About Trex Company

Trex Company, Inc. (Trex) operates as a manufacturer of composite decking and railing products, which are marketed under the brand name Trex and manufactured in the United States. Trex continues to reinvent and redefine outdoor living with a commitment to innovation and growth that has made Trex the world's #1 brand of sustainably made wood-alternative decking and deck railing, along with a comprehensive portfolio of sustainable, high performance, low-maintenance outdoor living products including fencing, cladding, fasteners, and outdoor lighting. Strategy The key elements of the company's strategy are to accelerate material conversion from wood; expand its market by introducing new products that are innovative, eco-friendly and durable; leverage brand leadership to drive customer demand; increase the number of stocking dealers and retailers by leveraging its market-leading channel relationships; and execute strategic acquisitions that expand its product offerings and/or enrich its manufacturing process. Products Operations and Products: The company operated in one reportable segment during the year ended December 31, 2023: Trex Residential. Trex Residential is the world's largest manufacturer of high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing, with more than 30 years of product experience. Trex outdoor living products are marketed under the brand name Trex and manufactured in the United States. Stocked in more than 6,700 retail locations worldwide, Trex Residential offers a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing, cladding and outdoor lighting categories. A majority of the products are eco-friendly and leverage recycled and reclaimed materials to the extent possible. Trex Residential decking is made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film, making Trex Residential one of the largest recyclers of waste polyethylene plastic film in North America. The company's composite deck boards do not rot, warp, or splinter and the versatile colors feature a refined wood grain that adds depth and luxury to any backyard. Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market. Trex offers the following products through Trex Residential: Decking and Accessories The company's principal decking products are Trex Signature, Trex Transcend Lineage, Trex Transcend, Trex Select, and Trex Enhance. In addition, the company's Trex Transcend decking product can also be used as cladding. The company's high-performance, low-maintenance, eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold and scratching. Trex Signature decking offers realistic woodgrain aesthetics that raises the bar for beauty, performance and sustainability and is available in two luxurious hues inspired by stunning natural settings. Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in four luxurious, on-trend hues inspired by some of the most picturesque locales in the United States. The company's Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in eight multi-tonal monochromatic classical earth tones and premium tropical colors. Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in five nature-inspired earth tone colors. The company's Trex Enhance boards pair the beauty of authentic wood-grain appearance with the durability of composite with minimal maintenance and the affordability of wood and is available in natural and basic colors. The company also offers accessories to its decking products. Trex Hideaway, a self-gapping universal hidden fastener designed to give a seamless finish to every project. Trex DeckLighting, an outdoor lighting system, is a line of energy-efficient LED dimmable deck lighting designed to use 75% less energy compared to incandescent lighting. It can be installed into the railing, stair risers or the deck itself. The line includes a post cap light, deck rail light, riser light, a soffit light and a recessed deck light. Pre-assembled stair panels that allow for easier installation and are designed to save time on the jobsite. Railing The company's railing products are Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, and Trex Signature aluminum railing. The company's high-performance composite and aluminum deck railing kits and systems are sustainably manufactured, easy to install and durable. Trex railing systems are built with the same durability as Trex decking and will not rot, warp, peel or splinter and resist fading and corrosion. Trex Transcend Railing, made from approximately 40 percent recycled content, is available in the colors of Trex Transcend decking and finishes that make it appropriate for use with Trex decking products, as well as other decking materials. Trex Select Railing, made from approximately 40 percent recycled content, is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck. Trex Select T-Rail, made from a minimum of 40 percent recycled materials, is available in square composite balusters in Classic White for a cohesive, coordinated look, or round aluminum balusters in Charcoal Black for a more modern contrast. Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. Fencing The company's Trex Seclusions composite fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rails, pickets, top rails and decorative post caps. The top and bottom rails of Trex fencing are designed to provide a picture frame element and the deep rich colors have a matte surface to prevent harsh sunlight reflections. Trex Residential products offer a number of significant aesthetic advantages over wood while eliminating many of wood's major functional disadvantages, which include warping, splitting and other damage from moisture. In addition to resisting fading and surface staining, Trex Residential products require no sanding, staining or sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation. Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) facilitate installation, reduce contractor call-backs and afford consumers a wide range of design options. Combined, these aspects yield significant aesthetic advantages and lower maintenance than wood decking and railing and ultimately render Trex Residential products less costly than wood over the life of the deck. The company has received product building code listings from the major U.S. building code listing agencies for decking and railing and from the major Canadian building code listing agency for decking. The listings facilitate the acquisition of building permits by deck builders and promote consumer and industry acceptance of its products as an alternative to wood decking. The company is a licensor in a number of licensing agreements with third parties to manufacture and sell products under the Trex trademark. The company's licensed products are: Trex Outdoor Furniture: A line of outdoor furniture products manufactured and sold by PolyWood, Inc. Trex RainEscape, Trex Protect, Trex RainEscape Soffit Light, and Trex Seal Ledger Flashing Tape: An above joist deck drainage system manufactured and sold by IBP, LLC. Trex Protect Joist, Beam and Rim tape is a self-adhesive butyl tape that protects wooden deck framing/substructure elements. Trex RainEscape Soffit Light is a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck. Trex Seal Ledger Flashing tape is butyl flashing tape with an aluminum liner. Trex Pergola: Pergolas made from low maintenance cellular PVC and all-aluminum product, manufactured by Home & Leisure, Inc., doing business as Structureworks Fabrication. Trex Lattice: Outdoor lattice boards manufactured and sold by Structureworks Fabrication. Trex Cornhole: Cornhole boards manufactured and sold by IPC Global Marketing LLC. Trex Blade: A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc. Trex SpiralStairs: A staircase alternative for use with all deck substructures manufactured and sold by SS Industries dba Paragon Stairs. Trex Outdoor Kitchens: Outdoor kitchen cabinetry manufactured and sold by Danver Outdoor Kitchens. Customers and Distribution The company is committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations. The company's Vendor and Customer Code of Conduct and Ethics (Code), available at www.trex.com/company, applies to all parties providing goods and services to the company, and all channel partners who distribute, sell and/or install its products (collectively, Business Partners). Trex Residential: Wholesale Distributors/Retail Lumber Dealers: The company generates most of its sales for its composite decking and railing products through its wholesale distribution network by selling Trex Residential products to wholesale distributors, who in turn, sell its products to retail lumber outlets. These retail dealers market to both homeowners and contractors, but they emphasize sales to professional contractors, remodelers and homebuilders. Contractor-installed decks generally are larger installations with professional craftsmanship. The company's retail dealers generally provide sales personnel trained in Trex Residential products, contractor training, inventory commitment and point-of-sale display support. The company's distributors provide value-added service in marketing its products because they sell premium wood decking products and other innovative building materials that typically require product training and personal selling efforts. The company typically appoints two to three distributors within a specified area to sell only Trex Residential decking products on an exclusive basis. Home Depot and Lowe's: The company sells its products through Home Depot and Lowe's stores. Home Depot and Lowe's purchase products directly from it for stocking on their shelves. They also purchase product through its wholesale distributors for special orders placed by consumers. Home Depot and Lowe's serve both the contractor market and the do-it-yourself market. Brand exposure through Home Depot and Lowe's promotes consumer acceptance of the company's products. In the year ended December 31, 2023,sales to certain customers of Trex Residential accounted for 10% or more of the company's total net sales. For the year ended December 31, 2023, three customers of Trex Residential represented approximately 72% of the company's total net sales. Competition The company's principal competitors include The Azek Company Inc., and Fiberon (a division of Fortune Brands, Inc.). Seasonality As part of its normal business practice and consistent with industry practice, Trex Residential Products has historically offered incentive programs to its distributors and dealers to build inventory levels before the start of the prime deck-building season in order to ensure adequate availability of its product to meet anticipated seasonal consumer demand. The seasonal effects are often offset by the positive effect of the incentive programs. Intellectual Property The company has two U.S. Patents for decking technology. The company intends to maintain its existing patents in effect until they expire on January 15, 2038, and May 23, 2038, respectively, as well as to seek additional patents as it considers appropriate. The U.S. Patent and Trademark Office has granted it federal registrations for many of the company's trademarks. Federal registration of trademarks is effective for as long as the company continues to use the trademarks and renew their registrations. Research and Development For the year ended December 31, 2023, the company's research and development costs were $3.3 million. Government Regulation The company is subject to federal, state and local environmental regulation. The emissions of particulates and other substances from the company's manufacturing facilities must meet federal and state air quality standards implemented through air permits issued to it by the Department of Environmental Quality of the Commonwealth of Virginia, the Division of Environmental Protection of Nevada's Department of Conservation and Natural Resources, and the Division of Environmental Quality of Arkansas' Department of Energy and Environment. The company's operations also are subject to workplace safety regulation by the U.S. Occupational Safety and Health Administration, the Commonwealth of Virginia, and the States of Nevada and Arkansas. Environmental and Occupational Safety The company is a member of the Voluntary Protection Program Participants Association, the National Safety Council, and the National Fire Protection Association. Also, the company supports all EHS staff in becoming Certified Occupational Safety Specialists and obtaining the Certificate for Occupational Safety Managers through programs offered by the Federal Occupational Health and Safety Administration. History Trex Company, Inc. was founded in 1996. The company was incorporated as a Delaware corporation in 1998.