Good afternoon, and welcome to the Trex Company Q3 2023 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press Star, then one on your telephone keypad. To withdraw your question, please press Star, then two. Please note, this event is being recorded. I would now like to turn the conference over to Viktoriia Nakhla. Please go ahead. Thank you everyone for joining us today. With us on the call are Bryan Fairbanks, President and Chief Executive Officer. He is joined by finance executives, Brad McDonald, Chief Accounting Officer, and Kara Strosnider, Director of Financial Planning and Analysis, as well as Amy Fernandez, Vice President, General Counsel, together with other members of Trex Management, including the recently named Senior Vice President and Chief Financial Officer, Brenda Lovcik. The company issued a press release today after market close, containing financial results for the Q3 of 2023. This release is available on the company's website. This conference call is also being webcast and will be available on the Investor Relations page of the company's website for 30 days. I would now like to turn the call over to Amy Fernandez. Amy? Thank you, Viktoriia. Before we begin, let me remind everyone that statements on this call regarding the company's expected future performance and conditions constitute forward-looking statements within the meaning of federal securities law. These statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. For a discussion of such risks and uncertainties, please see our most recent Form 10-K and Form 10-Qs, as well as our 1933 and other 1934 Act filings with the SEC. Additionally, non-GAAP financial measures will be referenced in this call. A reconciliation of these measures to the comparable GAAP financial measure can be found in our earnings press release at trex.com. The company expressly disclaims any obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. With that introduction, I will turn the call over to Bryan Fairbanks. Thank you, Amy. Good evening, and thank you for joining us to discuss our Q3 2023 results. Building off our strong Q2 performance, Trex delivered another robust quarter with improvements across all key financial metrics. Consumer demand for Trex products remained resilient, with channel sell-through growth in the mid-single digits. Sales growth in the quarter also benefited from the successful launch of new products, along with our brand and marketing investments. These products resonate with consumers who value the aesthetics and low maintenance advantages of Trex products over traditional wood. We continue to leverage our industry-leading manufacturing capabilities, driving further cost reductions through increased production efficiencies, resulting in an adjusted gross margin of 41.8%. This strong performance on less than full capacity is a clear indication of the leverage inherent in the Trex business model. Adjusted EBITDA margin reached 31.5%, inclusive of our continued marketing and branding investments. As we highlighted in our recent Analyst Day, we remain focused on continuing to grow our market share as we convert more of the traditional wood decking market to Trex. Innovative new products remain central to our growth strategy, and we continue to expand our portfolio to meet consumer needs and preferences across all price points. In the Q3, we experienced continued positive market response to our Trex Signature and Trex Transcend Lineage products, two recently launched lines targeting the higher-end consumer. Lineage, with its proprietary heat mitigation technology and a more refined, clean look, has been well-received in the marketplace, and after successful testing in selected geographies, we plan a national rollout for Signature Decking, which is competing well at the high end of the market. We spent many years developing these game-changing products and are pleased with the reception we're seeing from both our channel partners and consumers. We also see significant growth potential in our broader residential segment, driven by railing, fasteners, cladding, and fencing, which together with decking, brings our overall addressable market opportunity to approximately $14 billion. We believe in opportunities, and railing alone offers substantial growth potential. The growth will be driven by expanded attachment rates, coupled with attractive solutions to match consumer preferences at each price point, while still delivering on Trex quality. While we have manufactured and sold Trex Railing products since our early years, we recently accelerated our efforts to further penetrate the market. Notably, we introduced our Trex Select T-Rail system in the Q2. This composite rail system is priced competitively against low-cost vinyl railing, yet outperforms vinyl both in terms of aesthetics and performance. T-Rail is off to a great start, expanding our share in railing and building greater awareness of the Trex brand in this important category. The T-Rail launch continues our strategy of providing railing product at every price point, as we have successfully done in decking. As we continue to drive innovation through new products and tap into a range of new growth opportunities, we are expanding our production capacity in a disciplined manner. We will continue to develop our new facility in Arkansas using a modular approach, enabling us to match new capacity with anticipated market demand, while allowing us to incorporate emerging technologies that will further optimize production efficiency. As a part of our planned investment, we intend to incorporate AI to further improve product quality and create the lowest cost manufacturing facility in the industry. We continue to focus on long-term growth and delivering value to shareholders in a sustainable manner. ESG leadership is important to us, as it's been part of our company's DNA since its inception, and our sustainability goals align with profitability targets. We remain committed to the reduction of waste, water, and energy consumption, empowering and investing in our valuable employees, and helping build strong and healthy communities where we operate through our recycling programs, employee volunteer efforts, and charitable donations. Now, I will turn the call over to Brad McDonald, Chief Accounting Officer, for a review of our financial performance. Thank you, Bryan, and good evening. As in the previous quarter, given the divestiture of Trex Commercial Products at the end of 2022, and to provide a more meaningful comparison, my comments will compare our Q3 2023 financial performance to the Q3 of 2022 Trex Residential Results. Net sales of $304 million exceeded our expectations and were significantly above last year's $178 million of residential net sales, which were impacted by channel inventory destocking. Improved utilization rates from higher production volumes and the benefits from our investments in production efficiencies and cost out programs, drove a significant improvement in gross margin to 43.1%. During the quarter, we recognized the benefit of $3.8 million due to a reduction in the warranty reserve related to the legacy surface flaking issue that affected a portion of the products manufactured at the Nevada plant prior to 2007. Excluding the warranty benefit, gross margin was 41.8% compared to residential gross margin of 25.4% in last year's Q3. Selling general and administrative expenses were $45 million, or 14.7% of net sales, compared to $25 million, or 13.9% of Trex Residential net sales in the 2022 quarter. As discussed in the previous quarter, we're returning to more normalized SG&A spending levels with a focus on branding, marketing, and R&D. Net income in the 2023 quarter was $65 million or $0.60 per diluted share, compared to Trex Residential net income of $15 million or $0.14 per diluted share during the prior year quarter. EBITDA was $99 million, and EBITDA as a percentage of net sales or EBITDA margin, was 32.7%, compared to Trex Residential EBITDA of $32 million and EBITDA margin of 17.8% in the Q3 of 2022. Excluding the warranty benefit, net income in the 2023 quarter was $62 million or $0.57 per diluted share, and adjusted EBITDA was $96 million, and EBITDA margin was 31.5%. Year-to-date, 2023 net sales were $899 million, compared to $879 million of residential net sales in the year ago period. Net income was $183 million or $1.69 per diluted share, compared to Trex Residential net income of $177 million or $1.57 per diluted share in 2022. Year-to-date, 2023 EBITDA was $285 million, resulting in an EBITDA margin of 31.7%, compared to Trex Residential EBITDA of $268 million and EBITDA margin of 30.5% in 2022. Excluding the warranty benefit, year-to-date, 2023 net income was $181 million or $1.66 per diluted share. Adjusted EBITDA was $281 million, and adjusted EBITDA margin was 31.3%. Year-to-date operating cash flow was $288 million, compared to $244 million in the comparable period of 2022, as we converted significant working capital into cash through inventory reduction. Capital expenditures amounted to $113 million year-to-date, primarily related to the build-out of the Arkansas facility. I will now turn to our updated guidance. We are projecting Q4 revenues in the range of $185 million-$195 million, reflecting both seasonally lower demand and the shift of our pre-buy to the Q1 of 2024, as discussed in last quarter's conference call. The resulting impact is that full year 2023 revenues are projected to be $1.09 billion, assuming the midpoint of the Q4 revenue guidance. This is an increase from the $1.04 billion-$1.06 billion range provided during our last update. We are also increasing our full-year adjusted EBITDA margin guidance to be between 29%-29.5%, compared to the previous range of 28%-29%. This guidance includes our expectation that SG&A will be at the higher end of the range of 15%-16% of net sales. Capital spending guidance is projected at the higher end of the estimated $145 million-$155 million previously provided. Depreciation and amortization will range from $47 million-$50 million, and our tax rate guidance remains at 25%-26%. With that, I'll now turn the call back to Bryan. Thank you, Brad. Before I finish my remarks, I wanted to introduce the most recent addition to the Trex Executive Team, Brenda Lovcik, our new Senior Vice President and Chief Financial Officer. With over 25 years of experience, Brenda brings deep financial experience gained at global manufacturing companies, a strong track record in business operations and proven leadership skills. Brenda? Thank you, Bryan, and good evening, everyone. This is an exciting time for Trex, and I am delighted to join the team as we continue to execute our growth strategy and build long-term value for Trex stakeholders. I look forward to speaking and meeting with you in person over the coming months. Thank you, Brenda. Trex is continuing to successfully navigate this dynamic environment, leveraging our industry-leading competitive advantages that clearly distinguish Trex from our competitors. Our laser focus on share gains from an expanding addressable market, complemented by our continued investment in innovation, product launches, and consumer education, will ensure we drive long-term shareholder value. I want to thank our Trex team members for their hard work and channel partners for the many years of productive growth, and look forward to many more years working together. Operator, please open the call to questions. We will now begin the question and answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To withdraw your question, please press star, then two. Please limit yourself to one question and one follow-up. If you have further questions, you may reenter the question queue. At this time, we will pause momentarily to assemble the roster. Our first question comes from John Lovallo of UBS. Please go ahead. Good evening, guys. Thanks for taking my questions. The first one is, you know, the Q4 revenue expectations improved from, you know, what was implied at about $155 million- $185 million last quarter to the $185-$195 today. And this would actually, you know, represent year-over-year growth versus the Q4 of 2022. That said, the implied EBITDA in the Q4 would still be down sort of 18%-20% year-over-year. So can you just help us sort of bucket the year-over-year drivers that are weighing on the Q4 EBITDA, other than maybe the higher SG&A? The biggest driver of that is going to be the SG&A related to branding spend. We do have new products that will be coming into the marketplace next year, so we will be creating samples, merchandising, creating all of the literature that goes around that. So we will have, when you do the modeling for SG&A, you'll see that that will come in quite a bit higher than what it has been historically as we prepare to launch those products. Understood. Okay. And then, you know, maybe just from a high level, how did demand sort of trend through the quarter? You know, how would you characterize September exits rate, you know, exit rate, and how are things, did things look in October? We were pleased with the consumer reaction to our products throughout the Q3. Saw a mid-single digit type sales growth, and for the Q4, inclusive in our guidance, and to your point, slightly better than what we provided for with before. We assumed a roughly flat. Now, I would expect a low single digit type growth in the Q4 with consumer demand. So we're still positive on the Trex consumer, the effectiveness of our marketing, also the weather conditions that we're seeing across most of North America. Great. Thanks, Bryan. Thank you. The next question comes from Susan Maklari of Goldman Sachs. Please go ahead. Thank you. Good afternoon, and thanks for taking the questions. Hi, Susan. Bryan, maybe to start with. Hello. Can you talk a bit about how you're thinking of the setup for 2024? I mean, appreciating that it's still a bit early out there, but how do you think the industry, as well as Trex, will end the year in terms of channel inventories and maybe the potential to pull more volumes in next year, especially as you think about sell-in perhaps outpacing sell out? I think the best way to look at it at this point, if I take myself back to this time last year, we were looking at 2023 being down mid-single digits. And with the guidance we've provided, it will end up being up mid-single digits, on a full year, full year basis, excluding any impacts from inventory changes at year-end. I am feeling more positive about the Trex consumer today than I was feeling a year ago. I see how these consumers are reacting to the value of installing a Trex deck. We hear more often than not, these are consumers that might be normally looking to move up in their home, but because of high interest rates and high values of those homes, they're not making that move, so they're improving their existing spaces. I expect that tailwind on the repair and remodel side to continue to be a benefit for Trex as we move forward. So I'm feeling marginally more positive today than I was at the end of last year. Okay. That's helpful color. And then, you know, maybe following up on John's question a bit, you mentioned to expect SG&A to be a bit higher in the Q4, in support of the new products that you'll be launching. Any thoughts on how we should think about margin cadence for 2024? Any key items you'd highlight for next year? We'll provide a lot more detail on 2024 as we get into the end of the year call and margin cadence. I would expect that we will see a stronger early buy as the channel recognizes that we need to ensure the appropriate amount of material is out there. But aside from that, really nothing else to provide at this point. Okay. All right. Thanks for the color. Good luck with everything. Thank you. The next question comes from Ryan Merkel of William Blair. Please go ahead. Hey, everyone. Thanks for taking the questions. My first one, Bryan, is just, you mentioned the positive response to the new Decking Products. How did you measure that? And then should we expect a bigger pop next year as you're rolling that out in a bigger way? Well, yeah, to answer your second question, yes, absolutely. It does take some time to get these products in the market. We launched two colors of our Lineage product line in, I believe it was May of last year, and then two additional colors in December 2022. So we've seen that build as we've gone through the course of the year, and we expect to see that continue to build next year as more people get more familiar with the Transcend Lineage product line, the heat-mitigating technology, the updated colors. So what we're calling it based off of what we're actually seeing in the market. From a Signature perspective, we expect that'll be more of a niche product. It's designed to really hold on to that super premium buyer that's looking for the aesthetics and the feel of that real tropical hardwood. So we are seeing that turn through the channel in the test markets that we've launched it into, and we will have a national rollout of that in the new year. Perfect. And then for my follow-up, I'm just getting asked about the risk of consumer financing again. Can you just refresh us on your thinking there and, you know, what percent of the consumer you think uses financing for your products? Consumer financing for deck projects is not extensively used. Data that we have in talking with our contractors, it's less than 10% of the marketplace. It's not something that we hear back from our contractors, and our contractors are not shy about asking us for selling tools to help them in the marketplace. It doesn't even show up in the top 10 of things that they're looking for, for selling tools along the way. Great. Thank you. Thanks. The next question comes from Joe Ahlersmeyer of Deutsche Bank. Please go ahead. Hi, Joe. Hey, good afternoon, everybody. Thanks for taking the questions. You know, I'm always looking at your finished good inventory, but I think this Q3 number is particularly important as we think about what actions people might take in the channel around pre-buy. It's $43 million, I think, on finished goods. That is far lower than last year, and it's more in line with 2021. I'm just wondering, you know, how you're planning, I guess, production in the Q4 to service even the guidance that you've put out, and then what you might do if the pre-buy is actually a little bit stronger than you're assuming. I just want to also make sure that the number that you assume is pushed to Q1 hasn't changed either. Yeah, remember, last year, we pulled back our sales guidance significantly because of the need to reduce inventory in the channel. So we were building inventory and putting it on our balance sheet, from that perspective. Whereas this year, it was a regular Q3 inventory, and to your point, looks more like a normal end of the Q3, where we finish with usually the lowest inventory, for the year. As we go into the end of the year, we will be building inventory as we normally do during the Q4, and we'll use that in addition to our production, to be able to service the early buy and then through the Q2 of next year. And so thinking about the Q4 implied gross margin, that's reflective probably of the production rate of 3Q. And so as you build inventory in 4Q, we might see a pretty decent step up into Q1 gross margin. Is that a fair way to think about it? Yeah. Production will be roughly in line with what we made, maybe even marginally a little bit higher than what we made in the Q3. All right. Thanks a lot. Good luck. Thanks. The next question comes from Jeffrey Stevenson of Loop Capital. Please go ahead. Hi, thanks for taking my questions today, and congrats on the strong results. Thanks, Jeff. So, Bryan, can you talk about the current sentiment at your dealer and distributor partners? I'm just wondering if they've become incrementally more optimistic after another strong sell-through demand quarter, or does there remain some conservatism given concerns about the impact of higher interest rates and slowing existing home sales? What we're hearing from the channel is that, while there's concern from consumers, those that have strong consumer brands are holding up better than other parts of the marketplace, which are more commodity-based. So overall, much like my comments earlier in the call, they're feeling more positive about the Trex business going into next year than they did going into 2023, and they want to ensure they have the right inventory on the ground to be able to support those consumers as we continue to see a tailwind from homeowners that are staying in their existing homes, that they're upgrading those wood decks. We've talked in the past about there being 50 million-60 million wood decks, and about half of those are either past or at the point of needing replacement. Okay, now that's very helpful. My second question is, if there's an opportunity to become more aggressive with your share repurchase program after the recent market-driven pullback here? We operate our program through 10b5-1 filings. Those parameters are preset when the program is filed. We do have a continuing program for the shares, and I expect that it's a continued important part of our capital allocation. Our top priority is our organic growth, and then second would be share buyback. Great. Thanks, Bryan. Thank you. The next question comes from Keith Hughes of SunTrust. Please go ahead. Thank you. You've given us kind of the view for capital spending for 2023. If we look into 2024, will it be the same order of magnitude? We'll provide additional color on that, but I do expect 2024 to be quite a significant year of capital spending as we really get into the heavy part of the build-out and the purchasing of the equipment for the decking building, as well as potentially adding a warehouse onto that site as well, too, and most of that capital will be expended within the course of the year. On the quarter, was the revenue growth, was that all units, or was there some price mix in the number? There was no price. No price. Okay. Thank you very much. Thank you. The next question comes from Trey Grooms of Stephens. Please go ahead. Hi, good afternoon. This is Noah Merkousko on for Trey. Thanks for taking my questions. First, do you anticipate the need to take any pricing in 2024? We haven't made decisions on pricing. We would. If we were to take pricing, we would talk with the channel prior to talking with the investment community on that. We have not seen any significant upward move in our overall costs. There have been a few things here and there on some certain specific smaller product lines that we might consider along the way, but I wouldn't expect it to be material. Got it. That makes sense. And then for my follow-up, is $60 million-$80 million still the right way to think about potential inventory build in Q1 2024? I wouldn't necessarily call it inventory build. I would expect the inventory build to be larger than that. The $60 million-$80 million specifically refers to those sales that would have otherwise occurred in December as part of our early buy. Last year, we did it over a four-month time period from December through March. This year, we'll do it over a three-month time period, January through March. Got it. That makes sense. Thanks for taking my questions. Thanks. The next question comes from Alex Rygiel of B. Riley FBR. Please go ahead. Hi, Alex. Thanks, Bryan, and very nice quarter here. Could you provide a bit more color on the increase in sales guidance relative to sell-through versus channel inventory rebounding? You're talking specifically for the Q4? Yes. So for the Q4, originally, we had expected that we would be looking at a flattish Q4. Now I'm expecting to see a low single-digit type growth, and then there'll be just a little bit of inventory build within the channel itself. When looking at the end of the Q3, was well below where, where things were last year, and so I would expect just a small rebound within the quarter, and then the meaningful inventory build will occur during the Q4 of next year. That's helpful. And then I believe rail attachment rates are in that 15%-20% range. Is there any way you could be a little bit more specific in that, maybe talk about how that's changed in 2023, and maybe talk about how that could change in 2024? It's a significant variance in attachment rate, depending upon the regions that we operate within and the attractiveness of our existing railing profiles to those regions out there. And it can be anywhere from 15%, going all the way up to over 50%, depending upon the area. That's one of the things that we're going to work on, and how can we better have a metric to reference that back to the marketplace. But there's such a wide variance on it today, that trying to pick a single metric on overall attachment rate doesn't work all that well for us. But what we do see is where we have those lower attachment rates, that means that there are areas of the marketplace that we're not hitting the sweet spot for what they're looking for, and they're all opportunity for us to be able to expand that attachment rate to get it up to 50%-60% across the board. Thank you. The next question comes from Phil Ng of Jefferies. Please go ahead. Hey, guys. Congrats on a strong quarter, and Brenda, looking forward to working with you going forward. Hey, Phil. So Bryan, I guess sellout was obviously quite impressive in a pretty tough backdrop in RNR. A few building product companies have talked about maybe flat to down low single-digit RNR for 2024. So assuming that's the right backdrop, do you expect to grow in that environment? And I know at your investor day, you guided, like, low double-digit organic growth. Is that something that's, you know, achievable in this current environment? Yeah, I think next year, growth is absolutely in the cards for Trex. I'll go back to my comments around the brands continue to bring consumers in. We also operate in a segment that when consumers do tend to pull back, they, our consumers tend to be a little bit higher income and, so don't pull back quite as hard. So we feel good about where we stand in the market. Okay, that's helpful. And then the attachment rate on railing, you've talked about at length at your investor day, and you called it out in your outlook as well today. Do you have any wins that you want to call out that could be substantial? And how are you approaching, you know, trying to capture share in this business differently than years past? Is it a product rollout? And when we think about wins here, does it have any material impact on your margins, incremental margins, mix, and all that good stuff? I think it's fair to say, when you've listened to us talk over the past four years or so, we've talked about decking. And so you've heard a little bit of a shift. It's not as if we're moving away from decking, but we want the market to understand there's a real opportunity for Trex in railing. There will be more resources, both from an R&D perspective as well as focus from our sales team, of how we go about ensuring that we're getting our fair share in the market. And a great example is the launch of a T-Rail system. There's a lot of people that install the low-cost vinyl railing systems in the marketplace. We've put a product out there. We've had a couple nice wins where we've been able to take competitor product off of the shelves, and they brought Trex in, they bundled it in with the rest of the program, and we continue to see great opportunity to do that with T-Rail, but also other railing profiles that we're not playing in today. Any impact on margins and incrementals? We focus on continually improving our margins on an ongoing basis. Some of our products have higher, some have a little bit lower along the way, but we're looking for overall continuous improvement. I wouldn't expect to see a significant change just because of additional focus on railing. Okay, thank you. Thanks. The next question comes from Stanley Elliott of Stifel. Please go ahead. Hey, everybody. Thank you all for the question. Bryan, you mentioned, you know, the cost environment, you're not really moving one way or the other. Is that more a function of just what you're seeing in the macro? I know you guys, and I guess you, you've spent a lot of energy on kind of moving downstream on the recycling. I'm just curious, kind of what sort of the breakdown would be from the process improvement versus just overall commodity prices. One of our strategies is to have ongoing continuous improvement programs that can offset a, let's call a normal amount of inflation over the course of the year and generate improvement from our overall EBITDA margin perspective. So let's say we get back to a normal environment, we're back down to a 2% type inflation rate, I would expect that we can continually offset that with continuous improvement. Really, the only thing that we've seen, I would say, over the last quarter, of course, fuel prices, diesel, has gone up, and then electric prices out in the, western footprint continue to go up. But again, those are not that significant compared to the type of inflation that we saw the prior two years, where we really had to take pricing to cover it. In terms of kind of some of the new product launches you've got slated for next year, you mentioned a reference, should we expect those to be more kind of in the decking category, more in some of the adjacent categories that you guys had touched on at the recent Analyst Day? Stay tuned on that. All right. There'll be some good news forthcoming later on in the quarter. Very good. All right. Thanks so much. Best of luck. Thanks, Stanley. The next question comes from Tim Wojs of Baird. Please go ahead. Hey, guys. Good afternoon, nice job. Maybe just on sell-through, the mid-single digit that you talked about, was there any kind of variance between, you know, the different, you know, types of channels that you service? I would say the pro channel, and when I say pro, anybody selling to a contractor. So our pro channel sells to contractors, but our DIY big boxes also sell to those pro customers. That tended to be somewhat stronger than the pure DIY customer during the Q3. Okay. Okay, good. And then just on the winter buy, I guess one, is there any change to that kind of $50 million shift that you talked about last quarter from Q4 to Q1? And did you make any structural changes to the winter buy program at all, or is it just really just a, you know, one less month than what you've had before? That's the, probably the biggest difference, is it's one less month. Otherwise, the program is relatively similar. We do make some adjustments based off of feedback that we get from our channel partners each year and things that we specifically want to focus on, but otherwise, it's not too far off what we've done in the past. Okay. Okay, good. Well, good luck on the rest of the year. Thanks. Thanks, Tim. The next question comes from Rafe Jadrosich of Bank of America. Please go ahead. Hi, good afternoon. Thanks for taking my question. But Bryan, on the Q4 marketing investments, would you be able to just quantify it a little bit for us? Like, should we be thinking about SG&A dollars, maybe flattish quarter-over-quarter? And is any of that pull forward of investments? I don't expect it will be flattish. You can back into it with the SG&A guidance, where we talked about 15%-16%, but being at the higher end of that part of the guidance and back into a number for the Q4. Got it. And then, I mean, there, there's been a big step up on, on SG&A this year, and it seems like it's been effective in driving the demand and, and, and sell-through. How do we think about the level of spend that's appropriate going forward and as, as we go into, into next year? Do you think the, the 2023 run rate is, is the right level? I think we'll continue to leverage SG&A. We've talked about that before as one of the driving opportunities for our EBITDA improvement over time. I don't see that we're going to be looking at 40-50 basis point annual improvements, but that 20-30 type level, absolutely. Got it. Okay. And then, just one more quick one. Would you be able to talk about the sell-through trends now that railing is becoming a bigger part of your business and you're focusing more there? How did the decking sell-through trend versus railing? Did one outperform the other, or both of them in that mid-single digit range? Both of them were in that range. Great, thank you. Very helpful. The next question comes from Michael Rehaut of JP Morgan. Please go ahead. Hi, good afternoon, thanks for taking my questions. Hi, Michael. Hey, so first, I just wanted to make sure I heard you correctly, from before in terms of, you know, Q4 into Q1. It It looks like, you know, from, like, 2015 to 2019, it was a seasonal move of about $40 million-$50 million of higher sales in Q1 versus Q4. Are you saying that, you know, we should expect it to be a little greater than that due to that month shift, maybe by another $15 million or $20 million? Is that the right way to think about it? Just want to make sure I was understanding you correctly. I think the more important part is we're a bigger company today from those years that you're looking at. So yes, the number would be higher, but the model really hasn't changed, where it's extremely important that that inventory gets pre-staged in the marketplace before the season really turns on during the peak seasonal months. Okay, got it. Got it. No, thank you. And, and I guess just secondly, you know, talking about the attachment rates for railing and the opportunity there, and obviously, you also have some, you know, additional capacity that you've turned on over the last couple of years. Is there any way to think about, you know, whatever the market baseline would be in 2024, what you think those additional opportunities, either from ramping up your sales efforts on the railing side or just pursuing additional opportunities through your you know, your additional capacity, the builder channel or other channels? Any way to think about, you know, what the growth opportunity might be above the market next year? We'll talk more about next year as we get into the end of the year call. But I think when you look at over the longer term, inclusive of our investor day of a 12% top line, and growing our EBITDA margin by 500 basis points, through 2028, that's inclusive of that railing and decking growth. Okay. Thank you. Thanks. The next question comes from Kurt Yinger of D.A. Davidson. Please go ahead. Great, thanks, and good afternoon, Bryan. Just wanted to start off on sell-through. When you talk about the mid-single digit growth, is that based on sales out of two-step or more reflective of kind of point of sale at the dealers and retailers themselves? And then as we kind of think about the full year guide of $1.09 billion in sales, we think about some of the sales being pushed into Q1 of next year. Is kind of a realistic kind of full year sell-through number, kind of in that $1.15 billion in sales, a reasonable starting point as we start thinking about 2024? We'll talk more about 2024 on the next call. Related to the sell-through specifically, it was really kind of consistent, I guess I would say, between the level, so not necessarily at the Trex side. That takes out any movements that you would have in inventory. Okay, got it. And then, you know, this last quarter, one of the kind of more notable shifts that we heard on the contractor side was just kind of a thinning of project backlogs, and in some cases, those being below normal at this stage. Is that a theme you've heard of all out of your contractor network? And how does that maybe impact your view around underlying demand trends going forward? What we're hearing is there's some thinning for some of the smaller projects that are out there, but the bigger projects, there continues to be a good backlog and quite robust demand for those larger projects. Okay, thanks for the color. Thanks. The next question comes from Reuben Garner of The Benchmark Company. Please go ahead. Thank you. Good evening, everybody. Bryan, did I hear you mention increasing capacity in the near term? If so, how are you going about doing that? Did you quantify how much, and is there any kind of near-term investment or impact on margins from doing that? Now, remember, we pulled back our capacity quite significantly last July. This is just bringing back on some of that capacity, and I would expect the Q4 just to be marginally higher than where we were in the Q3. Okay, great. And then, the railing initiative, is there any potential or opportunity that there might be kind of a inventory fill situation next year, where some of your customers kind of ramp the amount of product that they carry or keep on hand as you guys build that out? Or is that kind of that's not baked, I assume, into that kind of $60 million-$80 million number that you talked about. Would that I assume that would be separate. Is that a sizable opportunity or something probably not as material? I think what you're asking, is there a one-time infill related to it? Clearly, as- Right -we end up with new products, there are going to be one-time infills. These infills are not nearly to the same degree as, for example, when we launched Enhance back in 2019, and we had, I think it was 5 or 6 different colors, a bunch of different lengths. We had the basics, we had the enhanced product. It was a material infill. So the railing piece will be part of our normal early buy, and there'll be some level of infill, but it's not going to drive the growth on its own. Perfect. Thanks. Congrats on the strong results. Thanks. The next question comes from Steven Ramsey of Thompson Research Group. Please go ahead. Good evening. Just a quick question to clarify first. Did Pro outpace DIY? You said that, was DIY a drag, or was Pro just meaningfully better, but both positive? Well, what I'm trying to make sure that we clarify is, both Home Depot and Lowe's both sell to the Pro contractor. So if I bifurcate my Pro and my folks that are buying, they may be buying from any part of the channel, and they're doing it themselves, that part of it was weaker. Anybody that's selling to the Pro channel, continued to be, somewhat stronger and drove more of the growth. Okay, helpful. And then getting into the nuance of higher SG&A spending at the high end, still on a percentage of sales, but a higher dollar amount as well. Is there a way to think like-for-like spending on higher SG&A spend on decking versus how much of that is related to driving demand in the ancillary products, like railing? We've not tried to split that out. We're continued to focus on our branding effort to make sure we're doing everything that we can to bring those customers in the door to buy a Trex Product, especially while the weather continues to hold up here at the end of the season. That's helpful. Thank you. Thanks. The next question comes from Matthew Bouley of Barclays. Please go ahead. Hey, good evening, guys. Thanks for taking the question. So on the Q4 margin guide, I think even with SG&A getting to the high end of your full year guide, I mean, it still implies that step down in gross margin in the Q4. I think you said earlier that the timing of some of your production economics is going to play into it. But, you know, my question is: Was the production in Q3, I guess, enough to take your gross margins down to that degree in Q4? Is there anything else hitting the gross margin in the Q4, or are you just sort of building in conservatism there? Thank you. It's primarily related to the production economics. So the revenue is significantly lower than it is in Q3. Not all of the costs that go through manufacturing end up getting put into inventory. You saw that impact last year in the Q4. So that's just continued part of the impact from the way the costs flow through the balance sheet and inventory. Perfect. Got it. Okay, and second one, you know, on the last comment that that sort of true retail DIY was a tad weaker, you know, how do you read into that? Historically, have you seen that DIY, you know, lead Pro or, or perhaps not? Is it just different types of consumers? My question is really, you know, what do you make of that, Bryan? I think at the, at the lower cost decking side of things, it has probably more of an impact in the short term, but everything that I'm seeing is that the consumer that's looking to do the larger projects and using the higher-end material is absolutely there. We talked about the tailwinds from higher interest rates preventing people to move up, and we're hearing that as a continued storyline coming back from our contractors as well as our dealer body. Thanks, Bryan. Good luck. Great. Thank you. This concludes our question and answer session. I would like to turn the conference back over to Bryan Fairbanks for any closing remarks. Thanks for everybody's participation today and your support of the Trex Company and our growth objectives. We look forward to speaking with many of you in the coming weeks. Good evening. The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect.