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WINCHESTER, Va.--(BUSINESS WIRE)--Trex Company, Inc. (NYSE: TREX), the world's largest manufacturer of high-performance, low-maintenance composite decking and railing, today announced that it has named Prithvi (Prith) Gandhi as Senior Vice President, Chief Financial Officer effective October 6, 2025. Mr. Gandhi brings over 25 years of financial leadership experience, having served in CFO, FP&A, strategy and corporate development roles across the building products, manufacturing, basic mater. ...

Core Insights - Trex Company has completed the 2025 Sunset Idea House in Palm Springs, showcasing its high-performance outdoor living products [1][2] - The project combines mid-century modern design with sustainability and innovation, featuring Trex's composite decking and railing systems [2][3] Product Features - Trex's Transcend Lineage composite decking includes SunComfortable™ technology, which reflects solar energy to keep surfaces cooler, beneficial in Palm Springs' climate with over 350 sunny days annually [3][6] - The decking is designed to resist stains, scratches, and mold, eliminating the need for sanding, staining, or sealing, and is easy to clean with soap and water [4][6] - The decking's Biscayne hue and natural woodgrain finish enhance the home's aesthetic, while Trex Signature X-Series Cable Rail maximizes views of the Coachella Valley [5][6] Sustainability Efforts - Trex's products are made from up to 95% recycled materials, diverting over 1 billion pounds from landfills annually, and the aluminum railing contains 40% recycled content [6][6] - The 2025 Sunset Idea House exemplifies eco-conscious design, aligning with Trex's commitment to sustainable living [6][6] Company Overview - Trex Company is the leading manufacturer of composite decking and railing, with a strong distribution network across over 6,700 retail outlets globally [9] - The company has received multiple accolades for sustainability and trustworthiness, including being named one of America's Most Responsible Companies and ranking on Barron's list of the 100 Most Sustainable U.S. Companies [9][9]

Group 1 - The Trex Company held its Second Quarter 2025 Earnings Conference Call, which included key executives such as the CEO and CFO [2][3][4] - A press release was issued after market close detailing the financial results for the second quarter of 2025, which is accessible on the company's website [4]

Company Performance - Trex reported quarterly earnings of $0.74 per share, exceeding the Zacks Consensus Estimate of $0.72 per share, but down from $0.80 per share a year ago, representing an earnings surprise of +2.78% [1] - The company achieved revenues of $387.8 million for the quarter ended June 2025, surpassing the Zacks Consensus Estimate by 2.62% and up from $376.47 million year-over-year [2] - Over the last four quarters, Trex has consistently surpassed consensus EPS and revenue estimates [2] Stock Outlook - Trex shares have declined approximately 8.1% since the beginning of the year, contrasting with the S&P 500's gain of 6.1% [3] - The current consensus EPS estimate for the upcoming quarter is $0.64 on revenues of $309.91 million, and for the current fiscal year, it is $2.22 on revenues of $1.23 billion [7] - The estimate revisions trend for Trex was mixed prior to the earnings release, resulting in a Zacks Rank 3 (Hold), indicating expected performance in line with the market [6] Industry Context - The Building Products - Wood industry, to which Trex belongs, is currently ranked in the bottom 10% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that industry outlook can significantly affect stock performance [5][8]

Financial Data and Key Metrics Changes - In Q2 2025, net sales were $388 million, a 3% increase from $376 million in Q2 2024, achieving record quarterly sales despite adverse weather and a declining repair and remodel market [19][22] - Gross profit was $158 million with a gross margin of 40.8%, down from $168 million and 44.7% in the prior year, primarily due to one-time strategic investments and lower production levels [20][22] - Net income decreased by 13% to $76 million or $0.71 per diluted share, compared to $87 million or $0.80 per diluted share in the previous year [22][23] - Year-to-date net sales totaled $728 million, a 3% decrease from $750 million in the first half of 2024 [23] Business Line Data and Key Metrics Changes - Demand was led by strong performance in Trex composite and aluminum railing, Trex lineage decking, and the expanded mid-price select decking line [10][12] - New products launched in the last 36 months accounted for 22% of quarterly sales, significantly up from 13% in the same period last year [12][19] Market Data and Key Metrics Changes - Wood alternative products gained 170 basis points of market share from wood over the past 18 months, with Trex aggressively pursuing wood conversion as a growth strategy [10][12] - Strong demand was observed across various U.S. markets, particularly in the Western Region [10][11] Company Strategy and Development Direction - The company is focused on product development, with new products contributing significantly to sales performance and plans to continue rolling out heat mitigating technology [12][14] - Trex aims to strengthen its market position through consistent consumer messaging and commitment to channel partners, ensuring product availability at consumer purchasing points [11][27] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming the market despite a projected decline in the repair and remodel market for 2025 [15][24] - The company anticipates strong year-over-year comparisons in the second half of the year, driven by improved production levels and continuous improvement initiatives [24][25] Other Important Information - The Arkansas manufacturing facility is expected to become the most efficient production hub once fully operational, enhancing production capacity and reducing costs [17][24] - The company reaffirmed its full-year 2025 guidance, expecting net sales growth of 5% to 7% and adjusted EBITDA margins exceeding 31% [24] Q&A Session Summary Question: Clarification on gross margin comments for Q3 - Management clarified that the 100 basis point improvement refers to EBITDA margin, not gross margin, and that Q3 will benefit from the reversal of level loading and elimination of enhanced costs [33][34] Question: Demand picture and outperformance - Management noted strong contractor backlogs and continued outperformance against the repair and remodel market, driven by a significant number of aging wood decks in North America [41][42] Question: Broader R&R outlook changes - Management indicated that general consumer uneasiness about the economy has led to expectations of a slight decline in the repair and remodel market [55] Question: Capital allocation thoughts - Management plans to prioritize organic growth opportunities, potential acquisitions, and share buybacks as free cash flow generation increases [70][89] Question: Impact of adverse weather on sales - Management acknowledged that adverse weather conditions negatively impacted sales but did not quantify the effect [82] Question: New product introductions and demand shifts - Management confirmed that new product introductions would continue regardless of consumer demand fluctuations, as these are long-term investments [83]

Financial Data and Key Metrics Changes - In Q2 2025, net sales were $388 million, a 3% increase from $376 million in Q2 2024, achieving record quarterly sales despite adverse weather and a declining repair and remodel market [19][7] - Gross profit was $158 million with a gross margin of 40.8%, down from $168 million and 44.7% in the prior year, primarily due to one-time strategic investments and lower production levels [20][21] - Net income decreased by 13% to $76 million or $0.71 per diluted share, compared to $87 million or $0.80 per diluted share in the previous year [22][21] - Year-to-date net sales totaled $728 million, a 3% decrease from $750 million in the first half of 2024 [22] Business Line Data and Key Metrics Changes - Demand was led by strong performance in Trex composite and aluminum railing, Trex lineage decking, and the expanded mid-price select decking line [8][7] - New products launched in the last 36 months accounted for 22% of quarterly sales, significantly up from 13% in the same period last year [11] Market Data and Key Metrics Changes - Wood alternative products gained 170 basis points of market share from wood over the past 18 months, with Trex aggressively pursuing wood conversion as a growth strategy [8][7] - Strong demand was noted across various U.S. markets, particularly in the Western Region, supported by dealer conversions and contractor recruitment [9] Company Strategy and Development Direction - The company is focused on product development as a key element of its long-term strategy, with ongoing investments in branding and marketing to enhance consumer connection [12][10] - The Arkansas manufacturing facility is expected to become a model for efficient, vertically integrated production, supporting growth opportunities [13][16] - The company plans to continue rolling out heat mitigating technology with new product launches [12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in outperforming the repair and remodel market despite projected declines, citing resilient consumer demand and successful new product launches [15][14] - The company anticipates strong year-over-year comparisons in the second half of 2025, driven by improved production levels and continuous improvement initiatives [23][14] Other Important Information - The company reaffirmed its full-year 2025 guidance, expecting net sales growth of 5% to 7% and adjusted EBITDA margins to exceed 31% [23] - Capital expenditures for 2025 are projected to be approximately $200 million, primarily for the Arkansas facility [23] Q&A Session Summary Question: Clarification on gross margin comments for Q3 - Management clarified that the 100 basis point improvement refers to EBITDA margin, not gross margin, and that Q3 will benefit from the reversal of level loading and absence of enhanced costs [34][35] Question: Demand picture and outperformance versus the market - Management noted strong contractor backlogs and continued outperformance against the repair and remodel market, driven by the need for deck replacements [44][43] Question: Pricing actions taken in 2025 - A mid-single digit price increase was implemented across many decking products, but not on railing products [66] Question: Impact of adverse weather on sales - Management acknowledged weaker sales due to adverse weather but did not quantify the impact [84][83] Question: Future capital allocation strategy - The company plans to prioritize organic growth opportunities, potential acquisitions, and share buybacks as free cash flow increases [72][71]

PART I FINANCIAL INFORMATION [Item 1. Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The financial statements for H1 2025 show decreased net income and gross profit, increased assets and liabilities, and significantly higher operating cash flow [Condensed Consolidated Statements of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) This section details comprehensive income, showing net sales, gross profit, and net income for Q2 and H1 2025 versus 2024 Financial Performance Summary (in thousands, except EPS) | Metric | Q2 2025 | Q2 2024 | YoY Change | H1 2025 | H1 2024 | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $387,801 | $376,470 | 3.0% | $727,794 | $750,105 | (3.0)% | | **Gross Profit** | $158,132 | $168,110 | (5.9)% | $295,863 | $337,721 | (12.4)% | | **Income from Operations** | $102,398 | $116,904 | (12.4)% | $184,062 | $235,915 | (22.0)% | | **Net Income** | $75,909 | $86,998 | (12.7)% | $136,343 | $176,068 | (22.6)% | | **Diluted EPS** | $0.71 | $0.80 | (11.3)% | $1.27 | $1.62 | (21.6)% | [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This section details the company's financial position, outlining assets, liabilities, and equity for June 30, 2025, and December 31, 2024 Balance Sheet Summary (in thousands) | Account | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $453,464 | $318,908 | | **Property, Plant and Equipment, net** | $1,000,852 | $922,868 | | **Total Assets** | $1,537,855 | $1,324,298 | | **Total Current Liabilities** | $419,357 | $342,477 | | **Line of Credit** | $245,447 | $202,600 | | **Total Liabilities** | $548,599 | $474,156 | | **Total Stockholders' Equity** | $989,256 | $850,142 | [Condensed Consolidated Statements of Cash Flows](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This section outlines cash inflows and outflows from operating, investing, and financing activities for H1 2025 and 2024 Cash Flow Summary for Six Months Ended June 30 (in thousands) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net cash provided by operating activities** | $95,739 | $19,641 | | **Net cash used in investing activities** | $(130,987) | $(73,096) | | **Net cash provided by financing activities** | $39,479 | $52,668 | | **Net increase (decrease) in cash** | $4,231 | $(787) | | **Cash and cash equivalents, end of period** | $5,523 | $1,172 | - The significant increase in cash from operations in H1 2025 compared to H1 2024 was primarily driven by a **$65.4 million decrease in inventories**, whereas in the prior year, inventories increased by $41.8 million[18](index=18&type=chunk)[104](index=104&type=chunk) - Expenditures for property, plant, and equipment increased to **$126.3 million** in H1 2025 from **$73.2 million** in H1 2024, reflecting ongoing investment in manufacturing facilities[18](index=18&type=chunk)[85](index=85&type=chunk) [Notes to Condensed Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations on accounting policies, financial instruments, and significant financial disclosures - The company operates in a single reportable segment, **Trex Residential**, manufacturing wood-alternative decking, railing, and outdoor living products[21](index=21&type=chunk)[63](index=63&type=chunk) - As of June 30, 2025, the company had **$245.4 million** in borrowings outstanding under its revolving credit facility, with an available capacity of **$304.6 million** and a weighted average interest rate of **5.23%**[44](index=44&type=chunk) Product Warranty Reserve Reconciliation - H1 2025 (in thousands) | | Product Warranty | Surface Flaking | Total | | :--- | :--- | :--- | :--- | | **Beginning Balance, Jan 1** | $15,596 | $7,239 | $22,835 | | **Provisions** | $6,705 | $0 | $6,705 | | **Settlements** | $(3,099) | $(690) | $(3,789) | | **Ending Balance, June 30** | $19,202 | $6,549 | $25,751 | - The company's effective tax rate for the first six months of 2025 was **25.9%**, compared to **25.4%** for the same period in 2024[58](index=58&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses H1 2025 net sales decline, gross margin compression, increased SG&A, and capital investments in the Arkansas facility [Results of Operations](index=19&type=section&id=Results%20of%20Operations) This section analyzes financial performance for Q2 and H1 2025, detailing changes in net sales, gross profit, gross margin, and SG&A expenses Q2 2025 vs Q2 2024 Performance (in thousands) | Metric | Q2 2025 | Q2 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $387,801 | $376,470 | $11,331 | 3.0% | | **Gross Profit** | $158,132 | $168,110 | $(9,978) | (5.9)% | | **Gross Margin** | 40.8% | 44.7% | - | - | - The Q2 2025 increase in net sales was driven by higher volume, but gross margin decreased due to lower production, Arkansas facility start-up costs, and production process refinements for Enhance® decking[92](index=92&type=chunk)[93](index=93&type=chunk) H1 2025 vs H1 2024 Performance (in thousands) | Metric | H1 2025 | H1 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net Sales** | $727,794 | $750,105 | $(22,311) | (3.0)% | | **Gross Profit** | $295,863 | $337,721 | $(41,858) | (12.4)% | | **Gross Margin** | 40.7% | 45.0% | - | - | - The **3.0% decrease** in H1 2025 net sales was due to lower volume from a revised channel inventory strategy, with gross margin declining due to lower production and Arkansas facility costs[98](index=98&type=chunk)[99](index=99&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **9.8%** in H1 2025 to **$111.8 million**, driven by higher spending on branding (**$6.6 million**), personnel (**$2.1 million**), and Arkansas start-up costs (**$1.7 million**)[100](index=100&type=chunk) [Liquidity and Capital Resources](index=22&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, capital expenditure plans, and share repurchase activities - The company's primary sources of liquidity are cash from operations and borrowings under its revolving credit facility[103](index=103&type=chunk) - Capital expenditures for H1 2025 were **$126.3 million**, with **$97.6 million** allocated to the new Arkansas manufacturing facility[85](index=85&type=chunk)[105](index=105&type=chunk) - The full-year 2025 capital expenditure guidance is between **$190 million** and **$210 million**, with approximately **$484 million** of the total anticipated **$550 million** for the Arkansas facility already invested[125](index=125&type=chunk)[126](index=126&type=chunk) - The company did not repurchase any shares of its common stock during the six months ended June 30, 2025, under its **10.8 million** share repurchase program[52](index=52&type=chunk)[109](index=109&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=25&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposure during H1 2025, consistent with its 2024 Annual Report disclosures - There were no material changes to the Company's market risk exposure during the six months ended June 30, 2025[135](index=135&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, with no material changes to internal controls over financial reporting - The company's management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of June 30, 2025[136](index=136&type=chunk) - No changes in internal control over financial reporting occurred during the six-month period that have materially affected, or are reasonably likely to materially affect, the company's internal controls[136](index=136&type=chunk) PART II OTHER INFORMATION [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in routine litigation and claims, which management believes will not materially affect its financial condition or operations - The company faces lawsuits and claims incidental to its business, but management does not expect their resolution to have a material financial impact[139](index=139&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=26&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company did not repurchase common stock in Q2 2025, with its 10.8 million share repurchase program remaining active - No shares of common stock were repurchased during the three months ended June 30, 2025[140](index=140&type=chunk)[141](index=141&type=chunk) - As of June 30, 2025, the company may still purchase up to **8,954,464 shares** under its publicly announced stock repurchase program[140](index=140&type=chunk) [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading plan changes occurred during the quarter, and the company amended severance agreements for its CEO and other officers - No directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements during the quarter ended June 30, 2025[142](index=142&type=chunk) - The company amended severance agreements for the CEO and other officers, modifying the timing of severance payments to occur no later than ten days after the effective date of a written release, rather than ten days after termination[143](index=143&type=chunk)[144](index=144&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with the Form 10-Q, including certifications and amended severance agreements - The Exhibit Index lists documents filed with the report, including an Amended and Restated Severance Agreement for the CEO and a new Form of Severance Agreement for other officers[151](index=151&type=chunk)

[Financial & Operational Highlights](index=1&type=section&id=Financial%20%26%20Operational%20Highlights) Trex Company exceeded Q2 sales guidance with **$388 million**, driven by new products and strong market position, reaffirming full-year 2025 guidance [Second Quarter 2025 Financial Highlights](index=1&type=section&id=Second%20Quarter%202025%20Financial%20Highlights) Q2 2025 Key Financial Metrics | Metric | Value | | :--- | :--- | | Net Sales | $388 million | | Gross Profit | $158 million | | Adjusted Gross Profit | $161 million | | Net Income | $76 million | | Diluted EPS | $0.71 | | Adjusted Net Income | $79 million | | Adjusted Diluted EPS | $0.73 | | Adjusted EBITDA | $122 million | [CEO Commentary](index=1&type=section&id=CEO%20Commentary) - Product innovation is a key driver, with new products launched in the last 36 months representing **22% of second-quarter sales**, a significant increase from 13% in the prior-year period[5](index=5&type=chunk) - The company is seeing positive momentum in its railing products, with year-to-date sales tracking towards **double-digit growth in 2025**, aiming to double its market share in the **$3 billion railing market** within five years[6](index=6&type=chunk) - Consumer demand remains resilient, particularly for high-end products like Transcend Lineage® and the expanded mid-priced Select® line, with increased market penetration in the western U.S[7](index=7&type=chunk) - The new Arkansas plastic processing facility is performing above expectations, improving vertical integration and reducing the need for external material purchases[8](index=8&type=chunk) [Financial Performance Analysis](index=2&type=section&id=Financial%20Performance%20Analysis) Q2 2025 net sales grew 3% to **$388 million**, but net income declined due to production strategy and start-up costs [Second Quarter 2025 Results](index=2&type=section&id=Second%20Quarter%202025%20Results) Q2 2025 vs Q2 2024 Performance | Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $388M | $376M | +3% | | Gross Profit | $158M | $168M | -6% | | Gross Margin | 40.8% | 44.7% | -390 bps | | Net Income | $76M | $87M | -13% | | Diluted EPS | $0.71 | $0.80 | -11% | - The decrease in gross margin was attributed to a revised inventory strategy to level-load production, costs for performance refinements to Enhance® decking boards, railing conversion costs, and start-up expenses for the Arkansas plant[12](index=12&type=chunk) - Selling, general, and administrative (SG&A) expenses increased to **$56 million** (14.4% of sales) from **$51 million** (13.6% of sales) in the prior year, driven by investments in branding and one-time start-up costs[13](index=13&type=chunk) [Year-to-Date Results](index=3&type=section&id=Year-to-Date%20Results) YTD 2025 vs YTD 2024 Performance | Metric | YTD 2025 | YTD 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $728M | $750M | -3% | | Gross Profit | $296M | $338M | -12% | | Gross Margin | 40.7% | 45.0% | -430 bps | | Net Income | $136M | $176M | -23% | | Diluted EPS | $1.27 | $1.62 | -22% | - The year-to-date decrease in net sales was attributed to the company's revised inventory and level-load production strategies[16](index=16&type=chunk) [Summary and Outlook](index=4&type=section&id=Summary%20and%20Outlook) Trex reaffirmed full-year 2025 guidance for 5-7% revenue growth and >31% adjusted EBITDA margin, with Q3 sales projected at **$295-305 million** [Business Summary & Strategic Initiatives](index=4&type=section&id=Business%20Summary%20%26%20Strategic%20Initiatives) - Strategic initiatives strengthening market leadership include the launch of new decking with SunComfortable™ technology, expansion of the railing portfolio, and the rollout of Trex-engineered fastening solutions[21](index=21&type=chunk) - A revised inventory strategy involving level-loading production is being implemented to reduce channel stocking volatility and enhance operational efficiency[22](index=22&type=chunk) - The company has mitigated most of the impact from tariffs, with less than **5% of its cost of sales** projected to be affected, primarily related to aluminum and steel purchases[23](index=23&type=chunk) [Full Year 2025 and Q3 2025 Guidance](index=4&type=section&id=Full%20Year%202025%20and%20Q3%202025%20Guidance) Financial Guidance | Period | Metric | Guidance | | :--- | :--- | :--- | | **Full Year 2025** | Sales Growth | 5% to 7% | | **Full Year 2025** | Adjusted EBITDA Margin | > 31% | | **Q3 2025** | Net Sales | $295M to $305M | | **Q3 2025** | Gross Margin | ~100 bps sequential expansion | [Non-GAAP Financial Measures Reconciliation](index=5&type=section&id=Non-GAAP%20Financial%20Measures%20Reconciliation) Non-GAAP reconciliations are provided, with Q2 2025 adjustments for railing conversion, Arkansas facility start-up, and digital transformation costs [Reconciliation of Gross Profit (GAAP to Non-GAAP)](index=6&type=section&id=Reconciliation%20of%20Gross%20Profit%20(GAAP%20to%20Non-GAAP)) Q2 2025 Gross Profit Reconciliation ($ in thousands) | Description | Q2 2025 | | :--- | :--- | | Gross profit (GAAP) | $158,132 | | Railing conversion | $1,424 | | Arkansas start-up | $1,281 | | **Adjusted gross profit (non-GAAP)** | **$160,837** | [Reconciliation of Net Income (GAAP to Non-GAAP)](index=6&type=section&id=Reconciliation%20of%20Net%20Income%20(GAAP%20to%20Non-GAAP)) Q2 2025 Net Income Reconciliation ($ in thousands) | Description | Q2 2025 | | :--- | :--- | | Net income (GAAP) | $75,909 | | Railing conversion | $1,424 | | Digital transformation | $478 | | Arkansas start-up | $1,888 | | Income tax effect | ($982) | | **Adjusted net income (non-GAAP)** | **$78,717** | [Reconciliation of EBITDA (GAAP to Non-GAAP)](index=7&type=section&id=Reconciliation%20of%20EBITDA%20(GAAP%20to%20Non-GAAP)) Q2 2025 EBITDA Reconciliation ($ in thousands) | Description | Q2 2025 | | :--- | :--- | | Net income (GAAP) | $75,909 | | Interest income | ($77) | | Income tax expense | $26,566 | | Depreciation and amortization | $15,807 | | **EBITDA (non-GAAP)** | **$118,205** | | Railing conversion | $1,424 | | Digital transformation | $478 | | Arkansas start-up | $1,888 | | **Adjusted EBITDA (non-GAAP)** | **$121,995** | [Consolidated Financial Statements (Unaudited)](index=9&type=section&id=Consolidated%20Financial%20Statements%20(Unaudited)) Unaudited statements show Q2 and YTD net income decline, increased total assets to **$1.54 billion**, and improved operating cash flow to **$95.7 million** [Condensed Consolidated Statements of Comprehensive Income](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) Income Statement Summary (In thousands) | Metric | Three Months Ended June 30, 2025 | Six Months Ended June 30, 2025 | | :--- | :--- | :--- | | Net sales | $387,801 | $727,794 | | Gross profit | $158,132 | $295,863 | | Income from operations | $102,398 | $184,062 | | Net income | $75,909 | $136,343 | | Diluted EPS | $0.71 | $1.27 | [Condensed Consolidated Balance Sheets](index=10&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Balance Sheet Summary (In thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Total current assets | $453,464 | $318,908 | | Total assets | $1,537,855 | $1,324,298 | | Total current liabilities | $419,357 | $342,477 | | Total liabilities | $548,599 | $474,156 | | Total stockholders' equity | $989,256 | $850,142 | [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Cash Flow Summary - Six Months Ended June 30 (In thousands) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $95,739 | $19,641 | | Net cash used in investing activities | ($130,987) | ($73,096) | | Net cash provided by financing activities | $39,479 | $52,668 | | Net increase (decrease) in cash | $4,231 | ($787) | | Cash and cash equivalents at end of period | $5,523 | $1,172 | [Company Overview & Forward-Looking Statements](index=7&type=section&id=Company%20Overview%20%26%20Forward-Looking%20Statements) Trex is the 1 wood-alternative decking brand, with forward-looking statements subject to market, economic, and raw material risks [About Trex Company](index=7&type=section&id=About%20Trex%20Company) - Trex is the world's 1 brand of sustainably made wood-alternative decking and railing, with products sold through more than **6,700 retail outlets** across six continents[35](index=35&type=chunk) - The company has received numerous accolades for trust and sustainability, including being named America's Most Trusted® Outdoor Decking for **5 consecutive years** (2021-2025) and listed on Barron's 100 Most Sustainable U.S. Companies[35](index=35&type=chunk) [Forward-Looking Statements](index=8&type=section&id=Forward-Looking%20Statements) - The company's performance is subject to risks including market acceptance of new products, general economic conditions, seasonal demand fluctuations, raw material availability and cost (scrap polyethylene, wood fiber), inflation, and tariffs[39](index=39&type=chunk)