8-K

                      SECURITIES AND EXCHANGE COMMISSION
                            Washington, D.C. 20549

                                   FORM 8-K

               Current Report Pursuant to Section 13 or 15(d) of
                      the Securities Exchange Act of 1934



Date of Report (Date of earliest event reported): May 25, 1999


                              TREX COMPANY, INC.
            (Exact name of registrant as specified in its charter)


            Delaware                      001-14649             54-1910453
    (State or other jurisdiction         (Commission         (I.R.S. Employer
         of incorporation)               File Number)     Identification Number)

       20 South Cameron Street
         Winchester, Virginia                                    22601
(Address of principal executive offices)                       (Zip Code)

Registrant's telephone number, including area code:   (540) 678-4070

                                Not applicable
         (Former name or former address, if changed since last report)


Item 5.   Other Events

     In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, Trex Company, Inc. is hereby filing cautionary
statements identifying important factors that could cause its actual results to
differ materially from those projected in forward-looking statements made by or
on behalf of Trex Company, Inc.

Item 7.  Financial Statements and Exhibits

         (c)   Exhibits.

               99   Cautionary Statements for Purposes of the "Safe Harbor"
                    Provisions of the Private Securities Litigation Reform
                    Act of 1995.

                                       2


                                   SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.


                                    TREX COMPANY, INC.


Date:  May 25, 1999                By:  /s/ Anthony J. Cavanna
                                        -----------------------------------
                                         Anthony J. Cavanna
                                         Executive Vice President and
                                         Chief Financial Officer

                                       3

EX-99

                                                                      EXHIBIT 99
                                                                      ----------

                   CAUTIONARY STATEMENTS FOR PURPOSES OF THE
              "SAFE HARBOR" PROVISIONS OF THE PRIVATE SECURITIES
                         LITIGATION REFORM ACT OF 1995

     Trex Company, Inc. is filing this Current Report on Form 8-K to take
advantage of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Many of the important factors presented below have been
discussed in our prior filings with the Securities and Exchange Commission.

     We wish to caution readers that the following important factors, among
others, in some cases have affected, and in the future could affect, our actual
results, and could cause our actual results for the fiscal periods ending after
the date of this Current Report to differ materially from those expressed in any
forward-looking statements made by us or on our behalf. The following factors
are not all of the factors which investors should consider prior to making an
investment decision with respect to our securities, nor should investors assume
that the information contained herein is complete or accurate in all respects
after the date of this filing. We disclaim any duty to update the statements
contained in this report.


     We will have to increase market acceptance of Trex to grow

     Our ability to grow will depend largely on our success in converting demand
for wood decking products, which accounted for approximately 97% of the 1997
decking market when measured by board feet of lumber, into demand for our Trex
Wood-Polymer(TM) lumber product, which we refer to in this report as "Trex." Our
failure to achieve increased market acceptance of Trex could have a material
adverse effect on our business, operating results and financial condition. Our
strategy to increase market acceptance is to develop and promote the Trex brand
name as a premium decking product and to emphasize the advantages of Trex over
wood decking products. To increase our market share, we must overcome:

     .  the low consumer awareness of non-wood decking alternatives;

     .  the preference of many consumers for well-accepted wood products;

     .  the somewhat different appearance of Trex;

     .  the greater initial expense of installing a Trex deck; and

     .  the established relationships existing between suppliers of wood decking
        products and contractors and homebuilders.




     All of our sales result from one product

     All of our sales are derived from sales of Trex. Although we have developed
new Trex products and new applications for Trex since 1992, and we intend to
continue this development, our product line is based exclusively on the
composite formula and manufacturing process for Trex Wood-Polymer(TM) lumber. If
we should experience any problems, real or perceived, with product quality or
acceptance of Trex, our lack of product diversification could have a material
adverse effect on our business, operating results and financial condition.

     We currently depend on a single manufacturing facility to meet the demand
     for Trex

     We currently produce Trex solely in our manufacturing facility in
Winchester, Virginia.  Any interruption in the operations or decrease in the
production capacity of this facility, whether because of equipment failure,
natural disaster or otherwise, would limit our ability to meet existing and
future customer demand for Trex and could have a material adverse effect on our
business, operating results and financial condition.

     We have acquired a site near Reno, Nevada, where, in January 1999, we began
construction of a second manufacturing facility.  We expect to begin production
in the new facility in the fourth quarter of 1999, but construction and
equipping of the facility is subject to risks that could delay commencement of
operations beyond that date.

     Our business is subject to risks in obtaining the raw materials we use to
     produce Trex

     The production of Trex requires substantial amounts of wood fiber and
polyethylene.  Our business is subject to the risks that we may be unable to
purchase sufficient quantities of these raw materials to meet our production
requirements or that we may have to pay higher prices for our supplies.

     We purchase wood fiber for our Winchester facility under contracts with a
relatively small number of suppliers primarily located within a 200-mile radius
of the facility, and we obtain polyethylene under purchase order arrangements
with suppliers of reclaimed grocery sacks and stretch film throughout the United
States. In 1998, four suppliers collectively accounted for approximately 80% of
our wood fiber purchases. Our ability to obtain adequate polyethylene supplies
depends on our success in developing new sources, entering into long-term


arrangements with suppliers and managing the collection of supplies from
geographically dispersed distribution centers. We generally obtain our raw
materials from existing suppliers at fixed prices that are established annually.
We cannot be sure that we will be successful in maintaining these pricing
policies to protect against fluctuations in raw materials prices. The
termination of significant sources of raw materials, the payment of higher
prices for raw materials or the failure to obtain sufficient additional raw
materials to meet planned increases in capacity could have a material adverse
effect on our business, operating results and financial condition.

     The demand for decking products is sensitive to general economic conditions
     and could be adversely affected by economic downturns

     The demand for decking products is sensitive to changes in the level of
activity in home improvements and, to a lesser extent, new home construction.
These activity levels, in turn, are affected by such factors as consumer
spending habits, employment, interest rates and inflation.  An economic downturn
could reduce consumer income available for spending on discretionary items such
as decking, which could have a material adverse effect on our business,
operating results and financial condition.

     We face risks in implementing our plan to increase our manufacturing
     capacity to meet customer demand for Trex

     Currently, customer demand for Trex exceeds our manufacturing capacity.  To
increase capacity, we added one production line in our Winchester facility in
December 1998 and a second production line in January 1999 and began
construction of a second manufacturing facility, located near Reno, Nevada, in
the first quarter of 1999.  In constructing and equipping the new facility, we
face risks normally associated with the development of manufacturing
facilities, including:

     .  the timely receipt of environmental and other regulatory approvals;

     .  the cost and timely completion of construction, which may be affected by
        causes beyond our control, such as weather, labor conditions or material
        shortages;

     .  the costs associated with financing equipment purchases; and

     .  the availability of long-term borrowings on acceptable terms to
        refinance the short-term site acquisition and construction loans we have
        obtained.


Further, in the start-up and operation of the new facility and the two new
production lines in our Winchester facility, we will face risks:

     .  recruiting and training a factory workforce;

     .  installing and operating new production equipment;

     .  purchasing raw materials;

     .  commencing manufacturing operations; and

     .  maintaining product quality.

These risks could result in substantial unanticipated delays or expense, which
could have a material adverse effect on our business, financial condition and
results of operations.

     The expansion and future profitability of our business could be adversely
     affected if we do not manage our growth effectively

     Our recent growth has placed significant demands on our management and
other resources. If we are unable to manage our future growth effectively, our
inability to do so could have a material adverse effect on the quality of our
products and on our business, operating results and financial condition. Our net
sales increased to $46.8 million in 1998 from $34.1 million in 1997 and $23.8
million in 1996. The number of dealer outlets selling Trex has increased from
approximately 1,200 at December 31, 1996 to approximately 2,000 at March 31,
1999, and we expect further significant increases in the future. We plan to
support our geographic expansion by opening a second manufacturing facility near
Reno, Nevada. To manage our growth effectively, we will need to continue to
develop and improve our operational, financial, accounting and other internal
systems. In addition, our future success will depend in large part on our
ability to recruit, train, motivate and retain senior managers and other
employees and to maintain product quality.


     We experience seasonal fluctuations in our sales and quarterly operating
     results

     Our net sales and income from operations historically have varied from
quarter to quarter. We believe period-to-period comparisons of our net sales and
other operating results are not reliable indicators of future performance, and
the operating results for any quarterly period may not be indicative of
operating results to be expected for a full year. The variations in our
quarterly results are principally attributable to seasonal trends in the demand
for Trex. We experience lower net sales levels during the fourth quarter, in
which holidays and adverse weather conditions in some regions usually reduce the
level of home improvement and new construction activity. Income from operations
and net income tend to be lower in quarters with lower sales due to a lower
gross margin which is not offset by a corresponding reduction in selling,
general and administrative expenses, in part because we continue to make
advertising expenditures throughout the year.

     We will have to make significant capital expenditures to increase our
     manufacturing capacity

     We currently estimate that our aggregate capital requirements in 1999 and
2000 will total approximately $23.8 million, of which we expect to incur
approximately $20.3 million in 1999 and approximately $3.5 million in 2000. Our
failure to generate sufficient funds to meet our capital requirements could have
a material adverse effect on our business, operating results and financial
condition. We will use capital expenditures in 1999 and 2000 primarily for the
construction and equipping of our new manufacturing facility located near Reno,
Nevada, which we expect to begin production in the fourth quarter of 1999. The
actual amount and timing of our future capital requirements may differ
materially from our estimates, depending on the demand for Trex and as a result
of new market developments and opportunities. We may determine that it is
necessary or desirable to obtain financing for our capital requirements through
bank borrowings or the issuance of debt or equity securities. Debt financing
would increase our leverage, while equity financing may dilute the ownership of
our stockholders. We cannot be sure as to whether, or as to the terms on which,
we will be able to obtain this financing.

     Our sales depend on a small number of significant distributors

     Our aggregate net sales to our five largest distributors accounted for
approximately 74% of our net sales in 1998. Our contracts with these
distributors are terminable by the distributors upon notice at any time during
the contract term. A contract termination or significant decrease or
interruption in business from any of our five largest distributors or any other
significant distributor could cause a


short-term disruption of our operations. Such a disruption could have a material
adverse effect on our business, operating results and financial condition.

     Our success depends largely on a small number of management employees and
     other key personnel

     Our success depends largely on the continued services of a small number of
key management employees, including Anthony J. Cavanna, Andrew U. Ferrari,
Robert G. Matheny and Roger A. Wittenberg. We do not have employment agreements
with any of these employees. If we were to lose the services of one or more of
our key employees, or if one or more of our key employees were to resign to join
a competitor or to form a competing company, the loss of these employees and any
resulting loss of existing or potential customers to the competitor could have a
material adverse effect on our business, operating results and financial
condition. If we lose any key employee, we cannot be sure that we would be able
to prevent the unauthorized disclosure or use of our technical knowledge,
practices or procedures by the employee. Although our key employees have signed
agreements containing confidentiality covenants, we cannot be sure that the
courts will enforce those covenants as written or that the agreements will deter
conduct prohibited by the covenants.

     We face highly competitive conditions in the decking market

     The residential and commercial decking market in which we principally
operate is highly competitive. Our failure to compete successfully in this
market could have a material adverse effect on our business, operating results
and financial condition. As a wood/plastic composite product, Trex competes with
wood, other wood/plastic composites and 100% plastic lumber for use as decking.
The primary competition for Trex is wood decking, which accounted for
approximately 97% of 1997 decking sales when measured by board feet of lumber.
The conventional lumber suppliers with which we compete have established ties
in many cases to the building and construction industry and have well-accepted
products. Many of our competitors in the decking market that sell wood products
have significantly greater financial, technical and marketing resources than we
do. Our ability to compete depends, in part, upon a number of factors outside
our control, including the ability of our competitors to develop new non-wood
decking alternatives which are competitive with Trex.

     Trex is the only non-wood decking alternative to receive a product building
code listing from the NES or any of its three regional members. A product
building code listing covers all uses of a product meeting the specified design
criteria. We are aware of one manufacturer of wood/plastic composite products
that has publicly announced it has applied for a regional application listing
for its products and of at least four manufacturers that have received regional
application listings for their


100% plastic lumber products. An application listing covers only specific uses
of the listed products. We cannot be sure that one or more of our competitors
will not receive a listing for their non-wood decking alternative products in
the immediate future. Any product receiving a similar listing could be more
competitive with Trex.

     We are subject to government regulation

     We are subject to federal, state and local environmental, occupational
health and safety, and other laws and regulations. Liability for violations of
these laws and regulations could have a material adverse effect on our business,
operating results and financial condition. The environmental laws and
regulations applicable to our operations establish air quality standards for
emissions from our manufacturing operations, govern the disposal of solid waste,
and regulate waste water and storm water discharge. As is the case with
manufacturers in general, we may be held liable for response costs and damages
to natural resources if a release or threat of release of hazardous materials
occurs on or from our properties or any associated offsite disposal location, or
if contamination from prior activities is discovered at any properties we own or
operate.

     Problems related to the Year 2000 issue could cause failures in our systems
     which would impair our operations

     We and third parties with which we do business rely on numerous computer
programs in our day-to-day operations. We have undertaken a program to address
the Year 2000 issue as it relates to our internal computer systems and the
third-party computer systems with which we interact, including the systems of
our major suppliers and customers. Our failure to correct a Year 2000 problem
could result in a material interruption in, or a material failure of, our normal
business activities or operations. We expect to continue incurring internal
staff costs and other expenses, which may be significant and will be expensed as
incurred, to address these issues. In addition, the appropriate course of action
may include replacement or an upgrade of some systems or equipment at a
substantial cost to us. We cannot be sure that the Year 2000 issue will be
resolved in 1999. If not resolved, this issue could have a material adverse
impact on our business, operating results and financial condition.

     Our principal stockholders have a controlling influence over our business

     Our four principal stockholders beneficially own approximately 60% of our
common stock. As a result, these stockholders will collectively be able to
exercise control over our business and affairs by virtue of their voting power
with respect to the election of directors and actions requiring stockholder
approval.


     We cannot be sure our intellectual property is adequately protected

     Our success depends, in part, on our intellectual property rights. Our
failure to protect those rights could have a material adverse effect on our
business, operating results and financial condition. We rely on a combination of
trade secret, nondisclosure and other contractual arrangements, and copyright
and trademark laws to protect our proprietary rights. We have also obtained
patent protection for some of our production processes. We enter into
confidentiality agreements with our employees and limit access to and
distribution of our proprietary information. We cannot be sure that the steps we
have taken in this respect will be adequate to deter misappropriation of our
proprietary information or that we will be able to detect unauthorized use and
take appropriate steps to enforce our intellectual property rights.

     Provisions in our organizational documents and in the Delaware general
     corporation law may prevent takeover attempts that could be beneficial to
     our stockholders

     Provisions of our certificate of incorporation, our bylaws and the Delaware
general corporation law could have anti-takeover effects even if a change of
control over our company would be beneficial to the interests of our
stockholders. These provisions include a requirement that our board of directors
be divided into three classes, with approximately one-third of the directors to
be elected each year. This classification of directors makes it more difficult
for an acquirer or for other stockholders to change the composition of the board
of directors. In addition, our certificate of incorporation authorizes the board
of directors to provide for the issuance of up to 3,000,000 shares of our
preferred stock, in one or more series, which the board of directors could issue
without stockholder approval and with terms and conditions, and having rights,
privileges and preferences, to be determined by the board of directors. The
ability to issue preferred stock could discourage unsolicited acquisition
proposals or make it more difficult for a third party to gain control over us,
or otherwise could adversely affect the market price of our common stock. We are
also subject to section 203 of the Delaware general corporation law, which
prohibits us from engaging in some business combinations with stockholders that
beneficially own 15% or more of our voting stock, or with the affiliates of
those stockholders, unless our directors or stockholders approve the business
combination in the manner prescribed by the statute.


     Our stock price could fluctuate significantly in the future as a result of
     our operating performance and conditions in our industry

     In recent years, stock markets have experienced extreme price and volume
fluctuations. The trading price of our common stock could be subject to wide
fluctuations in response to a number of factors. These factors include the
following:

     .    quarterly variations in our operating results;

     .    changes in earnings estimates by analysts;

     .    announcements of new contracts or product offerings by us or our
          competitors; and

     .    general economic or stock market conditions.

     We do not anticipate paying any dividends on our common stock

     We do not anticipate paying any cash dividends on the common stock in the
foreseeable future. Our credit facility contains provisions restricting our
ability to pay cash dividends on the common stock.

     Future sales of our common stock in the public market could lower our stock
     price and impair our ability to raise funds in new stock offerings

     Future sales of a substantial number of shares of our common stock in the
public market, or the perception that such sales could occur, could adversely
affect the prevailing market price of our common stock and could make it more
difficult for us to raise funds through a public offering of our equity
securities. There are currently 14,115,450 shares of our common stock
outstanding. Of these shares, 4,718,450 shares sold in our initial public
offering are freely tradable under the Securities Act by persons other than our
"affiliates" as defined in Rule 144 under the Securities Act of 1933. The
remaining 9,397,000 shares are deemed "restricted securities" within the meaning
of Rule 144 and may not be sold unless they are first registered under the
Securities Act or unless they are sold in Rule 144 transactions or other
transactions exempt from registration.

     We have granted registration rights with respect to 847,000 shares of our
common stock held by three of our stockholders. These stockholders may require
us to register the sale of their shares on up to two occasions. In addition, if
we propose to register our common stock in specified circumstances, whether or
not for our own account, the stockholders may require us, subject to conditions,
to include all or a


portion of their shares in such a registration. These registration rights are
subject to certain notice requirements, timing restrictions and volume
limitations which may be imposed by the underwriters of an offering. We are
required to bear the expenses of all of these registrations except for
underwriting discounts and commissions.