TWP Trex CO., Inc.

Trex Company, Inc. (NYSE: TWP), manufacturer and distributor of Trex® decking, railing, fencing and trim, today announced financial results for the second quarter ended June 30, 2009.

Net sales for the second quarter of 2009 totaled $91.5 million compared to net sales of $95.0 million for the 2008 second quarter. The company reported net income of $7.4 million, or $0.49 per diluted share, for the 2009 second quarter compared to net income of $6.5 million, or $0.43 per diluted share, for the 2008 second quarter. The company’s adoption of FASB Staff Position No. APB 14-1 related to embedded interest on convertible debt resulted in $1.6 million and $1.4 million of non-cash interest expense in the second quarter of 2009 and 2008, respectively, reducing earnings per share by $0.11 and $0.09, respectively.

For the six months ended June 30, 2009, Trex Company reported net sales of $159.1 million compared to net sales of $214.5 million for the prior-year period. Net income for the 2009 six-month period totaled $4.3 million, or $0.28 per diluted share, compared to $13.9 million, or $0.93 per diluted share, for the 2008 six-month period. These results included $3.3 million and $2.7 million of non-cash interest expense in the first six months of 2009 and 2008, respectively, which reduced earnings per share by $0.22 and $0.18, respectively.

President and Chief Executive Officer Ronald W. Kaplan commented, “The fundamental change in purchasing patterns we predicted for 2009 continued in the second quarter. Because of the tough economy, customers have been holding inventories low and ordering primarily based on pull-through demand from the consumer. This trend greatly reduced the importance of this year’s early-buy season, shifting a larger proportion of our sales activity to the second and third quarters. We’re pleased that in these challenging times so many consumers have been selecting Trex® as the preferred choice to help maximize their outdoor living experience.

“Our unwavering focus on enhancing Trex’s operations continued to produce results. We continue to expand the use of Lean Six Sigma manufacturing techniques throughout every phase of Trex’s manufacturing process in both our Winchester and Fernley plants. The resulting improvements enabled us to raise gross margin by 220 basis points to 31.2% quarter over quarter despite lower levels of capacity utilization. Our operating cash flow for the second quarter was strong, and we continued to execute our cash management strategy extremely well. We believe we’ve weathered the economic downturn better than many of our competitors. Our cash balance at quarter-end increased to $46.4 million and we haven’t borrowed against our revolver for more than a year.

“During the quarter, we completed the launch of our expanded Trex Artisan Series Railing®, which offers consumers unparalleled versatility in their deck and railing design. Our quest to add dealers to Trex’s distribution chain and gain market share continues to meet with receptivity. All in all, we’re proud of the progress we’ve been making and firmly believe that our expanding array of innovative products, enhanced operations, growing market share and financial strength position Trex for long-term success.”

Mr. Kaplan concluded, “Our guidance for the third quarter reflects the shift in purchasing patterns I described earlier. Based on our current order flow, we expect net sales to approximate $70 million for the third quarter of 2009.”

Second-Quarter-2009 Conference Call and Webcast Information

Trex will hold a conference call to discuss its second-quarter-2009 results on Wednesday, July 29, 2009 at 10:00 a.m. ET. To participate in the live call by telephone, please dial 706-634-1218 and reference conference ID #18436576. A live webcast of the conference call will also be available to all investors in the Investor Relations section of the Trex Company website at www.trex.com. The call will also be simulcast at www.streetevents.com.

For those who cannot listen to the live broadcast, the webcast will be available on Trex’s website for 30 days. A telephone replay of the call will also be available for seven days, beginning at approximately 1:00 p.m. ET on July 29. To listen to the telephone replay, dial 706-645-9291 and enter conference ID #18436576.

About Trex Company

Trex Company is the nation’s largest manufacturer of composite decking, railing and fencing, with more than 15 years of product experience. Built on “green” principles and values, Trex makes its products from a unique formulation of reclaimed wood and waste plastic, combined through a proprietary process. Trex decking, railing and fencing offer significant design flexibility with fewer ongoing maintenance requirements than wood, as well as a truly environmentally responsible choice. In addition, Trex distributes ultra-low maintenance PVC decking under the trademark Trex Escapes® and PVC trim under the trademark TrexTrim™. For more information, visit the Company’s website, www.trex.com. Trex®, Trex Artisan Series Railing®, Trex Escapes® and TrexTrim™ are trademarks of Trex Company, Inc., Winchester, Va.

The statements in this press release regarding the Company's expected future performance and condition 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 obtain raw materials at acceptable prices; the Company's ability to maintain product quality and product performance at an acceptable cost; the level of expenses associated with product replacement and consumer relations expenses related to product quality; 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 12, 2009 and its subsequent report on Form 10-Q filed on May 8, 2009 discuss 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)             Three Months Ended June 30, Six Months Ended June 30,

2008

2009

2008

2009

(Restated) (Restated)   Net sales $ 94,998 $ 91,455 $ 214,527 $ 159,105   Cost of sales   67,380   62,893   154,633   113,790     Gross profit 27,618 28,562 59,894 45,315   Selling, general and administrative expenses   17,831   17,423   38,139   33,973     Income from operations 9,787 11,139 21,755 11,342   Interest expense, net   3,252   3,643   7,599   7,082     Income (loss) before income taxes 6,535 7,496 14,156 4,260   Provision (benefit) for income taxes   51   118   271   (2 )   Net income (loss) $ 6,484 $ 7,378 $ 13,885 $ 4,262     Diluted earnings (loss) per common share $ 0.43 $ 0.49 $ 0.93 $ 0.28       Diluted weighted average common shares outstanding   15,044,943   15,107,510   15,001,972   15,094,572     TREX COMPANY, INC. Condensed Consolidated Balance Sheets (In thousands, except share data)    

31-Dec-08

30-Jun-09

(Restated)

(Unaudited)

ASSETS Current assets: Cash and cash equivalents $ 23,189 $ 46,367 Accounts receivable, net 13,555 37,802 Inventories 69,397 40,078 Prepaid expenses and other assets 5,518 3,957 Income taxes receivable 2,554 201 Deferred income taxes   2,141     2,141   Total current assets   116,354     130,546   Property, plant and equipment, net 176,336 168,712 Goodwill 6,837 6,837 Other assets   7,557     6,788   Total assets $ 307,084   $ 312,883     LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable and accrued expenses $ 37,666 $ 39,990 Accrued warranty 12,310 13,779 Current portion long-term debt   1,293     1,348   Total current liabilities   51,269     55,117   Deferred income taxes 3,531 3,531 Accrued taxes 2,640 2,519 Non-current accrued warranty 9,546 3,716 Debt-related derivatives 2,069 1,610 Long-term debt, net of current portion   100,201     102,791   Total liabilities   169,256     169,284     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; 15,310,343 and 15,357,479 shares issued and outstanding at December 31, 2008 and June 30, 2009 153 154 Additional paid-in capital 92,825 94,052 Accumulated other comprehensive income (loss) (1,092 ) (811 ) Retained earnings   45,942     50,204   Total stockholders’ equity   137,828     143,599   Total liabilities and stockholders’ equity $ 307,084   $ 312,883   TREX COMPANY, INC. Condensed Consolidated Statements of Cash Flows (In thousands) (Unaudited)       Six Months Ended June 30,

2008

2009

(Restated) OPERATING ACTIVITIES Net income $ 13,885 $ 4,262 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 15,959 15,492 Other non-cash charges 1,064 1,647 Changes in operating assets and liabilities   (7,016 )   6,910     Net cash provided by operating activities $ 23,892   $ 28,311     INVESTING ACTIVITIES $ (5,552 ) $ (4,067 )   FINANCING ACTIVITIES $ (731 ) $ (1,066 )   Net increase in cash and cash equivalents $ 17,609 $ 23,178 Cash and cash equivalents at beginning of period $ 66   $ 23,189     Cash and cash equivalents at end of period $ 17,675   $ 46,367