Warranty Claims Reverse Trex’s Net Gain

A $20 million pre-tax increase to Trex’s warranty reserve to fulfill claims for faulty decking material manufactured at its Nevada plant between 2002 and 2006 pushed the company’s bottom line into the red during the third quarter, company officials said. The Winchester, Va.-based wood-alternative decking maker posted a net loss of $14.3 million, building on a net loss of $500,000 from the same period a year earlier. The company said it received claims at a higher rate than anticipated during the quarter and expects the trend to continue. Sales for the quarter rose 4.2% from a year earlier to $70.8 million, with gross margins topping 31%. View the full results.