Segment Information

12 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

17. SEGMENT INFORMATION

Through December 30, 2022, the Company operated in two reportable segments. On December 30, 2022, the Company completed the sale of its wholly-owned subsidiary and reportable segment, Trex Commercial. Subsequent to the sale of Trex Commercial, the Company operates in one reportable segment, Trex Residential.

• 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 are determined in accordance with its internal management structure, which, through December 30, 2022, was 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, 2023
Trex Residential	$	1,094,837	$	205,384		$	326,393		$	50,189	$	70,815		$	166,089	$	932,885
Consolidated	$	1,094,837	$	205,384		$	326,393		$	50,189	$	70,815		$	166,089	$	932,885
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		—
Consolidated	$	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
Consolidated	$	1,196,952	$	208,737		$	311,322		$	35,946	$	66,654		$	159,394	$	920,321

(1) For the year ended December 31, 2022, 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, 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 Expense / (Income), Net			Income Tax Expense / (Benefit)			Depreciation and Amortization		EBITDA
December 31, 2023
Trex Residential	$	205,384		$	5		$	70,815		$	50,189	$	326,393
Consolidated	$	205,384		$	5		$	70,815		$	50,189	$	326,393
December 31, 2022
Trex Residential	$	200,876		$	(103	)	$	67,313		$	43,173	$	311,259
Trex Commercial		(16,250	)		—			(5,101	)		1,125		(20,226	)
Consolidated	$	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	)
Consolidated	$	208,737		$	(15	)	$	66,654		$	35,946	$	311,322