About Simon Meester
In a September 2020 interview on CNBC's "The Exchange," Trex CEO Brian Fairbanks discussed the company's growth and demand for composite decking. Fairbanks stated that Trex's revenue grew at a 14 percent annual rate since 2015, with EBITDA increasing by 20 percent over the same period. He attributed recent demand partly to people moving from cities to suburbs and seeking outdoor living spaces, but said he did not think the growth was "simply because of the COVID pandemic." Fairbanks noted that only about 20 percent of decking currently uses Trex composite products, describing a "large conversion opportunity from wood to composite products."
Fairbanks also addressed production capacity, saying Trex announced a capacity expansion in mid-2019, with new capacity coming online in June 2020 and a larger amount expected in early 2021 at its Virginia facility. He acknowledged the company would like to have more capacity but stated it was "well down the road to building more capacity to service that expanded demand."
Source: AI-verified profile updated from Simon Meester's recent appearances.
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Transcript (8 segments)
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Reporter0:00
Trex's stock has soared more than 124 percent. In fact, to keep up with demand, Trex is spending on future production at a time when companies are looking to cut costs. Joining us right now in our Out of Stock segment today, Trex CEO and President Brian Fairbanks. Brian, good to see you. Thank you for joining us today.
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Brian Fairbanks0:19
Great, thanks for having us on.
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Reporter0:20
How much is your business up this year, and do you think it's simply because of the COVID pandemic?
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Brian Fairbanks0:24
I don't think it's simply because of the COVID pandemic. But coming through the second quarter, we saw a growth of seven percent, and then we guided to a 13 percent at the midpoint through the third quarter of this year. With people moving away from the cities, they seem to be looking to have more outdoor living spaces further out in the suburbs, and that has definitely driven the demand for composite decking.
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Reporter0:52
But your stock, and I know CEOs don't like to talk about their stock price, but I mean, you've obviously seen what has happened. Your stock acts like you've had much greater growth, or at least the markets are anticipating much greater growth down the road. Are you?
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Brian Fairbanks1:06
Well, we've had great growth. If we look back since 2015, we've grown our revenue at a 14 percent annual rate. During that same time, we've grown our EBITDA by 20 percent. So it's been impressive growth in the past. What's even more exciting is as we look forward, the conversion of wood to composite products in the future. Today, only about 20 percent of decking is used with Trex composite products. So as we move forward, we see a large conversion opportunity.
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Reporter1:35
But you have had a problem getting enough production going to meet the demand that's out there. Has that capped your growth to some degree?
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Brian Fairbanks1:44
We announced a capacity expansion in mid-2019 that we would start to see some of that capacity come in in the middle of 2020. We saw that come on in June, and then early 2021 we'll see the larger amount of that capacity come on at our Virginia facility. Would we like to have more capacity today? Absolutely. But we're well down the road to building more capacity to service that expanded demand.
