The following management discussion and analysis of financial condition and results of operations (MD&A) should be read in conjunction with the Trex Company, Inc. (Trex, Company, we or our) Annual Report on Form 10-K for the year ended December 31, 2025 filed with the U.S. Securities and Exchange Commission (SEC) and the condensed consolidated financial statements and notes thereto included in Part I, Item 1. “Financial Statements” of this quarterly report. NOTE ON FORWARD-LOOKING STATEMENTS This MD&A contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements regarding our expected financial position and operating results, our business strategy, our financing plans, forecasted demographic and economic trends relating to our industry and similar matters are forward-looking statements. These statements can sometimes be identified by our use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect,” “intend” or similar expressions. We cannot promise you that our expectations in such forward-looking statements will turn out to be correct. Our actual results could be materially different from our expectations because of various factors, including the factors discussed under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC. These statements are also subject to risks and uncertainties that could cause the Company’s actual operating results to differ materially. Such risks and uncertainties include, but are not limited to: the extent of market acceptance of the Company’s current and newly developed products; the costs associated with the development and launch of new products and the market acceptance of such new products; the sensitivity of the Company’s business to general economic conditions; the impact of seasonal and weather-related demand fluctuations on inventory levels in the distribution channel and sales of the Company’s products; the availability and cost of third-party transportation services for the Company’s products and raw materials; the Company’s ability to obtain raw materials, including scrap polyethylene, wood fiber, and other materials used in making our products, at acceptable prices; increasing inflation and tariffs in the macro-economic environment; the Company’s ability to maintain product quality and product performance at an acceptable cost; the Company’s ability to increase throughput and capacity to adequately match supply with demand; the level of expenses associated with warranty claims, product replacement and consumer relations expenses related to product quality; the highly competitive markets in which the Company operates; cyber-attacks, security breaches or other security vulnerabilities; the impact of current and upcoming data privacy laws and the EU General Data Protection Regulation and the related actual or potential costs and consequences; material adverse impacts from global public health pandemics, geopolitical conflicts; and material adverse impacts related to labor shortages or increases in labor costs. OVERVIEW The following MD&A is intended to help the reader understand the operations and current business environment of the Company. The MD&A is provided as a supplement to, and should be read in conjunction with, our Condensed Consolidated Financial Statements and the accompanying notes thereto contained in "Item 1. Condensed Consolidated Financial Statements" of this report. MD&A includes the following sections: •Operations and Products — a general description of our business, a brief overview of our reportable segment’s products, and a discussion of our operational highlights. •Highlights and Financial Performance Quarter-to-Date and Year-to-Date – a summary of financial performance and highlights for the three months and six months ended June 30, 2026, a general discussion of factors that may affect our operations, and a description of relevant financial statement line items. •Results of Operations — an analysis of our consolidated results of operations for the three months and six months ended June 30, 2026 compared to the three months and six months ended June 30, 2025. •Liquidity and Capital Resources — an analysis of cash flows; contractual obligations, and a discussion of our capital and other cash requirements. OPERATIONS AND PRODUCTS Trex is the world’s largest manufacturer of high-performance composite decking and railing products and a leader in outdoor living products, which are marketed under the brand name Trex® and manufactured in the United States. With more than 30 years of product experience, we offer a comprehensive set of aesthetically appealing and durable, low-maintenance product offerings in the decking, railing, fencing and outdoor lighting categories. A majority of the products are eco-friendly and leverage recycled and reclaimed materials to the extent possible. Trex decking is made in a proprietary process that combines reclaimed wood fibers and recycled polyethylene film, making Trex one of the largest recyclers of plastic film in North America. In addition to resisting fading and surface staining, Trex products require no sanding and sealing, resist moisture damage, provide a splinter-free surface and do not require chemical treatment against rot or insect infestation. Combined, these aspects yield significant aesthetic advantages and lower maintenance than wood decking and railing and ultimately render Trex products less costly than wood over the life of the deck. Special characteristics (including resistance to splitting, the ability to bend, and ease and consistency of machining and finishing) 15 facilitate installation, reduce contractor call-backs and afford consumers a wide range of design options. Trex products are sold to distributors and home centers for final resale primarily to the residential market. Trex offers the following products: Decking and Accessories Our principal decking products are Trex Signature®, Trex Transcend® Lineage™, Trex Transcend®, Trex Refuge™, Trex Select®, and Trex Enhance®. Our high performance, low maintenance decking products feature a protective shell for enhanced protection against fading, staining, mold, and scratching. Our eco-friendly composite decking products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film, and our PVC decking product features ignition resistance. Trex Signature decking offers realistic woodgrain aesthetics that raise the bar for beauty, performance, and sustainability and is available in two luxurious hues inspired by stunning natural settings. Trex Transcend Lineage is the next generation of design and performance in composite decking and is available in seven luxurious, on-trend hues inspired by some of the most picturesque locales in the United States. Our Trex Transcend decking provides elevated aesthetics paired with the highest level of performance and is available in six multi-tonal monochromatic classical earth tones and premium tropical colors. Trex Refuge decking features a refined wire brushed grain pattern and is offered in two hues. Trex Select decking offers the perfect pairing of price and minimal maintenance and is available in two nature-inspired earth tone colors and three subtly streaked on trend hues. Our Trex Enhance boards pair the beauty of authentic wood-grain appearance with the durability of composite with minimal maintenance and the affordability of wood and is available in six natural and four basic colors.We also offer accessories to our decking products. The Trex Hideaway® Fastener Collection, offers solutions for every Trex deck fastening and finishing need, featuring color-matched screws and plugs, specially engineered bits, depth setters, and clips, designed to make installation easier and more efficient while delivering a clean, cohesive aesthetic. Trex DeckLighting™, an outdoor lighting system, is a line of energy-efficient LED dimmable deck lighting designed to use 75% less energy compared to incandescent lighting. It can be installed into the railing, stair risers, or the deck itself. The line includes a post cap light, deck rail light, riser light, a soffit light, and a recessed deck light. Railing Our railing products are Trex Signature® X-Series™ Railing, Trex Signature® aluminum railing, Trex Transcend Railing, Trex Select® Railing, Trex Select® T-Rail, and Trex Enhance™ Railing. Our high-performance cable rail, frameless glass rail, composite, and aluminum-deck railing kits and systems are sustainably manufactured, easy to install, and durable. Trex railing systems are built with the same durability as Trex decking and will not rot, warp, peel, or splinter and resist fading and corrosion. Trex Signature X-Series, made from approximately 30 percent recycled materials, is available in Charcoal Black with stainless steel or glass infill. Trex Signature aluminum railing, made from a minimum of 40 percent recycled content, is available in three colors and designed for consumers who want a sleek, contemporary look. Trex Transcend Railing, made from approximately 40 percent recycled content, is available in four colors that complement our Trex decking products. Trex Select® Railing, made from approximately 40 percent recycled content, is offered in a white finish and is ideal for consumers who desire a simple clean finished look for their deck. Trex Select® T-Rail, made from a minimum of 40 percent recycled materials, is available in square composite balusters in Classic White for a cohesive, coordinated look, or round aluminum balusters in Charcoal Black for a more modern contrast. Trex Enhance™ railing is available in four composite colors, and an Enhance Steel line was recently introduced in Charcoal Black, to expand the Trex addressable market. Fencing Our Trex Seclusions® composite fencing product is offered through two specialty distributors. This product consists of structural posts, bottom rails, pickets, top rails, and decorative post caps. The top and bottom rails of Trex fencing are designed to provide a “picture frame’ element and the deep rich colors have a matte surface to prevent harsh sunlight reflections. Cladding Our cladding products are Trex Signature® and Trex Transcend® Lineage™, and Trex Transcend®. Our high-performance, low-maintenance, eco-friendly composite cladding products are comprised of a blend of 95 percent reclaimed wood fibers and recycled polyethylene film and feature a protective polymer shell for enhanced protection against fading, staining, mold, and scratching. Trex Signature cladding offers realistic woodgrain aesthetics that raise the bar for beauty and performance and is available in hues inspired by stunning natural settings. Trex Transcend Lineage cladding is available in six luxurious on trend hues. Trex Transcend cladding is available in six multi-tonal monochromatic classical earth tones and premium tropical colors. 16 We are a licensor in a number of licensing agreements with third parties to manufacture and sell products under the Trex trademark. Our licensed products are: Trex® Outdoor Furniture™ A line of outdoor furniture products manufactured and sold by PolyWood, Inc. Trex® RainEscape®, Trex® Protect®, Trex® RainEscape® Soffit Light, and Trex® Seal™ Ledger Flashing Tape An above joist deck drainage system manufactured and sold by IBP, LLC. Trex Protect Joist, Beam and Rim tape is a self-adhesive butyl tape that protects wooden deck framing/substructure elements. Trex RainEscape Soffit Light is a plug-and-play LED Soffit light that is installed in the under-deck ceiling of a two-story deck. Trex Seal Ledger Flashing tape is butyl flashing tape with an aluminum liner. Trex® Pergola Pergolas made from low maintenance cellular PVC and all-aluminum product, manufactured by Home & Leisure, Inc. dba Structureworks Fabrication. Trex® Lattice Outdoor lattice boards manufactured and sold by Structureworks Fabrication. Trex® Cornhole Cornhole boards manufactured and sold by Johnson Enterprises, LLC under a Trademark License Agreement with Trex Company, Inc. Trex® Blade A specialty saw blade for wood-alternative composite decking manufactured and sold by Freud America, Inc. Trex® Spiral Stairs A staircase alternative for use with all deck substructures manufactured and sold by SS Industries dba Paragon Stairs. Trex® Outdoor Kitchens™ Outdoor kitchen cabinetry manufactured and sold by Danver Outdoor Kitchens. HIGHLIGHTS AND FINANCIAL PERFORMANCE Highlights: •Trex Named Among America's Climate Leaders by USA Today. Trex was among 500 U.S. companies that are making measurable progress in reducing their carbon footprint and taking meaningful climate action. •Trex's 2025 Sustainability Report, 'For Today and Tomorrow.' The report published in June, highlights Trex's unique commitment to the quality, durability, and sustainability of its products. •Trex Named to TIME's List of America's Best Companies 2026. Trex was the only decking brand to be included in this year's roster. In addition, Trex was ranked among the Top 100 Sustainable Engineering, Manufacturing & Medical Technology Companies. Financial performance. The following table presents highlights of our financial performance for the quarter and year-to-date: Three Months Ended June 30, 2026 2025 $ Change % Change ($ 000s omitted, except per share data) Net sales $ 418,019 $ 387,801 $ 30,218 7.8 % Gross profit $ 158,344 $ 158,132 $ 212 0.1 % Net income $ 61,876 $ 75,909 $ (14,033 ) (18.5 )% EBITDA* $ 105,559 $ 118,205 $ (12,646 ) (10.7 )% Diluted earnings per share $ 0.60 $ 0.71 $ (0.11 ) (15.5 )% Six Months Ended June 30, 2026 2025 $ Change % Change ($ 000s omitted, except per share data) Net sales $ 761,422 $ 727,794 $ 33,628 4.6 % Gross profit $ 297,366 $ 295,863 $ 1,503 0.5 % Net income $ 123,279 $ 136,343 $ (13,064 ) (9.6 )% EBITDA* $ 207,435 $ 214,119 $ (6,684 ) (3.1 )% Diluted earnings per share $ 1.19 $ 1.27 $ (0.08 ) (6.3 )% 17 *A reconciliation of Net Income (GAAP) to EBITDA (non-GAAP) is presented on pages 20 and 21 of this Quarterly Report on Form 10-Q under “Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA).” Capital expenditures. During the six months ended June 30, 2026, our capital expenditures were $57.3 million primarily related to $20.0 million for the Arkansas manufacturing facility, $6.5 million in cost reduction initiatives, $4.5 million for our ERP tool and other platforms, and $26.3 million in all other including capacity expansion in our existing facilities. RESULTS OF OPERATIONS General. Our results of operations are affected by a number of factors, including, but not limited to, the cost to manufacture and distribute products, cost of raw materials, inflation, interest rates, tariffs, consumer spending and preferences, the impact of any supply chain disruptions, economic conditions, and any adverse effects from global health pandemics and geopolitical conflicts. Conflict with Iran. To date, U.S. and Israel's conflict with Iran has not materially affected our business or our results of operations. We will continue to closely monitor the potential economic impact of the conflict on commodity and fuel prices, supply chains, pricing of raw materials, and its impact on consumer confidence. We cannot predict the impact continued conflict may have on the economy, our industry, or our business. Net Sales. Net sales consist of sales, net of discounts. The level of net sales is principally affected by sales volume and the prices paid for Trex products. Trex operating results have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions reduce the level of home and commercial improvement and residential and commercial construction and can shift sales of our products to a later period or decrease overall sales in affected locations. As part of our normal business practice and consistent with industry practice, we have historically provided our distributors and dealers of our Trex products incentives to build inventory levels before the start of the prime deck-building season to ensure adequate availability of our product to meet anticipated seasonal consumer demand and to enable production planning. These incentives include payment discounts, favorable payment terms, price discounts, or volume rebates on specified products and other incentives based on increases in purchases as part of specific promotional programs. The timing of our incentive programs can significantly impact sales, receivables and inventory levels during the offering period. Gross Profit. Gross profit represents the difference between net sales and cost of sales. Cost of sales consists of raw material costs, direct labor costs, manufacturing costs, subcontract costs and freight. Raw material costs generally include the costs to purchase and transport reclaimed wood fiber, reclaimed polyethylene, pigmentation for coloring our products, and commodities used in the production of railing and staging. Direct labor costs include wages and benefits of personnel engaged in the manufacturing process. Manufacturing costs consist of costs of depreciation, utilities, maintenance supplies and repairs, indirect labor, including wages and benefits, and warehouse and equipment rental activities. Less than 5% of our cost of sales is projected to be impacted by tariffs. The majority of tariffs are related to purchases of aluminum and steel used in our railing and fastening products. We have and will further mitigate some of the impact on our cost of sales through higher levels of existing pre-tariff inventory and supplier negotiations. Selling, General and Administrative Expenses. The largest component of selling, general and administrative expenses is personnel related costs, which includes salaries, commissions, incentive compensation, and benefits of personnel engaged in sales and marketing, accounting, information technology, corporate operations, research and development, and other business functions. Another component of selling, general and administrative expenses is branding and other sales and marketing costs, which are used to build brand awareness. These costs consist primarily of advertising, merchandising, and other promotional costs. Other general and administrative expenses include professional fees, office occupancy costs attributable to the business functions previously referenced, and consumer relations expenses. As a percentage of net sales, selling, general and administrative expenses may vary from quarter to quarter due, in part, to the seasonality of our business. Below is the discussion and analysis of our operating results and material changes in our operating results for the three months ended June 30, 2026 (2026 quarter) compared to the three months ended June 30, 2025 (2025 quarter), and for the six months ended June 30, 2026 (2026 six-month period) compared to the six months ended June 30, 2025 (2025 six-month period). Three Months Ended June 30, 2026 Compared To The Three Months Ended June 30, 2025 Net Sales Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Net sales $ 418,019 $ 387,801 $ 30,218 7.8 % 18 Net sales increased by $30.2 million, or 7.8%, in the 2026 quarter compared to the 2025 quarter. The increase was due to an increase in volume and net price, offset by the mix of products sold. Gross Profit Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Cost of sales $ 259,675 $ 229,669 $ 30,006 13.1 % % of total net sales 62.1 % 59.2 % Gross profit $ 158,344 $ 158,132 $ 212 0.1 % Gross margin 37.9 % 40.8 % Gross profit as a percentage of net sales, gross margin, was 37.9% in the 2026 quarter compared to 40.8% in the 2025 quarter. The decrease in gross margin was primarily the result of higher input and material costs, increased depreciation, lower production, and unfavorable mix. Selling, General and Administrative Expenses Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Selling, general and administrative expenses $ 67,480 $ 55,734 $ 11,746 21.1 % % of total net sales 16.1 % 14.4 % Selling, general and administrative expenses increased $11.7 million to $67.5 million, or 16.1% of net sales, in the 2026 quarter. The increase primarily related to increases of $4.1 million in personnel related expenses, $3.7 million in branding, and $2.8 million in services. Other Expenses Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Other expenses $ 4,672 $ — $ 4,672 100.0 % % of total net sales 1.1 % — Other expenses increased $4.7 million in the 2026 quarter. The increase was due to the write down of assets at our Virginia manufacturing facilities to reduce the carrying value of the assets to their estimated fair value. Provision for Income Taxes Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Provision for income taxes $ 21,989 $ 26,566 $ (4,577 ) (17.2 )% Effective tax rate 26.2 % 25.9 % The effective tax rate for the 2026 quarter was comparable to the 2025 quarter and was 26.2% and 25.9%, respectively. 19 Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)1 (dollars in thousands) Reconciliation of net income (GAAP) to EBITDA (non-GAAP): Three Months Ended June 30, 2026 Three Months Ended June 30, 2025 Net income $ 61,876 $ 75,909 Interest expense (income), net 2,327 (77 ) Income tax expense 21,989 26,566 Depreciation and amortization 19,367 15,807 EBITDA $ 105,559 $ 118,205 Three Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) EBITDA $ 105,559 $ 118,205 $ (12,646 ) (10.7 )% EBITDA decreased 10.7% to $105.6 million for the 2026 quarter compared to $118.2 million for the 2025 quarter. The decrease in EBITDA was driven primarily by lower gross profit and the write down of assets. Six Months Ended June 30, 2026 Compared To The Six Months Ended June 30, 2025 Net Sales Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Net sales $ 761,422 $ 727,794 $ 33,628 4.6 % Total net sales increased by $33.6 million, or 4.6%, in the 2026 six-month period compared to the 2025 six-month period. The increase was due to an increase in volume and net price. Gross Profit Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Cost of sales $ 464,056 $ 431,931 $ 32,125 7.4 % % of total net sales 60.9 % 59.3 % Gross profit $ 297,366 $ 295,863 $ 1,503 0.5 % Gross margin 39.1 % 40.7 % Gross profit as a percentage of net sales, gross margin, was 39.1% in the 2026 six-month period compared to 40.7% in the 2025 six-month period. The decrease in gross margin was primarily the result of higher input and material costs, increased depreciation, and unfavorable mix, partially offset by increased productivity. __________________________ 1EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management believes it facilitates performance comparison between the Company and its competitors. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, income taxes, and depreciation and amortization charges to net income or loss. In relation to competitors, EBITDA eliminates differences among companies in capitalization and tax structures, capital investment cycles and ages of related assets. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP and are not meant to be considered superior to or a substitute for our GAAP results. 20 Selling, General and Administrative Expenses Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Selling, general and administrative expenses $ 122,997 $ 111,801 $ 11,196 10.0 % % of total net sales 16.2 % 15.4 % Selling, general and administrative expenses increased $11.2 million to $123.0 million, or 16.2% of net sales, in the 2026 six-month period. The increase primarily related to increases of $5.1 million in branding, $3.4 million in services, and $1.1 million in personnel related expenses. Other Expenses Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Other expenses $ 4,672 $ — $ 4,672 100.0 % % of total net sales 0.6 % — Other expenses increased $4.7 million in the 2026 six-month period. The increase was due to the write down of assets at our Virginia manufacturing facilities to reduce the carrying value of the assets to their estimated fair value. Provision for Income Taxes Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) Provision for income taxes $ 44,091 $ 47,719 $ (3,628 ) (7.6 )% Effective tax rate 26.3 % 25.9 % The effective tax rate for the 2026 six-month period and the 2025 six-month period was 26.3% and 25.9%, respectively. Net Income and Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)2 (dollars in thousands) Reconciliation of net income (GAAP) to EBITDA and EBITDA margin (non-GAAP): Six Months Ended June 30, 2026 Six Months Ended June 30, 2025 Net income $ 123,279 $ 136,343 Interest expense, net 2,327 — Income tax expense 44,091 47,719 Depreciation and amortization 37,738 30,057 EBITDA $ 207,435 $ 214,119 Six Months Ended June 30, 2026 2025 $ Change % Change (dollars in thousands) EBITDA $ 207,435 $ 214,119 $ (6,684 ) (3.1 )% _______________________ 2EBITDA represents net income before interest, income taxes, depreciation and amortization. EBITDA is not a measurement of financial performance under accounting principles generally accepted in the United States (GAAP). We have included data with respect to EBITDA because management believes it facilitates performance comparison between the Company and its competitors. Management considers EBITDA to be an important supplemental indicator of our core operating performance because it eliminates interest, income taxes, and depreciation and amortization charges to net income or loss. In relation to competitors, EBITDA eliminates differences among companies in capitalization and tax structures, capital investment cycles and ages of related assets. For these reasons, management believes that EBITDA provides important information regarding the operating performance of the Company. Non-GAAP financial measures should be viewed in addition to, and not as an alternative for, the Company’s reported results prepared in accordance with GAAP and are not meant to be considered superior to or a substitute for our GAAP results. 21 Total EBITDA decreased 3.1% to $207.4 million for the 2026 six-month period compared to $214.1 million for the 2025 six-month period. The decrease in EBITDA was driven primarily by lower gross profit and the write down of assets. LIQUIDITY AND CAPITAL RESOURCES We finance operations and growth primarily with cash flows from operations, borrowings under our revolving credit facilities, operating leases and normal trade credit terms from operating activities. At June 30, 2026, we had $6.5 million of cash and cash equivalents. Sources and Uses of Cash. The following table summarizes our cash flows from operating, investing and financing activities (in thousands): Six Months Ended June 30, 2026 2025 Net cash provided by operating activities $ 95,740 $ 95,739 Net cash used in investing activities (57,198 ) (130,987 ) Net cash used in (provided by) financing activities (35,874 ) 39,479 Net increase in cash and cash equivalents $ 2,668 $ 4,231 Operating Activities Cash provided by operations was $95.7 million during the 2026 six-month period compared to cash provided by operations of $95.7 million during the 2025 six-month period. Accounts receivable increased more during the six months ended June 30, 2026 than during the comparable prior-year period, primarily due to higher sales volume. This unfavorable impact on operating cash flow was partially offset by lower tax payments compared to the 2025 six-month period. Investing Activities Capital expenditures in the 2026 six-month period were $57.3 million primarily related to $20.0 million for the Arkansas manufacturing facility, $6.5 million in cost reduction initiatives, $4.5 million for our ERP tool and other platforms, and $26.3 million in all other including capacity expansion in our existing facilities. Financing Activities Net cash used in financing activities in the 2026 six-month period consisted primarily of repurchases of common stock, partially offset by net borrowings on the revolving credit facility. Stock Repurchase Program. On May 4, 2023, the Trex Board of Directors adopted a stock repurchase program (2023 Stock Repurchase Program) of up to 10.8 million shares of its outstanding common stock. On February 26, 2026, Trex entered into an Accelerated Stock Repurchase program ("ASR") under the 2023 Stock Repurchase Program. On April 28, 2026, the Trex Board of Directors authorized an additional 10 million shares to be repurchased under the 2023 Stock Repurchase Program. During the six months ended, June 30, 2026, the Company repurchased an aggregate of 3.9 million shares of its common stock, consisting of 2.6 million shares by the ASR program and 1.3 million shares under the 2023 Repurchase Program. As of June 30, 2026 the remaining number of shares available for repurchase under the 2023 Stock Repurchase Program is 13,470,185. On July 29, 2026, the Board of Directors authorized a new share repurchase program allowing for the repurchase of up to $150.0 million of the Company's common stock. Management believes the authorization provides flexibility in the Company's capital allocation strategy and reflects confidence in the Company's long-term cash flow generation and financial position. Future repurchases will depend on business conditions, available liquidity, market conditions, and other investment opportunities. Revolving Credit Facility Indebtedness prior to March 26, 2026. On October 10, 2024, Trex entered into a Second Amendment to the Credit Agreement (Second Amendment) with certain lending parties thereto (Lenders) to amend that Credit Agreement dated as of May 18, 2022, as amended by that certain First Amendment dated as of December 22, 2022. The Second Amendment provides us with Revolving A Loans in the maximum principal amount of $400,000,000 (Revolving A Loans), Revolving B Loans in the maximum principal amount of $150,000,000 (Revolving B Loans), and Letters of Credit and Swing 22 Line Loans (as defined in the Credit Agreement). The Second Amendment extends the maturity date of the Revolving B Loans from December 22, 2024 to December 22, 2026. Base Rate Loans (as defined in the Credit Agreement) under the Revolving A Loan and the Swing Line Loans accrue interest at the Base Rate plus the Applicable Rate (as defined in the Credit Agreement) and Term SOFR Loans for the Revolving Loans accrue interest at the rate per annum equal to the sum of Term SOFR for such interest period plus the Applicable Rate (as defined in the Credit Agreement). The Base Rate for any day is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by BOA as its prime rate, and (c) the Term SOFR plus 1.0% subject to certain interest rate floors. Repayment of all then outstanding principal, interest, fees and costs is due at the end of the Term (as defined in the Credit Agreement). With respect to Revolving B Loans (as defined in the Credit Agreement), for any day, the rate per annum is a tiered pricing based upon the Consolidated Debt to Consolidated EBITDA Ratio. The applicable rate for Revolving B Loans that are Base Rate Loans range between 0.20% and 1.15%. and the applicable rate for Revolving B Loans that are Term SOFR/Term SOFR Daily Floating Rate range between 1.20% and 2.15%. Indebtedness on and after March 26, 2026. On March 26, 2026 Trex entered into a Credit Agreement with certain lending parties thereto (Lenders) to amend and restate the Credit Agreement dated as of May 18, 2022, as amended (the Prior Credit Agreement). The Credit Agreement provides us with one or more Revolving Loans in a collective maximum principal amount of $700,000,000 (Loan Limit) throughout the term, which ends March 26, 2031. Included within the Loan Limit are sublimits for, Letters of Credit (as defined in the Credit Agreement) in an amount not to exceed $60,000,000 and Swing Line Loans (as defined in the Credit Agreement) in an amount not to exceed $40,000,000. Base Rate Loans (as defined in the Credit Agreement) under the Revolving Loans and the Swing Line Loans accrue interest at the Base Rate plus the Applicable Rate (as defined in the Credit Agreement) and Term SOFR Loans or Term SOFR Daily Floating Rate Loans for the Revolving Loans accrue interest at the rate per annum equal to the sum of Term SOFR Loans/Term SOFR Daily Floating Rate for such interest period plus the Applicable Rate (as defined in the Credit Agreement). The Base Rate for any day is a fluctuating rate per annum equal to the highest of (a) the Federal Funds Rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by BOA as its prime rate, and (c) the Term SOFR plus 1.0% subject to certain interest rate floors. Repayment of all then outstanding principal, interest, fees and costs is due on the last day of the Term (as defined in the Credit Agreement). Compliance with Debt Covenants and Restrictions. Pursuant to the terms of the Credit Agreement, the Company is subject to certain loan compliance covenants. The Credit Agreement requires the Company to maintain (a) a Consolidated Interest Coverage Ratio of not less than 2.50 to 1.0 and (b) a Consolidated Debt to Consolidated EBITDA Ratio of not more than 3.75 to 1.0, each measured as of the end of each Fiscal Quarter, commencing with the Fiscal Quarter ended June 30, 2026. The maximum Consolidated Debt to Consolidated EBITDA Ratio is automatically increased to 4.25 to 1.0 for the Fiscal Quarter in which a qualifying Acquisition with cash consideration (including assumed or acquired Debt) of $75,000,000 or more occurs and each of the following four Fiscal Quarters (an "Adjustment Period"), subject to a limit of two Adjustment Periods during the term of the Credit Agreement. The Credit Agreement also contains an equity cure mechanism, under which the Company may make cash equity contributions (funded with proceeds of common equity) to be included in the calculation of Consolidated EBITDA solely for purposes of determining compliance with the financial covenants, subject to certain conditions and limitations, including that in each consecutive four Fiscal Quarter period there must be at least two Fiscal Quarters in which no such contribution is made. At June 30, 2026, we had $253.0 million in outstanding borrowings under the revolving credit facility. The total availability under the revolving credit facility was $443.9 million as of June 30, 2026, which reflects a reduction for outstanding letters of credit totaling $3.1 million. We believe that cash on hand, cash from operations and borrowings expected to be available under our revolving credit facilities will provide sufficient funds to fund planned capital expenditures, make scheduled principal and interest payments, fund warranty payments, and meet other cash requirements. We currently expect to fund future capital expenditures from operations and financing activities. The actual amount and timing of future capital requirements may differ materially from our estimate depending on the demand for Trex products and new market developments and opportunities. Capital Requirements. Our capital expenditure guidance for 2026 is $100 million to $120 million. Our capital allocation priorities for 2026 include expenditures for internal growth opportunities, manufacturing cost reductions, upgrading equipment and 23 support systems, and acquisitions which fit our long-term growth strategy as we continue to evaluate opportunities that would be a good strategic fit for Trex, and return of capital to shareholders. Inventory in Distribution Channels. We sell our decking and railing products through a tiered distribution system. We have over 100 distributor locations worldwide and two national retail merchandisers to which we sell our products. The distributors in turn sell the products to dealers and retail locations who in turn sell the products to end users. Significant increases in inventory levels in the distribution channel without a corresponding change in end-use demand could have an adverse effect on future sales. Product Warranty. We warrant that for the applicable warranty period our products, when properly installed, used and maintained, will be free from material defects in workmanship and materials and our decking, cladding, fascia and railing products will not split, splinter, rot or suffer structural damage from termites or fungal decay. Products sold on or after January 1, 2023: The warranty period for residential use is 50 years for Transcend® decking, 35 years for Select® decking and Universal Fascia, and 25 years for Enhance® decking and Transcend, Select, Enhance and Signature® railing. The warranty period for commercial use is 10 years, excluding Signature railing and Transcend cladding, which each have a warranty period of 25 years. We further warrant that Trex Transcend, Trex Enhance and Trex Select decking and cladding and Universal Fascia products will not fade in color from light and weathering exposure more than a certain amount and will be resistant to permanent staining from food and beverage substances or mold and mildew, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, we have an obligation either to replace the defective product or refund the purchase price. Products sold prior to January 1, 2023: The warranty period is 25 years for residential use and 10 years for commercial use. With respect to Trex Signature railing, the warranty period is 25 years for both residential and commercial use. We further warrant that Trex Transcend, Trex Enhance, Trex Select and Universal Fascia products will not fade in color more than a certain amount and will be resistant to permanent staining from food substances or mold, provided the stain is cleaned within seven days of appearance, for the warranty period referred to above. If there is a breach of such warranties, we have an obligation either to replace the defective product or refund the purchase price. We maintain a warranty reserve for the settlement of our product warranty claims. We accrue for the estimated cost of product warranty claims at the time revenue is recognized based on such factors as historical claims experience and future claims experience. To estimate our future claims experience, we utilize actuarial techniques to determine a reasonable possible range of amounts to be paid related to defects covered by our product warranty. The actuarial techniques consider claims received, claims closed, and the corresponding amounts paid. Estimates for these elements are quantified using a range of assumptions derived from claim history and consideration of additional factors influencing claim counts or costs incurred to settle claims in order to determine the best estimate of future claims for which to record a related liability. We review and adjust these estimates, if necessary, based on the differences between actual experience and historical estimates. We monitor claims activity each quarter for indications that our estimates require revision. We use the best and most complete underlying information available and a rational methodology to determine our warranty obligations. We consider all available evidence to assess the reasonableness of all key assumptions underlying our estimated warranty obligations. Our analysis is based on currently known facts and a number of assumptions, as discussed above, and current expectations. Projecting future events such as the number of claims to be received, the number of claims that will require payment and the costs associated with settling claims could cause the actual warranty liability to be higher or lower than projected, which could materially affect our financial condition, results of operations or cash flows. Seasonality. The operating results for Trex have historically varied from quarter to quarter. Seasonal, erratic or prolonged adverse weather conditions in certain geographic regions may reduce the level of home improvement and construction activity and can shift demand for its products to a later period. As part of its normal business practice and consistent with industry practice, Trex has historically offered incentive programs to its distributors and dealers to build inventory levels before the start of the prime deck-building season in order to ensure adequate availability of its product to meet anticipated seasonal consumer demand. The seasonal effects are often offset by the positive effect of the incentive programs.