Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2022 | Apr. 26, 2022 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Type | 10-Q | |
Document Fiscal Period Focus | Q1 | |
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 | Mar. 31, 2022 | |
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 | 113,199,234 | |
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 | |
Document Quarterly Report | true |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Statement [Abstract] | ||
Net sales | $ 339,228 | $ 245,524 |
Cost of sales | 204,316 | 149,723 |
Gross profit | 134,912 | 95,801 |
Selling, general and administrative expenses | 39,960 | 32,049 |
Gain on insurance proceeds | (737) | |
Income from operations | 94,952 | 64,489 |
Interest expense (income), net | 14 | (3) |
Income before income taxes | 94,938 | 64,492 |
Provision for income taxes | 23,727 | 15,947 |
Net income | $ 71,211 | $ 48,545 |
Basic earnings per common share | $ 0.62 | $ 0.42 |
Basic weighted average common shares outstanding | 114,638,424 | 115,663,366 |
Diluted earnings per common share | $ 0.62 | $ 0.42 |
Diluted weighted average common shares outstanding | 114,853,881 | 116,017,400 |
Comprehensive income | $ 71,211 | $ 48,545 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 115,188 | $ 141,053 |
Accounts receivable, net | 200,920 | 151,096 |
Inventories | 98,176 | 83,753 |
Prepaid expenses and other assets | 22,878 | 25,152 |
Total current assets | 437,162 | 401,054 |
Property, plant and equipment, net | 472,525 | 460,365 |
Operating lease assets | 37,479 | 34,571 |
Goodwill and other intangible assets, net | 18,896 | 19,001 |
Other assets | 6,334 | 5,330 |
Total assets | 972,396 | 920,321 |
Current liabilities: | ||
Accounts payable | 61,707 | 24,861 |
Accrued expenses and other liabilities | 75,013 | 58,041 |
Accrued warranty | 6,300 | 5,800 |
Total current liabilities | 143,020 | 88,702 |
Deferred income taxes | 43,967 | 43,967 |
Operating lease liabilities | 30,672 | 28,263 |
Non-current accrued warranty | 22,112 | 22,795 |
Other long-term liabilities | 11,560 | 11,560 |
Total liabilities | 251,331 | 195,287 |
Commitments and contingencies | ||
Stockholders' equity: | ||
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding | 0 | |
Common stock, $0.01 par value, 180,000,000 shares authorized; 140,787,904 and 140,734,753 shares issued and 114,367,340 and 115,148,152 shares outstanding at March 31, 2022 and December 31, 2021, respectively | 1,408 | 1,407 |
Additional paid-in capital | 127,623 | 127,787 |
Retained earnings | 1,017,259 | 946,048 |
Treasury stock, at cost, 26,420,564 and 25,586,601 shares at March 31, 2022 and December 31, 2021, respectively | (425,225) | (350,208) |
Total stockholders' equity | 721,065 | 725,034 |
Total liabilities and stockholders' equity | $ 972,396 | $ 920,321 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2022 | Dec. 31, 2021 |
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 | 180,000,000 | 180,000,000 |
Common stock, shares issued | 140,787,904 | 140,734,753 |
Common stock, shares outstanding | 114,367,340 | 115,148,152 |
Treasury stock, shares | 26,420,564 | 25,586,601 |
Condensed Consolidated Statem_2
Condensed Consolidated 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, 2020 | $ 588,531 | $ 1,406 | $ 126,087 | $ 737,311 | $ (276,273) |
Beginning Balance, Shares at Dec. 31, 2020 | 115,799,503 | 24,777,502 | |||
Net income | 48,545 | 48,545 | |||
Employee stock plans | 460 | 460 | |||
Employee stock plans, Shares | 28,286 | ||||
Shares withheld for taxes on awards | (4,045) | (4,045) | |||
Shares withheld for taxes on awards, Shares | (38,212) | ||||
Stock-based compensation | 2,176 | 2,176 | |||
Stock-based compensation, Shares | 76,094 | ||||
Repurchases of common stock | (45,523) | $ (45,523) | |||
Repurchases of common stock, Shares | (504,275) | 504,275 | |||
Ending Balance at Mar. 31, 2021 | 590,144 | $ 1,406 | 124,678 | 785,856 | $ (321,796) |
Ending Balance, Shares at Mar. 31, 2021 | 115,361,396 | 25,281,777 | |||
Beginning Balance at Dec. 31, 2021 | 725,034 | $ 1,407 | 127,787 | 946,048 | $ (350,208) |
Beginning Balance, Shares at Dec. 31, 2021 | 115,148,152 | 25,586,601 | |||
Net income | 71,211 | 71,211 | |||
Employee stock plans | 523 | 523 | |||
Employee stock plans, Shares | 9,081 | ||||
Shares withheld for taxes on awards | (2,912) | (2,912) | |||
Shares withheld for taxes on awards, Shares | (35,856) | ||||
Stock-based compensation | 2,226 | $ 1 | 2,225 | ||
Stock-based compensation, Shares | 79,926 | ||||
Repurchases of common stock | (75,017) | $ (75,017) | |||
Repurchases of common stock, Shares | (833,963) | 833,963 | |||
Ending Balance at Mar. 31, 2022 | $ 721,065 | $ 1,408 | $ 127,623 | $ 1,017,259 | $ (425,225) |
Ending Balance, Shares at Mar. 31, 2022 | 114,367,340 | 26,420,564 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Operating Activities | ||
Net income | $ 71,211 | $ 48,545 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 10,473 | 6,423 |
Stock-based compensation | 2,226 | 2,176 |
Gain on disposal of property, plant and equipment | (98) | |
Other non-cash adjustments | 77 | 77 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (49,825) | (202,781) |
Inventories | (14,423) | (6,774) |
Prepaid expenses and other assets | 1,560 | (809) |
Accounts payable | 36,605 | 10,494 |
Accrued expenses and other liabilities | (6,149) | (14,453) |
Income taxes receivable/payable | 22,124 | 14,626 |
Net cash provided by (used in) operating activities | 73,879 | (142,574) |
Investing Activities | ||
Expenditures for property, plant and equipment | (22,288) | (58,093) |
Proceeds from sales of property, plant and equipment | 293 | |
Net cash used in investing activities | (22,288) | (57,800) |
Financing Activities | ||
Borrowings under line of credit | 142,000 | |
Principal payments under line of credit | (6,000) | |
Repurchases of common stock | (77,929) | (49,566) |
Proceeds from employee stock purchase and option plans | 523 | 460 |
Financing costs | (50) | |
Net cash (used in) provided by financing activities | (77,456) | 86,894 |
Net decrease in cash and cash equivalents | (25,865) | (113,480) |
Cash and cash equivalents, beginning of period | 141,053 | 121,701 |
Cash and cash equivalents, end of period | 115,188 | 8,221 |
Supplemental Disclosure: | ||
Cash paid for interest, net of capitalized interest | 0 | 0 |
Cash paid for income taxes, net | $ 1,604 | $ 1,319 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2022 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | 1. BUSINESS AND ORGANIZATION Trex Company, Inc. (Trex), a Delaware corporation, was incorporated on September 4, 1998. Together, Trex and its wholly-owned subsidiary, Trex Commercial Products, Inc., are referred to as the Company. The Company operates in two reportable segments, Trex Residential Products (Trex Residential) and Trex Commercial Products (Trex Commercial). Trex Residential, the Company’s principal business based on net sales, is the world’s largest manufacturer of high-performance, low-maintenance ® (540) 542-6300. |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2022 | |
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 consolidated results of operations for the three months ended March 31, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The Company’s results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, consumer spending and preferences, the impact of any supply chain disruptions, economic conditions, and any adverse effects from the COVID-19 These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2021 and 2020 and for each of the three years in the period ended December 31, 2021 included in the Annual Report of Trex Company, Inc. on Form 10-K, |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | 3. RECENTLY ADOPTED ACCOUNTING STANDARDS In November 2021, the FASB issued ASU No. 2021-10, Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance 958-605. |
New Accounting Standards Not Ye
New Accounting Standards Not Yet Adopted | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards Not Yet Adopted | 4. NEW ACCOUNTING STANDARDS NOT YET ADOPTED In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting related to contract modifications a |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INVENTORIES Inventories valued at LIFO (last-in, first-out), March 31, December 31, Finished goods $ 64,382 $ 58,401 Raw materials 63,175 56,441 Total FIFO (first-in, first-out) 127,557 114,842 Reserve to adjust inventories to LIFO value (36,467 ) (36,467 ) Total LIFO inventories $ 91,090 $ 78,375 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 Inventories valued at lower of cost (FIFO method) and net realizable value were $7.1 million at March 31, 2022 and $5.4 million at December 31, 2021, consisting primarily of raw materials. The Company utilizes the FIFO method of accounting related to its Trex Commercial products. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 3 Months Ended |
Mar. 31, 2022 | |
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): March 31, 2022 December 31, 2021 Prepaid expenses $ 12,599 $ 15,061 Revenues in excess of billings 8,897 9,109 Income tax receivable 723 406 Other 659 576 Total prepaid expenses and other assets $ 22,878 $ 25,152 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2022 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | 7. GOODWILL AND OTHER INTANGIBLE ASSETS, NET The carrying amount of goodwill by reportable segment at March 31, 2022 and December 31, 2021 was $14.2 million for Trex Residential. The Company’s intangible assets consist of domain names. At March 31, 2022 and December 31, 2021, intangible assets were $6.3 million and accumulated amortization was $1.6 million and $1.5 million, respectively. 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 15 years, which approximates the pattern in which the economic benefits are expected to be received. The Company evaluates the recoverability of intangible assets periodically and considers events or circumstances that may warrant revised estimates of useful lives or that may indicate an impairment. Intangible asset amortization expense for the three months ended March 31, 2022 and March 31, 2021 was $0.1 million and $0.1 million, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2022 | |
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): March 31, 2022 December 31, Income taxes $ 22,441 $ — Sales and marketing 21,948 16,439 Compensation and benefits 12,719 25,450 Operating lease liabilities 7,504 7,066 Manufacturing costs 4,060 4,110 Billings in excess of revenues 2,151 1,436 Other 4,190 3,540 Total accrued expenses and other liabilities $ 75,013 $ 58,041 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT Revolving Credit Facility On November 5, 2019, the Company entered into a Fourth Amended and Restated Credit Agreement (Fourth Amended Credit Agreement) as borrower, Trex Commercial Products, Inc., as guarantor; Bank of America, N.A. as a Lender, Administrative Agent, Swing Line Lender and L/C Issuer; and certain other lenders including Wells Fargo Bank, N.A., who is also Syndication Agent, and Truist Bank, arranged by BOA Securities, Inc., as Sole Lead Arranger and Sole Bookrunner, to amend and restate the Third Amended and Restated Credit Agreement (Third Amended Credit Agreement), dated as of January 12, 2016, as amended. The Fourth Amended Credit Agreement 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 November 5, 2024. On May 26, 2020, the Company entered into a First Amendment to the Original Credit Agreement (the First Amendment) to provide for an additional $100 million line of credit through May 26, 2022. As a matter of convenience, the parties incorporated the amendments to the Original Credit Agreement made by the First Amendment into a new Fourth Amended and Restated Credit Agreement (New Credit Agreement). In the New Credit Agreement, the revolving commitments under the Original Credit Agreement are referred to as Revolving A Commitments and the new $100 million line of credit is referred to as Revolving B Commitments. In the New Credit Agreement, all of the material terms and conditions related to the original line of credit (Revolving A Commitments) remain unchanged from the Original Credit Agreement. The Company had no outstanding borrowings under its revolving credit facility and available borrowing capacity of $350 million at March 31, 2022. Compliance with Debt Covenants and Restrictions Pursuant to the terms of the Fourth Amended Credit Agreement, the Company is subject to certain loan compliance covenants. The Company was in compliance with all covenants as of March 31, 2022. Failure to comply with the financial covenants could be considered a default of repayment obligations and, among other remedies, could accelerate payment of any amounts outstanding. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Leases | 10. LEASES The Company leases office space, storage warehouses and certain plant equipment under various operating leases. The Company’s operating leases have remaining lease terms of less than 1 year to 8 years. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. For the three months ended March 31, 2022 and March 31, 2021, total operating lease expense was $2.1 million and $2.0 million, respectively. The weighted average remaining lease term at March 31, 2022 and December 31, 2021 was 5.9 years and 5.8 years, respectively. The weighted average discount rate at March 31, 2022 and December 31, 2021 was 2.20% and 2.47%, respectively. The following table includes supplemental cash flow information for the three months ended March 31, 2022 and March 31, 2021 and supplemental balance sheet information at March 31, 2022 and December 31, 2021 related to operating leases (in thousands): Three Months Ended March 31, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,174 $ 2,056 Operating ROU assets obtained in exchange for lease liabilities $ 6,053 $ 1,038 Supplemental balance sheet information March 31, 2022 December 31, Operating lease ROU assets $ 37,479 $ 34,571 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,504 $ 7,066 Operating lease liabilities 30,672 28,263 Total operating lease liabilities $ 38,176 $ 35,329 The following table summarizes maturities of operating lease liabilities at March 31, 2022 (in thousands): Maturities of operating lease liabilities 2022 $ 6,276 2023 7,377 2024 6,653 2025 5,362 2026 4,852 Thereafter 10,156 Total lease payments 40,676 Less imputed interest (2,500 ) Total operating lease liabilities $ 38,176 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 and December 31, 2021. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Numerator: Net income available to common shareholders $ 71,211 $ 48,545 Denominator: Basic weighted average shares outstanding 114,638,424 115,663,366 Effect of dilutive securities: Stock appreciation rights and options 124,327 207,060 Restricted stock 91,130 146,974 Diluted weighted average shares outstanding 114,853,881 116,017,400 Basic earnings per share $ 0.62 $ 0.42 Diluted earnings per share $ 0.62 $ 0.42 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 2022 2021 Stock appreciation rights 31,006 7,181 Restricted stock 52,278 23,079 Stock Repurchase Program On February 16, 2018, the Trex Board of Directors adopted a stock repurchase program of up to 11.6 million shares of its outstanding common stock (Stock Repurchase Program). As of March 31, 2022, Trex has repurchased 4.4 million shares of its outstanding common stock under the Stock Repurchase Program. First Certificate of Amendment to the Restated Certificate of Incorporation At the annual meeting of stockholders of Trex held on May 5, 2022, its stockholders approved an amendment of the Trex Restated Certificate of Incorporation (Amendment), effective as of May 5, 2022. The Board of Directors of Trex unanimously approved the Amendment on February 23, 2022, subject to stockholder approval. The Amendment increases the number of shares of common stock, par value $.01 per share, that Trex is authorized to issue from 180 million shares to 360 million shares. The Amendment was filed with the Delaware Secretary of State on May 5, 2022. |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Mar. 31, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue From Contracts With Customers | 13. REVENUE FROM CONTRACTS WITH CUSTOMERS Trex Residential Products Trex Residential principally generates revenue from the manufacture and sale of its high-performance, low-maintenance, eco-friendly 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. The transaction price allocated to remaining performance obligations on contracts with an original duration greater than one year was $26.0 million as of March 31, 2022. The Company will recognize this revenue as contracts are completed, which is expected to occur within the next 26 months. For the three months ended March 31, 2022 and March 31, 2021, net sales were 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 net sales with the Company’s reportable segments (in thousands). Three Months Ended March 31, 2022 Reportable Segment Trex Residential Trex Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 327,194 $ — $ 327,194 Products transferred over time and fixed price contracts — 12,034 12,034 $ 327,194 $ 12,034 $ 339,228 Three Months Ended March 31, 2021 Reportable Segment Trex Residential Trex Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 233,070 $ — $ 233,070 Products transferred over time and fixed price contracts — 12,454 12,454 $ 233,070 $ 12,454 $ 245,524 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2022 | |
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 Trex stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan is administered by the Compensation Committee of the Trex 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 Trex common stock that may be issued und The following table summarizes the Company’s stock-based compensation grants for the three months ended March 31, 2022: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 38,164 $ 82.27 Performance-based restricted stock units (a) 71,731 $ 76.24 Stock appreciation rights 32,971 $ 82.01 (a) Includes 46,651 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2022, and adjustments of 8,160, 11,684, and 5,236 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2021, 2020, and 2019, 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 three months ended March 31, 2021 and March 31, 2020 the data and assumptions shown in the following table were used: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Weighted-average fair value of grants $ 33.90 $ 51.84 Dividend yield 0 % 0 % Average risk-free interest rate 1.9 % 0.6 % Expected term (years) 5 5 Expected volatility 44.9 % 58.7 % The Company recognizes stock-based compensation expense ratably over the period from the grant date to the earlier of: (1) the vesting date of the award, or (2) the date the grantee is eligible to retire without forfeiting the award. For performance-based restricted stock and performance-based restricted stock units, expense is recognized ratably over the performance and vesting period of each tranche based on management’s judgment of the ultimate award that is likely to be paid out based on the achievement of the predetermined performance measures. For the employee stock purchase plan, compensation expense is recognized related to the discount on purchases. Stock-based compensation expense is included in “Selling, general and administrative expenses” in the Condensed Consolidated Statements of Comprehensive Income. The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended 2022 2021 Stock appreciation rights $ 154 $ 114 Time-based restricted stock and restricted stock units 847 687 Performance-based restricted stock and restricted stock units 1,158 1,275 Employee stock purchase plan 67 100 Total stock-based compensation $ 2,226 $ 2,176 Total unrecognized compensation cost related to unvested awards as of March 31, 2022 was $15.9 million. The cost of these unvested awards is being recognized over the requisite vesting period of each award. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2022 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2022 and March 31, 2021 was 25.0% and 24.7%, respectively, which resulted in expense of $23.7 million and $15.9 million, respectively. The increase of 0.3% in the effective tax rate was primarily due to a current year decrease in excess tax benefits from the exercise of share-based payments. During the three months ended March 31, 2022 and March 31, 2021, the Company realized $0.1million and $0.8 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 March 31, 2022, the Company maintains a valuation allowance of $2.2 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 March 31, 2022, for certain tax jurisdictions tax years 2018 through 2021 remain subject to examination. The Company believes that adequate provisions have been made for all tax returns subject to examination. Sales made to foreign distributors are not taxable in any foreign jurisdiction as the Company does not have a taxable presence in any foreign jurisdiction. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2022 | |
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. 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, income 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, income taxes, and depreciation and amortization charges to income. The below segment data for the three months ended March 31, 2022 and March 31, 2021 includes data for Trex Residential and Trex Commercial (in thousands): Segment Data: Three Months Ended March 31, 2022 Three Months Ended Trex Residential Trex Commercial Total Trex Residential Trex Commercial Total Net sales $ 327,194 $ 12,034 $ 339,228 $ 233,070 $ 12,454 $ 245,524 Net income (loss) $ 72,215 $ (1,004 ) $ 71,211 $ 48,745 $ (200 ) $ 48,545 EBITDA $ 106,483 $ (1,058 ) $ 105,425 $ 70,964 $ (52 ) $ 70,912 Depreciation and amortization $ 10,191 $ 282 $ 10,473 $ 6,210 $ 213 $ 6,423 Income tax expense (benefit) $ 24,063 $ (336 ) $ 23,727 $ 16,012 $ (65 ) $ 15,947 Capital expenditures $ 22,283 $ 5 $ 22,288 $ 56,563 $ 1,530 $ 58,093 Total assets $ 929,737 $ 42,659 $ 972,396 $ 808,864 $ 91,426 $ 900,290 Reconciliation of Net Income to EBITDA: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Trex Residential Trex Commercial Total Trex Residential Trex Commercial Total Net income (loss) $ 72,215 $ (1,004 ) $ 71,211 $ 48,745 $ (200 ) $ 48,545 Interest expense (income), net 14 — 14 (3 ) — (3 ) Income tax expense (benefit) 24,063 (336 ) 23,727 16,012 (65 ) 15,947 Depreciation and amortization 10,191 282 10,473 6,210 213 6,423 EBITDA $ 106,483 $ (1,058 ) $ 105,425 $ 70,964 $ (52 ) $ 70,912 |
Seasonality
Seasonality | 3 Months Ended |
Mar. 31, 2022 | |
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 | 3 Months Ended |
Mar. 31, 2022 | |
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. Depending on the product and its use, the Company also warrants its Trex Commercial products will be free of manufacturing defects for one 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 three months ended March 31, 2022, was lower than the number of claims received in the three months ended March 31, 2021 and lower than the Company’s expectations for the first quarter of 2022. Average cost per claim experienced in the three months ended March 31, 2022 was significantly higher than that experienced in the three months ended March 31, 2021 and higher than the Company’s expectations for the current year. The elevated average cost per claim experienced in the three months ended March 31, 2022, was primarily the result of the closure of two large claims, which were considered in the Company’s estimation of its surface flaking warranty reserve. The Company believes its reserve at March 31, 2022 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 consolidated financial condition, results of operations or cash flows. The Company estimates that the annual number of claims received will decline over time and that the average cost per claim will increase. 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 an 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 $1.8 million change in the surface flaking warranty reserve. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Three Months Ended March 31, 2022 Surface Flaking Other Residential Total Beginning balance, January 1 $ 18,542 $ 10,053 $ 28,595 Provisions and changes in estimates — 1,090 1,090 Settlements made during the period (745 ) (528 ) (1,273 ) Ending balance, March 31 $ 17,797 $ 10,615 $ 28,412 Three Months Ended March 31, 2021 Surface Flaking Other Residential Total Beginning balance, January 1 $ 21,325 $ 8,148 $ 29,473 Provisions and changes in estimates — 1,092 1,092 Settlements made during the period (604 ) (416 ) (1,020 ) Ending balance, March 31 $ 20,721 $ 8,824 $ 29,545 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. |
Summary of Significant Accounti
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Accounting Policies [Abstract] | |
Stock-Based Compensation | The Company has one stock-based compensation plan, the 2014 Stock Incentive Plan (Plan), approved by Trex stockholders in April 2014. The Plan amended and restated in its entirety the Trex Company, Inc. 2005 Stock Incentive Plan. The Plan is administered by the Compensation Committee of the Trex 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 Trex common stock that may be issued und |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories valued at LIFO (last-in, first-out), March 31, December 31, Finished goods $ 64,382 $ 58,401 Raw materials 63,175 56,441 Total FIFO (first-in, first-out) 127,557 114,842 Reserve to adjust inventories to LIFO value (36,467 ) (36,467 ) Total LIFO inventories $ 91,090 $ 78,375 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): March 31, 2022 December 31, 2021 Prepaid expenses $ 12,599 $ 15,061 Revenues in excess of billings 8,897 9,109 Income tax receivable 723 406 Other 659 576 Total prepaid expenses and other assets $ 22,878 $ 25,152 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands): March 31, 2022 December 31, Income taxes $ 22,441 $ — Sales and marketing 21,948 16,439 Compensation and benefits 12,719 25,450 Operating lease liabilities 7,504 7,066 Manufacturing costs 4,060 4,110 Billings in excess of revenues 2,151 1,436 Other 4,190 3,540 Total accrued expenses and other liabilities $ 75,013 $ 58,041 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Leases [Abstract] | |
Supplemental Cash Flow information and Supplemental balance sheet information related to operating leases | The following table includes supplemental cash flow information for the three months ended March 31, 2022 and March 31, 2021 and supplemental balance sheet information at March 31, 2022 and December 31, 2021 related to operating leases (in thousands): Three Months Ended March 31, Supplemental cash flow information 2022 2021 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,174 $ 2,056 Operating ROU assets obtained in exchange for lease liabilities $ 6,053 $ 1,038 Supplemental balance sheet information March 31, 2022 December 31, Operating lease ROU assets $ 37,479 $ 34,571 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,504 $ 7,066 Operating lease liabilities 30,672 28,263 Total operating lease liabilities $ 38,176 $ 35,329 |
Maturities of operating lease liabilities | The following table summarizes maturities of operating lease liabilities at March 31, 2022 (in thousands): Maturities of operating lease liabilities 2022 $ 6,276 2023 7,377 2024 6,653 2025 5,362 2026 4,852 Thereafter 10,156 Total lease payments 40,676 Less imputed interest (2,500 ) Total operating lease liabilities $ 38,176 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 2021 Numerator: Net income available to common shareholders $ 71,211 $ 48,545 Denominator: Basic weighted average shares outstanding 114,638,424 115,663,366 Effect of dilutive securities: Stock appreciation rights and options 124,327 207,060 Restricted stock 91,130 146,974 Diluted weighted average shares outstanding 114,853,881 116,017,400 Basic earnings per share $ 0.62 $ 0.42 Diluted earnings per share $ 0.62 $ 0.42 |
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 2022 2021 Stock appreciation rights 31,006 7,181 Restricted stock 52,278 23,079 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 March 31, 2022 Reportable Segment Trex Residential Trex Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 327,194 $ — $ 327,194 Products transferred over time and fixed price contracts — 12,034 12,034 $ 327,194 $ 12,034 $ 339,228 Three Months Ended March 31, 2021 Reportable Segment Trex Residential Trex Commercial Total Timing of Revenue Recognition and Type of Contract Products transferred at a point in time and variable consideration contracts $ 233,070 $ — $ 233,070 Products transferred over time and fixed price contracts — 12,454 12,454 $ 233,070 $ 12,454 $ 245,524 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Stock-Based Compensation Grants | The following table summarizes the Company’s stock-based compensation grants for the three months ended March 31, 2022: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 38,164 $ 82.27 Performance-based restricted stock units (a) 71,731 $ 76.24 Stock appreciation rights 32,971 $ 82.01 (a) Includes 46,651 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2022, and adjustments of 8,160, 11,684, and 5,236 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2021, 2020, and 2019, respectively. |
Summary of Assumptions Used to Estimate Fair Value of Each SAR | For SARs issued in the three months ended March 31, 2021 and March 31, 2020 the data and assumptions shown in the following table were used: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Weighted-average fair value of grants $ 33.90 $ 51.84 Dividend yield 0 % 0 % Average risk-free interest rate 1.9 % 0.6 % Expected term (years) 5 5 Expected volatility 44.9 % 58.7 % |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended 2022 2021 Stock appreciation rights $ 154 $ 114 Time-based restricted stock and restricted stock units 847 687 Performance-based restricted stock and restricted stock units 1,158 1,275 Employee stock purchase plan 67 100 Total stock-based compensation $ 2,226 $ 2,176 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Segment Reporting [Abstract] | |
Details of Segment Information | The below segment data for the three months ended March 31, 2022 and March 31, 2021 includes data for Trex Residential and Trex Commercial (in thousands): Segment Data: Three Months Ended March 31, 2022 Three Months Ended Trex Residential Trex Commercial Total Trex Residential Trex Commercial Total Net sales $ 327,194 $ 12,034 $ 339,228 $ 233,070 $ 12,454 $ 245,524 Net income (loss) $ 72,215 $ (1,004 ) $ 71,211 $ 48,745 $ (200 ) $ 48,545 EBITDA $ 106,483 $ (1,058 ) $ 105,425 $ 70,964 $ (52 ) $ 70,912 Depreciation and amortization $ 10,191 $ 282 $ 10,473 $ 6,210 $ 213 $ 6,423 Income tax expense (benefit) $ 24,063 $ (336 ) $ 23,727 $ 16,012 $ (65 ) $ 15,947 Capital expenditures $ 22,283 $ 5 $ 22,288 $ 56,563 $ 1,530 $ 58,093 Total assets $ 929,737 $ 42,659 $ 972,396 $ 808,864 $ 91,426 $ 900,290 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of Net Income to EBITDA: Three Months Ended March 31, 2022 Three Months Ended March 31, 2021 Trex Residential Trex Commercial Total Trex Residential Trex Commercial Total Net income (loss) $ 72,215 $ (1,004 ) $ 71,211 $ 48,745 $ (200 ) $ 48,545 Interest expense (income), net 14 — 14 (3 ) — (3 ) Income tax expense (benefit) 24,063 (336 ) 23,727 16,012 (65 ) 15,947 Depreciation and amortization 10,191 282 10,473 6,210 213 6,423 EBITDA $ 106,483 $ (1,058 ) $ 105,425 $ 70,964 $ (52 ) $ 70,912 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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): Three Months Ended March 31, 2022 Surface Flaking Other Residential Total Beginning balance, January 1 $ 18,542 $ 10,053 $ 28,595 Provisions and changes in estimates — 1,090 1,090 Settlements made during the period (745 ) (528 ) (1,273 ) Ending balance, March 31 $ 17,797 $ 10,615 $ 28,412 Three Months Ended March 31, 2021 Surface Flaking Other Residential Total Beginning balance, January 1 $ 21,325 $ 8,148 $ 29,473 Provisions and changes in estimates — 1,092 1,092 Settlements made during the period (604 ) (416 ) (1,020 ) Ending balance, March 31 $ 20,721 $ 8,824 $ 29,545 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2022Segment | |
Accounting Policies [Abstract] | |
Number of reportable segments | 2 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 64,382 | $ 58,401 |
Raw materials | 63,175 | 56,441 |
Total FIFO (first-in, first-out) inventories | 127,557 | 114,842 |
Reserve to adjust inventories to LIFO value | (36,467) | (36,467) |
Total LIFO inventories | $ 91,090 | $ 78,375 |
Inventories - Additional Inform
Inventories - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
Inventory Disclosure [Abstract] | ||
LIFO inventory liquidations | $ 0 | |
Raw materials | $ 7,100,000 | $ 5,400,000 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 12,599 | $ 15,061 |
Revenues in excess of billings | 8,897 | 9,109 |
Income tax receivable | 723 | 406 |
Other | 659 | 576 |
Total prepaid expenses and other assets | $ 22,878 | $ 25,152 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Goodwill [Line Items] | |||
Amortization of intangible asset | $ 0.1 | $ 0.1 | |
Intangible Assets | 6.3 | $ 6.3 | |
Accumulated Amortization | 1.6 | 1.5 | |
Residential [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 14.2 | $ 14.2 | |
Domain Names [Member] | |||
Goodwill [Line Items] | |||
Amortization period | 15 years |
Accrued Expenses and Other Li_3
Accrued Expenses and Other Liabilities - Summary of Accrued Expenses and Other Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Payables and Accruals [Abstract] | ||
Income taxes | $ 22,441 | $ 0 |
Sales and marketing | 21,948 | 16,439 |
Compensation and benefits | 12,719 | 25,450 |
Operating lease liabilities | $ 7,504 | 7,066 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | Total accrued expenses and other liabilities | |
Manufacturing costs | $ 4,060 | 4,110 |
Billings in excess of revenues | 2,151 | 1,436 |
Other | 4,190 | 3,540 |
Total accrued expenses and other liabilities | $ 75,013 | $ 58,041 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | May 26, 2020 | |
Line of Credit Facility [Line Items] | ||
Outstanding borrowing capacity | $ 0 | |
Remaining available borrowing capacity | $ 350,000,000 | |
Termination date of the Credit Agreement | Nov. 5, 2024 | |
Revolver Loans Portion Effective January 1 through June 30 [Member] | Fourth 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] | Fourth Amended And Restated Credit Agreement [Member] | ||
Line of Credit Facility [Line Items] | ||
Revolving loans in a collective maximum principal amount | $ 200,000,000 | |
Revolving Credit Facility [Member] | ||
Line of Credit Facility [Line Items] | ||
Line of Credit Facility, Additional Borrowing Capacity | $ 100,000,000 |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Weighted average discount rate | 2.20% | 2.47% | |
Operating lease cost | $ 2.1 | $ 2 | |
Weighted average remaining lease term | 5 years 10 months 24 days | 5 years 9 months 18 days | |
Minimum [Member] | |||
Operating Lease terms | 1 year | ||
Maximum [Member] | |||
Operating Lease terms | 8 years |
Leases - Supplemental Cash flow
Leases - Supplemental Cash flow Information to operating leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Supplemental cash flow information | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 2,174 | $ 2,056 | |
Operating ROU assets obtained in exchange for lease liabilities | 6,053 | $ 1,038 | |
Supplemental balance sheet information | |||
Operating lease ROU assets | 37,479 | $ 34,571 | |
Operating lease liabilities: | |||
Accrued expenses and other current liabilities | 7,504 | 7,066 | |
Operating lease liabilities | 30,672 | 28,263 | |
Total operating lease liabilities | $ 38,176 | $ 35,329 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2022 | $ 6,276 | |
2023 | 7,377 | |
2024 | 6,653 | |
2025 | 5,362 | |
2026 | 4,852 | |
Thereafter | 10,156 | |
Total lease payments | 40,676 | |
Less imputed interest | (2,500) | |
Total operating lease liabilities | $ 38,176 | $ 35,329 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - $ / shares | 3 Months Ended | |||
Mar. 31, 2022 | May 05, 2022 | Dec. 31, 2021 | Mar. 31, 2021 | |
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock, shares authorized | 180,000,000 | 180,000,000 | 180,000,000 | |
Common stock, par value | $ 0.01 | $ 0.01 | ||
Subsequent Event [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock, shares authorized | 360,000,000 | |||
Common stock, par value | $ 0.01 | |||
Stock Repurchase Programs [Member] | ||||
Equity, Class of Treasury Stock [Line Items] | ||||
Common stock repurchase program, authorized shares | 11,600,000 | |||
Number of shares repurchased by the Company | 4,400,000 |
Stockholders' Equity - Computat
Stockholders' Equity - Computation of Basic and Diluted Earnings Per Share (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Numerator: | ||
Net income | $ 71,211 | $ 48,545 |
Denominator: | ||
Basic weighted average shares outstanding | 114,638,424 | 115,663,366 |
Effect of dilutive securities: | ||
Diluted weighted average shares outstanding | 114,853,881 | 116,017,400 |
Basic earnings per share | $ 0.62 | $ 0.42 |
Diluted earnings per share | $ 0.62 | $ 0.42 |
Stock appreciation rights [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 124,327 | 207,060 |
Restricted stock [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 91,130 | 146,974 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Restricted stock [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Anti-dilutive securities excluded from the computation of diluted earnings per share | 52,278 | 23,079 |
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 | 31,006 | 7,181 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Revenue from Contract with Customer [Abstract] | |
Revenue remaining performance obligation | $ 26 |
Revenue remaining performance obligation description | 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 | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 339,228 | $ 245,524 |
Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 327,194 | 233,070 |
Products Transferred Over Time and Fixed Price Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 12,034 | 12,454 |
Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 327,194 | 233,070 |
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 327,194 | 233,070 |
Commercial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 12,034 | 12,454 |
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 12,034 | $ 12,454 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Unrecognized compensation cost related to unvested awards | $ | $ 15.9 |
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 | 25,680,000 |
Number of common stock available for future issuance | 11,072,584 |
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) | 3 Months Ended | |
Mar. 31, 2022$ / sharesshares | ||
Time Based Restricted Stock Units [Member] | ||
Stock Awards Granted | shares | 38,164 | |
Weighted-Average Grant Price Per Share | $ / shares | $ 82.27 | |
Performance Based Restricted Stock Units [Member] | ||
Stock Awards Granted | shares | 71,731 | [1] |
Weighted-Average Grant Price Per Share | $ / shares | $ 76.24 | [1] |
Stock Appreciation Rights [Member] | ||
Stock Awards Granted | shares | 32,971 | |
Weighted-Average Grant Price Per Share | $ / shares | $ 82.01 | |
[1] | Includes 46,651 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2022, and adjustments of 8,160, 11,684, and 5,236 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2021, 2020, and 2019, respectively. |
Stock-Based Compensation - Su_2
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Parenthetical) (Detail) - shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Performance Based Restricted Stock Unit Target [Member] | ||||
Stock Awards Granted | 46,651 | |||
Performance Based Restricted Stock Unit Adjustment [Member] | ||||
Stock Awards Granted | 8,160 | 11,684 | 5,236 |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | ||
Weighted-average fair value of grants | $ 33.90 | $ 51.84 |
Dividend yield | 0.00% | 0.00% |
Average risk-free interest rate | 1.90% | 0.60% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 44.90% | 58.70% |
Stock-Based Compensation - Su_4
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 2,226 | $ 2,176 |
Stock Appreciation Rights [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 154 | 114 |
Time-Based Restricted Stock and Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 847 | 687 |
Performance-Based Restricted Stock and Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 1,158 | 1,275 |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 67 | $ 100 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Income Tax Contingency [Line Items] | ||
Valuation allowance | $ 2,200 | |
Income tax expense (benefit) | $ 23,727 | $ 15,947 |
Effective tax rate | 25.00% | 24.70% |
Excess tax benefits from stock based awards | $ 100 | $ 800 |
Effective income tax rate reconciliation nondeductible expense share-based payment arrangement percent | 0.30% | |
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax years subject to examination | 2018 | |
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax years subject to examination | 2021 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) | 3 Months Ended |
Mar. 31, 2022Segment | |
Segment Reporting Information [Line Items] | |
Number of reportable segment | 2 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2022 | Mar. 31, 2021 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 339,228 | $ 245,524 | |
Net income (loss) | 71,211 | 48,545 | |
Depreciation and amortization | 10,473 | 6,423 | |
Income tax expense (benefit) | 23,727 | 15,947 | |
Total assets | 972,396 | $ 920,321 | |
Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 327,194 | 233,070 | |
Net income (loss) | 48,745 | ||
EBITDA | 70,964 | ||
Depreciation and amortization | 6,210 | ||
Income tax expense (benefit) | 16,012 | ||
Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,034 | 12,454 | |
Net income (loss) | (200) | ||
EBITDA | (52) | ||
Depreciation and amortization | 213 | ||
Income tax expense (benefit) | (65) | ||
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 339,228 | 245,524 | |
Net income (loss) | 71,211 | 48,545 | |
EBITDA | 105,425 | 70,912 | |
Depreciation and amortization | 10,473 | 6,423 | |
Income tax expense (benefit) | 23,727 | 15,947 | |
Capital expenditures | 22,288 | 58,093 | |
Total assets | 972,396 | 900,290 | |
Operating Segments [Member] | Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 327,194 | 233,070 | |
Net income (loss) | 72,215 | 48,745 | |
EBITDA | 106,483 | 70,964 | |
Depreciation and amortization | 10,191 | 6,210 | |
Income tax expense (benefit) | 24,063 | 16,012 | |
Capital expenditures | 22,283 | 56,563 | |
Total assets | 929,737 | 808,864 | |
Operating Segments [Member] | Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,034 | 12,454 | |
Net income (loss) | (1,004) | (200) | |
EBITDA | (1,058) | (52) | |
Depreciation and amortization | 282 | 213 | |
Income tax expense (benefit) | (336) | (65) | |
Capital expenditures | 5 | 1,530 | |
Total assets | $ 42,659 | $ 91,426 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Segment Reporting Information [Line Items] | ||
Net income (loss) | $ 71,211 | $ 48,545 |
Interest expense (income), net | (14) | 3 |
Income tax expense (benefit) | 23,727 | 15,947 |
Depreciation and amortization | 10,473 | 6,423 |
Residential [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | 48,745 | |
Interest expense (income), net | (3) | |
Income tax expense (benefit) | 16,012 | |
Depreciation and amortization | 6,210 | |
EBITDA | 70,964 | |
Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | (200) | |
Income tax expense (benefit) | (65) | |
Depreciation and amortization | 213 | |
EBITDA | (52) | |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | 71,211 | 48,545 |
Interest expense (income), net | 14 | (3) |
Income tax expense (benefit) | 23,727 | 15,947 |
Depreciation and amortization | 10,473 | 6,423 |
EBITDA | 105,425 | 70,912 |
Operating Segments [Member] | Residential [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | 72,215 | 48,745 |
Interest expense (income), net | 14 | |
Income tax expense (benefit) | 24,063 | 16,012 |
Depreciation and amortization | 10,191 | 6,210 |
EBITDA | 106,483 | 70,964 |
Operating Segments [Member] | Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | (1,004) | (200) |
Income tax expense (benefit) | (336) | (65) |
Depreciation and amortization | 282 | 213 |
EBITDA | $ (1,058) | $ (52) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Schedule Of Commitments And Contingencies [Line Items] | |
Change in warranty reserve for disclosure purposes only | $ 1.8 |
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% |
Commercial Railing And Staging Systems [Member] | Commercial Use [Member] | Minimum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 1 year |
Commercial Railing And Staging Systems [Member] | Commercial Use [Member] | Maximum [Member] | |
Schedule Of Commitments And Contingencies [Line Items] | |
Warranty period | 3 years |
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 | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 28,595 | $ 29,473 |
Provisions and changes in estimates | 1,090 | 1,092 |
Settlements made during the period | (1,273) | (1,020) |
Ending balance | 28,412 | 29,545 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 18,542 | 21,325 |
Settlements made during the period | (745) | (604) |
Ending balance | 17,797 | 20,721 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 10,053 | 8,148 |
Provisions and changes in estimates | 1,090 | 1,092 |
Settlements made during the period | (528) | (416) |
Ending balance | $ 10,615 | $ 8,824 |