Trex more than doubled its year-ago profits while rebounding from a fourth-quarter 2011 loss to net $12.3 million in earnings for the first quarter 2012, the company reported Monday. Net sales jumped nearly 40%, hitting $96.1 million for the same period and contributing to the second-highest first-quarter earnings-per-share performance in the company's 13-year-history on the public exchange.
The Winchester, Va.-based alternative-wood decking and railing products manufacturer credits continued demand for low-maintenance, alternative wood products, no planned price increases for 2012, and good weather for strong numbers nationwide.
Operating income grew to $16.8 million for the quarter, up from $6.4 million a year ago.
Inventories shrunk by 35% from the fourth quarter 2011, totaling $18.7 million for the current period; first-quarter inventories droped 56% from a year ago. "We know that our inventories at the distributor channel are lower than last year," president and CEO Ron Kaplan told investors during a call Monday morning, adding that "sales off the dealers' shelves are up substaintially."
Accounts recievable, fueled largely by the company's early-buy sales program, jumped to $103.4 million for the quarter from the $52.9 million recorded for the year-ago period as well as from the $29.2 million recorded for the fourth quarter of 2011. Gross margins, which totaled 36.9% for the quarter, represent an increase of 350 basis points from the year-ago period, chief financial officer James Cline noted.
Cline and Kaplan also noted a 3% increase in average price per unit as the company shifts to higher-priced, ultra-low-maintenance products. "The stragegy of the good, better, best is playing out as we hoped it would," Kaplan said.