Trex Co Inc (NYSE: TREX)

Trex Company, Inc. is the world’s largest manufacturer of composite decking and railing products. The company also produces fencing, cladding, outdoor lighting and related accessories under the Trex brand. It operates in the outdoor living products industry, focusing on sustainable, low maintenance alternatives to wood.

The company generates revenue primarily by selling its composite decking, railing, fencing, cladding and outdoor lighting products to wholesale distributors who then supply retail lumber outlets and to home improvement retailers such as Home Depot and Lowe's. It also earns income from licensing agreements that allow third parties to manufacture and sell products under the Trex trademark. Sales are driven by demand from homeowners, contractors, remodelers and homebuilders seeking durable, low maintenance outdoor living solutions.

The company operates through the following segment.

• The single reportable segment includes all of Trex's product lines such as composite decking, railing, fencing, cladding, outdoor lighting and accessories, as well as licensing arrangements. The segment encompasses manufacturing, distribution and sales of sustainable, low maintenance outdoor living products primarily for the residential market.

Trex holds a leading position in the outdoor living products market as the world’s largest manufacturer of composite decking and railing. Its main competitors include traditional wood producers and wood alternative makers such as Azek, Deckorators and Fiberon. Competitive advantages stem from strong brand recognition, a proprietary manufacturing process that uses reclaimed wood fibers and recycled polyethylene, a broad distribution network that includes thousands of retail locations and a reputation for durable, low maintenance products that offer long term cost savings compared to wood.

The company’s customers consist of homeowners, contractors, remodelers and homebuilders who purchase Trex products through wholesale distributors, retail lumber outlets and home improvement chains. Specific retail customers named in the filing include Home Depot and Lowe's. The majority of sales are derived from the residential market where demand is driven by renovation and new construction activity.