Company Overview and Strategy - Trex is a leader in outdoor living products, emphasizing sustainable product innovation and driving conversion from wood [5] - The company's strategic growth drivers include leveraging the Trex brand, expanding reach, optimizing operations, and capital allocation [9, 10, 11] - Trex is expanding its production capacity with a new site in Little Rock, AR, slated to begin production in mid-2024 [15] - The company focuses on cost reduction and continuous improvement initiatives through automation, modernization, energy utilization, and material processing [17] Market and Product Expansion - The core market size for decking and railing is $8 billion and growing [19] - Composite decking market share for 2021 was approximately 25%, an increase of over 200 basis points compared to 2020 [14] - Trex is expanding internationally, with 61% year-over-year growth and sales in 42 countries outside the U S [14] - Trex is launching the next generation of Transcend decking with refined aesthetics and enhanced performance features [7] Financial Performance and Capital Allocation - Trex has shown strong double-digit revenue growth [51] - The company has allocated over $450 million in capital expenditures since 2016 [49] - Trex has repurchased $425 million in shares over the past 10 years, including $74 million in FY21 and $75 million in Q1'22 [49]

INVESTOR PRESENTATION NYSE : TREX N Y S E : T R E X May 2022 1 SAFE HARBOR / NON-GAAP MEASURES This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause the Company's actual operating results to differ materially from those contemplated by the forward-looking statements. For further information on risk factors affecting ...

Trex Company, Inc. (NYSE:TREX) Q1 2022 Earnings Conference Call May 9, 2022 5:00 PM ET Company Participants Viktoriia Nakhla – Investor Relations Amy Fernandez – Vice President-General Counsel Bryan Fairbanks – President and Chief Executive Officer Dennis Schemm – Senior Vice President and Chief Financial Officer Conference Call Participants Keith Hughes – Truist John Lovallo – UBS Ryan Merkel – William Blair Stanley Elliott – Stifel Josh Chan – Baird Alexander Leach – Berenberg Capital Markets Jeff Stevens ...

PART I [PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the company's condensed consolidated financial statements and related disclosures for the first quarter [Item 1. Condensed Consolidated Financial Statements](index=4&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) The company's Q1 2022 condensed consolidated financial statements show net sales increased 38.2% to $339.2 million and net income rose 46.7% to $71.2 million, with operating cash flow turning positive [Condensed Consolidated Statements of Comprehensive Income](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Comprehensive%20Income) For Q1 2022, Trex Company reported a 38.2% increase in net sales to $339.2 million and a 46.7% increase in net income to $71.2 million, with diluted EPS growing to $0.62 Condensed Consolidated Statements of Comprehensive Income (Unaudited, in thousands) | Metric | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net sales | $339,228 | $245,524 | | Gross profit | $134,912 | $95,801 | | Income from operations | $94,952 | $64,489 | | Net income | $71,211 | $48,545 | | Diluted earnings per common share | $0.62 | $0.42 | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2022, total assets increased to $972.4 million driven by accounts receivable and inventories, while total liabilities also rose to $251.3 million due to higher payables and accrued expenses Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2022 (Unaudited) | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $115,188 | $141,053 | | Accounts receivable, net | $200,920 | $151,096 | | Inventories | $98,176 | $83,753 | | Total current assets | $437,162 | $401,054 | | Total assets | $972,396 | $920,321 | | **Liabilities and Stockholders' Equity** | | | | Total current liabilities | $143,020 | $88,702 | | Total liabilities | $251,331 | $195,287 | | Total stockholders' equity | $721,065 | $725,034 | | Total liabilities and stockholders' equity | $972,396 | $920,321 | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) In Q1 2022, net cash provided by operating activities significantly improved to $73.9 million, while investing activities used $22.3 million and financing activities used $77.5 million primarily for stock repurchases Condensed Consolidated Statements of Cash Flows (Unaudited, in thousands) | Cash Flow Activity | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $73,879 | $(142,574) | | Net cash used in investing activities | $(22,288) | $(57,800) | | Net cash (used in) provided by financing activities | $(77,456) | $86,894 | | Net decrease in cash and cash equivalents | $(25,865) | $(113,480) | [Notes to Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the company's two segments, Trex Residential and Trex Commercial, with Trex Residential dominating Q1 2022 net sales, and provide insights into warranty reserves and credit facility status - The company operates in two reportable segments: Trex Residential Products, the world's largest manufacturer of wood-alternative decking and railing, and Trex Commercial Products, a provider of custom-engineered railing and staging systems[22](index=22&type=chunk)[65](index=65&type=chunk) Segment Net Sales (in thousands) | Segment | Q1 2022 Net Sales | Q1 2021 Net Sales | | :--- | :--- | :--- | | Trex Residential | $327,194 | $233,070 | | Trex Commercial | $12,034 | $12,454 | | **Total** | **$339,228** | **$245,524** | - The company had no outstanding borrowings under its revolving credit facility and an available borrowing capacity of **$350 million** at March 31, 2022[37](index=37&type=chunk) Residential Product Warranty Reserve Reconciliation (in thousands) | Description | Surface Flaking | Other Residential | Total | | :--- | :--- | :--- | :--- | | Beginning balance, Jan 1, 2022 | $18,542 | $10,053 | $28,595 | | Provisions and changes | $0 | $1,090 | $1,090 | | Settlements | $(745) | $(528) | $(1,273) | | **Ending balance, Mar 31, 2022** | **$17,797** | **$10,615** | **$28,412** | [Item 2. 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 attributes strong Q1 2022 performance to robust demand and market share gains, with net sales up 38.2% driven by Trex Residential's price and volume increases, and plans significant capital investment for future growth [Results of Operations](index=21&type=section&id=Results%20of%20Operations) Q1 2022 net sales increased 38.2% to $339.2 million, driven by Trex Residential's price and volume gains, leading to a gross margin improvement to 39.8% despite higher SG&A expenses - The **40.4% increase** in Trex Residential net sales was primarily due to an **18% increase in average price per unit** and a **19% increase in volume**[98](index=98&type=chunk) - Gross margin increased to **39.8%** in Q1 2022 from **39.0%** in Q1 2021, driven by pricing realization at Trex Residential, which was partially offset by inflationary pressures on raw materials, labor, and transportation[99](index=99&type=chunk) - Selling, general and administrative expenses increased by **$8.6 million (27.6%)**, primarily due to a **$4.8 million increase in marketing and branding spend** and a **$3.8 million increase in personnel-related expenses**[100](index=100&type=chunk) EBITDA Reconciliation and Growth (in thousands) | Segment | Q1 2022 EBITDA | Q1 2021 EBITDA | % Change | | :--- | :--- | :--- | :--- | | Trex Residential | $106,483 | $70,964 | 50.1% | | Trex Commercial | $(1,058) | $(52) | NM | | **Total EBITDA** | **$105,425** | **$70,912** | **48.7%** | [Liquidity and Capital Resources](index=23&type=section&id=Liquidity%20and%20Capital%20Resources) The company maintains strong liquidity with $115.2 million cash and $350 million credit availability, supported by $73.9 million operating cash flow, and plans significant capital expenditures including a new $400 million Arkansas facility - The company had **$115.2 million of cash and cash equivalents** and **$350 million of available borrowing capacity** at March 31, 2022[104](index=104&type=chunk)[114](index=114&type=chunk) - The company announced plans for a third U.S. manufacturing facility in Little Rock, Arkansas, with an expected investment of approximately **$400 million over the next five years**[118](index=118&type=chunk) - Capital expenditure guidance for 2022 is set at **$200 million to $220 million**, covering the new Arkansas facility, cost reductions, and equipment upgrades[119](index=119&type=chunk) - During Q1 2022, the company repurchased **833,963 shares** of its common stock for **$77.9 million**[88](index=88&type=chunk)[110](index=110&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) No material changes occurred in the company's market risk exposure during Q1 2022, with further details available in the 2021 Annual Report on Form 10-K - There were **no material changes** to the Company's market risk exposure during the first quarter of 2022[121](index=121&type=chunk) [Item 4. Controls and Procedures](index=25&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2022, with no material changes to internal control over financial reporting during the quarter - The Company's management concluded that disclosure controls and procedures were **effective** as of March 31, 2022[122](index=122&type=chunk) - **No changes** in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[122](index=122&type=chunk) PART II [PART II OTHER INFORMATION](index=26&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers other important information including legal proceedings, equity sales, and recent stockholder meeting outcomes [Item 1. Legal Proceedings](index=26&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in ordinary, routine litigation and claims, which management believes will not materially affect its financial condition or results of operations - The Company faces lawsuits and claims that are considered ordinary routine litigation incidental to the business, which are **not expected to have a material financial impact**[125](index=125&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) During Q1 2022, the company repurchased 833,963 shares of common stock, with 7,154,160 shares remaining available under the repurchase program as of March 31, 2022 Common Stock Repurchases in Q1 2022 | Period | Total Shares Purchased | Average Price Paid per Share | Shares Purchased Under Program | | :--- | :--- | :--- | :--- | | Jan 2022 | 363,918 | $90.12 | 363,918 | | Feb 2022 | 505,901 | $89.36 | 470,045 | | Mar 2022 | 0 | — | 0 | | **Q1 Total** | **869,819** | | **833,963** | [Item 5. Other Information](index=26&type=section&id=Item%205.%20Other%20Information) At the May 5, 2022 Annual Meeting, stockholders approved director elections, executive compensation, an increase in authorized common stock to 360 million shares, and ratified the independent auditor - At the May 5, 2022 Annual Meeting, stockholders approved an amendment to increase the number of authorized shares of common stock from **180 million to 360 million**[130](index=130&type=chunk)[131](index=131&type=chunk)[132](index=132&type=chunk) - All other proposals at the Annual Meeting were also **approved**, including the election of three directors, advisory approval of executive compensation, and ratification of the independent auditor[129](index=129&type=chunk)[130](index=130&type=chunk)[131](index=131&type=chunk) [Item 6. Exhibits](index=27&type=section&id=Item%206.%20Exhibits) This section refers to the Exhibit Index for a comprehensive list of all filed exhibits, including certifications and corporate amendments

Financial Data and Key Metrics Changes - The company reported record sales of $1.2 billion for the full year 2021, with fourth quarter sales increasing 33% to $304 million and adjusted earnings per share growing 49% to $0.55 per share [11][34] - Consolidated gross margin in the fourth quarter was 38.9%, down from 40.5% in the previous year, primarily due to increased raw material and transportation costs [27][28] - Net income for the fourth quarter was $25 million or $0.22 per diluted share, with adjusted net income at $64 million or $0.55 per diluted share, representing increases of 47% and 49% respectively from the previous year [32][34] - Full year 2021 adjusted EBITDA increased 38% to $357 million, with an adjusted EBITDA margin of 29.8% [35] Business Line Data and Key Metrics Changes - Trex Residential net sales grew 38% to $1.14 billion, while Trex Commercial contributed $58 million to net sales, with a 6% year-on-year increase [34][27] - Fourth quarter gross margin for Trex Residential was 39.7%, down from 41.3% in the previous year, while Trex Commercial's gross margin was 24%, down from 28% [28] Market Data and Key Metrics Changes - The company noted strong consumer demand driven by repair and remodel activity, particularly in outdoor living spaces, which is the fastest-growing category [13][15] - The company expects international growth to exceed domestic market expansion in the long term, as composites have lower market penetration outside of North America [21] Company Strategy and Development Direction - The company executed the largest capacity expansion program in its history, increasing total capacity by 85% above 2019 levels, including a new facility in Little Rock, Arkansas, expected to commence operations in 2024 [18][19] - A new marketing campaign launched in 2022 aims to highlight how Trex products transform outdoor living spaces, reinforcing the brand's market position [23] - The company remains focused on sustainable growth and increasing market share from wood, utilizing recycled materials in its products [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in strong demand continuing into 2022, driven by favorable trends in outdoor living and home renovations [15][44] - The company anticipates double-digit revenue growth for 2022, with first quarter consolidated net sales expected to range from $320 million to $330 million [39][38] - Management acknowledged challenges from inflation and transportation costs but expects pricing realization to offset these pressures [50][99] Other Important Information - The company recognized a $54 million goodwill impairment charge in the fourth quarter due to reduced project commitments in the commercial segment, influenced by COVID-related uncertainties [29] - The company generated record cash from operations of $258 million in 2021, enabling self-financing of capacity expansion and stock repurchases totaling $74 million [35][37] Q&A Session Summary Question: Can you talk about the incremental EBITDA margin guide for the year? - Management expects EBITDA margins to improve sequentially throughout the year, with the highest margins anticipated in Q3 and Q4 [48] Question: Can you unpack sales outlook for 2022? - Management indicated that pricing will contribute in the low teens, with normalized seasonality expected to return [58][59] Question: What are contractors saying about their backlogs? - Contractors reported positive sentiment with backlogs ranging from three to six months, indicating strong interest in outdoor living [67] Question: Can you elaborate on the reduction in commercial project commitments? - The reduction was primarily due to COVID-related uncertainties affecting investments in core markets like sports and entertainment [75] Question: Was there any negative impact from Omicron in January? - The company experienced elevated absences due to Omicron but managed to offset this with increased overtime [82] Question: Can you talk about international growth opportunities? - Management sees potential for international markets to outgrow North American markets, focusing on regions with higher GDP and interest in outdoor living [96][152] Question: How much of the sales growth is from core wood conversion? - Management indicated that growth is driven by remodeling, wood conversion, and international market expansion [120] Question: What is the expected decline in commercial sales for 2022? - Management expects a decline of about 10% year-over-year in the commercial segment [158]

Financial Performance - Net sales increased by 35.9%, or $316 million, to $1.2 billion for the twelve months ended December 31, 2021, compared to $881 million in the previous year, marking the highest sales in the company's history [148]. - Trex Residential net sales rose by 37.6%, or $311 million, to $1.14 billion for the same period, also the highest in its history [148]. - Gross profit increased by 28.1%, or $101 million, to $461 million for the twelve months ended December 31, 2021, compared to $359 million in 2020 [148]. - Net income reached $209 million, an 18.8% increase over the previous year's net income of $176 million [148]. - Total net sales for the year ended December 31, 2021, were $1,196,952 thousand, representing a 35.9% increase from $880,831 thousand in 2020 [176]. - Trex Residential net sales increased by 37.6% to $1,139,266 thousand in 2021, driven by strong demand and market share gains from wood [176]. - Gross profit for 2021 was $460,504 thousand, with a gross margin of 38.5%, down from 40.8% in 2020, primarily due to inflationary pressures and increased costs [178]. - Total EBITDA increased by 23.7% to $311.3 million in 2021, driven by a $116.7 million increase in Trex Residential EBITDA, offset by a $56.9 million decrease in Trex Commercial EBITDA [186]. Investments and Capital Expenditures - The company plans to invest approximately $400 million over the next five years to develop a new manufacturing facility in Little Rock, Arkansas, expected to begin production in 2024 [142][154]. - Capital expenditures totaled $159 million, primarily for increasing production capacity at Virginia and Nevada facilities [148]. - Capital expenditures in 2021 totaled $159.4 million, with $126.3 million allocated for capacity expansion and cost reduction initiatives [190]. - Capital expenditure guidance for 2022 is set between $200 million and $220 million, focusing on internal growth opportunities and manufacturing cost reductions [205]. Operational Efficiency and Workforce - The company welcomed approximately 400 new employees in 2021 to support growth and enhance diversity, equity, and inclusion efforts [144][145]. - The new Arkansas facility will employ approximately 500 people and is strategically located to optimize raw material access and transportation costs [142][154]. - Trex continues to focus on cost reduction through increased automation and energy efficiency to enhance margins and drive profit growth [143]. - The company’s capacity expansion program was fully operational in 2021, enabling it to capture additional growth in Trex Residential [176]. Claims and Impairments - The average cost per surface flaking claim increased to $3,519 in 2021, compared to $3,390 in 2020 [163]. - The number of unresolved surface flaking claims at the end of 2021 was 1,759, a decrease from 1,799 at the end of 2020 [163]. - The company recognized impairment charges of $42.5 million and $11.8 million for its commercial railing and staging reporting units, respectively, in Q4 2021 [169]. - Goodwill impairment loss for 2021 was $54.2 million, representing 4.5% of total net sales, due to reduced project commitments influenced by COVID-19 [180]. - The company estimates that a 10% change in the expected number of claims or the cost to settle claims could result in approximately a $1.9 million change in the warranty reserve [162]. Cash Flow and Financing - Cash flows from operating activities were $258 million for the twelve months ended December 31, 2021, compared to $187 million in 2020 [148]. - Net cash provided by operating activities rose to $258.1 million in 2021, a $71 million increase compared to 2020, attributed to a $117 million increase in Trex Residential EBITDA [189]. - As of December 31, 2021, the company had no outstanding indebtedness under revolving credit facilities, with a borrowing capacity of $300 million [197]. - The company believes that cash on hand, cash flows from operations, and borrowings from the revolving credit facility will provide sufficient funds for planned capital expenditures and other cash requirements for at least the next 12 months [206]. - The company expects to fund future capital expenditures primarily from operations and borrowings under the revolving credit facility, with actual future capital requirements potentially differing based on product demand and market developments [206]. - The company may need to obtain additional financing through bank borrowings or the issuance of debt or equity securities, which could increase indebtedness or dilute stockholder ownership [207]. - As of December 31, 2021, the company had no debt outstanding under its revolving line of credit, and a 1% increase in interest rates would not materially affect its financial position or liquidity [210]. - The company had no interest rate swap agreements outstanding as of December 31, 2021, indicating a lack of hedging against interest rate fluctuations [211]. Tax and Shareholder Returns - The effective tax rate for 2021 was 24.2%, slightly lower than the 25.2% rate in 2020 [183]. - The company repurchased 3.6 million shares under its Stock Repurchase Program, with $82.5 million used for share repurchases in 2021 [191]. - The company does not expect the adoption of new accounting standards related to reference rate reform to have a material effect on its consolidated financial statements [208]. - The company is required to disclose material transactions with government assistance, but does not expect this to materially affect its consolidated financial statements [209].

INVESTOR PRESENTATION N Y S E : T R E X November 2021 SAFE HARBOR / NON-GAAP MEASURES This presentation contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are subject to risks and uncertainties that could cause the Company's actual operating results to differ materially from those contemplated by the forward-looking statements. For further information on risk factors affecting the Comp ...

Trex Company, Inc. (NYSE:TREX) Q3 2021 Earnings Conference Call November 8, 2021 5:00 PM ET Company Participants Viktoriia Nakhla - Investor Relations Bill Gupp - Senior Vice President, General Counsel & Secretary Bryan Fairbanks - President & Chief Executive Officer Dennis Schemm - Senior Vice President & Chief Financial Officer Conference Call Participants Stanley Elliott - Stifel Ryan Merkel - William Blair Matthew Bouley - Barclays Trey Grooms - Stephens Inc. Tim Wojs - Baird Jeff Stevenson - Loop Capit ...

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, 2021 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 2021 Earnings Conference Call August 2, 2021 5:00 PM ET Company Participants Viktoriia Nakhla - Investor Relations Bill Gupp - Senior Vice President, General Counsel & Secretary Bryan Fairbanks - President & Chief Executive Officer Dennis Schemm - Senior Vice President & Chief Financial Officer Conference Call Participants Jeff Stevenson - Loop Capital Keith Hughes - Truist Ryan Merkel - William Blair Michael Rehaut - JPMorgan Matthew Bouley - Barclays Ketan Mamtora - BMO C ...