|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
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(Address of principal executive offices) |
(Zip Code) |
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☒ |
Accelerated filer |
☐ | |||
Non-accelerated filer |
☐ |
Smaller reporting company |
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Emerging growth company |
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Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
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Page |
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1 |
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Item 1. |
1 |
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1 |
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2 |
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3 |
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4 |
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5 |
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Item 2. |
18 |
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Item 3. |
27 |
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Item 4. |
27 |
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28 |
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Item 1. |
28 |
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Item 2. |
28 |
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Item 6. |
28 |
Item 1. |
Financial Statements |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Net sales |
$ | |
$ | |
$ | |
$ | |
||||||||
Cost of sales |
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||||||||||||
Gross profit |
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Selling, general and administrative expenses |
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||||||||||||
Income from operations |
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||||||||||||
Interest (income) expense, net |
( |
) | |
( |
) | |
||||||||||
Income before income taxes |
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||||||||||||
Provision for income taxes |
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|
|
|
||||||||||||
Net income |
$ | |
$ | |
$ | |
$ | |
||||||||
Basic earnings per common share |
$ | |
$ | |
$ | |
$ | |
||||||||
Basic weighted average common shares outstanding |
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|
|
|
||||||||||||
Diluted earnings per common share |
$ | |
$ | |
$ | |
$ | |
||||||||
Diluted weighted average common shares outstanding |
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|
|
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||||||||||||
Comprehensive income |
$ | |
$ | |
$ | |
$ | |
||||||||
June 30, 2019 |
December 31, 2018 |
|||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | |
$ | |
||||
Accounts receivable, net |
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|
||||||
Inventories |
|
|
||||||
Prepaid expenses and other assets |
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|
||||||
Total current assets |
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|
||||||
Property, plant and equipment, net |
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|
||||||
Goodwill and other intangibles |
|
|
||||||
Operating lease assets |
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|
||||||
Other assets |
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|
||||||
Total assets |
$ | |
$ | |
||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | |
$ | |
||||
Accrued expenses and other liabilities |
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|
||||||
Accrued warranty |
|
|
||||||
Line of credit |
|
|
||||||
Total current liabilities |
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|
||||||
Operating lease liabilities |
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|
||||||
Deferred income taxes |
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|
||||||
Non-current accrued warranty |
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|
||||||
Other long-term liabilities |
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|
||||||
Total liabilities |
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|
||||||
Commitments and contingencies |
|
|
||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ |
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|
||||||
Common stock, $ |
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|
||||||
Additional paid-in capital |
|
|
||||||
Retained earnings |
|
|
||||||
Treasury stock, at cost, |
( |
) | ( |
) | ||||
Total stockholders’ equity |
|
|
||||||
Total liabilities and stockholders’ equity |
$ | |
$ | |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||
Balance, December 31, 2018 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
||||||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||
Employee stock plans |
|
— |
|
— |
— |
— |
|
||||||||||||||||||||||
Shares withheld for taxes on awards |
( |
) | — |
( |
) | — |
— |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
||||||||||||||||||||||
Repurchases of common stock |
( |
) | — |
— |
— |
|
( |
) | ( |
) | |||||||||||||||||||
Balance, March 31, 2019 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
||||||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||
Employee stock plans |
|
— |
|
— |
— |
— |
|
||||||||||||||||||||||
Shares withheld for taxes on awards |
( |
) | — |
( |
) | — |
— |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
||||||||||||||||||||||
Repurchases of common stock |
( |
) | — |
— |
— |
|
( |
) | ( |
) | |||||||||||||||||||
Balance, June 30, 2019 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Total |
|||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
||||||||||||||||||||||||||
Balance, December 31, 2017 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
||||||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||
Employee stock plans |
|
— |
|
— |
— |
— |
|
||||||||||||||||||||||
Shares withheld for taxes on awards |
( |
) | — |
( |
) | — |
— |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
||||||||||||||||||||||
Repurchases of common stock |
( |
) | — |
— |
— |
|
( |
) | ( |
) | |||||||||||||||||||
Balance, March 31, 2018 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
||||||||||||||||
Net income |
— |
— |
— |
|
— |
— |
|
||||||||||||||||||||||
Employee stock plans |
|
|
|
— |
— |
— |
|
||||||||||||||||||||||
Shares withheld for taxes on awards |
( |
) | — |
( |
) | — |
— |
— |
( |
) | |||||||||||||||||||
Stock-based compensation |
|
|
|
— |
— |
— |
|
||||||||||||||||||||||
Repurchases of common stock |
( |
) | — |
— |
— |
|
( |
) | ( |
) | |||||||||||||||||||
Balance, June 30, 2018 |
|
$ | |
$ | |
$ | |
|
$ | ( |
) | $ | |
Six Months Ended June 30, |
||||||||
2019 |
2018 |
|||||||
Operating Activities |
||||||||
Net income |
$ | |
$ | |
||||
Adjustments to reconcile net income to net cash provided by (used in) operating activities: |
||||||||
Depreciation and amortization |
|
|
||||||
Stock-based compensation |
|
|
||||||
Loss (gain) on disposal of property, plant and equipment |
|
( |
) | |||||
Other non-cash adjustments |
( |
) | ( |
) | ||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( |
) | ( |
) | ||||
Inventories |
|
( |
) | |||||
Prepaid expenses and other assets |
|
( |
) | |||||
Accounts payable |
( |
) | |
|||||
Accrued expenses and other liabilities |
( |
) | ( |
) | ||||
Income taxes receivable/payable |
( |
) | |
|||||
Net cash provided by (used in) operating activities |
|
( |
) | |||||
Investing Activities |
||||||||
Expenditures for property, plant and equipment and intangibles |
( |
) | ( |
) | ||||
Proceeds from sales of property, plant and equipment |
— |
|
||||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Financing Activities |
||||||||
Borrowings under line of credit |
|
|
||||||
Principal payments under line of credit |
( |
) | ( |
) | ||||
Repurchases of common stock |
( |
) | ( |
) | ||||
Proceeds from employee stock purchase and option plans |
|
|
||||||
Net cash used in financing activities |
( |
) | ( |
) | ||||
Net increase (decrease) in cash and cash equivalents |
|
( |
) | |||||
Cash and cash equivalents, beginning of period |
|
|
||||||
Cash and cash equivalents, end of period |
|
$ | |
|||||
Supplemental Disclosure: |
||||||||
Cash paid for interest |
$ | |
$ | |
||||
Cash paid for income taxes, net |
$ | |
$ | |
1 . |
BUSINESS AND ORGANIZATION |
2. |
BASIS OF PRESENTATION |
3. |
RECENTLY ADOPTED ACCOUNTING STANDARDS |
4. |
NEW ACCOUNTING STANDARDS NOT YET ADOPTED |
5. |
INVENTORIES |
|
|
June 30, 2019 |
|
|
December 31, 2018 |
| ||
Finished goods |
$ | |
$ | |
||||
Raw materials |
|
|
||||||
Total FIFO (first-in, first-out) inventories |
|
|
||||||
Reserve to adjust inventories to LIFO value |
( |
) | ( |
) | ||||
Total LIFO inventories |
$ | |
$ | |
6. |
PREPAID EXPENSES AND OTHER ASSETS |
June 30, 2019 |
December 31, 2018 |
|||||||
Revenues in excess of billings |
$ | |
$ | |
||||
Prepaid expenses |
|
|
||||||
Contract retainage |
|
|
||||||
Income tax receivable |
|
|
||||||
Other |
|
|
||||||
Total prepaid expenses and other assets |
$ | |
$ | |
7. |
GOODWILL AND OTHER INTANGIBLE ASSETS |
June 30, 2019 |
December 31, 2018 |
|||||||
Intangible assets: |
||||||||
Customer backlog |
$ | |
$ | |
||||
Trade names and trademarks |
|
|
||||||
Domain names |
|
|
||||||
Total intangible assets |
|
|
||||||
Accumulated amortization: |
||||||||
Customer backlog |
( |
) | ( |
) | ||||
Trade name and trademarks |
( |
) | ( |
) | ||||
Domain names |
( |
) | ( |
) | ||||
Total accumulated amortization |
( |
) | ( |
) | ||||
Intantible assets, net |
$ | |
$ | |
8. |
ACCRUED EXPENSES AND OTHER LIABILITIES |
June 30, 2019 |
December 31, 2018 |
|||||||
Sales and marketing |
$ | |
$ | |
||||
Compensation and benefits |
|
|
||||||
Operating lease liabilities |
|
|
||||||
Customer deposits |
|
|
||||||
Manufacturing costs |
|
|
||||||
Billings in excess of revenues |
|
|
||||||
Other |
|
|
||||||
Total accrued expenses and other liabilities |
$ | |
$ | |
9. |
DEBT |
10. |
LEASES |
Supplemental cash flow information |
||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ | |
||
Operating ROU assets obtained in exchange for lease liabilities |
$ | |
Supplemental balance sheet information (in thousands) |
||||
Operating lease ROU assets |
$ | |
||
Operating lease liabilities: |
||||
Accrued expenses and other current liabilities |
$ | |
||
Operating lease liabilities |
|
|||
Total operating lease liabilities |
$ | |
Maturities of operating lease liabilities |
||||
2019 (excluding the six months ended June 30, 2019) |
$ | |
||
2020 |
|
|||
2021 |
|
|||
2022 |
|
|||
2023 |
|
|||
Thereafter |
|
|||
Total lease payments |
|
|||
Less imputed interest |
( |
) | ||
Total operating liabilities |
$ | 43,913 |
11. |
FINANCIAL INSTRUMENTS |
12. |
STOCKHOLDERS’ EQUITY |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Numerator: |
||||||||||||||||
Net income available to common shareholders |
$ | |
$ | |
$ | |
$ | |
||||||||
Denominator: |
||||||||||||||||
Basic weighted average shares outstanding |
|
|
|
|
||||||||||||
Effect of dilutive securities: |
||||||||||||||||
Stock appreciation rights and options |
|
|
|
|
||||||||||||
Restricted stock |
|
|
|
|
||||||||||||
Diluted weighted average shares outstanding |
|
|
|
|
||||||||||||
Basic earnings per share |
$ | |
$ | |
$ | |
$ | |
||||||||
Diluted earnings per share |
$ | |
$ | |
$ | |
$ | |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Stock appreciation rights |
|
|
|
|
||||||||||||
Performance-based restricted stock units |
— |
|
— |
|
13. |
REVENUE FROM CONTRACTS WITH CUSTOMERS |
Three Months Ended June 30, 2019 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | |
$ | — |
$ | |
||||||
Products transferred over time and fixed price contracts |
— |
|
|
|||||||||
$ | |
$ | |
$ | |
Six Months Ended June 30, 2019 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | |
$ | — |
$ | |
||||||
Products transferred over time and fixed price contracts |
— |
|
|
|||||||||
$ | |
$ | |
$ | |
Three Months Ended June 30, 2018 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | |
$ | — |
$ | |
||||||
Products transferred over time and fixed price contracts |
— |
|
|
|||||||||
$ | |
$ | |
$ | |
Six Months Ended June 30, 2018 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | |
$ | — |
$ | |
||||||
Products transferred over time and fixed price contracts |
— |
|
|
|||||||||
$ | |
$ | |
$ | |
14. |
STOCK-BASED COMPENSATION |
Stock Awards Granted |
Weighted-Average Grant Price Per Share |
|||||||
Time-based restricted stock units |
|
$ | |
|||||
Performance-based restricted stock units (a) |
|
$ | |
|||||
Stock appreciation rights |
|
$ | |
(a) | Includes |
Six Months Ended June 30, 2019 |
Six Months Ended June 30, 2018 |
|||||||
Weighted-average fair value of grants |
$ | |
$ | |
||||
Dividend yield |
|
% | |
% | ||||
Average risk-free interest rate |
|
% | |
% | ||||
Expected term (years) |
|
|
||||||
Expected volatility |
|
% | |
% |
Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
2019 |
2018 |
2019 |
2018 |
|||||||||||||
Stock appreciation rights |
$ | |
$ | |
$ | |
$ | |
||||||||
Time-based restricted stock and restricted stock units |
|
|
|
|
||||||||||||
Performance-based restricted stock and restricted stock units |
|
|
|
|
||||||||||||
Employee stock purchase plan |
|
|
|
|
||||||||||||
Total stock-based compensation |
$ | |
$ | |
$ | |
$ | |
15. |
INCOME TAXES |
16. |
SEGMENT INFORMATION |
• | Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® . Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. Trex Residential net sales were $358.9 million and $344.4 million in the six months ended June 30, 2019 and 2018, respectively. |
• | Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products are marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market. Trex Commercial net sales were $27.1 million and $33.5 million in the six months ended June 30, 2019 and 2018, respectively. |
Three Months Ended June 30, 2019 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net sales |
$ | |
$ | |
$ | |
||||||
Net income |
$ | |
$ | |
$ | |
||||||
EBITDA |
$ | |
$ | |
$ | |
||||||
Depreciation and amortization |
$ | |
$ | |
$ | |
||||||
Income tax expense |
$ | |
$ | |
$ | |
||||||
Capital expenditures |
$ | |
$ | |
$ | |
||||||
Total assets |
$ | |
$ | |
$ | |
|
Three Months Ended June 30, 2019 |
| ||||||||||
|
Trex Residential |
|
|
Trex Commercial |
|
|
Total |
| ||||
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Interest expense (income), net |
|
|
|
|
|
( |
) |
|
|
( |
) | |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Six Months Ended June 30, 2019 |
| ||||||||||
|
Trex Residential |
|
|
Trex Commercial |
|
|
Total |
| ||||
Net sales |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
EBITDA |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Depreciation and amortization |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Income tax expense |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Capital expenditures |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Total assets |
|
$ |
447,725 |
|
|
$ |
88,473 |
|
|
$ |
536,198 |
|
|
Six Months Ended June 30, 2019 |
| ||||||||||
|
Trex Residential |
|
|
Trex Commercial |
|
|
Total |
| ||||
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Interest income, net |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Income tax expense |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
|
Three Months Ended June 30, 2018 |
| ||||||||||
|
Trex Residential |
|
|
Trex Commercial |
|
|
Total |
| ||||
Net sales |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Net income |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
EBITDA |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Depreciation and amortization |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Income tax expense |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Capital expenditures |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Total assets |
|
$ |
|
|
|
$ |
|
|
|
$ |
|
|
Three Months Ended June 30, 2018 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | |
$ | |
$ | |
||||||
Interest expense, net |
|
— |
|
|||||||||
Income tax expense |
|
|
|
|||||||||
Depreciation and amortization |
|
|
|
|||||||||
EBITDA |
$ | |
$ | |
$ | |
Six Months Ended June 30, 2018 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net sales |
$ | |
$ | |
$ | |
||||||
Net income |
$ | |
$ | |
$ | |
||||||
EBITDA |
$ | |
$ | |
$ | |
||||||
Depreciation and amortization |
$ | |
$ | |
$ | |
||||||
Income tax expense |
$ | |
$ | |
$ | |
||||||
Capital expenditures |
$ | |
$ | |
$ | |
||||||
Total assets |
$ | 334,289 |
$ | 80,156 |
$ | 414,445 |
Six Months Ended June 30, 2018 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | |
$ | |
$ | |
||||||
Interest expense, net |
|
— |
|
|||||||||
Income tax expense |
|
|
|
|||||||||
Depreciation and amortization |
|
|
|
|||||||||
EBITDA |
$ | |
$ | |
$ | |
17. |
SEASONALITY |
18. |
COMMITMENTS AND CONTINGENCIES |
Six Months Ended June 30, 2019 |
||||||||||||
Surface Flaking |
Other Residential |
Total |
||||||||||
Beginning balance, January 1 |
$ |
|
$ |
|
$ |
|
||||||
Provisions and changes in estimates |
— |
|
|
|||||||||
Settlements made during the period |
( |
) |
( |
) |
( |
) | ||||||
Ending balance, June 30 |
$ |
|
$ |
|
$ |
|
||||||
Six Months Ended June 30, 2018 |
||||||||||||
Surface Flaking |
Other Residential |
Total |
||||||||||
Beginning balance, January 1 |
$ | |
$ | |
$ | |
||||||
Provisions and changes in estimates |
— |
|
|
|||||||||
Settlements made during the period |
( |
) | ( |
) | ( |
) | ||||||
Ending balance, June 30 |
$ | |
$ | |
$ | |
||||||
Decking |
Our principal decking products are Trex Transcend ® , Trex Enhance® ® . Late in 2018, we re-engineered our Enhance line to provide homeowners with a high-performance, lower-cost deck board designed to compete more directly with wood. Differentiating the Enhance collection is a scalloped profile that is lighter weight for easier handling and installation. Our eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled plastic film and feature a protective polymer shell for enhanced protection against fading, staining, mold and scratching. We also offer Trex Hideaway® , a hidden fastening system for grooved boards. |
Railing |
Our residential railing products are Trex Transcend Railing, Trex Select Railing, Trex Enhance Railing and Trex Signature ® aluminum railing. Trex Transcend Railing is available in the colors of Trex Transcend decking and finishes that make it appropriate for use with Trex decking products as well as other decking materials, which we believe enhances the sales prospects of our railing products. Trex Select Railing is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck. Trex Enhance is available in three colors and is offered through home improvement retailers in kits that contain the top rail, bottom rail, balusters and hardware in one box. Trex Signature aluminum railing, made from a minimum of 50 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. | ||
Fencing |
Our Trex Seclusions ® fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rail, pickets, top rail and decorative post caps. | ||
Steel Deck Framing |
Our triple-coated steel deck framing system called Trex Elevations ® leverages the strength and dimensional stability of steel to create a flat surface for our decking. Trex Elevations provides consistency and reliability that wood does not and is fire resistant. | ||
Outdoor Lighting |
Our outdoor lighting systems are Trex DeckLighting ™ ™ . Trex DeckLighting is a line of energy-efficient LED dimmable deck lighting, which is designed for use on posts, floors and steps. The line includes a post cap light, deck rail light, riser light and a recessed deck light. The Trex LandscapeLighting line includes an energy-efficient well light, path light, multifunction light and spotlight. |
Architectural Railing Systems |
Our architectural railing systems are pre-engineered guardrails with options to accommodate styles ranging from classic and elegant wood top rail combined with sleek stainless components and glass infill, to modern and minimalist stainless cable and rod infill choices. | ||
Aluminum Railing Systems |
Trex Signature ® aluminum railing collection, made from a minimum of 50 percent recycled content, combines superior styling with the unparalleled strength of aluminum – making it an ideal railing choice for a variety of commercial settings. Its straightforward, unobtrusive design features traditional balusters and contemporary vertical rods, and can be installed with continuously graspable rail options for added safety, comfort and functionality. Trex Signature is available in three colors – charcoal black, bronze and classic white – and is available in a variety of stock lengths. | ||
Custom Railing Options |
Trex Commercial can design, engineer and manufacture custom railing systems tailored to the customer’s specific material, style and finish. Many railing styles are achievable, including glass, mesh, perforated railing and cable railing. |
Staging Equipment and Accessories |
Our advanced modular, lightweight custom staging systems include portable platforms, orchestra shells, guardrails, stair units, barricades, camera platforms, VIP viewing decks, ADA infills, DJ booths, pool covers, and other custom applications. Our systems provide superior staging product solutions for facilities and venues with custom needs. Our modular stage equipment is designed to appear seamless, feel permanent, and maximize the functionality of the space. |
• | Repurchase of 125,151 shares of our outstanding common stock during the three months ended June 30, 2019 under our Stock Repurchase Program, for a total of 709,461 shares repurchased under the program to date. |
• | Net cash provided by operating activities of $43.1 million during the six months ended June 30, 2019 compared to net cash used in operating activities of $1.7 million during the six months ended June 30, 2018. |
• | New capital expenditure program to increase production capacity at the Trex Residential facilities in Winchester, Virginia, and Fernley, Nevada, and projected at approximately $200 million between now and 2021. |
Six Months Ended June 30, |
||||||||
2019 |
2018 |
|||||||
Claims open, beginning of period |
2,021 |
2,306 |
||||||
Claims received (1) |
700 |
796 |
||||||
Claims resolved (2) |
(716 |
) | (871 |
) | ||||
Claims open, end of period |
2,005 |
2,231 |
||||||
Average cost per claim (3) |
$ | 2,992 |
$ | 2,663 |
(1) | Claims received include new claims received or identified during the period. |
(2) | Claims resolved include all claims settled with or without payment and closed during the period. |
(3) | Average cost per claim represents the average settlement cost of claims closed with payment during the period. |
Three Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Total net sales |
$ | 206,453 |
$ | 206,692 |
$ | (239 |
) | (0.1 |
)% | ||||||||
Trex Residential net sales |
$ | 193,468 |
$ | 189,201 |
$ | 4,267 |
2.3 |
% | |||||||||
Trex Commercial net sales |
$ | 12,985 |
$ | 17,491 |
$ | (4,506 |
) | (25.8 |
)% |
Three Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Cost of sales |
$ | 123,009 |
$ | 115,577 |
$ | 7,432 |
6.4 |
% | |||||||||
% of total net sales |
59.6 |
% | 55.9 |
% | |||||||||||||
Gross profit |
$ | 83,444 |
$ | 91,115 |
$ | (7,671 |
) | (8.4 |
)% | ||||||||
Gross margin |
40.4 |
% | 44.1 |
% |
Three Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Selling, general and administrative expenses |
$ | 35,705 |
$ | 33,513 |
$ | 2,192 |
6.5 |
% | |||||||||
% of total net sales |
17.3 |
% | 16.2 |
% |
Three Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Provision for income taxes |
$ | 12,030 |
$ | 14,413 |
$ | (2,383 |
) | (16.5 |
)% | ||||||||
Effective tax rate |
25.2 |
% | 25.2 |
% |
Three Months Ended June 30, 2019 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | 35,223 |
$ | 487 |
$ | 35,710 |
||||||
Interest expense (income), net |
6 |
(7 |
) | (1 |
) | |||||||
Income tax expense |
11,866 |
164 |
12,030 |
|||||||||
Depreciation and amortization |
3,258 |
141 |
3,399 |
|||||||||
EBITDA |
$ | 50,353 |
$ | 785 |
$ | 51,138 |
||||||
1 |
EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management evaluates the performance of its reportable segments using several measures, including EBITDA. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, taxes, and depreciation and amortization charges to net income or loss. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company’s reportable segments. |
Three Months Ended June 30, 2018 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | 42,115 |
$ | 704 |
$ | 42,819 |
||||||
Interest expense, net |
369 |
— |
369 |
|||||||||
Income tax expense |
14,178 |
235 |
14,413 |
|||||||||
Depreciation and amortization |
3,277 |
1,289 |
4,566 |
|||||||||
EBITDA |
$ | 59,939 |
$ | 2,228 |
$ | 62,167 |
||||||
Three Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Total EBITDA |
$ | 51,138 |
$ | 62,167 |
$ | (11,029 |
) | (17.7 |
)% | ||||||||
Trex Residential EBITDA |
$ | 50,353 |
$ | 59,939 |
$ | (9,586 |
) | (16.0 |
)% | ||||||||
Trex Commercial EBITDA |
$ | 785 |
$ | 2,228 |
$ | (1,443 |
) | (64.8 |
)% |
Six Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Total net sales |
$ | 386,024 |
$ | 377,899 |
$ | 8,125 |
2.2 |
% | |||||||||
Trex Residential net sales |
$ | 358,947 |
$ | 344,401 |
$ | 14,546 |
4.2 |
% | |||||||||
Trex Commercial net sales |
$ | 27,077 |
$ | 33,498 |
$ | (6,421 |
) | (19.2 |
)% |
Six Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Cost of sales |
$ | 233,214 |
$ | 210,071 |
$ | 23,143 |
11.0 |
% | |||||||||
% of total net sales |
60.4 |
% | 55.6 |
% | |||||||||||||
Gross profit |
$ | 152,810 |
$ | 167,828 |
$ | (15,018 |
) | (9.0 |
)% | ||||||||
Gross margin |
39.6 |
% | 44.4 |
% |
Six Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Selling, general and administrative expenses |
$ | 65,872 |
$ | 62,472 |
$ | 3,400 |
5.4 |
% | |||||||||
% of total net sales |
17.1 |
% | 16.5 |
% |
Six Months Ended June 30, |
$ Change |
% Change |
|||||||||||||||
2019 |
2018 |
||||||||||||||||
(dollars in thousands) |
|||||||||||||||||
Provision for income taxes |
$ | 19,730 |
$ | 24,828 |
$ | (5,098 |
) | (20.5 |
)% | ||||||||
Effective tax rate |
22.7 |
% | 23.7 |
% |
Six Months Ended June 30, 2019 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | 66,478 |
$ | 787 |
$ | 67,265 |
||||||
Interest income, net |
(50 |
) | (7 |
) | (57 |
) | ||||||
Income tax expense |
19,466 |
264 |
19,730 |
|||||||||
Depreciation and amortization |
6,525 |
268 |
6,793 |
|||||||||
EBITDA |
$ | 92,419 |
$ | 1,312 |
$ | 93,731 |
||||||
2 |
EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management evaluates the performance of its reportable segments using several measures, including EBITDA. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, taxes, and depreciation and amortization charges to net income or loss. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company’s reportable segments. |
Six Months Ended June 30, 2018 |
||||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | 79,694 |
$ | 236 |
$ | 79,930 |
||||||
Interest expense, net |
598 |
— |
598 |
|||||||||
Income tax expense |
24,750 |
78 |
24,828 |
|||||||||
Depreciation and amortization |
6,731 |
2,568 |
9,299 |
|||||||||
EBITDA |
$ | 111,773 |
$ | 2,882 |
$ | 114,655 |
||||||
Six Months Ended June 30, |
$ Change |
% Change |
||||||||||||||
2019 |
2018 |
|||||||||||||||
(dollars in thousands) |
||||||||||||||||
Total EBITDA |
$ | 93,731 |
$ | 114,655 |
$ | (20,924 |
) | (18.3 |
)% | |||||||
Trex Residential EBITDA |
$ | 92,419 |
$ | 111,773 |
$ | (19,354 |
) | (17.3 |
)% | |||||||
Trex Commercial EBITDA |
$ | 1,312 |
$ | 2,882 |
$ | (1,570 |
) | (54.5 |
)% |
Six Months Ended June 30, |
||||||||
2019 |
2018 |
|||||||
Net cash provided by (used in) operating activities |
$ | 43,058 |
$ | (1,674 |
) | |||
Net cash used in investing activities |
(19,061 |
) | (17,614 |
) | ||||
Net cash used in financing activities |
(23,612 |
) | (8,325 |
) | ||||
Net increase (decrease) in cash and cash equivalents |
$ | 385 |
$ | (27,613 |
) | |||
Item |
3. Quantitative and Qualitative Disclosures About Market Risk |
Item |
4. Controls and Procedures |
Item |
1. Legal Proceedings |
Item |
2. Unregistered Sales of Equity Securities and Use of Proceeds |
Period |
(a) Total Number of Shares (or Units) Purchased (1) |
(b) Average Price Paid per Share (or Unit) ($) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) |
(d) Maximum number of Shares (or Units) that May Yet Be Purchased Under the Plan or Program |
||||||||||||
April 1, 2019 – April 30, 2019 |
49,510 |
$ | 71.94 |
41,859 |
5,173,831 |
|||||||||||
May 1, 2019 – May 31, 2019 |
53,881 |
$ | 62.40 |
43,612 |
5,130,219 |
|||||||||||
June 1, 2019 – June 30, 2019 |
40,934 |
$ | 68.30 |
39,680 |
5,090,539 |
|||||||||||
Quarterly period ended June 30, 2019 |
144,325 |
125,151 |
||||||||||||||
(1) | Includes shares withheld by, or delivered to, the Company pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s 2014 Stock Incentive Plan allowing the Company to withhold, or the recipient to deliver to the Company, the number of shares having the fair value equal to tax withholding due. |
(2) | On February 16, 2018, the Company’s Board of Directors authorized a common stock repurchase program of up to 5.8 million shares of the Company’s outstanding common stock (Stock Repurchase Program). The Stock Repurchase Program was publicly announced on February 21, 2018. During the three months ended June 30, 2019, the Company repurchased 125,151 shares under the Stock Repurchase Program. |
Item 6. |
Exhibits |
TREX COMPANY, INC. | ||||||
Date: July 29, 2019 |
By: |
/s/ Bryan H. Fairbanks | ||||
Bryan H. Fairbanks | ||||||
Executive Vice President and Chief Financial Officer | ||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit Number |
Exhibit Description | |||
3.1 |
||||
3.2 |
||||
3.3 |
||||
3.4 |
||||
3.5 |
||||
10.1 |
||||
10.2 |
||||
10.3 |
||||
31.1 |
||||
31.2 |
||||
32 |
||||
101.INS |
XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||
101.INS |
XBRL Instance Document. Filed. | |||
101.SCH |
XBRL Taxonomy Extension Schema Document. Filed. | |||
101.CAL |
XBRL Taxonomy Extension Calculation Linkbase Document. Filed. | |||
101.DEF |
XBRL Taxonomy Extension Definition Linkbase Document. Filed. | |||
101.LAB |
XBRL Taxonomy Extension Label Linkbase Document. Filed. | |||
101.PRE |
XBRL Taxonomy Extension Presentation Linkbase Document. Filed. |
** | Management contract or compensatory plan or agreement. |
Exhibit 10.1
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
Trex Company, Inc., a Delaware corporation (the Company), hereby grants stock appreciation rights (SARs) relating to its common stock, $.01 par value, (the Stock) to the Grantee named below, subject to the vesting conditions set forth in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment, and in the Companys 2014 Stock Incentive Plan (the Plan).
Grant Date: | _________________ |
Name of Grantee: | ___________________________________________________ |
Number of SARs: | _________________ |
SAR Grant Price per Share: | $____ |
Vesting Schedule: | Vesting Date | Number of SARs | ||||
Vest 1 | # | |||||
Vest 2 | # | |||||
Vest 3 | # |
Last Date to Exercise: ____________3
By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan, and agree that unless otherwise specifically provided herein, the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Grantee: | ||||
(Signature) | ||||
Company: | ||||
William R. Gupp |
||||
Senior Vice President, General Counsel and Secretary |
This is not a stock certificate or a negotiable instrument.
3 | Certain events can cause an earlier termination of the SAR. See Effects of Changes in Capitalization in the Plan. This date shall be extended for one (1) year in the event your employment terminates due to your death during the tenth year of the term. |
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
STOCK APPRECIATION RIGHTS AGREEMENT
SARs | The SARS are only exercisable before the Last Date to Exercise (noted on the cover sheet) and then only with respect to the vested portion of the SARs. Subject to the preceding sentence, you may exercise the SARs, in whole or in part, by following the procedures set forth in the Plan and below in this Agreement. For the purpose of this Agreement, Service means service as an employee of the Company or any Affiliate or service as Service Provider. | |
Vesting | Your right to exercise the SARs vests as to thirty three and one-third percent (331/3%) of the total number of SARs on each anniversary of the grant, as shown on the cover sheet, provided that you then continue in Service on each such vesting date. The resulting aggregate number of vested SARs will be rounded to the nearest whole number, and you may not vest in more than the number of SARs shown on the cover sheet. | |
Except as otherwise provided herein, no SARs will vest after your Service has terminated for any reason. | ||
Early Vesting | Upon the termination of your Services, other than by reason of your death, Disability, Retirement, or termination by the Company without Cause or at your election with Good Reason, any SARs that have not vested hereunder shall immediately be deemed forfeited and your vested SARs will expire at the close of business at Company headquarters on the 90th day after your termination date (or, if such 90th day is a Saturday, Sunday or holiday, at the close of business on the next preceding day that is not a Saturday, Sunday or holiday); but in any event no later than the Last Date to Exercise. | |
In the event of the termination of your Services because of your death, Disability, or Retirement, any SARs that have not vested hereunder shall immediately become fully vested and will expire at the close of business at Company headquarters on the date five (5) years after your termination date (but not later than the Last Date to Exercise). During that five year period (but not later than the Last Date to Exercise), your or your estate or heirs may exercise your SARs. As a condition to such SARs vesting upon your termination of employment by the Company without Cause or at your election with Good Reason, you must first execute a written release and agreement provided by the Company and not revoke such release and agreement within the time permitted therein for such revocation. | ||
In the event of the termination of your Services by the Company without Cause or at your election with Good Reason, or in the event of a Change in Control, any SARs that have not vested hereunder shall immediately become fully vested and will expire at the close of business at Company headquarters on the 90th day after your termination date or Change in Control, whichever is applicable, (or, if such 90th day is a Saturday, Sunday or holiday, at the close of business on the next preceding day that is not a Saturday, Sunday or holiday); but in any event no later than the Last Date to Exercise. | ||
Cause means one of the following reasons for which your employment with the Company is terminated: (1) Your willful or grossly negligent misconduct that is materially injurious to the Company; (2) Your embezzlement or misappropriation of funds or property of the Company; (3) Your conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony; (4) Your conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the entrance of a plea of guilty or nolo contendere to such a crime; or (5) Your willful failure or refusal by you to devote your full business time (other than on account of disability or approved leave) and attention to the performance of your duties and responsibilities if such breach has not been cured within 15 days after written notice thereof is given to you by the Board of Directors. |
Good Reason shall exist upon: (1) a material and adverse change in your status or position(s) as an officer or management employee of the Company, including, without limitation, any adverse change in your status or position as an employee of the Company as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which are materially inconsistent with such status or position(s) (other than any isolated and inadvertent failure by the Company that is cured promptly upon your giving notice), or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with your termination other than for Good Reason); (2) a 10% or greater reduction in your aggregate base salary and targeted bonus, other than any such reduction proportionately consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company; (3) the failure by the Company to continue in effect any material employee benefit plan (excluding any equity compensation plan) in which you are participating (or plans providing you with similar benefits that are not materially reduced in the aggregate) other than as a result of the normal expiration of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company or any successor which would adversely affect your continued participation in any of such plans on at least as favorable a basis to you or which would materially reduce your benefits under any of such plans; (4) Companys requiring you to be based at an office that is both more than 50 miles from where your office is located and further from your then current residence; or (5) a material breach by the Company of any agreement with you; provided, however, that if any of the conditions exists, you must provide written notice to the Company no more than ninety (90) calendar days following the initial existence of the condition and your intention to terminate your employment for Good Reason. Upon such notice, the Company shall have a period of thirty (30) calendar days during which it may remedy the condition and, if the Company fails to remedy such condition, you terminate your Services within ninety (90) calendar days following such failure. | ||
Change in Control shall have the meaning given to such term in the Change in Control Severance Agreement between you and the Company, provided that in all cases such Change in Control constitutes a change in control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i). | ||
Notwithstanding the foregoing or any other provision herein to the contrary, SARs shall also vest according to the terms and conditions, if so provided, in any separate agreement between you and the Company, including but not limited to any Employment Agreement, Severance Agreement or Change in Control Severance Agreement. | ||
Notice of Exercise | When you wish to exercise this award of SARs, you must notify the Company by filing the proper Notice of Exercise form at the address given on the form. All exercises must take place before, and your SARs will expire on, the Last Date to Exercise (shown on the cover sheet), or such earlier date following your death, disability, retirement or other termination of your service as otherwise provided herein or a Change in Control. Your notice must specify how many SARs you wish to exercise. Your notice must also specify how the shares of Stock received on the exercise of your SARs should be registered (in your name only or in your and your spouses names as joint tenants with right of survivorship). The notice will be effective when it is received by the Company. | |
If someone else wants to exercise the SARs after your death, that person must prove to the Companys satisfaction that he or she is entitled to do so. | ||
Payment for SARs | Upon your exercise of the SARs, the Company will pay you in shares of Stock an amount equal to the positive difference (if any) between the Fair Market Value of a share of Stock on the exercise date and the SAR Grant Price, multiplied by the number of SARs being exercised. Any fractional shares of Stock will be paid to you in cash. |
Withholding Taxes | You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of the exercise of SARs. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the exercise of SARs, the Company shall have the right to require such payments from you, withhold shares that would otherwise have been issued to you under this Agreement or withhold such amounts from other payments due to you from the Company or any Affiliate. | |
Retention Rights | This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your Service at any time and for any reason. | |
Shareholder Rights | You, or your estate or heirs, have no rights as a shareholder of the Company until a certificate for shares of Stock received pursuant to the exercise of your SARS has been issued (or an appropriate book entry has been made). No adjustments are made for dividends or other rights if the applicable record date occurs before your stock certificate is issued (or an appropriate book entry has been made), except as described in the Plan. | |
Adjustments | In the event of a stock split, a stock dividend or a similar change in the Stock, the number of SARs and the SAR Grant Price per share shall be adjusted (and rounded down to the nearest whole number) if required pursuant to the Plan. Your SARs shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. | |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |
The Plan | The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. | |
This Agreement and the Plan constitute the entire understanding between you and the Company regarding the SARs. Any prior agreements, commitments or negotiations concerning the SARs are superseded. | ||
Consent to Electronic Delivery | The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting the SARs you agree that the Company may deliver the Plan prospectus and the Companys annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to, the Company would be pleased to provide copies. Please contact Corporate Human Resources to request paper copies of these documents. |
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
Exhibit 10.2
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
TIME-BASED VESTING
Trex Company, Inc., a Delaware corporation (the Company), hereby grants restricted stock units (RSUs) relating to its common stock, $.01 par value (the Stock), to the Grantee named below, subject to the vesting conditions set forth in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment and in the Companys 2014 Stock Incentive Plan (the Plan).
Grant Date: | ||
Name of Grantee: | ||
Number of RSUs Covered by Grant: | ||
Vesting Schedule: |
Vesting Date |
Number of RSUs | |||
_________, 20___ | # | |||
_________, 20___ | # | |||
_________, 20___ | # |
By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan, and agree that unless otherwise specifically provided herein, the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Grantee: | ||||
(Signature) | ||||
Company: | ||||
William R. Gupp, Senior Vice President, General Counsel and Secretary |
This is not a stock certificate or a negotiable instrument.
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
TIME-BASED VESTING
Restricted Stock Units | This grant is an award of restricted stock units in the number of units set forth on the cover sheet, and subject to the vesting and other conditions described below (the RSUs). Each RSU represents the right to receive one share of Stock, subject to the terms and conditions set forth in this Agreement and the Plan. Your RSUs may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the RSUs be made subject to execution, attachment or similar process. | |
Vesting | Your RSUs will vest as to thirty three and one-third percent (331/3%) of the total number of RSUs covered by this grant, on each anniversary of the grant, as shown on the cover sheet; provided, that you continue to provide services to the Company or a Subsidiary as an employee or a Service Provider (Services) on each such vesting date. The resulting aggregate number of vested RSUs will be rounded to the nearest whole number, and you may not vest in more than the number of RSUs covered by this grant. | |
Delivery | As soon as practicable following the vesting of the RSUs hereunder, the Company will issue to you a share certificate for the shares of Stock to which such vested RSUs relate. In the alternative, the Company may use the book-entry method of share recordation to indicate your share ownership. You will have no further rights with regard to a RSU once the share of Stock related to such RSU has been issued. | |
Early Vesting | Upon the termination of your Services, other than by reason of your death, Disability, Retirement, or termination by the Company without Cause or at your election with Good Reason, any RSUs that have not vested hereunder shall immediately be deemed forfeited. | |
In the event of the termination of your Services because of your death, Disability, Retirement or termination by the Company without Cause or at your election with Good Reason, any RSUs that have not vested hereunder shall immediately become fully vested. (For purposes of clarification, these vesting provisions apply notwithstanding any different vesting provision in the Plan.) As a condition to such RSUs vesting upon your termination of employment by the Company without Cause or at your election with Good Reason, you must first execute a written release and agreement provided by the Company and not revoke such release and agreement within the time permitted therein for such revocation. | ||
Cause means one of the following reasons for which your employment with the Company is terminated: (1) Your willful or grossly negligent misconduct that is materially injurious to the Company; (2) Your embezzlement or misappropriation of funds or property of the Company; (3) Your conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony; (4) Your conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the entrance of a plea of guilty or nolo contendere to such a crime; or (5) Your willful failure or refusal by you to devote your full business time (other than on account of disability or approved leave) and attention to the performance of your duties and responsibilities if such breach has not been cured within 15 days after written notice thereof is given to you by the Board of Directors. |
Good Reason shall exist upon: (1) a material and adverse change in your status or position(s) as an officer or management employee of the Company, including, without limitation, any adverse change in your status or position as an employee of the Company as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which are materially inconsistent with such status or position(s) (other than any isolated and inadvertent failure by the Company that is cured promptly upon your giving notice), or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with your termination other than for Good Reason); (2) a 10% or greater reduction in your aggregate base salary and targeted bonus, other than any such reduction proportionately consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company; (3) the failure by the Company to continue in effect any material employee benefit plan (excluding any equity compensation plan) in which you are participating (or plans providing you with similar benefits that are not materially reduced in the aggregate) other than as a result of the normal expiration of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company or any successor which would adversely affect your continued participation in any of such plans on at least as favorable a basis to you or which would materially reduce your benefits under any of such plans; (4) Companys requiring you to be based at an office that is both more than 50 miles from where your office is located and further from your then current residence; or (5) a material breach by the Company of any agreement with you; provided, however, that if any of the conditions exists, you must provide written notice to the Company no more than ninety (90) calendar days following the initial existence of the condition and your intention to terminate your employment for Good Reason. Upon such notice, the Company shall have a period of thirty (30) calendar days during which it may remedy the condition and, if the Company fails to remedy such condition, you terminate your Services within ninety (90) calendar days following such failure. | ||
In the event of a Change in Control, any RSUs that have not vested hereunder shall immediately become fully vested. Change in Control shall have the meaning given to such term in the Change in Control Severance Agreement between you and the Company, provided that in all cases such Change in Control constitutes a change in control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i). | ||
Notwithstanding the foregoing or any other provision herein to the contrary, RSUs shall also vest according to the terms and conditions, if so provided, in any separate agreement between you and the Company, including but not limited to any Employment Agreement, Severance Agreement or Change in Control Severance Agreement. | ||
Withholding Taxes | You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of vesting in RSUs (including any employment taxes that may become payable if you become eligible for Retirement prior to the end of the performance period for the RSUs) or delivery of Stock acquired under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the vesting in RSUs or delivery of shares arising from this grant, the Company shall have the right to require such payments from you, withhold shares that would otherwise have been issued to you under this Agreement or withhold such amounts from other payments due to you from the Company or any Affiliate. | |
Retention Rights | This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your service with the Company at any time and for any reason. | |
Shareholder Rights | Except as provided in the following paragraph, you do not have any of the rights of a shareholder with respect to the RSUs. | |
If, prior to the vesting date, the Company declares a cash dividend on the Stock, you will be credited with dividend equivalents in an amount determined based on the dividends that you would have received, had you held shares of Stock equal to the vested number of your RSUs from the date of your award to the date of the distribution of shares of Stock following the vesting of your RSUs, and assuming that the dividends were reinvested in Stock (and any dividends on such shares were reinvested in Stock). Any such dividend equivalents will be subject to the same vesting conditions as the shares represented by your RSUs and, in the event of vesting of your RSUs, credited dividend equivalents will be settled as soon as practicable thereafter in cash. |
Adjustments | In the event of a stock split, a stock dividend or a similar change in the Stock, the number of RSUs covered by this grant shall be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your RSUs shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. | |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |
Section 409A | To the extent applicable, the RSUs granted under this Agreement are intended to comply with Section 409A of the Internal Revenue Code and the regulations and other guidance promulgated thereunder (collectively, Section 409A). The provisions of this paragraph shall qualify and supersede all other provisions of this Agreement and the Plan as necessary to fulfill the foregoing intent. In furtherance of the foregoing, any RSUs that accelerate and vest upon a termination of Services hereunder and that are otherwise subject to Section 409A shall accelerate and vest upon such a termination of Services solely if such termination constitutes a separation from service within the meaning of Section 409A. Additionally, if at the time of any such separation from service you are entitled to accelerated vesting of any RSUs granted hereunder and are also a specified employee (within the meaning of Section 409A and as determined by the Company) and such RSUs granted hereunder may not be settled without subjecting you to additional tax, interest and/or penalties under Section 409A, then such RSUs shall accelerate and vest upon your separation from service but shall not settle until the earlier of (i) your death or (ii) the first business day of the seventh (7th) month immediately following your separation from service. For purposes of Section 409A, each tranche of RSUs granted hereunder shall be treated as a separate payment and not as one of a series of payments treated as a single payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). | |
The Plan | The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. | |
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant are superseded. | ||
Consent to Electronic Delivery | The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Companys annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to receive, the Company would be pleased to provide copies. Please contact the Director of Human Resources to request paper copies of these documents. |
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
Exhibit 10.3
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
PERFORMANCE-BASED VESTING
Trex Company, Inc., a Delaware corporation (the Company), hereby grants restricted stock units (RSUs) relating to its common stock, $.01 par value (the Stock), to the Grantee named below, subject to the vesting conditions set forth in the attachment. Additional terms and conditions of the grant are set forth in this cover sheet, in the attachment and in the Companys 2014 Stock Incentive Plan (the Plan).
Grant Date: |
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Name of Grantee: |
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Target Number of RSUs Covered by Grant: |
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Maximum Number of RSUs Covered by Grant: |
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Vesting Schedule: |
Vesting Date |
Target # of RSUs |
Maximum # of RSUs |
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201___ | ||||||||||
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201___ | ||||||||||
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201___ | ||||||||||
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The actual vesting date each year shall be the date of the first regularly scheduled Compensation Committee meeting held in that year.
By signing this cover sheet, you agree to all of the terms and conditions described in the attached Agreement and in the Plan. You acknowledge that you have carefully reviewed the Plan, and agree that unless otherwise specifically provided herein, the Plan will control in the event any provision of this Agreement should appear to be inconsistent.
Grantee: | ||||
(Signature) | ||||
Company: | ||||
William R. Gupp, Senior Vice President, General Counsel and Secretary |
This is not a stock certificate or a negotiable instrument.
TREX COMPANY, INC.
2014 STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AGREEMENT
PERFORMANCE-BASED VESTING
Restricted Stock Units | This grant is an award of up to the maximum number of RSUs set forth on the cover sheet, and subject to the vesting and other conditions described below (the RSUs). Each RSU represents the right to receive one share of Stock, subject to the terms and conditions set forth in this Agreement and the Plan. Your RSUs may not be transferred, assigned, pledged or hypothecated, whether by operation of law or otherwise, nor may the RSUs be made subject to execution, attachment or similar process. | |
Vesting | The actual number of RSUs that will vest each year, if any, will be determined based on the Companys attainment of the performance goals set forth on Schedule A for the time periods indicated; provided that you continue to provide services to the Company or a Subsidiary as an employee or a Service Provider (Services) on each such vesting date. Each year, on the vesting date referred to on the cover sheet, the actual performance multiple, as referred to on the attached Schedule A, shall be applied to the Target # of RSUs set forth on the cover sheet to determine the actual number of RSUs that shall vest (which in no event shall be more than the Maximum Number of RSUs set forth on the cover sheet), with any fractional RSUs being rounded to the nearest whole number. | |
Delivery | As soon as practicable following the vesting of the RSUs hereunder, the Company will issue to you a share certificate for the shares of Stock to which such vested RSUs relate. In the alternative, the Company may use the book-entry method of share recordation to indicate your share ownership. You will have no further rights with regard to a RSU once the share of Stock related to such RSU has been issued. | |
Early Vesting | Upon the termination of your Services, other than by reason of your death, Disability, Retirement, or termination by the Company without Cause or at your election with Good Reason, any RSUs that have not vested hereunder shall immediately be deemed forfeited. | |
In the event of the termination of your Services because of your death, Disability, Retirement, or termination by the Company without Cause or at your election with Good Reason, any RSUs that have not vested hereunder shall immediately become fully vested. (For purposes of clarification, these vesting provisions apply notwithstanding any different vesting provision in the Plan.) As a condition to such RSUs vesting upon your termination of employment by the Company without Cause or at your election with Good Reason, you must first execute a written release and agreement provided by the Company and not revoke such release and agreement within the time permitted therein for such revocation. | ||
Cause means one of the following reasons for which your employment with the Company is terminated: (1) Your willful or grossly negligent misconduct that is materially injurious to the Company; (2) Your embezzlement or misappropriation of funds or property of the Company; (3) Your conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony; (4) Your conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the entrance of a plea of guilty or nolo contendere to such a crime; or (5) Your willful failure or refusal by you to devote your full business time (other than on account of disability or approved leave) and attention to the performance of your duties and responsibilities if such breach has not been cured within 15 days after written notice thereof is given to you by the Board of Directors. |
Early Vesting | Good Reason shall exist upon: (1) a material and adverse change in your status or position(s) as an officer or management employee of the Company, including, without limitation, any adverse change in your status or position as an employee of the Company as a result of a material diminution in your duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to you of any duties or responsibilities which are materially inconsistent with such status or position(s) (other than any isolated and inadvertent failure by the Company that is cured promptly upon your giving notice), or any removal of you from or any failure to reappoint or reelect you to such position(s) (except in connection with your termination other than for Good Reason); (2) a 10% or greater reduction in your aggregate base salary and targeted bonus, other than any such reduction proportionately consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company; (3) the failure by the Company to continue in effect any material employee benefit plan (excluding any equity compensation plan) in which you are participating (or plans providing you with similar benefits that are not materially reduced in the aggregate) other than as a result of the normal expiration of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company or any successor which would adversely affect your continued participation in any of such plans on at least as favorable a basis to you or which would materially reduce your benefits under any of such plans; (4) Companys requiring you to be based at an office that is both more than 50 miles from where your office is located and further from your then current residence; or (5) a material breach by the Company of any agreement with you; provided, however, that if any of the conditions exists, you must provide written notice to the Company no more than ninety (90) calendar days following the initial existence of the condition and your intention to terminate your employment for Good Reason. Upon such notice, the Company shall have a period of thirty (30) calendar days during which it may remedy the condition and, if the Company fails to remedy such condition, you terminate your Services within ninety (90) calendar days following such failure. | |
In the event of a Change in Control, any RSUs that have not vested hereunder shall immediately become fully vested. Change in Control shall have the meaning given to such term in the Change in Control Severance Agreement between you and the Company, provided that in all cases such Change in Control constitutes a change in control event within the meaning of Treasury Regulation Section 1.409A-3(i)(5)(i). | ||
Notwithstanding the foregoing or any other provision herein to the contrary, RSUs shall also vest according to the terms and conditions, if so provided, in any separate agreement between you and the Company, including but not limited to any Employment Agreement, Severance Agreement or Change in Control Severance Agreement. | ||
In the event a RSU vests early (under any circumstance), it shall vest at the Target amount (and not the Maximum amount) (regardless of the amount of the relevant performance period that precedes such event or the level of performance to date). | ||
Withholding Taxes | You agree, as a condition of this grant, that you will make acceptable arrangements to pay any withholding or other taxes that may be due as a result of vesting in RSUs (including any employment taxes that may become payable if you become eligible for Retirement prior to the end of the performance period for the RSUs) or delivery of Stock acquired under this grant. In the event that the Company determines that any federal, state, local or foreign tax or withholding payment is required relating to the vesting in RSUs or delivery of shares arising from this grant, the Company shall have the right to require such payments from you, withhold shares that would otherwise have been issued to you under this Agreement or withhold such amounts from other payments due to you from the Company or any Affiliate. | |
Retention Rights | This Agreement does not give you the right to be retained by the Company in any capacity. The Company reserves the right to terminate your service with the Company at any time and for any reason. | |
Shareholder Rights | Except as provided in the following paragraph, you do not have any of the rights of a shareholder with respect to the RSUs. |
If, prior to the vesting date, the Company declares a cash dividend on the Stock, you will be credited with dividend equivalents in an amount determined based on the dividends that you would have received, had you held shares of Stock equal to the vested number of your RSUs from the date of your award to the date of the distribution of shares of Stock following the vesting of your RSUs, and assuming that the dividends were reinvested in Stock (and any dividends on such shares were reinvested in Stock). Any such dividend equivalents will be subject to the same vesting conditions as the shares represented by your RSUs and, in the event of vesting of your RSUs, credited dividend equivalents will be settled as soon as practicable thereafter in cash. | ||
Adjustments | In the event of a stock split, a stock dividend or a similar change in the Stock, the number of RSUs covered by this grant shall be adjusted (and rounded down to the nearest whole number) pursuant to the Plan. Your RSUs shall be subject to the terms of the agreement of merger, liquidation or reorganization in the event the Company is subject to such corporate activity. | |
Applicable Law | This Agreement will be interpreted and enforced under the laws of the State of Delaware, other than any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of this Agreement to the substantive law of another jurisdiction. | |
Section 409A | To the extent applicable, the RSUs granted under this Agreement are intended to comply with Section 409A of the Internal Revenue Code and the regulations and other guidance promulgated thereunder (collectively, Section 409A). The provisions of this paragraph shall qualify and supersede all other provisions of this Agreement and the Plan as necessary to fulfill the foregoing intent. In furtherance of the foregoing, any RSUs that accelerate and vest upon a termination of Services hereunder and that are otherwise subject to Section 409A shall accelerate and vest upon such a termination of Services solely if such termination constitutes a separation from service within the meaning of Section 409A. Additionally, if at the time of any such separation from service you are entitled to accelerated vesting of any RSUs granted hereunder and are also a specified employee (within the meaning of Section 409A and as determined by the Company) and such RSUs granted hereunder may not be settled without subjecting you to additional tax, interest and/or penalties under Section 409A, then such RSUs shall accelerate and vest upon your separation from service but shall not settle until the earlier of (i) your death or (ii) the first business day of the seventh (7th) month immediately following your separation from service. For purposes of Section 409A, each tranche of RSUs granted hereunder shall be treated as a separate payment and not as one of a series of payments treated as a single payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). | |
The Plan |
The text of the Plan is incorporated in this Agreement by reference. Certain capitalized terms used in this Agreement are defined in the Plan, and have the meaning set forth in the Plan. | |
This Agreement and the Plan constitute the entire understanding between you and the Company regarding this grant of RSUs. Any prior agreements, commitments or negotiations concerning this grant are superseded. | ||
Consent to Electronic Delivery | The Company may choose to deliver certain statutory materials relating to the Plan in electronic form. By accepting this grant you agree that the Company may deliver the Plan prospectus and the Companys annual report to you in an electronic format. If at any time you would prefer to receive paper copies of these documents, as you are entitled to receive, the Company would be pleased to provide copies. Please contact the Director of Human Resources to request paper copies of these documents. |
By signing the cover sheet of this Agreement, you agree to all of the terms and conditions described above and in the Plan.
Exhibit 31.1
CERTIFICATION
I, James E. Cline, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Trex Company, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function(s)): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 29, 2019
/s/ James E. Cline |
James E. Cline |
President and Chief Executive Officer |
(Principal Executive Officer) |
Exhibit 31.2
CERTIFICATION
I, Bryan H. Fairbanks, certify that:
1. | I have reviewed this quarterly report on Form 10-Q of Trex Company, Inc.; |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
4. | The registrants other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. | The registrants other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent function(s)): |
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: July 29, 2019
/s/ Bryan H. Fairbanks |
Bryan H. Fairbanks |
Executive Vice President and Chief Financial Officer (Principal Financial Officer) |
Exhibit 32
Certifications of Chief Executive Officer and Chief Financial Officer
Pursuant to Section 906
of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)
The undersigned, the President and Chief Executive Officer and the Vice President and Chief Financial Officer of Trex Company, Inc. (the Company), each hereby certifies that, on the date hereof:
(a) | the Quarterly Report on Form 10-Q of the Company for the quarterly period ended June 30, 2019 filed on the date hereof with the U.S. Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(b) | information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Date: July 29, 2019 | /s/ James E. Cline | |
James E. Cline | ||
President and Chief Executive Officer | ||
Date: July 29, 2019 | /s/ Bryan H. Fairbanks | |
Bryan H. Fairbanks | ||
Executive Vice President and Chief Financial Officer |