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Sep 30, 2023
Trex Q3 2023 Earnings Report
Trex demonstrated strong performance driven by consumer demand, operating efficiencies, and improved utilization.
Key Takeaways
Trex Company reported strong Q3 2023 results, marked by a significant increase in net sales and gross margin compared to the prior-year quarter. The company's performance was driven by robust consumer demand for Trex products, operating efficiencies, and improved utilization. Trex also raised its full-year revenue and adjusted EBITDA guidance.
Net sales reached $304 million.
Gross margin was 43.1%, or 41.8% excluding a $3.8 million warranty reserve benefit.
Net income was $65 million, with diluted earnings per share of $0.60.
Adjusted EBITDA stood at $96 million, resulting in an adjusted EBITDA margin of 31.5%.
Trex
Trex
Forward Guidance
Trex projects fourth quarter revenues of $185 million to $195 million and expects full year adjusted EBITDA margin to range from 29% to 29.5%.
Positive Outlook
- Full year revenue expected to be $1.09 billion using the mid-point of the guidance.
- Expected to retain position as industry’s greenest and lowest cost manufacturer.
- Benefits from ongoing cost-out programs.
- Future benefits from world class Arkansas facility.
- Expect SG&A spending will represent 15% to 16% of net sales for the year.
Challenges Ahead
- Fourth quarter revenues reflect seasonally low demand.
- Expectation that year-end channel inventories will be below those of year-end 2022.