Segment Information

12 Months Ended

Dec. 31, 2022

Segment Reporting [Abstract]

Segment Information

17. SEGMENT INFORMATION

Through December 30, 2022, the Company operated 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 Commercial designed, engineered, and marketed modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products were sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. On December 30, 2022, the Company completed the sale of Trex Commercial. Refer to Note 3 to these consolidated financial statements for additional information on the sale of Trex Commercial.

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.

Segment Data (in thousands):

	Net Sales		Net Income (Loss) (1)			EBITDA			Depreciation and Amortization		Income Tax Expense / (Benefit)			Capital Expenditures		Total Assets
December 31, 2022
Trex Residential	$	1,059,536	$	200,876		$	311,259		$	43,173	$	67,313		$	175,904	$	933,705
Trex Commercial		46,507		(16,250	)		(20,226	)		1,125		(5,101	)		324		—
Total	$	1,106,043	$	184,626		$	291,033		$	44,298	$	62,212		$	176,228	$	933,705
December 31, 2021
Trex Residential	$	1,139,266	$	247,059		$	361,485		$	34,941	$	79,500		$	157,568	$	881,225
Trex Commercial		57,686		(38,322	)		(50,163	)		1,005		(12,846	)		1,826		39,096
Total	$	1,196,952	$	208,737		$	311,322		$	35,946	$	66,654		$	159,394	$	920,321
December 31, 2020
Trex Residential	$	827,792	$	171,197		$	244,817		$	17,131	$	57,488		$	171,784	$	676,948
Trex Commercial		53,039		4,434			6,758			809		1,515			1,039		93,544
Total	$	880,831	$	175,631		$	251,575		$	17,940	$	59,003		$	172,823	$	770,492

(1) For the year ended December 31, 2022, total consolidated net income and net loss at Trex Commercial includes a loss on sale of Trex Commercial on December 30, 2022 of $15.4 million. For the year ended December 31, 2021, total consolidated net income and net loss at Trex Commercial includes a goodwill impairment charge of $54.2 million.

Reconciliation of Net Income (Loss) to EBITDA (in thousands):

	Net Income / (Loss)			Interest (Income), Net			Income Tax Expense / (Benefit)			Depreciation and Amortization		EBITDA
December 31, 2022
Trex Residential	$	200,876		$	(103	)	$	67,313		$	43,173	$	311,259
Trex Commercial		(16,250	)		—			(5,101	)		1,125		(20,226	)
Total	$	184,626		$	(103	)	$	62,212		$	44,298	$	291,033
December 31, 2021
Trex Residential	$	247,059		$	(15	)	$	79,500		$	34,941	$	361,485
Trex Commercial		(38,322	)		—			(12,846	)		1,005		(50,163	)
Total	$	208,737		$	(15	)	$	66,654		$	35,946	$	311,322
December 31, 2020
Trex Residential	$	171,197		$	(999	)	$	57,488		$	17,131	$	244,817
Trex Commercial		4,434			—			1,515			809		6,758
Total	$	175,631		$	(999	)	$	59,003		$	17,940	$	251,575