Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | Apr. 24, 2023 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
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, 2023 | |
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 | 108,803,516 | |
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, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net sales | $ 238,718 | $ 339,228 |
Cost of sales | 144,290 | 204,316 |
Gross profit | 94,428 | 134,912 |
Selling, general and administrative expenses | 37,480 | 39,960 |
Income from operations | 56,948 | 94,952 |
Interest expense, net | 1,985 | 14 |
Income before income taxes | 54,963 | 94,938 |
Provision for income taxes | 13,832 | 23,727 |
Net income | $ 41,131 | $ 71,211 |
Basic earnings per common share | $ 0.38 | $ 0.62 |
Basic weighted average common shares outstanding | 108,771,958 | 114,638,424 |
Diluted earnings per common share | $ 0.38 | $ 0.62 |
Diluted weighted average common shares outstanding | 108,916,261 | 114,853,881 |
Comprehensive income | $ 41,131 | $ 71,211 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 3,916 | $ 12,325 |
Accounts receivable, net | 302,071 | 98,057 |
Inventories | 127,784 | 141,355 |
Prepaid expenses and other assets | 25,712 | 35,105 |
Total current assets | 459,483 | 286,842 |
Property, plant and equipment, net | 617,503 | 589,892 |
Operating lease assets | 30,654 | 30,991 |
Goodwill and other intangible assets, net | 18,477 | 18,582 |
Other assets | 7,004 | 7,398 |
Total assets | 1,133,121 | 933,705 |
Current liabilities | ||
Accounts payable | 23,136 | 19,935 |
Accrued expenses and other liabilities | 50,529 | 44,064 |
Accrued warranty | 4,600 | 4,600 |
Line of credit | 369,500 | 222,000 |
Total current liabilities | 447,765 | 290,599 |
Deferred income taxes | 68,224 | 68,224 |
Operating lease liabilities | 23,318 | 23,974 |
Non-current accrued warranty | 22,077 | 20,999 |
Other long-term liabilities | 11,560 | 11,560 |
Total liabilities | 572,944 | 415,356 |
Commitments and contingencies | ||
Stockholders' Equity: | ||
Preferred stock, $0.01 par value, 3,000,000 shares authorized; none issued and outstanding | 0 | 0 |
Common stock, $0.01 par value, 360,000,000 shares authorized; 140,901,926 and 140,841,833 shares issued and 108,803,516 and 108,743,423 share outstanding, at March 31, 2023 and December 31, 2022, respectively | 1,409 | 1,408 |
Additional paid-in capital | 132,235 | 131,539 |
Retained earnings | 1,171,805 | 1,130,674 |
Treasury stock, at cost, 32,098,410 shares at March 31, 2023 and December 31, 2022 | (745,272) | (745,272) |
Total stockholders' equity | 560,177 | 518,349 |
Total liabilities and stockholders' equity | $ 1,133,121 | $ 933,705 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2023 | Dec. 31, 2022 |
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 | 360,000,000 | 360,000,000 |
Common stock, shares issued | 140,901,926 | 140,841,833 |
Common stock, shares outstanding | 108,803,516 | 108,743,423 |
Treasury stock, shares | 32,098,410 | 32,098,410 |
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 [Member] | Treasury Stock [Member] |
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 | |||
Beginning Balance at Dec. 31, 2022 | 518,349 | $ 1,408 | 131,539 | 1,130,674 | $ (745,272) |
Beginning Balance, Shares at Dec. 31, 2022 | 108,743,423 | 32,098,410 | |||
Net income | 41,131 | 41,131 | |||
Employee stock plans | 316 | 316 | |||
Employee stock plans, Shares | 8,504 | ||||
Shares withheld for taxes on awards | (1,592) | (1,592) | |||
Shares withheld for taxes on awards, Shares | (28,773) | ||||
Stock-based compensation | 1,973 | $ 1 | 1,972 | ||
Stock-based compensation, Shares | 80,362 | ||||
Ending Balance at Mar. 31, 2023 | $ 560,177 | $ 1,409 | $ 132,235 | $ 1,171,805 | $ (745,272) |
Ending Balance, Shares at Mar. 31, 2023 | 108,803,516 | 32,098,410 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
OPERATING ACTIVITIES | ||
Net income | $ 41,131 | $ 71,211 |
Adjustments to reconcile net income to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 11,915 | 10,473 |
Stock-based compensation | 1,972 | 2,226 |
Other non-cash adjustments | 121 | 77 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (204,014) | (49,825) |
Inventories | 13,571 | (14,423) |
Prepaid expenses and other assets | 291 | 1,560 |
Accounts payable | 2,975 | 36,605 |
Accrued expenses and other liabilities | 3,361 | (6,149) |
Income taxes receivable/payable | 13,206 | 22,124 |
Net cash (used in) provided by operating activities | (115,471) | 73,879 |
INVESTING ACTIVITIES | ||
Expenditures for property, plant and equipment | (39,192) | (22,288) |
Net cash used in investing activities | (39,192) | (22,288) |
FINANCING ACTIVITIES | ||
Borrowings under line of credit | 200,500 | |
Principal payments under line of credit | (53,000) | |
Repurchases of common stock | (1,592) | (77,929) |
Proceeds from employee stock purchase and option plans | 316 | 523 |
Financing costs | 30 | (50) |
Net cash provided by (used in) financing activities | 146,254 | (77,456) |
Net decrease in cash and cash equivalents | (8,409) | (25,865) |
Cash and cash equivalents, beginning of period | 12,325 | 141,053 |
Cash and cash equivalents, end of period | 3,916 | 115,188 |
Supplemental Disclosure: | ||
Cash paid for interest, net of capitalized interest | 1,817 | |
Cash paid for income taxes, net | 733 | 1,604 |
Capital expenditures in accounts payable | $ 229 | $ 239 |
Business and Organization
Business and Organization | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | 1. BUSINESS AND ORGANIZATION Trex Company, Inc. (Trex, Company), a Delaware corporation, was incorporated on September 4, 1998. As of December 30, 2022, the Company operates in one reportable segment, Trex Residential Products (Trex Residential). Through December 30, 2022, Trex had one wholly-owned subsidiary, Trex Commercial Products, Inc. (Trex Commercial) and operated in two reportable segments, Trex Residential and 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, 2023 | |
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, 2023, are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2023. 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, interest rates, the impact of any supply chain disruptions, economic conditions, and/or any adverse effects from global health pandemics and geopolitical conflicts. Towards the end of June 2022, the Company experienced a reduction in demand from its distribution partners, which the Company believed was primarily spurred by concerns over a potential easing in consumer demand due to rising interest rates, declining consumer sentiment and expectations of a general slowing in the economy. As a result, beginning in the third quarter of 2022 the Company’s channel partners met demand partially through inventory drawdown rather than reordering products and maintaining current inventories. This inventory recalibration was completed by year end. These unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements as of December 31, 2022, and December 31, 2021, and for each of the three years in the period ended December 31, 2022, included in the Annual Report of Trex Company, Inc. on Form 10-K, |
Sale of Trex Commercial Product
Sale of Trex Commercial Products, Inc. | 3 Months Ended |
Mar. 31, 2023 | |
Trex Commercial Products Inc [Member] | |
Subsidiary or Equity Method Investee [Line Items] | |
Sale of Trex Commercial Products, Inc. | 3. SALE OF TREX COMMERCIAL PRODUCTS, INC. On December 30, 2022, the Company completed the sale of substantially all of the assets of its wholly-owned subsidiary and reportable segment, Trex Commercial. The divestiture reflected the Company’s decision to focus on driving the most profitable growth strategy for the Company and its shareholders through the execution of its outdoor living strategy. With the sale complete, the Company will dedicate its resources to accelerating conversion to composites from wood and further strengthen its leadership position in the outdoor living category. The divestiture did not represent a strategic shift with a major effect on the Company’s operations. The results of operations of Trex Commercial are consolidated in the Company’s results of operations for the three months ended March 31, 2022. |
Recently Adopted Accounting Sta
Recently Adopted Accounting Standards | 3 Months Ended |
Mar. 31, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Recently Adopted Accounting Standards | 4. RECENTLY ADOPTED ACCOUNTING STANDARDS In December 2022, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2022-06 No. 2020-04 No. 2020-04 |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories | 5. INVENTORIES Inventories valued at LIFO (last-in, first-out), March 31, December 31, Finished goods $ 98,573 $ 107,114 Raw materials 64,262 69,292 Total FIFO (first-in, first-out) 162,835 176,406 Reserve to adjust inventories to LIFO value (35,051 ) (35,051 ) Total LIFO inventories $ 127,784 $ 141,355 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 In the three months ended March 31, 2023, the Company had a reduction in inventory that it does not expect will be replenished by year end. However, the Company estimates that the LIFO liquidation will not have a material impact on cost of sales for the year ended December 31, 2023 and, accordingly, it did not impact the cost of sales for the three months ended March 31, 2023. |
Prepaid Expenses and Other Asse
Prepaid Expenses and Other Assets | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 December 31, Prepaid expenses $ 10,738 $ 10,787 Income tax receivable 14,635 23,979 Other 339 339 Total prepaid expenses and other assets $ 25,712 $ 35,105 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, Net | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets, Net | 7. GOODWILL AND OTHER INTANGIBLE ASSETS, NET The carrying amount of goodwill at March 31, 2023, and December 31, 2022, was $14.2 million for Trex Residential. The Company’s intangible assets, purchased in 2018, consist of domain names for Trex Residential. At March 31, 2023, and December 31, 2022, intangible assets were $6.3 million and accumulated amortization was $2.0 million and $1.9 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, 2023, and March 31, 2022, was $0.1 million and $0.1 million, respectively. |
Accrued Expenses and Other Liab
Accrued Expenses and Other Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 December 31, Sales and marketing $ 18,300 $ 19,194 Compensation and benefits 10,413 8,646 Operating lease liabilities 7,731 7,488 Manufacturing costs 3,084 3,425 Income taxes 3,863 — Other 7,138 5,311 Total accrued expenses and other liabilities $ 50,529 $ 44,064 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | 9. DEBT Revolving Credit Facility Indebtedness prior to May 18, 2022 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) remained unchanged from the Original Credit Agreement. The Company’s revolving credit facility executed November 5, 2019, was completely replaced by the Company’s revolving credit facility executed May 18, 2022. Indebtedness on and after May 18, 2022 and prior to December 22, 2022 Under the Credit Agreement, the Lenders agreed to provide the Company with one or more Revolving Loans in a collective maximum principal amount of $400,000,000 (Loan Limit) throughout the term, which ends May 18, 2027 (Term). Included within the Loan Limit are sublimits for a Letter of Credit facility in an amount not to exceed $60,000,000; and Swing Line Loans in an aggregate principal amount at any time outstanding not to exceed $20,000,000. The Revolving Loans, the Letter of Credit facility and the Swing Line Loans are for the purpose of raising working capital and supporting general business operations. The Credit Agreement provides the Company, in the aggregate, the ability to borrow an amount up to the Loan Limit during the Term. The Company is not obligated to borrow any amount under the Loan Limit. Within the Loan Limit, the Company may borrow, repay and reborrow at any time or from time to time while the Notes are in effect. Base Rate Loans (as defined in the Credit Agreement) under the Revolving Loans and the Swing Line Loans accrue interest at the Base Rate plus the Applicable Rate (as defined in the Credit Agreement) and Term SOFR Loans for the Revolving Loans accrue interest at the rate per annum equal to the sum of Term SOFR for such interest period plus the Applicable Rate (as defined in the Credit Agreement). The Base Rate for any day is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by BOA as its prime rate, and (c) the Term SOFR plus 1.0% subject to certain interest rate floors. Repayment of all then outstanding principal, interest, fees and costs is due at the end of the Term. The Company and BofA Securities as a sustainability coordinator, are entitled to establish specified key performance indicators (KPIs) with respect to certain environmental, social and governance targets of the Company and its subsidiaries. The sustainability coordinator and the Company may amend the Credit Agreement for the purpose of incorporating the KPIs and other related provisions, unless the Lenders object to such amendment on or prior to the date that is ten business days Under the terms of the Security and Pledge Agreement, the Company and Trex Commercial, subject to certain permitted encumbrances, as collateral security for the above-stated loans and all other present and future indebtedness of the Company owing to the Lenders grants to BOA, as Administrative Agent for the Lenders, a continuing security interest in certain collateral described and defined in the Security and Pledge Agreement but excluding the Excluded Property (as defined in the Security and Pledge Agreement). Indebtedness On and After December 22, 2022 Under the First Amendment, the Lenders agreed to provide the Company with a Revolving B Loan consisting of one or more revolving loans in a collective maximum principal amount of $150,000,000 (Revolving B Loan Limit) throughout the term, which ends December 22, 2024 (Revolving B Loan Term). Previously, under the Credit Agreement, there was no Revolving B Loan. The First Amendment also provided that TD would serve as Syndication Agent. As of December 22, 2022, the Credit Agreement was amended and restated to refer to this loan as the Revolving A Loan. The amended and restated Credit Agreement was made an Exhibit A to the First Amendment. All of the terms of the Credit Agreement apply to the Revolving B Loan. The Credit Agreement continues to include sublimits under the Revolving A Loan for a Letter of Credit facility in an amount not to exceed $60,000,000; and Swing Line Loans in an aggregate principal amount at any time outstanding not to exceed $20,000,000. The Revolving Loans, the Letter of Credit facility and the Swing Line Loans under Revolving A Loan are for the purpose of raising working capital and supporting general business operations. The Notes provide the Company, in the aggregate, the ability to borrow an amount up to the Revolving A Loan Limit during the Revolving A Loan Term and Revolving B Loan Limit during the Revolving B Loan Term. The Company is not obligated to borrow any amount under the revolving loans. Within the respective loan limit, the Company may borrow, repay and reborrow at any time or from time to time while the Notes are in effect. With respect to Revolving B Loans, for any day, the rate per annum is a tiered pricing based upon the Consolidated Debt to Consolidated EBITDA Ratio. The applicable rate for Revolving B Loans that are Base Rate Loans range between 1.20% and 2.15% and the applicable rate for Revolving B Loans that are Term SOFR/Term SOFR Daily Floating Rate range between 0.20% and 1.15%. The Company had $369.5 million in borrowings outstanding under its revolving credit facility and available borrowing capacity of $180.5 million at March 31, 2023. The weighted average interest rate on the revolving credit facility was 5.64% as of March 31, 2023. Compliance with Debt Covenants and Restrictions Pursuant to the terms of the Credit Agreement, the Company is subject to certain loan compliance covenants. The Company was in compliance with all covenants as of March 31, 2023. 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, 2023 | |
Leases [Abstract] | |
Leases | 10. LEASES The Company leases office space, storage warehouses, training and manufacturing facilities, and certain plant equipment under various operating leases. The Company’s operating leases have remaining lease terms of 1 year to 7 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, 2023, and March 31, 2022, total operating lease expense was $2.1 million and $2.1 million, respectively. The weighted average remaining lease term at March 31, 2023 and December 31, 2022 was 5.0 years and 5.2 years, respectively. The weighted average discount rate at March 31, 2023 and December 31, 2022 was 2.25% and 2.10%, respectively. The following table includes supplemental cash flow information for the three months ended March 31, 2023, and March 31, 2022, and supplemental balance sheet information at March 31, 2023 and December 31, 2022 related to operating leases (in thousands): Three Months Ended March 31, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,120 $ 2,174 Operating ROU assets obtained in exchange for lease liabilities $ 1,541 $ 6,053 Supplemental balance sheet information March 31, 2023 December 31, Operating lease ROU assets $ 30,654 $ 30,991 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,731 $ 7,488 Operating lease liabilities 23,318 23,974 Total operating lease liabilities $ 31,049 $ 31,462 The following table summarizes maturities of operating lease liabilities at March 31, 2023 (in thousands): Maturities of operating lease liabilities 2023 $ 5,960 2024 7,290 2025 5,456 2026 4,755 2027 4,400 Thereafter 4,844 Total lease payments 32,705 Less imputed interest (1,656 ) Total operating lease liabilities $ 31,049 |
Financial Instruments
Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 and December 31, 2022. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 Numerator: Net income available to common shareholders $ 41,131 $ 71,211 Denominator: Basic weighted average shares outstanding 108,771,958 114,638,424 Effect of dilutive securities: Stock appreciation rights and options 70,004 124,327 Restricted stock 74,299 91,130 Diluted weighted average shares outstanding 108,916,261 114,853,881 Basic earnings per share $ 0.38 $ 0.62 Diluted earnings per share $ 0.38 $ 0.62 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 2023 2022 Stock appreciation rights 108,749 31,006 Restricted stock 107,571 52,278 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). During the three months ended March 31, 2023, Trex did no |
Revenue From Contracts With Cus
Revenue From Contracts With Customers | 3 Months Ended |
Mar. 31, 2023 | |
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 On December 30, 2022, the Company completed the sale of its wholly-owned subsidiary and reportable segment, Trex Commercial. Prior to December 30, 2022, Trex Commercial generated revenue from the manufacture and sale of its modular and architectural railing and staging systems. All of its revenues were from fixed-price contracts with customers. Trex Commercial contracts had a single performance obligation as the promise to transfer the individual goods or services were not separately identifiable from other promises in the contract and was, therefore, not distinct. For the three months ended March 31, 2023, and March 31, 2022, 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, 2023 Trex Timing of Revenue and Type of Contract Products transferred at a point in time and variable consideration contracts $ 238,718 $ 238,718 Three Months Ended March 31, 2022 Reportable Segment Trex Trex Consolidated 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 |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | 14. STOCK-BASED COMPENSATION At the annual meeting of stockholders of the Company held on May 4, 2023, the Company’s stockholders approved the Trex Company, Inc. 2023 Stock Incentive Plan (Plan). The Company’s board of directors unanimously approved the Plan on April 10, 2023, subject to stockholder approval. The Plan amends and restates in its entirety the Trex Company, Inc. 2014 Stock Incentive Plan (2014 Plan), which was last approved by the Company’s stockholders at the annual meeting held on April 30, 2014. The Plan, which will be administered by the compensation committee of the board of directors, provides for the grant of stock options, restricted stock, restricted stock units, stock appreciation rights and unrestricted stock, which are referred to collectively as “awards.” Awards may be granted under the Plan to officers, directors (including non-employee The following table summarizes the Company’s stock-based compensation grants for the three months ended March 31, 2023: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 76,698 $ 56.75 Performance-based restricted stock units (a) 96,013 $ 56.79 Stock appreciation rights 51,916 $ 56.80 (a) Includes 11,059 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2023, and adjustments of 1,413, and 9,646 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2021, and 2020, 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, 2023, and March 31, 2022, the data and assumptions shown in the following table were used: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Weighted-average fair value of grants $ 27.19 $ 33.90 Dividend yield 0 % 0 % Average risk-free interest rate 4.0 % 1.9 % Expected term (years) 5 5 Expected volatility 49.5 % 44.9 % 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 2023 2022 Stock appreciation rights $ 215 $ 154 Time-based restricted stock and restricted stock units 935 847 Performance-based restricted stock and restricted stock units 724 1,158 Employee stock purchase plan 98 67 Total stock-based compensation $ 1,972 $ 2,226 Total unrecognized compensation cost related to unvested awards as of March 31, 2023, was $18.6 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, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | 15. INCOME TAXES The Company’s effective tax rate for the three months ended March 31, 2023, was 25.2% and was comparable to the effective tax rate for the three months ended March 31, 2022, of 25.0%, which resulted in income tax expense of $13.8 million and $23.7 million, respectively. During the three months ended March 31, 2023 and March 31, 2022, the Company realized $0.2 million and $0.1 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, 2023, 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 March 31, 2023, for certain tax jurisdictions tax years 2019 through 2022 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, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | 16. SEGMENT INFORMATION Through December 30, 2022, the Company operated in two reportable segments. On December 30, 2022, the Company completed the sale of its wholly-owned subsidiary and reportable segment, Trex Commercial. Subsequent to the sale of Trex Commercial, the Company operates in one reportable segment, Trex Residential: • Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex ® • Trex Commercial designed, engineered, and marketed modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products were marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market. The Company’s reportable segments are determined in accordance with its internal management structure, which, through December 30, 2022, was based on residential and commercial sales activities and, subsequent to December 30, 2022, is based on its residential 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, 2023 Segment Data: Three Months March 31, 2023 Three Months Ended March 31, 2022 Trex Residential Trex Trex Consolidated Net sales $ 238,718 $ 327,194 $ 12,034 $ 339,228 Net Income (loss) $ 41,131 $ 72,215 $ (1,004 ) $ 71,211 EBITDA $ 68,862 $ 106,483 $ (1,058 ) $ 105,425 Depreciation and amortization $ 11,914 $ 10,191 $ 282 $ 10,473 Income tax expense (benefit) $ 13,832 $ 24,063 $ (336 ) $ 23,727 Capital expenditures $ 39,192 $ 22,283 $ 5 $ 22 288 Total assets $ 1,133,121 $ 929,737 $ 42,659 $ 972,396 Reconciliation of Net Income to EBITDA: Three Months March 31, 2023 Three Months Ended March 31, 2022 Trex Residential Trex Trex Consolidated Net Income (loss) $ 41,131 $ 72,215 $ (1,004 ) $ 71,211 Interest expense, net 1,985 14 — 14 Income tax expense (benefit) 13,832 24,063 (336 ) 23,727 Depreciation and amortization 11,914 10,191 282 10,473 EBITDA $ 68,862 $ 106,483 $ (1,058 ) $ 105,425 |
Seasonality
Seasonality | 3 Months Ended |
Mar. 31, 2023 | |
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. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 18. COMMITMENTS AND CONTINGENCIES Product Warranty The Company warrants that for the applicable warranty period its Trex Residential products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and its decking, cladding, fascia and railing products will not split, splinter, rot or suffer structural damage from termites or fungal decay. Products sold on or after January 1, 2023: The warranty period for residential use is 50 years for Transcend ® ® ® ® Products sold prior to January 1, 2023: The warranty period is 25 years for residential use and 10 years for commercial use. With respect to Trex Signature railing, the warranty period is 25 years for both residential and commercial use. The Company further warrants that Trex Transcend, Trex Enhance, Trex Select and Universal Fascia products will not fade in color more than a certain amount and will be resistant to permanent staining from food substances or mold, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, the company has an obligation either to replace the defective product or refund the purchase price. Trex Residential continues to receive and settle claims for decking products manufactured at its Nevada facility prior to 2007 that exhibit surface flaking and maintains a warranty reserve to provide for the settlement of these claims. Estimating the warranty reserve for surface flaking claims requires management to estimate (1) the number of claims to be settled with payment and (2) the average cost to settle each claim. To estimate the number of claims to be settled with payment, the Company utilizes actuarial techniques to determine a reasonable possible range of claims to be received and the percentage of those claims that will ultimately require payment (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 to determine its best estimate of future claims for which to record a related liability. 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, 2023 was lower than the number of claims received in the three months ended March 31, 2022, and lower than the Company’s expectations for 2023. Average cost per claim experienced in the three months ended March 31, 2023 was significantly lower than that experienced in the three months ended March 31, 2022, which was elevated due to the closure of three large claims, and lower than the Company’s expectations for 2023. The Company believes the reserve at March 31, 2023 is sufficient to cover future surface flaking obligations. The Company’s analysis is based on currently known facts and a number of assumptions, as discussed above, and current expectations. Projecting future events such as the number of claims to be received, the number of claims that will require payment and the average cost of claims could cause the actual warranty liabilities to be higher or lower than those projected, which could materially affect the Company’s financial condition, results of operations or cash flows. The Company estimates that the annual number of claims received will continue to decline over time and that the average cost per claim will increase slightly, primarily due to inflation. If the level of claims received or average cost per claim differs materially from expectations, it could result in additional increases or decreases to the warranty reserve and a decrease or increase in earnings and cash flows in future periods. The Company estimates that a 10% change in the expected number of remaining claims to be settled with payment or the expected cost to settle claims may result in approximately a $1.6 million change in the surface flaking warranty reserve. The Company also maintains a warranty reserve for the settlement of other residential product warranty claims and records the provision at the time of product sale. The following is a reconciliation of the Company’s residential product warranty reserve (in thousands): Three Months Ended March 31, 2023 Surface Other Total Beginning balance, January 1 $ 15,905 $ 9,694 $ 25,599 Provisions and changes in estimates — 1,945 1,945 Settlements made during the period (316 ) (551 ) (867 ) Ending balance, March 31 $ 15,589 $ 11,088 $ 26,677 Three Months Ended March 31, 2022 Surface Other 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 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. Arkansas Facility In October 2021, the Company announced plans to add a third U.S.-based Trex Residential manufacturing facility located in Little Rock, Arkansas, that will sit on approximately 300 acres of land. The development approach for the new campus will be modular and calibrated to demand trends for Trex Residential outdoor living products. Construction began on the new facility in the second quarter of 2022, and in July 2022, the Company entered into a design-build agreement. As previously announced, the Company anticipates spending approximately $400 million on the facility and the budget for the design-build agreement is contained within this amount. Construction for the new facility will be funded primarily through the Company’s ongoing cash generation or its line of credit. |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Summary of Inventories | Inventories valued at LIFO (last-in, first-out), March 31, December 31, Finished goods $ 98,573 $ 107,114 Raw materials 64,262 69,292 Total FIFO (first-in, first-out) 162,835 176,406 Reserve to adjust inventories to LIFO value (35,051 ) (35,051 ) Total LIFO inventories $ 127,784 $ 141,355 |
Prepaid Expenses and Other As_2
Prepaid Expenses and Other Assets (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Text Block [Abstract] | |
Summary of Prepaid Expenses and Other Assets | Prepaid expenses and other assets consist of the following (in thousands): March 31, 2023 December 31, Prepaid expenses $ 10,738 $ 10,787 Income tax receivable 14,635 23,979 Other 339 339 Total prepaid expenses and other assets $ 25,712 $ 35,105 |
Accrued Expenses and Other Li_2
Accrued Expenses and Other Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Payables and Accruals [Abstract] | |
Summary of Accrued Expenses and Other Liabilities | Accrued expenses and other liabilities consist of the following (in thousands): March 31, 2023 December 31, Sales and marketing $ 18,300 $ 19,194 Compensation and benefits 10,413 8,646 Operating lease liabilities 7,731 7,488 Manufacturing costs 3,084 3,425 Income taxes 3,863 — Other 7,138 5,311 Total accrued expenses and other liabilities $ 50,529 $ 44,064 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023, and March 31, 2022, and supplemental balance sheet information at March 31, 2023 and December 31, 2022 related to operating leases (in thousands): Three Months Ended March 31, Supplemental cash flow information 2023 2022 Cash paid for amounts included in the measurement of operating lease liabilities $ 2,120 $ 2,174 Operating ROU assets obtained in exchange for lease liabilities $ 1,541 $ 6,053 Supplemental balance sheet information March 31, 2023 December 31, Operating lease ROU assets $ 30,654 $ 30,991 Operating lease liabilities: Accrued expenses and other current liabilities $ 7,731 $ 7,488 Operating lease liabilities 23,318 23,974 Total operating lease liabilities $ 31,049 $ 31,462 |
Maturities of operating lease liabilities | The following table summarizes maturities of operating lease liabilities at March 31, 2023 (in thousands): Maturities of operating lease liabilities 2023 $ 5,960 2024 7,290 2025 5,456 2026 4,755 2027 4,400 Thereafter 4,844 Total lease payments 32,705 Less imputed interest (1,656 ) Total operating lease liabilities $ 31,049 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 2022 Numerator: Net income available to common shareholders $ 41,131 $ 71,211 Denominator: Basic weighted average shares outstanding 108,771,958 114,638,424 Effect of dilutive securities: Stock appreciation rights and options 70,004 124,327 Restricted stock 74,299 91,130 Diluted weighted average shares outstanding 108,916,261 114,853,881 Basic earnings per share $ 0.38 $ 0.62 Diluted earnings per share $ 0.38 $ 0.62 |
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 2023 2022 Stock appreciation rights 108,749 31,006 Restricted stock 107,571 52,278 |
Revenue From Contracts With C_2
Revenue From Contracts With Customers (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 Trex Timing of Revenue and Type of Contract Products transferred at a point in time and variable consideration contracts $ 238,718 $ 238,718 Three Months Ended March 31, 2022 Reportable Segment Trex Trex Consolidated 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 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Summary of Stock-Based Compensation Expense | The following table summarizes the Company’s stock-based compensation expense (in thousands): Three Months Ended 2023 2022 Stock appreciation rights $ 215 $ 154 Time-based restricted stock and restricted stock units 935 847 Performance-based restricted stock and restricted stock units 724 1,158 Employee stock purchase plan 98 67 Total stock-based compensation $ 1,972 $ 2,226 |
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 three months ended March 31, 2023, and March 31, 2022, the data and assumptions shown in the following table were used: Three Months Ended March 31, 2023 Three Months Ended March 31, 2022 Weighted-average fair value of grants $ 27.19 $ 33.90 Dividend yield 0 % 0 % Average risk-free interest rate 4.0 % 1.9 % Expected term (years) 5 5 Expected volatility 49.5 % 44.9 % |
Summary of Stock-Based Compensation Grants | The following table summarizes the Company’s stock-based compensation grants for the three months ended March 31, 2023: Stock Awards Granted Weighted-Average Per Share Time-based restricted stock units 76,698 $ 56.75 Performance-based restricted stock units (a) 96,013 $ 56.79 Stock appreciation rights 51,916 $ 56.80 (a) Includes 11,059 of target performance-based restricted stock unit awards granted during the three months ended March 31, 2023, and adjustments of 1,413, and 9,646 to grants due to the actual performance level achieved for restricted stock and restricted stock units awarded in 2021, and 2020, respectively. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Details of Segment Information | Segment Data: Three Months March 31, 2023 Three Months Ended March 31, 2022 Trex Residential Trex Trex Consolidated Net sales $ 238,718 $ 327,194 $ 12,034 $ 339,228 Net Income (loss) $ 41,131 $ 72,215 $ (1,004 ) $ 71,211 EBITDA $ 68,862 $ 106,483 $ (1,058 ) $ 105,425 Depreciation and amortization $ 11,914 $ 10,191 $ 282 $ 10,473 Income tax expense (benefit) $ 13,832 $ 24,063 $ (336 ) $ 23,727 Capital expenditures $ 39,192 $ 22,283 $ 5 $ 22 288 Total assets $ 1,133,121 $ 929,737 $ 42,659 $ 972,396 |
Schedule of Reconciliation of Net Income to EBITDA | Reconciliation of Net Income to EBITDA: Three Months March 31, 2023 Three Months Ended March 31, 2022 Trex Residential Trex Trex Consolidated Net Income (loss) $ 41,131 $ 72,215 $ (1,004 ) $ 71,211 Interest expense, net 1,985 14 — 14 Income tax expense (benefit) 13,832 24,063 (336 ) 23,727 Depreciation and amortization 11,914 10,191 282 10,473 EBITDA $ 68,862 $ 106,483 $ (1,058 ) $ 105,425 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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, 2023 Surface Other Total Beginning balance, January 1 $ 15,905 $ 9,694 $ 25,599 Provisions and changes in estimates — 1,945 1,945 Settlements made during the period (316 ) (551 ) (867 ) Ending balance, March 31 $ 15,589 $ 11,088 $ 26,677 Three Months Ended March 31, 2022 Surface Other 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 |
Business and Organization - Add
Business and Organization - Additional Information (Detail) - Segment | 3 Months Ended | |
Dec. 30, 2022 | Mar. 31, 2023 | |
Accounting Policies [Abstract] | ||
Number of reportable segments | 2 | 1 |
Inventories - Summary of Invent
Inventories - Summary of Inventories (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Finished goods | $ 98,573 | $ 107,114 |
Raw materials | 64,262 | 69,292 |
Total FIFO (first-in, first-out) inventories | 162,835 | 176,406 |
Reserve to adjust inventories to LIFO value | (35,051) | (35,051) |
Total LIFO inventories | $ 127,784 | $ 141,355 |
Prepaid Expenses and Other As_3
Prepaid Expenses and Other Assets - Summary of Prepaid Expenses and Other Assets (Detail) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid expenses | $ 10,738 | $ 10,787 |
Income tax receivable | 14,635 | 23,979 |
Other | 339 | 339 |
Total prepaid expenses and other assets | $ 25,712 | $ 35,105 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, Net - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Goodwill [Line Items] | |||
Amortization of intangible asset | $ 0.1 | $ 0.1 | |
Intangible Assets | 6.3 | $ 6.3 | |
Accumulated Amortization | 2 | 1.9 | |
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, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Sales and marketing | $ 18,300 | $ 19,194 |
Compensation and benefits | 10,413 | 8,646 |
Operating lease liabilities | 7,731 | 7,488 |
Manufacturing costs | 3,084 | 3,425 |
Income taxes | 3,863 | 0 |
Other | 7,138 | 5,311 |
Total accrued expenses and other liabilities | $ 50,529 | $ 44,064 |
Debt - Additional Information (
Debt - Additional Information (Detail) - USD ($) | 3 Months Ended | |||||
Mar. 31, 2023 | Dec. 31, 2022 | Dec. 22, 2022 | May 26, 2022 | May 18, 2022 | May 26, 2020 | |
Line of Credit Facility [Line Items] | ||||||
Remaining available borrowing capacity | $ 180,500,000 | |||||
Termination date of the Credit Agreement | Nov. 05, 2024 | |||||
Outstanding borrowing capacity | $ 369,500,000 | $ 222,000,000 | ||||
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] | ||||||
Revolving loans in a collective maximum principal amount | $ 100,000,000 | $ 100,000,000 | ||||
Debt, Weighted Average Interest Rate | 5.64% | |||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving loans in a collective maximum principal amount | $ 400,000,000 | |||||
Termination date of the Credit Agreement | May 18, 2027 | |||||
Number Of Business Days Within Which Lender May Raise Objections To Amendment | 10 days | |||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | Letter of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving loans in a collective maximum principal amount | 60,000,000 | |||||
Revolving Credit Facility [Member] | Fifth Amendment And Restated Agreement [Member] | Swingline Letter Of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving loans in a collective maximum principal amount | $ 20,000,000 | |||||
Revolving Credit Facility [Member] | Base Rate [Member] | Fifth Amendment And Restated Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 0.50% | |||||
Debt instrument, description of variable rate basis | the Federal Funds Rate plus 0.50% | |||||
Revolving Credit Facility [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Fifth Amendment And Restated Agreement [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 1% | |||||
Debt instrument, description of variable rate basis | the Term SOFR plus 1.0% | |||||
Revolving B Loan [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Long-Term Line of Credit | $ 150,000,000 | |||||
Revolving B Loan [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, Interest rate, Stated percentage | 2.15% | |||||
Revolving B Loan [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Debt instrument, Interest rate, Stated percentage | 1.20% | |||||
Revolving B Loan [Member] | Fifth Amendment And Restated Agreement [Member] | Letter of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving loans in a collective maximum principal amount | $ 60,000,000 | |||||
Revolving B Loan [Member] | Fifth Amendment And Restated Agreement [Member] | Swingline Letter Of Credit [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Revolving loans in a collective maximum principal amount | $ 20,000,000 | |||||
Revolving B Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Maximum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 1.15% | |||||
Revolving B Loan [Member] | Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate [Member] | Minimum [Member] | ||||||
Line of Credit Facility [Line Items] | ||||||
Interest rate | 0.20% |
Leases - Additional Information
Leases - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Weighted average discount rate | 2.25% | 2.10% | |
Operating lease cost | $ 2.1 | $ 2.1 | |
Weighted average remaining lease term | 5 years | 5 years 2 months 12 days | |
Minimum [Member] | |||
Operating Lease terms | 1 year | ||
Maximum [Member] | |||
Operating Lease terms | 7 years |
Leases - Supplemental Cash flow
Leases - Supplemental Cash flow Information to operating leases (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Supplemental cash flow information | |||
Cash paid for amounts included in the measurement of operating lease liabilities | $ 2,120 | $ 2,174 | |
Operating ROU assets obtained in exchange for lease liabilities | 1,541 | $ 6,053 | |
Supplemental balance sheet information | |||
Operating lease ROU assets | 30,654 | $ 30,991 | |
Operating lease liabilities: | |||
Accrued expenses and other current liabilities | 7,731 | 7,488 | |
Operating lease liabilities | 23,318 | 23,974 | |
Total operating lease liabilities | $ 31,049 | $ 31,462 |
Leases - Maturities of Operatin
Leases - Maturities of Operating Lease Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Operating Lease Liabilities, Payments Due [Abstract] | ||
2023 | $ 5,960 | |
2024 | 7,290 | |
2025 | 5,456 | |
2026 | 4,755 | |
2027 | 4,400 | |
Thereafter | 4,844 | |
Total lease payments | 32,705 | |
Less imputed interest | (1,656) | |
Total operating lease liabilities | $ 31,049 | $ 31,462 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) - Stock Repurchase Programs [Member] - shares | May 04, 2023 | Mar. 31, 2023 |
Equity, Class of Treasury Stock [Line Items] | ||
Common stock repurchase program, authorized shares | 11,600,000 | |
Subsequent Event [Member] | ||
Equity, Class of Treasury Stock [Line Items] | ||
Number of shares repurchased by the Company | 10,800,000 |
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, 2023 | Mar. 31, 2022 | |
Numerator: | ||
Net income available to common shareholders | $ 41,131 | $ 71,211 |
Denominator: | ||
Basic weighted average shares outstanding | 108,771,958 | 114,638,424 |
Effect of dilutive securities: | ||
Diluted weighted average shares outstanding | 108,916,261 | 114,853,881 |
Basic earnings per share | $ 0.38 | $ 0.62 |
Diluted earnings per share | $ 0.38 | $ 0.62 |
Stock appreciation rights [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 70,004 | 124,327 |
Restricted stock [Member] | ||
Effect of dilutive securities: | ||
Dilutive securities | 74,299 | 91,130 |
Stockholders' Equity - Antidilu
Stockholders' Equity - Antidilutive Securities Excluded from Computation of Earnings Per Share (Detail) - shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
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 | 107,571 | 52,278 |
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 | 108,749 | 31,006 |
Revenue From Contracts With C_3
Revenue From Contracts With Customers - Summary of Disaggregated Net Sales (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 238,718 | $ 339,228 |
Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 327,194 | |
Products Transferred Over Time and Fixed Price Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 12,034 | |
Residential [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 238,718 | 327,194 |
Residential [Member] | Products Transferred at a Point in Time and Variable Consideration Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 238,718 | 327,194 |
Commercial [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 12,034 | |
Commercial [Member] | Products Transferred Over Time and Fixed Price Contracts [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 12,034 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Dec. 31, 2021 | Dec. 31, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation cost related to unvested awards | $ 18.6 | ||
2014 Stock Incentive Plan [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of common stock available for future issuance | 4,000,000 | ||
Performance-Based Restricted Stock and Performance-Based Restricted Stock Units [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares or rights issued | 11,059 | ||
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 | ||
Number of shares or rights issued | 51,916 | ||
Performance Based Restricted Stock Adjustment [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares or rights issued | 1,413 | 9,646 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Stock-Based Compensation Expenses (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 1,972 | $ 2,226 |
Stock Appreciation Rights [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 215 | 154 |
Time-Based Restricted Stock and Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 935 | 847 |
Performance-Based Restricted Stock and Restricted Stock Units [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | 724 | 1,158 |
Employee Stock Purchase Plan [Member] | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation expense | $ 98 | $ 67 |
Stock-Based Compensation - Su_2
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, 2023 | Mar. 31, 2022 | |
Share Based Compensation Arrangement by Share Based Payment Award Fair Value Assumptions and Methodology [Line Items] | ||
Weighted-average fair value of grants | $ 27.19 | $ 33.9 |
Dividend yield | 0% | 0% |
Average risk-free interest rate | 4% | 1.90% |
Expected term (years) | 5 years | 5 years |
Expected volatility | 49.50% | 44.90% |
Stock-Based Compensation - Su_3
Stock-Based Compensation - Summary of Stock-Based Compensation Grants (Detail) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Time Based Restricted Stock Units [Member] | |
Stock Awards Granted | shares | 76,698 |
Weighted-Average Grant Price Per Share | $ / shares | $ 56.75 |
Performance Based Restricted Stock Units [Member] | |
Stock Awards Granted | shares | 96,013 |
Weighted-Average Grant Price Per Share | $ / shares | $ 56.79 |
Stock Appreciation Rights [Member] | |
Stock Awards Granted | shares | 51,916 |
Weighted-Average Grant Price Per Share | $ / shares | $ 56.8 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Tax Contingency [Line Items] | ||
Valuation allowance | $ 3,000 | |
Income tax expense (benefit) | $ 13,832 | $ 23,727 |
Effective tax rate | 25.20% | 25% |
Excess tax benefits from stock based awards | $ 200 | $ 100 |
Earliest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax years subject to examination | 2019 | |
Latest Tax Year [Member] | Federal Tax Jurisdiction [Member] | ||
Income Tax Contingency [Line Items] | ||
Tax years subject to examination | 2022 |
Segment Information - Additiona
Segment Information - Additional Information (Detail) - Segment | 3 Months Ended | |
Dec. 30, 2022 | Mar. 31, 2023 | |
Segment Reporting Information [Line Items] | ||
Number of reportable segment | 2 | 1 |
Segment Information - Details o
Segment Information - Details of Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net sales | $ 238,718 | $ 339,228 | |
Net Income (loss) | 41,131 | 71,211 | |
Depreciation and amortization | 11,915 | 10,473 | |
Income tax expense (benefit) | 13,832 | 23,727 | |
Total assets | 1,133,121 | $ 933,705 | |
Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 238,718 | 327,194 | |
Net Income (loss) | 72,215 | ||
EBITDA | 106,483 | ||
Depreciation and amortization | 10,191 | ||
Income tax expense (benefit) | 24,063 | ||
Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,034 | ||
Net Income (loss) | (1,004) | ||
EBITDA | (1,058) | ||
Depreciation and amortization | 282 | ||
Income tax expense (benefit) | (336) | ||
Operating Segments [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 339,228 | ||
Net Income (loss) | 71,211 | ||
EBITDA | 105,425 | ||
Depreciation and amortization | 10,473 | ||
Income tax expense (benefit) | 23,727 | ||
Capital expenditures | 22,288 | ||
Total assets | 972,396 | ||
Operating Segments [Member] | Residential [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 238,718 | 327,194 | |
Net Income (loss) | 41,131 | 72,215 | |
EBITDA | 68,862 | 106,483 | |
Depreciation and amortization | 11,914 | 10,191 | |
Income tax expense (benefit) | 13,832 | 24,063 | |
Capital expenditures | 39,192 | 22,283 | |
Total assets | $ 1,133,121 | 929,737 | |
Operating Segments [Member] | Commercial [Member] | |||
Segment Reporting Information [Line Items] | |||
Net sales | 12,034 | ||
Net Income (loss) | (1,004) | ||
EBITDA | (1,058) | ||
Depreciation and amortization | 282 | ||
Income tax expense (benefit) | (336) | ||
Capital expenditures | 5 | ||
Total assets | $ 42,659 |
Segment Information - Schedule
Segment Information - Schedule of Reconciliation of Net Income to EBITDA (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net Income (loss) | $ 41,131 | $ 71,211 |
Interest expense, net | (1,985) | (14) |
Income tax expense (benefit) | 13,832 | 23,727 |
Depreciation and amortization | 11,915 | 10,473 |
Residential [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Income (loss) | 72,215 | |
Interest expense, net | 14 | |
Income tax expense (benefit) | 24,063 | |
Depreciation and amortization | 10,191 | |
EBITDA | 106,483 | |
Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Income (loss) | (1,004) | |
Income tax expense (benefit) | (336) | |
Depreciation and amortization | 282 | |
EBITDA | (1,058) | |
Operating Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Income (loss) | 71,211 | |
Interest expense, net | 14 | |
Income tax expense (benefit) | 23,727 | |
Depreciation and amortization | 10,473 | |
EBITDA | 105,425 | |
Operating Segments [Member] | Residential [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Income (loss) | 41,131 | 72,215 |
Interest expense, net | 1,985 | |
Income tax expense (benefit) | 13,832 | 24,063 |
Depreciation and amortization | 11,914 | 10,191 |
EBITDA | $ 68,862 | 106,483 |
Operating Segments [Member] | Commercial [Member] | ||
Segment Reporting Information [Line Items] | ||
Net Income (loss) | (1,004) | |
Income tax expense (benefit) | (336) | |
Depreciation and amortization | 282 | |
EBITDA | $ (1,058) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 USD ($) | Oct. 26, 2021 USD ($) a | |
Schedule Of Commitments And Contingencies [Line Items] | ||
Change in warranty reserve for disclosure purposes only | $ 1.6 | |
Area of Land | a | 300 | |
Residential Portfolio Segment [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Land and Land Improvements | $ 400 | |
Surface Flaking Warranty Reserve [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Percentage change in warranty claims used as a threshold for disclosure | 10% | |
Residential Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 25 years | |
Commercial Use [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 10 years | |
Commercial Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 10 years | |
Signature Railing And Transcend Cladding [Member] | Commercial Use [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 25 years | |
Transcend Decking [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 50 years | |
Select Decking And Universal Fascia [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 35 years | |
Enhance Decking And Transcend, Select, Enhance And Signature Railing [Member] | Residential Use [Member] | Products Sold on or After January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 25 years | |
Signature Railing [Member] | Residential and Commercial Use [Member] | Products Sold Prior to January One, Two Thousand and Twenty Three [Member] | ||
Schedule Of Commitments And Contingencies [Line Items] | ||
Warranty period | 25 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, 2023 | Mar. 31, 2022 | |
Product Warranty Liability [Line Items] | ||
Beginning balance | $ 25,599 | $ 28,595 |
Provisions and changes in estimates | 1,945 | 1,090 |
Settlements made during the period | (867) | (1,273) |
Ending balance | 26,677 | 28,412 |
Surface Flaking [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 15,905 | 18,542 |
Settlements made during the period | (316) | (745) |
Ending balance | 15,589 | 17,797 |
Other Residential [Member] | ||
Product Warranty Liability [Line Items] | ||
Beginning balance | 9,694 | 10,053 |
Provisions and changes in estimates | 1,945 | 1,090 |
Settlements made during the period | (551) | (528) |
Ending balance | $ 11,088 | $ 10,615 |