Company Overview - Trex's market capitalization is valued at $5.3 billion as of March 31, 2023, supported by brand strength, distribution network, low-cost leadership, and product breadth[15, 16, 17] - The company has recycled over 5 billion pounds of plastic film since its inception, utilizing 95% reclaimed and recycled materials in its durable decking[18, 19] - Trex has reduced its greenhouse gas emissions intensity by 33% between 2020 and 2021[19] Market Position and Growth - 82% of people say their outdoor space is more important to them than ever[32] - Trex residential growth from 2015 to 2022 was 140%, outpacing the outdoor living category's growth of 102% and the repair & remodeling sector's growth of 71%[38] - Trex holds a 12% market share of the $8 billion U S decking & railing category[39] Product Innovation and Value - Trex is launching a new luxury line with realistic wood grain and colors inspired by nature, with 2 colors available in Q1 2023 in select markets, backed by a new 50-year warranty[75] - Trex web traffic commands more than 60% of the category, generating high-quality Trex leads[99] Financial Performance and Capital Allocation - Trex has capital expenditures of $656 million since 2016[128] - The company has $745 million in share repurchases over the past 10 years, including $395 million in 2022 repurchases[129] - The company anticipates capital expenditures of $130-140 million, SG&A at 15-16% of sales, depreciation & amortization of $45-47 million, a tax rate of 25-26%, and an EBITDA margin of 26-27%[141]

SEEING MORE INVESTOR PRESENTATION | AS O F Q2 2023 NYSE:TREX AT TREX, EVEN OUR PRESENTATION DECKS SAVE TREES. Scan for our paperless investor presentation. 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 cont ...

Company Overview - Trex is the 1 brand in trust, consumer awareness, search, traffic, social media, sales, and market share[13] - Trex decking is made of 95% reclaimed and recycled materials, and the company has recycled over 5 billion pounds of plastic film since inception[14] - The company has a market cap supported by brand, distribution, low-cost leadership, and product breadth[15] Market Opportunity and Growth - Trex Residential experienced 140% growth from 2015 to 2022, outpacing the outdoor living category's 102% growth and the repair & remodeling category's 71% growth[32] - Trex has a 12% market share of the $8 billion U S decking & railing category[33] - Homeowners are increasingly allocating budgets to outdoor living spaces, with 25% of overall budgets going to upgrades[37] - The company estimates $400 million in expenditures for the Arkansas site through 2026[42] Sustainability and Impact - 95% of Trex decking is upcycled from diverted wastes[116] - The company reclaims approximately 13,000 pounds of scrap Trex boards and cut-off ends through a pilot circulatory program[116] - Trex recycles ~99% of water annually with closed-loop cooling systems at its Virginia and Nevada manufacturing facilities[117] Financial Performance and Guidance - Trex Residential adjusted sales for TTM 2024 were $1.23 billion[130] - Trex Residential adjusted EBITDA for TTM 2024 was $388 million, representing 32% of net sales[132] - The company projects full-year revenue growth of 11-13%[135]

Company Overview - Trex has recycled over 5 billion pounds of plastic film since its inception, positioning itself as one of the largest polyethylene film recyclers in North America[14] - The company's market capitalization is supported by its brand, distribution network, low-cost leadership, and product breadth, valued at $6.5 billion[15] - Trex holds a 13% market share in the $8 billion U S decking and railing category[36] Market Trends and Opportunities - There's a growing demand for multi-functional outdoor living spaces, with a 50% increase since 2020[39] - Sustainability is gaining industry influence, with 77% of designers prioritizing products made with responsibly sourced materials[41] - The railing market presents a $3.3 billion opportunity, where Trex aims to double its market share over the next five years[44,48] Financial Performance and Capital Allocation - Trex has allocated $699 million in capital expenditures since 2016, including $200 million for capacity expansion completed in FY2021[44] - The company's capital allocation strategy prioritizes high-return CapEx spending, high-impact acquisitions, and share buybacks[158] - Trex's adjusted sales for 2024 reached $1.151 billion, with an adjusted EBITDA of $360 million, representing a 31% margin[174] Sustainability and Environmental Impact - Trex upcycles 95% of materials in its decking from diverted wastes[150] - The company reclaims 13000 pounds of scrap Trex boards and cut-off ends through a pilot circularity program[150] - Trex recycles approximately 99% of process water annually with closed-loop cooling systems at its Virginia and Nevada manufacturing facilities[151]

SEEING MORE INVESTOR PRESENTATION | AS O F Q3 2023 NYSE:TREX AT TREX, EVEN OUR PRESENTATION DECKS SAVE TREES. Scan for our paperless investor presentation. 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 cont ...

Company Performance - Trex reported quarterly earnings of $0.60 per share, exceeding the Zacks Consensus Estimate of $0.58 per share, but down from $0.82 per share a year ago, representing an earnings surprise of 3.45% [1] - The company posted revenues of $339.99 million for the quarter ended March 2025, surpassing the Zacks Consensus Estimate by 3.28%, but down from $373.64 million year-over-year [2] - Over the last four quarters, Trex has surpassed consensus EPS estimates four times and topped consensus revenue estimates three times [2] Stock Performance - Trex shares have declined approximately 18.1% since the beginning of the year, compared to a decline of 4.3% for the S&P 500 [3] - The current Zacks Rank for Trex is 3 (Hold), indicating that shares are expected to perform in line with the market in the near future [6] Future Outlook - The current consensus EPS estimate for the upcoming quarter is $0.78 on revenues of $379.47 million, and for the current fiscal year, it is $2.16 on revenues of $1.22 billion [7] - The outlook for the Building Products - Wood industry, to which Trex belongs, is currently in the bottom 16% of over 250 Zacks industries, which may impact Trex's stock performance [8]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $340 million, a decrease of 9% compared to $374 million in Q1 2024, primarily due to a $40 million benefit from channel inventory build in the previous year that did not repeat [23][25] - Gross profit was $138 million with a gross margin of 40.5%, down from $170 million and 45.4% year-over-year, attributed to railing conversion costs and lower production levels [24][25] - Net income decreased by 32% to $60 million or $0.56 per diluted share, compared to $89 million or $0.82 per diluted share in the prior year [25] Business Line Data and Key Metrics Changes - New products launched in the last 36 months accounted for approximately 22% of trailing twelve-month sales, more than double the level from the previous year [9][18] - The company is seeing strong demand for premium products across all channels, with a notable increase in dealer conversions to the Trex brand [9][20] Market Data and Key Metrics Changes - The repair and remodel market is projected to rebound, with spending expected to increase from a low of $1 per square foot in 2024 back to the long-term average of $1.26 by 2027 [16][17] - The company anticipates outperforming the repair and remodel market in 2025, driven by new product introductions and market share gains [17][26] Company Strategy and Development Direction - The company is focused on enhancing its product offerings through innovation, with a commitment to serving consumers across all price points [18][19] - Trex is expanding its distribution partnerships and enhancing brand alignment with contractors to drive sales [14][20] - The new manufacturing campus in Arkansas is expected to improve operational efficiency and reduce costs [15][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position despite macroeconomic challenges and competitive pressures [28][29] - The company is maintaining its full-year guidance for 2025, expecting net sales growth between 5% to 7% and adjusted EBITDA margin to exceed 31% [26] Other Important Information - The company is implementing a new inventory strategy to reduce quarterly volatility and ensure adequate supply to meet consumer demand [11] - Tariff impacts are projected to affect less than 5% of cost of sales, with mitigation strategies in place [12][88] Q&A Session Summary Question: What drove the changes to the Enhance product line? - Management noted customer feedback led to manufacturing changes that improved the strength and aesthetics of the product [31][32] Question: What are the expectations for gross margins in Q2? - Management indicated that Q2 margins would be similar to Q1, primarily due to ongoing costs from product enhancements [33][34] Question: What is the sell-through rate for Q1? - The company reported strong demand for premium products and a turnaround in entry-level products, aligning with full-year guidance [40][41] Question: How will inventory practices affect seasonality? - Management expects a return to more normal seasonal patterns, with a strong first quarter followed by a slight decline in the third and fourth quarters [45][46] Question: What are the impacts of tariffs on costs? - The company has limited exposure to China and is exploring alternative sourcing options to mitigate tariff impacts [88][89] Question: How is the entry-level market performing? - There has been sequential improvement in entry-level products, with expectations for continued stabilization [114][115]

Financial Data and Key Metrics Changes - In Q1 2025, net sales were $340 million, a decrease of 9% compared to $374 million in Q1 2024, primarily due to a lack of channel inventory build that occurred in the previous year [21][25] - Gross profit was $138 million with a gross margin of 40.5%, down from $170 million and 45.4% year-over-year, attributed to railing conversion costs and lower production levels [22][23] - Net income decreased by 32% to $60 million or $0.56 per diluted share, compared to $89 million or $0.82 per diluted share in the prior year [23][25] Business Line Data and Key Metrics Changes - New products launched in the last 36 months accounted for approximately 22% of trailing twelve-month sales, more than double the level from the previous year [7][17] - The company is seeing strong demand for premium products across all channels, with a notable increase in dealer conversions to the Trex brand [6][19] Market Data and Key Metrics Changes - The repair and remodel market is projected to rebound, with spending expected to return to long-term averages by 2027, driven by the aging of existing decks [14][15] - The company anticipates outperforming the repair and remodel market in 2025, supported by new product introductions and market share gains [15][25] Company Strategy and Development Direction - The company is focused on product innovation and expanding its portfolio, with a strategy to offer a comprehensive range of decking and railing products [7][17] - A new manufacturing campus in Arkansas is expected to enhance operational efficiency and reduce costs, with production of recycled plastic pellets already underway [14][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's market position despite macroeconomic pressures, citing strong demand for premium products and positive feedback on new offerings [26][27] - The company is maintaining its full-year guidance for 2025, expecting net sales growth between 5% to 7% and adjusted EBITDA margins exceeding 31% [25][26] Other Important Information - The company is implementing a new inventory strategy to reduce quarterly volatility and ensure adequate supply to meet consumer demand [10] - Tariff impacts are projected to affect less than 5% of cost of sales, with mitigation strategies in place to manage costs [11][84] Q&A Session Summary Question: Changes to the Enhance product line - Management explained that refinements were made based on customer feedback to improve strength and aesthetics, expecting stronger sales post-change [29][30] Question: Sell-through rates and guidance - Management confirmed strong demand for premium products and a turnaround in entry-level products, maintaining guidance for mid to high single-digit growth [38][39] Question: Seasonal trends and inventory practices - Management indicated a return to more normal seasonal patterns, with expectations for a less pronounced drop-off in Q3 compared to historical trends [42][44] Question: SG&A expenses and guidance - SG&A expenses are expected to be front-loaded due to marketing and innovation investments, with a decrease anticipated in subsequent quarters [49][50] Question: Tariff impacts and mitigation - Management noted limited exposure to China and ongoing efforts to mitigate tariff impacts through supplier negotiations and inventory strategies [84][86] Question: Capital allocation priorities - The company remains focused on organic growth, potential acquisitions, and share buybacks, with expectations for increased free cash flow in the coming years [57][115]

[PART I FINANCIAL INFORMATION](index=2&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section provides the unaudited condensed consolidated financial statements, management's discussion and analysis, market risk disclosures, and controls and procedures for the first quarter of 2025 [Item 1. Condensed Consolidated Financial Statements](index=2&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements) Presents unaudited condensed consolidated financial statements, including income, balance sheet, equity, and cash flow statements, with notes for Q1 2025 and 2024 Condensed Consolidated Statements of Comprehensive Income (Unaudited) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | (In thousands, except per share data) | **2025** | **2024** | | **Net sales** | $339,993 | $373,635 | | **Gross profit** | $137,731 | $169,612 | | **Income from operations** | $81,663 | $119,012 | | **Net income** | $60,434 | $89,070 | | **Diluted earnings per common share** | $0.56 | $0.82 | Condensed Consolidated Balance Sheets (Unaudited) | | March 31, 2025 (Unaudited) | December 31, 2024 | | :--- | :--- | :--- | | (In thousands) | | | | **Total current assets** | $592,190 | $318,908 | | **Total assets** | $1,641,199 | $1,324,298 | | **Total current liabilities** | $601,561 | $342,477 | | **Total liabilities** | $731,120 | $474,156 | | **Total stockholders' equity** | $910,079 | $850,142 | Condensed Consolidated Statements of Cash Flows (Unaudited) | | Three Months Ended March 31, | | | :--- | :--- | :--- | | (In thousands) | **2025** | **2024** | | **Net cash used in operating activities** | $(154,013) | $(174,044) | | **Net cash used in investing activities** | $(79,965) | $(37,614) | | **Net cash provided by financing activities** | $237,649 | $212,752 | | **Net increase in cash and cash equivalents** | $3,671 | $1,094 | [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 analyzes Q1 2025 financial performance, detailing decreased net sales and net income, operational highlights, liquidity, and capital resources [Highlights and Financial Performance](index=18&type=section&id=Highlights%20and%20Financial%20Performance) Summarizes Q1 2025 financial results, showing year-over-year declines in key metrics and highlighting corporate achievements and sustainability recognition Key Financial Highlights (Unaudited) | | Three Months Ended March 31, | | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | (In thousands, except per share data) | **2025** | **2024** | | | | **Net sales** | $339,993 | $373,635 | $(33,642) | (9.0)% | | **Gross profit** | $137,731 | $169,612 | $(31,881) | (18.8)% | | **Net income** | $60,434 | $89,070 | $(28,636) | (32.1)% | | **EBITDA*** | $95,912 | $133,166 | $(37,254) | (28.0)% | | **Diluted earnings per share** | $0.56 | $0.82 | $(0.26) | (31.7)% | - Key achievements in Q1 2025 include: - Named America's Most Trusted® Outdoor Decking for the fifth consecutive year - Ranked among Barron's 100 Most Sustainable Companies for 2025, moving up **20 spots** - Earned top honors at the Environment + Energy Leader Awards - Named Green Builder Media's Sustainable Brand Leader in the decking category[83](index=83&type=chunk) [Results of Operations](index=19&type=section&id=Results%20of%20Operations) Analyzes Q1 2025 operational results, detailing decreased net sales due to lower volume, contracted gross margin, and increased SG&A expenses - Net sales decreased by **$33.6 million (9.0%)** in Q1 2025 compared to Q1 2024, primarily due to a decrease in volume as a **$40 million** channel inventory build in the prior-year quarter did not reoccur in 2025[91](index=91&type=chunk) - Gross margin decreased to **40.5%** in Q1 2025 from **45.4%** in Q1 2024, mainly due to lower production year-over-year and changes to the production process for Enhance® decking[92](index=92&type=chunk) - Selling, general and administrative expenses increased by **$5.5 million (10.8%)** in Q1 2025, primarily due to a **$3.4 million** increase in branding, a **$1.0 million** increase in personnel expenses, and **$1.0 million** in start-up expenses for the Arkansas facility[93](index=93&type=chunk) [Liquidity and Capital Resources](index=21&type=section&id=Liquidity%20and%20Capital%20Resources) Details Q1 2025 cash flow from operations, capital expenditures for the Arkansas facility, outstanding borrowings, and future capital expenditure guidance - Cash used in operations was **$154.0 million** for the first three months of 2025, a decrease from **$174.0 million** in the same period of 2024, primarily due to a decrease in inventories and reduced profitability[97](index=97&type=chunk)[98](index=98&type=chunk) - Capital expenditures for Q1 2025 totaled **$79.5 million**, with **$64.2 million** allocated to the new Arkansas manufacturing facility[84](index=84&type=chunk)[99](index=99&type=chunk) - As of March 31, 2025, the company had **$443.9 million** in outstanding borrowings under its revolving credit facility, with an available borrowing capacity of **$106.1 million**[44](index=44&type=chunk)[113](index=113&type=chunk) - The company's capital expenditure guidance for the full year 2025 is projected to be between **$190 million** and **$210 million**[116](index=116&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=24&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Confirms no material changes to market risk exposure in Q1 2025, referring to the detailed disclosure in the 2024 Annual Report on Form 10-K - There were no material changes to the Company's market risk exposure during the three months ended March 31, 2025[126](index=126&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - Based on an evaluation as of March 31, 2025, the President and Chief Executive Officer and the Senior Vice President and Chief Financial Officer concluded that the Company's disclosure controls and procedures are effective[127](index=127&type=chunk) - No changes in the Company's internal control over financial reporting occurred during the first quarter of 2025 that have materially affected, or are reasonably likely to materially affect, the internal controls[127](index=127&type=chunk) [PART II OTHER INFORMATION](index=25&type=section&id=PART%20II%20OTHER%20INFORMATION) This section covers legal proceedings, equity security sales, other corporate information, and a list of exhibits for the first quarter of 2025 [Item 1. Legal Proceedings](index=25&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 is involved in lawsuits and claims that are considered ordinary and incidental to its business, which management does not expect to have a material effect on the company's financial condition or results of operations[71](index=71&type=chunk)[130](index=130&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=25&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No shares were repurchased under the stock repurchase program in Q1 2025, though 49,949 shares were withheld for employee tax obligations - No shares were repurchased under the company's stock repurchase program during the three months ended March 31, 2025[132](index=132&type=chunk) - A total of **49,949 shares** were withheld by the company to cover tax withholding obligations for employees on restricted stock grants during the quarter[131](index=131&type=chunk) [Item 5. Other Information](index=25&type=section&id=Item%205.%20Other%20Information) No Rule 10b5-1 trading plan changes by directors or officers, and the Annual Meeting results included director elections, advisory executive compensation approval, and auditor ratification - During the quarter ended March 31, 2025, no directors or officers adopted, modified, or terminated any Rule 10b5-1 trading plans or other non-Rule 10b5-1 trading arrangements[133](index=133&type=chunk) - At the Annual Meeting of Stockholders on May 6, 2025, three directors were elected, the compensation of executive officers was approved on an advisory basis, and the selection of Ernst & Young LLP as the independent registered public accounting firm for fiscal year 2025 was ratified[134](index=134&type=chunk)[135](index=135&type=chunk)[137](index=137&type=chunk) [Item 6. Exhibits](index=26&type=section&id=Item%206.%20Exhibits) Refers to the Exhibit Index at the end of the report for a comprehensive list of all exhibits filed with this Form 10-Q - A list of exhibits filed with this Quarterly Report on Form 10-Q is available in the Exhibit Index at the end of the document[138](index=138&type=chunk)

Exhibit 99.1 NEWS RELEASE TREX COMPANY REPORTS FIRST QUARTER 2025 RESULTS First Quarter Sales Exceeded Guidance Driven by Continued Demand for Premium Products New Products Accounted for 22% of Trailing Twelve-Month Sales Pro-Dealer Conversions Drive Future Growth Opportunities Second Quarter Revenue Guidance of $370 million to $380 million Full Year 2025 Guidance Reaffirmed at 5%-7% Revenue Growth and Adjusted EBITDA Margin to Exceed 31% First Quarter 2025 Results First quarter 2025 net sales were $340 mil ...