Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2019 | Oct. 15, 2019 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001069878 | |
Current Fiscal Year End Date | --12-31 | |
Document Transition Report | false | |
Entity Registrant Name | TREX CO INC | |
Document Period End Date | Sep. 30, 2019 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Trading Symbol | TREX | |
Entity Shell Company | false | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 58,336,505 | |
Entity File Number | 001-14649 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 54-1910453 | |
Entity Address, Address Line One | 160 Exeter Drive | |
Entity Address, City or Town | Winchester | |
Entity Address, Postal Zip Code | 22603-8605 | |
Entity Address, State or Province | VA | |
City Area Code | 540 | |
Local Phone Number | 542-6300 | |
Title of 12(b) Security | Common stock | |
Security Exchange Name | NYSE |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Net sales | $ 194,551 | $ 166,380 | $ 580,575 | $ 544,279 |
Cost of sales | 112,120 | 99,170 | 345,334 | 309,241 |
Gross profit | 82,431 | 67,210 | 235,241 | 235,038 |
Selling, general and administrative expenses | 27,409 | 28,132 | 93,281 | 90,603 |
Income from operations | 55,022 | 39,078 | 141,960 | 144,435 |
Interest (income) expense, net | (744) | (222) | (801) | 377 |
Income before income taxes | 55,766 | 39,300 | 142,761 | 144,058 |
Provision for income taxes | 13,790 | 9,829 | 33,520 | 34,657 |
Net income | $ 41,976 | $ 29,471 | $ 109,241 | $ 109,401 |
Basic earnings per common share | $ 0.72 | $ 0.50 | $ 1.87 | $ 1.86 |
Basic weighted average common shares outstanding | 58,401,183 | 58,741,973 | 58,476,430 | 58,785,546 |
Diluted earnings per common share | $ 0.72 | $ 0.50 | $ 1.86 | $ 1.85 |
Diluted weighted average common shares outstanding | 58,605,726 | 59,084,117 | 58,706,960 | 59,111,303 |
Comprehensive income | $ 41,976 | $ 29,471 | $ 109,241 | $ 109,401 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 133,282 | $ 105,699 |
Accounts receivable, net | 117,386 | 91,163 |
Inventories | 43,923 | 57,801 |
Prepaid expenses and other assets | 13,254 | 15,562 |
Total current assets | 307,845 | 270,225 |
Property, plant and equipment, net | 143,893 | 117,144 |
Goodwill and other intangible assets, net | 74,189 | 74,503 |
Operating lease assets | 41,317 | 0 |
Other assets | 3,526 | 3,250 |
Total assets | 570,770 | 465,122 |
Current liabilities: | ||
Accounts payable | 24,641 | 31,084 |
Accrued expenses and other liabilities | 57,483 | 56,291 |
Accrued warranty | 5,400 | 5,400 |
Line of credit | 0 | 0 |
Total current liabilities | 87,524 | 92,775 |
Operating lease liabilities | 35,662 | 0 |
Deferred income taxes | 2,125 | 2,125 |
Non-current accrued warranty | 21,894 | 25,354 |
Other long-term liabilities | 15 | 1,905 |
Total liabilities | 147,220 | 122,159 |
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; 70,175,776 and 69,998,336 shares issued and 58,353,973 and 58,551,653 shares outstanding at September 30, 2019 and December 31, 2018, respectively | 702 | 700 |
Additional paid-in capital | 122,841 | 124,224 |
Retained earnings | 526,183 | 416,942 |
Treasury stock, at cost, 11,821,803 and 11,446,683 shares at September 30, 2019 and December 31, 2018, respectively | (226,176) | (198,903) |
Total stockholders' equity | 423,550 | 342,963 |
Total liabilities and stockholders' equity | $ 570,770 | $ 465,122 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
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 | |
Common stock, shares issued | 70,175,776 | 69,998,336 |
Common stock, shares outstanding | 58,353,973 | 58,551,653 |
Treasury stock, shares | 11,821,803 | 11,446,683 |
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, 2017 | $ 231,250 | $ 698 | $ 121,694 | $ 282,370 | $ (173,512) |
Beginning Balance, Shares at Dec. 31, 2017 | 58,856,860 | 10,987,362 | |||
Net income | 37,110 | 37,110 | |||
Employee stock plans | 195 | 195 | |||
Employee stock plans, Shares | 26,832 | ||||
Shares withheld for taxes on awards | (3,782) | (3,782) | |||
Shares withheld for taxes on awards, Shares | (13,028) | ||||
Stock-based compensation | 2,296 | $ 1 | 2,295 | ||
Stock-based compensation, Shares | 80,988 | ||||
Repurchases of common stock | (5,211) | $ (5,211) | |||
Repurchases of common stock, Shares | (100,044) | 100,044 | |||
Ending Balance at Mar. 31, 2018 | 261,858 | $ 699 | 120,402 | 319,480 | $ (178,723) |
Ending Balance, Shares at Mar. 31, 2018 | 58,851,608 | 11,087,406 | |||
Beginning Balance at Dec. 31, 2017 | 231,250 | $ 698 | 121,694 | 282,370 | $ (173,512) |
Beginning Balance, Shares at Dec. 31, 2017 | 58,856,860 | 10,987,362 | |||
Net income | 109,401 | ||||
Ending Balance at Sep. 30, 2018 | 328,655 | $ 700 | 122,725 | 391,771 | $ (186,541) |
Ending Balance, Shares at Sep. 30, 2018 | 58,754,048 | 11,237,406 | |||
Beginning Balance at Mar. 31, 2018 | 261,858 | $ 699 | 120,402 | 319,480 | $ (178,723) |
Beginning Balance, Shares at Mar. 31, 2018 | 58,851,608 | 11,087,406 | |||
Net income | 42,820 | 42,820 | |||
Employee stock plans | 210 | $ 1 | 209 | ||
Employee stock plans, Shares | 22,549 | ||||
Shares withheld for taxes on awards | (420) | (420) | |||
Shares withheld for taxes on awards, Shares | (7,493) | ||||
Stock-based compensation | 1,350 | $ 0 | 1,350 | ||
Stock-based compensation, Shares | 9,735 | ||||
Repurchases of common stock | (7,818) | $ (7,818) | |||
Repurchases of common stock, Shares | (150,000) | 150,000 | |||
Ending Balance at Jun. 30, 2018 | 298,000 | $ 700 | 121,541 | 362,300 | $ (186,541) |
Ending Balance, Shares at Jun. 30, 2018 | 58,726,399 | 11,237,406 | |||
Net income | 29,471 | 29,471 | |||
Employee stock plans | 238 | $ 0 | 238 | ||
Employee stock plans, Shares | 7,377 | ||||
Shares withheld for taxes on awards | (493) | (493) | |||
Shares withheld for taxes on awards, Shares | (6,272) | ||||
Stock-based compensation | 1,439 | $ 0 | 1,439 | ||
Stock-based compensation, Shares | 26,544 | ||||
Ending Balance at Sep. 30, 2018 | 328,655 | $ 700 | 122,725 | 391,771 | $ (186,541) |
Ending Balance, Shares at Sep. 30, 2018 | 58,754,048 | 11,237,406 | |||
Beginning Balance at Dec. 31, 2018 | 342,963 | $ 700 | 124,224 | 416,942 | $ (198,903) |
Beginning Balance, Shares at Dec. 31, 2018 | 58,551,653 | 11,446,683 | |||
Net income | 31,555 | 31,555 | |||
Employee stock plans | 302 | 302 | |||
Employee stock plans, Shares | 24,472 | ||||
Shares withheld for taxes on awards | (5,727) | (5,727) | |||
Shares withheld for taxes on awards, Shares | (74,010) | ||||
Stock-based compensation | 2,794 | $ 1 | 2,793 | ||
Stock-based compensation, Shares | 160,359 | ||||
Repurchases of common stock | (8,730) | $ (8,730) | |||
Repurchases of common stock, Shares | (124,989) | 124,989 | |||
Ending Balance at Mar. 31, 2019 | 363,157 | $ 701 | 121,592 | 448,497 | $ (207,633) |
Ending Balance, Shares at Mar. 31, 2019 | 58,537,485 | 11,571,672 | |||
Beginning Balance at Dec. 31, 2018 | 342,963 | $ 700 | 124,224 | 416,942 | $ (198,903) |
Beginning Balance, Shares at Dec. 31, 2018 | 58,551,653 | 11,446,683 | |||
Net income | 109,241 | ||||
Ending Balance at Sep. 30, 2019 | 423,550 | $ 702 | 122,841 | 526,183 | $ (226,176) |
Ending Balance, Shares at Sep. 30, 2019 | 58,353,973 | 11,821,803 | |||
Beginning Balance at Mar. 31, 2019 | 363,157 | $ 701 | 121,592 | 448,497 | $ (207,633) |
Beginning Balance, Shares at Mar. 31, 2019 | 58,537,485 | 11,571,672 | |||
Net income | 35,710 | 35,710 | |||
Employee stock plans | 257 | 257 | |||
Employee stock plans, Shares | 14,905 | ||||
Shares withheld for taxes on awards | (1,254) | (1,254) | |||
Shares withheld for taxes on awards, Shares | (19,174) | ||||
Stock-based compensation | 2,125 | $ 0 | 2,125 | ||
Stock-based compensation, Shares | 32,139 | ||||
Repurchases of common stock | (8,462) | $ (8,462) | |||
Repurchases of common stock, Shares | (125,151) | 125,151 | |||
Ending Balance at Jun. 30, 2019 | 391,533 | $ 701 | 122,720 | 484,207 | $ (216,095) |
Ending Balance, Shares at Jun. 30, 2019 | 58,440,204 | 11,696,823 | |||
Net income | 41,976 | 41,976 | |||
Employee stock plans | 159 | $ 1 | 158 | ||
Employee stock plans, Shares | 26,162 | ||||
Shares withheld for taxes on awards | (963) | (963) | |||
Shares withheld for taxes on awards, Shares | (4,722) | ||||
Stock-based compensation | 926 | $ 0 | 926 | ||
Stock-based compensation, Shares | 17,309 | ||||
Repurchases of common stock | (10,081) | $ (10,081) | |||
Repurchases of common stock, Shares | (124,980) | 124,980 | |||
Ending Balance at Sep. 30, 2019 | $ 423,550 | $ 702 | $ 122,841 | $ 526,183 | $ (226,176) |
Ending Balance, Shares at Sep. 30, 2019 | 58,353,973 | 11,821,803 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Operating Activities | ||
Net income | $ 109,241 | $ 109,401 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 10,477 | 13,164 |
Stock-based compensation | 5,844 | 5,045 |
Loss (gain) on disposal of property, plant and equipment | 90 | 50 |
Other non-cash adjustments | (372) | (408) |
Changes in operating assets and liabilities: | ||
Accounts receivable | (26,225) | (21,034) |
Inventories | 13,878 | (927) |
Prepaid expenses and other assets | 2,129 | (3,155) |
Accounts payable | (6,443) | 8,245 |
Accrued expenses and other liabilities | (10,262) | 619 |
Income taxes receivable/payable | 629 | 4,369 |
Net cash provided by operating activities | 98,986 | 115,369 |
Investing Activities | ||
Expenditures for property, plant and equipment and intangibles | (36,926) | (21,611) |
Proceeds from sales of property, plant and equipment | 21 | 83 |
Net cash used in investing activities | (36,905) | (21,528) |
Financing Activities | ||
Borrowings under line of credit | 89,500 | 172,250 |
Principal payments under line of credit | (89,500) | (172,250) |
Repurchases of common stock | (35,216) | (17,723) |
Proceeds from employee stock purchase and option plans | 718 | 681 |
Net cash used in financing activities | (34,498) | (17,042) |
Net increase in cash and cash equivalents | 27,583 | 76,799 |
Cash and cash equivalents, beginning of period | 105,699 | 30,514 |
Cash and cash equivalents, end of period | 133,282 | 107,313 |
Supplemental Disclosure: | ||
Cash paid for interest | 321 | 662 |
Cash paid for income taxes, net | $ 32,872 | $ 39,170 |
Business and Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2019 | |
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, eco-friendly 542-6300. |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
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 consolidated results of operations for the three and nine months ended September 30, 2019 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2019. These condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2018 and 2017 and for each of the three years in the period ended December 31, 2018 included in the Annual Report of Trex Company, Inc. on Form 10-K, |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | 3. RECENTLY ADOPTED ACCOUNTING STANDARDS 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 February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), 2018-01, 2018-10 2018-11, 2018-20, 2019-01 right-of-use right-of-use right-of-use (current and non-current) |
New Accounting Standards Not Ye
New Accounting Standards Not Yet Adopted | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards Not Yet Adopted | 4. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (a consensus of FASB Emerging Issues Task Force)” internal-use In January 2017, the FASB issued ASU No. 2017-04, Intangibles—Goodwill and Other (Topic 350), Simplifying the Test for Goodwill Impairment In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses in Financial Instruments, 2019-04, 2019-05. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INVENTORIES Inventories valued at LIFO (last-in, first-out), September 30, December 31, Finished goods $ 27,068 $ 46,638 Raw materials 33,468 27,321 Total FIFO (first-in, first-out) 60,536 73,959 Reserve to adjust inventories to LIFO value (18,442 ) (18,442 ) Total LIFO inventories $ 42,094 $ 55,517 The Company utilizes the LIFO method of accounting related to its Trex Residential 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 year-end no Inventories valued at lower of cost (FIFO method) and net realizable value were $1.8 million at September 30, 2019 and $2.3 million at December 31, 2018, consisting primarily of raw materials. The Company utilizes the FIFO method of accounting related to its Trex Commercial architectural railing and staging systems for the commercial and multi-family market. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Prepaid Expenses and Other Assets | 6. PREPAID EXPENSES AND OTHER ASSETS Prepaid expenses and other assets consist of the following (in thousands): September 30, 2019 December 31, Prepaid expenses $ 5,385 $ 3,390 Revenues in excess of billings 4,850 7,987 Contract retainage 2,426 2,469 Income tax receivable 291 471 Other 302 1,245 Total prepaid expenses and other assets $ 13,254 $ 15,562 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | 7. GOODWILL AND OTHER INTANGIBLE ASSETS Intangible assets consist of the following (in thousands): September 30, 2019 December 31, Intangible assets: Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,327 6,327 Total intangible assets 11,227 11,227 Accumulated amortization: Customer backlog (4,000 ) (4,000 ) Trade name and trademarks (900 ) (900 ) Domain names (599 ) (285 ) Total accumulated amortization (5,499 ) (5,185 ) Intangible assets, net $ 5,728 $ 6,042 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 The Company evaluates s The carrying amount of goodwill by r |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses and Other Liabilities | 8. ACCRUED EXPENSES AND OTHER LIABILITIES Accrued expenses and other liabilities consist of the following (in thousands): September 30, December 31, Sales and marketing $ 29,786 $ 25,379 Compensation and benefits 10,112 19,124 Operating lease liabilities 6,961 — Customer deposits 2,535 2,058 Manufacturing costs 2,509 3,744 Billings in excess of revenues 992 512 Other 4,588 5,474 Total accrued expenses and other liabilities $ 57,483 $ 56,291 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt | 9. 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 no 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. |
Leases
Leases | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Leases | 10. LEASES The Company leases office space, storage warehouses and certain plant equipment under various operating leases. The Company determines if an arrangement is a lease at inception. The arrangement is a lease if it conveys the right to the Company to control the use of identified property, plant, or equipment for a period of time in exchange for consideration. Operating leases are included in operating lease right-of-use 12 months or less 1 10 For the nine months ended September 30, 2019, total operating lease cost was $6.3 million. The weighted average remaining lease term and weighted average discount rate at September 30, 2019 were 6.6 years and 3.67%, respectively. The following table includes supplemental cash flow information for the nine months ended September 30, 2019 and supplemental balance sheet information at September 30, 2019 related to operating leases (in thousands): Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 6,356 Operating ROU assets obtained in exchange for lease liabilities $ 855 Supplemental balance sheet information Operating lease ROU assets $ 41,317 Operating lease liabilities: Accrued expenses and other current liabilities $ 6,961 Operating lease liabilities 35,662 Total operating lease liabilities $ 42,623 The following table summarizes maturities of operating lease liabilities at September 30, 2019 (in thousands): Maturities of operating lease liabilities 2019 $ 2,123 2020 8,376 2021 8,183 2022 6,368 2023 6,013 Thereafter 17,145 Total lease payments 48,208 Less imputed interest (5,585 ) Total operating liabilities $ 42,623 |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019 and December 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2019 | |
Equity [Abstract] | |
Stockholders' Equity | 12. STOCKHOLDERS’ EQUITY Earnings Per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except share and per share data): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income available to common shareholders $ 41,976 $ 29,471 $ 109,241 $ 109,401 Denominator: Basic weighted average shares outstanding 58,401,183 58,741,973 58,476,430 58,785,546 Effect of dilutive securities: Stock appreciation rights and options 115,175 177,412 133,030 181,680 Restricted stock 89,368 164,732 97,500 144,077 Diluted weighted average shares outstanding 58,605,726 59,084,117 58,706,960 59,111,303 Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Basic earnings per share $ 0.72 $ 0.50 $ 1.87 $ 1.86 Diluted earnings per share $ 0.72 $ 0.50 $ 1.86 $ 1.85 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 Nine Months Ended 2019 2018 2019 2018 Stock appreciation rights 23,422 — 20,257 10,709 Performance-based restricted stock units — — — 285 Stock Repurchase Program On February 16, 2018, the Board of Directors adopted a stock repurchase program of up to 5.8 million shares of the Company’s outstanding common stock (Stock Repurchase Program). As of September 30, 2019, the Company had repurchased 834,441 shares of the Company’s outstanding common stock under the Stock Repurchase Program. |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | 13. REVENUE FROM CONTRACTS WITH CUSTOMERS Topic 606 provides a single, comprehensive model for revenue recognition arising from contracts with customers. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is the unit of account in Topic 606. A contract’s transaction price is allocated to each distinct performance obligation and revenue is recognized when or as the Company satisfies the performance obligation. Revenue is recognized at an amount that reflects the consideration to which the entity expects to be entitled in exchange for transferring control of the goods or services to a customer. Trex Residential Products Trex Residential principally generates revenue from the manufacture and sale of its high-performance, low-maintenance, eco-friendly 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 may offer various sales incentive programs throughout the year. It estimates the amount of sales incentive to allocate to each performance obligation, or product shipped, based on direct sales to the customer. The estimate is updated each reporting period and any changes are allocated to the performance obligations on the same basis as at inception. Changes in estimate allocated to a previously satisfied performance obligation are recognized as a reduction of revenue in the period in which the change occurs under the cumulative catch-up Trex Residential pays commissions to certain employees. However, the sales commissions are not directly attributable to identifiable contracts, are discretionary in nature and are based on other factors not related to obtaining a contract, such as individual performance, profitability of the entity, annual sales targets, etc. These costs are included in selling, general and administrative expenses as incurred. Trex Residential does not grant contractual product return rights to customers other than pursuant to its assurance product warranty (see related disclosure on product warranties in Note 18, “ Commitments and Contingencies Trex Commercial Products Trex Commercial generates revenue from the manufacture and sale of its modular and architectural railing and staging systems. All of its revenues are from fixed-price contracts with customers. Trex Commercial 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 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 actual costs incurred to date relative to total estimated costs at completion to measure progress toward satisfying the performance obligation. Incurred costs represent work performed, which corresponds with, and thereby best depicts, the transfer of control to the customer. Incurred costs 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 discloses only the transaction price allocated to its remaining performance obligations on contracts with an original duration greater than one year 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) in the Condensed Consolidated Balance Sheet. These assets and liabilities are reported on a contract-by-contract Trex Commercial 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 , For the three months and nine months ended September The tables also include a reconciliation of the respective disaggregated net sales with the Company’s reportable segments (in thousands): Three Months Ended September 30, 2019 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 182,775 $ — $ 182,775 Products transferred over time and fixed price contracts — 11,776 11,776 $ 182,775 $ 11,776 $ 194,551 Nine Months Ended September 30, 2019 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 541,722 $ — $ 541,722 Products transferred over time and fixed price contracts — 38,853 38,853 $ 541,722 $ 38,853 $ 580,575 Three Months Ended September 30, 2018 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 146,998 $ — $ 146,998 Products transferred over time and fixed price contracts — 19,382 19,382 $ 146,998 $ 19,382 $ 166,380 Nine Months Ended September 30, 2018 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 491,399 $ — $ 491,399 Products transferred over time and fixed price contracts — 52,880 52,880 $ 491,399 $ 52,880 $ 544,279 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019, the total number of shares available for future issuance are 5,724,953. 13 The following table summarizes the Company’s stock-based compensation grants for the nine months ended September 30, 2019: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 26,325 $ 77.53 Performance-based restricted stock units (a) 80,104 $ 47.89 Stock appreciation rights 24,536 $ 77.70 (a) Includes 32,462 of target performance-based restricted stock unit awards granted during the nine months ended September 30, 2019, and adjustments of 27,154, 14,900 and 5,588 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2016, 2017, and 2018, respectively. The fair value of each SAR is estimated on the date of grant using a Black-Scholes option-pricing formula. For SARs issued in the nine months ended September 30, 2019 and 2018 the data and assumptions shown in the following table were used: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Weighted-average fair value of grants $ 29.56 $ 22.09 Dividend yield 0 % 0 % Average risk-free interest rate 2.5 % 2.7 % Expected term (years) 5 5 Expected volatility 39.1 % 40.5 % The Company recognizes stock-based compensation expense ratably over the period from the grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. For the employee stock purchase plan, compensation expense is recognized related to the discount on purchases. Stock-based compensation expense i s Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock appreciation rights $ 82 $ 56 $ 580 $ 314 Time-based restricted stock and restricted stock units 602 672 3,057 2,073 Performance-based restricted stock and restricted stock units 162 616 2,045 2,534 Employee stock purchase plan 80 57 162 124 Total stock-based compensation $ 926 $ 1,401 $ 5,844 $ 5,045 Total unrecognized compensation cost related to unvested awards as of September 30, 2019 was $5.5 million. The cost of these unvested awards is being recognized over the requisite vesting period of each award. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company’s effective tax rate for the nine months ended September 30, 2019 and 2018 was 23.5% and 24.1%, respectively, which resulted in expense of $33.5 million and $34.7 million, respectively. The decrease of 0.6% in the effective tax rate was primarily due to a current year increase in excess tax benefits from the exercise of share-based payments. During the nine months ended September 30, 2019 and 2018, the Company realized $3.3 million and $2.3 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 September 30, 2019, the Company maintains a valuation allowance of $3.0 million against deferred tax assets primarily related to state tax credits it estimates will expire before they are realized. The Company operates in multiple tax jurisdictions and, in the normal course of business, its tax returns are subject to examination by various taxing authorities. Such examinations may result in future assessments by these taxing authorities, and the Company accrues a liability when it believes that it is more likely than not that benefits of tax positions will not be realized. The Company believes that adequate provisions have been made for all tax returns subject to examination. As of September 30, 2019, for certain tax jurisdictions tax years 2015 through 2018 remain subject to examination. The Company’s returns filed with the state of Oregon for the tax years 2015 through 2017 are currently under examination. No material adjustments are expected as a result of the audit. 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 | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION The Company operates in two reportable segments: • Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® • Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products are marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market. Trex Commercial net sales were $38.9 million and $52.9 million in the nine months ended September 30, 2019 and 2018, respectively. The Company’s reportable 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 nine months ended September 30, 2019 and 2018 includes data for Trex Residential and Trex Commercial (in thousands): Segment Data: Three September 30, Three September 30, Trex Residential Trex Total Trex Trex Total Net sales $ 182,775 $ 11,776 $ 194,551 $ 146,998 $ 19,382 $ 166,380 Net income $ 41,381 $ 595 $ 41,976 $ 27,755 $ 1,716 $ 29,471 EBITDA $ 57,639 $ 970 $ 58,609 $ 40,067 $ 2,780 $ 42,847 Depreciation and amortization $ 3,422 $ 165 $ 3,587 $ 3,275 $ 494 $ 3,769 Income tax expense $ 13,580 $ 210 $ 13,790 $ 9,259 $ 570 $ 9,829 Capital expenditures $ 17,766 $ 99 $ 17,865 $ 3,693 $ 221 $ 3,914 Total assets $ 482,825 $ 87,945 $ 570,770 $ 352,014 $ 82,895 $ 434,909 Reconciliation of Net Income to EBITDA: Three Three Trex Residential Trex Total Trex Trex Total Net income $ 41,381 $ 595 $ 41,976 $ 27,755 $ 1,716 $ 29,471 Interest income, net (744 ) — (744 ) (222 ) — (222 ) Income tax expense 13,580 210 13,790 9,259 570 9,829 Depreciation and amortization 3,422 165 3,587 3,275 494 3,769 EBITDA $ 57,639 $ 970 $ 58,609 $ 40,067 $ 2,780 $ 42,847 Segment Data: Nine Nine Trex Residential Trex Total Trex Trex Total Net sales $ 541,722 $ 38,853 $ 580,575 $ 491,399 $ 52,880 $ 544,279 Net income $ 107,859 $ 1,382 $ 109,241 $ 107,449 $ 1,952 $ 109,401 EBITDA $ 150,058 $ 2,282 $ 152,340 $ 151,839 $ 5,663 $ 157,502 Depreciation and amortization $ 9,947 $ 433 $ 10,380 $ 10,004 $ 3,063 $ 13,067 Income tax expense $ 33,046 $ 474 $ 33,520 $ 34,009 $ 648 $ 34,657 Capital expenditures $ 35,584 $ 1,342 $ 36,926 $ 14,274 $ 1,050 $ 15,324 Total assets $ 482,825 $ 87,945 $ 570,770 $ 352,014 $ 82,895 $ 434,909 Reconciliation of Net Income to EBITDA: Nine Nine Trex Residential Trex Total Trex Trex Total Net income $ 107,859 $ 1,382 $ 109,241 $ 107,449 $ 1,952 $ 109,401 Interest (income) expense, net (794 ) (7 ) (801 ) 377 — 377 Income tax expense 33,046 474 33,520 34,009 648 34,657 Depreciation and amortization 9,947 433 10,380 10,004 3,063 13,067 EBITDA $ 150,058 $ 2,282 $ 152,340 $ 151,839 $ 5,663 $ 157,502 |
Seasonality
Seasonality | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Seasonality | 17. SEASONALITY The operating results for Trex Residential have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions reduce the level of home improvement and construction activity and can shift demand for its products to a later period. As part of its normal business practice and consistent with industry practice, Trex Residential has historically offered incentive programs to its distributors and dealers to build inventory levels before the start of the prime deck-building season in order to ensure adequate availability of its product to meet anticipated seasonal consumer demand. The seasonal effects are often offset by the positive effect of the incentive programs. The operating results for Trex Commercial have not historically varied from quarter to quarter as a result of seasonality. However, they are driven by the timing of individual projects, which may vary each quarterly period. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
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 incoming claims received in the nine months ended September 30, 2019 was lower than the Company’s expectations and lower than the number of claims received in the nine months ended September 30, 2018, continuing the historical year-over-year decline in incoming claims. Average settlement cost per claim experienced in the nine months ended September 30, 2019 was higher than the Company’s expectations and higher than the average settlement cost per claim experienced in the nine months ended September 30, 2018 The Company believes its reserve at September , is sufficient to cover future surface flaking obligations and no adjustments were required in the current quarter. 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 $2.0 million change in the surface flaking warranty reserve. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Nine Months Ended September 30, 2019 Surface Other Total Beginning balance, January 1 $ 23,951 $ 6,803 $ 30,754 Provisions and changes in estimates — 1,571 1,571 Settlements made during the period (4,027 ) (1,004 ) (5,031 ) Ending balance, September 30 $ 19,924 $ 7,370 $ 27,294 Nine Months Ended September 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,961 1,961 Settlements made during the period (3,467 ) (858 ) (4,325 ) Ending balance, September 30 $ 24,690 $ 7,945 $ 32,635 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) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, 2019, the total number of shares available for future issuance are 5,724,953. |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories valued at LIFO (last-in, first-out), September 30, December 31, Finished goods $ 27,068 $ 46,638 Raw materials 33,468 27,321 Total FIFO (first-in, first-out) 60,536 73,959 Reserve to adjust inventories to LIFO value (18,442 ) (18,442 ) Total LIFO inventories $ 42,094 $ 55,517 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): September 30, 2019 December 31, Prepaid expenses $ 5,385 $ 3,390 Revenues in excess of billings 4,850 7,987 Contract retainage 2,426 2,469 Income tax receivable 291 471 Other 302 1,245 Total prepaid expenses and other assets $ 13,254 $ 15,562 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Details of Intangible Assets | Intangible assets consist of the following (in thousands): September 30, 2019 December 31, Intangible assets: Customer backlog $ 4,000 $ 4,000 Trade names and trademarks 900 900 Domain names 6,327 6,327 Total intangible assets 11,227 11,227 Accumulated amortization: Customer backlog (4,000 ) (4,000 ) Trade name and trademarks (900 ) (900 ) Domain names (599 ) (285 ) Total accumulated amortization (5,499 ) (5,185 ) Intangible assets, net $ 5,728 $ 6,042 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands): September 30, December 31, Sales and marketing $ 29,786 $ 25,379 Compensation and benefits 10,112 19,124 Operating lease liabilities 6,961 — Customer deposits 2,535 2,058 Manufacturing costs 2,509 3,744 Billings in excess of revenues 992 512 Other 4,588 5,474 Total accrued expenses and other liabilities $ 57,483 $ 56,291 |
Leases (Tables)
Leases (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Supplemental Cash Flow information and Supplemental balance sheet information related to operating leases to operating leases | The following table includes supplemental cash flow information for the nine months ended September 30, 2019 and supplemental balance sheet information at September 30, 2019 related to operating leases (in thousands): Supplemental cash flow information Cash paid for amounts included in the measurement of operating lease liabilities $ 6,356 Operating ROU assets obtained in exchange for lease liabilities $ 855 Supplemental balance sheet information Operating lease ROU assets $ 41,317 Operating lease liabilities: Accrued expenses and other current liabilities $ 6,961 Operating lease liabilities 35,662 Total operating lease liabilities $ 42,623 |
Maturities of operating lease liabilities | The following table summarizes maturities of operating lease liabilities at September 30, 2019 (in thousands): Maturities of operating lease liabilities 2019 $ 2,123 2020 8,376 2021 8,183 2022 6,368 2023 6,013 Thereafter 17,145 Total lease payments 48,208 Less imputed interest (5,585 ) Total operating liabilities $ 42,623 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
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 September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Numerator: Net income available to common shareholders $ 41,976 $ 29,471 $ 109,241 $ 109,401 Denominator: Basic weighted average shares outstanding 58,401,183 58,741,973 58,476,430 58,785,546 Effect of dilutive securities: Stock appreciation rights and options 115,175 177,412 133,030 181,680 Restricted stock 89,368 164,732 97,500 144,077 Diluted weighted average shares outstanding 58,605,726 59,084,117 58,706,960 59,111,303 Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Basic earnings per share $ 0.72 $ 0.50 $ 1.87 $ 1.86 Diluted earnings per share $ 0.72 $ 0.50 $ 1.86 $ 1.85 |
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 Nine Months Ended 2019 2018 2019 2018 Stock appreciation rights 23,422 — 20,257 10,709 Performance-based restricted stock units — — — 285 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Revenue from Contract with Customer [Abstract] | |
Summary of Disaggregated Net Sales | The tables also include a reconciliation of the respective disaggregated net sales with the Company’s reportable segments (in thousands): Three Months Ended September 30, 2019 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 182,775 $ — $ 182,775 Products transferred over time and fixed price contracts — 11,776 11,776 $ 182,775 $ 11,776 $ 194,551 Nine Months Ended September 30, 2019 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 541,722 $ — $ 541,722 Products transferred over time and fixed price contracts — 38,853 38,853 $ 541,722 $ 38,853 $ 580,575 Three Months Ended September 30, 2018 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 146,998 $ — $ 146,998 Products transferred over time and fixed price contracts — 19,382 19,382 $ 146,998 $ 19,382 $ 166,380 Nine Months Ended September 30, 2018 Reportable Segment Trex Trex Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 491,399 $ — $ 491,399 Products transferred over time and fixed price contracts — 52,880 52,880 $ 491,399 $ 52,880 $ 544,279 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Stock-Based Compensation Grants | The following table summarizes the Company’s stock-based compensation grants for the nine months ended September 30, 2019: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 26,325 $ 77.53 Performance-based restricted stock units (a) 80,104 $ 47.89 Stock appreciation rights 24,536 $ 77.70 (a) Includes 32,462 of target performance-based restricted stock unit awards granted during the nine months ended September 30, 2019, and adjustments of 27,154, 14,900 and 5,588 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2016, 2017, and 2018, 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 nine months ended September 30, 2019 and 2018 the data and assumptions shown in the following table were used: Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Weighted-average fair value of grants $ 29.56 $ 22.09 Dividend yield 0 % 0 % Average risk-free interest rate 2.5 % 2.7 % Expected term (years) 5 5 Expected volatility 39.1 % 40.5 % |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 Stock appreciation rights $ 82 $ 56 $ 580 $ 314 Time-based restricted stock and restricted stock units 602 672 3,057 2,073 Performance-based restricted stock and restricted stock units 162 616 2,045 2,534 Employee stock purchase plan 80 57 162 124 Total stock-based compensation $ 926 $ 1,401 $ 5,844 $ 5,045 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Details of Segment Information | The below segment data for the three and nine months ended September 30, 2019 and 2018 includes data for Trex Residential and Trex Commercial (in thousands): Three September 30, Three September 30, Trex Residential Trex Total Trex Trex Total Net sales $ 182,775 $ 11,776 $ 194,551 $ 146,998 $ 19,382 $ 166,380 Net income $ 41,381 $ 595 $ 41,976 $ 27,755 $ 1,716 $ 29,471 EBITDA $ 57,639 $ 970 $ 58,609 $ 40,067 $ 2,780 $ 42,847 Depreciation and amortization $ 3,422 $ 165 $ 3,587 $ 3,275 $ 494 $ 3,769 Income tax expense $ 13,580 $ 210 $ 13,790 $ 9,259 $ 570 $ 9,829 Capital expenditures $ 17,766 $ 99 $ 17,865 $ 3,693 $ 221 $ 3,914 Total assets $ 482,825 $ 87,945 $ 570,770 $ 352,014 $ 82,895 $ 434,909 Nine Nine Trex Residential Trex Total Trex Trex Total Net sales $ 541,722 $ 38,853 $ 580,575 $ 491,399 $ 52,880 $ 544,279 Net income $ 107,859 $ 1,382 $ 109,241 $ 107,449 $ 1,952 $ 109,401 EBITDA $ 150,058 $ 2,282 $ 152,340 $ 151,839 $ 5,663 $ 157,502 Depreciation and amortization $ 9,947 $ 433 $ 10,380 $ 10,004 $ 3,063 $ 13,067 Income tax expense $ 33,046 $ 474 $ 33,520 $ 34,009 $ 648 $ 34,657 Capital expenditures $ 35,584 $ 1,342 $ 36,926 $ 14,274 $ 1,050 $ 15,324 Total assets $ 482,825 $ 87,945 $ 570,770 $ 352,014 $ 82,895 $ 434,909 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of Net Income to EBITDA: Three Three Trex Residential Trex Total Trex Trex Total Net income $ 41,381 $ 595 $ 41,976 $ 27,755 $ 1,716 $ 29,471 Interest income, net (744 ) — (744 ) (222 ) — (222 ) Income tax expense 13,580 210 13,790 9,259 570 9,829 Depreciation and amortization 3,422 165 3,587 3,275 494 3,769 EBITDA $ 57,639 $ 970 $ 58,609 $ 40,067 $ 2,780 $ 42,847 Reconciliation of Net Income to EBITDA: Nine Nine Trex Residential Trex Total Trex Trex Total Net income $ 107,859 $ 1,382 $ 109,241 $ 107,449 $ 1,952 $ 109,401 Interest (income) expense, net (794 ) (7 ) (801 ) 377 — 377 Income tax expense 33,046 474 33,520 34,009 648 34,657 Depreciation and amortization 9,947 433 10,380 10,004 3,063 13,067 EBITDA $ 150,058 $ 2,282 $ 152,340 $ 151,839 $ 5,663 $ 157,502 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Summary of Reconciliation of Company's Residential Product Warranty Reserve | Nine Months Ended September 30, 2019 Surface Other Total Beginning balance, January 1 $ 23,951 $ 6,803 $ 30,754 Provisions and changes in estimates — 1,571 1,571 Settlements made during the period (4,027 ) (1,004 ) (5,031 ) Ending balance, September 30 $ 19,924 $ 7,370 $ 27,294 Nine Months Ended September 30, 2018 Surface Other Total Beginning balance, January 1 $ 28,157 $ 6,842 $ 34,999 Provisions and changes in estimates — 1,961 1,961 Settlements made during the period (3,467 ) (858 ) (4,325 ) Ending balance, September 30 $ 24,690 $ 7,945 $ 32,635 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) | 9 Months Ended |
Sep. 30, 2019Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 2 |
Recently Adopted Accounting S_2
Recently Adopted Accounting Standards - Additional Information (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating lease assets | $ 41,317 | $ 0 | |
Operating lease liabilities | $ 6,961 | $ 0 | |
Accounting Standards Update 2016-02 [Member] | |||
Operating lease assets | $ 45,800 | ||
Operating lease liabilities | $ 47,200 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 27,068 | $ 46,638 |
Raw materials | 33,468 | 27,321 |
Total FIFO (first-in, first-out) inventories | 60,536 | 73,959 |
Reserve to adjust inventories to LIFO value | (18,442) | (18,442) |
Total LIFO inventories | $ 42,094 | $ 55,517 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Inventory Disclosure [Abstract] | ||
LIFO inventory liquidations | $ 0 | |
Raw materials | $ 1,800,000 | $ 2,300,000 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 5,385 | $ 3,390 |
Revenues in excess of billings | 4,850 | 7,987 |
Contract retainage | 2,426 | 2,469 |
Income tax receivable | 291 | 471 |
Other | 302 | 1,245 |
Total prepaid expenses and other assets | $ 13,254 | $ 15,562 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended | ||
May 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Goodwill [Line Items] | ||||
Amortization of intangible asset | $ 0.3 | $ 3 | ||
Commercial [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 54.3 | |||
Residential [Member] | ||||
Goodwill [Line Items] | ||||
Goodwill | $ 14.2 | |||
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 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Details of Intangible Assets (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | $ 11,227 | $ 11,227 |
Total accumulated amortization | (5,499) | (5,185) |
Intangible assets, net | 5,728 | 6,042 |
Domain Names [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 6,327 | 6,327 |
Total accumulated amortization | (599) | (285) |
Customer Backlog [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 4,000 | 4,000 |
Total accumulated amortization | (4,000) | (4,000) |
Trade Names and Trademarks [Member] | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Total intangible assets | 900 | 900 |
Total accumulated amortization | $ (900) | $ (900) |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Sales and marketing | $ 29,786 | $ 25,379 |
Compensation and benefits | 10,112 | 19,124 |
Operating lease liabilities | 6,961 | 0 |
Customer deposits | 2,535 | 2,058 |
Manufacturing costs | 2,509 | 3,744 |
Billings in excess of revenues | 992 | 512 |
Other | 4,588 | 5,474 |
Total accrued expenses and other liabilities | $ 57,483 | $ 56,291 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Line of Credit Facility [Line Items] | ||
Remaining available borrowing capacity | $ 200,000,000 | |
Outstanding borrowings under the revolver loans | $ 0 | $ 0 |
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 |
Leases - Supplemental Cash flow
Leases - Supplemental Cash flow Information to operating leases (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Supplemental cash flow information | ||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 6,356 | |
Operating ROU assets obtained in exchange for lease liabilities | 855 | |
Supplemental balance sheet information | ||
Operating lease ROU assets | 41,317 | $ 0 |
Operating lease liabilities: | ||
Accrued expenses and other current liabilities | 6,961 | |
Operating lease liabilities | 35,662 | $ 0 |
Total operating lease liabilities | $ 42,623 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Operating Lease Liabilities, Payments Due [Abstract] | |
2019 | $ 2,123 |
2020 | 8,376 |
2021 | 8,183 |
2022 | 6,368 |
2023 | 6,013 |
Thereafter | 17,145 |
Total lease payments | 48,208 |
Less imputed interest | (5,585) |
Total operating liabilities | $ 42,623 |
Leases - Additional Information
Leases - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Weighted average discount rate | 3.67% |
Operating lease cost | $ 6.3 |
Operating leases with an initial term | 12 months or less |
Weighted average remaining lease term | 6 years 7 months 6 days |
Minimum [Member] | |
Operating Lease terms | 1 year |
Maximum [Member] | |
Operating Lease terms | 10 years |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - Stock Repurchase Programs [Member] | 20 Months Ended |
Sep. 30, 2019shares | |
Equity, Class of Treasury Stock [Line Items] | |
Common stock repurchase program, authorized shares | 5,800,000 |
Number of shares repurchased by the Company | 834,441 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Numerator: | ||||||||
Net income available to common shareholders | $ 41,976 | $ 35,710 | $ 31,555 | $ 29,471 | $ 42,820 | $ 37,110 | $ 109,241 | $ 109,401 |
Denominator: | ||||||||
Basic weighted average shares outstanding | 58,401,183 | 58,741,973 | 58,476,430 | 58,785,546 | ||||
Effect of dilutive securities: | ||||||||
Diluted weighted average shares outstanding | 58,605,726 | 59,084,117 | 58,706,960 | 59,111,303 | ||||
Basic earnings per share | $ 0.72 | $ 0.50 | $ 1.87 | $ 1.86 | ||||
Diluted earnings per share | $ 0.72 | $ 0.50 | $ 1.86 | $ 1.85 | ||||
Stock appreciation rights and options [Member] | ||||||||
Effect of dilutive securities: | ||||||||
Dilutive securities | 115,175 | 177,412 | 133,030 | 181,680 | ||||
Restricted Stock [Member] | ||||||||
Effect of dilutive securities: | ||||||||
Dilutive securities | 89,368 | 164,732 | 97,500 | 144,077 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
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 | 23,422 | 0 | 20,257 | 10,709 |
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 | 0 | 285 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue remaining performance obligation | $ 46.8 |
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 From Contracts With C_4
Revenue From Contracts With Customers - Summary of Disaggregated Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 194,551 | $ 166,380 | $ 580,575 | $ 544,279 |
Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 182,775 | 146,998 | 541,722 | 491,399 |
Products Transferred Over Time and Fixed Price Contracts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 11,776 | 19,382 | 38,853 | 52,880 |
Residential [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 182,775 | 146,998 | 541,722 | 491,399 |
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 182,775 | 146,998 | 541,722 | 491,399 |
Commercial [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 11,776 | 19,382 | 38,853 | 52,880 |
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 11,776 | $ 19,382 | $ 38,853 | $ 52,880 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to unvested awards | $ | $ 5.5 |
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 | 5,724,953 |
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) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Time Based Restricted Stock Units [Member] | |
Stock Awards Granted | shares | 26,325 |
Weighted-Average Grant Price Per Share | $ / shares | $ 77.53 |
Performance Based Restricted Stock Units [Member] | |
Stock Awards Granted | shares | 80,104 |
Weighted-Average Grant Price Per Share | $ / shares | $ 47.89 |
Stock Appreciation Rights [Member] | |
Stock Awards Granted | shares | 24,536 |
Weighted-Average Grant Price Per Share | $ / shares | $ 77.70 |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Parenthetical) (Detail) - shares | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Performance Based Restricted Stock Unit Target [Member] | ||||
Stock Awards Granted | 32,462 | |||
Performance Based Restricted Stock Unit Adjustment [Member] | ||||
Stock Awards Granted | 5,588 | 14,900 | 27,154 |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Assumptions Used to Estimate Fair Value of Each SAR (Detail) - Stock Appreciation Rights [Member] - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | ||
Weighted-average fair value of grants | $ 29.56 | $ 22.09 |
Dividend yield | 0.00% | 0.00% |
Average risk-free interest rate | 2.50% | 2.70% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 39.10% | 40.50% |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 926 | $ 1,401 | $ 5,844 | $ 5,045 |
Stock Appreciation Rights [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 82 | 56 | 580 | 314 |
Time-Based Restricted Stock and Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 602 | 672 | 3,057 | 2,073 |
Performance-Based Restricted Stock and Restricted Stock Units [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | 162 | 616 | 2,045 | 2,534 |
Employee Stock Purchase Plan [Member] | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based compensation expense | $ 80 | $ 57 | $ 162 | $ 124 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Contingency [Line Items] | ||||
Valuation allowance | $ 3,000 | $ 3,000 | ||
Income tax expense (benefit) | $ 13,790 | $ 9,829 | $ 33,520 | $ 34,657 |
Effective tax rate | 23.50% | 24.10% | ||
Decrease in effective tax rate due to increase in domestic production activities deduction | 0.60% | |||
Excess tax benefits from stock based awards | $ 3,300 | $ 2,300 | ||
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Tax years subject to examination | 2015 | |||
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||||
Income Tax Contingency [Line Items] | ||||
Tax years subject to examination | 2018 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Sep. 30, 2019USD ($)Segment | Sep. 30, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segment | Segment | 2 | |||
Net sales | $ 194,551 | $ 166,380 | $ 580,575 | $ 544,279 |
Residential [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 182,775 | 146,998 | 541,722 | 491,399 |
Commercial [Member] | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | $ 11,776 | $ 19,382 | $ 38,853 | $ 52,880 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||||||||
Net sales | $ 194,551 | $ 166,380 | $ 580,575 | $ 544,279 | |||||
Net income | 41,976 | $ 35,710 | $ 31,555 | 29,471 | $ 42,820 | $ 37,110 | 109,241 | 109,401 | |
Depreciation and amortization | 10,477 | 13,164 | |||||||
Income tax expense | 13,790 | 9,829 | 33,520 | 34,657 | |||||
Total assets | 570,770 | 570,770 | $ 465,122 | ||||||
Residential [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | 182,775 | 146,998 | 541,722 | 491,399 | |||||
Commercial [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | 11,776 | 19,382 | 38,853 | 52,880 | |||||
Operating Segments [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | 194,551 | 166,380 | 580,575 | 544,279 | |||||
Net income | 41,976 | 29,471 | 109,241 | 109,401 | |||||
EBITDA | 58,609 | 42,847 | 152,340 | 157,502 | |||||
Depreciation and amortization | 3,587 | 3,769 | 10,380 | 13,067 | |||||
Income tax expense | 13,790 | 9,829 | 33,520 | 34,657 | |||||
Capital expenditures | 17,865 | 3,914 | 36,926 | 15,324 | |||||
Total assets | 570,770 | 434,909 | 570,770 | 434,909 | |||||
Operating Segments [Member] | Residential [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | 182,775 | 146,998 | 541,722 | 491,399 | |||||
Net income | 41,381 | 27,755 | 107,859 | 107,449 | |||||
EBITDA | 57,639 | 40,067 | 150,058 | 151,839 | |||||
Depreciation and amortization | 3,422 | 3,275 | 9,947 | 10,004 | |||||
Income tax expense | 13,580 | 9,259 | 33,046 | 34,009 | |||||
Capital expenditures | 17,766 | 3,693 | 35,584 | 14,274 | |||||
Total assets | 482,825 | 352,014 | 482,825 | 352,014 | |||||
Operating Segments [Member] | Commercial [Member] | |||||||||
Segment Reporting Information [Line Items] | |||||||||
Net sales | 11,776 | 19,382 | 38,853 | 52,880 | |||||
Net income | 595 | 1,716 | 1,382 | 1,952 | |||||
EBITDA | 970 | 2,780 | 2,282 | 5,663 | |||||
Depreciation and amortization | 165 | 494 | 433 | 3,063 | |||||
Income tax expense | 210 | 570 | 474 | 648 | |||||
Capital expenditures | 99 | 221 | 1,342 | 1,050 | |||||
Total assets | $ 87,945 | $ 82,895 | $ 87,945 | $ 82,895 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Segment Reporting Information [Line Items] | ||||||||
Net income | $ 41,976 | $ 35,710 | $ 31,555 | $ 29,471 | $ 42,820 | $ 37,110 | $ 109,241 | $ 109,401 |
Interest (income) expense, net | (744) | (222) | (801) | 377 | ||||
Income tax expense | 13,790 | 9,829 | 33,520 | 34,657 | ||||
Depreciation and amortization | 10,477 | 13,164 | ||||||
Operating Segments [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net income | 41,976 | 29,471 | 109,241 | 109,401 | ||||
Interest (income) expense, net | (744) | (222) | (801) | |||||
Income tax expense | 13,790 | 9,829 | 33,520 | 34,657 | ||||
Depreciation and amortization | 3,587 | 3,769 | 10,380 | 13,067 | ||||
EBITDA | 58,609 | 42,847 | 152,340 | 157,502 | ||||
Operating Segments [Member] | Residential [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net income | 41,381 | 27,755 | 107,859 | 107,449 | ||||
Interest (income) expense, net | (744) | (222) | (794) | 377 | ||||
Income tax expense | 13,580 | 9,259 | 33,046 | 34,009 | ||||
Depreciation and amortization | 3,422 | 3,275 | 9,947 | 10,004 | ||||
EBITDA | 57,639 | 40,067 | 150,058 | 151,839 | ||||
Operating Segments [Member] | Commercial [Member] | ||||||||
Segment Reporting Information [Line Items] | ||||||||
Net income | 595 | 1,716 | 1,382 | 1,952 | ||||
Interest (income) expense, net | (7) | |||||||
Income tax expense | 210 | 570 | 474 | 648 | ||||
Depreciation and amortization | 165 | 494 | 433 | 3,063 | ||||
EBITDA | $ 970 | $ 2,780 | $ 2,282 | $ 5,663 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Schedule Of Commitments And Contingencies [Line Items] | |
Change in warranty reserve for disclosure purposes only | $ 2 |
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 Contingencies_2
Commitments and Contingencies - Summary of Reconciliation of Company's Residential Product Warranty Reserve (Detail) - Surface Flaking Warranty Reserve [Member] - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 30,754 | $ 34,999 |
Provisions and changes in estimates | 1,571 | 1,961 |
Settlements made during the period | (5,031) | (4,325) |
Ending balance | 27,294 | 32,635 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 23,951 | 28,157 |
Settlements made during the period | (4,027) | (3,467) |
Ending balance | 19,924 | 24,690 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 6,803 | 6,842 |
Provisions and changes in estimates | 1,571 | 1,961 |
Settlements made during the period | (1,004) | (858) |
Ending balance | $ 7,370 | $ 7,945 |