Excluding these charges, net sales and earnings per share would have been $280.5 million and $2.57 respectively for the 2013 nine-month period compared to net sales and earnings per share of $261.2 million and $1.70 respectively for the 2012 nine-month period.
Chairman, President and CEO Ronald W. Kaplan commented, “The market’s response to our expanded line-up of high-performance decking and railing products continues to be enthusiastic, resulting in third-quarter sales exceeding our revenue guidance. Our sales success was masked by a $1.8 million charge that supports a significant sales growth opportunity moving forward. This charge is an investment in the future as we completely transition from our prior-generation wood-plastic composite products to our comprehensive and innovative second-generation high-performance decking and railing products. We will couple this with a revamped pricing strategy and expanded support for our business partners. This plan is a key element of our strategy to advance Trex’s industry-leading market share.
“Operationally, it was another solid quarter for Trex. Our operating gross margin was strong despite operating at seasonally lower levels of capacity utilization and our underlying EPS was better than anticipated at $0.45 per share.
“To further advance our industry leading market share, we are continuing to expand our distribution network. In the last couple of weeks, we added three major East Coast distributors, significantly increasing our presence in this strategically important region. We expect sales growth from our expansion strategies with all classes of customers to occur over the next several years with 2014 benefiting by $40 million to $60 million.”Mr. Kaplan concluded, “As we position ourselves for 2014, we are confident in Trex’s core strategies of providing a best-in-class product platform, growing our distribution presence, leveraging our low-cost manufacturing capabilities and expanding our brand reach. For the fourth quarter of 2013, we expect net sales of approximately $50 million, an increase of approximately 9% over the prior-year period.”