Segment Information

12 Months Ended

Dec. 31, 2024

Segment Reporting [Abstract]

Segment Information

17.SEGMENT INFORMATION

Through December 30, 2022, the Company operated in two reportable segments. On December 30, 2022, the Company completed the sale of its wholly-owned subsidiary and reportable segment, Trex Commercial. Subsequent to the sale of Trex Commercial, the Company operates in one reportable segment, Trex Residential, with resource allocation and assessment of financial performance based on a consolidated basis.

•Trex Residential manufactures composite decking and railing and related outdoor living products marketed under the brand name Trex®. The products are sold to its distributors and two national retailers who, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction.

•Trex Commercial designed, engineered, and marketed modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products were sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. On December 30, 2022, the Company completed the sale of Trex Commercial. Refer to Note 3 to these consolidated financial statements for additional information on the sale of Trex Commercial.

The Company’s reportable segments are determined in accordance with its internal management structure, which, through December 30, 2022, was based on residential and commercial operations. The Company has identified its President and Chief Executive Officer as the Chief Operating Decision Maker (CODM). The Company’s CODM has final authority over resource allocation decisions and performance assessments and makes key operating decisions. The primary objective of the CODM is to optimize positive Company-wide performance and financial results. The CODM evaluates segment performance primarily based on net income and net sales. The CODM uses net income to assess performance and allocate resources as this measure provides insight into all aspects of the segment’s operations and overall success of the segment for a given period. The CODM also uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors.

Segment Data (in thousands):

	Year Ended December 31, 2024		Year Ended December 31, 2023		Year Ended December 31, 2022
	Consolidated		Consolidated		Trex Residential		Trex Commercial			Consolidated
Net Sales (1)	$	1,151,449	$	1,094,837	$	1,059,536	$	46,507		$	1,106,043
Cost of Sales		665,781		642,430		659,689		42,365			702,054
Selling, General, and Administrative Expenses		179,995		176,203		131,761		10,070			141,831
Loss on Sale (2)		-		-		-		15,423			15,423
Depreciation and Amortization		54,670		50,189		43,173		1,125			44,298
Interest Revenue		11		73		103		-			103
Interest Expense		-		78		-		-			-
Income Tax Expense (Benefit), Net		79,292		70,815		67,313		(5,101	)		62,212
Net Income (Loss) (3)		226,392		205,384		200,876		(16,250	)		184,626
Capital Expenditures		232,337		166,089		175,904		324			176,228
Total Assets (4)		1,324,298		932,885		933,705		-			933,705

(1)For the year ended December 31, 2022, Trex Residential net sales excludes $485k of intercompany net sales.

(2)On December 30, 2022, the Company sold the assets of it wholly owned subsidiary, Trex Commercial, resulting in a loss of $15.4 million.

(3)For the year ended December 31, 2022, Consolidated net income and Trex Commercial net loss includes a loss on sale of Trex Commercial on December 30, 2022, of $15.4 million.

(4)The assets of Trex Commercial were sold on December 30, 2022.