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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 20, 2004
TREX COMPANY, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-14649 54-1910453
(State or Other Jurisdiction of (Commission File Number) (IRS Employer
Incorporation) Identification No.)
160 Exeter Drive
Winchester, Virginia 22603-8605
(Address of Principal Executive Offices) (ZIP Code)
Registrant's telephone number, including area code: (540) 542-6300
Not Applicable
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(Former Name or Former Address, if Changed Since Last Report)
Item 12. Results of Operations and Financial Condition.
On April 20, 2004, Trex Company, Inc. issued a press release announcing
financial results for the quarter ended March 31, 2004. A copy of such press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
The information contained in this report on Form 8-K shall not be deemed to
be filed for the purposes of Section 18 of the Securities Exchange Act of 1934
or otherwise subject to the liabilities of that Section.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
TREX COMPANY, INC.
Date: April 21, 2004 /s/ Robert G. Matheny
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Robert G. Matheny
Chairman and CEO
EXHIBIT INDEX
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Exhibit Number Exhibit Description
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99.1 Press release dated April 20, 2004
Exhibit 99.1
Trex Company First-Quarter Revenue Up 11%; 2004 Guidance Confirmed
WINCHESTER, Va.--(BUSINESS WIRE)--April 20, 2004--Trex Company,
Inc. (NYSE: TWP), manufacturer of Trex(R) decking and railing, today
announced financial results for the first quarter ended March 31,
2004.
Net sales for the first quarter of 2004 totaled $76.3 million
compared to $68.7 million for the first quarter of 2003. Net income
for the 2004 first quarter totaled $9.3 million, or $0.63 per diluted
share, compared to $10.1 million, or $0.69 per diluted share, for the
2003 first quarter.
Chairman and Chief Executive Officer Robert Matheny commented,
"The year is off to a very strong start for Trex. Although our
expanded 'early buy' program, which now runs through April rather than
March, shifts sales from the first to the second quarter of 2004, we
are extremely pleased with the company's performance to date. In fact,
we exceeded our expectations for the first quarter and believe we are
on track to achieve the $240-$245 million in net sales that we
previously forecast for 2004, which would be an increase of 26%-28%
over 2003's net sales.
"As expected, our first-quarter 2004 earnings were impacted by
increased brand-building activities and sales incentives related to
the promotion of our new Trex Accents(TM) and Trex Origins(TM) decking
products. We achieved our goal of bringing finished goods inventories
down by approximately 38%, although lower production levels compared
to last year's first quarter resulted in the unfavorable absorption of
fixed manufacturing overhead. Again, we are ahead of our expectations
and on target to achieve our previously announced net income guidance
for 2004 of $1.75-$1.80 per diluted share, a 22%-26% increase over
2003's net income."
Mr. Matheny continued, "We view the first four months of the year
as the time to sell our product into distribution, with the ensuing
months dedicated to 'pull through' efforts and restocking the
distribution channel. Our distributors' response to our expanded early
buy program and our textured Trex Accents(TM) product line has been
excellent. Shipments of our new Trex Designer Series Railing(TM), a
line of high-style railing components that match our deck boards, have
begun to reach our dealers, and both our channel partners and
contractors have responded very favorably to the new product. Our
extensive brand building efforts are underway, with ad campaigns both
in print publications and on television, and are helping Trex gain
ever more recognition as the pre-eminent brand franchise in the
decking and related outdoor products market.
"In addition, our recent agreement with The Home Depot, the
world's leading home improvement retailer, represents an exciting
opportunity for Trex to expand the company's distribution channels and
reach a whole new set of consumers and contractors, in the process
dramatically accelerating the conversion from wood to composite
decking. All in all, we expect 2004 to be a very successful year for
our company."
About Trex Company
Trex Company is the nation's largest manufacturer of non-wood
decking, which is marketed under the brand name Trex(R). Trex
Wood-Polymer(R) lumber offers an attractive appearance and the
workability of wood without the ongoing need for protective sealants
or repairs. Trex decking and railing is manufactured in a proprietary
process that combines waste wood fibers and reclaimed polyethylene and
is used primarily for residential and commercial decking. The Company
sells its products through approximately 90 wholesale distribution
locations, which in turn sell Trex decking to approximately 3,300
independent contractor-oriented retail lumberyards across the United
States. In addition, in 2004, the Company's products will be available
in a limited number of Home Depot stores.
For more information on Trex(R) decking and railing products,
visit www.trex.com. Trex(R), Trex Wood-Polymer(R), Trex Accents(TM),
Trex Origins(TM) and Trex Designer Series Railing(TM) are trademarks
of Trex Company, Inc., Winchester, Va.
Note: The Company has scheduled a conference call to discuss
first-quarter 2004 results for 11:00 a.m. ET on Wednesday, April 21. A
live webcast of the conference call will be available to all investors
at the Trex Company web site at www.trex.com. The call will also be
simulcast at www.streetevents.com. For those who cannot listen to the
live broadcast, an audio replay of the call will be available on these
web sites for 30 days. A telephone replay of the call will also be
available from 2:00 p.m. ET on April 21 until 11:59 p.m. ET on April
28. To listen to the telephone replay, dial 800-642-1687 (706-645-9291
outside the U.S.) and enter conference ID #6540617.
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
continue to obtain raw materials at acceptable prices, the Company's
ability to increase production levels to meet increasing demand for
its products, and the highly competitive markets in which the Company
operates. The Company's report on Form 10-K filed with the Securities
and Exchange Commission on March 5, 2004 discusses some of the
important factors that could cause the Company's actual results to
differ materially from those expressed or implied in these
forward-looking statements. The Company expressly disclaims any
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.
TREX COMPANY, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Quarter Ended March 31,
2003 2004
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Net sales $68,678 $76,257
Cost of sales 38,920 46,274
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Gross profit $29,758 $29,983
Selling, general and administrative expenses 12,559 14,139
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Income (loss) from operations 17,199 15,844
Interest expense, net (913) (974)
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Income (loss) before income taxes 16,286 14,870
Income taxes 6,189 5,533
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Net income (loss) $10,097 $9,337
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Diluted earnings per common share $0.69 $0.63
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Weighted average diluted shares outstanding 14,624,823 14,751,621
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TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
31-Dec-03 31-Mar-04
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $8,151 $22,516
Trade accounts receivable 5,829 31,869
Inventories 45,950 30,270
Prepaid expenses and other assets 1,899 1,334
Deferred income taxes 2,169 1,981
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Total current assets 63,998 87,970
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Property, plant and equipment, net 138,062 136,702
Goodwill, net 6,837 6,837
Other assets 1,558 1,429
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Total assets $210,455 $232,938
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable and accrued
expenses $13,297 $21,616
Income tax payable 200 4,576
Current portion long-term debt 886 905
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Total current liabilities 14,383 27,097
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Deferred income taxes 13,174 13,457
Debt-related derivatives 2,202 2,471
Long-term debt, net of current portion 53,490 53,254
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Total liabilities 83,249 96,279
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Stockholders' equity:
Preferred stock, $0.01 par value,
3,000,000 shares authorized; none issued
and outstanding -- --
Common stock, $0.01 par value, 40,000,000
shares authorized; 14,702,231 and
14,708,733 shares issued and outstanding
at December 31, 2003 and March 31, 2004 147 147
Additional paid-in capital 55,889 56,032
Deferred compensation (1,829) (1,687)
Accumulated other comprehensive loss (1,387) (1,556)
Retained earnings 74,386 83,723
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Total stockholders' equity 127,206 136,659
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Total liabilities and
stockholders' equity $210,455 $232,938
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TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Quarter Ended March 31,
2003 2004
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OPERATING ACTIVITIES
Net income $10,097 $9,337
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 3,043 3,324
Other non-cash charges 1,062 860
Changes in operating assets and liabilities 2,671 3,267
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Net cash provided by operating activities $16,873 $16,788
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INVESTING ACTIVITIES ($3,239) ($2,351)
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FINANCING ACTIVITIES $5,113 ($72)
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Net increase (decrease) in cash and cash
equivalents $18,747 $14,365
Cash and cash equivalents at beginning of
period $14,893 $8,151
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Cash and cash equivalents at end of period $33,640 $22,516
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CONTACT: Trex Company, Inc.
Robert G. Matheny, 540-542-6300
Chairman and CEO
or
Lippert/Heilshorn & Associates
Harriet Fried, 212-838-3777