HUTTIG BUILDING PRODUCTS INC - 10-Q Quarterly Report

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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 SEPTEMBER 30, 2002
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 (I.R.S. EMPLOYER IDENTIFICATION NO.)
OR ORGANIZATION)

555 MARYVILLE UNIVERSITY DRIVE
SUITE 240
ST. LOUIS, MISSOURI 63141
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)

(314) 216-2600
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)

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

The number of shares of Common Stock outstanding on September 30,
2002 was 19,741,132 shares.

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In Millions)

see notes to consolidated financial statements

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

(In Millions, Except Share and Per Share Data)

see notes to consolidated financial statements

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

(In Millions, Except Per Share Amounts)

see notes to consolidated financial statements

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

(In Millions)

see notes to consolidated financial statements

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 AND 2001
(UNAUDITED)

(In Millions)

see notes to consolidated financial statements

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HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)

1. BASIS OF PRESENTATION

The consolidated financial statements included herein have been prepared by
Huttig Building Products, Inc. (the "Company" or "Huttig") on a consolidated
basis, without audit, pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote disclosures normally
included in the consolidated financial statements prepared in accordance with
accounting principles generally accepted in the United States of America have
been condensed or omitted pursuant to the rules and regulations of the
Securities and Exchange Commission. The Company believes that the disclosures
are adequate to make the information presented not misleading. It is recommended
that these consolidated financial statements be read in conjunction with the
audited consolidated financial statements and notes thereto included in the
Company's latest Annual Report on Form 10-K. This financial information
reflects, in the opinion of management, all adjustments necessary to present
fairly, consisting of normal recurring items, the results for the interim
periods presented. Certain amounts in the prior period consolidated financial
statements have been reclassified to be consistent with the current period's
presentation.

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

2. RESTRUCTURING ACTIVITY

During the fourth quarter of 2001, the Company recorded $3.2 million of
restructuring charges related to the closure of several historically
under-performing branches, of which $1.1 million was included in costs of sales
for the write-down of inventory to realizable value. Other components of the
charge were $0.8 million for severance related costs and $1.3 million for
facility and other shutdown-related costs. Included in amounts charged against
this restructuring reserve in 2001 were $0.5 million for inventory losses and
$0.3 million for facility and other shutdown-related costs.

During the first nine months of 2002, approximately $0.5 million was charged
against the reserve for inventory losses, $0.6 million for severance, and $0.6
million for facility and other shutdown costs. During the first six months of
2002, the Company completed the closure of three facilities. During the third
quarter, management determined not to close two branches which had originally
been planned for closure. Consequently, the Company reversed $0.3 million of the
restructuring reserve related to these two branches, the components of which are
$0.1 million for severance and $0.2 million for facility and other shut-down
related costs. As of September 30, 2002 approximately $0.4 million of the
restructuring reserve remains, which includes $0.1 million for inventory, $0.1
million for severance and $0.2 million for facility and other shutdown-related
costs. The Company expects to finalize the remaining restructuring activities
during the fourth quarter of 2002.

During the fourth quarter of 2000, the Company recorded $2.1 million as a
restructuring charge related to the termination of Huttig's distribution
agreement with Andersen Windows and Doors, of which $0.8 million was included in
cost of sales. The charge related to inventory impairment and downsizing of
branch operations that previously distributed Andersen products. Approximately
$1.0 million was charged against this reserve during the fourth quarter of 2000,
leaving a balance of $1.1 million at December 31, 2000. The remaining balance
was fully utilized during 2001.

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3. DEBT

Debt consisted of the following at September 30, 2002 and December 31, 2001 (in
millions):

In August 2002, the Company entered into a new, three-year, $150.0 million
Senior Secured Revolving Credit Facility (the "Credit Facility") and repaid all
outstanding borrowings under and terminated the Company's former revolving
credit facility. The Credit Facility consists of a revolving line of credit
("Revolving Credit") that provides financing of up to $150.0 million, including
up to $10.0 million of Letters of Credit, at a floating rate of either (a) LIBOR
plus from 200 to 300 basis points or (b) the prime commercial lending rate of
the agent (or, if greater, the federal funds rate plus 0.5%) plus from 25 to 125
basis points, in each case depending on the Company's trailing average
collateral availability. The Revolving Credit borrowing base shall not exceed
the sum of (a) up to 85% of eligible domestic trade receivables and (b) up to
the lesser of 65% of the cost of eligible inventory or 85% of the appraised net
liquidation value of eligible inventory. The Company has agreed to pay a
commitment fee in the range of 0.25% to 0.50% per annum on the average daily
unused amount of the Revolving Credit commitment. All of the Company's assets,
except real property, collateralize borrowings under the Credit Facility. As of
September 30, 2002, the Company had revolving credit borrowings of $88.3 million
with $37.5 million of excess credit available under the Credit Facility.

Provisions of the Credit Facility contain various covenants which, among other
things, limit the Company's ability to incur indebtedness, incur liens, make
certain types of acquisitions, declare or pay dividends or make restricted
payments, consolidate, merge or sell assets. They also contain financial
covenants tied to the Company's borrowing base. If the borrowing base exceeds
the Company's actual outstanding borrowing and pre-established reserve levels by
less than $25.0 million, the Company must maintain or meet a 1.25 to 1.0 minimum
fixed charge ratio (defined as (a) EBITDA - as defined in the Credit Facility
agreement - less capital expenditures less cash taxes plus cash rent expense
divided by (b) cash interest expense plus scheduled debt repayments plus cash
rent expense). Also, the Company must not permit its revolving availability
under the Credit Facility to drop below $10.0 million.

As a result of entering into the Credit Facility, the Company capitalized $1.4
million of debt issuance costs that are being amortized over the life of the
facility. In addition, $0.9 million of unamortized costs associated with the
previous facility were written off and included as a component of other expense
on the statement of operations.

At September 30, 2002, the Company had three interest rate swap agreements which
expire in May 2003, with a total notional principal amount of $80.0 million.
These swap agreements, in conjunction with the Credit Facility at September 30,
2002, effectively provide for a fixed weighted average rate of 7.15% plus the
applicable spread over LIBOR as determined by the amount of collateral
availability on $80.0 million of the Company's outstanding revolving credit
borrowings. When actual borrowings under the facility are less than the notional
amount of the interest rate swaps, the Company incurs an expense equal to the
difference between $80.0 million and the actual amount borrowed, multiplied by
the difference between the fixed rate on the interest rate swap agreement and
the 90-day LIBOR rate.

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4. REPURCHASE OF COMMON STOCK

In October 2002, the Company's Board of Directors authorized a new $5.0 million
stock repurchase program that expires in October 2003. Under the prior
repurchase program, which expired by its terms in August 2002, the Company
repurchased approximately 1.1 million shares of common stock for an aggregate
purchase price of approximately $6.7 million.

5. DERIVATIVES AND INTEREST RATE RISK MANAGEMENT

The Company holds three interest rate swap agreements, which expire in May 2003,
with a total notional amount of $80.0 million, that are used to hedge interest
rate risks related to its variable rate borrowings. Two of the interest rate
swap agreements, with notional amounts totaling $42.5 million, which management
believes are economic hedges and mitigate exposure to fluctuations in variable
interest rates, do not qualify as hedges for accounting purposes. The remaining
interest rate swap, with a notional amount of $37.5 million, is accounted for as
a cash flow hedge.

For the nine months ended September 30, 2002, a total unrealized gain on
derivatives of $0.6 million was recorded. This includes $1.0 million of an
unrealized gain related to the change in fair value on the two interest rate
swaps that do not qualify as hedges for accounting purposes which was partially
offset by $0.4 million of expense that was amortized from accumulated other
comprehensive loss. The interest rate swap that is designated as a cash flow
hedge was determined to be highly effective and substantially all of the change
in the fair value was charged to accumulated other comprehensive loss.

There is no impact on cash flow as a result of the accounting treatment required
by SFAS No. 133 for the three interest rate swap agreements.

6. COMMITMENTS AND CONTINGENCIES

In March 2002, the Company agreed to settle one of three asbestos-related
product liability lawsuits then pending against it and recorded $0.9 million for
the settlement and related legal costs.

In May 2002, the Company was dismissed as a defendant from one of its then
pending asbestos-related product liability lawsuits. Also in May 2002 and in
July 2002, the Company was named as a defendant, individually and, in one of the
suits, as successor-in-interest to Rugby Building Products, Inc. and a
predecessor company acquired by Rugby Building Products, Inc. in 1994, in two
separate asbestos-related product liability lawsuits.

In September 2002, the Company was dismissed from two of the three remaining
lawsuits relating to exposure to asbestos contained in products allegedly
distributed by Huttig as successor-in-interest to Rugby Building Products, Inc.
In November 2002, plaintiffs' counsel in the remaining asbestos-related lawsuit
agreed to dismiss the Company from that suit.

In April 2002, the Company filed a lawsuit against The Rugby Group Ltd., the
Company's principal stockholder, and Rugby IPD Corp., a subsidiary of The Rugby
Group Ltd., alleging that they breached their contractual obligations to
indemnify and defend Huttig against asbestos-related liabilities and claims
arising out of the business that was acquired by Rugby Building Products, Inc.
in 1994. There can be no assurance at this time that Huttig will recover any of
its costs related to past or future asbestos-related claims from insurance
carriers or from The Rugby Group or that such costs will not have a material
adverse effect on Huttig's business or financial condition.

The Company is subject to federal, state and local environmental protection laws
and regulations. The Company's management believes the Company is in compliance,
or is taking action aimed at assuring compliance, with applicable environmental
protection laws and regulations. However, there can be no assurance that future

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environmental liabilities will not have a material adverse effect on the
consolidated financial condition or results of operations. The Company has been
identified as a potentially responsible party in connection with the clean up of
contamination at a formerly owned property in Montana. The Company is
voluntarily remediating this property under the oversight of and in cooperation
with the Montana Department of Environmental Quality ("DEQ") and is complying
with a 1995 unilateral administrative order of the DEQ to complete a remedial
investigation and feasibility study. When the state agency issues its final risk
assessment of this property, the Company will conduct a feasibility study to
evaluate alternatives for cleanup, including continuation of remediation
measures already in place. The DEQ then will select a final remedy, publish a
record of decision and negotiate with the Company for an administrative order of
consent on the implementation of the final remedy. The Company's management
currently believes that this process may take several more years to complete and
intends to continue monitoring and remediating the site, evaluating cleanup
alternatives and reporting regularly to the DEQ during this interim period.
Based on experience to date in remediating this site, management of the Company
does not believe that the scope of remediation that the DEQ ultimately
determines will have a materially adverse effect on its results of operations or
financial condition.

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

7. GOODWILL

The Company adopted SFAS No. 142, Goodwill and Other Intangible Assets,
effective January 1, 2002. Under SFAS No. 142, goodwill is no longer amortized
but is reviewed for impairment annually, or more frequently if certain
indicators arise. In addition, the statement requires reassessment of the useful
lives of previously recognized intangible assets.

SFAS No. 142 prescribes a two-step process for impairment testing of goodwill.
In the second quarter, the Company completed the first step of the transitional
impairment test and the results indicated a potential impairment in the
Company's reporting unit that sells directly to homebuilders. The second step of
the impairment test was performed during the third quarter and, based on
discounted cash flow models, the carrying value of the reporting unit that sells
directly to homebuilders exceeded its business enterprise value. An after-tax
impairment charge of $12.8 million was recorded effective January 1, 2002, as a
cumulative effect of a change in accounting principle based on the change in
criteria for measuring impairment from an undiscounted to discounted cash flow
method.

Changes to goodwill during the nine months ended September 30, 2002, including
the pre-tax effect of adopting SFAS No. 142 are as follows (in millions):

Balance at January 1, 2002, net of accumulated amortization $ 34.3
Pre-tax write-off of goodwill recognized in cumulative effect adjustment 20.7
------
Balance at September 30, 2002, net of accumulated amortization $ 13.6
======

With the adoption of SFAS No. 142, the Company ceased amortization of goodwill
as of January 1, 2002. The following table presents the pro forma quarterly net
income of the Company excluding the effects of goodwill amortization (in
millions, except per share amounts):

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The following table reflects the components of intangible assets that are being
amortized, excluding goodwill (in millions):

Amortization expense on intangible assets was $0.3 million and $0.4 million for
the nine months ended September 30, 2002 and 2001, respectively. The following
table sets forth the estimated amortization expense on intangible assets for the
years ending December 31, (in millions):

2002 $ 0.5
2003 0.3
2004 0.1
2005 0.1
2006 0.1
Thereafter 0.6

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8. NEW ACCOUNTING PRONOUNCEMENTS

In October 2001, the Financial Accounting Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-lived Assets. This statement
establishes a single accounting model for the impairment or disposal of
long-lived assets and broadens the presentation of discontinued operations. The
Company adopted this statement effective January 1, 2002, and the adoption did
not have a material impact on its consolidated financial statements.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections. This statement rescinds, updates, clarifies and
simplifies existing accounting pronouncements. Among other things, the statement
rescinds SFAS No. 4, which required all gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. Under SFAS No. 145, the criteria in Accounting
Principles Board (APB) No. 30 will now be used to classify those gains and
losses. The Company has adopted SFAS No. 145, and therefore separately recorded
the write-off of unamortized loan fees associated with its previous credit
facility as a component of other income (expense) in the third quarter.

In July 2002, the Financial Accounting Standards Board issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities. This statement
requires recording costs associated with exit or disposal activities at their
fair values when a liability has been incurred. Under previous guidance, certain
exit costs were accrued upon management's commitment to an exit plan, which is
generally before an actual liability has been incurred. Adoption of this
statement is required for exit or disposal activities initiated after December
31, 2002. Previously issued financials statements will not be restated. This
Statement will impact the timing of exit or disposal activities reported by the
Company after adoption.

9. NET INCOME (LOSS) PER SHARE

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

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ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

OVERVIEW

Huttig Building Products, Inc. is one of the largest domestic distributors of
building materials that are used principally in new residential construction and
in home improvement, remodeling and repair work. We distribute our products
through 56 distribution centers serving 46 states, principally to building
materials dealers, who, in turn, supply the end-user, directly to professional
builders and large contractors, home centers, national buying groups and
industrial and manufactured housing builders. Our American Pine Products
manufacturing facility, located in Prineville, Oregon, produces softwood
mouldings. Approximately 35% of American Pine's sales were to Huttig's
distribution centers in the nine months ended September 30, 2002.

The following table sets forth our sales, by product classification as a
percentage of total sales, for the three and nine months ended September 30,
2002 and 2001:

(1) Millwork includes windows, mouldings, frames and stair products.
(2) Wood products include panels, lumber and engineered wood products.
(3) Weatherization and metal products include roofing, connectors and
fasteners, siding, housewrap and insulation.
(4) General building products include decking, drywall and other
miscellaneous building products.

We strive to increase shareholder value by pursuing the following business
strategies:

o expanding product lines and adding higher margin products;

o focusing on providing efficient, high quality customer service through
the deployment of information technology and implementation of industry
best practices;

o simplifying our business processes to make it easier for our customers
and vendors to do business with us;

o leveraging our size to negotiate better pricing, delivery and service
terms with our suppliers;

o achieving operating efficiencies by consolidating administrative systems
across the company; and

o pursuing opportunities to expand our product lines, service and delivery
capabilities and geographic reach through acquisitions.

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

CRITICAL ACCOUNTING POLICIES

We prepare our consolidated financial statements in accordance with accounting
principles generally accepted in the United States of America, which require
management to make estimates and assumptions. Management bases these estimates
and assumptions on historical results and known trends as well as our forecasts
as to how these might

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change in the future. Actual results could differ from these estimates and
assumptions. In addition to items discussed in our Annual Report on Form 10-K in
Part II, Item 7 - "Critical Accounting Policies", we believe that of our
significant accounting policies, the following accounting policy may involve a
higher degree of judgment and complexity.

Contingencies - We accrue expenses when it is probable that an asset has been
impaired or a liability has been incurred and the amount can be reasonably
estimated. Contingencies for which we have made accruals include environmental,
product liability and other legal matters. Based on management's assessment of
the most recent information available, management currently does not expect any
of these contingencies to have a material adverse effect on our financial
position or cash flow. It is possible, however, that future results of
operations for any particular quarter or annual period and our financial
condition could be materially affected by changes in assumptions or other
circumstances related to these matters. We accrue our best estimate of the cost
of resolution of these matters and make adjustments to the amounts accrued as
circumstances change.

RESULTS OF OPERATIONS

THREE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE THREE MONTHS ENDED
SEPTEMBER 30, 2001

Net sales for the three months ended September 30, 2002 were $234.0 million, an
8.8% decrease from the third quarter of 2001 when sales were $256.7 million.
Excluding $6.2 million of sales attributable to branches that were closed, same
branch net sales decreased 6.6%, or $16.5 million, over the same period from the
prior year. Of this decrease, approximately $15.1 million represents volume
decreases and $1.4 million is attributable to deflation in the commodity wood
market as lumber prices declined in the third quarter of 2002 compared to the
third quarter of 2001. Approximately $7.9 million of the volume decrease is
attributable to the impact of a new competitor in the Kansas City, Missouri
area. We expect this new competitor in our Kansas City markets to have a
continuing impact on sales for the reasonably foreseeable future. Approximately
$4.0 million of the volume decrease is attributable to lower housewrap sales
resulting from the termination of our distribution of Tyvek(R) and our
transition to Typar(R), a competing housewrap product. As we continue to
transition to this new product, we may continue to realize lower sales of
housewrap on a comparative, year-over-year basis. Also, international sales
decreased $1.5 million compared to the third quarter of 2001 due to the weak
economy in the Far East. Other factors that contributed to the decrease in third
quarter sales include a continuing weak economy and poor manufactured housing
market in the Northwest. The overall net sales volume decrease was offset by
having one additional shipping day in 2002 versus 2001, resulting in an increase
of approximately $3.7 million. The aforementioned factors contributing to the
overall volume decrease include the impact of the additional shipping day.

Gross profit decreased $5.6 million to $46.5 million in the third quarter of
2002 from $52.1 million in the same period of 2001. The change in gross profit
attributable to branches that were closed was $1.2 million. Same branch gross
profit as a percentage of net sales was 19.9% versus 20.3% for the quarters
ended September 30, 2002 and 2001, respectively. The decrease in gross profit
percentage resulted from a shift in regional product mix, pricing pressures in
certain regions due to soft market conditions and increased competition in the
Kansas City area. We currently expect the impact of slower economic activity to
continue at least into the reasonably foreseeable future.

Operating expenses were $37.1 million in the third quarter of 2002 compared to
$43.1 million in the third quarter of 2001. The $6.0 million decrease includes
$1.6 million of cost reductions from closed branches. The remaining decrease
resulted from a $2.3 million decrease in compensation and contract labor costs
at ongoing facilities due to lower headcount than the prior year, a $1.2 million
decrease in supplies and other non-personnel expenses from expense reduction
initiatives, a decrease in the bad debt expense of $0.6 million, and $0.4
million of costs incurred in 2001 for system implementations. The decrease was
partially offset by an increase in our vehicle liability insurance reserves of
$0.3 million.

We reversed $0.3 million of restructuring charges in the third quarter of
2002 for branches originally planned to be closed that will now remain open. See
"Restructuring Activities", below, for further discussion.

Depreciation and amortization was $1.5 million in the third quarter of 2002,
which is $0.4 million lower than the same period in the prior year. The decrease
is primarily due to goodwill no longer being amortized, in accordance

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with SFAS No. 142, Goodwill and Other Intangible Assets. For the three months
ended September 30, 2001, we amortized $0.6 million of goodwill.

There were no gains on disposal of assets for the quarter ended September 30,
2002. In the third quarter of 2001, gains on disposal of assets were $0.4
million for the sale of previously closed facilities.

Net interest expense was $2.4 million in both the third quarter of 2002 and
2001. Our average outstanding total debt decreased $2.8 million compared to the
same period of the prior year, which was offset by a slightly higher effective
interest rate on our outstanding debt.

During the third quarter of 2002, we recorded a charge of $0.9 million to write
off the remaining unamortized loan fees related to our previous credit facility,
which we replaced in August 2002.

Unrealized gain on derivatives of $0.3 million was recorded in the third quarter
of 2002 as compared to an unrealized loss of $1.3 million in the third quarter
of 2001. The net gain in 2002 related to a $0.3 million gain in the fair value
on two interest rate swaps that do not qualify as hedges for accounting
purposes. See Item 3, "Quantitative and Qualitative Disclosures About Market
Risk."

As a result of the foregoing factors, pretax income increased $1.4 million to
$5.2 million for the three months ended September 30, 2002 as compared to pretax
income of $3.8 million for the same period in 2001.

Income taxes were provided at an effective rate of 38% for the quarters ended
September 30, 2002 and 2001.

NINE MONTHS ENDED SEPTEMBER 30, 2002 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 2001

Net sales for the nine months ended September 30, 2002 were $670.3 million, a
7.4% decrease from the first nine months of 2001 when sales were $723.5 million.
Excluding $20.4 million of sales attributable to branches that were closed, same
branch net sales decreased 4.7% or $32.8 million over the same period from the
prior year. Of this decrease, $31.0 million represents volume decreases and $1.8
million is attributable to deflation in the commodity wood market. Approximately
$15.9 million of the volume decrease is attributable to the impact of the new
competitor in the Kansas City, Missouri area. Approximately $7.8 million is
attributable to lower housewrap sales resulting from our transition to a new
product. Also, international sales decreased $3.1 million compared to the third
quarter of 2001 due to the weak economy in the Far East. Other contributing
factors include a continuing weak economy and poor manufactured housing market
in the Northwest.

Gross profit decreased $20.6 million to $129.5 million in the first nine months
of 2002 from $150.1 million in the same period from 2001. The change in gross
profit attributable to branches that were closed was $4.5 million. Same branch
gross profit as a percentage of net sales was 19.2% versus 20.7% for the nine
months ended September 30, 2002 and 2001, respectively. The decrease in gross
profit percentage resulted from a shift in regional product mix, pricing
pressures in certain regions due to soft market conditions and increased
competition in the Kansas City area.

Operating expenses were $116.8 million in the first nine months of 2002 compared
to $124.5 million in the first nine months of 2001. The decrease represents $5.5
million of cost reductions from closed branches. The remaining decrease is
primarily attributable to a $1.7 million decrease in supplies and maintenance
costs at ongoing facilities and $1.4 million of lower labor related costs
resulting from lower headcount than the prior year. Additionally, we incurred
$0.7 million of lower system implementation costs in 2002 as compared to 2001.
These decreases were partially offset by an increase of $0.9 million primarily
from an increase in our vehicle liability insurance reserve and expenses of $0.9
million for costs relating to the settlement and legal expenses of an
asbestos-related product liability lawsuit.

We reversed $0.3 million or restructuring charges in the third quarter of 2002
for branches originally planned to be closed that will now remain open. See
"Restructuring Activities" for further discussion.

Depreciation and amortization was $4.3 million in the first nine months of 2002,
which is $1.5 million lower than the same period in the prior year. The decrease
is due primarily to goodwill no longer being amortized, in

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accordance with SFAS No. 142, Goodwill and Other Intangible Assets. For the nine
months ended September 30, 2001, we amortized $1.8 million of goodwill.

Gains on disposal of assets were $0.4 million for the nine months ended
September 30, 2002, for the sale of previously closed facilities. During the
first nine months ended September 30, 2001, gains on disposal of assets were
$0.9 million for the sale of previously closed facilities.

Net interest expense decreased to $7.1 million in the first nine months of 2002
from $7.5 million in the same period of 2001. Our average outstanding total debt
decreased $9.0 million compared to the same period of the prior year, reducing
our interest expense.

The nine months ended September 30, 2002, includes a charge of $0.9 million
recorded in the third quarter to write off the remaining unamortized loan fees
related to our previous credit facility.

Unrealized gain on derivatives of $0.6 million was recorded in the first nine
months of 2002 versus a $2.1 million loss a year ago. The gain related to a $1.0
million change in the fair value on two interest rate swaps that do not qualify
as hedges for accounting purposes that was partially offset by $0.4 million of
expense amortized from accumulated other comprehensive loss established upon the
adoption of SFAS No. 133 in 2001. See Item 3, "Quantitative and Qualitative
Disclosures About Market Risk."

As a result of the foregoing factors, pretax income before cumulative effect of
a change in accounting principle decreased $9.4 million to $1.7 million for the
nine months ended September 30, 2002 as compared to pretax income of $11.1
million for the same period in 2001.

Cumulative effect of a change in accounting principle was $12.8 million for the
nine months ended September 30, 2002. See "New Accounting Pronouncements",
below, for further discussion.

Income taxes were provided at an effective rate of 38% for the nine months ended
September 30, 2002 and 2001.

LIQUIDITY AND CAPITAL RESOURCES

We depend on cash flow from operations and funds available under our secured
credit facility to finance seasonal working capital needs, capital expenditures
and acquisitions. Our working capital requirements are generally greatest in the
second and third quarters, which reflects the seasonal nature of our business.
The second and third quarters are typically our strongest operating quarters,
largely due to more favorable weather throughout many of our markets compared to
the first and fourth quarters. We typically generate cash from working capital
reductions in the fourth quarter of the year and build working capital during
the first quarter in preparation for our second and third quarters.

We measure our working capital as the sum of net trade accounts receivable, net
FIFO inventories and trade accounts payable. At September 30, 2002 and 2001, and
December 31, 2001, our working capital was as follows:

-17-

In the first nine months of 2002, changes in operating assets and liabilities
used $21.3 million in cash from operating activities due primarily to increases
in trade accounts receivable and inventories, offset by increases in trade
accounts payable. Changes in operating assets and liabilities in the first nine
months of 2001 used $13.0 million in cash from operating activities from
increases in the same accounts. The increase in inventory for the nine month
period ended September 30, 2002 over the same period in 2001 is due primarily to
support an anticipated increase in customer demand for doors in the fourth
quarter.

Cash used in investing activities for the first nine months of 2002 reflects
$4.7 million of capital expenditures for normal operating activities and $1.5
million for a warehouse logistics system implementation at selected branches.
These expenditures were offset by $1.4 million of proceeds on disposals of
assets from previously closed facilities. In 2001, we spent $2.7 million on
capital expenditures along with $1.2 million to purchase assets from Monarch
Manufacturing, Inc. in Baltimore, Maryland and Hope Lumber and Supply
Corporation in Kansas City, Missouri. These expenditures were offset by $0.9
million of proceeds on disposals of assets during the first nine months of 2001.

Cash provided from financing activities for both 2002 and 2001 primarily reflect
the $18.5 million and $8.3 million in net borrowings, respectively, under our
former and current revolving credit facilities.

In August 2002, we entered into a new, three-year, $150.0 million senior secured
revolving credit facility, from which we repaid outstanding borrowings under and
terminated our former revolving credit facility. The credit facility consists of
a revolving line of credit that provides financing of up to $150.0 million,
including up to $10.0 million of letters of credit, at a floating rate of either

(a) LIBOR plus from 200 to 300 basis points or

(b) the prime commercial lending rate of the agent (or, if greater,
the federal funds rate plus 0.5%) plus from 25 to 125 basis
points,

in each case depending on our trailing average collateral availability. The
revolving credit borrowing base shall not exceed the sum of (a) up to 85% of
eligible domestic trade receivables and (b) up to the lesser of 65% of the cost
of eligible inventory or 85% of the appraised net liquidation value of eligible
inventory. We have agreed to pay a commitment fee in the range of 0.25% to 0.50%
per annum on the average daily unused amount of the revolving credit commitment.
Huttig and its domestic subsidiaries are co-borrowers under this facility, and
all of the borrowers' assets, except real property, collateralize borrowings
under the credit facility.

The new credit facility agreement contains various covenants which, among other
things, limit our ability to incur indebtedness, incur liens, make certain types
of acquisitions, declare or pay dividends or make restricted payments,
consolidate, merge or sell assets. It also contains financial covenants tied to
our borrowing base. If the borrowing base exceeds our actual outstanding
borrowing and pre-established reserve levels by less than $25.0 million, we must
maintain or meet a 1.25 to 1.0 minimum fixed charge ratio. As defined in the
agreement, the ratio is determined for a rolling 12-month period by dividing
EBITDA plus cash rent expense, less non-facility-financed capital expenditures
and cash taxes, by cash interest expense plus scheduled debt repayments plus
cash rent expense for such period. As defined in the credit agreement, EBITDA
means the sum of

(a) net income,

(b) interest expense,

(c) income tax expense,

(d) depreciation,

(e) amortization,

(f) write-down of goodwill, and

(g) all cash and non-cash extraordinary expenses and losses,

less all cash and non-cash extraordinary income and gains during the period of
measurement. Also, we must not permit our revolving availability under the new
credit facility to fall below $10.0 million.

-18-

As of September 30, 2002, the Company had revolving credit borrowings of $88.3
million with $37.5 million of excess credit available under the new credit
facility.

At September 30, 2002, we had three interest rate swap agreements, which expire
in May 2003, having a total notional amount of principal of $80.0 million
outstanding. These swap agreements, in combination with the new revolving credit
facility, effectively provide for a fixed weighted average rate of 7.15% plus
the applicable spread over LIBOR as determined by the amount of collateral
availability on $80.0 million of our outstanding revolving credit borrowings.
When actual borrowings under the facility are less than the notional amount of
the interest rate swaps, we incur an expense equal to the difference between
$80.0 million and the actual amount borrowed, times the difference between the
fixed rate on the interest rate swap agreement and the 90-day LIBOR rate.

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

STOCK REPURCHASE PROGRAM

In October 2002, our board of directors authorized a new $5.0 million stock
repurchase program that expires in October 2003. Under our prior repurchase
program, which expired by its terms in August 2002, we repurchased approximately
1.1 million shares of our common stock for an aggregate purchase price of
approximately $6.7 million.

RESTRUCTURING ACTIVITIES

During the fourth quarter of 2001, we recorded $3.2 million of restructuring
charges related to the closure of several historically under-performing
branches, of which $1.1 million was included in costs of sales for the
write-down of inventory to realizable value. Other components of the charge were
$0.8 million for severance related costs and $1.3 million for facility and other
shutdown-related costs. Included in amounts charged against this restructuring
reserve in 2001 were $0.5 million for inventory losses and $0.3 million for
facility and other shutdown-related costs.

During the first nine months of 2002, approximately $0.5 million was charged
against the reserve for inventory losses, $0.6 million for severance, and $0.6
million for facility and other shutdown costs. During the first six months of
2002, we completed the closure of three facilities. During the third quarter,
management determined not to close two branches which had originally been
planned for closure. Consequently, we reversed $0.3 million of the restructuring
reserve related to these two branches, the components of which are $0.1 million
for severance and $0.2 million for facility and other shut-down related costs.
As of September 30, 2002 approximately $0.4 million of the restructuring reserve
remains, which includes $0.1 million for inventory, $0.1 million for severance
and $0.2 million for facility and other shutdown-related costs. We expect to
finalize the remaining restructuring activities during the fourth quarter of
2002.

During the fourth quarter of 2000, we recorded $2.1 million as a restructuring
charge related to the termination of our distribution agreement with Andersen
Windows and Doors, of which $0.8 million was included in cost of sales. The
charge related to inventory impairment and downsizing of branch operations that
previously distributed Andersen products. Approximately $1.0 million was charged
against this reserve during the fourth quarter of 2000, leaving a balance of
$1.1 million at December 31, 2000. The remaining balance was fully utilized
during 2001.

NEW ACCOUNTING PRONOUNCEMENTS

We adopted SFAS No. 142, Goodwill and Other Intangible Assets, effective January
1, 2002. Under SFAS No. 142, goodwill is no longer amortized but is reviewed for
impairment annually, or more frequently if certain indicators arise. In
addition, the statement requires reassessment of the useful lives of previously
recognized intangible assets.

SFAS No. 142 prescribes a two-step process for impairment testing of goodwill.
We completed the first step of the transitional impairment test and the results
indicated a potential impairment in our reporting unit that sells directly to
homebuilders. The second step of the impairment test was performed and based on
discounted cash flow models, the carrying value of the reporting unit that sells
directly to homebuilders exceeded its business enterprise value. An

-19-

after tax impairment charge of $12.8 million was recorded effective January 1,
2002 as a cumulative effect of a change in accounting principle based on the
change in criteria for measuring impairment from an undiscounted to discounted
cash flow method. Goodwill amortization for the nine months ended September 30,
2001 was $1.8 million.

In October 2001, the Financial Accounting Standards Board issued SFAS No. 144,
Accounting for the Impairment or Disposal of Long-lived Assets. This statement
establishes a single accounting model for the impairment or disposal of
long-lived assets and broadens the presentation of discontinued operations. We
adopted this statement effective January 1, 2002, and the adoption did not have
a material impact on our consolidated financial statements.

In April 2002, the Financial Accounting Standards Board issued SFAS No. 145,
Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No.
13, and Technical Corrections. This statement rescinds, updates, clarifies and
simplifies existing accounting pronouncements. Among other things, the statement
rescinds SFAS No. 4, which required all gains and losses from extinguishment of
debt to be aggregated and, if material, classified as an extraordinary item, net
of related income tax effect. Under SFAS No. 145, the criteria in Accounting
Principles Board (APB) No. 30 will now be used to classify those gains and
losses. We adopted SFAS No. 145, and therefore separately recorded the write-off
of unamortized loan fees associated with our previous credit facility as a
component of other income (expense) in the third quarter.

In July 2002, the Financial Accounting Standards Board issued SFAS No. 146,
Accounting for Costs Associated with Exit or Disposal Activities. This Statement
requires recording costs associated with exit or disposal activities at their
fair values when a liability has been incurred. Under previous guidance, certain
exit costs were accrued upon management's commitment to an exit plan, which is
generally before an actual liability has been incurred. Adoption of this
Statement is required for exit or disposal activities initiated after December
31, 2002. Previously issued financial statements will not be restated. This
Statement will impact the timing of exit or disposal activities reported by us
after adoption.

CYCLICALITY AND SEASONALITY

Our sales depend heavily on the strength of national and local new residential
construction and home improvement and remodeling markets. The strength of these
markets depends on new housing starts and residential renovation projects, which
are a function of many factors beyond our control. Some of these factors include
interest rates, employment levels, availability of credit, prices of commodity
wood products and consumer confidence. Future downturns in the markets that we
serve or in the economy generally could have a material adverse effect on our
operating results and financial condition. Reduced levels of construction
activity may result in intense price competition among building materials
suppliers, which may adversely affect our gross margins. The impact of changes
in construction activity will vary depending on our market penetration per
housing start in different regions of the country.

Our first quarter revenues and, to a lesser extent, our fourth quarter revenues
are typically adversely affected by winter construction cycles and weather
patterns in colder climates as the level of activity in the new construction and
home improvement markets decreases. Because much of our overhead and expense
remains relatively fixed throughout the year, our operating profits also tend to
be lower during the first and fourth quarters.

ENVIRONMENTAL REGULATION

We are subject to federal, state and local environmental protection laws and
regulations. We can give no assurance that future environmental liabilities will
not have a material adverse effect on our financial condition or results of
operations. We have been identified as a potentially responsible party in
connection with the clean up of contamination at a formerly owned property in
Montana. We are voluntarily remediating this property under the oversight of and
in cooperation with the Montana Department of Environmental Quality ("DEQ"), and
are complying with a 1995 unilateral administrative order of the DEQ to complete
a remedial investigation and feasibility study. When the state agency issues its
final risk assessment of this property, we will conduct a feasibility study to
evaluate alternatives for cleanup, including continuation of our remediation
measures already in place. The DEQ then will select a final remedy, publish a
record of decision and negotiate with us for an administrative order of consent
on the implementation of the final remedy. We currently believe that this
process may take several more

-20-

years to complete and intend to continue monitoring and remediating the site,
evaluating cleanup alternatives and reporting regularly to the DEQ during this
interim period. Based on our experience to date in remediating this site, we do
not believe that the scope of remediation that the DEQ ultimately determines
will have a material adverse effect on our results of operations or financial
condition. Until the DEQ selects a final remedy, however, we can give no
assurance as to the scope or cost to us of the final remediation order.

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

CAUTIONARY STATEMENT

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

o our business strategy;

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

o the future impact of the new competitor in our Kansas City
markets, our transition to a new housewrap product and slower
economic activity on our results of operations;

o our liquidity; and

o cyclical and seasonal trends.

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

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

-- interest rates,

-- employment levels,

-- availability of credit,

-- prices of commodity wood products,

-- consumer confidence and

-- weather conditions,

o the level of competition in our industry,

o our relationships with suppliers of the products we distribute,

o costs of complying with environmental laws and regulations,

o our exposure to product liability claims,

o the loss of key employees, and

o our ability to comply with availability requirements and
financial covenants under our revolving credit facility.

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

-21-

ITEM 3 -- QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We have exposure to market risk as it relates to effects of changes in interest
rates. We had debt outstanding at September 30, 2002 under our New Credit
Facility of $88.3 million. Also at September 30, 2002, we had three interest
rate swap agreements, which expire in May 2003, having a total notional
principal amount of $80.0 million. These swap agreements in combination with the
New Credit Facility, effectively provides for a fixed weighted average rate of
7.15% plus the applicable spread over LIBOR as determined by the amount of
collateral availability (See Item 2 - "Liquidity and Capital Resources") on
$80.0 million of our outstanding revolving credit borrowings. When actual
borrowings under the credit facility are less than the notional amount of the
interest rate swaps, we incur an expense equal to the difference between $80.0
million and the actual amount borrowed, times the difference between the fixed
rate on the interest rate swap agreement and the 90-day LIBOR rate.

We have three interest rate swap agreements, which expire in May 2003, that
provide for fixed interest rates on $80.0 million of our outstanding borrowings.
Under the accounting treatment prescribed by SFAS No. 133, our liabilities
include the fair value of these swaps of $2.6 million and shareholders' equity
includes $0.8 million, net of tax, which is recorded as accumulated other
comprehensive loss. Included in income for the nine months ended September 30,
2002, after profit from operations, is $0.6 million of an unrealized gain
related to the portion of our swap agreements, which do not qualify for hedge
accounting treatment according to the SFAS No. 133 criteria. This unrealized
gain resulted in an increase to earnings per share of $0.02 in the nine month
period ending September 30, 2002. There is no impact on cash flow as a result of
the accounting treatment required by SFAS No. 133.

Effective January 1, 2002, we entered into a price swap agreement, which expires
in December 2002, to purchase specified levels of heating oil on a monthly basis
at a fixed price, in an effort to hedge the cost of our diesel fuel consumption
for our delivery fleet. We have accounted for this contract as a cash flow hedge
in accordance with SFAS No. 133 and there was no material impact to our
consolidated financial statements during the first nine months of 2002.

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

-22-

ITEM 4 -- CONTROLS AND PROCEDURES

Within the 90 days prior to the date of filing this Quarterly Report on Form
10-Q, we carried out an evaluation, under the supervision and with the
participation of our Disclosure Committee and our management, including the
Chief Executive Officer and the Chief Financial Officer, of the effectiveness of
the design and operation of our disclosure controls and procedures pursuant to
Exchange Act Rule 13a-14. Based upon that evaluation, the Chief Executive
Officer and the Chief Financial Officer concluded that our disclosure controls
and procedures are effective in timely alerting them to material information
relating to Huttig (including its consolidated subsidiaries) required to be
included in our periodic SEC filings. Subsequent to the date of that evaluation,
there have been no significant changes in our internal controls or in other
factors that could significantly affect internal controls, nor were any
corrective actions required with regard to significant deficiencies or material
weaknesses.

-23-

PART II -- OTHER INFORMATION

ITEM 1 -- LEGAL PROCEEDINGS

Reference is made to Part I, Item 3, in our Annual Report on Form 10-K for the
year ended December 31, 2001 and Part II, Item 1 of our Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2002 and June 30, 2002 for a
description of the following and other legal proceedings.

In September 2002, we were dismissed from two of three previously reported, then
pending lawsuits relating to exposure to asbestos contained in products
allegedly distributed by Huttig as successor-in-interest to Rugby Building
Products, Inc. In November 2002, plaintiffs' counsel in our remaining
asbestos-related lawsuit agreed to dismiss us from that suit.

We continue to pursue our previously reported lawsuit against The Rugby Group
Limited, our principal stockholder, and Rugby IPD Corp., its wholly owned
subsidiary. In our lawsuit, we seek to recover sums we have spent to defend and,
with respect to one lawsuit, settle our asbestos lawsuits, as well as a
declaratory judgment that Rugby Group and Rugby IPD indemnify and defend us for
these lawsuits and any similarly situated claims that may be asserted against us
in the future. Rugby Group has denied any obligation to defend or indemnify us
for any of these cases. There can be no assurance at this time that we will
recover any costs relating to these past or potential future claims from
insurance carriers or from Rugby Group or Rugby IPD, or that such costs will not
have a material adverse effect on our business or financial condition.

-24-

ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

EXHIBIT NUMBER DESCRIPTION

3.1 Restated Certificate of Incorporation of the
company. (Incorporated by reference to Exhibit 3.1
to the Form 10 filed with the Commission on
September 21, 1999.)

3.2 Bylaws of the company as amended as of July 22,
2002 (Incorporated by reference to Exhibit 3.2 to
the Form 10-Q filed with the Commission on August
14, 2002).

99.1 Certification by Chief Executive Officer pursuant
to 18 U.S.C. Section 1350, as adopted by Section
906 of the Sarbanes-Oxley Act of 2002.

99.2 Certification by Chief Financial Officer pursuant
to 18 U.S.C. Section 1350, as adopted by Section
906 of the Sarbanes-Oxley Act of 2002.

(b) Reports on Form 8-K

None.

-25-

SIGNATURES

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

HUTTIG BUILDING PRODUCTS, INC.

Date: November 13, 2002 /s/ Barry J. Kulpa
-----------------------------------------------
Barry J. Kulpa
President, Chief Executive Officer
And Director (Principal Executive Officer)

Date: November 13, 2002 /s/ Thomas S. McHugh
-----------------------------------------------
Thomas S. McHugh
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Barry J. Kulpa, President and Chief Executive Officer of Huttig Building
Products, Inc., certify that:

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

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

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

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures 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
quarterly report is being prepared;

(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date
within 90 days prior to the filing date of this
quarterly report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls
and procedures based on our evaluation as of the
Evaluation Date;

-26-

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

(a) all significant deficiencies in the design or
operation of internal controls which could adversely
affect the registrant's ability to record, process,
summarize and report financial data and have
identified for the registrant's auditors any material
weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 13, 2002 /s/ Barry J. Kulpa
-----------------------------------------
Barry J. Kulpa
President and Chief Executive Officer

HUTTIG BUILDING PRODUCTS, INC. AND SUBSIDIARIES
CERTIFICATION PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

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

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

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

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

4. The registrant's other certifying officer and I are
responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules
13a-14 and 15d-14) for the registrant and we have:

(a) designed such disclosure controls and procedures 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 quarterly
report is being prepared;

(b) evaluated the effectiveness of the registrant's
disclosure controls and procedures as of a date within
90 days prior to the filing date of this quarterly
report (the "Evaluation Date"); and

(c) presented in this quarterly report our conclusions
about the effectiveness of the disclosure controls and
procedures based on our evaluation as of the Evaluation
Date;

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

-27-

(a) all significant deficiencies in the design or operation
of internal controls which could adversely affect the
registrant's ability to record, process, summarize and
report financial data and have identified for the
registrant's auditors any material weaknesses in
internal controls; and

(b) any fraud, whether or not material, that involves
management or other employees who have a significant
role in the registrant's internal controls; and

6. The registrant's other certifying officer and I have indicated
in this quarterly report whether or not there were significant
changes in internal controls or in other factors that could
significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective
actions with regard to significant deficiencies and material
weaknesses.

Date: November 13, 2002 /s/ Thomas S. McHugh
-----------------------------------------------
Thomas S. McHugh
Vice President - Finance and Chief Financial
Officer

-28-

EXHIBIT INDEX