WINCHESTER, Va.--(BUSINESS WIRE)--
Trex Company, Inc. (TREX), the world’s largest manufacturer of wood-alternative decking and railing products, today announced financial results for the first quarter ended March 31, 2013.
Net sales for the first quarter of 2013 totaled $107.9 million compared to net sales of $96.1 million for the 2012 first quarter, an increase of 12%. The Company reported net income of $21.6 million, or $1.25 per diluted share, for the 2013 period compared to $12.3 million, or $0.74 per diluted share, for the prior-year period, a 70% increase.
Chairman, President and CEO Ronald W. Kaplan commented, “This was an excellent quarter, with substantial increases in many key financial metrics. Most significantly, we achieved the best quarterly income performance in Trex’s history. Our new record reflects the continual enhancements we have been making to our product platform, operations, distribution network and marketing strategies.
“Our ‘good, better, best’ decking and railing line-up has been well received, and we are pleased with the gains we are making in the sale of our new railing options. During the quarter, we continued to leverage our low-cost manufacturing competitive advantage. We achieved a 38.8% gross margin, exceeding the 2012 quarter’s by 190 basis points. Excluding a 90-basis-point non-recurring LIFO inventory benefit realized in the 2012 quarter, gross margin improved by 280 basis points.
“In April we won four 2013 Platinum Awards and one Gold Award for Design Excellence in a competition sponsored by Design Journal magazine that draws approximately 2,000 entries from 500 companies each year. These awards reinforce the positive professional and consumer feedback we have been receiving for Trex’s expanded portfolio of high-performance products.
“With the outstanding reception our 2013 product platform is garnering, coupled with our high-profile Engineered Artistry branding campaign and the strengthening home remodeling market, we are confident about our prospects for 2013. For the second quarter, we expect net sales of approximately $103 million, a gain of 10% from last year’s period.”
First-Quarter 2013 Conference Call and Webcast Information
Trex will hold a conference call to discuss its first-quarter 2013 results on Friday, May 3, 2013 at 10:00 a.m. ET. To participate in the live call by telephone, please dial 706-634-1218 or 888-803-7566 and reference conference ID #34072251. A live webcast of the conference call will also be available in the Investor Relations section of the Trex Company website at trex.com.
For those who cannot listen to the live broadcast, an audio replay of the earnings call will be available on the Trex website for 30 days.
The statements in this press release regarding the Company's expected future performance and condition constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause the Company's actual operating results to differ materially. Such risks and uncertainties include the extent of market acceptance of the Company's products; the costs associated with the development and launch of new products and the market acceptance of such new products; the sensitivity of the Company's business to general economic conditions; the impact of weather-related demand fluctuations on inventory levels in the distribution channel and sales of the Company’s products; the Company's ability to obtain raw materials at acceptable prices; the Company's ability to maintain product quality and product performance at an acceptable cost; the level of expenses associated with product replacement and consumer relations expenses related to product quality; and the highly competitive markets in which the Company operates. Documents filed with the Securities and Exchange Commission by the Company, including in particular its latest annual report on Form 10-K and quarterly reports on Form 10-Q, discuss some of the important factors that could cause the Company's actual results to differ materially from those expressed or implied in these forward-looking statements. The Company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
About Trex Company
Trex Company is the world’s largest manufacturer of wood-alternative decking and railing, with more than 20 years of product experience. Stocked in more than 6,000 retail locations throughout the world, Trex® outdoor living products offer a wide range of style options with fewer ongoing maintenance requirements than wood, as well as a truly environmentally responsible choice. For more information, visit trex.com.
|TREX COMPANY, INC.|
|Condensed Consolidated Statements of Comprehensive Income|
|(In thousands, except share and per share data)|
|Three Months Ended March 31,|
|Cost of sales||66,020||60,681|
|Selling, general and administrative expenses||19,842||18,601|
|Income from operations||22,018||16,818|
|Interest expense, net||251||4,411|
|Income before income taxes||21,767||12,407|
|Provision for income taxes||198||96|
|Basic earnings per common share||$||1.28||$||0.80|
|Basic weighted average common shares outstanding||16,883,111||15,473,777|
|Diluted earnings per common share||$||1.25||$||0.74|
|Diluted weighted average common shares outstanding||17,280,445||16,717,987|
|TREX COMPANY, INC.|
|Condensed Consolidated Balance Sheets|
|(In thousands, except share data)|
|Cash and cash equivalents||$||1,902||$||2,159|
|Accounts receivable, net||117,385||26,542|
|Prepaid expenses and other assets||1,338||2,188|
|Income taxes receivable||514||435|
|Deferred income taxes||3,837||3,792|
|Total current assets||140,010||52,637|
|Property, plant and equipment, net||102,246||104,425|
|Goodwill and other intangibles||10,548||10,550|
|LIABILITIES AND STOCKHOLDERS’ EQUITY|
|Line of credit||72,000||5,000|
|Total current liabilities||105,886||42,479|
|Deferred income taxes||7,161||7,353|
|Non-current accrued warranty||19,806||21,487|
|Other long-term liabilities||3,889||3,310|
|Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding||-||-|
Common stock, $0.01 par value, 40,000,000 shares authorized; 17,174,484 and 17,010,493
shares issued and outstanding at March 31, 2013 and December 31, 2012, respectively
|Additional paid-in capital||100,113||98,638|
|Retained earnings (deficit)||16,747||(4,822||)|
|Total Stockholders’ Equity||117,032||93,986|
|Total Liabilities and Stockholders’ Equity||$||253,774||$||168,615|
|TREX COMPANY, INC.|
|Condensed Consolidated Statements of Cash Flows|
|Three Months Ended March 31,|
|Adjustments to reconcile net income to net cash used in|
|Depreciation and amortization||4,164||7,120|
|Other non-cash charges||591||752|
|Changes in operating assets and liabilities||(92,277||)||(65,572||)|
|Net cash used in operating activities||$||(65,953||)||$||(45,389||)|
|Net increase (decrease) in cash and cash equivalents||$||(257||)||$||305|
|Cash and cash equivalents at beginning of period||$||2,159||$||4,526|
|Cash and cash equivalents at end of period||$||1,902||$||4,831|
James Cline, 540-542-6300
Chief Financial Officer
Harriet Fried, 212-838-3777