Trex Company Reports First Quarter 2021 Results
Trex Company (NYSE:TREX) reported strong Q1 2021 results, with net sales of $246 million, a 23% increase year-over-year. Residential Products sales surged 25% to $233 million. Gross margin stood at 39%, affected by start-up costs and inflation. Net income rose 14% to $49 million, or $0.42 per diluted share. The company expects Q2 sales between $295 million to $305 million, reflecting 36% growth. Innovative initiatives like the NexTrex Packaging Label underscore Trex's commitment to sustainability, alongside recent industry accolades.
- 23% year-over-year growth in consolidated net sales to $246 million.
- Residential Products sales increased by 25% to $233 million.
- Net income rose 14% to $49 million, equivalent to $0.42 per diluted share.
- Capacity expansion ahead of schedule, increasing production capacity by approximately 70% compared to 2019.
- Q2 2021 sales forecast between $295 million to $305 million, indicating 36% growth.
- Gross margin decreased to 39% due to start-up costs, inflation, and a fire incident.
- Gross margins for Trex Commercial Products significantly lower at 17.2%, indicating possible challenges in this segment.
Trex Company, Inc. (NYSE:TREX), the world’s #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 financial results for the first quarter ended March 31, 2021.
“Sustained demand for Trex Residential products and accelerated market share gains from wood drove first quarter sales growth, laying the foundation for another year of strong double-digit revenue growth in 2021. At the same time, capacity expansion at our new state-of-the-art manufacturing facility in Virginia is coming on faster than originally anticipated. We now expect all lines in our new plant to be fully operational by the end of May, thirty days ahead of schedule. When completed, our capacity expansion investment will provide approximately
First Quarter 2021 Results
Consolidated net sales for the 2021 first quarter were
Gross margin for the quarter was
Selling, general and administrative expenses were
Net income for the 2021 first quarter was
The company repurchased 504,275 shares of its outstanding common stock for
Recent Developments and Recognitions
- Trex Company was named to Forbes’ 2021 List of America’s Best Mid-Size Companies, ranking #12 overall on this year’s list of 100 companies.
- For the 14th consecutive year, Trex topped Builder magazine’s annual Brand Use Study for “brand familiarity”, “brand used the most” and “brand used in the past two years” across both the composite/PVC decking and deck railings categories.
- For the 11th consecutive year, Trex has been named the “greenest” decking in the industry by the readers of Green Builder magazine and received the highest score for decking in the Green Builder Media Brand Index.
- Green Builder also named the company’s Signature® Railing as one of its “Hot 50 Products” for 2021, demonstrating that Trex’s leadership extends beyond its world-famous decking.
- Trex introduced NexTrex Packaging Label initiative, which allows for packaging to be branded with an official certification that it has been tested, verified, and certified as acceptable for recycling into high-performance Trex decking.
Summary and Outlook
“The dedication and collaboration of the Trex organization and our extended family of retailers, dealers, contractors and distributors has been the driving force in enabling us to report
“As the recognized leader in product performance, aesthetics, quality and the use of
“For the second quarter of 2021, we expect consolidated net sales to range from
First Quarter 2021 Conference Call and Webcast Information
Trex will hold a conference call to discuss its first quarter 2021 results and other corporate matters on Monday, May 10, 2021 at 5:00 p.m. EDT. To participate on the day of the call, please dial 1-844-792-3734, or internationally 1-412-317-5126, approximately ten minutes before the call and tell the operator you wish to join the Trex Company Conference Call.
A live webcast of the conference call will be available in the Investor Relations section of the Trex Company website here. For those who cannot listen to the live broadcast, an audio replay of the conference call will be available on the Trex website for 30 days.
Forward-Looking Statements
The statements in this press release regarding the Company's expected future performance and condition constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause the Company's actual operating results to differ materially. Such risks and uncertainties include, but are not limited to: the extent of market acceptance of the Company’s current and newly developed products; the costs associated with the development and launch of new products and the market acceptance of such new products; the sensitivity of the Company’s business to general economic conditions; the impact of seasonal and weather-related demand fluctuations on inventory levels in the distribution channel and sales of the Company’s products; the availability and cost of third-party transportation services for the Company’s products; the Company’s ability to obtain raw materials at acceptable prices; the Company’s ability to maintain product quality and product performance at an acceptable cost; the level of expenses associated with product replacement and consumer relations expenses related to product quality; the highly competitive markets in which the Company operates; cyber-attacks, security breaches or other security vulnerabilities; the impact of upcoming data privacy laws and the General Data Protection Regulation and the related actual or potential costs and consequences; material adverse impacts from global public health pandemics, including the strain of coronavirus known as COVID-19; and material adverse impacts related to labor shortages or increases in labor costs. Documents filed with the U.S. Securities and Exchange Commission by the Company, including in particular its latest annual report on Form 10-K and quarterly reports on Form 10-Q, discuss some of the important factors that could cause the Company's actual results to differ materially from those expressed or implied in these forward-looking statements. The Company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Use of Non-GAAP Measures
In addition to the financial measures prepared in accordance with U.S. generally accepted accounting principles (GAAP), we use the non-GAAP financial measure of earnings before interest, income taxes, depreciation and amortization (EBITDA) and EBITDA as a percentage of net sales, EBITDA margin, to assess performance. We consider EBITDA and EBITDA margin to be important supplemental indicators of our core operating performance because they eliminate many differences among companies in capitalization and tax structures, capital investment cycles and ages of related assets. We believe that the use of EBITDA and EBITDA margin helps investors gain a better understanding of our core operating results and future prospects consistent with how management measures and forecasts the Company’s performance, especially when comparing such results to previous periods or forecasts. EBITDA should not be considered as an alternative to net income, as calculated in accordance with GAAP, and is not meant to be considered superior to or a substitute for our GAAP results.
Reconciliation of net income (GAAP) to EBITDA (non-GAAP) is as follows:
|
Three Months ended
|
|||||
|
2021 |
2020 |
||||
|
(000s omitted) |
|||||
Net income |
$ |
48,545 |
|
$ |
42,402 |
|
Interest income, net |
|
(3 |
) |
|
(522 |
) |
Income tax expense |
|
15,947 |
|
|
13,255 |
|
Depreciation and amortization |
|
6,423 |
|
|
3,851 |
|
EBITDA |
$ |
70,912 |
|
$ |
58,986 |
|
|
|
|
||||
Net income as a percentage of net sales |
|
19.8 |
% |
|
21.2 |
% |
EBITDA as a percentage of net sales (EBITDA margin) |
|
28.9 |
% |
|
29.4 |
% |
About Trex Company
Trex Company is the world’s largest manufacturer of high-performance, low-maintenance wood-alternative decking and railing, with nearly 30 years of product experience. The #1 brand in outdoor living is proud to be named to Fortune magazine’s 2020 list of the world’s 100 Fastest-Growing Companies and to Forbes’ 2021 List of America’s Best Mid-Size Companies. Stocked in more than 6,700 retail locations worldwide, Trex outdoor living products offer a wide range of style options with fewer ongoing maintenance requirements than wood, as well as a truly environmentally responsible choice. Also, Trex is a leading national provider of custom-engineered railing systems for the commercial and multi-family market, including performing arts venues and sports stadiums. For more information, visit trex.com.
| TREX COMPANY, INC. | ||||||||||
| Condensed Consolidated Statements of Comprehensive Income | ||||||||||
| (In thousands, except share and per share data) | ||||||||||
| Three Months Ended March 31, |
||||||||||
2021 |
2020 |
|||||||||
| (Unaudited) | ||||||||||
| Net sales | $ |
245,524 |
|
$ |
200,395 |
|
||||
| Cost of sales |
|
149,723 |
|
|
110,699 |
|
||||
| Gross profit |
|
95,801 |
|
|
89,696 |
|
||||
| Selling, general and administrative expenses |
|
31,312 |
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FAQ
What were Trex's Q1 2021 financial results?
Trex reported Q1 2021 net sales of $246 million, a 23% increase from the previous year.
How did Trex's net income perform in Q1 2021?
Net income for Q1 2021 was $49 million, or $0.42 per diluted share, reflecting a 14% increase.
What is Trex's sales forecast for Q2 2021?
Trex expects Q2 2021 sales to range from $295 million to $305 million, representing 36% growth.
What challenges did Trex face in Q1 2021?
In Q1 2021, Trex faced reduced gross margins due to start-up costs, inflation, and a fire at its Virginia facility.
What capacity expansion plans does Trex have?
Trex's new facility in Virginia will be fully operational by the end of May, increasing capacity by 70% compared to 2019.
Trex Company, Inc.
NYSE:TREXTREX RankingsTREX Latest NewsTREX Stock Data
7.62B
106.43M
0.67%
100.22%
4.38%
Building Products & Equipment
Lumber & Wood Products (no Furniture)
United States of America
WINCHESTER
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