Press Release
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Trex Company Announces Record Third-Quarter Sales and EPS
-
Net sales increase 32% YOY to
$95.5 million -
EPS increases to
$0.28 -
4Q revenue guidance of
$70 million
Net sales for the third quarter of 2014 totaled
Chairman, President and CEO
“The start-up of the first polyethylene pellet manufacturing line for our entry into commercial business applications is proceeding well. Our entry into this market will enable us to leverage our Company’s core recycling and extrusion capabilities, adding significant value to our surplus recycled polyethylene film supplies. We sold product from our first line in the third quarter and will begin the build-out of the three additional lines during the first half of 2015.
“For the fourth quarter of 2014, we expect net sales to reach
For the nine months ended
Share Repurchase Program
The Company also announced that its Board of Directors has authorized a common stock repurchase program of up to two million of the Company's outstanding common stock. There is no guarantee as to the exact number of shares that will be repurchased under the program, or that there will be any repurchases pursuant to the program. In addition, the stock repurchase program may be suspended, extended or terminated by the Company at any time without prior notice.
Third-Quarter 2014 Conference Call and Webcast Information
For those who cannot listen to the live broadcast, an audio replay of
the earnings call will be available on the
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
About
| TREX COMPANY, INC. | |||||||||||||
| Condensed Consolidated Statements of Comprehensive Income | |||||||||||||
| (In thousands, except share and per share data) | |||||||||||||
| (Unaudited) | |||||||||||||
|
Three Months Ended |
Nine Months Ended |
||||||||||||
| 2014 | 2013 | 2014 | 2013 | ||||||||||
| Net sales | $ | 95,502 | $ | 72,249 | $ | 317,458 | $ | 278,680 | |||||
| Cost of sales | 65,133 | 72,098 | 203,897 | 199,747 | |||||||||
| Gross profit | 30,369 | 151 | 113,561 | 78,933 | |||||||||
| Selling, general and administrative expenses | 15,902 | 15,375 | 54,468 | 58,609 | |||||||||
| Income (loss) from operations | 14,467 | (15,224 | ) | 59,093 | 20,324 | ||||||||
| Interest expense, net | 167 | 70 | 791 | 531 | |||||||||
| Income (loss) before income taxes | 14,300 | (15,294 | ) | 58,302 | 19,793 | ||||||||
| Provision for income taxes | 5,387 | 4 | 21,934 | 298 | |||||||||
| Net income (loss) | $ | 8,913 | $ | (15,298 | ) | $ | 36,368 | $ | 19,495 | ||||
| Basic earnings (loss) per common share | $ | 0.28 | $ | (0.45 | ) | $ | 1.12 | $ | 0.58 | ||||
| Basic weighted average common shares outstanding | 31,606,264 | 33,660,212 | 32,538,832 | 33,772,710 | |||||||||
| Diluted earnings (loss) per common share | $ | 0.28 | $ | (0.45 | ) | $ | 1.10 | $ | 0.56 | ||||
| Diluted weighted average common shares outstanding | 32,008,781 | 33,660,212 | 32,966,317 | 34,506,910 | |||||||||
| Comprehensive income (loss) | $ | 8,913 | $ | (15,298 | ) | $ | 36,368 | $ | 19,495 | ||||
| TREX COMPANY, INC. | ||||||||
| Condensed Consolidated Balance Sheets | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
|
September 30, |
December 31, |
|||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 3,841 | $ | 3,772 | ||||
| Accounts receivable, net | 44,977 | 37,338 | ||||||
| Inventories | 14,639 | 22,428 | ||||||
| Prepaid expenses and other assets | 3,279 | 3,145 | ||||||
| Deferred income taxes | 9,497 | 9,497 | ||||||
| Total current assets | 76,233 | 76,180 | ||||||
| Property, plant and equipment, net | 98,199 | 100,783 | ||||||
| Goodwill and other intangibles | 10,536 | 10,542 | ||||||
| Other assets | 897 | 652 | ||||||
| Total assets | $ | 185,865 | $ | 188,157 | ||||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 12,864 | $ | 14,891 | ||||
| Accrued expenses | 24,275 | 23,295 | ||||||
| Accrued warranty | 8,500 | 9,000 | ||||||
| Line of credit | 3,000 | - | ||||||
| Total current liabilities | 48,639 | 47,186 | ||||||
| Deferred income taxes | 360 | 360 | ||||||
| Non-current accrued warranty | 27,587 | 31,812 | ||||||
| Other long-term liabilities | 2,164 | 2,183 | ||||||
| Total liabilities | 78,750 | 81,541 | ||||||
| Stockholders’ equity: | ||||||||
| 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; 34,783,546 and 34,598,124 shares issued and 32,003,117 and 33,475,614 shares outstanding at September 30, 2014 and December 31, 2013, respectively | 348 | 173 | ||||||
| Additional paid-in capital | 115,623 | 101,667 | ||||||
| Retained earnings | 66,144 | 29,776 | ||||||
| Treasury stock, at cost, 2,780,429 and 1,122,510 shares at September 30, 2014 and December 31, 2013, respectively | (75,000 | ) | (25,000 | ) | ||||
| Total stockholders’ equity | 107,115 | 106,616 | ||||||
| Total liabilities and stockholders’ equity | $ | 185,865 | $ | 188,157 | ||||
| TREX COMPANY, INC. | ||||||||
| Condensed Consolidated Statements of Cash Flows | ||||||||
| (In thousands) | ||||||||
| (Unaudited) | ||||||||
| Nine Months Ended September 30, | ||||||||
| 2014 | 2013 | |||||||
| Operating Activities | ||||||||
| Net income | $ | 36,368 | $ | 19,495 | ||||
|
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||
| Depreciation and amortization | 11,449 | 12,444 | ||||||
| Deferred income taxes | - | (2,991 | ) | |||||
| Stock-based compensation | 3,672 | 2,781 | ||||||
| Loss on disposal of property, plant and equipment | 169 | 587 | ||||||
| Excess tax benefits from stock compensation | (12,677 | ) | (2,567 | ) | ||||
| Other non-cash adjustments | (245 | ) | (337 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (7,698 | ) | 2,543 | |||||
| Inventories | 7,789 | 6,343 | ||||||
| Prepaid expenses and other assets | (415 | ) | 447 | |||||
| Accounts payable | (2,027 | ) | (4,488 | ) | ||||
| Accrued expenses and other liabilities | (3,690 | ) | 16,775 | |||||
| Income taxes receivable/payable | 12,630 | 2,633 | ||||||
| Net cash provided by operating activities | 45,325 | 53,665 | ||||||
| Investing Activities | ||||||||
| Expenditures for property, plant and equipment | (8,794 | ) | (8,971 | ) | ||||
| Proceeds from sales of property, plant and equipment | 48 | 176 | ||||||
| Purchase of acquired company, net of cash acquired | (44 | ) | - | |||||
| Notes receivable, net | 59 | 78 | ||||||
| Net cash used in investing activities | (8,731 | ) | (8,717 | ) | ||||
| Financing Activities | ||||||||
| Financing costs | - | (73 | ) | |||||
| Borrowings under line of credit | 139,000 | 74,500 | ||||||
| Principal payments under line of credit | (136,000 | ) | (79,500 | ) | ||||
| Repurchases of common stock | (52,892 | ) | (28,445 | ) | ||||
| Proceeds from employee stock purchase and option plans | 690 | 3,427 | ||||||
| Excess tax benefits from stock compensation | 12,677 | 2,567 | ||||||
| Net cash used in financing activities | (36,525 | ) | (27,524 | ) | ||||
| Net increase in cash and cash equivalents | 69 | 17,424 | ||||||
| Cash and cash equivalents at beginning of period | 3,772 | 2,159 | ||||||
| Cash and cash equivalents at end of period | $ | 3,841 | $ | 19,583 | ||||
| Supplemental Disclosure: | ||||||||
| Cash paid for interest, net of capitalized interest | $ | 498 | $ | 348 | ||||
| Cash paid for income taxes, net | $ | 9,342 | $ | 696 | ||||
Source:
Trex Company, Inc.
James Cline, 540-542-6300
SVP & CFO
or
LHA
Harriet
Fried, 212-838-3777