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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): October 27, 2003
TREX COMPANY, INC.
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(Exact Name of Registrant as Specified in Charter)
Delaware 001-14649 54-1910453
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(State or Other Jurisdiction (Commission File Number) (IRS Employer
of Incorporation) Identification No.)
160 Exeter Drive
Winchester, Virginia 22603-8605
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(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 October 27, 2003, Trex Company, Inc. issued a press release
announcing financial results for the quarter ended September 30, 2003. 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: October 27, 2003 /s/ Robert G. Matheny
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Robert G. Matheny
President and CEO
EXHIBIT INDEX
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Exhibit Number Exhibit Description
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99.1 Press release dated October 27, 2003
Exhibit 99.1
Trex Company Reports Revenue of $41.2 Million, Net Income of $5.1
Million and Earnings Per Share of $0.35 in Third Quarter
WINCHESTER, Va.--(BUSINESS WIRE)--Oct. 27, 2003--Trex Company,
Inc. (NYSE: TWP), manufacturer of Trex(R) decking and railing, today
announced financial results for the third quarter ended September 30,
2003 in line with the revised guidance recently provided by the
Company.
Net sales for the quarter totaled $41.2 million compared to $49.5
million in the third quarter of 2002. Income from operations in the
third quarter of 2003 totaled $9.0 million compared to $10.9 million
in last year's third quarter. Net income in the 2003 quarter totaled
$5.1 million compared to $6.1 million in the same period last year. On
a diluted basis, net income per share for the 2003 quarter was $0.35
per share compared to $0.43 per share for the 2002 quarter.
For the nine months ended September 30, 2003, Trex Company
reported revenues of $169.1 million compared to $147.4 million for the
same period last year. Income from operations in the 2003 nine-month
period totaled $37.2 million compared to $36.2 million in the first
nine months of 2002. Net income totaled $21.8 million, or $1.48 per
diluted share, versus $18.2 million, or $1.26 per diluted share in
2002.
President Robert Matheny commented, "As previously announced, poor
weather conditions, especially along the entire East Coast, restricted
sales growth in the third quarter, while the price of plastic raw
materials adversely affected our costs. We are pursuing several
programs to reduce the delivered cost of plastic to the Trex plant
sites. The rail siding we are planning to construct at our Winchester,
Va. manufacturing site will facilitate the transportation process for
our inbound raw materials as well as reduce transportation costs for
the finished Trex products we ship to our customers.
"In 2004, we expect that our new Trex Accents(TM) decking product
line will stimulate even greater interest in wood composite decking
and, combined with an extensive advertising and promotional campaign,
will contribute to sales growth and enhance the status of the Trex
brand.
"We have continued to pursue commercial and industrial
installations as showcase projects. Most recently, marina
installations using Trex's marina offerings have been specified for
decks at the Washington Sailing Marina in Alexandria, Va. and at the
Paradise Lakes boat docks in Bakersfield, Calif. We are also
experiencing greater success at new home subdivisions all around the
country, where contractors are increasingly installing Trex in their
model homes or offering our decking as an option to new home
purchasers."
About Trex Company
Trex Company is the nation's largest manufacturer of non-wood
decking, which is marketed under the brand name Trex(R). Trex
Wood-Polymer(R) lumber offers an attractive appearance and the
workability of wood without the ongoing need for protective sealants
or repairs. Trex decking and railing is manufactured in a proprietary
process that combines waste wood fibers and reclaimed polyethylene and
is used primarily for residential and commercial decking. The Company
sells its products through approximately 90 wholesale distribution
locations, which in turn sell Trex decking to approximately 3,300
independent contractor-oriented retail lumberyards across the United
States.
For a Trex decking and railing dealer near you, call
1-800-BUY-TREX (289-8739) or for dealers and product details, visit
www.trex.com.
Trex(R) and Trex Wood-Polymer(R) are trademarks of Trex Company,
Inc., Winchester, Va.
Note: The Company has scheduled a conference call to discuss
third-quarter results for 11:00 a.m. ET on Tuesday, October 28. 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 12:00 p.m. ET on October 28 until 12:00 a.m. ET on
November 4. To listen to the telephone replay, dial 800-642-1687
(706-645-9291 outside the U.S.) and enter conference ID #3101931.
The statements in this press release regarding the Company's
expected sales performance and operating results, its projections of
revenues, earnings 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, and the highly competitive markets in which the
Company operates. The Company's report on Form 10-K filed with the
Securities and Exchange Commission on March 19, 2003 discusses some of
the important factors that could cause the Company's actual results to
differ materially from those expressed or implied in these
forward-looking statements. The Company expressly disclaims any
obligation to update or revise publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.
(Tables to follow)
TREX COMPANY, INC.
Condensed Consolidated Statements of Operations
(In thousands, except share and per share data)
(Unaudited)
Quarter Ended September Nine Months Ended
30, September 30,
2002 2003 2002 2003
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Net sales $49,522 $41,224 $147,442 $169,100
Cost of sales 25,069 21,779 78,779 92,999
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Gross profit 24,453 19,445 68,663 76,101
Selling, general and
administrative
expenses 13,546 10,457 32,505 38,919
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Income from operations 10,907 8,988 36,158 37,182
Interest expense, net (1,205) (858) (7,016) (2,655)
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Income before taxes 9,702 8,130 29,142 34,527
Income taxes 3,571 3,008 10,961 12,775
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Net income $6,131 $5,122 $18,181 $21,752
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Diluted earnings per
common share $0.43 $0.35 $1.26 $1.48
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Weighted average
diluted shares
outstanding 14,416,853 14,731,373 14,463,460 14,715,170
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TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
31-Dec-02 30-Sep-03
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(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $14,893 $28,003
Trade accounts receivable 840 13,088
Inventories 22,429 27,533
Prepaid expenses and other assets 1,395 1,643
Deferred income taxes 2,269 2,574
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Total current assets 41,826 72,841
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Property, plant and equipment, net 133,570 137,633
Goodwill, net 6,837 6,837
Other assets 1,323 1,615
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Total assets $183,556 $218,926
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable $10,056 $15,252
Accrued expenses 6,089 4,618
Income taxes payable 114 726
Other current liabilities 638 1,066
Current portion long-term debt 795 888
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Total current liabilities 17,692 22,550
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Deferred income taxes 9,915 13,274
Debt-related derivatives 2,773 2,536
Long-term debt, net of current portion 54,401 53,697
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Total liabilities 84,781 92,057
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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; 14,297,711 and
14,686,981 shares issued and outstanding at
December 31, 2002 and September 30,
2003 143 147
Additional capital 49,354 55,112
Retained earnings 53,397 75,149
Deferred compensation (2,400) (1,972)
Accumulated other comprehensive net loss (1,719) (1,567)
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Total stockholders' equity 98,775 126,869
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Total liabilities and stockholders'
equity $183,556 $218,926
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TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2002 2003
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OPERATING ACTIVITIES
Net income $18,181 $21,752
Adjustments to reconcile net income to net cash
provided by
operating activities:
Depreciation and amortization 6,877 9,206
Other non-cash charges 6,732 3,665
Changes in operating assets and liabilities 29,643 (13,526)
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Net cash provided by operating activities $61,433 $21,097
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INVESTING ACTIVITIES ($2,702) ($13,290)
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FINANCING ACTIVITIES ($28,783) $5,303
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Net increase in cash and cash equivalents $29,948 $13,110
Cash and cash equivalents at beginning of period $- $14,893
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Cash and cash equivalents at end of period $29,948 $28,003
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CONTACT: Trex Company, Inc.
Robert G. Matheny, 540-542-6300
or:
Lippert/Heilshorn & Associates
Harriet Fried / John Heilshorn
212-838-3777