Earnings rise at Trex
Earnings at composite decking manufacturer Trex more than tripled in the first quarter to $8.9 million from $2.73 million in the same period last year. Net sales were up 3.1 percent, to $119.5 million from $115.9 million last year.
The company credited expanding distribution for the earnings increase, as well as brand strength, which “enabled us to increase sales revenue despite the weakening economy and continued softness in the building materials industry,” said CEO Ronald Kaplan.
“In addition, our improved gross margin reflects our successful focus on productivity and cost containment initiatives," he said. “The measures we took in the first quarter -- including rightsizing the company, recruiting new management, controlling costs and enhancing operating and financial controls -- have established a solid foundation for delivering improved financial results.”
Still, recent poor weather has delayed many outdoor building projects, according to the company. Additionally, building material dealers are “choosing to operate with depressed inventory levels,” and the economic outlook in the United States is still uncertain, Kaplan said. For those reasons, the company is projecting lower revenue in the second quarter, expected to be down 23 percent to 33 percent compared with last year’s second quarter.
Based in Winchester, Va., Trex is a manufacturer of composite decking, railing and fencing products.