Trex / TWP

About Trex

160 Exeter Dr., Winchester, Va. 22603
www.trex.com | 540-542-6300 | Founded: 1996

Industry: Manufacturing | Category: Public Companies

Trex faced new challenges in 2005 with both manufacturing and cost problems, which resulted in lower-than-expected profit and sales for the year.
Last year, the company opened a manufacturing plant in Olive Branch, Miss., its third such plant, and changed the manufacturing process for one of its products, resulting in some struggles with production efficiency. The company was hurt last year by the rising cost of plastic — up 40 percent over the first half of the year — and the pain was further exacerbated by Hurricane Katrina. In particular, the price of resin rose after Katrina hit the Gulf Coast, where many resin manufacturers are located. That increase in turn led to a price increase for recycled plastic, which the company uses to manufacture its composite decks.
The company blamed bad weather on less-than-stellar sales in 2005, which caused inventories in retail outlets to pile up and sales to drop off. The company's stock took a tumble in mid-2005 to $25 a share from $40 to $45 a share. This year, company leaders said they are more optimistic that financial results will improve as the company absorbs the start-up costs of its new plant.
Two of Trex's four original founders came out of retirement in 2005 to lead the company, and one founder stepped down. Anthony J. Cavanna became chairman and chief executive and Andrew U. Ferrari became president and chief operating officer. Former chief executive Robert G. Matheny, 60, retired from his position and continues to serve on the board.
In January of this year, Trex launched a new product, Trex Seclusions Privacy Fencing, that uses the same synthetic wood material found in decks to provide easy-to-install fences for residential customers. The company plans to expand its distribution, making its products available at 200 to 300 more Home Depot stores this year.

2005 Financial Data

Revenues: $294,133,000 | Net Income: $2,499,000
Asssets: $286,269,000 | Earnings Per Share: $0.17
Total employees: 759 | Local employees: 411