Trex (TREX) investor relations material

Executive summary

• Delivered solid Q1 2026 results with net sales of $343–$343.4 million, up 1% year-over-year, and strong gross margin of 40.5%, driven by premium product mix and operational improvements.

• Focused on five strategic priorities: brand loyalty, high-performance innovation, channel optimization, cost reduction, and growth enablement, leveraging a strong brand to capture wood-to-composite conversion.

• Leadership changes include a new CEO, COO, and enhanced finance and marketing teams to drive execution and innovation.

• Aggressively investing in marketing, technology, and talent to support long-term growth and operational excellence.

• Completed a multi-year capital investment cycle, unlocking margin and free cash flow expansion, and launched new products to expand brand presence.

Financial highlights

• Q1 gross profit was $139 million with a gross margin of 40.5%, and net income rose 1.6% to $61.4 million ($0.58 per diluted share).

• Adjusted EBITDA reached $103 million, up 2% year-over-year, with EBITDA margin at 29.7% for Q1 2026.

• Free cash flow was negative $143 million, a 39–40% improvement from the prior year, reflecting inventory build ahead of peak season and lower capex.

• SG&A expenses were $55.5–$56 million (16.2% of sales), flat year-over-year and below expectations due to lower medical claims and timing.

• 2025 revenue was approximately $1.2 billion, with adjusted EBITDA of $336 million and a 28.5% margin.

Outlook and guidance

• Maintained full-year 2026 net sales guidance of $1.185–$1.23 billion and adjusted EBITDA of $315–$340 million.

• Q2 2026 net sales expected between $388–$403 million, with a reversal of some Q1 gross margin benefit due to product mix.

• CapEx for 2026 projected at $100–$120 million, down from $224 million in 2025, with further declines to maintenance levels in 2027.

• Free cash flow expected to improve significantly as Arkansas facility build-out completes and transitions to operational phase.

• Innovation-driven revenue impact expected to materialize meaningfully in 2028–2030.