Trex Company, Inc. (NYSE: TREX), the world’s largest manufacturer of wood-alternative decking and railing products, today announced financial results for the fourth quarter ended December 31, 2011.
Net sales for the fourth quarter of 2011 totaled $51.5 million compared to net sales of $75.3 million for the 2010 fourth quarter. The Company reported a net loss of $18.3 million, or $1.18 per share, compared to a net loss of $0.5 million, or $0.03 per share, for the 2010 period. During the 2011 period, the Company recognized a $10.0 million increase to the Company’s warranty reserve for decking material manufactured at its Nevada plant prior to mid-2006. Before giving effect to this charge, the net loss was $8.3 million, or $0.54 per share. During the 2010 period, the Company recognized $4.1 million of unusual charges. Before giving effect to these charges, net income for the 2010 period was $3.6 million, or $0.23 per share.
For the full year ended December 31, 2011, Trex Company reported net sales of $266.8 million compared to net sales of $317.7 million for 2010. The Company reported a net loss of $11.6 million, or $0.75 per share, compared to a net loss of $10.1 million, or $0.66 per share, for 2010. The 2011 results reflect the $10.0 million increase to the Company’s warranty reserve in the fourth quarter and a net $2.3 million non-cash benefit recognized in prior quarters. Before giving effect to these adjustments, net loss for 2011 totaled $3.9 million, or $0.25 per share. During 2010, the Company recognized a total of $21.3 million of unusual charges. Before giving effect to these charges, net income for 2010 totaled $11.3 million, or $0.72 per share.
Chairman, President and CEO Ronald W. Kaplan commented, “Our fourth-quarter sales were right in line with our guidance. While an announced price increase for Trex Transcend® drove significant buying in the fourth quarter of 2010, this season we maintained pricing, with the result that more sales have shifted to the first quarter of 2012. To date, our early-buy sales program for 2012 has been progressing as planned and we are pleased with our performance so far this year.“Our steady stream of new product launches has set the stage for a strong year for Trex. Initial response to our newest deck board Trex Enhance™ – which fits in the middle of our ‘good, better, best’ product platform strategy, offering Trex Transcend® technology with some of Transcend’s performance features – has been robust. The Trex Transcend Porch Flooring & Railing System we introduced last summer has given us an excellent entry into a whole new, $1 billion marketplace, and we believe it will be a strong contributor to our 2012 results. We continue to make progress with our international marketing efforts and our entry into the $2 billion sub-structure market through Trex Elevations™, our lightweight, easy-to-install deck framing, is gaining traction.
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