Trex Company Inc (NYSE: TREX) stock fell 3.38% on 24th February, 2020 and continued its bearish momentum on 25th Feb, 2020 falling over 0.7% (Source: Google finance) despite decent fourth quarter of FY 19. The company has reported the net income for the fourth quarter of 2019 was $35 million, representing increases of 41% and 42%, respectively, from net income of $25 million reported for last year’s fourth quarter. Meanwhile from June 2019, the company had added two lines in our Nevada facility and an additional line in the Virginia facility. Late in the second quarter of 2020, the company plans to bring online three additional lines at the Nevada facility and an additional line in Virginia.
TREX in the fourth quarter of FY 19 has reported the adjusted earnings per share of 61 cents, while reported the adjusted revenue growth of 18 percent to $164.77 million in the fourth quarter of FY 19.
Trex Residential Products net sales grew 25% to $153 million, and Trex Commercial Products contributed $12 million to consolidated fourth quarter sales. Consolidated gross margin for the quarter had expanded by 40 basis points to 43.2%, representing gross margins from Trex Residential and Trex Commercial of 44.6% and 26.3%, respectively.
For the first quarter of 2020, the company expects the consolidated net sales to be of approximately $200 million, or 11% ahead of the first quarter 2019, with sales growth in the remainder of the year closely tied to the ramp-up of additional capacity detailed above.
Full year 2020 incremental gross margin is projected to be at 50%, and the company expects the tax rate to be approximately 25%. The company had incurred the capital expenditures for full year 2019 of $67 million. For 2020, the company expects capital spending to range from $140 million to $160 million, with the majority earmarked for capital expansion.
On the other hand, the company has appointed Bryan H. Fairbanks, who is currently Executive Vice President and Chief Financial Officer, to the positions of President and Chief Executive Officer and Board Member. Mr. Fairbanks will assume his new roles on April 29, 2020 coinciding with James E. Cline’s planned retirement from the President and CEO positions. On that date, Mr. Cline will take the position of Chairman of the Board and Ronald W. Kaplan will move to Vice Chairman.