What changed in this filing

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Item 1. Business

2025-02-24 compared with 2024-02-26 · 75 added, 72 removed, 237 unchanged (38% of the section changed)

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Today, Trex continues to reinvent and redefine outdoor living with a commitment to innovation and growth that has made Trex the world’s #1 brand of sustainably made wood-alternative decking and deck railing, along with a comprehensive portfolio of sustainable, high performance, low-maintenance outdoor living products including fencing, cladding, fasteners, and outdoor lighting.

Helping homeowner’s design outdoor spaces that reflect their individual styles and budgets, coupled with products at various price points makes Trex the leading brand for homeowners seeking to invest in their outdoor living spaces.

Helping homeowners design outdoor spaces that reflect their individual styles and budgets, coupled with Performance- Engineered products at various price points makes Trex the leading brand for homeowners seeking to invest in their outdoor living spaces.

Trex’s ability to leverage strong brand awareness and a product offering with the advantages of sustainability, low-maintenance, and durability to help fuel conversion from wood decking and railing to Trex positions our Company well within the large and expanding Outdoor Living market.

Key to Trex’s leadership and growth is the strength of the Trex brand.

Marketing investments focused on homeowners’ needs and wants drove brand awareness to its highest level in a decade, with 90% of people surveyed being aware of the Trex brand, while products for every price point help drive profitable growth and wood conversion.

Marketing investments focused on homeowners’ needs and wants continued to drive brand awareness to its highest level in a decade, with Trex consistently being the leading brand in both unaided and aided brand recognition, while products for every price point help drive profitable growth and wood conversion.

Brand strength coupled with an unparalleled distribution and pro-channel dealer network and a leading brand presence at major home improvement retailers ensures that homeowners can find Trex products wherever and whenever they choose.

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Operations and Products:

The Company operated in one reportable segment during the year ended December 31, 2023:

The Company operated in one reportable segment during the years ended December 31, 2024 and December 31, 2023:

Trex Residential.

The Company operated in two reportable segments during the years ended December 31, 2022, and December 31, 2021:

The Company operated in two reportable segments during the year ended December 31, 2022:

Trex Residential Products (Trex Residential), the Company’s principal business based on net sales, and Trex Commercial Products (Trex Commercial).

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See related information in Note 3 to the Consolidated Financial Statements to this Form 10-K.

Trex Residential is the world’s largest manufacturer of high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing, with more than 30 years of product experience.

Trex outdoor living products are marketed under the brand name Trex ® and manufactured in the United States.

Trex Residential is the world’s largest manufacturer of high-performance, low-maintenance, eco-friendly wood-alternative composite decking and railing and a leader in outdoor living products, with more than 30 years of product experience.

Trex products are marketed under the brand name Trex ® and manufactured in the United States.

Stocked in more than 6,700 retail locations worldwide, Trex Residential offers a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing, cladding and outdoor lighting categories.

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Our high-performance, low-maintenance, eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold, and scratching.

Trex Signature decking offers realistic woodgrain aesthetics that raises the bar for beauty, performance and sustainability and is available in two luxurious hues inspired by stunning natural settings.

Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in four luxurious, on-trend hues inspired by some of the most picturesque locales in the United States.

Our Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in eight multi-tonal monochromatic classical earth tones and premium tropical colors.

Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in five nature-inspired earth tone colors.

Trex Signature decking offers realistic woodgrain aesthetics that raise the bar for beauty, performance, and sustainability and is available in two luxurious hues inspired by stunning natural settings.

Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in seven luxurious, on-trend hues inspired by some of the most picturesque locales in the United States.

Our Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in six multi-tonal monochromatic classical earth tones and premium tropical colors.

Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in two nature-inspired earth tone colors.

Our Trex Enhance boards pair the beauty of authentic wood-grain appearance with the durability of composite with minimal maintenance and the affordability of wood and is available in natural and basic colors.

We also offer accessories to our decking products.

Trex Hideaway ® , a self-gapping universal hidden fastener designed to give a seamless finish to every project.

The Trex Hideaway ® Fastener Collection , offers solutions for every composite deck fastening and finishing need, featuring color-matched screws and plugs, specially engineered bits, depth setters, and clips, designed to make installation easier and more efficient while delivering a clean, cohesive aesthetic.

Trex DeckLighting , an outdoor lighting system, is a line of energy-efficient LED dimmable deck lighting designed to use 75% less energy compared to incandescent lighting.

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The line includes a post cap light, deck rail light, riser light, a soffit light, and a recessed deck light.

Pre-assembled stair panels that allow for easier installation and are designed to save time on the jobsite.

Our railing products are Trex Transcend Railing, Trex Select Railing, Trex Select T-Rail, and Trex Signature ® aluminum railing.

Our high-performance composite and aluminum deck railing kits and systems are sustainably manufactured, easy to install and durable.

Our railing products are Trex Signature ® X-Series Railing, Trex Signature ® aluminum railing, Trex Transcend Railing, Trex Select ® Railing, Trex Select ® T-Rail, and Trex Enhance Railing.

Our high-performance cable rail, frameless glass rail, composite, and aluminum-deck railing kits and systems are sustainably manufactured, easy to install, and durable.

Trex railing systems are built with the same durability as Trex decking and will not rot, warp, peel, or splinter and resist fading and corrosion.

Trex Transcend Railing, made from approximately 40 percent recycled content, is available in the colors of Trex Transcend decking and finishes that make it appropriate for use with Trex decking products as well as other decking materials, which we believe enhances the sales prospects of our railing products.

Trex Signature X-Series, made from approximately 30 percent recycled materials, is available in Charcoal Black with stainless steel or glass infill.

Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look.

Trex Transcend Railing, made from approximately 40 percent recycled content, is available in four colors that complement our Trex decking products.

Trex Select ® Railing, made from approximately 40 percent recycled content, is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck.

Trex Select ® T-Rail, made from a minimum of 40 percent recycled materials, is available in square composite balusters in Classic White for a cohesive, coordinated look, or round aluminum balusters in Charcoal Black for a more modern contrast.

Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look.

Trex Enhance railing is available in four composite colors, and an Enhance Steel line was recently introduced in Charcoal Black, to expand the Trex addressable market.

Our Trex Seclusions ® composite fencing product is offered through two specialty distributors.

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Trex Residential products offer a number of significant aesthetic advantages over wood while eliminating many of wood’s major functional disadvantages, which include warping, splitting, and other damage from moisture.

In addition to resisting fading and surface staining, Trex Residential products require no sanding, staining or sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation.

Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) facilitate installation, reduce contractor call-backs and afford

consumers a wide range of design options.

In addition to resisting fading and

surface staining, Trex Residential products require no sanding, staining, or sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation.

Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) facilitate installation, reduce contractor call-backs, and afford consumers a wide range of design options.

Combined, these aspects yield significant aesthetic advantages and lower maintenance than wood decking and railing and ultimately render Trex Residential products less costly than wood over the life of the deck.

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A line of outdoor furniture products manufactured and sold by PolyWood, Inc.

Trex ® RainEscape ® , Trex ® Protect ® , Trex ® RainEscape ® Soffit Light, and Trex ®

Seal ™ Ledger Flashing Tape

Trex ® RainEscape ® , Trex ® Protect, Trex ® RainEscape ® Soffit Light, and Trex ® Seal Ledger Flashing Tape

An above joist deck drainage system manufactured and sold by IBP, LLC.

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Trex ® Cornhole

Cornhole boards manufactured and sold by IPC Global Marketing LLC.

Trex ® Blade ™

Cornhole boards manufactured and sold by Johnson Enterprises, LLC.

under a Trademark License Agreements with Trex Company, Inc.

A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc.

Trex ® SpiralStairs

Trex ® Spiral Stairs

A staircase alternative for use with all deck substructures manufactured and sold by SS Industries dba Paragon Stairs.

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We believe that brand exposure through Home Depot and Lowe’s promotes consumer acceptance of our products.

In the years ended December 31, 2023, 2022, and 2021, sales to certain customers of Trex Residential accounted for 10% or more of the Company’s total net sales.

For the years ended December 31, 2024, 2023, and 2022, three customers of Trex Residential represented approximately 81%, 72%, and 64%, respectively, of the Company’s total net sales.

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We have continuously invested the capital necessary to expand our manufacturing throughput and improve our manufacturing processes.

In October 2021, we 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, we entered into a design-build agreement.

We anticipate spending approximately $450 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 our ongoing cash generation or our line of credit.

In October 2021, the Company announced plans to add a third manufacturing facility located in Little Rock, Arkansas (Little Rock).

that w ill sit on approximately 300 acres of land.

Construction began on the new facility in 2022.

The development approach for the new campus will be modular and calibrated to demand trends for Trex Outdoor Living Products.

In addition, we prioritize cost reduction projects and continuous improvement opportunities, primarily related to automation, modernization, energy efficiency, and raw material processing, and remain focused on innovation and new product development.

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We fulfill requirements for raw materials under both purchase orders and supply contracts.

In the year ended December 31, 2023, we purchased our reclaimed wood fiber requirements under purchase orders and long-term supply commitments not exceeding four years.

In the year ended December 31, 2024, we purchased our reclaimed wood fiber requirements under purchase orders and long-term supply commitments.

All of our polyethylene purchases are under short-term supply contracts that generally have a term of approximately one year for which pricing is negotiated as needed, or under purchase orders that do not involve long-term supply commitments.

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Our ability to compete depends, in part, on a number of factors outside our control, including the ability of our competitors to develop new wood-alternative decking and railing products that are competitive with our products.

We believe that the principal competitive factors in the decking and railing market include product quality, price, aesthetics, maintenance cost, and distribution and brand strength.

We believe that the principal competitive factors in the decking and railing market include product quality, price, aesthetics, maintenance cost, distribution and brand strength.

We believe we compete favorably with respect to these factors.

We believe that our products offer aesthetic and cost advantages over the life of a deck when compared to other types of decking and railing materials.

Although a contractor-installed deck built with Trex products using a pressure-treated wood substructure generally costs more than a deck made entirely from pressure-treated wood, Trex products are low maintenance compared to the on-going maintenance required for a pressure-treated deck and are, therefore, less costly over the life of the deck.

Although a contractor-installed deck built with Trex products using a pressure-treated wood substructure generally costs more than a deck made entirely from

pressure-treated wood, Trex products are low maintenance compared to the on-going maintenance required for a pressure-treated deck and are therefore, less costly over the life of the deck.

We believe that our manufacturing process and utilization of relatively low-cost raw material sources provide us with a competitive cost advantage relative to other manufacturers of wood-alternative decking and railing products.

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Human Capital

As of December 31, 2023, Trex employed 1,765 full-time employees.

Overview As of December 31, 2024, Trex employed 1,838 full-time employees.

Our people are what have fueled our growth as the world’s #1 brand of sustainably made, wood-alternative decking and deck railing for nearly three decades.

As we look to the future, we continue to put our people first as we execute on a comprehensive plan for strategic talent management.

Over the past year, we have made significant investments in the infrastructure across all aspects of our human capital development.

We have updated and enriched competency models to standardize and align all aspect of recruiting, hiring, training, and development.

We have invested heavily in our employer value proposition to increase visibility and awareness of our careers to a wider and more diverse talent pool.

We have implemented targeted development programs like our Trex Leadership Academy so that senior leaders and high potential team members have the opportunity to develop their skills as they contribute to Company performance.

We have also invested heavily in our culture, ensuring that leaders and team members hold each other accountable to our shared beliefs and values though out all parts of the organization.

To help support our strategic talent development, we invested in several enabling tools and systems to strengthen our decision making and accelerate our progress.

In 2023, we began a semi-annual cadence of employee engagement surveying and action planning using tools from the Gallup organization.

All Company managers and leaders received training on the tools and new expectations have been set to ensure action is taken between each survey.

We have also continued to evolve our internal communications function.

New tools, channels, and processes have enabled the Company to move beyond weekly newsletter updates to real-time news sharing and dynamic access to information through a centralized intranet.

Finally, we updated our annual performance and ongoing coaching expectations for all people leaders, creating more standardized process and usable information for functions like high potential identification and succession planning.

While significant investments have been made on internal development, wide-net recruiting outside talent continues to infuse the Company with new and diverse perspectives.

An expanded summer internship program coupled with an aggressive campus recruitment program has created a pipeline of young talent, while at the same time we continue to attract some of the most talented senior leaders from around the country to fill key leadership positions.

Trex continues to be committed to building a workforce that is reflective of the communities in which we operate.

Embracing diverse perspectives and fostering a culture of inclusion and belonging are at the core of what has fueled Trex’s legacy of invention and innovation.

We continue to find new ways to increase opportunities for underrepresented team members, including offering English language classes for non-native speakers and partnering with local agencies to provide employment opportunities to neuro-diverse candidates.

As an equal opportunity employer, Trex is committed to providing fair and equitable pay for all employees across the Company.

As we look to the future, Trex is poised for growth and innovation and that growth is dependent upon our people’s talent and commitment.

We continue to invest in our people as we execute on our strategic talent management plan which aims to support our employees in gaining the competencies needed to advance and enjoy long-lasting careers at Trex.

Pay Equity As an equal opportunity employer, Trex is committed to providing fair and equitable pay for all employees across the Company.

We have a strong track record as an industry leader in terms of hourly wages, salary and total compensation.

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The policy is available at www.trex.com/our-company.

We know our people are what will fuel our future growth and innovation and we are committed to reinvesting in our people and executing our strategic talent management plan at the highest level.

Development and Recruiting Developing internal talent is another key multi-year infrastructure investment for Trex.

To help support our strategic talent development, we continue to invest in enabling tools, systems, and training to strengthen our decision making and accelerate progress.

This includes new training for managers in the areas of team development, performance reviews, and recognition.

In addition, the Trex Leadership Academy, a 12-month program, continues to develop and refine the competencies and leadership skills of high potential team members.

Trex’s tuition reimbursement policy assists team members in achieving their full potential by furthering their education, affording them opportunities to grow their skills set and favorably impact the business.

Safety remains a core value at Trex and in 2024 hourly manufacturing onboarding was enhanced to include more time for new team members to learn the process and incorporate additional safety best practices.

While significant investments have been made in internal development, wide-net recruiting outside talent continues to infuse the Company with new and diverse perspectives.

Our summer intern program continues to grow and welcomes students from both universities and vocational schools across the mid-Atlantic.

This program along with an aggressive campus recruitment has created a pipeline of young talent, while at the same time we continue to attract some of the most talented senior leaders from around the country to fill key leadership positions.

Engagement and Culture We continue to invest in employee engagement and related action planning by conducting Gallup surveys.

Our people managers use the results to develop specific action plans to drive engagement throughout our organization.

We also evolved our approach to curation of culture, providing training through an internal trainer to hourly employees in addition to leaders.

This multi-year roll out of culture training targets all Trex team members to create shared understanding and expectations.

Trex is committed to building a workforce that is reflective of the communities in which we operate.

Embracing diverse perspectives and fostering a culture of inclusion and belonging are at the core of what has fueled Trex’s legacy of innovation.

At Trex, our people fuel our growth and innovation.

We are committed to reinvesting in our team and executing our strategic talent management plan at the highest level.

Corporate Governance

Information related to the Company’s governance and related activities and programs may be found in the Company’s Definitive Proxy Statement filed on March 25, 2024 in Schedule 14A.

Also, a copy of the Company’s Code of Conduct and Ethics (Code) is maintained on the Company’s web site at www.trex.com/our-company.

Also, a copy of the Company’s Code of Conduct and Ethics (Code) is maintained on the Company’s web site at www.trex.com/our-company/corporate-governance/.

The Company has a whistle-blowing policy included in its Code that encourages reporting by employees of activities the employee considers illegal or dishonest.

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Our Environmental Policy, located on our web site at www.trex.com/our-company, outlines our commitment to conducting business in an ethical and socially responsible manner that respects the environment.

The Nominating / Corporate Governance Committee of the Board of Directors oversees the Company’s environmental, social and governance (ESG) matters that are significant to the Company.

Periodically, the Committee reviews the Company’s ESG strategy, initiatives and policies and receives updates from the Group Vice President, Marketing and ESG Development, who oversees the Company’s ESG initiatives.

Also, environmental matters relevant to the Company’s operations are the responsibility of the President and Chief Executive Officer, the Executive Vice President and Chief Operating Officer, the Senior Vice President and Chief Financial Officer, and the Senior Vice President, Chief Legal Officer and Secretary.

Trex Residential’s proprietary, eco-friendly processing method minimizes greenhouse gas emissions, and our bi-coastal factories reduce fuel consumption and CO 2 emissions.

The Nominating / Corporate Governance Committee of the Board of Directors oversees the Company’s sustainability matters that are significant to the Company.

Periodically, the Committee reviews the Company’s sustainability strategy, initiatives and policies and receives updates from the Senior Vice President, Chief Legal Officer and Secretary, who oversees the Company’s sustainability initiatives.

Also, environmental matters relevant to the Company’s operations are the responsibility of the President and Chief Executive Officer, the Executive Vice President and Chief Operating Officer, and the Senior Vice President and Chief Financial Officer.

Trex Residential’s bi-coastal factories reduce fuel consumption and CO 2 emissions by reducing transit distance.

We strive to reduce energy use and associated greenhouse gas emissions in Trex manufacturing operations by designing our facilities to run efficiently.

In addition, almost 100 percent of our factory runoff and refuse are recycled back into the manufacturing line.

Any product that does not meet quality specifications is reprocessed, which eliminates the need for landfill.

Any product that does not meet quality specifications is reprocessed, which eliminates the need for landfill for product waste.

The Company’s primary resource usage consists of water, natural gas and electricity.

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Water management is of critical importance to us.

Our Virginia and Nevada manufacturing facilities have closed-loop recirculation systems that run water through multiple

cycles of re-use before being returned to the municipal wastewater stream.

Our Virginia and Nevada manufacturing facilities have closed-loop recirculation systems that run water through multiple cycles of re-use before being returned to the municipal wastewater stream.

We prioritize energy savings as part of our ongoing evaluation and optimization of business operations and manufacturing processes.

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The Company’s internal standards for environmental stewardship and product integrity are recognized year-over-year in the marketplace.

Trex Transcend ® Lineage ™ was named as a 2023 Sustainable Product of the Year by Green Builder Media.

Trex was named to the Barron’s “100 Most Sustainable Companies” list for 2024.

Trex Transcend ® Lineage won Good Housekeeping’ s 2024 Sustainable Innovation Award.

In addition, Trex was also recognized as Sustainable Brand Leader in the decking category of Green Builder’s annual Reader’s Choice Survey for the 14th consecutive year.

Trex also earned the Lowe’s 2023 Sustainability Award, recognition as one of the 100 Best ESG Companies for 2023 by Investor’s Business Daily and Trex was ranked by Newsweek magazine as one of America’s Most Responsible Companies 2024.

Trex was ranked by Newsweek magazine as one of America’s Most Responsible Companies 2024.

Trex environmental benefits are recognized by the receipt of the Leadership in Energy and Environmental Design (LEED) certification by the United States Green Building Council.

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LEED is a point-based system designed to reward points to building projects that incorporate efficient, and safe eco-friendly products, leading to a building’s designation as LEED Silver, Gold or Platinum.

Trex Residential decking can add up to five points to a project — four points in the Materials and Resources category for being composed of 95% recycled and reclaimed materials, and one point in the Innovation and Design category.

Trex Residential decking can add up to four points to a project — four points in the Materials and Resources category for being composed of 95% recycled and reclaimed materials.

Green Building Council member, Trex works along with council members to transform the way buildings and communities are designed, built and operated with the goal of creating environmentally and socially responsible spaces that improve the quality of life.

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• Tracking company and site level safety performance metrics including common lagging indicators, such as injury rates, but also leading indicators such as safety observations, near-misses, and proactive actions taken at the sites to ensure worker safety.

Each of our manufacturing sites has a dedicated health and safety (EHS) coordinator and committee.

The Site EHS Managers ensure safety is at the forefront of our manufacturing operations every day.

Employee representatives on the Process Safety Committee meet monthly to collect, discuss and act upon safety feedback from their colleagues.

Our active Process Safety Committees perform safety audits and observations, review and trend all incidents, and participate in all Pre-Startup Safety Reviews and are an example of our robust employee engagement in safety.

Long term, the Company is committed to pursuing Occupational Health and Safety Administration Voluntary Protection Program (VPP) recognition and is an active participant in state level VPP

development programs.

The Company is a member of the Voluntary Protection Program Participants Association, the National Safety Council, and the National Fire Protection Association.

Also, we support all EHS staff in becoming Certified Occupational Safety Specialists and obtaining the Certificate for Occupational Safety Managers through programs offered by the Federal Occupational Health and Safety Administration.

Each of our manufacturing sites have dedicated health and safety (EHS) professionals and safety committees.

In 2024, several changes to the EHS organization were made to better support the business and align resources.

These changes include the addition of an EHS Specialist to our distribution and transportation department, and a Corporate Health and Safety Manager to focus on advancing our health and safety programs.

This position is a counterpart to our Corporate Environmental Manager role which has been in place for several years.

All EHS professionals are required to complete continuing education courses to build internal expertise and capacity.

In 2024, Trex launched numerous health and safety initiatives such as FAST Response, Safety Steering Committee, Rules to Live By, and the inaugural Safety Pulse Survey.

FAST response is a weekly meeting of frontline leaders and support personnel focused on identifying and correcting safety non-compliance on the production floor to prevent incidents from occurring.

The Safety Steering Committee’s charter is to create a forum for managers and leaders from all functional areas to discuss health and safety.

This includes reviewing incidents and corrective actions from across the organization, sharing information related to safety improvements, and providing transparency to health and safety performance monthly.

Rules to Live By outline expectations of employee compliance with safety rules related to high-risk activities such as powered industrial trucks, lockout/tagout and control of hazardous energy, confined spaces, machine guarding, working at height and hoisting and rigging.

Websites and Additional Information

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business