TREX
#Sure.
On the attachment rate for the railing, we did see that railing as a percent of our sales did grow a little bit in the first quarter.
A little bit unusual.
Usually that's a slow quarter for the railing activity.
So that has been quite modest.
I'll let <UNK> take the second part of that.
As it relates to poly pricing, with recycled materials it does tend to lag the virgin pricing.
It does come down.
But generally you're looking at 3 to 6 to 8 months after.
So we have been taking advantage of that reduction in the marketplace since it started coming down.
We are seeing it level out at this point, as we are seeing the virgin pricing level out as well.
There are accounts we are still working with and negotiating with, but we do expect the gains from that as we go forward to moderate.
Thanks, <UNK>.
No, there was really very little mix impact.
Very consistent with what we did last year.
Yes, we've been a little bit surprised about the aberrant behavior of the competitors with these back-end rebates.
They've been fairly significant in nature.
They have been relatively unsuccessful in gaining additional sales, but they certainly have been effective at holding existing customers to their product category.
Our reaction has been not to respond in kind.
We think it is disruptive in the marketplace to the rest of the customers, because what happens is everybody is worried about whether or not the next guy is getting a better deal.
When you do a special deal with one customer, how do they know they're getting the best deal.
We give our customers the best deal every day.
And basically, we give them the same pricing formula based on the types of purchases and the way they purchase their product.
Well, we certainly are open to acquisitions.
We are reviewing those alternatives.
I would expect that most acquisitions we would be interested in would be related to outdoor products, and they would be rather modest in size as opposed to transformational acquisitions.
Yes, we've ---+ as we've talked before, the low price of the polyethylene have caused the market to be less receptive to recycled pellets.
In addition, we found that the new blended pellets with the different polymers are taking a little bit longer to get through testing and qualification than what we'd anticipated.
So, yes, I think it's fair to say that we pushed our horizon out a bit.
As a percentage of revenue.
It would be inclusive of that, yes.
Those are generally one-off type of opportunities.
We do have some specific advertising campaigns that are not part of our core advertising that we are doing this year.
But the details of that we really don't convey in advance of those taking place.
The guidance that <UNK> gave you on the share count is the one that you ought to be using at this point.
Typically the way we approach our share repurchases are on a very opportunistic basis.
We announce those at the next quarter's release, and therefore we would not be in a position to communicate that at this point.
It would be ---+ as a percentage of sales it would be flat on a year-over-year basis.
That was for the six months.
For the six months.
That's correct, yes.
Yes.
Basically, what we do is we look at a variety of metrics related to our website activity.
And based on that we developed a view on how we could maximize the benefit from our advertising.
And based on what we were seeing with our Web traffic, we felt that moving that to the second quarter would be more impactful, and that's why it was moved.
The investment for Trex University was in the fourth quarter as well as in the first quarter.
And that was a capital expenditure.
Capital, right.
Not SG&A.
I think it's fair ---+ when you look at SG&A on a full-year basis, we've tended to leverage the additional sales dollars we've had over the past number of years.
We would expect to continue to have some level of leverage on a full-year basis as we go forward.
I wish I could put numbers against the weather piece of it.
In the first quarter it's very difficult to determine the organic outgoing demand specifically related to weather.
We did have a strong early buy.
Our customers all recognized that the market was growing.
They built their inventory so that they could service a higher market this year than last year.
And as <UNK> mentioned in his comments, they are very comfortable with their inventory positions coming out at the end of the first quarter.
Yes, sure.
Price on a full-year basis is going to run around 80 basis points.
<UNK> mentioned that the pellet business was insignificant in the first quarter.
And going into the second quarter, we are expecting continued depressed prices.
So there will be some level of improvement, but again, not a significant driver to the revenue of the Company.
We hope some of the initiatives that we are working on will result in a higher level of sales later on this year.
But it's something that we will speak about further at the end of the second-quarter call.
The vast majority of the benefit of what you're seeing is Trex growth in the decking and railing business, growing in excess of the market, which has been stated to be growing in the low- to mid-single digits.
Yes, we haven't changed any of our guidance on capital spending for the year.
We're still expecting the $20 million to $25 million range for the year.
From a working capital perspective, looking at our numbers historically and adding in adjustments for growth of the Company would be appropriate.
One of the things that you will see ---+ in Q2 and Q3 last year, DSOs were quite high in those two quarters because of the programming that we had put in place.
If you were to model that this year, taking an average of the prior three years of each of the quarters should get you pretty close.
Well, we're certainly very interested in the opening price point typically through the two major retailers.
They do have a bid process that they utilize, and Trex will be very active in that bid process.
So in the first quarter we ran about 10% higher than we did during the prior year.
I don't have the five-year-ago number.
It would be significantly higher from a volume output perspective.
But our efficiencies in our plants have improved so significantly that, honestly, it wouldn't be a particularly good comparator for modeling purposes.
<UNK>, we don't release information on a quarterly basis.
The guidance we've given in the past is last year we were roughly 50%.
And we will be close to 50% on average for this year, as we expect to continue to see improvements in our manufacturing capabilities.
Well, that, in addition to other cost drivers and efficiencies that we have within our operations as well as cost-saving initiatives.
I would like for our operations to continue improving their efficiencies.
We'll continue to grow the Company and stay at the capacity utilization we are today.
We recognize that that isn't always going to be the case, but we do believe that there's additional room for efficiency improvements within our plants.
So we wouldn't have a split specifically for first quarter.
Those growth numbers tend to be over a little bit longer period of time.
So I wouldn't want to hazard a number on what the first quarter was growing.
We don't see any major shift in the market that would say that composites are growing more quickly from a market perspective than the mid-single digits.
The virgin spot market or contract market, excuse me, is running around $0.60 a pound and has pretty well leveled out there; whereas last year around this time, we had already seen quite a bit of drop in that marketplace.
It was around $0.70 a pound.
From a recycled perspective, we buy a lot of different classes of recycled materials.
And it really depends upon the number of buyers, the cleanliness of the products in the marketplace.
It's not as easy to provide just a pure percentage to that.
So we're not going to provide anything further related to the recycled side of it.
Suffice it to say that we are driving down our raw material purchase cost with recycled materials in line with the marketplace.
Ken, as I think you're aware, Trex has ---+ one of its strengths is the development of new and exciting products.
And certainly we continue to see the opportunity for new products and new product introductions to be a strong quality of Trex's growth pattern.
We normally announce any new products at our distributor meeting, which will occur around the first week of November.
So stay tuned shortly after that.
If there are any new products, that's when the Street will hear about them.
Thank you for participating in today's call.
We look forward to seeing you at upcoming events.
And with that, I'll turn the call back over to the operator.
Thank you.
