{"id":521516,"date":"2021-08-02T16:09:19","date_gmt":"2021-08-02T20:09:19","guid":{"rendered":"https:\/\/www.marketnewsdesk.com\/index.php\/trex-company-reports-strong-results-in-second-quarter\/"},"modified":"2021-08-02T16:09:19","modified_gmt":"2021-08-02T20:09:19","slug":"trex-company-reports-strong-results-in-second-quarter","status":"publish","type":"post","link":"https:\/\/www.marketnewsdesk.com\/index.php\/trex-company-reports-strong-results-in-second-quarter\/","title":{"rendered":"Trex Company Reports Strong Results in Second Quarter"},"content":{"rendered":"

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Trex Company Reports Strong Results in Second Quarter<\/b><\/p>\n

\u2500 Residential Revenues Grew 43% Reflecting Continued Broad-Based Demand \u2500
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\u2500 Additional Decking Lines to Further Boost Recently Expanded Capacity \u2500
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\u2500 40% Revenue Growth at Mid-point of Guidance Expected in Third Quarter 2021 \u2500<\/b><\/p>\n

Second Quarter 2021 Highlights<\/span><\/b><\/p>\n

\n– Consolidated net sales increased 41% to $312 million
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– Diluted earnings per share of $0.53, up 29%
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– EBITDA increased 36% to $92 million; EBITDA margin of 29.4%\n<\/p>\n

WINCHESTER, Va.–(BUSINESS WIRE<\/a>)–
\nTrex Company, Inc. (NYSE:TREX), the world\u2019s #1 brand of composite decking and railing and leader in high-performance, low-maintenance and eco-friendly outdoor living products and a leading national provider of custom-engineered commercial railing systems, today reported second quarter 2021 results and year-to-date performance.\n<\/p>\n

\n\u201cOur strong second quarter revenue growth was driven by sustained broad-based demand across all Trex Residential product lines and market share gains from wood. The completion of our $200 million capacity expansion program in May enabled Trex Residential to convert significant customer demand into an impressive 43% increase in sales. Additionally, we are pleased with the success of our tiered product strategy, which supports consumer decision-making by providing a range of product aesthetics, features and price points that have broad appeal and distinct competitive advantages over wood. With the largest part of our capacity expansion behind us, we will now pivot to cost reduction projects and continuous improvement opportunities. These efforts will be focused on automation, modernization, energy efficiency and raw material processing.\n<\/p>\n

\n\u201cAs expected, higher raw material costs and logistic expenses pressured second quarter gross margin. Together with the start-up expenses related to our capacity expansion program, these additional costs reduced gross margin by approximately 400 basis points compared to second quarter 2020. This negative impact was partially offset by robust sales growth in the Residential segment, which resulted in EBITDA growth of 36%. The previously announced price increase that was effective August 1, along with the continued benefits of greater-than-projected productivity experienced in our new Virginia facility, will serve to manage a portion of the inflationary pressures that we have experienced in the first half of this year,\u201d said Bryan Fairbanks, President and CEO.\n<\/p>\n

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Second Quarter 2021 Results<\/b><\/p>\n

\nConsolidated net sales for the 2021 second quarter were $312 million, 41% ahead of the 2020 second quarter. Trex Residential net sales increased 43% to $299 million, with Trex Commercial contributing $13 million. The increase also reflects a price increase that was effective January 1, 2021 to address inflationary pressures.\n<\/p>\n

\nConsolidated gross margin for the 2021 second quarter was 38.0%, after absorbing an approximately 400 basis point impact related to start-up costs and inflationary pressures on key raw materials and transportation, versus 41.9% in the 2020 second quarter. Gross margin was also impacted by labor constraints and increased depreciation related to the company\u2019s capital expansion program at Trex Residential. Gross margin for Trex Residential and Trex Commercial were 38.7% and 21.6%, respectively, compared to 42.5% and 30.7%, respectively, in the 2020 quarter.\n<\/p>\n

\nSelling, general and administrative expenses were $36 million, or 11.5% of net sales, compared to $29 million, or 13.2% of net sales, in the 2020 second quarter and included a $4.6 million increase in personnel related expenses and a $1.5 million increase in branding and advertising spend and travel and entertainment expenses, as COVID-related impacts eased.\n<\/p>\n

\nNet income for the 2021 second quarter was $61 million, or $0.53 per diluted share, representing increases of 30% and 29%, respectively, from net income of $47 million, or $0.41 per diluted share, reported for the prior year second quarter. EBITDA increased 36% to $92 million and EBITDA margin was 29.4%.\n<\/p>\n

Year-to-Date Performance<\/b><\/p>\n

\nNet sales year-to-date were $557 million, 32% ahead of the $421 million reported in the prior year. Trex Residential net sales increased 34% to $532 million, with Trex Commercial contributing an additional $25 million. Year-to-date consolidated gross margin was 38.4%, representing gross margins of 39.3% and 19.4% for Trex Residential and Trex Commercial, respectively. Selling, general and administrative expenses were $67 million, or 12.1% of net sales, compared to $64 million, or 15.1% of net sales.\n<\/p>\n

\nNet income year-to-date was $110 million, or $0.95 per diluted share compared to $90 million, or $0.77 per diluted share. EBITDA increased 29% to $163 million and EBITDA margin was 29.2%.\n<\/p>\n

ESG <\/b><\/p>\n

\nIn June, Trex Company published its 2020 Environmental, Social and Governance (ESG) Report. The company\u2019s third annual ESG Report recaps a year of \u201cBuilding a Better Tomorrow Together\u201d for its customers, employees, communities, investors and the environment. Achievements highlighted in the 2020 report include:\n<\/p>\n