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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 27, 2005
TREX COMPANY, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-14649 54-1910453
(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
160 Exeter Drive
Winchester, Virginia 22603-8605
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (540) 542-6300
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 2.02. Results of Operations and Financial Condition.
On April 27, 2005, Trex Company, Inc. issued a press release announcing
financial results for the quarter ended March 31, 2005. A copy of such press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained in this report on Form 8-K shall not be deemed to
be filed for the purposes of Section 18 of the Securities Exchange Act of 1934
or otherwise subject to the liabilities of that Section.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TREX COMPANY, INC.
Date: April 27, 2005 /s/ Robert G. Matheny
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Robert G. Matheny
Chairman and Chief Executive Officer
EXHIBIT INDEX
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Exhibit Number Exhibit Description
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99.1 Press release dated April 27, 2005
Exhibit 99.1
Trex Company Reports 2005 First Quarter Revenue of $89.9 Million
WINCHESTER, Va.--(BUSINESS WIRE)--April 27, 2005--Trex Company, Inc. (NYSE:
TWP), manufacturer of Trex(R) decking and railing, today announced financial
results for the quarter ended March 31, 2005.
Net sales for the 2005 first quarter totaled $89.9 million, compared to net
sales of $76.3 million for the first quarter of 2004. Net income for the 2005
first quarter totaled $8.4 million, or $0.56 per diluted share, compared to $9.3
million, or $0.63 per diluted share, for the 2004 first quarter.
Chairman and Chief Executive Officer Robert Matheny commented, "As
previously announced, the first quarter of 2005 was more challenging than last
year's due to a variety of factors, such as the higher cost of plastic raw
materials, inclement weather in many parts of the U.S., and costs associated
with the start-up of our newest products. Despite these challenges, we are
pleased with the performance of our marketing and 'early buy' programs, all of
which are designed to sell Trex's products into distribution before the
deck-building season moves into high gear in the spring.
"Our product line-up for 2005 is stronger than ever, and we are very
excited about the wider array of choices we are now offering consumers,
including Trex Brasilia(TM), our premium line of deck boards, trim profiles and
railings, and Trex Artisan Series Railing (TM), which can be used with all types
of decks and porches. Both our channel partners and contractors have responded
very favorably to these new products, as well as to our more established
offerings.
"At the same time, we have been expanding our distribution channels,
increasing the number of dealers through which Trex(R) decking and railing can
be bought, and continuing to build momentum in our newest, mass-merchandising
channel through our agreement with The Home Depot. Our 2005 advertising
campaign, 'Create Your Space(TM), the largest we have ever undertaken, is
driving our brand by demonstrating the creativity and customization that Trex(R)
products allow. In addition, our new manufacturing facility in Olive Branch,
Mississippi, which is designed to fulfill the growing demand for our products
and enable us to serve customers in the South and Midwest more efficiently, will
begin shipping product on schedule in the second quarter. The plant's initial
manufacturing lines will add $50 million to Trex's revenue-generating capacity,
and we are prepared to construct additional lines when needed."
Mr. Matheny concluded, "As the market for composite decking continues to
expand, we believe Trex Company is better positioned than ever to define our
category. We have established the Company as a leader in outdoor living and
design, and, as a result of our many successful marketing, manufacturing and
distribution initiatives, continue to expect net sales and earnings per diluted
share to increase approximately 18% to 22% in 2005."
About Trex Company
Trex Company is the nation's largest manufacturer of composite decking,
which is marketed under the brand name Trex(R). Made from a unique combination
of reclaimed wood and plastic, Trex decking and railing products offer
significant design flexibility with fewer ongoing maintenance requirements. For
more information, visit the Company's website, www.trex.com. Trex(R), Trex
Brasilia(TM) and Trex Artisan Series Railing(TM) are trademarks of Trex Company,
Inc., Winchester, Va.
Note: The Company has scheduled a conference call to discuss first-quarter
2005 results for 11:00 a.m. ET on Thursday, April 28. A live webcast of the
conference call will be available at the Trex Company web site at www.trex.com.
The call will also be simulcast at www.streetevents.com. For those who cannot
listen to the live broadcast, an audio replay of the call will be available on
these web sites for 30 days. A telephone replay of the call will also be
available from 2:00 p.m. ET on April 28 until 11:59 p.m. ET on May 4. To listen
to the telephone replay, dial 800-642-1687 (706-645-9291 outside the U.S.) and
enter conference ID #5380983.
The statements in this news release regarding the Company's expected sales
performance and operating results, its projections of net sales, net income,
earnings per share and costs, its anticipated financial condition and its
business strategy constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These statements are subject to risks and uncertainties
that could cause the Company's actual operating results to differ materially.
Such risks and uncertainties include the extent of market acceptance of the
Company's products, the sensitivity of the Company's business to general
economic conditions, the Company's ability to continue to obtain raw materials
at acceptable prices, the Company's ability to increase production levels to
meet increasing demand for its products, and the highly competitive markets in
which the Company operates. The Company's report on Form 10-K filed with the
Securities and Exchange Commission on March 16, 2005 discusses some of the
important factors that could cause the Company's actual results to differ
materially from those expressed or implied in these forward-looking statements.
The Company expressly disclaims any obligation to update or revise publicly any
forward-looking statements, whether as a result of new information, future
events or otherwise.
TREX COMPANY, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Three Months Ended March 31,
2004 2005
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Net sales $76,257 $89,904
Cost of sales 46,274 56,568
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Gross profit 29,983 33,336
Selling, general and administrative
expenses 14,139 19,416
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Income from operations 15,844 13,920
Interest expense, net (974) (756)
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Income before income taxes 14,870 13,164
Income taxes 5,533 4,760
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Net income $9,337 $8,404
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Diluted earnings per common share $0.63 $0.56
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Diluted weighted average shares
outstanding 14,751,621 14,921,705
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TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
31-Dec-04 31-Mar-05
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $23,925 $362
Restricted cash 20,959 9,299
Accounts receivable 21,964 68,825
Inventories 44,357 38,806
Prepaid expenses and other assets 4,659 5,362
Deferred income taxes 2,975 2,052
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Total current assets 118,839 124,706
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Property, plant and equipment, net 158,389 170,462
Goodwill 6,837 6,837
Debt-related derivatives -- 186
Other assets 2,986 3,045
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Total assets $287,051 $305,236
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $31,296 $35,066
Income taxes payable 200 $2,966
Line of credit -- 2,713
Current portion long-term debt 8,932 8,973
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Total current liabilities 40,428 49,718
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Deferred income taxes 15,808 16,231
Debt-related derivatives 1,736 1,354
Long-term debt, net of current portion 69,565 69,285
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Total liabilities 127,537 136,588
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Stockholders' equity:
Preferred stock, $0.01 par value,
3,000,000 shares authorized; none
issued and outstanding. -- --
Common stock, $0.01 par value,
40,000,000 shares authorized;
14,843,820 and 14,864,446 shares
issued and outstanding at
December 31, 2004 and March 31,
2005 148 149
Additional paid-in capital 60,182 61,258
Deferred compensation (1,259) (1,967)
Accumulated other comprehensive loss (1,098) (737)
Retained earnings 101,541 109,945
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Total stockholders' equity 159,514 168,648
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Total liabilities and
stockholders' equity $287,051 $305,236
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TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended March 31,
2004 2005
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OPERATING ACTIVITIES
Net income $9,337 $8,404
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 3,324 3,496
Other non-cash charges 860 1,989
Changes in operating assets and
liabilities 3,267 (35,477)
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Net cash provided by (used in) operating
activities $16,788 ($21,588)
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INVESTING ACTIVITIES ($2,351) ($4,230)
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FINANCING ACTIVITIES ($72) $2,255
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Net increase (decrease) in cash and cash
equivalents $14,365 $(23,563)
Cash and cash equivalents at beginning
of period $8,151 $23,925
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Cash and cash equivalents at end of
period $22,516 $362
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CONTACT: Trex Company, Inc.
Paul Fletcher, 540-542-6300
or
Lippert/Heilshorn & Associates
Harriet Fried, 212-838-3777