What changed in this filing

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Item 1. Business

2024-02-26 compared with 2023-02-27 · 98 added, 122 removed, 211 unchanged (51% of the section changed)

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The Company is the world’s largest manufacturer of composite decking and railing products, which are marketed under the brand name Trex ® and manufactured in the United States.

In addition, Trex provided custom-engineered railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues.

Our principal executive offices are located at 160 Exeter Drive, Winchester, Virginia 22603, and our telephone number at that address is (540) 542-6300.

Our principal executive offices are located at 2500 Trex Way, Winchester, Virginia 22601, and our telephone number at that address is (540) 542-6300.

Business and Growth Strategies

More than 30 years ago, Trex invented the composite decking category.

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.

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.

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.

As the inventor of composite decking, Trex is known for delivering innovative products leveraging the proprietary and skill-based advantages in our eco-friendly manufacturing process.

We continue to extract value from the materials by broadening our material streams, implementing new material processes, and developing the next generation of low-cost materials.

Our growth and margin expansion strategy positions us well to expand our leadership position in the category with beautiful, high performance, low-maintenance products and includes the following initiatives:

Accelerate material conversion from wood.

Expand our market by introducing new products that are innovative, eco-friendly and durable.

Leverage brand leadership to drive customer demand.

Increase the number of stocking dealers and retailers by leveraging our market-leading channel relationships.

Drive margin expansion by continually improving our polyethylene recycling capabilities and manufacturing productivity.

Execute strategic acquisitions that expand our product offerings and/or enrich our manufacturing process.

Operations and Products:

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

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

Trex Residential.

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

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

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Trex offers the following products through Trex Residential:

Decking and Accessories

Our principal decking products are Trex Transcend ® Lineage ™ , Trex Transcend ® , Trex Signature ® , Trex Select ® , and Trex Enhance ® .

Our principal decking products are Trex Signature ® , Trex Transcend ® Lineage ™ , Trex Transcend ® , Trex Select ® , and Trex Enhance ® .

In addition, our Trex Transcend decking product can also be used as cladding.

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.

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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, and Trex Signature ® aluminum railing.

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.

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

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 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.

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

This product consists of structural posts, bottom rail, pickets, top rail and decorative post caps.

This product consists of structural posts, bottom rails, pickets, top rails and decorative post caps.

The top and bottom rails of Trex fencing are designed to provide a “picture frame’ element and the deep rich colors have a matte surface to prevent harsh sunlight reflections.

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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.

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 ®

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

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.

Trex Protect Joist, Beam and Rim tape is a self-adhesive butyl tape that protects wooden deck framing/substructure elements.

Trex RainEscape Soffit Light is a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck.

Trex Seal Ledger Flashing tape is butyl flashing tape with an aluminum liner.

Trex ® Pergola ™

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dba Structureworks Fabrication.

Trex Latticeworks ™

Trex ® Lattice ™

Outdoor lattice boards manufactured and sold by Structureworks Fabrication.

Trex Cornhole ™ Boards

Trex ® Cornhole ™

Cornhole boards manufactured and sold by IPC Global Marketing LLC.

Diablo ® Trex Blade

Trex ® Blade ™

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

Trex SpiralStairs ™ and Structural Steel Posts and Trex Signature Assembled Stair Panels

A staircase alternative and structural steel posts for use with all deck substructures manufactured and sold by M.

Cohen and Sons, Inc.

dba The Iron Shop.

Trex Outdoor Kitchens, Cabinetry and Storage

Outdoor kitchens, cabinetry and storage manufactured and sold by Danver Stainless Outdoor Kitchens.

Trex Commercial designed and engineered custom railing solutions, which are prevalent in professional and collegiate sports facilities, standardized architectural and aluminum railing systems, which targeted commercial and high-rise applications, and custom staging systems for the performing arts, sports, and event production and rental market.

Trex ® SpiralStairs

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

Trex ® Outdoor Kitchens ™

Outdoor kitchen cabinetry manufactured and sold by Danver Outdoor Kitchens.

Trex Commercial designed and engineered custom railing solutions prevalent in professional and collegiate sports facilities, standardized architectural and aluminum railing systems targeted at commercial and high-rise applications, and custom staging systems for the performing arts, sports, and event production and rental market.

Trex Commercial marketed to architects, specifiers, contractors, and building owners.

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Architectural railing systems;

The architectural railing systems were pre-engineered guardrails with options to accommodate styles ranging from classic and elegant wood top rail combined with sleek stainless components and glass infill, to modern and minimalist stainless cable and rod infill choices.

Trex Commercial also designed, engineered and manufactured custom railing systems tailored to the customer’s specific material, style and finish.

Many railing styles included glass, mesh, perforated railing and cable railing.

Aluminum railing systems;

The Trex Signature aluminum railings, made from a minimum of 40 percent recycled content, were a versatile, cost-effective and low-maintenance choice for a variety of interior and exterior applications that blended form, function and style.

Its straightforward, unobtrusive design featured traditional balusters and contemporary vertical rods, and could be installed with continuously graspable rail options for added safety, comfort and functionality.

Aluminum railings were available in a variety of colors and stock lengths to accommodate project needs.

Staging equipment and accessories.

The advanced modular, lightweight custom staging systems, including portable platforms and other custom applications, provided superior staging product solutions for facilities and venues with custom needs.

The modular stage equipment was designed to appear seamless, feel permanent, and maximize the functionality of the space.

Customers and Distribution

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For the years ended December 31, 2023, 2022, and 2021, three customers of Trex Residential represented approximately 72%, 64%, and 61%, respectively, of the Company’s total net sales.

No other customer represented 10% or more of the Company’s total net sales.

Trex Commercial:

We sold our modular and architectural railing and staging systems to the commercial and multifamily market, including sports stadiums and performing arts venues, primarily to facility owners and general contractors throughout the country.

We marketed these products through our direct sales staff, independent sales representatives, and bidding on projects.

Prior to the sale of Trex Commercial on December 30, 2022, we sold modular and architectural railing and staging systems to the commercial and multifamily market, including sports stadiums and performing arts venues, primarily to facility owners and general contractors throughout the country.

We marketed these products through direct sales staff, independent sales representatives, and bidding on projects.

Manufacturing Process

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We use many proprietary and skill-based advantages in our eco-friendly manufacturing process.

Products manufactured at our Trex Commercial manufacturing facility in Minnesota were primarily manufactured from aluminum and stainless steel.

The primary manufacturing process for these products involved cutting, machining, welding and finishing.

We use Six Sigma and Lean Manufacturing methodologies throughout our Company within our plant operations and in the planning and execution of certain projects.

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Construction began on the new facility in the second quarter of 2022, and in July 2022, we entered into a design-build agreement.

As previously announced, we anticipate spending approximately $400 million on the facility and the budget for the design-build agreement is contained within this amount.

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.

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The Company is committed to conducting business activities with the highest standards of business ethics and in accordance with all applicable laws and regulations.

As stated above, our Vendor and

Customer Code of Conduct and Ethics, our Company Code of Conduct and Ethics, and our Human Rights Policy apply to all suppliers of the Company.

As stated above, our Vendor and Customer Code of Conduct and Ethics, our Company Code of Conduct and Ethics, and our Human Rights Policy apply to all suppliers of the Company.

The production of most of our decking products requires a supply of reclaimed wood fiber and scrap polyethylene.

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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.

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

Reclaimed Wood Fiber :

Cabinet and flooring manufacturers are our preferred suppliers of reclaimed wood fiber because the reclaimed wood fiber produced by these operations contains little contamination and is low in moisture.

These facilities generate reclaimed wood fiber as a byproduct of their manufacturing operations.

Most of our reclaimed wood supply originates in North America through relationships with cabinet makers, wood flooring manufacturers, sawmills, lumberyards and other entities that generate and collect wood byproducts in their operations.

In addition, we purchase scrap select wood chips generated from various farming operations.

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In addition, we outsource the production of certain products to third-party manufacturers.

The production of our commercial products required a supply of aluminum, stainless steel and glass components.

We used multiple sources for each material to ensure consistent availability of material and competitive pricing.

We purchased substantially all of our aluminum, stainless steel and glass under purchase orders, which did not involve long-term supply commitments.

Trex University is our state-of-the-art training facility located near our Virginia manufacturing plant designed to educate and train retailers, contractors and other partners on the benefits of Trex Residential aesthetically pleasing, high-performance, low-maintenance, eco-friendly outdoor living products.

In addition, in the 2022 second quarter we launched Trex Academy, an online multimedia content hub dedicated to helping the Trex Residential Do-It-Yourself customer bring their deck dreams to life by providing how-to content.

Growth Strategies

Our long-term goals are to continue leading the category with beautiful, high-performance, low-maintenance Trex products, including our outdoor living products, such as composite decking and railing for the residential market and custom-engineered railing systems for the commercial market.

To do this, we will increase market share and expand into new product categories and geographic markets through the design, creation and marketing of outdoor living products that offer superior aesthetics and quality and by expanding our sales to the commercial market.

Trex Residential will expand its offering of eco-friendly decking and railing

products for a breadth of audiences, whether by converting wood buyers who have not previously considered composite decking or appealing to the most discriminating high-end homeowners seeking superior aesthetics and quality.

Additionally, Trex will continue to explore opportunities that leverage our manufacturing and extrusion expertise and recycling heritage.

We intend to employ the following long-term strategies to achieve our goals:

Introduce new products that address unmet consumer and trade professional needs.

Provide a compelling value proposition through ease of installation, low maintenance, long-term durability and superior aesthetics.

Expand awareness, preference and commitment for the Trex brand with both consumers and trade professionals.

Deliver on the brand’s promise of superior quality, functionality, pleasing aesthetics and overall performance in outdoor living products and custom-engineered railing systems.

Leverage omnichannel efforts to extend the Trex brand presence, both nationally and globally.

Achieve comprehensive market segment and geographic coverage for Trex products by increasing the number of stocking dealers and retailers and expanding our international presence for our eco-friendly wood-alternative outdoor living products, thereby making our products available wherever our customers choose to purchase their decking or railing , and by continuing to develop our commercial market penetration for our railing systems.

Continuously advance the quality of all operational and business processes, with the goal of achieving superior product quality and service levels, thereby giving us a sustainable competitive advantage.

Through capital investments and process engineering, continuously seek to lower the cost to manufacture Trex residential products.

Investments in polyethylene recycling capabilities will allow us to expand our ability to use a wider breadth of waste materials thereby lowering raw material costs of our outdoor living products.

We plan to continue to achieve significant improvements in manufacturing productivity by reducing waste and improving our production process.

Customer Service :

Through our commitment to superior customer service, continually deliver consistently outstanding, personalized service to all customers and prospects in all segments.

In addition, Trex Academy is an online multimedia content hub dedicated to helping the Trex Residential Do-It-Yourself customer bring their deck dreams to life by providing how-to content.

Our primary competition for our composite decking and residential railing products consists of wood products, which constitute a substantial majority of decking and railing sales, as measured by linear feet of lumber.

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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 we compete

favorably with respect to these factors.

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.

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Our 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.

Seasonal, erratic or prolonged adverse weather conditions may reduce the level of home improvement and construction activity and can shift demand for our products to a later period.

As part of its normal business practice and consistent with industry practice, Trex Residential Products has historically offered incentive programs to its distributors and dealers to build inventory levels before the start of the prime deck-building season in order to ensure adequate availability of its product to meet anticipated seasonal consumer demand.

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We are also subject to federal, state and local environmental regulation.

The emissions of particulates and other substances from our manufacturing facilities must meet federal and state air quality standards implemented through air permits issued to us by the Department of Environmental Quality of the Commonwealth of Virginia, and the Division of Environmental Protection of Nevada’s Department of Conservation and Natural Resources.

The emissions of particulates and other substances from our manufacturing facilities must meet federal and state air quality standards implemented through air permits issued to us by the Department of Environmental Quality of the Commonwealth of Virginia, the Division of Environmental Protection of Nevada’s Department of Conservation and Natural Resources, and the Division of Environmental Quality of Arkansas’ Department of Energy and Environment.

Our facilities are regulated by federal and state laws governing the disposal of solid waste and by state and local permits and requirements with respect to wastewater and storm water discharge.

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Intellectual property rights may be challenged by third parties and may not exclude competitors from using the same or similar technologies, brands or works.

We seek to secure effective rights for our intellectual property

but cannot provide assurance that third parties will not successfully challenge, or avoid infringing, our intellectual property rights.

We seek to secure effective rights for our intellectual property but cannot provide assurance that third parties will not successfully challenge, or avoid infringing, our intellectual property rights.

We consider our trademarks to be of material importance to our business plans.

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This law provides protection to authors of original works, whether published or unpublished, and whether registered or unregistered.

We have one current U.S.

Patent for decking technology.

We intend to maintain our existing patent in effect until it expires as well as to seek additional patents as we consider appropriate.

We have two current U.S.

Patents for decking technology.

We intend to maintain our existing patents in effect until they expire on January 15, 2038 and May 23, 2038, respectively, as well as to seek additional patents as we consider appropriate.

We enter into confidentiality agreements with our employees and limit access to and distribution of our proprietary information.

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Human Capital

We are committed to furthering our stature as the highest quality, pre-eminent decking brand in the world, while delivering robust value to our shareholders.

As we continue to grow, a differentiating factor continues to be the caliber of our talent.

The Company embraces a culture of diverse thinking and perspectives.

We strive for this by making human capital a key strategic pillar overseen by the Board of Directors and management.

Our focus is to attract, develop and retain a highly engaged and diverse workforce.

We accomplish this through broad and transparent employment branding efforts, competitive and equitable compensation philosophies, proactive employee relations, and by offering a work environment with meaningful career growth opportunities.

At December 31, 2022, Trex Residential employed 1,636 full-time employees.

Our employees are not covered by collective bargaining agreements.

We believe that our relationships with our employees are favorable, and we have not had any serious complaints or claims over the last three years.

Our Human Rights Policy sets forth our values related to working conditions and human rights, and it underscores our philosophy about the way we conduct our business.

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

We believe that diversity, equity and inclusion enriches our organization, contributes to our long-term value creation, and fosters an environment of creativity and innovative thinking, which will bring forth new ideas and challenge the status quo.

The strategy we have developed aims to advance our efforts to increase the diversity of our workforce, while we continue to be a destination workplace for talent and maximize returns to our shareholders.

We are undergoing a new approach for employee communications to further elevate employee engagement while also acting to foster inclusiveness across the organization.

We believe the best candidate or employee is someone who is driven, bold, hard-working, determined and tenacious;

embodies our overarching ideals and identity;

and who looks, thinks or acts differently than the majority.

These differences could be represented by race, ethnicity, gender, or academic and professional backgrounds.

When comparing our ethnicity demographics against those in the geographies where we operate, we seek to accurately represent the diversity of our local communities and beyond.

We continue to build our employer brand by accurately and transparently reflecting our work culture to attract candidates with actions that include, but are not limited to:

Further expanding the number of roles for exclusively Spanish speaking employees while offering English as a second language and Spanish as a second language courses;

Leveraging large, diverse recruiting platforms to reach broader audiences and increasing our presence at regional universities to recruit interns and new graduates to help further diversify our talent pool;

Creating a partnership with NW Works (www.nwworks.com), a local nonprofit that provides counseling and employment services to disabled adults in the Winchester, Virginia area, and providing a number of job opportunities for their clients;

Further developing the Trex culture to improve retention and employee engagement at our manufacturing locations in a variety of ways;

Expanding our training department to sharpen our focus on the training and development of our employees.

Trex has taken these steps to ensure all employees feel comfortable, and to ensure that we remain an employer of choice, well-known for both innovation and opportunity.

We are also looking to expand our focus on developing our existing employees so that Trex is well prepared for the future and our employees know they can grow with us.

In addition, we provide Code of Conduct and Ethics training to our employees.

We are planning a refreshed version of our employee survey for the first quarter of 2023.

Our recruitment strategy includes advanced education recruitment and veteran recruitment.

We recognize the skills learned through these pursuits align with the skills necessary to be a successful employee, and our active involvement with these recruiting paths offers many opportunities to build partnerships and reach candidate pools at various career stages that are both diverse and geographically varied.

The strategy also offers opportunities to partner with organizations that appeal to these talent groups, to increase our employer brand exposure, and to help sustain diversity and recruitment efforts.

As of December 31, 2023, Trex employed 1,765 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.

We strive to be an industry leader in terms of hourly wages, salary and total compensation.

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

We use a compensation grade structure as part of our process to determine the appropriate grade level for each position at Trex.

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In addition, we regularly review our compensation structures for signs of emerging inequities along gender or ethnicity lines as well as market competitiveness.

Our employees are not covered by collective bargaining agreements and we believe that our relationships with our employees are favorable.

Our Human Rights Policy sets forth our values related to working conditions and human rights, and it underscores our philosophy about the way we conduct our business.

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.

Corporate Governance

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

Each employee is notified of the whistle-blower policy and a toll-free hotline is provided for reporting issues directly to the Board of Directors and the Company’s General Counsel.

Each employee is notified of the whistle-blower policy and a toll-free hotline is provided for reporting issues directly to the Board of Directors and the Company’s Senior Vice President, Chief Legal Officer and Secretary.

Environmental and Occupational Safety

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The Company’s commitment to improving our environmental footprint includes developing and offering more sustainable products to the market as well as advancing sustainability and efficiency in our operations.

From continuous improvement in our manufacturing practices that reduce the use of energy to making products using industry leading high levels of reclaimed and recycled materials, the Company is able to improve the use of resources,

greenhouse gas emissions, and waste streams.

The foundation for our commitment to sustainability includes, but is not limited to:

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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 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 President of Trex Residential, the President of Trex Commercial, the Senior Vice President and Chief Financial Officer, the Senior Vice President, Chief Legal Officer and Secretary, and the Vice President, General Counsel and Assistant Secretary.

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.

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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 was named one of 2022’s 50 Best U.S.

Manufacturers by Industry Week and was named to Forbes’ 2021 List of America’s Best Mid-Sized Companies – ranking #12 overall on the list of 100 companies.

For the 12 th consecutive year, in 2022 Trex earned the designation “greenest” decking in the industry by the readers of Green Builder magazine and received the highest score for decking in the Green Builder Media Brand Index.

Trex was also honored with the 2022 Green Builder Sustainable Product of the Year for Trex AR Deck Visualizer.

In addition, Lifestory Research’s America’s Most Trusted ® survey named Trex America’s Most Trusted Outdoor Decking Brand – receiving the only five-star rating in the decking category.

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

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

Trex Residential decking products

meet LEED requirements for builders and our commercial products have contributed to the LEED certifications of some high-profile venues.

Trex Residential decking products meet LEED requirements for builders and our commercial products have contributed to the LEED certifications of some high-profile venues.

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.

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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) manager and committee.

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 Site Safety Committee meet monthly to collect, discuss and act upon safety feedback from their colleagues.

Our active Site 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.

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.

2 unchanged sentences

Securities and Exchange Commission (SEC) maintains an Internet web site at www.sec.gov that contains reports, proxy statements, and other information regarding our Company.

Our website is www.trex.com.

In addition, we maintain an Internet corporate web site at www.trex.com/our-company/investor-relations.

3 unchanged sentences

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