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What changed in TREX CO INC's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of TREX CO INC's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+124 added−121 removedSource: 10-K (2025-02-24) vs 10-K (2024-02-26)

Top changes in TREX CO INC's 2024 10-K

124 paragraphs added · 121 removed · 98 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

57 edited+15 added−18 removed60 unchanged
Biggest changeIn October 2021, we 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.
Biggest changeWe have continuously invested the capital necessary to expand our manufacturing throughput and improve our manufacturing processes. In October 2021, the Company announced plans to add a third manufacturing facility located in Little Rock, Arkansas (Little Rock). that w ill sit on approximately 300 acres of land. Construction began on the new facility in 2022.
Our ability to compete depends, in part, on a number of factors outside our control, including the ability of our competitors to develop new wood-alternative decking and railing products that are competitive with our products. We believe that the principal competitive factors in the decking and railing market include product quality, price, aesthetics, maintenance cost, and distribution and brand strength.
Our ability to compete depends, in part, on a number of factors outside our control, including the ability of our competitors to develop new wood-alternative decking and railing products that are competitive with our products. We believe that the principal competitive factors in the decking and railing market include product quality, price, aesthetics, maintenance cost, distribution and brand strength.
Also, a copy of the Company’s Code of Conduct and Ethics (Code) is maintained on the Company’s web site at www.trex.com/our-company. The Company has a whistle-blowing policy included in its Code that encourages reporting by employees of activities the employee considers illegal or dishonest.
Also, a copy of the Company’s Code of Conduct and Ethics (Code) is maintained on the Company’s web site at www.trex.com/our-company/corporate-governance/. The Company has a whistle-blowing policy included in its Code that encourages reporting by employees of activities the employee considers illegal or dishonest.
The seasonal effects are often offset by the positive effect of the incentive programs. 7 Table of Contents Government Regulation Our business activities are subject to various federal, state and local laws and regulations. Costs and accruals incurred to comply with these governmental regulations are presently not material to our capital expenditures, results of operations and competitive position.
The seasonal effects are often offset by the positive effect of the incentive programs. Government Regulation Our business activities are subject to various federal, state and local laws and regulations. Costs and accruals incurred to comply with these governmental regulations are presently not material to our capital expenditures, results of operations and competitive position.
Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in four luxurious, on-trend hues inspired by some of the most picturesque locales in the United States.
Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in seven luxurious, on-trend hues inspired by some of the most picturesque locales in the United States.
Our Environmental Policy, located on our web site at www.trex.com/our-company, outlines our commitment to conducting business in an ethical and socially responsible manner that respects the environment. The Nominating / Corporate Governance Committee of the Board of Directors oversees the Company’s environmental, social and governance (ESG) matters that are significant to the Company.
Our Environmental Policy, located on our web site at www.trex.com/our-company, outlines our commitment to conducting business in an ethical and socially responsible manner that respects the environment. The Nominating / Corporate Governance Committee of the Board of Directors oversees the Company’s sustainability matters that are significant to the Company.
Our Virginia and Nevada manufacturing facilities have closed-loop recirculation systems that run water through multiple 10 Table of Contents cycles of re-use before being returned to the municipal wastewater stream. We prioritize energy savings as part of our ongoing evaluation and optimization of business operations and manufacturing processes.
Our Virginia and Nevada manufacturing facilities have closed-loop recirculation systems that run water through multiple cycles of re-use before being returned to the municipal wastewater stream. We prioritize energy savings as part of our ongoing evaluation and optimization of business operations and manufacturing processes.
Trex Signature decking offers realistic woodgrain aesthetics that raises the bar for beauty, performance and sustainability and is available in two luxurious hues inspired by stunning natural settings.
Trex Signature decking offers realistic woodgrain aesthetics that raise the bar for beauty, performance, and sustainability and is available in two luxurious hues inspired by stunning natural settings.
Although a contractor-installed deck built with Trex products using a pressure-treated wood substructure generally costs more than a deck made entirely from pressure-treated wood, Trex products are low maintenance compared to the on-going maintenance required for a pressure-treated deck and are, therefore, less costly over the life of the deck.
Although a contractor-installed deck built with Trex products using a pressure-treated wood substructure generally costs more than a deck made entirely from 5 Table of Contents pressure-treated wood, Trex products are low maintenance compared to the on-going maintenance required for a pressure-treated deck and are therefore, less costly over the life of the deck.
We do not charge any fees to view, print, or access these reports on our web site. The contents of our web site are not a part of this report.
We do not charge any fees to view, print, or access these reports on our web site. The contents of our web site are not a part of this report. 9 Table of Contents
Trex ® SpiralStairs A staircase alternative for use with all deck substructures manufactured and sold by SS Industries dba Paragon Stairs. Trex ® Outdoor Kitchens ™ Outdoor kitchen cabinetry manufactured and sold by Danver Outdoor Kitchens.
Trex ® Spiral Stairs A staircase alternative for use with all deck substructures manufactured and sold by SS Industries dba Paragon Stairs. Trex ® Outdoor Kitchens Outdoor kitchen cabinetry manufactured and sold by Danver Outdoor Kitchens.
Helping homeowner’s design outdoor spaces that reflect their individual styles and budgets, coupled with products at various price points makes Trex the leading brand for homeowners seeking to invest in their outdoor living spaces.
Helping homeowners design outdoor spaces that reflect their individual styles and budgets, coupled with Performance- Engineered ™ products at various price points makes Trex the leading brand for homeowners seeking to invest in their outdoor living spaces.
Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) facilitate installation, reduce contractor call-backs and afford 3 Table of Contents consumers a wide range of design options.
Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) facilitate installation, reduce contractor call-backs, and afford consumers a wide range of design options.
Our Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in eight multi-tonal monochromatic classical earth tones and premium tropical colors. Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in five nature-inspired earth tone colors.
Our Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in six multi-tonal monochromatic classical earth tones and premium tropical colors. Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in two nature-inspired earth tone colors.
In addition to resisting fading and surface staining, Trex Residential products require no sanding, staining or sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation.
In addition to resisting fading and 2 Table of Contents surface staining, Trex Residential products require no sanding, staining, or sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation.
Green Building Council member, Trex works along with council members to transform the way buildings and communities are designed, built and operated with the goal of creating environmentally and socially responsible spaces that improve the quality of life. Occupational Health and Safety The health and safety of our employees is our highest priority.
As a U.S. Green Building Council member, Trex works along with council members to transform the way buildings and communities are designed, built and operated with the goal of creating environmentally and socially responsible spaces that improve the quality of life. 8 Table of Contents Occupational Health and Safety The health and safety of our employees is our highest priority.
If it is necessary to disclose proprietary information to third parties for business reasons, we require that such third parties sign a confidentiality agreement prior to any disclosure. 8 Table of Contents Human Capital As of December 31, 2023, Trex employed 1,765 full-time employees.
If it is necessary to disclose proprietary information to third parties for business reasons, we require that such third parties sign a confidentiality agreement prior to any disclosure. 6 Table of Contents Human Capital Overview As of December 31, 2024, Trex employed 1,838 full-time employees.
Training Trex University is our state-of-the-art training facility located near our Virginia manufacturing plant designed to educate and train retailers, contractors and other partners on the benefits of Trex Residential aesthetically pleasing, high-performance, low-maintenance, eco-friendly outdoor living products.
In addition, we outsource the production of certain products to third-party manufacturers. Training Trex University is our state-of-the-art training facility located near our Virginia manufacturing plant designed to educate and train retailers, contractors and other partners on the benefits of Trex Residential aesthetically pleasing, high-performance, low-maintenance, eco-friendly outdoor living products.
Our growth and margin expansion strategy positions us well to expand our leadership position in the category with beautiful, high performance, low-maintenance products and includes the following initiatives: • Accelerate material conversion from wood. • Expand our market by introducing new products that are innovative, eco-friendly and durable. • Leverage brand leadership to drive customer demand. • Increase the number of stocking dealers and retailers by leveraging our market-leading channel relationships. • Drive margin expansion by continually improving our polyethylene recycling capabilities and manufacturing productivity. • Execute strategic acquisitions that expand our product offerings and/or enrich our manufacturing process. 1 Table of Contents Products Operations and Products: The Company operated in one reportable segment during the year ended December 31, 2023: Trex Residential.
Our growth and margin expansion strategy positions us well to expand our leadership position in the category with beautiful, high performance, low-maintenance products and includes the following initiatives: • Accelerate material conversion from wood. • Expand our market by introducing new products that are innovative, eco-friendly and durable. • Leverage brand leadership to drive customer demand. • Increase the number of stocking dealers and retailers by leveraging our market-leading channel relationships. • Drive margin expansion by continually improving our polyethylene recycling capabilities and manufacturing productivity. • Execute strategic acquisitions that expand our product offerings and/or enrich our manufacturing process.
The Company develops budgets and plans that improve shareholder return by ensuring the optimal use of each resource, which promotes resource efficiency and minimal waste of the resource. Water management is of critical importance to us.
The Company’s primary resource usage consists of water, natural gas and electricity. The Company develops budgets and plans that improve shareholder return by ensuring the optimal use of each resource, which promotes resource efficiency and minimal waste of the resource. Water management is of critical importance to us.
See related information in Note 3 to the Consolidated Financial Statements to this Form 10-K. Trex Residential is the world’s largest manufacturer of high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing, with more than 30 years of product experience. Trex outdoor living products are marketed under the brand name Trex ® and manufactured in the United States.
See related information in Note 3 to the Consolidated Financial Statements to this Form 10-K. 1 Table of Contents Trex Residential is the world’s largest manufacturer of high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing and a leader in outdoor living products, with more than 30 years of product experience.
In addition, our Trex Transcend decking product can also be used as cladding. Our high-performance, low-maintenance, eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold and scratching.
Our high-performance, low-maintenance, eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold, and scratching.
Trex Residential decking is made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film, making Trex Residential one of the largest recyclers of waste polyethylene plastic film in North America.
A majority of the products are eco-friendly and leverage recycled and reclaimed materials to the extent possible. Trex Residential decking is made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film, making Trex Residential one of the largest recyclers of waste polyethylene plastic film in North America.
Marketing investments focused on homeowners’ needs and wants drove brand awareness to its highest level in a decade, with 90% of people surveyed being aware of the Trex brand, while products for every price point help drive profitable growth and wood conversion.
Marketing investments focused on homeowners’ needs and wants continued to drive brand awareness to its highest level in a decade, with Trex consistently being the leading brand in both unaided and aided brand recognition, while products for every price point help drive profitable growth and wood conversion.
Our Trex Enhance boards pair the beauty of authentic wood-grain appearance with the durability of composite with minimal maintenance and the affordability of wood and is available in natural and basic colors. We also offer accessories to our decking products. Trex Hideaway ® , a self-gapping universal hidden fastener designed to give a seamless finish to every project.
Our Trex Enhance boards pair the beauty of authentic wood-grain appearance with the durability of composite with minimal maintenance and the affordability of wood and is available in natural and basic colors. We also offer accessories to our decking products.
In the years ended December 31, 2023, 2022, and 2021, sales to certain customers of Trex Residential accounted for 10% or more of the Company’s total net sales. For the years ended December 31, 2023, 2022, and 2021, three customers of Trex Residential represented approximately 72%, 64%, and 61%, respectively, of the Company’s total net sales.
For the years ended December 31, 2024, 2023, and 2022, three customers of Trex Residential represented approximately 81%, 72%, and 64%, respectively, of the Company’s total net sales. No other customer represented 10% or more of the Company’s total net sales.
Trex ® Lattice ™ Outdoor lattice boards manufactured and sold by Structureworks Fabrication. Trex ® Cornhole ™ Cornhole boards manufactured and sold by IPC Global Marketing LLC. Trex ® Blade ™ A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc.
Trex ® Lattice Outdoor lattice boards manufactured and sold by Structureworks Fabrication. Trex ® Cornhole Cornhole boards manufactured and sold by Johnson Enterprises, LLC. under a Trademark License Agreements with Trex Company, Inc. Trex ® Blade A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc.
We know our people are what will fuel our future growth and innovation and we are committed to reinvesting in our people and executing our strategic talent management plan at the highest level. 9 Table of Contents Corporate Governance Information related to the Company’s governance and related activities and programs may be found in the Company’s Definitive Proxy Statement filed on March 21, 2023 in Schedule 14A.
We are committed to reinvesting in our team and executing our strategic talent management plan at the highest level. Corporate Governance Information related to the Company’s governance and related activities and programs may be found in the Company’s Definitive Proxy Statement filed on March 25, 2024 in Schedule 14A.
Stocked in more than 6,700 retail locations worldwide, Trex Residential offers a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing, cladding and outdoor lighting categories. A majority of the products are eco-friendly and leverage recycled and reclaimed materials to the extent possible.
Trex products are marketed under the brand name Trex ® and manufactured in the United States. Stocked in more than 6,700 retail locations worldwide, Trex Residential offers a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing, cladding and outdoor lighting categories.
Our composite deck boards do not rot, warp, or splinter and the versatile colors feature a refined wood grain that adds depth and luxury to any backyard.
Our composite deck boards do not rot, warp, or splinter and the versatile colors feature a refined wood grain that adds depth and luxury to any backyard. Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market.
Trex continues to be committed to building a workforce that is reflective of the communities in which we operate. Embracing diverse perspectives and fostering a culture of inclusion and belonging are at the core of what has fueled Trex’s legacy of invention and innovation.
This multi-year roll out of culture training targets all Trex team members to create shared understanding and expectations. Trex is committed to building a workforce that is reflective of the communities in which we operate. Embracing diverse perspectives and fostering a culture of inclusion and belonging are at the core of what has fueled Trex’s legacy of innovation.
An expanded summer internship program coupled with an aggressive campus recruitment program has created a pipeline of young talent, while at the same time we continue to attract some of the most talented senior leaders from around the country to fill key leadership positions.
Our summer intern program continues to grow and welcomes students from both universities and vocational schools across the mid-Atlantic. This program along with an aggressive campus recruitment has created a pipeline of young talent, while at the same time we continue to attract some of the most talented senior leaders from around the country to fill key leadership positions.
We fulfill requirements for raw materials under both purchase orders and supply contracts. In the year ended December 31, 2023, we purchased our reclaimed wood fiber requirements under purchase orders and long-term supply commitments not exceeding four years.
The production of most of our decking products requires a supply of reclaimed wood fiber and scrap polyethylene. We fulfill requirements for raw materials under both purchase orders and supply contracts. In the year ended December 31, 2024, we purchased our reclaimed wood fiber requirements under purchase orders and long-term supply commitments.
In addition, Trex was also recognized as Sustainable Brand Leader in the decking category of Green Builder’s annual Reader’s Choice Survey for the 13 th consecutive year.
In addition, Trex was also recognized as Sustainable Brand Leader in the decking category of Green Builder’s annual Reader’s Choice Survey for the 14th consecutive year. Trex was ranked by Newsweek magazine as one of America’s Most Responsible Companies 2024.
No other customer represented 10% or more of the Company’s total net sales. Trex Commercial: Prior to the sale of Trex Commercial on December 30, 2022, we sold modular and architectural railing and staging systems to the commercial and multifamily market, including sports stadiums and performing arts venues, primarily to facility owners and general contractors throughout the country.
Trex Commercial: Prior to the sale of Trex Commercial on December 30, 2022, we sold modular and architectural railing and staging systems to the commercial and multifamily market, including sports stadiums and performing arts venues, primarily to facility owners and general contractors throughout the country. We marketed these products through direct sales staff, independent sales representatives, and bidding on projects.
We use Six Sigma and Lean Manufacturing methodologies throughout our Company within our plant operations and in the planning and execution of certain projects. 5 Table of Contents Our manufacturing processes require significant capital investment, expertise and time to develop. We have continuously invested the capital necessary to expand our manufacturing throughput and improve our manufacturing processes.
We use many proprietary and skill-based advantages in our eco-friendly manufacturing process. We use Six Sigma and Lean Manufacturing methodologies throughout our Company within our plant operations and in the planning and execution of certain projects. Our manufacturing processes require significant capital investment, expertise, and time to develop.
Periodically, the Committee reviews the Company’s ESG strategy, initiatives and policies and receives updates from the Group Vice President, Marketing and ESG Development, who oversees the Company’s ESG initiatives.
Periodically, the Committee reviews the Company’s sustainability strategy, initiatives and policies and receives updates from the Senior Vice President, Chief Legal Officer and Secretary, who oversees the Company’s sustainability initiatives.
Our people are what have fueled our growth as the world’s #1 brand of sustainably made, wood-alternative decking and deck railing for nearly three decades. As we look to the future, we continue to put our people first as we execute on a comprehensive plan for strategic talent management.
Our people are what have fueled our growth as the world’s #1 brand of sustainably made, wood-alternative decking and deck railing for nearly three decades. As we look to the future, Trex is poised for growth and innovation and that growth is dependent upon our people’s talent and commitment.
The Company’s commitment to improving our environmental footprint includes developing and offering more sustainable products to the market as well as advancing sustainability and efficiency in our operations.
Trex Residential’s high-performance, low-maintenance composite decking is made from 95% recycled and reclaimed materials. The Company’s commitment to improving our environmental footprint includes developing and offering more sustainable products to the market as well as advancing sustainability and efficiency in our operations.
The Company operated in two reportable segments during the years ended December 31, 2022, and December 31, 2021: Trex Residential Products (Trex Residential), the Company’s principal business based on net sales, and Trex Commercial Products (Trex Commercial). On December 30, 2022, the Company sold substantially all of the assets of its wholly-owned subsidiary and reportable segment, Trex Commercial Products, Inc.
Products Operations and Products: The Company operated in one reportable segment during the years ended December 31, 2024 and December 31, 2023: Trex Residential. The Company operated in two reportable segments during the year ended December 31, 2022: Trex Residential Products (Trex Residential), the Company’s principal business based on net sales, and Trex Commercial Products (Trex Commercial).
Construction for the new facility will be funded primarily through our ongoing cash generation or our line of credit. In addition, we prioritize cost reduction projects and continuous improvement opportunities, primarily related to automation, modernization, energy efficiency and raw material processing, and remain focused on innovation and new product development.
The development approach for the new campus will be modular and calibrated to demand trends for Trex Outdoor Living Products. In addition, we prioritize cost reduction projects and continuous improvement opportunities, primarily related to automation, modernization, energy efficiency, and raw material processing, and remain focused on innovation and new product development.
We have also broadened the range of raw materials that we can use to produce a consistent and high-quality finished product. In connection with national building code listings, we maintain a quality control testing program. Suppliers We conduct supply chain assessments when considered necessary in relation to the significance of the purchase and business opportunity for the Company.
In connection with national building code listings, we maintain a quality control testing program. 4 Table of Contents Suppliers We conduct supply chain assessments when considered necessary in relation to the significance of the purchase and business opportunity for the Company. Assessments include in-person reviews and tours of operating facilities.
We continue to find new ways to increase opportunities for underrepresented team members, including offering English language classes for non-native speakers and partnering with local agencies to provide employment opportunities to neuro-diverse candidates. As an equal opportunity employer, Trex is committed to providing fair and equitable pay for all employees across the Company.
We continue to find new ways to increase opportunities for underrepresented team members, including offering English language classes for non-native speakers and partnering with local agencies to provide employment opportunities to neuro-diverse candidates. At Trex, our people fuel our growth and innovation.
LEED is a point-based system designed to reward points to building projects that incorporate efficient, and safe eco-friendly products, leading to a building’s designation as LEED Silver, Gold or Platinum.
LEED is a point-based system designed to reward points to building projects that incorporate efficient, and safe eco-friendly products, leading to a building’s designation as LEED Silver, Gold or Platinum. Trex Residential decking can add up to four points to a project — four points in the Materials and Resources category for being composed of 95% recycled and reclaimed materials.
In addition, almost 100 percent of our factory runoff and refuse are recycled back into the manufacturing line. Any product that does not meet quality specifications is reprocessed, which eliminates the need for landfill. The Company’s primary resource usage consists of water, natural gas and electricity.
We strive to reduce energy use and associated greenhouse gas emissions in Trex manufacturing operations by designing our facilities to run efficiently. In addition, almost 100 percent of our factory runoff and refuse are recycled back into the manufacturing line. Any product that does not meet quality specifications is reprocessed, which eliminates the need for landfill for product waste.
Market Recognition of Trex Brand’s Environmental Characteristics The Company’s internal standards for environmental stewardship and product integrity are recognized year-over-year in the marketplace. Trex Transcend ® Lineage ™ was named as a 2023 Sustainable Product of the Year by Green Builder Media.
Market Recognition of Trex Brand’s Environmental Characteristics The Company’s internal standards for environmental stewardship and product integrity are recognized year-over-year in the marketplace. Trex was named to the Barron’s “100 Most Sustainable Companies” list for 2024. Trex Transcend ® Lineage ™ won Good Housekeeping’ s 2024 Sustainable Innovation Award.
Our primary manufacturing process for the products involves mixing wood particles with plastic, heating and then extruding, or forcing, the highly viscous and abrasive material through a profile die. We use many proprietary and skill-based advantages in our eco-friendly manufacturing process.
Manufacturing Process Products manufactured at our Trex Residential manufacturing facilities in Virginia and Nevada are primarily manufactured from reclaimed wood fiber and scrap polyethylene. Our primary manufacturing process for the products involves mixing wood particles with plastic, heating and then extruding, or forcing, the highly viscous and abrasive material through a profile die.
We maintain this ability through the continued expansion of our plastic reprocessing operations in combination with the advancement of our proprietary material preparation and extrusion processes. 6 Table of Contents In addition, we outsource the production of certain products to third-party manufacturers.
Our ability to source and use a wide variety of polyethylene from third party distribution and manufacturing operations is important to our cost strategy. We maintain this ability through the continued expansion of our plastic reprocessing operations in combination with the advancement of our proprietary material preparation and extrusion processes.
Also, environmental matters relevant to the Company’s operations are the responsibility of the President and Chief Executive Officer, the Executive Vice President and Chief Operating Officer, the Senior Vice President and Chief Financial Officer, and the Senior Vice President, Chief Legal Officer and Secretary.
Also, environmental matters relevant to the Company’s operations are the responsibility of the President and Chief Executive Officer, the Executive Vice President and Chief Operating Officer, and the Senior Vice President and Chief Financial Officer. Trex Residential’s bi-coastal factories reduce fuel consumption and CO 2 emissions by reducing transit distance.
Trex railing systems are built with the same durability as Trex decking and will not rot, warp, peel or splinter and resist fading and corrosion.
Trex railing systems are built with the same durability as Trex decking and will not rot, warp, peel, or splinter and resist fading and corrosion. Trex Signature X-Series, made from approximately 30 percent recycled materials, is available in Charcoal Black with stainless steel or glass infill.
Pre-assembled stair panels that allow for easier installation and are designed to save time on the jobsite. Railing Our railing products are Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, and Trex Signature ® aluminum railing. Our high-performance composite and aluminum deck railing kits and systems are sustainably manufactured, easy to install and durable.
Railing Our railing products are Trex Signature ® X-Series ™ Railing, Trex Signature ® aluminum railing, Trex Transcend Railing, Trex Select ® Railing, Trex Select ® T-Rail, and Trex Enhance ™ Railing. Our high-performance cable rail, frameless glass rail, composite, and aluminum-deck railing kits and systems are sustainably manufactured, easy to install, and durable.
Through the date of sale of Trex Commercial on December 30, 2022, Trex offered the following products through Trex Commercial: • Architectural railing systems; • Aluminum railing systems; and • Staging equipment and accessories. 4 Table of Contents Customers and Distribution We are committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations.
Customers and Distribution 3 Table of Contents We are committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations.
Each employee is notified of the whistle-blower policy and a toll-free hotline is provided for reporting issues directly to the Board of Directors and the Company’s Senior Vice President, Chief Legal Officer and Secretary.
Each employee is notified of the whistle-blower policy and a toll-free hotline is provided for reporting issues directly to the Board of Directors and the Company’s Senior Vice President, Chief Legal Officer and Secretary. 7 Table of Contents Environmental and Occupational Safety Environmental The Company has been committed to sustainability since our inception more than 30 years ago, creating eco-friendly products from reclaimed and recycled materials.
Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. Fencing Our Trex Seclusions ® composite fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rails, pickets, top rails and decorative post caps.
Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. Trex Transcend Railing, made from approximately 40 percent recycled content, is available in four colors that complement our Trex decking products.
Assessments include in-person reviews and tours of operating facilities. The Company is committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations.
The Company is committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations. As stated above, our Vendor and Customer Code of Conduct and Ethics, our Company Code of Conduct and Ethics, and our Human Rights Policy apply to all suppliers of the Company.
While significant investments have been made on internal development, wide-net recruiting outside talent continues to infuse the Company with new and diverse perspectives.
Safety remains a core value at Trex and in 2024 hourly manufacturing onboarding was enhanced to include more time for new team members to learn the process and incorporate additional safety best practices. While significant investments have been made in internal development, wide-net recruiting outside talent continues to infuse the Company with new and diverse perspectives.
Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market. 2 Table of Contents Trex offers the following products through Trex Residential: Decking and Accessories Our principal decking products are Trex Signature ® , Trex Transcend ® Lineage ™ , Trex Transcend ® , Trex Select ® , and Trex Enhance ® .
Trex offers the following products through Trex Residential: Decking and Accessories Our principal decking products are Trex Signature ® , Trex Transcend ® Lineage ™ , Trex Transcend ® , Trex Select ® , and Trex Enhance ® . In addition, our Trex Transcend decking product can also be used as cladding.
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Trex Transcend Railing, made from approximately 40 percent recycled content, is available in the colors of Trex Transcend decking and finishes that make it appropriate for use with Trex decking products as well as other decking materials, which we believe enhances the sales prospects of our railing products.
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On December 30, 2022, the Company sold substantially all of the assets of its wholly-owned subsidiary and reportable segment, Trex Commercial Products, Inc.
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We marketed these products through direct sales staff, independent sales representatives, and bidding on projects. Manufacturing Process Products manufactured at our Trex Residential manufacturing facilities in Virginia and Nevada are primarily manufactured from reclaimed wood fiber and scrap polyethylene.
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The Trex Hideaway ® Fastener Collection , offers solutions for every composite deck fastening and finishing need, featuring color-matched screws and plugs, specially engineered bits, depth setters, and clips, designed to make installation easier and more efficient while delivering a clean, cohesive aesthetic.
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Construction began on the new facility in the second quarter of 2022, and in July 2022, we entered into a design-build agreement. We anticipate spending approximately $450 million on the facility and the budget for the design-build agreement is contained within this amount.
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Trex Enhance ™ railing is available in four composite colors, and an Enhance Steel line was recently introduced in Charcoal Black, to expand the Trex addressable market. Fencing Our Trex Seclusions ® composite fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rails, pickets, top rails, and decorative post caps.
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As stated above, our Vendor and Customer Code of Conduct and Ethics, our Company Code of Conduct and Ethics, and our Human Rights Policy apply to all suppliers of the Company. The production of most of our decking products requires a supply of reclaimed wood fiber and scrap polyethylene.
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Through the date of sale of Trex Commercial on December 30, 2022, Trex offered the following products through Trex Commercial: • Architectural railing systems; • Aluminum railing systems; and • Staging equipment and accessories.
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Our ability to source and use a wide variety of polyethylene from third party distribution and manufacturing operations is important to our cost strategy.
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We have also broadened the range of raw materials that we can use to produce a consistent and high-quality finished product.
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Over the past year, we have made significant investments in the infrastructure across all aspects of our human capital development. We have updated and enriched competency models to standardize and align all aspect of recruiting, hiring, training, and development.
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We continue to invest in our people as we execute on our strategic talent management plan which aims to support our employees in gaining the competencies needed to advance and enjoy long-lasting careers at Trex. Pay Equity As an equal opportunity employer, Trex is committed to providing fair and equitable pay for all employees across the Company.
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We have invested heavily in our employer value proposition to increase visibility and awareness of our careers to a wider and more diverse talent pool. We have implemented targeted development programs like our Trex Leadership Academy so that senior leaders and high potential team members have the opportunity to develop their skills as they contribute to Company performance.
Added
Development and Recruiting Developing internal talent is another key multi-year infrastructure investment for Trex. To help support our strategic talent development, we continue to invest in enabling tools, systems, and training to strengthen our decision making and accelerate progress. This includes new training for managers in the areas of team development, performance reviews, and recognition.
Removed
We have also invested heavily in our culture, ensuring that leaders and team members hold each other accountable to our shared beliefs and values though out all parts of the organization. To help support our strategic talent development, we invested in several enabling tools and systems to strengthen our decision making and accelerate our progress.
Added
In addition, the Trex Leadership Academy, a 12-month program, continues to develop and refine the competencies and leadership skills of high potential team members. Trex’s tuition reimbursement policy assists team members in achieving their full potential by furthering their education, affording them opportunities to grow their skills set and favorably impact the business.
Removed
In 2023, we began a semi-annual cadence of employee engagement surveying and action planning using tools from the Gallup organization. All Company managers and leaders received training on the tools and new expectations have been set to ensure action is taken between each survey. We have also continued to evolve our internal communications function.
Added
Engagement and Culture We continue to invest in employee engagement and related action planning by conducting Gallup surveys. Our people managers use the results to develop specific action plans to drive engagement throughout our organization. We also evolved our approach to curation of culture, providing training through an internal trainer to hourly employees in addition to leaders.
Removed
New tools, channels, and processes have enabled the Company to move beyond weekly newsletter updates to real-time news sharing and dynamic access to information through a centralized intranet. Finally, we updated our annual performance and ongoing coaching expectations for all people leaders, creating more standardized process and usable information for functions like high potential identification and succession planning.
Added
Each of our manufacturing sites have dedicated health and safety (EHS) professionals and safety committees. In 2024, several changes to the EHS organization were made to better support the business and align resources.
Removed
Environmental and Occupational Safety Environmental The Company has been committed to sustainability since our inception more than 30 years ago, creating eco-friendly products from reclaimed and recycled materials. Trex Residential’s high-performance, low-maintenance composite decking is made from 95% recycled and reclaimed materials.
Added
These changes include the addition of an EHS Specialist to our distribution and transportation department, and a Corporate Health and Safety Manager to focus on advancing our health and safety programs. This position is a counterpart to our Corporate Environmental Manager role which has been in place for several years.
Removed
Trex Residential’s proprietary, eco-friendly processing method minimizes greenhouse gas emissions, and our bi-coastal factories reduce fuel consumption and CO 2 emissions. We strive to reduce energy use and associated greenhouse gas emissions in Trex manufacturing operations by designing our facilities to run efficiently.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAt the same time, we would expand our marketing campaigns, including campaigns to highlight the advantages of our decking over wood, as well as campaigns focused on innovation and new product development that further strengthens our consumer brand and distribution advantages. 17 Table of Contents In general, we believe that an effect of inflation would be a short-term disruption and that, over time, we would offset increased input costs through cost reduction projects, purchasing strategies, and increased production efficiencies and improvement opportunities to enhance our margins.
Biggest changeIn general, we believe that an effect of inflation would be a short-term disruption and that, over time, we would offset increased input costs through cost reduction projects, purchasing strategies, and increased production efficiencies and improvement opportunities to enhance our margins.
Impact Our failure to compete successfully could have a material adverse effect on our ability replace wood products or increase our market share amongst wood-alternative products. • If our products do not meet emerging demands and preferences, we could lose market share, which could have a material adverse effect on our business. • In addition, substantially all of our revenues are derived from sales of our proprietary wood/polyethylene composite material.
Impact Our failure to compete successfully could have a material adverse effect on our ability to replace wood products or increase our market share amongst wood-alternative products. • If our products do not meet emerging demands and preferences, we could lose market share, which could have a material adverse effect on our business. • In addition, substantially all of our revenues are derived from sales of our proprietary wood/polyethylene composite material.
Any increased energy or compliance costs and expenses may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products. 19 Table of Contents Risk Discussion Description Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation.
Any increased energy or compliance costs and expenses may cause disruptions in, or an increase in the costs associated with, the manufacturing and distribution of our products. 18 Table of Contents Risk Discussion Description Cyberattacks and other security breaches could compromise our proprietary and confidential information which could harm our business and reputation.
In order to successfully compete for wholesaler distributors, dealers and retail lumber outlets, we must accurately assess their customers’ needs and preferences. 13 Table of Contents Risk Discussion Description Certain of our customers account for a significant portion of our sales, and the loss of one or more of these customers could have an adverse effect on our business.
In order to successfully compete for wholesaler distributors, dealers and retail lumber outlets, we must accurately assess their customers’ needs and preferences. Risk Discussion Description Certain of our customers account for a significant portion of our sales, and the loss of one or more of these customers could have an adverse effect on our business.
Further, improvements in the economy and labor markets could impact our ability to attract and retain key personnel. Risks Related to the Availability of Capital Risk Discussion Description Our ability to continue to obtain financing on favorable terms, and the level of any outstanding indebtedness, could adversely affect our financial condition and ability to compete.
Further, improvements in the economy and labor markets could impact our ability to attract and retain key personnel. 16 Table of Contents Risks Related to the Availability of Capital Risk Discussion Description Our ability to continue to obtain financing on favorable terms, and the level of any outstanding indebtedness, could adversely affect our financial condition and ability to compete.
We expect that a significant portion of our sales will continue to be sold through a small number of customers, and certain customers will continue to account for a significant portion of our sales. Risk Discussion Description Our operating results may vary quarter to quarter due to the level of inventory maintained in our distribution channel.
We expect that a significant portion of our sales will continue to be sold through a small number of customers, and certain customers will continue to account for a significant portion of our sales. 11 Table of Contents Risk Discussion Description Our operating results may vary quarter to quarter due to the level of inventory maintained in our distribution channel.
Failure to achieve the expected benefits from our investments may result in reduced cash flows in future periods, obsolete or impaired assets, and charges to our earnings. Risk Discussion Description Our prospects for sales growth and profitability may be adversely affected if we fail to maintain product quality and product performance at an acceptable cost.
Failure to achieve the expected benefits from our investments may result in reduced cash flows in future periods, obsolete or impaired assets, and charges to our earnings. 14 Table of Contents Risk Discussion Description Our prospects for sales growth and profitability may be adversely affected if we fail to maintain product quality and product performance at an acceptable cost.
A number of class action lawsuits alleging defects in our products have been brought against us, all of which have been settled. 16 Table of Contents Risk Discussion Description Our business is subject to risks in obtaining the raw materials we use.
A number of class action lawsuits alleging defects in our products have been brought against us, all of which have been settled. Risk Discussion Description Our business is subject to risks in obtaining the raw materials we use.
For the years ended December 31, 2023, 2022, and 2021, three customers of Trex Residential represented approximately 72%, 64%, and 61%, respectively, of the Company’s total net sales.
For the years ended December 31, 2024, 2023, and 2022, three customers of Trex Residential represented approximately 81%, 72%, and 64%, respectively, of the Company’s total net sales.
To increase our market share, we must overcome: • Lack of awareness of the enhanced value of composite products in general and our products in particular; 12 Table of Contents • Resistance of many consumers and contractors to change from well-established wood products; • Consumer lack of awareness that the greater initial expense of our products compared to wood is a one-time cost that is reduced over time as our products have lower maintenance costs and a longer life span than wood; • Established relationships existing between suppliers of wood products and contractors and homebuilders; • Actual and perceived quality issues with first generation composite products; and • Competition from other wood-alternative manufacturers.
To increase our market share, we must overcome: • Lack of awareness of the enhanced value of composite products in general and our products in particular; • Resistance of many consumers and contractors to change from well-established wood products; • Consumer lack of awareness that the greater initial expense of our products compared to wood is a one-time cost that is reduced over time as our products have lower maintenance costs and a longer life span than wood; • Established relationships existing between suppliers of wood products and contractors and homebuilders; • Actual and perceived quality issues with first generation composite products; and • Competition from other wood-alternative manufacturers. 10 Table of Contents Risk Discussion Description The demand for our products is influenced by the home improvement market and could be adversely affected by conditions that negatively impact this market.
At certain periods during the year, we may borrow significant amounts on our senior credit facility for working capital purposes. In addition, we may borrow on the senior credit facility to pursue strategic opportunities or other general business matters.
At certain periods during the year, we may borrow significant amounts on our senior credit facility for working capital purposes. In addition, we may borrow on the senior credit facility to pursue strategic opportunities or other general business matters. Accordingly, our future level of indebtedness and the terms of our borrowings could have important consequences.
In addition, underutilization of any such investments may result in reduced profitability through reduced gross profit and lower gross margins. Impact Our ability to achieve the expected benefits and returns from our capital investments, such as increased production, improved efficiency, cost savings, or diversification into new product markets, is subject to estimates, assumptions, and market risks.
Impact Our ability to achieve the expected benefits and returns from our capital investments, such as increased production, improved efficiency, cost savings, or diversification into new product markets, is subject to estimates, assumptions, and market risks.
Any economic downturn or adverse changes in the home improvement market could reduce consumer income or equity capital available for spending on discretionary items, which could adversely affect the demand for our products.
Impact We cannot predict conditions that may negatively impact the home remodeling and new home construction environment. Any economic downturn or adverse changes in the home improvement market could reduce consumer income or equity capital available for spending on discretionary items, which could adversely affect the demand for our products.
Despite these proactive measures, there is no guarantee that these measures will prevent a cybersecurity incident that could have a material adverse effect on the Company. 20 Table of Contents Item 1B. Unresolved Staff Comments None.
Despite these proactive measures, there is no guarantee that these measures will prevent a cybersecurity incident that could have a material adverse effect on the Company.
The extent to which the impact of a global public health pandemic or a continuing global political conflict may have on our business, supply chains, commodity and fuel prices, and prices of raw materials will depend on future developments, which may be highly uncertain and cannot be predicted.
The extent to which the impact of a global public health pandemic or a continuing global political conflict may have on our business, supply chains, commodity and fuel prices, and prices of raw materials will depend on future developments, which may be highly uncertain and cannot be predicted. 17 Table of Contents Risk Discussion Description Climate change and legal or regulatory responses thereto may have a long-term adverse impact on our business and results of operations.
Accordingly, our future level of indebtedness and the terms of our borrowings could have important consequences. 18 Table of Contents Risks Related to Other Matters Risk Discussion Description Our business, results of operations and financial condition may be disrupted and adversely affected by global public health pandemics or geopolitical conflicts.
Risks Related to Other Matters Risk Discussion Description Our business, results of operations and financial condition may be disrupted and adversely affected by global public health pandemics or geopolitical conflicts.
In particular, a significant portion of our finished goods are transported by flatbed trucks, which are occasionally in high demand (especially at the end of calendar quarters) and/or subject to price fluctuations based on market conditions and the price of fuel.
In particular, a significant portion of our finished goods are transported by flatbed trucks, which are occasionally in high demand (especially at the end of calendar quarters) and/or subject to price fluctuations based on market conditions and the price of fuel. 13 Table of Contents Risks Related to the Manufacture of Our Product Risk Discussion Description Our business is dependent on consistently producing a product which is available when needed to meet the demands of our customers.
The imposition of tariffs and other potential changes in U.S. trade policy could increase the cost and/or limit the availability of raw materials, which could hurt our competitive position and adversely impact our business, financial condition and results of operations.
The imposition of tariffs and other potential changes in U.S. trade policy could increase the cost and/or limit the availability of raw materials, which could hurt our competitive position and adversely impact our business, financial condition and results of operations. 15 Table of Contents Risk Discussion Description Periods of significant or prolonged inflation could affect our ability to obtain manufacturing inputs at acceptable prices and may negatively impact our profitability.
Risk Discussion Description The demand for our outdoor living products may be negatively affected by seasonal, erratic, or prolonged adverse weather conditions. Impact Seasonal, erratic, or prolonged adverse weather conditions may shift sales of our products to future periods or decrease overall sales in affected locations, which could have a negative impact on our results of operations and liquidity.
Impact Seasonal, erratic, or prolonged adverse weather conditions may reduce the level of home improvement and construction activity and can shift sales of our products to a later period or decrease overall sales in affected locations, which could have a negative impact on our results of operations and liquidity.
Impact Our sales growth and profitability could suffer from our failure to effectively pair supply and demand for our products. Our customers’ demands for varying quantities of products and delivery items throughout the year, and increased demand year to year, require monitoring and the ability to adjust production in accordance with these demands.
Our customers’ demands for varying quantities of products and delivery items throughout the year, and increased demand year to year, require monitoring and the ability to adjust production in accordance with these demands. Failure to do so can lead to lost or reduced sales and have a negative effect on earnings.
Our sourcing team must obtain raw materials on a timely basis at an appropriate volume. 15 Table of Contents Risk Discussion Description We have made and may continue to make significant capital investments in new and existing manufacturing facilities, that may become impaired or obsolete and result in a charge to our earnings.
Risk Discussion Description We have made and may continue to make significant capital investments in new and existing manufacturing facilities, that may become impaired or obsolete and result in a charge to our earnings. In addition, underutilization of any such investments may result in reduced profitability through reduced gross profit and lower gross margins.
Seasonal, erratic or prolonged adverse weather conditions may interfere with ordinary construction, delay projects or lead to cessation of construction involving our products. 14 Table of Contents Risk Discussion Description We depend on third parties for transportation services and the lack of availability of transportation and/or increases in cost could materially adversely affect our business and operations.
The seasonal effects are often offset by the positive effect of the incentive programs. 12 Table of Contents Risk Discussion Description We depend on third parties for transportation services and the lack of availability of transportation and/or increases in cost could materially adversely affect our business and operations.
Failure to do so can lead to lost or reduced sales and have a negative effect on earnings. In order to meet customer demand in a timely manner, we must adjust capacity to meet customer needs and provide increased throughput on our existing capacity.
In order to meet customer demand in a timely manner, we must adjust capacity to meet customer needs and provide increased throughput on our existing capacity. Our sourcing team must obtain raw materials on a timely basis at an appropriate volume.
Removed
Risk Discussion Description The demand for our products is influenced by the home improvement market and could be adversely affected by conditions that negatively impact this market. Impact We cannot predict conditions that may negatively impact the home remodeling and new home construction environment.
Added
Risk Discussion Description The demand for our outdoor living products may be negatively affected by erratic, or prolonged adverse weather conditions, and our operating results may vary quarter to quarter due to seasonality.
Removed
Risks Related to the Manufacture of Our Product Risk Discussion Description Our business is dependent on consistently producing a product which is available when needed to meet the demands of our customers. As our business grows, we must adjust capacity to meet customer needs and provide increased throughput on our existing capacity.
Added
Erratic or prolonged adverse weather conditions may interfere with home improvement or ordinary construction, delay projects, or lead to cessation of construction involving our products. In addition, our operating results have historically varied from quarter to quarter due to seasonality.
Removed
Risk Discussion Description Periods of significant or prolonged inflation could affect our ability to obtain manufacturing inputs at acceptable prices and may negatively impact our profitability.
Added
As part of normal business practice and consistent with industry practice, we have historically offered incentive programs to our distributors and dealers to build inventory before the start of the prime deck-building season in order to ensure adequate availability of our products to meet anticipated seasonal consumer demand.
Removed
Risk Discussion Description Climate change and legal or regulatory responses thereto may have a long-term adverse impact on our business and results of operations.
Added
As our business grows, we must adjust capacity to meet customer needs and provide increased throughput on our existing capacity. Impact Our sales growth and profitability could suffer from our failure to effectively pair supply and demand for our products.
Added
At the same time, we would expand our marketing campaigns, including campaigns to highlight the advantages of our decking over wood, as well as campaigns focused on innovation and new product development that further strengthens our consumer brand and distribution advantages.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIn October 2021, we 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.
Biggest changeIn October 2021, the Company announced plans to add a third manufacturing facility located in Little Rock, Arkansas (Little Rock). Construction on the new facility began in the second quarter of 2022.
We own all of our manufacturing equipment. We lease some equipment, primarily forklifts, at our facilities under operating leases.
We lease some equipment, primarily forklifts, at our facilities under operating leases.
Properties We own and lease certain properties, as noted in the below table: Square Footage/ Acres Leased / Owned Lease Expiration Dates Location Purpose Corporate Headquarters 62,942 SF Owned N/A Virginia Office Space Corporate Headquarters 8 Acres Owned N/A Virginia Land Trex Residential 1,848,535 SF Leased 2023 – 2029 Virginia / Nevada/ Arkansas Warehouse, Research and Development, Storage, Training and Manufacturing Facilities Trex Residential 1,236,360 SF / 455 Acres Owned N/A Virginia / Nevada / Arkansas Manufacturing Facilities, Storage and Office Space We regularly evaluate our various facilities and equipment and make capital investments where necessary.
P roperties We own and lease certain properties, as noted in the below table: Square Footage/ Acres Leased / Owned Lease Expiration Dates Location Purpose Corporate Headquarters 62,210 SF Owned N/A Virginia Office Space Corporate Headquarters 8 Acres Owned N/A Virginia Land Trex Residential 2,421,733 SF Leased 2024 – 2035 Virginia / West Virginia / Nevada/ Arkansas Warehouse, Research and Development, Storage, Training and Manufacturing Facilities Trex Residential 1,525,254 SF / 473 Acres Owned N/A Virginia / Nevada / Arkansas Manufacturing Facilities, Storage and Office Space We regularly evaluate our various facilities and equipment and make capital investments where necessary.
In 2023, we spent a total of $166.1 million on capital expenditures, primarily at our Trex Residential facilities, including $98.0 million related to construction of our Arkansas facility, $23.9 million related to general plant cost reduction initiatives at our Virginia and Nevada facilities, $13.0 million related to our new corporate office development and $29.0 million for general support, safety and environmental initiatives.
In 2024, we spent a total of $232.3 million on capital expenditures, primarily at our Trex Residential facilities, including $174.8 million related to construction of our Arkansas facility, $14.7 million related to capacity expansion at our Virginia facilities, $14.5 million related to general plant cost reduction initiatives at our Virginia and Nevada facilities, and $17.0 million for general support, safety and environmental initiatives.
Construction for the new facility will be funded primarily through our ongoing cash generation or our line of credit. For information about our leases, see Note 10 to our Consolidated Financial Statements appearing elsewhere in this report. The equipment and machinery we use in our operations consist principally of plastic and wood conveying and processing equipment.
The liability and IRB asset are equal and are reported net in the Consolidated Balance Sheets. For information about our leases, see Note 10 to our Consolidated Financial Statements appearing elsewhere in this report. The equipment and machinery we use in our operations consist principally of plastic and wood conveying and processing equipment. We own all of our manufacturing equipment.
Removed
Construction began on the new facility in the second quarter of 2022, and in July 2022, we entered into a design-build agreement. We anticipate spending approximately $450 million on the facility and the budget for the design-build agreement is contained within this amount.
Added
In connection with the construction of the new facility, during 2024 the Company and Little Rock entered into an agreement in which Little Rock agreed to issue up to $450 million of its industrial revenue bonds (IRBs) for the purpose of constructing a manufacturing facility.
Added
Under the agreement, the Company transferred ownership of the facility to Little Rock and simultaneously leased the related asset from Little Rock. The Company is also the purchaser of the IRBs and, therefore, is the bondholder as well as the lessee of the Little Rock facility purchased with the IRB proceeds.
Added
As a result of the agreement, the Company was able to reduce the cost of certain state and local tax expenditures for twenty years. The Company has a purchase option included in the lease agreement for below the fair value of the asset, which prevents the transfer of the asset to Little Rock from being recognized as a sale.
Added
Furthermore, the Company has not derecognized the transferred asset and continues to recognize it in property, plant and equipment in the Consolidated Balance Sheets. The Company has the right and intends to set-off any obligations to make payments under the finance liability, with proceeds due from the IRBs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeManagement 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. Item 4. Mine Safety Disclosures. Not applicable. 22 Table of Contents PART II
Biggest changeManagement 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. Item 4. Mine S afety Disclosures. Not applicable. 21 Table of Contents PART II
Item 3. Legal Proceedings The Company has lawsuits, as well as other claims, pending against it which are ordinary routine litigation and claims incidental to the business.
Item 3. Leg al Proceedings The Company has lawsuits, as well as other claims, pending against it which are ordinary routine litigation and claims incidental to the business.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeItem 4. Mine Safety Disclosures 22 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 23 Item 6. Reserved 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 39 Item 8.
Biggest changeItem 4. Mine Safety Disclosures 21 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 22 Item 6. Reserved 23 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 24 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 35 Item 8.
Added
Financial Statements and Supplementary Data 35 Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure 35 Item 9A. Controls and Procedures 36 Item 9B. Other Information 39

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe graph assumes $100 was invested on December 31, 2018, in (1) the Company’s common stock, (2) the Russell 2000 Index and (3) the S&P 600 Building Products and assumes reinvestment of dividends and market capitalization weighting as of December 31, 2019, 2020, 2021, 2022 and 2023. 23 Table of Contents Comparison of Cumulative Total Return Among Trex Company, Inc., Russell 2000 Index, and S&P 600 Building Products Index 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 Trex Company, Inc. $ 100.00 $ 151.42 $ 282.08 $ 454.95 $ 142.62 $ 278.94 Russell 2000 Index $ 100.00 $ 125.53 $ 150.59 $ 173.16 $ 137.76 $ 161.09 S&P 600 Building Products $ 100.00 $ 142.19 $ 179.24 $ 222.61 $ 184.43 $ 276.54 Other Stockholder Matters As of February 12, 2024, there were approximately 138 holders of record of our common stock, although we believe that there are a significantly larger number of beneficial owners of our common stock.
Biggest changeComparison of Cumulative Total Return Among Trex Company, Inc., Russell 2000 Index, and S&P 600 Building Products Index 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 Trex Company, Inc. $ 100.00 $ 186.29 $ 300.46 $ 94.19 $ 184.22 $ 153.60 Russell 2000 Index $ 100.00 $ 119.96 $ 137.94 $ 109.74 $ 128.33 $ 143.14 S&P 600 Building Products $ 100.00 $ 126.06 $ 156.56 $ 129.71 $ 194.49 $ 218.00 Other Stockholder Matters As of February 10, 2025, there were approximately 130 holders of record of our common stock, although we believe that there are a significantly larger number of beneficial owners of our common stock.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our common stock has been listed on the New York Stock Exchange (NYSE) since April 8, 1999. Effective November 23, 2009, our common stock is listed under the symbol “TREX”.
Item 5. Mark et for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Market for Common Stock Our common stock has been listed on the New York Stock Exchange (NYSE) since April 8, 1999. Effective November 23, 2009, our common stock is listed under the symbol “TREX”.
In 2023, we submitted to the NYSE in a timely manner the annual certification that our Chief Executive Officer was not aware of any violation by us of the NYSE corporate governance listing standards.
In 2024, we submitted to the NYSE in a timely manner the annual certification that our Chief Executive Officer was not aware of any violation by us of the NYSE corporate governance listing standards.
Issuer Purchases of Equity Securities The following table provides information relating to the purchases of our common stock during the three months ended December 31, 2023 in accordance with Item 703 of Regulation S-K: Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (or Unit) ($) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) (d) Maximum number of Shares (or Units) that May Yet Be Purchased Under the Plan or Program October 1, 2023 – October 31, 2023 — $ — — 10,535,104 November 1, 2023 – November 30, 2023 — $ — — 10,535,104 December 1, 2023 – December 31, 2023 — $ — — 10,535,104 Quarter ended December 31, 2023 — — (1) During the three months ended December 31, 2023, no shares were withheld by, or delivered to, the Company pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s 2014 and 2023 Stock Incentive Plan allowing the Company to withhold, or the recipient to deliver to the Company, the number of shares having the fair value equal to tax withholding due.
Issuer Purchases of Equity Securities The following table provides information relating to the purchases of our common stock during the three months ended December 31, 2024 in accordance with Item 703 of Regulation S-K: Period (a) Total Number of Shares (or Units) Purchased (1) (b) Average Price Paid per Share (or Unit) ($) (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (2) (d) Maximum number of Shares (or Units) that May Yet Be Purchased Under the Plan or Program October 1, 2024 – October 31, 2024 758,782 $ 65.94 758,240 8,954,464 November 1, 2024 – November 30, 2024 3,677 $ 70.21 — 8,954,464 December 1, 2024 – December 31, 2024 — $ — — 8,954,464 Quarter ended December 31, 2024 762,459 758,240 (1) During the three months ended December 31, 2024, 4,219 shares of common stock were withheld by, or delivered to, the Company pursuant to provisions in agreements with recipients of restricted stock granted under the Company’s 2014 and 2023 Stock Incentive Plan allowing the Company to withhold, or the recipient to deliver to the Company, the number of shares having the fair value equal to the tax withholding due.
(2) On May 4, 2023, the Trex Board of Directors adopted a stock repurchase program (2023 Stock Repurchase Program) of up to 10.8 million shares of its outstanding common stock. The 2023 Stock Repurchase Program has no set expiration date and no shares were repurchased under the program during the three months ended December 31, 2023.
(2) On May 4, 2023, the Trex Board of Directors adopted a stock repurchase program (2023 Stock Repurchase Program) of up to 10.8 million shares of the Company's outstanding common stock.
Stockholder Return Performance Graph The following graph and table show the cumulative total stockholder return on the Company’s common stock for the last five fiscal years compared to the Russell 2000 Index and the Standard and Poor’s 600 Building Products Index (S&P 600 Building Products).
The 2023 Stock Repurchase Program has no set expiration date and 758,240 shares were repurchased under the program during the three months ended December 31, 2024. 22 Table of Contents Stockholder Return Performance Graph The following graph and table show the cumulative total stockholder return on the Company’s common stock for the last five fiscal years compared to the Russell 2000 Index and the Standard and Poor’s 600 Building Products Index (S&P 600 Building Products).
Added
The graph assumes $100 was invested on December 31, 2019, in (1) the Company’s common stock, (2) the Russell 2000 Index and (3) the S&P 600 Building Products and assumes reinvestment of dividends and market capitalization weighting as of December 31, 2020, 2021, 2022, 2023 and 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeItem 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.
Biggest changeItem 7. Managem ent’s Discussion and Analysis of Financial Condition and Results of Operations This Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFinancial Statements and Supplementary Data The financial statements listed in Item 15 of this Form 10-K are incorporated by reference in this Item 8 and are filed as part of this report. 39 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.
Biggest changeFinancial St atements and Supplementary Data The financial statements listed in Item 15 of this Form 10-K are incorporated by reference in this Item 8 and are filed as part of this report.
In certain instances, we may use interest rate swap agreements to modify fixed rate obligations to variable rate obligations, thereby adjusting the interest rates to current market rates and ensuring that the debt instruments are always reflected at fair value. We had no interest rate swap agreements outstanding as of December 31, 2023. Item 8.
In certain instances, we may use interest rate swap agreements to modify fixed rate obligations to variable rate obligations, thereby adjusting the interest rates to current market rates and ensuring that the debt instruments are always reflected at fair value. We had no interest rate swap agreements outstanding as of December 31, 2024. Item 8.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are subject to market risks from changing interest rates associated with our borrowings. To meet our seasonal working capital needs, we borrow periodically on our variable rate revolving line of credit. At December 31, 2023, we had $5.5 million in debt outstanding under our revolving line of credit.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are subject to market risks from changing interest rates associated with our borrowings. To meet our seasonal working capital needs, we borrow periodically on our variable rate revolving line of credit. At December 31, 2024, we had $202.6 million in debt outstanding under our revolving line of credit.

Other TREX 10-K year-over-year comparisons