NEW YORK, Aug. 9, 2005 (PRIMEZONE) -- Murray, Frank & Sailer LLP has filed a class action lawsuit in the United States District Court for the Western District of Virginia on behalf of shareholders who purchased or otherwise acquired the securities of Trex Company, Inc. ("Trex" or the "Company") (NYSE:TWP) between October 25, 2004 and June 22, 2005, inclusive (the "Class Period"). Trex, Robert G. Matheny, and Paul D. Fletcher are named as defendants.
Trex manufactures and distributes wood/plastic composite products primarily for residential and commercial decking and railing applications. It manufactures Trex Wood-Polymer lumber through a process that combines waste wood fibers and reclaimed polyethylene. The Company provides three decking lines, including Trex Origins, which features a smooth surface; Trex Accents featuring a smooth surface on one side and an embossed wood grain on the other; and Trex Brasilia, which replicates the look of tropical hardwoods with color variations.
The complaint alleges that defendants' Class Period representations regarding Trex were materially false and misleading when made for the following reasons: (1) that the expected re-orders of inventory were not materializing, as Trex distributors worked to dispose of excess inventory; (2) that the expansion of the Company's distribution program with The Home Depot materially slowed due to delays in rolling out the Company's products; (3) that the Company cost cutting initiatives failed to limit the impact of higher raw material costs; (4) that there were manufacturing issues with the Artisan and Brasilia rail lines; and (5) that as a consequence of the foregoing, defendants' positive statements about the Company's growth and progress lacked in any reasonable basis when made.
On June 22, 2005, Trex announced that the Company expected a substantial loss for the quarter and guided its earnings lower for the year. On this news, shares of Trex fell $10.59 per share, or 29.66%, on June 23, 2005, to close at $25.11 per share. In the month leading up to the June 22, 2005 press release, and while Trex stock was still trading at artificially inflated prices, three insiders, including Matheny and two Company directors, sold 513,40 shares for gross proceeds of $19622,325.
Murray, Frank & Sailer LLP and its predecessor firms have devoted its practice to shareholder class actions and complex commercial litigation for more than fifteen years and have recovered hundreds of millions of dollars for shareholders in class actions throughout the United States.
If you purchased or otherwise acquired Trex securities on any exchange between October 25, 2004 and June 22, 2005, and sustained damages, you may, no later than September 6, 2005, move the Court to serve as lead plaintiff. Shareholders outside the United States may also join the action, regardless of which exchange was used to purchase the securities. To serve as lead plaintiff, however, you must meet certain legal requirements. You can join this class action as lead plaintiff online at http://www.murrayfrank.com/CM/NewCases/NewCases.asp. If you would like to discuss this action, this announcement, or your rights and interests, please contact plaintiff's counsel Eric J. Belfi, Christopher S. Hinton or Bradley P. Dyer of Murray, Frank & Sailer LLP.