Trex posts $15.3 million net loss
Winchester, Va.-based Trex Co. posted a third-quarter net loss of $15.3 million for the period ended Sept. 30, 2013 -- that compares with a loss of $14.3 million in the same quarter last year.
The losses were the result of non-operating charges, the company said. The consisted of a $1.8 million charge related to resetting its prices for certain products as the company transitions its product offerings exclusively to Transcend technology; a $20.0 million increase to its warranty reserve for decking material manufactured at its Nevada plant prior to 2007; and a $1.1 million charge related to subleased office space in Dulles, Va. During the 2012 third quarter, the company recognized a $20 million increase to its warranty reserve and $0.5 million related tax charge.
Net sales for the third quarter of 2013 totaled $72.2 million compared with net sales of $70.8 million for the 2012 third quarter, an increase of 2%.
“Operationally, it was another solid quarter for Trex,” said CEO Ronald Kaplan. “Our operating gross margin was strong despite operating at seasonally lower levels of capacity utilization, and our underlying EPS was better than anticipated at $0.45 per share.
“To further advance our industry-leading market share, we are continuing to expand our distribution network,” he added. “In the last couple of weeks, we added three major East Coast distributors, significantly increasing our presence in this strategically important region. We expect sales growth from our expansion strategies with all classes of customers to occur over the next several years with 2014 benefiting by $40 million to $60 million.”