Press Release
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Trex Company Announces Fourth-Quarter 2011 Results
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4Q 2011 Sales Meet Forecast
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1Q 2012 Sales Forecast Revised Upward
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Warranty Reserve Increased
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Ends 4Q 2011 with $41 Million in Cash
Net sales for the fourth quarter of 2011 totaled
For the full year ended
Chairman, President and CEO
“Our steady stream of new product launches has set the stage for a strong year for
“On the manufacturing side, we are continuing to drive productivity improvements, further enhancing the speed and quality of our execution. Since 2008, we have increased productivity by 17%, reaching an all-time high in 2011, and we are pursuing additional opportunities to improve manufacturing yields and line rates. Our balance sheet is also stronger than ever. We ended the year with
"With our ever-expanding array of products, continued drive to gain market share and a stabilizing economy, we expect 2012 to be a successful year for
Vice President and CFO
Fourth-Quarter 2011 Conference Call and Webcast Information
For those who cannot listen to the live broadcast, the webcast will be available on Trex’s website for 30 days. A telephone replay of the call will also be available for seven days, beginning at approximately
Forward-Looking Statements
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 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
About Pro-Forma Net Income and Related Earnings Per Share (EPS)
To supplement the condensed consolidated financial statements, which are prepared and presented in accordance with U.S. GAAP, the Company uses the following non-GAAP financial measures: net income on a pro-forma basis and related EPS. The presentation of this financial information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP.
The Company defines net income on a pro-forma basis as net income before certain charges. The fourth quarter of 2011 includes a
The Company defines related EPS as net income on a pro-forma basis divided by the weighted average outstanding shares, on a fully diluted basis. The Company uses these pro-forma financial measures for financial and operational decision-making and as a means to evaluate period-to-period comparisons. The Company also believes that investors and analysts benefit from referring to these pro-forma financial measures in assessing the performance and expectations of the Company’s future performance.
For more information on the reconciliation of GAAP and pro-forma financial terms, please see the two tables titled “Reconciliations of Pro-Forma Results of Operations Measures to the Nearest Comparable GAAP Measures Three Months Ended
About
TREX COMPANY, INC. | ||||||||||||||||||
Condensed Consolidated Statements of Operations | ||||||||||||||||||
(In thousands, except share and per share data) | ||||||||||||||||||
(Unaudited) | ||||||||||||||||||
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||||||||
Net sales | $ | 51,462 | $ | 75,272 | $ | 266,789 | $ | 317,690 | ||||||||||
Cost of sales | 52,514 | 56,720 | 203,998 | 244,875 | ||||||||||||||
Gross profit (loss) | (1,052 | ) | 18,552 | 62,791 | 72,815 | |||||||||||||
Selling, general and administrative expenses | 13,609 | 15,459 | 60,620 | 67,764 | ||||||||||||||
Income (loss) from operations | (14,661 | ) | 3,093 | 2,171 | 5,051 | |||||||||||||
Interest expense, net | 3,595 | 3,711 | 16,364 | 15,288 | ||||||||||||||
Loss before income taxes | (18,256 | ) | (618 | ) | (14,193 | ) | (10,237 | ) | ||||||||||
Benefit for income taxes | (1 | ) | (106 | ) | (2,605 | ) | (171 | ) | ||||||||||
Net loss | $ | (18,255 | ) | $ | (512 | ) | $ | (11,588 | ) | $ | (10,066 | ) | ||||||
Basic loss per common share | $ | (1.18 | ) | $ | (0.03 | ) | $ | (0.75 | ) | $ | (0.66 | ) | ||||||
Basic weighted average common shares outstanding | 15,433,931 | 15,209,016 | 15,388,456 | 15,187,028 | ||||||||||||||
Diluted loss per common share | $ | (1.18 | ) | $ | (0.03 | ) | $ | (0.75 | ) | $ | (0.66 | ) | ||||||
Diluted weighted average common shares outstanding | 15,433,931 | 15,209,016 | 15,388,456 | 15,187,028 | ||||||||||||||
TREX COMPANY, INC. | |||||||||||
Condensed Consolidated Balance Sheets | |||||||||||
(In thousands, except share data) | |||||||||||
(unaudited) | |||||||||||
31-Dec-11 | 31-Dec-10 | ||||||||||
ASSETS | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 4,526 | $ | 27,270 | |||||||
Restricted cash | 37,000 | - | |||||||||
Accounts receivable | 29,192 | 53,332 | |||||||||
Inventories | 28,896 | 29,021 | |||||||||
Prepaid expenses and other assets | 2,118 | 1,539 | |||||||||
Income taxes receivable | 322 | 70 | |||||||||
Deferred income taxes | - | 1,004 | |||||||||
Total current assets | 102,054 | 112,236 | |||||||||
Property, plant and equipment, net | 115,212 | 126,857 | |||||||||
Goodwill | 10,558 | 6,837 | |||||||||
Other assets | 266 | 1,885 | |||||||||
Total assets | $ | 228,090 | $ | 247,815 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 11,892 | $ | 15,107 | |||||||
Accrued expenses | 16,187 | 23,479 | |||||||||
Accrued warranty | 6,000 | 7,003 | |||||||||
Deferred income taxes | 124 | - | |||||||||
Current portion of long-term debt | 86,425 | 590 | |||||||||
Total current liabilities | 120,628 | 46,179 | |||||||||
Deferred income taxes | 2,819 | 3,614 | |||||||||
Accrued taxes | 60 | 3,126 | |||||||||
Non-current accrued warranty | 10,345 | 7,469 | |||||||||
Debt-related derivatives | - | 312 | |||||||||
Long-term debt, net of current portion | - | 84,193 | |||||||||
Other long-term liabilities | 1,739 | - | |||||||||
Total liabilities | 135,591 | 144,893 | |||||||||
Stockholders’ equity: | |||||||||||
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; 15,602,132 and 15,458,002 shares issued and outstanding at December 31, 2011 and December 31, 2010, respectively |
156 | 155 | |||||||||
Additional paid-in capital | 99,885 | 98,905 | |||||||||
Accumulated other comprehensive loss | - | (184 | ) | ||||||||
Retained earnings (deficit) | (7,542 | ) | 4,046 | ||||||||
Total stockholders’ equity | 92,499 | 102,922 | |||||||||
Total liabilities and stockholders’ equity | $ | 228,090 | $ | 247,815 | |||||||
TREX COMPANY, INC. | ||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||
(In thousands) | ||||||||||
(Unaudited) | ||||||||||
Twelve Months Ended December 31, | ||||||||||
2011 | 2010 | |||||||||
OPERATING ACTIVITIES | ||||||||||
Net loss | $ | (11,588 | ) | $ | (10,066 | ) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||
Depreciation and amortization | 28,708 | 28,937 | ||||||||
Other non-cash charges | 4,643 | 5,488 | ||||||||
Changes in operating assets and liabilities | 12,084 | (5,365 | ) | |||||||
Net cash provided by operating activities | $ | 33,847 | $ | 18,994 | ||||||
INVESTING ACTIVITIES | $ | (9,367 | ) | $ | (9,773 | ) | ||||
FINANCING ACTIVITIES | $ | (47,224 | ) | $ | (1,465 | ) | ||||
Net increase (decrease) in cash and cash equivalents | $ | (22,744 | ) | $ | 7,756 | |||||
Cash and cash equivalents at beginning of period | $ | 27,270 | $ | 19,514 | ||||||
Cash and cash equivalents at end of period | $ | 4,526 | $ | 27,270 | ||||||
Trex Company, Inc. | ||||||||||||||||||||
Reconciliations of Pro-Forma Results of Operations Measures to the Nearest Comparable GAAP Measures | ||||||||||||||||||||
Three Months Ended December 31, | ||||||||||||||||||||
(amounts in 000's except for diluted earnings (loss) per common share) | ||||||||||||||||||||
2010 Reconciliation | 2011 Reconciliation | |||||||||||||||||||
GAAP | Pro-Forma | Pro-Forma | GAAP | Pro-Forma | Pro-Forma | |||||||||||||||
2010 | Adjustments(1) | 2010 | 2011 | Adjustments(2) | 2011 | |||||||||||||||
Net sales | $75,272 | $0 | $75,272 | $51,462 | $0 | $51,462 | ||||||||||||||
Cost of sales | $56,720 | ($4,117 | ) | $52,603 | $52,514 | ($9,976 | ) | $42,538 | ||||||||||||
Gross Profit | $18,552 | $4,117 | $22,669 | ($1,052 | ) | $9,976 | $8,924 | |||||||||||||
% of Net sales | 24.6 | % | 5.5 | % | 30.1 | % | -2.0 | % | 19.4 | % | 17.3 | % | ||||||||
SG&A Expenses | $15,459 | $0 | $15,459 | $13,609 | $0 | $13,609 | ||||||||||||||
% of Net sales | 20.5 | % | 0.0 | % | 20.5 | % | 26.4 | % | 0.0 | % | 26.4 | % | ||||||||
Interest expense, net | $3,711 | $0 | $3,711 | $3,595 | $0 | $3,595 | ||||||||||||||
Income (loss) before income taxes | ($618 | ) | $4,117 | $3,499 | ($18,256 | ) | $9,976 | ($8,280 | ) | |||||||||||
Income taxes | ($106 | ) | $0 | ($106 | ) | ($1 | ) | $0 | ($1 | ) | ||||||||||
Net income (loss) | ($512 | ) | $4,117 | $3,605 | ($18,255 | ) | $9,976 | ($8,279 | ) | |||||||||||
% of Net sales | -0.7 | % | 5.5 | % | 4.8 | % | -35.5 | % | 19.4 | % | -16.1 | % | ||||||||
Diluted earnings (loss) per common share | ($0.03 | ) | $0.26 | $0.23 | ($1.18 | ) | $0.66 | ($0.54 | ) | |||||||||||
(1) 2010 Pro-Forma Adjustments include a
(2) 2011 Pro-Forma Adjustments include a
Trex Company, Inc. | ||||||||||||||||||||
Reconciliations of Pro-Forma Results of Operations Measures to the Nearest Comparable GAAP Measures | ||||||||||||||||||||
Twelve Months Ended December 31, | ||||||||||||||||||||
(amounts in 000's except for diluted earnings (loss) per common share) | ||||||||||||||||||||
2010 Reconciliation | 2011 Reconciliation | |||||||||||||||||||
GAAP | Pro-Forma | Pro-Forma | GAAP | Pro-Forma | Pro-Forma | |||||||||||||||
2010 | Adjustments(1) | 2010 | 2011 | Adjustments(2) | 2011 | |||||||||||||||
Net sales | $317,690 | $0 | $317,690 | $266,789 | $0 | $266,789 | ||||||||||||||
Cost of sales | $244,875 | ($18,924 | ) | $225,951 | $203,998 | ($9,976 | ) | $194,022 | ||||||||||||
Gross Profit | $72,815 | $18,924 | $91,739 | $62,791 | $9,976 | $72,767 | ||||||||||||||
% of Net sales | 22.9 | % | 6.0 | % | 28.9 | % | 23.5 | % | 3.7 | % | 27.3 | % | ||||||||
SG&A Expenses | $67,764 | ($2,405 | ) | $65,359 | $60,620 | $0 | $60,620 | |||||||||||||
% of Net sales | 21.3 | % | -0.8 | % | 20.6 | % | 22.7 | % | 0.0 | % | 22.7 | % | ||||||||
Interest expense, net | $15,288 | $0 | $15,288 | $16,364 | ($324 | ) | $16,040 | |||||||||||||
Income (loss) before income taxes | ($10,237 | ) | $21,329 | $11,092 | ($14,193 | ) | $10,300 | ($3,893 | ) | |||||||||||
Income taxes | ($171 | ) | $0 | ($171 | ) | ($2,605 | ) | $2,616 | $11 | |||||||||||
Net income (loss) | ($10,066 | ) | $21,329 | $11,263 | ($11,588 | ) | $7,684 | ($3,904 | ) | |||||||||||
% of Net sales | -3.2 | % | 6.7 | % | 3.5 | % | -4.3 | % | 2.9 | % | -1.5 | % | ||||||||
Diluted earnings (loss) per common share | ($0.66 | ) | $1.38 | $0.72 | ($0.75 | ) | $0.50 | ($0.25 | ) |
(1) 2010 Pro-Forma Adjustments include a
(2) 2011 Pro-Forma Adjustments include a
Source:
Trex Company, Inc.
James Cline, 540-542-6300
Chief Financial Officer
or
LHA
Harriet Fried, 212-838-3777