SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2001
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _____________________ to _____________________
Commission File Number: 001-14649
Trex Company, Inc.
(Exact name of registrant as specified in its charter)
Delaware 54-1910453
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
20 South Cameron Street
Winchester, Virginia 22601
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (540) 678-4070
Not Applicable
--------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
The number of shares of the registrant's common stock, par value $.01 per share,
outstanding at May 9, 2001 was 14,142,270 shares.
TREX COMPANY, INC.
INDEX
Page
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of December 31, 2000
and March 31, 2001 (unaudited)............................... 3
Consolidated Statements of Operations for the Three
Months Ended March 31, 2000 and 2001 (unaudited)............. 4
Consolidated Statements of Cash Flows for the Three
Months Ended March 31, 2000 and 2001 (unaudited)............. 5
Notes to Condensed Consolidated Financial
Statements (unaudited)....................................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................ 9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk............................................ 11
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................... 12
Signatures
2
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
TREX COMPANY, INC.
Consolidated Balance Sheets
December 31, March 31,
2000 2001
------------- -------------
ASSETS (unaudited)
Current assets:
Cash and cash equivalents......................................................... $ -- $ --
Trade accounts receivable......................................................... 10,582,000 27,325,000
Inventories....................................................................... 23,017,000 21,556,000
Prepaid expenses and other assets................................................. 689,000 618,000
Deferred income taxes............................................................. 478,000 360,000
------------ ------------
Total current assets............................................................. 34,766,000 49,859,000
------------ ------------
Property, plant, and equipment, net................................................ 113,635,000 121,915,000
Intangible assets, net............................................................. 7,544,000 7,367,000
Other.............................................................................. 650,000 650,000
------------ ------------
Total assets..................................................................... $156,595,000 $179,791,000
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade accounts payable............................................................ $ 17,082,000 $ 9,679,000
Accrued expenses.................................................................. 2,053,000 1,253,000
Income taxes payable.............................................................. 574,000 4,730,000
Other current liabilities......................................................... 664,000 1,136,000
Line of credit.................................................................... -- 13,676,000
Current portion of long-term debt................................................. 697,000 637,000
------------ ------------
Total current liabilities........................................................ 21,070,000 31,111,000
Deferred income taxes.............................................................. 5,782,000 5,636,000
Line of credit..................................................................... 44,748,000 50,000,000
Long-term debt related derivatives................................................. -- 1,205,000
Long-term debt..................................................................... 15,954,000 15,840,000
------------ ------------
Total liabilities................................................................ 87,554,000 103,792,000
------------ ------------
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; 14,135,060 and
14,137,586 shares issued and outstanding......................................... 141,000 141,000
Additional capital................................................................ 41,330,000 41,380,000
Retained earnings................................................................. 27,570,000 35,225,000
Accumulated other comprehensive net loss.......................................... -- (747,000)
------------ ------------
Total stockholders' equity....................................................... 69,041,000 75,999,000
------------ ------------
Total liabilities and stockholders' equity....................................... $156,595,000 $179,791,000
============ ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED).
3
TREX COMPANY, INC.
Consolidated Statements of Operations
(unaudited)
Three Months Ended March 31,
----------------------------
2000 2001
------------ -------------
Net sales.................................... $39,054,000 $42,196,000
Cost of sales................................ 20,892,000 22,978,000
----------- -----------
Gross profit................................. 18,162,000 19,218,000
Selling, general and administrative expenses. 6,510,000 6,403,000
----------- -----------
Income from operations....................... 11,652,000 12,815,000
Interest income.............................. -- 1,000
Interest (expense)........................... (277,000) (466,000)
----------- -----------
Income before taxes.......................... 11,375,000 12,350,000
Income taxes................................. 4,318,000 4,695,000
----------- -----------
Net income................................... $ 7,057,000 $ 7,655,000
=========== ===========
Basic earnings per common share.............. $ 0.50 $ 0.54
=========== ===========
Weighted average basic shares outstanding.... 14,122,172 14,136,786
=========== ===========
Diluted earnings per common share............ $ 0.50 $ 0.54
=========== ===========
Weighted average diluted shares outstanding.. 14,195,982 14,172,064
=========== ===========
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED).
4
TREX COMPANY, INC.
Consolidated Statements of Cash Flows
(unaudited)
Three Months Ended March 31,
----------------------------
2000 2001
----------- ------------
OPERATING ACTIVITIES
Net income................................................................................... $ 7,057,000 $ 7,655,000
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Deferred income taxes....................................................................... 399,000 430,000
Depreciation and amortization............................................................... 1,491,000 1,894,000
Changes in operating assets and liabilities:
Trade accounts receivable.................................................................. (3,450,000) (16,743,000)
Inventories................................................................................ 3,449,000 1,461,000
Prepaid expenses and other assets.......................................................... 65,000 71,000
Trade accounts payable..................................................................... (593,000) (7,403,000)
Accrued expenses........................................................................... (795,000) (800,000)
Income taxes payable....................................................................... 3,841,000 4,156,000
Other current liabilities.................................................................. (80,000) 472,000
----------- ------------
Net cash provided by (used in) operating activities.......................................... 11,384,000 (8,807,000)
----------- ------------
INVESTING ACTIVITIES
Expenditures for property, plant and equipment............................................... (5,004,000) (9,997,000)
----------- ------------
Net cash used in investing activities........................................................ (5,004,000) (9,997,000)
----------- ------------
FINANCING ACTIVITIES
Principal payments under mortgages and notes................................................. (109,000) (174,000)
Borrowings under line of credit.............................................................. 2,315,000 35,978,000
Principal payments under line of credit...................................................... (6,736,000) (17,050,000)
Proceeds from exercise of employee stock purchase and option plans........................... 45,000 50,000
----------- ------------
Net cash (used in) provided by financing activities.......................................... (4,485,000) 18,804,000
----------- ------------
Net increase in cash and cash equivalents.................................................... 1,895,000 --
Cash and cash equivalents at beginning of period............................................. -- --
----------- ------------
Cash and cash equivalents at end of period................................................... $ 1,895,000 $ --
=========== ============
SEE ACCOMPANYING NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED).
5
TREX COMPANY, INC.
Notes to Condensed Consolidated Financial Statements
For the Three Months Ended March 31, 2000 and 2001 (Unaudited)
1. BUSINESS AND ORGANIZATION
Trex Company, Inc. (the "Company"), a Delaware corporation, was incorporated on
September 4, 1998 for the purpose of acquiring 100% of the membership interests
and operating the business of TREX Company, LLC, a Delaware limited liability
company, in connection with an initial public offering of the Company's common
stock. Through its wholly owned subsidiary, TREX Company, LLC, the Company
manufactures and distributes wood/plastic composite products primarily for
residential and commercial decking applications. Trex Wood-Polymer(TM) lumber
("Trex") is manufactured in a proprietary process that combines waste wood
fibers and reclaimed polyethylene. TREX Company, LLC is a limited liability
company formed under the laws of the State of Delaware on July 1, 1996
(inception). It initiated commercial activity on August 29, 1996. On August 29,
1996, TREX Company, LLC acquired substantially all of the assets and assumed
certain liabilities of the Composite Products Division of Mobil Oil Corporation
for a cash purchase price of approximately $29.5 million. The acquisition was
accounted for using the purchase accounting method.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, the accompanying condensed consolidated financial
statements do not include all of the information and footnotes required by
generally accepted accounting principles for complete financial statements. In
the opinion of management, all adjustments (consisting of normally recurring
accruals) considered necessary for a fair presentation have been included in the
accompanying condensed consolidated financial statements. The consolidated
results of operations for the three-month period ended March 31, 2001 are not
necessarily indicative of the results that may be expected for the full fiscal
year. These condensed consolidated financial statements should be read in
conjunction with the consolidated audited financial statements as of December
31, 1999 and 2000 and for each of the three years in the period ended December
31, 2000 included in the annual report of Trex Company, Inc. on Form 10-K (File
No. 001-14649), as filed with the Securities and Exchange Commission.
3. INVENTORY
Inventories consist of the following:
December 31, 2000 March 31, 2001
----------------- ---------------
(unaudited)
Finished goods... $19,523,000 $17,460,000
Raw materials.... 3,494,000 4,096,000
----------- -----------
$23,017,000 $21,556,000
=========== ===========
4. DEBT
On January 31, 2001, the Company entered into a second credit facility. The new
facility provides for borrowings of up to $15.0 million on an unsecured basis
for working capital and general corporate purposes. Amounts drawn under the
facility bear interest at an annual rate equal to LIBOR plus 1.00%. The facility
will mature on April 30, 2001 and contains customary restrictive and financial
covenants.
In the first quarter of 2001, the Company and the lenders under its mortgages
and revolving credit facilities revised, through June 29, 2001, loan covenants
relating to debt to capital and debt to cash flow limits in relation to the
Company's augmented early-buy program and the anticipated higher level of trade
receivables to be financed with borrowings under the credit facilities. The
Company was in compliance with the revised covenants at March 31, 2001 and
expects to be in compliance with the original covenants on June 30, 2001.
6
5. STOCKHOLDERS' EQUITY
The following table sets forth the computation of basic and diluted earnings per
share:
Three Months Ended March 31,
----------------------------
2000 2001
---- ----
Numerator:
Net income available to common
shareholders, basic and diluted.......... $ 7,057,000 $ 7,655,000
=========== ===========
Denominator:
Weighted average shares outstanding,
basic................................... 14,122,172 14,136,786
Impact of potential common shares:
Stock options........................... 73,810 35,278
----------- -----------
Weighted average shares outstanding,
diluted................................. 14,195,982 14,172,064
=========== ===========
Basic earnings per share.................. $ 0.50 $ 0.54
=========== ===========
Diluted earnings per share................ $ 0.50 $ 0.54
=========== ===========
6. SEASONALITY
The Company's net sales and income from operations have historically varied from
quarter to quarter. Such variations are principally attributable to seasonal
trends in the demand for the Trex product. The Company has historically
experienced lower net sales during the fourth quarter because of holidays and
adverse weather conditions in certain regions, which reduce the level of home
improvement and new construction activity. Net sales during the first quarter of
2000 accounted for approximately 33% of annual sales in 2000. During the third
quarter of 2000, the Company's increased production capacity enabled it to
eliminate the allocation of product supply to its network of wholesale
distributors and retail dealers. Because customer stockpiling of inventories
resulting from this allocation policy affected seasonality, the Company's
historical seasonality may not be a reliable indicator of future seasonality.
7. NEW ACCOUNTING STANDARDS
Effective January 1, 2001, the Company adopted Statement of Financial Accounting
Standard No. 133 "Accounting for Derivative Instruments and Hedging Activities,"
as amended by Statement of Financial Accounting Standard No. 138, "Accounting
for Certain Derivative Instruments and Certain Hedging Activities." SFAS No.
133, as amended, establishes accounting and reporting standards for derivative
instruments, including certain derivative instruments embedded in other
contracts, and for hedging activities. The statement requires that an entity
recognize all derivatives as either assets or liabilities in the statement of
financial position and measure those instruments at fair value.
In order to manage market risk exposure related to changing interest rates, the
Company has entered into interest rate swap agreements effectively converting
its floating rate mortgage debt to a fixed-rate obligation. These interest rate
swap agreements have the same payment and maturity terms as the underlying debt
and are accounted for under the short-cut method as permitted by SFAS No. 133.
The transition adjustment to implement this new standard, which is presented as
a cumulative effect of change in accounting principle, increased liabilities by
approximately $820,000, with a corresponding reduction in stockholders' equity
through other comprehensive income (approximately $508,000, net of tax). During
the quarter ended March 31, 2001, the Company recognized an increase in the
liability of approximately $385,000, with a corresponding reduction in
stockholders' equity through other comprehensive income (approximately $259,000,
net of tax) to reflect the change in fair value of these hedges. The Company
estimates that of the amounts included in other comprehensive income,
approximately $218,000 net of taxes of approximately $134,000, will be
reclassified to earnings over the next 12 months.
7
Comprehensive income for the Company includes net income and derivative gains or
losses that are excluded from net income but included as a separate component of
total stockholders' equity. Comprehensive income for the three-month periods
ended March 31, 2000 and 2001 is as follows:
Three Months Ended March 31,
----------------------------
2000 2001
---------- ----------
Net income...................................... $7,057,000 $7,655,000
Cumulative effect of a change in accounting
principle...................................... -- (508,000)
Net derivative change in fair value............. -- (259,000)
Derivative loss reclassified to earnings........ -- 20,000
---------- ----------
Total comprehensive income...................... $7,057,000 $6,908,000
========== ==========
The Company implemented the consensus of the Emerging Issues Task Force Issue
00-10, "Accounting for Shipping and Handling Fees and Costs," or EITF 00-10,
in the fourth quarter of 2000. This rule requires that all shipping and handling
fees be recorded in net sales and that the related costs be included in cost of
sales. Previously, the Company had classified shipping and handling fees, net of
shipping and handling costs, as cost of sales. The effect of this
reclassification was to increase net sales and cost of sales by approximately
$1.0 million for the quarter ended March 31, 2000. This reclassification had no
effect on net income in any period.
8
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
This Management's Discussion and Analysis of Financial Condition and Results of
Operations contains 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. All statements regarding the Company's expected financial position and
operating results, its business strategy and its financing plans are forward-
looking statements. These statements are subject to risks and uncertainties that
could cause the Company's actual results to differ materially. Such risks and
uncertainties include the Company's ability to increase market acceptance of its
Trex product; the Company's lack of product diversification; the Company's
current dependence on its two manufacturing facilities and its ability to
increase its manufacturing capacity in its existing facilities; the Company's
reliance on the supply of raw materials used in its production process; the
Company's sensitivity to economic conditions, which influence the level of
activity in home improvements and new home construction; the Company's ability
to manage its growth; the Company's significant capital requirements; and the
Company's dependence on its largest distributors to market and sell its
products. A discussion of these risks and uncertainties is contained in the
Company's Annual Report on Form 10-K filed with the Securities and Exchange
Commission on March 28, 2001. The Company undertakes no obligation to update or
revise publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
Overview
The Company is the nation's largest manufacturer of non-wood decking alternative
products, which are marketed under the brand name Trex(R). Trex Wood-Polymer(TM)
lumber ("Trex") is a wood/plastic composite which is manufactured in a
proprietary process that combines waste wood fibers and reclaimed polyethylene.
Trex is used primarily for residential and commercial decking. Trex also has
non-decking product applications, including applications for parks and
recreational areas, floating and fixed docks and other marine applications, and
landscape edging.
Net sales consists of sales and freight, net of returns and discounts. Cost of
sales consists of raw material costs, direct labor costs and manufacturing
costs, including depreciation and freight. The principal component of selling,
general and administrative expenses is branding and other sales and marketing
costs, which have increased significantly as the Company has sought to build
brand awareness of Trex in the decking market. Sales and marketing costs consist
primarily of salaries, commissions and benefits paid to sales and marketing
personnel, advertising expenses and other promotional costs. General and
administrative expenses include salaries and benefits of personnel engaged in
research and development, procurement, accounting and other business functions
and office occupancy costs attributable to such functions, as well as
amortization expense.
Because of the continued expansion of its production capacity, during the third
quarter of 2000 the Company was able to eliminate the allocation of product
supply to its network of wholesale distributors and retail dealers. As a result,
customers generally no longer seek to stockpile inventories. The Company
believes there has been a temporary slowdown in new orders as excess inventories
at the wholesale and retail levels are reduced, and that the impact of this
slowdown may continue until the normal seasonal demand for Trex resumes in the
second quarter of 2001.
Three Months Ended March 31, 2001 Compared with Three Months Ended March 31,
2000
Net Sales
Net sales in the three months ended March 31, 2001 (the "2001 quarter")
increased 8.0% to $42.2 million from $39.1 million in the three months ended
March 31, 2000 (the "2000 quarter"). The increase in net sales was primarily
attributable to a growth in sales volume provided by an increase in the number
of dealer outlets, from approximately 2,300 at March 31, 2000 to approximately
2,800 at March 31, 2001.
Cost of Sales
Cost of sales increased 10.0% to $23.0 million in the 2001 quarter from $20.9
million in the 2000 quarter. Cost of sales as a percentage of net sales
increased to 54.5% in the 2001 quarter from 53.5% in the 2000 quarter. The
increase principally reflected higher raw material costs. The increased cost of
sales was partially offset by operating efficiencies from improved production
line rates and the economies of scale resulting from additional production
lines.
Gross Profit
Gross profit increased 5.8% to $19.2 million in the 2001 quarter from $18.2
million in the 2000 quarter. The increase in gross profit was attributable to
the higher sales volume and was partially offset by the increase in cost of
sales. Gross profit as a percentage of net sales decreased to 45.5% in the 2001
quarter from 46.5% in the 2000 quarter.
9
Selling, General and Administrative Expenses
Selling, general and administrative expenses decreased 1.6% to $6.4 million in
the 2001 quarter from $6.5 million in the 2000 quarter, primarily because of a
decrease of $0.8 million in performance bonuses. This decrease was partially
offset by an increase of $0.7 million in expense related to additional corporate
personnel and related hiring costs necessary to support the Company's growth.
As a percentage of net sales, selling, general and administrative expenses
decreased to 15.2% in the 2001 quarter from 16.7% in the 2000 quarter.
Interest Expense
Net interest expense increased to $0.5 million in the 2001 quarter from $0.3
million in the 2000 quarter. The increased expense primarily reflected higher
average debt balances incurred since the 2000 quarter to fund the expansion of
the Company's production capacity. The increase was substantially offset by the
capitalization of interest with respect to those projects.
Provision for Income Taxes
The Company recorded a provision for income taxes of $4.7 million in the 2001
quarter compared to a provision of $4.3 million in the 2000 quarter. Both
provisions reflect a 38% combined effective tax rate.
Net Income
The Company's net income increased 8.5% to $7.7 million in the 2001 quarter from
$7.1 million in the 2000 quarter. The increase in net income in the 2001 quarter
primarily resulted from an increase of $1.2 million in income from operations,
the effect of which was offset in part by an increase of $0.4 million in the
income tax provision.
Liquidity and Capital Resources
The Company's total assets increased from $156.6 million at December 31, 2000 to
$179.8 million at March 31, 2001. Higher receivables balances resulting from an
increase in net sales in the 2001 quarter and the Company's augmented early-buy
program, which offered extended payment terms for purchases by distributors
during the months of January through April, accounted for the $16.7 million
increase. Inventories decreased by $1.5 million as a result of increased sales.
Property, plant and equipment, net, increased $8.3 million as the Company
continued construction of a second manufacturing facility in Winchester,
Virginia, installation of manufacturing lines in both its Winchester, Virginia
and Fernley, Nevada facilities, and construction of a plastic processing
facility in Winchester, Virginia. Trade accounts payable decreased $7.4 million
as a result of the timing of payments relating to the foregoing construction
projects. Income taxes payable increased $4.2 million based on the Company's
taxable income during the quarter, with first quarter estimated tax payments not
due until April 2001. The Company has financed these activities in the 2001
quarter from operating cash flows and additional net draws of approximately
$18.9 million under its revolving credit facilities.
The Company historically has financed its operations and growth primarily with
cash flow from operations, operating leases, normal trade credit terms, and
borrowings under its credit facilities.
The Company's cash flow used in operating activities for the 2001 quarter was
$8.8 million compared to cash flow from operating activities of $11.4 million
for the 2000 quarter. Trade accounts receivable, net, increased from $4.7
million at March 31, 2000 to $27.3 million at March 31, 2001 as a result of
higher sales levels and the early-buy program.
As of March 31, 2001, the Company's long-term indebtedness, excluding amounts
outstanding under the revolving credit facilities, totaled $16.5 million and had
an overall weighted average interest rate of approximately 7.7% per annum.
On October 27, 2000, the Company and the lender revised the terms of the
Company's bank revolving credit agreement primarily to increase the maximum
amount of borrowings available to the Company. The terms of this new revolving
credit facility currently provide for borrowings of up to $75.0 million on an
unsecured basis for working capital and general corporate purposes through
September 30, 2001 and $50.0 million thereafter. Amounts drawn under the
revolving credit facility bear interest at an annual rate equal to LIBOR plus
1.00%. The facility will mature on June 30, 2003 and contains customary
restrictive and financial covenants.
In the first quarter of 2001, the Company and the lenders under its mortgages
and revolving credit facilities revised, through June 29, 2001, loan covenants
relating to debt to capital and debt to cash flow limits in relation to the
Company's augmented early-buy program and the anticipated higher level of trade
receivables to be financed with borrowings under the credit facilities. The
Company was in compliance with the revised covenants at March 31, 2001 and
expects to be in compliance with the original covenants on June 30, 2001.
10
On January 31, 2001, the Company entered into a second revolving credit facility
with another lender. The terms of this facility provide for borrowings of up to
$15.0 million on an unsecured basis for working capital and general corporate
purposes. Amounts drawn under the revolving credit facility bear interest at an
annual rate equal to LIBOR plus 1.00%. The facility will mature on April 30,
2001 and contains customary restrictive and financial covenants.
Expansion of the Company's production capacity will continue to require
significant capital expenditures. In the second quarter of 2000, the Company
accelerated its capital expenditure program to invest in additional production
capacity to meet current and expected demand for its product. Capital
expenditures during the 2001 quarter totaled $10.0 million and for the balance
of 2001 are expected to total approximately $22.7 million. The Company believes
that cash flow from operations and borrowings expected to be available under the
Company's revolving credit facilities will provide sufficient funds to enable
the Company to expand its business as currently planned for at least the next 12
months. The actual amount and timing of the Company's future capital
requirements may differ materially from the Company's estimate depending on the
demand for Trex and new market developments and opportunities. The Company may
determine that it is necessary or desirable to obtain financing for such
requirements through bank borrowings or the issuance of debt or equity
securities. Debt financing would increase the leverage of the Company, while
equity financing may dilute the ownership of the Company's stockholders. There
can be no assurance as to whether, or as to the terms on which, the Company will
be able to obtain such financing.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company's primary market risk exposure is to changing interest rates. The
Company's policy is to manage interest rates through a combination of variable-
rate debt under its revolving credit facilities and interest rate swap
agreements with respect to its other debt. Amounts drawn under the revolving
credit facilities bear interest at an annual rate equal to LIBOR plus 1.00%. As
of March 31, 2001, pursuant to interest rate swap agreements, the Company had
effectively fixed its interest rate exposure under its other debt at
approximately 7.7% through 2014.
The Company does not have any foreign currency forward contracts or commodity
contracts and does not have any material foreign currency exposure.
11
Part II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) The Company files herewith the following exhibits:
10.1 Fifth Amendment to Amended and Restated Credit Agreement, dated as
of February 28, 2001, among Trex Company, Inc., TREX Company, LLC and
First Union National Bank.
10.2 Loan Modification Agreement, dated as of March
30, 2001, among Trex Company, Inc., TREX Company, LLC and Bank of America,
N.A.
(b) The Company did not file any Current Reports on Form 8-K during the
period covered by this report.
12
SIGNATURES
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 thereunto duly authorized.
TREX COMPANY, INC.
(Registrant)
Date: May 14, 2001 /s/ Anthony J. Cavanna
----------------------
Anthony J. Cavanna, Executive Vice
President and Chief Financial Officer
(Duly Authorized Officer and Principal
Financial Officer)
13