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Segment Information | 12 Months Ended
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Dec. 31, 2019
Segment Reporting [Abstract] |
Segment Information |
17. | SEGMENT INFORMATION
Prior to July 31, 2017, the Company operated in one reportable segment. Subsequent to the acquisition of certain assets and assumption of certain liabilities of SC Company on July 31, 2017, the Company operates in two reportable segments:
| • | Trex Residential manufactures composite decking and railing and related products marketed under the brand name Trex ® . The products are sold to its distributors and two national retailers who, in turn, sell primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products. Trex Residential net sales were $694.3 million, $613.2 million, and $543.3 million in the years ended December 31, 2019, December 31, 2018, and December 31, 2017, respectively.
| • | Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for commercial and multi-family market, including sports stadiums and performing arts venues. The segment’s products are sold through architects, specifiers, contractors, and others doing business within the segment’s commercial market. Trex Commercial net sales were $51.1 million and $71.0 million in the year ended December 31, 2019 and December 31, 2018, respectively, and $21.8 million from the date of acquisition through December 31, 2017.
The Company’s reportable segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial operations. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, taxes, depreciation and amortization (EBITDA). The Company uses net sales to assess performance and allocate resources as this measure represents the amount of business the segment engaged in during a given period of time, is an indicator of market growth and acceptance of segment products, and represents the segment’s customers’ spending habits along with the amount of product the segment sells relative to its competitors. The Company uses EBITDA to assess performance and allocate resources because it believes that EBITDA facilitates performance comparison between the segments by eliminating interest, taxes, and depreciation and amortization charges to income. The below segment data includes data for Trex Residential for the years ended December 31, 2019, December 31, 2018 and December 31, 2017, and data for Trex Commercial for the years ended December 31, 2019 and December 31, 2018, and from the date of the acquisition of SC Company through December 31, 2017, for the year ended December 31, 2017 (in thousands): Segment Data:
|  | Net Sales |  |  | Net Income (Loss) |  |  | EBITDA |  |  | Depreciation and Amortization |  |  | Income Tax Expense (Benefit) |  |  | Capital Expenditures |  |  | Total Assets |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 694,267 |  |  | $ | 142,811 |  |  | $ | 199,020 |  |  | $ | 13,413 |  |  | $ | 44,292 |  |  | $ | 65,399 |  |  | $ | 503,883 |
Trex Commercial |  |  | 51,080 |  |  |  | 1,927 |  |  |  | 3,210 |  |  |  | 618 |  |  |  | 672 |  |  |  | 1,866 |  |  |  | 88,356 |
Total |  | $ | 745,347 |  |  | $ | 144,738 |  |  | $ | 202,230 |  |  | $ | 14,031 |  |  | $ | 44,964 |  |  | $ | 67,265 |  |  | $ | 592,239 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 613,229 |  |  | $ | 131,823 |  |  | $ | 186,268 |  |  | $ | 13,216 |  |  | $ | 41,421 |  |  | $ | 31,392 |  |  | $ | 380,682 |
Trex Commercial |  |  | 71,021 |  |  |  | 2,749 |  |  |  | 6,868 |  |  |  | 3,251 |  |  |  | 868 |  |  |  | 2,424 |  |  |  | 84,440 |
Total |  | $ | 684,250 |  |  | $ | 134,572 |  |  | $ | 193,136 |  |  | $ | 16,467 |  |  | $ | 42,289 |  |  | $ | 33,816 |  |  | $ | 465,122 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 543,346 |  |  | $ | 97,412 |  |  | $ | 160,382 |  |  | $ | 14,598 |  |  | $ | 47,911 |  |  | $ | 14,989 |  |  | $ | 247,817 |
Trex Commercial |  |  | 21,807 |  |  |  | (2,284 | ) |  |  | (1,272 | ) |  |  | 2,132 |  |  |  | (1,120 | ) |  |  | 51 |  |  |  | 78,410 |
Total |  | $ | 565,153 |  |  | $ | 95,128 |  |  | $ | 159,110 |  |  | $ | 16,730 |  |  | $ | 46,791 |  |  | $ | 15,040 |  |  | $ | 326,227 |
Reconciliation of Net Income (Loss) to EBITDA:
|  | Net Income (Loss) |  |  | Interest (Income) Expense, Net |  |  | Income Tax Expense (Benefit) |  |  | Depreciation and Amortization |  |  | EBITDA |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 142,811 |  |  | $ | (1,496 | ) |  | $ | 44,292 |  |  | $ | 13,413 |  |  | $ | 199,020 |
Trex Commercial |  |  | 1,927 |  |  |  | (7 | ) |  |  | 672 |  |  |  | 618 |  |  |  | 3,210 |
Total |  | $ | 144,738 |  |  | $ | (1,503 | ) |  | $ | 44,964 |  |  | $ | 14,031 |  |  | $ | 202,230 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 131,823 |  |  | $ | (192 | ) |  | $ | 41,421 |  |  | $ | 13,216 |  |  | $ | 186,268 |
Trex Commercial |  |  | 2,749 |  |  |  | — |  |  |  | 868 |  |  |  | 3,251 |  |  |  | 6,868 |
Total |  | $ | 134,572 |  |  | $ | (192 | ) |  | $ | 42,289 |  |  | $ | 16,467 |  |  | $ | 193,136 |
December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Trex Residential |  | $ | 97,412 |  |  | $ | 461 |  |  | $ | 47,911 |  |  | $ | 14,598 |  |  | $ | 160,382 |
Trex Commercial |  |  | (2,284 | ) |  |  | — |  |  |  | (1,120 | ) |  |  | 2,132 |  |  |  | (1,272 | )
Total |  | $ | 95,128 |  |  | $ | 461 |  |  | $ | 46,791 |  |  | $ | 16,730 |  |  | $ | 159,110 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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