Decks, Music and More

VIRGINIA BUSINESS

TAKING STOCK

DECKS MUSIC AND MORE

You've read about Trex Co. before in the pages of this magazine. The Winchester decking company has for two years running been the manufacturing winner in the Fantastic 50, a compilation of the fastest-growing small private companies in the commonwealth.

The company first made the list with a three-year growth rate of 574 percent and 1996 revenues of $23.8 million. The company made the list again this April, with a three-year growth rate of 356 percent and $34 million in revenues.

It's no wonder then that the managers of Trex (Nasdaq, TWP: $19) decided to take the company public. The stock opened at $10 on April 8, netting the company $40 million. The extra funding should prove useful on the company's journey. Trex expects to double manufacturing capacity by the end of the year, not only with new production lines at its Winchester plant, but with operations at a new facility expected to open this fall in Nevada.

Trex isn't your average decking company. It's a niche producer of a long-lasting wood and recycled plastic blend. The company takes sawdust and plastic grocery bags -- the ones you take back to the store when you don't use them to clean up after the dog -- and turns them into a decking material that holds up to weather and insects and won't rot or splinter.

The product costs up to twice as much as treated wood found at the local lumber yard, but users recoup that initial cost through the product's longevity and low maintenance. Trex decking has been used at Busch Gardens, Disney World and Everglades National Park.

The drawback for investors -- or maybe it's a plus -- is that few analysts cover the stock. Because companies face a quiet period during new stock offerings, there's only so much information out there on Trex and other companies mentioned here. With research and resolve, however, investors interested in Virginia IPOs have a full plate to choose from.

Musicmaker.com Inc. (Nasdaq, HITS: pending) hasn't begun trading, but it filed its intent to do so with the Securities and Exchange Commission in February. The company uses the Internet to sell custom CDs. The listener who wants his own, personal mix of love songs by the Beach Boys, John Coltrane, Johnny Cash, The Kinks and Frank Zappa can put in an order and have it the next day. Musicmaker has 150,000 licensed song titles, but it wants to add more.

The Reston company hopes to raise $30 million, which will be used to give advances to record labels to sign up more musicians for the musicmaker.com library. The funds also will allow the company to get its name in front of music buyers and to upgrade its technical systems.

There are at least two pending issues in the world of banking. McLean's Online Resources & Communications Corp. (Nasdaq, ORCC: pending) hopes to raise $46 million. The e-commerce company works with regional and community banks that want to offer depositors online financial services -- banking, bill paying and everything else that the megabanks already offer.

Online banking is expected to grow more popular in the years to come -- from 6 million people this year to 25 million by 2004, according to the company. Online Resources hopes to help smaller banks get in on the trend.

There's a more classical offering by another Northern Virginia outfit, Reston's Greater Atlantic Financial Corp. (Nasdaq, GAFC: pending), which operates a federally chartered savings bank with four branches in metropolitan Washington, D.C. The bank dates to 1886 and was originally a Maryland thrift trading under the name Greater Baltimore Savings and Loan Association. It later became Greater Atlantic Bank.

Another company that filed with the SEC in late April is Apple Suites Inc. of Richmond -- proof yet again that you don't have to be a Northern Virginia technology company to start trading. The managers want to raise $300 million to capitalize a real estate investment trust that would own extended-stay hotels.

There's not much data on Apple Suites, but there is information about the trend the company is chasing. These are properties for the growing number of travelers who need to stay five days or longer away from home -- everyone from technical consultants to executives attending training programs to construction crews. No room service, no valet, no fancy trappings, but extended-stay properties do offer a little more space than your basic hotel room, and they have amenities like small kitchens. They offer separate living and sleeping areas and access to laundry facilities.

In Virginia alone, there were only four such hotels three years ago. Today there are dozens. Occupancy rates are a little higher because guests stay longer. Most run at 80 percent or more occupancy. Apple Suites currently owns no properties, but it intends to use its IPO proceeds to buy corporate apartments and extended-stay hotels in southeastern and southwestern cities.

Do your homework to determine whether these companies are good investments. If anything, though, the flood of plans indicates that the commonwealth's IPO market may be on the uptick.

Leigh Anne Larance
Senior Editor