10-Q

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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 June 30, 2020

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

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 400 St. Louis, Missouri	63141
(Address of principal executive offices)	(Zip code)

(314) 216-2600

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common, par value $0.01 per share	HBP	The NASDAQ Stock Market LLC

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  ☑    No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☑    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☑

The number of shares of Common Stock outstanding on July 28, 2020 was 26,894,006 shares.

		Page No.
PART I. FINANCIAL INFORMATION
Item 1.	Financial Statements	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2020 and 2019 (unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2020, December 31, 2019 and June 30, 2019 (unaudited)	4
	Condensed Consolidated Statement of Shareholders’ Equity for the three and six months ended June 30, 2020 and 2019 (unaudited)	6
	Condensed Consolidated Statements of Cash Flows for the three and six months ended June 30, 2020 and 2019 (unaudited)	7
	Notes to Condensed Consolidated Financial Statements (unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4.	Controls and Procedures	20
PART II. OTHER INFORMATION
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 6.	Exhibits	21
Signatures		22

2

PART I FINANCIAL INFORMATION

ITEM 1 — FINANCIAL STATEMENTS

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(unaudited)

(in millions, except per share data)

	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2020		2019			2020			2019
Net sales	$	192.0	$	218.5		$	395.0		$	415.9
Cost of sales		153.3		174.2			315.4			334.2
Gross margin		38.7		44.3			79.6			81.7
Operating expenses		34.7		41.0			73.7			80.6
Goodwill impairment		—		—			9.5			—
Restucturing charges		1.5		—			1.5			—
Operating income (loss)		2.5		3.3			(5.1	)		1.1
Interest expense, net		0.9		1.8			2.2			3.5
Income (loss) from operations before income taxes		1.6		1.5			(7.3	)		(2.4	)
Income tax expense		—		11.8			—			11.1
Income (loss) from continuing operations		1.6		(10.3	)		(7.3	)		(13.5	)
Loss from discontinued operations, net of taxes		—		—			—			—
Net income (loss)	$	1.6	$	(10.3	)	$	(7.3	)	$	(13.5	)
Earnings (loss) per share:
Earnings (loss) from continuing operations per share- basic	$	0.06	$	(0.40	)	$	(0.28	)	$	(0.53	)
Loss from discontinued operations per share- basic		—		—			—			—
Net earnings (loss) per share - basic	$	0.06	$	(0.40	)	$	(0.28	)	$	(0.53	)
Earnings (loss) from continuing operations per share- diluted	$	0.06	$	(0.40	)	$	(0.28	)	$	(0.53	)
Loss from discontinued operations per share- diluted		—		—			—			—
Net income (loss) per share- diluted	$	0.06	$	(0.40	)	$	(0.28	)	$	(0.53	)
Weighted average shares outstanding:
Basic shares outstanding		26.0		25.5			26.0			25.4
Diluted shares outstanding		26.2		25.5			26.0			25.4

See notes to condensed consolidated financial statements

3

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions)

	June 30,		December 31,		June 30,
	2020		2019		2019
ASSETS
CURRENT ASSETS:
Cash and equivalents	$	1.8	$	2.2	$	1.1
Trade accounts receivable, net		95.5		60.5		96.7
Inventories, net		108.5		139.4		141.7
Other current assets		9.2		12.8		13.4
Total current assets		215.0		214.9		252.9
PROPERTY, PLANT AND EQUIPMENT:
Land		5.0		5.0		5.0
Buildings and improvements		32.6		32.4		32.5
Machinery and equipment		58.8		58.2		56.5
Gross property, plant and equipment		96.4		95.6		94.0
Less accumulated depreciation		66.6		64.4		62.0
Property, plant and equipment, net		29.8		31.2		32.0
OTHER ASSETS:
Operating lease right-of-use assets		38.6		40.9		34.2
Goodwill		—		9.5		9.5
Deferred income taxes		—		—		—
Other		4.8		5.0		5.5
Total other assets		43.4		55.4		49.2
TOTAL ASSETS	$	288.2	$	301.5	$	334.1

See notes to condensed consolidated financial statements

4

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(in millions, except share data)

	June 30,			December 31,			June 30,
	2020			2019			2019
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Current maturities of long-term debt	$	1.7		$	1.7		$	1.7
Current maturities of operating lease right-of-use liabilities		9.8			9.7			9.2
Trade accounts payable		62.9			56.8			69.6
Accrued compensation		5.5			5.5			4.4
Other accrued liabilities		15.3			15.8			13.1
Total current liabilities		95.2			89.5			98.0
NON-CURRENT LIABILITIES:
Long-term debt, less current maturities		125.6			135.1			158.6
Operating lease right-of-use liabilities, less current maturities		29.0			31.6			25.5
Other non-current liabilities		2.2			2.4			2.5
Total non-current liabilities		156.8			169.1			186.6
SHAREHOLDERS’ EQUITY:
Preferred shares: $.01 par (5,000,000 shares authorized)		—			—			—
Common shares: $.01 par (75,000,000 shares authorized: 26,894,006;    26,441,926; and 26,542,639 shares issued at June 30, 2020,    December 31, 2019 and June 30, 2019, respectively)		0.3			0.3			0.3
Additional paid-in capital		48.8			48.2			47.0
Retained earnings (accumulated deficit)		(12.9	)		(5.6	)		2.2
Total shareholders’ equity		36.2			42.9			49.5
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	288.2		$	301.5		$	334.1

See notes to condensed consolidated financial statements

5

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS’ EQUITY

(unaudited)

(in millions)

	Common Shares		Additional			Retained Earnings			Total
	Outstanding,		Paid-In			(Accumulated			Shareholders’
	at Par Value		Capital			Deficit)			Equity
Balance at January 1, 2019	$	0.3	$	46.0		$	15.7		$	62.0
Net loss		-		-			(3.2	)		(3.2	)
Payment for taxes related to share    settlement of equity awards		-		(0.1	)		-			(0.1	)
Stock compensation expense		-		0.5			-			0.5
Balance at March 31, 2019	$	0.3	$	46.4		$	12.5		$	59.2
Net loss		-		-			(10.3	)		(10.3	)
Stock compensation expense		-		0.6			-			0.6
Balance at June 30, 2019	$	0.3	$	47.0		$	2.2		$	49.5
Balance at January 1, 2020	$	0.3	$	48.2		$	(5.6	)	$	42.9
Net loss		-		-			(8.9	)		(8.9	)
Stock compensation expense		-		0.3			-			0.3
Balance at March 31, 2020	$	0.3	$	48.5		$	(14.5	)	$	34.3
Net income		-		-			1.6			1.6
Stock compensation expense		-		0.3			-			0.3
Balance at June 30, 2020	$	0.3	$	48.8		$	(12.9	)	$	36.2

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

(in millions)

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Cash Flows From Operating Activities:
Net income (loss)	$	1.6		$	(10.3	)	$	(7.3	)	$	(13.5	)
Adjustments to reconcile net loss to net cash used in    operating activities:
Depreciation and amortization		1.4			1.3			2.7			2.7
Non-cash interest expense		—			—			0.1			0.1
Stock-based compensation		0.3			0.6			0.6			1.1
Deferred income taxes		—			11.8			—			11.0
Goodwill impairment		—			—			9.5			—
Restructuring charges		1.5			—			1.5			—
Changes in operating assets and liabilities:
Trade accounts receivable		1.2			(7.5	)		(35.0	)		(27.7	)
Inventories, net		38.8			7.5			30.9			(7.7	)
Trade accounts payable		(22.6	)		(17.0	)		6.1			18.1
Other		2.5			(0.6	)		1.2			(3.9	)
Cash provided by (used in) continuing operating activities		24.7			(14.2	)		10.3			(19.8	)
Cash used in discontinued operating activities		—			(0.1	)		(0.1	)		(0.2	)
Total cash provided by (used in) operating activities		24.7			(14.3	)		10.2			(20.0	)
Cash Flows From Investing Activities:
Capital expenditures		(0.4	)		(0.4	)		(0.8	)		(0.8	)
Total cash used in investing activities		(0.4	)		(0.4	)		(0.8	)		(0.8	)
Cash Flows From Financing Activities:
Borrowings (repayments) of debt, net		(22.9	)		14.9			(9.8	)		21.2
Repurchase of shares to satisfy employee tax withholdings		—			—			—			(0.1	)
Total cash provided by (used in) financing activities		(22.9	)		14.9			(9.8	)		21.1
Net increase (decrease) in cash and equivalents		1.4			0.2			(0.4	)		0.3
Cash and equivalents, beginning of period		0.4			0.9			2.2			0.8
Cash and equivalents, end of period	$	1.8		$	1.1		$	1.8		$	1.1
Supplemental Disclosure of Cash Flow Information:
Interest paid	$	1.0		$	1.7		$	2.2		$	3.3
Income taxes paid		0.3			0.1			0.4			0.1
Non-cash financing activities:
Assets acquired with debt obligations		0.2			0.1			0.2			0.2

See notes to condensed consolidated financial statements

7

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARY

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

1. BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of Huttig Building Products, Inc. and its subsidiary (the “Company” or “Huttig”) were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented. Financial statement preparation further requires management to make estimates and assumptions. Management bases these estimates and assumptions on historical results and known trends as well as management forecasts. Actual results could differ from these estimates and assumptions and these differences may be material. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The condensed 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, or any other interim period, which may differ materially due to, among other things, the factors described in Part I, Item 2 of this Quarterly Report on Form 10-Q and those set forth under Part I, Item 1A – “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by Form 8-K filed on April 27, 2020 and Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

On January 1, 2020, the Company adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be assessed for impairment under the current expected credit loss model rather than an incurred loss model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.  The primary financial asset of the Company within the scope of ASU 2016-13 is trade receivables.  The adoption of ASU 2016-13 did not materially impact the Company's consolidated financial statements.

Recent accounting pronouncements pending adoption and not discussed above are either not applicable or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations, or cash flows.

3. REVENUE

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods.  The Company reports sales revenue, including direct sales, on a net basis, which includes gross revenue adjustments for estimated returns, cash payment discounts based on the satisfaction of outstanding receivables, and volume purchase rebates.  The Company’s customer payment terms vary by customer, location, and the products purchased but are typical for the Company’s industry.

Regarding direct sales, the Company is the principal of these arrangements and is responsible for fulfilling the promise to provide specific goods to its customers, including product specifications, pricing and modifications prior to delivery.  Direct sales as a percentage of net sales were 18.2% and 17.3% in the three month periods ended June 30, 2020 and 2019, respectively, and 20.0% and 20.9% in the six month periods ended June 30, 2020 and 2019, respectively.

The following table disaggregates revenue by product classification (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Millwork products	$	81.7	$	99.5	$	177.9	$	194.8
Building products	$	97.5		101.1	$	190.0		189.3
Wood products	$	12.8		17.9	$	27.1		31.8
Net sales	$	192.0	$	218.5	$	395.0	$	415.9

4.  LEASES

The Company has operating and financing leases for corporate offices, distribution centers, vehicles, and certain equipment. These leases have remaining lease terms of less than 1 year to 12 years and many of the leases have renewal options.  Because the Company is not reasonably certain to exercise the renewal options, the options are not considered in determining the lease term, and associated potential

8

option payments are excluded from lease payments and right-of-use calculations.  Leases with an initial term of 12 months or less are likewise excluded from right-of-use calculations.

In addition to fixed payments, many of the Company’s lease contracts contain variable payments. Vehicle lease variable payments typically include mileage, and real estate leases include variable charges for taxes and common area maintenance.  Variable lease payments and payments for leases with an initial term of 12 months or less are recognized in the period incurred.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions):	2020		2019		2020		2019
Operating Lease Cost	$	3.1	$	3.0	$	6.3	$	6.2
Finance Lease Cost:
Amortization of right-of-use assets		0.3		0.4		0.6		0.9
Interest on lease liabilities		0.1		0.1		0.1		0.1
Total finance lease cost	$	0.4	$	0.5	$	0.7	$	1.0

The following lease assets and liabilities are included on the condensed consolidated balance sheet (in millions):

	June 30,			December 31,			June 30,
	2020			2019			2019
Operating Leases:
Operating lease right-of-use assets	$	38.6		$	40.9		$	34.2
Current maturities of operating lease right-of-use assets		9.8			9.7			9.2
Operating lease right-of-use liabilities, less current maturities		29.0			31.6			25.5
Total operating lease liabilities	$	38.8		$	41.3		$	34.7
Finance Leases:
Gross property, plant and equipment	$	10.8		$	10.6		$	9.8
Accumulated depreciation		(5.7	)		(5.2	)		(4.6	)
Property, plant and equipment, net	$	5.1		$	5.4		$	5.2
Current maturities of long-term lease liabilities	$	1.4		$	1.4		$	1.4
Long-term lease liabilities, less current maturities		2.3			2.8			2.8
Total finance lease liabilities	$	3.7		$	4.2		$	4.2

As of June 30, 2020, the weighted average remaining lease term for the Company’s operating leases was 5.3 years and for its financing leases was 3.0 years. These leases have weighted average discount rates of 6.2% and 5.3% for operating leases and financing leases, respectively. The rate implicit in the lease is used to discount leases when known. While the implicit rate is often known for finance leases, the Company is generally unable to calculate the implicit rate in operating leases because it does not have access to the lessor’s residual value estimates nor the amount of the lessor’s deferred initial direct costs.  When the implicit rate is not known, the Company uses the incremental borrowing rate for secured loans of similar term. The Company uses available data for unsecured loans to borrowers of similar credit to the Company and adjusts the rate to reflect the effect of providing collateral equivalent to the outstanding obligation balance.

The following cash flow items are included on the condensed consolidated statement of cash flows (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating cash used for operating leases	$	3.2	$	3.0	$	6.5	$	6.1
Operating cash used for finance leases		0.1		0.1		0.1		0.1
Financing cash used for finance leases		0.3		0.4		0.7		0.9

Maturities of lease liabilities are as follows (in millions):

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	Finance Leases			Operating Leases
2020 (1)	$	0.8		$	6.1
2021		1.5			10.7
2022		1.1			8.5
2023		0.6			7.0
2024		0.1			4.3
Thereafter		—			9.0
Total lease payments	$	4.1		$	45.6
Less: imputed interest		(0.4	)		(6.8	)
Total future lease obligation	$	3.7		$	38.8

 ⁽¹⁾ This amount excludes the six months ended June 30, 2020.

5. GOODWILL

Goodwill is reviewed for impairment annually, or more frequently if certain indicators arise. The Company assesses each reporting period whether events and circumstances warrant a revision to the previously established useful lives.

During the first quarter of 2020, a decline in the market value of the Company’s public equity concurrent with the COVID-19 pandemic triggered an assessment of goodwill. The fair value of each reporting unit was determined using a market approach to consider factors such as market capitalization of the Company at March 31, 2020, observed ratios of enterprise value to earnings and the relative sales contribution of each reporting unit. If a reporting unit’s carrying value exceeded its estimated fair value, an impairment was recorded for the amount in excess. As a result of the interim goodwill impairment test, the Company recognized a goodwill impairment charge of $9.5 million.  The following table summarizes goodwill activity for the six-month periods ended June 30, 2020 and 2019 (in millions):

			Accumulated			Goodwill,
	Goodwill		Impairments			Net
Balance at January 1, 2019	$	21.3	$	(11.8	)	$	9.5
No activity in 2019		—		—			—
Balance June 30, 2019	$	21.3	$	(11.8	)	$	9.5
Balance at January 1, 2020		21.3		(11.8	)		9.5
Impairment		—		(9.5	)		(9.5	)
Balance at June 30, 2020	$	21.3	$	(21.3	)	$	-

6. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful accounts consisted of the following (in millions):

	June 30,
	2020			2019
Balance at beginning of year	$	3.1		$	2.1
Provision charged to expense		0.1			—
Write-offs, less recoveries		(0.3	)		(0.1	)
Balance at end of period	$	2.9		$	2.0

7. DEBT

Debt consisted of the following (in millions): 

	June 30,		December 31,		June 30,
	2020		2019		2019
Revolving credit facility	$	122.4	$	131.3	$	154.6
Other obligations		4.9		5.5		5.7
Total debt		127.3		136.8		160.3
Less current maturities of long-term debt		1.7		1.7		1.7
Long-term debt, less current maturities	$	125.6	$	135.1	$	158.6

Credit Facility — The Company has a $250.0 million asset-based senior secured revolving credit facility (the “credit facility”).  Borrowing availability under the credit facility is based on eligible accounts receivable, inventory and real estate. The real estate

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component of the borrowing base amortizes monthly over 12.5 years on a straight-line basis.  Borrowings under the credit facility are collateralized by substantially all of the Company’s assets, and the Company is subject to certain operating limitations applicable to a loan of this type, which, among other things, place limitations on indebtedness, liens, investments, mergers and acquisitions, dispositions of assets, cash dividends and transactions with affiliates.  The entire unpaid balance under the credit facility is due and payable on July 14, 2022.    

At June 30, 2020, the Company had revolving credit borrowings of $122.4 million outstanding at a weighted average interest rate of 1.77% per annum, letters of credit outstanding totaling $3.2 million, primarily used as collateral for health and workers’ compensation insurance, and $54.2 million of excess committed borrowing availability.  The Company pays an unused commitment fee of 0.25% per annum. In addition, the Company had $1.2 million of other obligations maturing in 2023 at a borrowing rate of 6.11%. The Company also had $3.7 million of financing lease obligations at June 30, 2020.  See Note 4 – “Leases” for more information.  

The sole financial covenant in the credit facility is the minimum fixed charge coverage ratio (“FCCR”) of 1.00:1.00, which must be tested by the Company if the excess borrowing availability falls below an amount in the range of $17.5 million to $31.3 million, depending on the borrowing base. In the first six months of 2020, the minimum FCCR was not required to be tested as excess borrowing availability was greater than the minimum threshold. However, if the Company’s availability would have fallen below that threshold, the Company would not have met the minimum FCCR. The FCCR must also be tested on a pro forma basis prior to consummation of certain significant business transactions outside the ordinary course of business, as defined in the agreement. 

While the Company believes its cash on hand, borrowing capacity available under the credit facility, and cash flows from operations for the next twelve months will be sufficient to service its liquidity needs, it cannot predict whether future developments associated with the COVID-19 pandemic will materially adversely affect its liquidity position. See Note 13, “Impact of and Company Response to the COVID-19 Pandemic” for additional disclosure regarding the potential impact the current pandemic may have on the Company’s future liquidity and financial position.

8. OTHER ACCRUED LIABILITIES

The Company had other accrued liabilities consisting of the following (in millions):

	June 30,		December 31,		June 30,
	2020		2019		2019
Self insurance	$	4.1	$	3.7	$	3.9
Sales incentive programs		3.8		7.4		4.1
Short-term environmental		1.1		1.1		1.1
Other accruals		6.3		3.6		4.0
Other accrued liabilities	$	15.3	$	15.8	$	13.1

9. CONTINGENCIES

The Company carries insurance policies on insurable risks with coverage and other terms that it believes to be 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 claims experience. Liabilities for existing and unreported claims are accrued when it is probable that future costs will be incurred and can be reasonably estimated.

Environmental and Legal Matters

The Company accrues expenses for contingencies when it is probable that an asset has been impaired or a liability has been incurred and management can reasonably estimate the expense. Contingencies for which the Company has made accruals include environmental and other legal matters. It is possible, however, that actual expenses could exceed the accruals by a material amount, which could have a material adverse effect on the Company’s future liquidity, financial condition, and operating results in the period in which any such additional expenses are incurred or recognized.

Environmental Matters

The Company was previously identified as a potentially responsible party in connection with contamination cleanup at a formerly owned property in Montana. On February 18, 2015, the Montana Department of Environmental Quality (the “DEQ”) issued an amendment to the unilateral administrative order of the DEQ outlining the final remediation of the property in its Record of Decision.  In September 2015, the remedial action work plan (“RAWP”) was approved.

The Company paid $0.1 million in the first six months of 2020 implementing the RAWP.  The Company estimates the total remaining cost of implementing the RAWP to be $2.8 million at June 30, 2020, with $1.1 million in short-term other accrued liabilities and $1.7 million in other non-current liabilities. As of June 30, 2020, the Company believes the accrual represents a reasonable best estimate of the total remaining remediation costs, based on facts, circumstances, and information currently available.  However, there are currently unknown variables relating to the actual levels of contaminants and amounts of soil that will ultimately require treatment or removal. As part of the remediation process, additional soil and groundwater sampling, and bench and pilot testing is required to

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ensure the remediation will achieve the outcome required by the DEQ.  The ultimate final amount of remediation costs and expenditures are difficult to estimate with certainty and as a result, the amount of actual costs and expenses ultimately incurred by the Company with respect to this property could be lower than, or exceed the amount accrued as of June 30, 2020 by a material amount.  If actual costs are materially higher, the incremental expenses over the amount currently accrued could have a material adverse effect on the Company’s liquidity, financial condition and operating results.  

With consent of the DEQ, remediation efforts and expenditures have been temporarily suspended during the current pandemic based on health, safety, financial and other considerations.  The Company is working with the DEQ to schedule further remediation as the circumstances of the COVID-19 pandemic allow.  See Note 13, “Impact of and Company Response to the COVID-19 Pandemic.”

In addition, some of the Company’s current and former distribution centers are located in areas where environmental contamination may have occurred, and for which the Company, among others, could be held responsible. The Company currently believes that there are no material environmental liabilities at any of its distribution center locations.

10. EARNINGS (LOSS) PER SHARE

The Company calculates its basic income (loss) per share by dividing net income (loss) allocated to common shares outstanding by the weighted average number of common shares outstanding. Unvested shares of restricted stock participate in dividends on the same basis as common shares. As a result, these share-based awards meet the definition of participating securities and the Company applies the two-class method to compute earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. In periods in which the Company has net losses, the losses are not allocated to participating securities because the participating security holders are not obligated to share in such losses.

The following table presents the number of participating securities and earnings allocated to those securities (in millions).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Earnings allocated to participating shareholders	$	—	$	—	$	—	$	—
Number of participating securities		0.9		1.1		0.9		1.1

The diluted earnings per share calculations include the effect of assumed exercise using the treasury stock method for unvested restricted stock units, except when the effect would be anti-dilutive.  The following table presents the number of common shares used in the calculation of net income (loss) per share from continuing operations (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Weighted-average number of common shares-basic		26.0		25.5		26.0		25.4
Dilutive potential common shares		0.2		—		—		—
Weighted-average number of common shares-diluted		26.2		25.5		26.0		25.4

11. INCOME TAXES

The Company assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing deferred tax assets.  The cumulative loss incurred by the Company over the three-year period ended June 30, 2020 constitutes a significant piece of objective negative evidence.  Such objective negative evidence limits the ability to consider other subjective evidence, such as our projections for future profitability and growth.  Based on this evaluation, as of June 30, 2020, the Company maintained a valuation allowance of $19.7 million to reduce net deferred tax assets as their realization did not meet the more-likely-than-not criterion.  The amount of deferred tax assets considered realizable, however, could be adjusted in the future if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future profitability and growth.

The Company’s effective tax rate from continuing operations was a benefit of 0% and 787% in the three-month periods ended June 30, 2020 and 2019, respectively, and expense of 0% and 463% in the six-month periods ended June 30, 2020 and 2019, respectively.   The tax rate for the first six months of 2020 was impacted by state tax expense and amortization of tax goodwill, which continues to increase the indefinite-lived deferred tax liability.

In response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including

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temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, alternative minimum tax credit refunds, and the creation of certain refundable employee retention credits. The Company anticipates it may benefit in the future from the temporary five-year net operating loss carryback provisions, the technical correction for qualified leasehold improvements, which changes 39-year property to 15-year property, eligibility for 100% tax bonus depreciation, and potentially other provisions within the CARES Act. Where certain tax provisions of the CARES Act are determined to be applicable following the completion of the Company’s assessment, these may result in tax credits, refunds and income tax or other benefits which would be recorded in the Consolidated Statements of Operations in the period in which the benefit is incurred.

12. STOCK-BASED COMPENSATION

The Company recognized $0.3 million and $0.6 million in non-cash, stock-based compensation expense for the second quarter of 2020 and 2019, respectively, and $0.6 million and $1.1 million in non-cash, stock-based compensation expense for the six-month periods ended June 30, 2020 and 2019, respectively.  During the first six months of 2020, the Company granted an aggregate of 390,325 shares of restricted stock at a weighted average value of $1.40 per share under its 2005 Executive Incentive Compensation Plan, as amended and restated. Most restricted shares vest in three equal installments on the first, second and third anniversaries of the grant date, or cliff vest in five years. During the first six months of 2020, the Company granted an aggregate of 90,000 shares of restricted stock under its Non-Employee Directors’ Restricted Stock Plan, as amended, at an average fair market value of $1.44 per share. The directors’ restricted shares vest on the first anniversary of the grant date. Unearned compensation expense is amortized into expense on a straight-line basis over the requisite service period for the entire award. As of June 30, 2020 and 2019, the total compensation expense not yet recognized related to all outstanding restricted stock awards was $1.5 million and $3.2 million, respectively.

13. IMPACT OF AND COMPANY RESPONSE TO COVID-19

In March 2020, the World Health Organization recognized the novel strain of coronavirus, COVID-19, as a pandemic.  The United States, various other countries and state and local jurisdictions have imposed, among other things, travel and business operation restrictions intended to limit the spread of the COVID-19 virus and have advised or required individuals to adhere to social distancing or limit or forego their time outside of their home.  This pandemic and the governmental response have resulted in significant and widespread economic disruptions to, and uncertainty in, the global and U.S. economies, including in the regions in which the Company operates.  In many jurisdictions, the Company and its customers were deemed “essential businesses” and continued to operate, reducing the impact of these restrictions on its operations and results for the three and six months ended June 30, 2020.  However, the Company’s management cannot reliably predict the future impact of the pandemic and the governmental response to the pandemic on the Company’s operations and future results.

With the exception of closing two branches as a part of the Company’s restructuring efforts (as discussed in Note 14, “Branch Closures and Related Costs”), all of the Company’s branches remain open and capable of meeting customer needs.  The Company has taken protective measures to guard the health and well-being of its employees and customers, including the implementation of social distancing guidelines and remote work options where possible.  The Company has observed certain of its customers reducing purchases and operations due to the impact of COVID-19 and governmental restrictions. The Company adjusted its sales forecast accordingly and has taken proactive measures to protect its operating liquidity, including communicating with vendors and customers, seeking modification of payment and other terms of rental and procurement agreements and monitoring its accounts receivable.  The Company has also reduced inventory levels to meet an anticipated decrease in demand and has implemented cost containment measures, including closing two of its branches, lay-offs, wage reductions, suspension of matching contributions to its qualified defined contribution plan, and eliminated non-essential spend.  The Company has also delayed or cancelled certain planned capital expenditures.  The Company has utilized its diverse overseas network to source alternative suppliers of its proprietary products, while simultaneously rationalizing its purchase volume to better align with its current sales projections.  The Company has also been proactively communicating with its lenders regarding potential modification to the terms of its credit facility should it be deemed necessary.  While the Company intends for these actions to mitigate the impact of the pandemic on its operations, it cannot provide any assurance that these actions will be successful.

14. BRANCH CLOSURES AND RELATED COSTS

During the second quarter of 2020, the Company announced the closure of its Columbus, OH and Selkirk, NY branches to improve operating results and gain operational efficiency through leverage of workforce, logistics and working capital.  The Company incurred $1.5 million in pre-tax charges for the three month and six month periods ended June 30, 2020, which consisted of $0.7 million for estimated impairment of inventory and inventory transfer costs, $0.2 million of facility exit costs, $0.1 million for employee retention and extension of benefits, and $0.5 million for other branch closure costs. The facility closures are expected to be substantially completed by September 30, 2020.  

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

Cautionary Statement Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.  The words or phrases “will likely result,” “are expected to,” “will continue,” “is anticipated,” “believe,” “estimate,” “project” or similar expressions may identify forward-looking statements, although not all forward-looking statements contain such words.  Statements made in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K looking forward in time, including, but not limited to, statements regarding our current views with respect to financial performance, future growth in the housing market, distribution channels, sales, favorable supplier relationships, inventory levels, the ability to meet customer needs, enhanced competitive posture, strategic initiatives, absence of material financial impact from litigation or contingencies, including environmental proceedings, are included pursuant to the “safe harbor” provision of the Private Securities Litigation Reform Act of 1995.

These statements present management’s expectations, beliefs, plans and objectives regarding our future business and financial performance. We cannot guarantee that any forward-looking statements will be realized or achieved.  These forward-looking statements are based on current projections, estimates, assumptions and judgments, and involve known and unknown risks and uncertainties. We disclaim any obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise.

There are a number of factors, some of which are beyond our control 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 impact of global health concerns, including the current COVID-19 pandemic, and governmental responses to such concerns, on our business, results of operations, liquidity and capital resources; the success of our growth initiatives; the strength of new construction, home improvement and remodeling markets and the recovery of the homebuilding industry to levels consistent with the historical annual average total housing starts from 1959 to 2019 of approximately 1.4 million starts based on statistics tracked by the U.S. Census Bureau (“Historical Average”); the cyclical nature of our industry; our ability to comply with, and the restrictive effect of, the financial covenant applicable under our credit facility; risks of international suppliers; the ability to source alternative suppliers in light of the COVID-19 pandemic; product liability claims and other legal proceedings; commodity prices and demand in light of the COVID-19 pandemic; stock market volatility; failure to meet exchange listing requirements; stockholder activist disruption; current or future litigation; information technology failures, network disruptions, cybersecurity attacks or breaches in data security; termination of key supplier relationships; our failure to attract and retain key personnel; goodwill impairment; deterioration of our customers’ creditworthiness or our inability to forecast such deteriorations particularly in light of the COVID-19 pandemic; the loss of a significant customer; the cost of environmental compliance, including actual expenses we may incur to resolve proceedings we are involved in arising out of a formerly owned facility in Montana; competition with existing or new industry participants; deterioration in our relationship with our unionized employees, including work stoppages or other disputes; funding requirements for multi-employer pension plans for our unionized employees; significant uninsured claims; the integration of any business we acquire and the liabilities of such businesses; the seasonality of our operations; federal and state transportation regulations; fuel cost increases; any limitations on our ability to utilize our deferred tax assets to reduce future taxable income and tax liabilities; risks associated with our private brands; uncertainties resulting from changes to United States and foreign laws, regulations and policies; the potential impact of changes in tariff costs, including tariffs on imported steel and aluminum, and potential anti-dumping or countervailing duties; and those set forth under Part I, Item 1A – “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by Form 8-K filed on April 27, 2020 and Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. These factors may not constitute all factors that could cause actual results to differ from those discussed in any forward-looking statement. Accordingly, forward-looking statements should not be relied upon as a predictor of actual results.

Overview

We are a distributor of a broad array of building material products used principally in new residential construction, home improvement, and remodeling and repair projects.  We distribute our products through 27 distribution centers serving 41 states and sell primarily to building materials dealers, national buying groups, home centers and industrial users, including makers of manufactured homes.

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The following table sets forth our sales by product classification as a percentage of total sales:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2020			2019			2020			2019
Millwork products (1)		43	%		46	%		45	%		47	%
Building products (2)		50	%		46	%		48	%		45	%
Wood products (3)		7	%		8	%		7	%		8	%
Total net product sales		100	%		100	%		100	%		100	%

⁽¹⁾ Millwork products generally include exterior and interior doors, pre-hung door units, windows, mouldings, frames, stair parts and columns.

⁽²⁾ Building products generally include composite decking, connectors, fasteners, housewrap, siding, roofing products, insulation and other miscellaneous building products.

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

Industry Conditions

New housing activity continues to trend below the historical annual average of 1.4 million total housing starts from 1959 to 2019 based on statistics tracked by the United States Census Bureau. Total housing starts were approximately 1.3 million in 2019. Through June 30, 2020, based on the most recent data provided by the United States Census Bureau, total new housing starts were 0.7% higher than 2019 levels for the corresponding six-month period.

In March 2020, the World Health Organization recognized the novel strain of coronavirus, COVID-19, as a pandemic.  The United States, various other countries and state and local jurisdictions have imposed, among other things, travel and business operation restrictions intended to limit the spread of the COVID-19 virus and are advising or requiring individuals to adhere to social distancing or limit or forego their time outside of their home.  This pandemic and the governmental response have resulted in significant and widespread economic disruptions to, and uncertainty in, the global and U.S. economy, including in the regions in which we operate.  In many jurisdictions, we and our customers were deemed “essential businesses” and continued to operate, reducing the impact of these restrictions on our operations and results for the three and six month periods ended June 30, 2020. However, we cannot reliably predict the future impact of the pandemic and the governmental response to the pandemic on our operations and future results.

With the exception of our decision to close two branches as part of our restructuring efforts (as discussed in Note 14, “Branch Closures and Related Costs,” of the Notes to the Condensed Consolidated Financial Statements), all of our branches remain open and capable of meeting customer needs.  We have taken protective measures to guard the health and well-being of our employees and customers, including the implementation of social distancing guidelines and remote work options where possible.  We have observed certain of our customers reducing purchases and operations due to the impact of COVID-19 and governmental restrictions.  Accordingly, we have taken proactive measures to protect our operating liquidity including communicating with vendors and customers, seeking temporary modification of payment and other terms of rental and procurement agreements and monitoring our accounts receivable. Substantially all such temporary modifications reverted to pre-pandemic terms by the end of the second quarter.  We have reduced inventory levels to meet anticipated demand and have implemented cost containment measures, including closing two of our branches, lay-offs, wage reductions, suspension of matching contributions to our qualified defined contribution plan, and eliminated non-essential spend. We have also delayed or cancelled certain planned capital expenditures.  We have utilized our diverse overseas network to source alternative suppliers of our proprietary products, while simultaneously rationalizing our purchase volume to better align with our current sales projections.  Notwithstanding earlier lay-offs in April 2020, we began selectively calling previously furloughed branch employees back to work as sales conditions and operations necessitated later in the second quarter of 2020.

We also communicated with lendors regarding potential modification of terms under our credit facility, if it is deemed necessary.  If in the future, we fail to meet our borrowing covenants and are unable to maintain excess borrowing availability of more than the applicable required amount, our lenders would have the right to terminate the loan commitments and accelerate the repayment of the entire amount outstanding under the credit facility. Our lenders also could foreclose on our assets securing our credit facility. In that event, we would be forced to seek alternative sources of financing.  Our ability to restructure our debt or refinance may depend on the condition of the financial markets and the availability of credit during the COVID-19 pandemic, which may result in credit being unavailable on terms acceptable to us or at all. While we intend for our actions to mitigate the impact of the pandemic on our operations, we cannot provide any assurance that these actions will be successful.

Various other factors have caused our results of operations to fluctuate from period to period. These factors include levels of residential construction, the mix of single family and multi-family starts as a percentage of total residential construction, home improvement and remodeling activity, weather, prices of commodity wood and steel products, dumping duties, tariffs, interest rates, competitive pressures, availability of credit and other local, regional and national economic conditions. Many of these factors are cyclical or seasonal in nature. We anticipate that further fluctuations in operating results from period to period will continue in the future. Our results in the first and fourth quarters of each year are generally adversely affected by winter weather patterns in the Midwest, Northeast and Northwest, which typically result in seasonal decreases in levels of construction activity in these areas. As

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much of our overhead and expenses remain relatively fixed throughout the year, our operating profits tend to be lower during the first and fourth quarters.

We believe we have the product offerings, distribution channels, personnel, systems infrastructure and financial and competitive resources necessary for continued operations. Our future revenues, costs and profitability, however, are all likely to be influenced by a number of risks and uncertainties all of which may be amplified by the COVID-19 pandemic.

Strategic Initiatives

Our strategy is to increase shareholder value through the growth and diversification of our business.  To accomplish this, we have developed strategic initiatives that require investments in our infrastructure, our people and technology platform.  Our goals are to accelerate our growth and diversify our business, which we believe will improve operating leverage over the intermediate term.  We have continued to make progress on our strategic initiatives, although our ability to continue advancing these initiatives has been, and may continue to be, impaired by present and future impacts of the COVID-19 pandemic on our operations.

To accelerate our growth and diversification, we have made strategic capital and operating investments to execute our product line expansion and market segment penetration organic growth initiatives.  The national expansion of our Huttig-Grip product line, which is sourced both domestically and internationally, expands the breadth and geographic coverage of our private label specialty building product lines.  Through our investments in automated, high-capacity, pre-finish door lines and segment-focused sales resources, further penetration of the home improvement, repair and remodel market diversifies our business to be less dependent on new home construction, reinforces our position as the largest, value-add door fabricator to the professional residential construction market in the country, and accelerates our growth in higher-value, and higher-gross margin products.  We evaluate our strategic initiatives on a regular basis as part of our overall strategic planning process.

In addition to the above initiatives, we continue to invest in our organization to attract the best talent to achieve our goal of creating a top-performing, disciplined organization with talented, engaged, and empowered people.  We also continue to invest in our technology platform to achieve improved operating efficiencies in the functional areas of the business while delivering advanced customer interface technology to make Huttig the clear supplier of choice for the products we sell.

Critical Accounting Policies

We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which requires management to make estimates and assumptions. Management bases these estimates and assumptions on historical results and known trends as well as management forecasts. Actual results could differ from these estimates and assumptions and these differences may be material. For a discussion of our significant accounting policies and estimates, see our Annual Report on Form 10-K for the year ended December 31, 2019 in Part II, Item 7 - “Management’s Discussion and Analysis of Financial Condition and Results of Operations-Critical Accounting Policies.” During the six months ended June 30, 2020, there were no material changes to the critical accounting policies and estimates discussed in our Annual Report on Form 10-K for the year ended December 31, 2019.

Results of Operations

Three Months Ended June 30, 2020 Compared to Three Months Ended June 30, 2019

As anticipated, the impact of the COVID-19 pandemic negatively affected our net sales, although our COVID-19 readiness and response plan has driven an overall improvement in our operating results relative to our initial pandemic forecasts.  

Net sales were $192.0 million in the second quarter of 2020, which was $26.5 million, or 12.1%, lower than the second quarter of 2019.  The decline was caused primarily by the changes to the operating environment resulting from the pandemic. While some of our largest markets were significantly impacted by the pandemic early in the second quarter, demand has improved as construction activity has rebounded. Revenues were lower in all three of our product classifications, with varying levels of pandemic-related supply chain disruption across product lines.

Millwork product sales decreased 17.9% in the second quarter of 2020 to $81.7 million, compared to $99.5 million in the second quarter of 2019; building products sales decreased 3.6% in the second quarter of 2020 to $97.5 million, compared to $101.1 million in the second quarter of 2019; and wood product sales decreased 28.5% in the second quarter of 2020 to $12.8 million, compared to $17.9 million in the second quarter of 2019. Millwork sales were most impacted by the disruption of our supply chain. Building product sales were more resilient as certain product lines within this category retained relatively consistent high levels of demand. The decline in wood product sales also reflected our decision to de-emphasize certain product lines within the category.

Gross margin was $38.7 million in the second quarter of 2020, compared to $44.3 million in the second quarter of 2019. As a percentage of sales, gross margin was 20.2% in the second quarter of 2020, compared to 20.3% in the second quarter of 2019. Gross margins were negatively impacted by a shift in sales mix reflecting higher proportionate sales of lower margin categories and direct sales.

Operating expenses, excluding restructuring charges of $1.5 million (as discussed in Note 14, “Branch Closures and Related Costs,” of the Notes to the Condensed Consolidated Financial Statements), decreased $6.3 million to $34.7 million in the second quarter of 2020, compared to $41.0 million in the second quarter of 2019.  Personnel costs decreased $4.7 million, or 19.3%, as a result of expense

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reduction actions taken in response to the COVID-19 pandemic, including the closing of two branches, workforce reductions, wage reductions and suspension of Company matching contributions under an employee benefit plan, as well as reduced medical claims. Non-personnel costs decreased $1.6 million as travel and other discretionary spend was curtailed and fuel costs were lower due to lower volume and pricing. As a percentage of sales, operating expenses, exclusive of restructuring, were 18.1% in the second quarter of 2020 compared to 18.8% in the second quarter of 2019.

We are in the process of closing our Columbus, Ohio and Selkirk, New York branch locations as part of our restructuring efforts.  We expect these efforts to be substantially complete by the end of the third quarter this year.  During the second quarter of 2020, we recorded a restructuring charge of $1.5 million for closure-related costs for personnel, facility, equipment and working capital related costs.

Net interest expense was $0.9 million in the second quarter of 2020 and $1.8 million in the second quarter of 2019.  The lower expense in the second quarter of 2020 reflects both lower average debt outstanding and lower interest rates.

Income taxes were $0.0 million for the quarter ended June 30, 2020, as compared to income tax expense of $11.8 million for the comparable quarter ended June 30, 2019.  We recorded a tax charge of $11.8 million in the second quarter of 2019 related to an increase in our deferred tax asset valuation allowance.  The increase was required as realization of the net deferred asset was determined to no longer meet the more-likely-than-not criterion under US GAAP.  Most of the Company’s net deferred tax asset is comprised of federal tax loss carryforwards which will begin expiring in 2030.  The deferred tax valuation allowance is assessed each reporting period and the amount of net deferred tax assets considered realizable could be adjusted in future periods based on the Company’s financial performance.  As of June 30, 2020, we have continued to maintain a full valuation allowance on our deferred tax assets.  The net operating loss carryforwards remain available to offset future taxable income.

As a result of the foregoing factors, we reported net income of $1.6 million for the quarter ended June 30, 2020, compared to a net loss of $10.3 million for the quarter ended June 30, 2019.  Adjusted for the $1.5 million restructuring charge in 2020 and the $11.8 million tax charge in 2019, net income was $3.1 million and $1.5 million in 2020 and 2019, respectively.

Six Months Ended June 30, 2020 Compared to Six Months Ended June 30, 2019

Net sales were $395.0 million in the first six months of 2020, which was $20.9 million, or 5.0%, lower than the first six months of 2019.  The decrease in net sales was primarily caused by the impact of the COVID-19 pandemic early in the second quarter.  While some of our largest markets were significantly impacted by the pandemic in the second quarter, demand has improved as construction activity has rebounded.  Revenues were lower in all three of our product classifications, with varying levels of pandemic-related supply chain disruption across product lines.

Millwork product sales decreased 8.7% in the first six months of 2020 to $177.9 million, compared to $194.8 million in the first six months of 2019; building products sales increased 0.4% in the first six months of 2020 to $190.0 million, compared to $189.3 million in the first six months of 2019; and wood product sales decreased 14.8% in the first six months of 2020 to $27.1 million, compared to $31.8 million in the first six months of 2019. Millwork sales were most impacted by the disruption of our supply chain when compared to other product classifications. Building product sales were more resilient as certain product lines within this category retained relatively consistent high levels of demand. The decline in wood product sales also reflected our decision to de-emphasize certain product lines within the category.

Gross margin was $79.6 million in the first six months of 2020, compared to $81.7 million in the first six months of 2019. As a percentage of sales, gross margin was 20.2% in the first six months of 2020, compared to 19.6% in the first six months of 2019.  The gross margin percentage reflects the favorable impact from our focus on higher margin sales opportunities, partially offset by the change in product mix consistent with the disproportionate increase in the building products category.

Operating expenses, excluding restructuring costs of $1.5 million, decreased $6.9 million to $73.7 million in the first six months of 2020, compared to $80.6 million in the first six months of 2019.  Personnel costs decreased $6.2 million as a result of expense reduction actions taken in response to the COVID-19 pandemic, including the closing of two branches, workforce reductions wage reductions, suspension of Company matching contributions under an employee benefit plan and reduced medical claims.  Non-personnel costs decreased $0.7 million as travel and other discretionary spend was curtailed and fuel costs were lower due to lower volume and price, partially offset by an increase in worker’s compensation expense and other insurance costs. As a percentage of sales, operating expenses, net of restructuring, were 18.7% in the first six months of 2020 compared to 19.4% in the first six months of 2019.

During the first quarter of 2020, a decline in the market value of the Company’s public equity concurrent with the COVID-19 pandemic triggered an assessment of goodwill. As a result of the interim goodwill impairment test, the Company recognized a goodwill impairment charge of $9.5 million.

We are in the process of closing of our Columbus, Ohio and Selkirk, New York branch locations as part of our restructuring efforts.  We expect these efforts to be substantially complete by the end of the third quarter this year.  During the second quarter of 2020, we recorded a restructuring charge of $1.5 million for closure-related costs for personnel, facility, equipment and working capital related costs.

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Net interest expense was $2.2 million in the first six months of 2020 compared to $3.5 million in the first six months of 2019. The lower expense in the first six months of 2020 reflected both lower average borrowing and lower interest rates.

Income taxes were $0.0 million for the first six months of 2020, as compared to income tax expense of $11.1 million for the first six months of 2019. In the six months ended June 30, 2019, we recorded a tax charge of $11.8 million for an increase in our deferred tax asset valuation allowance.  The increase was required as realization of the net deferred asset was determined to no longer meet the more-likely-than-not criterion under US GAAP.  Most of the Company’s net deferred tax asset is comprised of federal tax loss carryforwards which will begin expiring in 2030.  The deferred tax valuation allowance is assessed each reporting period and the amount of net deferred tax assets considered realizable could be adjusted in future periods based on the Company’s financial performance.  The net operating loss carryforwards remain available to offset future taxable income.

As a result of the foregoing factors, we reported a net loss of $7.3 million and $13.5 million for the six months ended June 30, 2020 and 2019, respectively.  Adjusted for the $9.5 million goodwill impairment charge and the $1.5 million restructuring charge in 2020, and adjusted for the $11.8 million tax charge in 2019, year-to-date net inome was $3.7 million in 2020 compared to a net loss of $1.7 million a year ago.

Liquidity and Capital Resources

We depend on our cash flows from operations and funds available under our revolving credit facility to finance seasonal working capital needs, capital expenditures, additional investments in our product lines, and any acquisitions that we may undertake. To the extent that our sales decline or our customers are unable to meet their obligations, including as a result of the current COVID-19 pandemic and global economic instability, our cash flows would be negatively affected.

Typically, our working capital requirements are greatest in the second and third quarters, which reflect the seasonal nature of our business. The second and third quarters also tend to be 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 second quarter in preparation for our second and third quarters. We also maintain significant inventories to meet the rapid delivery requirements of our customers and to enable us to obtain favorable pricing, delivery and service terms with our suppliers. As part of our COVID-19 readiness and response plan, we significantly reduced our inventory levels in the second quarter of 2020. Reductions were made in anticipation of reduced sales demand which improved as the quarter progressed. As a result, in the second quarter, we were able to generate cash from operations and reduce our indebtedness.

At June 30, 2020, we had $54.2 million of excess committed borrowing availability and $1.8 million cash.  We have reduced our senior indebtedness year-over-year at June 30, 2020 by $32.2 million.  However, the current COVID-19 pandemic could have a negative impact on our excess committed borrowing availability if sales and working capital levels decline and outstanding debt increases. Our liquidity assumptions and our ability to meet our credit facility covenants are dependent on many additional factors, including the “Risk Factors” set forth in Part I, Item 1A of the Form 10-K for the year ended December 31, 2019 as updated by Form 8-K filed on April 27, 2020 and Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.  

Operations.  Cash provided by operating activities was $10.3 million during the first six months of 2020, compared to a cash usage of $19.8 million during the first six months of 2019. The increase in cash provided by operating activities was primarily attributable to improved operating results combined with a $30.9 million reduction of inventory during the first six months of 2020 driven by our COVID-19 readiness and response plan. Accounts payable increased $6.1 million and $18.1 million in 2020 and 2019, respectively, primarily as a result of seasonal inventory purchase activity and temporary modifications to terms with key vendors during the first six months of 2020, and due to seasonal inventory purchases to support cyclical sales activity during the first six months of 2019.  These decreases in working capital were partially offset by an increase in accounts receivable of $35.0 million during the first six months of 2020, compared to an increase of $27.7 million in the prior-year corresponding period. The increase in accounts receivable over the first six months of 2020 was primarily a result of cyclical increases in sales activity with a disproportionate impact from recovering sales late in the second quarter of 2020.

Investing.  Investing activities used $0.8 million of cash during the first six months of both 2020 and 2019. These expenditures were primarily for replacement equipment at various distribution centers.

Financing.  Cash used in financing activities of $9.8 million during the first six months of 2020 resulted from a reduction in net borrowings under our credit facility. Cash provided by financing activities of $21.1 million in the first six months of 2019 reflected net borrowings of $21.2 million offset by $0.1 million for the repurchase of shares to satisfy employee tax withholdings on stock-based awards.

While we believe that our cash on hand, borrowing capacity available under our credit facility, and cash flows from operations for the next twelve months will be sufficient to service our liquidity needs, we cannot predict whether future developments associated with the COVID-19 pandemic will materially adversely affect our liquidity position. Our liquidity assumptions and our ability to meet our credit facility covenants are dependent on many additional factors, including the “Risk Factors” in Part I, Item 1A in our Annual

18

Report on Form 10-K for the year ended December 31, 2019 as updated by Form 8-K filed on April 27, 2020 and as set forth in Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020.

At June 30, 2020, the minimum fixed charge coverage ratio (“FCCR”) was not required to be tested, as excess borrowing availability was greater than the minimum threshold. However, if our availability had fallen below that threshold, we would not have met the minimum FCCR. If we are unable to maintain excess borrowing availability of more than the applicable amount in the range of $17.5 million to $31.3 million and we do not meet the minimum FCCR, our lendors would have the right to terminate the loan commitments and accelerate the repayment of the entire amount outstanding under our credit facility. Our lendors could also foreclose on our assets that secure the credit facility. If the credit facility was terminated, we would be forced to seek alternative sources of financing, which may not be available on terms acceptable to us, or at all.

Goodwill Analysis

We review goodwill annually for impairment, or more frequently if Company or market conditions indicate reporting units may be at risk of impairment.  Our last review was performed as of March 31, 2020 following a broad market selloff over concerns of the impact of COVID-19 on macroeconomic conditions; our market capitalization had declined below the carrying value of equity.  Therefore, we reassessed the implied value of our reporting units relative to their net book value. As a result of our interim goodwill impairment test, we recognized a goodwill impairment charge of $9.5 million in the first quarter of 2020.  We have no remaining goodwill on our balance sheet.  

Contingencies

We carry insurance policies on insurable risks with coverage and other terms that we believe to be appropriate. We generally have self-insured retention limits and have obtained fully insured layers of coverage above such self-insured retention limits. Accruals for self-insurance losses are made based on claims experience. Liabilities for existing and unreported claims are accrued for when it is probable that future costs will be incurred and can be reasonably estimated.

See Note 9 – “Contingencies” of the Notes to the Condensed Consolidated Financial Statements (unaudited) in Part I, Item 1 for information on legal proceedings in which we are involved.  See also Note 10- “Commitments and Contingencies” in the notes to our consolidated financial statements under Part II, Item 8 – “Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2020.

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ITEM 3 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no material changes in market risk from the information provided in Part II, Item 7A – “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report on Form 10-K for the year ended December 31, 2019.

ITEM 4 — CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures – The Company, under the supervision and with the participation of our Disclosure Committee and management, including our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e)) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2020 in all material respects to (a) cause information required to be disclosed by us in reports that we file or submit under the U.S. Securities and Exchange Commission’s rules and forms and (b) cause such information to be accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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.

Management’s Report on Internal Control Over Financial Reporting – The Company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f). Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Management’s assessment included an evaluation of the design of the Company’s internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Management reviewed the results of its assessment with the Audit Committee of our Board of Directors. Based on our evaluation under the framework in Internal Control-Integrated Framework (2013), our management concluded that our internal control over financial reporting was effective as of June 30, 2020.

Changes in Internal Control of Financial Reporting – The Company did not modify any existing internal controls as a result of its response to the COVID-19 pandemic that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II — OTHER INFORMATION

ITEM 1 — LEGAL PROCEEDINGS 

See Note 9 – “Contingencies” of the Notes to the Condensed Consolidated Financial Statements (unaudited) in Part I, Item 1 for information on legal proceedings in which the Company is involved. See also Note 10 – “Commitments and Contingencies” in the notes to our consolidated financial statements under Part II, Item 8 “Financial Statements and Supplementary Data” of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

ITEM 1A — RISK FACTORS

In addition to the other information set forth in this report, you should carefully consider the factors discussed in Part I, Item 1A – “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by Form 8-K filed on April 27, 2020, and Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020, filed on May 5, 2020.  Such risk factors could materially affect our business, financial condition, and future results. These described risks are not the only risks that we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition, and operating results. Other than the risk factors set forth below and as set forth in Form 8-K filed on April 27, 2020, there have been no material changes to the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2019.

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ITEM 6 — EXHIBITS

Exhibit Number	Description
2.1	Distribution Agreement dated December 6, 1999 between Crane Co. and the Company. (Incorporated by reference to Exhibit No. 2.1 of Amendment No. 4 to the Company’s Registration Statement on Form 10 (File No. 1-14982) filed on December 6, 1999).
3.1	Second Amended and Restated Certificate of Incorporation of the Company (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed on May 2, 2017).
3.2	Amended and Restated Bylaws of the Company (as of September 26, 2007) (Incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on September 28, 2007).
3.3	Amended and Restated Certificate of Designation of Series A Junior Participating Preferred Stock, as filed with the Secretary of State of Delaware on May 18, 2016 (Incorporated by reference to Exhibit 3.01 to the Company’s Current Report on Form 8-K filed on May 20, 2016).
4.1	Rights Agreement, dated May 18, 2016, by and between Huttig Building Products, Inc. and Computershare Trust Company, N.A., as Rights Agents (Incorporated by reference to Exhibit 4.01 to the Company’s Current Report on Form 8-K filed on May 20, 2016).
4.2	First Amendment to Rights Agreement, dated as of May 6, 2019, by and between Huttig Building Products, Inc. and Computershare Trust Company, N.A., as Rights Agent (Incorporated by reference to Exhibit 4.01 to the Company’s Current Report on Form 8-K filed on May 6, 2019).
10.21	First Amendment to Amended and Restated Executive Agreement between the Company and Jon P. Vrabely dated April 27, 2020 (Incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2020)*
10.22	First Amendment to Amended and Restated Executive Agreement between the Company and Robert Furio dated April 27, 2020 (Incorporated by reference to Exhibit 10.21 to the Company’s Quarterly Report on Form 10-Q filed on May 5, 2020)*
31.1	Certification by Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	Certification by Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1	Certification by Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted by Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
10l.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

* Management contract or compensatory plan or arrangement.

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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.
	/s/  Jon P. Vrabely
Date: August 4, 2020
	Jon P. Vrabely
	President and Chief Executive Officer
	(Principal Executive Officer)

	HUTTIG BUILDING PRODUCTS, INC.
	/s/  Philip W. Keipp
Date: August 4, 2020
	Philip W. Keipp
	Vice President and Chief Financial Officer
	(Principal Financial and Accounting Officer)

22

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, Jon P. Vrabely, certify that:

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

2. Based on my knowledge, this 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 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(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) 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

(d) 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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 functions):

(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: August 4, 2020	/s/ Jon P. Vrabely
	Jon P. Vrabely
	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, Philip W. Keipp, certify that:

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

2. Based on my knowledge, this 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 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(s) 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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) 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. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. 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

d. 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 (the registrant’s fourth fiscal quarter in the case of an annual report) 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(s) 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 functions):

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: August 4, 2020	/s/ Philip W. Keipp
	Philip W. Keipp
	Vice President - 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 June 30, 2020, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Jon P. Vrabely, President and Chief Executive Officer of the Company, and I, Philip W. Keipp, Vice President and Chief Financial Officer of the Company, certify, to our knowledge, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

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/ Jon P. Vrabely

Jon P. Vrabely

President and Chief Executive Officer

August 4, 2020

/s/ Philip W. Keipp

Philip W. Keipp

Vice President - Chief Financial Officer

August 4, 2020

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2020	Jul. 28, 2020
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2020
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Entity Registrant Name	HUTTIG BUILDING PRODUCTS, INC.
Entity Central Index Key	0001093082
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Emerging Growth Company	false
Entity Filer Category	Non-accelerated Filer
Smaller reporting company	true
Entity Common Stock, Shares Outstanding		26,894,006
Entity Shell Company	false
Entity File Number	1-14982
Entity Tax Identification Number	43-0334550
Entity Address, Address Line One	555 Maryville University Drive Suite 400
Entity Address, City or Town	St. Louis
Entity Address, State or Province	MO
Entity Address, Postal Zip Code	63141
City Area Code	314
Local Phone Number	216-2600
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	DE
Title of 12(b) Security	Common, par value $0.01 per share
Trading Symbol	HBP
Security Exchange Name	NASDAQ

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Net sales	$ 192.0	$ 218.5	$ 395.0	$ 415.9
Cost of sales	153.3	174.2	315.4	334.2
Gross margin	38.7	44.3	79.6	81.7
Operating expenses	34.7	41.0	73.7	80.6
Goodwill impairment			9.5
Restucturing charges	1.5		1.5
Operating income (loss)	2.5	3.3	(5.1)	1.1
Interest expense, net	0.9	1.8	2.2	3.5
Income (loss) from operations before income taxes	1.6	1.5	(7.3)	(2.4)
Income tax expense		11.8		11.1
Income (loss) from continuing operations	1.6	(10.3)	(7.3)	(13.5)
Net income (loss)	$ 1.6	$ (10.3)	$ (7.3)	$ (13.5)
Earnings (loss) per share:
Earnings (loss) from continuing operations per share- basic	$ 0.06	$ (0.40)	$ (0.28)	$ (0.53)
Net earnings (loss) per share - basic	0.06	(0.40)	(0.28)	(0.53)
Earnings (loss) from continuing operations per share- diluted	0.06	(0.40)	(0.28)	(0.53)
Net income (loss) per share- diluted	$ 0.06	$ (0.40)	$ (0.28)	$ (0.53)
Weighted average shares outstanding:
Basic shares outstanding	26.0	25.5	26.0	25.4
Diluted shares outstanding	26.2	25.5	26.0	25.4

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
CURRENT ASSETS:
Cash and equivalents	$ 1.8	$ 2.2	$ 1.1
Trade accounts receivable, net	95.5	60.5	96.7
Inventories, net	108.5	139.4	141.7
Other current assets	9.2	12.8	13.4
Total current assets	215.0	214.9	252.9
PROPERTY, PLANT AND EQUIPMENT:
Land	5.0	5.0	5.0
Buildings and improvements	32.6	32.4	32.5
Machinery and equipment	58.8	58.2	56.5
Gross property, plant and equipment	96.4	95.6	94.0
Less accumulated depreciation	66.6	64.4	62.0
Property, plant and equipment, net	29.8	31.2	32.0
OTHER ASSETS:
Operating lease right-of-use assets	38.6	40.9	34.2
Goodwill	0.0	9.5	9.5
Other	4.8	5.0	5.5
Total other assets	43.4	55.4	49.2
TOTAL ASSETS	288.2	301.5	334.1
CURRENT LIABILITIES:
Current maturities of long-term debt	1.7	1.7	1.7
Current maturities of operating lease right-of-use liabilities	9.8	9.7	9.2
Trade accounts payable	62.9	56.8	69.6
Accrued compensation	5.5	5.5	4.4
Other accrued liabilities	15.3	15.8	13.1
Total current liabilities	95.2	89.5	98.0
NON-CURRENT LIABILITIES:
Long-term debt, less current maturities	125.6	135.1	158.6
Operating lease right-of-use liabilities, less current maturities	29.0	31.6	25.5
Other non-current liabilities	2.2	2.4	2.5
Total non-current liabilities	156.8	169.1	186.6
SHAREHOLDERS’ EQUITY:
Preferred shares: $.01 par (5,000,000 shares authorized)
Common shares: $.01 par (75,000,000 shares authorized: 26,894,006; 26,441,926; and 26,542,639 shares issued at June 30, 2020, December 31, 2019 and June 30, 2019, respectively)	0.3	0.3	0.3
Additional paid-in capital	48.8	48.2	47.0
Retained earnings (accumulated deficit)	(12.9)	(5.6)	2.2
Total shareholders’ equity	36.2	42.9	49.5
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$ 288.2	$ 301.5	$ 334.1

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000	5,000,000
Common stock, par value	$ 0.01	$ 0.01	$ 0.01
Common stock, shares authorized	75,000,000	75,000,000	75,000,000
Common stock, shares issued	26,894,006	26,441,926	26,542,639

XML

Condensed Consolidated Statement of Shareholders' Equity (Unaudited) - USD ($) $ in Millions	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Retained Earnings (Accumulated Deficit) [Member]
Beginning Balance at Dec. 31, 2018	$ 62.0	$ 0.3	$ 46.0	$ 15.7
Net income (loss)	(3.2)			(3.2)
Payment for taxes related to share settlement of equity awards	(0.1)		(0.1)
Stock compensation expense	0.5		0.5
Ending Balance at Mar. 31, 2019	59.2	0.3	46.4	12.5
Beginning Balance at Dec. 31, 2018	62.0	0.3	46.0	15.7
Net income (loss)	(13.5)
Ending Balance at Jun. 30, 2019	49.5	0.3	47.0	2.2
Beginning Balance at Mar. 31, 2019	59.2	0.3	46.4	12.5
Net income (loss)	(10.3)			(10.3)
Stock compensation expense	0.6		0.6
Ending Balance at Jun. 30, 2019	49.5	0.3	47.0	2.2
Beginning Balance at Dec. 31, 2019	42.9	0.3	48.2	(5.6)
Net income (loss)	(8.9)			(8.9)
Stock compensation expense	0.3		0.3
Ending Balance at Mar. 31, 2020	34.3	0.3	48.5	(14.5)
Beginning Balance at Dec. 31, 2019	42.9	0.3	48.2	(5.6)
Net income (loss)	(7.3)
Ending Balance at Jun. 30, 2020	36.2	0.3	48.8	(12.9)
Beginning Balance at Mar. 31, 2020	34.3	0.3	48.5	(14.5)
Net income (loss)	1.6			1.6
Stock compensation expense	0.3		0.3
Ending Balance at Jun. 30, 2020	$ 36.2	$ 0.3	$ 48.8	$ (12.9)

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Cash Flows From Operating Activities:
Net income (loss)	$ 1.6	$ (10.3)	$ (7.3)	$ (13.5)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1.4	1.3	2.7	2.7
Non-cash interest expense			0.1	0.1
Stock-based compensation	0.3	0.6	0.6	1.1
Deferred income taxes		11.8		11.0
Goodwill impairment			9.5
Restructuring charges	1.5		1.5
Changes in operating assets and liabilities:
Trade accounts receivable	1.2	(7.5)	(35.0)	(27.7)
Inventories, net	38.8	7.5	30.9	(7.7)
Trade accounts payable	(22.6)	(17.0)	6.1	18.1
Other	2.5	(0.6)	1.2	(3.9)
Cash provided by (used in) continuing operating activities	24.7	(14.2)	10.3	(19.8)
Cash used in discontinued operating activities		(0.1)	(0.1)	(0.2)
Total cash provided by (used in) operating activities	24.7	(14.3)	10.2	(20.0)
Cash Flows From Investing Activities:
Capital expenditures	(0.4)	(0.4)	(0.8)	(0.8)
Total cash used in investing activities	(0.4)	(0.4)	(0.8)	(0.8)
Cash Flows From Financing Activities:
Borrowings (repayments) of debt, net	(22.9)	14.9	(9.8)	21.2
Repurchase of shares to satisfy employee tax withholdings				(0.1)
Total cash provided by (used in) financing activities	(22.9)	14.9	(9.8)	21.1
Net increase (decrease) in cash and equivalents	1.4	0.2	(0.4)	0.3
Cash and equivalents, beginning of period	0.4	0.9	2.2	0.8
Cash and equivalents, end of period	1.8	1.1	1.8	1.1
Supplemental Disclosure of Cash Flow Information:
Interest paid	1.0	1.7	2.2	3.3
Income taxes paid	0.3	0.1	0.4	0.1
Non-cash financing activities:
Assets acquired with debt obligations	$ 0.2	$ 0.1	$ 0.2	$ 0.2

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Basis of Presentation

6 Months Ended

Jun. 30, 2020

Accounting Policies [Abstract]

Basis of Presentation

1. BASIS OF PRESENTATION

The unaudited interim condensed consolidated financial statements of Huttig Building Products, Inc. and its subsidiary (the “Company” or “Huttig”) were prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and reflect all adjustments (including normal recurring accruals) which, in the opinion of management, are considered necessary for the fair presentation of the results for the periods presented. Financial statement preparation further requires management to make estimates and assumptions. Management bases these estimates and assumptions on historical results and known trends as well as management forecasts. Actual results could differ from these estimates and assumptions and these differences may be material. These statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019.

The condensed 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, or any other interim period, which may differ materially due to, among other things, the factors described in Part I, Item 2 of this Quarterly Report on Form 10-Q and those set forth under Part I, Item 1A – “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, as supplemented by Form 8-K filed on April 27, 2020 and Part II, Item 1A – “Risk Factors” of the Quarterly Report on Form 10-Q for the quarter ended March 31, 2020. 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

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New Accounting Standards

6 Months Ended

Jun. 30, 2020

New Accounting Pronouncements And Changes In Accounting Principles [Abstract]

New Accounting Standards

2. NEW ACCOUNTING STANDARDS

Adoption of New Accounting Standards

On January 1, 2020, the Company adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” ASU 2016-13 requires a financial asset (or a group of financial assets) measured at amortized cost basis to be assessed for impairment under the current expected credit loss model rather than an incurred loss model. The measurement of expected credit losses is based on relevant information about past events, including historical experience, current conditions and reasonable and supportable forecasts that affect the collectability of the reported amount.  The primary financial asset of the Company within the scope of ASU 2016-13 is trade receivables.  The adoption of ASU 2016-13 did not materially impact the Company's consolidated financial statements.

Recent accounting pronouncements pending adoption and not discussed above are either not applicable or will not have, or are not expected to have, a material impact on our consolidated financial condition, results of operations, or cash flows.

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Revenue

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Revenue

3. REVENUE

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods.  The Company reports sales revenue, including direct sales, on a net basis, which includes gross revenue adjustments for estimated returns, cash payment discounts based on the satisfaction of outstanding receivables, and volume purchase rebates.  The Company’s customer payment terms vary by customer, location, and the products purchased but are typical for the Company’s industry.

Regarding direct sales, the Company is the principal of these arrangements and is responsible for fulfilling the promise to provide specific goods to its customers, including product specifications, pricing and modifications prior to delivery.  Direct sales as a percentage of net sales were 18.2% and 17.3% in the three month periods ended June 30, 2020 and 2019, respectively, and 20.0% and 20.9% in the six month periods ended June 30, 2020 and 2019, respectively.

The following table disaggregates revenue by product classification (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Millwork products	$	81.7	$	99.5	$	177.9	$	194.8
Building products	$	97.5		101.1	$	190.0		189.3
Wood products	$	12.8		17.9	$	27.1		31.8
Net sales	$	192.0	$	218.5	$	395.0	$	415.9

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Leases

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Leases

4.  LEASES

The Company has operating and financing leases for corporate offices, distribution centers, vehicles, and certain equipment. These leases have remaining lease terms of less than 1 year to 12 years and many of the leases have renewal options.  Because the Company is not reasonably certain to exercise the renewal options, the options are not considered in determining the lease term, and associated potential

option payments are excluded from lease payments and right-of-use calculations.  Leases with an initial term of 12 months or less are likewise excluded from right-of-use calculations.

In addition to fixed payments, many of the Company’s lease contracts contain variable payments. Vehicle lease variable payments typically include mileage, and real estate leases include variable charges for taxes and common area maintenance.  Variable lease payments and payments for leases with an initial term of 12 months or less are recognized in the period incurred.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions):	2020		2019		2020		2019
Operating Lease Cost	$	3.1	$	3.0	$	6.3	$	6.2
Finance Lease Cost:
Amortization of right-of-use assets		0.3		0.4		0.6		0.9
Interest on lease liabilities		0.1		0.1		0.1		0.1
Total finance lease cost	$	0.4	$	0.5	$	0.7	$	1.0

The following lease assets and liabilities are included on the condensed consolidated balance sheet (in millions):

	June 30,			December 31,			June 30,
	2020			2019			2019
Operating Leases:
Operating lease right-of-use assets	$	38.6		$	40.9		$	34.2
Current maturities of operating lease right-of-use assets		9.8			9.7			9.2
Operating lease right-of-use liabilities, less current maturities		29.0			31.6			25.5
Total operating lease liabilities	$	38.8		$	41.3		$	34.7
Finance Leases:
Gross property, plant and equipment	$	10.8		$	10.6		$	9.8
Accumulated depreciation		(5.7	)		(5.2	)		(4.6	)
Property, plant and equipment, net	$	5.1		$	5.4		$	5.2
Current maturities of long-term lease liabilities	$	1.4		$	1.4		$	1.4
Long-term lease liabilities, less current maturities		2.3			2.8			2.8
Total finance lease liabilities	$	3.7		$	4.2		$	4.2

As of June 30, 2020, the weighted average remaining lease term for the Company’s operating leases was 5.3 years and for its financing leases was 3.0 years. These leases have weighted average discount rates of 6.2% and 5.3% for operating leases and financing leases, respectively. The rate implicit in the lease is used to discount leases when known. While the implicit rate is often known for finance leases, the Company is generally unable to calculate the implicit rate in operating leases because it does not have access to the lessor’s residual value estimates nor the amount of the lessor’s deferred initial direct costs.  When the implicit rate is not known, the Company uses the incremental borrowing rate for secured loans of similar term. The Company uses available data for unsecured loans to borrowers of similar credit to the Company and adjusts the rate to reflect the effect of providing collateral equivalent to the outstanding obligation balance.

The following cash flow items are included on the condensed consolidated statement of cash flows (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating cash used for operating leases	$	3.2	$	3.0	$	6.5	$	6.1
Operating cash used for finance leases		0.1		0.1		0.1		0.1
Financing cash used for finance leases		0.3		0.4		0.7		0.9

Maturities of lease liabilities are as follows (in millions):

	Finance Leases			Operating Leases
2020 (1)	$	0.8		$	6.1
2021		1.5			10.7
2022		1.1			8.5
2023		0.6			7.0
2024		0.1			4.3
Thereafter		—			9.0
Total lease payments	$	4.1		$	45.6
Less: imputed interest		(0.4	)		(6.8	)
Total future lease obligation	$	3.7		$	38.8

 ⁽¹⁾ This amount excludes the six months ended June 30, 2020.

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Goodwill

6 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Goodwill

5. GOODWILL

Goodwill is reviewed for impairment annually, or more frequently if certain indicators arise. The Company assesses each reporting period whether events and circumstances warrant a revision to the previously established useful lives.

During the first quarter of 2020, a decline in the market value of the Company’s public equity concurrent with the COVID-19 pandemic triggered an assessment of goodwill. The fair value of each reporting unit was determined using a market approach to consider factors such as market capitalization of the Company at March 31, 2020, observed ratios of enterprise value to earnings and the relative sales contribution of each reporting unit. If a reporting unit’s carrying value exceeded its estimated fair value, an impairment was recorded for the amount in excess. As a result of the interim goodwill impairment test, the Company recognized a goodwill impairment charge of $9.5 million.  The following table summarizes goodwill activity for the six-month periods ended June 30, 2020 and 2019 (in millions):

			Accumulated			Goodwill,
	Goodwill		Impairments			Net
Balance at January 1, 2019	$	21.3	$	(11.8	)	$	9.5
No activity in 2019		—		—			—
Balance June 30, 2019	$	21.3	$	(11.8	)	$	9.5
Balance at January 1, 2020		21.3		(11.8	)		9.5
Impairment		—		(9.5	)		(9.5	)
Balance at June 30, 2020	$	21.3	$	(21.3	)	$	-

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Allowance for Doubtful Accounts

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Allowance For Doubtful Accounts

6. ALLOWANCE FOR DOUBTFUL ACCOUNTS

The allowance for doubtful accounts consisted of the following (in millions):

	June 30,
	2020			2019
Balance at beginning of year	$	3.1		$	2.1
Provision charged to expense		0.1			—
Write-offs, less recoveries		(0.3	)		(0.1	)
Balance at end of period	$	2.9		$	2.0

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Debt

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Debt

7. DEBT

Debt consisted of the following (in millions): 

	June 30,		December 31,		June 30,
	2020		2019		2019
Revolving credit facility	$	122.4	$	131.3	$	154.6
Other obligations		4.9		5.5		5.7
Total debt		127.3		136.8		160.3
Less current maturities of long-term debt		1.7		1.7		1.7
Long-term debt, less current maturities	$	125.6	$	135.1	$	158.6

Credit Facility — The Company has a $250.0 million asset-based senior secured revolving credit facility (the “credit facility”).  Borrowing availability under the credit facility is based on eligible accounts receivable, inventory and real estate. The real estate

component of the borrowing base amortizes monthly over 12.5 years on a straight-line basis.  Borrowings under the credit facility are collateralized by substantially all of the Company’s assets, and the Company is subject to certain operating limitations applicable to a loan of this type, which, among other things, place limitations on indebtedness, liens, investments, mergers and acquisitions, dispositions of assets, cash dividends and transactions with affiliates.  The entire unpaid balance under the credit facility is due and payable on July 14, 2022.    

At June 30, 2020, the Company had revolving credit borrowings of $122.4 million outstanding at a weighted average interest rate of 1.77% per annum, letters of credit outstanding totaling $3.2 million, primarily used as collateral for health and workers’ compensation insurance, and $54.2 million of excess committed borrowing availability.  The Company pays an unused commitment fee of 0.25% per annum. In addition, the Company had $1.2 million of other obligations maturing in 2023 at a borrowing rate of 6.11%. The Company also had $3.7 million of financing lease obligations at June 30, 2020.  See Note 4 – “Leases” for more information.  

The sole financial covenant in the credit facility is the minimum fixed charge coverage ratio (“FCCR”) of 1.00:1.00, which must be tested by the Company if the excess borrowing availability falls below an amount in the range of $17.5 million to $31.3 million, depending on the borrowing base. In the first six months of 2020, the minimum FCCR was not required to be tested as excess borrowing availability was greater than the minimum threshold. However, if the Company’s availability would have fallen below that threshold, the Company would not have met the minimum FCCR. The FCCR must also be tested on a pro forma basis prior to consummation of certain significant business transactions outside the ordinary course of business, as defined in the agreement. 

While the Company believes its cash on hand, borrowing capacity available under the credit facility, and cash flows from operations for the next twelve months will be sufficient to service its liquidity needs, it cannot predict whether future developments associated with the COVID-19 pandemic will materially adversely affect its liquidity position. See Note 13, “Impact of and Company Response to the COVID-19 Pandemic” for additional disclosure regarding the potential impact the current pandemic may have on the Company’s future liquidity and financial position.

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Other Accrued Liabilities

6 Months Ended

Jun. 30, 2020

Other Liabilities Disclosure [Abstract]

Other Accrued Liabilities

8. OTHER ACCRUED LIABILITIES

The Company had other accrued liabilities consisting of the following (in millions):

	June 30,		December 31,		June 30,
	2020		2019		2019
Self insurance	$	4.1	$	3.7	$	3.9
Sales incentive programs		3.8		7.4		4.1
Short-term environmental		1.1		1.1		1.1
Other accruals		6.3		3.6		4.0
Other accrued liabilities	$	15.3	$	15.8	$	13.1

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Contingencies

6 Months Ended

Jun. 30, 2020

Commitments And Contingencies Disclosure [Abstract]

Contingencies

9. CONTINGENCIES

The Company carries insurance policies on insurable risks with coverage and other terms that it believes to be 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 claims experience. Liabilities for existing and unreported claims are accrued when it is probable that future costs will be incurred and can be reasonably estimated.

Environmental and Legal Matters

The Company accrues expenses for contingencies when it is probable that an asset has been impaired or a liability has been incurred and management can reasonably estimate the expense. Contingencies for which the Company has made accruals include environmental and other legal matters. It is possible, however, that actual expenses could exceed the accruals by a material amount, which could have a material adverse effect on the Company’s future liquidity, financial condition, and operating results in the period in which any such additional expenses are incurred or recognized.

Environmental Matters

The Company was previously identified as a potentially responsible party in connection with contamination cleanup at a formerly owned property in Montana. On February 18, 2015, the Montana Department of Environmental Quality (the “DEQ”) issued an amendment to the unilateral administrative order of the DEQ outlining the final remediation of the property in its Record of Decision.  In September 2015, the remedial action work plan (“RAWP”) was approved.

The Company paid $0.1 million in the first six months of 2020 implementing the RAWP.  The Company estimates the total remaining cost of implementing the RAWP to be $2.8 million at June 30, 2020, with $1.1 million in short-term other accrued liabilities and $1.7 million in other non-current liabilities. As of June 30, 2020, the Company believes the accrual represents a reasonable best estimate of the total remaining remediation costs, based on facts, circumstances, and information currently available.  However, there are currently unknown variables relating to the actual levels of contaminants and amounts of soil that will ultimately require treatment or removal. As part of the remediation process, additional soil and groundwater sampling, and bench and pilot testing is required to

ensure the remediation will achieve the outcome required by the DEQ.  The ultimate final amount of remediation costs and expenditures are difficult to estimate with certainty and as a result, the amount of actual costs and expenses ultimately incurred by the Company with respect to this property could be lower than, or exceed the amount accrued as of June 30, 2020 by a material amount.  If actual costs are materially higher, the incremental expenses over the amount currently accrued could have a material adverse effect on the Company’s liquidity, financial condition and operating results.  

With consent of the DEQ, remediation efforts and expenditures have been temporarily suspended during the current pandemic based on health, safety, financial and other considerations.  The Company is working with the DEQ to schedule further remediation as the circumstances of the COVID-19 pandemic allow.  See Note 13, “Impact of and Company Response to the COVID-19 Pandemic.”

In addition, some of the Company’s current and former distribution centers are located in areas where environmental contamination may have occurred, and for which the Company, among others, could be held responsible. The Company currently believes that there are no material environmental liabilities at any of its distribution center locations.

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Earnings (Loss) Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

10. EARNINGS (LOSS) PER SHARE

The Company calculates its basic income (loss) per share by dividing net income (loss) allocated to common shares outstanding by the weighted average number of common shares outstanding. Unvested shares of restricted stock participate in dividends on the same basis as common shares. As a result, these share-based awards meet the definition of participating securities and the Company applies the two-class method to compute earnings per share. The two-class method is an earnings allocation formula that treats participating securities as having rights to earnings that would otherwise have been available to common stockholders. In periods in which the Company has net losses, the losses are not allocated to participating securities because the participating security holders are not obligated to share in such losses.

The following table presents the number of participating securities and earnings allocated to those securities (in millions).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Earnings allocated to participating shareholders	$	—	$	—	$	—	$	—
Number of participating securities		0.9		1.1		0.9		1.1

The diluted earnings per share calculations include the effect of assumed exercise using the treasury stock method for unvested restricted stock units, except when the effect would be anti-dilutive.  The following table presents the number of common shares used in the calculation of net income (loss) per share from continuing operations (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Weighted-average number of common shares-basic		26.0		25.5		26.0		25.4
Dilutive potential common shares		0.2		—		—		—
Weighted-average number of common shares-diluted		26.2		25.5		26.0		25.4

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Income Taxes

6 Months Ended

Jun. 30, 2020

Income Tax Disclosure [Abstract]

Income Taxes

11. INCOME TAXES

The Company assesses available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of existing deferred tax assets.  The cumulative loss incurred by the Company over the three-year period ended June 30, 2020 constitutes a significant piece of objective negative evidence.  Such objective negative evidence limits the ability to consider other subjective evidence, such as our projections for future profitability and growth.  Based on this evaluation, as of June 30, 2020, the Company maintained a valuation allowance of $19.7 million to reduce net deferred tax assets as their realization did not meet the more-likely-than-not criterion.  The amount of deferred tax assets considered realizable, however, could be adjusted in the future if objective negative evidence in the form of cumulative losses is no longer present and additional weight is given to subjective evidence such as our projections for future profitability and growth.

The Company’s effective tax rate from continuing operations was a benefit of 0% and 787% in the three-month periods ended June 30, 2020 and 2019, respectively, and expense of 0% and 463% in the six-month periods ended June 30, 2020 and 2019, respectively.   The tax rate for the first six months of 2020 was impacted by state tax expense and amortization of tax goodwill, which continues to increase the indefinite-lived deferred tax liability.

In response to COVID-19, President Donald Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) on March 27, 2020. The CARES Act provides numerous tax provisions and other stimulus measures, including

temporary changes regarding the prior and future utilization of net operating losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of Social Security taxes, technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property, alternative minimum tax credit refunds, and the creation of certain refundable employee retention credits. The Company anticipates it may benefit in the future from the temporary five-year net operating loss carryback provisions, the technical correction for qualified leasehold improvements, which changes 39-year property to 15-year property, eligibility for 100% tax bonus depreciation, and potentially other provisions within the CARES Act. Where certain tax provisions of the CARES Act are determined to be applicable following the completion of the Company’s assessment, these may result in tax credits, refunds and income tax or other benefits which would be recorded in the Consolidated Statements of Operations in the period in which the benefit is incurred.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

Stock-Based Compensation

12. STOCK-BASED COMPENSATION

The Company recognized $0.3 million and $0.6 million in non-cash, stock-based compensation expense for the second quarter of 2020 and 2019, respectively, and $0.6 million and $1.1 million in non-cash, stock-based compensation expense for the six-month periods ended June 30, 2020 and 2019, respectively.  During the first six months of 2020, the Company granted an aggregate of 390,325 shares of restricted stock at a weighted average value of $1.40 per share under its 2005 Executive Incentive Compensation Plan, as amended and restated. Most restricted shares vest in three equal installments on the first, second and third anniversaries of the grant date, or cliff vest in five years. During the first six months of 2020, the Company granted an aggregate of 90,000 shares of restricted stock under its Non-Employee Directors’ Restricted Stock Plan, as amended, at an average fair market value of $1.44 per share. The directors’ restricted shares vest on the first anniversary of the grant date. Unearned compensation expense is amortized into expense on a straight-line basis over the requisite service period for the entire award. As of June 30, 2020 and 2019, the total compensation expense not yet recognized related to all outstanding restricted stock awards was $1.5 million and $3.2 million, respectively.

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Impact of and Company Response to COVID-19

6 Months Ended

Jun. 30, 2020

Extraordinary And Unusual Items [Abstract]

Impact of and Company Response to COVID-19

13. IMPACT OF AND COMPANY RESPONSE TO COVID-19

In March 2020, the World Health Organization recognized the novel strain of coronavirus, COVID-19, as a pandemic.  The United States, various other countries and state and local jurisdictions have imposed, among other things, travel and business operation restrictions intended to limit the spread of the COVID-19 virus and have advised or required individuals to adhere to social distancing or limit or forego their time outside of their home.  This pandemic and the governmental response have resulted in significant and widespread economic disruptions to, and uncertainty in, the global and U.S. economies, including in the regions in which the Company operates.  In many jurisdictions, the Company and its customers were deemed “essential businesses” and continued to operate, reducing the impact of these restrictions on its operations and results for the three and six months ended June 30, 2020.  However, the Company’s management cannot reliably predict the future impact of the pandemic and the governmental response to the pandemic on the Company’s operations and future results.

With the exception of closing two branches as a part of the Company’s restructuring efforts (as discussed in Note 14, “Branch Closures and Related Costs”), all of the Company’s branches remain open and capable of meeting customer needs.  The Company has taken protective measures to guard the health and well-being of its employees and customers, including the implementation of social distancing guidelines and remote work options where possible.  The Company has observed certain of its customers reducing purchases and operations due to the impact of COVID-19 and governmental restrictions. The Company adjusted its sales forecast accordingly and has taken proactive measures to protect its operating liquidity, including communicating with vendors and customers, seeking modification of payment and other terms of rental and procurement agreements and monitoring its accounts receivable.  The Company has also reduced inventory levels to meet an anticipated decrease in demand and has implemented cost containment measures, including closing two of its branches, lay-offs, wage reductions, suspension of matching contributions to its qualified defined contribution plan, and eliminated non-essential spend.  The Company has also delayed or cancelled certain planned capital expenditures.  The Company has utilized its diverse overseas network to source alternative suppliers of its proprietary products, while simultaneously rationalizing its purchase volume to better align with its current sales projections.  The Company has also been proactively communicating with its lenders regarding potential modification to the terms of its credit facility should it be deemed necessary.  While the Company intends for these actions to mitigate the impact of the pandemic on its operations, it cannot provide any assurance that these actions will be successful.

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Branch Closures and Related Costs

6 Months Ended

Jun. 30, 2020

Restructuring And Related Activities [Abstract]

Branch Closures and Related Costs

14. BRANCH CLOSURES AND RELATED COSTS

During the second quarter of 2020, the Company announced the closure of its Columbus, OH and Selkirk, NY branches to improve operating results and gain operational efficiency through leverage of workforce, logistics and working capital.  The Company incurred $1.5 million in pre-tax charges for the three month and six month periods ended June 30, 2020, which consisted of $0.7 million for estimated impairment of inventory and inventory transfer costs, $0.2 million of facility exit costs, $0.1 million for employee retention and extension of benefits, and $0.5 million for other branch closure costs. The facility closures are expected to be substantially completed by September 30, 2020.  

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Revenue (Tables)

6 Months Ended

Jun. 30, 2020

Revenue From Contract With Customer [Abstract]

Schedule of Disaggregation of Revenue by Product Classification

The following table disaggregates revenue by product classification (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Millwork products	$	81.7	$	99.5	$	177.9	$	194.8
Building products	$	97.5		101.1	$	190.0		189.3
Wood products	$	12.8		17.9	$	27.1		31.8
Net sales	$	192.0	$	218.5	$	395.0	$	415.9

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Leases (Tables)

6 Months Ended

Jun. 30, 2020

Leases [Abstract]

Components of Lease Expense

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in millions):	2020		2019		2020		2019
Operating Lease Cost	$	3.1	$	3.0	$	6.3	$	6.2
Finance Lease Cost:
Amortization of right-of-use assets		0.3		0.4		0.6		0.9
Interest on lease liabilities		0.1		0.1		0.1		0.1
Total finance lease cost	$	0.4	$	0.5	$	0.7	$	1.0

Schedule of Lease Assets and Liabilities Included on Condensed Consolidated Balance Sheet

The following lease assets and liabilities are included on the condensed consolidated balance sheet (in millions):

	June 30,			December 31,			June 30,
	2020			2019			2019
Operating Leases:
Operating lease right-of-use assets	$	38.6		$	40.9		$	34.2
Current maturities of operating lease right-of-use assets		9.8			9.7			9.2
Operating lease right-of-use liabilities, less current maturities		29.0			31.6			25.5
Total operating lease liabilities	$	38.8		$	41.3		$	34.7
Finance Leases:
Gross property, plant and equipment	$	10.8		$	10.6		$	9.8
Accumulated depreciation		(5.7	)		(5.2	)		(4.6	)
Property, plant and equipment, net	$	5.1		$	5.4		$	5.2
Current maturities of long-term lease liabilities	$	1.4		$	1.4		$	1.4
Long-term lease liabilities, less current maturities		2.3			2.8			2.8
Total finance lease liabilities	$	3.7		$	4.2		$	4.2

Schedule of Cash Flow items are Included on the Condensed Consolidated Statement of Cash Flows

The following cash flow items are included on the condensed consolidated statement of cash flows (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Operating cash used for operating leases	$	3.2	$	3.0	$	6.5	$	6.1
Operating cash used for finance leases		0.1		0.1		0.1		0.1
Financing cash used for finance leases		0.3		0.4		0.7		0.9

Schedule of Maturities of Lease Liabilities

Maturities of lease liabilities are as follows (in millions):

	Finance Leases			Operating Leases
2020 (1)	$	0.8		$	6.1
2021		1.5			10.7
2022		1.1			8.5
2023		0.6			7.0
2024		0.1			4.3
Thereafter		—			9.0
Total lease payments	$	4.1		$	45.6
Less: imputed interest		(0.4	)		(6.8	)
Total future lease obligation	$	3.7		$	38.8

 ⁽¹⁾ This amount excludes the six months ended June 30, 2020.

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Goodwill (Tables)

6 Months Ended

Jun. 30, 2020

Goodwill And Intangible Assets Disclosure [Abstract]

Summary of Goodwill Activity

The following table summarizes goodwill activity for the six-month periods ended June 30, 2020 and 2019 (in millions):

			Accumulated			Goodwill,
	Goodwill		Impairments			Net
Balance at January 1, 2019	$	21.3	$	(11.8	)	$	9.5
No activity in 2019		—		—			—
Balance June 30, 2019	$	21.3	$	(11.8	)	$	9.5
Balance at January 1, 2020		21.3		(11.8	)		9.5
Impairment		—		(9.5	)		(9.5	)
Balance at June 30, 2020	$	21.3	$	(21.3	)	$	-

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Allowance for Doubtful Accounts (Tables)

6 Months Ended

Jun. 30, 2020

Receivables [Abstract]

Summary of Allowance for Doubtful Accounts

The allowance for doubtful accounts consisted of the following (in millions):

	June 30,
	2020			2019
Balance at beginning of year	$	3.1		$	2.1
Provision charged to expense		0.1			—
Write-offs, less recoveries		(0.3	)		(0.1	)
Balance at end of period	$	2.9		$	2.0

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Debt (Tables)

6 Months Ended

Jun. 30, 2020

Debt Disclosure [Abstract]

Summary of Long-term Debt

Debt consisted of the following (in millions): 

	June 30,		December 31,		June 30,
	2020		2019		2019
Revolving credit facility	$	122.4	$	131.3	$	154.6
Other obligations		4.9		5.5		5.7
Total debt		127.3		136.8		160.3
Less current maturities of long-term debt		1.7		1.7		1.7
Long-term debt, less current maturities	$	125.6	$	135.1	$	158.6

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Other Accrued Liabilities (Tables)

6 Months Ended

Jun. 30, 2020

Other Liabilities Disclosure [Abstract]

Summary of Other Accrued Liabilities

The Company had other accrued liabilities consisting of the following (in millions):

	June 30,		December 31,		June 30,
	2020		2019		2019
Self insurance	$	4.1	$	3.7	$	3.9
Sales incentive programs		3.8		7.4		4.1
Short-term environmental		1.1		1.1		1.1
Other accruals		6.3		3.6		4.0
Other accrued liabilities	$	15.3	$	15.8	$	13.1

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Earnings (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Summary of Number of Participating Securities and Earning Allocations to those Securities

The following table presents the number of participating securities and earnings allocated to those securities (in millions).

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Earnings allocated to participating shareholders	$	—	$	—	$	—	$	—
Number of participating securities		0.9		1.1		0.9		1.1

Summary of Diluted Earning Per Share

The following table presents the number of common shares used in the calculation of net income (loss) per share from continuing operations (in millions):

	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Weighted-average number of common shares-basic		26.0		25.5		26.0		25.4
Dilutive potential common shares		0.2		—		—		—
Weighted-average number of common shares-diluted		26.2		25.5		26.0		25.4

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New Accounting Standards - Additional Information (Detail) - Accounting Standards Update 2016-13 [Member]	Jun. 30, 2020
New Accounting Pronouncements Or Change In Accounting Principle [Line Items]
Change in accounting principle, accounting standards update, adopted	true
Change in accounting principle, accounting standards update, adoption date	Jan. 01, 2020
Change in accounting principle, accounting standards update, immaterial effect	true

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Revenue - Additional Information (Detail)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Direct Sales [Member] | Customer Concentration Risk [Member]
Disaggregation Of Revenue [Line Items]
Direct sales, percentage of net sales	18.20%	17.30%	20.00%	20.90%

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Revenue - Schedule of Disaggregation of Revenue by Product Classification (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Disaggregation Of Revenue [Line Items]
Net Sales	$ 192.0	$ 218.5	$ 395.0	$ 415.9
ASC Topic 606
Disaggregation Of Revenue [Line Items]
Net Sales	192.0	218.5	395.0	415.9
ASC Topic 606 | Millwork Products [Member]
Disaggregation Of Revenue [Line Items]
Net Sales	81.7	99.5	177.9	194.8
ASC Topic 606 | Building Products [Member]
Disaggregation Of Revenue [Line Items]
Net Sales	97.5	101.1	190.0	189.3
ASC Topic 606 | Wood Products [Member]
Disaggregation Of Revenue [Line Items]
Net Sales	$ 12.8	$ 17.9	$ 27.1	$ 31.8

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Leases - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2020
Leases [Line Items]
Operating lease, weighted average remaining lease term	5 years 3 months 18 days
Finance lease, weighted average remaining lease term	3 years
Operating lease, weighted average discount rate, percent	6.20%
Finance lease, weighted average discount rate, percent	5.30%
Minimum [Member]
Leases [Line Items]
Operating and Financing leases, remaining lease terms	1 year
Maximum [Member]
Leases [Line Items]
Operating and Financing leases, remaining lease terms	12 years

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Leases - Components of Lease Expense (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Operating Lease Cost	$ 3.1	$ 3.0	$ 6.3	$ 6.2
Finance Lease Cost:
Amortization of right-of-use assets	0.3	0.4	0.6	0.9
Interest on lease liabilities	0.1	0.1	0.1	0.1
Total finance lease cost	$ 0.4	$ 0.5	$ 0.7	$ 1.0

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Leases - Schedule of Lease Assets and Liabilities Included on Condensed Consolidated Balance Sheet (Detail) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Operating Leases:
Operating lease right-of-use assets	$ 38.6	$ 40.9	$ 34.2
Current maturities of operating lease right-of-use assets	9.8	9.7	9.2
Operating lease right-of-use liabilities, less current maturities	29.0	31.6	25.5
Total operating lease liabilities	38.8	41.3	34.7
Finance Leases:
Gross property, plant and equipment	10.8	10.6	9.8
Accumulated depreciation	(5.7)	(5.2)	(4.6)
Property, plant and equipment, net	5.1	5.4	$ 5.2
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List]			us-gaap:PropertyPlantAndEquipmentNet
Current maturities of long-term lease liabilities	1.4	1.4	$ 1.4
Long-term lease liabilities, less current maturities	2.3	2.8	2.8
Total finance lease liabilities	$ 3.7	$ 4.2	$ 4.2

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Leases - Schedule of Cash Flow Items are Included on Condensed Consolidated Statement of Cash Flows (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Leases [Abstract]
Operating cash used for operating leases	$ 3.2	$ 3.0	$ 6.5	$ 6.1
Operating cash used for finance leases	0.1	0.1	0.1	0.1
Financing cash used for finance leases	$ 0.3	$ 0.4	$ 0.7	$ 0.9

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Leases - Schedule of Maturities of Lease Liabilities (Detail) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Finance Lease Liabilities, Payments, Due [Abstract]
2020	$ 0.8
2021	1.5
2022	1.1
2023	0.6
2024	0.1
Total lease payments	4.1
Less: imputed interest	(0.4)
Total future lease obligation	3.7	$ 4.2	$ 4.2
Operating Lease Liabilities, Payments Due [Abstract]
2020	6.1
2021	10.7
2022	8.5
2023	7.0
2024	4.3
Thereafter	9.0
Total lease payments	45.6
Less: imputed interest	(6.8)
Total future lease obligation	$ 38.8	$ 41.3	$ 34.7

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Goodwill - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill impairment charge	$ 9.5

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Goodwill - Summary of Goodwill Activity (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019	Dec. 31, 2018
Goodwill And Intangible Assets Disclosure [Abstract]
Goodwill Beginning Balance, Gross	$ 21.3	$ 21.3
No activity in period		0.0
Impairment	(9.5)
Goodwill Ending Balance, Gross	21.3	21.3
Accumulated Impairments	(21.3)	(11.8)	$ (11.8)	$ (11.8)
Goodwill Beginning Balance, Net	9.5	9.5
Goodwill Ending Balance, Net	$ 0.0	$ 9.5

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Allowance for Doubtful Accounts - Summary of Allowance for Doubtful Accounts (Detail) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Debt Disclosure [Abstract]
Balance at beginning of year	$ 3.1	$ 2.1
Provision charged to expense	0.1
Write-offs, less recoveries	(0.3)	(0.1)
Balance at end of period	$ 2.9	$ 2.0

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Debt - Summary of Long-term Debt (Detail) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Debt Disclosure [Abstract]
Revolving credit facility	$ 122.4	$ 131.3	$ 154.6
Other obligations	4.9	5.5	5.7
Total debt	127.3	136.8	160.3
Less current maturities of long-term debt	1.7	1.7	1.7
Long-term debt, less current maturities	$ 125.6	$ 135.1	$ 158.6

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Debt - Additional Information (Detail) - USD ($)		6 Months Ended
	Jul. 14, 2017	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Line of Credit Facility [Line Items]
Revolving credit borrowing		$ 122,400,000	$ 131,300,000	$ 154,600,000
Letters of credit outstanding		3,200,000
Other obligations		1,200,000
Financing lease obligations		3,700,000	$ 4,200,000	$ 4,200,000
Minimum [Member]
Line of Credit Facility [Line Items]
Fall of excess borrowing availability		17,500,000
Maximum [Member]
Line of Credit Facility [Line Items]
Fall of excess borrowing availability		$ 31,300,000
Other Obligations [Member]
Line of Credit Facility [Line Items]
Debt instrument maturity year		2023
Debt instrument interest rate		6.11%
Revolving Credit Facility [Member]
Line of Credit Facility [Line Items]
Line of credit facility, due and payable date	Jul. 14, 2022
Amortization period on real estate component of borrowing base	12 years 6 months
Revolving credit borrowing		$ 122,400,000
Weighted average interest rate		1.77%
Excess committed borrowing availability		$ 54,200,000
Unused commitment fees		0.25%
Fixed charge coverage ratio of credit facility		100.00%
Revolving Credit Facility [Member] | Asset Backed Securities [Member]
Line of Credit Facility [Line Items]
Line of credit facility, maximum borrowing capacity	$ 250,000,000.0

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Other Accrued Liabilities - Summary of Other Accrued Liabilities (Detail) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019	Jun. 30, 2019
Other Liabilities Disclosure [Abstract]
Self insurance	$ 4.1	$ 3.7	$ 3.9
Sales incentive programs	3.8	7.4	4.1
Short-term environmental	1.1	1.1	1.1
Other accruals	6.3	3.6	4.0
Other accrued liabilities	$ 15.3	$ 15.8	$ 13.1

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Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2020 USD ($)
Contingencies And Commitments [Line Items]
Amount paid to implement remedial action work plan	$ 0.1
Accrual for reasonably estimable remediation cost	2.8
Short-term Other Accrued Liabilities [Member]
Contingencies And Commitments [Line Items]
Accrual for reasonably estimable remediation cost	1.1
Other Non-current Liabilities [Member]
Contingencies And Commitments [Line Items]
Accrual for reasonably estimable remediation cost	$ 1.7

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Earnings (Loss) Per Share - Summary of Number of Participating Securities and Earning Allocated to those Securities (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Number of participating securities	0.9	1.1	0.9	1.1

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Earnings (Loss) Per Share - Summary of Diluted Earning Per Share (Detail) - shares shares in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Weighted Average Number Of Shares Outstanding [Abstract]
Weighted-average number of common shares-basic	26.0	25.5	26.0	25.4
Dilutive potential common shares	0.2
Weighted-average number of common shares-diluted	26.2	25.5	26.0	25.4

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Income Taxes - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Tax Disclosure [Abstract]
Deferred tax assets, additional valuation allowance			$ 19.7
Effective income tax rate reconciliation expense (benefit), percent	0.00%	(787.00%)	0.00%	463.00%

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Stock-Based Compensation - Additional Information (Detail) $ / shares in Units, $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) Installment $ / shares shares	Jun. 30, 2019 USD ($)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation | $	$ 0.3	$ 0.6	$ 0.6	$ 1.1
Number of installments of restricted shares | Installment			3
Restricted stock award vesting rights			The directors’ restricted shares vest on the first anniversary of the grant date.
Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation expense of restricted stock | $	$ 1.5	$ 3.2	$ 1.5	$ 3.2
2005 Executive Incentive Compensation Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted | shares			390,325
Weighted average fair market value of restricted shares granted | $ / shares			$ 1.40
Non-Employee Directors' Restricted Stock Plan [Member] | Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted stock shares granted | shares			90,000
Weighted average fair market value of restricted shares granted | $ / shares			$ 1.44
Cliff Vest [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Restricted shares, vesting period			5 years

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Impact of and Company Response to COVID-19 - Additional Information (Detail)	Jun. 30, 2020 Branch
Extraordinary And Unusual Items [Abstract]
Number of branches closed	2

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Branch Closures and Related Costs - Additional Information (Detail) - USD ($) $ in Millions	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Restructuring Cost And Reserve [Line Items]
Pre-tax charges incurred	$ 1.5	$ 1.5
Closure of Columbus, OH and Selkirk, NY Branches [Member]
Restructuring Cost And Reserve [Line Items]
Branch closures announcement description		During the second quarter of 2020, the Company announced the closure of its Columbus, OH and Selkirk, NY branches to improve operating results and gain operational efficiency through leverage of workforce, logistics and working capital
Pre-tax charges incurred	1.5	$ 1.5
Estimated impairment of inventory and inventory transfer costs	0.7	0.7
Facility exit costs	0.2	0.2
Employee retention and extension of benefits	0.1	0.1
Other branch closure costs	$ 0.5	$ 0.5
Expected substantially completion date of facility closures		Sep. 30, 2020