Trex nearly broke even during the third quarter, compiling a net loss of $496,000, a vast improvement over the $8.8 million deficit during the same period a year ago, the company reported today. Net sales rose over $7 million to reach $67.9 million during the quarter ended Sept. 30.
The Winchester, Va.-based composite decking manufacturer nearly doubled gross profit with results of $17.3 million. Operationally, the company swung into the black with a $4.3 million operating income, compared with a $4.8 million loss a year ago. Selling, general, and administrative expenses fell during the quarter by just over $1 million to $13 million.
"During the third quarter, we executed well in a challenging environment, increasing year-over-year net sales by 12% even as consumer confidence deteriorated and the economic recovery lost steam," said chairman, president, and CEO Ronald W. Kaplan.
During the quarter, the company recognized an accelerated non-cash charge of $500,000 related to its repurchase of $5.6 million of its senior subordinated convertible notes due in July 2012. Excluding this charge, the company said it had $28,000 in net income, which it reflected in a set of pro-forma results included with its quarterly earnings statement.
Kaplan said the company expects net sales of about $50 million to 55 million during the fourth quarter. He also said the company expects first-quarter 2012 sales to beat 2011's first quarter sales by 25%.
Shortly after the end of the third quarter, the manufacturer announced a new decking line called Trex Enhance. Enhance is a capped, high-performance decking product that uses the company's Transcend technology. It is intended to be the middle offering in its "good, better, best" product platform strategy. The company also entered into a trademark licensing agreement with Backyard America to market pergola kits in early October.