Trex Q2 2022 Earnings Report
Key Takeaways
Trex Company reported a 24% increase in consolidated net sales, reaching $386 million. Net income rose by 45% to $89 million, with diluted earnings per share up 49% to $0.79. The company's EBITDA increased by 41% to $129 million, with an EBITDA margin of 33.4%.
Consolidated net sales increased 24% to $386 million.
Net income increased 45% to $89 million, with diluted earnings per share up 49% to $0.79.
EBITDA increased 41% to $129 million, with EBITDA margin up 400 basis points to 33.4%.
Trex Residential net sales increased 25% to $374 million.
Trex
Trex
Forward Guidance
The company anticipates a significant reduction in revenues in the second half of 2022 as consumer demand is filled by existing channel inventories. Third and fourth quarter revenues are expected to range from $185 million to $195 million, and $180 million to $190 million, respectively. The company expects EBITDA margin of 27% to 29% for full year 2022.
Positive Outlook
- The enduring strength of the Trex brand continues to resonate with consumers.
- Trex has the highest production efficiencies within the industry.
- Trex's product portfolio is well-positioned to capture demand across a broad consumer base.
- Trex enters this period with tremendous financial and operating strength.
- Trex can continue to capture share not only from wood but also gain share within the composite industry.
Challenges Ahead
- Experienced a sudden reduction in pro-channel demand in late June.
- Channel partners began to adjust their inventory levels to align with expectations for an economic slowdown.
- Anticipate a significant reduction in revenues in the second half of 2022.
- Consumer demand is filled by existing channel inventories.
- Revising capital expenditure spending for 2022 to $170 million to $180 million down from previous range.