Shares of Trex Company jumped on Monday following the release of an exceptionally strong second-quarter earnings report, results which the company attributed to pent-up demand and the success of its various initiatives.
Net sales increased 23% year-over-year to $121.3 million, compared to $98.6 million in 2013.
Net income for the three months ended June 30 was $15.2 million, up 62% from last year's earnings of $13.2 million. This takes into account a $9.1 million increase in income taxes after Trex exited its tax valuation allowance at the end of last year.
“As we expected, second-quarter sales were strong largely due to pent-up demand and market share gains," said president and CEO Ronald Kaplan. "Several distributors reported record sales of our products reflecting our expanded distribution footprint and dealer conversions."
Kaplan added that the company's performance was impacted by three cost reduction initiatives that have begun to pay off, as well as Trex's entry into the recycling and extrusion industry via the manufacture of polyethylene pellets made from recycled plastic.
Trex anticipates third-quarter net sales of $92 million, in line with this quarter's 23% year-over-year growth rate.