2004 Revenue Increases 33%, EPS up 28%
Trex Company, Inc. (NYSE: TWP), manufacturer of wood plastic Trex decking and railing, today announced financial results for the fourth quarter and fiscal year ended December 31, 2004. Net sales for the 2004 fourth quarter totaled $29.6 million compared to $21.9 million for the 2003 fourth quarter. The net loss decreased to $0.4 million, or $0.02 per diluted share, for the 2004 fourth quarter from a net loss of $0.8 million, or $0.05 per diluted share, for the 2003 fourth quarter.
Chairman and Chief Executive Officer Robert Matheny commented, “Trex Company typically reports a loss in the fourth quarter due to the highly seasonal nature of deck installations, whose peak periods occur from late winter through September. As is usual in the fourth quarter, we built product inventory to prepare for the heavy demand we anticipate during the upcoming peak season. During the period, our cost of sales was negatively affected by the higher cost of plastic raw materials.”
For the full 2004 year, Trex Company reported net sales of $253.6 million compared to $191.0 million for 2003, which represents an increase of 33%. Net income increased 29% to $27.2 million, or $1.83 per diluted share, from net income of $21.0 million, or $1.43 per diluted share, for 2003.
Mr. Matheny continued, “As our financial results clearly demonstrate, 2004 was a successful year for Trex. As the demand for composite decking and railing products continued to grow, we took steps to expand our market leadership position. We introduced a series of products – Trex Origins(TM), Trex Accents(TM), and Trex Designer Series Railing(TM) – that have been well accepted by the market. In fact, Trex Accents(TM) has already established itself as the leading wood grain-textured deck board in the composite market. We launched a relationship with The Home Depot designed to complement our existing distribution channel and reach a new set of consumers and contractors. In addition, we started construction on our third manufacturing plant, in Olive Branch, Mississippi.
“In 2005, we will capitalize even further on the growing popularity of composite decking and railing. In December, we began shipping Trex Brasilia(TM), a new line of deck boards, trim profiles and railings that feature the look of tropical hardwoods, including subtle shadings and color variations. Our Trex Artisan Series Railing(TM) will also debut in 2005. This new railing system has a white textured surface with the appearance of painted wood and is crafted from a durable composite material that offers an elegant look while setting a new standard for easy installation. Our new advertising campaign, ‘Create Your Space(TM)’, kicked off in February and is designed to demonstrate the broad design flexibility Trex Company’s products offer homeowners looking to create an outside living environment.”
Mr. Matheny concluded, “We believe Trex Company is well positioned to take advantage of the extraordinary opportunities that exist in our market and to continue expanding our leadership role. For 2005, we expect net sales and earnings per diluted share to increase approximately 18% to 22%.”
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