CPG International Inc. Posts Second Quarter Results

SCRANTON, Pa., Aug. 6 /PRNewswire/ --CPG International Inc. (CPG) a leading manufacturer of premium, low maintenance building products for residential, commercial, and industrial markets today announced second quarter 2010 financial results.  CPG's products include AZEK Trim, AZEK Deck, AZEK Porch, AZEK Moulding, and AZEK Rail for residential housing markets; bathroom and locker systems sold under the brand names Comtec Industries, Hiny Hider and TuffTec, used in commercial building markets; and Vycom which extrudes plastic sheet products under the names of Celtec, Seaboard® and Flametec® and other non-fabricated products for special applications in industrial markets.

Second Quarter Highlights

• Second quarter sales were $85.7 million, up 37.5% from the second quarter 2009.  64.3% revenue growth at AZEK Deck, Rail and Trim and 74.3% volume growth at Vycom offset softness in the commercial market.
• Gross margin decreased to 30.9% from 35.6% in the second quarter of 2009 driven primarily by higher material costs.
• Net income was $2.8 million for the second quarter of 2010, compared to $0.1 million in the second quarter of 2009.  
• EBITDA increased to $16.6 million in the second quarter of 2010.  Adjusted EBITDA was $17.3 million in the second quarter of 2010, up from $14.5 million in the second quarter of 2009.  

Year-to-Date Highlights

• Sales for the first six months of 2010 were $180.4 million, up 25.5% from 2009.  Revenue growth at AZEK Deck, driven by new product offerings and a stabilizing residential repair and remodel market, and volume growth at Vycom offset softness in the commercial market.
• Gross margin decreased to 31.1% in the first six months of 2010 from 34.9% driven primarily by higher material costs.
• Net income was $6.0 million for 2010, compared to a net loss of $(7.0) million in 2009.  
• EBITDA increased to $36.7 million year-to-date in 2010.  Adjusted EBITDA was $38.5 million in the first six months of 2010, up from $35.5 million in the first six months of 2009.

"We are very excited about our second quarter results," commented Eric Jungbluth, CPG's President and Chief Executive Officer.  "Our new product initiatives and marketing efforts continue to differentiate us in the market place and are accelerating the conversion to our lower maintenance product offering."

EBITDA Guidance

(See the accompanying financial schedules for full financial details and a reconciliation of non-GAAP financial measures to their GAAP equivalents.)

CPG raised earnings guidance for 2010 with Adjusted EBITDA guidance of $57 million to $67 million.  Scott Harrison, Executive Vice President and Chief Financial Officer, said "Based on our second quarter results, we are slightly increasing our Adjusted EBITDA guidance for the year.  We continue to expect revenue growth driven by new products and marketing initiatives, being partially offset by higher material costs and a challenging commercial market.  To help meet the demand for growth with AZEK Deck, we are increasing the expected range for capital expenditures in 2010 to $15 million to $20 million."

Investor Call

CPG will hold an investor conference call to discuss Second Quarter 2010 financial results at 9 AM Eastern time on Friday, August 6, 2010.  Eric Jungbluth, President and Chief Executive Officer and Scott Harrison, Executive Vice President and Chief Financial Officer, will host the call.

To access the conference call, please dial (866) 863-6818, and use conference ID code 80981126.  An encore presentation will be available for one week after the completion of the call.  In order to access the encore presentation, please dial (800) 642-1687 or (706) 645-9291, and use the conference ID code 80981126.

Forward-looking Statements

Statements in this investor release and the schedules hereto which are not purely historical facts or which necessarily depend upon future events, including statements about forecasted financial performance, guidance or other statements about anticipations, beliefs, expectations, hopes, intentions or strategies for the future, may be forward-looking statements within the meaning of Section 21E of the Securities and Exchange Act of 1934, as amended.  Readers are cautioned not to place undue reliance on forward-looking statements.  All forward-looking statements are based upon information available to CPG on the date this release was submitted.  CPG undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.  Any forward-looking statements involve risks and uncertainties that could cause actual events or results to differ materially from the events or results described in the forward-looking statements, including risks or uncertainties related to CPG's revenues and operating results being highly dependent on, among other things, the homebuilding industry, the commercial building industry, raw material prices, competition, the economy and the financial markets.  CPG may not succeed in addressing these and other risks.  Further information regarding factors that could affect our financial and other results can be found in the risk factors section of CPG's most recent annual report on Form 10-K and quarterly report on Form 10-Q filed with the Securities and Exchange Commission.  Consequently, all forward-looking statements in this release are qualified by the factors, risks and uncertainties contained therein.

About CPG International

Headquartered in Scranton, Pennsylvania, CPG International is a manufacturer of market-leading brands of highly engineered, premium, low-maintenance, building products for residential and commercial markets designed to replace wood, metal and other traditional materials in a variety of construction applications.  The Company's products are marketed under several brands including AZEK® Trim and Moulding, AZEK® Deck, AZEK® Rail, Santana Products, Comtec Industries, Capitol, TuffTec™, Hiny Hider® and Celtec®, as well as many other brands.  For additional information on CPG please visit our web site at www.cpgint.com.

SOURCE CPG International Inc.