Trex beats its guidance in Q4

Trex Company made some impressive strides during a fourth quarter that was already up against a record-breaking year-ago period.

“Fourth quarter sales performance was above our guidance and represented broad based, year-on-year growth across our product lines and geographies," said president and CEO James Cline. "The high single-digit sales growth achieved in the fourth quarter is noteworthy given the difficult comparisons to last year’s record fourth quarter, when unusually warm weather contributed to a 20% year-on-year sales increase. Gross margin expansion and cost discipline resulted in operating income as a percentage of net sales, operating income margin, of over 20%, substantially ahead of the 15% reported in the prior year."

Net sales for the fourth quarter ended Dec. 31, 2016 came in at $95.3 million, 7% above the $89.2 million reported last year.

Net income was $12.6 million, up 56% from the net income of $8.1 million reported for last year’s fourth quarter.

The company's progress was also visible during the full fiscal year of 2016, with net sales of $479.6 million up 9%, and net income of $68 million up 41% from 2015.

“This was another record year for Trex, reflecting the success of our branding campaigns and market share initiatives which included a heightened focus on wood market conversion," said Cline. "We continued to expand our brand reach and strengthened our global distribution network in 2016, resulting in a double-digit increase in domestic and international sales of decking and railing products. At the same time, lower input costs and manufacturing cost savings generated significant operating leverage, enabling us to achieve income growth that significantly outpaced revenue growth."

Trex outlined its outlook for 2017, which included revenue growth from favorable forecasts for repair and remodeling spending and high consumer confidence levels, as well as boosts in Trex's market share position.

For the first quarter, Trex expects net sales of approximately $144 million (up 9% year-over-year).