Trex's Q4 sales burst 20% above prior-year numbers
Trex Company had a remarkable 20% boost in top-line revenue during the fourth quarter, exceeding its own previously issued guidance thanks to the benevolent forces of unseasonably good weather.
Net sales for the fourth quarter were $89 million, 20% above the previous year's $74 million.
Net income came in at $8.1 million, up 57% year-over-year.
“Our fourth quarter results represented a strong finish to 2015," said president and CEO James Cline. "Year-over-year net sales growth of 20% was slightly ahead of our guidance, thanks to unseasonably good weather and positive momentum going into the 2016 “Early Buy” season. Additionally, we continued to generate operating leverage by maintaining our gross margin at close to 36% and reducing our SG&A expenditures as a percentage of revenues by 170 basis points to 21%, after excluding 2014 expenses of $1.1 million related to our Dulles lease and a terminated transaction.”
Full-year 2015 results followed a similar pattern of excellent growth, with net sales of $441 million up 13% year-over-year, as well as net income up 16% to $48.1 million.
However, full-year gross margin was 35.1%, a 70 basis point decrease from 2014.
“We achieved record net sales for 2015, posting year-over-year growth that substantially outpaced the industry, as we continued to successfully execute our market share expansion strategy," added Cline. "Throughout the year, we experienced increasing acceptance of our “good, better, best Decking & Railing” product lineup and greater consumer recognition of the opportunity to design customized outdoor living spaces with long-lasting Trex products. At the same time, we maintained our pricing discipline and implemented operating efficiencies that enabled us to expand our gross margin by 110 basis points, before giving effect to the warranty charges noted above."
Cline added that Trex will be dedicating a large portion of its media budget toward wood decking beginning in the second quarter.
Additionally, the company expects net sales of $131 million in Q1, an 8% year-over-year increase.