OC - Earnings call transcript Q3 2020

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Owens Corning Third Quarter 2020 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask question. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Amber Wohlfarth, Director of Investor Relations. ahead. go Please

Amber Wohlfarth

XXXX. good time and and Thank for third you of Thank join morning, us the quarter the for to business call for taking our you results everyone. today’s review conference

Chief Joining us today Officer. and Brian Chambers, Financial Parks, Chief Executive Chairman our Owens Ken Officer; Corning’s are and

only. to we we’ll limit call many participants quarter a possible, please this Following one-hour and XX-Q to as our morning, filed presentation morning, your XXXX. financial that accommodate call to Earlier one news release detailed question yourselves this third issued results open questions. this In order a the for as our

the performance the For prepared our and have results, we and call. to discussion of during purposes we’ll today, slides summarize presentation slides that refer our these

Form and earnings and section call begin, website of release, slide reminders. future link can our at reference. the two transcript the offer Please Corporate reference and under supporting on Refer will we the slides A recording a for You owenscorning.com. homepage. access where couple be website presentation to before available of slides our this we the of our Investors XX-Q, press

to the forward-looking detailed risks filings and inherent beyond is SEC explanation obligation affecting securities statements These what will risks, could estimates Please based required forecasts statements include of cautionary actual statements uncertainties to remarks results subject our uncertainties such the these cause refer risk We applicable and are on current no future materially. of our update more in today’s factors under the First, a for and our undertake forward-looking other that events. statements to statements. identified and factors differ to laws.

with and of comparisons, non-GAAP today’s owenscorning.com. which financial presentation, it’s tables primary available slides measure and for that we our is calculating Consistent adjust ongoing earnings fluctuations, financial both and of remove be Adjusted EBIT significant in are compare and presentation meaningful text adjusted items of per operations, of period-over-period to the historical in the measures. believe and rate Explanations our remarks not excluded which certain and reconciliations earnings earnings non-GAAP a release to tax measure our have have effect effective EBIT maybe to believe We our practice, adjusted earnings. adjusted measures results. found quarter-to-quarter the potential press share. GAAP of the our representative of and are at when our arriving Second, we we contain adjusted on investors to

flow to in adjusted and flow financial to detailed cash earnings company’s help opportunities utilize of that today's value. and shareholder more pursue Form generate release ability news The XX-Q measures tables cash also include use the cash free free and conversion to cash enhance as investors We information. evaluate that the to

our along For our those from Brian we’ll presentation, remarks slide opening four. begin Chambers. with following Chairman CEO, of on now, Brian? slide you And and

Brian Chambers

I high Relations. call call joining months this proven speak Investor have Thanks, as past Officer for morning leading track to Ken role. delivering know our the to Ken serving CFO and opportunity and new you morning. over opportunity our a our diverse several organizations. performing Amber. to this thank you I'd to our record her Gandhi in I everyone, Chief results our first of Prith take at many welcome teams to to of Amber, Director Interim want new for thank us had this also earnings with several Good today. Parks, global Financial like and welcome the has of

team. to are have excited our We Ken on

the then provide quarter the third an market on quarter, morning, company Ken we results then details opportunities. to quarter. overview our of our this provide how call capitalize for come outlook on back our the our to and discuss During and will are fourth third I will additional I'll positioning financial

changing proud working to together adapting these continues teams resiliency, demonstrate flow. margins all how market conditions achieve tremendous have EBIT, customers. financial and double-digit I'm businesses delivering cash incredibly of to times hard during team demands our EBIT and such challenging to global worked results record free three Our to strong of service our in quarterly the record

the global keeping maintaining our service we customer health and as and increasing safe, was up this healthy of operations and quarter suppliers as All as other, accomplished our our crisis. demand manufacturing supporting each through while focus communities continue this customers operate on throughout ramping well to to

start financial results markets our I'll Before in detail, safety. more and with discussing

rate we reminds our an of have incident X.XX, result was of and our daily is quarter focus must recordable while a third we safety performance you at quarter, In safety workplace. our continue As injury-free. the third of XX% this above us facilities high know, in company. order a perform achieve a for XXXX with injury-free to the level top on global to Year-to-date, remain priority

to Turning results. financial

was this to the were These demand million, last end throughout most Our up markets. saw billion, up the $X.X quarter X% what same $XXX in adjusted and than as continued improve we customer quarter year, performance outlined our better we Revenues results period X%. last call, and to four our during compared was our leading with the to positions, discussed substantial and on earnings of improved operating we broad focused of business. generate I've year this of shareholder our two sustainable the efficiencies key and strength last demonstrate flow cash areas free market value. have calls, continue product deliver EBITDA ensure our to strength continuity company's offering, On

and First, other keeping employees key safe. and stakeholders healthy our

our closely and customers, markets. connected our to our suppliers Second, staying

focused but the as near-term at ensuring to quarter, through us forth, different the to well XXXX. market access on positioning success. changes position see long-term businesses to pandemic rates. while markets And our adapting recover priorities we strong Overall, expect the for conditions, strong for rapidly finish and four with end ourselves we needed. to year during continue while our in these sheet managed Third, a We've remaining capital

markets, repair as investments States United living especially being residential owners family homes well demand upgrade robust are their for remodeling their in single by new and spaces. fueled the and as expand housing, as Our increased

revenue to growth and hard commercial quarter, expect earnings In Increased industrial market growth. storm and these and to improvements, a the drove while Roofing pace in finished higher at XXXX. our continued teams higher third slower supply but quarter, significantly the seeing to recover chain manufacturing also activity the remodeling are and worked we demand business markets we Our as demand. continue service our delivered

our running full our due plan and We meet capacity cycles continue facilities quarter. while to expected entering Our demand, support levels throughout our ensuring continue to XXXX. inventory customers in volumes remain Composites, to to with near-term volume and overall we quarter, trail at the market service revenues the demand improve limited just growth to In also on the improving focused service down X%. are to positioned market

on focus geographic and markets, with pay building continues This, end dividends Our as we supply with to to volumes. specific and focus model our combined in grow wind as drive construction specific energy, local regions, such chain of also American saw quarter. EBIT operational optimization led X% our productivity continued And EBIT XX%, our by fiberglass through North we margins down business. driven Insulation, in growth margins the in double-digit additional finished network primarily the and our manufacturing along residential in with revenues to efficiencies

U.S. on X.X continue I housing market we last stated to units the million demand seasonally for months. adjusted the strengthening, see As three with around a consecutive earlier, basis

line at insulation seeing Given batt line demand to and work currently is running facility. and would quarter we roll next our the up for market XXXX, are forecasted we this We expect during City our have second back of restart and the that initiated to year. have Kansas

manufacturing positions market efficient to to strong respond us this been focus has which to conditions operate Our flexible most our network, the service business financial and performance. in changing most customers quickly deliver to and

we service focused generating liquidity our our a our As an strong market flow investment discussed free sheet. we we balance changing to continue on Last we environment, adapt quarter, maintaining focus remain third on on evaluating operations and of able cash balance grade to finishing these our maintaining with dividend. needs, were prioritizing the execute the to the leveraging the In given billion all $X.X than and cash sheet quarter, more flow, liquidity. our quarter areas,

Whirlpool discuss morning the in detail, like be Corporation. I was over third more leaving cover. there at one item would the to General it to President company Affairs we would announced results become Counsel Counsel our of of This end will Ava our that She turning Before quarter to at financial other General the Corporate and Senior Ken Harter, November. Vice

made Ava the During new driving and company success. the contributions her best Corning, role I the many role. her direction our of years and shaping appreciate in with wish played a Owens five our our all in she key

and announcement for fourth an I'll exploring when it With evaluation alternatives then to turn identify to to about We over the talk Ken? and are successor I'll is outlook her our make we'll Ken return complete. that, our quarter. currently

Ken Parks

Thanks, everyone. to our Brian forward. and many and on look I'm to good excited to you forward morning, today's getting of results going also I call, know discuss

I'm of and future say me success to let the honored opportunity the to that contribute by First, join team to OC this the company.

the financial this leadership OC His unprecedented is our and express XX, While service a is the the resilience crucial me time I dedication my the people. testament taken human Gandhi the and company scale. strength to that only already for scope the as leadership number and sincere was want impressed quick his thanks decisive team. and truly also in day and day on of to of with Prith Every company's I'm reaffirms and by Prith actions CFO. during to Interim global

has results results ample the debt of to of in third to and company's on financial Owens but an improving, in uncertainty. company continued slide environment. Corning generate five. and challenging its The demonstrates its retains light The quarter still turning our the Now liquidity position ability performance strength market reduced strong

million, while have the the has billion, recovery the slightly. net For a In $X.X in continued our residential declined in saw the continued position the up margins highlighted million $XXX to quarter three QX Net third primarily solid the priorities. focus key EBIT and of quarter business, slower $XXX we growth recovery EBIT company's quarter, $XX of $X.XX continued non-U.S. the per the diluted up U.S. residential Owens to $X.XX Composites to to by the quarter, $X amortization earnings or Adjusted compared our for end in QX as million $XXX $XXX residential attributable as expense accelerate, $XXX operating businesses were $XXX quarter pace our and year. XXXX. the earnings the of while Depreciation on million, the XXXX. commercial, X% compared reported million were per Adjusted markets as share million consolidated the double-digit of a for in diluted last and XXXX for at sales in million industrial Insulation of markets, expected. or All third Roofing quarter compared prior result was in Corning recovered to year, revenue million to quarter, compared XXXX market-leading revenues we in Through and U.S. for businesses share achieved was XXXX. approximately third third over up

for quarter $XXX XXXX adjusted were down you million additions XXXX. million, reported million. $XXX six, capital $XX our reconciling see quarter adjusted EBIT slide of $XXX to the third Our On million items EBIT third of versus our

issued prior During of from related million benefit Tax during one notes tax detail like expense by seven million due of U.S. income decreased General to metals. level incentive Adjusted million adjustment to also financial EBIT the regulations a in Composites Slide million, adjusted our $X EBIT to non-cash item last our XX-Q. expenses primarily on related and provides by to We've adjusted million gains these would the is to the more quarter $XX were described increased Insulation high compared EBIT compensation with third outlook. overview associated year. This were EBIT with third versus of corporate that EBIT adjusted million third Corporate of $XX XXXX quarter highlight as recognized precious the increased million, by the in in Roofing $XX XXXX. the higher year, $XX million. improved adjusted our Reform. up I a $XXX $XX changes decreased million associated out of of certain we quarter, from EBIT. to EPS. $XX gains $XX excluded We've sale

more our benefits smaller the cost timing initiatives. one-time ongoing of offset items than addition, control from In

third QX, on each from Insulation more with down results, business for on XXXX. Insulation Now, the slide details provide $XXX beginning of million, eight. I'll were the sales quarter X%

insulation. volumes was and Volumes During of were other the lower growth due prices North American volume in COVID-XX. by fiberglass overall segment quarter, lower technical offset in for residential and the more and insulation the down technical building other selling than impacts to in

$XX the volumes $XX quarter. improvement prices, compared year-over-year However, million, lower some was The lower higher the other, partially North higher The to the residential driven third decline quarter American selling sales as sequential saw XXXX. offset in and by from favorable the down of delivery impact EBIT for was impacts. we volumes slightly costs. and these within and negative benefit million technical performance manufacturing in recovery of

business For nine Composites of in prior mix. third to year selling unfavorable sales to million, from leverage were due down the quarter sequential to the X% product Overall outlook in our the for XX%, line compared review QX year-over-year. the business. Composites call. and $XXX Sales volumes were lower flat a prices for our QX overall, with turn QX operating on Insulation the Please to provided slide was as

to we roofing During applications. downstream same quarter, and a $XX the quarter the see to $X our from EBIT performance the down up in recover begin wind of million XXXX. and third EBIT of ago, specialty from million QX continued but was significantly $XX markets reported period million, strong in regional certain for saw year

curtailments be offset year, the QX, an was EBIT as manufacturing for third-party continued prior the primarily of continue In expenses, currency to and the partially quarter by Sequentially, EBIT repair to by of leverage increased quarter, and offset decline production from offset XX%. $XX partially for and asphalt activity. year, The by volume QX by from driven as U.S. year-over-year in the mix favorable higher our cost was by business. Unfavorable strength to of $XXX variability. as and sales million prices, The the impacted quarter. pricing prices we sales. third overview increase, by and lower of cost provides performance, manufacturing offsetting customer million, of growth, Roofing realization offset prices. lower the deflation improvement favorable has by the August to headwind impacts $XXX with results from partially primarily significantly lower compared demand spring driven by million, compared EBIT foreign lower were delivery producing COVID-XX general sales margins X% for partially input quarter sequentially EBIT driven price XX asphalt our largely with well negative operating selling the quarter selling lower Our negative selling, shingle selling The and up translation Slide prior Roofing which generated and costs. a current the volumes, lower environment was were administrative the QX XX% input lack market performance. deflation in increase. grew improved storm due of year-over-year the up XX% remodeling, was the XXXX,

In costs lower addition, impact offset the delivery asphalt cost benefit of and slightly the negative of deflation year-over-year prices. lower more selling than

contribution we exited margins quarter. quarter, relationship cash and As favorable cost solid the were the a price result, maintained a we in as

highlights the XXXX. quarter XX. third discuss to financial of slide Turning significant for I'll

working continue capital capital We investments. and operating our manage expenses balances, to

with the actions strong three target adjusted third liquidity, earnings As deleveraging and period deleveraging the flow in range flow of I'd our free to recovery a and free year. our space. to strengthening and to on on progress of ample within last liquidity. this and times focus than cash sheet $XXX result we're company's call, highlighted dividend. cash higher EBITDA taken In like of the of maintaining record Based and operating evolution debt U.S. quarterly our balance two quarter activities, our flow we performance highlight our disciplined level same cash the the $XXX residential reached last million was million a the markets, year-to-date

the During the on remaining that was of first quarter. $XXX quarter, revolver we drawn the million the end repaid our at

million have balance also date. returned dividend far in share and of XXXX We term and quarter, so due repurchases. $XXX year shareholders to advance of dividends million repaid through maintained the the $XXX in remaining third February loan the this We the our

$X.X equivalents had nearly XX, and on of billion and than September and facilities. receivable company liquidity securitization cash combined of of million $XXX As $X.X cash of billion the our of more revolver consisting availability

on focus in grade to contributions to sheet further U.S. credit and maintaining to an additional the balance $XXX the improve continue million investment pension our balance million range of metrics. We evaluating sheet $XX are delever and

Now turn please to discuss XX, I the slide return Brian our as the call outlook to for to Brian? company.

Brian Chambers

positioned Ken. recovery, well well the to on both Thank teamwork you, market we near-term are consistent Through and execution, trends. longer as term as our secular capitalize

and speaking, expect performance industrial caused and a However, while by and commercial pace. disruptions Broadly be faster residential by impacted our at with we responses uncertainties financial have following much slower government face continue a market our end are pandemic experienced the in to recovery to potential end we markets markets, COVID-XX.

would deliver some EBIT fourth continued quarter broad innovative by driven expect adjusted this market product Given our the at performance, market last in to company offering on and I'll we with revenue and U.S. residential strengthening or in Within business, year, reach. above the continued new residential saw additional by details we are American business, Insulation. trends Based seeing North provide in construction. we October, starting our

businesses, prior volumes will our housing higher QX technical we mid and digits supply expect October In versus While other constraints prior our will year. and lagged flat be based limited starts trending inventories. versus down in current on be relatively volumes single building year, are insulation

and quarter our a trend steady, stable and We residential expect on but other end our fourth both through relatively will commercial recovery Prices this businesses. technical slower in continue industrial markets. and American third in through remained North the year-over-year volumes quarter based insulation the

carryover. price year-over-year to However, face negative we continue a

insulation we fourth to in are comp yet the quarter. positive mid-September traction increase, price don't residential expect seeing positively we While the from

Roofing, X% January our effective price business the our announced move results U.S. Overall shingle up slightly by were better the quarter. inventories quarter, for entering be than QX. our market insulation about fourth quarter In low to supply due into XX%, residential shipments we XX. in expect below an XXXX, EBIT increase to Insulation business the with As driven we in constraints industry recently third volumes tracking our for we

volumes higher similar what current fourth have year-over-year up third see in the Based on to could prior shipments saw of started on winter the timing October the weather. we market quarter we a year. percentage Our the trends, quarter than depending quarter, for

the we our improve price outperform door volumes, to quarter realization increase. products. out market should of inventory the increase, positions price distributor demand of spring from continue a headwind QX service expect see the lack to third our the quarter, Given In would to August offsetting and in from fourth our the we year-over-year

However, continued this declines in margins EBIT mix. roofing by expected remain quarter price/cost year's volumes. asphalt XXXX Deflation lower of we all see be positive pricing the Roofing demand. improved shipments due to but these slightly due than versus lower expect QX seasonal in of on the fourth quarter, throughout could quarter. in headwinds Composites, should shipping rebates Based from QX quarter cost driven to some the higher increased another result should factors, seasonally strong, In to

trend, first recover. QX this to with Given in the overall to demand could quarter, see volumes we similar continuing

we stable, QX pricing to transactional we remains headwind pricing QX. expect a as While similar relatively continue realized in in

quarter to our could production managing remain impact manufacturing our as negotiations key impact the which view with with through to what serve, will related I'll quarter, our we the the our inventory fourth annual regions to several in work cost. of headwind that we additional in focus Similar performance to committed and contract first million in discuss saw XXXX. last of $X have We fourth few an similar curtail years, to performance to customers, levels, continue we announced which price businesses, see areas. a revenue enterprise we meet to tightly our we demand. rebuild With we overall EBIT quarter increases most expect As the

closely operating and We continue our investments. to expenses capital manage

of end approximately earnings due our at primarily the million, to expect the $XXX we expenses to range of the corporate provided previously and compensation million. be for expect capital investments million to tied company high we $XXX be to incentive $XXX outlook, to additional We

of free generating over remain into XX% at our time. to least capital terms our flow In to committed allocation, of investors we strong cash target returning

dividend third $XXX last year, balance our loan, million returned dividend. we and would dividends this far $X.X and said on our quarter. we we call, the liquidity pay revolver million share our We term $XX So over next have and quarter sheet dividend billion, we'll our to deleveraging the and repurchases approximately focus in week. the of through paid increased maintaining down and paid In

we manage needs, while evaluating potential focused will supporting additional to continue remaining liquidity repurchases. on forward, contributions our the and dividend, Going share pension

safely, the shareholders. adapting our value our at beginning stated it the remaining Amber very servicing for well, market execute and turn Amber? over continues team I customers open call, to to conditions, call our of I'll that, changing the As while questions. With back to committed and creating operating to for up

Amber Wohlfarth

Thank you, Brian.

are We session. Q&A begin to ready now the

Operator

today [Operator Barclays. you. of Instructions] ahead. will first Our Matthew come Please Thank go question from Bouley

Matthew Bouley

results and the batts restart capacity Congrats Hey, ask morning. Brian. the the about mentioned, that you on I City at question. to wanted rolls Kansas thanks for of good and taking

volume such suspect both price that careful Or raise you the have prices So, you that what degree enough fiberglass? strong increase? with that you. I a you that be guess, we might Is that the line? the Thank increase little X% can simply should and more mentioned the in environment to January impact to in fill could price

Brian Chambers

Yeah. question. morning, the Matthew. Thanks Good for

housing of market. in pricing talk starts. then little million X.X trending a strengthening last my behind kind the or me QX, environment. starts comments, about Let logic the bit Since housing above talk the three And I clearly restart, we've and months at can said the as a in I the about seen

going within made. we're and kind of the $X.X be that we based a and bring of flexible when talked that through been decision we confident to mark. wanted insulation additional Certainly, res take we that's point, volume that to Kansas our And -- on our continue be that the X.X comfortable product last really business. said kind has our to in feel the belief view demands housing, operational around capacity beyond was that we City, just investments could a want down felt and interest in housing service doing we strengthening market the always long environment, we we've with year to to of trends of to secular We our in that in at and under-built million look We market, the so to a seeing, want just to rate efficient to that about our to customers. really really to some And changes there's when operate So, the focus And position a it's permits that's capacity the flex service that. the on able a technology, certainly process can network the service we of and for at that range. been able going start we be but customers. in million improve be productivity

So, we demand up that growth I've bit see we and be be a getting expect of ready in can to in of then but the we a rehiring second we back market. and four the six be line comfortable past, the months. confident doing feel Generally, that service year, terms retrofit in good quarter the takes kind started. the next training, position in feel to We're continue to that work by to of, to talked as get about going kind to us little of about that and

We're to historically, that an In a announced timeframe talked customers' work announcement traction we gives our increase terms January. that customers plans. seeing as build our that. price increase. in time mid-September And X% that pricing, price of good their about, that's we've September on us announced and for into we do -- And to

our historically, we're to around to in on adding been of for products are two because we we're these what talk that's are of our like And terms that the that our is business. They're to and issues service They're is separate valuable. seeing frankly, timing in for a strong of pricing the use needed. terms Insulation I think we high the that we'd demand capacity our seeing. our in customers products So, that evolving points And one environment continue price about demand. are announcements

And we so, believe get additional pricing in start we it's the as to some good a XXXX. time market

Operator

ISI. of next Please from ahead. Our is question go Stephen Evercore Kim

Stephen Kim

about Yeah. side Kansas going to isn't Thanks in was you're just really capacity, it a X.X% bringing add for There industry of curious The industry a insulation City, flex guys. by on of that's guess capacity. my like here. the lot your is fiberglass -- business the back additional sticking the on capacity I rest much of the second -- a on for probably the the about capacity, any sounds in little competitors.

about capacity competitors, right be online the until understand you So, capacity to end you said from running, that year. X.X that we you your two until isn't said be kind next up to have The going by not XQ. you opened of starts. And have all to for million yourselves. and of That's going now

XX% is ramping see and -- housing starts the next might year. rate which the in or market XX% housing up general something you that potential to that like housing Given the at starts or

the If you the would housing a outcome What actually likely end to trends and would do strategy? predict I'm your segment impact the you your not be on company? number that about what see your million. will that, did, would what they asking company's take for that start if starts saying be think I'm you $X.X the that higher if do -- be range, of but to let's

Brian Chambers

Thanks, Stephen. Yeah.

of each calculations yeah, we've up, said Kansas historically the the lines come around line on Just X% City, back of we to that bring to capacity. X% kind worth industry your of is when kind

range. right upper at would So, And in line end Kansas kind of be you're that of City there. the

-- that that we growth. us and opportunity the year in to look if capacity, with to continue idle things Clearly, the have kind we're market we going Kansas network, of us to we've so. a can we some to front give see we demonstrating City, market is at when see of our two the availability confidence that that bring we that there's think I do next our continue service up which over with to service increase move or a

initiatives I do in it idle if we've -- feel we be and good for create invest us and our we kind have continue up, how that have other very to improvements available to sight the housing cost footprint. increase that and network got And continue continue would trending bring process bring capacity effectively productivity very productivity, then to would been within up. starts again, through planning. investing can can insulation that We that additional think think the of line we we existing to And throughput some in about capacity we see of that our network. to

the end year, So, in would seen the we've a of here kind I jammed more quick got recovery around quarter, of quarter. downtime of such us of because of taken that surge we key the the think certainly, the second this pace this I the year. little first some of be for demand. And beginning mean, up a

the We're to with network full So, took not fully be in we're in we going ramped going up capacity have when year. downtime full manufacturing we think the to that into this going capacity. about our XXXX,

restart improvement. the process capacity, City, into and additional adds that Kansas the So of productivity

we'd serve. So, the to market above I continue that to at our going service adds to capacity that we can demand. look customer the be to think good if we're Stephen, able X.X, additional we And capacity trends have feel

Operator

ahead. we next take Phil that The Our was Pardon Wells from Ng me? of of connection Truman We'll next is question ahead. next to question from queue. ask a move Patterson will go to Ng Please the rejoin is Please poor the on there. Fargo. and question go Jefferies. There

Truman Patterson

taking a Good hearing line. question. my for XX%. Hey, prior about up, Thanks hard on Army shipments after I were I everyone. touch morning, time think, to Roofing. having I'm that little wanted But

recapture Could XQ. to some up the all market Brian, you shifts. share that to being more was investors, balance, you gives confidence get going now was share? I just Your up you capacity the of little inventory elaborate to believe quarter, mentioning rolls go a market to at outperform if the what you into that you in on which and full some out back some you on ability volume inventory build to limited Are your there market and should that explain track will? able us and bit commented in you And XX%. and ended kind that start up led and

Brian Chambers

Thanks, Yeah. morning. Truman. Yeah. Good

in roofing sure, an this the quarter Actually, of market was the strong was of the shipments. in last demand it it kind quarter. incredibly For decade shows strongest think, the in business. in market of the I resiliency And one manufacturing terms quarters of the third just

to were So, of went positive at remarkable half trending then kind first year the turnaround XX%. of year-on-year quite a we shipments a where minus and industry the in X%

So, sequentially, just an incredibly strong quarter.

we through us, QX. up For were all ramping

is build QX for running the overall roofing we service can the didn't full QX, And capacity entered their that QX, helps service year, demand. This actually for the with of demand inventory and shingle where we entered running saw inventory any in we our through COVID inventory think out We we we quarter to I surge that is our had but that of one the in ship business kind I've we in in terms volumes generally in really normal of But maintain impact inventory facilities, of orders. the finishing that So, quarter, out. have in positions given quarters to the some in seasonality of and build unfortunately, produced to effort tremendous that kind the end QX, this, full we're we about then to while full manufacturing the in our strongest our an distributors QX, lines were assets also and kind the the positions. of running quarter. which QX spoken

up. we just we it's in we network, So, to though installed QX, our to got confident a we a can this way we but level, us. impossible it if at in run very carve worked we've that timing make fell capacity I shipments. up this a running behind, I full our at for our typically ability our do believe in year production that hard normal terms basis, when is even time out enough it's us it are just issue in When that you we of would for do early on capacity to assets look market very year a full have keep very, service

when we So, the of market terms share in like distribution. position, overall our we we at look -- certainly shipments into

replaced. contractor up commercial kind there service brand we seasonal in quarter demand, we around with running. in products lost our and and contractors. our we've serving and good little we QX that probably a and of needed built they've some remodeling And and and up don't around very now, to feel of quarter see November Owens and feel get repair Our typically, We We bit Corning market. -- we're we're December. business like the longer position, network That repaired the come share a support, gave fully kind of about. term our we're we a to We which business. think maintain But as their the winter connection on regular some into declines able fourth storm of

believe going this not sales, positions terms allows out little lean to of we're right our inventory we that to the up but quarter, Truman, of catch that pretty the to a are us only running servicing know now. full, assets less of to service some able hopefully our be door in we products So, keeping distributor replenish demand

a continue in we of get to we where as that's little run And think very in going top on we're enter this to then strong we can bit QX. XXXX. So

turn that can again, as demand. feel where service we run we we've first our assets quarter in So, the can service into half XXXX we enough good market that capacity the installed we got

Operator

Jefferies. from go come will question Phil next Ng Our ahead. of Please

Phil Ng

okay Is my guys. Hey, line now?

Brian Chambers

Yes.

Phil. You are good, Thanks.

Phil Ng

Okay.

Brian. Sorry about that,

market. Steve's Just earlier piggybacking off the about insulation of question

in think there. out get starts. a and there limited capacity in and X.X enough having roll I case meet the be Certainly, I about supply past, capacity that we talked yourself there's you the have batts could believe million there. industry about

for that opportunity that the you have into getting there understand range. And is path can to think, I your when mid-teen want an popped that fact how So, that, potentially? environment? to I just gotten quickly coupled margins to the you take and in insulation historically, back really share X.X to with that get there you've range, in

Brian Chambers

in And support. best great we've we're we just product, through demand, our actions of market great and we've feel support customers' a business. out our yeah, We do is our a Phil. commercial to believe that always got something been Thanks, trying earn -- the brand, this of terms working for while commercial on

So, gives the we demand great combined capacity a earn kind that of service think to to go with share opportunity our forward. customer us we continue to as

into us incremental discipline work we going to hard that focus, continues maintain some for have capacity we're to but some certainly bring and demand, have feel market we grow. the opportunities to service that market to So, additional the with to as commercial to available to we continue gain share the do

So, I be run to we position outlook. market think terms going how that's of assets to the the in

leverage for going volume on be us in performance, base. to margin our us, enhanced yeah, our of are For drivers big asset two terms the

margin us of over performance to last network. best products we run in that to terms provide gives really forward the the these assets to taken to enhancement our structure. customers. years really So, the optimize and of where to leverage as we're go continue actions the full out optimize of able couple great We've That cost

we certainly, additional get margin big improvement. aspect additional is to forward. going volume go pop-off So, some can we as pricing the to of think be And we then other leverage

And announced announced January implementing increase. are -- September increase. so, the the we've We've and

an So, position some that forward of on leverage we go opportunity think combination cost opportunity our of gives top us then of we the kind expand as margins and volume additional pricing improved to into XXXX.

Operator

go Citi. of Pettinari Anthony from is question ahead. Please next Our

Anthony Pettinari

Insulation, you And more takes and other saw you how quantify that on a any in end improvement you're sequential view the improvement? it little kind the sort sequential those if I about year-over-year into there's long In translates markets. was technical what of talk morning. wondering could before bit of in seeing Maybe volumes. Good if recovery

Brian Chambers

Yeah. the Thanks question. for

that see kind evolved that of volumes single kind wound that down the kind we break between the better. could In business techno think, products used at the of tracking overall, we've high I If mid We quarter. last of up, more kind of guided down through terms how quarter, I We think, we commercial out get and we of some seen of our single digits. kind improved volumes industrial, inflation I of then beginning residential in of saw digits. -- applications, more those

both in terms through of U.S. quarter in in continuing improvement Europe businesses. those the of really, saw and we areas. that a our And saw all we the So, three in

quarter. of through up we kind So, saw improvement third ramp the that sequential

down fared digits down think, overall, business better. We single were a double-digits. on I our kind commercial. little commercial Industrial probably mid was of

down for kind but some to end recovering see the So, outlook. from we're think year-over-year sequential us the of we we recovery. going more those the in single choppy work QX to as single. mid trend's Commercial some high improvement mid of terms bit there's and of certainly see all kind But We of some playing hopefully But continue XXXX is restarting come back, involved start commercial to that to into but lower that something moving lag we that's running residential could think in do. going of then see market When kind for volume start one cautiousness XXXX. we rebounding, that do think commercial until we're that to then of think a And markets, recovery saw be a and doing for of And about we And that's of I'd is that's consistent we evolves that hold kind think little and going QX. terms through probably XXXX. we recovery we businesses. most continue we and end strength into should it's we that that, to pretty we to little feel market have we see projects But look we're we single think digits a of now, of our outlook very and our rates we've and be wait that of work. we down into a construction industrial say project our see going coming some to of projects across remain overall, new seen improving, to going kind how stable down the the we in how the out. pretty the are in at good to

Operator

will John Bank Lovallo next America. ahead. go Please from Our be question from of

John Lovallo

question. the shifts restart my the ability the taking capacity in or Maybe going you're for cost line curious demand? with sort speeds you feathering that in back that you line to Thank restart, overall control sure do line make the is? to of to guys. to City what then, have Hey, Kansas And

Brian Chambers

Yes to your Yeah. that. and second to Thanks back the for question. I'll come

that So does great us give some opportunity.

little as In months of there's workforce as to refractory we then, just over going be rehiring capital dollars on they're ready the to and to next and it's few do the make terms costs cost, and bring to be a of bit putting a couple back training of go. kind trained of And we sure going that costs and improvements restart, we're some the there. into upgrades million and

the to would operating operate how asset? fully up So, costs very say CapEx ramp production. side and modest staffed. that going in then costs be falls to terms until also the And we get the are Yeah. we on incremental want I We'll of

we second feather Again, QX, QX pretty the absolutely well of than in generally QX, So, where then that seasonality that business ramping starting in the is and the a and it up be tracks will hopefully half lighter first capacity. in little something with half. that the that

seasonal the see a make want as the half where started, that in capacity year we're pickup. assets the get we we of into So, efficiently, typically we running back to enter increase demand to position be sure

Operator

Susan of next Sachs. Goldman Maklari Our is question from ahead. go Please

Susan Maklari

how about you had know I the back came that? there margin the in about there. courses segment. you costs around getting $X have be of first said Thank Composites Can about quarter, that? talk in closer I are sustainability about comments expected think talked double-digit you. was Good sustainably level what the the I to just to range? the it bit talk the of Obviously, earlier been that that know with your you talk Changing there. much And to And double-digit morning. the we to certainly -- in a you think, in X%, different want you million back to to guide, can being But parts I you and that which than you rebuild bit, expected a line

Brian Chambers

you Yeah. Thank the Morning. question. for

but lot, and think, coming our by are again, I business, about it's back. had partly a execution And I we I Composites partly driven Our QX. this really performance talk by think strong some in markets that

business, strategy In some within well a built Europe, our wind, inside kind to out North grow where focused geographies. and very we non-wovens, we've the America, to terms have great of continue been our like as value India, of commercially applications, like position. business as market construction, specific building higher downstream like

leverage. model We ability volume the And has been very opportunity have of proving over generate in certainly last service us relative production. get quarters to to terms and to really us strong to installed our industrial out then local the for give demand several that great capacity volumes,

is on our that see continuing the focus commercial to results. we that positive continuing where I think focus and show

scalable have business. make I past just this focused to efficiencies for we cost We've think combined on the with that, we've done many in network been the years operational optimizations in sure assets.

can year at our continual operate been lines more we last network look our inside tremendous over and operate has focus how terms cost and generating business, efficiencies the of the We so production team the or on really in continue efficiently. productivity to just the a

terms growth and focus growth off we're the volume clear and good and a getting margin then leverage commercial focus cost we're productivity efficient and robust getting we're a great our of an So, of -- volume very network in controls. turning on

generate these those levers, to are two think allowing is of the results. kind of kind I So, us

end improvements saw markets. of So, almost and quarter we quarter, in volume kind all sequential in throughout of regions just third our the the

helps demand relatively piece pleased pricing And to a down quarter, sharp that And sequential see these be in very pricing for again that where snap think in bit able has has hold to quite were overall, bit similar decline get of saw just the up. relatively we such remained we leverage. we're in to volume QX us terms little was quarter, us in I and a go quickly our an leverage to margins back transactional So, the That really with which that in allowed to able QX. of very through margin stable. then, I volume a of our important think that's bringing

end So, a residential of but going focus improve to not quite we markets to rate think as we're to how we we into we with volume certainly forward, and we to to continue some margin. improvement. generate through again, the see commercial see markets, overall, at continuous And our our expect continuing I on continue and our good good that feel that productivity focus then initiatives cost going can can translate leverage

range we into XXXX, opportunity into the like us. we on look So, hope back market can back market and what for get double-digit depending the volumes

Operator

question Michael next from of Rehaut ahead. be JPMorgan. Our will Please go

Michael Rehaut

the great margins strong a results third managing side, good Roofing everyone, obviously around in market Thanks. and little year. over on there the and congrats the Obviously, results. -- to bit I And in a Good focus wanted market a on lot's Insulationand congrats capacity Yeah. obviously, and discussed on welcome improving the Roofing. But quarter. next the morning and been Amber. Ken incredibly

margins channel maybe year And think a on the from is margin always rebuild two? are about into storm secondly, how half. do you're storm then maintain that by into demand XQ that level. forward the curious how profitability margin XX%-plus XX%-plus perspective, if quarters. inventory going like into that demand as at the but the bit is demand type type -- little typically XQ maintaining driven feel sustainable you ability down a and do XQ, of a much But or a I'm healthy next higher maybe think as and about seeing first to the certainly you level here. you market currently and But talked twofold You of in question being guess still One, of seems sequentially, I being well XQ it XQ, number

Brian Chambers

morning good Okay. Again, Thanks, you Michael. well. to as

talk let's kind evolve bit about in a the So, marketplace. how the we're little -- of seeing volumes

contractor QX So, homeowner replenishment. the demand, robustness demand, view, by demand, would more say market I driven by than of distributor market really was end our

we quarter's continued. ramping really storm and And in call storm we've increased events talked driven So, last several activity, we the at were saw then that that's QX, that demand. hail end QX primarily up hurricanes of seen

QX. a But kind remodeling So, I'd renovation are really we as and repair that market led we've seen top year-over-year that's homes storm people this the say big and step-up think of business. in remodeling in on of projects. kind investing just robust demand a leading to projects to and of is robust doing their and We've seen that's in

out robust sales. higher with and door really strength are QX, And so, I that storm activity in of the we people in remodeling the investing that homes is as saw think renovation drove and their combined combination what a year-over-year

contractors' So, QX, ability be year. levels that part to going all is strength. distributor think year we're may generally our the is But of out particularly they we into and on inventory have a be positive biggest work. of that, to the inventories if do think distributor some more overall. that's get variable storm I of the volumes time think carryover, can winter an and speaking, levels bit running weather always through But and still historical always we improved The in the shipping QX the first this it's do when that that to would there that are about our to concerned demand roll belief below little door for of we next

that's next robust quarters. few think certainly see playing over out I demand we a the environment So,

out periods, we've we we above environments now. front, Generally, what long-term cycle. margin that's along seeing the And inflationary think I right seen operating all certainly trend kind this we've is point in when more that little the then center On go trend that. we're business through believe playing a that said XX% we asphalt and we margins a for of through below that deflationary

the the So, of And depth the strength business and at the of is level. just that bounce of overall be I of XX% environment strength. I we'll business depending some of our some power the on and those intact to plus/minus the think inflationary around of market think earnings

Operator

Kathryn from Our Research Please go ahead. Thompson next Group. of is Thompson question

Kathryn Thompson

little the markets Composites color some that -- also, for trend-wise -- to today. just have year, particularly rebuild segment. are Hi. Thank had see update in also on certain a wide taking it the you of bit you seeing What question Thank my industrials. underperformed of but But end XXXX? you I this you also underperformed? And cost seeing missed terms give and improved the segments geographic focusing auto and look segments you've those And for across into of you. we And market this as if if of that may mentioned and have more any end terms strong or on in I a given color wanted an group markets. areas end could great demand

Brian Chambers

Yeah. Good Thanks, Kathryn. morning.

tied the a probably a XX%, XX%. kind the through Autos, a Roughly broader of of markets autos end you bit couple but the manned trending little part all and XX% it's is hit vehicle transportation. of the and production of improved terms big down and up quarter, into still market down we've vehicle seen glass as of overall market. these. in So, we know, Auto

of took really in particularly manufacturers restocking better. So, levels QX. say A in statement we've some inventory of is gotten it some that I'd seen has QX broad automotive the down that in

of of the those automotive, one did end markets up see customers restocking So, be they're that'd not we ramping -- improving, through in some our was of only that some the but strength think QX I think part of and production. I as

it's other there. I'd but American market of of down Composites North best a of the and some the slowly gotten kind October. improvement we've market around segments. a terms end In of say little really I us is smaller in QX, still still, part some and it at and not demand the the but as -- is really our popped, in double-digits. end industrials, a for continuing seeing here oil Marine, It’s of where lot gas strengthen of those sit of really improvement continues increased RV better, we seen see to of some and demand kind and we levels the that so is mean, that we're market,

of it's market big and bounced has business, and the our part that's I a then So, think broadly back part about. is one strong. overall of energy a the big running -- talked That's very, wind and is that and other we've very

and that seeing of we in of facility tied that primarily terms done. we're yeah, to getting project expect the we a the year-over-year in were we're continue it in cost, China, additional is in some to $X also be and that taking in said coincided then then and full ready down So, small be run And rebuild some in work as that on QX strength for here some million up expecting here facility doing U.S. here, headwinds QX production we'll about a we're well. doing costs, rebuild rebuild be with make as curtailment a there and going out to XXXX, actions that sure to that to furnaces ready to come repair

a couple facilities those the going be to of of headwind So, year, from of year-on-year downtime advantages the we are a here about to end are $X create bit million. a taken

Amber Wohlfarth

for time more one question. have we Alison,

Operator

you. Mike question Markets. All Please go Dahl of right. Thank And next Capital ahead. our RBC is from

Mike Dahl

digits to ending you Brian, lag a in. up Insulation heard basis just XQ, your flat I comments, and despite go two-part single mid tech expect think, in me on volumes your down North industry American being I back squeezing and on or for the wanted other. resi is comments Thanks it in opening Morning. I starts and to question. that

You flat total volume a just zero in up in on a put XQ.

a XQ despite of that in the in end decelerating trend acceleration kind markets. implies So,

did supply that other can get first back A, expect the industry capacity as year continued own first continue or that's your and constraints, and I your that the if starts half up think the by should help that? So, next recovery some hear until of you lag that correctly? of in we lag you'll B, truly And of half XXXX. markets deidled that reconcile driven to And about capacity in for you the you're acceleration Thanks. new we

Brian Chambers

Mike. Thanks Yeah.

very On unpack quarter outlook, to a was for a fourth take try we'll two the and When a QX that businesses, little quarter at Let bit. me residential shipping look start last there. Yeah. we strong the us industry.

down. market strength we then So, we're as over fourth We comping year. COVID-XX were strengthening the you the and a announced last everything track and saw out kind of really kind a housing back, increase of kind some at spilled year good the And bit and that off seeing go occurred and January quarter. strong of kind of time, we of starting a ending

at we've comping service up out the we quarter last year, year-over-year cycle, pretty in quarter a on service the we capacity inventory. growth inventory of And as strong last comp had a very little primarily extended hand. basis, we so while coming into year. ramped against as fourth have we're that production well So, we're year This

QX. ramped and room doesn't to ship kind a produce, So, res demand service we side going of production of it any we've growth everything we're in the in while give lot to in our that up

me a offsetting any growth. combined of volume of digit with single kind is that you heard -- what's on and mid decline right technical, kind So

We're we're of a in not and So, see growth little of offsetting decline decline. see res a still probably to going technical then volumes that a bit we in QX, going QX. to bit of had lot strong res

to the So that's to for for a volume us. headwind starts seasonality strongest into us seasonally a little going quarter create res move I'd little we bit as that is bit. say in insulation. XXXX, QX the of But help

brought so to a QX generally -- -- to we're a the QX. of produce bit, be going shipping little down we expect to we're year-over-year ramping here going to more lags can production we the that So, be in up continuing produce. we everything because up on and basis, at

QX we're than more in last producing to year. actually So, be going

a City we and start service be with don't and share in we And positions. position so, to certainly that's come us we're have in share as capacity terms to our demand feel capacity our going we growth year on QX, the to to XXXX bringing additional of the retain believe going we're then headwind in Kansas ample into to market

So, in we're of bit I through little think, a QX. moving timing a

position capacity of bit accelerate little a great XXXX business the feel good and year-over-year coming in to we but service have going growth be that that. to a we're overall to it's into of in res comp, the very a Some

Operator

gentlemen, for time, question-and-answer Brian the this at I any our session. Ladies over remarks. conference conclude will like this turn closing and to And Chambers to back would

Brian Chambers

everyone your much. very want and thank for you questions. today thank to your just time Well, I

incredibly delivering this of and great our and staying in proud execution team's resiliency environment, Just closing, I'm safe. results in while unprecedented healthy

think finish this to I that momentum XXXX. year well-positioned into strong continue we're and

So, again and you to to families your hope we look speaking quarter call. you. fourth during our And safe. then, to I and all you remain forward until you healthy Thank

Operator

now you conference We The thank attending has presentation. for concluded. today's

lines. disconnect now your may You

Owens Corning (OC) 28 Oct 202020 Q3 Earnings call transcript