1069878--3/17/2008--TREX_CO

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{customer, product, revenue}

{product, market, service}

{debt, indebtedness, cash}

{gas, price, oil}

{cost, regulation, environmental}

{cost, contract, operation}

{condition, economic, financial}

{property, intellectual, protect}

{stock, price, operating}

We will not be able to grow unless we increase market acceptance of our products and develop new products and applications. Our business could suffer from a lack of product diversification. Our prospects for sales growth and profitability will be adversely affected if we fail to maintain product quality and product performance at an acceptable cost. Our dependence on three manufacturing sites to meet the demand for Trex products could limit our ability to meet customer demand. Our business is subject to risks in obtaining the raw materials we use. We have limited ability to control or project inventory build-ups in our distribution channel that can negatively affect our sales in subsequent periods. Our strategy of using recycled plastic and waste wood to create a competitive cost advantage involves significant risks. The demand for our products is influenced by general economic conditions and could be adversely affected by economic downturns. Our performance will suffer if we do not compete effectively in the highly competitive decking, railing, fencing and trim markets. We face risks in increasing our production levels to meet customer demand. Past seasonal fluctuations in our net sales and quarterly operating results may not be a reliable indicator of future seasonal fluctuations. We have significant capital invested in property, plant and equipment that may become obsolete or impaired and result in a charge to our earnings. Our substantial level of indebtedness could adversely affect our financial health and ability to compete. We will have to generate substantial operating cash flow to meet our obligations and maintain compliance under our debt obligations. Our dependence on a small number of significant distributors makes us vulnerable to business interruptions involving these distributors. Environmental regulation exposes us to potential liability for response costs and damages to natural resources. We may not have adequate protection for the intellectual property rights on which our business depends.

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1069878--3/17/2008--TREX_CO_INC