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Segment Information
 12 Months Ended
Dec. 31, 2019
Segment Reporting [Abstract]  
Segment Information
17.
SEGMENT INFORMATION
Prior to July 31, 2017, the Company operated in
one
reportable segment. Subsequent to the acquisition of certain assets and assumption of certain liabilities of SC Company on July 31, 2017, the Company operates in
two
reportable segments:
  • Trex Residential manufactures composite decking and railing and related products marketed under the brand name Trex
®
. The products are sold to its distributors and
two
national retailers who, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. Trex Residential net sales were $694.3 million, $613.2 million, and $543.3 million in the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.
  • Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products are sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. Trex Commercial net sales were $51.1 million and $71.0 million in the year ended December 31, 2019 and December 31, 2018, respectively, and $21.8 million from the date of acquisition through December 31, 2017.
The Company’s reportable segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial operations. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. The below segment data includes data for Trex Residential for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, and data for Trex Commercial for the years ended December 31, 2019 and December 31, 2018, and from the date of the acquisition of SC Company through December 31, 2017, for the year ended December 31, 2017 (in thousands):
Segment Data:
 
Net Sales
 
  
Net Income
(Loss)
 
  
EBITDA
 
  
Depreciation
and
Amortization
 
  
Income Tax
Expense
(Benefit)
 
  
Capital
Expenditures
 
  
Total Assets
 
December 31, 2019
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Trex Residential
  $
694,267
    $
142,811
    $
199,020
    $
13,413
    $
44,292
    $
65,399
    $
503,883
 
Trex Commercial
   
51,080
     
1,927
     
3,210
     
618
     
672
     
1,866
     
88,356
 
                                                         
Total
  $
745,347
    $
144,738
    $
202,230
    $
14,031
    $
44,964
    $
67,265
    $
592,239
 
                                                         
December 31, 2018
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Trex Residential
  $
613,229
    $
131,823
    $
186,268
    $
13,216
    $
41,421
    $
31,392
    $
380,682
 
Trex Commercial
    
71,021
     
2,749
     
6,868
     
3,251
     
868
     
2,424
     
84,440
 
                                                         
Total
  $
684,250
    $
134,572
    $
193,136
    $
16,467
    $
42,289
    $
33,816
    $
465,122
 
                                                         
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Trex Residential
 
$
543,346
 
 
$
97,412
 
 
$
160,382
 
 
$
14,598
 
 
$
47,911
 
 
$
14,989
 
 
$
247,817
 
Trex Commercial
 
 
21,807
 
 
 
(2,284
)
 
 
(1,272
)
 
 
2,132
 
 
 
(1,120
)
 
 
51
 
 
 
78,410
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
$
565,153
 
 
$
95,128
 
 
$
159,110
 
 
$
16,730
 
 
$
46,791
 
 
$
15,040
 
 
$
326,227
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Net Income (Loss) to EBITDA:
 
Net Income
(Loss)
 
  
Interest
(Income)
Expense, Net
 
  
Income Tax
Expense
(Benefit)
 
  
Depreciation
and
Amortization
 
  
EBITDA
 
December 31, 2019
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Trex Residential
  $
142,811
    $
 
(1,496
)    $
44,292
    $
13,413
    $
199,020
 
Trex Commercial
   
1,927
     
(7
)     
672
     
618
     
3,210
 
                                         
Total
  $
144,738
    $
(1,503
)    $
44,964
    $
14,031
    $
202,230
 
                                         
December 31, 2018
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Trex Residential
  $
131,823
    $
(192
 )   $
41,421
    $
13,216
    $
186,268
 
Trex Commercial
   
2,749
     
—  
      
868
     
3,251
     
6,868
 
                                         
Total
  $
134,572
    $
(192
 )   $
42,289
    $
16,467
    $
193,136
 
                                         
December 31, 2017
 
 
 
  
 
 
  
 
 
  
 
 
  
 
 
Trex Residential
  $
97,412
    $
461
    $
47,911
    $
14,598
    $
160,382
 
Trex Commercial
   
(2,284
 )    
—  
      
(1,120
 )    
2,132
     
(1,272
 )
                                         
Total
  $
95,128
    $
461
    $
46,791
    $
16,730
    $
159,110