TREX
#Thanks.
Good morning, <UNK>.
Yes.
We anticipate when the year finishes up, we will see a very modest expansion in market share driven by either expansion with existing dealers or in some cases a few new dealers.
There have not been any significant changes that have occurred with the dealer base as you saw several years ago, though.
I believe that the growth that we see will primarily be driven by conversions from wood, which will have the effect of allowing us to gain additional share but not necessarily taking share from competitors in the alternative wood products category.
There is always a little bit of that that occurs but I do not see any significant opportunities on the horizon at this point.
We haven't talked about capacity utilization in the form of a percentage significantly because of the continuous improvement programs that we have in place.
A number of years ago we saw significant improvements which made modeling based off of that capacity utilization almost irrelevant at that time frame.
We're continuing to see opportunities within our operations to improve both of our rates, yields, and overall operational efficiencies.
We talked in prior quarters that from an overall capacity perspective this year we thought we would be running between 50% and 55%.
We are still on track with that with where revenues are at this point so no change from that perspective.
And, as we move forward I expect we will continue to drive improvements within that number and you can gauge a revenue based off of that.
Yes.
<UNK>, my expectation by the time that we get done with the year I think that the industry will see roughly mid single-digit growth.
You will see some people with growth at the high end of that, you will see some of our competitors who will see growth at the lower end of the single-digit.
As I mentioned, our trailing 12 months including the third quarter forecast is roughly at 11%.
So, that implies to me that we are clearly outpacing the general market conditions.
Yes, it will be primarily in building material related products and investments within our operations for future efficiencies.
The B&Q relationship is progressing well.
We have been advertising extensively in the UK and that appears to be having the desired effects that we anticipated.
We look forward to expanding that relationship over the next several years and hopefully build a much closer relationship with them.
No, I would not expect this to be a one-year test.
B&Q is part of the Kingfisher Group and we continue to have discussions regarding other opportunities in Europe.
Well, I do not think it was significant.
We adjusted in our guidance where we felt the quarter would lie.
I can also tell you that as we looked at the month of June we actually saw a little bit of softness in the latter part of June.
Typical market timing.
Sometimes you find that the consumers decide to take a little sabbatical on their projects.
Now, coming out of the month of June, they were back in the market and we did see it strengthen.
I would say that the month, I'm sorry the second quarter, is a typical second quarter, a little bit slow in the front-end, maybe a little bit slow in the rear end but the middle was very strong.
Thank you.
Good morning, <UNK>.
Yes.
With regard to conversion of wood, we just started the campaign this year.
As we mentioned before this will be a multi year campaign while directionally we are seeing the interest we believe the drive to wood will take place, begin to really take place more in next year and the following year.
So it is very difficult to see that in the numbers, especially as we look at the numbers throughout the year.
Really you need to look at a full year to really determine whether or not that movement is occurring.
We are seeing good growth across the full breadth of the market.
Big box as well as the two-step distribution model.
So, it is a very balanced growth that we are seeing and I believe that is probably representative of the entire market since we are such a large portion of that share.
I think what we saw in July was the fact that inventories went down a little bit too far and they were right sized in the July time period.
But we believe that the market continues to be strong.
When we look at the activity we see on our website, we anticipate that the third quarter is going to continue to be a fairly strong business environment for decking and railing.
No significant one-time projects.
We announce our pricing to our distribution and channel partners prior to any other actions that we would do.
We did take pricing on our Transcend Classic line in October of last year, but as of right now there is nothing on the drawing board.
We will be meeting with our distributors late in the fourth quarter and any pricing actions would be talked about in that timeframe.
Again, thank you for joining us for our business outlook and financial results.
We look forward to talking more about the third quarter in our next conference call.
That conference call will be scheduled to also be after our distributor meeting so we will be able to give you a little bit more color on where we believe the market is headed in 2017 as well as the end to the period in 2016.
Thank you again for joining us.
Have a good day.
