10-Q

PART I

FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

TREX COMPANY, INC.

Condensed Consolidated Statements of Comprehensive Income

(Unaudited)

(In thousands, except share and per share data)


	Three Months Ended September 30,					Nine Months Ended September 30,
	2025		2024			2025		2024
Net sales	$	285,348	$	233,717		$	1,013,142	$	983,822
Cost of sales		169,910		140,512			601,842		552,896
Gross profit		115,438		93,205			411,300		430,926
Selling, general and administrative expenses		45,041		38,901			156,841		140,708
Income from operations		70,397		54,304			254,459		290,218
Interest income, net		—		(5	)		—		(11	)
Income before income taxes		70,397		54,309			254,459		290,229
Provision for income taxes		18,627		13,756			66,346		73,609
Net income	$	51,770	$	40,553		$	188,113	$	216,620
Basic earnings per common share	$	0.48	$	0.37		$	1.75	$	2.00
Basic weighted average common shares outstanding		107,244,573		108,258,401			107,217,689		108,529,825
Diluted earnings per common share	$	0.48	$	0.37		$	1.75	$	1.99
Diluted weighted average common shares outstanding		107,332,641		108,379,416			107,304,543		108,659,118
Comprehensive income	$	51,770	$	40,553		$	188,113	$	216,620

See Notes to Condensed Consolidated Financial Statements (Unaudited).

TREX COMPANY, INC.

Condensed Consolidated Balance Sheets

(In thousands, except share data)


	September 30, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	11,357		$	1,292
Accounts receivable, net		163,997			88,356
Inventories		149,552			207,282
Prepaid expenses and other assets		12,879			21,978
Total current assets		337,785			318,908
Property, plant and equipment, net		1,029,124			922,868
Operating lease right-of-use (ROU) assets		45,871			52,195
Goodwill and other intangible assets, net		30,392			22,048
Other assets		9,306			8,279
Total assets	$	1,452,478		$	1,324,298
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	47,460		$	61,272
Accrued expenses and other liabilities		117,251			72,879
Accrued warranty		6,168			5,726
Line of credit		111,300			202,600
Total current liabilities		282,179			342,477
Deferred income taxes		56,032			56,032
Operating lease liabilities		35,706			41,979
Non-current accrued warranty		19,519			17,109
Other long-term liabilities		16,560			16,559
Total liabilities		409,996			474,156
Commitments and contingencies		—			—

Stockholders’ equity
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding		—			—
Common stock, $0.01 par value, 360,000,000 shares authorized; 141,198,437 and 141,098,251 shares issued and 107,254,491 and 107,154,305 shares outstanding, at September 30, 2025 and December 31, 2024, respectively		1,412			1,411
Additional paid-in capital		152,379			148,153
Retained earnings		1,750,563			1,562,450
Treasury stock, at cost, 33,943,946 shares as of September 30, 2025 and December 31, 2024		(861,872	)		(861,872	)
Total stockholders’ equity		1,042,482			850,142
Total liabilities and stockholders’ equity	$	1,452,478		$	1,324,298

See Notes to Condensed Consolidated Financial Statements (Unaudited).

TREX COMPANY, INC.

Condensed Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

(In thousands, except share data)


	Common Stock						Additional Paid-In			Retained		Treasury Stock
	Shares			Amount			Capital			Earnings		Shares		Amount			Total
Balance, December 31, 2024		107,154,305		$	1,411		$	148,153		$	1,562,450		33,943,946	$	(861,872	)	$	850,142
Net income		—			—			—			60,434		—		—			60,434
Employee stock plans		6,068			—			299			—		—		—			299
Shares withheld for taxes on awards		(49,949	)		—			(3,110	)		—		—		—			(3,110	)
Stock-based compensation		116,588			1			2,313			—		—		—			2,314
Balance, March 31, 2025		107,227,012		$	1,412		$	147,655		$	1,622,884		33,943,946	$	(861,872	)	$	910,079
Net income		—			—			—			75,909		—		—			75,909
Employee stock plans		7,250			—			335			—		—		—			335
Shares withheld for taxes on awards		—			—			(1	)		—		—		—			(1	)
Stock-based compensation		26			—			2,934			—		—		—			2,934
Balance, June 30, 2025		107,234,288		$	1,412		$	150,923		$	1,698,793		33,943,946	$	(861,872	)	$	989,256
Net income		—			—			—			51,770		—		—			51,770
Employee stock plans		6,076			—			267			—		—		—			267
Shares withheld for taxes on awards		(424	)		1			(24	)		—		—		—			(23	)
Stock-based compensation		14,551			(1	)		1,213			—		—		—			1,212
Balance, September 30, 2025		107,254,491		$	1,412		$	152,379		$	1,750,563		33,943,946	$	(861,872	)	$	1,042,482


	Common Stock					Additional Paid-In			Retained		Treasury Stock
	Shares			Amount		Capital			Earnings		Shares		Amount			Total
Balance, December 31, 2023		108,611,537		$	1,410	$	140,157		$	1,336,058		32,363,306	$	(760,954	)	$	716,671
Net income		—			—		—			89,070		—		—			89,070
Employee stock plans		5,640			—		397			—		—		—			397
Shares withheld for taxes on awards		(55,103	)		—		(5,146	)		—		—		—			(5,146	)
Stock-based compensation		130,683			1		3,153			—		—		—			3,154
Balance, March 31, 2024		108,692,757		$	1,411	$	138,561		$	1,425,128		32,363,306	$	(760,954	)	$	804,146
Net income		—			—		—			86,998		—		—			86,998
Employee stock plans		5,408			—		341			—		—		—			341
Shares withheld for taxes on awards		(5,020	)		—		(424	)		—		—		—			(424	)
Stock-based compensation		12,623			—		3,839			—		—		—			3,839
Balance, June 30, 2024		108,705,768		$	1,411	$	142,317		$	1,512,126		32,363,306	$	(760,954	)	$	894,900
Net income		—			—		—			40,553		—		—			40,553
Employee stock plans		4,764			—		269			—		—		—			269
Shares withheld for taxes on awards		(739	)		—		(59	)		—		—		—			(59	)
Stock-based compensation		14,589			—		2,671			—		—		—			2,671
Repurchases of common stock		(822,400	)									822,400		(50,430	)		(50,430	)
Balance, September 30, 2024		107,901,982		$	1,411	$	145,198		$	1,552,679		33,185,706	$	(811,384	)	$	887,904

See Notes to Condensed Consolidated Financial Statements (Unaudited).

TREX COMPANY, INC.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

(In thousands)


	Nine Months Ended September 30,
	2025			2024
OPERATING ACTIVITIES
Net income	$	188,113		$	216,620
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		46,068			41,218
Deferred income taxes		—			(5,212	)
Stock-based compensation		6,460			9,663
Loss on disposal of property, plant and equipment		507			2,262
Other non-cash adjustments		(169	)		46
Changes in operating assets and liabilities:
Accounts receivable		(75,641	)		(98,924	)
Inventories		57,731			(80,847	)
Prepaid expenses and other assets		8,236			1,266
Accounts payable		13,150			681
Accrued expenses and other liabilities		30,512			52,125
Income taxes receivable/payable		17,660			13,504
Net cash provided by operating activities		292,627			152,402

INVESTING ACTIVITIES
Expenditures for property, plant and equipment		(180,214	)		(151,481	)
Purchased intangibles		(8,280	)		—
Proceeds from sales of property, plant and equipment		358			106
Net cash used in investing activities		(188,136	)		(151,375	)

FINANCING ACTIVITIES
Borrowings under line of credit		679,547			608,300
Principal payments under line of credit		(770,847	)		(543,800	)
Repurchases of common stock		(4,033	)		(55,655	)
Proceeds from employee stock purchase and option plans		901			1,007
Financing costs		6			—
Net cash used in (provided by) financing activities		(94,426	)		9,852
Net increase in cash and cash equivalents		10,065			10,879
Cash and cash equivalents, beginning of period		1,292			1,959
Cash and cash equivalents, end of period	$	11,357		$	12,838
Supplemental Disclosure:
Cash paid for interest, net of capitalized interest	$	—		$	—
Cash paid for income taxes, net	$	48,686		$	65,318
Supplemental non-cash investing and financing disclosure:
Capital expenditures in accounts payable and accrued expenses	$	27,437		$	35,300
Excise tax on repurchases of common stock	$	—		$	402

See Notes to Condensed Consolidated Financial Statements (Unaudited).

TREX COMPANY, INC.

Notes to Condensed Consolidated Financial Statements

For the Nine Months Ended September 30, 2025 and September 30, 2024

(Unaudited)

BUSINESS AND ORGANIZATION

Trex Company, Inc. (Trex or Company), is the world’s largest manufacturer of high-performance, low-maintenance wood-alternative decking and railing and outdoor living products and accessories, marketed under the brand name Trex®, with more than 30 years of product experience. A majority of its products are manufactured in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. The Company is incorporated in Delaware. The principal executive offices are located at 2500 Trex Way, Winchester, Virginia 22601, and the telephone number at that address is (540) 542-6300. The Company operates in a single reportable segment.

BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and U.S. Securities and Exchange Commission instructions to Form 10-Q and Article 10 of Regulation S-X and, accordingly, the accompanying unaudited condensed consolidated financial statements do not include all of the information and notes required by accounting principles generally accepted in the United States for complete financial statements. In the opinion of management, all adjustments (consisting of normal and recurring adjustments, except as otherwise described herein) considered necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements include the accounts of the Company for all periods presented.

The unaudited consolidated results of operations for the three and nine months ended September 30, 2025, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2025. 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, tariffs, consumer spending and preferences, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from global health pandemics and geopolitical conflicts.

These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Annual Report of Trex Company, Inc. on Form 10-K for the year ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission.

RECENTLY ADOPTED ACCOUNTING STANDARDS

In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The guidance requires disclosure of significant segment expenses which are regularly provided to the chief operating decision maker (CODM), the composition of and amount of other segment items, the CODM’s title and position within the organization, and how the CODM uses the reported measure(s) of segment’s profit or loss to assess the performance of the segment. In addition, on an interim basis, all segment profit or loss and asset disclosures currently required on an annual basis must be reported, as well as those required by Topic 280. The guidance allows for multiple measures of a segment’s profit or loss to be reported. Entities which have a single reportable segment must apply Topic 280 in its entirety. The guidance was effective for fiscal years beginning after December 15, 2023, and for interim periods beginning after December 15, 2024. Early adoption was permitted. Entities are required to apply the amendments of this update retrospectively for all prior periods presented in the financial statements. The Company adopted the standard in the quarterly period ended December 31, 2024. The Company applied the standard retrospectively and accordingly, prior periods were adjusted. Adoption of this guidance did not impact consolidated results of operations and financial position.

NEW ACCOUNTING STANDARDS NOT YET ADOPTED

In September 2025, the FASB issued ASU No. 2025-06, "Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40)." This guidance clarifies and modernizes when an entity is required to begin capitalizing software costs. Specifically it requires capitalization when both of the following are met (i) management has authorized and committed to funding the software project and (ii) it is probable that the project will be completed and the software will be used to perform the function intended. The amendments to this update are effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption of this update is permitted. The amendments to this update may be applied prospectively, retrospectively, or on a modified transition approach. The Company is evaluating this guidance and the impact it may have on its Consolidated Financial Statements upon adoption.

In July 2025, the FASB issued ASU No. 2025-05, "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets." This guidance provides an optional practical expedient related to the estimation of expected credit losses for current accounts receivable and contract assets that arise from transactions accounted for under FASB Accounting Standards Codification 606. Specifically, this optional practical expedient allows an entity to assume that current conditions as of the balance sheet date will not change for the remaining life of the asset. The amendments to this update are effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption of this update is permitted. The amendments to this update should be applied prospectively. The Company continues to evaluate the guidance and does not believe adoption will have a material impact on its consolidated results of operations or financial position.

In November 2024, the FASB issued ASU No. 2024-03, “Income Statement – Reporting Comprehensive Income – Disaggregation Disclosures.” This guidance requires more detailed disclosure about the types of expenses presented within the expense captions of the financial statements. Specifically, disclosure of purchases of inventory, employee compensation, depreciation, and intangible asset amortization are required on both an interim and annual basis. In addition, a qualitative description of remaining amounts in relevant expense captions which have not separately been disaggregated will be required on an interim and annual basis. On an annual basis, disclosure of an entity’s definition of selling expenses and the amount of selling expenses is required. The amendments to this update are effective for annual reporting periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption of this update is permitted. The amendments to this update should be applied prospectively to financial statements issued for reporting periods after the effective date of the update or retrospectively to any or all prior periods presented in the financial statements. The Company believes adoption will result in expanded financial statement footnote disclosure but does not believe adoption of this update will have a material impact on its consolidated results of operations. The Company is continuing to evaluate the impacts of adoption.

In December 2023, the FASB issued ASU No. 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The guidance requires public entities to disclose additional categories of information related to federal, state, and foreign income taxes and additional details related to reconciling items should they meet a quantitative threshold. The guidance requires disclosure of income taxes paid (net of refunds received) disaggregated by federal, state, and foreign taxes and to disaggregate the information by jurisdiction based on quantitative thresholds. The guidance is effective for annual reporting periods beginning after December 15, 2024. Early adoption was permitted. The guidance should be applied on a prospective basis; retrospective application is permitted. The Company does not expect adoption of the guidance to have a material effect on its consolidated results of operations and financial position.

INVENTORIES

Inventories valued at LIFO (last-in, first-out), consist of the following (in thousands):


	September 30, 2025			December 31, 2024
Finished goods	$	132,511		$	183,670
Raw materials		66,710			73,281
Total FIFO (first-in, first-out) inventories		199,221			256,951
Reserve to adjust inventories to LIFO value		(49,669	)		(49,669	)
Total LIFO inventories	$	149,552		$	207,282

The Company utilizes the LIFO method of accounting, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances may cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end do not result in a LIFO liquidation. Accordingly, interim LIFO calculations are based, in part, on management’s estimates of expected year-end inventory levels and costs and may differ from actual results. Since inventory levels and costs are subject to factors beyond management’s control, interim results are subject to the final year-end LIFO inventory

valuation. As of September 30, 2025, management estimates that inventory balances will be replenished by year-end and there were no LIFO inventory liquidations or related impact on cost of sales in the nine months ended September 30, 2025.

PREPAID EXPENSES AND OTHER ASSETS

Prepaid expenses and other assets consist of the following (in thousands):


	September 30, 2025		December 31, 2024
Prepaid expenses	$	12,379	$	21,353
Other		500		625
Total prepaid expenses and other assets	$	12,879	$	21,978

GOODWILL AND OTHER INTANGIBLE ASSETS, NET

The carrying amount of goodwill at September 30, 2025, and December 31, 2024, was $14.2 million. The Company’s intangible assets consist of domain names and internal use software. At September 30, 2025, and December 31, 2024, intangible assets were $19.4 million and $10.6 million and accumulated amortization was $3.2 million and $2.8 million, respectively. Intangible assets are amortized over the estimated useful lives on a straight-line basis over 15 years for domain names and 10 years for internal use software, 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 nine months ended September 30, 2025, and September 30, 2024, was $0.4 million and $0.3 million, respectively.

ACCRUED EXPENSES AND OTHER LIABILITIES

Accrued expenses and other liabilities consist of the following (in thousands):


	September 30, 2025		December 31, 2024
Sales and marketing		51,972		22,874
Compensation and benefits		20,400		16,132
Income taxes		19,838		917
Operating lease liabilities		11,298		10,800
Capital projects		5,125		13,274
Manufacturing costs		3,678		2,904
Other		4,940		5,978
Total accrued expenses and other liabilities	$	117,251	$	72,879

DEBT

Revolving Credit Facility

Indebtedness prior to October 10, 2024. On May 18, 2022, the Company entered into a Credit Agreement (Credit Agreement) with certain lending parties thereto (Lenders) 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.

On December 22, 2022, the Company entered into a First Amendment to the Credit Agreement (First Amendment). As a part of the First Amendment, the Credit Agreement was amended and restated to provide for an additional Revolving B Loan (as hereinafter defined). 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 ended 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.

In conjunction with the First Amendment, on December 22, 2022, the Credit Agreement was amended and restated to refer to the original 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 amended Credit Agreement provides the Company, in the aggregate, the ability to borrow an amount up to the Revolving A Loan Limit during the Revolving A Loan Term (which ends May 18, 2027) 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 issued pursuant to the Credit Agreement are in effect.

Base Rate Loans (as defined in the Credit Agreement) under the Revolving A Loan 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.

With respect to Revolving B Loans (as defined in the First Amendment), 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 between 1.20% 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%.

Under the terms of the Security and Pledge Agreement, the Company, 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 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 October 10, 2024. On October 10, 2024, the Company, entered into a Second Amendment to the Credit Agreement (Second Amendment) with certain lending parties thereto (Lenders) to amend that Credit Agreement dated as of May 18, 2022, as amended by that certain First Amendment dated as of December 22, 2022.

The Second Amendment provides the Company with Revolving A Loans in the maximum principal amount of $400,000,000 (Revolving A Loans), Revolving B Loans in the maximum principal amount of $150,000,000 (Revolving B Loans), and Letters of Credit and Swing Line Loans (as defined in the Credit Agreement). The Second Amendment extends the maturity date of the Revolving B Loans from December 22, 2024 to December 22, 2026.

With respect to Revolving B Loans (as defined in the Credit Agreement), 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 ranges between 0.20% and 1.15%. and the applicable rate for Revolving B Loans that are Term SOFR/Term SOFR Daily Floating Rate range between 1.20% and 2.15%.

As of September 30, 2025, the Company had $111.3 million in borrowings outstanding under its revolving credit facility. The total availability under the revolving credit facility was $435.6 million as of September 30, 2025, which reflects a reduction for outstanding letters of credit totaling $3.1 million. The weighted average interest rate on the revolving credit facility was 5.06% as of September 30, 2025.

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 September 30, 2025. 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.

10.

LEASES

The Company leases manufacturing and training facilities, storage warehouses, office space, and certain plant equipment under various operating leases. The Company’s operating leases have remaining lease terms of up to 10 years. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option.

For the nine months ended September 30, 2025 and September 30, 2024, total operating lease expense was $9.0 million and $7.3 million, respectively. The weighted average remaining lease term at September 30, 2025 and December 31, 2024 was 5.8 years and 6.3 years, respectively. The weighted average discount rate at September 30, 2025 and December 31, 2024 was 4.66% and 4.57%, respectively.

The following table includes supplemental cash flow information for the nine months ended September 30, 2025 and September 30, 2024, and supplemental balance sheet information at September 30, 2025 and December 31, 2024 related to operating leases (in thousands):


	Nine Months Ended September 30,
Supplemental cash flow information	2025		2024
Cash paid for amounts included in the measurement of operating lease liabilities	$	8,410	$	7,346
Operating ROU assets obtained in exchange for lease liabilities	$	1,419	$	16,379


Supplemental balance sheet information	September 30, 2025		December 31, 2024
Operating lease ROU assets	$	45,871	$	52,195
Operating lease liabilities:
Accrued expenses and other current liabilities	$	11,298	$	10,800
Operating lease liabilities		35,706		41,979
Total operating lease liabilities	$	47,004	$	52,779

The following table summarizes maturities of operating lease liabilities at September 30, 2025 (in thousands):


Maturities of operating lease liabilities
2025	$	2,912
2026		11,476
2027		10,858
2028		9,779
2029		4,448
Thereafter		15,562
Total lease payments		55,035
Less imputed interest		(8,031	)
Total operating lease liabilities	$	47,004

11.

FINANCIAL INSTRUMENTS

The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Condensed Consolidated Balance Sheets at September 30, 2025 and December 31, 2024.

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):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Numerator:
Net income available to common shareholders	$	51,770	$	40,553	$	188,113	$	216,620
Denominator:
Basic weighted average shares outstanding		107,244,573		108,258,401		107,217,689		108,529,825
Effect of dilutive securities:
Stock appreciation rights and options		31,206		38,602		31,002		54,679
Restricted stock		56,862		82,413		55,852		74,614
Diluted weighted average shares outstanding		107,332,641		108,379,416		107,304,543		108,659,118
Basic earnings per share	$	0.48	$	0.37	$	1.75	$	2.00
Diluted earnings per share	$	0.48	$	0.37	$	1.75	$	1.99

Diluted earnings per share is computed using the weighted average number of shares determined for the basic earnings per share computation plus the dilutive effect of common stock equivalents using the treasury stock method. The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2025		2024		2025		2024
Stock appreciation rights		145,249		70,979		141,199		66,387
Restricted stock		31,053		51,001		72,016		33,199

Stock Repurchase Program

On May 4, 2023, the Trex Board of Directors adopted a new stock repurchase program (2023 Stock Repurchase Program) of up to 10.8 million shares of its outstanding common stock, and terminated the existing Stock Repurchase Program. The 2023 Stock Repurchase Program has no set expiration date. During the nine months ended September 30, 2025, Trex did not repurchase any shares of its outstanding common stock under the 2023 Stock Repurchase Program.

13.

REVENUE FROM CONTRACTS WITH CUSTOMERS

The Company principally generates revenue from the manufacture and sale of its high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing products and accessories. Substantially all of its revenues are from contracts with customers, which are purchase orders of short-term duration of less than one year. Its customers, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. The Company satisfies its performance obligations at a point in time. The shipment of each product is a separate performance obligation as the customer is able to derive benefit from each product shipped and no performance obligation remains after shipment. Upon shipment of the product, the customer obtains control over the distinct product and Trex satisfies its performance obligation. Any performance obligation that remains unsatisfied at the end of a reporting period is part of a contract that has an original expected duration of one year or less. Any variable consideration related to the unsatisfied performance obligation is allocated wholly to the unsatisfied performance obligation, is recognized when the product ships and the performance obligation is satisfied and is included in “Accrued expenses and other liabilities, Sales and marketing” in Note 8 to the Condensed Consolidated Financial Statements. For the three months ended September 30, 2025 and September 30, 2024, the Company’s net sales were $285,348 and $233,717, respectively. For the nine months ended September 30, 2025 and September 30, 2024, the Company's net sales were $1,013,142 and $983,822, respectively. During these periods, revenues were recognized at a point in time upon transfer of its outdoor living products under variable consideration contracts into the building products market.

14.

STOCK-BASED COMPENSATION

At the annual meeting of stockholders of the Company held on May 4, 2023, the Company’s stockholders approved the Trex Company, Inc. 2023 Stock Incentive Plan (Plan). The Company’s board of directors unanimously approved the Plan on April 10, 2023, subject to stockholder approval. The Plan, which is administered by the compensation committee of the board of directors, provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights and unrestricted stock, which are referred to collectively as “awards.” Awards may be granted under the Plan to officers, directors (including non-employee directors) and other employees of the Company or any subsidiary thereof, to any adviser, consultant, or other provider of services to the Company (and any employee thereof), and to any other individuals who are approved by the board of directors as eligible to participate in the Plan. Only employees of the Company or any subsidiary thereof are eligible to receive incentive stock options. Subject to certain adjustments as provided in the Plan, the total number of shares of common stock available for future grants under the Plan is 3,674,799 shares.

The following table summarizes the Company’s stock-based compensation grants for the nine months ended September 30, 2025:


	Stock Awards Granted		Weighted- Average Grant Price Per Share
Time-based restricted stock units		88,547	$	66.33
Performance-based restricted stock units (a)		102,049	$	64.85
Stock appreciation rights		46,126	$	66.67

(a)

Includes 80,196 of target performance-based restricted stock unit awards granted during the nine months ended September 30, 2025, and adjustments of 1,093, and 20,760 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2024 and 2023, respectively.

The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the nine months ended September 30, 2025 and September 30, 2024, the data and assumptions shown in the following table were used:


	Nine Months Ended September 30, 2025			Nine Months Ended September 30, 2024
Weighted-average fair value of grants	$	33.06		$	44.83
Dividend yield		0	%		0	%
Average risk-free interest rate		4.3	%		4.3	%
Expected term (years)		5			5
Expected volatility		51.4	%		51.2	%

The Company recognizes stock-based compensation expense ratably over the period from the grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. For the employee stock purchase plan, compensation expense is recognized related to the discount on purchases. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income. The following table summarizes the Company’s stock-based compensation expense (in thousands):


	Three Months Ended September 30,					Nine Months Ended September 30,
	2025			2024		2025		2024
Stock appreciation rights	$	264		$	307	$	888	$	987
Time-based restricted stock and restricted stock units		1,068			1,206		3,472		3,731
Performance-based restricted stock and restricted stock units		(166	)		1,110		1,940		4,671
Employee stock purchase plan		47			48		160		274
Total stock-based compensation	$	1,213		$	2,671	$	6,460	$	9,663

Total unrecognized compensation cost related to unvested awards as of September 30, 2025 was $11.0 million. The cost of these unvested awards is being recognized over the requisite vesting period of each award.

15.

INCOME TAXES

The Company’s effective tax rate for the nine months ended September 30, 2025 and September 30, 2024, was 26.1% and 25.4%, which resulted in income tax expense of $66.3 million and $73.6 million, respectively. The increase in the effective rate was primarily due to excess tax expense from stock-based awards in 2025 and excess tax benefit from stock-based awards in 2024, as well as a reduction in the allowable deduction for foreign derived intangible income.

During the nine months ended September 30, 2025 and September 30, 2024, the Company realized $(0.1) million and $0.7 million, respectively, of excess tax expense and excess tax benefit from stock-based awards and recorded a corresponding expense and benefit to income tax expense.

The Company analyzes its deferred tax assets each reporting period, considering all available positive and negative evidence in determining the expected realization of those deferred tax assets. As of September 30, 2025, the Company maintains a valuation allowance of $2.6 million against deferred tax assets primarily related to state tax credits it estimates will expire before they are realized.

The Company operates in multiple tax jurisdictions, and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company accrues a liability when it believes that it is more likely than not that benefits of tax positions will not be realized. The Company believes that adequate provisions have been made for all tax returns subject to examination. As of September 30, 2025, for certain tax jurisdictions tax years 2020 through 2024 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 jurisdiction as the Company does not have a taxable presence in any foreign jurisdiction.

On July 4, 2025, H.R.1 - One Big Beautiful Bill Act (Act) was enacted into law. The Act includes several changes to the U.S. corporate income tax framework. The Company has completed an assessment of the Act’s provisions and determined that they will not have a material impact on the Company’s effective tax rate or income tax expense for the year ended December 31, 2025. The Company will continue to monitor any regulatory guidance related to the Act and assess its potential effects on future reporting periods.

16.

SEGMENT INFORMATION

The Company operates in one reportable segment, with resource allocation and assessment of financial performance based on a consolidated basis.

Trex manufactures composite decking and railing and related outdoor living products marketed under the brand name Trex®. The products are sold to its distributors and two national retailers who, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction.

The Company’s reportable segments are determined in accordance with its internal management structure, which is based on operations. The Company has identified its President and Chief Executive Officer as the Chief Operating Decision Maker (CODM). The Company’s CODM has final authority over resource allocation decisions and performance assessments and makes key operating decisions. The primary objective of the CODM is to optimize positive Company-wide performance and financial results. The CODM evaluates segment performance primarily based on net income and net sales. The CODM uses net income to assess performance and allocate resources as this measure provides insight into all aspects of the segment’s operations and overall success of the segment for a given period. The CODM also 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. In addition, the CODM reviews significant segment expenses with a primary focus on cost of sales and total selling, general, and administrative expenses. These measures are provided in the accompanying Condensed Consolidated Statements of Comprehensive Income. Segment assets are reported on the Condensed Consolidated Balance Sheets.

17.

SEASONALITY

The operating results for Trex 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 sales of its products to a later period or decrease overall sales in affected locations. As part of its normal business practice, and consistent with industry practice, Trex 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.

18.

COMMITMENTS AND CONTINGENCIES

Product Warranty

The Company warrants that for the applicable warranty period its 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® decking, 35 years for Select® decking and Universal Fascia, and 25 years for Enhance® decking and Transcend, Select, Enhance and Signature® railing. The warranty period for commercial use is 10 years, excluding Signature railing and Transcend cladding, which each have a warranty period of 25 years. The Company further warrants 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.

The Company maintains a warranty reserve for the settlement of its product warranty claims. The Company accrues for the estimated cost of product warranty claims at the time revenue is recognized based on such factors as historical claims experience and estimated future claims. Management reviews and adjusts these estimates, if necessary, based on the differences between actual experience and historical estimates. Additionally, the Company accrues for warranty costs associated with occasional or unanticipated product quality issues if a loss is probable and can be reasonably estimated, as necessary.

The Company 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 the number of claims to be settled with payment and the average cost to settle each claim. The Company monitors surface flaking claims activity each quarter for indications that its estimates require revision.

The Company believes its product warranty and surface flaking reserves at September 30, 2025 are sufficient to cover future warranty obligations. The following is a reconciliation of the Company’s product warranty and surface flaking reserves (in thousands):


	Nine Months Ended September 30, 2025
	Product Warranty			Surface Flaking			Total
Beginning balance, January 1	$	15,596		$	7,239		$	22,835
Provisions and changes in estimates		8,660			—			8,660
Settlements made during the period		(4,903	)		(905	)		(5,808	)
Ending balance, September 30	$	19,353		$	6,334		$	25,687


	Nine Months Ended September 30, 2024
	Product Warranty			Surface Flaking			Total
Beginning balance, January 1	$	12,066		$	10,112		$	22,178
Provisions and changes in estimates		8,375			(1,077	)		7,298
Settlements made during the period		(4,717	)		(1,125	)		(5,842	)
Ending balance, September 30	$	15,724		$	7,910		$	23,634

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.

Industrial Revenue Bonds

In 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. 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. 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 borrower/lessee of the Little Rock facility purchased with the IRB proceeds. 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. Furthermore, the Company has not derecognized the transferred asset and continues to recognize it in property, plant and equipment in the Condensed 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. The liability and IRB asset are equal and are reported net in the Condensed Consolidated Balance Sheets. As of September 30, 2025, the gross asset and liability associated with the IRBs was $450 million.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with the Trex Company, Inc. (Trex, Company, we or our) Annual Report on Form 10-K for the year ended December 31, 2024 filed with the U.S. Securities and Exchange Commission (SEC) and the condensed consolidated financial statements and notes thereto included in Part I, Item 1. “Financial Statements” of this quarterly report.

NOTE ON FORWARD-LOOKING STATEMENTS

This 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. All statements regarding our expected financial position and operating results, our business strategy, our financing plans, forecasted demographic and economic trends relating to our industry and similar matters are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” “intend” or similar expressions. We cannot promise you that our expectations in such forward-looking statements will turn out to be correct. Our actual results could be materially different from our expectations because of various factors, including the factors discussed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC. These statements are also subject to risks and uncertainties that could cause the Company’s actual operating results to differ materially. Such risks and uncertainties include, but are not limited to: the extent of market acceptance of the Company’s current and newly developed products; the costs associated with the development and launch of new products and the market acceptance of such new products; the sensitivity of the Company’s business to general economic conditions; the impact of seasonal and weather-related demand fluctuations on inventory levels in the distribution channel and sales of the Company’s products; the availability and cost of third-party transportation services for the Company’s products and raw materials; the Company’s ability to obtain raw materials, including scrap polyethylene, wood fiber, and other materials used in making our products, at acceptable prices; increasing inflation and tariffs in the macro-economic environment; the Company’s ability to maintain product quality and product performance at an acceptable cost; the Company’s ability to increase throughput and capacity to adequately match supply with demand; the level of expenses associated with warranty claims, product replacement and consumer relations expenses related to product quality; the highly competitive markets in which the Company operates; cyber-attacks, security breaches or other security vulnerabilities; the impact of current and upcoming data privacy laws and the EU General Data Protection Regulation and the related actual or potential costs and consequences; material adverse impacts from global public health pandemics, geopolitical conflicts; and material adverse impacts related to labor shortages or increases in labor costs.

OVERVIEW

The following MD&A is intended to help the reader understand the operations and current business environment of the Company. The MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes thereto contained in "Item 1. Condensed Consolidated Financial Statements" of this report. MD&A includes the following sections:

•

Operations and Products — a general description of our business, a brief overview of our reportable segment’s products, and a discussion of our operational highlights.

•

Highlights and Financial Performance Quarter-to-Date and Year-to-Date – a summary of financial performance and highlights for the three months and nine months ended September 30, 2025, a general discussion of factors that may affect our operations, and a description of relevant financial statement line items.

•

Results of Operations — an analysis of our consolidated results of operations for the three months and nine months ended September 30, 2025 compared to the three months and nine months ended September 30, 2024.

•

Liquidity and Capital Resources — an analysis of cash flows; contractual obligations, and a discussion of our capital and other cash requirements.

OPERATIONS AND PRODUCTS

Trex is the world’s largest manufacturer of high-performance composite decking and railing products and a leader in outdoor living products, which are marketed under the brand name Trex® and manufactured in the United States. With more than 30 years of product experience, we offer a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing and outdoor lighting categories. A majority of the products are eco-friendly and leverage recycled and reclaimed materials to the extent possible. Trex decking is made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film, making Trex one of the largest recyclers of plastic film in North America. In addition to resisting fading and surface staining, Trex products require no sanding and sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation. Combined, these aspects yield significant aesthetic advantages and lower maintenance than wood decking and railing and ultimately render Trex products less costly than wood over the life of the deck. 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. Trex products are sold to distributors and home centers for final resale primarily to the residential market.

Trex offers the following products:


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. 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 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. 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 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. 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. 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. Trex DeckLighting™, an outdoor lighting system, is a line of energy-efficient LED dimmable deck lighting designed to use 75% less energy compared to incandescent lighting. It can be installed into the railing, stair risers, or the deck itself. The line includes a post cap light, deck rail light, riser light, a soffit light, and a recessed deck light.
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. 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. 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. Trex Select® Railing, made from approximately 40 percent recycled content, is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck. Trex Select® T-Rail, made from a minimum of 40 percent recycled materials, is available in square composite balusters in Classic White for a cohesive, coordinated look, or round aluminum balusters in Charcoal Black for a more modern contrast. Trex 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. The top and bottom rails of Trex fencing are designed to provide a “picture frame’ element and the deep rich colors have a matte surface to prevent harsh sunlight reflections.

We are a licensor in a number of licensing agreements with third parties to manufacture and sell products under the Trex trademark. Our licensed products are:


Trex® Outdoor Furniture™	A line of outdoor furniture products manufactured and sold by PolyWood, Inc.
Trex® RainEscape®, Trex® Protect®, Trex® RainEscape® Soffit Light, and Trex® Seal™ Ledger Flashing Tape	An above joist deck drainage system manufactured and sold by IBP, LLC. Trex Protect Joist, Beam and Rim tape is a self-adhesive butyl tape that protects wooden deck framing/substructure elements. Trex RainEscape Soffit Light is a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck. Trex Seal Ledger Flashing tape is butyl flashing tape with an aluminum liner.
Trex® Pergola	Pergolas made from low maintenance cellular PVC and all-aluminum product, manufactured by Home & Leisure, Inc. dba Structureworks Fabrication.
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 Agreement with Trex Company, Inc.
Trex® Blade	A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc.
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.

HIGHLIGHTS AND FINANCIAL PERFORMANCE

Highlights:

•

Trex Simplifies Railing Specification with Interactive Design Tool. The Trex® Deck Railing Designer was launched in an effort to simplify the railing selection process with speed, accuracy, and efficiency in mind. This new tool delivers 3D visualization and instant material estimates which simplifies the planning process for both homeowners and contractors.

•

Trex Broadens Western U.S. Reach Through Expansion with International Wood Products, LLC (IWP). IWP will exclusively stock Trex® decking and railing products at its newly opened facility in Salt Lake City, Utah strengthening Trex's presence in Utah and across the Intermountain West.

•

Trex Celebrates Completion of 2025 Sunset Idea House in Palm Springs. Featuring performance engineered™ products and modeled for eco-conscious design, Trex decking and railing have been featured in the Sunset Idea House creating durable, functional, and sleek outdoor living spaces.

Financial performance. The following table presents highlights of our financial performance for the quarter and year-to-date:


	Three Months Ended September 30,
	2025		2024		$ Change			% Change
($ 000s omitted, except per share data)
Net sales	$	285,348	$	233,717	$	51,631			22.1	%
Gross profit	$	115,438	$	93,205	$	22,233			23.9	%
Net income	$	51,770	$	40,553	$	11,217			27.7	%
EBITDA*	$	86,409	$	67,915	$	18,494			27.2	%
Diluted earnings per share	$	0.48	$	0.37	$	0.11			29.7	%

	Nine Months Ended September 30,
	2025		2024		$ Change			% Change
($ 000s omitted, except per share data)
Net sales	$	1,013,142	$	983,822	$	29,320			3.0	%
Gross profit	$	411,300	$	430,926	$	(19,626	)		(4.6	)%
Net income	$	188,113	$	216,620	$	(28,507	)		(13.2	)%
EBITDA*	$	300,527	$	331,436	$	(30,909	)		(9.3	)%
Diluted earnings per share	$	1.75	$	1.99	$	(0.24	)		(12.1	)%

*A reconciliation of Net Income (GAAP) to EBITDA (non-GAAP) is presented on pages 21 and 22 of this Quarterly Report on Form 10-Q under “Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).”

Capital expenditures. During the nine months ended September 30, 2025, our capital expenditures were $188 million primarily related to $144.2 million for the Arkansas manufacturing facility, $13.8 million in safety, environmental and general support, $8.3 million in purchased intangibles related to digital transformation, and $12.4 million in all other including cost reduction initiatives and capacity expansion in our existing facilities.

RESULTS OF OPERATIONS

General. Our 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, interest rates, tariffs, consumer spending and preferences, the impact of any supply chain disruptions, economic conditions, and any adverse effects from global health pandemics and geopolitical conflicts.

Net Sales. Net sales consist of sales, net of discounts. The level of net sales is principally affected by sales volume and the prices paid for Trex products. Trex operating results have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions reduce the level of home and commercial improvement and residential and commercial construction and can shift sales of our products to a later period or decrease overall sales in affected locations. As part of our normal business practice and consistent with industry practice, we have historically provided our distributors and dealers of our Trex products incentives to build inventory levels before the start of the prime deck-building season to ensure adequate availability of our product to meet anticipated seasonal consumer demand and to enable production planning. These incentives include payment discounts, favorable payment terms, price discounts, or volume rebates on specified products and other incentives based on increases in purchases as part of specific promotional programs. The timing of our incentive programs can significantly impact sales, receivables and inventory levels during the offering period.

Gross Profit. Gross profit represents the difference between net sales and cost of sales. Cost of sales consists of raw material costs, direct labor costs, manufacturing costs, subcontract costs and freight. Raw material costs generally include the costs to purchase and transport reclaimed wood fiber, reclaimed polyethylene, pigmentation for coloring our products, and commodities used in the production of railing and staging. Direct labor costs include wages and benefits of personnel engaged in the manufacturing process. Manufacturing costs consist of costs of depreciation, utilities, maintenance supplies and repairs, indirect labor, including wages and benefits, and warehouse and equipment rental activities.

Less than 5% of our cost of sales is projected to be impacted by tariffs. The majority of tariffs are related to purchases of aluminum and steel used in our railing and fastening products. We have and will further mitigate some of the impact on our cost of sales through higher levels of existing pre-tariff inventory and supplier negotiations.

Selling, General and Administrative Expenses. The largest component of selling, general and administrative expenses is personnel related costs, which includes salaries, commissions, incentive compensation, and benefits of personnel engaged in sales and marketing, accounting, information technology, corporate operations, research and development, and other business functions. Another component of selling, general and administrative expenses is branding and other sales and marketing costs, which are used to

build brand awareness. These costs consist primarily of advertising, merchandising, and other promotional costs. Other general and administrative expenses include professional fees, office occupancy costs attributable to the business functions previously referenced, and consumer relations expenses. As a percentage of net sales, selling, general and administrative expenses may vary from quarter to quarter due, in part, to the seasonality of our business.

Below is the discussion and analysis of our operating results and material changes in our operating results for the three months ended September 30, 2025 (2025 quarter) compared to the three months ended September 30, 2024 (2024 quarter), and for the nine months ended September 30, 2025 (2025 nine-month period) compared to the nine months ended September 30, 2024 (2024 nine-month period).

Three Months Ended September 30, 2025 Compared To The Three Months Ended September 30, 2024

Net Sales


	Three Months Ended September 30,
	2025		2024		$ Change		% Change
	(dollars in thousands)
Net sales	$	285,348	$	233,717	$	51,631		22.1	%

Net sales increased by $51.6 million, or 22.1%, in the 2025 quarter compared to the 2024 quarter. The increase was substantially all due to an increase in volume.

Gross Profit


	Three Months Ended September 30,
	2025			2024			$ Change		% Change
	(dollars in thousands)
Cost of sales	$	169,910		$	140,512		$	29,398		20.9	%
% of total net sales		59.5	%		60.1	%
Gross profit	$	115,438		$	93,205		$	22,233		23.9	%
Gross margin		40.5	%		39.9	%

Gross profit as a percentage of net sales, gross margin, was 40.5% in the 2025 quarter compared to 39.9% in the 2024 quarter. The increase was primarily the result of operational savings and lower labor costs, partially offset by tariffs on certain aluminum and steel railing products and lower production levels.

Selling, General and Administrative Expenses


	Three Months Ended September 30,
	2025			2024			$ Change		% Change
	(dollars in thousands)
Selling, general and administrative expenses	$	45,041		$	38,901		$	6,140		15.8	%
% of total net sales		15.8	%		16.6	%

Selling, general and administrative expenses increased $6.1 million to $45.0 million, or 15.8% of net sales, in the 2025 quarter. The increase primarily related to increases of $2.5 million in branding, $1.8 million in digital transformation, $0.9 million in research and development, and $0.8 million of other increases.

Provision for Income Taxes


	Three Months Ended September 30,
	2025			2024			$ Change		% Change
	(dollars in thousands)
Provision for income taxes	$	18,627		$	13,756		$	4,871		35.4	%
Effective tax rate		26.5	%		25.3	%

The effective tax rate for the 2025 quarter was 26.5% compared to 25.3% for the 2024 quarter. The increase in the effective rate was primarily due to a reduction in the allowable deduction for foreign derived intangible income.

Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)1 (dollars in thousands)

Reconciliation of net income (GAAP) to EBITDA (non-GAAP):


	Three Months Ended September 30, 2025		Three Months Ended September 30, 2024
Net income	$	51,770	$	40,553
Interest income, net		—		(5	)
Income tax expense		18,627		13,756
Depreciation and amortization		16,012		13,611
EBITDA	$	86,409	$	67,915


	Three Months Ended September 30,
	2025		2024		$ Change		% Change
	(dollars in thousands)
EBITDA	$	86,409	$	67,915	$	18,494		27.2	%

EBITDA increased 27.2% to $86.4 million for the 2025 quarter compared to $67.9 million for the 2024 quarter. The increase in EBITDA was primarily due to volume growth in net sales.

Nine Months Ended September 30, 2025 Compared To The Nine Months Ended September 30, 2024

Net Sales


	Nine Months Ended September 30,
	2025		2024		$ Change		% Change
	(dollars in thousands)
Net sales	$	1,013,142	$	983,822	$	29,320		3.0	%

Total net sales increased by $29.3 million, or 3%, in the 2025 nine-month period compared to the 2024 nine-month period. The increase was substantially all driven by products introduced within the last 36 months.

Gross Profit


	Nine Months Ended September 30,
	2025			2024			$ Change			% Change
	(dollars in thousands)
Cost of sales	$	601,842		$	552,896		$	48,946			8.9	%
% of total net sales		59.4	%		56.2	%
Gross profit	$	411,300		$	430,926		$	(19,626	)		(4.6	)%
Gross margin		40.6	%		43.8	%

__________________________

1EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management believes it facilitates performance comparison between the Company and its competitors. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, income taxes, and depreciation and amortization charges to net income or loss. In relation to competitors, EBITDA eliminates differences among companies in capitalization and tax structures, capital investment cycles and ages of related assets. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP and are not meant to be considered superior to or a substitute for our GAAP results.

Gross profit as a percentage of net sales, gross margin, was 40.6% in the 2025 nine-month period compared to 43.8% in the 2024 nine-month period. The decrease in gross margin was primarily the result of inefficiencies associated with start-up costs at our

Arkansas facility, higher raw material costs, changes to our production process driven by refinements made to our Enhance® decking product line in 2025, and tariffs, partially offset by pricing.

Selling, General and Administrative Expenses


	Nine Months Ended September 30,
	2025			2024			$ Change		% Change
	(dollars in thousands)
Selling, general and administrative expenses	$	156,841		$	140,708		$	16,133		11.5	%
% of total net sales		15.5	%		14.3	%

Selling, general and administrative expenses increased $16.1 million to $156.8 million, or 15.5% of net sales, in the 2025 nine-month period. The increase primarily related to increases of $9.1 million in branding, $2.7 million in digital transformation, $2.3 million in Arkansas start-up costs, and $2.2 million in personnel related expenses.

Provision for Income Taxes


	Nine Months Ended September 30,
	2025			2024			$ Change			% Change
	(dollars in thousands)
Provision for income taxes	$	66,346		$	73,609		$	(7,263	)		(9.9	)%
Effective tax rate		26.1	%		25.4	%

The effective tax rate for the 2025 nine-month period was 26.1% compared to 25.4% for the 2024 nine month period. The increase in the effective rate was primarily due to excess tax expense from stock-based awards in 2025 and excess tax benefit from stock-based awards in 2024, as well as a reduction in the allowable deduction for foreign derived intangible income.

Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)2 (dollars in thousands)

Reconciliation of net income (GAAP) to EBITDA and EBITDA margin (non-GAAP):


	Nine Months Ended September 30, 2025		Nine Months Ended September 30, 2024
Net income	$	188,113	$	216,620
Interest income, net		—		(11	)
Income tax expense		66,346		73,609
Depreciation and amortization		46,068		41,218
EBITDA	$	300,527	$	331,436

______________________

2EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management believes it facilitates performance comparison between the Company and its competitors. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, income taxes, and depreciation and amortization charges to net income or loss. In relation to competitors, EBITDA eliminates differences among companies in capitalization and tax structures, capital investment cycles and ages of related assets. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP and are not meant to be considered superior to or a substitute for our GAAP results.


	Nine Months Ended September 30,
	2025		2024		$ Change			% Change
	(dollars in thousands)
EBITDA	$	300,527	$	331,436	$	(30,909	)		(9.3	)%

Total EBITDA decreased 9.3% to $300.5 million for the 2025 nine-month period compared to $331.4 million for the 2024 nine-month period. The decrease in EBITDA was driven primarily by lower gross profit and higher selling, general, and administrative expenses.

LIQUIDITY AND CAPITAL RESOURCES

We finance operations and growth primarily with cash flows from operations, borrowings under our revolving credit facilities, operating leases and normal trade credit terms from operating activities. At September 30, 2025, we had $11.4 million of cash and cash equivalents.

Sources and Uses of Cash. The following table summarizes our cash flows from operating, investing and financing activities (in thousands):


	Nine Months Ended September 30,
	2025			2024
Net cash provided by operating activities	$	292,627		$	152,402
Net cash used in investing activities		(188,136	)		(151,375	)
Net cash used in (provided by) financing activities		(94,426	)		9,852
Net increase in cash and cash equivalents	$	10,065		$	10,879

Operating Activities

Cash provided by operations was $292.6 million during the 2025 nine-month period compared to cash provided by operations of $152.4 million during the 2024 nine-month period. The $140.2 million increase in cash provided by operating activities was primarily related to a decrease in inventories in the nine months ended September 30, 2025 compared to an increase in inventories in the nine months ended September 30, 2024. The decrease in inventories in 2025 is the result of lower production driven by our strategy to level load our facilities.

Investing Activities

Financing Activities

Net cash used in financing activities in the 2025 nine-month period consisted primarily of net payments on our line of credit.

Stock Repurchase Program. On May 4, 2023, the Trex Board of Directors adopted a new stock repurchase program of up to 10.8 million shares of its outstanding common stock, and terminated the existing Stock Repurchase Program. This repurchase program has no set expiration date. During the nine months ended September 30, 2025, the Company did not repurchase any shares of its common stock under the 2023 Stock Repurchase Program.

Revolving Credit Facility

Indebtedness on and after October 10, 2024. On October 10, 2024, Trex entered into a Second Amendment to the Credit Agreement (Second Amendment) with certain lending parties thereto (Lenders) to amend that Credit Agreement dated as of May 18, 2022, as amended by that certain First Amendment dated as of December 22, 2022.

The Second Amendment provides us with Revolving A Loans in the maximum principal amount of $400,000,000 (Revolving A Loans), Revolving B Loans in the maximum principal amount of $150,000,000 (Revolving B Loans), and Letters of Credit and Swing Line Loans (as defined in the Credit Agreement). The Second Amendment extends the maturity date of the Revolving B Loans from December 22, 2024 to December 22, 2026.

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 at September 30, 2025. 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.

We believe that cash on hand, cash from operations and borrowings expected to be available under our revolving credit facilities will provide sufficient funds to fund planned capital expenditures, make scheduled principal and interest payments, fund warranty payments, and meet other cash requirements. We currently expect to fund future capital expenditures from operations and financing activities. The actual amount and timing of future capital requirements may differ materially from our estimate depending on the demand for Trex products and new market developments and opportunities.

Capital Requirements. Our capital expenditure guidance for 2025 is $210 million to $220 million. In addition to the construction of the Arkansas facility, our capital allocation priorities for 2025 include expenditures for internal growth opportunities, manufacturing cost reductions, upgrading equipment and support systems, and acquisitions which fit our long-term growth strategy as we continue to evaluate opportunities that would be a good strategic fit for Trex, and return of capital to shareholders.

As previously announced, the Company anticipates spending approximately $550 million on the Arkansas facility, of which we have already invested $519 million.

Inventory in Distribution Channels. We sell our decking and railing products through a tiered distribution system. We have over 50 distributors worldwide and two national retail merchandisers to which we sell our products. The distributors in turn sell the products to dealers and retail locations who in turn sell the products to end users. Significant increases in inventory levels in the distribution channel without a corresponding change in end-use demand could have an adverse effect on future sales.

Product Warranty. We warrant that for the applicable warranty period our products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and our 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® decking, 35 years for Select® decking and Universal Fascia, and 25 years for Enhance® decking and Transcend, Select, Enhance and Signature® railing. The warranty period for commercial use is 10 years, excluding Signature railing and Transcend cladding, which each have a warranty period of 25 years. We further warrant 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, we have 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. We further warrant 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, we have an obligation either to replace the defective product or refund the purchase price.

We maintain a warranty reserve for the settlement of our product warranty claims. We accrue for the estimated cost of product warranty claims at the time revenue is recognized based on such factors as historical claims experience and estimated future claims. We review and adjust these estimates, if necessary, based on the differences between actual experience and historical estimates. Additionally, we accrue for warranty costs associated with occasional or unanticipated product quality issues if a loss is probable and can be reasonably estimated.

We continue to receive and settle claims for decking products manufactured at our Nevada facility prior to 2007 that exhibit surface flaking and maintain a warranty reserve to provide for the settlement of these claims. Estimating the warranty reserve for surface flaking claims requires us to estimate the number of claims to be settled with payment and the average cost to settle each claim. We monitor surface flaking claims activity each quarter for indications that our estimates require revision.

Seasonality. The operating results for Trex have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions may 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 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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For information regarding our exposure to certain market risks, see “Quantitative and Qualitative Disclosures about Market Risk,” in Part II, Item 7A of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There were no material changes to the Company’s market risk exposure during the nine months ended September 30, 2025.

Item 4. Controls and Procedures

The Company’s management, with the participation of its President and Chief Executive Officer, who is the Company’s principal executive officer, and the acting Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of September 30, 2025. Based on this evaluation, the President and Chief Executive Officer and acting Chief Financial Officer has concluded that the Company’s disclosure controls and procedures are effective. There have been no changes in the Company’s internal control over financial reporting during the nine-month period ended September 30, 2025, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1. Legal Proceedings

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(c)

The following table provides information relating to the purchases of our common stock during the three months ended September 30, 2025 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
July 1, 2025 – July 31, 2025		424	$	56.86		—		8,954,464
August 1, 2025 – August 31, 2025		—		—		—		8,954,464
September 1, 2025 – September 30, 2025		—		—		—		8,954,464
Quarterly period ended September 30, 2025		424				—

(1)

During the three months ended September 30, 2025, 424 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.

(2)

On May 4, 2023, the Trex Board of Directors adopted a new stock repurchase program of up to 10.8 million shares of its outstanding common stock, and terminated the existing Stock Repurchase Program. This repurchase program has no set expiration date and no shares were repurchased under the program during the three months ended September 30, 2025.

Item 5. Other Information

Insider Trading Arrangements. During the quarter ended September 30, 2025, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted, modified or terminated any contract, instruction or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

Appointment of Prithvi S. Gandhi as Senior Vice President and Chief Financial Officer. On September 30, 2025 the Board of Directors and the Compensation Committee of Trex Company, Inc. (the Company) appointed Prithvi S. Gandhi to serve as the Company’s Senior Vice President and Chief Financial Officer effective October 6, 2025. Mr. Gandhi will also serve as the principal financial and principal accounting officer of the Company commencing immediately after the filing of this Form 10-Q (Mr. Fairbanks who has served as the principal financial and principal accounting officer of the Company since August 5, 2025 will cease serving in such roles upon the filing of this Form 10-Q) and will be a named executive officer for purposes of the Company’s financial filings and public reporting. As the Senior Vice President and Chief Financial Officer, Mr. Gandhi will be responsible for overseeing all aspects of the finance and accounting functions of the Company.

Mr. Gandhi, age 55, served as Executive Vice President and CFO of Beacon Roofing Supply from April 2024 to June 2025. Prior to that, from August 2022 until April 2024, he served as Vice President and CFO of TAMKO Building Products, LLC, one of the largest independent U.S. manufacturers of residential roofing products, where he drove financial performance improvements and spearheaded the company’s entry into sustainable products. From August 2021 to July 2022, Mr. Gandhi was Executive Vice President and Chief Financial Officer of Fast Radius, Inc.. Earlier in his career, Mr. Gandhi had a successful eight-year tenure from August 2013 until May 2021, with Owens Corning [NYSE: OC], where he held multiple senior finance roles, including as Interim CFO from 2019-2020. Mr. Gandhi received a Bachelor of Science degree in Mathematics and Economics from the University of California, a Master of Arts degree in International Economics from Georgetown University, and Master of Business Administration degree with a concentration in Finance and Accounting from the Wharton School of Business.

Retention Agreement. On October 30, 2025, the Company entered into a Retention Agreement with Amy M. Fernandez, the Company’s Senior Vice President, Chief Legal Officer, Secretary and Chief Sustainability Officer, pursuant to which the Company will award restricted stock units (RSUs) to Ms. Fernandez, with the RSUs vesting only if Ms. Fernandez is actively employed by the Company on October 30, 2028 (the Retention Date). The aggregate value of the RSUs is two (2) times Ms. Fernandez current base salary, $980,000. The number of RSUs shall be based upon the closing market price of the stock on the second day after the Company issues its third quarter 2025 earnings release.

The RSUs will be granted pursuant to the Trex Company, Inc. 2023 Stock Incentive Plan.

The Retention Agreement provides that the RSUs shall vest, and the cash payment will be made, in the event of the death or disability of the Recipient, if the Company terminates the Recipient’s employment without “cause”, or if the Recipient resigns for “good reason,” prior to the Recipient achieving the applicable Retention Date. For this purpose, “cause” shall mean (i) Recipient’s willful or grossly negligent misconduct, or subversive, disruptive or insubordinate behavior, that is injurious to the Company or that violates Company policy; (ii) Recipient’s embezzlement or misappropriation of funds or property of the Company; (iii) Recipient’s conviction of a felony or the entrance of a plea of guilty or nolo contendere to a felony; (iv) Recipient’s conviction of any crime involving fraud, dishonesty, moral turpitude or breach of trust or the entrance of a plea of guilty or nolo contendere to such a crime; or (v) Recipient’s willful failure or refusal by Recipient to devote Recipient’s full business time (other than on account of disability or approved leave) and attention to the performance of Recipient’s duties and responsibilities if such breach has not been cured within 15 days after written notice thereof is given to the Recipient by the Board, and “good reason” shall mean (i) a material and adverse change in Recipient’s status or position(s) as an officer or management employee of the Company, including, without limitation, any adverse change in his status or position as an employee of the Company as a result of a material diminution in Recipient’s duties or responsibilities (other than, if applicable, any such change directly attributable to the fact that the Company is no longer publicly owned) or the assignment to Recipient of any duties or responsibilities which are materially inconsistent with such status or position(s) (other than any isolated and inadvertent failure by the Company that is cured promptly upon his giving notice), or any removal of Recipient from or any failure to reappoint or reelect Recipient to such position(s) (except in connection with Recipient’s termination other than for good reason); (ii) a 10% or greater reduction in Recipient’s aggregate base salary and targeted bonus, other than any such reduction proportionately consistent with a general reduction of pay across the executive staff as a group, as an economic or strategic measure due to poor financial performance by the Company; (iii) the failure by the Company or any successor to continue in effect any material employee benefit plan (excluding any equity compensation plan) in which the Recipient is participating (or plans providing the Recipient with similar benefits that are not materially reduced in the aggregate) other than as a result of the normal expiration of any such plan in accordance with its terms; or the taking of any action, or the failure to act, by the Company or any successor which would adversely affect the Recipient’s continued participation in any of such plans on at least as favorable a basis to Recipient or which would materially reduce Recipient’s benefits under any of such plans, or (iv) Company’s requiring Recipient to be based at an office that is both more than 50 miles from where Recipient’s office is located and further from Recipient’s then current residence.

The Board of Directors has implemented this Retention Agreement reflecting their confidence in Ms. Fernandez’s ability to continue to provide outstanding results and encourage her to continue to focus on the current and future growth of the Company.

The foregoing description of the Retention Agreement is qualified in its entirety by reference to the full text of the Retention Agreement, which is filed as Exhibit 10.2 hereto.

Departure of Director – Ronald W. Kaplan. On October 29, 2025, at a duly-convened meeting of the Nominating/Corporate Governance Committee (the “NCGC”) of the Board of Directors (the “Board”) of the Company, Ronald W. Kaplan notified the chairperson of the NCGC that he will not stand for re-election and intends to retire from the Board, effective as of the date of the Company’s 2026 Annual Meeting of Shareholders (the “2026 Annual Meeting”). Accordingly, Mr. Kaplan will not be nominated by the Board for re-election at the 2026 Annual Meeting and his term as director will end when his current term expires at the 2026 Annual Meeting. Mr. Kaplan currently serves as the Vice Chairman of the Board. Mr. Kaplan has served as a director of the Company since 2008. The Company thanks Mr. Kaplan for his years of service as an officer of the Company and as a director on the Board and for his many valuable contributions to the Company during his tenure.

Departure of Director – Melkeya McDuffie. On October 30, 2025, in connection with her recent appointment to a senior executive role at a Fortune 250 company in the automotive retail industry, Ms. McDuffie determined that stepping down from the Board of the Company would enable her to focus fully on these new responsibilities. Ms. McDuffie informed the Chairperson of the NCGC and the Chairman of the Board of her decision to resign from the Board effective October 31, 2025. Ms. McDuffie has served as a director of the Company since April 2023 and was a member of the Compensation Committee and the Audit Committee, where she provided thoughtful oversight and strategic perspective. The Audit Committee continues to have three members meeting the Audit Committee requirements of the SEC and NYSE. The Company expresses its appreciation for Ms. McDuffie’s service and wishes her continued success in her leadership journey.

Mr. Kaplan’s and Ms. McDuffie’s resignations were not the result of any dispute or disagreement with the Company on any matter relating to the Company’s operations, policies or practices. In connection with its responsibility to oversee Board composition and succession planning, the NCGC has been actively engaged in the Company’s search process for two new directors.

Item 6. Exhibits

See Exhibit Index at the end of the Quarterly Report on Form 10-Q for the information required by this Item which is incorporated by reference.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


	TREX COMPANY, INC.

Date: November 4, 2025	By:	/s/ Bryan H. Fairbanks
		Bryan H. Fairbanks
		President and Chief Executive Officer
		(Duly Authorized Officer and Principal Executive Officer)

EXHIBIT INDEX


		Incorporated by reference
Exhibit Number	Description	Form	Exhibit	Filing Date	File No.

3.1	Restated Certificate of Incorporation of Trex Company, Inc. dated July 28, 2021.	10-Q	3.6	August 2, 2021	001-14649

3.2	First Certificate of Amendment to the Restated Certificate of Incorporation of Trex Company, Inc. dated May 5, 2022	10-Q	3.2	May 9, 2022	001-14649

3.3	Amended and Restated By-Laws of the Company dated February 21, 2024	10-K	3.3	February 26, 2024	001-14649

10.2/*	Form of Retention Agreement between Trex Company, Inc. and Amy M. Fernandez dated October 30, 2025.

31.1*	Certification of Chief Executive Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

31.2*	Certification of Chief Financial Officer of the Company pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.

32***	Certifications of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. § 1350).


101.INS*	Inline XBRL Instance Document—the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.


101.SCH*	Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents.


104.1	Cover Page Interactive Data File—The cover page interactive data file does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.

* Filed herewith.

** Management contract or compensatory plan or agreement

*** Furnished herewith.



Delaware	54-1910453
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2500 Trex Way Winchester, Virginia	22601
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock	TREX	New York Stock Exchange


		Page

PART I FINANCIAL INFORMATION		2

Item 1.	Condensed Consolidated Financial Statements	2

Condensed Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)		2

Condensed Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 (unaudited)		3

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)		4

Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and September 30, 2024 (unaudited)		5

Notes to Condensed Consolidated Financial Statements (unaudited)		6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	26

Item 4.	Controls and Procedures	26

PART II OTHER INFORMATION		27

Item 1.	Legal Proceedings	27

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	27

Item 5.	Other Information	27

Item 6.	Exhibits	29