Net income at Trex Co. fell 56% during the second quarter, compared with the same period a year ago, to $2.1 million on a 32% decline in sales to $78.4 million, the company announced today.
"... Second-quarter sales were less than expected due to poor weather in much of the country and, to a lesser extent, the challenging macroeconomic environment," said chairman, president and CEO Ronald Kaplan.
Gross profit for the quarter totaled $23.5 million as the cost of sales fell 34% to $54.9 million. Income from operations fell 28% to $6.2 million following an almost $4 million drop in selling, general and administrative expenses, which finished at $17.3 million. The company also reported a $62,000 provision for income taxes during the quarter. During the company's 2010 second quarter, it recognized $13.3 million of non-cash charges, which included a $9 million increase to its warranty reserve.
"We believe that external factors that negatively impacted our sales also affected the overall market, and that Trex is continuing to take market share," said Kaplan. "We started our 2011 early buy season with a focus on dealer conversions. This focus, combined with our growing product platform, had enabled us to initiate or expand our relationships with a significant number of dealers."
Kaplan said the company is continuing to refine its products and expand its product line, which it recently did with its Transcend porch flooring and railing system. He also said the company remains encouraged based on sales increases that occurred in June and July.
"While forecasting in this overall environment has proven challenging, based on order activity to date and discussions with our distribution partners, we expect net sales of approximately $65 to $70 million for the third quarter of 2011 compared to $60.6 million in the 2010 period," said Kaplan.
