UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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): January 15, 2009
TREX COMPANY, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-14649 | 54-1910453 | ||
| (State or other jurisdiction of incorporation) |
(Commission File Number) | (IRS Employer 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
(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 8.01. | Other Events |
On January 15, 2009, the Company received a copy of a complaint for a class action lawsuit filed by the law firm Hagens Berman Sobol Shapiro LLP against the Company on behalf of plaintiff, Mark Okano. The complaint alleges certain product defects in the Company’s products, and that the Company has failed to provide adequate remedies for defective products. The case was filed in the United States District Court, Western District of Washington. On January 16, 2009, Hagens Berman issued a press release announcing the filing of the class action lawsuit, a copy of which is attached as Exhibit 99.1 and incorporated herein by reference. The Company reviewed the merits of the claims. Following its review, the Company released the press release attached hereto as Exhibit 99.2, which is incorporated herein by reference.
On January 19, 2009, the Company received service of process of a complaint for a class action lawsuit filed by the law firms of Lieff, Cabraser, Heimann & Bernstein, LLP, and Cohen, Milstead, Hausfeld & Toll, PLLC, on behalf of Eric Ross, Thomas Mabrey, Jr. and Dianna Spalliero. The complaint makes similar allegations to the complaint described in the first paragraph above. The case was filed in the Superior Court of California, Santa Cruz County. The Company reviewed the merits of the claims, and its position is similar to the position it has taken with respect to the complaint described in the first paragraph above.
| Item 9.01 | Financial Statements and Exhibits. |
(d) Trex Company, Inc. herewith files the following exhibits:
| Exhibit |
Description of Exhibit | |
| 99.1 |
Press Release issued by Hagens Berman. FILED HEREWITH. | |
| 99.2 |
Press Release issued by Trex Company, Inc. FILED HEREWITH. | |
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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: January 21, 2009 | /s/ James E. Cline | |||
| James E. Cline | ||||
| Chief Financial Officer | ||||
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Exhibit 99.1
| Press Release | Source: Hagens Berman Sobol Shapiro |
Hagens Berman Files Suit Against Trex Company Over Decking Products
Friday January 16, 2:34 pm ET
Customer claims Trex sold defective product yet refuses to cover replacement costs, violating consumer protection laws.
SEATTLE, Jan. 16 /PRNewswire/ — A Washington homeowner filed a proposed class-action lawsuit against Trex Company, Inc. (NYSE: TWP - News) this week, claiming the nation’s largest manufacturer of wood-alternative decking is selling flawed products, and fails to live up to its guarantee when its products fail.
Mark Okano, a Gig Harbor resident, claims his two-year old deck made entirely from Trex product began degrading, cracking and rotting in July 2008, but the company refuses to reimburse him for the costs associated with repairing the deck — specifically the cost of labor to remove the bad boards and install new ones.
Okano claims in his lawsuit that the company touts its product as superior to alternatives and charges high prices for the premium product, but fails customers in honoring warranties when problems arise. He claims his deck is unsafe and unusable as result of the product’s faulty performance.
“Home maintenance and repairs are an expensive reality of homeownership, but when a company fails to meet its product’s promises and refuses to pay for repairs, customers have a right to fight back,” said Steve Berman lead attorney and managing partner at Hagens Berman Sobol Shapiro.
Okano’s case is not the first time Trex attempted to evade responsibilities to customers, the suit contends. In 2000, Trex faced a similar lawsuit that settled with a provision stating Trex would pay for replacement labor costs in addition to new product.
After the first suit, Trex acknowledged the widespread defects in the product and set aside $45 million in reserve to deal with future losses stemming from the claims of customers for replacement materials.
“This is familiar territory to Trex and we intend to recover damages for our client and other frustrated customers nationwide,” said Berman. “Trex has a legal obligation to honor warranties and by not doing so is showing its true colors and failed commitment to customers.”
Okano claims he received no warranty information when he purchased the product. Once he contacted the company to report his problems, Trex sent a limited warranty document claiming ‘Trex shall not be responsible for costs and expenses incurred with respect to the removal of defective Trex products or the installation of replacement materials, including but not limited to labor and freight.’
After submitting his claim to Trex, Okano received a letter more than six weeks later telling him Trex is committed to resolving the identified conditions. Trex promised to ship 113 boards to his home without any offer to help with labor costs.
In return for the new product, Trex asked Okano to sign a release freeing the company from further liabilities, losses or claims relating to the affected Trex materials or its replacement. It also asked that he keep the settlement confidential and refrain from making any negative or disparaging remarks to third parties.
According to court documents, Okano refused to sign the agreement and rejected the offer for replacement materials.
The lawsuit claims Trex’s warranty documents violate the federal Magnuson-Moss Warranty Act.
The lawsuit seeks to represent consumers nationwide who either purchased or obtained Trex decking material that exhibits defects including peeling, rot, splintering, checks, cracks, decomposition, flaking, bowing, expanding, swelling and more. The proposed class period ranges from Aug. 1, 2004 until present.
The lawsuit names several counts against Trex in addition to the violation of the Magnuson-Moss Warranty Act, including violations of state sales and consumer protection statutes. The suit seeks reform of Trex’s warranty documents, awards for damages under state sales, warranty, consumer protection laws, trebling of damages where permitted, and punitive damages.
To learn more about this case or sign up, please visit http://www.hbsslaw.com/trex.
About Hagens Berman Sobol Shapiro
Hagens Berman Sobol Shapiro is based in Seattle with offices in Chicago, Boston, Los Angeles, Phoenix, San Francisco and New York. Since the firm’s founding in 1993, it has developed a nationally recognized practice in class action and complex litigation. Among recent successes, HBSS has negotiated a pending $300 million settlement as lead counsel in the DRAM memory antitrust litigation; a $340 million recovery on behalf of Enron employees which is awaiting distribution; a $150 million settlement involving charges of illegally inflated charges for the drug Lupron, and served as co-counsel on the Visa/Mastercard litigation which resulted in a $3 billion settlement, the largest anti-trust settlement to date. HBSS also served as counsel in a $850 million settlement in the Washington Public Power Supply litigation and represented Washington and 12 other states in lawsuits against the tobacco industry that resulted in the largest settlement in the history of litigation. For a complete listing of HBSS cases, visit http://www.hbsslaw.com.
CONTACTS:
Steve Berman (206) 623-7292
Hagens Berman Sobol Shapiro
Steve@hbsslaw.com
Mark Firmani (206) 443-9357
Firmani + Associates Inc.
Mark@firmani.com
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Exhibit 99.2
| NEWS RELEASE FOR IMMEDIATE RELEASE |
Contacts: Heather Hahn or Allison Kurtz (Media) | |
| L.C. Williams & Associates | ||
| 800/837-7123 or 312/565-3900 | ||
| hhahn@lcwa.com or akurtz@lcwa.com | ||
| Harriet Fried (Investors) | ||
| Lippert/Heilshorn & Associates | ||
| 212-838-3777 | ||
| hfried@lhai.com | ||
TREX COMPANY RESPONDS TO FILING OF CLASS ACTION LAWSUIT
WINCHESTER, Va. – (BUSINESS WIRE) – January 16, 2009 – Trex Company, Inc. (NYSE: TWP), the nation’s leading manufacturer and distributor of wood alternative decking, railing, fencing and trim, responded to a class action suit filed in Washington by a plaintiffs’ class action law firm alleging certain product defects.
In response to the claims of the case, which focus on product surface flaking, Ronald Kaplan, president and CEO of Trex Company, noted that, “Trex has fully and publicly disclosed that a manufacturing problem affected a small percentage of product manufactured in its Fernley, Nevada plant beginning in 2003. This issue was entirely isolated to parts of the West Coast, only affected a small percentage of Trex decking materials produced in the Nevada plant, and has since been remediated.”
According to Kaplan, Trex took a $45 million warranty reserve in the third quarter of 2007, and has honored – and continues to honor – its warranty with respect to all affected product.
Kaplan further commented, “We believe we have fully met our obligations to our customers and that these claims are completely without merit. These class action firms make their livings initiating speculative lawsuits merely as a way of leveraging settlements that result in large attorneys’ fees awards. We believe we have been wrongfully targeted in this case and, without exception, we stand firmly behind our warranty.”
“We trust the court will recognize this case for what it is – an unconscionable and irresponsible abuse of the legal system,” added Kaplan. “We stand proudly behind our award-winning decking, railing, fencing and trim products and we look forward to having this unnecessary distraction removed so that we can continue to focus on delivering the highest quality products to our valued customers.”
For more information about Trex Company, visit www.trex.com.
About Trex Company
Trex Company is the nation’s largest manufacturer of composite decking, railing, fencing and trim, with over 15 years of product experience. Built on “green” principles and values, Trex makes its products from a unique formulation of reclaimed wood and plastic, combined through a proprietary process. Trex decking, railing, fencing and trim offer significant design flexibility with fewer ongoing maintenance requirements than wood, as well as a truly environmentally responsible choice. In addition, Trex distributes ultra-low maintenance PVC decking under the trademark Trex Escapes® and PVC trim under the trademark Trex Trim™. For more information, visit the Company’s website, www.trex.com. Trex®, Trex Escapes® and Trex Trim™ are trademarks of Trex Company, Inc., Winchester, Va.
The statements in this press 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 obtain raw materials at acceptable prices; the Company’s ability to maintain product quality and product performance at an acceptable cost; the level of expenses associated with product replacement and consumer relations expenses related to product quality; 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 17, 2008 and its subsequent reports on Form 10-Q filed on May 9, 2008, August 6, 2008 and November 4, 2008 discuss 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.
SOURCE: Trex Company