WEBVTT - Trex's Cline on Alternative Decking: Poised For Growth (Audio) 0:00:03.160 --> 0:00:07.440 Broadcasting live to New York, Bloomberg eleventh Rio to Washington, 0:00:07.560 --> 0:00:12.560 d C. Bloomber to Boston, Bloomberg twelve hundred to San Francisco, 0:00:12.680 --> 0:00:17.680 Bloomberg nine to the countries Channel one nine and around 0:00:17.720 --> 0:00:21.080 the globe the Bloomberg Radio Plus app and Bloomberg Got Gone. 0:00:21.360 --> 0:00:25.000 This is taking Stock. Coming up on taking stock. When 0:00:25.040 --> 0:00:28.760 Americans fix up their homes, they turned to the chief 0:00:28.800 --> 0:00:31.479 executive of the next company will be speaking about treks, 0:00:32.040 --> 0:00:36.520 and you're the inventors of composite decking made from recyclable materials. 0:00:36.560 --> 0:00:39.440 We're gonna tell you all about treks and trends in 0:00:39.600 --> 0:00:42.199 the home remodeled business. We're else can be taking a 0:00:42.200 --> 0:00:44.519 look at the markets and some big eco reports this 0:00:44.560 --> 0:00:48.080 week Pan Manufacturing. That ties right into our guest as well. 0:00:48.360 --> 0:00:50.639 Now let's get to Charlie Pellett. He's in the newsroom 0:00:50.640 --> 0:00:53.680 with a Bloomberg business land and I thank you very much, Kathleen, 0:00:53.800 --> 0:00:56.560 thank you him. Welcome back from Bermuda the DALV SMP 0:00:56.720 --> 0:00:59.600 NEZ back all moving higher. We are brought to you 0:00:59.680 --> 0:01:05.959 by the American Arbitration Association. Business disputes are inevitable, resolve 0:01:06.040 --> 0:01:09.720 faster with the American Arbitration Association, the global leader in 0:01:09.800 --> 0:01:14.119 alternative dispute resolution for over eighty five years. Learn more 0:01:14.360 --> 0:01:18.000 at a d R dot org a rally and Crewe prices, 0:01:18.040 --> 0:01:22.880 boosting energy shares. Apple also jumping after Berkshire Hathaway disclosed 0:01:22.880 --> 0:01:25.759 a stake in the iPhone maker. Apple up now by 0:01:25.920 --> 0:01:28.920 four percent. Oil trading at a six month high, as 0:01:29.000 --> 0:01:32.840 Goldman Sachs said the market moved into a deficit earlier 0:01:32.840 --> 0:01:37.440 than expected following supply disruptions in Nigeria along with an 0:01:37.440 --> 0:01:41.679 increase in demand. Will Kennedy covers oil for Bloomberg News 0:01:41.720 --> 0:01:44.959 in London. In the last few days, Nigeria has been 0:01:44.959 --> 0:01:48.760 the big story. We've seen a resurgance of violence in 0:01:48.800 --> 0:01:52.160 the Niger Delta, where rebels have always wanted to try 0:01:52.200 --> 0:01:54.240 and get more oil revenue out of the central government. 0:01:55.000 --> 0:01:58.160 Right now they've attacked several oil platforms throughout the vision. 0:01:58.200 --> 0:02:00.640 And that's not six hundred thousand piles at a straight 0:02:00.640 --> 0:02:03.760 out of the market taken Niga introduction to twenty a low, 0:02:04.080 --> 0:02:06.960 and remember that comes out of existing atoges in Canada, 0:02:07.000 --> 0:02:09.640 which is still trying to recover from the wildfire in 0:02:09.720 --> 0:02:12.720 Venezuela where the claps. The economy is having an impact, 0:02:12.840 --> 0:02:15.160 and right now crude oil up three and a half percent, 0:02:15.400 --> 0:02:19.200 closer to forty eight dollars now four hired by a 0:02:19.320 --> 0:02:23.720 dollar sixty three on West Texas Intermediate Delta Airlines will 0:02:23.760 --> 0:02:26.680 trim plan growth for the second half of this year 0:02:26.680 --> 0:02:29.760 and delay delivery of four jets as the carrier attempts 0:02:29.960 --> 0:02:33.120 to reverse a revenue decline that has extended more than 0:02:33.160 --> 0:02:35.840 a year. Delta shares up now by three and a 0:02:35.840 --> 0:02:39.040 half percent, Dow indust reels up one night eight, SMP 0:02:39.240 --> 0:02:41.639 up twenty two, and gold up a dollar eight e. 0:02:41.800 --> 0:02:44.280 Now let's look at other news from around the world. 0:02:45.040 --> 0:02:47.960 Thank you Charnie from the Bloomberg news room. I'm Sherry Anne. 0:02:48.360 --> 0:02:50.560 This news update is brought to you by the Jute 0:02:50.560 --> 0:02:54.040 Grand Cherokee, the most awarded suv ever. The Grand Cherokee 0:02:54.120 --> 0:02:57.080 continues to raise the bar with this luxurious interior and 0:02:57.200 --> 0:03:00.959 legendary four by four capability. Drive one at your local 0:03:01.040 --> 0:03:05.520 Qute dealer today. Three Santa Monica, California police officers who 0:03:05.639 --> 0:03:08.720 responded to a deadly rampage at a community college are 0:03:08.720 --> 0:03:12.680 among thirteen law enforcement officers being honored with the medal 0:03:12.720 --> 0:03:16.040 of Valor today. President Obama spoke this morning at a 0:03:16.080 --> 0:03:19.080 ceremony at the White House. The public safety officers we 0:03:19.120 --> 0:03:23.560 recognized today with the Medal of Valor found courage. Not 0:03:23.720 --> 0:03:27.680 in search of recognition, they did it instinctively. In an 0:03:27.680 --> 0:03:30.320 interview on i t v S Good Morning Britain, Donald 0:03:30.360 --> 0:03:33.160 Trump was asked how he felt about the British Prime 0:03:33.160 --> 0:03:36.600 Minister's criticism of his call Front band on Muslims entering 0:03:36.640 --> 0:03:39.440 the US. Well, Number one, I'm not stupid, Okay, I 0:03:39.480 --> 0:03:42.400 can tell you that right now. Just the opposite number 0:03:42.400 --> 0:03:44.240 two in terms of divisive. I don't think I'm a 0:03:44.240 --> 0:03:47.120 divisive person. I'm a unifier. Unlike our president. Now, I'm 0:03:47.120 --> 0:03:50.560 a unifier. A cruise ship has docked in Galveston, Texas 0:03:50.640 --> 0:03:55.000 minus one of its passengers. Samantha Broberg, apparently fell overboard 0:03:55.040 --> 0:03:58.560 from the Carnival Liberty into the Gulf of Mexico early Friday. 0:03:58.800 --> 0:04:01.240 The Coast Guard called off the search after looking for 0:04:01.280 --> 0:04:03.920 the thirty three year old for more than twenty hours. 0:04:04.920 --> 0:04:08.080 Utilities and their labor unions are asking state lawmakers to 0:04:08.200 --> 0:04:11.920 make it a felony when anyone attacks utility workers. They 0:04:11.920 --> 0:04:15.720 say the legislation is necessary as a deterrent, particularly for 0:04:15.760 --> 0:04:18.280 those in the field restoring lost power who are on 0:04:18.440 --> 0:04:21.880 high risk of violence. Global News twenty four hours a day, 0:04:21.880 --> 0:04:24.600 powered by our two hundred journalists in more than a 0:04:24.680 --> 0:04:27.200 hundred and fifty news bureaus around the world. From the 0:04:27.200 --> 0:04:31.719 Bloomberg News Room, I'm sharing an Charlie, and we thank 0:04:31.760 --> 0:04:34.680 you and again recapping S and P five hundred index 0:04:34.760 --> 0:04:37.719 up twenty one points, a gain of one percent. I'm 0:04:37.800 --> 0:04:42.720 Charlie Pellett and that's a Bloomberg business flash. You're listening 0:04:42.720 --> 0:04:45.719 to Taking Stock with Kathleen Hays and Pim Fox on 0:04:45.760 --> 0:04:51.640 Bloomberg Radio. Welcome back to taking Stock. We're going to 0:04:51.720 --> 0:04:56.080 be looking now at an alternative wood decking company. If 0:04:56.080 --> 0:04:58.040 you've put in a new deck lately or tried your 0:04:58.120 --> 0:04:59.880 parent old when, I bet you're thinking, gee, I do 0:05:00.000 --> 0:05:02.400 didn't know this existed, or maybe wishing you'd given a look. 0:05:02.600 --> 0:05:05.720 Jim Klein is President and CEO of Treks. That's t 0:05:05.960 --> 0:05:09.360 R e X located Winchester, Virginia, joining us in our 0:05:09.400 --> 0:05:15.440 studio today. So Jim, welcome, thank you. So alternative wood decking. 0:05:15.520 --> 0:05:17.800 A lot of people have their you know, their pressure 0:05:17.839 --> 0:05:21.400 treated wood. They have their cedar. What is alternative would 0:05:21.440 --> 0:05:27.000 ducking like? Basically? It offers advantages that would can't offer. Uh, 0:05:27.040 --> 0:05:30.960 it requires significantly less maintenance and will last for over 0:05:31.040 --> 0:05:35.960 twenty five years. Is it more expensive? It's a little 0:05:35.960 --> 0:05:39.160 bit more expensive depending on the quality of product you buy. 0:05:39.240 --> 0:05:42.599 It will be about ten to twenty more than a 0:05:42.640 --> 0:05:45.599 pressure treated deck. What does it look like? Uh, it 0:05:45.720 --> 0:05:49.000 will It will look very similar to wood, but it 0:05:49.160 --> 0:05:52.479 is made from recycled paul ours is made from recycled 0:05:52.480 --> 0:05:56.279 polyethylene and sawdust. So the combination of those two give 0:05:56.320 --> 0:06:00.719 a fairly realistic would look to it? Now, just to 0:06:00.760 --> 0:06:04.000 go over the details, right, saw dust, wood palettes, wood chips, 0:06:04.040 --> 0:06:08.760 would fiber then also polyethylene. You just described you want 0:06:08.800 --> 0:06:11.760 to go after not just the market that you've got, 0:06:12.040 --> 0:06:14.640 You want to go after the market that includes the 0:06:14.680 --> 0:06:20.479 traditional all wood planking and decking material. Correct. Absolutely right, 0:06:20.640 --> 0:06:22.440 And and the reason we want to do that is 0:06:22.760 --> 0:06:26.600 eight percent of the lineal feet sold or would either 0:06:26.640 --> 0:06:31.880 pressure treated or hardwoods. Alternative wood products are only about 0:06:31.880 --> 0:06:35.640 six For every one percent we can move to alternative 0:06:35.640 --> 0:06:39.240 wood products, it's fifty million of additional sales to us. 0:06:39.279 --> 0:06:42.760 So you joined Tracks in two thousand eight as the 0:06:42.800 --> 0:06:47.479 CFO chief financial officer. You're now the president and CEO. 0:06:47.640 --> 0:06:49.880 What kind of background did you come from and what 0:06:49.960 --> 0:06:53.960 did you bring? What attracted you two Tracks? Well, prior 0:06:53.960 --> 0:06:56.599 to coming with Tracks, I had worked for the new 0:06:56.680 --> 0:07:01.279 CEO of Tracks for about twenty years, and so I 0:07:01.400 --> 0:07:05.320 had a fair amount of experience in finance. When UH 0:07:05.839 --> 0:07:11.120 the president slot opened up, I was offered the president 0:07:11.200 --> 0:07:15.240 slot of a division of Harscoe Corporation. UH worked there 0:07:15.280 --> 0:07:18.000 for two and a half years, culminated in a sale 0:07:18.000 --> 0:07:22.720 of that division. I found myself retired and I got 0:07:22.720 --> 0:07:25.400 a call from an old boss. He suggested maybe I 0:07:25.480 --> 0:07:29.160 might be interested in working as a CFO for him. 0:07:29.280 --> 0:07:31.400 Right now, what are we talking about? An annual run 0:07:31.520 --> 0:07:34.320 rate I believe of around four hundred and fifty million 0:07:34.360 --> 0:07:37.960 dollars something in that range. And what the net income 0:07:38.040 --> 0:07:42.120 of nearly sixty million? Uh? That's right. Our sales have 0:07:42.200 --> 0:07:44.560 been growing at an average compound growth over the last 0:07:44.640 --> 0:07:50.880 four years. About earnings, Eva daw about thirty. As far 0:07:51.040 --> 0:07:55.600 as the technology that goes into making this h can 0:07:55.600 --> 0:07:59.040 we call it a composite? Would that be accurate? Okay, 0:08:00.040 --> 0:08:02.280 You've got something special, which I believe has to do 0:08:02.320 --> 0:08:04.960 with having invented it at tracks. Does this mean it's 0:08:04.960 --> 0:08:08.800 patent protected? There's no patents on the product we manufacture. 0:08:09.560 --> 0:08:14.200 We are a recycled product. Our deck boards are recycled material. 0:08:14.880 --> 0:08:20.000 Waste polyethylene such as grocery bags, shopping bags, saw dust 0:08:20.040 --> 0:08:24.200 from cabinet and UH flooring manufacturers are combined to make 0:08:24.240 --> 0:08:30.600 our product. So you have longstanding relationships with some of 0:08:30.600 --> 0:08:34.160 the big national retailers like Walmart and Target. What is 0:08:34.200 --> 0:08:37.240 the ambition that you have to for Trecks? Do you 0:08:37.280 --> 0:08:38.520 want to grow? Do you want to get into different 0:08:38.600 --> 0:08:41.240 kinds of products? What are you know where? What's the 0:08:41.480 --> 0:08:44.880 what's your dream? What's your vision? Well, we certainly are 0:08:45.360 --> 0:08:49.240 have our roots UH in recycling, that was the origin 0:08:49.280 --> 0:08:52.600 of the company. But Trecks is a typical manufacturing company. 0:08:52.640 --> 0:08:55.000 We're trying to make the right kind of return for 0:08:55.040 --> 0:08:58.280 our shareholders. So to do that, we believe growth is 0:08:58.320 --> 0:09:00.640 a key component of that. One of the ways we 0:09:00.679 --> 0:09:04.520 get there is by converting people from wood products to 0:09:04.679 --> 0:09:08.040 what alternative products? Do you have any trouble finding skilled workers? 0:09:08.040 --> 0:09:10.240 You know? And and and how about this strong dollar? 0:09:10.280 --> 0:09:12.160 That kind of those kind of macro forces we talk 0:09:12.200 --> 0:09:16.240 about all the time on this show, especially for manufacturers. UH. 0:09:16.480 --> 0:09:20.120 Tricks has manufactured in the United States. We do have 0:09:20.160 --> 0:09:22.440 an international business. It's a little bit less than ten 0:09:22.480 --> 0:09:25.440 percent of our sales. Uh. Certainly that is created a 0:09:25.440 --> 0:09:28.400 head wind because it makes our products more expensive overseas. 0:09:29.480 --> 0:09:32.680 You also have the Transcend product line. Correct, this is 0:09:32.880 --> 0:09:35.600 uh something that you've introduced I guests over the last 0:09:35.600 --> 0:09:40.120 five or six years. Uh, that's correct. The Transcend product 0:09:40.160 --> 0:09:43.280 is a second generation product that offers a much more 0:09:43.360 --> 0:09:47.280 resilient product that requires dramatically less maintenance than any of 0:09:47.320 --> 0:09:53.559 the predecessing products. So uh, in terms of recycling, and 0:09:53.600 --> 0:09:56.840 this is saying that's with the company's roots. Uh, what 0:09:56.920 --> 0:09:59.319 are are you pleased? We haven't been in the industry 0:09:59.360 --> 0:10:01.440 for so long seeing what you're seeing there? Are we? 0:10:01.640 --> 0:10:03.720 Are we doing enough? We're moving enough in the right direction. 0:10:04.720 --> 0:10:06.080 I think we have a long way to go. If 0:10:06.080 --> 0:10:09.240 you look at the amount of waste poly ethylene that's recycled, 0:10:09.280 --> 0:10:12.640 it's a small percentage, So we could all do more 0:10:12.760 --> 0:10:16.560 in the recycling. A lot of people are are not 0:10:16.640 --> 0:10:19.440 as conscious as they should be with regard to going 0:10:19.480 --> 0:10:23.040 to recycling centers and depositing their plastics at recycling centers. 0:10:23.640 --> 0:10:25.760 Thank you very much for spending time with us. Jim 0:10:25.840 --> 0:10:29.400 Klein is the chief executive of Treks, a company. They 0:10:29.400 --> 0:10:33.520 are based in Winchester, Virginia. Thank you, thank you. Shares 0:10:33.600 --> 0:10:36.200 of Treks right now up thirty two cents or forty 0:10:36.240 --> 0:10:39.360 one eighty six cents. The stock is up a little 0:10:39.360 --> 0:10:43.200 bit more than ten percent so far this year. Coming 0:10:43.280 --> 0:10:45.960 up on taking stock, We're we're speaking with Brad McMillan, 0:10:46.040 --> 0:10:50.520 chief investment officer for Commonwealth Financial Network. Find out what 0:10:50.600 --> 0:10:53.600 you should do with your money. That's next right here, 0:10:53.720 --> 0:11:03.240 I'm Doomer Radio. Down day for you, as government bonds, 0:11:03.320 --> 0:11:07.640 as stocks move one percent higher across the board, what 0:11:07.720 --> 0:11:09.880 do you have to be on the lookout for this week? 0:11:09.880 --> 0:11:11.920 We're going to find out, coming up right now on 0:11:11.960 --> 0:11:12.880 Bloomberg Radio.