Press Release
<< Back
Trex Company Announces Preliminary Net Sales for 2007
As the Company exited 2007, it became apparent that, due to an aesthetic enhancement made in 2007 to its best-selling deck board, Trex Accents(R), a significant amount of older-generation product remained in inventory at its distributor locations. Although this older-generation product is saleable at a measured rate, the Company decided to take back this inventory so that its 2008 sales and marketing program could focus on a totally consistent product platform.
As a result, while Trex did achieve gross sales for 2007 that were within the range of the net sales guidance it provided on November 29, 2007, net sales were adversely impacted late in the fourth quarter by $7.6 million in distributor credits related to older-generation Trex Accents and a $500 thousand sales revenue reduction that is part of a $1.5 million fourth-quarter increase to the product defect reserve the Company recorded in the third quarter of 2007.
Although the Company expects the difficult business environment that the building materials sector has been experiencing to continue in 2008, it will compete aggressively by continuing to expand Trex's distribution network and by introducing several new and refined products. Recent promising additions to the Company's product line-up include the ultra-low maintenance deck board, Trex Escapes(TM); a PVC-trim product for window and door surrounds and soffits, Trex Trim(TM); a new color for Trex Brasilia(R), its premium rain forest decking offering; and several new railing items to enhance its ability to capture a greater share of the railing sector of the market.
From a cost standpoint, in the second half of 2007, Trex completed its capital program to improve production yields while continuing to enhance the quality of its product offering. Production rates and yields have already showed marked improvement at the higher-quality levels.
President and Chief Executive Officer Ronald W. Kaplan commented, "Since joining Trex last month, I have begun a thorough review of the Company's operations and am identifying a series of actions aimed at returning the Company to strong growth and profitability. While I am very impressed with Trex's outstanding brand, distribution network and the steps already taken to address manufacturing issues, I see many opportunities to improve other facets of the Company's operations. Above all else, our mission must be to deliver industry-leading quality in everything Trex does and to do so in a way that consistently delivers shareholder value."
Fourth-Quarter and Year-end 2007 Conference Call and Webcast Information
Trex will hold a conference call to discuss its 2007 fourth-quarter and year-end results on Tuesday, February 26, 2008 at 10:00 a.m. ET. A live webcast of the conference call will be available to all investors in the Investor Relations section of the Trex Company website at www.trex.com. The call will also be simulcast at www.streetevents.com.
For those who cannot listen to the live broadcast, the webcast will be available on Trex's website for 30 days. A telephone replay of the call will also be available for seven days, beginning at approximately 1:00 p.m. ET on February 26. To listen to the telephone replay, dial 706-645-9291 and enter conference ID #32443266.
About Trex Company
Trex Company is the nation's largest manufacturer of composite decking, railing and fencing, with over 15 years of product experience. Products are marketed under the brand name Trex(R). Made from a unique formulation of reclaimed wood and plastic, combined through a proprietary process, Trex decking, railing and fencing offer significant design flexibility with fewer ongoing maintenance requirements than wood. In addition, Trex distributes ultra-low maintenance PVC decking under the trademark Trex Escapes(TM) and PVC trim under the trademark Trex Trim(TM). For more information, visit the Company's website, www.trex.com. Trex(R) is a trademark 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 April 2, 2007 and its subsequent filings on Form 10-Q and Form 8-K 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, Inc.
Trex Company, Inc.
Anthony J. Cavanna, 540-542-6300
Chief Financial Officer
or
Lippert/Heilshorn & Assoc.
Harriet Fried, 212-838-3777