Cover Page
Cover Page - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2022 | Feb. 06, 2023 | Jun. 30, 2022 | |
Cover [Abstract] | |||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2022 | ||
Document Type | 10-K | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001069878 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity Registrant Name | TREX CO INC | ||
Document Period End Date | Dec. 31, 2022 | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Trading Symbol | TREX | ||
Entity Shell Company | false | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Common Stock, Shares Outstanding | 108,758,882 | ||
Entity File Number | 001-14649 | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 54-1910453 | ||
Entity Address, Address Line One | 160 Exeter Drive | ||
Entity Address, City or Town | Winchester | ||
Entity Address, Postal Zip Code | 22603-8605 | ||
Entity Address, State or Province | VA | ||
City Area Code | 540 | ||
Local Phone Number | 542-6300 | ||
Title of 12(b) Security | Common stock | ||
Security Exchange Name | NYSE | ||
Document Annual Report | true | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Public Float | $ 6 | ||
ICFR Auditor Attestation Flag | true | ||
Auditor Name | Ernst & Young LLP | ||
Auditor Firm ID | 42 | ||
Auditor Location | Tysons, Virginia |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Income Statement [Abstract] | |||
Net sales | $ 1,106,043 | $ 1,196,952 | $ 880,831 |
Cost of sales | 702,054 | 736,448 | 521,374 |
Gross profit | 403,989 | 460,504 | 359,457 |
Selling, general and administrative expenses | 141,831 | 139,624 | 125,822 |
Goodwill impairment | 54,245 | 0 | |
Loss on sale | 15,423 | ||
Gain on insurance proceeds | (8,741) | ||
Income from operations | 246,735 | 275,376 | 233,635 |
Interest income, net | (103) | (15) | (999) |
Income before income taxes | 246,838 | 275,391 | 234,634 |
Provision for income taxes | 62,212 | 66,654 | 59,003 |
Net income | $ 184,626 | $ 208,737 | $ 175,631 |
Basic earnings per common share | $ 1.65 | $ 1.81 | $ 1.52 |
Basic weighted average common shares outstanding | 111,710,676 | 115,461,016 | 115,888,859 |
Diluted earnings per common share | $ 1.65 | $ 1.8 | $ 1.51 |
Diluted weighted average common shares outstanding | 111,880,488 | 115,762,843 | 116,252,866 |
Comprehensive income | $ 184,626 | $ 208,737 | $ 175,631 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Current Assets: | ||
Cash and cash equivalents | $ 12,325 | $ 141,053 |
Accounts receivable, net | 98,057 | 151,096 |
Inventories | 141,355 | 83,753 |
Prepaid expenses and other assets | 35,105 | 25,152 |
Total current assets | 286,842 | 401,054 |
Property, plant and equipment, net | 589,892 | 460,365 |
Operating lease assets | 30,991 | 34,571 |
Goodwill and other intangible assets, net | 18,582 | 19,001 |
Other assets | 7,398 | 5,330 |
Total Assets | 933,705 | 920,321 |
Current Liabilities: | ||
Accounts payable | 19,935 | 24,861 |
Accrued expenses and other liabilities | 44,064 | 58,041 |
Accrued warranty | 4,600 | 5,800 |
Line of credit | 222,000 | |
Total current liabilities | 290,599 | 88,702 |
Deferred income taxes | 68,224 | 43,967 |
Operating lease liabilities | 23,974 | 28,263 |
Non-current accrued warranty | 20,999 | 22,795 |
Other long-term liabilities | 11,560 | 11,560 |
Total Liabilities | 415,356 | 195,287 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 360,000,000 shares authorized; 140,841,833 and 140,734,753 shares issued and 108,743,423 and 115,148,152 shares outstanding at December 31, 2022 and December 31, 2021, respectively | 1,408 | 1,407 |
Additional paid-in capital | 131,539 | 127,787 |
Retained earnings | 1,130,674 | 946,048 |
Treasury stock, at cost, 32,098,410 and 25,586,601 shares at December 31, 2022 and December 31, 2021, respectively | (745,272) | (350,208) |
Total Stockholders' Equity | 518,349 | 725,034 |
Total Liabilities and Stockholders' Equity | $ 933,705 | $ 920,321 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2022 | Dec. 31, 2021 |
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 | 360,000,000 | 360,000,000 |
Common stock, shares issued | 140,841,833 | 140,734,753 |
Common stock, shares outstanding | 108,743,423 | 115,148,152 |
Treasury stock, shares | 32,098,410 | 25,586,601 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2019 | $ 449,175 | $ 1,404 | $ 123,294 | $ 561,680 | $ (237,203) |
Beginning Balance, Shares at Dec. 31, 2019 | 116,481,442 | 23,893,484 | |||
Net income | 175,631 | 175,631 | |||
Employee stock plans | 1,446 | 1,446 | |||
Employee stock plans, Shares | 68,061 | ||||
Shares withheld for taxes on awards | (5,784) | (5,784) | |||
Shares withheld for taxes on awards, Shares | (111,433) | ||||
Stock-based compensation | 7,133 | $ 2 | 7,131 | ||
Stock-based compensation, Shares | 245,451 | ||||
Repurchases of common stock | (39,070) | $ (39,070) | |||
Repurchases of common stock, Shares | (884,018) | 884,018 | |||
Ending Balance at Dec. 31, 2020 | 588,531 | $ 1,406 | 126,087 | 737,311 | $ (276,273) |
Ending Balance, Shares at Dec. 31, 2020 | 115,799,503 | 24,777,502 | |||
Net income | 208,737 | 208,737 | |||
Employee stock plans | 1,800 | 1,800 | |||
Employee stock plans, Shares | 113,242 | ||||
Shares withheld for taxes on awards | (8,538) | (8,538) | |||
Shares withheld for taxes on awards, Shares | (78,626) | ||||
Stock-based compensation | 8,439 | $ 1 | 8,438 | ||
Stock-based compensation, Shares | 123,132 | ||||
Repurchases of common stock | (73,935) | $ (73,935) | |||
Repurchases of common stock, Shares | (809,099) | 809,099 | |||
Ending Balance at Dec. 31, 2021 | 725,034 | $ 1,407 | 127,787 | 946,048 | $ (350,208) |
Ending Balance, Shares at Dec. 31, 2021 | 115,148,152 | 25,586,601 | |||
Net income | 184,626 | 184,626 | |||
Employee stock plans | 1,742 | 1,742 | |||
Employee stock plans, Shares | 38,320 | ||||
Shares withheld for taxes on awards | (3,318) | $ 1 | (3,319) | ||
Shares withheld for taxes on awards, Shares | (45,834) | ||||
Stock-based compensation | 5,329 | 5,329 | |||
Stock-based compensation, Shares | 114,594 | ||||
Repurchases of common stock | (395,064) | $ (395,064) | |||
Repurchases of common stock, Shares | (6,511,809) | 6,511,809 | |||
Ending Balance at Dec. 31, 2022 | $ 518,349 | $ 1,408 | $ 131,539 | $ 1,130,674 | $ (745,272) |
Ending Balance, Shares at Dec. 31, 2022 | 108,743,423 | 32,098,410 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Operating Activities | |||
Net income | $ 184,626 | $ 208,737 | $ 175,631 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Goodwill impairment | 54,245 | 0 | |
Depreciation and amortization | 44,298 | 35,946 | 17,939 |
Deferred income taxes | 24,256 | 21,012 | 13,125 |
Loss on sale | 15,423 | ||
Stock-based compensation | 5,329 | 8,438 | 7,131 |
Gain on disposal of property, plant and equipment | (27) | (45) | (56) |
Other non-cash adjustments | (117) | 40 | 51 |
Changes in operating assets and liabilities: | |||
Accounts receivable | 42,513 | (44,349) | (28,286) |
Inventories | (64,454) | (15,515) | (12,132) |
Prepaid expenses and other assets | 7,925 | (8,715) | (358) |
Accounts payable | (5,595) | (3,473) | 11,353 |
Accrued expenses and other liabilities | (14,385) | (5,285) | 7,655 |
Income taxes receivable/payable | (23,572) | 7,028 | (4,759) |
Net cash provided by operating activities | 216,220 | 258,064 | 187,294 |
Investing Activities | |||
Expenditures for property, plant and equipment | (176,228) | (159,394) | (172,823) |
Proceeds from sale of assets | 7,290 | ||
Proceeds from sales of property, plant and equipment | 54 | 1,355 | 2,165 |
Net cash used in investing activities | (168,884) | (158,039) | (170,658) |
Financing Activities | |||
Borrowings under line of credit | 425,000 | 494,500 | 276,000 |
Principal payments under line of credit | (203,000) | (494,500) | (276,000) |
Repurchases of common stock | (398,382) | (82,473) | (44,854) |
Proceeds from employee stock purchase and option plans | 1,742 | 1,800 | 1,446 |
Financing costs | (1,424) | 0 | (360) |
Net cash used in financing activities | (176,064) | (80,673) | (43,768) |
Net decrease increase in cash and cash equivalents | (128,728) | 19,352 | (27,132) |
Cash and cash equivalents at beginning of year | 141,053 | 121,701 | 148,833 |
Cash and cash equivalents at end of year | 12,325 | 141,053 | 121,701 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest, net of capitalized interest | 0 | 0 | 0 |
Cash paid for income taxes, net | 59,934 | 38,614 | 50,744 |
Capital expenditures in accounts payable | $ 1,814 | $ 2,564 | $ 12,853 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | 1. BUSINESS AND ORGANIZATION Trex Company, Inc. (Trex), a Delaware corporation, was incorporated on September 4, 1998. Through December 30, 2022, Trex had one wholly-owned subsidiary, Trex Commercial Products, Inc. Together, Trex and Trex Commercial Products, Inc. are referred to as the Company. During the three years ended December 31, 2022, the Company operated in two reportable segments, Trex Residential Products (Trex Residential) and Trex Commercial Products (Trex Commercial). On December 30, 2022, the Company completed the sale of substantially all of the assets of its wholly-owned subsidiary and reportable segment, Trex Commercial. Refer to Note 3 below for more information on the sale . low-maintenance ® (540) 542-6300. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. The Company’s results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, consumer spending and preferences, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from pandemics and geopolitical conflicts. Towards the end of June 2022, we experienced a reduction in demand from our distribution partners, spurred by concerns over a potential easing in consumer demand due to rising interest rates, declining consumer sentiment and expectations of a general slowing in the economy. As a result, beginning in the third quarter our channel partners met demand partially through inventory drawdown rather than reordering products and maintaining current inventories. The drawdown negatively impacted third quarter and fourth quarter sales. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. Concentrations and Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. As of December 31, 2022, substantially all deposits are maintained in one financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to its cash and cash equivalents. The Company routinely assesses the financial strength of its customers and believes that its trade receivables credit risk exposure is limited. Trade receivables are recognized at the amount of revenue recognized on each shipment for Trex Residential products and for satisfied performance obligations for Trex Commercial products as the Company has an unconditional right to consideration from the customer and payment is due based solely on the passage of time. An estimate of expected credit losses is recognized as a valuation allowance and adjusted each reporting period. The estimate is based on the current expected credit loss model and is determined using an aging schedule, including past events, current conditions and reasonable and supportable forecasts about the future. There was no material valuation allowance recorded as of December 31, 2022 and December 31, 2021. In the years ended December 31, 2022, 2021, and 2020 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, 2022 three customers of Trex Residential represented 64% of the Company’s total net sales. For the year ended December 31, 2021, three customers of Trex Residential represented approximately 61% of the Company’s total net sales. For the year ended December 31, 2020, three customers of Trex Residential represented approximately 56% of the Company’s total net sales. At December 31, 2022, two customers represented 35% and 26%, respectively, of the Company’s total accounts receivable balance. At December 31, 2021, two customers represented 29% and 25%, respectively, of the Company’s total accounts receivable balance. For each year ended December 31, 2022, 2021, and 2020, approximately 17.5%, 26%, and 28%, respectively, of the Company’s materials purchases at Trex Residential were purchased from its four largest suppliers. Inventories Inventories for the composite decking and railing products at Trex Residential are valued at the lower of cost (last-in, first-out, A majority of the products at Trex Residential are made in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. Trex Residential grinds up scrap materials generated from its manufacturing process and inventories deemed no longer salable and reintroduces the reclaimed material into the manufacturing process as a substitute for raw materials. The reclaimed material is valued at the costs of the raw material components of the material. Inventories for the railing and staging products at Trex Commercial for the commercial and multi-family market were valued at the lower of cost (first-in, first-out Property, Plant and Equipment Property, plant and equipment are stated at historical reported in cash flows from investing activities in the Consolidated Statements of Cash Flows are adjusted to exclude unpaid amounts accrued at period end. Depreciation is provided using the straight-line method generally over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and fixtures 10 years Forklifts and tractors 5 years Computer equipment and software 5 years Leasehold improvements are amortized over the shorter of the lease term or 15 years. The Company reviews its long-lived assets, including property, plant and equipment, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the long-lived assets. If the estimated cash flows are less than the carrying amount of the long-lived assets, the assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future. As a result, the carrying amount of long-lived assets could be reduced in the future. Long-lived assets held for sale are stated at the lower of cost or fair value less cost to sell. Leases The Company leases office space, storage warehouses, training and manufacturing facilities, and certain office and plant equipment under various operating leases. At inception of an arrangement, the Company evaluates, among other things, whether it has the right to control the use of an identified asset in order to determine if the arrangement is or contains a lease. Operating leases are included in operating lease right-of-use non-lease non-lease Fair Value Measurement Assets and liabilities measured at fair value are measured at the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and classified into one of the following fair value hierarchies: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 – Valuations derived from management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Goodwill Goodwill represents the excess of cost over net assets acquired resulting from the Company’s 1996 purchase of the Mobil Composite Products Division, the 2011 purchase of the assets of the Iron Deck Corporation, and the 2017 purchase of certain assets and the assumption of certain liabilities of SC Company. The Company evaluates the recoverability of goodwill in accordance with Accounting Standard Codification Topic 350, “ Intangibles – Goodwill and Other The Company assigned its goodwill to reporting units and tests each reporting unit’s goodwill for impairment at least on an annual basis, or more frequently if an event occurs or circumstances change in the interim that indicate the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill. The Company identified its reporting units based on the way it manages its operating segments. The Company has determined that it has three reporting units: a residential reporting unit in the Trex Residential reportable segment, and a commercial railing reporting unit and a staging reporting unit in the Trex Commercial reportable segment. Each reporting unit constitutes a business with discrete financial information and operating segment management, at a level below the Company’s chief operating decision maker, regularly reviews the operating results of the reporting unit. The Company assigned goodwill to the reporting units based on the excess of the fair values acquired over the fair value of the sum of the individual assets acquired and liabilities assumed that were assigned to the reporting units. In testing for goodwill impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment indicates that the carrying amount of the reporting unit exceeds its fair value, including goodwill, the Company is then required to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company measures fair value of the reporting units based on a combination of the Income Approach (i.e., the Discounted Cash Flow Method) and a Market Approach. The Discounted Cash Flow Method is a multiple period discounting model in which the fair value of the reporting units are determined by discounting the projected free cash flows using an appropriate discount rate and indicates the fair value of the reporting units based on the present value of the cash flows that the reporting unit is expected to generate in the future. Significant assumptions in the Discounted Cash Flow Method include: the weighted average cost of capital (or discount rate); residual growth rate; future cash flow projections; and working capital effects. The Market Approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets and liabilities, such as a business. Significant estimates in the Market Approach model may include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization (EBITDA) in estimating the fair value of the reporting units. The use of different assumptions, estimates or judgements, including estimated future cash flows and the discount rate used to discount estimated cash flows to their net present value, could materially increase or decrease the fair value of the reporting unit and impact our assessment of any goodwill impairment charges. Also, if different conditions exist in future periods, future impairment charges could result. The Company performs the annual impairment testing of its goodwill as of October 31 of each year. For fiscal years 2022 2021 and 2020, the Company completed its annual impairment test of goodwill for its residential reporting unit utilizing the qualitative assessment and concluded it was not more likely than not that the fair value of the residential reporting unit was less than its carrying amount. Qualitative factors the Company considered include events and circumstances such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant Company-specific events, as applicable. For the fiscal year 2020, the Company completed its annual impairment test of goodwill for its commercial railing reporting unit and its staging reporting unit utilizing the qualitative assessment and concluded that it was not more likely than not that the fair value of the respective reporting unit was less than its carrying amount. For fiscal year 2021, the Company determined that it was necessary to perform the goodwill impairment test for its railing and staging reporting units utilizing the quantitative assessment. The Company performed a quantitative assessment primarily due to a reduction in project commitments, which adversely impacted project backlog and forecasted net sales and EBITDA. The reduction in project commitments was influenced by a continued delay in new projects due to lingering uncertainty created in the commercial railing and staging markets by the COVID-19 pre-pandemic tax-deductible The Company uses assumptions that are consistent with those it believes a market participant would use. However, the use of different events and circumstances or different assumptions, estimates or judgements, including estimated future cash flows, and the discount rate used to discount estimated cash flows to their net present value and the residual growth rate, could materially increase or decrease the fair value of the reporting unit and impact our assessment of any goodwill impairment charge. Product Warranty The Company warrants that for the applicable warranty period its Trex Residential products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and its decking, cladding, fascia and railing products will not split, splinter, rot or suffer structural damage from termites or fungal decay. Products sold on or after January 1, 2023: The warranty period for residential use is 50 years for Transcend ® ® ® ® that Trex Transcend, Trex Enhance and Trex Select decking and cladding and Universal Fascia products will not fade in color from light and weathering exposure more than a certain amount and will be resistant to permanent staining from food and beverage substances or mold and mildew, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. Products sold prior to January 1, 2023: The warranty period is 25 years for residential use and 10 years for commercial use. With respect to Trex Signature railing, the warranty period is 25 years for both residential and commercial use. The Company further warrants that Trex Transcend, Trex Enhance, Trex Select and Universal Fascia products will not fade in color more than a certain amount and will be resistant to permanent staining from food substances or mold, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. Reserve estimates are based on management’s judgment, considering such factors as cost per claim, historical experience, anticipated rates of claims, and other available information. Management reviews and adjusts these estimates, if necessary, based on the differences between actual experience and historical estimates. Treasury Stock The Company records the repurchase of shares of its common stock at cost. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. Revenue Recognition Trex Residential Products. low-maintenance, eco-friendly Trex Commercial Products. Trex Commercial satisfied its performance obligation over time as work progressed because control transferred continuously to its customers. Revenue and estimated profit were recognized over time based on the proportion of actual 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 included all direct material, labor, subcontract and certain indirect costs. The Company reviewed and updated its estimates regularly and recognized adjustments in estimated profit on contracts under the cumulative catch-up impact of the adjustment on revenue and estimated profit to date on a contract is recognized in the period Insurance Proceeds The Company maintains insurance coverage for losses it may incur from identifiable insurable events resulting in facility repairs, incremental direct costs to serve its customers and losses in operating income from the loss in net sales. The Company recognizes a gain in the amount of any related insurance proceeds received in excess of any losses incurred. The gain on insurance proceeds is presented in a separate line item in the Consolidated Statements of Comprehensive Income. During the year ended December 31, 2021, the Company recognized gains on insurance proceeds of $8.7 million primarily related to the fire at its Virginia Facility. Stock-Based Compensation The Company measures stock-based compensation at the grant date of the award based on the fair value. For stock options, stock appreciation rights and time-based restricted stock and time-based restricted stock units, stock-based compensation is recognized on a straight-line basis over the vesting periods of the award. The Company recognizes forfeitures as they occur. 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 probable to be paid out based on the achievement of predetermined performance measures. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Income Taxes The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax laws and statutory tax rates. The Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. As of December 31, 2022, the Company has a valuation allowance of $3.0 million against these deferred tax assets related to certain state tax credits. The Company analyzes its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. Research and Development Costs Research and development costs are expensed as incurred. For the years ended December 31, 2022, 2021, and 2020, research and development costs were $0.5 million, $6.0 million, and $3.4 million, respectively, and have been included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Advertising Costs The Company expenses its branding and advertising communication costs as incurred. Production costs are deferred and recognized as expense in the period that the related advertisement is first used. At December 31, 2022 and December 31, 2021, $1.6 million and $3.1 million was included in prepaid expenses for production costs, respectively. For the years ended December 31, 2022, 2021, and 2020, branding expenses, including advertising expenses as described above, were $43.3 million, $30.7 million, and $31.7 million, respectively. Fair Value of 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 and other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Consolidated Balance Sheets at December 31, 2022 and 2021. Recently Adopted Accounting Standards In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance 958-605. In March 2020, the FASB issued ASU No. 2020-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Sale of Trex Commercial Product
Sale of Trex Commercial Products, Inc. | 12 Months Ended |
Dec. 31, 2022 | |
Trex Commercial Products Inc [Member] | |
Subsidiary or Equity Method Investee [Line Items] | |
Sale of Trex Commercial Products, Inc. | 3. SALE OF TREX COMMERCIAL PRODUCTS, INC. On December 30, 2022, the Company completed the sale of substantially all of the assets of its wholly-owned subsidiary and reportable segment, Trex Commercial, for net proceeds of $7.3 million. The divestiture reflects the Company’s decision to focus on driving the most profitable growth strategy for the Company and its shareholders through the execution of its outdoor living strategy. With the sale complete, the Company will dedicate its resources to accelerating conversion to composites from wood and further strengthen its leadership position in the outdoor living category. The sale resulted in a loss on sale of $15.4 million and is reported in the Consolidated Statements of Comprehensive Income. The divestiture did not represent a strategic shift with a major effect on the Company’s operations and financial results and therefore is not reported as a discontinued operation. As such, the results of operations of Trex Commercial are consolidated in the Company’s results of operations for the year ended December 31, 2022, through the date of sale. Refer to Note 17, Segment Information, for additional information on the Trex Commercial segment. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. INVENTORIES Inventories at LIFO value consist of the following as of December 31 (in thousands): 2022 2021 Finished goods $ 107,114 $ 58,401 Raw materials 69,292 56,441 Total FIFO inventories 176,406 114,842 Reserve to adjust inventories to LIFO value (35,051 ) (36,467 ) Total LIFO inventories $ 141,355 $ 78,375 Inventory related to Trex Residential composite decking and railing products is stated at the lower of LIFO cost or market. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated market. Under the LIFO method, reductions in inventory cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs. There was no inventory reduction during 2022 or 2021. Inventories valued at lower of cost (FIFO method) and net realizable value as of December 31, 2021, were $5.4 million consisting primarily of raw materials. The Company utilized the FIFO method of accounting related to its Trex Commercial products. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2022 | |
Text Block [Abstract] | |
Prepaid Expenses and Other Assets | 5. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following as of December 31 (in thousands): 2022 2021 Prepaid expenses $ 10,787 $ 15,061 Revenues in excess of billings — 9,109 Income tax receivable 23,979 406 Other 339 576 Total prepaid expenses and other assets $ 35,105 $ 25,152 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 12 Months Ended |
Dec. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | 6. GOODWILL AND OTHER INTANGIBLE ASSETS, NET The carrying amount of goodwill at December 31, 2022, and December 31, 2021, was $14.2 million for Trex Residential. For fiscal years 2022, 2021 and 2020, the Company completed its annual impairment test of goodwill for its residential reporting unit in Trex Residential utilizing the qualitative assessment and concluded it was not more likely than not that the fair value of the residential reporting unit was less than its carrying amount. For fiscal year 2020, the Company completed its annual impairment test of goodwill for its commercial railing reporting unit and its staging reporting unit in Trex Commercial utilizing the qualitative assessment and concluded that it was not more likely than not that the fair value of the respective reporting unit was less than its carrying amount. For fiscal year 2021, the Company elected to perform the impairment test of goodwill for its commercial railing reporting unit and its staging reporting unit utilizing the quantitative assessment. The Company performed a quantitative assessment primarily due to a reduction in project commitments, which adversely impacted project backlog and forecasted net sales and EBITDA. The reduction in project commitments was influenced by a continued delay in new projects due to lingering uncertainty created in the commercial railing and staging markets by the COVID-19 pre-pandemic tax-deductible Level 3 inputs used to determine the fair value of each reporting unit include management’s future cash flow projections, a weighted average cost of capital and a residual growth rate. The cash flows used to determine fair value are dependent on a number of significant management assumptions, such as expectations of future performance and the expected future economic environment, which are partly based on historical experience. Differences between actual and expected results may be material and dependent on future actions and plans. The discount rate and the residual growth rate are based on management’s judgment of the rates that would be utilized by a hypothetical market participant. The use of different assumptions, estimates or judgments, including the estimated future cash flows, the discount rate used to discount estimated cash flows to their net present value, and the residual growth rate, could materially increase or decrease the fair value of the reporting unit and, accordingly, could materially increase or decrease related impairment charges. The Company’s intangible assets, purchased in 2018, consist of domain names for Trex Residential. At December 31, 2022, and December 31, 2021, intangible assets were $6.3 million and accumulated amortization was $1.9 million and $1.5 million, respectively. 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 15 years, which approximates the pattern in which the economic benefits are expected to be received. The Company evaluates the recoverability of intangible assets periodically and considers events or circumstances that may warrant revised estimates of useful lives or that may indicate an impairment. Intangible asset amortization expense for the year ended December 31, 2022 and December 31, 2021, was $0.4 million and $0.4 million, respectively. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 7. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following as of December 31 (in thousands): 2022 2021 Machinery and equipment $ 529,975 $ 471,667 Building and improvements 120,116 101,609 Forklifts and tractors 24,516 18,584 Computer equipment 16,182 15,022 Furniture and fixtures 6,180 2,283 Construction in process 161,035 87,700 Land 24,886 22,911 Total property, plant and equipment 882,890 719,776 Accumulated depreciation (292,998 ) (259,411 ) Total property, plant and equipment, net $ 589,892 $ 460,365 The Company had construction in process as of December 31, 2022 of approximately $161 million. The Company expects that substantially all of the above noted construction in process will be completed and put into service in the year ending December 31, 2025. Depreciation expense for the years ended December 31, 2022, 2021, and 2020, totaled $43.9 million, $35.5 million, and $17.5 million, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 8. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following as of December 31 (in thousands): 2022 2021 Sales and marketing $ 19,194 $ 16,439 Compensation and benefits 8,646 25,450 Op 7,488 7,066 Manufacturing costs 3,425 4,110 Billings in excess of revenues — 1,401 Customer deposits — 35 Other 5,311 3,540 Total accrued expenses and other liabilities $ 44,064 $ 58,041 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT Revolving Credit Facility Indebtedness prior to May 18, 2022 On May 26, 2020, the Company entered into a First Amendment to the Original Credit Agreement (the First Amendment) to provide for an additional $100 million line of credit through May 26, 2022. As a matter of convenience, the parties incorporated the amendments to the Original Credit Agreement made by the First Amendment into a new Fourth Amended and Restated Credit Agreement (New Credit Agreement). In the New Credit Agreement, the revolving commitments under the Original Credit Agreement are referred to as Revolving A Commitments and the new $100 million line of credit is referred to as Revolving B Commitments. In the New Credit Agreement, all of the material terms and conditions related to the original line of credit (Revolving A Commitments) remained unchanged from the Original Credit Agreement. The Company’s revolving credit facility executed November 5, 2019, was completely replaced by the Company’s revolving credit facility executed May 18, 2022. Indebtedness on and after May 18, 2022 Syndication Agent; Regions Bank, PNC Bank, National Association, and TD Bank, N.A. (each, a Lender and collectively, the Lenders), arranged by BofA Securities, Inc. as Sole Lead Arranger and Sole Bookrunner, entered into a Credit Agreement (Credit Agreement) to amend and restate the Fourth Amended and Restated Credit Agreement dated as of November 5, 2019. Under the Credit Agreement, the Lenders agreed to provide the Company with one or more Revolving Loans in a collective maximum principal amount of $400,000,000 (Loan Limit) throughout the term, which ends May 18, 2027 (Term). Included within the Loan Limit are sublimits for a Letter of Credit facility in an amount not to exceed $60,000,000; and Swing Line Loans in an aggregate principal amount at any time outstanding not to exceed $20,000,000. The Revolving Loans, the Letter of Credit facility and the Swing Line Loans are for the purpose of raising working capital and supporting general business operations. The Credit Agreement provides the Company, in the aggregate, the ability to borrow an amount up to the Loan Limit during the Term. The Company is not obligated to borrow any amount under the Loan Limit. Within the Loan Limit, the Company may borrow, repay and reborrow at any time or from time to time while the Notes are in effect. Base Rate Loans (as defined in the Credit Agreement) under the Revolving Loans and the Swing Line Loans accrue interest at the Base Rate plus the Applicable Rate (as defined in the Credit Agreement) and Term SOFR Loans for the Revolving Loans accrue interest at the rate per annum equal to the sum of Term SOFR for such interest period plus the Applicable Rate (as defined in the Credit Agreement). The Base Rate for any day is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by BOA as its prime rate, and (c) the Term SOFR plus 1.0% subject to certain interest rate floors. Repayment of all then outstanding principal, interest, fees and costs is due at the end of the Term. The Company and BofA Securities, Inc. as a sustainability coordinator, are entitled to establish specified key performance indicators (KPIs) with respect to certain environmental, social and governance targets of the Company and its subsidiaries. The sustainability coordinator and the Company may amend the Credit Agreement for the purpose of incorporating the KPIs and other related provisions, unless the Lenders object to such amendment on or prior to the date that is ten business days Under the terms of the Security and Pledge Agreement, the Company and Trex Commercial, subject to certain permitted encumbrances, as collateral security for the above-stated loans and all other present and future indebtedness of the Company owing to the Lenders grants to BOA, as Administrative Agent for the Lenders, a continuing security interest in certain collateral described and defined in the Security and Pledge Agreement but excluding the Excluded Property (as defined in the Security and Pledge Agreement). Indebtedness On and After December 22, 2022 Under the First Amendment, the Lenders agreed to provide the Company with a Revolving B Loan consisting of one or more revolving loans in a collective maximum principal amount of $150,000,000 (Revolving B Loan Limit) throughout the term, which ends December 22, 2024 (Revolving B Loan Term). Previously, under the Credit Agreement, there was no Revolving B Loan. The First Amendment also provided that TD Bank, N.A. would serve as Syndication Agent. As of December 22, 2022, the Credit Agreement was amended and restated to refer to this loan as the Revolving A Loan. The amended and restated Credit Agreement was made an Exhibit A to the First Amendment. All of the terms of the Credit Agreement apply to the Revolving B Loan. The Credit Agreement continues to include sublimits under the Revolving A Loan for a Letter of Credit facility in an amount not to exceed $60,000,000; and Swing Line Loans in an aggregate principal amount at any time outstanding not to exceed $20,000,000. The Revolving Loans, the Letter of Credit facility and the Swing Line Loans under Revolving A Loan are for the purpose of raising working capital and supporting general business operations. The Notes provide the Company, in the aggregate, the ability to borrow an amount up to the Revolving A Loan Limit during the Revolving A Loan Term and Revolving B Loan Limit during the Revolving B Loan Term. The Company is not obligated to borrow any amount under the revolving loans. Within the respective loan limit, the Company may borrow, repay and reborrow at any time or from time to time while the Notes are in effect. With respect to Revolving B Loans, for any day, the rate per annum is a tiered pricing based upon the Consolidated Debt to Consolidated EBITDA Ratio. The applicable rate for Revolving B Loans that are Base Rate Loans range between1.20% and 2.15% and the applicable rate for Revolving B Loans that are Term SOFR/Term SOFR Daily Floating Rate range between 0.20% and 1.15%. The Company had $222 million in borrowings outstanding under its revolving credit facility and available borrowing capacity of $328 million at December 31, 2022. The weighted average interest rate on the revolving credit facility was 5.22% as of December 31, 2022. Compliance with Debt Covenants and Restrictions Pursuant to the terms of the Credit Agreement, the Company is subject to certain loan compliance covenants. The Company was in compliance with all covenants as of December 31, 2022. Failure to comply with the financial covenants could be considered a default of repayment obligations and, among other remedies, could accelerate payment of any amounts outstanding. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Leases | 10. LEASES For the years ended December 31, 2022 and December 31, 2021, total operating lease cost was $8.4 million and $8.1 million, respectively. The weighted average remaining lease term at December 31, 2022 and December 31, 2021 was 5.2 years and 5.8 years, respectively. The weighted average discount rate at December 31, 2022 and December 31, 2021 was 2.10% and 2.47%, respectively. The following table includes supplemental cash flow information for the years ended December 31, 2022 and December 31, 2021 and December 31, 2020 and supplemental balance sheet information at December 31, 2022 and December 31, 2021 related to operating leases (in thousands): Supplemental Cash Flow Information For the Year Ended 2022 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 8,688 $ 8,280 $ 8,736 Operating ROU assets obtained in exchange for lease liabilities $ 8,064 $ 7,295 $ 1,427 Supplemental Balance Sheet Information December 31, December 31, Operating lease ROU assets $ 30,991 $ 34,571 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,488 $ 7,066 Operating lease liabilities 23,974 28,263 Total operating lease liabilities $ 31,462 $ 35,329 The following table summarizes maturities of operating lease liabilities at December 31, 2022 (in thousands): Maturities of operating lease liabilities 2023 $ 7,591 2024 6,746 2025 5,155 2026 4,476 2027 4,318 Thereafter 4,840 Total lease payments 33,126 Less imputed interest (1,664 ) Total operating liabilities $ 31,462 |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2022 | |
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 and other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Consolidated Balance Sheets at December 31, 2022 and 2021. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2022 | |
Equity [Abstract] | |
Stockholders' Equity | 12. STOCKHOLDERS’ EQUITY 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): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 184,626 $ 208,737 $ 175,631 Denominator: Basic weighted average shares outstanding 111,710,676 115,461,016 115,888,859 Year Ended December 31, 2022 2021 2020 Effect of dilutive securities: Stock appreciation rights 94,859 180,875 192,579 Restricted stock 74,953 120,952 171,428 Diluted weighted average shares outstanding 111,880,488 115,762,843 116,252,866 Basic earnings per share $ 1.65 $ 1.81 $ 1.52 Diluted earnings per share $ 1.65 $ 1.80 $ 1.51 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: Year Ended December 31, 2022 2021 2020 Restricted stock 48,851 6,296 — Stock appreciation rights 52,107 12,602 14,697 Stock Repurchase Program On February 16, 2018, the Board of Directors adopted a stock repurchase program of up to 11.6 million shares of the Company’s outstanding common stock (Stock Repurchase Program). During 2022, the Company repurchased 6.5 million shares of the Company’s outstanding common stock under the Stock Repurchase Program. |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 12 Months Ended |
Dec. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | 13. REVENUE FROM CONTRACTS WITH CUSTOMERS 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 principally generates revenue from the manufacture and sale of its high-performance, low-maintenance, eco-friendly included in “Accrued expenses and other liabilities, Sales and marketing” in Note 8 to the Consolidated Financial Statements. 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 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” in the Consolidated Balance Sheets. Trex Residential 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, 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 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 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 Residential accounts for all shipping and handling fees invoiced to the customer in net sales and the related costs in cost of sales. Trex Commercial Products Trex Commercial generated revenue from the manufacture and sale of its modular and architectural railing and staging systems. All of its revenues were from fixed-price contracts with customers. Trex Commercial contracts had a single performance obligation as the promise to transfer the individual goods or services was not separately identifiable from other promises in the contract and was, therefore, not distinct. On December 30, 2022, the Company completed the sale of Trex Commercial. Trex Commercial satisfied its performance obligation over time as work progressed because control transferred continuously to its customers. Revenue and estimated profit was recognized over time based on the proportion of actual 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 included all direct material, labor, subcontract and certain indirect costs. The Company reviewed and updated its estimates regularly and recognized adjustments in estimated profit on contracts under the cumulative catch-up The Company recognized an account receivable for satisfied performance obligations as it had an unconditional right to consideration and payment from the customer was due based solely on the passage of time. The Company received payments from its customers on the accounts receivable based on the payment terms applicable to each individual contract and the customer paid in less than one year. In addition, the timing of revenue recognition, billings and cash collections resulted in revenues in excess of billings and contract retainage (contract assets), and billings in excess of revenues and customer deposits (contract liabilities). These assets and liabilities were reported on a contract-by-contract Trex Commercial paid sales commissions that were directly attributable to identifiable contracts to certain of its employees. If the amortization period of the commission was one year or less, then the Company recognized the commission expense as incurred. Otherwise, the Company capitalized the commission and amortized it on a straight-line basis over the life of the contract. Trex Commercial did 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 were included in net sales and the related costs were included in cost of sales. For each year in the three years ended December 31, 2022, net sales are 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): Year Ended December 31, 2022 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 1,059,536 $ — $ 1,059,536 Products transferred over time and fixed price contracts — 46,507 46,507 $ 1,059,536 $ 46,507 $ 1,106,043 Year Ended December 31, 2021 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 1,139,266 $ — $ 1,139,266 Products transferred over time and fixed price contracts — 57,686 57,686 $ 1,139,266 $ 57,686 $ 1,196,952 Year Ended December 31, 2020 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 827,792 $ — $ 827,792 Products transferred over time and fixed price contracts — 53,039 53,039 $ 827,792 $ 53,039 $ 880,831 |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2022 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 14. STOCK-BASED COMPENSATION On April 30, 2014, Trex stockholders approved the Trex Company, Inc. 2014 Stock Incentive Plan (Plan), which was previously approved by the Board of Directors on February 19, 2014. The Plan is administered by the Compensation Committee of the Trex 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 Trex common stock that may be issued under the Plan is 25,680,000 and as of December 31, 2022, the total number of shares available for future issuance was 11,047,894. The Company recognizes stock-based compensation expense ratably over the period from 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 probable to be paid out based on the achievement of the predetermined performance measures. For the employee stock purchase plan, compensation expense is recognized related to the discount on purchases. The following table summarizes the Company’s stock-based compensation expense (in thousands): Year Ended December 31, 2022 2021 2020 Time-based restricted stock and restricted stock units $ 3,783 $ 2,892 $ 3,219 Performance-based restricted stock and restricted stock units 540 4,681 2,881 Stock appreciation rights 792 485 648 Employee stock purchase plan 214 381 383 Total stock-based compensation $ 5,329 $ 8,439 $ 7,131 Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Time-Based Restricted Stock and Time-Based Restricted Stock Units The fair value of time-based restricted stock and time-based restricted stock units is determined based on the closing price of Trex shares on the grant date. Time-based restricted stock and time-based restricted stock units vest based on the terms of the awards. Unvested time-based restricted stock and unvested time-based restricted stock units are generally forfeitable upon the resignation of employment or termination of employment with cause. The total fair value of vested time-based restricted shares and vested time-based restricted stock units for the years ended December 31, 2022, 2021 and 2020 was $3.7 million, $8.2 million, and $6.1 million, respectively. At December 31, 2022, there was $3.5 million of total compensation expense related to unvested time-based restricted stock and unvested time-based restricted stock units remaining to be recognized over a weighted-average period of approximately 1.6 years. Time-based restricted stock and restricted stock unit activity under the Plan and all predecessor stock incentive plans is as follows: Time-based Weighted- Nonvested at December 31, 2019 218,466 $ 28.75 Granted 54,406 $ 53.97 Vested (111,036 ) $ 30.94 Forfeited (1,114 ) $ 40.34 Nonvested at December 31, 2020 160,722 $ 35.68 Granted 33,703 $ 100.50 Vested (78,081 ) $ 37.81 Forfeited (4,798 ) $ 66.00 Nonvested at December 31, 2021 111,546 $ 52.91 Granted 57,094 $ 75.06 Vested (56,719 ) $ 58.13 Forfeited (1,286 ) $ 86.84 Nonvested at December 31, 2022 110,635 $ 61.28 Performance-based Restricted Stock and Performance-Based Restricted Stock Units The fair value of performance-based restricted stock and performance-based restricted stock units is determined based on the closing price of Trex shares on the grant date. Unvested performance-based restricted stock and unvested performance-based restricted stock units are generally forfeitable upon the resignation of employment or termination of employment with cause. The performance-based restricted shares and performance-based restricted stock units have a three-year vesting period, vesting one-third Performance-based restricted stock activity under the Plan is as follows: Performance-based Weighted-Average Nonvested at December 31, 2019 123,656 $ 30.67 Granted 78,404 $ 39.60 Vested (128,762 ) $ 28.87 Forfeited (728 ) $ 41.12 Nonvested at December 31, 2020 72,570 $ 43.42 Granted 36,522 $ 86.26 Vested (45,051 ) $ 39.41 Forfeited (6,273 ) $ 65.30 Nonvested at December 31, 2021 57,768 $ 71.21 Granted 72,152 $ 76.14 Vested (57,875 ) $ 64.43 Forfeited (562 ) $ 82.95 Nonvested at December 31, 2022 71,483 $ 81.57 Stock Appreciation Rights SARs are granted with a grant price equal to the closing market price of the Company’s common stock on the date of grant. These awards expire ten years after the date of grant and vest based on the terms of the individual awards. The SARs are generally forfeitable upon the resignation of employment or termination of employment with cause. The Company recognizes forfeitures as they occur. The Company recognizes compensation cost on a straight-line basis over the vesting period for the award. As of December 31, 2022, there was $1.1 million of unrecognized compensation cost related to SARs. The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing model. For SARs issued in the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively, the assumptions shown in the following table were used: Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Average risk-free interest rate 1.9 % 0.6 % 1.3 % Expected term (years) 5 5 5 Expected volatility 44.9 % 58.7 % 38.3 % Dividend Yield. Average Risk-Free Interest Rate. Expected Term. Expected Volatility. The weighted-average grant date fair value of SARs granted during the years ended December 31, 2022, December 31, 2021 and December 31, 2020 was $33.90, $51.84, and $17.81, respectively. SAR activity under the Plan and all predecessor stock incentive plans is as follows: SARs Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2019 304,038 $ 15.79 Granted 43,830 $ 50.39 Exercised (54,592 ) $ 9.41 Canceled — $ — Outstanding at December 31, 2020 293,276 $ 22.15 Granted 15,029 $ 104.56 Exercised (102,562 ) $ 9.45 Canceled (4,745 ) $ 61.66 Outstanding at December 31, 2021 200,998 $ 33.86 Granted 32,971 $ 82.01 Exercised — $ — Canceled — $ — Outstanding at December 31, 2022 233,969 $ 40.64 5.5 $ 2,885,217 Vested at December 31, 2022 184,563 $ 30.11 4.6 $ 2,885,517 Exercisable at December 31, 2022 184,563 $ 30.11 4.6 $ 2,885,217 Employee Stock Purchase Plan The Company has an employee stock purchase plan (ESPP) that permits eligible employees to purchase shares of common stock of the Company at a purchase price which is the lesser of 85% of the market price on either the first day of the calendar quarter or the last day of the calendar quarter. Eligible employees may elect to participate in the plan by authorizing payroll deductions of up to 15% of gross compensation for each payroll period. On the last day of each quarter, each participant’s contribution account is used to purchase the maximum number of whole shares of common stock determined by dividing the contribution account balance by the purchase price. The aggregate number of shares of common stock that may be purchased under the plan is 2,400,000. Through December 31, 2022, employees had purchased approximately 1,870,151 shares under the plan. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2022 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | 15. EMPLOYEE BENEFIT PLANS The Company has two 401(k) Profit Sharing Plans for the benefit of its employees who meet certain eligibility requirements and it matches qualifying employee contributions. The Company’s contributions to the plans totaled $8.1 million, $6.6 million, and $5.7 million, for the years ended December 31, 2022, 2021 and 2020, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 16. INCOME TAXES Income tax provision (benefit) consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax provision: Federal $ 28,830 $ 30,450 $ 35,423 State 9,126 15,192 10,455 37,956 45,642 45,878 Deferred income tax provision: Federal 20,000 21,607 12,603 State 4,256 (595 ) 522 24,256 21,012 13,125 Total income tax provision $ 62,212 $ 66,654 $ 59,003 The Company’s effective tax rate for the year ended December 31, 2022 was 25.2% and was comparable to the effective tax rate for the year ended December 31, 2021, which resulted in income tax expense of $62.2 million and $66.7 million, respectively. The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands): Year Ended December 31, 2022 2021 2020 U.S. Federal statutory taxes $ 51,836 $ 57,832 $ 49,273 State and local taxes, net of U.S. Federal benefit 10,608 12,174 10,641 Permanent items (208 ) 1,208 1,198 Excess tax benefits from vesting or settlement of stock compensation awards (11 ) (2,868 ) (1,635 ) Federal credits (598 ) (686 ) (565 ) Other 585 (1,006 ) 91 Total income tax provision $ 62,212 $ 66,654 $ 59,003 Deferred tax assets and liabilities consist of the following (in thousands): As of December 31, 2022 2021 Deferred tax assets: Net operating losses $ 132 $ 64 Tax Cut and Jobs Act capitalization of research and development costs 2,152 — Residential product warranty reserve 6,469 7,260 Stock-based compensation 1,146 1,305 Accruals not currently deductible and other 373 1,371 Inventories 2,965 2,210 Operating lease liability 7,941 8,965 Deferred revenue 2,921 2,935 Goodwill amortization — 6,858 State tax credit carryforwards 4,084 3,394 Gross deferred tax assets, before valuation allowance 28,183 34,362 Valuation allowance (3,026 ) (2,232 ) Gross deferred tax assets, after valuation allowance 25,157 32,130 Deferred tax liabilities: Depreciation (74,604 ) (63,483 ) Operating lease right-of-use (7,687 ) (8,635 ) Inventories (6,749 ) (2,485 ) Goodwill amortization (2,879 ) — Other (1,462 ) (1,494 ) Gross deferred tax liabilities (93,381 ) (76,097 ) Net deferred tax liability $ (68,224 ) $ (43,967 ) The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax laws and statutory tax rates. In accordance with accounting standards, the Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized, primarily certain state income tax credits. As of December 31, 2022, the Company had a valuation allowance of $3.0 million against deferred tax assets it estimates will not be realized. The Company will analyze its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. The Company recognizes interest and penalties related to tax matters as a component of “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. As of December 31, 2022, the Company has identified no uncertain tax position and, accordingly, has not recorded any unrecognized tax benefits or associated interest and penalties. 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 has accrued a liability when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with accounting standards. As of December 31, 2022, for certain tax jurisdictions, tax years 2018 through 2022 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdictions as |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Segment Information | 17. SEGMENT INFORMATION Through December 30, 2022, the Company operated in two reportable segments: • Trex Residential manufactures composite decking and railing and related products marketed under the brand name Trex ® • Trex Commercial designed, engineered, and marketed modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products were sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. On December 30, 2022, the Company completed the sale of Trex Commercial. Refer to Note 3 to these consolidated financial statements for additional information on the sale of Trex Commercial. The Company’s reportable segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial operations. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. Segment Data (in thousands): Net Sales Net Income EBITDA Depreciation Income Tax Capital Total Assets December 31, 2022 Trex Residential $ 1,059,536 $ 200,876 $ 311,259 $ 43,173 $ 67,313 $ 175,904 $ 933,705 Trex Commercial 46,507 (16,250 ) (20,226 ) 1,125 (5,101 ) 324 — Total $ 1,106,043 $ 184,626 $ 291,033 $ 44,298 $ 62,212 $ 176,228 $ 933,705 December 31, 2021 Trex Residential $ 1,139,266 $ 247,059 $ 361,485 $ 34,941 $ 79,500 $ 157,568 $ 881,225 Trex Commercial 57,686 (38,322 ) (50,163 ) 1,005 (12,846 ) 1,826 39,096 Total $ 1,196,952 $ 208,737 $ 311,322 $ 35,946 $ 66,654 $ 159,394 $ 920,321 December 31, 2020 Trex Residential $ 827,792 $ 171,197 $ 244,817 $ 17,131 $ 57,488 $ 171,784 $ 676,948 Trex Commercial 53,039 4,434 6,758 809 1,515 1,039 93,544 Total $ 880,831 $ 175,631 $ 251,575 $ 17,940 $ 59,003 $ 172,823 $ 770,492 (1) For the year ended December 31, 2022, total consolidated net income and net loss at Trex Commercial includes a loss on sale of Trex Commercial on December 30, 2022 of $15.4 million. For the year ended December 31, 2021, total consolidated net income and net loss at Reconciliation of Net Income (Loss) to EBITDA (in thousands): Net Income / Interest Income Tax Depreciation EBITDA December 31, 2022 Trex Residential $ 200,876 $ (103 ) $ 67,313 $ 43,173 $ 311,259 Trex Commercial (16,250 ) — (5,101 ) 1,125 (20,226 ) Total $ 184,626 $ (103 ) $ 62,212 $ 44,298 $ 291,033 December 31, 2021 Trex Residential $ 247,059 $ (15 ) $ 79,500 $ 34,941 $ 361,485 Trex Commercial (38,322 ) — (12,846 ) 1,005 (50,163 ) Total $ 208,737 $ (15 ) $ 66,654 $ 35,946 $ 311,322 December 31, 2020 Trex Residential $ 171,197 $ (999 ) $ 57,488 $ 17,131 $ 244,817 Trex Commercial 4,434 — 1,515 809 6,758 Total $ 175,631 $ (999 ) $ 59,003 $ 17,940 $ 251,575 |
Seasonality
Seasonality | 12 Months Ended |
Dec. 31, 2022 | |
Text Block [Abstract] | |
Seasonality | 18. SEASONALITY The operating results for Trex Residential 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 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 |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 19. COMMITMENTS AND CONTINGENCIES 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. Purchase Commitments The Company fulfills requirements for raw materials under both purchase orders and supply contracts. In the year ended December 31, 2022, the Company purchased reclaimed wood fiber requirements under purchase orders and long-term supply commitments not exceeding four years. All of the Company’s scrap polyethylene, aluminum and stainless-steel purchases are under short-term supply contracts that may average approximately one The wood and polyethylene supply contracts generally provide that the Company is obligated to purchase all wood or polyethylene a supplier provides, if the wood or polyethylene meets certain specifications. The amount of wood and polyethylene the Company is required to purchase under these contracts varies with the production of its suppliers and, accordingly, is not fixed or determinable. As of December 31, 2022, the Company has purchase commitments under material supply contracts of $53 million for the year ending December 31, 2023, and a total of $45 million for the years ending December 31, 2024 through 2026. Product Warranty The Company warrants that for the applicable warranty period its Trex Residential products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and its decking, cladding, fascia and railing products will not split, splinter, rot or suffer structural damage from termites or fungal decay. Products sold on or after January 1, 2023: The warranty period for residential use is 50 years for Transcend ® ® ® ® Products sold prior to January 1, 2023: The warranty period is 25 years for residential use and 10 years for commercial use. With respect to Trex Signature railing, the warranty period is 25 years for both residential and commercial use. The Company further warrants that Trex Transcend, Trex Enhance, Trex Select and Universal Fascia products will not fade in color more than a certain amount and will be resistant to permanent staining from food substances or mold, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the company has an obligation either to replace the defective product or refund the purchase price. Trex Residential continues to receive and settle claims for decking 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 determine a reasonable possible range 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 to determine its best estimate of future claims for which to record a related liability. 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 year ended December 31, 2022 was significantly lower than the number of claims received in the year ended December 31, 2021, and lower than the Company’s expectations for 2022. Average cost per claim experienced in the year ended December 31, 2022 was significantly higher than that experienced in the year ended December 31, 2021, and higher than the Company’s expectations for 2022. The elevated average cost per claim experienced in the year ended December 31, 2022, was primarily the result of the closure of three large claims, which were considered in the Company’s estimation of the surface flaking reserve. The Company believes the reserve at December 31, 202 2 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 the 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 % 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 $ million change in the surface flaking warranty reserve. The Company also maintains a warranty reserve for the settlement of other residential product warranty claims and records the provision at the time of product sale. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Year Ended December 31, 2022 Surface Other Total Beginning balance, January 1 $ 18,542 $ 10,053 $ 28,595 Provisions and changes in estimates — 1,914 1,914 Settlements made during the period (2,637 ) (2,273 ) (4,910 ) Ending balance, December 31 $ 15,905 $ 9,694 $ 25,599 Year Ended December 31, 2021 Surface Other Total Beginning balance, January 1 $ 21,325 $ 8,148 $ 29,473 Provisions and changes in estimates — 3,846 3,846 Settlements made during the period (2,783 ) (1,941 ) (4,724 ) Ending balance, December 31 $ 18,542 $ 10,053 $ 28,595 Trex Residential Arkansas Manufacturing Facility In October 2021, the Company announced plans to add a third U.S.-based Trex Residential manufacturing facility located in Little Rock, Arkansas, that will sit on approximately 300 acres of land. The development approach for the new campus will be modular and calibrated to demand trends for Trex Residential outdoor living products. Construction began on the new facility in the second quarter of 2022, and in July 2022, the Company entered into a design-build agreement. As previously announced, the Company anticipates spending approximately $400 million on the facility and the budget for the design-build agreement is contained within this amount. Construction for the new facility will be funded primarily through the Company’s ongoing cash generation or its line of credit. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2022 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | TREX COMPANY, INC. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (In thousands) Descriptions Balance at Additions Deductions Balance Year ended December 31, 2022: Trex Residential product warranty reserve $ 28,595 $ 1,914 $ (4,910 ) $ 25,599 Income tax valuation allowance $ 2,232 $ 794 $ — $ 3,026 Year ended December 31, 2021: Trex Residential product warranty reserve $ 29,473 $ 3,846 $ (4,724 ) $ 28,595 Income tax valuation allowance $ 2,775 $ — $ (543 ) $ 2,232 Year ended December 31, 2020: Trex Residential product warranty reserve $ 25,494 $ 9,861 $ (5,882 ) $ 29,473 Income tax valuation allowance $ 2,988 $ 1 $ (214 ) $ 2,775 |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of the Company. Intercompany accounts and transactions have been eliminated in consolidation. The Company’s results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, consumer spending and preferences, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from pandemics and geopolitical conflicts. Towards the end of June 2022, we experienced a reduction in demand from our distribution partners, spurred by concerns over a potential easing in consumer demand due to rising interest rates, declining consumer sentiment and expectations of a general slowing in the economy. As a result, beginning in the third quarter our channel partners met demand partially through inventory drawdown rather than reordering products and maintaining current inventories. The drawdown negatively impacted third quarter and fourth quarter sales. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. |
Concentrations and Credit Risk | Concentrations and Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. As of December 31, 2022, substantially all deposits are maintained in one financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to its cash and cash equivalents. The Company routinely assesses the financial strength of its customers and believes that its trade receivables credit risk exposure is limited. Trade receivables are recognized at the amount of revenue recognized on each shipment for Trex Residential products and for satisfied performance obligations for Trex Commercial products as the Company has an unconditional right to consideration from the customer and payment is due based solely on the passage of time. An estimate of expected credit losses is recognized as a valuation allowance and adjusted each reporting period. The estimate is based on the current expected credit loss model and is determined using an aging schedule, including past events, current conditions and reasonable and supportable forecasts about the future. There was no material valuation allowance recorded as of December 31, 2022 and December 31, 2021. In the years ended December 31, 2022, 2021, and 2020 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, 2022 three customers of Trex Residential represented 64% of the Company’s total net sales. For the year ended December 31, 2021, three customers of Trex Residential represented approximately 61% of the Company’s total net sales. For the year ended December 31, 2020, three customers of Trex Residential represented approximately 56% of the Company’s total net sales. At December 31, 2022, two customers represented 35% and 26%, respectively, of the Company’s total accounts receivable balance. At December 31, 2021, two customers represented 29% and 25%, respectively, of the Company’s total accounts receivable balance. For each year ended December 31, 2022, 2021, and 2020, approximately 17.5%, 26%, and 28%, respectively, of the Company’s materials purchases at Trex Residential were purchased from its four largest suppliers. |
Inventories | Inventories Inventories for the composite decking and railing products at Trex Residential are valued at the lower of cost (last-in, first-out, A majority of the products at Trex Residential are made in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. Trex Residential grinds up scrap materials generated from its manufacturing process and inventories deemed no longer salable and reintroduces the reclaimed material into the manufacturing process as a substitute for raw materials. The reclaimed material is valued at the costs of the raw material components of the material. Inventories for the railing and staging products at Trex Commercial for the commercial and multi-family market were valued at the lower of cost (first-in, first-out |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at historical reported in cash flows from investing activities in the Consolidated Statements of Cash Flows are adjusted to exclude unpaid amounts accrued at period end. Depreciation is provided using the straight-line method generally over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and fixtures 10 years Forklifts and tractors 5 years Computer equipment and software 5 years Leasehold improvements are amortized over the shorter of the lease term or 15 years. The Company reviews its long-lived assets, including property, plant and equipment, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the long-lived assets. If the estimated cash flows are less than the carrying amount of the long-lived assets, the assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future. As a result, the carrying amount of long-lived assets could be reduced in the future. Long-lived assets held for sale are stated at the lower of cost or fair value less cost to sell. |
Leases | Leases The Company leases office space, storage warehouses, training and manufacturing facilities, and certain office and plant equipment under various operating leases. At inception of an arrangement, the Company evaluates, among other things, whether it has the right to control the use of an identified asset in order to determine if the arrangement is or contains a lease. Operating leases are included in operating lease right-of-use non-lease non-lease |
Fair Value Measurement | Fair Value Measurement Assets and liabilities measured at fair value are measured at the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and classified into one of the following fair value hierarchies: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 – Valuations derived from management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Goodwill | Goodwill Goodwill represents the excess of cost over net assets acquired resulting from the Company’s 1996 purchase of the Mobil Composite Products Division, the 2011 purchase of the assets of the Iron Deck Corporation, and the 2017 purchase of certain assets and the assumption of certain liabilities of SC Company. The Company evaluates the recoverability of goodwill in accordance with Accounting Standard Codification Topic 350, “ Intangibles – Goodwill and Other The Company assigned its goodwill to reporting units and tests each reporting unit’s goodwill for impairment at least on an annual basis, or more frequently if an event occurs or circumstances change in the interim that indicate the carrying amount of reporting unit goodwill exceeds the implied fair value of that goodwill. The Company identified its reporting units based on the way it manages its operating segments. The Company has determined that it has three reporting units: a residential reporting unit in the Trex Residential reportable segment, and a commercial railing reporting unit and a staging reporting unit in the Trex Commercial reportable segment. Each reporting unit constitutes a business with discrete financial information and operating segment management, at a level below the Company’s chief operating decision maker, regularly reviews the operating results of the reporting unit. The Company assigned goodwill to the reporting units based on the excess of the fair values acquired over the fair value of the sum of the individual assets acquired and liabilities assumed that were assigned to the reporting units. In testing for goodwill impairment, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If the qualitative assessment indicates that the carrying amount of the reporting unit exceeds its fair value, including goodwill, the Company is then required to perform a quantitative goodwill impairment test. The quantitative goodwill impairment test, used to identify both the existence of impairment and the amount of impairment loss, compares the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit refers to the price that would be received to sell the unit as a whole in an orderly transaction between market participants at the measurement date. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company measures fair value of the reporting units based on a combination of the Income Approach (i.e., the Discounted Cash Flow Method) and a Market Approach. The Discounted Cash Flow Method is a multiple period discounting model in which the fair value of the reporting units are determined by discounting the projected free cash flows using an appropriate discount rate and indicates the fair value of the reporting units based on the present value of the cash flows that the reporting unit is expected to generate in the future. Significant assumptions in the Discounted Cash Flow Method include: the weighted average cost of capital (or discount rate); residual growth rate; future cash flow projections; and working capital effects. The Market Approach uses prices and other relevant information generated by market transactions involving identical or comparable assets, liabilities or a group of assets and liabilities, such as a business. Significant estimates in the Market Approach model may include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization (EBITDA) in estimating the fair value of the reporting units. The use of different assumptions, estimates or judgements, including estimated future cash flows and the discount rate used to discount estimated cash flows to their net present value, could materially increase or decrease the fair value of the reporting unit and impact our assessment of any goodwill impairment charges. Also, if different conditions exist in future periods, future impairment charges could result. The Company performs the annual impairment testing of its goodwill as of October 31 of each year. For fiscal years 2022 2021 and 2020, the Company completed its annual impairment test of goodwill for its residential reporting unit utilizing the qualitative assessment and concluded it was not more likely than not that the fair value of the residential reporting unit was less than its carrying amount. Qualitative factors the Company considered include events and circumstances such as macroeconomic conditions, industry and market considerations, cost factors, overall financial performance and other relevant Company-specific events, as applicable. For the fiscal year 2020, the Company completed its annual impairment test of goodwill for its commercial railing reporting unit and its staging reporting unit utilizing the qualitative assessment and concluded that it was not more likely than not that the fair value of the respective reporting unit was less than its carrying amount. For fiscal year 2021, the Company determined that it was necessary to perform the goodwill impairment test for its railing and staging reporting units utilizing the quantitative assessment. The Company performed a quantitative assessment primarily due to a reduction in project commitments, which adversely impacted project backlog and forecasted net sales and EBITDA. The reduction in project commitments was influenced by a continued delay in new projects due to lingering uncertainty created in the commercial railing and staging markets by the COVID-19 pre-pandemic tax-deductible The Company uses assumptions that are consistent with those it believes a market participant would use. However, the use of different events and circumstances or different assumptions, estimates or judgements, including estimated future cash flows, and the discount rate used to discount estimated cash flows to their net present value and the residual growth rate, could materially increase or decrease the fair value of the reporting unit and impact our assessment of any goodwill impairment charge. |
Product Warranty | Product Warranty The Company warrants that for the applicable warranty period its Trex Residential products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and its decking, cladding, fascia and railing products will not split, splinter, rot or suffer structural damage from termites or fungal decay. Products sold on or after January 1, 2023: The warranty period for residential use is 50 years for Transcend ® ® ® ® that Trex Transcend, Trex Enhance and Trex Select decking and cladding and Universal Fascia products will not fade in color from light and weathering exposure more than a certain amount and will be resistant to permanent staining from food and beverage substances or mold and mildew, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. Products sold prior to January 1, 2023: The warranty period is 25 years for residential use and 10 years for commercial use. With respect to Trex Signature railing, the warranty period is 25 years for both residential and commercial use. The Company further warrants that Trex Transcend, Trex Enhance, Trex Select and Universal Fascia products will not fade in color more than a certain amount and will be resistant to permanent staining from food substances or mold, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. Reserve estimates are based on management’s judgment, considering such factors as cost per claim, historical experience, anticipated rates of claims, and other available information. Management reviews and adjusts these estimates, if necessary, based on the differences between actual experience and historical estimates. |
Treasury Stock | Treasury Stock The Company records the repurchase of shares of its common stock at cost. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
Revenue Recognition | Revenue Recognition Trex Residential Products. low-maintenance, eco-friendly Trex Commercial Products. Trex Commercial satisfied its performance obligation over time as work progressed because control transferred continuously to its customers. Revenue and estimated profit were recognized over time based on the proportion of actual 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 included all direct material, labor, subcontract and certain indirect costs. The Company reviewed and updated its estimates regularly and recognized adjustments in estimated profit on contracts under the cumulative catch-up impact of the adjustment on revenue and estimated profit to date on a contract is recognized in the period |
Insurance Proceeds | Insurance Proceeds The Company maintains insurance coverage for losses it may incur from identifiable insurable events resulting in facility repairs, incremental direct costs to serve its customers and losses in operating income from the loss in net sales. The Company recognizes a gain in the amount of any related insurance proceeds received in excess of any losses incurred. The gain on insurance proceeds is presented in a separate line item in the Consolidated Statements of Comprehensive Income. During the year ended December 31, 2021, the Company recognized gains on insurance proceeds of $8.7 million primarily related to the fire at its Virginia Facility. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation at the grant date of the award based on the fair value. For stock options, stock appreciation rights and time-based restricted stock and time-based restricted stock units, stock-based compensation is recognized on a straight-line basis over the vesting periods of the award. The Company recognizes forfeitures as they occur. 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 probable to be paid out based on the achievement of predetermined performance measures. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted tax laws and statutory tax rates. The Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. As of December 31, 2022, the Company has a valuation allowance of $3.0 million against these deferred tax assets related to certain state tax credits. The Company analyzes its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. For the years ended December 31, 2022, 2021, and 2020, research and development costs were $0.5 million, $6.0 million, and $3.4 million, respectively, and have been included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. |
Advertising Costs | Advertising Costs The Company expenses its branding and advertising communication costs as incurred. Production costs are deferred and recognized as expense in the period that the related advertisement is first used. At December 31, 2022 and December 31, 2021, $1.6 million and $3.1 million was included in prepaid expenses for production costs, respectively. For the years ended December 31, 2022, 2021, and 2020, branding expenses, including advertising expenses as described above, were $43.3 million, $30.7 million, and $31.7 million, respectively. |
Fair Value of Financial Instruments | Fair Value of 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 and other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Consolidated Balance Sheets at December 31, 2022 and 2021. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance 958-605. In March 2020, the FASB issued ASU No. 2020-01, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property Plant and Equipment | Property, plant and equipment are stated at historical reported in cash flows from investing activities in the Consolidated Statements of Cash Flows are adjusted to exclude unpaid amounts accrued at period end. Depreciation is provided using the straight-line method generally over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and fixtures 10 years Forklifts and tractors 5 years Computer equipment and software 5 years |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories at LIFO value consist of the following as of December 31 (in thousands): 2022 2021 Finished goods $ 107,114 $ 58,401 Raw materials 69,292 56,441 Total FIFO inventories 176,406 114,842 Reserve to adjust inventories to LIFO value (35,051 ) (36,467 ) Total LIFO inventories $ 141,355 $ 78,375 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following as of December 31 (in thousands): 2022 2021 Prepaid expenses $ 10,787 $ 15,061 Revenues in excess of billings — 9,109 Income tax receivable 23,979 406 Other 339 576 Total prepaid expenses and other assets $ 35,105 $ 25,152 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment consist of the following as of December 31 (in thousands): 2022 2021 Machinery and equipment $ 529,975 $ 471,667 Building and improvements 120,116 101,609 Forklifts and tractors 24,516 18,584 Computer equipment 16,182 15,022 Furniture and fixtures 6,180 2,283 Construction in process 161,035 87,700 Land 24,886 22,911 Total property, plant and equipment 882,890 719,776 Accumulated depreciation (292,998 ) (259,411 ) Total property, plant and equipment, net $ 589,892 $ 460,365 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following as of December 31 (in thousands): 2022 2021 Sales and marketing $ 19,194 $ 16,439 Compensation and benefits 8,646 25,450 Op 7,488 7,066 Manufacturing costs 3,425 4,110 Billings in excess of revenues — 1,401 Customer deposits — 35 Other 5,311 3,540 Total accrued expenses and other liabilities $ 44,064 $ 58,041 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Leases [Abstract] | |
Supplemental Cash Flow information and Supplemental balance sheet information related to operating leases to operating leases | The following table includes supplemental cash flow information for the years ended December 31, 2022 and December 31, 2021 and December 31, 2020 and supplemental balance sheet information at December 31, 2022 and December 31, 2021 related to operating leases (in thousands): Supplemental Cash Flow Information For the Year Ended 2022 2021 2020 Cash paid for amounts included in the measurement of operating lease liabilities $ 8,688 $ 8,280 $ 8,736 Operating ROU assets obtained in exchange for lease liabilities $ 8,064 $ 7,295 $ 1,427 Supplemental Balance Sheet Information December 31, December 31, Operating lease ROU assets $ 30,991 $ 34,571 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,488 $ 7,066 Operating lease liabilities 23,974 28,263 Total operating lease liabilities $ 31,462 $ 35,329 |
Maturities of operating lease liabilities | The following table summarizes maturities of operating lease liabilities at December 31, 2022 (in thousands): Maturities of operating lease liabilities 2023 $ 7,591 2024 6,746 2025 5,155 2026 4,476 2027 4,318 Thereafter 4,840 Total lease payments 33,126 Less imputed interest (1,664 ) Total operating liabilities $ 31,462 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Equity [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): Year Ended December 31, 2022 2021 2020 Numerator: Net income $ 184,626 $ 208,737 $ 175,631 Denominator: Basic weighted average shares outstanding 111,710,676 115,461,016 115,888,859 Year Ended December 31, 2022 2021 2020 Effect of dilutive securities: Stock appreciation rights 94,859 180,875 192,579 Restricted stock 74,953 120,952 171,428 Diluted weighted average shares outstanding 111,880,488 115,762,843 116,252,866 Basic earnings per share $ 1.65 $ 1.81 $ 1.52 Diluted earnings per share $ 1.65 $ 1.80 $ 1.51 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Year Ended December 31, 2022 2021 2020 Restricted stock 48,851 6,296 — Stock appreciation rights 52,107 12,602 14,697 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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): Year Ended December 31, 2022 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 1,059,536 $ — $ 1,059,536 Products transferred over time and fixed price contracts — 46,507 46,507 $ 1,059,536 $ 46,507 $ 1,106,043 Year Ended December 31, 2021 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 1,139,266 $ — $ 1,139,266 Products transferred over time and fixed price contracts — 57,686 57,686 $ 1,139,266 $ 57,686 $ 1,196,952 Year Ended December 31, 2020 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 827,792 $ — $ 827,792 Products transferred over time and fixed price contracts — 53,039 53,039 $ 827,792 $ 53,039 $ 880,831 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Year Ended December 31, 2022 2021 2020 Time-based restricted stock and restricted stock units $ 3,783 $ 2,892 $ 3,219 Performance-based restricted stock and restricted stock units 540 4,681 2,881 Stock appreciation rights 792 485 648 Employee stock purchase plan 214 381 383 Total stock-based compensation $ 5,329 $ 8,439 $ 7,131 |
Summary of Assumptions Used to Estimate Fair Value of Each SAR | For SARs issued in the years ended December 31, 2022, December 31, 2021 and December 31, 2020, respectively, the assumptions shown in the following table were used: Year Ended December 31, 2022 2021 2020 Dividend yield 0 % 0 % 0 % Average risk-free interest rate 1.9 % 0.6 % 1.3 % Expected term (years) 5 5 5 Expected volatility 44.9 % 58.7 % 38.3 % |
SAR Activity | SAR activity under the Plan and all predecessor stock incentive plans is as follows: SARs Weighted-Average Weighted-Average Aggregate Outstanding at December 31, 2019 304,038 $ 15.79 Granted 43,830 $ 50.39 Exercised (54,592 ) $ 9.41 Canceled — $ — Outstanding at December 31, 2020 293,276 $ 22.15 Granted 15,029 $ 104.56 Exercised (102,562 ) $ 9.45 Canceled (4,745 ) $ 61.66 Outstanding at December 31, 2021 200,998 $ 33.86 Granted 32,971 $ 82.01 Exercised — $ — Canceled — $ — Outstanding at December 31, 2022 233,969 $ 40.64 5.5 $ 2,885,217 Vested at December 31, 2022 184,563 $ 30.11 4.6 $ 2,885,517 Exercisable at December 31, 2022 184,563 $ 30.11 4.6 $ 2,885,217 |
Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] | |
Restricted Stock Activity | Time-based restricted stock and restricted stock unit activity under the Plan and all predecessor stock incentive plans is as follows: Time-based Weighted- Nonvested at December 31, 2019 218,466 $ 28.75 Granted 54,406 $ 53.97 Vested (111,036 ) $ 30.94 Forfeited (1,114 ) $ 40.34 Nonvested at December 31, 2020 160,722 $ 35.68 Granted 33,703 $ 100.50 Vested (78,081 ) $ 37.81 Forfeited (4,798 ) $ 66.00 Nonvested at December 31, 2021 111,546 $ 52.91 Granted 57,094 $ 75.06 Vested (56,719 ) $ 58.13 Forfeited (1,286 ) $ 86.84 Nonvested at December 31, 2022 110,635 $ 61.28 |
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |
Restricted Stock Activity | Performance-based restricted stock activity under the Plan is as follows: Performance-based Weighted-Average Nonvested at December 31, 2019 123,656 $ 30.67 Granted 78,404 $ 39.60 Vested (128,762 ) $ 28.87 Forfeited (728 ) $ 41.12 Nonvested at December 31, 2020 72,570 $ 43.42 Granted 36,522 $ 86.26 Vested (45,051 ) $ 39.41 Forfeited (6,273 ) $ 65.30 Nonvested at December 31, 2021 57,768 $ 71.21 Granted 72,152 $ 76.14 Vested (57,875 ) $ 64.43 Forfeited (562 ) $ 82.95 Nonvested at December 31, 2022 71,483 $ 81.57 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) | Income tax provision (benefit) consists of the following (in thousands): Year Ended December 31, 2022 2021 2020 Current income tax provision: Federal $ 28,830 $ 30,450 $ 35,423 State 9,126 15,192 10,455 37,956 45,642 45,878 Deferred income tax provision: Federal 20,000 21,607 12,603 State 4,256 (595 ) 522 24,256 21,012 13,125 Total income tax provision $ 62,212 $ 66,654 $ 59,003 |
Reconciliation of Differences between Income Tax Provision and Income Tax Determined by Applying US Federal Statutory Rate | The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands): Year Ended December 31, 2022 2021 2020 U.S. Federal statutory taxes $ 51,836 $ 57,832 $ 49,273 State and local taxes, net of U.S. Federal benefit 10,608 12,174 10,641 Permanent items (208 ) 1,208 1,198 Excess tax benefits from vesting or settlement of stock compensation awards (11 ) (2,868 ) (1,635 ) Federal credits (598 ) (686 ) (565 ) Other 585 (1,006 ) 91 Total income tax provision $ 62,212 $ 66,654 $ 59,003 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following (in thousands): As of December 31, 2022 2021 Deferred tax assets: Net operating losses $ 132 $ 64 Tax Cut and Jobs Act capitalization of research and development costs 2,152 — Residential product warranty reserve 6,469 7,260 Stock-based compensation 1,146 1,305 Accruals not currently deductible and other 373 1,371 Inventories 2,965 2,210 Operating lease liability 7,941 8,965 Deferred revenue 2,921 2,935 Goodwill amortization — 6,858 State tax credit carryforwards 4,084 3,394 Gross deferred tax assets, before valuation allowance 28,183 34,362 Valuation allowance (3,026 ) (2,232 ) Gross deferred tax assets, after valuation allowance 25,157 32,130 Deferred tax liabilities: Depreciation (74,604 ) (63,483 ) Operating lease right-of-use (7,687 ) (8,635 ) Inventories (6,749 ) (2,485 ) Goodwill amortization (2,879 ) — Other (1,462 ) (1,494 ) Gross deferred tax liabilities (93,381 ) (76,097 ) Net deferred tax liability $ (68,224 ) $ (43,967 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
Segment Reporting [Abstract] | |
Details of Segment Information | Segment Data (in thousands): Net Sales Net Income EBITDA Depreciation Income Tax Capital Total Assets December 31, 2022 Trex Residential $ 1,059,536 $ 200,876 $ 311,259 $ 43,173 $ 67,313 $ 175,904 $ 933,705 Trex Commercial 46,507 (16,250 ) (20,226 ) 1,125 (5,101 ) 324 — Total $ 1,106,043 $ 184,626 $ 291,033 $ 44,298 $ 62,212 $ 176,228 $ 933,705 December 31, 2021 Trex Residential $ 1,139,266 $ 247,059 $ 361,485 $ 34,941 $ 79,500 $ 157,568 $ 881,225 Trex Commercial 57,686 (38,322 ) (50,163 ) 1,005 (12,846 ) 1,826 39,096 Total $ 1,196,952 $ 208,737 $ 311,322 $ 35,946 $ 66,654 $ 159,394 $ 920,321 December 31, 2020 Trex Residential $ 827,792 $ 171,197 $ 244,817 $ 17,131 $ 57,488 $ 171,784 $ 676,948 Trex Commercial 53,039 4,434 6,758 809 1,515 1,039 93,544 Total $ 880,831 $ 175,631 $ 251,575 $ 17,940 $ 59,003 $ 172,823 $ 770,492 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of Net Income (Loss) to EBITDA (in thousands): Net Income / Interest Income Tax Depreciation EBITDA December 31, 2022 Trex Residential $ 200,876 $ (103 ) $ 67,313 $ 43,173 $ 311,259 Trex Commercial (16,250 ) — (5,101 ) 1,125 (20,226 ) Total $ 184,626 $ (103 ) $ 62,212 $ 44,298 $ 291,033 December 31, 2021 Trex Residential $ 247,059 $ (15 ) $ 79,500 $ 34,941 $ 361,485 Trex Commercial (38,322 ) — (12,846 ) 1,005 (50,163 ) Total $ 208,737 $ (15 ) $ 66,654 $ 35,946 $ 311,322 December 31, 2020 Trex Residential $ 171,197 $ (999 ) $ 57,488 $ 17,131 $ 244,817 Trex Commercial 4,434 — 1,515 809 6,758 Total $ 175,631 $ (999 ) $ 59,003 $ 17,940 $ 251,575 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2022 | |
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): Year Ended December 31, 2022 Surface Other Total Beginning balance, January 1 $ 18,542 $ 10,053 $ 28,595 Provisions and changes in estimates — 1,914 1,914 Settlements made during the period (2,637 ) (2,273 ) (4,910 ) Ending balance, December 31 $ 15,905 $ 9,694 $ 25,599 Year Ended December 31, 2021 Surface Other Total Beginning balance, January 1 $ 21,325 $ 8,148 $ 29,473 Provisions and changes in estimates — 3,846 3,846 Settlements made during the period (2,783 ) (1,941 ) (4,724 ) Ending balance, December 31 $ 18,542 $ 10,053 $ 28,595 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) | 12 Months Ended |
Dec. 31, 2022 Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 2 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 12 Months Ended | |||
Jan. 01, 2023 | Dec. 31, 2022 USD ($) Customer Institution Supplier | Dec. 31, 2021 USD ($) Customer | Dec. 31, 2020 USD ($) Customer | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Maximum term of original maturities to classify as cash equivalent | 3 months | |||
Number of financial institutions where deposits are maintained | Institution | 1 | |||
Valuation allowance | $ 0 | $ 0 | ||
Number of customers that accounted for 10% or more of net sales | Customer | 3 | 3 | 3 | |
Number of customer accounted for 10% or more account receivable | Customer | 2 | 2 | ||
Number of largest raw material suppliers | Supplier | 4 | |||
Excess of the replacement cost of inventory over the LIFO value of inventory | $ (35,051) | $ (36,467) | ||
Annual impairment test of goodwill | 54,245 | $ 0 | ||
Valuation allowance | 3,026 | 2,232 | ||
Research and Development costs | 500 | 6,000 | 3,400 | |
Prepaid expenses for production costs of advertising | 1,600 | 3,100 | ||
Branding Expenses | $ 43,300 | 30,700 | $ 31,700 | |
Operating leases with an initial term | 12 months or less | |||
Leasehold Improvements [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Property, plant, and equipment estimated useful life | 15 years | |||
Fire At Virginia Facility [Member] | Insurance Settlement [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Gain loss on insurance settlement | $ 8,700 | |||
Commercial Portfolio Segment [Member] | Railing [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Annual impairment test of goodwill | 42,500 | |||
Commercial Portfolio Segment [Member] | Staging [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Annual impairment test of goodwill | $ 11,800 | |||
Maximum [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Operating Lease terms | 7 years | |||
Minimum [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Operating Lease terms | 1 year | |||
Commercial Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 10 years | 10 years | ||
Commercial Use [Member] | Subsequent Event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 10 years | |||
Commercial Use [Member] | Signature Railing And Transcend Cladding [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Commercial Use [Member] | Signature Railing And Transcend Cladding [Member] | Subsequent Event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Residential Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Residential Use [Member] | Signature Railing [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Residential Use [Member] | Transcend Decking [Member] | Subsequent Event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 50 years | |||
Residential Use [Member] | Select Decking And Universal Fascia [Member] | Subsequent Event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 35 years | |||
Residential Use [Member] | Enhance Decking And Transcend, Select, Enhance And Signature Railing [Member] | Subsequent Event [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Minimum [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 10% | 10% | 10% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 64% | 61% | 56% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 35% | 29% | ||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 26% | 25% | ||
Raw Materials [Member] | Supplier Concentration Risk [Member] | Four Largest Suppliers [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 17.50% | 26% | 28% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2022 | |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 40 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 10 years |
Forklifts and Tractors [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 5 years |
Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 5 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 11 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 3 years |
Sale of Trex Commercial Produ_2
Sale of Trex Commercial Products, Inc. - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 30, 2022 | Dec. 31, 2022 | |
Subsidiary or Equity Method Investee [Line Items] | ||
Proceeds from sale of assets | $ 7,290 | |
Gain (loss) on disposition of stock in subsidiary | $ (15,423) | |
Trex Commercial Products Inc [Member] | ||
Subsidiary or Equity Method Investee [Line Items] | ||
Proceeds from sale of assets | $ 7,300 | |
Gain (loss) on disposition of stock in subsidiary | $ (15,400) |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 107,114 | $ 58,401 |
Raw materials | 69,292 | 56,441 |
Total FIFO inventories | 176,406 | 114,842 |
Reserve to adjust inventories to LIFO value | (35,051) | (36,467) |
Total LIFO inventories | $ 141,355 | $ 78,375 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
LIFO inventory liquidations | $ 0 | $ 0 |
Raw materials | $ 5,400,000 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 10,787 | $ 15,061 |
Revenues in excess of billings | 0 | 9,109 |
Income tax receivable | 23,979 | 406 |
Other | 339 | 576 |
Total prepaid expenses and other assets | $ 35,105 | $ 25,152 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Goodwill [Line Items] | |||
Amortization of intangible asset | $ 400 | $ 400 | |
Intangible Assets | 6,300 | 6,300 | |
Accumulated Amortization | 1,900 | 1,500 | |
Goodwill, Impairment Loss | 54,245 | $ 0 | |
Commercial [Member] | Railing [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | 42,500 | ||
Commercial [Member] | Staging [Member] | |||
Goodwill [Line Items] | |||
Goodwill, Impairment Loss | 11,800 | ||
Residential [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 14,200 | $ 14,200 | |
Domain Names [Member] | |||
Goodwill [Line Items] | |||
Amortization period | 15 years |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 882,890 | $ 719,776 |
Accumulated depreciation | (292,998) | (259,411) |
Total property, plant and equipment, net | 589,892 | 460,365 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 529,975 | 471,667 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 120,116 | 101,609 |
Forklifts and Tractors [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 24,516 | 18,584 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 16,182 | 15,022 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 6,180 | 2,283 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 161,035 | 87,700 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 24,886 | $ 22,911 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Additional Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 882,890 | $ 719,776 | |
Depreciation expense | 43,900 | 35,500 | $ 17,500 |
Construction in Process [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property, Plant and Equipment, Gross | $ 161,035 | $ 87,700 |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Sales and marketing | $ 19,194 | $ 16,439 |
Compensation and benefits | 8,646 | 25,450 |
Operating lease liabilities | 7,488 | 7,066 |
Manufacturing costs | 3,425 | 4,110 |
Billings in excess of revenues | 0 | 1,401 |
Customer deposits | 0 | 35 |
Other | 5,311 | 3,540 |
Total accrued expenses and other liabilities | $ 44,064 | $ 58,041 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Liabilities, Current |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 12 Months Ended | ||||
Dec. 31, 2022 | Dec. 22, 2022 | May 26, 2022 | May 18, 2022 | May 26, 2020 | |
Line of Credit Facility [Line Items] | |||||
Remaining available borrowing capacity | $ 328,000,000 | ||||
Termination date of the Credit Agreement | Nov. 05, 2024 | ||||
Outstanding borrowing capacity | $ 222,000,000 | ||||
Revolver Loans Portion Effective January 1 through June 30 [Member] | Fourth 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] | Fourth Amended And Restated Credit Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 200,000,000 | ||||
Revolving Credit Facility [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 100,000,000 | $ 100,000,000 | |||
Debt, Weighted Average Interest Rate | 5.22% | ||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 400,000,000 | ||||
Termination date of the Credit Agreement | May 18, 2027 | ||||
Number Of Business Days Within Which Lender May Raise Objections To Amendment | 10 days | ||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | Letter of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | 60,000,000 | ||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | Swingline Letter Of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 20,000,000 | ||||
Revolving Credit Facility [Member] | Base Rate [Member] | Fifth Amendment And Restated Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 0.50% | ||||
Debt instrument, description of variable rate basis | the Federal Funds Rate plus 0.50% | ||||
Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Fifth Amendment And Restated Agreement [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 1% | ||||
Debt instrument, description of variable rate basis | the Term SOFR plus 1.0% | ||||
Revolving B Loan [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Long-Term Line of Credit | $ 150,000,000 | ||||
Revolving B Loan [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, Interest rate, Stated percentage | 2.15% | ||||
Revolving B Loan [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Debt instrument, Interest rate, Stated percentage | 1.20% | ||||
Revolving B Loan [Member] | Fifth Amendment And Restated Agreement [Member] | Letter of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 60,000,000 | ||||
Revolving B Loan [Member] | Fifth Amendment And Restated Agreement [Member] | Swingline Letter Of Credit [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Revolving loans in a collective maximum principal amount | $ 20,000,000 | ||||
Revolving B Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 1.15% | ||||
Revolving B Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | |||||
Line of Credit Facility [Line Items] | |||||
Interest rate | 0.20% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average discount rate | 2.10% | 2.47% |
Operating lease cost | $ 8.4 | $ 8.1 |
Weighted average remaining lease term | 5 years 2 months 12 days | 5 years 9 months 18 days |
Leases - Supplemental Cash flow
Leases - Supplemental Cash flow Information to operating leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Supplemental cash flow information | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 8,688 | $ 8,280 | $ 8,736 |
Operating ROU assets obtained in exchange for lease liabilities | 8,064 | 7,295 | $ 1,427 |
Supplemental balance sheet information | |||
Operating lease ROU assets | 30,991 | 34,571 | |
Operating lease liabilities: | |||
Accrued expenses and other current liabilities | 7,488 | 7,066 | |
Operating lease liabilities | 23,974 | 28,263 | |
Total operating lease liabilities | $ 31,462 | $ 35,329 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2023 | $ 7,591 | |
2024 | 6,746 | |
2025 | 5,155 | |
2026 | 4,476 | |
2027 | 4,318 | |
Thereafter | 4,840 | |
Total lease payments | 33,126 | |
Less imputed interest | (1,664) | |
Total operating liabilities | $ 31,462 | $ 35,329 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - Stock Repurchase Programs [Member] | 12 Months Ended |
Dec. 31, 2022 shares | |
Equity, Class of Treasury Stock [Line Items] | |
Common stock repurchase program, authorized shares | 11,600,000 |
Number of shares repurchased by the Company | 6,500,000 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Numerator: | |||
Net income | $ 184,626 | $ 208,737 | $ 175,631 |
Denominator: | |||
Basic weighted average shares outstanding | 111,710,676 | 115,461,016 | 115,888,859 |
Effect of dilutive securities: | |||
Diluted weighted average shares outstanding | 111,880,488 | 115,762,843 | 116,252,866 |
Basic earnings per share | $ 1.65 | $ 1.81 | $ 1.52 |
Diluted earnings per share | $ 1.65 | $ 1.8 | $ 1.51 |
Stock appreciation rights [Member] | |||
Effect of dilutive securities: | |||
Dilutive securities | 94,859 | 180,875 | 192,579 |
Restricted stock [Member] | |||
Effect of dilutive securities: | |||
Dilutive securities | 74,953 | 120,952 | 171,428 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Restricted stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 48,851 | 6,296 | 0 |
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 | 52,107 | 12,602 | 14,697 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Summary of Disaggregated Net Sales (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | $ 1,106,043 | $ 1,196,952 | $ 880,831 |
Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | 1,059,536 | 1,139,266 | 827,792 |
Products Transferred Over Time and Fixed Price Contracts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | 46,507 | 57,686 | 53,039 |
Residential [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | 1,059,536 | 1,139,266 | 827,792 |
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | 1,059,536 | 1,139,266 | 827,792 |
Commercial [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | 46,507 | 57,686 | 53,039 |
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Revenue from contract with customers | $ 46,507 | $ 57,686 | $ 53,039 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Approximate number of shares employees purchased under the Employee Stock Purchase Plan | 1,870,151 | ||
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 | 25,680,000 | ||
Number of common stock available for future issuance | 11,047,894 | ||
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost recognition period for unvested awards | 1 year | ||
Unrecognized compensation cost related to unvested awards | $ 0.3 | $ 2.8 | $ 1.7 |
Vesting period | 3 years | ||
Stock Appreciation Rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested awards | $ 1.1 | ||
Fair value assumptions method used | Black-Scholes option-pricing model | ||
Weighted-average fair value of grants | $ 33.9 | $ 51.84 | $ 17.81 |
Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation cost recognition period for unvested awards | 1 year 7 months 6 days | ||
Unrecognized compensation cost related to unvested awards | $ 3.5 | ||
Total fair value of restricted shares vested | $ 3.7 | $ 8.2 | $ 6.1 |
Employee Stock Purchase 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 | 2,400,000 | ||
Percentage of market price on lesser of either first day of calendar quarter or last day of calendar quarter for purchase price | 85% | ||
Percentage of gross compensation eligible employees may elect to participate in the plan | 15% | ||
Maximum [Member] | Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares that will vest | 200% | ||
Minimum [Member] | Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Percentage of target number of shares that will vest | 0% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5,329 | $ 8,439 | $ 7,131 |
Time-Based Restricted Stock and Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 3,783 | 2,892 | 3,219 |
Performance-Based Restricted Stock and Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 540 | 4,681 | 2,881 |
Stock Appreciation Rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 792 | 485 | 648 |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 214 | $ 381 | $ 383 |
Stock-Based Compensation - Time
Stock-Based Compensation - Time-Based Restricted Stock and Restricted Stock Unit Activity (Detail) - Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Restricted Stock Activity [Line Items] | |||
Nonvested, Shares, Beginning Balance | 111,546 | 160,722 | 218,466 |
Time-based Restricted Stock, Granted | 57,094 | 33,703 | 54,406 |
Time-based Restricted Stock, Vested | (56,719) | (78,081) | (111,036) |
Time-based Restricted Stock, Forfeited | (1,286) | (4,798) | (1,114) |
Nonvested, Shares, Ending Balance | 110,635 | 111,546 | 160,722 |
Nonvested, Weighted-Average Grant Price Per Share, Beginning Balance | $ 52.91 | $ 35.68 | $ 28.75 |
Weighted-Average Grant Price Per Share, Granted | 75.06 | 100.5 | 53.97 |
Weighted-Average Grant Price Per Share, Vested | 58.13 | 37.81 | 30.94 |
Weighted-Average Grant Price Per Share, Forfeited | 86.84 | 66 | 40.34 |
Nonvested, Weighted-Average Grant Price Per Share, Ending Balance | $ 61.28 | $ 52.91 | $ 35.68 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-Based Restricted Stock Activity (Detail) - Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Restricted Stock Activity [Line Items] | |||
Nonvested, Shares, Beginning Balance | 57,768 | 72,570 | 123,656 |
Performance-based Restricted Stock, Granted | 72,152 | 36,522 | 78,404 |
Performance-based Restricted Stock, Vested | (57,875) | (45,051) | (128,762) |
Performance-based Restricted Stock, Forfeited | (562) | (6,273) | (728) |
Nonvested, Shares, Ending Balance | 71,483 | 57,768 | 72,570 |
Nonvested, Weighted-Average Grant Price Per Share, Beginning Balance | $ 71.21 | $ 43.42 | $ 30.67 |
Weighted-Average Grant Price Per Share, Granted | 76.14 | 86.26 | 39.6 |
Weighted-Average Grant Price Per Share, Vested | 64.43 | 39.41 | 28.87 |
Weighted-Average Grant Price Per Share, Forfeited | 82.95 | 65.3 | 41.12 |
Nonvested, Weighted-Average Grant Price Per Share, Ending Balance | $ 81.57 | $ 71.21 | $ 43.42 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Each SAR (Detail) - Stock Appreciation Rights [Member] | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | |||
Dividend yield | 0% | 0% | 0% |
Average risk-free interest rate | 1.90% | 0.60% | 1.30% |
Expected term (years) | 5 years | 5 years | 5 years |
Expected volatility | 44.90% | 58.70% | 38.30% |
Stock-Based Compensation - SAR
Stock-Based Compensation - SAR Activity (Detail) - Stock Appreciation Rights [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Schedule Of Stock Appreciation Rights Activity [Line Items] | |||
SARs Outstanding, Beginning Balance | 200,998 | 293,276 | 304,038 |
Granted, SARs | 32,971 | 15,029 | 43,830 |
Exercised, SARs | 0 | (102,562) | (54,592) |
Canceled, SARs | 0 | (4,745) | 0 |
Shares Outstanding, SARs, Ending Balance | 233,969 | 200,998 | 293,276 |
Outstanding, Weighted Average Grant Price Per Share, Beginning Balance | $ 33.86 | $ 22.15 | $ 15.79 |
Vested, SARs | 184,563 | ||
Granted, Weighted Average Grant Price Per Share | $ 82.01 | 104.56 | 50.39 |
Exercisable, SARs | 184,563 | ||
Exercised, Weighted Average Grant Price Per Share | $ 0 | 9.45 | 9.41 |
Canceled, Weighted Average Grant Price Per Share | 0 | 61.66 | |
Outstanding, Weighted Average Grant Price Per Share, Ending Balance | 40.64 | $ 33.86 | $ 22.15 |
Vested, Weighted Average Grant Price Per Share | 30.11 | ||
Exercisable, Weighted Average Grant Price Per Share | $ 30.11 | ||
Weighted Average Remaining Contractual Life, Outstanding | 5 years 6 months | ||
Weighted Average Remaining Contractual Life, Vested | 4 years 7 months 6 days | ||
Weighted Average Remaining Contractual Life, Exercisable | 4 years 7 months 6 days | ||
Aggregate Intrinsic Value, Outstanding | $ 2,885,217 | ||
Aggregate Intrinsic Value, Vested | 2,885,517 | ||
Aggregate Intrinsic Value, Exercisable | $ 2,885,217 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Employer's contribution | $ 8.1 | $ 6.6 | $ 5.7 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Current income tax provision: | |||
Federal | $ 28,830 | $ 30,450 | $ 35,423 |
State | 9,126 | 15,192 | 10,455 |
Total | 37,956 | 45,642 | 45,878 |
Deferred income tax provision: | |||
Federal | 20,000 | 21,607 | 12,603 |
State | 4,256 | (595) | 522 |
Total | 24,256 | 21,012 | 13,125 |
Total income tax provision | $ 62,212 | $ 66,654 | $ 59,003 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Differences between Income Tax Provision and Income Tax Determined by Applying US Federal Statutory Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
U.S. Federal statutory taxes | $ 51,836 | $ 57,832 | $ 49,273 |
State and local taxes, net of U.S. Federal benefit | 10,608 | 12,174 | 10,641 |
Permanent items | (208) | 1,208 | 1,198 |
Excess tax benefits from vesting or settlement of stock compensation awards | (11) | (2,868) | (1,635) |
Federal credits | (598) | (686) | (565) |
Other | 585 | (1,006) | 91 |
Total income tax provision | $ 62,212 | $ 66,654 | $ 59,003 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2022 | Dec. 31, 2021 |
Deferred tax assets: | ||
Net operating losses | $ 132 | $ 64 |
Tax Cut and Jobs Act capitalization of research and development costs | 2,152 | |
Residential product warranty reserve | 6,469 | 7,260 |
Stock-based compensation | 1,146 | 1,305 |
Accruals not currently deductible and other | 373 | 1,371 |
Inventories | 2,965 | 2,210 |
Operating lease liability | 7,941 | 8,965 |
Deferred revenue | 2,921 | 2,935 |
Goodwill amortization | 6,858 | |
State tax credit carryforwards | 4,084 | 3,394 |
Gross deferred tax assets, before valuation allowance | 28,183 | 34,362 |
Valuation allowance | (3,026) | (2,232) |
Gross deferred tax assets, after valuation allowance | 25,157 | 32,130 |
Deferred tax liabilities: | ||
Depreciation | (74,604) | (63,483) |
Operating lease right-of-use asset | (7,687) | (8,635) |
Inventories | (6,749) | (2,485) |
Goodwill amortization | (2,879) | |
Other | (1,462) | (1,494) |
Gross deferred tax liabilities | (93,381) | (76,097) |
Net deferred tax liability | $ (68,224) | $ (43,967) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Tax_Positions | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Income Tax Contingency [Line Items] | |||
Valuation allowance | $ 3,026,000 | $ 2,232,000 | |
Income tax expense (benefit) | $ 62,212,000 | $ 66,654,000 | $ 59,003,000 |
Unrecognized tax benefits number of tax matters | Tax_Positions | 0 | ||
Unrecognized tax benefits related to identified uncertain tax positions | $ 0 | ||
Effective tax rate | 25.20% | ||
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax years subject to examination | 2018 | ||
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member] | |||
Income Tax Contingency [Line Items] | |||
Tax years subject to examination | 2022 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 USD ($) Segment Retailer | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | |
Segment Reporting Information [Line Items] | |||
Number of reportable segment | Segment | 2 | ||
Number of national retailers | Retailer | 2 | ||
Impairment Charge | $ 54,245 | $ 0 | |
Gain (loss) on disposition of stock in subsidiary | $ (15,423) | ||
Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Gain (loss) on disposition of stock in subsidiary | $ 15,400 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net Sales | $ 1,106,043 | $ 1,196,952 | $ 880,831 |
Net Income (Loss) | 184,626 | 208,737 | 175,631 |
Depreciation and Amortization | 44,298 | 35,946 | 17,939 |
Income Tax Expense /(Benefit) | 62,212 | 66,654 | 59,003 |
Total Assets | 933,705 | 920,321 | |
Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,059,536 | 1,139,266 | 827,792 |
Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 46,507 | 57,686 | 53,039 |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,106,043 | 1,196,952 | 880,831 |
Net Income (Loss) | 184,626 | 208,737 | 175,631 |
EBITDA | 291,033 | 311,322 | 251,575 |
Depreciation and Amortization | 44,298 | 35,946 | 17,940 |
Income Tax Expense /(Benefit) | 62,212 | 66,654 | 59,003 |
Capital Expenditures | 176,228 | 159,394 | 172,823 |
Total Assets | 933,705 | 920,321 | 770,492 |
Operating Segments [Member] | Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 1,059,536 | 1,139,266 | 827,792 |
Net Income (Loss) | 200,876 | 247,059 | 171,197 |
EBITDA | 311,259 | 361,485 | 244,817 |
Depreciation and Amortization | 43,173 | 34,941 | 17,131 |
Income Tax Expense /(Benefit) | 67,313 | 79,500 | 57,488 |
Capital Expenditures | 175,904 | 157,568 | 171,784 |
Total Assets | 933,705 | 881,225 | 676,948 |
Operating Segments [Member] | Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Sales | 46,507 | 57,686 | 53,039 |
Net Income (Loss) | (16,250) | (38,322) | 4,434 |
EBITDA | (20,226) | (50,163) | 6,758 |
Depreciation and Amortization | 1,125 | 1,005 | 809 |
Income Tax Expense /(Benefit) | (5,101) | (12,846) | 1,515 |
Capital Expenditures | 324 | 1,826 | 1,039 |
Total Assets | $ 0 | $ 39,096 | $ 93,544 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Segment Reporting Information [Line Items] | |||
Net Income/ (loss) | $ 184,626 | $ 208,737 | $ 175,631 |
Interest (Income), Net | 103 | 15 | 999 |
Income Tax Expense /(Benefit) | 62,212 | 66,654 | 59,003 |
Depreciation and Amortization | 44,298 | 35,946 | 17,939 |
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Income/ (loss) | 184,626 | 208,737 | 175,631 |
Interest (Income), Net | (103) | (15) | (999) |
Income Tax Expense /(Benefit) | 62,212 | 66,654 | 59,003 |
Depreciation and Amortization | 44,298 | 35,946 | 17,940 |
EBITDA | 291,033 | 311,322 | 251,575 |
Operating Segments [Member] | Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Income/ (loss) | 200,876 | 247,059 | 171,197 |
Interest (Income), Net | (103) | (15) | (999) |
Income Tax Expense /(Benefit) | 67,313 | 79,500 | 57,488 |
Depreciation and Amortization | 43,173 | 34,941 | 17,131 |
EBITDA | 311,259 | 361,485 | 244,817 |
Operating Segments [Member] | Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net Income/ (loss) | (16,250) | (38,322) | 4,434 |
Income Tax Expense /(Benefit) | (5,101) | (12,846) | 1,515 |
Depreciation and Amortization | 1,125 | 1,005 | 809 |
EBITDA | $ (20,226) | $ (50,163) | $ 6,758 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended | ||
Jan. 01, 2023 | Dec. 31, 2022 USD ($) | Oct. 26, 2021 USD ($) a | |
Schedule Of Commitments And Contingencies [Line Items] | |||
Change in warranty reserve for disclosure purposes only | $ 1.6 | ||
Area of Land | a | 300 | ||
Residential Portfolio Segment [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Land and Land Improvements | $ 400 | ||
Minimum [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Average period for PE material purchases under short-term supply contracts for which pricing is negotiated as needed | 1 year | ||
Maximum [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Average period for PE material purchases under short-term supply contracts for which pricing is negotiated as needed | 2 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% | ||
Residential Use [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Residential Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Commercial Use [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 10 years | 10 years | |
Commercial Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 10 years | ||
Signature Railing And Transcend Cladding [Member] | Commercial Use [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Transcend Decking [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 50 years | ||
Select Decking And Universal Fascia [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 35 years | ||
Enhance Decking And Transcend, Select, Enhance And Signature Railing [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Signature Railing [Member] | Residential Use [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Signature Railing [Member] | Residential and Commercial Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Warranty period | 25 years | ||
Raw Material Supply Contracts [Member] | |||
Schedule Of Commitments And Contingencies [Line Items] | |||
Purchase commitment, due in second year | $ 53 | ||
Purchase commitment, due in third year | 45 | ||
Purchase commitment, due in fourth year | $ 45 |
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 | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 28,595 | $ 29,473 |
Provisions and changes in estimates | 1,914 | 3,846 |
Settlements made during the period | (4,910) | (4,724) |
Ending balance | 25,599 | 28,595 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 18,542 | 21,325 |
Settlements made during the period | (2,637) | (2,783) |
Ending balance | 15,905 | 18,542 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 10,053 | 8,148 |
Provisions and changes in estimates | 1,914 | 3,846 |
Settlements made during the period | (2,273) | (1,941) |
Ending balance | $ 9,694 | $ 10,053 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts and Reserves (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Warranty Reserve [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 28,595 | $ 29,473 | $ 25,494 |
Additions Charged to Cost and Expenses | 1,914 | 3,846 | 9,861 |
Deductions | (4,910) | (4,724) | (5,882) |
Balance at End of Period | 25,599 | 28,595 | 29,473 |
Valuation Allowance of Deferred Tax Assets [Member] | |||
SEC Schedule, 12-09, Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 2,232 | 2,775 | 2,988 |
Additions Charged to Cost and Expenses | 794 | 1 | |
Deductions | (543) | (214) | |
Balance at End of Period | $ 3,026 | $ 2,232 | $ 2,775 |