Trex Company, Inc. (TREX)
Annual Report submitted under Section 13 or 15 (d)
Pursuant to Section 13 or Section 15, Interim Report of the Securities Trading Act No. 1934 for the fiscal year ended December 31, 2011 (d)
1934 document number of the Securities Trading Act on the transition period from Commission: 001-
The exact name of the registrant specified in the articles of association)Delaware 54-1910453 (
State or other jurisdiction registered or organized)(I. R. S.
Employer identity number)
160 Exeter Avenue, Winchester, Virginia 22603-8605 (
Main executive office address)(Zip Code)(540)542-
6300 telephone number of registrant, including area code: securities registered under section 12th (b)
Title of the act: name of each category: name of each exchange registered: Common stock with a par value of $0.
01 New York Stock Exchange securities per share registered under section 12th (g)
Key points of the bill: no one indicates by check mark whether the registrant is a well or not
Well-known experienced issuers as defined in Rule 405 of the Securities Act.
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The Trading Act.
Yes? No? Indicate whether the registrant (1)
All reports requested in Section 13 or 15 have been submitted (d)
Securities Trading Act of 1934 within the first 12 months (
Or a short period of time required for the registrant to submit such reports), and (2)
This filing requirement has been bound for the last 90 days.
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To the knowledge of the registrant, K is not included in the final proxy or information statement referenced in Part 3 of this Form 10 and will not be included in it --
K or any amendments to this form 10K.
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Indicate whether the registrant is a shell company by check mark (
Defined in Rule 12b-
2 parts of the transaction law).
Yes? No? Total market value of common stock of registrant held by non-shareholders
On June 30, 2011, the registrant\'s affiliates were approximately $372, the last working day of the second fiscal quarter recently completed by the registrant.
8 million according to the closing price of common stock reported by The New York Stock Exchange on that date and only for the purposes of this calculation, assuming the director of the registrant, the executive officer and beneficial owner of the common stock of the Registrar, 10% or more, are affiliates.
The number of shares of common stock issued by the registrant on February 20, 2012 was 15,635,777 shares.
The documents contained in the reference section of the following documents are incorporated into this form by reference 10-
As shown in this article: File section of 10-
K incorporates the proxy statement in relation to the registrant\'s 2012 annual shareholders meeting, part III, Part I of the catalogue.
Business 1 Item 1a.
9 risk factors 2.
Attribute 13 items 3
Part II item 5 legal procedure 14.
15 items 6 of the registrant\'s common stock, related shareholder matters and the market in which the issuer purchases stock securities.
Selected 17 Financial Data 7.
Management Discussion and Analysis of Financial Position and operational results
Quantitative and qualitative disclosure of market risks
31 items 9a of financial statements and supplementary information.
Control and procedure part 3 10.
34 11 directors, executives and corporate governance.
34 administrative compensation items 12.
34 items 13 of the secured ownership of certain beneficial owners and management and related shareholders.
34 related party transactions and director independence 14.
34 main accounting expenses and Services Sub-item 15 of Part IV
Annex to consolidated financial statements and schedule 35 to financial statements
1 Note on forwarding-
This report, including the information it incorporates by reference, contains the forward
Looking forward to the statements contained in Section 27a of the Securities Act of 1933 and Section 21e of the Securities Trading Act of 1934.
We are going forward.
Statement to be covered by the safe harbor regulations
Look for statements in these sections.
All statements regarding our expected financial position and results of operations, our business strategy, our financing plan, projected demographic and economic trends related to our industry and similar matters are moving forward --
Look at the report.
These statements can sometimes be used by US-
Look for words such as alimbelieve, alimtusmay, alimtuswill, alimtusanticipate, alimtusestimate, alimtuscinct GmbH or indintend.
We cannot assure you of our expectations for the future.
It turns out that the lookup statement is correct.
Due to various factors, including those discussed under \"risk factors\" in this report, our actual results may be significantly different from our expectations.
Part II Part I some of the information contained in this report about the markets and industries in which we operate comes from open information and industry sources.
Although we believe that this public information and the information provided by these industry sources are reliable, we have not independently verified the accuracy of any of this information. Item1.
Business general manager of Terex company(the x93Companyx94)
Founded in 1998, is the largest wood manufacturer in Delaware
Alternative deck and railing products sold under the brand Trex®.
Our main administrative office is located at 160 Ek Drive, Winchester, 22603, Virginia, telephone number, address is (540)542-6300.
Products we offer a complete set of beautiful, durable, low maintenance products in the deck, railing, porch, fence and decoration categories.
We believe that we offer a wide range of products that consumers can design most of their outdoor living space using Trex branded products.
Most of our products are made in a proprietary process that combines waste wood fiber with recycled polyethylene.
Our products are available in a variety of popular sizes and lengths, with multiple finishes and/or multiple colors to choose from. Decking.
We sell our deck products across multiple brands.
The floors of our main brands are: Beyond the Trex®, With enhanced anti-fading, dyeing and scraping protection shell;
Trex accent®, Providing a smooth surface on one side, and fine wood grain on the other side;
Escape with Trex®This is a super
Low maintenance honeycomb PVC Deck.
On October 2011, we announced the launch of Trex Enhance deckiting, which, like Transcend, features a protective case to Enhance protection against fading, staining and scratches.
We also have yatohai. ®This is a hidden fastening system for special slot plates. Railing.
Trex Transcend rail and Trex Designer Series railings are our two railing products®.
The Trex Transcend railing has the color of the Trex Transcend decoration and finish and is suitable for use with Trex decorative products and other decorative materials, which we believe will enhance the sales prospects of our railing business.
This railing product is made of FIREX. ®Material, this is the patented technology that we have licensed from Anderson.
Our designer collection railing system consists of decorative top and bottom railings, exquisite railings, our Trex railway pillars, and post caps and skirts.
In addition to the styling benefits for consumers, this railing is fast and easy to build for contractors using our TrexExpress assembly tools and systems.
The finish and color of the designer railing complement our Decorative Products. Porch.
In 2011, we introduced the Trex Transcend porch floor and railing system, an integrated system consisting of porch components and accessories. Fencing.
During the 2011 period, we provided two fencing products.
Each product consists of structural columns, bottom rails, pickets, top rails and decorative column caps.
Separation of Trex®In order to protect privacy and Trex environment, interlocking pickets are used for fence products®Fencing uses traditional pickets. 1 Trim.
Our TrexTrim product is a low-maintenance honeycomb PVC Residential Exterior product with excellent operability, durability, visual appeal and low maintenance level. Miscellaneous.
In 2011, we acquired most of the assets of iron deck, a steel deck frame system manufacturer.
This product is now manufactured and sold by our trademark Trex Elevations GmbH.
In 2011, we introduced Trex DeckLighting, an energy line.
Designed for efficient LED dimmable deck lighting for pillars, floors and steps.
The line includes column ceiling lights, deck rail lights, riser lights and recessed deck lights.
We are licensors of multiple license agreements with third parties to produce and sell products under the Trex trademark.
Our main authorized products are: Poly Trex outdoor furniture Grill, a series of outdoor furniture products manufactured and sold by PolyWood, Inc. ;
Yatuo RainEscape®, This is the upper beam deck drainage system manufactured and sold by Dri-
Deck Enterprise Co. , Ltd;
Yatuo customurve®This is about
Allows contractors to heat and bend the site system of Trex products manufactured and sold by CurveIt, LLC;
And pertrex Pergolas sale by family and leisure companies
Dba backyard USA, made from our low maintenance honeycomb PVC trim product TrexTrim.
Trex products offer many significant aesthetic advantages compared to wood, while eliminating many major functional defects of wood, including warping, cracking and other damage caused by moisture.
Our products do not need to be dyed, resistant to moisture and provide debris
Free surface, no need for chemical treatment of rot or pests.
These functions eliminate most on-
Carry out maintenance requirements for wooden decks and make Trex products cost less than wooden products during deck service life.
Trex\'s products are slippery like wood. resistant (even when wet)
And it is not easy to be hurt by ultraviolet rays.
You can draw and dye the Trex accent.
Special Features (
Including anti-splitting ability, bending ability, ease and consistency of processing and finishing)
Easy installation of decks, railings, fences and decorations to reduce contractor calls
Provide customers with a variety of design solutions.
Trex deck products do not have the tensile strength of the wood and, therefore, are not used as the primary structural member of the column, beam or column used in the lower deck structure.
We have received a list of product build codes from major US companiesS.
Canadian building code listing agency for our deck and railing system.
Our list helps deck builders to obtain building permits and promotes the acceptance of our products as a replacement for deck wood by consumers and the industry.
In addition, the Trex Seclusions privacy fence has passed the Miami/Dade County wind load test, a widely recognized standard for assessing the performance of fence products in extreme environmental conditions.
Our long-term growth strategy
The aim of the term is to continue our position as a leading producer of brand quality wood
Replace outdoor living products by increasing our market share and expanding to new product categories and geographic markets.
In order to achieve this goal, we intend to take advantage of the following long-term
Term Strategy: Innovation: bringing new products to market that meet the professional needs of consumers and trade.
Provide compelling value proposition with easy installation, low maintenance, long running
Long lasting and superior aesthetics.
Brand: continue to build preferences and commitment to the Trex brand with consumers and trade professionals.
Achieve the superior quality, function, aesthetics and overall performance of the brand commitment in the outdoor living space.
2 x95 Channel: Achieve Comprehensive Market Segmentation and geographical coverage of Trex products by increasing the number of inventory dealers and retailers, thus making our products a porch and decorative product anywhere the customer chooses to purchase the deck, railing.
Quality: continuously improve the quality of all operations and business processes to achieve superior product quality and service levels, so that our company can gain a sustainable competitive advantage.
Cost: continuously reduce the cost of manufacturing Trex products through capital investment and process engineering.
Investment in plastic recycling capacity will enable us to expand our ability to use a wider range of waste logistics, thereby reducing the cost of raw materials.
We plan to focus on increasing productivity in the production process, from raw material preparation to extrusion to finishing and packaging.
Customers and distribution we distribute and/or sell our products through wholesale distribution, retail wood dealers, Home Depot and low e-sales s.
In 2011, we sold Trex products to wholesale companies through the wholesale distribution network, achieving most of the sales.
In turn, our dealers are pushing our products to retail Wood stores.
Although our dealers sell homes to homeowners and contractors, they sell homes primarily to professional contractors, Rebuilders and home builders.
We believe to attract wholesale distributors who are committed to our products and marketing methods and can effectively sell higher value products to contractors
For our future growth, it is very important for directional wood mills and other retail stores.
Our distributors can provide value-
Because they sell quality wood floor products and other innovative building materials, usually require product training and personal sales work, services are added when marketing our products.
We usually have
Exclusive basis for distribution of Trex products within designated areas.
Dealers usually buy our products at a price that is valid when we ship them to dealers.
Based on our 2011 net sales, sales to one of our distributors, Boise Cascade, exceeded 10% of our net sales.
Retail timber dealers
Our products are sold at independent wood mills and professional distributors of building materials, emphasizing sales to contractors and builders.
Even though our products are in demandit-
Our sales work has always been focused on contractors-
Installation market. Contractor-
The installed deck is usually a larger installation with a professional process.
Our retail dealerships usually provide training to sales staff on Trex products, contractor training, inventory commitment and pointsof-
Sales display support.
Home Depot and low e s.
We sell our products through Home Depot and low e stores s stores.
Home Depot and low e mall buy products directly from us for storage on shelves.
They also buy products through our wholesale dealers and accept special orders from consumers.
Although Home Depot and low e serve the contractor\'s market, most of their sales are done by shopdo-it-
Your own homeowner customers buy materials at stores in Home Depot and low e Mall instead of retail timber dealers.
We believe that through the distribution of Home Depot and low e distribution, brand exposure promotes consumer acceptance and brings sales to contractors purchased from independent dealers.
Manufacturing process we have manufacturing facilities in Winchester, Virginia and fairnanli, Nevada, and as of December 31, 2011, they cover about 265,000 square feet and 250,000 square feet respectively.
Over the course of 3 months, we suspended operations at the Olive Branch plant in Mississippi and integrated all of our manufacturing operations into our Winchester and fairdeli plants.
During the year ended December 31, 2011, our manufacturing capacity utilization rate was 30%, excluding the olive branch factory.
Trex products are mainly made of waste wood fiber and recycled polyethylene, which we sometimes call the trepe material in this report.
Our main manufacturing processes include mixing wood particles with plastic, heating, and finally squeezing or forcing high viscosity and grinding materials through profile molds.
We have a lot of know-how.
Based on advantages in this process.
Producing a non-
Wood decoration alternatives like ours require a lot of capital investment, special process expertise and development time.
We are constantly investing the necessary funds to expand our manufacturing capabilities and improve our manufacturing processes.
We have also expanded the range of raw materials, we can produce consistent high with these raw materials
Finished product of quality.
We maintain R & D operations at the Trex Technology Center, which is adjacent to our manufacturing facility in Winchester, Virginia.
Regarding our list of building codes, we maintain a quality control test procedure monitored by an independent inspection agency.
We use six sigma practices and standard lean manufacturing methods in factory operations.
We will use these tools throughout the company to plan and execute projects that are most important to our success.
Supplier the production of most of our products needs to provide waste wood fiber and PE materials.
We meet the requirements of raw materials according to purchase order and supply contract.
For the year ended December 31, 2011, we purchased basically all of the wood waste fiber needs based on the purchase order, which do not involve long term
Long-term supply commitment.
Basically, all of our PE material purchases are insufficient.
Regular supply contracts with an average of about two years, negotiated pricing as needed.
The PE material supply contract did not have a significant adverse effect on our business.
Waste wood fiber.
The wood factory or mill is our preferred supplier of waste wood fiber, because the waste wood fiber pollution generated by these operations is small and the water content is low.
These facilities produce waste wood fibers as a by-product of their manufacturing operations.
If the waste wood fiber meets our specifications, our waste wood fiber supply contract usually requires us to purchase at least the specified minimum quantity and maximum quantity of waste wood fiber per year.
According to our needs, the amount of waste wood fiber that we actually purchase within the scope specified in any supply contract may vary significantly year by year. PE Material .
The PE materials we consumed in 2011 are mainly made up of recycled plastic films and plastic bags.
In the United States, about 2 billion of polyethylene resin is used each year to make Stretch Films and plastic bags.
We will continue to seek to meet our future demand for plastics from expanding existing supply sources and developing new sources, including post-sources
Industrial waste and plastic coatings.
We believe that we use multiple sources to provide us with a cost advantage and provide us with a way to source PE materials that are responsible for the environment.
Our ability to purchase and use a variety of PE materials is important for our cost strategy.
We maintain this capability by continuing to expand our plastics post-processing business, combined with the advances in our proprietary material preparation and extrusion processes. 4 Third-
We outsource the production of certain products to third parties.
According to the supply contract, Party manufacturers who promise us to buy the lowest level every year will last until 2012.
We have a purchase commitment under item 3.
Party a manufacturing contract of $5.
The year ended December 31, 2012 was 4 million per cent.
We compete with wood and other wood replacement deck products manufacturers.
Many of the traditional timber suppliers that we compete with have established connections with the construction and construction industries and have good
On the railing, we compete with wood and other composite manufacturers
Wood and plastic products, as well as railings using metal, glass, vinyl and other materials.
In terms of privacy fencing, we compete with manufacturers of wood, vinyl and other composites.
In terms of decoration, we compete with wood, engineered wood, fiber cement and other manufacturers of honeycomb PVC and similar plastic products.
Our main competitor is wood products, which, as measured by the linear feet of wood, accounted for a large part of the sales of decoration and railings in 2011.
Most of the wood used on the wooden deck is pressure-treated lumber.
South yellow pine and fir trees have gaps that easily absorb chemicals used during pressure treatment.
The same air holes make it easy for South yellow pine to absorb moisture, which causes the wood to warp, crack, crack and drain the fasteners.
In addition to pine trees and fir trees, other wood materials for decoration include mahogany, cedar and tropical hard wood such as Epps, teak and mahogany.
These products are usually much more expensive than the pressure.
Treated wood, but did not eliminate many of the shortcomings of other wood products.
Industry research has shown that we have a leading market share in the wood/plastic composite parts of the flooring and railing markets.
Our main competitors in the wood/plastic Composite flooring and railing market include advanced environmental recycling technology companies
, Fiber Composite Materials Co. , Ltd. and Timbertech Co. , Ltd.
We also compete with decorative products made of 100% plastic wood using polyethylene, fiberglass and PVC as raw materials.
Although several companies in the United States produce 100% of plastic wood, this sector accounted for only a small proportion of deck sales in 2011.
We believe that there are many factors that limit the success of 100% plastic wood manufacturers, including poor aesthetic and physical properties of products that are not suitable for paving, such as high thermal expansion and cold shrinkage and poor anti-slip.
Our main competitor in this market is Azek construction products.
Our ability to compete depends to a certain extent on a number of factors that we cannot control, including the development of new non-
Wood floor and railing replacement competing with our products.
We believe that product quality, price, aesthetics, maintenance costs, distribution and brand strength are the main competitive factors in the decoration and railing market.
We believe that our competition is advantageous in these factors.
We believe that our products provide aesthetic and cost advantages in terms of deck life compared to other types of deck and railing materials.
Although the contractor
Installation deck built in 2011 using Trex products use pressure-
The treated wood lower structure is usually more expensive than a deck made entirely of pressure
Processed wood, Trex products eliminate most on-
Maintenance required for pressure-
The treated deck therefore costs less during the service life of the deck.
We believe that our manufacturing processes and utilization rates are relatively low.
Compared to other wood/plastic composites and 100% plastic decorative products, the source of cost raw materials provides us with a competitive cost advantage.
Our business scale also increases the cost efficiency of manufacturing, sales and marketing.
We are bound by federal, state and local environmental regulations.
The particles and other substances discharged by our manufacturing facilities must comply with federal and state air quality standards, which are implemented through the air permit issued to us by the federal Department of Environmental Quality of Virginia, department of Environmental Protection, Department of Conservation and Natural Resources, Nevada and Department of Environmental Quality, Mississippi.
Our facilities are regulated by federal and state laws governing solid waste disposal as well as state and local licensing and requirements for wastewater and rain discharge.
Compliance with environmental laws and regulations does not have a significant adverse effect on our business, operating results or financial position.
Our operations are also subject to US workplace safety regulations. S.
The Occupational Safety and Health Authority, the Commonwealth of Virginia, Nevada and Mississippi.
Our compliance work includes providing safety awareness and training programs for production and maintenance of employees.
Intellectual property our success depends to a certain extent on our intellectual property rights related to products, production processes and other operations.
We rely on trade secrets, secrecy and other contractual arrangements as well as patent, copyright and trademark laws to protect our ownership.
We have invested heavily in manufacturing process improvement, enabling us to increase production line productivity, promote the development of new products, and improve the size consistency of existing products, uniform surface texture and color.
Intellectual property rights may be challenged by third parties and no competitor may be excluded from using the same or similar technology, brand or work.
We seek effective rights for our intellectual property rights, but there is no guarantee that third parties will not successfully challenge or avoid infringement of our intellectual property rights.
We have obtained two patents for the production of complementary preparation methods for raw materials in the manufacturing phase, one patent for the equipment used to implement one of the methods, and one patent for the tools used to install the cover plate.
We intend to keep our existing patents valid from 2015 until they expire and seek additional patents if we deem appropriate.
We believe that trademarks are essential to our business plan. The U. S.
The Patent and Trademark Office has approved the federal registration of many of our trademarks.
As long as we continue to use the trademark and update its registration, the federal registration of the trademark is valid.
We don\'t usually register any of our copyrights with the United States. S.
Copyright Office, but relying on the protection of these copyrights in the United StatesS. Copyright Act.
This law provides protection for authors of original works, whether published or not, whether registered or not.
We enter into non-disclosure agreements with employees and restrict access and distribution of our proprietary information.
If it is necessary for commercial reasons to disclose proprietary information to third parties, we require such third parties to sign a non-disclosure agreement prior to disclosure.
We have about 550 employees in December 31, 2011.
About 400 of the Time employees are employed in our manufacturing business.
The collective bargaining agreement does not include our employees.
We believe that our relationship with our employees is good.
The website and other information SEC maintains an Internet website on www. sec.
Gov with reports, agency statements and other information about our company.
In addition, we maintain an Internet company website on www. trex. com .
We provide the Annual Report on Form 10 through our website
Quarterly Report on table 10
Q: Current Report of Form 8
K, and all the amendments to these reports, as soon as we have submitted them electronically to the SEC or provided them to the SEC, where reasonably practicable.
There is no charge to view, print or access these reports on our website.
The content of our website is not part of this report.
6 The following table for executive officers and directors lists the information of our executive officers and directors as of February 29, 2012.
Age position at Ronald W.
President, President and chief executive of Kaplan 60;
Director James E.
Cline 60 Vice President and Chief Financial Officer J.
Mitchell Cox, vice president of sales 53
Chief Executive Officer, General Counsel and Secretary-General
Timothy Reese 59 vice president of action Adam D
William F. Zambonini 35, vice president of marketing
Paul A, director Andrews 80.
Director Jay M. Bruna 76
Frank H. , director and chief independent director. Merlotti, Jr.
Director Richard E.
Patricia B. director.
Director Ronald W Robinson 59
Kaplan has served as chairman, president and chief executive of the company since May 2010.
From January 2008 to May 2010, Sir.
Kaplan served as director, president and chief executive of the company.
From February 2006 to December 2007
Kaplan served as chief executive of Continental global group.
, Manufacturer of bulk material handling system.
26 years before that, sir.
Kaplan is employed by Harsco Corporation, an international industrial services and products company, as senior vice president of the company
Operations, and from 1994 to 2005, served as president of harsco gas technology group, which produces containment and control equipment for the global gas industry. Mr.
Karlan got B. A.
Degree and master\'s degree in economics, University of AlfredB. A.
Degree from Wharton School of Business, University of Pennsylvania. James E.
Since March 2008, Cline has served as vice president and chief financial officer of the company. Mr.
From July 2005 to December 2007, Cline served as president of Harsco GasServ, a subsidiary of Harsco Corporation and manufacturer of containment and control equipment for the global natural gas industry.
From January 2008 to February 2008, related to Taylor\'s purchase of Harsco GasServ
Wharton International LLC, owned by Windpoint Partners
Cline acts as a buyer consultant by providing transitional management and financial services.
From April 1994 to June 2005
Klein served as vice president and Harsco GasServ of the controller. Mr.
Cline held various positions at Huffy Corporation from June 1976 to February 1994, including as chief financial officer of its True Temper hardware subsidiary, a lawn care and building products manufacturer, there are nine manufacturing locations in the United States, Canada and Ireland. Mr.
Klein\'s B. S. B. A.
Bowling Green State University degree in accounting. J.
Mitchell Cox has been vice president of sales since September 2005.
From 1981 to August 2005
Cox is employed by Kraft Foods.
, An international manufacturer of packaged food and beverage products, from 1996 to August 2005, he held multiple positions in the company, including the regional vice president;
Director of category management from 1994 to 1996;
Sales Manager, Metro Department, New York/New Jersey, 1992-1994. Mr.
Cox received B. A.
University of North Carolina at Chapel Hill. William R.
Since October 2009, Gupp has served as chief executive officer, General Counsel and Secretary of the company.
From May 2001 to October 2009, Sir.
Gupp has served as vice president and general counsel for the company.
From March 1993 to May 2001, Sir.
Gupp is employed by Harsco Corporation, an international industrial services and products company, and has recently served as a senior legal adviser and director
From August 1985 to March 1993, sir.
Gupp is employed by Harter, Secrest & Emery law firm. Mr.
Gupp received B. S.
Bachelor\'s degree in accounting from Syracuse University and J. D.
From the University of Pennsylvania Law School. F.
Timothy Reese has served as vice president of operations for the company since February 2008.
From March 2007 to January 2008
Reese served as the director of operations for the Americas of DuPont Dijin film company, which is the United StatesS.
Limited Partnership and manufacturer of polyester film.
From 1979 to March 2007
From November 1995 to November 1998, Reese held multiple positions at DuPont, including DuPont\'s global director of high-performance films, business and integrated operations;
Global Operations Director/factory manager®Packaging Graphic products from December 1998 to May 2000;
Global Operations Director and Six Sigma Champion®Packaging Graphic products from June 2000 to February 2001;
Director/plant manager in multiple positions from March 2001 to February 2007, including corporate operations, HR and DuPont chemical solutions businesses. Mr.
Reese served in the United States. S.
The Navy received B. S.
In the field of marine engineering, the focus is on mechanical engineering in the United States. S. Naval Academy. Adam D.
Zambanini has been vice president of marketing for the company since 2011.
From 2005 to December 2010, Sir.
Zambanini has held several positions in the company and recently served as marketing director.
From January 2000 to September 2005
Zambanini is employed by the commercial product of Rubbermaid, the latest product manager. Mr.
Zambonini got B. S.
Bachelor\'s degree and master\'s degree in mechanical engineering, Penn State UniversityB. A.
A degree from Avit University. William F.
Andrews has been a director of the company since April 1999. Mr.
Andrews served as chairman of Katie industries.
It has been a manufacturer of maintenance and electrical products since October 2001. Mr.
Andrews served as chairman of the board of directors from August 2000 to July 2008 and as chairman of the Executive Committee of the board of directors from July 2008. Mr.
Andrews served as chairman of the Singer Sewing Company (sewing machine manufacturer) from 2004 to 2010 and continued to serve as a board member. Mr.
Andrews has been the head of venture capital firm Korberg since 1994 and served as chairman of United Airlines from 2000 to 2006.
Prior to 2002, he held various positions, including the chairman of Scovill Fasteners. ;
Chairman of Northwest Steel Wire company;
Bridgeport International Limited;
Chairman, President and CEO of Scovill Manufacturing
He worked there for more than 28 years.
Chairman and chief executive of andura company;
Chairman of yutika company;
Chairman, President and Chief Executive of Singer sewing. Mr.
Andrews also serves as a director of the black box company, the Ockley restaurant, and Thomas Nelson Publishing. Mr.
Andrews received B. S.
Bachelor\'s degree and master\'s degree in Business Administration, University of MarylandB. A.
Degree in marketing, Seton Hall University. Paul A.
Brenner has been a director of the company since February 2003. Mr.
Brunner is president and chief executive of Spring Capital.
He founded a commercial bank in 1985.
From 1982 to 1985
Brunner served as president and president of the United States. S.
Operation of Asea-
Swiss national manufacturer of high-tech products.
In 1967, he joined Crouse Hinds, a manufacturer of electronic and electronic equipment, and held various positions in the company during 1982, including president and chief operating officer, Vice President of Finance and finance, executive vice president of operations, director of mergers and acquisitions. Mr.
Brunner was a director of Johnson control.
From 1983 to 2007, and served as chairman of the Audit Committee from 1989 to 2005.
From 1959 to 1967, he worked as audit director at Coopers & Lybrand, an international accounting firm. Mr.
Bruna is a certified public accountant.
He got a B. S.
Obtained a degree in accounting and a master\'s degree from the University of Argentina. B. A.
Degree in management, Syracuse University. Jay M.
Gratz has served as a director of the company since February 2007 and as a chief independent director since May 2010. Mr.
Gratz VisTracks serves as chief financial officer, Inc.
Since March 2010, he has served as an application support platform service provider and has served as a director of the company since April 2010. Mr.
Gratz is the 8 partners of Tatum LLC, a national administrative services and consulting firm that focuses on the needs of the CFO\'s office from February 2010 to March 2010.
From October 2007 to February 2010
Gratz is an independent consultant.
From 1999 to October 2007, Sir.
Gratz served as executive vice president and chief financial officer of Ryerson.
From November 2001 to October 2007, he served as a metal processor and distributor, as well as President of the Ryerson coil processing division. Mr.
Gratz served as vice president and chief financial officer of inland steel industry from 1994 to 1998 and has held various other positions of the company since 1975, including Vice President of Finance. Mr.
Gratz is a certified public accountant.
He got a B. A.
State University of New York-Buffalo degree and master\'s degree in economicsB. A.
Bachelor\'s degree in Kellogg Graduate School of Management, Northwestern University. Frank H. Merlotti, Jr.
As director of the company since February 2006. Mr.
Merlotti holds the position of Coalesse division and Steelcase Co. , Ltd.
He has been a manufacturer of office furniture and furniture systems since October 2006 and has served as president of Steelcase North America from September 2002 to September 2006. Mr.
Merlotti has served as president and CEO of G & T Industries, a manufacturer and distributor of foam and soft bubbles
Surface materials in the Marine, office furniture and commercial construction industries, from August 1999 to September 2002.
From 1991 to 1999, Sir.
Merlotti has served as president and chief executive of Metropole Furniture Company.
From 1985 to 1999, Sir.
Merlotti has served as general manager, Business Furniture division, G & T Industries. Richard E.
Posey has been a director of the company since May 2009.
Prior to his retirement in 2007, he served as president and chief executive of Moen inincorporated, a leading global faucet market maker, for six years.
Before joining Moen, Mr.
Bosey is president and chief executive of Hamilton Beach/Proctor Silexfor five years. Mr.
Posey started his career in S. C.
For 22 years, he has held a series of increasingly responsible management positions overseas and in the United States. S.
Finally, the executive vice president of consumer goods in North America. Mr.
Bosey is the founding trustee of the School of Engineering Foundation at the Federal University of Virginia.
He got a B. A.
Bachelor\'s degree and master\'s degree in English from the University of Southern CaliforniaB. A.
University of Michigan. Patricia B.
Robinson has been a director of the company since November 2000. Ms.
Robinson has been an independent consultant since 1999.
From 1977 1998 Ms.
Robinson holds various positions with Mead, forest products, including school and office supplies for President Mead, vice president and strategic planning Gilbert, factory manager of professional mechanical facilities and product manager of new product packaging product introduction. Ms.
Robinson got B. A.
Duke University degree and master\'s degree in economicsB. A.
Get a degree at the University of Virginia Darton College. Item1A.
Risk factors our business is affected by some risks, including: We may not be able to grow, compete effectively and develop new products and applications unless we increase the market acceptance of our products.
Our main competitors are timber products, which make up a large part of the sales of decoration, railings, porches, fences and decorations.
As Wood/plastic composite products entered the market at the beginning of the 19 th century, their market acceptance has increased, but in the past few years, the conversion rate from the purchase of wood products to the purchase of wood/plastic composite products has slowed down.
Our ability to grow will depend to a large extent on whether we can successfully translate the demand for wood in decoration, railings, fences and decoration applications into demand for Trex products.
In order to increase our market share, we must overcome the following:
General wood flooring, railings, fences and decorative alternatives, especially the Trex brand products;
Many consumers and contractors resist changes in the well.
Mature wood products;
9. consumers lack awareness and the initial cost of Trex decks, railings, fences and decorations is greater than that of wood
Over time, the life of Trex products is longer than that of wood, and the time cost of realization;
Established relationships between suppliers of wood decoration, railings, fences and decorative products and contractors and home builders;
Practical and perceived quality issues of the first generation of wood/plastic composite products;
Competition from other Wood
We also have to compete with a number of companies in the wood/plastic composite parts of the decks, railings, fencing and trimming markets, and timber producers whose current production capacity exceeds the demand for such products.
Our failure to compete successfully in these markets may have a material adverse effect on our ability to replace Wood compared to wood, or increase the market share of wood/plastic composites.
Many of the traditional timber suppliers that we compete with have established connections with the construction and construction industries and have good
Our competitive ability depends to a certain extent on some factors that we cannot control, including the development of new non-competitors.
More competitive wood alternatives with Trex products.
On top of that, most of our revenue comes from the sales of our proprietary wood/plastic composites.
While we have developed and continue to develop new products made from other materials, if we encounter real or perceived significant problems, with the quality or acceptance of the products of the Trex wood/polyethylene composite, our lack of product diversity can have a significant adverse effect on our net sales level.
If we are unable to maintain product quality and product performance at an acceptable cost, our sales growth and profitability prospects may be adversely affected.
Only by successfully maintaining the quality and performance of our products can we expand net sales and maintain and strengthen profitable operations.
If we can\'t produce high
Producing high quality products at standard manufacturing rates and output, the unit cost may be higher.
The lack of product performance will hinder us from accepting our products in the market and lead to higher product replacement and consumer relationship costs, thus negatively affecting our profitability.
In the most recent period, we have experienced significant warranty costs related to a small portion of the products manufactured at Fernley plant in Nevada prior to 2007, and have increased the warranty reserve accordingly.
We agree to resolve the national class action, thus limiting our financial risk, which establishes our obligation to provide alternative products and provide partial labor compensation in each claim.
However, since the establishment of the reserve is an inherent uncertainty process involving an estimate of the number of future claims, our final loss may exceed our warranty reserve.
In recent years, our increased warranty reserves and payments for related claims have had a significant adverse impact on our profitability and cash flow during these periods.
Future increases in warranty reserves may have a significant adverse effect on our profitability and cash flow during the period when we increase and pay such claims.
In addition, our products are used outdoors and are sometimes affected by heavy use and harsh environments.
Although our limited warranty does not include any conditions attributable to God\'s conduct (
Such as floods, hurricanes, earthquakes, lightning, etc. , )
Environmental conditions (
Such as air pollution, mold, mildew, etc. )
Dyeing of foreign substances (
Such as dirt, grease, oil, etc. )
, Or normal weathering (
Defined as exposure to sunlight, weather, and atmosphere, which can cause any colored surface to fade gradually, chalk ash or build up dirt or stains)
If our products are affected in any way, this may result in an increased risk of product liability claims or litigation.
According to the mold growth of our products, we are currently defending some class action.
These claims and other potential claims are potential financial risks for us and may cause adverse publicity, which in turn may lead to consumer loss of confidence in our products, it will also reduce our sales.
Product quality claims may increase our expenses and have a significant adverse impact on the demand for our products, thereby reducing our net sales, net income and liquidity.
Our business is at risk in obtaining the raw materials we use at an acceptable price.
The production of our products requires a large amount of wood fiber and PE materials.
Our business strategy is to create a greater cost advantage than our competitors by using recycled plastic and recycled wood.
Our business may be affected by the termination of a large number of raw material sources, the rise in raw material prices or the failure to obtain sufficient additional raw materials to meet planned production growth.
Our ability to obtain adequate PE material supply depends on our success in developing new sources that meet the quality requirements, maintaining a good relationship with suppliers, and manage supply collection from geographically dispersed distribution centers and off-siteshore sources.
We sell to certain customers who account for a large part of our sales, and the loss of one or more of them may adversely affect our business.
A limited number of customers account for a large part of our sales.
Specifically, sales through our 15 largest customers accounted for about 89% of total sales for the fiscal year 2011, 92% for the fiscal year 2010 and 89% for the fiscal year 2009.
We expect that a large part of our sales will continue to be sold through a small number of customers, and certain customers will continue to make up a large part of our sales.
The loss of important customers may have a negative impact on our business, financial position and operational results.
We have limited ability to control inventory or build item inventory
In our distribution channels, ups will have a negative impact on our subsequent sales.
The dynamic nature of our industry may lead to significant fluctuations in the inventory levels of Trex products carried by our two companies
Step distribution channels.
We have limited ability to control or build inventory for precise items
Ups, this may adversely affect the net sales for our follow-up period.
Most of our sales target is wholesale dealers, and wholesale dealers sell our products to local timber factories.
Due to the seasonality of decoration, railings, fences and decoration needs, our distribution channel partners must anticipate the needs of our products, place orders for the products, and keep Trex products in stock before the gold plate
The construction season usually occurs in the later stages of our first to third fiscal quarters.
Therefore, our performance in the second and third fiscal quarters is difficult to predict, and past performance does not necessarily indicate future performance.
Inventory levels respond to some of the changing conditions in our industry, including product price increases due to rising raw material costs, an increase in the number of competing producers and an increase in the production capacity of these competitors, rapid pace of product introduction and innovation, changes in family level
Expenditure on construction and renovation, as well as the cost and availability of credit. Weather-
Related fluctuations in demand will also affect inventory levels.
Unexpected cool weather or unusual rainfall can lead to increased inventory
Adversely affect the sales of our products.
The demand for our products is affected by the general economic situation and may be adversely affected by the recession.
The demand for our products is related to changes in overall economic health, the level of home decoration activities, and the construction of new houses to a lesser extent.
In turn, these levels of activity are influenced by factors such as the value of household assets, consumer consumption habits, employment, interest rates and inflation.
Market conditions in the housing sector slowed significantly in 2008 and several subsequent periods, especially in the construction of new homes.
The value of housing equity in many markets has fallen sharply over this period, but has not yet recovered or has just begun to recover.
The depreciation of the value of housing equity has had an adverse effect on the availability of home equity withdrawals, which has resulted in the redistribution of home improvement spending in 11 dec.
The economy has suffered an unprecedented downturn since 2008.
We cannot predict when the economy will recover and whether the housing renovation and new house construction environment will stabilize or deteriorate.
Any ongoing recession can reduce consumer income or share capital that can be used for discretionary items such as decoration, railings, porches, fences and decorations, which may adversely affect the demand for our products
We have invested a lot of money in real estate, factories and equipment that can be out of date or damaged and cause our income to be charged.
In December 31, 2011, we had $115.
2 million of net property, plant and equipment.
We try to improve our manufacturing process, sometimes including implementing new technologies and replacing equipment in our manufacturing facilities, if the existing equipment is not fully depreciated, this may result in a fee being charged for our income.
On September 2007, we suspended the operation of the olive branch factory and integrated all our manufacturing operations into the Winchester and fairnanli factories.
On September 2009, we recorded
Tax impairment costs of $23.
3 million and long-
Living assets held by the facility.
As of December 31, 2011, our net property, plant and equipment was approximately $9.
9 million olive branch at our manufacturing plant in Mississippi.
We currently expect no further impairment of the remaining assets.
However, changes in the expected cash flow associated with the facility may result in additional impairment costs and a decrease in revenue for future periods.
Our level of debt and our ability to continue to obtain financing on favourable terms may adversely affect our financial health and our ability to compete.
We have $91 as of December 31, 2011.
9 million of total liabilities.
Our debt levels can have important consequences.
For example, it may increase our vulnerability to general adverse economic and industry conditions, including interest rate fluctuations;
We are required to use a large part of our operating cash flow for the payment of debt, thereby reducing the cash flow, capital expenditure and other general corporate uses of the funds we provide for working capital;
Limit our ability to borrow additional funds to ease liquidity restrictions, as there are financial and other restrictive covenants in our debt;
Limiting our flexibility in planning or responding to changes in our business and operations industries;
We are at a competitive disadvantage relative to companies with less debt;
Limits our ability to repay the principal secured debt.
In addition, our advanced secured credit mechanism imposes restrictions on operations and finance, which may limit our discretion on some business issues, which may make it more difficult for us to expand, fund our operations and participate in other business activities that may be in our interest.
These restrictions may limit our ability to: create additional debts and additional liens on our assets;
Engage in the merger, acquisition or disposal of assets;
Pay dividends or make other distributions;
Voluntary prepayment of other debts;
Conduct transactions with related personnel;
Change the nature of our business.
In addition to our current debt, we may also be in debt.
Any additional liability that we may generate in the future can make us face similar or even stricter conditions.
Our ability to refinance our debt will depend on our ability to generate cash flow from operations in the future and to raise extra funds, including by providing stock or debt securities.
We may not be able to generate sufficient cash flow from operations or raise additional funds that are necessary for us to repay our debts and meet our other cash needs when they are due.
Our ability to pay the predetermined principal and interest on convertible notes, borrow and repay amounts under our revolving credit mechanism, and continue to comply with our loan covenants, it will mainly depend on our ability to generate sufficient cash flow from operations.
Our failure to comply with our loan covenants may result in our lenders speeding up our repayment obligations under credit financing, which may be announced for immediate payment due to default and may result in cross-cutting
Our default under $91
9 million principal of outstanding convertible notes.
Our ability to borrow under the revolving credit mechanism relates to a loan base consisting of specific receivables and inventories.
In order to continue to comply with our credit arrangements, we must maintain a specific financial ratio based on our debt, capital, net worth, fixed fees and income levels (
Excluding special income and special incomecash losses)
Before interest, taxes, depreciation, and amortization, all of this is at risk for our business. Item2.
We lease our corporate headquarters in Winchester, Virginia, which consists of approximately 32,000 square feet of office space and the lease expires on March 2020.
In 2005, to relocate our corporate headquarters, we entered into an agreement to lease approximately 55,000 square feet of office space in Dulles, Virginia.
The lease expires in the middle2019.
We then reconsidered the decision to relocate the company\'s headquarters and decided not to relocate.
We have performed subletting for the entire space we currently rent.
The terms of the existing sublease expire from 2012 to 2015.
For a description of our financial report relating to the Dulles lease agreement, see Note 13 to the consolidated financial statements elsewhere in this report.
We have about 74 acres of land and buildings on this land in Winchester, Virginia.
The site includes our original manufacturing facility, which contains approximately 115,000 square feet of space, our R & D technical facility, which contains approximately 30,000 square feet of space, mixed-
Use a building with approximately 173,000 square feet of space and an additional manufacturing facility with approximately 150,000 square feet of space.
We own the land and manufacturing plant in fludley, Nevada, which has about 250,000 square feet of manufacturing space.
Our Fernley site is located on approximately 37 acres of land and includes outdoor open storage.
Our olive branches in Mississippi and the buildings on this land have about 102 acres.
The site consists of four buildings with an area of approximately 200,000 square feet for manufacturing and raw material handling operations.
On September 2007, we suspended the operation of the olive branch factory and integrated all our manufacturing operations into the Winchester and fairnanli factories.
We rented about 1 car in total.
The leased warehouse covers an area of square feet and is valid from 2012 to 2015.
For information on these leases, see Note 10 to consolidated financial statements in other parts of this report.
The equipment and machinery we use in our business mainly include plastic and wood transportation and processing equipment.
We have all the manufacturing equipment.
We lease forklift equipment in our facilities according to the operation.
We regularly evaluate our various facilities and equipment and make capital investments if necessary.
We spent a total of $7 in 2011.
4 million with respect to capital expenditures, it is primarily intended to improve processes and increase productivity.
We estimate that capital expenditure for 2012 will be approximately $10 to $15 million.
We want these expenditures to be used primarily for process and productivity improvements as well as for system upgrades. Item3.
On January 19, 2009, the Santa Cruz County High Court of California filed a class action case allegedly against the company, filed by Lieff, Cabraser, Heimann & Bernstein\'s chief law firm, law firm and other law firm (
The wikilieff Cabraser Group Limited)
I represent Eric Ross and Bradley.
The plaintiff in Hureth and similar circumstances.
These plaintiffs generally claim that there are certain defects in the company\'s products and that the company has failed to provide adequate remedies for the defective products.
On February 13, 2009, the company transferred the case to the U. S. District Court in Northern California.
On January 21, 2009, Hagens Berman Sobol Shapiro LLP law firm filed a class action lawsuit against the company in the U. S. District Court in the Western District of Washington (
Hagens Berman company)
Plaintiffs representing Mark Okano and similar circumstances generally claim that there are certain product defects in the company\'s products and that the company has failed to provide adequate remedies for the defective products.
The case was handed over to the California court by the Washington court as a related case in the Lieff Cabraser group case.
July 30, 2009, United StatesS.
The Northern District Court of California initially approved the settlement of the Lieff Cabraser group\'s claim for litigation involving the surface peeling of the company\'s products, and on March 15, 2010, it finally approved the settlement.
On April 14, 2010, Hagens Berman filed a notice with the Ninth Circuit Appeals Court of the United States to appeal the district court\'s decision.
On July 9, 2010, Hagens Berman dismissed their appeal, effectively making the settlement the final result.
On March 25, 2010, Lieff Cabraser Group modified its complaint, adding claims relating to alleged defects in the company\'s products and alleged false statements relating to mold growth.
The Hagens Berman company charged similar charges in its initial complaint.
In its final order to approve the surface peeling solution, the district court incorporated two pending proceedings relating to the mold claim and appointed Hagens Berman as the chief counsel for the case.
The Company believes that these claims are unreasonable and will strongly defend the lawsuit.
On December 15, 2010, Cohen & Malad, the leading law firm, allegedly filed a class action lawsuit against the company in the U. S. District Court in Western Kentucky (x93Cohen& Maladx94)
On June 13, 2011, on behalf of Richard Levin and the plaintiffs of similar circumstances, Cohen and marade filed a class action against the company on behalf of Alan copetski and the plaintiffs of similar circumstances in the Indiana Marion Circuit/high court.
On June 28, 2011, the company handed over the Kopetsky case to the Southern District Court of Indiana, USA.
On August 11, 2011, the 50 Circuit Court in Chippewa County, Michigan filed a class action against the company on behalf of Joel and Lori puvers, as well as the plaintiffs in similar circumstances.
On August 26, 2011, the company handed over the Peffers case to the US District Court in West Michigan.
The plaintiffs in these so-called class action actions often claim certain defects in the company\'s products and claim false statements relating to mold growth.
The company is of the view that these claims are unreasonable and will vigorously defend these proceedings.
The company also has other lawsuits and other claims, which are claims that come with day-to-day litigation and business.
Management has assessed the merits of these other proceedings and claims and believes that their final settlement will not have a significant impact on the Company\'s consolidated financial position, results of operations, liquidity or competitive position.
Part 2 5.
The common stock market of registrants, related shareholder matters, and the stock securities market in which issuers purchase common stock since April 8, 1999, our common stock has been listed on the New York Stock Exchange.
During the period from April 8-20, 1999 to November 22, it was listed as the symbol twtwp GmbH.
Effective November 23, 2009, the symbol becomes a TREX symbol.
The table below shows the high, low selling prices reported by The New York Stock Exchange for the period 2011 and 2010 for our common stock: 2011 high, low first quarter $33. 39 $ 22.
68 second quarter 34. 00 23.
24 Quarter 3 25. 97 15.
40 in the fourth quarter 23. 78 14.
The high of $2010 in the first quarter was 22. 00 $ 15.
39 26 in the second quarter. 51 18.
94 23 in the third quarter. 01 18.
42 24 in the fourth quarter. 67 16.
We have never paid a cash dividend to our common stock.
We intend to retain future income, if any, to fund the development and expansion of our business and, therefore, we do not expect to pay any cash dividends of common stock in the foreseeable future.
Under the terms of our credit agreement, our ability to pay dividends is limited.
15 the following figure and table of the shareholder return performance chart show the cumulative total shareholder return product index of Trex common stock in the past five fiscal years compared with Russell 2000 Index and S & P 600 building.
The chart assumes an investment of $100 in December 31, 2006 (1)
Common stock of Trex ,(2)
Russell 2000 Index and (3)
The S & P 600 index Building Products index, and assumes a weighted reinvestment of dividends and market value of 2008, 2009, 2010 and 2011 as of December 31, 2007.
December 31, 2006 December 31, 2007 December 31, 2008 December 31, 2009 December 31, 2010 December 31, 2011 Trex the company $100.