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As Of Filer Filing For·On·As Docs:Size Issuer Filing Agent 5/10/21 Trex Co. Inc. 10-Q 3/31/21 74:4.5M Donnelley … Solutions/FA |
Document/Exhibit Description Pages Size 1: 10-Q Quarterly Report HTML 601K 2: EX-31.1 Certification -- §302 - SOA'02 HTML 24K 3: EX-31.2 Certification -- §302 - SOA'02 HTML 24K 4: EX-32 Certification -- §906 - SOA'02 HTML 21K 11: R1 Cover Page HTML 74K 12: R2 Consolidated Statements of Comprehensive Income HTML 78K 13: R3 Consolidated Balance Sheets HTML 101K 14: R4 Consolidated Balance Sheets (Parenthetical) HTML 40K 15: R5 Statements of Changes in Stockholders' Equity HTML 61K 16: R6 Consolidated Statements of Cash Flows HTML 91K 17: R7 Business and Organization HTML 25K 18: R8 Basis of Presentation HTML 27K 19: R9 Recently Adopted Accounting Standards HTML 31K 20: R10 New Accounting Standards Not Yet Adopted HTML 25K 21: R11 Inventories HTML 33K 22: R12 Prepaid Expenses and Other Assets HTML 31K 23: R13 Goodwill and Other Intangible Assets HTML 25K 24: R14 Accrued Expenses and Other Liabilities HTML 34K 25: R15 Debt HTML 27K 26: R16 Leases HTML 46K 27: R17 Financial Instruments HTML 24K 28: R18 Stockholders' Equity HTML 46K 29: R19 Revenue From Contracts With Customers HTML 50K 30: R20 Stock-Based Compensation HTML 46K 31: R21 Income Taxes HTML 28K 32: R22 Segment Information HTML 65K 33: R23 Seasonality HTML 24K 34: R24 Commitments and Contingencies HTML 50K 35: R25 Summary of Significant Accounting Policies HTML 24K (Policies) 36: R26 Inventories (Tables) HTML 32K 37: R27 Prepaid Expenses and Other Assets (Tables) HTML 30K 38: R28 Accrued Expenses and Other Liabilities (Tables) HTML 33K 39: R29 Leases (Tables) HTML 46K 40: R30 Stockholders' Equity (Tables) HTML 44K 41: R31 Revenue From Contracts With Customers (Tables) HTML 43K 42: R32 Stock-Based Compensation (Tables) HTML 46K 43: R33 Segment Information (Tables) HTML 60K 44: R34 Commitments and Contingencies (Tables) HTML 41K 45: R35 Business and Organization - Additional Information HTML 22K (Detail) 46: R36 Inventories - Summary of Inventories (Detail) HTML 31K 47: R37 Inventories - Additional Information (Detail) HTML 25K 48: R38 Prepaid Expenses and Other Assets - Summary of HTML 35K Prepaid Expenses and Other Assets (Detail) 49: R39 Goodwill and Other Intangible Assets - Additional HTML 38K Information (Detail) 50: R40 Accrued Expenses and Other Liabilities - Summary HTML 41K of Accrued Expenses and Other Liabilities (Detail) 51: R41 Debt - Additional Information (Detail) HTML 41K 52: R42 Leases - Additional Information (Detail) HTML 32K 53: R43 Leases - Supplemental Cash flow Information to HTML 37K operating leases (Details) 54: R44 Leases - Maturities of Operating Lease Liabilities HTML 40K (Details) 55: R45 Stockholders' Equity - Additional Information HTML 34K (Detail) 56: R46 Stockholders' Equity - Computation of Basic and HTML 56K Diluted Earnings Per Share (Detail) 57: R47 Stockholders' Equity - Antidilutive Securities HTML 28K Excluded from Computation of Earnings Per Share (Detail) 58: R48 Revenue From Contracts With Customers - Additional HTML 25K Information (Detail) 59: R49 Revenue From Contracts With Customers - Summary of HTML 38K Disaggregated Net Sales (Detail) 60: R50 Stock-Based Compensation - Additional Information HTML 34K (Detail) 61: R51 Stock-Based Compensation - Summary of Stock-Based HTML 33K Compensation Expenses (Detail) 62: R52 Stock-Based Compensation - Summary of Assumptions HTML 35K Used to Estimate Fair Value of Each SAR (Detail) 63: R53 Stock-Based Compensation - Summary of Stock-Based HTML 30K Compensation Grants (Detail) 64: R54 Stock-Based Compensation - Summary of Stock-Based HTML 25K Compensation Grants (Parenthetical) (Detail) 65: R55 Income Taxes - Additional Information (Detail) HTML 41K 66: R56 Segment Information - Additional Information HTML 23K (Detail) 67: R57 Segment Information - Details of Segment HTML 64K Information (Detail) 68: R58 Segment Information - Schedule of Reconciliation HTML 49K of Net Income to EBITDA (Detail) 69: R59 Commitments and Contingencies - Additional HTML 40K Information (Detail) 70: R60 Commitments and Contingencies - Summary of HTML 35K Reconciliation of Company's Residential Product Warranty Reserve (Detail) 72: XML IDEA XML File -- Filing Summary XML 131K 10: XML XBRL Instance -- d134527d10q_htm XML 892K 71: EXCEL IDEA Workbook of Financial Reports XLSX 70K 6: EX-101.CAL XBRL Calculations -- trex-20210331_cal XML 118K 7: EX-101.DEF XBRL Definitions -- trex-20210331_def XML 410K 8: EX-101.LAB XBRL Labels -- trex-20210331_lab XML 809K 9: EX-101.PRE XBRL Presentations -- trex-20210331_pre XML 641K 5: EX-101.SCH XBRL Schema -- trex-20210331 XSD 127K 73: JSON XBRL Instance as JSON Data -- MetaLinks 289± 406K 74: ZIP XBRL Zipped Folder -- 0001193125-21-156397-xbrl Zip 134K
10-Q |
i ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
i Delaware |
i 54-1910453 | |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
i 160 Exeter Drive i Winchester, i Virginia |
i 22603-8605 | |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
i Common stock |
i TREX |
i New York Stock Exchange |
i Large accelerated filer | ☒ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☐ | Smaller reporting company | i ☐ | |||
Emerging growth company | i ☐ |
Three Months Ended |
||||||||
2020 |
||||||||
Net sales |
$ | i 245,524 | $ | i 200,395 | ||||
Cost of sales |
i 149,723 | i 110,699 | ||||||
|
|
|
|
|||||
Gross profit |
i 95,801 | i 89,696 | ||||||
Selling, general and administrative expenses |
i 31,312 | i 34,561 | ||||||
|
|
|
|
|||||
Income from operations |
i 64,489 | i 55,135 | ||||||
Interest income, net |
( i 3 | ) | ( i 522 | ) | ||||
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|
|
|
|||||
Income before income taxes |
i 64,492 | i 55,657 | ||||||
Provision for income taxes |
i 15,947 | i 13,255 | ||||||
|
|
|
|
|||||
Net income |
$ | i 48,545 | $ | i 42,402 | ||||
|
|
|
|
|||||
Basic earnings per common share |
$ | i 0.42 | $ | i 0.37 | ||||
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|
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|
|||||
Basic weighted average common shares outstanding |
i 115,663,366 | i 116,259,058 | ||||||
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|
|
|
|||||
Diluted earnings per common share |
$ | i 0.42 | $ | i 0.36 | ||||
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|
|
|
|||||
Diluted weighted average common shares outstanding |
i 116,017,400 | i 116,647,442 | ||||||
|
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|
|
|||||
Comprehensive income |
$ | i 48,545 | $ | i 42,402 | ||||
|
|
|
|
2021 |
||||||||
(Unaudited) |
||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and cash equivalents |
$ | i 8,221 | $ | i 121,701 | ||||
Accounts receivable, net |
i 309,527 | i 106,748 | ||||||
Inventories |
i 75,012 | i 68,238 | ||||||
Prepaid expenses and other assets |
i 17,322 | i 25,310 | ||||||
|
|
|
|
|||||
Total current assets |
i 410,082 | i 321,997 | ||||||
Property, plant and equipment, net |
i 378,167 | i 336,537 | ||||||
Goodwill and other intangible assets, net |
i 73,560 | i 73,665 | ||||||
Operating lease assets |
i 33,672 | i 34,382 | ||||||
Other assets |
i 4,809 | i 3,911 | ||||||
|
|
|
|
|||||
Total assets |
$ | i 900,290 | $ | i 770,492 | ||||
|
|
|
|
|||||
Liabilities and Stockholders’ Equity |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | i 39,167 | $ | i 38,622 | ||||
Accrued expenses and other liabilities |
i 55,058 | i 62,331 | ||||||
Accrued warranty |
i 5,400 | i 5,400 | ||||||
Line of credit |
i 136,000 | — | ||||||
|
|
|
|
|||||
Total current liabilities |
i 235,625 | i 106,353 | ||||||
Operating lease liabilities |
i 27,420 | i 28,579 | ||||||
Non-current accrued warranty |
i 24,145 | i 24,073 | ||||||
Deferred income taxes |
i 22,956 | i 22,956 | ||||||
|
|
|
|
|||||
Total liabilities |
i 310,146 | i 181,961 | ||||||
|
|
|
|
|||||
Commitments and contingencies |
i — | i — | ||||||
Stockholders’ equity: |
||||||||
Preferred stock, $ i i 0.01 /
par value, i i 3,000,000 / shares authorized; i i i i none / / /
issued and outstanding |
i — | i — | ||||||
Common stock, $ i i 0.01 /
par value, i i 180,000,000 / shares authorized; i 140,643,173
and i 140,577,005 shares issued and i 115,361,396 and i 115,799,503
shares outstanding at March 31, 2021 and December 31, 2020, respectively |
i 1,406 | i 1,406 | ||||||
Additional paid-in capital |
i 124,678 | i 126,087 | ||||||
Retained earnings |
i 785,856 | i 737,311 | ||||||
Treasury stock, at cost, i 25,281,777 and i 24,777,502 shares at March 31, 2021 and December 31, 2020, respectively |
( i 321,796 | ) | ( i 276,273 | ) | ||||
|
|
|
|
|||||
Total stockholders’ equity |
i 590,144 | i 588,531 | ||||||
|
|
|
|
|||||
Total liabilities and stockholders’ equity |
$ | i 900,290 | $ | i 770,492 | ||||
|
|
|
|
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Total |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance, December 31, 2020 |
i 115,799,503 | $ | i 1,406 | $ | i 126,087 | $ | i 737,311 | i 24,777,502 | $ | ( i 276,273 | ) | $ | i 588,531 | |||||||||||||||
Net income |
— | — | — | i 48,545 | — | — | i 48,545 | |||||||||||||||||||||
Employee stock plans |
i 28,286 | — | i 460 | — | — | — | i 460 | |||||||||||||||||||||
Shares withheld for taxes on award s |
( i 38,212 | ) | — | ( i 4,045 | ) | — | — | — | ( i 4,045 | ) | ||||||||||||||||||
Stock-based compensation |
i 76,094 | — | i 2,176 | — | — | — | i 2,176 | |||||||||||||||||||||
Repurchases of common stock |
( i 504,275 | ) | — | — | — | i 504,275 | ( i 45,523 | ) | ( i 45,523 | ) | ||||||||||||||||||
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Balance, March 31, 202 1 |
i 115,361,396 | $ | i 1,406 | $ | i 124,678 | $ | i 785,856 | i 25,281,777 | $ | ( i 321,796 | ) | $ | i 590,144 | |||||||||||||||
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|
Common Stock |
Additional Paid-In Capital |
Retained Earnings |
Treasury Stock |
Total |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance, December 31, 2019 |
i 116,481,442 | $ | i 1,404 | $ | i 123,294 | $ | i 561,680 | i 23,893,484 | $ | ( i 237,203 | ) | $ | i 449,175 | |||||||||||||||
Net incom e |
— | — | — | i 42,402 | — | — | i 42,402 | |||||||||||||||||||||
Employee stock plans |
i 32,772 | — | i 299 | — | — | — | i 299 | |||||||||||||||||||||
Shares withheld for taxes on awards |
( i 76,284 | ) | — | ( i 3,856 | ) | — | — | — | ( i 3,856 | ) | ||||||||||||||||||
Stock-based compensation |
i 152,408 | — | i 2,775 | — | — | — | i 2,775 | |||||||||||||||||||||
Repurchases of common stock |
( i 884,018 | ) | — | — | — | i 884,018 | ( i 39,072 | ) | ( i 39,072 | ) | ||||||||||||||||||
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Balance, March 31, 2020 |
i 115,706,320 | $ | i 1,404 | $ | i 122,512 | $ | i 604,082 | i 24,777,502 | $ | ( i 276,275 | ) | $ | i 451,723 | |||||||||||||||
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Three Months Ended March 31, |
||||||||
2020 |
||||||||
Operating Activities |
||||||||
Net incom e |
$ | i 48,545 | $ | i 42,402 | ||||
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
Depreciation and amortization |
i 6,423 | i 3,851 | ||||||
Stock-based compensation |
i 2,176 | i 2,775 | ||||||
Gain on disposal of property, plant and equipment |
( i 98 | ) | ( i 123 | ) | ||||
Other non-cash adjustments |
i 77 | i 32 | ||||||
Changes in operating assets and liabilities: |
||||||||
Accounts receivable |
( i 202,781 | ) | ( i 162,780 | ) | ||||
Inventories |
( i 6,774 | ) | ( i 2,610 | ) | ||||
Prepaid expenses and other assets |
( i 809 | ) | i 1,059 | |||||
Accounts payable |
i 10,494 | i 8,865 | ||||||
Accrued expenses and other liabilities |
( i 14,453 | ) | ( i 14,089 | ) | ||||
Income taxes receivable/payable |
i 14,626 | i 11,850 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
( i 142,574 | ) | ( i 108,768 | ) | ||||
|
|
|
|
|||||
Investing Activities |
||||||||
Expenditures for property, plant and equipment |
( i 58,093 | ) | ( i 22,733 | ) | ||||
Proceeds from sales of property, plant and equipment |
i 293 | i 2,136 | ||||||
|
|
|
|
|||||
Net cash used in investing activities |
( i 57,800 | ) | ( i 20,597 | ) | ||||
|
|
|
|
|||||
Financing Activities |
||||||||
Borrowings under line of credit |
i 142,000 | i 36,500 | ||||||
Principal payments under line of credit |
( i 6,000 | ) | ( i 8,000 | ) | ||||
Repurchases of common stock |
( i 49,566 | ) | ( i 42,929 | ) | ||||
Proceeds from employee stock purchase and option plans |
i 460 | i 300 | ||||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
i 86,894 | ( i 14,129 | ) | |||||
|
|
|
|
|||||
Net decrease in cash and cash equivalents |
( i 113,480 | ) | ( i 143,494 | ) | ||||
Cash and cash equivalents, beginning of period |
i 121,701 | i 148,833 | ||||||
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|
|
|||||
Cash and cash equivalents, end of period |
$ | i 8,221 | $ | i 5,339 | ||||
|
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|
|
|||||
Supplemental Disclosure: |
||||||||
Cash paid for interest |
$ | i 92 | $ | i 1 | ||||
Cash paid for income taxes, net |
$ | i 1,319 | $ | i 1,405 |
1. |
BUSINESS AND ORGANIZATION |
2. |
BASIS OF PRESENTATION |
3. |
RECENTLY ADOPTED ACCOUNTING STANDARDS |
4. |
NEW ACCOUNTING STANDARDS NOT YET ADOPTED |
5. |
INVENTORIES |
Finished goods |
$ | i 45,688 | $ | i 39,048 | ||||
Raw materials |
i 44,407 | i 44,475 | ||||||
|
|
|
|
|||||
Total FIFO (first-in, first-out) inventories |
i 90,095 | i 83,523 | ||||||
Reserve to adjust inventories to LIFO value |
( i 16,821 | ) | ( i 16,821 | ) | ||||
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|
|
|
|||||
Total LIFO inventories |
$ | i 73,274 | $ | i 66,702 | ||||
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|
|
6. |
PREPAID EXPENSES AND OTHER ASSETS |
2021 |
||||||||
Prepaid expenses |
$ | i 7,640 | $ | i 7,285 | ||||
Revenues in excess of billings |
i 6,499 | i 6,612 | ||||||
Contract retainage |
i 2,896 | i 2,267 | ||||||
Income tax receivable |
— | i 7,823 | ||||||
Other |
i 287 | i 1,323 | ||||||
|
|
|
|
|||||
Total prepaid expenses and other assets |
$ | i 17,322 | $ | i 25,310 | ||||
|
|
|
|
7. |
GOODWILL AND OTHER INTANGIBLE ASSETS |
8. |
ACCRUED EXPENSES AND OTHER LIABILITIES |
2021 |
||||||||
Sales and marketing |
$ | i 19,861 | $ | i 22,938 | ||||
Compensation and benefits |
i 10,902 | i 21,156 | ||||||
Income taxes |
i 7,193 | i 389 | ||||||
Operating lease liabilities |
i 7,130 | i 6,708 | ||||||
Manufacturing costs |
i 2,813 | i 3,641 | ||||||
Billings in excess of revenues |
i 1,189 | i 1,244 | ||||||
Customer deposits |
i 1,086 | i 1,174 | ||||||
Other |
i 4,884 | i 5,081 | ||||||
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|
|
|||||
Total accrued expenses and other liabilities |
$ | i 55,058 | $ | i 62,331 | ||||
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|
|
9. |
DEBT |
10. |
LEASES |
Three Months Ended March 31, |
||||||||
Supplemental cash flow information |
2021 |
2020 |
||||||
Cash paid for amounts included in the measurement of operating lease liabilities |
$ | i 2,056 | $ | i 2,143 | ||||
Operating ROU assets obtained in exchange for lease liabilities |
$ | i 1,038 | $ | — | ||||
Supplemental balance sheet information |
2021 |
|||||||
Operating lease ROU assets |
$ | i 33,672 | $ | i 34,382 | ||||
Operating lease liabilities: |
||||||||
Accrued expenses and other current liabilities |
$ | i 7,130 | $ | i 6,708 | ||||
Operating lease liabilities |
i 27,420 | i 28,579 | ||||||
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|
|||||
Total operating lease liabilities |
$ | i 34,550 | $ | i 35,287 | ||||
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|
|
Maturities of operating lease liabilities |
||||
2021 |
$ | i 6,163 | ||
2022 |
i 7,723 | |||
2023 |
i 6,748 | |||
2024 |
i 6,390 | |||
2025 |
i 4,483 | |||
Thereafter |
i 6,599 | |||
|
|
|||
Total lease payments |
i 38,106 | |||
Less imputed interest |
( i 3,556 | ) | ||
|
|
|||
Total operating lease liabilities |
$ | i 34,550 | ||
|
|
11. |
FINANCIAL INSTRUMENTS |
12. |
STOCKHOLDERS’ EQUITY |
Three Months Ended |
||||||||
2020 |
||||||||
Numerator: |
||||||||
Net income available to common shareholders |
$ | i 48,545 | $ | i 42,402 | ||||
|
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|
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Denominator: |
||||||||
Basic weighted average shares outstanding |
i 115,663,366 | i 116,259,058 | ||||||
Effect of dilutive securities: |
||||||||
Stock appreciation rights and options |
i 207,060 | i 181,446 | ||||||
Restricted stock |
i 146,974 | i 206,938 | ||||||
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|
|||||
Diluted weighted average shares outstanding |
i 116,017,400 | i 116,647,442 | ||||||
|
|
|
|
|||||
Basic earnings per share |
$ | i 0.42 | $ | i 0.37 | ||||
|
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|
|
|||||
Diluted earnings per share |
$ | i 0.42 | $ | i 0.36 | ||||
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|
Three Months Ended March 31, |
||||||||
2020 |
||||||||
Stock appreciation rights |
i 7,181 | i 18,270 | ||||||
Restricted stock |
i 23,079 | — |
13. |
REVENUE FROM CONTRACTS WITH CUSTOMERS |
Three Months Ended March 31, 2021 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | i 233,070 | $ | — | $ | i 233,070 | ||||||
Products transferred over time and fixed price contracts |
— | i 12,454 | i 12,454 | |||||||||
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|||||||
$ | i 233,070 | $ | i 12,454 | $ | i 245,524 | |||||||
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Three Months Ended March 31, 2020 |
Reportable Segment |
|||||||||||
Trex Residential |
Trex Commercial |
Total |
||||||||||
Timing of Revenue Recognition and Type of Contract |
||||||||||||
Products transferred at a point in time and variable consideration contracts |
$ | i 186,874 | $ | — | $ | i 186,874 | ||||||
Products transferred over time and fixed price contracts |
— | i 13,521 | i 13,521 | |||||||||
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|
|
|
|
|||||||
$ | i 186,874 | $ | i 13,521 | $ | i 200,395 | |||||||
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14. |
STOCK-BASED COMPENSATION |
Stock Awards Granted |
Weighted-Average Grant Price Per Share |
|||||||
Time-based restricted stock units |
i 23,330 | $ | i 103.89 | |||||
Performance-based restricted stock units (a) |
i 36,522 | $ | i 86.26 | |||||
Stock appreciation rights |
i 15,029 | $ | i 104.56 |
(a) | Includes i 26,511 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2021, and adjustments of i 4,813,
( i 887), and i 6,085
to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2020, 2019, and 2018, respectively. |
Three Months Ended |
Three Months Ended |
|||||||
Weighted-average fair value of grants |
$ | i 51.84 | $ | i 17.83 | ||||
Dividend yield |
i 0 | % | i 0 | % | ||||
Average risk-free interest rate |
i 0.6 | % | i 1.4 | % | ||||
Expected term (years) |
i 5 | i 5 | ||||||
Expected volatility |
i 58.7 | % | i 37.8 | % |
Three Months Ended March 31 |
||||||||
2021 |
2020 |
|||||||
Stock appreciation rights |
$ | i 114 | $ | i 354 | ||||
Time-based restricted stock and restricted stock units |
i 687 | i 1,256 | ||||||
Performance-based restricted stock and restricted stock units |
i 1,275 | i 1,135 | ||||||
Employee stock purchase plan |
i 100 | i 30 | ||||||
|
|
|
|
|||||
Total stock-based compensation |
$ | i 2,176 | $ | i 2,775 | ||||
|
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|
|
15. |
INCOME TAXES |
16. |
SEGMENT INFORMATION |
• | Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® . Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. |
• | Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products are marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market. |
Three Months Ended |
Three Months Ended March 31, 2020 |
|||||||||||||||||||||||
Trex Residential |
Trex Commercial |
Total |
Trex Residential |
Trex Commercial |
Total |
|||||||||||||||||||
Net sales |
$ | i 233,070 | $ | i 12,454 | $ | i 245,524 | $ | i 186,874 | $ | i 13,521 | $ | i 200,395 | ||||||||||||
Net income (loss) |
$ | i 48,745 | $ | ( i 200 | ) | $ | i 48,545 | $ | i 41,020 | $ | i 1,382 | $ | i 42,402 | |||||||||||
EBITDA |
$ | i 70,964 | $ | ( i 52 | ) | $ | i 70,912 | $ | i 56,950 | $ | i 2,036 | $ | i 58,986 | |||||||||||
Depreciation and amortization |
$ | i 6,210 | $ | i 213 | $ | i 6,423 | $ | i 3,664 | $ | i 187 | $ | i 3,851 | ||||||||||||
Income tax expense (benefit) |
$ | i 16,012 | $ | ( i 65 | ) | $ | i 15,947 | $ | i 12,788 | $ | i 467 | $ | i 13,255 | |||||||||||
Capital expenditures |
$ | i 56,563 | $ | i 1,530 | $ | i 58,093 | $ | i 22,416 | $ | i 317 | $ | i 22,733 | ||||||||||||
Total assets |
$ | i 808,864 | $ | i 91,426 | $ | i 900,290 | $ | i 539,352 | $ | i 91,504 | $ | i 630,856 |
Three Months Ended |
Three Months Ended March 31, 2020 |
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Trex Residential |
Trex Commercial |
Total |
Trex Residential |
Trex Commercial |
Total |
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Net income (loss) |
$ | i 48,745 | $ | ( i 200 | ) | $ | i 48,545 | $ | i 41,020 | $ | i 1,382 | $ | i 42,402 | |||||||||||
Interest income, net |
( i 3 | ) | — | ( i 3 | ) | ( i 522 | ) | — | ( i 522 | ) | ||||||||||||||
Income tax expense (benefit) |
i 16,012 | ( i 65 | ) | i 15,947 | i 12,788 | i 467 | i 13,255 | |||||||||||||||||
Depreciation and amortization |
i 6,210 | i 213 | i 6,423 | i 3,664 | i 187 | i 3,851 | ||||||||||||||||||
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EBITDA |
$ | i 70,964 | $ | ( i 52 | ) | $ | i 70,912 | $ | i 56,950 | $ | i 2,036 | $ | i 58,986 | |||||||||||
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17. |
SEASONALITY |
18. |
COMMITMENTS AND CONTINGENCIES |
Three Months Ended March 31, 2021 |
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Surface Flaking |
Other Residential |
Total |
||||||||||
Beginning balance, January 1 |
$ | i 21,325 | $ | i 8,148 | $ | i 29,473 | ||||||
Provisions and changes in estimates |
— | i 1,092 | i 1,092 | |||||||||
Settlements made during the period |
( i 604 | ) | ( i 416 | ) | ( i 1,020 | ) | ||||||
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Ending balance, March 31 |
$ | i 20,721 | $ | i 8,824 | $ | i 29,545 | ||||||
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Three Months Ended March 31, 2020 |
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Surface Flaking |
Other Residential |
Total |
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Beginning balance, January 1 |
$ | i 19,024 | $ | i 6,470 | $ | i 25,494 | ||||||
Provisions and changes in estimates |
— | i 321 | i 321 | |||||||||
Settlements made during the period |
( i 557 | ) | ( i 168 | ) | ( i 725 | ) | ||||||
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Ending balance, March 31 |
$ | i 18,467 | $ | i 6,623 | $ | i 25,090 | ||||||
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Decking and Accessories |
Our principal decking products are Trex Transcend ® , Trex Select® ® . In addition, our Trex Transcend decking product can also be used as cladding. Our high-performance, low-maintenance, eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold and scratching.We also offer accessories to our decking products, including Trex Hideaway ® and Trex DeckLighting™ , an outdoor lighting system. Trex DeckLighting is a line of energy-efficient LED dimmable deck lighting, which is designed for use on posts, floors and
steps. The line includes a post cap light, deck rail light, riser light and a recessed deck light. | |
Railing |
Our residential railing products are Trex Transcend ® Railing, Trex Select® Railing, Trex Enhance® Railing and Trex Signature® aluminum railing. Trex Transcend Railing, made from approximately 40 percent recycled content, is available in the colors of Trex Transcend decking and finishes that make it appropriate for use with Trex decking products as well as other decking materials, which we believe enhances the sales prospects of our railing products. Trex Select Railing, made from approximately 40 percent recycled content, is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck. Trex Enhance, made from approximately 40 percent recycled content, is available in three colors and is offered through home improvement retailers in kits that contain the complete railing system. Trex Signature
aluminum railing, made from a minimum of 50 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. | |
Fencing |
Our Trex Seclusions ® fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rail, pickets, top rail and decorative post caps. |
Architectural Railing Systems |
Our architectural railing systems are pre-engineered guardrails with options to accommodate styles ranging from classic and elegant wood top rail combined with sleek stainless components and glass infill, to modern and minimalist stainless cable and rod infill choices. Trex Commercial can also design, engineer and manufacture custom railing systems tailored to the customer’s specific material, style and finish. Many railing styles are achievable, including glass, mesh, perforated railing and cable railing. | |
Aluminum Railing Systems |
Trex Signature ® aluminum railing collection, made from a minimum of 50 percent recycled content, combines superior styling with the unparalleled strength of aluminum – making it an ideal railing choice for a variety of commercial settings. Its straightforward, unobtrusive design features traditional balusters and contemporary vertical rods, and can be installed with continuously graspable rail options for added safety, comfort and functionality. Trex Signature is available in a variety of colors and stock lengths to accommodate project needs. |
Staging Equipment and Accessories |
Our advanced modular, lightweight custom staging systems include portable platforms, orchestra shells, guardrails, stair units, barricades, camera platforms, VIP viewing decks, ADA infills, DJ booths, pool covers, and other custom applications. Our systems provide superior staging product solutions for facilities and venues with custom needs. Our modular stage equipment is designed to appear seamless, feel permanent, and maximize the functionality of the space. |
• | Increase in net sales of 22.5%, or $45.1 million, to $245.5 million for the three months ended March 31, 2021 compared to $200.4 million for the three months ended March 31, 2020. |
• | Increase in net income to $48.5 million, or $0.42 per diluted share, for the three months ended March 31, 2021 compared to $42.4 million, or $0.36 per diluted share, for the three months ended March 31, 2020. |
• | Increase in EBITDA (earnings before interest, income tax and depreciation and amortization) of 20.2%, or $11.9 million, to $70.9 million for the three months ended March 31, 2021 compared to $59.0 million for the three months ended March 31, 2020. |
• | Capital expenditures of $58.1 million, primarily to increase production capacity at the Trex Residential facilities and for cost reduction initiatives and other production improvements. |
• | Repurchase of 504,275 shares of our outstanding common stock during the three months ended March 31, 2021 under our Stock Repurchase Program for a total 3.3 million shares repurchased under the program to date. |
Three Months Ended March 31, |
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2020 |
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Claims open, beginning of period |
1,799 | 1,724 | ||||||
Claims received (1) |
214 | 205 | ||||||
Claims resolved (2) |
(215 | ) | (195 | ) | ||||
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Claims open, end of period |
1,798 | 1,734 | ||||||
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Average cost per claim (3) |
$ | 3,620 | $ | 3,331 |
(1) | Claims received include new claims received or identified during the period. |
(2) | Claims resolved include all claims settled with or without payment and closed during the period. |
(3) | Average cost per claim represents the average settlement cost of claims closed with payment during the period. |
Three Months Ended March 31, |
$ Change |
% Change |
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2021 |
2020 |
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(dollars in thousands) |
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Total net sales |
$ | 245,524 | $ | 200,395 | $ | 45,129 | 22.5 | % | ||||||||
Trex Residential net sales |
$ | 233,070 | $ | 186,874 | $ | 46,196 | 24.7 | % | ||||||||
Trex Commercial net sales |
$ | 12,454 | $ | 13,521 | $ | (1,067) | (7.9) | % |
Three Months Ended March 31, |
$ Change |
% Change |
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2021 |
2020 |
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(dollars in thousands) |
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Cost of sales |
$ | 149,723 | $ | 110,699 | $ | 39,024 | 35.3 | % | ||||||||
% of total net sales |
61.0 | % | 55.2 | % | ||||||||||||
Gross profit |
$ | 95,801 | $ | 89,696 | $ | 6,105 | 6.8 | % | ||||||||
Gross margin |
39.0 | % | 44.8 | % |
Three Months Ended March 31, |
$ Change |
% Change |
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2021 |
2020 |
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(dollars in thousands) |
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Selling, general and administrative expenses |
$ | 31,312 | $ | 34,561 | $ | (3,249 | ) | (9.4 | )% | |||||||
% of total net sales |
12.8 | % | 17.3 | % |
Three Months Ended March 31, |
$ Change |
% Change |
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2021 |
2020 |
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(dollars in thousands) |
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Provision for income taxes |
$ | 15,947 | $ | 13,255 | $ | 2,692 | 20.3 | % | ||||||||
Effective tax rate |
24.7 | % | 23.8 | % |
Three Months Ended March 31, 2021 |
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Trex Residential |
Trex Commercial |
Total |
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Net income (loss) |
$ | 48,745 | $ | (200 | ) | $ | 48,545 | |||||
Interest income, net |
(3 | ) | — | (3 | ) | |||||||
Income tax expense (benefit) |
16,012 | (65 | ) | 15,947 | ||||||||
Depreciation and amortization |
6,210 | 213 | 6,423 | |||||||||
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EBITDA |
$ | 70,964 | $ | (52 | ) | $ | 70,912 | |||||
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1 |
EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management believes it facilitates performance comparison between the Company and its competitors, and management evaluates the performance of its reportable segments using several measures, including EBITDA. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, income taxes, and depreciation and amortization charges to net income or loss. In relation to competitors, EBITDA eliminates differences among companies in capitalization and tax structures, capital investment cycles and ages of related
assets. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company and its reportable segments. |
Three Months Ended March 31, 2020 |
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Trex Residential |
Trex Commercial |
Total |
||||||||||
Net income |
$ | 41,020 | $ | 1,382 | $ | 42,402 | ||||||
Interest income, net |
(522 | ) | — | (522 | ) | |||||||
Income tax expense |
12,788 | 467 | 13,255 | |||||||||
Depreciation and amortization |
3,664 | 187 | 3,851 | |||||||||
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EBITDA |
$ | 56,950 | $ | 2,036 | $ | 58,986 | ||||||
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Three Months Ended March 31, |
$ Change |
% Change |
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2021 |
2020 |
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(dollars in thousands) |
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Total EBITDA |
$ | 70,912 | $ | 58,986 | $ | 11,926 | 20.2 | % | ||||||||
Trex Residential EBITDA |
$ | 70,964 | $ | 56,950 | $ | 14,014 | 24.6 | % | ||||||||
Trex Commercial EBITDA |
$ | (52 | ) | $ | 2,036 | $ | (2,088 | ) | (102.6 | )% |
Three Months Ended March 31, |
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2020 |
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Net cash used in operating activities |
$ | (142,574 | ) | $ | (108,768 | ) | ||
Net cash used in investing activities |
(57,800 | ) | (20,597 | ) | ||||
Net cash provided by (used in) financing activities |
86,894 | (14,129 | ) | |||||
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Net decrease in cash and cash equivalents |
$ | (113,480 | ) | $ | (143,494 | ) | ||
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Item 3. |
Quantitative and Qualitative Disclosures About Market Risk |
Item 4. |
Controls and Procedures |
Period |
(a) Total Number of Shares (or Units) Purchased (1) |
(b) Average Price Paid per Share (or Unit) ($) |
(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) |
(d) Maximum number of Shares (or Units) that May Yet Be Purchased Under the Plan or Program |
||||||||||||
— | — | — | 8,797,222 | |||||||||||||
201,212 | $ | 93.98 | 163,000 | 8,634,222 | ||||||||||||
341,275 | $ | 89.51 | 341,275 | 8,292,947 | ||||||||||||
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Quarterly period ended March 31, 2021 |
542,487 | 504,275 | ||||||||||||||
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(1) | Includes shares withheld by, or delivered to, the Company pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s 2014 Stock Incentive Plan allowing the Company to withhold, or the recipient to deliver to the Company, the number of shares having the fair value equal to tax withholding due. |
(2) | On February 16, 2018, the Company’s Board of Directors authorized a common stock repurchase program of up to 11.6 million shares of the Company’s outstanding common stock (Stock Repurchase Program). The Stock Repurchase Program was publicly announced on February 21, 2018. The Company purchased 504,275 shares of its common stock under the Stock Repurchase Program during the three months ended March 31, 2021. |
For |
Against |
Abstain |
Broker Non-Votes | |||||
James A. Cline |
91,265,534 | 5,955,022 | 689,178 | 8,810,454 | ||||
Bryan H. Fairbanks |
95,701,457 | 1,660,017 | 548,260 | 8,810,454 | ||||
Patricia B. Robinson |
90,332,987 | 6,535,808 | 1,040,939 | 8,810,454 | ||||
Gena C. Lovett |
96,463,791 | 900,600 | 545,343 | 8,810,454 |
For |
Against |
Abstain |
Broker Non-Votes | |||
90,343,066 | 7,105,369 | 461,299 | 8,810,454 |
For |
Against |
Abstain |
Broker Non-Votes | |||
104,053,811 | 2,600,618 | 65,759 | — |
Item 6. Exhibits |
TREX COMPANY, INC. | ||||||
Date: May 10, 2021 | By: | /s/ Dennis C. Schemm | ||||
Dennis C. Schemm | ||||||
Senior Vice President and Chief Financial Officer | ||||||
(Duly Authorized Officer and Principal Financial Officer) |
Exhibit Number |
Description |
Form |
Exhibit |
Filing Date |
File No. |
|||||||||||||
10.19 | Form of Trex Company, Inc. Fencing Agreement for Installers/Retailers. | 10-Q |
10.4 | November 9, 2006 | ||||||||||||||
31.1* | Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | |||||||||||||||||
31.2* | Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934. | |||||||||||||||||
32*** | Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350). | |||||||||||||||||
101.INS* | Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | |||||||||||||||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document. | |||||||||||||||||
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||||||||||
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||||||||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document. | |||||||||||||||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||||||||||
104.1 | Cover Page Interactive Data File—The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. |
* |
** | Management contract or compensatory plan or agreement. |
*** | Furnished herewith. |
This ‘10-Q’ Filing | Date | Other Filings | ||
---|---|---|---|---|
11/5/24 | ||||
12/31/22 | ||||
5/26/22 | ||||
12/31/21 | 10-K | |||
Filed on: | 5/10/21 | 8-K, 8-K/A | ||
5/6/21 | DEF 14A | |||
4/23/21 | ||||
For Period end: | 3/31/21 | |||
3/23/21 | DEF 14A | |||
3/13/21 | 8-K | |||
3/10/21 | ||||
3/1/21 | ||||
2/28/21 | ||||
2/22/21 | 10-K, 8-K, 8-K/A | |||
2/1/21 | ||||
1/31/21 | ||||
1/1/21 | ||||
12/31/20 | 10-K | |||
11/2/20 | 10-Q, 8-K, 8-K/A | |||
10/30/20 | ||||
9/30/20 | 10-Q | |||
9/14/20 | ||||
8/19/20 | ||||
7/29/20 | 4 | |||
5/28/20 | 8-K | |||
5/26/20 | 8-K | |||
5/4/20 | 10-Q, 8-K, 8-K/A | |||
3/31/20 | 10-Q | |||
3/12/20 | ||||
2/25/20 | 8-K | |||
12/31/19 | 10-K | |||
11/6/19 | 8-K | |||
11/5/19 | 8-K | |||
9/30/19 | 10-Q | |||
7/29/19 | 10-Q, 4/A, 8-K | |||
5/1/19 | 4, 8-K, DEF 14A, PRE 14A | |||
2/14/19 | 10-K, 8-K, SC 13G/A | |||
5/7/18 | 10-Q, 8-K | |||
2/21/18 | 10-K, 8-K | |||
2/16/18 | 4 | |||
2/21/17 | 10-K, 8-K | |||
1/14/16 | 8-K | |||
1/12/16 | 8-K | |||
8/3/15 | 10-Q, 8-K | |||
5/8/15 | 10-Q, 8-K | |||
5/5/14 | 10-Q, 8-K | |||
3/12/09 | 10-K | |||
11/9/06 | 10-Q, 8-K, SC 13G | |||
3/24/99 | 8-A12B, S-1/A | |||
List all Filings |