Press Release
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Trex Company Reports Fourth Quarter and Full Year 2017 Results
- Fifth Consecutive Year of Record Sales and Income Driven by Continued Strong Market Demand and Market Share Expansion for
Fourth Quarter Highlights
- Consolidated sales increased 28% to a record
$122 million - Residential Products sales increased 15%
- Residential Products gross margin expanded to 45.9%
- Consolidated Earnings increased 44% to a record
$0.62 per share
Full Year 2017 Highlights
- Consolidated sales up 18% to
$565 million ; Residential Products sales up 13% - Residential Products gross margin expanded to 44.3%
- Earnings per share increased by 41% to a record
$3.22 per share
Fourth Quarter 2017 Results
Consolidated sales for the fourth quarter of 2017 were
Net income for the fourth quarter of 2017 was
“Our fourth quarter results represented a strong finish to another record year for
Full Year 2017 Results
For full year 2017, consolidated sales were
“We achieved positive momentum across all key metrics in each quarter of 2017, reflecting our brand and market share leadership in residential products, supported by an operational infrastructure that is dedicated to continuous improvement. As a result, we have been able to achieve substantial operating leverage and post a significant increase in operating cash flow.
“The acquisition of
Summary and Outlook
“Looking ahead, indications point to continued positive trends for the repair and remodeling markets, which together with favorable consumer confidence data, have been closely correlated with demand for
“For the first quarter of 2018, we expect consolidated sales of
The Board of Directors approved a new share repurchase program under which the Company may repurchase up to 2.9 million shares of the Company’s outstanding common stock.
Fourth Quarter 2017 Conference Call and Webcast Information
Trex will hold a conference call to discuss its fourth quarter and full year 2017 results and other corporate matters on Wednesday, February 21, 2018 at 5:00 p.m. ET. To participate on the day of the call, dial 1-844-792-3734, or internationally 1-412-317-5126, approximately ten minutes before the call and tell the operator you wish to join the Trex Company Conference Call.
A live webcast of the conference call will be available in the Investor Relations section of the Trex Company website at
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 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.
Use of Non-GAAP Financial Measures
EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in
Reconciliation of net income to EBITDA: |
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Three Months Ended December 31 (in thousands) |
2017 |
2016 |
|||||||||||||
Net income | $ | 18,299 | $ | 12,629 | |||||||||||
Interest | $ | (53 | ) | $ | 17 | ||||||||||
Taxes | $ | 7,076 | $ | 7,112 | |||||||||||
Depreciation and Amortization | $ | 4,762 | $ | 3,573 | |||||||||||
EBITDA | $ | 30,084 | $ | 23,331 | |||||||||||
About
TREX COMPANY, INC. | |||||||||||||||||
Condensed Consolidated Statements of Comprehensive Income | |||||||||||||||||
(In thousands, except share and per share data) | |||||||||||||||||
Three Months Ended
December 31, |
Year Ended
December 31, |
||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||
(Unaudited) | |||||||||||||||||
Net sales | $ | 122,212 | $ | 95,322 | $ | 565,153 | $ | 479,616 | |||||||||
Cost of sales | 71,306 | 57,209 | 321,780 | 292,521 | |||||||||||||
Gross profit | 50,906 | 38,113 | 243,373 | 187,095 | |||||||||||||
Selling, general and administrative expenses | 25,584 | 18,355 | 100,993 | 83,140 | |||||||||||||
Income from operations | 25,322 | 19,758 | 142,380 | 103,955 | |||||||||||||
Interest expense, net | (53 | ) | 17 | 461 | 1,125 | ||||||||||||
Income before income taxes | 25,375 | 19,741 | 141,919 | 102,830 | |||||||||||||
Provision for income taxes | 7,076 | 7,112 | 46,791 | 34,983 | |||||||||||||
Net income | $ | 18,299 | $ | 12,629 | $ | 95,128 | $ | 67,847 | |||||||||
Basic earnings per common share | $ | 0.62 | $ | 0.43 | $ | 3.24 | $ | 2.31 | |||||||||
Basic weighted average common shares outstanding | 29,412,848 | 29,318,915 | 29,392,559 | 29,394,559 | |||||||||||||
Diluted earnings per common share | $ | 0.62 | $ | 0.43 | $ | 3.22 | $ | 2.29 | |||||||||
Diluted weighted average common shares outstanding | 29,611,129 | 29,543,842 | 29,575,460 | 29,612,669 | |||||||||||||
Comprehensive income | $ | 18,299 | $ | 12,629 | $ | 95,128 | $ | 67,847 | |||||||||
TREX COMPANY, INC. | ||||||||||
Condensed Consolidated Balance Sheets | ||||||||||
(In thousands, except share data) | ||||||||||
December 31, | December 31, | |||||||||
2017 | 2016 | |||||||||
ASSETS | ||||||||||
Current assets: | ||||||||||
Cash and cash equivalents | $ | 30,514 | $ | 18,664 | ||||||
Accounts receivable, net | 66,882 | 48,039 | ||||||||
Inventories | 34,524 | 28,546 | ||||||||
Prepaid expenses and other assets | 16,878 | 10,400 | ||||||||
Total current assets | 148,798 | 105,649 | ||||||||
Property, plant and equipment, net | 103,110 | 103,286 | ||||||||
Goodwill and other intangibles | 71,319 | 10,523 | ||||||||
Other assets | 3,000 | 1,972 | ||||||||
Total assets | $ | 326,227 | $ | 221,430 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Current liabilities: | ||||||||||
Accounts payable | $ | 9,953 | $ | 10,767 | ||||||
Accrued expenses and other liabilities | 46,266 | 34,693 | ||||||||
Accrued warranty | 6,290 | 5,925 | ||||||||
Total current liabilities | 62,509 | 51,385 | ||||||||
Deferred income taxes | 1,286 | 894 | ||||||||
Non-current accrued warranty | 28,709 | 31,767 | ||||||||
Other long-term liabilities | 2,473 | 3,223 | ||||||||
Total liabilities | 94,977 | 87,269 | ||||||||
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding | — | — | ||||||||
Common stock, $0.01 par value, 80,000,000 shares authorized; 34,922,111 and 34,894,233 shares issued and 29,428,430 and 29,400,552 shares outstanding at December 31, 2017 and 2016, respectively | 349 | 349 | ||||||||
Additional paid-in capital | 122,043 | 120,082 | ||||||||
Retained earnings | 282,370 | 187,242 | ||||||||
Treasury stock, at cost, 5,493,681 shares at December 31, 2017 and 2016, respectively | (173,512 | ) | (173,512 | ) | ||||||
Total stockholders’ equity | 231,250 | 134,161 | ||||||||
Total liabilities and stockholders’ equity | $ | 326,227 | $ | 221,430 | ||||||
TREX COMPANY, INC. | ||||||||||||||||||||
Condensed Consolidated Statements of Cash Flows | ||||||||||||||||||||
(In thousands) | ||||||||||||||||||||
Three Months ended December 31, |
Year Ended December 31, |
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2017 | 2016 | 2017 | 2016 | |||||||||||||||||
(unaudited) | ||||||||||||||||||||
Operating Activities | ||||||||||||||||||||
Net income | $ | 18,299 | $ | 12,629 | $ | 95,128 | $ | 67,847 | ||||||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||||||
Depreciation and amortization | 4,795 | 3,605 | 16,860 | 14,498 | ||||||||||||||||
Deferred income taxes | 194 | 5,433 | 194 | 5,433 | ||||||||||||||||
Stock-based compensation | 1,274 | 982 | 5,187 | 4,788 | ||||||||||||||||
Loss (Gain) on disposal of property, plant and equipment | 17 | 4 | 1,738 | (185 | ) | |||||||||||||||
Other non-cash adjustments | (2 | ) | 1 | (406 | ) | (284 | ) | |||||||||||||
Changes in operating assets and liabilities: | ||||||||||||||||||||
Accounts receivable | 3,920 | (2,232 | ) | (10,486 | ) | (653 | ) | |||||||||||||
Inventories | (8,495 | ) | (12,038 | ) | (3,635 | ) | (5,442 | ) | ||||||||||||
Prepaid expenses and other assets | (3,993 | ) | (3,485 | ) | (2,194 | ) | (4,256 | ) | ||||||||||||
Accounts payable | (6,006 | ) | (207 | ) | (4,804 | ) | (6,966 | ) | ||||||||||||
Accrued expenses and other liabilities | 4,927 | 4,399 | 2,488 | 9,403 | ||||||||||||||||
Income taxes receivable/payable | (5,903 | ) | (7,377 | ) | 1,795 | 1,110 | ||||||||||||||
Net cash provided by operating activities | 9,027 | 1,714 | 101,865 | 85,293 | ||||||||||||||||
Investing Activities | ||||||||||||||||||||
Expenditures for property, plant and equipment | (3,932 | ) | (6,017 | ) | (15,040 | ) | (14,551 | ) | ||||||||||||
Proceeds from sales of property, plant and equipment | 56 | - | 55 | 4,349 | ||||||||||||||||
Acquisition of business | (281 | ) | - | (71,804 | ) | - | ||||||||||||||
Net cash used in investing activities | (4,157 | ) | (6,017 | ) | (86,789 | ) | (10,202 | ) | ||||||||||||
Financing Activities | ||||||||||||||||||||
Borrowings under line of credit | - | - | - | 242,700 | ||||||||||||||||
Principal payments under line of credit | - | - | 201,000 | (249,700 | ) | |||||||||||||||
Repurchases of common stock | - | (31 | ) | (201,000 | ) | (55,216 | ) | |||||||||||||
Excess tax benefits from stock compensation | - | - | (3,617 | ) | - | |||||||||||||||
Financing costs | - | - | - | (485 | ) | |||||||||||||||
Proceeds from employee stock purchase and option plans | 103 | 61 | 391 | 279 | ||||||||||||||||
Net cash provided by (used in) financing activities | 103 | 30 | (3,226 | ) | (62,422 | ) | ||||||||||||||
Net increase in cash and cash equivalents | 4,973 | (4,273 | ) | 11,850 | 12,669 | |||||||||||||||
Cash and cash equivalents at beginning of period | 25,541 | 22,937 | 18,664 | 5,995 | ||||||||||||||||
Cash and cash equivalents at end of period | $ | 30,514 | $ | 18,664 | $ | 30,514 | $ | 18,664 | ||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20180221006176/en/
Source:
Trex Company, Inc.
Bryan Fairbanks
Vice President and CFO
540-542-6300
or
AdvisIRy Partners
Lynn Morgen/Viktoriia Nakhla
212-750-5800