-insured retention limits. Accruals for self-insurance losses are made based on our claims experience. The Company accrues for these liabilities for existing and unreported claims when it is probable that future costs will be incurred and when the costs can be estimated, and the Company makes adjustments to the amounts accrued as circumstances change. While management believes that the Company’s reserves are adequate based on current information, the ultimate outcome of these matters would not have a material effect on the Company’s financial condition but could have a material adverse effect on its results of operations.

-10-

5. BASIC AND DILUTED NET INCOME (LOSS) PER SHARE

The following table sets forth the computation of net income (loss) per basic and diluted share (net income (loss) amounts in millions, share amounts in thousands, per share amounts in dollars):

	Three Months Ended March 31,
	2004		2003
Net income (loss) (numerator)	$	2.7	$	(5.0	)
Weighted average number of basic shares outstanding (denominator)		19,436		19,552
Net income (loss) per basic share	$	0.14	$	(0.25	)
Weighted average number of basic shares outstanding		19,436		19,552
Common stock equivalents for diluted common shares outstanding		147		—
Weighted average number of diluted shares outstanding (denominator)		19,583		19,552
Net income (loss) per diluted share	$	0.14	$	(0.25	)

At March 31, 2004 and 2003, stock options to purchase 852,900 and 1,112,975 shares, respectively, were not dilutive and, therefore, were not included in the computations of diluted income (loss) per share amounts.

6. SUBSEQUENT EVENTS

In April 2004, the Company’s Board of Directors authorized management to enter into separate negotiations regarding the sales of its American Pine Products manufacturing facility in Prineville, Oregon, its Builder Resource branches in the Kansas City area and its Builder Resource branch in Baltimore. In the aggregate, these businesses comprised approximately $30.9 million of the Company’s total assets as of March 31, 2004, and accounted for sales of approximately $93.1 million and $22.1 million in the year ended December 31, 2003 and the quarter ended March 31, 2004, respectively. The Company has not entered into definitive agreements to sell any of these businesses.

In May 2004, the Company completed the sale of its owned facility in Indianapolis, Indiana. Prior to the sale, the Company moved its branch operations to a new, 96,600 square foot, leased facility in Indianapolis. The Company expects to recognize a gain on the sale of approximately $0.5 million.

-11-

ITEM 2—MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Overview

Huttig is one of the largest domestic distributors of building materials used principally in new residential construction and in home improvement, remodeling, and repair work. We distribute our products through 54 distribution centers serving 47 states. Our wholesale distribution centers sell principally to building materials dealers, national buying groups, and home centers, who, in turn, supply the end-user. Our Builder Resource locations sell directly to professional builders and contractors. Our American Pine Products manufacturing facility, located in Prineville, Oregon, produces softwood mouldings. Approximately 34% and 32% of American Pine’s sales were to Huttig’s distribution centers in the three months ended March 31, 2004 and 2003, respectively.

The following table sets forth our sales, by product classification as a percentage of total sales, for the three months ended March 31, 2004 and 2003:

	Three Months Ended March 31,
	2004		2003
Millwork(1)	53	%	56	%
General Building Products(2)	25	%	25	%
Wood Products(3)	22	%	19	%
Total Net Product Sales	100	%	100	%

(1) Millwork, including exterior and interior doors, pre-hung door units, windows, patio doors, mouldings, frames, stair parts and columns;

(2) General building products, such as roofing, siding, insulation, flashing, housewrap, connectors and fasteners, decking, drywall, kitchen and other miscellaneous building products; and

(3) Wood products, such as lumber, panels and engineered wood products.

Various factors historically have caused our results of operations to fluctuate from period to period. These factors include levels of construction, home improvement and remodeling activity, weather, prices of commodity wood products, interest rates, competitive pressures, availability of credit and other local, regional and economic conditions. Many of these factors are cyclical or seasonal in nature. We anticipate that fluctuations from period to period will continue in the future. Our first quarter and, occasionally, our fourth quarter are adversely affected by winter weather patterns in the Midwest, Mid-Atlantic and Northeast, which typically result in seasonal decreases in levels of construction activity in these areas. Because much of our overhead and expenses remain relatively fixed throughout the year, our operating profits also tend to be lower during the first and fourth quarters.

We believe we have the product offerings, warehouse and builder support facilities, personnel, systems infrastructure and financial and competitive resources necessary for continued business success. Our future revenues, costs and profitability, however, are all influenced by a number of risks and uncertainties, including those discussed under “Cautionary Statement”.

Critical Accounting Policies

We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the United States of America, which require management to make estimates and assumptions. Management bases these estimates and assumptions on historical results and known trends as well as our forecasts as to how these might change in the future. Actual results could differ from these estimates and assumptions. See our Annual Report on Form 10-K in Part II, Item 7—“Critical Accounting Policies.”

Results of Operations

Three Months Ended March 31, 2004 Compared to the Three Months Ended March 31, 2003

Net sales for the three months ended March 31, 2004 were $243.1 million, which was $46.6 million or 24% higher than the first quarter of 2003. Sales in all product categories achieved double-digit sales growth over the same quarter last year. Millwork sales increased $18.0 million or 16% over the prior year to $127.9 million, with interior and exterior doors up 18% and 14%, respectively, windows up 14%, and other millwork products, including mouldings, columns and

-12-

stairs, up 19%. Sales of building products increased $11.7 million or 23% from a year ago to $61.5 million, led by year-over-year increases in siding, decking, fasteners, and connectors, railings, insulation, and housewrap. Wood products sales increased $16.9 million or 46% over the prior year to $53.7 million. We believe that approximately half of the sales increase in wood products is due to sales volume, with the remainder of the increase due to inflation in wood prices. Same branch sales increased 25% in the first quarter of 2004 over the same quarter in 2003. Sales through the Company’s wholesale operations increased by 24% to $213.3 million for the first quarter of 2004, as compared to $171.5 million in the year-ago quarter. All five wholesale regions achieved double-digit sales growth compared to the first quarter of 2003. Builder Resource first quarter sales increased 25% to $20.5 million, from $16.4 million last year. First quarter sales at American Pine Products were unchanged at $13.1 million, of which approximately one-third were sales to Huttig’s branches.

Gross profit increased $13.3 million or 38% to $48.4 million in the first quarter from $35.1 million in the same period of 2003. Gross profit as a percentage of sales improved to 19.9% for the quarter ended March 31, 2004 compared with 17.9% in the first quarter of 2003. The increase in gross margins during the first quarter of 2004 versus 2003 was primarily due to a 2.3% increase in product line margins to customers. Margins on millwork sales increased 1.8% primarily due to a 2.2% increase on margins on sales of interior doors. Margins on building products increased 1.2% and margins on wood products increased 1.7%, principally due to inflation in wood prices.

Operating expenses as a percentage of sales declined to 17.0%, from 20.3% a year ago. Operating expenses were $41.3 million in the first quarter of 2004, or $1.5 million higher than the first quarter of 2003, which included $1.8 million of severance costs. Personnel expense increased $3.5 million in the first quarter 2004 over the same period in 2003, primarily associated with higher profitability and increased sales volume. Non-personnel expense decreased $0.3 million, principally due to lower advertising, outside services and telephone expenses, which was partially offset by an increase of $0.1 million in bad debt expense.

Depreciation and amortization was $1.6 million for the each of the quarters ended March 31, 2004 and 2003. Net interest expense was $1.1 million in the first quarter of 2004, which is $1.1 million less than the same period in 2003. Average debt during the first quarter of 2004 was $90.3 million at a 4.75% average interest rate versus $87.5 million at a 10.1% average interest rate in the first quarter of 2003. The decrease in 2004 is a result of a reduction in our effective borrowing rate after the expiration of our interest rate swaps in May 2003.

During the first quarter of 2003, we recorded a $0.5 million gain in the fair value on two interest rate swaps that did not qualify as hedges for accounting purposes. These interest rate swaps expired in May 2003.

As a result of the foregoing factors, pretax income increased by $12.4 million to $4.4 million in the first quarter of 2004 compared to a pretax loss of $8.0 million in the first quarter of 2003.

Income taxes were calculated at an effective rate of 38% for the three months ended March 31, 2004 and 2003.

Liquidity and Capital Resources

We depend on cash flow from operations and funds available under our secured credit facility to finance seasonal working capital needs, capital expenditures and any acquisitions that we may undertake. Our working capital requirements are generally greatest in the second and third quarters, which reflects the seasonal nature of our business. The second and third quarters are also typically our strongest operating quarters, largely due to more favorable weather throughout many of our markets compared to the first and fourth quarters. We typically generate cash from working capital reductions in the fourth quarter of the year and build working capital during the first quarter in preparation for our second and third quarters. We also maintain significant inventories to meet rapid delivery requirements of our customers and to enable us to obtain favorable pricing, delivery and service terms with our suppliers. At both March 31, 2004 and 2003, inventories constituted approximately 36% of our total assets. We closely monitor operating expenses and inventory levels during seasonally affected periods and, to the extent possible, manage variable operating costs to minimize seasonal effects on our profitability.

-13-

We measure our net operating working capital as the sum of net trade accounts receivable, net FIFO inventories and trade accounts payable. At March 31, 2004 and 2003, and December 31, 2003, our net operating working capital, days sales outstanding and inventory turns were as follows:

	March 31,						December 31, 2003
	2004			2003
Trade accounts receivable, net	$	104.6		$	83.6		$	70.9
FIFO inventories, net		106.9			98.7			87.3
Trade accounts payable		(80.8	)		(78.9	)		(63.6	)
Net operating working capital		130.7			103.4			94.6
Net operating working capital as % of annualized quarterly net sales (1)		11.9	%		12.7	%		9.4	%
Days sales outstanding (2)		33.6			38.4			31.3
Inventory turns (3)		6.2			5.3			6.5

(1) Determined by dividing quarter end average net operating working capital by annualized quarterly net sales.

(2) Determined by dividing month end trade accounts receivable, net, by current month net sales, then multiplying by 30.

(3) Determined by averaging the two most recent monthly warehouse and production cost of sales, dividing by month end FIFO inventory, net, then multiplying by 12.

Cash used in operating activities increased $5.7 million from $24.3 million in the first three months of 2003 to $30.0 million in 2004. The increase was primarily due to an increase in trade accounts receivable. The increase in inventory was partially offset by an increase in trade accounts payable. The increase in these items is principally the result of increased sales volume versus a year ago, as our days sales outstanding improved by 4.8 days from 38.4 days at March 31, 2003 to 33.6 days at March 31, 2004, and our inventory turns improved from 5.3 turns at March 31, 2003 to 6.2 at March 31, 2004.

Cash used in investing activities for the first three months of 2004 reflects $0.1 million of capital expenditures for normal operating activities compared to $1.0 million of capital expenditures for the first three months of 2003.

Cash provided from financing activities for both 2004 and 2003 primarily reflect the $27.9 million and $25.9 million in net borrowings, respectively, under our revolving credit facilities. In both 2004 and 2003, cash was used to pay back $0.4 million of capital lease obligations. In the first quarter of 2003, the Company also received proceeds of $1.0 million from the sale-leaseback of technology and communications equipment, for which we also recorded a $0.1 million deferred gain on sale.

We have a $150.0 million senior secured revolving credit facility, which expires in August 2005. On February 13, 2004, we and the agent and lenders amended the credit agreement to provide for a “springing” lock-box arrangement. Under this arrangement, we now maintain a lock-box from which we may apply cash receipts to any corporate purpose so long as our monthly average availability does not fall below $20.0 million and we are not in default under the credit agreement. The agent and the lenders maintain a security interest in our lock-box and, upon the occurrence of either of the foregoing triggering events, may redirect funds from the lock-box to a loan account in the name of the lenders on a daily basis and applied against the revolving loan balance. Effective with the amendment, we have classified the outstanding borrowings under the credit facility as long-term liabilities.

As of March 31, 2004, we had revolving credit borrowings of $91.4 million with $53.4 million of total excess credit available under the credit facility, which includes the daily minimum amount of $10.0 million. During the quarter ended March 31, 2004, our monthly average collateral availability exceeded the required monthly minimum average, and our daily revolving availability was in excess of $10.0 million each day. At March 31, 2004, we had letters of credit totaling $7.2 million, primarily for health and workers compensation insurance.

We believe that cash generated from our operations and funds available under our credit facility will provide sufficient funds to meet our currently anticipated short-term and long-term liquidity and capital expenditure requirements.

Environmental Regulation

We are subject to federal, state and local environmental protection laws and regulations. We believe that we are in compliance, or are taking action aimed at assuring compliance, with applicable environmental protection laws and regulations. However, there can be no assurance that future environmental liabilities will not have a material adverse effect on our financial condition or results or operations.

In January 2004, Huttig, individually and as a successor-in-interest to Rugby Building Products, Inc., was named in an action filed in Superior Court of California, County of Alameda, by an individual alleging that he suffered personal

-14-

injury as a result of exposure to asbestos-containing products distributed by Huttig and/or Rugby Building Products. The plaintiff seeks unspecified damages from Huttig and many other defendants named in this pending action. We believe that this lawsuit also relates to products distributed by a business acquired by Rugby Building Products and expect to seek indemnification for this lawsuit as part of our action against The Rugby Group and Rugby IPD Corp. While we believe that the factual allegations and legal claims asserted against us in this action are without merit, there can be no assurance at this time that we will recover any costs relating to these claims from insurance carriers or from The Rugby Group or Rugby IPD Corp., or that such costs will not have a material adverse effect on our business or financial condition.

In 1995, Huttig was identified as a potentially responsible party in connection with the clean up of contamination at a formerly owned property in Montana that was used for the manufacture of wood windows. We are voluntarily remediating this property under the oversight of and in cooperation with the Montana Department of Environmental Quality (“DEQ”), and is complying with a 1995 unilateral administrative order of the DEQ to complete a remedial investigation and feasibility study. The remedial investigation has been completed and approved by the DEQ, which has issued its final risk assessment of this property. The DEQ has also approved Huttig’s work plan for conducting a feasibility study to evaluate alternatives for cleanup. We expect to submit the feasibility study, which will evaluate several potential remedies, including continuation or enhancement of remedial measures already in place and operating, in 2004. The DEQ then will select a final remedy, publish a record of decision and negotiate with Huttig for an administrative order of consent on the implementation of the final remedy. Management currently believes that the DEQ will select the final remedy in late 2004 or early 2005 and that the remediation will take several more years to complete. During remediation, we intend to continue monitoring the site, evaluating and improving upon the selected remedy, and reporting regularly to the DEQ. Based on our experience to date in remediating this site, we do not believe that the scope of remediation that the DEQ ultimately determines will have a material adverse effect on our results of operations or financial condition. We spent less than $0.1 million on remediation costs at this site in the three months ended March 31, 2004. The annual level of future remediation expenditures is difficult to estimate because of the uncertainty relating to the final remedy to be selected. We have accrued $0.8 million for costs of remediating this site and believe this accrual represents management’s best estimate, based on current facts and circumstances, of the currently expected costs of continued remediation. Until the DEQ selects a final remedy, however, management can give no assurance as to the scope or cost to Huttig of the final remediation order.

In addition, some of our current and former distribution centers are located in areas of current or former industrial activity where environmental contamination may have occurred, and for which we, among others, could be held responsible. We currently believe that there are no material environmental liabilities at any of our distribution center locations.

Cautionary Statement

Certain statements in this Form 10-Q contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including but not limited to statements regarding:

• the effect of known contingencies, including risks relating to environmental and legal proceedings, on our financial condition, cash flow and results of operations;

• the future impact of competition, our ability to maintain favorable terms with our suppliers and transition to alternative suppliers of building products, and the effects of slower economic activity on our results of operations;

• expected benefits and impacts of branch consolidations;

• our future business success, sales volume and growth, product mix and results of operations;

• our liquidity and exposure to market risk; and

• cyclical and seasonal trends.

The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimate,” “project” or similar expressions identify “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

-15-

These statements present management’s expectations, beliefs, plans and objectives regarding our future business and financial performance. These forward-looking statements are based on current projections, estimates, assumptions and judgments, and involve known and unknown risks and uncertainties. There are a number of factors that could cause our actual results to differ materially from those expressed or implied in the forward-looking statements. These factors include, but are not limited to, the following:

• the strength of the national and local new residential construction and home improvement and remodeling markets, which in turn depend on factors such as

Ø interest rates,

Ø immigration patterns,

Ø regional demographics,

Ø employment levels,

Ø availability of credit,

Ø prices of commodity wood products,

Ø consumer confidence and

Ø weather conditions,

• the level of competition in our industry,

• our relationships with suppliers of the products we distribute,

• our ability to comply with availability requirements and financial covenants under our revolving credit facility,

• fluctuation in prices of commodity wood products,

• costs of complying with environmental laws and regulations,

• our exposure to product liability claims, and

• our ability to attract and retain key personnel.

Additional information concerning these and other factors that could materially affect our results of operations and financial condition are included in our most recent Annual Report on Form 10-K. We disclaim any obligation to publicly update or revise any of these forward-looking statements.

-16-

ITEM3—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to market risk as it relates to effects of changes in interest rates. We had debt outstanding at March 31, 2004 under our secured revolving credit facility of $91.4 million.

All of our bank debt accrues interest at a floating rate basis of between 200 and 300 basis points above LIBOR. If market interest rates for LIBOR had been different by an average of 1% for the quarter ended March 31, 2004, our interest expense and income before taxes would have changed by $0.1 million. These amounts are determined by considering the impact of the hypothetical interest rates on our borrowing cost. These analyses do not consider the effects of any change in the overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management would likely take actions to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in our financial structure.

We are subject to periodic fluctuations in the price of wood commodities. Profitability is influenced by these changes as prices change between the time we buy and sell the wood. In addition, to the extent changes in interest rates affect the housing and remodeling market, we would be affected by such changes.

-17-

ITEM 4—CONTROLS AND PROCEDURES

The Company, under the supervision and with the participation of our Disclosure Committee and management, including our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-14(c) under the Securities and Exchange Act of 1934). Based upon that evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures are effective as of March 31, 2004 in all material respects in (a) causing information required to be disclosed by us in reports that we file or submit under the Securities and Exchange Act of 1934 to be recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and (b) causing such information to be accumulated and communicated to our management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

There were no changes in the Company’s internal control on financial reporting during the Company’s fiscal first quarter ended March 31, 2004 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Control systems must reflect resource constraints and be cost-effective, can be undercut by simple errors and misjudgments, and can be circumvented by individuals within an organization. Because of these and other inherent limitations in all control systems, no matter how well they are designed, our disclosure controls and procedures and internal controls can provide reasonable, but not absolute, protection from error and fraud.

-18-

PART II—OTHER INFORMATION

ITEM 6—EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of the company. (Incorporated by reference to Exhibit 3.1 to the Form 10 filed with the Commission on September 21, 1999.)
3.2	Bylaws of the company as amended as of July 22, 2002. (Incorporated by reference to Exhibit 3.2 to the Form 10-Q filed with the Commission on August 14, 2002.)
*10.1	Schedule to Stock Option Agreement under the company’s 2001 Stock Incentive Plan.
*10.2	Form of First Amendment, dated as of January 27, 2004, to Executive Employment Contract dated May 1, 2003, between the Company and Michael A. Lupo.
*10.3	Form of Employment/Severance Agreement dated December 22, 2000 between the Company and Carl A. Liliequist.
31.1	Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

On February 18, 2004, we filed a Current Report on Form 8-K, dated February 13, 2004, reporting our press release setting forth our financial results for the fourth quarter of 2003 and an amendment to our bank credit agreement.

On February 26, 2004, we filed a Current Report on Form 8-K, dated February 13, 2004, filing the execution copy of an amendment to our bank credit agreement.

On March 24, 2004, we filed a Current Report on Form 8-K, dated March 18, 2004, reporting changes to our certifying accountants.

On March 29, 2004, we filed a Current Report on Form 8-K/A, dated March 19, 2004, amending the report of changes to our certifying accountants.

On April 7, 2004, we filed a Current Report on Form 8-K, dated April 6, 2004, reporting our press release updating the first quarter and full year guidance of expected net income and sales.

On April 16, 2004, we filed a Current Report on Form 8-K, dated April 14, 2004, reporting our press release setting forth our financial results for the first quarter of 2004.

-19-

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	HUTTIG BUILDING PRODUCTS, INC.
Date: May 10, 2004	/s/    MICHAEL A. LUPO
	Michael A. Lupo President, Chief Executive Officer And Director (Principal Executive Officer)

Date: May 10, 2004	/s/    THOMAS S. McHUGH
	Thomas S. McHugh Vice President—Finance and Chief Financial Officer (Principal Financial and Accounting Officer)

-20-

EXHIBIT INDEX

Exhibit Number	Description
3.1	Restated Certificate of Incorporation of the company. (Incorporated by reference to Exhibit 3.1 to the Form 10 filed with the Commission on September 21, 1999.)
3.2	Bylaws of the company as amended as of July 22, 2002 (Incorporated by reference to Exhibit 3.2 to the Form 10-Q filed with the Commission on August 14, 2002.)
*10.1	Schedule to Stock Option Agreement under the company’s 2001 Stock Incentive Plan.
*10.2	Form of First Amendment, dated as of January 27, 2004, to Executive Employment Contract dated May 1, 2003, between the Company and Michael A. Lupo.
*10.3	Form of Employment/Severance Agreement dated December 22, 2000 between the Company and Carl A. Liliequist.
31.1	Certification by Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
32.2	Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.

-21-

EX-10.1

Exhibit 10.1

Schedule to Stock Option Agreement Under Huttig Building Products, Inc.

Amended and Restated 2001 Stock Incentive Plan

Option Holder	Number Of Shares	Exercise Price		Date of Grant
Michael A. Lupo	400,000	$	2.30 per share	April 28, 2003
Michael A. Lupo	100,000	$	7.23 per share	April 27, 2004
Carl A. Liliequist	100,000	$	2.98 per share	August 5, 2003
Carl A. Liliequist	25,000	$	7.23 per share	April 27, 2004
Thomas S. McHugh	40,000	$	5.875 per share	January 29, 2002
Thomas S. McHugh	10,000	$	7.23 per share	April 27, 2004
Nick H. Varsam	34,000	$	5.875 per share	January 29, 2002
Nick H. Varsam	10,000	$	7.23 per share	April 27, 2004
Jon P. Vrabely	10,000	$	7.23 per share	April 27, 2004
Hank J. Krey	25,000	$	2.98 per share	August 5, 2003
Hank J. Krey	5,000	$	7.23 per share	April 27, 2004
Richard A. Baltz	10,000	$	2.98 per share	August 5, 2003
Richard A. Baltz	5,000	$	7.23 per share	April 27, 2004
Barry J. Kulpa	55,000	$	5.875 per share	January 29, 2002

EX-10.2

Exhibit 10.2

FIRST AMENDMENT TO

EXECUTIVE EMPLOYMENT CONTRACT

This First Amendment, dated as of January 27, 2004, to Executive Employment Contract dated May 1, 2003 (“Employment Contract”), between Huttig Building Products, Inc., a Delaware corporation, with its principal office located at 555 Maryville University Drive, Suite 240, St. Louis, Missouri 63141, hereinafter termed “Company”, and Michael A. Lupo, hereinafter termed “Executive”.

WHEREAS, the Company and Executive are parties to the Employment Contract which provides for a term of employment continuing until April 30, 2005; and

WHEREAS, the Board of Directors of the Company has determined that it is in the best interests of the Company to extend the term of the Employment Contract and has approved the extension of the term of the Employment Contract to December 31, 2005;

NOW, THEREFORE, in consideration of the premises and the representations, warranties, covenants and agreements contained herein, the Company and the Executive agree as follows:

1. Section 2(a) of the Employment Contract is hereby amended and restated to read as follows:

“(a) In General. The term of this Employment Contract shall begin on the 1st day of May, 2003 (“Commencement Date”) and shall continue until December 31, 2005.”

2. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute but one contract. Delivery of an executed signature page of this Amendment by facsimile transmission shall be effective as delivery of a manually executed counterpart hereof.

IN WITNESS WHEREOF, the Company has caused this Employment Contract to be executed by its duly authorized officers, and Executive has hereunto set his hand, as of the day and year first-above written.

COMPANY:

Huttig Building Products, Inc.

By:

Name:

Title:

EXECUTIVE:

Michael A. Lupo

EX-10.3

EXHIBIT 10.3

HUTTIG BUILDING PRODUCTS, INC.

EMPLOYMENT/SEVERANCE AGREEMENT

AGREEMENT by and between HUTTIG BUILDING PRODUCTS, INC., a Delaware corporation (the “Company”), and
Carl A. Liliequist (the “Employee”), dated December 22, 2000.

The Board of Directors of the Company (the “Board”), on the advice of its Organization and Compensation Committee, has determined that it is in the best interests of the Company and its shareholders to assure that the Company will have the continued dedication of the Employee as Regional Vice President of the Company, notwithstanding the possibility, threat, or occurrence of a Change of Control (as defined below) of the Company. The Board believes it is imperative to diminish the inevitable distraction of the Employee by virtue of the personal uncertainties and risks created by a pending or threatened Change of Control, to encourage the Employee’s full attention and dedication to the Company currently and in the event of any threatened or pending Change of Control, and to provide the Employee with compensation arrangements upon a Change of Control which provide the Employee with individual financial security and which are competitive with those of other corporations and, in order to accomplish these objectives, the Board has caused the Company to enter into this Agreement. This Agreement shall generally become effective on the Effective Date, provided that the covenants contained in Section 10 of this Agreement shall be effective immediately upon execution of this Agreement.

NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:

1. Certain Definitions.

(a) The “Effective Date” shall be the first date during the “Change of Control Period” (as defined in Section 1(b)) on which a Change of Control occurs. Anything in this Agreement to the contrary notwithstanding, if the Employee’s employment with the Company is terminated prior to the date on which a Change of Control occurs, and it is reasonably demonstrated that such termination (1) was at the request of a third party who has taken steps reasonably calculated to effect a Change of Control or (2) otherwise arose in connection with or anticipation of a Change of Control, then for all purposes of this Agreement the “Effective Date” shall mean the date immediately prior to the date of such termination.

(b) The “Change of Control Period” is the period commencing on the date hereof and ending on the earlier to occur of (i) the third anniversary of such date or (ii) the first day of the month next following the Employee’s normal retirement date (“Normal Retirement Date”) under the Huttig Building Products, Inc. Savings & Investment Plan, or any successor retirement plan (the “Retirement Plan”); provided, however, that commencing on the date one year after the date hereof, and on each annual anniversary of such date (such date and each annual anniversary thereof is hereinafter referred to as the “Renewal Date”), the Change of Control Period shall be automatically extended so as to terminate on the earlier of (x) three years from such Renewal Date or (y) the first day of the month coinciding with or next following the Employee’s Normal Retirement Date, unless at least 60 days prior to the Renewal Date the Company shall give notice that the Change of Control Period shall not be so extended.

1

2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall mean:

(i) The acquisition, other than from the Company, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, but excluding, for this purpose, any such acquisition by the Company or any of its subsidiaries, by The Rugby Group Ltd. or any direct transferee from The Rugby Group plc, or any employee benefit plan (or related trust) of the Company or its subsidiaries, or any corporation with respect to which, following such acquisition, more than 50% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by substantially the same individuals and entities who were the beneficial owners, respectively, of the common stock and voting securities of the Company immediately prior to such acquisition in substantially the same proportion as their ownership, immediately prior to such acquisition, of the then outstanding shares of common stock of the Company or the combined voting power of the then outstanding voting securities of the Company entitled to vote generally in the election of directors, as the case may be; or

(ii) Individuals who, as of the date hereof, constitute the Board (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of office is in connection with an actual or threatened election contest relating to the election of the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act); or

(iii) Approval by the stockholders of the Company of a reorganization, merger or consolidation, in each case, with respect to which substantially the same individuals and entities who were the respective beneficial owners of the common stock and voting securities of the Company immediately prior to such reorganization, merger or consolidation do not, following such reorganization, merger or consolidation, beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such reorganization, merger or consolidation, or a complete liquidation or dissolution of the Company or of the sale or other disposition of all or substantially all of the assets of the Company.

3. Employment Period. The Company hereby agrees to continue the Employee in its employ, and the Employee hereby agrees to remain in the employ of the Company, for the period commencing on the Effective Date and ending on the earlier to occur of (a) the third anniversary of such date or (b) the first day of the month coinciding with or next following the Employee’s Normal Retirement Date (the “Employment Period”).

2

4. Terms of Employment.

(a) Position and Duties. During the Employment Period, and excluding any periods of vacation and sick leave to which the Employee is entitled, the Employee agrees to devote reasonable attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge the responsibilities assigned to the Employee hereunder, to use the Employee’s reasonable best efforts to perform faithfully and efficiently such responsibilities. It is expressly understood and agreed that to the extent that any outside activities have been conducted by the Employee prior to the Effective Date, the continued conduct of such activities (or the conduct of activities similar in nature and scope thereto) subsequent to the Effective Date shall not thereafter be deemed to interfere with the performance of the Employee’s responsibilities to the Company.

(b) Compensation.

(i) Base Salary. During the Employment Period, the Employee shall receive an annual base salary (“Base Salary”) at a rate at least equal to twelve times the highest monthly base salary paid or payable to the Employee by the Company during the twelve-month period immediately preceding the month in which the Effective Date occurs. During the Employment Period, the Base Salary shall be reviewed at least annually and shall be increased at any time and from time to time as shall be substantially consistent with increases in base salary awarded in the ordinary course of business to other key employees of the Company and its subsidiaries. Any increase in Base Salary shall not serve to limit or reduce any other obligation to the Employee under this Agreement. Base Salary shall not be reduced after any such increase.

(ii) Annual Bonus. In addition to Base Salary, the Employee shall be eligible (but not entitled) to receive, for each fiscal year during the Employment Period, an annual bonus (an “Annual Bonus”) (either pursuant to any incentive compensation plan maintained by the Company or otherwise) in cash on the same basis as in the fiscal year immediately preceding the fiscal year in which the Effective Date occurs or, if more favorable to the Employee, on the same basis as awarded at any time thereafter to other key employees of the Company and its subsidiaries.

(iii) Incentive, Savings and Retirement Plans. In addition to Base Salary and Annual Bonus payable as hereinabove provided, the Employee shall be entitled to participate during the Employment Period in all incentive, savings and retirement plans, practices, policies and programs applicable to other key employees of the Company and its subsidiaries.

Such plans, practices, policies and programs, in the aggregate, shall provide the Employee with compensation, benefits and reward opportunities at least as favorable in the aggregate as the most favorable of such compensation, benefits and reward opportunities provided by the Company for the Employee under such plans, practices, policies and programs as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries.

3

(iv) Welfare Benefit Plans. During the Employment Period, the Employee and/or the Employee’s family, as the case may be, shall be eligible for participation in and shall receive all benefits under welfare benefit plans, practices, policies and programs provided by the Company and its subsidiaries (including, without limitation, medical, prescription, dental, disability, salary continuance, employee life, group life, accidental death and travel accident insurance plans and programs), at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(v) Expenses. During the Employment Period, the Employee shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by the Employee in accordance with the most favorable policies, practices and procedures of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(vi) Fringe Benefits. During the Employment Period, the Employee shall be entitled to fringe benefits, including use of an automobile and payment of related expenses, in accordance with the most favorable plans, practices, programs and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(vii) Office and Support Staff. During the Employment Period, the Employee shall be entitled to an office or offices of a size and with furnishings and other appointments, and to secretarial and other assistance, at least equal to the most favorable of the foregoing provided to the Employee by the Company and its subsidiaries at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as provided at any time thereafter with respect to other key employees of the Company and its subsidiaries.

(viii) Vacation. During the Employment Period, the Employee shall be entitled to paid vacation in accordance with the most favorable plans, policies, programs and practices of the Company and its subsidiaries as in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries.

5. Termination.

(a) Death or Disability. This Agreement shall terminate automatically upon the Employee’s death. If the Company determines in good faith that the Disability of the Employee has occurred (pursuant to the definition of “Disability” set forth below), it may give to the Employee written notice (given in accordance with Section 12(b) hereof) of its intention to terminate the Employee’s employment. In such event, the Employee’s employment with the Company shall terminate effective on the 30th day after receipt of such notice by the Employee

4

(the “Disability Effective Date”), provided that, within the 30 days after such receipt, the Employee shall not have returned to full-time performance of the Employee’s duties. For purposes of this Agreement, “Disability” means disability which, at least 26 weeks after its commencement, is determined to be total and permanent by a physician selected by the Company or its insurers and acceptable to the Employee or the Employee’s legal representative (such agreement as to acceptability not to be withheld unreasonably).

(b) Cause. The Company may terminate the Employee’s employment for “Cause.” For purposes of this Agreement, “Cause” shall constitute either (i) personal dishonesty or breach of fiduciary duty involving personal profit at the expense of the Company (ii) repeated violations by the Employee of the Employee’s obligations under Section 4(a) of this Agreement which are demonstrably willful and deliberate on the Employee’s part and which are not remedied in a reasonable period of time after receipt of written notice from the Company or (iii) the commission of a criminal act related to the performance of duties, or the furnishing of proprietary confidential information about the Company to a competitor, or potential competitor, or third party whose interests are adverse to those of the Company; (iv) habitual intoxication by alcohol or drugs during work hours; or (v) conviction of a felony.

(c) Good Reason. The Employee’s employment may be terminated by the Employee for Good Reason. For purposes of this Agreement, “Good Reason” means:

(i) any failure by the Company to comply with any of the provisions of Section 4(b) of this Agreement, other than an isolated, insubstantial and inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Employee;

(ii) any purported termination by the Company of the Employee’s employment otherwise than as expressly permitted by this Agreement; or

(iii) any failure by the Company to comply with and satisfy Section 11(c) of this Agreement.

For purposes of this Section 5(c), any good faith determination of “Good Reason” made by the Employee shall be conclusive.

(d) Notice of Termination. Any termination by the Company for Cause or by the Employee for Good Reason shall be communicated by Notice of Termination to the other party hereto given in accordance with Section 12(b) of this Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment under the provision so indicated and (iii) if the Date of Termination (as defined below) is other than the date of receipt of such notice, specifies the termination date (which date shall be not more than fifteen (15) days after the giving of such notice). The failure by the Employee to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason shall not waive any right of the Employee hereunder or preclude the Employee from asserting such fact or circumstance in enforcing his rights hereunder.

5

(e) Date of Termination. “Date of Termination” means the date of receipt of the Notice of Termination or any later date specified therein, as the case may be; provided, however, that (i) if the Employee’s employment is terminated by the Company other than for Cause or Disability, the Date of Termination shall be the date on which the Company notifies the Employee of such termination and (ii) if the Employee’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of the Employee or the Disability Effective Date, as the case may be.

6. Obligations of the Company upon Termination.

(a) Death. If the Employee’s employment is terminated by reason of the Employee’s death, this Agreement shall terminate without further obligations to the Employee’s legal representatives under this Agreement, other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including, for this purpose (i) the Employee’s full annual Base Salary through the Date of Termination at the rate in effect on the Date of Termination or, if higher, at the highest annual rate in effect at any time from the 90-day period preceding the Effective Date through the Date of Termination (the “Highest Base Salary”), (ii) the product of the Annual Bonus paid to the Employee for the last full fiscal year and a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365 and (iii) any compensation previously deferred by the Employee (together with accrued interest thereon, if any) and not yet paid by the Company and any accrued vacation pay not yet paid by the Company (such amounts specified in clauses (i), (ii) and (iii) are hereinafter referred to as “Accrued Obligations”). All such Accrued Obligations shall be paid to the Employee’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee’s family shall be entitled to receive benefits at least equal to the most favorable benefits provided by the Company and any of its subsidiaries to surviving families of employees of the Company and such subsidiaries under such plans, programs, practices and policies relating to family death benefits, if any, in accordance with the most favorable plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or the Employee’s family, as in effect on the date of the Employee’s death with respect to other key employees of the Company and its subsidiaries and their families.

(b) Disability. If the Employee’s employment is terminated by reason of the Employee’s Disability, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee as of the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination. Anything in this Agreement to the contrary notwithstanding, the Employee shall be entitled after the Disability Effective Date to receive disability and other benefits at least equal to the most favorable of those provided by the Company and its subsidiaries to disabled employees and/or their families in accordance with such plans, programs, practices and policies of the Company and its subsidiaries in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee and/or

6

the Employee’s family, as in effect at any time thereafter with respect to other key employees of the Company and its subsidiaries and their families.

(c) Cause; Other than for Good Reason. If the Employee’s employment shall be terminated for Cause, this Agreement shall terminate without further obligations to the Employee other than the obligation to pay to the Employee the Highest Base Salary through the Date of Termination plus the amount of any compensation previously deferred by the Employee (together with accrued interest thereon, if any). If the Employee terminates employment other than for Good Reason, this Agreement shall terminate without further obligations to the Employee, other than those obligations accrued or earned and vested (if applicable) by the Employee through the Date of Termination, including for this purpose, all Accrued Obligations. All such Accrued Obligations shall be paid to the Employee in a lump sum in cash within 30 days of the Date of Termination.

(d) Good Reason; Other Than for Cause or Disability. If, during the Employment Period, the Company shall terminate the Employee’s employment other than for Cause, Disability, or death or if the Employee shall terminate his employment for Good Reason:

(i) the Company shall pay to the Employee in a lump sum in cash within 30 days after the Date of Termination the aggregate of the following amounts:

A. to the extent not theretofore paid, the Employee’s Highest Base Salary through the Date of Termination; and

B. the product of (x) the greater of the Annual Bonus paid or payable (annualized for any fiscal year consisting of less than twelve full months or for which the Executive has been employed for less than twelve full months) to the Executive for the most recently completed fiscal year during the Employment Period, if any, or the average bonus (annualized for any fiscal year consisting of less than twelve full months or with respect to which the Executive has been employed by the Company for less than twelve full months) paid or payable to the Executive by the Company and its affiliated companies in respect of the three fiscal years immediately preceding the fiscal year in which the Effective Date occurs (the “Average Annual Bonus”), such greater amount being hereafter referred to as the “Highest Annual Bonus,” and (y) a fraction, the numerator of which is the number of days in the current fiscal year through the Date of Termination, and the denominator of which is 365;

C. the product of (x) two and (y) the sum of (i) the Highest Base Salary and (ii) the Average Annual Bonus; and

D. in the case of compensation previously deferred by the Employee, all amounts previously deferred (together with accrued interest thereon, if any) and not yet paid by the Company, and any accrued vacation pay not yet paid by the Company; and

(ii) for two years after the Date of Termination, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to the Employee and/or the Employee’s family at least equal to those which would have been provided to them as if the Employee’s employment had not been terminated, in accordance with the most

7

favorable employee welfare benefit plans (as such term is defined in Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended) of the Company and its subsidiaries (including health insurance and life insurance) during the 90-day period immediately preceding the Effective Date or, if more favorable to the Employee, as in effect at any time thereafter with respect to other key employees and their families, and for purposes of eligibility for retiree benefits pursuant to such employee welfare benefit plans, the Employee shall be considered to have remained employed for such two-year period and to have retired on the last day of such period.

7. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or limit the Employee’s continuing or future participation in any benefit, bonus, incentive or other plans, programs, policies or practices, provided by the Company or any of its subsidiaries and for which the Employee may qualify, nor shall anything herein limit or otherwise affect such rights as the Employee may have under any stock option, restricted stock, stock appreciation right, or other agreements with the Company or any of its subsidiaries. Amounts which are vested benefits or which the Employee is otherwise entitled to receive under any plan, policy, practice or program of the Company or any of its subsidiaries at or subsequent to the Date of Termination shall be payable in accordance with such plan, policy, practice or program provided, however, that in the event the terms of any such plan, policy, practice or program concerning the payment of benefits thereunder shall conflict with any provision of this Agreement, the terms of this Agreement shall take precedence but only if and to the extent the payment would not adversely affect the tax exempt status (if applicable) of any such plan, policy, practice or program and only if the employee agrees in writing that such payment shall be in lieu of any corresponding payment from such plan, policy, practice or program.

8. Full Settlement. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which the Company may have against the Employee or others. In no event shall the Employee be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to the Employee under any of the provisions of this Agreement. The Company agrees to pay, to the full extent permitted by law, all legal fees and expenses which the Employee may reasonably incur as a result of any contest (regardless of the outcome thereof) by the Company or others of the validity or enforceability of, or liability under, any provision of this Agreement or any guarantee of performance thereof (including as a result of any contest by the Employee about the amount of any payment pursuant to Section 9 of this Agreement), plus in each case interest at the applicable Federal rate provided for in Section 7872(f)(2) of the Internal Revenue Code of 1986, as amended (the “Code”).

9. Certain Limitations on Payments by the Company. Notwithstanding any other provision of this Agreement to the contrary, if tax counsel selected by the Company and reasonably acceptable to the Employee determines that any portion of any payment under this Agreement would constitute an “excess parachute payment” under Section 280G of the Internal Revenue Code, then the payments to be made to the Employee under this Agreement shall be reduced (but not below zero) such that the value of the aggregate payments that the Employee is entitled to receive under this Agreement and any other agreement or plan or program of the

8

Company shall be one dollar ($1) less than the maximum amount of payments which the Employee may receive without becoming subject to the tax imposed by Section 4999 of the Internal Revenue Code.

10. Certain Employee Covenants.

(a) Confidential Information. The Employee shall hold in a fiduciary capacity for the benefit of the Company all secret or confidential information, knowledge or data relating to the Company or any of its subsidiaries, and their respective businesses, which shall have been obtained by the Employee during the Employee’s employment by the Company or any of its subsidiaries and which shall not be or become public knowledge (other than by acts by the Employee or his representatives in violation of this Agreement). After termination of the Employee’s employment with the Company, the Employee shall not, without the prior written consent of the Company, communicate or divulge any such information, knowledge or data to anyone other than the Company and those designated by it. In no event shall an asserted violation of the provisions of this subsection (a) constitute a basis for deferring or withholding any amounts otherwise payable to the Employee under this Agreement.

(b) Covenant Not To Compete. At all times during the Employee’s employment by the Company or any of its subsidiaries and for one year following termination of the Employee’s employment, the Employee shall not, unless acting with the prior written consent of the Company, directly or indirectly (i) own, manage, operate, finance, join, control or participate in the ownership, management, operation, financing or control of, or be associated as an officer, director, employee, partner, principal, agent, representative, consultant or otherwise with, or use or permit his name to be used in connection with, any profit or not-for-profit business or enterprise which at any time during such period designs, manufactures, assembles, sells, distributes or provides products (or related services) in competition with those designed, manufactured, assembled, sold, distributed or provided, or under active development, by the Company (including all future developments in and improvements on such products and services) in any part of the world or (ii) offer or provide employment to, interfere with or attempt to entice away from either of the Company, either on a full-time or part-time or consulting basis, any person who then currently is, or who within one year prior thereto had been, employed by the Company; or (iii) directly or indirectly, solicit the business of, or do business with, any customer, supplier, or prospective customer or supplier of the Company with whom the Employee had direct or indirect contact or about whom the Employee may have acquired any knowledge while employed by the Company; provided, however, that this provision shall not be construed to prohibit the ownership by the Employee of not more than 2% of any class of securities of any corporation which is engaged in any of the foregoing businesses that has a class of securities registered pursuant to the Securities Exchange Act of 1934. If the Employee’s spouse engages in any of the restricted activities set forth in the preceding sentence, the Employee shall be deemed to have indirectly engaged in such activities in violation of this covenant. This provision shall be extended at the option of the Company, for a period of time equal to all periods during which the Employee is in violation of the foregoing covenant not to compete and to extend the covenant not to compete to run from the date any injunction may be issued against the Employee, should that occur, to enable the Company to receive the full benefit of the covenant not to compete agreed to herein by the Employee

9

(c) Rights and Remedies Upon Breach. It is recognized that the services to be rendered under this Agreement by the Employee are special, unique and of extraordinary character. If the Employee breaches, or threatens to commit a breach of, any of the provisions of Section 10(a) or 10(b) (the “Covenants”), then the Company and/or any of its affiliates shall have the following rights and remedies, each of which shall be independent of the other and severally enforceable, and all of which rights and remedies shall be in addition to, and not in lieu of, any other rights and remedies available to the Company under law or in equity:

(i) Specific Performance. The right and remedy to have the Covenants specifically enforced by any court having equity jurisdiction, including obtaining an injunction to prevent any continuing violation thereof, it being acknowledged and agreed that any such breach or threatened breach will cause irreparable injury to the Company and that money damages will be difficult to ascertain and will not provide adequate remedy to the Company.

(ii) Severability of Covenants. If any of the Covenants, or any part thereof, are hereafter construed to be invalid or unenforceable in any jurisdiction, the same shall not affect the remainder of the Covenants or the enforceability thereof in any other jurisdiction, which shall be given full effect, without regard to the invalidity or unenforceability in such other jurisdiction.

(iii) Blue-Pencilling. If any of the Covenants, or any part thereof, are held to be unenforceable because of the duration of such provision or the geographical scope covered thereby, the parties agree that the court making such determination shall have the power to reduce the duration or geographical scope of such provision and, in its reduced form, such provision shall then be enforceable and shall be enforced; provided, however, that the determination of such court shall not affect the enforceability of the Covenants in any other jurisdiction.

(d) Assignability. The Employee specifically acknowledges and agrees that in the event the Company should undergo any change in ownership or change in structure or control, or should the Company transfer some or all of its assets to another entity, the Covenants contained herein and the right to enforce the Covenants may be assigned by the Company to any company, business, partnership, individual or entity, and that the Employee will continue to remain bound by the Covenants.

11. Successors.

(a) This Agreement is personal to the Employee and without the prior written consent of the Company shall not be assignable by the Employee otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by the Employee’s legal representatives.

10

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

12. Miscellaneous.

(a) This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without reference to principles of conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall have no force and effect.

(b) All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Employee:

Carl Lillequist

18807 135th Ave. S.E.

Renton, WA 98058

If to the Company:

Huttig Building Products, Inc.

P.O. Box 1041

Chesterfield, MO 63017

Attention: Secretary

or to such other address as either party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.

(c) The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

(d) The Company may withhold from any amounts payable under this Agreement such federal, state or local taxes as shall be required to be withheld pursuant to any applicable law or regulation.

11

(e) The Employee’s failure to insist upon strict compliance with any provision hereof shall not be deemed to be a waiver of such provision or any other provision thereof.

(f) This Agreement contains the entire understanding of the Company and the Employee with respect to the subject matter hereof. This Agreement may not be amended or modified otherwise than by a written agreement executed by the parties hereto or their respective successors and legal representatives.

(g) The Employee and the Company acknowledge that the employment of the Employee by the Company is “at will,” and, prior to the Effective Date, may be terminated by either the Employee or the Company at any time. Upon a termination of the Employee’s employment or prior to the Effective Date, there shall be no further rights under this Agreement.

IN WITNESS WHEREOF, the Employee has hereunto set his hand and, pursuant to the authorization from its Board of Directors, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

EMPLOYEE
/s/    Carl A. Liliequist
Carl A. Liliequist
[Print name]
HUTTIG BUILDING PRODUCTS, INC.
By:	/s/    Barry J. Kulpa
	Title:

12

EX-31.1

EXHIBIT 31.1

Huttig Building Products, Inc. and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Michael A. Lupo, President and Chief Executive Officer of Huttig Building Products, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Huttig Building Products, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonable likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004	/s/    MICHAEL A. LUPO
	Michael A. Lupo
	President and Chief Executive Officer

EX-31.2

EXHIBIT 31.2

Huttig Building Products, Inc. and Subsidiaries

Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Thomas S. McHugh, Vice President—Finance and Chief Financial Officer of Huttig Building Products, Inc., certify that:

1. I have reviewed this quarterly report on Form 10-Q of Huttig Building Products, Inc.;

2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(c) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent function):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 10, 2004	/s/    THOMAS S. McHUGH
	Thomas S. McHugh
	Vice President— Finance and Chief Financial Officer

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Huttig Building Products, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Michael A. Lupo, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/     MICHAEL A. LUPO         

Michael A. Lupo

President and Chief Executive Officer

May 10, 2004

A signed original of this written statement required by Section 906 has been provided to Huttig Building Products, Inc. and will be retained by Huttig Building Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Huttig Building Products, Inc. (the “Company”) on Form 10-Q for the period ended March 31, 2004, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Thomas S. McHugh, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:

1. The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/    THOMAS S. McHUGH        

Thomas S. McHugh

Vice President—Finance and Chief Financial Officer

May 10, 2004

A signed original of this written statement required by Section 906 has been provided to Huttig Building Products, Inc. and will be retained by Huttig Building Products, Inc. and furnished to the Securities and Exchange Commission or its staff upon request.