Trex (TREX) 10-Q 30 Jul 18 2018 Q2 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Jul. 19, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2,018
Document Fiscal Period Focus	Q2
Trading Symbol	TREX
Entity Registrant Name	TREX CO INC
Entity Central Index Key	1,069,878
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		58,726,643

Condensed Consolidated Statemen

Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Statement [Abstract]
Net sales	$ 206,692	$ 157,941	$ 377,899	$ 302,747
Cost of sales	115,577	85,927	210,071	165,563
Gross profit	91,115	72,014	167,828	137,184
Selling, general and administrative expenses	33,513	27,221	62,472	50,490
Income from operations	57,602	44,793	105,356	86,694
Interest expense, net	369	251	598	456
Income before income taxes	57,233	44,542	104,758	86,238
Provision for income taxes	14,413	15,760	24,828	29,506
Net income	$ 42,820	$ 28,782	$ 79,930	$ 56,732
Basic earnings per common share	$ 0.73	$ 0.49	$ 1.36	$ 0.97
Basic weighted average common shares outstanding	58,760,753	58,778,916	58,807,694	58,752,814
Diluted earnings per common share	$ 0.73	$ 0.49	$ 1.35	$ 0.96
Diluted weighted average common shares outstanding	59,051,413	59,100,836	59,125,258	59,111,970
Comprehensive income	$ 42,820	$ 28,782	$ 79,930	$ 56,732

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 2,901	$ 30,514
Accounts receivable, net	171,131	66,882
Inventories	36,188	34,524
Prepaid expenses and other assets	18,136	16,878
Total current assets	228,356	148,798
Property, plant and equipment, net	107,652	103,110
Goodwill and other intangibles	75,121	71,319
Other assets	3,316	3,000
Total assets	414,445	326,227
Current liabilities:
Accounts payable	24,817	9,953
Accrued expenses and other liabilities	46,101	46,266
Accrued warranty	6,290	6,290
Line of credit	8,500
Total current liabilities	85,708	62,509
Deferred income taxes	1,286	1,286
Non-current accrued warranty	27,482	28,709
Other long-term liabilities	1,970	2,473
Total liabilities	116,446	94,977
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding
Common stock, $0.01 par value, 120,000,000 shares authorized; 69,959,734 and 69,844,222 shares issued and 58,722,328 and 58,856,860 shares outstanding at June 30, 2018 and December 31, 2017, respectively	700	349
Additional paid-in capital	121,541	122,043
Retained earnings	362,299	282,370
Treasury stock, at cost, 11,237,406 and 10,987,362 shares at June 30, 2018 and December 31, 2017, respectively	(186,541)	(173,512)
Total stockholders' equity	297,999	231,250
Total liabilities and stockholders' equity	$ 414,445	$ 326,227

Condensed Consolidated Balance4

Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	3,000,000	3,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	69,959,734	69,844,222
Common stock, shares outstanding	58,722,328	58,856,860
Treasury stock, shares	11,237,406	10,987,362

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Operating Activities
Net income	$ 79,930	$ 56,732
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Depreciation and amortization	9,363	7,513
Stock-based compensation	3,645	2,876
(Gain) loss on disposal of property, plant and equipment	(29)	1,343
Other non-cashadjustments	(406)	(405)
Changes in operating assets and liabilities:
Accounts receivable	(104,250)	(81,842)
Inventories	(1,664)	1,604
Prepaid expenses and other assets	(2,616)	3,701
Accounts payable	14,863	4,370
Accrued expenses and other liabilities	(5,705)	(5,680)
Income taxes receivable/payable	5,195	9,907
Net cash (used in) provided by operating activities	(1,674)	119
Investing Activities
Expenditures for property, plant and equipment and intangibles	(17,697)	(7,125)
Proceeds from sales of property, plant and equipment	83
Net cash used in investing activities	(17,614)	(7,125)
Financing Activities
Borrowings under line of credit	167,750	163,000
Principal payments under line of credit	(159,250)	(163,000)
Repurchases of common stock	(17,230)	(3,271)
Proceeds from employee stock purchase and option plans	405	189
Net cash used in financing activities	(8,325)	(3,082)
Net decrease in cash and cash equivalents	(27,613)	(10,088)
Cash and cash equivalents, beginning of period	30,514	18,664
Cash and cash equivalents, end of period	2,901	8,576
Supplemental Disclosure:
Cash paid for interest	385	364
Cash paid for income taxes, net	$ 19,618	$ 19,600

Business and Organization

Business and Organization	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business and Organization	1. BUSINESS AND ORGANIZATION Trex Company, Inc. (Company) is the world’s largest manufacturer of wood-alternative decking and railing products, with more than 25 years of product experience, which are marketed under the brand name Trex ® low-maintenance (540) 542-6300.

Basis of Presentation

Basis of Presentation	6 Months Ended
	Jun. 30, 2018
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	2. BASIS OF PRESENTATION The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and the instructions to Form 10-Q S-X The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, Trex Wood-Polymer Espana, S.L. and Trex Commercial Products, Inc. The accounts of Trex Wood-Polymer Espana, S.L. are included in the condensed consolidated financial statements for all periods presented. The Condensed Consolidated Statements of Comprehensive Income and the Condensed Consolidated Statements of Cash Flows of the Company include the operations and cash flows of Trex Commercial Products, Inc. for the three and six months ended June 30, 2018. The Company’s Condensed Consolidated Balance Sheet includes the assets and liabilities of Trex Commercial Products, Inc. for all periods presented. The consolidated results of operations for the three and six months ended June 30, 2018 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2018. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017 included in the Annual Report of Trex Company, Inc. on Form 10-K,

Recently Adopted Accounting Sta

Recently Adopted Accounting Standards	6 Months Ended
	Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]
Recently Adopted Accounting Standards	3. RECENTLY ADOPTED ACCOUNTING STANDARDS In May 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2017-09, Compensation—Stock Compensation (Topic 718), Scope Modification Accounting In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805), Clarifying the Definition of a Business. In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606), No. 2015-14, No. 2016-08, No. 2016-10, No. 2016-12, No. 2016-20 Revenue, In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments

New Accounting Standards Not Ye

New Accounting Standards Not Yet Adopted	6 Months Ended
	Jun. 30, 2018
Accounting Changes and Error Corrections [Abstract]
New Accounting Standards Not Yet Adopted	4. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In June 2018, the FASB issued ASU No. 2018-07, Compensation – Stock Compensation (Topic 718) 505-50, Equity—Equity-Based Payment to Non-Employees In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), No. 2018-01. right-of-use right-of-use

Acquisition

Acquisition	6 Months Ended
	Jun. 30, 2018
Business Combinations [Abstract]
Acquisition	5. ACQUISITION On July 31, 2017, through its newly-formed, wholly-owned subsidiary, Trex Commercial Products, Inc., the Company acquired certain assets and assumed certain liabilities of SC Company for $71.8 million. The Company used cash on hand and $30.0 million of funding from its existing revolving credit facility, which was fully paid on August 17, 2017, to acquire the assets. The acquired business designs, engineers and markets modular architectural railing, staging, acoustical and seating systems for the commercial and multi-family market, including sports stadiums and performing arts venues. As a result of the purchase, the Company gained access to growing commercial markets, expanded its custom design and engineering capabilities, and added the contract architect and specifier communities as new channels for its products. The acquisition was accounted for using the acquisition method of accounting under accounting principles generally accepted in the United States, which requires, among other things, that the assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The fair values of consideration transferred and net assets acquired were determined using a combination of Level 2 and Level 3 inputs as specified in the fair value hierarchy in Accounting Standards Codification 820, “ Fair Value Measurements and Disclosures Total consideration of $71.8 million was allocated to the assets acquired and liabilities assumed, as follows (in thousands): Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total estimated consideration $ 71,804 Goodwill of $57.9 million is primarily attributable to the potential opportunity for the Company to offer full service railing systems in the growing commercial and multi-family market, access to a complementary product category with a track record of substantial revenue growth, the ability to achieve economies of scale around raw material procurement, an increase in the range of products the Company may offer its core customers, and intangible assets that do not qualify for separable or legal criterion, such as an assembled workforce. The amount of goodwill that is expected to be amortized and deductible for tax purposes in 2018 is $3.9 million. All of the goodwill was recorded to the Trex Commercial Products reportable segment. The fair value attributed to intangible assets, which consists of production backlog and trade names and trademarks, 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. During the three and six months ended June 30, 2018 Trex Commercial Products, Inc. generated $17.4 million and $33.3 million of net sales, respectively, and $0.7 million and $0.2 million of net income, respectively. The following pro forma results of Trex Company, Inc. are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. The following unaudited pro forma results of operations assumes the acquisition occurred on January 1, 2017 (in thousands, except per share amounts): Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Actual Pro Forma Actual Pro Forma Net sales $ 157,941 $ 172,063 $ 302,747 $ 330,485 Net income $ 28,782 $ 28,633 $ 56,732 $ 56,082 Basic earnings per common share $ 0.49 $ 0.49 $ 0.97 $ 0.95 Diluted earnings per common share $ 0.49 $ 0.48 $ 0.96 $ 0.95 Significant pro forma adjustments included in the above pro forma information include an adjustment to amortization expense for the intangible assets acquired, elimination of transaction costs related to the acquisition as such costs are considered to be non-recurring

Inventories

Inventories	6 Months Ended
	Jun. 30, 2018
Inventory Disclosure [Abstract]
Inventories	6. INVENTORIES Inventories valued at LIFO (last-in, first-out), June 30, December 31, Finished goods $ 33,006 $ 32,986 Raw materials 21,438 19,432 Total FIFO (first-in, first-out) 54,444 52,418 Reserve to adjust inventories to LIFO value (20,070 ) (20,070 ) Total LIFO inventories $ 34,374 $ 32,348 The Company utilizes the LIFO method of accounting related to its wood-alternative decking and residential railing products, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end year-end year-end Inventories valued at lower of cost (FIFO method) and net realizable value consist of $1.8 million and $2.2 million consist of raw materials at June 30, 2018 and December 31, 2017, respectively. The Company utilizes the FIFO method of accounting related to its architectural railing, staging, acoustical and seating systems for the commercial and multi-family market.

Prepaid Expenses and Other Asse

Prepaid Expenses and Other Assets	6 Months Ended
	Jun. 30, 2018
Text Block [Abstract]
Prepaid Expenses and Other Assets	7. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following (in thousands): June 30, 2018 December 31, Revenues in excess of billings $ 8,517 $ 4,841 Prepaid expenses 5,466 7,494 Contract retainage 2,502 1,449 Income tax receivable 845 2,230 Other 806 864 Total prepaid expenses and other assets $ 18,136 $ 16,878

Goodwill and Other Intangible A

Goodwill and Other Intangible Assets	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill and Other Intangible Assets	8. GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets consist of the following (in thousands): Intangible assets: June 30, December 31, Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,287 — Total intangible assets 11,187 4,900 Accumulated amortization: Customer backlog (3,667 ) (1,666 ) Trade name and trademarks (825 ) (376 ) Domain names (75 ) — Total accumulated amortization (4,567 ) (2,042 ) Intantible assets, net $ 6,620 $ 2,858 Intangible asset amounts were determined based on the estimated economics of the asset and are amortized over the estimated useful lives on a straight-line basis over 12 months for customer backlog and trade names and trademarks and 15 years for domain names, which approximates the pattern in which the economic benefits are expected to be received. In May 2018, the Company purchased certain domain names for $6.3 million. We evaluate the recoverability of intangible assets periodically and consider events or circumstances that may warrant revised estimates of useful lives or that may indicate an impairment. Intangible asset amortization expense for the six months ended June 30, 2018 was $2.5 million. As of June 30, 2018, the Company had goodwill of $68.5 million.

Accrued Expenses and Other Liab

Accrued Expenses and Other Liabilities	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
Accrued Expenses and Other Liabilities	9. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following (in thousands): June 30, December 31, Sales and marketing $ 20,888 $ 21,964 Compensation and benefits 10,278 14,818 Income taxes 3,810 — Customer deposits 2,100 1,230 Manufacturing costs 2,076 1,979 Billings in excess of revenues 1,213 1,842 Rent obligations 967 779 Other 4,769 3,654 Total accrued expenses and other liabilities $ 46,101 $ 46,266

Debt

Debt	6 Months Ended
	Jun. 30, 2018
Debt Disclosure [Abstract]
Debt	10. DEBT The Company’s outstanding debt consists of a revolving credit facility. Revolving Credit Facility On January 12, 2016, the Company entered into a Third Amended and Restated Credit Agreement, as amended, with Bank of America, N.A. as Lender, Administrative Agent, Swing Line Lender and Letter of Credit Issuer, and certain other lenders including Citibank, N.A., Capital One, N.A., and SunTrust. The Third Amended Credit Agreement, as amended, provides the Company with one or more revolving loans in a collective maximum principal amount of $250 million from January 1 through June 30 of each year, and a maximum principal amount of $200 million from July 1 through December 31 of each year throughout the term, which ends January 12, 2021. The Company had $8.5 million of outstanding borrowings under its revolving credit facility and remaining available borrowing capacity of $241.5 million at June 30, 2018. Compliance with Debt Covenants and Restrictions The Company’s ability to make scheduled principal and interest payments, borrow and repay amounts under any outstanding revolving credit facility and continue to comply with any loan covenants depends primarily on the Company’s ability to generate sufficient cash flow from operations. As of June 30, 2018, the Company was in compliance with all of the covenants contained in its debt agreements. Failure to comply with the loan covenants might cause lenders to accelerate the repayment obligations under the credit facility, which may be declared payable immediately based on a default.

Financial Instruments

Financial Instruments	6 Months Ended
	Jun. 30, 2018
Investments, All Other Investments [Abstract]
Financial Instruments	11. FINANCIAL INSTRUMENTS The Company considers the recorded value of its financial assets and liabilities, consisting primarily of cash and cash equivalents, accounts receivable, accounts payable, accrued expenses, other current liabilities, and debt to approximate the fair value of the respective assets and liabilities on the Condensed Consolidated Balance Sheets at June 30, 2018 and December 31, 2017.

Stockholders' Equity

Stockholders' Equity	6 Months Ended
	Jun. 30, 2018
Equity [Abstract]
Stockholders' Equity	12. STOCKHOLDERS’ EQUITY Amendment of Restated Certificate of Incorporation The Company’s Board of Directors unanimously approved an amendment to the Company’s Restated Certificate of Incorporation (Amendment) on February 14, 2018, subject to stockholder approval. At the annual meeting of stockholders of the Company held on May 2, 2018, the Company’s stockholders approved the Amendment, effective as of May 2, 2018. The Amendment increased the number of shares of common stock, par value $.01 per share, that the Company is authorized to issue from 80,000,000 shares to 120,000,000 shares. The Amendment was filed with the Delaware Secretary of State on May 2, 2018. Stock Split On May 2, 2018, the Board of Directors of the Company approved a two-for-one Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 42,820 $ 28,782 $ 79,930 $ 56,732 Denominator: Basic weighted average shares outstanding 58,760,753 58,778,916 58,807,694 58,752,814 Effect of dilutive securities: Stock appreciation rights and options 173,571 197,626 183,814 199,398 Restricted stock 117,089 124,294 133,750 159,758 Diluted weighted average shares outstanding 59,051,413 59,100,836 59,125,258 59,111,970 Basic earnings per share $ 0.73 $ 0.49 $ 1.36 $ 0.97 Diluted earnings per share $ 0.73 $ 0.49 $ 1.35 $ 0.96 Diluted earnings per share is computed using the weighted average number of shares determined for the basic earnings per share computation plus the dilutive effect of common stock equivalents using the treasury stock method. The computation of diluted earnings per share excludes the following potentially dilutive securities because the effect would be anti-dilutive: Three Months Ended Six Months Ended 2018 2017 2018 2017 Stock appreciation rights 21,260 32,680 16,063 24,510 Performance-based restricted stock units 854 — 427 — Stock Repurchase Programs On February 16, 2017, the Board of Directors authorized a common stock repurchase program of up to 5.92 million shares of the Company’s outstanding common stock (February 2017 Stock Repurchase Program). The Company made no repurchases under the February 2017 Stock Repurchase Program. On February 16, 2018, the Board of Directors terminated the February 2017 Stock Repurchase Program and adopted a new stock repurchase program of up to 5.8 million shares of the Company’s outstanding common stock (February 2018 Stock Repurchase Program). As of the date of this report, the Company has repurchased 250,044 shares of the Company’s outstanding common stock under the February 2018 Stock Repurchase Program.

Revenue

Revenue	6 Months Ended
	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Revenue	13. REVENUE Topic 606 provides a single, comprehensive model for revenue recognition arising from contracts with customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when or as the Company satisfies the performance obligation. Revenue is recognized at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring control of the goods or services to a customer. Trex Residential Products Trex Residential Products principally generates revenue from the manufacture and sale of its high performance, low maintenance composite decking and residential railing products and accessories. Substantially all of its revenues are from contracts with customers, which are purchase orders of short-term duration of less than one year. Its customers, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. Trex Residential Products satisfies its performance obligations at a point in time. The shipment of each product is a separate performance obligation as the customer is able to derive benefit from each product shipped and no performance obligation remains after shipment. Upon shipment of the product, the customer obtains control over the distinct product and Trex Residential satisfies its performance obligation. Any performance obligation that remains unsatisfied at the end of a reporting period is part of a contract that has an original expected duration of one year or less. Any variable consideration related to the unsatisfied performance obligation is allocated wholly to the unsatisfied performance obligation and recognized when the product ships and the performance obligation is satisfied. For each product shipped, the transaction price by product is specified in the purchase order. The Company recognizes revenue on the transaction price less any amount offered under a sales incentive program. The Company recognizes an account receivable (contract asset) for the amount of revenue recognized as it has an unconditional right to consideration at the time of shipment and payment from the customer is due based solely on the passage of time. The Company receives payments from its customers based on the payment terms applicable to each individual contract and the customer pays in accordance with the billing terms specified in the purchase order, which is less than one year. The related accounts receivables are included in “ Accounts receivable, net Trex Residential Products may offer various sales incentive programs throughout the year. It estimates the amount of sales incentive to allocate to each performance obligation, or product shipped, using the most-likely-amount method of estimation based on direct sales to the customer. The estimate is updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception. Changes in estimate allocated to a previously satisfied performance obligation are recognized as a reduction of revenue in the period in which the change occurs under the cumulative catch-up Trex Residential Products pays commissions to certain employees. However, the sales commissions are not directly attributable to identifiable contracts, are discretionary in nature and are based on other factors not related to obtaining a contract, such as individual performance, profitability of the entity, annual sales targets, etc. These costs are included in selling, general and administrative expenses as incurred. Trex Residential Products does not grant contractual product return rights to customers other than pursuant to its assurance product warranty (see related disclosure on product warranties in Note 18, “ Commitments and Contingencies Trex Commercial Products Trex Commercial Products generates revenue from the manufacture and sale of its modular and architectural railing, staging, acoustical and seating systems. All of its revenues are from fixed-price contracts with customers. Trex Commercial Products contracts have a single performance obligation as the promise to transfer the individual goods or services is not separately identifiable from other promises in the contract and is, therefore, not distinct. Trex Commercial Products satisfies its performance obligation over time as work progresses because control is transferred continuously to its customers. Revenue and estimated profit is recognized over time based on the proportion of costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Incurred costs include all direct material, labor, subcontract and certain indirect costs. The Company reviews and updates its estimates regularly and recognizes adjustments in estimated profit on contracts under the cumulative catch-up 606-10-50-15, The Company recognizes an account receivable (contract asset) for satisfied performance obligations as it has an unconditional right to consideration and payment from the customer is due based solely on the passage of time. The Company receives payments from its customers on the accounts receivable based on the payment terms applicable to each individual contract and the customer pays in less than one year. Accounts receivables are included in “ Accounts receivable, net In addition, the timing of revenue recognition, billings and cash collections may result in revenues in excess of billings and contract retainage (contract assets), and billings in excess of revenues and customer deposits (contract liabilities) on the Condensed Consolidated Balance Sheet. These assets and liabilities are reported on a contract-by-contract Trex Commercial Products pays sales commissions that are directly attributable to identifiable contracts to certain of its employees. If the amortization period of the commission is one year or less then the Company recognizes the commission expense as incurred. Otherwise, the Company capitalizes the commission and amortizes it on a straight-line basis over the life of the contract. Trex Commercial Products does not grant contractual product return rights to customers other than pursuant to its assurance product warranty. All shipping and handling fees invoiced to the customer are included in net sales and the related costs are included in cost of sales. For the three and six months ended June 30, 2018, revenue is disaggregated in the following tables by (1) market, (2) timing of revenue recognition, and (3) type of contract. The tables also include a reconciliation of the respective disaggregated revenue with the Company’s reportable segments (in thousands). Three Months Ended June 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 189,201 $ — $ 189,201 Products transferred over time and fixed price contracts — 17,491 17,491 $189,201 $17,491 $206,692 Six Months Ended June 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 344,401 $ — $ 344,401 Products transferred over time and fixed price contracts — 33,498 33,498 $344,401 $33,498 $377,899

Stock-Based Compensation

Stock-Based Compensation	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Stock-Based Compensation	14. STOCK-BASED COMPENSATION The Company has one stock-based compensation plan, the 2014 Stock Incentive Plan (Plan), approved by the Company’s stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan was subsequently amended and restated by the Company’s Board of Directors in May 2014 and May 2018. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. Stock-based compensation is granted to officers, directors and certain key employees in accordance with the provisions of the Plan. The Plan provides for grants of stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and unrestricted stock. The total aggregate number of shares of the Company’s common stock that may be issued under the Plan is 12,840,000 and as of June 30, 2018, the total number of shares available for future issuance are 5,207,006. The following table summarizes the Company’s stock-based compensation grants for the six months ended June 30, 2018: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 79,712 $ 53.69 Performance-based restricted stock units (a) 79,022 $ 35.21 Stock appreciation rights 21,260 $ 56.21 (a) Includes 29,702 of target performance-based restricted stock unit awards granted during the six months ended June 30, 2018, and adjustments of 10,792, 27,166 and 11,362 grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2015, 2016, and 2017, respectively. The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the six months ended June 30, 2018 and 2017 the data and assumptions shown in the following table were used: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Weighted-average fair value of grants $ 22.09 $ 13.91 Dividend yield 0 % 0 % Average risk-free interest rate 2.7 % 2.01 % Expected term (years) 5 5 Expected volatility 40.4 % 42.4 % The Company recognizes stock-based compensation expense ratably over the period from the grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Stock appreciation rights $ 56 $ 25 $ 259 $ 192 Time-based restricted stock and restricted stock units 578 403 1,400 1,139 Performance-based restricted stock and restricted stock units 666 468 1,919 1,507 Employee stock purchase plan 45 16 67 38 Total stock-based compensation $ 1,345 $ 912 $ 3,645 $ 2,876 Total unrecognized compensation cost related to unvested awards as of June 30, 2018 was $8.2 million. The cost of these unvested awards is being recognized over the requisite vesting period of each award.

Income Taxes

Income Taxes	6 Months Ended
	Jun. 30, 2018
Income Tax Disclosure [Abstract]
Income Taxes	15. INCOME TAXES The Company’s effective tax rate for the six months ended June 30, 2018 and 2017 was 23.7% and 34.2%, respectively, which resulted in expense of $24.8 million and $29.5 million, respectively. The decrease of 10.5% in the effective tax rate was primarily due to the enactment on December 22, 2017 of tax legislation H.R.1, “An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018,” known as the Tax Cuts and Jobs Act (Act), which lowered the Federal statutory rate to 21%. The Company has finalized its analysis of the Act, which did not give rise to new deferred tax amounts. During the six months ended June 30, 2018 and 2017, the Company realized $2.0 million and $1.0 million, respectively, of excess tax benefits from stock-based awards and recorded a corresponding benefit to income tax expense. The Company analyzes its deferred tax assets each reporting period, considering all available positive and negative evidence in determining the expected realization of those deferred tax assets. As of June 30, 2018, the Company maintains a valuation allowance of $2.8 million against deferred tax assets primarily related to state tax credits it estimates will expire before they are realized. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company accrues a liability when it believes that it is more likely than not that benefits of tax positions will not be realized. The Company believes that adequate provisions have been made for all tax returns subject to examination. As of June 30, 2018, for certain tax jurisdictions tax years 2014 through 2017 remain subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdiction as the Company does not have a taxable presence in any foreign jurisdiction.

Segment Information

Segment Information	6 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Segment Information	16. SEGMENT INFORMATION Prior to July 31, 2017, the Company operated in one reportable segment. Subsequent to the acquisition of certain assets and assumption of certain liabilities of SC Company on July 31, 2017, the Company operates in two reportable segments: • Trex Residential Products manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® • Trex Commercial Products designs, engineers, and markets modular and architectural railing, staging, acoustical and seating systems for the commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products are marketed to architects, specifiers, contractors, and others doing business within the segment’s commercial and multi-family market. Net sales of Trex Commercial products were $33.5 million in the six months ended June 30, 2018. The Company’s operating segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial sales activities. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. The below segment data for the three and six months ended June 30, 2018, includes data for Trex Residential Products and Trex Commercial Product (in thousands): Three Months Ended June 30, 2018 Residential Commercial Total Net sales $ 189,201 $ 17,491 $ 206,692 Net income $ 42,115 $ 705 $ 42,820 EBITDA $ 59,939 $ 2,229 $ 62,168 Depreciation and amortization $ 3,277 $ 1,289 $ 4,566 Income tax expense $ 14,178 $ 235 $ 14,413 Capital expenditures $ 11,825 $ 438 $ 12,263 Total assets $ 334,289 $ 80,156 $ 414,445 Reconciliation of net income to EBITDA (in thousands): Three Months Ended June 30, 2018 Residential Commercial Total Net income $ 42,115 $ 705 $ 42,820 Interest 369 — 369 Taxes 14,178 235 14,413 Depreciation and amortization 3,277 1,289 4,566 EBITDA $ 59,939 $ 2,229 $ 62,168 Six Months Ended June 30, 2018 Residential Commercial Total Net sales $ 344,401 $ 33,498 $ 377,899 Net income $ 79,694 $ 236 $ 79,930 EBITDA $ 111,773 $ 2,882 $ 114,655 Depreciation and amortization $ 6,731 $ 2,568 $ 9,299 Income tax expense $ 24,750 $ 78 $ 24,828 Capital expenditures $ 16,868 $ 829 $ 17,697 Total assets $ 334,289 $ 80,156 $ 414,445 Reconciliation of net income to EBITDA (in thousands): Six Months Ended June 30, 2018 Residential Commercial Total Net income $ 79,694 $ 236 $ 79,930 Interest 598 — 598 Taxes 24,750 78 24,828 Depreciation and amortization 6,731 2,568 9,299 EBITDA $ 111,773 $ 2,882 $ 114,655

Seasonality

Seasonality	6 Months Ended
	Jun. 30, 2018
Text Block [Abstract]
Seasonality	17. SEASONALITY The operating results for Trex Residential Products have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions reduce the level of home improvement and construction activity and can shift demand for its products to a later period. As part of its normal business practice and consistent with industry practice, Trex Residential Products has historically offered incentive programs to its distributors and dealers to build inventory levels before the start of the prime deck-building season in order to ensure adequate availability of its product to meet anticipated seasonal consumer demand. The seasonal effects are often offset by the positive effect of the incentive programs. In addition, the operating results for Trex Commercial Products are driven by the timing of individual projects, which may vary each quarterly period.

Commitments and Contingencies

Commitments and Contingencies	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	18. COMMITMENTS AND CONTINGENCIES Product Warranty The Company warrants that its decking and residential railing products will be free from material defects in workmanship and materials for warranty periods ranging from 10 years to 25 years, depending on the product and its use. If there is a breach of such warranties, the Company has an obligation either to replace the defective product or refund the purchase price. The Company continues to receive and settle claims for products manufactured at its Nevada facility prior to 2007 that exhibit surface flaking and maintains a warranty reserve to provide for the settlement of these claims. Estimating the warranty reserve for surface flaking claims requires management to estimate (1) the number of claims to be settled with payment and (2) the average cost to settle each claim. To estimate the number of claims to be settled with payment, the Company utilizes actuarial techniques to quantify both the expected number of claims to be received and the percentage of those claims that will ultimately require payment (collectively, elements). Estimates for these elements are quantified using a range of assumptions derived from claim count history and the identification of factors influencing the claim counts. The cost per claim varies due to a number of factors, including the size of affected decks, the availability and type of replacement material used, the cost of production of replacement material and the method of claim settlement. The Company monitors surface flaking claims activity each quarter for indications that its estimates require revision. Typically, a majority of surface flaking claims received in a year are received during the summer outdoor season, which spans the second and third quarters. It has been the Company’s practice to utilize the actuarial techniques discussed above during the third quarter, after a significant portion of all claims has been received for the fiscal year and variances to annual claims expectations are more meaningful. The number of claims received in the six months ended June 30, 2018 was lower than claims received in the six months ended June 30, 2017, continuing the historical year-over-year decline in incoming claims, and consistent with the Company’s expectations. The average settlement cost per claim experienced in the six months ended June 30, 2018 was lower than the average settlement cost per claim experienced during the six months ended June 30, 2017 and consistent with the Company’s expectations. The Company believes its reserve at June 30, 2018 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 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 $2.6 million change in the surface flaking warranty reserve. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Six Months Ended June 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,567 1,567 Settlements made during the period (2,287 ) (506 ) (2,793 ) Ending balance, June 30 $ 25,870 $ 7,903 $ 33,773 Six Months Ended June 30, 2017 Surface Other Total Beginning balance, January 1 $ 33,847 $ 3,846 $ 37,693 Provisions and changes in estimates — 2,186 2,186 Settlements made during the period (2,683 ) (536 ) (3,219 ) Ending balance, June 30 $ 31,164 $ 5,496 $ 36,660 Legal Matters The Company has lawsuits, as well as other claims, pending against it which are ordinary routine litigation and claims incidental to the business. Management has evaluated the merits of these lawsuits and claims, and believes that their ultimate resolution will not have a material effect on the Company’s consolidated financial condition, results of operations, liquidity or competitive position.

Stock-Based Compensation (Polic

Stock-Based Compensation (Policies)	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Share-based Compensation	The Company has one stock-based compensation plan, the 2014 Stock Incentive Plan (Plan), approved by the Company’s stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan was subsequently amended and restated by the Company’s Board of Directors in May 2014 and May 2018. The Plan is administered by the Compensation Committee of the Company’s Board of Directors. Stock-based compensation is granted to officers, directors and certain key employees in accordance with the provisions of the Plan. The Plan provides for grants of stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), and unrestricted stock. The total aggregate number of shares of the Company’s common stock that may be issued under the Plan is 12,840,000 and as of June 30, 2018, the total number of shares available for future issuance are 5,207,006.

Acquisition (Tables)

Acquisition (Tables)	6 Months Ended
	Jun. 30, 2018
Business Combinations [Abstract]
Summary of Consideration Allocated to Assets Acquired and Liabilities Assumed	Total consideration of $71.8 million was allocated to the assets acquired and liabilities assumed, as follows (in thousands): Accounts receivable, net $ 8,357 Contract retainage 1,948 Inventories, net 2,344 Prepaid expenses and other assets 1,223 Revenues in excess of billings 3,463 Fixed assets, net 1,264 Intangible assets 4,900 Goodwill 57,938 Accounts payable (3,990 ) Accrued liabilities and other expenses (2,329 ) Billings in excess of revenues (1,752 ) Customer Deposits (1,562 ) Total estimated consideration $ 71,804
Summary of Unaudited Pro Forma Results of Operations	The following pro forma results of Trex Company, Inc. are prepared for comparative purposes only and do not necessarily reflect the results that would have occurred had the acquisition occurred at the beginning of the periods presented or the results which may occur in the future. The following unaudited pro forma results of operations assumes the acquisition occurred on January 1, 2017 (in thousands, except per share amounts): Three Months Ended June 30, 2017 Six Months Ended June 30, 2017 Actual Pro Forma Actual Pro Forma Net sales $ 157,941 $ 172,063 $ 302,747 $ 330,485 Net income $ 28,782 $ 28,633 $ 56,732 $ 56,082 Basic earnings per common share $ 0.49 $ 0.49 $ 0.97 $ 0.95 Diluted earnings per common share $ 0.49 $ 0.48 $ 0.96 $ 0.95

Inventories (Tables)

Inventories (Tables)	6 Months Ended
	Jun. 30, 2018
Inventory Disclosure [Abstract]
Summary of Inventories	Inventories valued at LIFO (last-in, first-out), June 30, December 31, Finished goods $ 33,006 $ 32,986 Raw materials 21,438 19,432 Total FIFO (first-in, first-out) 54,444 52,418 Reserve to adjust inventories to LIFO value (20,070 ) (20,070 ) Total LIFO inventories $ 34,374 $ 32,348

Prepaid Expenses and Other As27

Prepaid Expenses and Other Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Text Block [Abstract]
Summary of Prepaid Expenses and Other Assets	Prepaid expenses and other assets consist of the following (in thousands): June 30, 2018 December 31, Revenues in excess of billings $ 8,517 $ 4,841 Prepaid expenses 5,466 7,494 Contract retainage 2,502 1,449 Income tax receivable 845 2,230 Other 806 864 Total prepaid expenses and other assets $ 18,136 $ 16,878

Goodwill and Other Intangible28

Goodwill and Other Intangible Assets (Tables)	6 Months Ended
	Jun. 30, 2018
Goodwill and Intangible Assets Disclosure [Abstract]
Details of Intangible Assets	Intangible assets consist of the following (in thousands): Intangible assets: June 30, December 31, Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,287 — Total intangible assets 11,187 4,900 Accumulated amortization: Customer backlog (3,667 ) (1,666 ) Trade name and trademarks (825 ) (376 ) Domain names (75 ) — Total accumulated amortization (4,567 ) (2,042 ) Intantible assets, net $ 6,620 $ 2,858

Accrued Expenses and Other Li29

Accrued Expenses and Other Liabilities (Tables)	6 Months Ended
	Jun. 30, 2018
Payables and Accruals [Abstract]
Summary of Accrued Expenses and Other Liabilities	Accrued expenses and other liabilities consist of the following (in thousands): June 30, December 31, Sales and marketing $ 20,888 $ 21,964 Compensation and benefits 10,278 14,818 Income taxes 3,810 — Customer deposits 2,100 1,230 Manufacturing costs 2,076 1,979 Billings in excess of revenues 1,213 1,842 Rent obligations 967 779 Other 4,769 3,654 Total accrued expenses and other liabilities $ 46,101 $ 46,266

Stockholders' Equity (Tables)

Stockholders' Equity (Tables)	6 Months Ended
	Jun. 30, 2018
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): Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Numerator: Net income available to common shareholders $ 42,820 $ 28,782 $ 79,930 $ 56,732 Denominator: Basic weighted average shares outstanding 58,760,753 58,778,916 58,807,694 58,752,814 Effect of dilutive securities: Stock appreciation rights and options 173,571 197,626 183,814 199,398 Restricted stock 117,089 124,294 133,750 159,758 Diluted weighted average shares outstanding 59,051,413 59,100,836 59,125,258 59,111,970 Basic earnings per share $ 0.73 $ 0.49 $ 1.36 $ 0.97 Diluted earnings per share $ 0.73 $ 0.49 $ 1.35 $ 0.96
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: Three Months Ended Six Months Ended 2018 2017 2018 2017 Stock appreciation rights 21,260 32,680 16,063 24,510 Performance-based restricted stock units 854 — 427 —

Revenue (Tables)

Revenue (Tables)	6 Months Ended
	Jun. 30, 2018
Revenue from Contract with Customer [Abstract]
Summary of Disaggregated Revenue	The tables also include a reconciliation of the respective disaggregated revenue with the Company’s reportable segments (in thousands). Three Months Ended June 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 189,201 $ — $ 189,201 Products transferred over time and fixed price contracts — 17,491 17,491 $189,201 $17,491 $206,692 Six Months Ended June 30, 2018 Reportable Segment Residential Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 344,401 $ — $ 344,401 Products transferred over time and fixed price contracts — 33,498 33,498 $344,401 $33,498 $377,899

Stock-Based Compensation (Table

Stock-Based Compensation (Tables)	6 Months Ended
	Jun. 30, 2018
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
Summary of Stock-Based Compensation Grants	The following table summarizes the Company’s stock-based compensation grants for the six months ended June 30, 2018: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 79,712 $ 53.69 Performance-based restricted stock units (a) 79,022 $ 35.21 Stock appreciation rights 21,260 $ 56.21 (a) Includes 29,702 of target performance-based restricted stock unit awards granted during the six months ended June 30, 2018, and adjustments of 10,792, 27,166 and 11,362 grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2015, 2016, and 2017, respectively.
Summary of Assumptions Used to Estimate Fair Value of Each SAR	The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the six months ended June 30, 2018 and 2017 the data and assumptions shown in the following table were used: Six Months Ended June 30, 2018 Six Months Ended June 30, 2017 Weighted-average fair value of grants $ 22.09 $ 13.91 Dividend yield 0 % 0 % Average risk-free interest rate 2.7 % 2.01 % Expected term (years) 5 5 Expected volatility 40.4 % 42.4 %
Summary of Stock-Based Compensation Expense	The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended Six Months Ended 2018 2017 2018 2017 Stock appreciation rights $ 56 $ 25 $ 259 $ 192 Time-based restricted stock and restricted stock units 578 403 1,400 1,139 Performance-based restricted stock and restricted stock units 666 468 1,919 1,507 Employee stock purchase plan 45 16 67 38 Total stock-based compensation $ 1,345 $ 912 $ 3,645 $ 2,876

Segment Information (Tables)

Segment Information (Tables)	6 Months Ended
	Jun. 30, 2018
Segment Reporting [Abstract]
Details of Segment Information	The below segment data for the three and six months ended June 30, 2018, includes data for Trex Residential Products and Trex Commercial Product (in thousands): Three Months Ended June 30, 2018 Residential Commercial Total Net sales $ 189,201 $ 17,491 $ 206,692 Net income $ 42,115 $ 705 $ 42,820 EBITDA $ 59,939 $ 2,229 $ 62,168 Depreciation and amortization $ 3,277 $ 1,289 $ 4,566 Income tax expense $ 14,178 $ 235 $ 14,413 Capital expenditures $ 11,825 $ 438 $ 12,263 Total assets $ 334,289 $ 80,156 $ 414,445 Six Months Ended June 30, 2018 Residential Commercial Total Net sales $ 344,401 $ 33,498 $ 377,899 Net income $ 79,694 $ 236 $ 79,930 EBITDA $ 111,773 $ 2,882 $ 114,655 Depreciation and amortization $ 6,731 $ 2,568 $ 9,299 Income tax expense $ 24,750 $ 78 $ 24,828 Capital expenditures $ 16,868 $ 829 $ 17,697 Total assets $ 334,289 $ 80,156 $ 414,445
Schedule of Reconciliation of Net Income to EBITDA	Reconciliation of net income to EBITDA (in thousands): Three Months Ended June 30, 2018 Residential Commercial Total Net income $ 42,115 $ 705 $ 42,820 Interest 369 — 369 Taxes 14,178 235 14,413 Depreciation and amortization 3,277 1,289 4,566 EBITDA $ 59,939 $ 2,229 $ 62,168 Six Months Ended June 30, 2018 Residential Commercial Total Net income $ 79,694 $ 236 $ 79,930 Interest 598 — 598 Taxes 24,750 78 24,828 Depreciation and amortization 6,731 2,568 9,299 EBITDA $ 111,773 $ 2,882 $ 114,655

Commitments and Contingencies (

Commitments and Contingencies (Tables)	6 Months Ended
	Jun. 30, 2018
Commitments and Contingencies Disclosure [Abstract]
Summary of Reconciliation of Company's Residential Product Warranty Reserve	The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Six Months Ended June 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,567 1,567 Settlements made during the period (2,287 ) (506 ) (2,793 ) Ending balance, June 30 $ 25,870 $ 7,903 $ 33,773 Six Months Ended June 30, 2017 Surface Other Total Beginning balance, January 1 $ 33,847 $ 3,846 $ 37,693 Provisions and changes in estimates — 2,186 2,186 Settlements made during the period (2,683 ) (536 ) (3,219 ) Ending balance, June 30 $ 31,164 $ 5,496 $ 36,660

Business and Organization - Add

Business and Organization - Additional Information (Detail) - Segment	6 Months Ended	7 Months Ended	12 Months Ended
	Jun. 30, 2018	Jul. 31, 2017	Dec. 31, 2017
Accounting Policies [Abstract]
Number of reportable segments	2	1	2

Acquisition - Additional Inform

Acquisition - Additional Information (Detail) - USD ($) $ in Thousands	Aug. 17, 2017	Jul. 31, 2017	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Business Acquisition [Line Items]
Fund used to acquire business from revolving credit facility			$ 8,500		$ 8,500
Repayment of revolving credit facility					159,250	$ 163,000
Goodwill			68,500		68,500
Net income (loss)			42,820	$ 28,782	79,930	$ 56,732
Trex Commercial Products, Inc. (TCP) [Member]
Business Acquisition [Line Items]
Net sales			17,400		33,300
Net income (loss)			700		200
Staging Concepts Acquisition, LLC [Member]
Business Acquisition [Line Items]
Certain assets and liabilities acquired		$ 71,800
Total consideration		71,804
Goodwill		57,938
Goodwill expected to be amortized and deductible for tax purposes			$ 3,900		$ 3,900
Amortization period for intangible assets					12 months
Staging Concepts Acquisition, LLC [Member] | Revolving Credit Facility [Member]
Business Acquisition [Line Items]
Fund used to acquire business from revolving credit facility		$ 30,000
Repayment of revolving credit facility	$ 30,000

Acquisition - Summary of Consid

Acquisition - Summary of Consideration Allocated to Assets Acquired and Liabilities Assumed (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Jul. 31, 2017
Business Acquisition [Line Items]
Goodwill	$ 68,500
Staging Concepts Acquisition, LLC [Member]
Business Acquisition [Line Items]
Accounts receivable, net		$ 8,357
Contract retainage		1,948
Inventories, net		2,344
Prepaid expenses and other assets		1,223
Revenues in excess of billings		3,463
Fixed assets, net		1,264
Intangible assets		4,900
Goodwill		57,938
Accounts payable		(3,990)
Accrued liabilities and other expenses		(2,329)
Billings in excess of revenues		(1,752)
Customer Deposits		(1,562)
Total estimated consideration		$ 71,804

Acquisition - Summary of Unaudi

Acquisition - Summary of Unaudited Pro Forma Results of Operations (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Business Combinations [Abstract]
Net sales	$ 206,692	$ 157,941	$ 377,899	$ 302,747
Net income	$ 42,820	$ 28,782	$ 79,930	$ 56,732
Basic earnings per common share	$ 0.73	$ 0.49	$ 1.36	$ 0.97
Diluted earnings per common share	$ 0.73	$ 0.49	$ 1.35	$ 0.96
Pro Forma Net sales		$ 172,063		$ 330,485
Pro Forma Net income		$ 28,633		$ 56,082
Pro Forma Basic earnings per common share		$ 0.49		$ 0.95
Pro Forma Diluted earnings per common share		$ 0.48		$ 0.95

Inventories - Summary of Invent

Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Inventory Disclosure [Abstract]
Finished goods	$ 33,006	$ 32,986
Raw materials	21,438	19,432
Total FIFO (first-in,first-out) inventories	54,444	52,418
Reserve to adjust inventories to LIFO value	(20,070)	(20,070)
Total LIFO inventories	$ 34,374	$ 32,348

Inventories - Additional Inform

Inventories - Additional Information (Detail) - USD ($)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Inventory Disclosure [Abstract]
LIFO inventory liquidations	$ 0	$ 0
Raw materials	$ 1,800,000		$ 2,200,000

Prepaid Expenses and Other As41

Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Prepaid Expense and Other Assets [Abstract]
Revenues in excess of billings	$ 8,517	$ 4,841
Prepaid expenses	5,466	7,494
Contract retainage	2,502	1,449
Income tax receivable	845	2,230
Other	806	864
Total prepaid expenses and other assets	$ 18,136	$ 16,878

Goodwill and Other Intangible42

Goodwill and Other Intangible Assets - Details of Intangible Assets (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Indefinite-lived Intangible Assets [Line Items]
Total intangible assets	$ 11,187	$ 4,900
Total accumulated amortization	(4,567)	(2,042)
Intangible assets, net	6,620	2,858
Domain Names [Member]
Indefinite-lived Intangible Assets [Line Items]
Total intangible assets	6,287
Total accumulated amortization	(75)
Customer Backlog [Member]
Indefinite-lived Intangible Assets [Line Items]
Total intangible assets	4,000	4,000
Total accumulated amortization	(3,667)	(1,666)
Trade Names and Trademarks [Member]
Indefinite-lived Intangible Assets [Line Items]
Total intangible assets	900	900
Total accumulated amortization	$ (825)	$ (376)

Goodwill and Other Intangible43

Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions	1 Months Ended	6 Months Ended
	May 31, 2018	Jun. 30, 2018
Goodwill [Line Items]
Amortization of intangible asset		$ 2.5
Goodwill		$ 68.5
Domain Names [Member]
Goodwill [Line Items]
Amortization period		15 years
Purchase of domain names	$ 6.3
Customer Backlog [Member]
Goodwill [Line Items]
Amortization period		12 months
Trade Names and Trademarks [Member]
Goodwill [Line Items]
Amortization period		12 months

Accrued Expenses and Other Li44

Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Payables and Accruals [Abstract]
Sales and marketing	$ 20,888	$ 21,964
Compensation and benefits	10,278	14,818
Income taxes	3,810
Customer deposits	2,100	1,230
Manufacturing costs	2,076	1,979
Billings in excess of revenues	1,213	1,842
Rent obligations	967	779
Other	4,769	3,654
Total accrued expenses and other liabilities	$ 46,101	$ 46,266

Debt - Additional Information (

Debt - Additional Information (Detail)	6 Months Ended
	Jun. 30, 2018USD ($)
Line of Credit Facility [Line Items]
Outstanding borrowings under the revolver loans	$ 8,500,000
Remaining available borrowing capacity	$ 241,500,000
Third Amended and Restated Credit Agreement [Member]
Line of Credit Facility [Line Items]
Termination date of the Credit Agreement	Jan. 12, 2021
Revolver Loans Portion Effective January 1 through June 30 [Member] | Third Amended and Restated Credit Agreement [Member]
Line of Credit Facility [Line Items]
Revolving loans in a collective maximum principal amount	$ 250,000,000
Revolver Loans Portion Effective July 1 through December 31 [Member] | Third Amended and Restated Credit Agreement [Member]
Line of Credit Facility [Line Items]
Revolving loans in a collective maximum principal amount	$ 200,000,000

Stockholders' Equity - Addition

Stockholders' Equity - Additional Information (Detail)	May 02, 2018shares	Jun. 30, 2018$ / sharesshares	Jun. 30, 2017shares	Feb. 16, 2018shares	Dec. 31, 2017shares	Feb. 16, 2017shares
Equity, Class of Treasury Stock [Line Items]
Common stock, par value | $ / shares		$ 0.01
Common stock, shares authorized	80,000,000	120,000,000			120,000,000
Stock split	2
February 2017 Stock Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Common stock repurchase program, authorized shares						5,920,000
Number of shares repurchased by the Company			0
February 2018 Stock Repurchase Program [Member]
Equity, Class of Treasury Stock [Line Items]
Common stock repurchase program, authorized shares				5,800,000
Number of shares repurchased by the Company		250,044

Stockholders' Equity - Computat

Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Numerator:
Net income available to common shareholders	$ 42,820	$ 28,782	$ 79,930	$ 56,732
Denominator:
Basic weighted average shares outstanding	58,760,753	58,778,916	58,807,694	58,752,814
Effect of dilutive securities:
Diluted weighted average shares outstanding	59,051,413	59,100,836	59,125,258	59,111,970
Basic earnings per share	$ 0.73	$ 0.49	$ 1.36	$ 0.97
Diluted earnings per share	$ 0.73	$ 0.49	$ 1.35	$ 0.96
Stock Appreciation Rights and Options [Member]
Effect of dilutive securities:
Dilutive securities	173,571	197,626	183,814	199,398
Restricted Stock [Member]
Effect of dilutive securities:
Dilutive securities	117,089	124,294	133,750	159,758

Stockholders' Equity - Antidilu

Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Stock Appreciation Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of diluted earnings per share	21,260	32,680	16,063	24,510
Performance-based Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive securities excluded from the computation of diluted earnings per share	854		427

Revenue - Additional Informatio

Revenue - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2018USD ($)
Revenue from Contract with Customer [Abstract]
Revenue remaining performance obligation	$ 42
Revenue remaining performance obligation description	The Company discloses only the transaction price allocated to its remaining performance obligations on contracts with an original duration greater than one year

Revenue - Summary of Disaggrega

Revenue - Summary of Disaggregated Revenue (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	$ 206,692	$ 157,941	$ 377,899	$ 302,747
Products Transferred at a Point in Time and Variable Consideration Contracts [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	189,201		344,401
Products Transferred Over Time and Fixed Price Contracts [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	17,491		33,498
Residential [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	189,201		344,401	$ 302,700
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	189,201		344,401
Commercial [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	17,491		33,498
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member]
Disaggregation of Revenue [Line Items]
Revenue from contract with customers	$ 17,491		$ 33,498

Stock-Based Compensation - Addi

Stock-Based Compensation - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2018USD ($)Planshares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of stock based compensation plans | Plan	1
Unrecognized compensation cost related to unvested awards | $	$ 8.2
2014 Stock Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Total aggregate number of shares of common stock that may be issued	12,840,000
Number of common stock available for future issuance	5,207,006
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Fair value assumptions method used	Black-Scholes option-pricing formula

Stock-Based Compensation - Summ

Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Detail)	6 Months Ended
	Jun. 30, 2018$ / sharesshares
Time Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Awards Granted | shares	79,712
Weighted-Average Grant Price Per Share | $ / shares	$ 53.69
Performance Based Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Awards Granted | shares	79,022
Weighted-Average Grant Price Per Share | $ / shares	$ 35.21
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Awards Granted | shares	21,260
Weighted-Average Grant Price Per Share | $ / shares	$ 56.21

Stock-Based Compensation - Su53

Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Parenthetical) (Detail) - shares	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Performance Based Restricted Stock Unit Target [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Awards Granted	29,702
Performance Based Restricted Stock Unit Adjustment [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Awards Granted		11,362	27,166	10,792

Stock-Based Compensation - Su54

Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Each SAR (Detail) - Stock Appreciation Rights [Member] - $ / shares	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items]
Weighted-average fair value of grants	$ 22.09	$ 13.91
Dividend yield	0.00%	0.00%
Average risk-free interest rate	2.70%	2.01%
Expected term (years)	5 years	5 years
Expected volatility	40.40%	42.40%

Stock-Based Compensation - Su55

Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 1,345	$ 912	$ 3,645	$ 2,876
Stock Appreciation Rights [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	56	25	259	192
Time-Based Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	578	403	1,400	1,139
Performance-Based Restricted Stock and Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	666	468	1,919	1,507
Employee Stock Purchase Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock-based compensation expense	$ 45	$ 16	$ 67	$ 38

Income Taxes - Additional Infor

Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Contingency [Line Items]
Effective tax rate			23.70%	34.20%
Income tax expense (benefit)	$ 14,413	$ 15,760	$ 24,828	$ 29,506
Decrease in effective tax rate due to increase in domestic production activities deduction			10.50%
Statutory tax rate, percentage			21.00%
Excess tax benefits from stock based awards			$ 2,000	$ 1,000
Valuation allowance	$ 2,800		$ 2,800
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member]
Income Tax Contingency [Line Items]
Tax years subject to examination			2,014
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member]
Income Tax Contingency [Line Items]
Tax years subject to examination			2,017

Segment Information - Additiona

Segment Information - Additional Information (Detail) $ in Thousands	3 Months Ended		6 Months Ended		7 Months Ended	12 Months Ended
	Jun. 30, 2018USD ($)	Jun. 30, 2017USD ($)	Jun. 30, 2018USD ($)Segment	Jun. 30, 2017USD ($)	Jul. 31, 2017Segment	Dec. 31, 2017Segment
Segment Reporting Information [Line Items]
Number of reportable segment | Segment			2		1	2
Net sales	$ 206,692	$ 157,941	$ 377,899	$ 302,747
Residential [Member]
Segment Reporting Information [Line Items]
Net sales	189,201		344,401	$ 302,700
Commercial [Member]
Segment Reporting Information [Line Items]
Net sales	$ 17,491		$ 33,498

Segment Information - Details o

Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Segment Reporting Information [Line Items]
Net sales	$ 206,692	$ 157,941	$ 377,899	$ 302,747
Net income	42,820	28,782	79,930	56,732
Depreciation and amortization			9,363	7,513
Income tax expense	14,413	$ 15,760	24,828	29,506
Total assets	414,445		414,445		$ 326,227
Residential [Member]
Segment Reporting Information [Line Items]
Net sales	189,201		344,401	$ 302,700
Commercial [Member]
Segment Reporting Information [Line Items]
Net sales	17,491		33,498
Operating Segments [Member]
Segment Reporting Information [Line Items]
Net sales	206,692		377,899
Net income	42,820		79,930
EBITDA	62,168		114,655
Depreciation and amortization	4,566		9,299
Income tax expense	14,413		24,828
Capital expenditures	12,263		17,697
Total assets	414,445		414,445
Operating Segments [Member] | Residential [Member]
Segment Reporting Information [Line Items]
Net sales	189,201		344,401
Net income	42,115		79,694
EBITDA	59,939		111,773
Depreciation and amortization	3,277		6,731
Income tax expense	14,178		24,750
Capital expenditures	11,825		16,868
Total assets	334,289		334,289
Operating Segments [Member] | Commercial [Member]
Segment Reporting Information [Line Items]
Net sales	17,491		33,498
Net income	705		236
EBITDA	2,229		2,882
Depreciation and amortization	1,289		2,568
Income tax expense	235		78
Capital expenditures	438		829
Total assets	$ 80,156		$ 80,156

Segment Information - Schedule

Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Segment Reporting Information [Line Items]
Net income	$ 42,820	$ 28,782	$ 79,930	$ 56,732
Interest	369	251	598	456
Taxes	14,413	$ 15,760	24,828	29,506
Depreciation and amortization			9,363	$ 7,513
Operating Segments [Member]
Segment Reporting Information [Line Items]
Net income	42,820		79,930
Interest	369		598
Taxes	14,413		24,828
Depreciation and amortization	4,566		9,299
EBITDA	62,168		114,655
Operating Segments [Member] | Residential [Member]
Segment Reporting Information [Line Items]
Net income	42,115		79,694
Interest	369		598
Taxes	14,178		24,750
Depreciation and amortization	3,277		6,731
EBITDA	59,939		111,773
Operating Segments [Member] | Commercial [Member]
Segment Reporting Information [Line Items]
Net income	705		236
Taxes	235		78
Depreciation and amortization	1,289		2,568
EBITDA	$ 2,229		$ 2,882

Commitments and Contingencies -

Commitments and Contingencies - Additional Information (Detail) $ in Millions	6 Months Ended
	Jun. 30, 2018USD ($)
Schedule Of Commitments And Contingencies [Line Items]
Change in warranty reserve for disclosure purposes only	$ 2.6
Minimum [Member]
Schedule Of Commitments And Contingencies [Line Items]
Warranty period	10 years
Maximum [Member]
Schedule Of Commitments And Contingencies [Line Items]
Warranty period	25 years
Surface Flaking Warranty Reserve [Member]
Schedule Of Commitments And Contingencies [Line Items]
Percentage change in warranty claims used as a threshold for disclosure	10.00%

Commitments and Contingencies61

Commitments and Contingencies - Summary of Reconciliation of Company's Residential Product Warranty Reserve (Detail) - Surface Flaking Warranty Reserve [Member] - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Product Warranty Liability [Line Items]
Beginning balance	$ 34,999	$ 37,693
Provisions and changes in estimates	1,567	2,186
Settlements made during the period	(2,793)	(3,219)
Ending balance	33,773	36,660
Surface Flaking [Member]
Product Warranty Liability [Line Items]
Beginning balance	28,157	33,847
Settlements made during the period	(2,287)	(2,683)
Ending balance	25,870	31,164
Other Residential [Member]
Product Warranty Liability [Line Items]
Beginning balance	6,842	3,846
Provisions and changes in estimates	1,567	2,186
Settlements made during the period	(506)	(536)
Ending balance	$ 7,903	$ 5,496