Trex Company Inc Delivers More Double-Digit Profit Growth and a Surprise Acquisition

Leading wood-alternative decking, railing, and related accessories maker Trex Company Inc (NYSE: TREX) reported second-quarter financial results on July 31, turning in another of the same kind of quarter investors should have become accustomed to over the past few years. Revenue was up 8% to a highest-ever $157.9 million, while earnings increased 22% on a 370 basis point expansion of gross margin to 45.6%.

In addition, the company made an acquisition, buying SC Company, which designs and manufactures steel and aluminum railing for commercial and architectural applications, for $71.5 million. This was a bit of a surprising move considering that SC Company and Trex have very little overlap in typical applications, and no potential manufacturing synergies. In other words, this enters Trex into a brand-new business.

Trex is now in the commercial and architectural railing business. Image source: Trex subsidiary SC Railing.

Source: Fool.com