THE TAKE: Sales at Trex Co. rose 3 percent in the third quarter to $70.8 million, but the company’s loss widened during the quarter to $14.3 million, compared with $0.5 million during the third quarter of 2011. The loss reflected a $20 million pre-tax increase to its warranty reserve for decking material manufactured at its Nevada plant between 2002 and 2006. Without that special item, net income was $6.2 million, or 36 cents per share.
Revenue: $70.8 million, up from $67.9 million
Net loss: Loss of $14.3 million, compared with a loss of $496,000 last year
Special item: $20 million pre-tax increase to warranty reserve
Diluted loss per share: Loss of 86 cents per share, compared with 3 cents per share during the third quarter of last year
THE COMPANY’S TAKE: “With this week’s successful completion of our annual distributor meeting, we are confident that our newest product offerings and sales strategies provide a solid platform for growth. Market conversion to capped ultra-low-maintenance products such as Trex Transcend® and Trex Enhance® continues at a strong pace, and we are introducing a new line of capped decking to build on this trend,” Trex President, Chairman and CEO Ronald W. Kaplan said in a statement. “The line will complete our ‘good, better, best’ ultra-low-maintenance decking platform strategy. We are also enhancing our railing product platform to appeal to a wider array of consumers and markets. We have an impressive branding campaign on tap for 2013 and, coupled with our strong balance sheet, which we will use to our competitive advantage, will deliver a best-in-class sales program.”
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