Trex Company, Inc. reported a decline in financial performance for the first quarter of 2025, with net sales of $339.993 million, down 9% from $373.635 million in the same period last year. The company's gross profit also fell by 18.8% to $137.731 million, resulting in a gross margin of 40.5%, compared to 45.4% in the prior year. Net income decreased by 32.1% to $60.434 million, translating to diluted earnings per share of $0.56, down from $0.82 in the first quarter of 2024. The decline in revenue and profitability was attributed primarily to a decrease in sales volume, as the previous year included a significant channel inventory build that did not recur.
In terms of operational metrics, Trex's selling, general, and administrative expenses rose by 10.8% to $56.068 million, driven by increased branding costs and personnel-related expenses. The company reported a cash outflow from operating activities of $154.013 million, a slight improvement from $174.044 million in the prior year. Capital expenditures for the quarter totaled $79.486 million, primarily related to the construction of a new manufacturing facility in Arkansas, which is part of Trex's ongoing expansion strategy.
Trex's balance sheet showed total assets of $1.641 billion as of March 31, 2025, up from $1.324 billion at the end of 2024. The company had $443.947 million in borrowings under its revolving credit facility, with an available borrowing capacity of $106.1 million. The weighted average interest rate on the facility was 5.27%. Trex maintained compliance with all debt covenants as of the reporting date.
Looking ahead, Trex anticipates continued challenges in the market, including fluctuations in consumer demand and potential impacts from economic conditions. The company plans to focus on its capital allocation priorities, which include investments in manufacturing cost reductions, equipment upgrades, and strategic acquisitions. Trex's capital expenditure guidance for 2025 is set between $190 million and $210 million, reflecting its commitment to growth and operational efficiency.
About TREX CO INC
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