Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2018 | Oct. 17, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q3 | |
Trading Symbol | TREX | |
Entity Registrant Name | TREX CO INC | |
Entity Central Index Key | 1,069,878 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 58,754,240 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Statement [Abstract] | ||||
Net sales | $ 166,380 | $ 140,194 | $ 544,279 | $ 442,941 |
Cost of sales | 99,170 | 84,910 | 309,241 | 250,473 |
Gross profit | 67,210 | 55,284 | 235,038 | 192,468 |
Selling, general and administrative expenses | 28,132 | 24,919 | 90,603 | 75,409 |
Income from operations | 39,078 | 30,365 | 144,435 | 117,059 |
Interest (income) expense, net | (222) | 59 | 377 | 515 |
Income before income taxes | 39,300 | 30,306 | 144,058 | 116,544 |
Provision for income taxes | 9,829 | 10,208 | 34,657 | 39,715 |
Net income | $ 29,471 | $ 20,098 | $ 109,401 | $ 76,829 |
Basic earnings per common share | $ 0.50 | $ 0.34 | $ 1.86 | $ 1.31 |
Basic weighted average common shares outstanding | 58,741,973 | 58,808,098 | 58,785,546 | 58,771,444 |
Diluted earnings per common share | $ 0.50 | $ 0.34 | $ 1.85 | $ 1.30 |
Diluted weighted average common shares outstanding | 59,084,117 | 59,156,432 | 59,111,303 | 59,126,994 |
Comprehensive income | $ 29,471 | $ 20,098 | $ 109,401 | $ 76,829 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 107,313 | $ 30,514 |
Accounts receivable, net | 87,915 | 66,882 |
Inventories | 35,451 | 34,524 |
Prepaid expenses and other assets | 18,106 | 16,878 |
Total current assets | 248,785 | 148,798 |
Property, plant and equipment, net | 108,233 | 103,110 |
Goodwill and other intangibles | 74,608 | 71,319 |
Other assets | 3,283 | 3,000 |
Total assets | 434,909 | 326,227 |
Current liabilities: | ||
Accounts payable | 18,198 | 9,953 |
Accrued expenses and other liabilities | 52,244 | 46,266 |
Accrued warranty | 5,400 | 6,290 |
Line of credit | 0 | 0 |
Total current liabilities | 75,842 | 62,509 |
Deferred income taxes | 1,286 | 1,286 |
Non-current accrued warranty | 27,235 | 28,709 |
Other long-term liabilities | 1,892 | 2,473 |
Total liabilities | 106,255 | 94,977 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding | ||
Common stock, $0.01 par value, 120,000,000 shares authorized; 69,991,454 and 69,844,222 shares issued and 58,754,048 and 58,856,860 shares outstanding at September 30, 2018 and December 31, 2017, respectively | 700 | 349 |
Additional paid-in capital | 122,725 | 122,043 |
Retained earnings | 391,770 | 282,370 |
Treasury stock, at cost, 11,237,406 and 10,987,362 shares at September 30, 2018 and December 31, 2017, respectively | (186,541) | (173,512) |
Total stockholders' equity | 328,654 | 231,250 |
Total liabilities and stockholders' equity | $ 434,909 | $ 326,227 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, shares issued | 69,991,454 | 69,844,222 |
Common stock, shares outstanding | 58,754,048 | 58,856,860 |
Treasury stock, shares | 11,237,406 | 10,987,362 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Operating Activities | ||
Net income | $ 109,401 | $ 76,829 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 13,164 | 12,065 |
Stock-based compensation | 5,045 | 3,913 |
Loss on disposal of property, plant and equipment | 50 | 1,720 |
Other non-cash adjustments | (408) | (405) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (21,034) | (14,407) |
Inventories | (927) | 4,860 |
Prepaid expenses and other assets | (3,155) | 1,799 |
Accounts payable | 8,245 | 1,203 |
Accrued expenses and other liabilities | 619 | (2,438) |
Income taxes receivable/payable | 4,369 | 7,698 |
Net cash provided by operating activities | 115,369 | 92,837 |
Investing Activities | ||
Expenditures for property, plant and equipment and intangibles | (21,611) | (11,108) |
Proceeds from sales of property, plant and equipment | 83 | |
Acquisition of business | (71,523) | |
Net cash used in investing activities | (21,528) | (82,631) |
Financing Activities | ||
Borrowings under line of credit | 172,250 | 201,000 |
Principal payments under line of credit | (172,250) | (201,000) |
Repurchases of common stock | (17,723) | (3,617) |
Proceeds from employee stock purchase and option plans | 681 | 288 |
Net cash used in financing activities | (17,042) | (3,329) |
Net increase in cash and cash equivalents | 76,799 | 6,877 |
Cash and cash equivalents, beginning of period | 30,514 | 18,664 |
Cash and cash equivalents, end of period | 107,313 | 25,541 |
Supplemental Disclosure: | ||
Cash paid for interest | 662 | 416 |
Cash paid for income taxes, net | $ 39,170 | $ 32,016 |
Business and Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | 1. BUSINESS AND ORGANIZATION Trex Company, Inc. (Company) is the world’s largest manufacturer of wood-alternative decking and railing products, with more than 25 years of product experience, which are marketed under the brand name Trex ® low-maintenance (540) 542-6300. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | 2. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q S-X The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Trex Wood-Polymer Espana, S.L. and Trex Commercial Products, Inc. The accounts of Trex Wood-Polymer Espana, S.L. are included in the condensed consolidated financial statements for all periods presented. The Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Cash Flows of the Company include the operations and cash flows of Trex Commercial Products, Inc. for the three and nine months ended September 30, 2018, and from the date of acquisition of SC Company through September 30, 2017 for the three and nine months ended September 30, 2017. The Company’s Condensed Consolidated Balance Sheet includes the assets and liabilities of Trex Commercial Products, Inc. for all periods presented. The consolidated results of operations for the three and nine months ended September 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017 included in the Annual Report of Trex Company, Inc. on Form 10-K, |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | 3. RECENTLY ADOPTED ACCOUNTING STANDARDS In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope Modification Accounting In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606), No. 2015-14, No. 2016-08, No. 2016-10, No. 2016-12, No. 2016-20 Revenue, |
New Accounting Standards Not Ye
New Accounting Standards Not Yet Adopted | 9 Months Ended |
Sep. 30, 2018 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards Not Yet Adopted | 4. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) 505-50, Equity - Equity-Based Payment to Non-Employees In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), No. 2018-01 2018-10 2018-11. right-of-use right-of-use right-of-use |
Acquisition
Acquisition | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Acquisition | 5. ACQUISITION On July 31, 2017, through its newly-formed, wholly-owned subsidiary, Trex Commercial Products, Inc., the Company acquired certain assets and assumed certain liabilities of SC Company for $71.8 million. The Company used cash on hand and $30.0 million of funding from its existing revolving credit facility, which was fully paid on August 17, 2017, to acquire the assets. The acquired business designs, engineers and markets modular architectural railing, staging, acoustical and seating systems for the commercial and multi-family market, including sports stadiums and performing arts venues. As a result of the purchase, the Company gained access to growing commercial markets, expanded its custom design and engineering capabilities, and added the contract architect and specifier communities as new channels for its products. The acquisition was accounted for using the acquisition method of accounting under accounting principles generally accepted in the United States, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values of consideration transferred and net assets acquired were determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in Accounting Standards Codification 820, “ Fair Value Measurements and Disclosures Total consideration of $71.8 million was allocated to the assets acquired and liabilities assumed, as follows (in thousands): Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total estimated consideration $ 71,804 Goodwill of $57.9 million is primarily attributable to the potential opportunity for the Company to offer full service railing systems in the growing commercial and multi-family market, access to a complementary product category with a track record of substantial revenue growth, the ability to achieve economies of scale around raw material procurement, an increase in the range of products the Company may offer its core customers, and intangible assets that do not qualify for separable or legal criterion, such as an assembled workforce. The amount of goodwill that is expected to be amortized and deductible for tax purposes in 2018 is $3.9 million. All of the goodwill was recorded to the Trex Commercial Products reportable segment. The fair value attributed to intangible assets, which consists of production backlog and trade names and trademarks, was amortized straight line over 12 months and was based on the estimated economics of the assets. The fair value attributed to the intangible assets acquired and goodwill was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques. During the three and nine months ended September 30, 2018, Trex Commercial Products, Inc. generated $19.4 million and $52.9 million of net sales, respectively, and $1.7 million and $2.0 million of net income, respectively, which included amortization expense of $0.4 million and $2.9 million, respectively. From July 31, 2017 through September 30, 2017, Trex Commercial Products, Inc. generated $9.2 million of revenue and incurred a net loss of $75 thousand, which included amortization expense of $0.8 million. The following pro forma results of Trex Company, Inc. are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. The following unaudited pro forma results of operations assumes the acquisition occurred on January 1, 2017 (in thousands, except per share amounts): Nine Months Ended September 30, 2017 Actual Pro Forma Net sales $ 442,941 $ 475,076 Net income $ 76,829 $ 77,570 Basic earnings per common share $ 1.31 $ 1.32 Diluted earnings per common share $ 1.30 $ 1.31 Significant pro forma adjustments included in the above pro forma information include an adjustment to amortization expense for the intangible assets acquired, elimination of transaction costs related to the acquisition as such costs are considered to be non-recurring |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Inventories | 6. INVENTORIES Inventories valued at LIFO (last-in, first-out), September 30, December 31, Finished goods $ 30,936 $ 32,986 Raw materials 22,419 19,432 Total FIFO (first-in, first-out) 53,355 52,418 Reserve to adjust inventories to LIFO value (20,070 ) (20,070 ) Total LIFO inventories $ 33,285 $ 32,348 The Company utilizes the LIFO method of accounting related to its wood-alternative decking and residential railing products, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end year-end year-end Inventories valued at lower of cost (FIFO method) and net realizable value were $2.2 million at September 30, 2018 and December 31, 2017, consisting primarily of raw materials. The Company utilizes the FIFO method of accounting related to its architectural railing, staging, acoustical and seating systems for the commercial and multi-family market. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Prepaid Expenses and Other Assets | 7. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following (in thousands): September 30, 2018 December 31, Revenues in excess of billings $ 8,738 $ 4,841 Prepaid expenses 4,228 7,494 Contract retainage 2,449 1,449 Income tax receivable 275 2,230 Other 2,416 864 Total prepaid expenses and other assets $ 18,106 $ 16,878 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 8. GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets consist of the following (in thousands): September 30, December 31, Intangible assets: Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,287 — Total intangible assets 11,187 4,900 Accumulated amortization: Customer backlog (4,000 ) (1,666 ) Trade name and trademarks (900 ) (376 ) Domain names (140 ) — Total accumulated amortization (5,040 ) (2,042 ) Intantible assets, net $ 6,147 $ 2,858 Intangible asset amounts were determined based on the estimated economics of the asset and are amortized over the estimated useful lives on a straight-line basis over 12 months for customer backlog and trade names and trademarks and 15 years for domain names, which approximates the pattern in which the economic benefits are expected to be received. In May 2018, the Company purchased certain domain names for $6.3 million. We evaluate the recoverability of intangible assets periodically and consider events or circumstances that may warrant revised estimates of useful lives or that may indicate an impairment. Intangible asset amortization expense for the nine months ended September 30, 2018 was $3.0 million. As of September 30, 2018, the Company had goodwill of $68.5 million. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 9. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following (in thousands): September 30, December 31, Sales and marketing $ 25,567 $ 21,964 Compensation and benefits 14,058 14,818 Income taxes 2,414 — Customer deposits 2,225 1,230 Manufacturing costs 1,654 1,979 Billings in excess of revenues 961 1,842 Rent obligations 844 779 Other 4,521 3,654 Total accrued expenses and other liabilities $ 52,244 $ 46,266 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2018 | |
Debt Disclosure [Abstract] | |
Debt | 10. DEBT The Company’s outstanding debt consists of a revolving credit facility. Revolving Credit Facility On January 12, 2016, the Company entered into a Third Amended and Restated Credit Agreement, as amended, with Bank of America, N.A. as Lender, Administrative Agent, Swing Line Lender and Letter of Credit Issuer, and certain other lenders including Citibank, N.A., Capital One, N.A., and SunTrust. The Third Amended Credit Agreement, as amended, provides the Company with one or more revolving loans in a collective maximum principal amount of $250 million from January 1 through June 30 of each year, and a maximum principal amount of $200 million from July 1 through December 31 of each year throughout the term, which ends January 12, 2021. The Company had no outstanding borrowings under its revolving credit facility and remaining available borrowing capacity of $200.0 million at September 30, 2018. Compliance with Debt Covenants and Restrictions The Company’s ability to make scheduled principal and interest payments, borrow and repay amounts under any outstanding revolving credit facility and continue to comply with any loan covenants depends primarily on the Company’s ability to generate sufficient cash flow from operations. As of September 30, 2018, the Company was in compliance with all of the covenants contained in its debt agreements. Failure to comply with the loan covenants might cause lenders to accelerate the repayment obligations under the credit facility, which may be declared payable immediately based on a default. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2018 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | 11. FINANCIAL INSTRUMENTS The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Condensed Consolidated Balance Sheets at September 30, 2018 and December 31, 2017. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2018 | |
Federal Home Loan Banks [Abstract] | |
Stockholders' Equity | 12. STOCKHOLDERS’ EQUITY Amendment of Restated Certificate of Incorporation The Company’s Board of Directors unanimously approved an amendment to the Company’s Restated Certificate of Incorporation (Amendment) on February 14, 2018, subject to stockholder approval. At the annual meeting of stockholders of the Company held on May 2, 2018, the Company’s stockholders approved the Amendment, effective as of May 2, 2018. The Amendment increased the number of shares of common stock, par value $.01 per share, that the Company is authorized to issue from 80,000,000 shares to 120,000,000 shares. The Amendment was filed with the Delaware Secretary of State on May 2, 2018. Stock Split On May 2, 2018, the Board of Directors of the Company approved a two-for-one Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 29,471 $ 20,098 $ 109,401 $ 76,829 Denominator: Basic weighted average shares outstanding 58,741,973 58,808,098 58,785,546 58,771,444 Effect of dilutive securities: Stock appreciation rights and options 177,412 194,630 181,680 197,810 Restricted stock 164,732 153,704 144,077 157,740 Diluted weighted average shares outstanding 59,084,117 59,156,432 59,111,303 59,126,994 Basic earnings per share $ 0.50 $ 0.34 $ 1.86 $ 1.31 Diluted earnings per share $ 0.50 $ 0.34 $ 1.85 $ 1.30 Diluted earnings per share is computed using the weighted average number of shares determined for the basic earnings per share computation plus the dilutive effect of common stock equivalents using the treasury stock method. The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock appreciation rights — 35,914 10,709 28,311 Performance-based restricted stock units — 660 285 220 Stock Repurchase Programs On February 16, 2017, the Board of Directors authorized a common stock repurchase program of up to 5.92 million shares of the Company’s outstanding common stock (February 2017 Stock Repurchase Program). The Company made no repurchases under the February 2017 Stock Repurchase Program. On February 16, 2018, the Board of Directors terminated the February 2017 Stock Repurchase Program and adopted a new stock repurchase program of up to 5.8 million shares of the Company’s outstanding common stock (February 2018 Stock Repurchase Program). As of the date of this report, the Company has repurchased 250,044 shares of the Company’s outstanding common stock under the February 2018 Stock Repurchase Program. |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | 13. REVENUE Topic 606 provides a single, comprehensive model for revenue recognition arising from contracts with customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when or as the Company satisfies the performance obligation. Revenue is recognized at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring control of the goods or services to a customer. Trex Residential Products Trex Residential Products principally generates revenue from the manufacture and sale of its high performance, low maintenance composite decking and residential railing products and accessories. Substantially all of its revenues are from contracts with customers, which are purchase orders of short-term duration of less than one year. Its customers, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. Trex Residential Products satisfies its performance obligations at a point in time. The shipment of each product is a separate performance obligation as the customer is able to derive benefit from each product shipped and no performance obligation remains after shipment. Upon shipment of the product, the customer obtains control over the distinct product and Trex Residential satisfies its performance obligation. Any performance obligation that remains unsatisfied at the end of a reporting period is part of a contract that has an original expected duration of one year or less. Any variable consideration related to the unsatisfied performance obligation is allocated wholly to the unsatisfied performance obligation and recognized when the product ships and the performance obligation is satisfied. For each product shipped, the transaction price by product is specified in the purchase order. The Company recognizes revenue on the transaction price less any amount offered under a sales incentive program. The Company recognizes an account receivable (contract asset) for the amount of revenue recognized as it has an unconditional right to consideration at the time of shipment and payment from the customer is due based solely on the passage of time. The Company receives payments from its customers based on the payment terms applicable to each individual contract and the customer pays in accordance with the billing terms specified in the purchase order, which is less than one year. The related accounts receivables are included in “ Accounts receivable, net Trex Residential Products may offer various sales incentive programs throughout the year. It estimates the amount of sales incentive to allocate to each performance obligation, or product shipped, using the most-likely-amount method of estimation based on direct sales to the customer. The estimate is updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception. Changes in estimate allocated to a previously satisfied performance obligation are recognized as a reduction of revenue in the period in which the change occurs under the cumulative catch-up Trex Residential Products pays commissions to certain employees. However, the sales commissions are not directly attributable to identifiable contracts, are discretionary in nature and are based on other factors not related to obtaining a contract, such as individual performance, profitability of the entity, annual sales targets, etc. These costs are included in selling, general and administrative expenses as incurred. Trex Residential Products does not grant contractual product return rights to customers other than pursuant to its assurance product warranty (see related disclosure on product warranties in Note 18, “ Commitments and Contingencies Trex Commercial Products Trex Commercial Products generates revenue from the manufacture and sale of its modular and architectural railing, staging, acoustical and seating systems. All of its revenues are from fixed-price contracts with customers. Trex Commercial Products contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and is, therefore, not distinct. Trex Commercial Products satisfies its performance obligation over time as work progresses because control is transferred continuously to its customers. Revenue and estimated profit is recognized over time based on the proportion of costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Incurred costs include all direct material, labor, subcontract and certain indirect costs. The Company reviews and updates its estimates regularly and recognizes adjustments in estimated profit on contracts under the cumulative catch-up 606-10-50-15, The Company recognizes an account receivable (contract asset) for satisfied performance obligations as it has an unconditional right to consideration and payment from the customer is due based solely on the passage of time. The Company receives payments from its customers on the accounts receivable based on the payment terms applicable to each individual contract and the customer pays in less than one year. Accounts receivables are included in “ Accounts receivable, net In addition, the timing of revenue recognition, billings and cash collections may result in revenues in excess of billings and contract retainage (contract assets), and billings in excess of revenues and customer deposits (contract liabilities) on the Condensed Consolidated Balance Sheet. These assets and liabilities are reported on a contract-by-contract Trex Commercial Products pays sales commissions that are directly attributable to identifiable contracts to certain of its employees. If the amortization period of the commission is one year or less then the Company recognizes the commission expense as incurred. Otherwise, the Company capitalizes the commission and amortizes it on a straight-line basis over the life of the contract. Trex Commercial Products does not grant contractual product return rights to customers other than pursuant to its assurance product warranty. All shipping and handling fees invoiced to the customer are included in net sales and the related costs are included in cost of sales. For the three and nine months ended September 30, 2018, net sales were disaggregated in the following tables by (1) market, (2) timing of revenue recognition, and (3) type of contract. The tables also include a reconciliation of the respective disaggregated net sales with the Company’s reportable segments (in thousands). Three Months Ended September 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 146,998 $ — $ 146,998 Products transferred over time and fixed price contracts — 19,382 19,382 $ 146,998 $ 19,382 $ 166,380 Nine Months Ended September 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 491,399 $ — $ 491,399 Products transferred over time and fixed price contracts — 52,880 52,880 $ 491,399 $ 52,880 $ 544,279 Three Months Ended September 30, 2017 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 131,043 $ — $ 131,043 Products transferred over time and fixed price contracts — 9,151 9,151 $ 131,043 $ 9,151 $ 140,194 Nine Months Ended September 30, 2017 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 433,790 $ — $ 433,790 Products transferred over time and fixed price contracts — 9,151 9,151 $ 433,790 $ 9,151 $ 442,941 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 14. STOCK-BASED COMPENSATION The Company has one stock-based compensation plan, the 2014 Stock Incentive Plan (Plan), approved by the Company’s stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan was subsequently amended and restated by the Company’s Board of Directors in May 2014 and May 2018. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. Stock-based compensation is granted to officers, directors and certain key employees in accordance with the provisions of the Plan. The Plan provides for grants of stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and unrestricted stock. The total aggregate number of shares of the Company’s common stock that may be issued under the Plan is 12,840,000 and as of September 30, 2018, the total number of shares available for future issuance are 5,199,789. The following table summarizes the Company’s stock-based compensation grants for the nine months ended September 30, 2018: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 87,154 $ 54.69 Performance-based restricted stock units (a) 80,570 $ 35.26 Stock appreciation rights 21,260 $ 56.21 (a) Includes 29,702 of target performance-based restricted stock unit awards granted during the nine months ended September 30, 2018, and adjustments of 10,792, 27,166 and 12,910 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2015, 2016, and 2017, respectively. The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the nine months ended September 30, 2018 and 2017 the data and assumptions shown in the following table were used: Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Weighted-average fair value of grants $ 22.09 $ 13.99 Dividend yield 0 % 0 % Average risk-free interest rate 2.7 % 2.0 % Expected term (years) 5 5 Expected volatility 40.5 % 42.2 % The Company recognizes stock-based compensation expense ratably over the period from the grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock appreciation rights $ 56 $ 28 $ 314 $ 220 Time-based restricted stock and restricted stock units 672 417 2,073 1,557 Performance-based restricted stock and restricted stock units 616 538 2,534 2,044 Employee stock purchase plan 57 54 124 92 Total stock-based compensation $ 1,401 $ 1,037 $ 5,045 $ 3,913 Total unrecognized compensation cost related to unvested awards as of September 30, 2018 was $7.4 million. The cost of these unvested awards is being recognized over the requisite vesting period of each award. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company’s effective tax rate for the nine months ended September 30, 2018 and 2017 was 24.1% and 34.1%, respectively, which resulted in expense of $34.7 million and $39.7 million, respectively. The decrease of 10% in the effective tax rate was primarily due to the enactment on December 22, 2017 of tax legislation H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (Act), which lowered the Federal statutory rate to 21%. The Company has finalized its analysis of the Act, which did not give rise to new deferred tax amounts. During the nine months ended September 30, 2018 and 2017, the Company realized $2.3 million and $1.4 million, respectively, of excess tax benefits from stock-based awards and recorded a corresponding benefit to income tax expense. The Company analyzes its deferred tax assets each reporting period, considering all available positive and negative evidence in determining the expected realization of those deferred tax assets. As of September 30, 2018, the Company maintains a valuation allowance of $3.1 million against deferred tax assets primarily related to state tax credits it estimates will expire before they are realized. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company accrues a liability when it believes that it is more likely than not that benefits of tax positions will not be realized. The Company believes that adequate provisions have been made for all tax returns subject to examination. As of September 30, 2018, for certain tax jurisdictions tax years 2014 through 2017 remain subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdiction as the Company does not have a taxable presence in any foreign jurisdiction. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 16. 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 Products manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® • Trex Commercial Products designs, engineers, and markets modular and architectural railing, staging, acoustical and seating systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products are marketed to architects, specifiers, contractors, and others doing business within the segment’s commercial and multi-family market. Net sales of Trex Commercial products were $52.9 million in the nine months ended September 30, 2018 and $9.2 million from the date of the acquisition of SC Company through September 30, 2017. The Company’s operating segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial sales activities. 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 for the three and nine months ended September 30, 2018, includes data for Trex Residential Products and Trex Commercial Product and for the three and nine months ended September 30, 2017, includes data for Trex Residential Products and data for Trex Commercial Products from the date of the acquisition of SC Company through September 30, 2017 (in thousands): Three Months Ended September 30, 2018 Residential Commercial Total Net sales $ 146,998 $ 19,382 $ 166,380 Net income $ 27,755 $ 1,716 $ 29,471 EBITDA $ 40,067 $ 2,780 $ 42,847 Depreciation and amortization $ 3,275 $ 494 $ 3,769 Income tax expense $ 9,259 $ 570 $ 9,829 Capital expenditures $ 3,693 $ 221 $ 3,914 Total assets $ 352,014 $ 82,895 $ 434,909 Reconciliation of net income to EBITDA (in thousands): Three Months Ended September 30, 2018 Residential Commercial Total Net income $ 27,755 $ 1,716 $ 29,471 Interest, net (222 ) — (222 ) Taxes 9,259 570 9,829 Depreciation and amortization 3,275 494 3,769 EBITDA $ 40,067 $ 2,780 $ 42,847 Nine Months Ended September 30, 2018 Residential Commercial Total Net sales $ 491,399 $ 52,880 $ 544,279 Net income $ 107,449 $ 1,952 $ 109,401 EBITDA $ 151,839 $ 5,663 $ 157,502 Depreciation and amortization $ 10,004 $ 3,063 $ 13,067 Income tax expense $ 34,009 $ 648 $ 34,657 Capital expenditures $ 14,274 $ 1,050 $ 15,324 Total assets $ 352,014 $ 82,895 $ 434,909 Reconciliation of net income to EBITDA (in thousands): Nine Months Ended September 30, 2018 Residential Commercial Total Net income $ 107,449 $ 1,952 $ 109,401 Interest, net 377 — 377 Taxes 34,009 648 34,657 Depreciation and amortization 10,004 3,063 13,067 EBITDA $ 151,839 $ 5,663 $ 157,502 Three Months Ended September 30, 2017 Residential Commercial Total Net sales $ 131,043 $ 9,151 $ 140,194 Net income (loss) $ 20,173 $ (75 ) $ 20,098 EBITDA $ 34,079 $ 806 $ 34,885 Depreciation and amortization $ 3,639 $ 881 $ 4,520 Income tax expense $ 10,208 $ — $ 10,208 Capital expenditures $ 3,943 $ 40 $ 3,983 Total assets $ 232,663 $ 78,533 $ 311,196 Reconciliation of net income to EBITDA: Three Months Ended September 30, 2017 Residential Commercial Total Net income (loss) $ 20,173 $ (75 ) $ 20,098 Interest, net 59 — 59 Taxes 10,208 — 10,208 Depreciation and amortization 3,639 881 4,520 EBITDA $ 34,079 $ 806 $ 34,885 Nine Months Ended September 30, 2017 Residential Commercial Total Net sales $ 433,790 $ 9,151 $ 442,941 Net income (loss) $ 76,904 $ (75 ) $ 76,829 EBITDA $ 128,221 $ 806 $ 129,027 Depreciation and amortization $ 11,087 $ 881 $ 11,968 Income tax expense $ 39,715 $ — $ 39,715 Capital expenditures $ 11,068 $ 40 $ 11,108 Total assets $ 232,663 $ 78,533 $ 311,196 Reconciliation of net income to EBITDA: Nine Months Ended September 30, 2017 Residential Commercial Total Net income (loss) $ 76,904 $ (75 ) $ 76,829 Interest, net 515 — 515 Taxes 39,715 — 39,715 Depreciation and amortization 11,087 881 11,968 EBITDA $ 128,221 $ 806 $ 129,027 |
Seasonality
Seasonality | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Seasonality | 17. SEASONALITY The operating results for Trex Residential Products have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions reduce the level of home improvement and construction activity and can shift demand for its products to a later period. 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. The operating results for Trex Commercial Products have not historically varied from quarter to quarter as a result of seasonality; however, they are driven by the timing of individual projects, which may vary each quarterly period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. COMMITMENTS AND CONTINGENCIES Product Warranty The Company warrants that its decking and residential railing products will be free from material defects in workmanship and materials for warranty periods ranging from 10 years to 25 years, depending on the product and its use. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. The Company continues to receive and settle claims for products manufactured at its Nevada facility prior to 2007 that exhibit surface flaking and maintains a warranty reserve to provide for the settlement of these claims. Estimating the warranty reserve for surface flaking claims requires management to estimate (1) the number of claims to be settled with payment and (2) the average cost to settle each claim. To estimate the number of claims to be settled with payment, the Company utilizes actuarial techniques to quantify both the expected number of claims to be received and the percentage of those claims that will ultimately require payment (collectively, elements). Estimates for these elements are quantified using a range of assumptions derived from claim count history and the identification of factors influencing the claim counts. The cost per claim varies due to a number of factors, including the size of affected decks, the availability and type of replacement material used, the cost of production of replacement material and the method of claim settlement. The Company monitors surface flaking claims activity each quarter for indications that its estimates require revision. Typically, a majority of surface flaking claims received in a year are received during the summer outdoor season, which spans the second and third quarters. It has been the Company’s practice to utilize the actuarial techniques discussed above during the third quarter, after a significant portion of all claims has been received for the fiscal year and variances to annual claims expectations are more meaningful. The number of incoming claims received in the nine months ended September 30, 2018 was lower than the Company’s expectations and considerably lower than the number of claims received in the nine months ended September 30, 2017, continuing the historical year-over-year decline in incoming claims. The favorable experience in incoming claims was offset, in part, by increased average settlement cost per claim experienced in the nine months ended September 30, 2018. As a result, the Company believes its reserve at September 30, 2018 is sufficient to cover future surface flaking obligations and no adjustments were required in the current quarter. The Company’s analysis is based on currently known facts and a number of assumptions, as discussed above, and current expectations. Projecting future events such as the number of claims to be received, the number of claims that will require payment and the average cost of claims could cause actual warranty liabilities to be higher or lower than those projected, which could materially affect the Company’s financial condition, results of operations or cash flows. The Company estimates that the annual number of claims received will continue to decline over time and that the average cost per claim will increase slightly, primarily due to inflation. If the level of claims received or average cost per claim differs materially from expectations, it could result in additional increases or decreases to the warranty reserve and a decrease or increase in earnings and cash flows in future periods. The Company estimates that a 10% change in the expected number of remaining claims to be settled with payment or the expected cost to settle claims may result in approximately a $2.5 million change in the surface flaking warranty reserve. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Nine Months Ended September 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,961 1,961 Settlements made during the period (3,467 ) (858 ) (4,325 ) Ending balance, September 30 $ 24,690 $ 7,945 $ 32,635 Nine Months Ended September 30, 2017 Surface Other Total Beginning balance, January 1 $ 33,847 $ 3,846 $ 37,693 Provisions and changes in estimates — 4,156 4,156 Settlements made during the period (4,425 ) (966 ) (5,391 ) Ending balance, September 30 $ 29,422 $ 7,036 $ 36,458 Legal Matters The Company has lawsuits, as well as other claims, pending against it which are ordinary routine litigation and claims incidental to the business. Management has evaluated the merits of these lawsuits and claims, and believes that their ultimate resolution will not have a material effect on the Company’s consolidated financial condition, results of operations, liquidity or competitive position. |
Stock-Based Compensation (Polic
Stock-Based Compensation (Policies) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation | The Company has one stock-based compensation plan, the 2014 Stock Incentive Plan (Plan), approved by the Company’s stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan was subsequently amended and restated by the Company’s Board of Directors in May 2014 and May 2018. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. Stock-based compensation is granted to officers, directors and certain key employees in accordance with the provisions of the Plan. The Plan provides for grants of stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and unrestricted stock. The total aggregate number of shares of the Company’s common stock that may be issued under the Plan is 12,840,000 and as of September 30, 2018, the total number of shares available for future issuance are 5,199,789. |
Acquisition (Tables)
Acquisition (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Combinations [Abstract] | |
Summary of Consideration Allocated to Assets Acquired and Liabilities Assumed | Total consideration of $71.8 million was allocated to the assets acquired and liabilities assumed, as follows (in thousands): Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total estimated consideration $ 71,804 |
Summary of Unaudited Pro Forma Results of Operations | The following pro forma results of Trex Company, Inc. are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. The following unaudited pro forma results of operations assumes the acquisition occurred on January 1, 2017 (in thousands, except per share amounts): Nine Months Ended September 30, 2017 Actual Pro Forma Net sales $ 442,941 $ 475,076 Net income $ 76,829 $ 77,570 Basic earnings per common share $ 1.31 $ 1.32 Diluted earnings per common share $ 1.30 $ 1.31 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories valued at LIFO (last-in, first-out), September 30, December 31, Finished goods $ 30,936 $ 32,986 Raw materials 22,419 19,432 Total FIFO (first-in, first-out) 53,355 52,418 Reserve to adjust inventories to LIFO value (20,070 ) (20,070 ) Total LIFO inventories $ 33,285 $ 32,348 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): September 30, 2018 December 31, Revenues in excess of billings $ 8,738 $ 4,841 Prepaid expenses 4,228 7,494 Contract retainage 2,449 1,449 Income tax receivable 275 2,230 Other 2,416 864 Total prepaid expenses and other assets $ 18,106 $ 16,878 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Details of Intangible Assets | Intangible assets consist of the following (in thousands): September 30, December 31, Intangible assets: Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,287 — Total intangible assets 11,187 4,900 Accumulated amortization: Customer backlog (4,000 ) (1,666 ) Trade name and trademarks (900 ) (376 ) Domain names (140 ) — Total accumulated amortization (5,040 ) (2,042 ) Intantible assets, net $ 6,147 $ 2,858 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands): September 30, December 31, Sales and marketing $ 25,567 $ 21,964 Compensation and benefits 14,058 14,818 Income taxes 2,414 — Customer deposits 2,225 1,230 Manufacturing costs 1,654 1,979 Billings in excess of revenues 961 1,842 Rent obligations 844 779 Other 4,521 3,654 Total accrued expenses and other liabilities $ 52,244 $ 46,266 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Federal Home Loan Banks [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 29,471 $ 20,098 $ 109,401 $ 76,829 Denominator: Basic weighted average shares outstanding 58,741,973 58,808,098 58,785,546 58,771,444 Effect of dilutive securities: Stock appreciation rights and options 177,412 194,630 181,680 197,810 Restricted stock 164,732 153,704 144,077 157,740 Diluted weighted average shares outstanding 59,084,117 59,156,432 59,111,303 59,126,994 Basic earnings per share $ 0.50 $ 0.34 $ 1.86 $ 1.31 Diluted earnings per share $ 0.50 $ 0.34 $ 1.85 $ 1.30 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | effect of common stock equivalents using the treasury stock method. The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock appreciation rights — 35,914 10,709 28,311 Performance-based restricted stock units — 660 285 220 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregated Net Sales | The tables also include a reconciliation of the respective disaggregated net sales with the Company’s reportable segments (in thousands). Three Months Ended September 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 146,998 $ — $ 146,998 Products transferred over time and fixed price contracts — 19,382 19,382 $ 146,998 $ 19,382 $ 166,380 Nine Months Ended September 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 491,399 $ — $ 491,399 Products transferred over time and fixed price contracts — 52,880 52,880 $ 491,399 $ 52,880 $ 544,279 Three Months Ended September 30, 2017 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 131,043 $ — $ 131,043 Products transferred over time and fixed price contracts — 9,151 9,151 $ 131,043 $ 9,151 $ 140,194 Nine Months Ended September 30, 2017 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 433,790 $ — $ 433,790 Products transferred over time and fixed price contracts — 9,151 9,151 $ 433,790 $ 9,151 $ 442,941 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Summary of Stock-Based Compensation Grants | The following table summarizes the Company’s stock-based compensation grants for the nine months ended September 30, 2018: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 87,154 $ 54.69 Performance-based restricted stock units (a) 80,570 $ 35.26 Stock appreciation rights 21,260 $ 56.21 (a) Includes 29,702 of target performance-based restricted stock unit awards granted during the nine months ended September 30, 2018, and adjustments of 10,792, 27,166 and 12,910 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2015, 2016, and 2017, respectively. |
Summary of Assumptions Used to Estimate Fair Value of Each SAR | The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the nine months ended September 30, 2018 and 2017 the data and assumptions shown in the following table were used: Nine Months Ended September 30, 2018 Nine Months Ended September 30, 2017 Weighted-average fair value of grants $ 22.09 $ 13.99 Dividend yield 0 % 0 % Average risk-free interest rate 2.7 % 2.0 % Expected term (years) 5 5 Expected volatility 40.5 % 42.2 % |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended Nine Months Ended 2018 2017 2018 2017 Stock appreciation rights $ 56 $ 28 $ 314 $ 220 Time-based restricted stock and restricted stock units 672 417 2,073 1,557 Performance-based restricted stock and restricted stock units 616 538 2,534 2,044 Employee stock purchase plan 57 54 124 92 Total stock-based compensation $ 1,401 $ 1,037 $ 5,045 $ 3,913 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Segment Reporting [Abstract] | |
Details of Segment Information | The below segment data for the three and nine months ended September 30, 2018, includes data for Trex Residential Products and Trex Commercial Product and for the three and nine months ended September 30, 2017, includes data for Trex Residential Products and data for Trex Commercial Products from the date of the acquisition of SC Company through September 30, 2017 (in thousands): Three Months Ended September 30, 2018 Residential Commercial Total Net sales $ 146,998 $ 19,382 $ 166,380 Net income $ 27,755 $ 1,716 $ 29,471 EBITDA $ 40,067 $ 2,780 $ 42,847 Depreciation and amortization $ 3,275 $ 494 $ 3,769 Income tax expense $ 9,259 $ 570 $ 9,829 Capital expenditures $ 3,693 $ 221 $ 3,914 Total assets $ 352,014 $ 82,895 $ 434,909 Nine Months Ended September 30, 2018 Residential Commercial Total Net sales $ 491,399 $ 52,880 $ 544,279 Net income $ 107,449 $ 1,952 $ 109,401 EBITDA $ 151,839 $ 5,663 $ 157,502 Depreciation and amortization $ 10,004 $ 3,063 $ 13,067 Income tax expense $ 34,009 $ 648 $ 34,657 Capital expenditures $ 14,274 $ 1,050 $ 15,324 Total assets $ 352,014 $ 82,895 $ 434,909 Three Months Ended September 30, 2017 Residential Commercial Total Net sales $ 131,043 $ 9,151 $ 140,194 Net income (loss) $ 20,173 $ (75 ) $ 20,098 EBITDA $ 34,079 $ 806 $ 34,885 Depreciation and amortization $ 3,639 $ 881 $ 4,520 Income tax expense $ 10,208 $ — $ 10,208 Capital expenditures $ 3,943 $ 40 $ 3,983 Total assets $ 232,663 $ 78,533 $ 311,196 Nine Months Ended September 30, 2017 Residential Commercial Total Net sales $ 433,790 $ 9,151 $ 442,941 Net income (loss) $ 76,904 $ (75 ) $ 76,829 EBITDA $ 128,221 $ 806 $ 129,027 Depreciation and amortization $ 11,087 $ 881 $ 11,968 Income tax expense $ 39,715 $ — $ 39,715 Capital expenditures $ 11,068 $ 40 $ 11,108 Total assets $ 232,663 $ 78,533 $ 311,196 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of net income to EBITDA (in thousands): Three Months Ended September 30, 2018 Residential Commercial Total Net income $ 27,755 $ 1,716 $ 29,471 Interest, net (222 ) — (222 ) Taxes 9,259 570 9,829 Depreciation and amortization 3,275 494 3,769 EBITDA $ 40,067 $ 2,780 $ 42,847 Nine Months Ended September 30, 2018 Residential Commercial Total Net income $ 107,449 $ 1,952 $ 109,401 Interest, net 377 — 377 Taxes 34,009 648 34,657 Depreciation and amortization 10,004 3,063 13,067 EBITDA $ 151,839 $ 5,663 $ 157,502 Three Months Ended September 30, 2017 Residential Commercial Total Net income (loss) $ 20,173 $ (75 ) $ 20,098 Interest, net 59 — 59 Taxes 10,208 — 10,208 Depreciation and amortization 3,639 881 4,520 EBITDA $ 34,079 $ 806 $ 34,885 Nine Months Ended September 30, 2017 Residential Commercial Total Net income (loss) $ 76,904 $ (75 ) $ 76,829 Interest, net 515 — 515 Taxes 39,715 — 39,715 Depreciation and amortization 11,087 881 11,968 EBITDA $ 128,221 $ 806 $ 129,027 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Reconciliation of Company's Residential Product Warranty Reserve | The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Nine Months Ended September 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,961 1,961 Settlements made during the period (3,467 ) (858 ) (4,325 ) Ending balance, September 30 $ 24,690 $ 7,945 $ 32,635 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) - Segment | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Jul. 31, 2017 | Sep. 30, 2018 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | |||
Number of reportable segments | 1 | 2 | 2 |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 17, 2017 | Jul. 31, 2017 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 |
Business Acquisition [Line Items] | ||||||||
Fund used to acquire business from revolving credit facility | $ 0 | $ 0 | $ 0 | |||||
Repayment of revolving credit facility | 172,250 | $ 201,000 | ||||||
Goodwill | 68,500 | 68,500 | ||||||
Net income (loss) | 29,471 | $ 20,098 | 109,401 | $ 76,829 | ||||
Amortization expense | 3,000 | |||||||
Trex Commercial Products, Inc. (TCP) [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Net sales | $ 9,200 | 19,400 | 52,900 | |||||
Net income (loss) | (75) | 1,700 | 2,000 | |||||
Amortization expense | $ 800 | 400 | 2,900 | |||||
Staging Concepts Acquisition, LLC [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Certain assets and liabilities acquired | $ 71,800 | |||||||
Total consideration | 71,804 | |||||||
Goodwill | 57,938 | |||||||
Goodwill expected to be amortized and deductible for tax purposes | $ 3,900 | $ 3,900 | ||||||
Amortization period for intangible assets | 12 months | |||||||
Staging Concepts Acquisition, LLC [Member] | Revolving Credit Facility [Member] | ||||||||
Business Acquisition [Line Items] | ||||||||
Fund used to acquire business from revolving credit facility | $ 30,000 | |||||||
Repayment of revolving credit facility | $ 30,000 |
Acquisition - Summary of Consid
Acquisition - Summary of Consideration Allocated to Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Jul. 31, 2017 |
Business Acquisition [Line Items] | ||
Goodwill | $ 68,500 | |
Staging Concepts Acquisition, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivable, net | $ 8,357 | |
Contract retainage | 1,948 | |
Inventories, net | 2,344 | |
Prepaid expenses and other assets | 1,223 | |
Revenues in excess of billings | 3,463 | |
Fixed assets, net | 1,264 | |
Intangible assets | 4,900 | |
Goodwill | 57,938 | |
Accounts payable | (3,990) | |
Accrued liabilities and other expenses | (2,329) | |
Billings in excess of revenues | (1,752) | |
Customer Deposits | (1,562) | |
Total estimated consideration | $ 71,804 |
Acquisition - Summary of Unaudi
Acquisition - Summary of Unaudited Pro Forma Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Business Combinations [Abstract] | ||||
Net sales | $ 166,380 | $ 140,194 | $ 544,279 | $ 442,941 |
Net income | $ 29,471 | $ 20,098 | $ 109,401 | $ 76,829 |
Basic earnings per common share | $ 0.50 | $ 0.34 | $ 1.86 | $ 1.31 |
Diluted earnings per common share | $ 0.50 | $ 0.34 | $ 1.85 | $ 1.30 |
Pro Forma Net sales | $ 475,076 | |||
Pro Forma Net income | $ 77,570 | |||
Pro Forma Basic earnings per common share | $ 1.32 | |||
Pro Forma Diluted earnings per common share | $ 1.31 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 30,936 | $ 32,986 |
Raw materials | 22,419 | 19,432 |
Total FIFO (first-in,first-out) inventories | 53,355 | 52,418 |
Reserve to adjust inventories to LIFO value | (20,070) | (20,070) |
Total LIFO inventories | $ 33,285 | $ 32,348 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |||
LIFO inventory liquidations | $ 0 | $ 0 | |
Raw materials | $ 2,200,000 | $ 2,200,000 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Prepaid Expense and Other Assets [Abstract] | ||
Revenues in excess of billings | $ 8,738 | $ 4,841 |
Prepaid expenses | 4,228 | 7,494 |
Contract retainage | 2,449 | 1,449 |
Income tax receivable | 275 | 2,230 |
Other | 2,416 | 864 |
Total prepaid expenses and other assets | $ 18,106 | $ 16,878 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Details of Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 11,187 | $ 4,900 |
Total accumulated amortization | (5,040) | (2,042) |
Intangible assets, net | 6,147 | 2,858 |
Domain Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 6,287 | |
Total accumulated amortization | (140) | |
Customer Backlog [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 4,000 | 4,000 |
Total accumulated amortization | (4,000) | (1,666) |
Trade Names and Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 900 | 900 |
Total accumulated amortization | $ (900) | $ (376) |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
May 31, 2018 | Sep. 30, 2018 | |
Goodwill [Line Items] | ||
Amortization of intangible asset | $ 3 | |
Goodwill | $ 68.5 | |
Domain Names [Member] | ||
Goodwill [Line Items] | ||
Amortization period | 15 years | |
Purchase of domain names | $ 6.3 | |
Customer Backlog [Member] | ||
Goodwill [Line Items] | ||
Amortization period | 12 months | |
Trade Names and Trademarks [Member] | ||
Goodwill [Line Items] | ||
Amortization period | 12 months |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2018 | Dec. 31, 2017 |
Payables and Accruals [Abstract] | ||
Sales and marketing | $ 25,567 | $ 21,964 |
Compensation and benefits | 14,058 | 14,818 |
Income taxes | 2,414 | |
Customer deposits | 2,225 | 1,230 |
Manufacturing costs | 1,654 | 1,979 |
Billings in excess of revenues | 961 | 1,842 |
Rent obligations | 844 | 779 |
Other | 4,521 | 3,654 |
Total accrued expenses and other liabilities | $ 52,244 | $ 46,266 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2018 | Dec. 31, 2017 | |
Line of Credit Facility [Line Items] | ||
Outstanding borrowings under the revolver loans | $ 0 | $ 0 |
Remaining available borrowing capacity | $ 200,000,000 | |
Third Amended and Restated Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Termination date of the Credit Agreement | Jan. 12, 2021 | |
Revolver Loans Portion Effective January 1 through June 30 [Member] | Third Amended and Restated Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving loans in a collective maximum principal amount | $ 250,000,000 | |
Revolver Loans Portion Effective July 1 through December 31 [Member] | Third Amended and Restated Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving loans in a collective maximum principal amount | $ 200,000,000 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | May 02, 2018shares | Sep. 30, 2018$ / sharesshares | Feb. 16, 2018shares | Dec. 31, 2017shares | Feb. 16, 2017shares |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock, par value | $ / shares | $ 0.01 | ||||
Common stock, shares authorized | 80,000,000 | 120,000,000 | 120,000,000 | ||
Stock split | 2 | ||||
February 2017 Stock Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchase program, authorized shares | 5,920,000 | ||||
Number of shares repurchased by the Company | 0 | ||||
February 2018 Stock Repurchase Program [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock repurchase program, authorized shares | 5,800,000 | ||||
Number of shares repurchased by the Company | 250,044 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Numerator: | ||||
Net income available to common shareholders | $ 29,471 | $ 20,098 | $ 109,401 | $ 76,829 |
Denominator: | ||||
Basic weighted average shares outstanding | 58,741,973 | 58,808,098 | 58,785,546 | 58,771,444 |
Effect of dilutive securities: | ||||
Diluted weighted average shares outstanding | 59,084,117 | 59,156,432 | 59,111,303 | 59,126,994 |
Basic earnings per share | $ 0.50 | $ 0.34 | $ 1.86 | $ 1.31 |
Diluted earnings per share | $ 0.50 | $ 0.34 | $ 1.85 | $ 1.30 |
Stock Appreciation Rights and Options [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive securities | 177,412 | 194,630 | 181,680 | 197,810 |
Restricted Stock [Member] | ||||
Effect of dilutive securities: | ||||
Dilutive securities | 164,732 | 153,704 | 144,077 | 157,740 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Stock Appreciation Rights [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 35,914 | 10,709 | 28,311 |
Performance-based Restricted Stock Units [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 660 | 285 | 220 |
Revenue - Additional Informatio
Revenue - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue remaining performance obligation | $ 49 |
Revenue remaining performance obligation description | The Company discloses only the transaction price allocated to its remaining performance obligations on contracts with an original duration greater than one year |
Revenue - Summary of Disaggrega
Revenue - Summary of Disaggregated Net Sales (Detail) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | $ 166,380 | $ 140,194 | $ 544,279 | $ 442,941 | |
Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | 146,998 | 131,043 | 491,399 | 433,790 | |
Products Transferred Over Time and Fixed Price Contracts [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | 19,382 | 9,151 | 52,880 | 9,151 | |
Residential [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | 146,998 | 131,043 | 491,399 | 433,790 | |
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | 146,998 | 131,043 | 491,399 | 433,790 | |
Commercial [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | $ 9,200 | 19,382 | 9,151 | 52,880 | 9,151 |
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member] | |||||
Disaggregation of Revenue [Line Items] | |||||
Revenue from contract with customers | $ 19,382 | $ 9,151 | $ 52,880 | $ 9,151 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($)Planshares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of stock based compensation plans | Plan | 1 |
Unrecognized compensation cost related to unvested awards | $ | $ 7.4 |
2014 Stock Incentive Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Total aggregate number of shares of common stock that may be issued | 12,840,000 |
Number of common stock available for future issuance | 5,199,789 |
Stock Appreciation Rights [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Fair value assumptions method used | Black-Scholes option-pricing formula |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Detail) | 9 Months Ended |
Sep. 30, 2018$ / sharesshares | |
Time Based Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Awards Granted | shares | 87,154 |
Weighted-Average Grant Price Per Share | $ / shares | $ 54.69 |
Performance Based Restricted Stock Units [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Awards Granted | shares | 80,570 |
Weighted-Average Grant Price Per Share | $ / shares | $ 35.26 |
Stock Appreciation Rights [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Stock Awards Granted | shares | 21,260 |
Weighted-Average Grant Price Per Share | $ / shares | $ 56.21 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Parenthetical) (Detail) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Performance Based Restricted Stock Unit Target [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Awards Granted | 29,702 | |||
Performance Based Restricted Stock Unit Adjustment [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock Awards Granted | 12,910 | 27,166 | 10,792 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Each SAR (Detail) - Stock Appreciation Rights [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | ||
Weighted-average fair value of grants | $ 22.09 | $ 13.99 |
Dividend yield | 0.00% | 0.00% |
Average risk-free interest rate | 2.70% | 2.00% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 40.50% | 42.20% |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 1,401 | $ 1,037 | $ 5,045 | $ 3,913 |
Stock Appreciation Rights [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 56 | 28 | 314 | 220 |
Time-Based Restricted Stock and Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 672 | 417 | 2,073 | 1,557 |
Performance-Based Restricted Stock and Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 616 | 538 | 2,534 | 2,044 |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 57 | $ 54 | $ 124 | $ 92 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Income Tax Disclosure [Abstract] | ||||
Effective tax rate | 24.10% | 34.10% | ||
Income tax expense (benefit) | $ 9,829 | $ 10,208 | $ 34,657 | $ 39,715 |
Decrease in effective tax rate due to increase in domestic production activities deduction | 10.00% | |||
Statutory tax rate, percentage | 21.00% | |||
Excess tax benefits from stock based awards | $ 2,300 | $ 1,400 | ||
Valuation allowance | $ 3,100 | $ 3,100 | ||
Tax years subject to examination | 2014 2015 2016 2017 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2017USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2017USD ($) | Jul. 31, 2017Segment | Sep. 30, 2018USD ($)Segment | Sep. 30, 2017USD ($) | Dec. 31, 2017Segment | |
Segment Reporting Information [Line Items] | |||||||
Number of reportable segment | Segment | 1 | 2 | 2 | ||||
Net sales | $ 166,380 | $ 140,194 | $ 544,279 | $ 442,941 | |||
Residential [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Net sales | 146,998 | 131,043 | 491,399 | 433,790 | |||
Commercial [Member] | |||||||
Segment Reporting Information [Line Items] | |||||||
Net sales | $ 9,200 | $ 19,382 | $ 9,151 | $ 52,880 | $ 9,151 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 2 Months Ended | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 166,380 | $ 140,194 | $ 544,279 | $ 442,941 | ||
Net income (loss) | 29,471 | 20,098 | 109,401 | 76,829 | ||
Depreciation and amortization | 13,164 | 12,065 | ||||
Income tax expense | 9,829 | 10,208 | 34,657 | 39,715 | ||
Total assets | 434,909 | 434,909 | $ 326,227 | |||
Residential [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 146,998 | 131,043 | 491,399 | 433,790 | ||
Commercial [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | $ 9,200 | 19,382 | 9,151 | 52,880 | 9,151 | |
Operating Segments [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 166,380 | 140,194 | 544,279 | 442,941 | ||
Net income (loss) | 29,471 | 20,098 | 109,401 | 76,829 | ||
EBITDA | 42,847 | 34,885 | 157,502 | 129,027 | ||
Depreciation and amortization | 3,769 | 4,520 | 13,067 | 11,968 | ||
Income tax expense | 9,829 | 10,208 | 34,657 | 39,715 | ||
Capital expenditures | 3,914 | 3,983 | 15,324 | 11,108 | ||
Total assets | 311,196 | 434,909 | 311,196 | 434,909 | 311,196 | |
Operating Segments [Member] | Residential [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 146,998 | 131,043 | 491,399 | 433,790 | ||
Net income (loss) | 27,755 | 20,173 | 107,449 | 76,904 | ||
EBITDA | 40,067 | 34,079 | 151,839 | 128,221 | ||
Depreciation and amortization | 3,275 | 3,639 | 10,004 | 11,087 | ||
Income tax expense | 9,259 | 10,208 | 34,009 | 39,715 | ||
Capital expenditures | 3,693 | 3,943 | 14,274 | 11,068 | ||
Total assets | 232,663 | 352,014 | 232,663 | 352,014 | 232,663 | |
Operating Segments [Member] | Commercial [Member] | ||||||
Segment Reporting Information [Line Items] | ||||||
Net sales | 19,382 | 9,151 | 52,880 | 9,151 | ||
Net income (loss) | 1,716 | (75) | 1,952 | (75) | ||
EBITDA | 2,780 | 806 | 5,663 | 806 | ||
Depreciation and amortization | 494 | 881 | 3,063 | 881 | ||
Income tax expense | 570 | 648 | ||||
Capital expenditures | 221 | 40 | 1,050 | 40 | ||
Total assets | $ 78,533 | $ 82,895 | $ 78,533 | $ 82,895 | $ 78,533 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2018 | Sep. 30, 2017 | Sep. 30, 2018 | Sep. 30, 2017 | |
Segment Reporting Information [Line Items] | ||||
Net income (loss) | $ 29,471 | $ 20,098 | $ 109,401 | $ 76,829 |
Interest, net | 222 | (59) | (377) | (515) |
Taxes | 9,829 | 10,208 | 34,657 | 39,715 |
Depreciation and amortization | 13,164 | 12,065 | ||
Operating Segments [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net income (loss) | 29,471 | 20,098 | 109,401 | 76,829 |
Interest, net | (222) | 59 | 377 | 515 |
Taxes | 9,829 | 10,208 | 34,657 | 39,715 |
Depreciation and amortization | 3,769 | 4,520 | 13,067 | 11,968 |
EBITDA | 42,847 | 34,885 | 157,502 | 129,027 |
Operating Segments [Member] | Residential [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net income (loss) | 27,755 | 20,173 | 107,449 | 76,904 |
Interest, net | (222) | 59 | 377 | 515 |
Taxes | 9,259 | 10,208 | 34,009 | 39,715 |
Depreciation and amortization | 3,275 | 3,639 | 10,004 | 11,087 |
EBITDA | 40,067 | 34,079 | 151,839 | 128,221 |
Operating Segments [Member] | Commercial [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net income (loss) | 1,716 | (75) | 1,952 | (75) |
Taxes | 570 | 648 | ||
Depreciation and amortization | 494 | 881 | 3,063 | 881 |
EBITDA | $ 2,780 | $ 806 | $ 5,663 | $ 806 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2018USD ($) | |
Schedule Of Commitments And Contingencies [Line Items] | |
Change in warranty reserve for disclosure purposes only | $ 2.5 |
Minimum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 10 years |
Maximum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 25 years |
Surface Flaking Warranty Reserve [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Percentage change in warranty claims used as a threshold for disclosure | 10.00% |
Commitments and Contingencies_2
Commitments and Contingencies - Summary of Reconciliation of Company's Residential Product Warranty Reserve (Detail) - Surface Flaking Warranty Reserve [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2018 | Sep. 30, 2017 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 34,999 | $ 37,693 |
Provisions and changes in estimates | 1,961 | 4,156 |
Settlements made during the period | (4,325) | (5,391) |
Ending balance | 32,635 | 36,458 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 28,157 | 33,847 |
Settlements made during the period | (3,467) | (4,425) |
Ending balance | 24,690 | 29,422 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 6,842 | 3,846 |
Provisions and changes in estimates | 1,961 | 4,156 |
Settlements made during the period | (858) | (966) |
Ending balance | $ 7,945 | $ 7,036 |