Trex Company Completes Year of Strong Growth; 2004 Revenue Increases 33%, EPS up 28%.WINCHESTER Winchester, town, EnglandWinchester (wĭn`chĭstər), town (1991 pop. 34,127) and district, county seat of Hampshire, S central England. , Va. -- Trex Company, Inc. (NYSE NYSE See: New York Stock Exchange : TWP TWP Township TWP The Washington Post TWP Tropical Western Pacific TWP True Whig Party (political party in Liberia from 1878-1980) TWP Thomas Weisel Partners Group, Inc. ), manufacturer of Trex(R) decking decking multiple decks in animal accommodation or transportation facilities. Common for young animals, chiefly piglets, commercial poultry, laboratory animals, cats and dogs. and railing, today announced financial results for the fourth quarter and fiscal year ended December December: see month. 31, 2004. Net sales Net Sales The amount a seller receives from the buyer after costs associated with the sale are deducted. Notes: This amount is calculated by subtracting the following items from gross sales: merchandise returned for credit, allowances for damaged or missing goods, freight for the 2004 fourth quarter totaled $29.6 million compared to $21.9 million for the 2003 fourth quarter. The net loss decreased to $0.4 million, or $0.02 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share, for the 2004 fourth quarter from a net loss of $0.8 million, or $0.05 per diluted share, for the 2003 fourth quarter. Chairman and Chief Executive Officer Robert Robert, Henry Martyn 1837-1923. American army engineer and parliamentary authority. He designed the defenses for Washington, D.C., during the Civil War and later wrote Robert's Rules of Order (1876). Noun 1. Matheny commented, "Trex Company typically reports a loss in the fourth quarter due to the highly seasonal nature of deck (1) The part of a magnetic tape unit that holds and moves the tape reels. The term may refer to any equipment that serves as a physical framework for electronic or mechanical devices. See rack. See also DEC. installations, whose peak periods occur from late winter through September September: see month. . As is usual in the fourth quarter, we built product inventory to prepare for the heavy demand we anticipate during the upcoming peak season. During the period, our cost of sales was negatively affected by the higher cost of plastic raw materials." For the full 2004 year, Trex Company reported net sales of $253.6 million compared to $191.0 million for 2003, which represents an increase of 33%. Net income increased 29% to $27.2 million, or $1.83 per diluted share, from net income of $21.0 million, or $1.43 per diluted share, for 2003. Mr. Matheny continued, "As our financial results clearly demonstrate, 2004 was a successful year for Trex. As the demand for composite composite, alternate common name for Asteraceae or Compositae, the aster family. composite - aggregate decking and railing products continued to grow, we took steps to expand our market leadership position. We introduced a series of products - Trex Origins(TM), Trex Accents(TM), and Trex Designer Series Railing(TM) - that have been well accepted by the market. In fact, Trex Accents(TM) has already established itself as the leading wood grain-textured deck board in the composite market. We launched a relationship with The Home Depot The Home Depot (NYSE: HD) is an American retailer of home improvement and construction products and services. Headquartered in Vinings, just outside Atlanta in unincorporated Cobb County, Georgia, Home Depot employs more than 355,000 people and operates 2,164 big-box designed to complement our existing distribution channel and reach a new set of consumers and contractors. In addition, we started construction on our third manufacturing plant, in Olive Branch, Mississippi Olive Branch is a city in DeSoto County, Mississippi, United States. It is the ninth largest city in Mississippi. Olive Branch is a suburb of Memphis, Tennessee. The city is situated at the intersection of the U.S. . "In 2005, we will capitalize To regard the cost of an improvement or other purchase as a capital asset for purposes of determining Income Tax liability. To calculate the net worth upon which an investment is based. To issue company stocks or bonds to finance an investment. even further on the growing popularity of composite decking and railing. In December, we began shipping Trex Brasilia(TM), a new line of deck boards, trim profiles and railings that feature the look of tropical tropical /trop·i·cal/ (trop´i-k'l) pertaining to the regions of the earth bounded by the parallels of latitude 23° 27' north and south of the equator. hardwoods, including subtle shadings and color variations. Our Trex Artisan Series Railing(TM) will also debut in 2005. This new railing system has a white textured tex·ture n. 1. A structure of interwoven fibers or other elements. 2. The distinctive physical composition or structure of something, especially with respect to the size, shape, and arrangment of its parts: surface with the appearance of painted wood and is crafted from a durable composite material composite material or composite, any material made from at least two discrete substances, such as concrete. Many materials are produced as composites, such as the fiberglass-reinforced plastics used for automobile bodies and boat hulls, but the that offers an elegant look while setting a new standard for easy installation. Our new advertising campaign, 'Create Your Space(TM)', kicked off in February February: see month. and is designed to demonstrate the broad design flexibility Trex Company's products offer homeowners looking to create an outside living environment." Mr. Matheny concluded, "We believe Trex Company is well positioned to take advantage of the extraordinary opportunities that exist in our market and to continue expanding our leadership role. For 2005, we expect net sales and earnings per diluted share to increase approximately ap·prox·i·mate adj. 1. Almost exact or correct: the approximate time of the accident. 2. 18% to 22%." About Trex Company Trex Company is the nation's largest manufacturer of composite decking, which is marketed under the brand name Trex(R). Made from a unique combination of reclaimed re·claim tr.v. re·claimed, re·claim·ing, re·claims 1. To bring into or return to a suitable condition for use, as cultivation or habitation: reclaim marshlands; reclaim strip-mined land. wood and plastic, Trex decking and railing products offer significant design flexibility with fewer ongoing maintenance requirements. For more information, visit the Company's website, www.trex.com. Trex(R), Trex Origins(TM), Trex Accents(TM), Trex Designer Series Railing(TM), Trex Brasilia(TM) and Trex Artisan Series Railing(TM) are trademarks of Trex Company, Inc., Winchester, Va. Note: The Company has scheduled a conference call to discuss fourth-quarter 2004 and full-year results for 11:00 a.m. ET on Friday Friday: see Sabbath; week. Friday young Indian rescued by Crusoe and kept as servant and companion. [Br. Lit.: Robinson Crusoe] See : Servant , February 18. A live webcast of the conference call will be available at the Trex Company web site at www.trex.com. The call will also be simulcast Simulcast is a portmanteau of "simultaneous broadcast", and refers to programs or events broadcast across more than one medium, or more than one service on the same medium, at the same time. 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 February 18 until 11:59 p.m. ET on February 25. To listen to the telephone replay, dial 800-642-1687 (706-645-9291 outside the U.S.) and enter conference ID #3721038. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. " 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 Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. filed with the Securities and Exchange Commission on March 5, 2004 and its subsequent filings on Form 10-Q Form 10-Q See 10-Q. discuss some of the important factors that could cause the Company's actual results to differ materially from those expressed or implied Inferred from circumstances; known indirectly. In its legal application, the term implied is used in contrast with express, where the intention regarding the subject matter is explicitly and directly indicated. 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)
Three Months Ended
December 31, Year Ended December 31,
2003 2004 2003 2004
----------- ----------- ----------- -----------
Net sales $21,908 $29,614 $191,008 $253,628
Cost of sales 14,247 18,920 107,246 151,286
----------- ----------- ----------- -----------
Gross profit 7,661 10,694 83,762 102,342
Selling, general and
administrative
expenses 7,918 10,768 46,837 56,382
----------- ----------- ----------- -----------
Income (loss) from
operations (257) (74) 36,925 45,960
Interest expense, net (905) (515) (3,560) (3,064)
----------- ----------- ----------- -----------
Income (loss) before
income taxes (1,162) (589) 33,365 42,896
Income taxes (399) (238) 12,376 15,741
----------- ----------- ----------- -----------
Net income (loss) $(763) $(351) $20,989 $27,155
=========== =========== =========== ===========
Diluted earnings per
common share $(0.05) $(0.02) $1.43 $1.83
=========== =========== =========== ===========
Diluted weighted
average shares
outstanding 14,572,700 14,705,706 14,727,838 14,834,718
=========== =========== =========== ===========
TREX COMPANY, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share data)
31-Dec-03 31-Dec-04
--------- -----------
(unaudited)
ASSETS
Current assets:
Cash and cash equivalents $8,151 $23,925
Restricted cash -- 20,959
Trade accounts receivable 5,829 21,964
Inventories 45,950 44,357
Prepaid expenses and other assets 1,899 4,659
Deferred income taxes 2,169 2,975
--------- -----------
Total current assets 63,998 118,839
--------- -----------
Property, plant and equipment, net 138,062 158,389
Goodwill 6,837 6,837
Other assets 1,558 2,986
--------- -----------
Total assets $210,455 $287,051
========= ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $13,497 $31,496
Current portion long-term debt 886 8,932
--------- -----------
Total current liabilities 14,383 40,428
--------- -----------
Deferred income taxes 13,174 15,808
Debt-related derivatives 2,202 1,736
Long-term debt, net of current portion 53,490 69,565
--------- -----------
Total liabilities 83,249 127,537
--------- -----------
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 14,843,820
shares issued and outstanding at December 31,
2003 and 2004 147 148
Additional paid-in capital 55,889 60,182
Deferred compensation (1,829) (1,259)
Accumulated other comprehensive loss (1,387) (1,098)
Retained earnings 74,386 101,541
--------- -----------
Total stockholders' equity 127,206 159,514
--------- -----------
Total liabilities and stockholders'
equity $210,455 $287,051
========= ===========
TREX COMPANY, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(Unaudited)
Twelve Months
Ended December 31,
2003 2004
--------- ---------
OPERATING ACTIVITIES
Net income $20,989 $27,155
Adjustments to reconcile net income to net cash
provided by
operating activities:
Depreciation and amortization 12,539 13,713
Other non-cash charges 4,511 3,679
Changes in operating assets and liabilities (32,411) 697
--------- ---------
Net cash provided by operating activities $5,628 $45,244
--------- ---------
INVESTING ACTIVITIES ($17,749) ($35,370)
--------- ---------
FINANCING ACTIVITIES $5,379 $26,859
--------- ---------
Net increase in cash and cash equivalents $(6,742) $36,733
Cash and cash equivalents at beginning of
period $14,893 $8,151
--------- ---------
Cash and cash equivalents at end of period $8,151 $44,884
========= =========
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