Trex gets a Q3 sales bump
Composite decking manufacturer Trex Co. reported net sales of $70.8 million for the third fiscal quarter, a 4.2% rise over net sales of $67.9 million for the same quarter in 2011. The company reported a net loss of $14.3 million for the quarter, which ended Sept. 30, compared with a net loss of $0.5 million the prior-year period. Before a one-time charge during the third quarter of 2012 -- a $20 million pre-tax increase to its warranty reserve for decking material -- net income was $6.2 million.
In a prepared statement, chairman, president and CEO Ronald Kaplan said that warranty claims may continue to be a drag on the company’s earnings. “Although the rate of claims in 2012 has dropped off at a healthy pace -- and we expect reductions to continue in subsequent years -- it is now apparent that the declines will not be at the rate previously expected,” Kaplan said. “This not only has an impact on this year’s claims rate, but also on the rate of expected future claims.”
Trex is introducing a new line of capped decking, the chief executive said, to build on the trend of “ultra low maintenance products.&r