Trex Co.'s net loss shrank to $8.7 million in the third quarter from a $22.5 million loss in the year-earlier period on a 2.1% drop in net sales to $60.6 million, the maker of decking and railing products reported today. Excluding special items this year and last, the net loss on a pro-forma basis declined to $4.9 million from an $800,000 profit.

"After a very active and successful first half, the environment for Trex and other companies in the building materials sector changed abruptly in mid-summer," chairman, president and CEO Ronald W. Kaplan said in a statement. "Consumer sentiment declined rapidly, reducing the solid flow of orders we had been receiving. As a result, we had to decrease capacity utilization, a key contributor to gross margin. ... Notwithstanding the tough economic environment, based on recent strengthening in demand and our distributors' very positive response to our sales programs and pricing strategy, we expect a solid fourth quarter with sales of $60 million compared to $51.2 million in the 2009 period."

This year's special items included $3.1 million related to a supplyu contract and an $800,000 addition to Trex's warranty reserve for decking material made at its Nevada plant before mid-2006. The third quarter in 2009 included a non-cash impairment charge of $23.3 million related to its Olive Branch, Miss., facility.