Trex Announces 1Q 2006 Results

Trex Company, Inc. (NYSE: TWP) has announced financial results for the first quarter ended March 31, 2006. Net sales for the first quarter of 2006 totaled $105.3 million, compared to net sales of $89.9 million for the first quarter of 2005, which represented a 17.1% increase. The Company reported net income for the 2006 first quarter of $4.2 million, or $0.29 per diluted share, compared to net income of $8.4 million, or $0.56 per diluted share, for the 2005 first quarter.

Chairman and Chief Executive Officer Anthony J. Cavanna commented, “The success of our ‘early buy’ program – designed to sell Trex products into distribution before the deck-building season moves into high gear each spring – got 2006 off to a good start for Trex. The combination of strong product demand and low inventory levels at our plants led to increased manufacturing utilization throughout the period.

“We made progress with the series of initiatives we implemented in the fourth quarter of 2005 to enhance product quality and packaging and to improve manufacturing efficiencies. However, our profitability in the first quarter of 2006 was negatively affected by the increased cost of plastic raw materials due to our use of resin to facilitate the production of high quality product as we increased our manufacturing plant utilization.

“As we move through the second quarter, our consumer brand building activities are picking up on schedule in order to help us drive the conversion of the market from wood to composite decking and extend Trex’s pre-eminent position in the composite wood market. With the expanded line of products we have introduced over the past two years, Trex offers a full range of decking and railing at price points that satisfy all segments of the market. We expect to further enhance plant efficiencies and continue emphasizing product quality as the year continues.”

The Company affirmed its previously announced guidance for the first six months of 2006, which calls for net sales to range from $220 million to $230 million and earnings per diluted share to range from $0.57 to $0.62. The results projected in this guidance compare to net sales of $173 million and earnings per diluted share of $0.50 in the first six months of 2005.