Document and Entity Information
Document and Entity Information - USD ($) $ in Billions | 12 Months Ended | ||
Dec. 31, 2017 | Feb. 06, 2018 | Jun. 30, 2017 | |
Document And Entity Information [Abstract] | |||
Document Type | 10-K | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2017 | ||
Document Fiscal Year Focus | 2,017 | ||
Document Fiscal Period Focus | FY | ||
Trading Symbol | TREX | ||
Entity Registrant Name | TREX CO INC | ||
Entity Central Index Key | 1,069,878 | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Current Reporting Status | Yes | ||
Entity Voluntary Filers | No | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Common Stock, Shares Outstanding | 29,428,555 | ||
Entity Public Float | $ 2 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Income Statement [Abstract] | |||
Net sales | $ 565,153 | $ 479,616 | $ 440,804 |
Cost of sales | 321,780 | 292,521 | 285,935 |
Gross profit | 243,373 | 187,095 | 154,869 |
Selling, general and administrative expenses | 100,993 | 83,140 | 77,463 |
Income from operations | 142,380 | 103,955 | 77,406 |
Interest expense, net | 461 | 1,125 | 619 |
Income before income taxes | 141,919 | 102,830 | 76,787 |
Provision for income taxes | 46,791 | 34,983 | 28,689 |
Net income | $ 95,128 | $ 67,847 | $ 48,098 |
Basic earnings per common share | $ 3.24 | $ 2.31 | $ 1.53 |
Basic weighted average common shares outstanding | 29,392,559 | 29,394,559 | 31,350,542 |
Diluted earnings per common share | $ 3.22 | $ 2.29 | $ 1.52 |
Diluted weighted average common shares outstanding | 29,575,460 | 29,612,669 | 31,682,509 |
Comprehensive income | $ 95,128 | $ 67,847 | $ 48,098 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Current Assets: | ||
Cash and cash equivalents | $ 30,514 | $ 18,664 |
Accounts receivable, net | 66,882 | 48,039 |
Inventories | 34,524 | 28,546 |
Prepaid expenses and other assets | 16,878 | 10,400 |
Total current assets | 148,798 | 105,649 |
Property, plant and equipment, net | 103,110 | 103,286 |
Goodwill and other intangibles | 71,319 | 10,523 |
Other assets | 3,000 | 1,972 |
Total Assets | 326,227 | 221,430 |
Current Liabilities: | ||
Accounts payable | 9,953 | 10,767 |
Accrued expenses and other liabilities | 46,266 | 34,693 |
Accrued warranty | 6,290 | 5,925 |
Line of Credit | 0 | 0 |
Total current liabilities | 62,509 | 51,385 |
Deferred income taxes | 1,286 | 894 |
Non-current accrued warranty | 28,709 | 31,767 |
Other long-term liabilities | 2,473 | 3,223 |
Total Liabilities | 94,977 | 87,269 |
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, 80,000,000 shares authorized; 34,922,111 and 34,894,233 shares issued and 29,428,430 and 29,400,552 shares outstanding at December 31, 2017 and 2016, respectively | 349 | 349 |
Additional paid-in capital | 122,043 | 120,082 |
Retained earnings | 282,370 | 187,242 |
Treasury stock, at cost, 5,493,681 shares at December 31, 2017 and 2016, respectively | (173,512) | (173,512) |
Total Stockholders' Equity | 231,250 | 134,161 |
Total Liabilities and Stockholders' Equity | $ 326,227 | $ 221,430 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2017 | Dec. 31, 2016 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 3,000,000 | 3,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 80,000,000 | 80,000,000 |
Common stock, shares issued | 34,922,111 | 34,894,233 |
Common stock, shares outstanding | 29,428,430 | 29,400,552 |
Treasury stock, shares | 5,493,681 | 5,493,681 |
Statements of Changes in Stockh
Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Deficit) [Member] | Treasury Stock [Member] |
Beginning Balance at Dec. 31, 2014 | $ 113,385 | $ 348 | $ 116,740 | $ 71,297 | $ (75,000) |
Beginning Balance, Shares at Dec. 31, 2014 | 32,020,123 | 2,780,429 | |||
Net income | 48,098 | 48,098 | |||
Employee stock purchase and option plans | 315 | $ 1 | 314 | ||
Employee stock purchase and option plans, Shares | 113,996 | ||||
Shares withheld for taxes on share-based payment awards | (8,086) | $ (1) | (8,085) | ||
Shares withheld for taxes on share-based payment awards, Shares | (115,453) | ||||
Stock-based compensation | 4,861 | 4,861 | |||
Stock-based compensation, Shares | 20,164 | ||||
Excess tax benefits from stock compensation | 3,117 | 3,117 | |||
Shares repurchased under our publicly announced share repurchase programs | (45,227) | $ (45,227) | |||
Shares repurchased under our publicly announced share repurchase programs, Shares | 1,134,300 | ||||
Shares repurchased under our publicly announced share repurchase programs, Shares | (1,134,300) | ||||
Ending Balance at Dec. 31, 2015 | 116,463 | $ 348 | 116,947 | 119,395 | $ (120,227) |
Ending Balance, Shares at Dec. 31, 2015 | 30,904,530 | 3,914,729 | |||
Net income | 67,847 | 67,847 | |||
Employee stock purchase and option plans | 280 | $ 1 | 279 | ||
Employee stock purchase and option plans, Shares | 79,175 | ||||
Shares withheld for taxes on share-based payment awards | (1,933) | $ (1) | (1,932) | ||
Shares withheld for taxes on share-based payment awards, Shares | (13,193) | ||||
Stock-based compensation | 4,789 | $ 1 | 4,788 | ||
Stock-based compensation, Shares | 8,992 | ||||
Shares repurchased under our publicly announced share repurchase programs | (53,285) | $ (53,285) | |||
Shares repurchased under our publicly announced share repurchase programs, Shares | 1,578,952 | ||||
Shares repurchased under our publicly announced share repurchase programs, Shares | (1,578,952) | ||||
Ending Balance at Dec. 31, 2016 | 134,161 | $ 349 | 120,082 | 187,242 | $ (173,512) |
Ending Balance, Shares at Dec. 31, 2016 | 29,400,552 | 5,493,681 | |||
Net income | 95,128 | 95,128 | |||
Employee stock purchase and option plans | 392 | $ 1 | 391 | ||
Employee stock purchase and option plans, Shares | 16,614 | ||||
Shares withheld for taxes on share-based payment awards | (3,618) | $ (1) | (3,617) | ||
Shares withheld for taxes on share-based payment awards, Shares | (29,235) | ||||
Stock-based compensation | 5,187 | 5,187 | |||
Stock-based compensation, Shares | 40,499 | ||||
Ending Balance at Dec. 31, 2017 | $ 231,250 | $ 349 | $ 122,043 | $ 282,370 | $ (173,512) |
Ending Balance, Shares at Dec. 31, 2017 | 29,428,430 | 5,493,681 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Operating Activities | |||
Net income | $ 95,128 | $ 67,847 | $ 48,098 |
Adjustments to reconcile net income to net cash provided by operating activities: | |||
Depreciation and amortization | 16,860 | 14,498 | 14,384 |
Deferred income taxes | 194 | 5,433 | 1,024 |
Stock-based compensation | 5,187 | 4,788 | 4,861 |
Loss (Gain) on disposal of property, plant and equipment | 1,738 | (185) | 649 |
Excess tax benefits from stock compensation | (3,147) | ||
Other non-cash adjustments | (406) | (284) | (271) |
Changes in operating assets and liabilities: | |||
Accounts receivable | (10,486) | (653) | (10,995) |
Inventories | (3,635) | (5,442) | 643 |
Prepaid expenses and other assets | (2,194) | (4,256) | 905 |
Accounts payable | (4,804) | (6,966) | (2,317) |
Accrued expenses and other liabilities | 2,488 | 9,403 | 7,554 |
Income taxes receivable/payable | 1,795 | 1,110 | 1,246 |
Net cash provided by operating activities | 101,865 | 85,293 | 62,634 |
Investing Activities | |||
Expenditures for property, plant and equipment | (15,040) | (14,551) | (23,333) |
Proceeds from sales of property, plant and equipment | 55 | 4,349 | 35 |
Acquisition of business, net of cash acquired | (71,804) | (31) | |
Net cash used in investing activities | (86,789) | (10,202) | (23,329) |
Financing Activities | |||
Financing costs | (485) | (3) | |
Borrowings under line of credit | 201,000 | 242,700 | 225,500 |
Principal payments under line of credit | (201,000) | (249,700) | (218,500) |
Repurchases of common stock | (3,617) | (55,216) | (53,313) |
Proceeds from employee stock purchase and option plans | 391 | 279 | 315 |
Excess tax benefits from stock compensation | 3,147 | ||
Net cash used in financing activities | (3,226) | (62,422) | (42,854) |
Net increase (decrease) in cash and cash equivalents | 11,850 | 12,669 | (3,549) |
Cash and cash equivalents at beginning of year | 18,664 | 5,995 | 9,544 |
Cash and cash equivalents at end of year | 30,514 | 18,664 | 5,995 |
Supplemental disclosures of cash flow information: | |||
Cash paid for interest | 418 | 852 | 625 |
Cash paid for income taxes, net | $ 44,802 | $ 28,626 | $ 26,327 |
Business and Organization
Business and Organization | 12 Months Ended |
Dec. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | 1. BUSINESS AND ORGANIZATION Trex Company, Inc. (together with its subsidiaries, the Company), a Delaware corporation, was incorporated on September 4, 1998. The Company’s principal business based on net sales is the manufacture and distribution of wood/plastic composite products, as well as related accessories, primarily for residential and commercial decking and railing applications. A majority of its products are manufactured in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. On July 31, 2017, through its newly-formed, wholly-owned subsidiary, Trex Commercial Products, Inc., the Company acquired certain assets and assumed certain liabilities of Staging Concepts Acquisition, LLC (SC Company) and thus expanded its markets to include the design, engineering and marketing of modular and architectural railing systems and solutions for the commercial and multifamily markets, and a provider of staging, acoustical and seating systems for commercial markets, including sports stadiums and performing arts venues. Additional information on the acquisition of SC Company is presented in Note 3. The principal executive offices are located at 160 Exeter Drive, Winchester, Virginia 22603, and the telephone number at that address is (540) 542-6300. Subsequent to the acquisition, the Company operates in two reportable segments, Trex Residential Products and Trex Commercial Products. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Accounting The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Trex Wood-Polymer Espana, S.L. (TWPE) for all years presented, and its newly-formed, wholly-owned subsidiary, Trex Commercial Products, Inc. (Trex Commercial Products), from July 31, 2017 through December 31, 2017. Intercompany accounts and transactions have been eliminated in consolidation. TWPE was formed to hold the Company’s 35% equity interest in Denplax, S.A. (Denplax), a venture with a Spanish company responsible for public environmental programs in southern Spain and with an Italian equipment manufacturer. The venture was formed to recycle polyethylene at a facility in El Ejido, Spain. The Company’s investment in Denplax is accounted for using the equity method. During 2010, the Company determined that its investment in Denplax and a related note receivable were no longer recoverable and recorded a $2.4 million charge to earnings to fully reserve the equity investment and note. Both the equity investment and note remain fully reserved as of December 31, 2017. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. Cash and Cash Equivalents Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. Concentrations and Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. As of December 31, 2017, substantially all deposits are maintained in one financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to its cash and cash equivalents. The Company routinely assesses the financial strength of its customers and believes that its trade receivables credit risk exposure is limited. Trade receivables are carried at the original invoice amount less an estimate made for payment discounts and doubtful accounts. A valuation allowance is provided for known and anticipated credit losses and disputed amounts, as determined by management in the course of regularly evaluating individual customer receivables. This evaluation takes into consideration a customer’s financial condition and credit history, as well as current economic conditions. There was no material valuation allowance recorded as of December 31, 2017 and 2016. In the years ended December 31, 2017, 2016 and 2015, sales to certain customers accounted for 10% or more of the Company’s total net sales. For the year ended December 31, 2017, two customers of the Company represented approximately 41% of the Company’s net sales. For the year ended December 31, 2016, two customers of the Company represented approximately 39% of the Company’s net sales. For the year ended December 31, 2015, one customer of the Company represented approximately 27% of the Company’s net sales. At December 31, 2017, three customers represented 29%, 14%, and 11%, respectively, of the Company’s accounts receivable balance. Approximately 33%, 33%, and 35% of the Company’s materials purchases for the years ended December 31, 2017, 2016 and 2015, respectively, were purchased from its four largest suppliers. Inventories Inventories for the Company’s wood-alternative decking and railing products are stated at the lower of cost (last-in, first-out, or LIFO, method) and net realizable value. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated realizable value. The Company’s reserves for estimated slow moving products or obsolescence are not material. At December 31, 2017, the excess of the replacement cost of inventory over the LIFO value of inventory was approximately $20.1 million. Due to the nature of the LIFO valuation methodology, liquidations of inventories will result in a portion of the Company’s cost of sales being based on historical rather than current year costs. A majority of the Company’s products are made in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. The Company grinds up scrap materials generated from its manufacturing process and inventories deemed no longer salable and reintroduces the reclaimed material into the manufacturing process as a substitute for raw materials. The reclaimed material is valued at the costs of the raw material components of the material. Inventories for the Company’s staging and railing products for the commercial and multi-family markets are stated at the lower of cost (first-in, first-out or FIFO method), using actual cost, and net realizable value. Work-in process includes estimated production costs. Property, Plant and Equipment Property, plant and equipment are stated at historical cost. The costs of additions and improvements are capitalized, while maintenance and repairs are expensed as incurred. Depreciation is provided using the straight-line method over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and equipment 10 years Forklifts and tractors 5 years Computer equipment and software 5 years Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. The Company reviews its long-lived assets, including property, plant and equipment, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the long-lived assets. If the estimated cash flows are less than the carrying amount of the long-lived assets, the assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future. As a result, the carrying amount of long-lived assets could be reduced in the future. Long-lived assets held for sale are stated at the lower of cost or fair value less cost to sell. Fair Value Measurement Assets and liabilities measured at fair value are measured at the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and classified into one of the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 – Valuations derived from management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. Goodwill Goodwill represents the excess of cost over net assets acquired resulting from the Company’s 1996 purchase of the Mobil Composite Products Division, the 2011 purchase of the assets of the Iron Deck Corporation, and the 2017 purchase of certain assets and the assumption of certain liabilities of SC Company. The Company evaluates the recoverability of goodwill in accordance with Accounting Standard Codification Topic 350, “ Intangibles – Goodwill and Other The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than the carrying amount to determine if it should proceed with the evaluation of goodwill for impairment. The Company identified its reporting units based on the way it manages its operating segments. Each reporting unit constitutes a business with discrete financial information and a separate operation manager at a level below the Company’s chief operating decision maker. The Company assigned goodwill to the reporting units based on the excess of the fair values acquired over the fair value of the sum of the individual assets acquired and liabilities assumed that were assigned to the reporting units. If the Company proceeds with the two-step impairment test, the Company first compares the fair value of the reporting unit to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the goodwill of that reporting unit is potentially impaired and step two of the impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value should such a circumstance arise. The Company measures fair value of the reporting units based on a present value of future discounted cash flows and a market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the reporting unit is expected to generate in the future. Significant estimates in the discounted cash flows model include: the weighted average cost of capital; long-term rate of growth and profitability of the business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company against certain market information. Significant estimates in the market approach model include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization (EBITDA) in estimating the fair value of the reporting unit. For the years ended December 31, 2017, 2016 and 2015, the Company completed its annual impairment test of goodwill utilizing the qualitative assessment and concluded it was not more likely than not that the fair value of the reporting units are less than the carrying amounts. The Company performs the annual impairment testing of its goodwill as of October 31 of each year. However, actual results could differ from the Company’s estimates and projections, which would affect the assessment of impairment. As of December 31, 2017, the Company had goodwill of $68.5 million that is reviewed annually for impairment. Product Warranty The Company warrants that its residential decking products will be free from material defects in workmanship and materials. This warranty generally extends for a period of 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. With respect to the Company’s Transcend ® ® ® Treasury Stock The Company records the repurchase of shares of its common stock at cost. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. Revenue Recognition For Trex Residential Products, the Company recognizes revenue when title is transferred to customers, which is generally upon shipment of the product to the customer. The Company does not grant contractual product return rights to customers other than pursuant to its residential product warranty. The Company does not expect future product returns to be material and, consequently, does not maintain an allowance for product returns. The Company records all shipping and handling fees in sales and records all of the related costs in cost of sales. The Company offers sales incentive programs to dealers and distributors, including rebates, pricing discounts, favorable payment terms and cooperative advertising, many of which result in cash consideration made to dealers and distributors. The Company accounts for consideration made pursuant to these programs in accordance with accounting guidance that governs consideration given by a vendor to a customer . For Trex Commercial Products, the Company recognizes revenue using the percentage of completion method measured under the cost-to-cost method of accounting, whereby the Company recognizes sales and estimated profit as costs are incurred based on the proportion that the incurred costs represent of total estimated costs for each contract. Contract costs include all direct material, labor, subcontract and certain indirect costs. Administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are recognized when such losses are determined. Changes in job performance, conditions and estimated profitability may result in revisions to costs and income and are recognized in the period they are determined. Revenues recognized in excess of amounts billed are classified under current assets and billings in excess of revenues are classified under current liabilities in the Consolidated Balance Sheets. Stock-Based Compensation The Company measures stock-based compensation at the grant date of the award based on the fair value. For stock options, stock appreciation rights and time-based restricted stock and time-based restricted stock units, stock-based compensation is recognized on a straight line basis over the vesting periods of the award. The Company recognizes forfeitures as they occur. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is probable to be paid out based on the achievement of predetermined performance measures. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Income Taxes The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. The Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The tax legislation H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (Act), was enacted on December 22, 2017. Accordingly, we have recognized the tax effects of the Act in our financial statements and related notes as of and for the year ended December 31, 2017. As of December 31, 2017, the Company has a valuation allowance of $3.1 million against these deferred tax assets. The Company analyzes its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. Research and Development Costs Research and development costs are expensed as incurred. For the years ended December 31, 2017, 2016 and 2015, research and development costs were $3.8 million, $3.7 million, and $1.5 million, respectively, and have been included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Advertising Costs The Company expenses its branding and advertising communication costs as incurred. Significant production costs are deferred and recognized as expense in the period that the related advertisement is first used. At December 31, 2017, 2016 and 2015, $3.8 million, $2.4 million and $0.8 million, respectively, were included in prepaid expenses for production costs. For the years ended December 31, 2017, 2016 and 2015, branding expenses, including advertising expenses as described above, were $31.0 million, $24.8 million, and $23.4 million, respectively. Fair Value of Financial Instruments The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities to approximate the fair value of the respective assets and liabilities at December 31, 2017 and 2016. Recently Adopted Accounting Standards In March 2016, the FASB issued ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting • The Company recorded a tax benefit of $1.7 million within income tax expense related to the excess tax benefits of the settlement or vesting of time-based restricted stock or time-based restricted stock units and performance-based restricted stock or performance-based restricted stock units. The Company applied this guidance prospectively as of January 1, 2016 and, accordingly, data for the year ended December 31, 2015 was not adjusted. Prior to adoption this amount would have been recorded as an increase in additional paid-in capital. Going forward, this change could create volatility in the Company’s effective tax rate. • The Company elected to change its policy on accounting for forfeitures and recognize forfeitures as they occur. The Company applied this guidance on a modified retrospective transition method. The Company determined that the cumulative effect of applying the guidance under the modified retrospective transition method was not material to its Consolidated Financial Statements • Excess tax benefits are now reported as an operating activity in the Company’s Consolidated Statements of Cash Flows, rather than as a financing activity as was previously reported. As the Company applied this guidance prospectively as of January 1, 2016, excess tax benefits for the year ended December 31, 2015 were not adjusted and continue to be reported in financing activities in the Consolidated Statements of Cash Flows. • The standard requires the presentation of employee taxes as a financing activity in the Consolidated Statements of Cash Flows. This provision did not impact the Company’s Consolidated Financial Statements as the Company currently presents employee taxes as a financing activity in its Consolidated Statements of Cash Flows. The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share for 2016, which did not materially increase the diluted weighted average common shares outstanding. New Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606), In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, “ Compensation—Stock Compensation (Topic 718), Scope Modification Accounting |
Acquisition
Acquisition | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Acquisition | 3. ACQUISITION On July 31, 2017, through its newly-formed, wholly-owned subsidiary, Trex Commercial Products, the Company acquired certain assets and assumed certain liabilities of SC Company for $71.8 million in cash. The Company used cash on hand and $30.0 million of funding from its existing revolving credit facility, which was fully paid on August 17, 2017, to acquire the assets. The acquired business designs, engineers and markets modular architectural railing systems and solutions for the commercial and multifamily markets, and provides staging, acoustical and seating systems for commercial markets, including sports stadiums and performing arts venues. As a result of the purchase, the Company gained access to growing commercial markets, expanded its custom design and engineering capabilities, and added the contract architect and specifier communities as new channels for its products. The acquisition was accounted for using the acquisition method of accounting under U.S. Generally Accepted Accounting Principles, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values of consideration transferred and net assets acquired were determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in ASC 820, “ Fair Value Measurements and Disclosures Based on the Company’s preliminary valuation, a total estimated consideration of $71.8 million has been allocated on to the assets acquired and liabilities assumed, as follows (in thousands). During the fourth quarter, a final determination of the purchase price and the final valuation report were completed upon the final determination of working capital at closing. No adjustments were made to the fair values of assets acquired and liabilities assumed as a result: Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total consideration $ 71,804 Goodwill of $57.9 million is primarily attributable to the potential opportunity for the Company to offer full service railing systems in the growing commercial and multi-family markets, access to a complementary product category with a track record of substantial revenue growth, the ability to achieve economies of scale around raw material procurement, an increase in the range of products the Company may offer its core customers, and intangible assets that do not qualify for separable or legal criterion, such as an assembled workforce. The amount of goodwill that was amortized and deductible for tax purposes in 2017 was $1.6 million. All of the goodwill was recorded to the Trex Commercial Products reportable segment. The fair value attributed to intangible assets, which consists of production backlog and trade names and trademarks, is being amortized straight line over 12 months and is based on the estimated economics of the assets. The fair value attributed to the intangible assets acquired and goodwill was based on assumptions and other information compiled by management, including independent valuations that utilized established valuation techniques. From July 31, 2017, through December 31, 2017, Trex Commercial Products generated $21.8 million in net sales and incurred a net loss of $2.3 million, and which included $0.5 million of acquisition-related expenses during the year ended December 31, 2017, which are included in selling, general and administrative expense. The following pro forma results are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the years presented or the results which may occur in the future. The following unaudited pro forma results of operations assume the acquisition occurred on January 1, 2016 (in thousands, except per share amounts): Year Ended December 31 2017 2016 2017 2016 Actual Pro Forma Net sales $ 565,153 $ 479,616 $ 597,288 $ 534,618 Net income $ 95,128 $ 67,847 $ 96,608 $ 68,344 Basic earnings per common share $ 3.24 $ 2.31 $ 3.29 $ 2.33 Diluted earnings per common share $ 3.22 $ 2.29 $ 3.27 $ 2.31 Significant pro forma adjustments included in the above pro forma information include an adjustment to amortization expense for the intangible assets acquired, elimination of transaction costs related to the acquisition as such costs are considered to be non-recurring in nature, an adjustment to compensation expense related to restricted stock units granted in connection with the acquisition, the income tax effects of the adjustments based on a blended statutory rate of 38.0%. |
Inventories
Inventories | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Inventories | 4. INVENTORIES Inventories (at LIFO value) consist of the following as of December 31 (in thousands): 2017 2016 Finished goods $ 32,986 $ 29,686 Raw materials 19,432 20,231 Total FIFO (first-in, first out) inventories 52,418 49,917 Reserve to adjust inventories to LIFO value (20,070 ) (21,371 ) Total LIFO inventories $ 32,348 $ 28,546 Inventory related to the Company’s wood-alternative decking and railing products is stated at the lower of LIFO cost or net realizable value. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated net realizable value. Under the LIFO method, reductions in inventory cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs. There was no inventory reduction during 2017 and 2016. Inventories valued at lower of cost (FIFO method) and net realizable value as of December 31 consist of $2.2 million of raw materials. The Company utilizes the FIFO method of accounting related to its commercial railing and staging products. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 12 Months Ended |
Dec. 31, 2017 | |
Text Block [Abstract] | |
Prepaid Expenses and Other Assets | 5. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following as of December 31 (in thousands): 2017 2016 Prepaid expenses $ 7,494 $ 6,209 Contract retainage 1,449 — Revenues in excess of billings 4,841 — Income tax receivable 2,230 4,024 Other 864 167 Total prepaid expenses and other assets $ 16,878 $ 10,400 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 6. GOODWILL AND OTHER INTANGIBLE ASSETS The following table summarizes the activity related to the carrying amount of goodwill during the year ended December 31, 2017 (in thousands): 2017 Beginning balance, January 1 $ 10,523 Goodwill recognized from acquisition of SC Company 57,938 Ending balance, December 31 $ 68,461 The following table reports the carrying amount of goodwill by reportable segment as of December 31, 2017 (in thousands): 2017 Trex Residential Products $ 14,216 Trex Commercial Products 54,245 Ending Balance, December 31 $ 68,461 Intangible assets acquired from SC Company on July 31, 2017 consist of the following at December 31, 2017: Net Carrying Amortization (in thousands) (in months) Intangible assets: Customer backlog $ 4,000 12 Trade names and trademarks 900 12 Total intangible assets 4,900 Accumulated amortization: Customer backlog (1,666 ) Trade name (376 ) Total accumulated amortization (2,042 ) Intantible assets, net $ 2,858 Intangible asset amounts were determined based on the estimated economics of the asset and are amortized over the estimated useful lives on a straight-line bases, which approximates the pattern in which the economic benefits are expected to be received. Amortization expense for the year ended December 31, 2017 was $2.0 million. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | 7. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consist of the following as of December 31 (in thousands): 2017 2016 Building and improvements $ 49,403 $ 47,859 Machinery and equipment 228,107 223,450 Furniture and fixtures 1,620 2,710 Forklifts and tractors 9,799 10,167 Computer equipment 9,680 10,481 Construction in process 5,954 4,172 Land 11,417 11,417 Total property, plant and equipment 315,980 310,256 Accumulated depreciation (212,870 ) (206,970 ) Total property, plant and equipment, net $ 103,110 $ 103,286 The Company had construction in process as of December 31, 2017 of approximately $5.9 million. The Company expects that the construction in process will be completed and put into service in the year ending December 31, 2018. Depreciation expense for the years ended December 31, 2017, 2016, and 2015 totaled $14.7 million, $14.2 million, and $14.3 million, respectively. In January 2016, the Company sold a portion of the Olive Branch facility that contained the buildings for $4.2 million and recognized a $0.1 million gain on sale, which is reported in “Selling, general and administrative expenses” in the Consolidated Statements of Comprehensive Income. As of December 31, 2017, the Company continues to own approximately 62 acres of undeveloped land that is reported in “Property, plant and equipment, net” in the Consolidated Balance Sheet. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 8. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following as of December 31 (in thousands): 2017 2016 Sales and marketing costs $ 21,964 $ 16,707 Compensation and benefits 14,818 13,298 Manufacturing costs 1,979 1,799 Billings in excess of revenues 1,842 — Customer deposits 1,230 — Rent obligations 779 632 Other 3,654 2,257 Total accrued expenses $ 46,266 $ 34,693 |
Debt
Debt | 12 Months Ended |
Dec. 31, 2017 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT The Company’s debt consists of a revolving credit facility. At December 31, 2017 and 2016, the Company had no outstanding indebtedness. Available borrowing capacity at December 31, 2017, was $200 million. Revolving Credit Facility On January 12, 2016, the Company entered into a Third Amended and Restated Credit Agreement and also the First Amendment to the Third Amended and Restated Credit Agreement (together, the Third Amended Credit Agreement) with Bank of America, N.A. (BOA) as Lender, Administrative Agent, Swing Line Lender and Letter of Credit Issuer; and certain other lenders including Citibank, N.A., Capital One, N.A., and SunTrust Bank (collectively, Lenders) arranged by Bank of America Merrill Lynch as Sole Lead Arranger and Sole Bookrunner. The Third Amended Credit Agreement amended and restated the Second Amended Credit Agreement. Under the Third Amended Credit Agreement, the Lenders agree to provide the Company with one or more revolving loans in a collective maximum principal amount of $250 million from January 1 through June 30 of each year and a maximum principal amount of $200 million from July 1 through December 31 of each year throughout the term, which ends January 12, 2021. Included within the revolving loan limit are sublimits for a letter of credit facility in an amount not to exceed $15 million and swing line loans in an aggregate principal amount at any time outstanding not to exceed $5 million. The revolving loans, the letter of credit facility and the swing line loans are for the purpose of funding working capital needs and supporting general business operations. Additionally, within the Revolving Loan Limit, the Company could borrow, repay, and reborrow, at any time or from time to time while the Third Amended Credit Agreement is in effect. The Company has the option to select interest rates for each loan request at the Base Rate or Eurodollar Rate. Base rate loans under the revolving loans and the swing line loans accrue interest at the Base Rate plus the Applicable Rate. Eurodollar Rate Loans for the revolving loans and swing line loans accrue interest at the Adjusted London InterBank Offered Rate plus the Applicable Rate. 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 Eurodollar Rate plus 1.0%. Repayment of all then outstanding principal, interest, fees and costs is due on January 12, 2021. The Company shall reimburse BOA for all amounts payable, including interest, under a letter of credit at the earlier of (i) the date set forth in the application, or (ii) one business day after the payment under such letter of credit by BOA. The Third Amended Credit Agreement is secured by property with respect to which liens in favor of the Administrative Agent, for the benefit of itself and the other holders of the obligations, are purported to be granted pursuant to and in accordance with the terms of the collateral documents as referenced in the Third Amended Credit Agreement. Compliance with Debt Covenants and Restrictions The Company’s ability to make scheduled principal and interest payments, borrow and repay amounts under any outstanding revolving credit facility and continue to comply with any loan covenants depends primarily on its ability to generate sufficient cash flows from operations. To remain in compliance with financial covenants, the Company is required to maintain specified financial ratios based on levels of debt, fixed charges, and earnings (excluding extraordinary gains and extraordinary non-cash losses) before interest, taxes, depreciation and amortization, all of which are subject to the risks of the business, some of which are discussed in this report under “Risk Factors.” The material financial covenants and restrictions do not permit the Company’s fixed charge coverage ratio to be less than 1.5 to 1.0 and do not permit the Company’s consolidated debt to consolidated EBITDA ratio to exceed 3.0 to 1.0, measured as of the end of each fiscal quarter (and in the case of Consolidated EBITDA, for the four-quarter period ending on such date). The Company was in compliance with all covenants contained in the Third Amended Credit Agreement at December 31, 2017. 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. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2017 | |
Investments, All Other Investments [Abstract] | |
Financial Instruments | 10. FINANCIAL INSTRUMENTS The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities to approximate the fair value of the respective assets and liabilities at December 31, 2017 and 2016. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | 11. STOCKHOLDERS’ EQUITY Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 95,128 $ 67,847 $ 48,098 Denominator: Basic weighted average shares outstanding 29,392,559 29,394,559 31,350,542 Effect of dilutive securities: SARS 99,321 125,119 197,299 Restricted stock 83,580 92,991 134,668 Diluted weighted average shares outstanding 29,575,460 29,612,669 31,682,509 Basic earnings per share $ 3.24 $ 2.31 $ 1.53 Diluted earnings per share $ 3.22 $ 2.29 $ 1.52 Diluted earnings per share is computed using the weighted average number of shares determined for the basic earnings per share computation plus the dilutive effect of common stock equivalents using the treasury stock method. The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Year Ended December 31, 2017 2016 2015 Restricted stock 83 12 501 Stock appreciation rights 10,617 4,631 5,828 Stock Repurchase Programs On October 23, 2014, the Board of Directors authorized a common stock repurchase program of up to 2.0 million shares of the Company’s outstanding common stock (October 2014 Stock Repurchase Program). This authorization had no expiration date. During 2015, the Company repurchased 1,134,300 shares for $45.2 million under the October 2014 Stock Repurchase Program. On October 22, 2015, the Board of Directors terminated the October 2014 Stock Repurchase Program and adopted a new stock repurchase program of up to 3.15 million shares of the Company’s outstanding common stock (October 2015 Stock Repurchase Program). This authorization terminated on December 31, 2016. During 2016, the Company repurchased 1,578,952 shares for $53.3 million under the October 2015 Stock Repurchase Program. On February 16, 2017, the Board of Directors authorized a common stock repurchase program of up to 2.961 million shares of the Company’s outstanding common stock (February 2017 Stock Repurchase Program). The Company made no repurchases under the February 2017 Stock Repurchase Program. On February 16, 2018, the Board of Directors terminated the February 2017 Stock Repurchase Program and adopted a new stock repurchase program of up to 2.9 million shares of the Company’s outstanding common stock (February 2018 Stock Repurchase Program). As of the date of this report, the Company has made no repurchases under the February 2018 Stock Repurchase Program. |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 12. STOCK-BASED COMPENSATION On April 30, 2014, the Company’s stockholders approved the Trex Company, Inc. 2014 Stock Incentive Plan (Plan), which was previously approved by the Board of Directors on February 19, 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan, as previously disclosed. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. Stock-based compensation is granted to officers, directors and certain key employees in accordance with the provisions of the Plan. The Plan provides for grants of stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and unrestricted stock. The total aggregate number of shares of the Company’s common stock that may be issued under the Plan is 6,420,000. The Company recognizes stock-based compensation expense ratably over the period from grant date to the earlier of (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is probable to be paid out based on the achievement of the predetermined performance measures. For the employee stock purchase plan, compensation expense is recognized related to the discount on purchases. The following table summarizes the Company’s stock-based compensation expense (in thousands): Year Ended December 31, 2017 2016 2015 Time-based restricted stock and time-based restricted stock units $ 1,992 $ 2,281 $ 2,704 Performance-based restricted stock and performance-based restricted stock units 2,805 2,210 1,562 Stock appreciation rights 251 184 525 Employee stock purchase plan 139 113 70 Total stock-based compensation $ 5,187 $ 4,788 $ 4,861 Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. Time-Based Restricted Stock and Time-Based Restricted Stock Units The fair value of time-based restricted stock and time-based restricted stock units is determined based on the closing price of the Company’s shares on the grant date. Time-based restricted stock and time-based restricted stock units vest based on the terms of the awards. Unvested time-based restricted stock and unvested time-based restricted stock units are generally forfeitable upon the resignation of employment or termination of employment with cause. The total fair value of vested time-based restricted shares and vested time-based restricted stock units for the years ended December 31, 2017, 2016 and 2015 was $5.5 million, $1.7 million, and $9.8 million, respectively. At December 31, 2017, there was $2.1 million of total compensation expense related to unvested time-based restricted stock and unvested time-based restricted stock units remaining to be recognized over a weighted-average period of approximately 1.8 years. Time-based restricted stock and restricted stock unit activity under the Plan and all predecessor stock incentive plans is as follows: Time-based Weighted-Average Grant Price Per Share Nonvested at December 31, 2014 329,562 $ 18.89 Granted 57,598 $ 43.81 Vested (230,704 ) $ 42.37 Forfeited (48,549 ) $ 20.20 Nonvested at December 31, 2015 107,907 $ 29.43 Granted 57,874 $ 37.64 Vested (43,848 ) $ 42.34 Forfeited (133 ) $ 43.89 Nonvested at December 31, 2016 121,800 $ 31.59 Granted 36,201 $ 72.54 Vested (81,186 ) $ 28.90 Forfeited (256 ) $ 37.36 Nonvested at December 31, 2017 76,559 $ 53.79 Performance-based Restricted Stock and Performance-Based Restricted Stock Units The fair value of performance-based restricted stock and performance-based restricted stock units is determined based on the closing price of the Company’s shares on the grant date. Unvested performance-based restricted stock and unvested performance-based restricted stock units are generally forfeitable upon the resignation of employment or termination of employment with cause. The performance-based restricted shares and performance-based restricted stock units have a three-year vesting period, vesting one-third each year based on target earnings before interest, taxes, depreciation and amortization (EBITDA) for 1 year, cumulative 2 years and cumulative 3 years, respectively. The number of shares that will vest, with respect to each vesting, will be between 0% and 200% of the target number of shares. At December 31, 2017, 2016, and 2015 there was $1.8 million, $1.2 million, and $0.6 million, respectively, of total compensation expense related to unvested performance-based restricted stock and unvested performance-based restricted stock units remaining to be recognized over a weighted-average period of approximately 1.9 years. Performance-based restricted stock activity under the Plan is as follows: Performance-based Weighted-Average Nonvested at December 31, 2014 42,676 $ 33.72 Granted 34,638 $ 43.89 Vested (35,679 ) $ 41.91 Forfeited (12,538 ) $ 38.12 Nonvested at December 31, 2015 29,097 $ 39.38 Granted 44,925 $ 35.83 Vested (14,949 ) $ 35.71 Forfeited (657 ) $ 33.72 Nonvested at December 31, 2016 58,416 $ 36.63 Granted 43,307 $ 57.54 Vested (43,394 ) $ 37.27 Forfeited — $ — Nonvested at December 31, 2017 58,329 $ 51.69 Stock Appreciation Rights SARs are granted with a grant price equal to the closing market price of the Company’s common stock on the date of grant. These awards expire ten years after the date of grant and vest based on the terms of the individual awards. The SARs are generally forfeitable upon the resignation of employment or termination of employment with cause. The Company recognizes compensation cost on a straight-line basis over the vesting period for the award. As of December 31, 2017, there was $0.3 million of unrecognized compensation cost related to SARs. The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing model. There were no SARs issued in the year ended December 31, 2016. For SARs issued in the years ended December 31, 2017 and 2015, respectively, the assumptions shown in the following table were used: December 31, 2017 2015 Dividend yield 0 % 0 % Average risk-free interest rate 2.0 % 1.6 % Expected term (years) 5 5 Expected volatility 42.3 % 42.9 % Dividend Yield. Average Risk-Free Interest Rate. Expected Term. Expected Volatility. The Company recognizes forfeitures as they occur. The weighted-average grant date fair value of SARs granted during the years ended December 31, 2017 and 2015 was $27.97 and $16.26, respectively. SAR activity under the Plan and all predecessor stock incentive plans is as follows: SARs Weighted-Average Weighted- Aggregate Outstanding at December 31, 2014 515,830 $ 13.98 Granted 15,585 $ 41.19 Exercised (263,626 ) $ 13.86 Canceled (5,712 ) $ 21.94 Outstanding at December 31, 2015 262,077 $ 13.13 Granted — $ — Exercised (124,352 ) $ 11.09 Canceled — $ — Outstanding at December 31, 2016 137,725 $ 19.57 Granted 18,739 $ 70.75 Exercised (17,406 ) $ 16.13 Canceled — $ — Outstanding at December 31, 2017 139,058 $ 26.89 5.3 $ 11,333,033 Vested at December 31, 2017 139,058 $ 26.89 5.3 $ 11,333,033 Exercisable at December 31, 2017 115,191 $ 19.12 4.6 $ 10,282,908 Employee Stock Purchase Plan The Company has an employee stock purchase plan (ESPP) that permits eligible employees to purchase shares of common stock of the Company at a purchase price which is the lesser of 85% of the market price on either the first day of the calendar quarter or the last day of the calendar quarter. Eligible employees may elect to participate in the plan by authorizing payroll deductions of up to 15% of gross compensation for each payroll period. On the last day of each quarter, each participant’s contribution account is used to purchase the maximum number of whole shares of common stock determined by dividing the contribution account balance by the purchase price. The aggregate number of shares of common stock that may be purchased under the plan is 600,000. Through December 31, 2017, employees had purchased approximately 429,073 shares under the plan. Stock Options Stock options are granted with an exercise price equal to the closing market price of the Company’s common stock on the date of grant. These awards expire ten years after the date of grant and vest based on the terms of the individual awards. The options are generally forfeitable upon termination of a holder’s service as an employee or director, unless the individual’s service is terminated due to retirement, death or permanent disability. The fair value of each stock option award is estimated on the date of grant using a Black-Scholes option-pricing model. The Company recognizes compensation cost on a straight-line basis over the vesting period for the award. All outstanding options were exercised during fiscal 2015 and there were no stock options outstanding at December 31, 2017 and 2016. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Leases | 13. LE SES The Company leases office space, storage warehouses and certain office and plant equipment under various operating leases. Minimum annual payments under these non-cancelable leases as of December 31, 2017 were as follows (in thousands): Year Ending December 31, 2018 $ 10,626 2019 9,344 2020 7,223 2021 6,716 2022 4,843 Thereafter 14,046 Total minimum lease payments $ 52,798 For the years ended December 31, 2017, 2016 and 2015, the Company recognized rental expenses of approximately $9.1 million, $9.9 million, and $7.7 million, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2017 | |
Postemployment Benefits [Abstract] | |
Employee Benefit Plans | 14. EMPLOYEE BENEFIT PLANS The Company has two 401(k) Profit Sharing Plans for the benefit of its employees who meet certain eligibility requirements. The plans cover substantially all of the Company’s full-time employees. One of the plans provides for the Company to match contributions equal to 100% of an employee’s contribution to the plan up to 6% of base salary. The other plan provides for the Company to match $0.25 for every $1.00 contributed by an employee to the plan up to 6% of compensation. The Company’s contributions to the plans totaled $3.0 million, $2.5 million, and $2.2 million for the years ended December 31, 2017, 2016 and 2015, respectively. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES Income tax provision (benefit) consists of the following (in thousands): Year Ended December 31, 2017 2016 2015 Current income tax provision: Federal $ 41,177 $ 26,752 $ 25,105 State 5,420 2,798 2,560 46,597 29,550 27,665 Deferred income tax provision: Federal 1,177 5,217 987 State (983 ) 216 37 194 5,433 1,024 Total income tax provision $ 46,791 $ 34,983 $ 28,689 The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands): Year Ended December 31, 2017 2016 2015 U.S. Federal statutory taxes $ 49,671 $ 35,990 $ 26,876 State and local taxes, net of U.S. Federal benefit 5,110 3,747 2,806 Permanent items 576 396 1,308 Excess tax benefits from vesting or settlement of stock compensation awards (1,454 ) (1,749 ) — Domestic production activities deduction (4,376 ) (2,740 ) (2,262 ) Federal credits (534 ) (488 ) (328 ) Other (2,202 ) (173 ) 289 Total income tax provision $ 46,791 $ 34,983 $ 28,689 Deferred tax assets and liabilities consist of the following (in thousands): As of December 31, 2017 2016 Deferred tax assets: Net operating losses $ 123 $ 93 Residential product warranty reserve 8,876 14,510 Stock-based compensation 1,823 2,186 Accruals not currently deductible and other 1,838 2,261 Inventories 3,783 5,785 State tax credit carryforwards 3,619 4,020 Gross deferred tax assets, before valuation allowance 20,062 28,855 Valuation allowance (3,096 ) (4,061 ) Gross deferred tax assets, after valuation allowance 16,966 24,794 Deferred tax liabilities: Depreciation and other (18,055 ) (25,688 ) Gross deferred tax liabilities (18,055 ) (25,688 ) Net deferred tax (liability) asset $ (1,089 ) $ (894 ) The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. In accordance with accounting standards, the Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The Company has recognized the tax effects of the Tax Cuts and Jobs Act (Act) in its consolidated financial statements and related notes as of and for the year ended December 31, 2017. Deferred tax assets and deferred tax liabilities that existed as of the enactment date and that are expected to reverse after the Act’s effective date of January 1, 2018 have been adjusted to reflect the new Federal statutory tax rate of 21%. The effect of the change in tax rate on the deferred tax assets and deferred tax liabilities resulted in a tax benefit of $1.9 million for the year ended December 31, 2017, which is included in “Other” in the above tax rate reconciliation. We continue to analyze certain aspects of the Act and refine our calculation, which could potentially affect the measurement of these balances or give rise to new deferred tax amounts. As of December 31, 2017, the Company had a valuation allowance of $3.1 million against deferred tax assets it estimates will not be realized. The Company will analyze its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. In 2016, the Company adopted ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting The Company recognizes interest and penalties related to tax matters as a component of “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. As of December 31, 2017, the Company has identified no uncertain tax position and, accordingly, has not recorded any unrecognized tax benefits or associated interest and penalties. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company has accrued a liability when it believes that it is not more likely than not that it will realize the benefits of tax positions that it has taken or for the amount of any tax benefit that exceeds the cumulative probability threshold in accordance with accounting standards. As of December 31, 2017, Federal tax years 2013 through 2016 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdictions as the Company does not have a taxable presence. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION Prior to July 31, 2017, the Company operated in one reportable segment. Subsequent to the acquisition of certain assets and assumption of certain liabilities of SC Company on July 31, 2017, the Company operates in two reportable segments: • Trex Residential Products manufactures wood-alternative decking and railing and related products marketed under the brand name Trex ® • Trex Commercial Products designs, engineers, and markets modular and architectural railing systems and solutions for the commercial and multifamily markets, and staging, acoustical and seating systems for commercial markets, including sports stadiums and performing arts venues. The segment’s products are sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. Trex Commercial Products net sales were $21.8 million from the date of acquisition through December 31, 2017. The Company’s operating segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial operations. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. The below segment data for the year ended December 31, 2017, includes data for Trex Residential Products for the year ended December 31, 2017, and data for Trex Commercial Products from the date of the acquisition of SC Company through December 31, 2017 (in thousands): Year ended December 31, 2017 Residential Commercial Total Net sales $ 543,346 $ 21,807 $ 565,153 Net income (loss) $ 97,412 $ (2,284 ) $ 95,128 EBITDA $ 160,382 $ (1,272 ) $ 159,110 Depreciation and amortization $ 14,598 $ 2,132 $ 16,730 Income tax expense (benefit) $ 47,911 $ (1,120 ) $ 46,791 Capital expenditures $ 14,989 $ 51 $ 15,040 Total assets $ 247,817 $ 78,410 $ 326,227 Reconciliation of net income to EBITDA: Year Ended December 31, 2017 Residential Commercial Total Net income (loss) $ 97,412 $ (2,284 ) $ 95,128 Interest 461 — 461 Taxes 47,911 (1,120 ) 46,791 Depreciation and amortization 14,598 2,132 16,730 EBITDA $ 160,382 $ (1,272 ) $ 159,110 |
Seasonality
Seasonality | 12 Months Ended |
Dec. 31, 2017 | |
Text Block [Abstract] | |
Seasonality | 17. SEASONALITY The Company’s 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 improvement and construction activity and can shift demand for Trex products to a later period. As part of its normal business practice and consistent with industry practice, the Company 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 the Company’s product to meet anticipated seasonal consumer demand. The seasonal effects are often offset by the positive effect of the incentive programs. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. COMMITMENTS AND CONTINGENCIES Legal Matters The Company has lawsuits, as well as other claims, pending against it which are ordinary routine litigation and claims incidental to the business. Management has evaluated the merits of these lawsuits and claims, and believes that their ultimate resolution will not have a material effect on the Company’s consolidated financial condition, results of operations, liquidity or competitive position. Purchase Commitments The Company fulfills requirements for raw materials under both purchase orders and supply contracts. In the year ended December 31, 2017, the Company purchased substantially all of its reclaimed wood fiber requirements under purchase orders which do not involve long-term supply commitments. All of the Company’s scrap polyethylene, aluminum and stainless steel purchases are under short-term supply contracts that may average approximately one to two years, for which pricing is negotiated as needed, or under purchase orders that do not involve long-term supply commitments. The wood and polyethylene supply contracts generally provide that the Company is obligated to purchase all of the wood or polyethylene a supplier provides, if the wood or polyethylene meets certain specifications. The amount of wood and polyethylene the Company is required to purchase under these contracts varies with the production of its suppliers and, accordingly, is not fixed or determinable. As of December 31, 2017, the Company has purchase commitments under material supply contracts of $47.2 million, $9.5 million, and $5.9 million for the years ending December 31, 2018, 2019, and 2020, respectively. Product Warranty The Company warrants that its residential products will be free from material defects in workmanship and materials. This warranty generally extends for a period of 25 years for residential use and 10 years for commercial use, excluding Trex Signature™ Railing, which has a warranty period of 25 years for both residential and commercial use. The Company further warrants that Trex Transcend ® ® ® 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 (1) the number of claims to be settled with payment and (2) the average cost to settle each claim. To estimate the number of claims to be settled with payment, the Company utilizes actuarial techniques to determine a reasonable possible range of claims to be received and the percentage of those claims that will ultimately require payment. Management utilizes a range of assumptions derived from claim count history and the identification of factors influencing the claim counts to determine its best estimate of future claims for which to record a related liability. The number of claims received has declined each year since peaking in 2009, although the rate of decline has decelerated in recent years. The cost per claim varies due to a number of factors, including the size of affected decks, the availability and type of replacement material used, the cost of production of replacement material and the method of claim settlement. The Company monitors surface flaking claims activity each quarter for indications that its estimates require revision. Typically, a majority of surface flaking claims received in a year are received during the summer outdoor season, which spans the second and third quarters. It has been the Company’s practice to utilize the actuarial techniques discussed above during the third quarter, after a significant portion of all claims has been received for the fiscal year and variances to annual claims expectations are more meaningful. The number of claims received in the year ended December 31, 2017 was lower than claims received in the year ended December 31, 2016, and consistent with the Company’s expectations for 2017. Also, the average settlement cost per claim experienced in the year ended December 31, 2017 was lower than the average settlement cost per claim experienced during the year ended December 31, 2016 and consistent with the Company’s expectation for 2017. Based on the facts and circumstances at December 31, 2017, the Company believes its reserve is sufficient to cover future surface flaking obligations. The Company’s analysis is based on currently known facts and a number of assumptions, as discussed above, and current expectations. Projecting future events such as the number of claims to be received, the number of claims that will require payment and the average cost of claims could cause the actual warranty liabilities to be higher or lower than those projected, which could materially affect the Company’s financial condition, results of operations or cash flows. The Company estimates that the annual number of claims received will continue to decline over time and that the average cost per claim will increase slightly, primarily due to inflation. If the level of claims received or average cost per claim differs materially from expectations, it could result in additional increases or decreases to the warranty reserve and a decrease or increase in earnings and cash flows in future periods. The Company estimates that a 10% change in the expected number of remaining claims to be settled with payment or the expected cost to settle claims may result in approximately a $2.8 million change in the surface flaking warranty reserve. The Company also maintains a warranty reserve for the settlement of other residential product warranty claims and records the provision at the time of product sale. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Year Ended December 31, 2017 Surface Other Total Beginning balance, January 1 $ 33,847 $ 3,845 $ 37,692 Provisions and changes in estimates — 4,268 4,268 Settlements made during the period (5,689 ) (1,272 ) (6,961 ) Ending balance, December 31 $ 28,158 $ 6,841 $ 34,999 Year Ended December 31, 2016 Surface Other Total Beginning balance, January 1 $ 29,673 $ 3,849 $ 33,522 Provisions and changes in estimates 9,835 1,017 10,852 Settlements made during the period (5,661 ) (1,021 ) (6,682 ) Ending balance, December 31 $ 33,847 $ 3,845 $ 37,692 |
Interim Financial Data (Unaudit
Interim Financial Data (Unaudited) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Interim Financial Data (Unaudited) | 19. INTERIM FINANCIAL DATA (Unaudited) Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, (In thousands, except share and per share data) Net sales $ 122,212 $ 140,194 $ 157,941 $ 144,806 $ 95,322 $ 106,168 $ 146,450 $ 131,676 Gross profit $ 50,906 $ 55,284 $ 72,014 $ 65,169 $ 38,113 $ 29,945 $ 61,410 $ 57,627 Net income $ 18,299 $ 20,098 $ 28,782 $ 27,949 $ 12,629 $ 7,787 $ 23,725 $ 23,706 Basic net income per share $ 0.62 $ 0.68 $ 0.98 $ 0.95 $ 0.43 $ 0.27 $ 0.81 $ 0.80 Basic weighted average common shares outstanding 29,412,848 29,404,049 29,389,458 29,363,210 29,318,915 29,295,284 29,264,362 29,697,722 Diluted net income per share $ 0.62 $ 0.68 $ 0.97 $ 0.95 $ 0.43 $ 0.26 $ 0.80 $ 0.79 Diluted weighted average common shares outstanding 29,611,129 29,578,216 29,550,418 29,561,406 29,543,842 29,516,718 29,477,870 29,910,292 The Company’s 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 improvement and construction activity and can shift demand for Trex products to a later period. The Tax Cuts and Jobs Act (Act) was enacted on December 22, 2017. Accordingly, the Company has recognized the tax effects of the Act in its consolidated financial statements and related notes as of and for the year ended December 31, 2017. Deferred tax assets that existed as of the enactment date and that are expected to reverse after the Act’s effective date of January 1, 2018 have been adjusted to reflect the new Federal statutory tax rate of 21%. The effect of the change in tax rate on the deferred tax assets and deferred tax liabilities resulted in a tax benefit of $1.9 million for the year ended December 31, 2017. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts and Reserves | 12 Months Ended |
Dec. 31, 2017 | |
Valuation and Qualifying Accounts [Abstract] | |
Schedule II - Valuation and Qualifying Accounts and Reserves | TREX COMPANY, INC. SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS AND RESERVES (In thousands) Descriptions Balance at Additions Deductions Balance Year ended December 31, 2017: Residential product warranty reserve $ 37,692 $ 4,268 $ (6,961 ) $ 34,999 Income tax valuation allowance $ 4,061 $ — $ (965 ) $ 3,096 Year ended December 31, 2016: Residential product warranty reserve $ 33,522 $ 10,852 $ (6,682 ) $ 37,692 Income tax valuation allowance $ 4,582 $ — $ (521 ) $ 4,061 Year ended December 31, 2015: Residential product warranty reserve $ 33,841 $ 8,515 $ (8,834 ) $ 33,522 Income tax valuation allowance $ 4,465 $ 117 $ — $ 4,582 |
Summary of Significant Accoun27
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Basis of Accounting | Basis of Accounting The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States. The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiary, Trex Wood-Polymer Espana, S.L. (TWPE) for all years presented, and its newly-formed, wholly-owned subsidiary, Trex Commercial Products, Inc. (Trex Commercial Products), from July 31, 2017 through December 31, 2017. Intercompany accounts and transactions have been eliminated in consolidation. TWPE was formed to hold the Company’s 35% equity interest in Denplax, S.A. (Denplax), a venture with a Spanish company responsible for public environmental programs in southern Spain and with an Italian equipment manufacturer. The venture was formed to recycle polyethylene at a facility in El Ejido, Spain. The Company’s investment in Denplax is accounted for using the equity method. During 2010, the Company determined that its investment in Denplax and a related note receivable were no longer recoverable and recorded a $2.4 million charge to earnings to fully reserve the equity investment and note. Both the equity investment and note remain fully reserved as of December 31, 2017. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes. Actual results could differ from those estimates. |
Cash and Cash Equivalents | Cash and Cash Equivalents Cash equivalents consist of highly liquid investments purchased with original maturities of three months or less. |
Concentrations and Credit Risk | Concentrations and Credit Risk The Company’s financial instruments that are exposed to concentrations of credit risk consist primarily of cash and cash equivalents and trade accounts receivable. The Company from time to time may have bank deposits in excess of insurance limits of the Federal Deposit Insurance Corporation. As of December 31, 2017, substantially all deposits are maintained in one financial institution. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to its cash and cash equivalents. The Company routinely assesses the financial strength of its customers and believes that its trade receivables credit risk exposure is limited. Trade receivables are carried at the original invoice amount less an estimate made for payment discounts and doubtful accounts. A valuation allowance is provided for known and anticipated credit losses and disputed amounts, as determined by management in the course of regularly evaluating individual customer receivables. This evaluation takes into consideration a customer’s financial condition and credit history, as well as current economic conditions. There was no material valuation allowance recorded as of December 31, 2017 and 2016. In the years ended December 31, 2017, 2016 and 2015, sales to certain customers accounted for 10% or more of the Company’s total net sales. For the year ended December 31, 2017, two customers of the Company represented approximately 41% of the Company’s net sales. For the year ended December 31, 2016, two customers of the Company represented approximately 39% of the Company’s net sales. For the year ended December 31, 2015, one customer of the Company represented approximately 27% of the Company’s net sales. At December 31, 2017, three customers represented 29%, 14%, and 11%, respectively, of the Company’s accounts receivable balance. Approximately 33%, 33%, and 35% of the Company’s materials purchases for the years ended December 31, 2017, 2016 and 2015, respectively, were purchased from its four largest suppliers. |
Inventories | Inventories Inventories for the Company’s wood-alternative decking and railing products are stated at the lower of cost (last-in, first-out, or LIFO, method) and net realizable value. The Company periodically reviews its inventory for slow moving or obsolete items and writes down the related products to estimated realizable value. The Company’s reserves for estimated slow moving products or obsolescence are not material. At December 31, 2017, the excess of the replacement cost of inventory over the LIFO value of inventory was approximately $20.1 million. Due to the nature of the LIFO valuation methodology, liquidations of inventories will result in a portion of the Company’s cost of sales being based on historical rather than current year costs. A majority of the Company’s products are made in a proprietary process that combines reclaimed wood fibers and scrap polyethylene. The Company grinds up scrap materials generated from its manufacturing process and inventories deemed no longer salable and reintroduces the reclaimed material into the manufacturing process as a substitute for raw materials. The reclaimed material is valued at the costs of the raw material components of the material. Inventories for the Company’s staging and railing products for the commercial and multi-family markets are stated at the lower of cost (first-in, first-out or FIFO method), using actual cost, and net realizable value. Work-in process includes estimated production costs. |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are stated at historical cost. The costs of additions and improvements are capitalized, while maintenance and repairs are expensed as incurred. Depreciation is provided using the straight-line method over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and equipment 10 years Forklifts and tractors 5 years Computer equipment and software 5 years Leasehold improvements are amortized over the shorter of the lease term or the estimated useful life of the asset. The Company reviews its long-lived assets, including property, plant and equipment, whenever events or changes in circumstances indicate that the carrying amount of the assets may not be fully recoverable. To determine the recoverability of its long-lived assets, the Company evaluates the probability that future estimated undiscounted net cash flows will be less than the carrying amount of the long-lived assets. If the estimated cash flows are less than the carrying amount of the long-lived assets, the assets are written down to their fair value. The Company’s estimates of anticipated cash flows and the remaining estimated useful lives of long-lived assets could be reduced in the future. As a result, the carrying amount of long-lived assets could be reduced in the future. Long-lived assets held for sale are stated at the lower of cost or fair value less cost to sell. |
Fair Value Measurement | Fair Value Measurement Assets and liabilities measured at fair value are measured at the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date and classified into one of the following fair value hierarchy: • Level 1 – Quoted prices for identical instruments in active markets. • Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model derived valuations in which all significant inputs and significant value drivers are observable in active markets. • Level 3 – Valuations derived from management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model. |
Goodwill | Goodwill Goodwill represents the excess of cost over net assets acquired resulting from the Company’s 1996 purchase of the Mobil Composite Products Division, the 2011 purchase of the assets of the Iron Deck Corporation, and the 2017 purchase of certain assets and the assumption of certain liabilities of SC Company. The Company evaluates the recoverability of goodwill in accordance with Accounting Standard Codification Topic 350, “ Intangibles – Goodwill and Other The Company first assesses qualitative factors to determine if it is more likely than not that the fair value of the reporting units is less than the carrying amount to determine if it should proceed with the evaluation of goodwill for impairment. The Company identified its reporting units based on the way it manages its operating segments. Each reporting unit constitutes a business with discrete financial information and a separate operation manager at a level below the Company’s chief operating decision maker. The Company assigned goodwill to the reporting units based on the excess of the fair values acquired over the fair value of the sum of the individual assets acquired and liabilities assumed that were assigned to the reporting units. If the Company proceeds with the two-step impairment test, the Company first compares the fair value of the reporting unit to its carrying value. If the carrying value of a reporting unit exceeds its fair value, the goodwill of that reporting unit is potentially impaired and step two of the impairment analysis is performed. In step two of the analysis, an impairment loss is recorded equal to the excess of the carrying value of the reporting unit’s goodwill over its implied fair value should such a circumstance arise. The Company measures fair value of the reporting units based on a present value of future discounted cash flows and a market valuation approach. The discounted cash flows model indicates the fair value of the reporting unit based on the present value of the cash flows that the reporting unit is expected to generate in the future. Significant estimates in the discounted cash flows model include: the weighted average cost of capital; long-term rate of growth and profitability of the business; and working capital effects. The market valuation approach indicates the fair value of the business based on a comparison of the Company against certain market information. Significant estimates in the market approach model include identifying appropriate market multiples and assessing earnings before interest, income taxes, depreciation and amortization (EBITDA) in estimating the fair value of the reporting unit. For the years ended December 31, 2017, 2016 and 2015, the Company completed its annual impairment test of goodwill utilizing the qualitative assessment and concluded it was not more likely than not that the fair value of the reporting units are less than the carrying amounts. The Company performs the annual impairment testing of its goodwill as of October 31 of each year. However, actual results could differ from the Company’s estimates and projections, which would affect the assessment of impairment. As of December 31, 2017, the Company had goodwill of $68.5 million that is reviewed annually for impairment. |
Product Warranty | Product Warranty The Company warrants that its residential decking products will be free from material defects in workmanship and materials. This warranty generally extends for a period of 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. With respect to the Company’s Transcend ® ® ® |
Treasury Stock | Treasury Stock The Company records the repurchase of shares of its common stock at cost. These shares are considered treasury stock, which is a reduction to stockholders’ equity. Treasury stock is included in authorized and issued shares but excluded from outstanding shares. |
Revenue Recognition | Revenue Recognition For Trex Residential Products, the Company recognizes revenue when title is transferred to customers, which is generally upon shipment of the product to the customer. The Company does not grant contractual product return rights to customers other than pursuant to its residential product warranty. The Company does not expect future product returns to be material and, consequently, does not maintain an allowance for product returns. The Company records all shipping and handling fees in sales and records all of the related costs in cost of sales. The Company offers sales incentive programs to dealers and distributors, including rebates, pricing discounts, favorable payment terms and cooperative advertising, many of which result in cash consideration made to dealers and distributors. The Company accounts for consideration made pursuant to these programs in accordance with accounting guidance that governs consideration given by a vendor to a customer . For Trex Commercial Products, the Company recognizes revenue using the percentage of completion method measured under the cost-to-cost method of accounting, whereby the Company recognizes sales and estimated profit as costs are incurred based on the proportion that the incurred costs represent of total estimated costs for each contract. Contract costs include all direct material, labor, subcontract and certain indirect costs. Administrative costs are charged to expense as incurred. Provisions for estimated losses on uncompleted contracts are recognized when such losses are determined. Changes in job performance, conditions and estimated profitability may result in revisions to costs and income and are recognized in the period they are determined. Revenues recognized in excess of amounts billed are classified under current assets and billings in excess of revenues are classified under current liabilities in the Consolidated Balance Sheets. |
Stock-Based Compensation | Stock-Based Compensation The Company measures stock-based compensation at the grant date of the award based on the fair value. For stock options, stock appreciation rights and time-based restricted stock and time-based restricted stock units, stock-based compensation is recognized on a straight line basis over the vesting periods of the award. The Company recognizes forfeitures as they occur. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is probable to be paid out based on the achievement of predetermined performance measures. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. |
Income Taxes | Income Taxes The Company recognizes deferred tax assets and liabilities based on the difference between the financial statement basis and tax basis of assets and liabilities using enacted rates expected to be in effect during the year in which the differences reverse. The Company assesses the likelihood that its deferred tax assets will be realized. Deferred tax assets are reduced by a valuation allowance when, after considering all available positive and negative evidence, it is determined that it is more likely than not that some portion, or all, of the deferred tax asset will not be realized. The tax legislation H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (Act), was enacted on December 22, 2017. Accordingly, we have recognized the tax effects of the Act in our financial statements and related notes as of and for the year ended December 31, 2017. As of December 31, 2017, the Company has a valuation allowance of $3.1 million against these deferred tax assets. The Company analyzes its position in subsequent reporting periods, considering all available positive and negative evidence, in determining the expected realization of its deferred tax assets. |
Research and Development Costs | Research and Development Costs Research and development costs are expensed as incurred. For the years ended December 31, 2017, 2016 and 2015, research and development costs were $3.8 million, $3.7 million, and $1.5 million, respectively, and have been included in “Selling, general and administrative expenses” in the accompanying Consolidated Statements of Comprehensive Income. |
Advertising Costs | Advertising Costs The Company expenses its branding and advertising communication costs as incurred. Significant production costs are deferred and recognized as expense in the period that the related advertisement is first used. At December 31, 2017, 2016 and 2015, $3.8 million, $2.4 million and $0.8 million, respectively, were included in prepaid expenses for production costs. For the years ended December 31, 2017, 2016 and 2015, branding expenses, including advertising expenses as described above, were $31.0 million, $24.8 million, and $23.4 million, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses and other current liabilities to approximate the fair value of the respective assets and liabilities at December 31, 2017 and 2016. |
Recently Adopted Accounting Standards | Recently Adopted Accounting Standards In March 2016, the FASB issued ASU No. 2016-09, “ Compensation – Stock Compensation (Topic 718) Improvements to Employee Share-Based Payment Accounting • The Company recorded a tax benefit of $1.7 million within income tax expense related to the excess tax benefits of the settlement or vesting of time-based restricted stock or time-based restricted stock units and performance-based restricted stock or performance-based restricted stock units. The Company applied this guidance prospectively as of January 1, 2016 and, accordingly, data for the year ended December 31, 2015 was not adjusted. Prior to adoption this amount would have been recorded as an increase in additional paid-in capital. Going forward, this change could create volatility in the Company’s effective tax rate. • The Company elected to change its policy on accounting for forfeitures and recognize forfeitures as they occur. The Company applied this guidance on a modified retrospective transition method. The Company determined that the cumulative effect of applying the guidance under the modified retrospective transition method was not material to its Consolidated Financial Statements • Excess tax benefits are now reported as an operating activity in the Company’s Consolidated Statements of Cash Flows, rather than as a financing activity as was previously reported. As the Company applied this guidance prospectively as of January 1, 2016, excess tax benefits for the year ended December 31, 2015 were not adjusted and continue to be reported in financing activities in the Consolidated Statements of Cash Flows. • The standard requires the presentation of employee taxes as a financing activity in the Consolidated Statements of Cash Flows. This provision did not impact the Company’s Consolidated Financial Statements as the Company currently presents employee taxes as a financing activity in its Consolidated Statements of Cash Flows. The Company excluded the excess tax benefits from the assumed proceeds available to repurchase shares in the computation of diluted earnings per share for 2016, which did not materially increase the diluted weighted average common shares outstanding. |
New Accounting Standards Not Yet Adopted | New Accounting Standards Not Yet Adopted In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606), In February 2016, the FASB issued ASU No. 2016-02, “ Leases (Topic 842) In August 2016, the FASB issued ASU No. 2016-15, “ Statement of Cash flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments In January 2017, the FASB issued ASU No. 2017-04, “ Intangibles – Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment In May 2017, the FASB issued ASU No. 2017-09, “ Compensation—Stock Compensation (Topic 718), Scope Modification Accounting |
Summary of Significant Accoun28
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Accounting Policies [Abstract] | |
Estimated Useful Lives of Property Plant and Equipment | Property, plant and equipment are stated at historical cost. The costs of additions and improvements are capitalized, while maintenance and repairs are expensed as incurred. Depreciation is provided using the straight-line method over the following estimated useful lives: Buildings 40 years Machinery and equipment 3-11 years Furniture and equipment 10 years Forklifts and tractors 5 years Computer equipment and software 5 years |
Acquisition (Tables)
Acquisition (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Business Combinations [Abstract] | |
Summary of Estimated Consideration Allocated on a Preliminary Basis to Assets Acquired and Liabilities Assumed | Based on the Company’s preliminary valuation, a total estimated consideration of $71.8 million has been allocated on to the assets acquired and liabilities assumed, as follows (in thousands). During the fourth quarter, a final determination of the purchase price and the final valuation report were completed upon the final determination of working capital at closing. No adjustments were made to the fair values of assets acquired and liabilities assumed as a result: Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total consideration $ 71,804 |
Summary of Unaudited Pro Forma Results of Operations | The following pro forma results are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the years presented or the results which may occur in the future. The following unaudited pro forma results of operations assume the acquisition occurred on January 1, 2016 (in thousands, except per share amounts): Year Ended December 31 2017 2016 2017 2016 Actual Pro Forma Net sales $ 565,153 $ 479,616 $ 597,288 $ 534,618 Net income $ 95,128 $ 67,847 $ 96,608 $ 68,344 Basic earnings per common share $ 3.24 $ 2.31 $ 3.29 $ 2.33 Diluted earnings per common share $ 3.22 $ 2.29 $ 3.27 $ 2.31 |
Inventories (Tables)
Inventories (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories (at LIFO value) consist of the following as of December 31 (in thousands): 2017 2016 Finished goods $ 32,986 $ 29,686 Raw materials 19,432 20,231 Total FIFO (first-in, first out) inventories 52,418 49,917 Reserve to adjust inventories to LIFO value (20,070 ) (21,371 ) Total LIFO inventories $ 32,348 $ 28,546 |
Prepaid Expenses and Other As31
Prepaid Expenses and Other Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following as of December 31 (in thousands): 2017 2016 Prepaid expenses $ 7,494 $ 6,209 Contract retainage 1,449 — Revenues in excess of billings 4,841 — Income tax receivable 2,230 4,024 Other 864 167 Total prepaid expenses and other assets $ 16,878 $ 10,400 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Activity Related to Carrying Amount of Goodwill | The following table summarizes the activity related to the carrying amount of goodwill during the year ended December 31, 2017 (in thousands): 2017 Beginning balance, January 1 $ 10,523 Goodwill recognized from acquisition of SC Company 57,938 Ending balance, December 31 $ 68,461 |
Summary of Carrying Amount of Goodwill by Reportable Segment | The following table reports the carrying amount of goodwill by reportable segment as of December 31, 2017 (in thousands): 2017 Trex Residential Products $ 14,216 Trex Commercial Products 54,245 Ending Balance, December 31 $ 68,461 |
Details of Intangible Assets Acquired | Intangible assets acquired from SC Company on July 31, 2017 consist of the following at December 31, 2017: Net Carrying Amortization (in thousands) (in months) Intangible assets: Customer backlog $ 4,000 12 Trade names and trademarks 900 12 Total intangible assets 4,900 Accumulated amortization: Customer backlog (1,666 ) Trade name (376 ) Total accumulated amortization (2,042 ) Intantible assets, net $ 2,858 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property, Plant and Equipment | Property, plant and equipment consist of the following as of December 31 (in thousands): 2017 2016 Building and improvements $ 49,403 $ 47,859 Machinery and equipment 228,107 223,450 Furniture and fixtures 1,620 2,710 Forklifts and tractors 9,799 10,167 Computer equipment 9,680 10,481 Construction in process 5,954 4,172 Land 11,417 11,417 Total property, plant and equipment 315,980 310,256 Accumulated depreciation (212,870 ) (206,970 ) Total property, plant and equipment, net $ 103,110 $ 103,286 |
Accrued Expenses and Other Li34
Accrued Expenses and Other Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following as of December 31 (in thousands): 2017 2016 Sales and marketing costs $ 21,964 $ 16,707 Compensation and benefits 14,818 13,298 Manufacturing costs 1,979 1,799 Billings in excess of revenues 1,842 — Customer deposits 1,230 — Rent obligations 779 632 Other 3,654 2,257 Total accrued expenses $ 46,266 $ 34,693 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Equity [Abstract] | |
Computation of Basic and Diluted Earnings Per Share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Year Ended December 31, 2017 2016 2015 Numerator: Net income $ 95,128 $ 67,847 $ 48,098 Denominator: Basic weighted average shares outstanding 29,392,559 29,394,559 31,350,542 Effect of dilutive securities: SARS 99,321 125,119 197,299 Restricted stock 83,580 92,991 134,668 Diluted weighted average shares outstanding 29,575,460 29,612,669 31,682,509 Basic earnings per share $ 3.24 $ 2.31 $ 1.53 Diluted earnings per share $ 3.22 $ 2.29 $ 1.52 |
Antidilutive Securities Excluded from Computation of Earnings Per Share | The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Year Ended December 31, 2017 2016 2015 Restricted stock 83 12 501 Stock appreciation rights 10,617 4,631 5,828 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Year Ended December 31, 2017 2016 2015 Time-based restricted stock and time-based restricted stock units $ 1,992 $ 2,281 $ 2,704 Performance-based restricted stock and performance-based restricted stock units 2,805 2,210 1,562 Stock appreciation rights 251 184 525 Employee stock purchase plan 139 113 70 Total stock-based compensation $ 5,187 $ 4,788 $ 4,861 |
Summary of Assumptions Used to Estimate Fair Value of Each SAR | The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing model. There were no SARs issued in the year ended December 31, 2016. For SARs issued in the years ended December 31, 2017 and 2015, respectively, the assumptions shown in the following table were used: December 31, 2017 2015 Dividend yield 0 % 0 % Average risk-free interest rate 2.0 % 1.6 % Expected term (years) 5 5 Expected volatility 42.3 % 42.9 % |
SAR Activity | SAR activity under the Plan and all predecessor stock incentive plans is as follows: SARs Weighted-Average Weighted- Aggregate Outstanding at December 31, 2014 515,830 $ 13.98 Granted 15,585 $ 41.19 Exercised (263,626 ) $ 13.86 Canceled (5,712 ) $ 21.94 Outstanding at December 31, 2015 262,077 $ 13.13 Granted — $ — Exercised (124,352 ) $ 11.09 Canceled — $ — Outstanding at December 31, 2016 137,725 $ 19.57 Granted 18,739 $ 70.75 Exercised (17,406 ) $ 16.13 Canceled — $ — Outstanding at December 31, 2017 139,058 $ 26.89 5.3 $ 11,333,033 Vested at December 31, 2017 139,058 $ 26.89 5.3 $ 11,333,033 Exercisable at December 31, 2017 115,191 $ 19.12 4.6 $ 10,282,908 |
Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] | |
Restricted Stock Activity | Time-based restricted stock and restricted stock unit activity under the Plan and all predecessor stock incentive plans is as follows: Time-based Weighted-Average Grant Price Per Share Nonvested at December 31, 2014 329,562 $ 18.89 Granted 57,598 $ 43.81 Vested (230,704 ) $ 42.37 Forfeited (48,549 ) $ 20.20 Nonvested at December 31, 2015 107,907 $ 29.43 Granted 57,874 $ 37.64 Vested (43,848 ) $ 42.34 Forfeited (133 ) $ 43.89 Nonvested at December 31, 2016 121,800 $ 31.59 Granted 36,201 $ 72.54 Vested (81,186 ) $ 28.90 Forfeited (256 ) $ 37.36 Nonvested at December 31, 2017 76,559 $ 53.79 |
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |
Restricted Stock Activity | Performance-based restricted stock activity under the Plan is as follows: Performance-based Weighted-Average Nonvested at December 31, 2014 42,676 $ 33.72 Granted 34,638 $ 43.89 Vested (35,679 ) $ 41.91 Forfeited (12,538 ) $ 38.12 Nonvested at December 31, 2015 29,097 $ 39.38 Granted 44,925 $ 35.83 Vested (14,949 ) $ 35.71 Forfeited (657 ) $ 33.72 Nonvested at December 31, 2016 58,416 $ 36.63 Granted 43,307 $ 57.54 Vested (43,394 ) $ 37.27 Forfeited — $ — Nonvested at December 31, 2017 58,329 $ 51.69 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Leases [Abstract] | |
Minimum Annual Payments Under Non-Cancelable Leases | Minimum annual payments under these non-cancelable leases as of December 31, 2017 were as follows (in thousands): Year Ending December 31, 2018 $ 10,626 2019 9,344 2020 7,223 2021 6,716 2022 4,843 Thereafter 14,046 Total minimum lease payments $ 52,798 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |
Income Tax Provision (Benefit) | Income tax provision (benefit) consists of the following (in thousands): Year Ended December 31, 2017 2016 2015 Current income tax provision: Federal $ 41,177 $ 26,752 $ 25,105 State 5,420 2,798 2,560 46,597 29,550 27,665 Deferred income tax provision: Federal 1,177 5,217 987 State (983 ) 216 37 194 5,433 1,024 Total income tax provision $ 46,791 $ 34,983 $ 28,689 |
Reconciliation of Differences between Income Tax Provision and Income Tax Determined by Applying US Federal Statutory Rate | The income tax provision differs from the amount of income tax determined by applying the U.S. Federal statutory rate to income before taxes as a result of the following (in thousands): Year Ended December 31, 2017 2016 2015 U.S. Federal statutory taxes $ 49,671 $ 35,990 $ 26,876 State and local taxes, net of U.S. Federal benefit 5,110 3,747 2,806 Permanent items 576 396 1,308 Excess tax benefits from vesting or settlement of stock compensation awards (1,454 ) (1,749 ) — Domestic production activities deduction (4,376 ) (2,740 ) (2,262 ) Federal credits (534 ) (488 ) (328 ) Other (2,202 ) (173 ) 289 Total income tax provision $ 46,791 $ 34,983 $ 28,689 |
Schedule of Deferred Tax Assets and Liabilities | Deferred tax assets and liabilities consist of the following (in thousands): As of December 31, 2017 2016 Deferred tax assets: Net operating losses $ 123 $ 93 Residential product warranty reserve 8,876 14,510 Stock-based compensation 1,823 2,186 Accruals not currently deductible and other 1,838 2,261 Inventories 3,783 5,785 State tax credit carryforwards 3,619 4,020 Gross deferred tax assets, before valuation allowance 20,062 28,855 Valuation allowance (3,096 ) (4,061 ) Gross deferred tax assets, after valuation allowance 16,966 24,794 Deferred tax liabilities: Depreciation and other (18,055 ) (25,688 ) Gross deferred tax liabilities (18,055 ) (25,688 ) Net deferred tax (liability) asset $ (1,089 ) $ (894 ) |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Segment Reporting [Abstract] | |
Details of Segment Information | The below segment data for the year ended December 31, 2017, includes data for Trex Residential Products for the year ended December 31, 2017, and data for Trex Commercial Products from the date of the acquisition of SC Company through December 31, 2017 (in thousands): Year ended December 31, 2017 Residential Commercial Total Net sales $ 543,346 $ 21,807 $ 565,153 Net income (loss) $ 97,412 $ (2,284 ) $ 95,128 EBITDA $ 160,382 $ (1,272 ) $ 159,110 Depreciation and amortization $ 14,598 $ 2,132 $ 16,730 Income tax expense (benefit) $ 47,911 $ (1,120 ) $ 46,791 Capital expenditures $ 14,989 $ 51 $ 15,040 Total assets $ 247,817 $ 78,410 $ 326,227 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of net income to EBITDA: Year Ended December 31, 2017 Residential Commercial Total Net income (loss) $ 97,412 $ (2,284 ) $ 95,128 Interest 461 — 461 Taxes 47,911 (1,120 ) 46,791 Depreciation and amortization 14,598 2,132 16,730 EBITDA $ 160,382 $ (1,272 ) $ 159,110 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Reconciliation of Company's Residential Product Warranty Reserve | The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Year Ended December 31, 2017 Surface Other Total Beginning balance, January 1 $ 33,847 $ 3,845 $ 37,692 Provisions and changes in estimates — 4,268 4,268 Settlements made during the period (5,689 ) (1,272 ) (6,961 ) Ending balance, December 31 $ 28,158 $ 6,841 $ 34,999 Year Ended December 31, 2016 Surface Other Total Beginning balance, January 1 $ 29,673 $ 3,849 $ 33,522 Provisions and changes in estimates 9,835 1,017 10,852 Settlements made during the period (5,661 ) (1,021 ) (6,682 ) Ending balance, December 31 $ 33,847 $ 3,845 $ 37,692 |
Interim Financial Data (Unaud41
Interim Financial Data (Unaudited) (Tables) | 12 Months Ended |
Dec. 31, 2017 | |
Quarterly Financial Information Disclosure [Abstract] | |
Summary of Interim Financial Data | Three Months Ended December 31, September 30, June 30, March 31, December 31, September 30, June 30, March 31, (In thousands, except share and per share data) Net sales $ 122,212 $ 140,194 $ 157,941 $ 144,806 $ 95,322 $ 106,168 $ 146,450 $ 131,676 Gross profit $ 50,906 $ 55,284 $ 72,014 $ 65,169 $ 38,113 $ 29,945 $ 61,410 $ 57,627 Net income $ 18,299 $ 20,098 $ 28,782 $ 27,949 $ 12,629 $ 7,787 $ 23,725 $ 23,706 Basic net income per share $ 0.62 $ 0.68 $ 0.98 $ 0.95 $ 0.43 $ 0.27 $ 0.81 $ 0.80 Basic weighted average common shares outstanding 29,412,848 29,404,049 29,389,458 29,363,210 29,318,915 29,295,284 29,264,362 29,697,722 Diluted net income per share $ 0.62 $ 0.68 $ 0.97 $ 0.95 $ 0.43 $ 0.26 $ 0.80 $ 0.79 Diluted weighted average common shares outstanding 29,611,129 29,578,216 29,550,418 29,561,406 29,543,842 29,516,718 29,477,870 29,910,292 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) - Segment | 7 Months Ended | 12 Months Ended |
Jul. 31, 2017 | Dec. 31, 2017 | |
Accounting Policies [Abstract] | ||
Number of reportable segments | 1 | 2 |
Summary of Significant Accoun43
Summary of Significant Accounting Policies - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2017USD ($)CustomerInstitutionSupplier | Dec. 31, 2016USD ($)Customer | Dec. 31, 2015USD ($)Customer | Dec. 31, 2010USD ($) | |
Schedule Of Significant Accounting Policies [Line Items] | ||||
Charge to earning to fully reserve the equity investment and note | $ 2,400,000 | |||
Maximum term of original maturities to classify as cash equivalent | 3 months | |||
Number of financial institutions where deposits are maintained | Institution | 1 | |||
Valuation allowance | $ 0 | $ 0 | ||
Number of customers that accounted for 10% or more of net sales | Customer | 2 | 2 | 1 | |
Number of customer accounted for 10% or more account receivable | Customer | 3 | |||
Number of largest raw material suppliers | Supplier | 4 | |||
Excess of the replacement cost of inventory over the LIFO value of inventory | $ 20,100,000 | |||
Annual impairment test of goodwill | 0 | $ 0 | $ 0 | |
Goodwill | 68,461,000 | 10,523,000 | ||
Valuation allowance | 3,096,000 | 4,061,000 | ||
Research and Development costs | 3,800,000 | 3,700,000 | 1,500,000 | |
Prepaid expenses for production costs of advertising | 3,800,000 | 2,400,000 | 800,000 | |
Branding Expenses | 31,000,000 | 24,800,000 | 23,400,000 | |
Income tax expense (benefit) | 46,791,000 | 34,983,000 | $ 28,689,000 | |
Accounting Standards Update 2016-09 [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Income tax expense (benefit) | $ (1,500,000) | $ (1,700,000) | ||
Residential Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Commercial Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 10 years | |||
Trex Signature Railing [Member] | Residential Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Trex Signature Railing [Member] | Commercial Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Transcend, Enhance, Select and Universal Fascia Product [Member] | Residential Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 25 years | |||
Transcend, Enhance, Select and Universal Fascia Product [Member] | Commercial Use [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Warranty period | 10 years | |||
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Minimum [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 10.00% | 10.00% | 10.00% | |
Sales Revenue, Net [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 41.00% | 39.00% | 27.00% | |
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer One [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 29.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Two [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 14.00% | |||
Accounts Receivable [Member] | Customer Concentration Risk [Member] | Customer Three [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 11.00% | |||
Raw Materials [Member] | Supplier Concentration Risk [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Concentration risk as percentage of total | 33.00% | 33.00% | 35.00% | |
Denplax [Member] | ||||
Schedule Of Significant Accounting Policies [Line Items] | ||||
Holding company's interest in Denplax | 35.00% |
Summary of Significant Accoun44
Summary of Significant Accounting Policies - Estimated Useful Lives of Property Plant and Equipment (Detail) | 12 Months Ended |
Dec. 31, 2017 | |
Buildings [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 40 years |
Furniture and Fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 10 years |
Forklifts and Tractors [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 5 years |
Computer Equipment and Software [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 5 years |
Minimum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 3 years |
Maximum [Member] | Machinery and Equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, plant, and equipment estimated useful life | 11 years |
Acquisition - Additional Inform
Acquisition - Additional Information (Detail) - USD ($) $ in Thousands | Aug. 17, 2017 | Jul. 31, 2017 | Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Business Acquisition [Line Items] | ||||||||||||||
Fund used to acquire business from revolving credit facility | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | |||||||||
Repayment of revolving credit facility | 201,000 | 249,700 | $ 218,500 | |||||||||||
Goodwill | 68,461 | 10,523 | 68,461 | 68,461 | 10,523 | |||||||||
Net sales | 122,212 | $ 140,194 | $ 157,941 | $ 144,806 | 95,322 | $ 106,168 | $ 146,450 | $ 131,676 | 565,153 | 479,616 | 440,804 | |||
Net income (loss) | 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | $ 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | 95,128 | $ 67,847 | $ 48,098 | |||
Acquisition-related expenses | $ 500 | |||||||||||||
Blended statutory rate | 38.00% | |||||||||||||
Trex Commercial Products, Inc. (TCP) [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Net sales | 21,800 | |||||||||||||
Net income (loss) | (2,300) | |||||||||||||
Staging Concepts Acquisition, LLC [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Certain assets and liabilities acquired in cash | $ 71,800 | |||||||||||||
Estimated consideration | 71,804 | 71,804 | $ 71,804 | |||||||||||
Goodwill | 57,938 | 57,938 | 57,938 | |||||||||||
Goodwill expected to be amortized and deductible for tax purposes | $ 1,600 | $ 1,600 | $ 1,600 | |||||||||||
Amortization period for intangible assets | 12 months | |||||||||||||
Staging Concepts Acquisition, LLC [Member] | Revolving Credit Facility [Member] | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fund used to acquire business from revolving credit facility | $ 30,000 | |||||||||||||
Repayment of revolving credit facility | $ 30,000 |
Acquisition - Summary of Estima
Acquisition - Summary of Estimated Consideration Allocated on a Preliminary Basis to Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||
Goodwill | $ 68,461 | $ 10,523 |
Staging Concepts Acquisition, LLC [Member] | ||
Business Acquisition [Line Items] | ||
Accounts receivable, net | 8,357 | |
Contract retainage | 1,948 | |
Inventories, net | 2,344 | |
Prepaid expenses and other assets | 1,223 | |
Revenues in excess of billings | 3,463 | |
Fixed assets, net | 1,264 | |
Intangible assets | 4,900 | |
Goodwill | 57,938 | |
Accounts payable | (3,990) | |
Accrued liabilities and other expenses | (2,329) | |
Billings in excess of revenues | (1,752) | |
Customer Deposits | (1,562) | |
Total consideration | $ 71,804 |
Acquisition - Summary of Unaudi
Acquisition - Summary of Unaudited Pro Forma Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Business Combinations [Abstract] | |||||||||||
Net sales | $ 122,212 | $ 140,194 | $ 157,941 | $ 144,806 | $ 95,322 | $ 106,168 | $ 146,450 | $ 131,676 | $ 565,153 | $ 479,616 | $ 440,804 |
Net income | $ 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | $ 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | $ 95,128 | $ 67,847 | $ 48,098 |
Basic earnings per common share | $ 0.62 | $ 0.68 | $ 0.98 | $ 0.95 | $ 0.43 | $ 0.27 | $ 0.81 | $ 0.80 | $ 3.24 | $ 2.31 | $ 1.53 |
Diluted earnings per common share | $ 0.62 | $ 0.68 | $ 0.97 | $ 0.95 | $ 0.43 | $ 0.26 | $ 0.80 | $ 0.79 | $ 3.22 | $ 2.29 | $ 1.52 |
Pro Forma Net sales | $ 597,288 | $ 534,618 | |||||||||
Pro Forma Net income | $ 96,608 | $ 68,344 | |||||||||
Pro Forma Basic earnings per common share | $ 3.29 | $ 2.33 | |||||||||
Pro Forma Diluted earnings per common share | $ 3.27 | $ 2.31 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Inventory [Line Items] | ||
Raw materials | $ 2,200 | |
Reserve to adjust inventories to LIFO value | (20,100) | |
Total LIFO inventories | 34,524 | $ 28,546 |
LIFO [Member] | ||
Inventory [Line Items] | ||
Finished goods | 32,986 | 29,686 |
Raw materials | 19,432 | 20,231 |
Total FIFO (first-in, first out) inventories | 52,418 | 49,917 |
Reserve to adjust inventories to LIFO value | (20,070) | (21,371) |
Total LIFO inventories | $ 32,348 | $ 28,546 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) $ in Millions | Dec. 31, 2017USD ($) |
Inventory Disclosure [Abstract] | |
Raw materials | $ 2.2 |
Prepaid Expenses and Other As50
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 7,494 | $ 6,209 |
Contract retainage | 1,449 | |
Revenues in excess of billings | 4,841 | |
Income tax receivable | 2,230 | 4,024 |
Other | 864 | 167 |
Total prepaid expenses and other assets | $ 16,878 | $ 10,400 |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets - Summary of Activity Related to Carrying Amount of Goodwill (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Beginning balance | $ 10,523 |
Goodwill recognized from acquisition of SC Company | 57,938 |
Ending balance | $ 68,461 |
Goodwill and Other Intangible52
Goodwill and Other Intangible Assets - Summary of Carrying Amount of Goodwill by Reportable Segment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Goodwill [Line Items] | ||
Goodwill | $ 68,461 | $ 10,523 |
Residential [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 14,216 | |
Commercial [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 54,245 |
Goodwill and Other Intangible53
Goodwill and Other Intangible Assets - Details of Intangible Assets Acquired (Detail) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Indefinite-lived Intangible Assets [Line Items] | |
Net carrying amount,Intangible assets | $ 4,900 |
Net carrying amount, Accumulated amortization | (2,042) |
Intantible assets, net | 2,858 |
Customer Backlog [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Net carrying amount,Intangible assets | 4,000 |
Net carrying amount, Accumulated amortization | $ (1,666) |
Amortization period | 12 months |
Trade Names and Trademarks [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Net carrying amount,Intangible assets | $ 900 |
Amortization period | 12 months |
Trade Name [Member] | |
Indefinite-lived Intangible Assets [Line Items] | |
Net carrying amount, Accumulated amortization | $ (376) |
Goodwill and Other Intangible54
Goodwill and Other Intangible Assets - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization expense | $ 2 |
Property, Plant and Equipment -
Property, Plant and Equipment - Summary of Property, Plant and Equipment (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 315,980 | $ 310,256 |
Accumulated depreciation | (212,870) | (206,970) |
Total property, plant and equipment, net | 103,110 | 103,286 |
Building and Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 49,403 | 47,859 |
Machinery and Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 228,107 | 223,450 |
Furniture and Fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 1,620 | 2,710 |
Forklifts and Tractors [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,799 | 10,167 |
Computer Equipment and Software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 9,680 | 10,481 |
Construction in Process [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | 5,954 | 4,172 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, Plant and Equipment, Gross | $ 11,417 | $ 11,417 |
Property, Plant and Equipment56
Property, Plant and Equipment - Additional Information (Detail) $ in Thousands | 1 Months Ended | 12 Months Ended | ||
Jan. 31, 2016USD ($) | Dec. 31, 2017USD ($)a | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 315,980 | $ 310,256 | ||
Depreciation expense | 14,700 | 14,200 | $ 14,300 | |
Proceeds from sales of property, plant and equipment | 55 | 4,349 | 35 | |
Gain (loss) on disposal of property, plant and equipment | $ (1,738) | 185 | $ (649) | |
Olive Branch Assets [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Proceeds from sales of property, plant and equipment | $ 4,200 | |||
Gain (loss) on disposal of property, plant and equipment | $ 100 | |||
Area of land owned | a | 62 | |||
Construction in Process [Member] | ||||
Property, Plant and Equipment [Line Items] | ||||
Property, Plant and Equipment, Gross | $ 5,954 | $ 4,172 |
Accrued Expenses and Other Li57
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | ||
Sales and marketing costs | $ 21,964 | $ 16,707 |
Compensation and benefits | 14,818 | 13,298 |
Manufacturing costs | 1,979 | 1,799 |
Billings in excess of revenues | 1,842 | |
Customer deposits | 1,230 | |
Rent obligations | 779 | 632 |
Other | 3,654 | 2,257 |
Total accrued expenses | $ 46,266 | $ 34,693 |
Debt - Additional Information (
Debt - Additional Information (Detail) | Jan. 12, 2016 | Dec. 31, 2017USD ($) | Dec. 31, 2017USD ($) |
Line of Credit Facility [Line Items] | |||
Remaining available borrowing capacity | $ 200,000,000 | $ 200,000,000 | |
Company indebtedness | 0 | $ 0 | |
Third Amended and Restated Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Termination date of the Credit Agreement | Jan. 12, 2021 | ||
Third Amended and Restated Credit Agreement [Member] | Federal Funds Rate [Member] | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 0.50% | ||
Third Amended and Restated Credit Agreement [Member] | Eurodollar Rate Loans [Member] | |||
Line of Credit Facility [Line Items] | |||
Interest rate | 1.00% | ||
Second Amended and Restated Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Credit facility covenant terms | The material financial covenants and restrictions do not permit the Company’s fixed charge coverage ratio to be less than 1.5 to 1.0 and do not permit the Company’s consolidated debt to consolidated EBITDA ratio to exceed 3.0 to 1.0, measured as of the end of each fiscal quarter (and in the case of Consolidated EBITDA, for the four-quarter period ending on such date). | ||
Revolver Loans Portion Effective January 1 through June 30 [Member] | Third Amended and Restated Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving loans in a collective maximum principal amount | 250,000,000 | $ 250,000,000 | |
Revolver Loans Portion Effective July 1 through December 31 [Member] | Third Amended and Restated Credit Agreement [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving loans in a collective maximum principal amount | $ 200,000,000 | 200,000,000 | |
Revolving Credit Facility [Member] | Second Amended and Restated Credit Agreement [Member] | Minimum [Member] | |||
Line of Credit Facility [Line Items] | |||
Fixed charge coverage ratio as per credit agreement | 1.5 | ||
Revolving Credit Facility [Member] | Second Amended and Restated Credit Agreement [Member] | Maximum [Member] | |||
Line of Credit Facility [Line Items] | |||
Consolidated debt to earnings before interest taxes depreciation amortization ratio as per the credit agreement | 3 | ||
Revolving Credit Facility [Member] | Letter of Credit Facility Sublimit [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving loans in a collective maximum principal amount | $ 15,000,000 | 15,000,000 | |
Revolving Credit Facility [Member] | Swing Advance Loan Sublimit [Member] | |||
Line of Credit Facility [Line Items] | |||
Revolving loans in a collective maximum principal amount | $ 5,000,000 | $ 5,000,000 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Numerator: | |||||||||||
Net income | $ 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | $ 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | $ 95,128 | $ 67,847 | $ 48,098 |
Denominator: | |||||||||||
Basic weighted average shares outstanding | 29,412,848 | 29,404,049 | 29,389,458 | 29,363,210 | 29,318,915 | 29,295,284 | 29,264,362 | 29,697,722 | 29,392,559 | 29,394,559 | 31,350,542 |
Effect of dilutive securities: | |||||||||||
Diluted weighted average shares outstanding | 29,611,129 | 29,578,216 | 29,550,418 | 29,561,406 | 29,543,842 | 29,516,718 | 29,477,870 | 29,910,292 | 29,575,460 | 29,612,669 | 31,682,509 |
Basic earnings per share | $ 0.62 | $ 0.68 | $ 0.98 | $ 0.95 | $ 0.43 | $ 0.27 | $ 0.81 | $ 0.80 | $ 3.24 | $ 2.31 | $ 1.53 |
Diluted earnings per share | $ 0.62 | $ 0.68 | $ 0.97 | $ 0.95 | $ 0.43 | $ 0.26 | $ 0.80 | $ 0.79 | $ 3.22 | $ 2.29 | $ 1.52 |
Stock Appreciation Rights [Member] | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities | 99,321 | 125,119 | 197,299 | ||||||||
Restricted Stock [Member] | |||||||||||
Effect of dilutive securities: | |||||||||||
Dilutive securities | 83,580 | 92,991 | 134,668 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Restricted Stock [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 83 | 12 | 501 |
Stock Appreciation Rights [Member] | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 10,617 | 4,631 | 5,828 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | Feb. 16, 2018 | Feb. 16, 2017 | Oct. 22, 2015 | Oct. 23, 2014 | |
October 2014 Stock Repurchase Program [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Common stock repurchase program, authorized shares | 2,000,000 | ||||||
Number of shares repurchased by the Company | 1,134,300 | ||||||
Value of shares repurchased by the Company | $ 45.2 | ||||||
Common stock repurchase program, termination date | Oct. 22, 2015 | ||||||
October 2015 Stock Repurchase Program [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Common stock repurchase program, authorized shares | 3,150,000 | ||||||
Number of shares repurchased by the Company | 1,578,952 | ||||||
Value of shares repurchased by the Company | $ 53.3 | ||||||
Common stock repurchase program, termination date | Dec. 31, 2016 | ||||||
February 2017 Stock Repurchase Program [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Common stock repurchase program, authorized shares | 2,961,000 | ||||||
Number of shares repurchased by the Company | 0 | ||||||
February 2018 Stock Repurchase Program [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Number of shares repurchased by the Company | 0 | ||||||
February 2018 Stock Repurchase Program [Member] | Subsequent Event [Member] | |||||||
Equity, Class of Treasury Stock [Line Items] | |||||||
Common stock repurchase program, authorized shares | 2,900,000 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Millions | Dec. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Approximate number of shares employees purchased under the Employee Stock Purchase Plan | 429,073 | |||
2014 Stock Incentive Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total aggregate number of shares of common stock that may be issued | 6,420,000 | 6,420,000 | ||
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost recognition period for unvested awards | 1 year 10 months 25 days | |||
Unrecognized compensation cost related to unvested awards | $ 1.8 | $ 1.8 | $ 1.2 | $ 0.6 |
Vesting period | 3 years | |||
Number of shares or rights issued | 43,307 | 44,925 | 34,638 | |
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | Share-Based Compensation Award, Tranche One [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation vesting percentage | 33.33% | |||
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | Share-Based Compensation Award, Tranche Two [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation vesting percentage | 33.33% | |||
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | Share-Based Compensation Award, Tranche Three [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation vesting percentage | 33.33% | |||
Stock Appreciation Rights [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Unrecognized compensation cost related to unvested awards | $ 0.3 | |||
Maximum contractual term | 10 years | |||
Fair value assumptions method used | Black-Scholes option-pricing model | |||
Number of shares or rights issued | 0 | |||
Weighted-average fair value of grants | $ 27.97 | $ 16.26 | ||
Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Compensation cost recognition period for unvested awards | 1 year 9 months 18 days | |||
Unrecognized compensation cost related to unvested awards | $ 2.1 | $ 2.1 | ||
Total fair value of restricted shares vested | $ 5.5 | $ 1.7 | $ 9.8 | |
Number of shares or rights issued | 36,201 | 57,874 | 57,598 | |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total aggregate number of shares of common stock that may be issued | 600,000 | 600,000 | ||
Percentage of market price on lesser of either first day of calendar quarter or last day of calendar quarter for purchase price | 85.00% | |||
Percentage of gross compensation eligible employees may elect to participate in the plan | 15.00% | 15.00% | ||
Minimum [Member] | Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target number of shares that will vest | 0.00% | |||
Maximum [Member] | Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Percentage of target number of shares that will vest | 200.00% |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 5,187 | $ 4,788 | $ 4,861 |
Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 1,992 | 2,281 | 2,704 |
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 2,805 | 2,210 | 1,562 |
Stock Appreciation Rights [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | 251 | 184 | 525 |
Employee Stock Purchase Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock-based compensation expense | $ 139 | $ 113 | $ 70 |
Stock-Based Compensation - Time
Stock-Based Compensation - Time-Based Restricted Stock and Restricted Stock Unit Activity (Detail) - Time-Based Restricted Stock and Time-Based Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Restricted Stock Activity [Line Items] | |||
Nonvested, Shares, Beginning Balance | 121,800 | 107,907 | 329,562 |
Time-based Restricted Stock, Granted | 36,201 | 57,874 | 57,598 |
Time-based Restricted Stock, Vested | (81,186) | (43,848) | (230,704) |
Time-based Restricted Stock, Forfeited | (256) | (133) | (48,549) |
Nonvested, Shares, Ending Balance | 76,559 | 121,800 | 107,907 |
Nonvested, Weighted-Average Grant Price Per Share, Beginning Balance | $ 31.59 | $ 29.43 | $ 18.89 |
Weighted-Average Grant Price Per Share, Granted | 72.54 | 37.64 | 43.81 |
Weighted-Average Grant Price Per Share, Vested | 28.90 | 42.34 | 42.37 |
Weighted-Average Grant Price Per Share, Forfeited | 37.36 | 43.89 | 20.20 |
Nonvested, Weighted-Average Grant Price Per Share, Ending Balance | $ 53.79 | $ 31.59 | $ 29.43 |
Stock-Based Compensation - Perf
Stock-Based Compensation - Performance-Based Restricted Stock Activity (Detail) - Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] - $ / shares | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Restricted Stock Activity [Line Items] | |||
Nonvested, Shares, Beginning Balance | 58,416 | 29,097 | 42,676 |
Performance-based Restricted Stock, Granted | 43,307 | 44,925 | 34,638 |
Performance-based Restricted Stock, Vested | (43,394) | (14,949) | (35,679) |
Performance-based Restricted Stock, Forfeited | (657) | (12,538) | |
Nonvested, Shares, Ending Balance | 58,329 | 58,416 | 29,097 |
Nonvested, Weighted-Average Grant Price Per Share, Beginning Balance | $ 36.63 | $ 39.38 | $ 33.72 |
Weighted-Average Grant Price Per Share, Granted | 57.54 | 35.83 | 43.89 |
Weighted-Average Grant Price Per Share, Vested | 37.27 | 35.71 | 41.91 |
Weighted-Average Grant Price Per Share, Forfeited | 33.72 | 38.12 | |
Nonvested, Weighted-Average Grant Price Per Share, Ending Balance | $ 51.69 | $ 36.63 | $ 39.38 |
Stock-Based Compensation - Su66
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Each SAR (Detail) - Stock Appreciation Rights [Member] | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2015 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | ||
Dividend yield | 0.00% | 0.00% |
Average risk-free interest rate | 2.00% | 1.60% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 42.30% | 42.90% |
Stock-Based Compensation - SAR
Stock-Based Compensation - SAR Activity (Detail) - Stock Appreciation Rights [Member] - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Schedule Of Stock Appreciation Rights Activity [Line Items] | |||
SARs Outstanding, Beginning Balance | 137,725 | 262,077 | 515,830 |
Granted, SARs | 18,739 | 15,585 | |
Exercised, SARs | (17,406) | (124,352) | (263,626) |
Canceled, SARs | (5,712) | ||
Shares Outstanding, SARs, Ending Balance | 139,058 | 137,725 | 262,077 |
Outstanding, Weighted Average Grant Price Per Share, Beginning Balance | $ 19.57 | $ 13.13 | $ 13.98 |
Vested, SARs | 139,058 | ||
Granted, Weighted Average Grant Price Per Share | $ 70.75 | 41.19 | |
Exercisable, SARs | 115,191 | ||
Exercised, Weighted Average Grant Price Per Share | $ 16.13 | 11.09 | 13.86 |
Canceled, Weighted Average Grant Price Per Share | 21.94 | ||
Outstanding, Weighted Average Grant Price Per Share, Ending Balance | 26.89 | $ 19.57 | $ 13.13 |
Vested, Weighted Average Grant Price Per Share | 26.89 | ||
Exercisable, Weighted Average Grant Price Per Share | $ 19.12 | ||
Weighted Average Remaining Contractual Life, Outstanding | 5 years 3 months 19 days | ||
Weighted Average Remaining Contractual Life, Vested | 5 years 3 months 19 days | ||
Weighted Average Remaining Contractual Life, Exercisable | 4 years 7 months 6 days | ||
Aggregate Intrinsic Value, Outstanding | $ 11,333,033 | ||
Aggregate Intrinsic Value, Vested | 11,333,033 | ||
Aggregate Intrinsic Value, Exercisable | $ 10,282,908 |
Leases - Minimum Annual Payment
Leases - Minimum Annual Payments Under Non-Cancelable Leases (Detail) $ in Thousands | Dec. 31, 2017USD ($) |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | |
2,018 | $ 10,626 |
2,019 | 9,344 |
2,020 | 7,223 |
2,021 | 6,716 |
2,022 | 4,843 |
Thereafter | 14,046 |
Total minimum lease payments | $ 52,798 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Leases [Abstract] | |||
Recognized rental expenses | $ 9.1 | $ 9.9 | $ 7.7 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Defined Benefit Plan Disclosure [Line Items] | |||
Percentage of employee's contribution to the plan up to 6% of base salary matched by the Company | 100.00% | ||
Employer's contribution percentage | 6.00% | ||
Employer's contribution | $ 3,000,000 | $ 2,500,000 | $ 2,200,000 |
401(k) Profit Sharing Plan Two [Member] | |||
Defined Benefit Plan Disclosure [Line Items] | |||
Employer's contribution percentage | 6.00% | ||
Employer contribution to the plan for every $1.00 contributed by an employee | $ 0.25 | ||
Employee's contribution to the plan up to 6% of base salary by the company | $ 1 |
Income Taxes - Income Tax Provi
Income Taxes - Income Tax Provision (Benefit) (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Current income tax provision: | |||
Federal | $ 41,177 | $ 26,752 | $ 25,105 |
State | 5,420 | 2,798 | 2,560 |
Total | 46,597 | 29,550 | 27,665 |
Deferred income tax provision: | |||
Federal | 1,177 | 5,217 | 987 |
State | (983) | 216 | 37 |
Total | 194 | 5,433 | 1,024 |
Total income tax provision | $ 46,791 | $ 34,983 | $ 28,689 |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Differences between Income Tax Provision and Income Tax Determined by Applying US Federal Statutory Rate (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Effective Income Tax Rate Reconciliation, Amount [Abstract] | |||
U.S. Federal statutory taxes | $ 49,671 | $ 35,990 | $ 26,876 |
State and local taxes, net of U.S. Federal benefit | 5,110 | 3,747 | 2,806 |
Permanent items | 576 | 396 | 1,308 |
Excess tax benefits from vesting or settlement of stock compensation awards | (1,454) | (1,749) | |
Domestic production activities deduction | (4,376) | (2,740) | (2,262) |
Federal credits | (534) | (488) | (328) |
Other | (2,202) | (173) | 289 |
Total income tax provision | $ 46,791 | $ 34,983 | $ 28,689 |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Detail) - USD ($) $ in Thousands | Dec. 31, 2017 | Dec. 31, 2016 |
Deferred tax assets: | ||
Net operating losses | $ 123 | $ 93 |
Residential product warranty reserve | 8,876 | 14,510 |
Stock-based compensation | 1,823 | 2,186 |
Accruals not currently deductible and other | 1,838 | 2,261 |
Inventories | 3,783 | 5,785 |
State tax credit carryforwards | 3,619 | 4,020 |
Gross deferred tax assets, before valuation allowance | 20,062 | 28,855 |
Valuation allowance | (3,096) | (4,061) |
Gross deferred tax assets, after valuation allowance | 16,966 | 24,794 |
Deferred tax liabilities: | ||
Depreciation and other | (18,055) | (25,688) |
Gross deferred tax liabilities | (18,055) | (25,688) |
Net deferred tax (liability) asset | $ (1,089) | $ (894) |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) | 12 Months Ended | |||
Dec. 31, 2018 | Dec. 31, 2017USD ($)Tax_Positions | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Income Tax Contingency [Line Items] | ||||
Deferred tax assets, liability | $ 1,900,000 | |||
Valuation allowance | 3,096,000 | $ 4,061,000 | ||
Income tax expense (benefit) | $ 46,791,000 | 34,983,000 | $ 28,689,000 | |
Unrecognized tax benefits number of tax matters | Tax_Positions | 0 | |||
Unrecognized tax benefits related to identified uncertain tax positions | $ 0 | |||
Accounting Standards Update 2016-09 [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Income tax expense (benefit) | $ (1,500,000) | $ (1,700,000) | ||
Scenario, Forecast [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Statutory tax rate, percentage | 21.00% | |||
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Tax years subject to examination | 2,013 | |||
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Tax years subject to examination | 2,016 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 7 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017USD ($) | Sep. 30, 2017USD ($) | Jun. 30, 2017USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2016USD ($) | Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Mar. 31, 2016USD ($) | Jul. 31, 2017Segment | Dec. 31, 2017USD ($)SegmentRetailer | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | |
Segment Reporting Information [Line Items] | ||||||||||||
Number of reportable segment | Segment | 1 | 2 | ||||||||||
Number of national retailers | Retailer | 2 | |||||||||||
Net sales | $ 122,212 | $ 140,194 | $ 157,941 | $ 144,806 | $ 95,322 | $ 106,168 | $ 146,450 | $ 131,676 | $ 565,153 | $ 479,616 | $ 440,804 | |
Residential [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | 543,300 | $ 479,600 | $ 440,800 | |||||||||
Commercial [Member] | ||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||
Net sales | $ 21,800 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net sales | $ 122,212 | $ 140,194 | $ 157,941 | $ 144,806 | $ 95,322 | $ 106,168 | $ 146,450 | $ 131,676 | $ 565,153 | $ 479,616 | $ 440,804 |
Net income (loss) | 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | 95,128 | 67,847 | 48,098 |
Depreciation and amortization | 16,860 | 14,498 | 14,384 | ||||||||
Income tax expense (benefit) | 46,791 | 34,983 | 28,689 | ||||||||
Total assets | 326,227 | $ 221,430 | 326,227 | 221,430 | |||||||
Residential [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 543,300 | $ 479,600 | $ 440,800 | ||||||||
Commercial [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 21,800 | ||||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 565,153 | ||||||||||
Net income (loss) | 95,128 | ||||||||||
EBITDA | 159,110 | ||||||||||
Depreciation and amortization | 16,730 | ||||||||||
Income tax expense (benefit) | 46,791 | ||||||||||
Capital expenditures | 15,040 | ||||||||||
Total assets | 326,227 | 326,227 | |||||||||
Operating Segments [Member] | Residential [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 543,346 | ||||||||||
Net income (loss) | 97,412 | ||||||||||
EBITDA | 160,382 | ||||||||||
Depreciation and amortization | 14,598 | ||||||||||
Income tax expense (benefit) | 47,911 | ||||||||||
Capital expenditures | 14,989 | ||||||||||
Total assets | 247,817 | 247,817 | |||||||||
Operating Segments [Member] | Commercial [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net sales | 21,807 | ||||||||||
Net income (loss) | (2,284) | ||||||||||
EBITDA | (1,272) | ||||||||||
Depreciation and amortization | 2,132 | ||||||||||
Income tax expense (benefit) | (1,120) | ||||||||||
Capital expenditures | 51 | ||||||||||
Total assets | $ 78,410 | $ 78,410 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||||||||
Net income (loss) | $ 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | $ 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | $ 95,128 | $ 67,847 | $ 48,098 |
Interest | 461 | 1,125 | 619 | ||||||||
Taxes | 46,791 | 34,983 | 28,689 | ||||||||
Depreciation and amortization | 16,860 | $ 14,498 | $ 14,384 | ||||||||
Operating Segments [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net income (loss) | 95,128 | ||||||||||
Interest | 461 | ||||||||||
Taxes | 46,791 | ||||||||||
Depreciation and amortization | 16,730 | ||||||||||
EBITDA | 159,110 | ||||||||||
Operating Segments [Member] | Residential [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net income (loss) | 97,412 | ||||||||||
Interest | 461 | ||||||||||
Taxes | 47,911 | ||||||||||
Depreciation and amortization | 14,598 | ||||||||||
EBITDA | 160,382 | ||||||||||
Operating Segments [Member] | Commercial [Member] | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Net income (loss) | (2,284) | ||||||||||
Taxes | (1,120) | ||||||||||
Depreciation and amortization | 2,132 | ||||||||||
EBITDA | $ (1,272) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Schedule Of Commitments And Contingencies [Line Items] | |
Change in warranty reserve for disclosure purposes only | $ 2.8 |
Minimum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Average period for PE material purchases under short-term supply contracts for which pricing is negotiated as needed | 1 year |
Maximum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Average period for PE material purchases under short-term supply contracts for which pricing is negotiated as needed | 2 years |
Surface Flaking Warranty Reserve [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Percentage change in warranty claims used as a threshold for disclosure | 10.00% |
Residential Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 25 years |
Commercial Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 10 years |
Transcend, Enhance, Select and Universal Fascia Product [Member] | Residential Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 25 years |
Transcend, Enhance, Select and Universal Fascia Product [Member] | Commercial Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 10 years |
Trex Signature Railing [Member] | Residential Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 25 years |
Trex Signature Railing [Member] | Commercial Use [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 25 years |
Raw Material Supply Contracts [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Purchase commitment | $ 47.2 |
Purchase commitment, due in second year | 9.5 |
Purchase commitment, due in third year | $ 5.9 |
Commitments and Contingencies79
Commitments and Contingencies - Summary of Reconciliation of Company's Residential Product Warranty Reserve (Detail) - Surface Flaking Warranty Reserve [Member] - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2017 | Dec. 31, 2016 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 37,692 | $ 33,522 |
Provisions and changes in estimates | 4,268 | 10,852 |
Settlements made during the period | (6,961) | (6,682) |
Ending balance | 34,999 | 37,692 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 33,847 | 29,673 |
Provisions and changes in estimates | 9,835 | |
Settlements made during the period | (5,689) | (5,661) |
Ending balance | 28,158 | 33,847 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 3,845 | 3,849 |
Provisions and changes in estimates | 4,268 | 1,017 |
Settlements made during the period | (1,272) | (1,021) |
Ending balance | $ 6,841 | $ 3,845 |
Interim Financial Data (Unaud80
Interim Financial Data (Unaudited) - Summary of Interim Financial Data (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2017 | Sep. 30, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2016 | Sep. 30, 2016 | Jun. 30, 2016 | Mar. 31, 2016 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Quarterly Financial Data [Abstract] | |||||||||||
Net sales | $ 122,212 | $ 140,194 | $ 157,941 | $ 144,806 | $ 95,322 | $ 106,168 | $ 146,450 | $ 131,676 | $ 565,153 | $ 479,616 | $ 440,804 |
Gross profit | 50,906 | 55,284 | 72,014 | 65,169 | 38,113 | 29,945 | 61,410 | 57,627 | 243,373 | 187,095 | 154,869 |
Net income | $ 18,299 | $ 20,098 | $ 28,782 | $ 27,949 | $ 12,629 | $ 7,787 | $ 23,725 | $ 23,706 | $ 95,128 | $ 67,847 | $ 48,098 |
Basic net income per share | $ 0.62 | $ 0.68 | $ 0.98 | $ 0.95 | $ 0.43 | $ 0.27 | $ 0.81 | $ 0.80 | $ 3.24 | $ 2.31 | $ 1.53 |
Basic weighted average common shares outstanding | 29,412,848 | 29,404,049 | 29,389,458 | 29,363,210 | 29,318,915 | 29,295,284 | 29,264,362 | 29,697,722 | 29,392,559 | 29,394,559 | 31,350,542 |
Diluted net income per share | $ 0.62 | $ 0.68 | $ 0.97 | $ 0.95 | $ 0.43 | $ 0.26 | $ 0.80 | $ 0.79 | $ 3.22 | $ 2.29 | $ 1.52 |
Diluted weighted average common shares outstanding | 29,611,129 | 29,578,216 | 29,550,418 | 29,561,406 | 29,543,842 | 29,516,718 | 29,477,870 | 29,910,292 | 29,575,460 | 29,612,669 | 31,682,509 |
Interim Financial Data (Unaud81
Interim Financial Data (Unaudited) - Additional Information (Detail) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2018 | Dec. 31, 2017 | |
Interim Reporting [Line Items] | ||
Tax benefit due to change in tax rate on the deferred tax assets and deferred tax liabilities | $ 1.9 | |
Scenario, Forecast [Member] | ||
Interim Reporting [Line Items] | ||
Federal statutory tax rate, percentage | 21.00% |
Schedule II - Valuation and Q82
Schedule II - Valuation and Qualifying Accounts and Reserves (Detail) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2015 | |
Warranty Reserve [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | $ 37,692 | $ 33,522 | $ 33,841 |
Additions (Reductions) Charged to Cost and Expenses | 4,268 | 10,852 | 8,515 |
Deductions | (6,961) | (6,682) | (8,834) |
Balance at End of Period | 34,999 | 37,692 | 33,522 |
Valuation Allowance of Deferred Tax Assets [Member] | |||
Valuation and Qualifying Accounts Disclosure [Line Items] | |||
Balance at Beginning of Period | 4,061 | 4,582 | 4,465 |
Additions (Reductions) Charged to Cost and Expenses | 117 | ||
Deductions | (965) | (521) | |
Balance at End of Period | $ 3,096 | $ 4,061 | $ 4,582 |