Latest / Bloomberg Intelligence / Trex's Cline on Alternative Decking: Poised For Growth (Audio)

Transcript

Trex's Cline on Alternative Decking: Poised For Growth (Audio) · Bloomberg Intelligence

• 0:03
  Speaker 1: Broadcasting live to New York, Bloomberg eleventh Rio to Washington,
• 0:07
  Speaker 1: d C. Bloomber to Boston, Bloomberg twelve hundred to San Francisco,
• 0:12
  Speaker 1: Bloomberg nine to the countries Channel one nine and around
• 0:17
  Speaker 1: the globe the Bloomberg Radio Plus app and Bloomberg Got Gone.
• 0:21
  Speaker 1: This is taking Stock. Coming up on taking stock. When
• 0:25
  Speaker 1: Americans fix up their homes, they turned to the chief
• 0:28
  Speaker 1: executive of the next company will be speaking about treks,
• 0:32
  Speaker 1: and you're the inventors of composite decking made from recyclable materials.
• 0:36
  Speaker 1: We're gonna tell you all about treks and trends in
• 0:39
  Speaker 1: the home remodeled business. We're else can be taking a
• 0:42
  Speaker 1: look at the markets and some big eco reports this
• 0:44
  Speaker 1: week Pan Manufacturing. That ties right into our guest as well.
• 0:48
  Speaker 1: Now let's get to Charlie Pellett. He's in the newsroom
• 0:50
  Speaker 1: with a Bloomberg business land and I thank you very much, Kathleen,
• 0:53
  Speaker 1: thank you him. Welcome back from Bermuda the DALV SMP
• 0:56
  Speaker 1: NEZ back all moving higher. We are brought to you
• 0:59
  Speaker 1: by the American Arbitration Association. Business disputes are inevitable, resolve
• 1:06
  Speaker 1: faster with the American Arbitration Association, the global leader in
• 1:09
  Speaker 1: alternative dispute resolution for over eighty five years. Learn more
• 1:14
  Speaker 1: at a d R dot org a rally and Crewe prices,
• 1:18
  Speaker 1: boosting energy shares. Apple also jumping after Berkshire Hathaway disclosed
• 1:22
  Speaker 1: a stake in the iPhone maker. Apple up now by
• 1:25
  Speaker 1: four percent. Oil trading at a six month high, as
• 1:29
  Speaker 1: Goldman Sachs said the market moved into a deficit earlier
• 1:32
  Speaker 1: than expected following supply disruptions in Nigeria along with an
• 1:37
  Speaker 1: increase in demand. Will Kennedy covers oil for Bloomberg News
• 1:41
  Speaker 1: in London. In the last few days, Nigeria has been
• 1:44
  Speaker 1: the big story. We've seen a resurgance of violence in
• 1:48
  Speaker 1: the Niger Delta, where rebels have always wanted to try
• 1:52
  Speaker 1: and get more oil revenue out of the central government.
• 1:55
  Speaker 1: Right now they've attacked several oil platforms throughout the vision.
• 1:58
  Speaker 1: And that's not six hundred thousand piles at a straight
• 2:00
  Speaker 1: out of the market taken Niga introduction to twenty a low,
• 2:04
  Speaker 1: and remember that comes out of existing atoges in Canada,
• 2:07
  Speaker 1: which is still trying to recover from the wildfire in
• 2:09
  Speaker 1: Venezuela where the claps. The economy is having an impact,
• 2:12
  Speaker 1: and right now crude oil up three and a half percent,
• 2:15
  Speaker 1: closer to forty eight dollars now four hired by a
• 2:19
  Speaker 1: dollar sixty three on West Texas Intermediate Delta Airlines will
• 2:23
  Speaker 1: trim plan growth for the second half of this year
• 2:26
  Speaker 1: and delay delivery of four jets as the carrier attempts
• 2:29
  Speaker 1: to reverse a revenue decline that has extended more than
• 2:33
  Speaker 1: a year. Delta shares up now by three and a
• 2:35
  Speaker 1: half percent, Dow indust reels up one night eight, SMP
• 2:39
  Speaker 1: up twenty two, and gold up a dollar eight e.
• 2:41
  Speaker 1: Now let's look at other news from around the world.
• 2:45
  Speaker 1: Thank you Charnie from the Bloomberg news room. I'm Sherry Anne.
• 2:48
  Speaker 1: This news update is brought to you by the Jute
• 2:50
  Speaker 1: Grand Cherokee, the most awarded suv ever. The Grand Cherokee
• 2:54
  Speaker 1: continues to raise the bar with this luxurious interior and
• 2:57
  Speaker 1: legendary four by four capability. Drive one at your local
• 3:01
  Speaker 1: Qute dealer today. Three Santa Monica, California police officers who
• 3:05
  Speaker 1: responded to a deadly rampage at a community college are
• 3:08
  Speaker 1: among thirteen law enforcement officers being honored with the medal
• 3:12
  Speaker 1: of Valor today. President Obama spoke this morning at a
• 3:16
  Speaker 1: ceremony at the White House. The public safety officers we
• 3:19
  Speaker 1: recognized today with the Medal of Valor found courage. Not
• 3:23
  Speaker 1: in search of recognition, they did it instinctively. In an
• 3:27
  Speaker 1: interview on i t v S Good Morning Britain, Donald
• 3:30
  Speaker 1: Trump was asked how he felt about the British Prime
• 3:33
  Speaker 1: Minister's criticism of his call Front band on Muslims entering
• 3:36
  Speaker 1: the US. Well, Number one, I'm not stupid, Okay, I
• 3:39
  Speaker 1: can tell you that right now. Just the opposite number
• 3:42
  Speaker 1: two in terms of divisive. I don't think I'm a
• 3:44
  Speaker 1: divisive person. I'm a unifier. Unlike our president. Now, I'm
• 3:47
  Speaker 1: a unifier. A cruise ship has docked in Galveston, Texas
• 3:50
  Speaker 1: minus one of its passengers. Samantha Broberg, apparently fell overboard
• 3:55
  Speaker 1: from the Carnival Liberty into the Gulf of Mexico early Friday.
• 3:58
  Speaker 1: The Coast Guard called off the search after looking for
• 4:01
  Speaker 1: the thirty three year old for more than twenty hours.
• 4:04
  Speaker 1: Utilities and their labor unions are asking state lawmakers to
• 4:08
  Speaker 1: make it a felony when anyone attacks utility workers. They
• 4:11
  Speaker 1: say the legislation is necessary as a deterrent, particularly for
• 4:15
  Speaker 1: those in the field restoring lost power who are on
• 4:18
  Speaker 1: high risk of violence. Global News twenty four hours a day,
• 4:21
  Speaker 1: powered by our two hundred journalists in more than a
• 4:24
  Speaker 1: hundred and fifty news bureaus around the world. From the
• 4:27
  Speaker 1: Bloomberg News Room, I'm sharing an Charlie, and we thank
• 4:31
  Speaker 1: you and again recapping S and P five hundred index
• 4:34
  Speaker 1: up twenty one points, a gain of one percent. I'm
• 4:37
  Speaker 1: Charlie Pellett and that's a Bloomberg business flash. You're listening
• 4:42
  Speaker 1: to Taking Stock with Kathleen Hays and Pim Fox on
• 4:45
  Speaker 1: Bloomberg Radio. Welcome back to taking Stock. We're going to
• 4:51
  Speaker 1: be looking now at an alternative wood decking company. If
• 4:56
  Speaker 1: you've put in a new deck lately or tried your
• 4:58
  Speaker 1: parent old when, I bet you're thinking, gee, I do
• 5:00
  Speaker 1: didn't know this existed, or maybe wishing you'd given a look.
• 5:02
  Speaker 1: Jim Klein is President and CEO of Treks. That's t
• 5:05
  Speaker 1: R e X located Winchester, Virginia, joining us in our
• 5:09
  Speaker 1: studio today. So Jim, welcome, thank you. So alternative wood decking.
• 5:15
  Speaker 1: A lot of people have their you know, their pressure
• 5:17
  Speaker 1: treated wood. They have their cedar. What is alternative would
• 5:21
  Speaker 1: ducking like? Basically? It offers advantages that would can't offer. Uh,
• 5:27
  Speaker 1: it requires significantly less maintenance and will last for over
• 5:31
  Speaker 1: twenty five years. Is it more expensive? It's a little
• 5:35
  Speaker 1: bit more expensive depending on the quality of product you buy.
• 5:39
  Speaker 1: It will be about ten to twenty more than a
• 5:42
  Speaker 1: pressure treated deck. What does it look like? Uh, it
• 5:45
  Speaker 1: will It will look very similar to wood, but it
• 5:49
  Speaker 1: is made from recycled paul ours is made from recycled
• 5:52
  Speaker 1: polyethylene and sawdust. So the combination of those two give
• 5:56
  Speaker 1: a fairly realistic would look to it? Now, just to
• 6:00
  Speaker 1: go over the details, right, saw dust, wood palettes, wood chips,
• 6:04
  Speaker 1: would fiber then also polyethylene. You just described you want
• 6:08
  Speaker 1: to go after not just the market that you've got,
• 6:12
  Speaker 1: You want to go after the market that includes the
• 6:14
  Speaker 1: traditional all wood planking and decking material. Correct. Absolutely right,
• 6:20
  Speaker 1: And and the reason we want to do that is
• 6:22
  Speaker 1: eight percent of the lineal feet sold or would either
• 6:26
  Speaker 1: pressure treated or hardwoods. Alternative wood products are only about
• 6:31
  Speaker 1: six For every one percent we can move to alternative
• 6:35
  Speaker 1: wood products, it's fifty million of additional sales to us.
• 6:39
  Speaker 1: So you joined Tracks in two thousand eight as the
• 6:42
  Speaker 1: CFO chief financial officer. You're now the president and CEO.
• 6:47
  Speaker 1: What kind of background did you come from and what
• 6:49
  Speaker 1: did you bring? What attracted you two Tracks? Well, prior
• 6:53
  Speaker 1: to coming with Tracks, I had worked for the new
• 6:56
  Speaker 1: CEO of Tracks for about twenty years, and so I
• 7:01
  Speaker 1: had a fair amount of experience in finance. When UH
• 7:05
  Speaker 1: the president slot opened up, I was offered the president
• 7:11
  Speaker 1: slot of a division of Harscoe Corporation. UH worked there
• 7:15
  Speaker 1: for two and a half years, culminated in a sale
• 7:18
  Speaker 1: of that division. I found myself retired and I got
• 7:22
  Speaker 1: a call from an old boss. He suggested maybe I
• 7:25
  Speaker 1: might be interested in working as a CFO for him.
• 7:29
  Speaker 1: Right now, what are we talking about? An annual run
• 7:31
  Speaker 1: rate I believe of around four hundred and fifty million
• 7:34
  Speaker 1: dollars something in that range. And what the net income
• 7:38
  Speaker 1: of nearly sixty million? Uh? That's right. Our sales have
• 7:42
  Speaker 1: been growing at an average compound growth over the last
• 7:44
  Speaker 1: four years. About earnings, Eva daw about thirty. As far
• 7:51
  Speaker 1: as the technology that goes into making this h can
• 7:55
  Speaker 1: we call it a composite? Would that be accurate? Okay,
• 8:00
  Speaker 1: You've got something special, which I believe has to do
• 8:02
  Speaker 1: with having invented it at tracks. Does this mean it's
• 8:04
  Speaker 1: patent protected? There's no patents on the product we manufacture.
• 8:09
  Speaker 1: We are a recycled product. Our deck boards are recycled material.
• 8:14
  Speaker 1: Waste polyethylene such as grocery bags, shopping bags, saw dust
• 8:20
  Speaker 1: from cabinet and UH flooring manufacturers are combined to make
• 8:24
  Speaker 1: our product. So you have longstanding relationships with some of
• 8:30
  Speaker 1: the big national retailers like Walmart and Target. What is
• 8:34
  Speaker 1: the ambition that you have to for Trecks? Do you
• 8:37
  Speaker 1: want to grow? Do you want to get into different
• 8:38
  Speaker 1: kinds of products? What are you know where? What's the
• 8:41
  Speaker 1: what's your dream? What's your vision? Well, we certainly are
• 8:45
  Speaker 1: have our roots UH in recycling, that was the origin
• 8:49
  Speaker 1: of the company. But Trecks is a typical manufacturing company.
• 8:52
  Speaker 1: We're trying to make the right kind of return for
• 8:55
  Speaker 1: our shareholders. So to do that, we believe growth is
• 8:58
  Speaker 1: a key component of that. One of the ways we
• 9:00
  Speaker 1: get there is by converting people from wood products to
• 9:04
  Speaker 1: what alternative products? Do you have any trouble finding skilled workers?
• 9:08
  Speaker 1: You know? And and and how about this strong dollar?
• 9:10
  Speaker 1: That kind of those kind of macro forces we talk
• 9:12
  Speaker 1: about all the time on this show, especially for manufacturers. UH.
• 9:16
  Speaker 1: Tricks has manufactured in the United States. We do have
• 9:20
  Speaker 1: an international business. It's a little bit less than ten
• 9:22
  Speaker 1: percent of our sales. Uh. Certainly that is created a
• 9:25
  Speaker 1: head wind because it makes our products more expensive overseas.
• 9:29
  Speaker 1: You also have the Transcend product line. Correct, this is
• 9:32
  Speaker 1: uh something that you've introduced I guests over the last
• 9:35
  Speaker 1: five or six years. Uh, that's correct. The Transcend product
• 9:40
  Speaker 1: is a second generation product that offers a much more
• 9:43
  Speaker 1: resilient product that requires dramatically less maintenance than any of
• 9:47
  Speaker 1: the predecessing products. So uh, in terms of recycling, and
• 9:53
  Speaker 1: this is saying that's with the company's roots. Uh, what
• 9:56
  Speaker 1: are are you pleased? We haven't been in the industry
• 9:59
  Speaker 1: for so long seeing what you're seeing there? Are we?
• 10:01
  Speaker 1: Are we doing enough? We're moving enough in the right direction.
• 10:04
  Speaker 1: I think we have a long way to go. If
• 10:06
  Speaker 1: you look at the amount of waste poly ethylene that's recycled,
• 10:09
  Speaker 1: it's a small percentage, So we could all do more
• 10:12
  Speaker 1: in the recycling. A lot of people are are not
• 10:16
  Speaker 1: as conscious as they should be with regard to going
• 10:19
  Speaker 1: to recycling centers and depositing their plastics at recycling centers.
• 10:23
  Speaker 1: Thank you very much for spending time with us. Jim
• 10:25
  Speaker 1: Klein is the chief executive of Treks, a company. They
• 10:29
  Speaker 1: are based in Winchester, Virginia. Thank you, thank you. Shares
• 10:33
  Speaker 1: of Treks right now up thirty two cents or forty
• 10:36
  Speaker 1: one eighty six cents. The stock is up a little
• 10:39
  Speaker 1: bit more than ten percent so far this year. Coming
• 10:43
  Speaker 1: up on taking stock, We're we're speaking with Brad McMillan,
• 10:46
  Speaker 1: chief investment officer for Commonwealth Financial Network. Find out what
• 10:50
  Speaker 1: you should do with your money. That's next right here,
• 10:53
  Speaker 1: I'm Doomer Radio. Down day for you, as government bonds,
• 11:03
  Speaker 1: as stocks move one percent higher across the board, what
• 11:07
  Speaker 1: do you have to be on the lookout for this week?
• 11:09
  Speaker 1: We're going to find out, coming up right now on
• 11:11
  Speaker 1: Bloomberg Radio.