Trex Co. swung deeper into the red during the fourth quarter with a net loss of $0.5 million, compared to a $0.3 million loss during the year earlier period, despite a 47% jump in net sales to $75.3 million, the company announced today.

During the quarter, the Winchester, Va.-based composite decking manufacturer had $4.1 million in unusual charges, which included a $5.2 million increase to the company's warranty reserve for decking material manufactured at its Nevada plant prior to mid-2006. This charge was partially offset by a $1.1 million reduction to supply contract-related charges taken during prior 2010 quarters.

"Sales broke our fourth quarter record as both distributors and dealers responded enthusiastically to our products, sales programs, and pricing strategy," chairman, president, and CEO Ronald Kaplan said.

The company also posted income from operations of $3.1 million, a big swing out of the red compared to the $2.2 million loss from operations the company had during the year prior period. Gross profit margin for the quarter was 24.6% after taking into account the unusual charges, lower than the 29.5% gross profit margin the company posted during fourth quarter 2009.

For the year the company reported net sales of $317.7 million, a 16.7% increase over 2009. Net loss for the year was $10.1 million, a $6.8 million improvement over 2009's net loss. The company posted income from operations of $5.1 million for the year, jump out of the red compared to the $8 million loss from operations the company posted in 2009. For 2010, Trex posted a gross profit margin of 22.9%, following reconciliation and adjustments, a dip of almost seven percentage points from 2009's 29.6% gross margin.

"With our expanding roster of market-leading products, the significant manufacturing enhancements we've achieved and a stabilizing economy, we expect 2011 to be a strong year for Trex," Kaplan said. "Based on market demand we are currently seeing, we expect net sales of approximately $70 million for the first quarter."