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Trex Company Reports 57% Increase in First Quarter Net Income
WINCHESTER, Va., Apr 23, 2003 (BUSINESS WIRE) -- Trex Company, Inc. (NYSE: TWP), manufacturer of Trex(R) decking and railing, today announced financial results for the first quarter ended March 31, 2003.
Net sales for the quarter were a record $68.7 million, which represented an increase of 32% over the $52.0 million reported for the first quarter of 2002. Net income for the quarter increased 57% to $10.1 million from the $6.4 million recorded in the first quarter of 2002. On a fully diluted per share basis, net income for the quarter was $0.69 per share versus $0.45 per share in 2002.
Trex Company President Robert Matheny commented, "Our goal at Trex has always been to create a better product, tell people about it, and make it easy to buy. During the first quarter of 2003, progress on all three fronts was reflected in our strong financial performance. Demand for our product was strong during the first quarter early buy period and our two new production lines ran at full capacity. We are in the process of installing two additional manufacturing lines (bringing the total to nineteen), with start-ups scheduled for this summer. This will bring our annual revenue generating capacity to above $250 million. In addition, this year we are instituting the most compelling advertising and marketing program in our history, all aimed at defining the decking category, Trex. Finally, we have strengthened our sales force, are enlarging our dealer base, and are significantly expanding our TrexPro(TM) initiative, which matches homeowners interested in Trex decking and railing with experienced contractors in their area."
"Based on these developments and trends, we expect that 2003's second quarter revenue will be between $55 and $57 million, resulting in earnings of $0.42 to $0.44 per fully diluted share. In the second quarter of 2003, SG&A expenses will be up significantly over those of 2002's second quarter, primarily to support our extensive marketing communication program. For the full year 2003, our expectation is that revenue will exceed $200 million, with earnings of between $1.63 to $1.66 per fully diluted share. Previous guidance for gross profit and SG&A as a percent of revenue remains the same.
About Trex Company
Trex Company is the nation's largest manufacturer of non-wood decking, which is marketed under the brand name Trex(R). Trex Wood-Polymer(R) lumber offers an attractive appearance and the workability of wood without the ongoing need for protective sealants or repairs. Trex decking and railing is manufactured in a proprietary process that combines waste wood fibers and reclaimed polyethylene and is used primarily for residential and commercial decking. The Company sells its products through approximately 90 wholesale distribution locations, which in turn sell Trex decking to approximately 3,300 independent contractor-oriented retail lumberyards across the United States.
For a Trex decking and railing dealer near you, call 1-800-BUY-TREX (289-8739) or for dealers and product details, visit www.trex.com.
Trex(R) and Trex Wood-Polymer(R) are trademarks of Trex Company, Inc., Winchester, Va.
Note: The Company has scheduled a conference call to discuss first-quarter results for 11:00 a.m. EDT on April 24. A live webcast of the conference call will be available to all investors 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. EDT on April 24 until 2:00 p.m. EDT on May 1. To listen to the telephone replay, dial 800-642-1687 or 706-645-9291 and enter reservation number 9696983.
The statements in this press release regarding the Company's expected sales performance and operating results, its projections of revenues and earnings, 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, 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 19, 2003 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 data)
(Unaudited)
Three Months Ended
March 31,
2002 2003
----------------------
Net sales $51,996 $68,678
Cost of sales 32,034 38,920
----------------------
Gross profit 19,962 29,758
Selling, general and administrative expenses 7,136 12,559
----------------------
Income (loss) from operations 12,826 17,199
Interest expense, net (2,470) (913)
----------------------
Income (loss) before taxes 10,356 16,286
Income taxes 3,936 6,189
----------------------
Net income (loss) $6,420 $10,097
======================
Fully diluted earnings (loss) per common
share. $0.45 $0.69
======================
Weighted average fully diluted shares
outstanding 14,373,248 14,624,823
======================
TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
31-Dec-02 31-Mar-03
--------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $14,893 $33,640
Trade accounts receivable 840 13,913
Inventories 22,429 12,494
Prepaid expenses and other assets 1,395 2,091
Deferred income taxes 2,269 2,042
--------- -----------
Total current assets 41,826 64,180
--------- -----------
Property, plant and equipment, net 133,570 133,750
Intangible assets, net 6,837 6,837
Other 1,323 1,165
--------- -----------
Total assets $183,556 $205,932
========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $10,056 $13,641
Accrued expenses 6,089 3,560
Income taxes payable 114 5,181
Other current liabilities 638 1,020
Current portion long-term debt 795 857
--------- -----------
Total current liabilities 17,692 24,259
--------- -----------
Deferred income taxes 9,915 10,450
Debt-related derivatives 2,773 2,731
Mortgages 14,401 14,137
Long-term debt 40,000 40,000
--------- -----------
Total liabilities 84,781 91,577
--------- -----------
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; 14,297,711 and 14,654,453
shares issued and outstanding at December
31, 2002 and March 31, 2003 143 147
Additional capital 49,354 54,665
Retained earnings 53,397 63,494
Deferred compensation (2,400) (2,258)
Accumulated other comprehensive net loss (1,719) (1,693)
--------- -----------
Total stockholders' equity 98,775 114,355
--------- -----------
Total liabilities and stockholders'
equity $183,556 $205,932
========= ===========
TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2002 2003
-----------------
OPERATING ACTIVITIES
Net income $6,420 $10,097
Adjustments to reconcile net income to net cash
provided by
operating activities:
Depreciation and amortization 3,538 3,269
Other non-cash charges 524 836
Changes in operating assets and liabilities 11,918 2,671
Net cash provided by operating activities $22,400 $16,873
-----------------
INVESTING ACTIVITIES ($770)($3,239)
-----------------
FINANCING ACTIVITIES ($21,630) $5,113
-----------------
Net increase in cash and cash equivalents $- $18,747
Cash and cash equivalents at beginning of period - 14,893
-----------------
Cash and cash equivalents at end of period $- $33,640
=================
Trex Company, Inc. Robert G. Matheny, 540-542-6300 or Lippert/Heilshorn & Associates John Nesbett Harriet Fried 212/838-3777
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