Trex Company reported second quarter 2013 net income of $13.2 million, a 58% increase over the $8.3 million earned in the same quarter of 2012. And, despite the dampening effect of a wet June, the company had net sales of $98.6 million in the quarter, compared to $94.3 million in the year-ago quarter, a 4.5% increase, year over year.
For the first half of the year, Trex earned $34.8 million, a 68% increase over net income of $20.6 million in the first six months of 2012. Net sales for the period rose 8.4% to $206.4 million compared to $190.4 million for the prior-year period.
Wet weather in June adversely impacted sales, Trex chairman, president and CEO Ronald Kaplan said today during the company’s second quarter earnings call. “The wet spring, specifically in June, adversely impacted our second quarter sales. Despite the weather conditions, we delivered a strong financial performance,” Kaplan said.
And while weather was part of the story for the second quarter, a lackluster recovery in the repair and remodeling market also contributed to slower sales growth. “The recovery of repair and remodeling is just not as aggressive as the resurgence of new housing construction,” Kaplan said. “We think it will follow but it’s a little slower rate of increase.”
The Winchester, Va., company recognized $1.9 million of adjustments to the mold class action provision in the 2013 period and recognized an increase of $1.5 million to the warranty reserve and $0.7 million severance charges in the 2012 period.
“Our 2013 strategy of providing a full line-up of high-performance decking and railing products made a strong contribution to our growth in sales,” Kaplan said. “Our expanded array of best-in-class products is also helping us build stronger relationships with our distributors, dealers and contractors.”
“This year’s branding strategy, featuring our Engineered Artistry advertising campaign, coupled with a strong focus on digital marketing, has been very successful,” he said, adding that the company dominated the decking composite and vinyl category in Remodeling Magazine’s 2013 Brand Use Study.
The company continues to see a shift in product mix as consumers move toward the higher-priced products, which Kaplan says helped the company build stronger relationships with dealers and distributers.
“With expanded high-performance products, we’re able to go after a broader range of consumer,” Kaplan said. “We’ve gone beyond WPC market and offer products that compete in the PVC and aluminum railing segments, [the strategy] is showing early signs of success.”
“By offering Trex Select and Trex Reveal railing we have access to $325 million of market opportunity not previously served by Trex,” he said, noting that the company now offers 1,200 combinations of decking and railing products.