WINCHESTER, Va. - Trex Company, Inc., the world's largest manufacturer of wood-alternative decking and railing products, today announced financial results for the first quarter ended March 31, 2012.
Net sales for the first quarter of 2012 totaled $96.1 million compared to net sales of $69.0 million for the 2011 first quarter, an increase of 39%. As described in the 2011 fourth quarter press release, the Company did not increase prices in 2012. This led to a more normal product demand in the 2012 quarter. The Company reported net income of $12.3 million, or $0.74 per diluted share, for the 2012 period compared to net income of $5.1 million, or $0.30 per diluted share, for the prior-year period. The Company's 2011 results reflected a favorable resolution of uncertain tax positions that positively impacted income taxes by $2.6 million. Excluding that adjustment, net income in the 2011 first quarter was $2.5 million, or $0.15 per diluted share.
Chairman, President and CEO Ronald W. Kaplan commented, "Our first quarter sales were 7% above guidance. Our best-in-class product platform, combined with market share gains, helped us exceed our revenue target. Today's results also represent the second highest first-quarter EPS performance since the Company went public in 1999.
"Demand for our 2011 new product introductions, particularly Trex Enhance(TM) and Trex Transcend(R) Porch, contributed significantly to our strong showing. Our expansion into the international arena also gained momentum, with a substantial year-over-year sales increase. Our manufacturing and productivity initiatives continued to deliver important benefits, contributing to our gross margin of 36.9%, up 350 basis points from the 2011 period."
Mr. Kaplan concluded, "We continue to see a strong shift in the market towards ultra-low-maintenance wood alternative products. With our expanding ultra-low-maintenance product offering, utilizing Transcend technology, we are off to a great start for the year. Based on the market demand we are currently seeing, we expect net sales of approximately $90 million for the second quarter of 2012, an increase of 15% from last year's period."
First-Quarter 2012 Conference Call and Webcast Information
Trex will hold a conference call to discuss its first-quarter 2012 results on Monday, May 7, 2012 at 10:00 a.m. ET. To participate in the live call by telephone, please dial 706-634-1218 or 888-803-7566 and reference conference ID #70002443. A live webcast of the conference call will also be available in the Investor Relations section of the Trex Company website at trex.com.
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 1:00 p.m. ET on Monday, May 7, 2012. To listen to the telephone replay, dial 404-537-3406 and enter conference ID #70002443.
TREX COMPANY, INC.
Condensed Consolidated Statements of Comprehensive Income
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended March 31,
2012 2011
-------------- ------------------
Net sales $ 96,100 $ 69,006
Cost of sales 60,681 45,977
---------- ----------
Gross profit 35,419 23,029
Selling, general and administrative expenses 18,601 16,657
---------- ----------
Income from operations 16,818 6,372
Interest expense, net 4,411 3,963
---------- ----------
Income before income taxes 12,407 2,409
Provision (benefit) for income taxes 96 (2,648)
---------- ---------- ----
Net income $ 12,311 $ 5,057
==== ========== ==== ==========
Basic income per common share $ 0.80 $ 0.33
==== ========== ==== ==========
Basic weighted average common shares outstanding 15,473,777 15,292,959
========== ==========
Diluted income per common share $ 0.74 $ 0.30
==== ========== ==== ==========
Diluted weighted average common shares outstanding 16,717,987 16,823,788
========== ==========
Comprehensive income $ 12,311 $ 5,241
---- ---------- ---- ----------
TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
(unaudited)
31-Mar-12 31-Dec-11
----------- -------------
ASSETS
Current assets:
Cash and cash equivalents $ 4,831 $ 4,526
Restricted cash 25,000 37,000
Accounts receivable, net 103,381 29,192
Inventories 18,665 28,896
Prepaid expenses and other assets 1,681 2,118
Income taxes receivable 328 322
------- -------
Total current assets 153,886 102,054
Property, plant and equipment, net 112,214 115,212
Goodwill and other intangibles 10,556 10,558
Other assets 969 266
------- -------
Total assets $ 277,625 $ 228,090
==== ======= === =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 11,908 $ 11,892
Accrued expenses 15,797 16,187
Accrued warranty 5,700 6,000
Deferred income taxes 124 124
Line of credit 36,700 -
Current portion of long-term debt 89,150 86,425
------- -------
Total current liabilities 159,379 120,628
Deferred income taxes 2,819 2,819
Accrued taxes 38 60
Non-current accrued warranty 9,225 10,345
Other long-term liabilities 1,728 1,739
------- -------
Total liabilities 173,189 135,591
------- -------
Stockholders' equity:
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none - -
issued and outstanding
157 156
Common stock, $0.01 par value, 40,000,000 shares authorized;
15,683,837 and 15,602,132 shares
issued and outstanding at
March 31, 2012 and December 31, 2011, respectively
Additional paid-in capital 99,510 99,885
Retained earnings (deficit) 4,769 (7,542)
------- ------- ---
Total stockholders' equity 104,436 92,499
------- -------
Total liabilities and stockholders' equity $ 277,625 $ 228,090
==== ======= === =======
TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
2012 2011
------------- -------------
OPERATING ACTIVITIES
Net income $ 12,311 $ 5,057
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 7,120 7,218
Other non-cash charges 752 929
Changes in operating assets and liabilities (65,572) (22,613)
------- --- ------- ---
Net cash used in operating activities $ (45,389) $ (9,409)
--- ------- --- --- ------- ---
INVESTING ACTIVITIES $ (1,167) $ (2,248)
--- ------- --- --- ------- ---
FINANCING ACTIVITIES $ 46,861 $ (3,599)
--- ------- --- ------- ---
Net increase (decrease) in cash and cash equivalents $ 305 $ (15,256)
Cash and cash equivalents at beginning of period $ 4,526 $ 27,270
--- ------- --- -------
Cash and cash equivalents at end of period $ 4,831 $ 12,014
=== ======= === =======
Source: Trex Company, Inc.
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