Trex Co. reported today that its net loss shrank to $10 million in the fourth quarter of 2008 from $41 million in the year-earlier quarter, helping swing the company to net income of $13.6 million in 2008 against a $75.9 million in loss in 2007.
Net sales in the quarter totaled $29.3 million, just $1 million less than in the year-earlier quarter, while sales for the year were virtually unchanged at $329.2 million. But direct comparisons are tricky in that Trex recorded a $92 million charge in 2007, of which $37.8 million involved net sales. Excluding the effect of that charge, net sales in 2007 totaled $366.8 million.
"Although we reported a net loss in the 2008 fourth quarter--as Trex typically does due to the highly seasonal nature of outdoor home improvements--on a pro forma basis, our results improved significantly over the same period in 2007," Trex president and CEO Ronald W. Kaplan said in a statement. "Our gross margin for fiscal year 2008 climbed to 27.8% or 29.1% on a pro forma basis from 12.0% or 24.1% on a pro forma basis for the 2007 year. Free cash flow for the 2008 year (defined as cash provided by, or used in, operating activities less cash used for capital expenditures) rose substantially to $25.2 million from negative $25.2 million in 2007 and we ended 2008 with a cash balance of $23.2 million, greatly enhancing our financial and operational flexibility in the coming year."
Trex said its goal is to record $60 million in nest sales during this quarter.