Trex Company Attributes the Strong Second Quarter to Lean Six Sigma
Posted by: meikah | 30 July 2009 | 9:52 pm
Net sales for the second quarter of 2009 totaled $91.5 million compared to net sales of $95.0 million for the 2008 second quarter. The company reported net income of $7.4 million, or $0.49 per diluted share, for the 2009 second quarter compared to net income of $6.5 million, or $0.43 per diluted share, for the 2008 second quarter. The company’s adoption of FASB Staff Position No. APB 14-1 related to embedded interest on convertible debt resulted in $1.6 million and $1.4 million of non-cash interest expense in the second quarter of 2009 and 2008, respectively, reducing earnings per share by $0.11 and $0.09, respectively.
For the six months ended June 30, 2009, Trex Company reported net sales of $159.1 million compared to net sales of $214.5 million for the prior-year period. Net income for the 2009 six-month period totaled $4.3 million, or $0.28 per diluted share, compared to $13.9 million, or $0.93 per diluted share, for the 2008 six-month period. These results included $3.3 million and $2.7 million of non-cash interest expense in the first six months of 2009 and 2008, respectively, which reduced earnings per share by $0.22 and $0.18, respectively.
President and Chief Executive Officer Ronald W. Kaplan has this to say:
“Our unwavering focus on enhancing Trex’s operations continued to produce results. We continue to expand the use of Lean Six Sigma manufacturing techniques throughout every phase of Trex’s manufacturing process in both our Winchester and Fernley plants. The resulting improvements enabled us to raise gross margin by 220 basis points to 31.2% quarter over quarter despite lower levels of capacity utilization. Our operating cash flow for the second quarter was strong, and we continued to execute our cash management strategy extremely well. We believe we’ve weathered the economic downturn better than many of our competitors. Our cash balance at quarter-end increased to $46.4 million and we haven’t borrowed against our revolver for more than a year…”
