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Segment Information
 6 Months Ended
Jun. 30, 2021
Segment Reporting [Abstract]  
Segment Information
 
16.
SEGMENT INFORMATION
The Company operates in two reportable segments:
 
  •  
Trex Residential manufactures wood-alternative decking and residential railing and related products marketed under the brand name Trex
®
. Trex Residential products are sold to distributors and home centers for final resale primarily to the residential market, which includes replacement, remodeling and new construction related to outdoor living products.
 
  •  
Trex Commercial designs, engineers, and markets modular and architectural railing and staging systems for the commercial and multi-family market, including sports stadiums and performing arts venues. Trex Commercial products are marketed to architects, specifiers, contractors, and others doing business within the commercial and multi-family market.
The Company’s reportable segments have been determined in accordance with its internal management structure, which is organized based on residential and commercial sales activities. The Company evaluates performance of each segment primarily based on net sales and earnings before interest, income 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, income taxes, and depreciation and amortization charges to income. The below segment data for the three months and six months ended June 30, 2021 and June 30, 2020 includes data for Trex Residential and Trex Commercial (in thousands):
Segment Data:
 
    
Three Months Ended

June 30, 2021
     
Three Months Ended

June 30, 2020
  
    
Trex Residential
     
Trex Commercial
     
Total
     
Trex Residential
     
Trex Commercial
     
Total
  
Net sales
    $ 298,632      $ 12,964      $ 311,596      $ 208,877      $ 11,771      $ 220,648  
Net income
    $ 61,089      $ 277      $ 61,366      $ 45,912      $ 1,306      $ 47,218  
EBITDA
    $ 91,008      $ 627      $ 91,635      $ 65,495      $ 1,964      $ 67,459  
Depreciation and amortization
    $ 9,020      $ 258      $ 9,278      $ 3,865      $ 198      $ 4,063  
Income tax expense
    $ 20,886      $ 92      $ 20,978      $ 15,789      $ 460      $ 16,249  
Capital expenditures
    $ 36,514      $ 224      $ 36,738      $ 39,610      $ 270      $ 39,880  
Total assets
    $ 807,713      $ 91,107      $ 898,820      $ 577,684      $ 93,306      $ 670,990  
Reconciliation of Net Income to EBITDA:
 
    
Three Months Ended

June 30, 2021
     
Three Months Ended

June 30, 2020
  
    
Trex Residential
     
Trex Commercial
     
Total
     
Trex Residential
    
Trex Commercial
     
Total
  
Net income
    $ 61,089      $ 277      $ 61,366      $ 45,912     $ 1,306      $ 47,218  
Interest expense (income), net
      13        —          13        (71 )      —          (71 ) 
Income tax expense
      20,886        92        20,978        15,789       460        16,249  
Depreciation and amortization
      9,020        258        9,278        3,865       198        4,063  
    
 
 
     
 
 
     
 
 
     
 
 
    
 
 
     
 
 
  
EBITDA
    $ 91,008      $ 627      $ 91,635      $ 65,495     $ 1,964      $ 67,459  
    
 
 
     
 
 
     
 
 
     
 
 
    
 
 
     
 
 
  
Segment Data:
 
    
Six Months Ended

June 30, 2021
     
Six Months Ended

June 30, 2020
  
    
Trex Residential
     
Trex Commercial
     
Total
     
Trex Residential
     
Trex Commercial
     
Total
  
Net sales
    $ 531,702      $ 25,418      $ 557,120      $ 395,751      $ 25,292      $ 421,043  
Net income
    $ 109,833      $ 77      $ 109,910      $ 86,932      $ 2,688      $ 89,620  
EBITDA
    $ 161,973      $ 575      $ 162,548      $ 122,445      $ 4,001      $ 126,446  
Depreciation and amortization
    $ 15,231      $ 472      $ 15,703      $ 7,529      $ 386      $ 7,915  
Income tax expense
    $ 36,899      $ 26      $ 36,925      $ 28,577      $ 927      $ 29,504  
Capital expenditures
    $ 93,077      $ 1,754      $ 94,831      $ 62,026      $ 587      $ 62,613  
Total assets
    $ 807,713      $ 91,107      $ 898,820      $ 577,684      $ 93,306      $ 670,990  
Reconciliation of Net Income to EBITDA:
 
    
Six Months Ended

June 30, 2021
     
Six Months Ended

June 30, 2020
  
    
Trex Residential
     
Trex Commercial
     
Total
     
Trex Residential
    
Trex Commercial
     
Total
  
Net income
    $ 109,833      $ 77      $ 109,910      $ 86,932     $ 2,688      $ 89,620  
Interest expense (income), net
      10        —          10        (593 )      —          (593 ) 
Income tax expense
      36,899        26        36,925        28,577       927        29,504  
Depreciation and amortization
      15,231        472        15,703        7,529       386        7,915  
    
 
 
     
 
 
     
 
 
     
 
 
    
 
 
     
 
 
  
EBITDA
    $ 161,973      $ 575      $ 162,548      $ 122,445     $ 4,001      $ 126,446