Trex Company, Inc (TREX) has reported 84.24 percent jump in profit for the quarter ended Sep. 30, 2016. The company has earned $6.90 million, or $0.23 a share in the quarter, compared with $3.74 million, or $0.12 a share for the same period last year. Revenue during the quarter grew 12.92 percent to $106.17 million from $94.02 million in the previous year period. Gross margin for the quarter expanded 465 basis points over the previous year period to 28.21 percent. Total expenses were 90.05 percent of quarterly revenues, down from 93.15 percent for the same period last year. This has led to an improvement of 310 basis points in operating margin to 9.95 percent.
Operating income for the quarter was $10.57 million, compared with $6.44 million in the previous year period.
“Demand for Trex products continues to grow and resulted in significant revenue gains in the third quarter that substantially outpaced the sector,” said James E. Cline, President and Chief Executive Officer. “We posted strong, double-digit revenue growth for the period, reflecting the appeal of our high aesthetic, top performing product offerings and the success of Trex’s brand strategy with consumers and the trade.
Operating cash flow improves significantly
Trex Company, Inc has generated cash of $81.88 million from operating activities during the nine month period, up 573.85 percent or $69.73 million, when compared with the last year period. The company has spent $4.18 million cash to meet investing activities during the nine month period as against cash outgo of $18.28 million in the last year period. It has incurred net capital expenditure of $4.19 million on net basis during the nine month period, down 77.06 percent or $14.06 million from year ago period.
The company has spent $60.75 million cash to carry out financing activities during the nine month period as against cash outgo of $0.89 million in the last year period.
Cash and cash equivalents stood at $22.94 million as on Sep. 30, 2016, up 805.88 percent or $20.40 million from $2.53 million on Sep. 30, 2015.
Working capital increases sharply
Trex Company, Inc has recorded an increase in the working capital over the last year. It stood at $50.36 million as at Sep. 30, 2016, up 96.07 percent or $24.68 million from $25.68 million on Sep. 30, 2015. Current ratio was at 2.03 as on Sep. 30, 2016, up from 1.29 on Sep. 30, 2015.
Cash conversion cycle (CCC) has decreased to 65 days for the quarter from 104 days for the last year period. Days sales outstanding went down to 74 days for the quarter compared with 100 days for the same period last year.
Days inventory outstanding has decreased to 10 days for the quarter compared with 23 days for the previous year period. At the same time, days payable outstanding was almost stable at 19 days for the quarter, when compared with the previous year period.
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