TREX COMPANY REPORTS FIRST QUARTER 2024 RESULTS Robust First Quarter Sales Reflect Double-Digit Sell-Through for Premium Products and Early Buy Program Exhibit 99.1 NEWS RELEASE Gross Margin Expansion Driven by Higher Utilization and Cost Efficiencies Guiding to Second Quarter Revenues of $380 million to $390 million Reaffirms Full Year 2024 Guidance WINCHESTER, Va. —May 9, 2024— Trex Company, Inc. (NYSE:TREX) (Trex or Company), the world's #1 brand of high-performance, low-maintenance and eco-friendly comp ...

Financial Data and Key Metrics Changes - In Q4 2023, net sales were $196 million, an increase of 8.4% from $181 million in Q4 2022, driven by increased volume and the absence of residual channel inventory destocking [22] - Full year 2023 net sales totaled $1.095 billion, up from $1.060 billion in 2022, representing a growth of 3% [25] - Gross margin for 2023 expanded by 360 basis points to 41.3% from 37.7% in 2022, benefiting from improved plant performance and cost-out initiatives [25] - Full year net income was $205 million or $1.89 per diluted share, compared to $201 million or $1.80 per diluted share in 2022 [26] - EBITDA for 2023 was $326 million, up from $311 million in 2022, with an EBITDA margin of 29.8%, a 40 basis point improvement from 2022 [26] Business Line Data and Key Metrics Changes - The company launched new products in Q4 2023, including Trex Transcend Lineage and Trex Signature, aimed at the premium customer segment [10][11] - The railing segment saw the introduction of Trex Select T-Rail and the Signature X-series cable rail, expanding the product offerings [12] - The company also launched a Trex branded fastener collection to enhance the installation experience for contractors and DIY installers [13] Market Data and Key Metrics Changes - Channel sell-through growth was in the mid-single digits, consistent with the previous quarters, indicating stable market demand [9] - Year-end decking inventories were down approximately 15% from the prior year lows, reflecting increased growth expectations for Q1 2024 [21] Company Strategy and Development Direction - The company aims for double-digit revenue and EBITDA growth in 2024, supported by an early buy program expected to generate $60 million to $80 million in incremental sales in the first half of 2024 [17][18] - The strategic focus includes expanding the product portfolio and enhancing brand strength to capture a larger share of the $14 billion addressable market [32] - Continuous improvement cost-out programs are expected to contribute to ongoing gross margin benefits [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the brand and product offerings, anticipating mid-single digit underlying demand growth despite a flat to low-single digit outlook for the larger repair and remodel market in 2024 [18][19] - The company is optimistic about consumer behavior, noting that homeowners are investing in outdoor spaces to enhance home value [19] - Management highlighted the importance of maintaining appropriate inventory levels to support market demand as the season progresses [111] Other Important Information - The company received multiple recognitions for sustainability efforts in 2023, including being named one of the 100 best ESG companies [16] - Capital expenditures for 2024 are projected at approximately $220 million, primarily for the Arkansas manufacturing facility [29] Q&A Session Summary Question: Revenue growth assumptions for the full year - Management indicated that underlying growth assumptions for sell-through are expected to be in the mid-single digits, with higher growth in Q1 due to inventory adjustments and early buy program [37] Question: SG&A spending and leverage - SG&A expenses are expected to show leverage throughout the year, particularly in the early part of the year with higher revenues [45] Question: Feedback from contractors and bookings - Contractors are reporting confidence, with average lead times returning to normal levels and projects becoming larger [67] Question: Inventory levels and channel management - Management is focused on ensuring inventories are at appropriate levels as the season begins, with no concerns about year-end inventory levels [111] Question: Long-term EBITDA margin targets - Management expects gross margins to be impacted by startup costs from the Arkansas facility but anticipates long-term improvements as the facility reaches full capacity [113]

Part I [Business](index=4&type=section&id=Item%201.%20Business) Trex is the world's largest manufacturer of wood-alternative composite decking and railing, operating in the Trex Residential segment and focusing on market conversion, innovation, and manufacturing expansion - Trex is the **world's largest manufacturer** of composite decking and railing, operating under the Trex Residential segment after divesting the Trex Commercial segment in late 2022[12](index=12&type=chunk)[17](index=17&type=chunk) - The company's growth strategy is centered on converting the market from wood to composite materials, expanding its product line, leveraging its strong brand, and improving manufacturing productivity[16](index=16&type=chunk) Trex Residential Product Offerings | Category | Products | | :--- | :--- | | **Decking & Accessories** | Trex Signature®, Trex Transcend® Lineage™, Trex Transcend®, Trex Select®, Trex Enhance®, Trex Hideaway® fasteners, Trex DeckLighting™ | | **Railing** | Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, Trex Signature® aluminum railing | | **Fencing** | Trex Seclusions® composite fencing | - Trex is investing approximately **$450 million** in a new manufacturing facility in Little Rock, Arkansas, to expand capacity, with construction beginning in Q2 2022[33](index=33&type=chunk)[146](index=146&type=chunk) - The company has a significant customer concentration, with three customers representing approximately **72%** of total net sales in 2023[28](index=28&type=chunk) - As of December 31, 2023, the company employed **1,765** full-time employees, none of whom are covered by collective bargaining agreements[53](index=53&type=chunk)[58](index=58&type=chunk) [Risk Factors](index=15&type=section&id=Item%201A.%20Risk%20Factors) The company faces risks from market competition, customer concentration, product quality, raw material sourcing, supply chain, and external factors like inflation and cybersecurity - A primary risk is the ability to compete with traditional wood products, which constitute the majority of the decking and railing market, and other wood-alternative manufacturers[75](index=75&type=chunk) - The company has significant customer concentration risk, with three customers accounting for **72%** of total net sales in 2023, where the loss of a major customer could materially impact the business[78](index=78&type=chunk) - Product quality and performance are critical, as the company continues to manage a warranty reserve for surface flaking issues on decking produced at its Nevada facility before 2007, which could impact profitability[89](index=89&type=chunk) - The business depends on obtaining adequate supplies of raw materials, particularly wood fiber and scrap polyethylene, where sourcing challenges or price volatility could negatively affect profitability[92](index=92&type=chunk) - The business is subject to risks from cybersecurity attacks, which could compromise confidential information and disrupt operations despite proactive security measures being in place[112](index=112&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk) [Unresolved Staff Comments](index=24&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports no unresolved staff comments from the SEC - None[118](index=118&type=chunk) [Cybersecurity](index=24&type=section&id=Item%201C.%20Cybersecurity) The company maintains a comprehensive cybersecurity risk management program, overseen by the CIO and Audit Committee, which has not materially impacted business operations or financial condition - The company's cybersecurity program is managed by the Chief Information Officer and Director of Information Security, with oversight from an Executive Information Security Oversight Committee and the Audit Committee of the Board of Directors[122](index=122&type=chunk)[123](index=123&type=chunk) - Risk management processes include engaging third-party security monitoring, annual employee training, phishing simulations, and vulnerability scanning[120](index=120&type=chunk) - The company has not experienced any cybersecurity risks that have had a material effect on its business strategy, results of operations, or financial condition[121](index=121&type=chunk) [Properties](index=25&type=section&id=Item%202.%20Properties) Trex owns and leases significant corporate, manufacturing, and warehouse properties across multiple states, with 2023 capital expenditures of **$166.1 million** primarily for the new Arkansas facility Owned and Leased Properties | Type | Square Footage / Acres | Status | Location(s) | | :--- | :--- | :--- | :--- | | Corporate Headquarters | 62,942 SF / 8 Acres | Owned | Virginia | | Trex Residential Facilities | 1,848,535 SF | Leased | Virginia / Nevada / Arkansas | | Trex Residential Facilities | 1,236,360 SF / 455 Acres | Owned | Virginia / Nevada / Arkansas | - Total capital expenditures in 2023 were **$166.1 million**, with a primary focus on the new Arkansas facility (**$98.0 million**) and cost reduction initiatives at existing plants (**$23.9 million**)[125](index=125&type=chunk) [Legal Proceedings](index=25&type=section&id=Item%203.%20Legal%20Proceedings) The company is involved in routine litigation and claims not expected to materially affect its financial condition or operations - The company faces routine litigation and claims incidental to its business, which are not expected to have a material financial impact[128](index=128&type=chunk) [Mine Safety Disclosures](index=25&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[129](index=129&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=26&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) Trex common stock is listed on the NYSE, with the company prioritizing reinvestment and share repurchases over dividends, and its five-year cumulative total stockholder return significantly outperformed the Russell 2000 Index - The company has never paid cash dividends and has no current intention to do so, prioritizing reinvestment and share repurchases[132](index=132&type=chunk) - On May 4, 2023, the Board authorized a new stock repurchase program for up to **10.8 million shares**, with no shares repurchased under this program in the quarter ended December 31, 2023[134](index=134&type=chunk) Comparison of 5-Year Cumulative Total Return | Index | 12/31/2018 | 12/31/2023 | Cumulative Return | | :--- | :--- | :--- | :--- | | **Trex Company, Inc.** | $100.00 | $278.94 | **178.94%** | | **Russell 2000 Index** | $100.00 | $161.09 | **61.09%** | | **S&P 600 Building Products** | $100.00 | $276.54 | **176.54%** | [Reserved]](index=27&type=section&id=Item%206.%20%5BReserved%5D) This item is reserved [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, total net sales decreased **1.0%** to **$1.09 billion** due to divestiture, while Trex Residential sales grew **3.3%**, gross margin improved to **41.3%**, and net income increased **11.2%** to **$205.4 million**, supported by strong cash flow and capital investments Financial Performance Highlights (2023 vs. 2022) | Metric | 2023 | 2022 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | **Net sales** | $1,094.8M | $1,106.0M | $(11.2M) | (1.0)% | | **Gross profit** | $452.4M | $404.0M | $48.4M | 12.0% | | **Net income** | $205.4M | $184.6M | $20.8M | 11.2% | | **Diluted EPS** | $1.89 | $1.65 | $0.24 | 14.5% | - The **1.0%** decrease in total net sales was due to the divestiture of Trex Commercial, while Trex Residential net sales increased by **3.3%** due to a **2.6%** rise in sales volume[183](index=183&type=chunk) - Gross margin for Trex Residential improved from **37.7%** in 2022 to **41.3%** in 2023, driven by cost savings and improved plant performance, offsetting reduced production absorption[184](index=184&type=chunk) - Selling, general and administrative (SG&A) expenses increased by **24.2%** to **$176.2 million**, primarily due to higher personnel, branding, and R&D expenses[185](index=185&type=chunk) - The company continues to manage a warranty reserve for surface flaking claims on products made before 2007, with a decrease in estimated future claims leading to a **$3.8 million** reduction in the reserve in Q3 2023[163](index=163&type=chunk) Cash Flow Summary (in thousands) | Activity | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net cash from operating activities** | $389,420 | $216,220 | $258,064 | | **Net cash used in investing activities** | $(166,089) | $(168,884) | $(158,039) | | **Net cash used in financing activities** | $(233,697) | $(176,064) | $(80,673) | - Capital expenditures for 2024 are projected to be between **$210 million** and **$230 million**, continuing the investment in the Arkansas facility and other growth initiatives[219](index=219&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=42&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company's primary market risk is interest rate exposure from its variable-rate revolving line of credit, with a **$5.5 million** outstanding balance, which is not expected to materially impact financial results from a **1%** rate increase - The company is exposed to interest rate risk from its variable-rate revolving line of credit, which had **$5.5 million** outstanding at year-end 2023[224](index=224&type=chunk) - A hypothetical **1%** increase in interest rates is not expected to materially impact the company's financial results[224](index=224&type=chunk) [Financial Statements and Supplementary Data](index=42&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section incorporates the company's audited consolidated financial statements for fiscal year 2023, including comprehensive income, balance sheets, equity changes, cash flows, and notes Consolidated Statements of Comprehensive Income (Year Ended Dec 31, in thousands) | Account | 2023 | 2022 | 2021 | | :--- | :--- | :--- | :--- | | **Net sales** | $1,094,837 | $1,106,043 | $1,196,952 | | **Gross profit** | $452,407 | $403,989 | $460,504 | | **Income from operations** | $276,204 | $246,735 | $275,376 | | **Net income** | $205,384 | $184,626 | $208,737 | Consolidated Balance Sheets (As of Dec 31, in thousands) | Account | 2023 | 2022 | | :--- | :--- | :--- | | **Total current assets** | $172,254 | $286,842 | | **Total Assets** | $932,885 | $933,705 | | **Total current liabilities** | $91,062 | $290,599 | | **Total Liabilities** | $216,214 | $415,356 | | **Total Stockholders' Equity** | $716,671 | $518,349 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=43&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[227](index=227&type=chunk) [Controls and Procedures](index=43&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2023, with an unqualified opinion from Ernst & Young LLP - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[228](index=228&type=chunk) - Management assessed internal control over financial reporting based on the COSO framework and concluded it was effective as of December 31, 2023[232](index=232&type=chunk) - Ernst & Young LLP, the independent auditor, provided an unqualified opinion on the effectiveness of the company's internal control over financial reporting[237](index=237&type=chunk) - No material changes to internal control over financial reporting occurred during the fourth fiscal quarter of 2023[234](index=234&type=chunk) [Other Information](index=46&type=section&id=Item%209B.%20Other%20Information) The Board amended by-laws on February 21, 2024, to clarify director stock ownership and meeting leadership, with no Rule 10b5-1 trading plan changes by directors or officers in Q4 2023 - The company's by-laws were amended on February 21, 2024, to clarify director stock ownership guidelines and meeting leadership protocols[245](index=245&type=chunk) - No directors or officers made changes to any Rule 10b5-1 trading arrangements in Q4 2023[246](index=246&type=chunk) [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](index=46&type=section&id=Item%209C.%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20the%20Prevent%20Inspections) This item is not applicable to the company - None[247](index=247&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=47&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information on directors, executive officers, and corporate governance is incorporated by reference from the 2024 proxy statement - Information for this item is incorporated by reference from the 2024 proxy statement[249](index=249&type=chunk) [Executive Compensation](index=47&type=section&id=Item%2011.%20Executive%20Compensation) Executive compensation information is incorporated by reference from the 2024 proxy statement - Information for this item is incorporated by reference from the 2024 proxy statement[251](index=251&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=47&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Security ownership information is incorporated by reference from the 2024 proxy statement - Information for this item is incorporated by reference from the 2024 proxy statement[252](index=252&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=47&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2024 proxy statement - Information for this item is incorporated by reference from the 2024 proxy statement[253](index=253&type=chunk) [Principal Accounting Fees and Services](index=47&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) Principal accounting fees and services information is incorporated by reference from the 2024 proxy statement - Information for this item is incorporated by reference from the 2024 proxy statement[254](index=254&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=48&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements, schedules, and exhibits filed as part of the Form 10-K report - This section lists the financial statements, schedules, and exhibits filed with the Form 10-K[256](index=256&type=chunk)[257](index=257&type=chunk) [Form 10-K Summary](index=48&type=section&id=Item%2016.%20Form%2010-K%20Summary) No Form 10-K summary is provided - None[258](index=258&type=chunk)

Exhibit 99.1 NEWS RELEASE TREX COMPANY REPORTS FOURTH QUARTER AND FULL YEAR 2023 RESULTS —Strong Fourth Quarter Sales Cap a Year of Resilient Consumer Demand for Trex Decking & Railing— —Full Year Gross Margin Expanded By 480 Basis Points— —2024 Guidance Anticipates Double-Digit Sales Growth and Further Margin Expansion— WINCHESTER, Va.—February 26, 2024— Trex Company, Inc. (NYSE:TREX) (Trex or Company), the world's #1 brand of high-performance, low-maintenance and eco-friendly decking and railing and a lea ...

Trex Company, Inc. (NYSE:TREX) Q3 2023 Earnings Conference Call October 30, 2023 5:00 PM ET Company Participants Viktoriia Nakhla - IR Bryan Fairbanks - President & CEO Amy Fernandez - Vice President, General Counsel Brad McDonald - Chief Accounting Officer Kara Strosnider - Director of Financial Planning and Analysis Amy Fernandez - Vice President, General Counsel Brenda Lovcik - Senior Vice President and Chief Financial Officer Conference Call Participants John Lovallo - UBS Susan Maklari - Goldman Sachs ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-14649 Trex Company, Inc. (Exact name of registrant as specified in its charter) Delaware 54-1910453 (State or other ...

Trex Company, Inc. (NYSE:TREX) Q2 2023 Earnings Conference Call July 31, 2023 5:00 PM ET Company Participants Viktoriia Nakhla - IR Amy Fernandez - Vice President, General Counsel Bryan Fairbanks - President & CEO Brad McDonald - Chief Accounting Officer Conference Call Participants Keith Hughes - Truist Securities Tim Wojs - Baird John Lovallo - UBS Rafe Jadrosich - Bank of America Alexander Rygiel - B. Riley Ryan Merkel - William Blair Stanley Elliott - Stifel Joseph Ahlersmeyer - Deutsche Bank Michael Re ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Exact name of registrant as specified in its charter) Delaware 54-1910453 (State or other jurisdiction of incorporation or organization) 2500 Trex Way Winchester, Virginia 22601 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRAN ...

Financial Data and Key Metrics Changes - Net sales for Q1 2023 were $239 million, reflecting cautious purchase patterns due to softening economic conditions, compared to a channel inventory build in the prior year [12] - Gross margin increased by 350 basis points sequentially to 39.6%, driven by process efficiencies and raw material optimization, while the previous year's gross margin was 40.9% [12][13] - Net income for Q1 2023 was $41 million or $0.38 per diluted share, down from $72 million or $0.63 per diluted share in the prior year [13] - EBITDA for Q1 2023 was $69 million, representing 28.8% of net sales, with a full-year EBITDA margin guidance of 26% to 27% [13][15] Business Line Data and Key Metrics Changes - The company maintained production at a $1 billion level, with the ability to flex production based on demand [6] - Selling, general and administrative expenses were $37 million, or 15.7% of net sales, compared to 11.4% in the prior year, reflecting a return to normalized branding spending and increased R&D [13] Market Data and Key Metrics Changes - Channel partners reported strong backlogs entering the busy season, indicating continued demand for outdoor living projects despite economic uncertainty [5] - The conversion from wood to composite materials is accelerating, with Trex's market leadership position reinforced by the decline in wood prices [5][6] Company Strategy and Development Direction - The company aims to increase composite penetration from 25% to 50% of the decking market, equating to an incremental $2 billion in composite sales [17] - Trex continues to invest in brand and marketing programs to drive consumer demand and strengthen relationships with channel partners [7][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth prospects despite economic uncertainties, emphasizing the importance of consumer behavior in the back half of the year [35][76] - The company anticipates Q2 2023 net sales to be in the range of $310 million to $320 million, with expectations of a slight decline compared to the prior year when excluding inventory build [15] Other Important Information - The company announced a new stock repurchase program of up to 10.8 million shares, reflecting confidence in its financial strength [15] - Trex was recognized as the most sustainable decking brand for the 13th consecutive year, highlighting its commitment to sustainability [8][9] Q&A Session Summary Question: How should gross margin be expected to trend moving forward? - Management indicated that gross margins are expected to be slightly above 40% in Q2, with a commitment to maintaining EBITDA margins of 26% to 27% for the full year [19] Question: What impact did weather have on sell-through demand? - Management reported that sell-through demand remained flattish, with some impact from wet weather on the West Coast, offset by good weather in other regions [21] Question: What are the expectations for inventory levels throughout the year? - Management expects inventory levels to decrease significantly in Q2 and Q3, aiming for around six to eight weeks of inventory by year-end [32] Question: What would be needed to ramp up production above the current $1 billion run rate? - Management stated that growth in Q2 and continued demand into the early part of Q3 would be necessary to consider increasing production [68] Question: How does the company view potential M&A opportunities? - Management acknowledged the potential for M&A to expand into adjacent product categories, emphasizing the importance of leveraging Trex's expertise [67]

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Condensed Consolidated Financial Statements](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the unaudited condensed consolidated financial statements for the three months ended March 31, 2023, and 2022, including key financial statements and notes, highlighting the company's transition to a single-segment entity Condensed Consolidated Statements of Comprehensive Income (Unaudited) | | Three Months Ended March 31, | | | | :--- | :--- | :--- | :--- | | (In thousands, except per share data) | 2023 | 2022 | | | Net sales | $ 238,718 | $ 339,228 | | | Cost of sales | 144,290 | 204,316 | | | Gross profit | 94,428 | 134,912 | | | Selling, general and administrative expenses | 37,480 | 39,960 | | | Income from operations | 56,948 | 94,952 | | | Net income | $ 41,131 | $ 71,211 | | | Diluted earnings per common share | $ 0.38 | $ 0.62 | Condensed Consolidated Balance Sheets Highlights (Unaudited) | (In thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **ASSETS** | | | | Total current assets | $ 459,483 | $ 286,842 | | Total assets | $ 1,133,121 | $ 933,705 | | **LIABILITIES AND STOCKHOLDERS' EQUITY** | | | | Total current liabilities | $ 447,765 | $ 290,599 | | Total liabilities | $ 572,944 | $ 415,356 | | Total stockholders' equity | $ 560,177 | $ 518,349 | Condensed Consolidated Statements of Cash Flows (Unaudited) | (In thousands) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | $ (115,471) | $ 73,879 | | Net cash used in investing activities | $ (39,192) | $ (22,288) | | Net cash provided by (used in) financing activities | $ 146,254 | $ (77,456) | | Net decrease in cash and cash equivalents | $ (8,409) | $ (25,865) | - On December 30, 2022, the Company completed the sale of its Trex Commercial segment to focus on its core outdoor living strategy, resulting in the company now operating in a **single reportable segment**, Trex Residential[22](index=22&type=chunk)[27](index=27&type=chunk)[69](index=69&type=chunk) - On May 4, 2023, the Board of Directors adopted a new stock repurchase program for up to **10.8 million shares** of its common stock, terminating the existing program[56](index=56&type=chunk) Residential Product Warranty Reserve Reconciliation (in thousands) | | Surface Flaking | Other Residential | Total | | :--- | :--- | :--- | :--- | | **Three Months Ended March 31, 2023** | | | | | Beginning balance, January 1 | $ 15,905 | $ 9,694 | $ 25,599 | | Provisions and changes in estimates | — | 1,945 | 1,945 | | Settlements made during the period | (316) | (551) | (867) | | Ending balance, March 31 | $ 15,589 | $ 11,088 | $ 26,677 | [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses a significant **29.6% decrease in net sales** for Q1 2023 due to channel inventory reduction, with a slight gross margin decline and increased revolving credit facility borrowings Q1 Financial Performance Highlights | ($ 000s omitted, except per share data) | Three Months Ended March 31, 2023 | Three Months Ended March 31, 2022 | % Change | | :--- | :--- | :--- | :--- | | Net sales | $ 238,718 | $ 339,228 | (29.6)% | | Gross profit | $ 94,428 | $ 134,912 | (30.0)% | | Net income | $ 41,131 | $ 71,211 | (42.2)% | | EBITDA | $ 68,862 | $ 105,425 | (34.7)% | | Diluted earnings per share | $ 0.38 | $ 0.62 | (38.7)% | - The decrease in net sales was substantially due to a decrease in volume, resulting from more cautious purchasing by channel partners due to softening economic conditions[99](index=99&type=chunk)[106](index=106&type=chunk) - Gross margin decreased slightly to **39.6%** from 39.8% in the prior-year quarter, primarily due to lower absorption from decreased production levels[108](index=108&type=chunk) - Capital expenditures in Q1 2023 were **$39.2 million**, with **$22.6 million** allocated to the new Arkansas manufacturing facility, and full-year 2023 capital expenditure guidance is **$130 million to $140 million**[117](index=117&type=chunk)[138](index=138&type=chunk) - Cash used in operations was **$115.5 million**, a **$189.4 million decrease** from the prior year, primarily due to an increase in accounts receivable resulting from different payment terms on the early buy program[114](index=114&type=chunk)[115](index=115&type=chunk) - As of March 31, 2023, the company had **$369.5 million** in outstanding borrowings under its revolving credit facility, with an available capacity of **$180.5 million**[48](index=48&type=chunk)[133](index=133&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=28&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) The company reports no material changes to its market risk exposure during the three months ended March 31, 2023, referring to prior annual report disclosures - There were no material changes to the Company's market risk exposure during the three months ended March 31, 2023[149](index=149&type=chunk) [Controls and Procedures](index=28&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and CFO, concluded that disclosure controls and procedures were effective as of March 31, 2023, with no material changes in internal control over financial reporting - The Company's management, including the CEO and CFO, concluded that the Company's disclosure controls and procedures are effective as of March 31, 2023[150](index=150&type=chunk) - No changes in the Company's internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[150](index=150&type=chunk) [PART II OTHER INFORMATION](index=29&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=29&type=section&id=Item%201.%20Legal%20Proceedings) The company is subject to routine litigation and claims, which management believes will not materially affect its financial condition or operations - The Company has pending lawsuits and claims that are considered ordinary routine litigation incidental to the business and are not expected to have a material effect on its financial condition or operations[152](index=152&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=29&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased in Q1 2023 under the existing program, which was terminated and replaced by a new **10.8 million share** repurchase program on May 4, 2023 - The Company did not purchase any shares of its common stock under its publicly announced stock repurchase program during the three months ended March 31, 2023[154](index=154&type=chunk) - On May 4, 2023, the Board of Directors approved a new stock repurchase program for up to **10.8 million shares** and terminated the prior program from 2018[154](index=154&type=chunk) [Other Information](index=29&type=section&id=Item%205.%20Other%20Information) Stockholders approved the Trex Company, Inc. 2023 Stock Incentive Plan and ratified all five proposals at the Annual Meeting on May 4, 2023 - At the annual meeting on May 4, 2023, stockholders approved the Trex Company, Inc. 2023 Stock Incentive Plan, which amends and restates the 2014 Plan and makes **4,000,000 shares** of common stock available for future grants[155](index=155&type=chunk) - Stockholders elected three directors, approved executive compensation on an advisory basis, recommended an annual frequency for future say-on-pay votes, and ratified the selection of Ernst & Young LLP as the independent auditor for 2023[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Exhibits](index=31&type=section&id=Item%206.%20Exhibits) This section provides an index of all exhibits filed with or furnished as part of the Quarterly Report on Form 10-Q, including certifications and XBRL data files - An index of exhibits filed with the Form 10-Q is provided, including the 2023 Stock Incentive Plan, CEO/CFO certifications, and Inline XBRL documents[161](index=161&type=chunk)[168](index=168&type=chunk)