Trex (TREX) investor relations material

Executive summary

• Achieved record Q2 2026 net sales of $418 million, up 8% year-over-year, driven by broad-based volume growth, strong execution, and demand across products, channels, and price points.

• Demand accelerated through May and June, with momentum continuing into Q3, prompting an increase in full-year guidance and planned share repurchases.

• Accelerated Arkansas (Little Rock) facility expansion by six months to meet demand, targeting 50% capacity by year-end 2026.

• Strategic investments in branding, talent, and organizational capabilities, including digital transformation and enhanced marketing, are supporting long-term growth.

• Reaffirmed long-term strategy to accelerate profitable growth, deliver shareholder value, and target $2 billion in annual sales by 2030.

Financial highlights

• Q2 2026 net sales: $418 million (up 8% year-over-year); gross margin: 37.9% (down from 40.8% in Q2 2025) due to product mix and higher depreciation.

• Net income: $62 million; diluted EPS: $0.60; adjusted net income: $63 million; adjusted EPS: $0.62 (includes $0.03 impact from $5M non-cash write-down).

• Adjusted EBITDA: $112 million (down from $122 million year-over-year); six-month net sales: $761.4 million.

• Free cash flow: $182 million, enabling $51 million in share repurchases and $130 million in debt repayment.

• Strong balance sheet with $201 million in cash and net debt of $6 million as of June 30, 2026.

Outlook and guidance

• Full-year 2026 net sales guidance: $1.215–$1.25 billion; adjusted EBITDA: $335–$350 million.

• Full-year adjusted gross margin expected at ~38%, up from 37.5% prior, driven by higher capacity utilization at Arkansas.

• Q3 2026 net sales guidance: $305 million–$320 million.

• Long-term goal reaffirmed: $2 billion in annual sales by 2030, with 2/3 organic growth and 1/3 M&A.

• Expecting gross margin profile to increase by 500bps over the next three years, driven by manufacturing efficiencies and cost reductions.