OC - Earnings call transcript Q1 2021

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Operator

Good morning, and welcome to the Owens Corning First Quarter 2021 Earnings Conference Call. All participants will be in a listen-only mode. [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. Please go ahead.

Amber Wohlfarth

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

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

your quarter issued that presentation to first a for and a morning, XX-K news our hour this Earlier financial the Instructions] our will open release [Operator Following one this detailed results this XXXX. we call questions. morning, we filed

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

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

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

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

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

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

Brian Chambers

Thanks, thank for are hope Amber. Good healthy and I you staying and joining the of call all us. everyone, morning, you on safe.

as extraordinary I During from extraordinary were the actions. of times year challenges one unprecedented pandemic, create opportunity with the contending a global this call onset noted all ago, the that for we

to impacted pleased live. work has to that consistently our challenges the our not say I'm past Over we and fundamentally markets, that and year, the ways the businesses team but only risen

or capitalize conditions. and delivering operating longer this model demonstrating people our great by We improving and operational drive technologies demonstrated financial the market exceptional respond those our that adapt changing lives, to to unique uncompromising be market positions, to certainly enterprise challenges commitment and daily and in they learned performance condition, can customers strong our first on an no even of many and process continue strong against While to agile leading execution affect are leveraging We've more quarter, to unprecedented. our to backdrop. results product market this and

I'll I with who morning, then on our results., will this financial Owens call second additional quarter provide come business before performance. to over overview details During Ken, our markets. first on share will an perspective about and of key turning our the for Corning's back it quarter start talk outlook our to

will where I other, together always, begin As review customers my each safe. our and our focus collective healthy our safety, keep to at working remains and suppliers,

the the More the EBIT an with remained for XXXX quarter injury-free very for globe X.XX, year. of double reported a more than than on quarter first facilities in During any a with half the up an basis; year year last compared Financially, million, $XXX constant a of is billion, period we of XX% line quarter, of environment performance. revenue quarter first record of full we safe maintained XX% which our RIR our currency of which across delivered what first we for a record first same XXXX, increase and is than historically. with adjusted $X.X and have more

financial power environment, in earnings dynamic results the Our market our execute to outstanding delivering company. of global a demonstrating teams continue well,

in XX%, Our was performance driven of businesses posting our for our and EBIT volumes, three across the with price strong quarter. good all businesses, during broad adjusted all consecutive margin realization an margins resulting efficiencies the for by manufacturing quarter the double-digit third company EBIT of

many across During the saw quarter, our we broad end of strength markets.

products. growth at repair new for construction housing robust Specifically, and run pace, demand market a both continues strong to remodeling driving residential our activity the and with US

In well continue industrial to improved of the throughout our as markets as many end markets our addition, quarter. and we see commercial global

Within we invest we priorities, certainly growth investing our conditions operating to continue flexible to benefit cost, technologies results. manufacturing to have insulation positioned housing investments we a have performance. in are a business initiatives in and and market improve our us While create process in lower from deliver more and residential Insulation, commercially and select our customers the to service financial favorable, automation execution these ourselves operating our position strong productivity to more network market. turned Across strong enterprise, as

markets and product Composites business, our to wind new to key building and investing infrastructure. applications products expand roofing, India. are systems, model in with partnerships continue North products and focused and to continue leverage America, energy innovative invest offering. components we network our we nonresidential our vertical their distributors, service Insulation And And in grow to grow applications, in to with develop systems strengthening In such Europe we as such expanding integration brands. low-cost businesses our optimizing remain In in materials our and to while our on manufacturing we higher-value downstream addition, and global and as our construction, to and offering roofing contractors help

by to opportunities, expand model, operating strong material cash free operating improve efficiencies and scale, our global is operating and capabilities flow. All enabled which our commercial strength, work growth of our enterprise this leverages science generate our

performance Before to few in detail, I to turn share through a our more walk Ken enterprise it financial I'd like updates. additional over to

On great the talent front, of appointment recently executives. we two announced the

Chief as congratulate Jose how customers the pipeline we Officer. role product leading key to promotion deliver a our and his increase grow we market. on fundamental do to and innovation to Research our a to and Dr. science are like will Andino company. play helping in Material research innovation and we and Jose what recent win Mendez I'd First, Development and value process in are ensure efforts our

most than and decades across to valuable and multiple X and our Corporation to experience served General from Pareto years, to effective recently Gina will their Nordson executive excited team. next a as company us our welcome brings she Counsel our I'm as two for both where Secretary, She more June Corporate Additionally, be Gina of partner Counsel. me working General joins entire X. industries

Today three are I pillars: highlight XXth of Today, expanding over environmental beyond the our like titled, the our our Beyond would Another our is positive reducing social sustainability our to recent the environmental footprint began on publication impact. and share goals expanded Tomorrow. have years, key built X and journey ago. nearly Shaping of We sustainability evolved products, well increasing our decades report annual sustainability. they And impact

differentiator despite We are another our gas This In to climate turn results result recently our an further in be Ken continue and by also emissions supply peak progress gas making material on a being are all XX% to our adding With absolute on greenhouse the in reduction our sustainability proud goals, absolute driver forward. over we our At our several over in important is will emissions and XXXX since past committed now focus along that, we XXXX below and company our X published scope acquisitions core have financial of same XX%. from particularly are across progress our year where the Ken? discuss to to greenhouse committed XXXX action, operations I to time, will reduce impact our our our peak. by XX% emissions throughout of chain. Sustainability we moving goals, we for decade XX% to the detail. our it more as accomplishments our way. a purpose emissions will positive reduced these

Ken Parks

Thanks, morning. Brian, and good

of stronger As free continued capital quarter capital in and discipline top Brian in continued operating an management Owens working focus investments, with record expense Corning basis along EBIT, margin and expansion quarter. on resulted quarter. growth, outstanding combined adjusted commented, XX%. Strong adjusted results cash EBIT the generation line healthy the in The first of flow margin financial earnings, a points delivered with gross drove first XXX

driving than execution ago, are across business they from year While fundamental stronger to benefiting the solid this performance. market broadly was conditions that were continued a

As through a than manufacturing managing balance Maintaining environment, remains more inflationary related price a anticipated, we productivity to this this the and in environment. we're inflation more and offset move primarily Positive materials the inflationary quarter. realization as positive focus transportation. headwind

can results. Now at closer We turning look to slide X. a our take

by were in diluted highlighted up EBIT all XXXX. share expense year. Depreciation the billion, the reflecting net US compared revenue and quarter the million, Adjusted growth share to $XXX the million robust margins. consolidated double-digit million, $XXX and quarter market compared continuing first the first all up sales to $X.XX $XXX million XXXX $X.XX the per reported $XXX X diluted for amortization for first was in of and was or quarter or quarter, XXXX for housing QX X and prior year continued we to million XX% strengthening up the commercial of deliver reached segments, with earnings $XX industrial Adjusted $X.X compared EBIT segments to over double-digit markets. per residential prior of the For slightly

additions reconciles spending first EBIT XXXX. reported million of delivering $X for on up our Slide to that cash as $XX our $XXX be growth disciplined QX compared flow in capital quarter adjusted our the we We'll investments first continue X quarter million to and as productivity. strong were $XXX free prioritizing million, of EBIT Our to and focus drive million. capital

enabled us precious gains we metal of the and our process of During sale our reduce on further million manufacturing on precious has the to $XX productivity progress recognized the and certain tooling quarter, Ongoing certain production modify technology initiatives of designs metals. holdings.

XXXX. EBIT addition, Adjusted more initiated million recorded XXXX actions costs million adjusted optimization was we $XXX grew a Composites quarter quarter to Insulation fourth increased restructuring of overview are quarter items the and first comparing EBIT X with $X in by XX%. over high-level provides and excluded record our Insulation the their first for the prior XXXX. our $XXX of associated from Slide first of a than EBIT. new quarter doubled company In and EBIT million These Roofing adjusted we the of network that year.

in businesses the to to storms our onetime February. financial we had storms. I want our of Before each to the the to disruptions turning Each related the of operational from speak faced impacts businesses, review winter of

the However, these by renewable gains businesses each of in settlements. on offset energy were

As quarter our first contemplated these time were guidance. the of impacts call, year-end at we discussed in our

can million, increase the deliver of to happy turning across of the call I'll to volume three of we've at performance to taken up Sales Pricing North on benefit healthy. businesses. the saw produce our XXXX. be continue we In well and in a over quarter. had see as technical construction quarter The move very ship Fiberglas US I'm we bottom over both We stable, and We new new February first batts end saw across business to lines. American strength markets specified executed the products, we globally Insulation, and growth to volumes the we slide strengthen. with rolls City the started for expectations XX% result translation Europe. in to up our to business the the were insulation, growth of quarter positive $XXX that in Insulation the Now saw that to up production more on America continue we as and and X. each demand as and serve In market remains through continues all the and business the many line time to last residential up pricing commercial details US robust, the top saw continue residential as continued other provide North we strong in we continuing a with of we volume from and actions past currency lines Kansas be highly continued in quarter. ramp our see share to quarters. in the a the

the For continued material margins of million EBIT inflation. quarter business $XX in transportation the manufacturing first year. the XX% last more execution We our than overall, operations of double good offset Insulation delivered headwinds million accelerating in of and EBIT and partially of $XX

resulted first start business. up to the year. volume construction prior local volumes the our growth and as of strong drove as downstream Now building the Stronger-than-expected the wind demand model quarter from higher by is supply in prior please were slide year. year. well $XXX compared valued demand applications local demand to The serving being had to to where Composites and the the for turn for review our business key for and a a quarter customers Sales million, XX% for geographies X markets compared Composites in

price saw manufacturing of contract in performance our most and resulting negotiations Operationally, positive transportation material headwinds and inflation. from recent strength realization the also the offset We from markets. solid Composites,

face we Roofing of business. and quarter, produced provides XX%. Roofing the quarter top price to the delivered The overview realization strongest volumes, its and as remained our of Roofing year price $XX slightly business first through an business the Similar For strong on increases quarter of Composites into businesses, strong our margin and outperforming bottom we XX prior announced EBIT fundamental with and Slide asphalt million EBIT year. shingle quarter, as other to positive to as We're started XX% US operate narrow the continued a prior for the the up continue grew in seeing performance a environment. compared market. the Sales The to deflation market was costs line quarter X $XXX were performance to to shingle in the sold-out million, of transportation XX% first the US inflation. manufacturing results. our compared element asphalt

from EBIT up prior the quarter, For EBIT million XX% was year, the million, $XXX $XX margins. achieving

capital, year first significant slide XXXX, the I'll around management financial resulted capital expenses XX. and flow. for strong to Turning operating discuss highlights continued discipline quarter and investments working cash of full in

record that of quarter million to In addition, quarter we typically didn't of was experience the first cash seasonal quarter working at the our see the a year due first $XXX first first up for the compared XXXX robust across of capital we Free million, a $XXX XXXX. flow the build demand It for quarter. in businesses. to

During of of XXXX, $XXX stock the shares repurchases of first and repurchased million dividends. X.X and returned quarter we cash million shareholders through stock our to common

we At a range activities, are sheet $X.X target our and ample debt of the EBITDA quarter liquidity last operating combined and sheet. consisting time billion We debt of an remain $X.X strong to facilities. at XX% focused free nearly cash $XXX on cash availability consistently maintaining flow, balance over our investors on million within had With to company deleveraging with solid maintain year's approximately the strong adjusted least billion, liquidity. returning investment-grade and balance performance end, generating cash and of investment-grade of bank

XXXX be is $XXX $XXX additions that between to outlook there below million from $XXX million, I'll amortization financial are are are to provided key in February. out $XXX million. approximately initial expenses for and expected expected corporate million. approximately which items. depreciation turning expected changes Now outlook Capital no of General and to our point range

adjusted XX% XX% We at to expense capital be rate. pretax we be on XX% landscape XXXX million tax cash continue adjusted our opportunities And of to rate a US level and our pretax on support $XXX to cash effect sustained tax closely to the estimated and between to mitigate the businesses long-term intensity We're to over earnings be lower rate monitoring tax proactive earnings. time. to tax to potential of will effective be of Interest expect and changes XX% focus is million. our our to $XXX

to please Brian? I'll for further our call return turn the Now discuss to and Brian outlook XX, company. slide the to

Brian Chambers

Thank you, Ken.

strong to performance quarter first year. Our provided start the a

repair expect remodeling As US we look strengthen. forward, and markets residential we to and the our construction end commercial markets new and robust to with industrial remain continuing

results our While building on high to power the teams well a at the are this earnings to level, pandemic create demonstrate COVID-XX of position market company producing uncertainty, outstanding our continue performance. continues and that us performing

continued our in business operational In on of be revenue pandemic-related prior market Consistent another year. key the year. and strength last and focus we in I'll volume strength my continue and to prior our company outlook markets with significant to of expect business, versus expectations shipments performance, new responses, the Insulation, generate growth our QX. quarter we our construction. quarter each Given U.S. comments for earnings with residential to practice, year the expect prior comparisons we which see impacted Starting production second affected by

the shipments Fiberglas XX%, North quarter, with Given the our realization decline pricing grow of second in American expect last shipments continuing during April we increase. those about year from improve to sea to Insulation residential

effective to expected volumes June for inflation, businesses, applications. recently demand global these second Given XX. stable relatively mid-teens be technical In we for announced and to up. our is volumes construction in as building up our slightly businesses increasing products remain see expect Pricing to in we we quarter, are levels. an building price pre-Covid to we our outlook also In have X% recover seeing increase insulation other our the and

by increases QX in inflation, continue current In to meaningful terms the offset faced a in strong more manufacturing transportation way in we quarter, and productivity. partially of ongoing expect cost we material

million absorption approximately production volumes. benefits $XX of we better Additionally, fixed from on anticipate cost higher

for this, all we approaching quarter. Given margins EBIT expect sequentially, improve to the mid-teens

Moving on to Composites.

to to a XX% year-over-year. reversal million similar be the approximately XXXX. up Roofing, to from year. first partially the quarter. the with volume productivity saw in improve mid benefit the last to a should continue of quarter we to headwind XX% face EBIT We expect high XX%, to growth our expect more to meaningful represent in versus will an other second through inputs, anticipate the a particularly QX pace, improve of market is used more material industry Margins to to of We we inflation shipments which standpoint, broader market $XX sequential basis, volumes we low are components resin the the announced for the strength the strong to of volume gains. month. also margins pricing roughly expect up expected to cost that trail expected our growth prior and due headwinds to digits our growth cost between On asphalt would our in trend, expected mid-single our business. of in of and of single up was digits. with Roofing X% the at effective Pricing significant is X% be expect we offset in the at year. curtailment with increase From beginning Consistent this will in And inflation QX business,

businesses, from expect we this, mid price XX%. few X% sequentially I'll to announced increase key a EBIT X% enterprise to mid-June. that our have an effective view Overall, QX, approaching of increase we turn in Given With of recently areas. additional margins to

and remains flow. committed strong team cash generating operating Our to free

business, balance share of and cash on priorities at in to least sheet. In capital over through our and an repurchases remain XX% shareholders Returning productivity organic dividends maintaining investment-grade allocation, initiatives. terms our growth focused time and free flow of especially reinvesting

commercial, upgrade and investments In as new acquisitions expand growth years our and their opportunities geographic for spaces homes. their in and are in the US are operational several well addition, positioned several offering. near-term on investments and the bolt-on as opportunities, well housing demand also including that for that we strengths living and Overall, product as we capitalize market multiyear homeowners been continued our which longer-term secular has to trends building evaluating provide leverage remodeling underbuilt construction renovate

our tease technologies partner for greater creates seeing also for in to drive help placed customers are infrastructure. science renewable with and energy and the to systems Each with on importance trends them Corning science, opportunities investments and material being a and and of sustainability We in grow building benefit additional being homes unique services. opportunities and energy product material made growing from leverage durability Owens additional buildings, and products, to our increased process and efficiency

proud As financial With at call, help the of the and by the I we Amber in deliver our value beginning are company, questions. outstanding quarter grow it to operational to now excited we open call is and noted of have performance opportunities team today's the for delivered our back turn in market our I our the to that, customers the up win will and shareholders. first to

Amber Wohlfarth

Thank Brian. you,

We are begin the now session. to ready

Operator

our Dahl question comes And from ahead. first Instructions] Mike go Please of Capital [Operator RBC Markets.

Mike Dahl

The question Good taking my morning. Nice question. results. around Thanks costs. is for

just there's And how lot current frame should think be and on obviously of either your a help around the incremental dollar opportunities terms, pieces of assuming piece good segments -- a us can done type out percentage what you both price evolving segment, some current thought previous increases across and for realization across you that so inflation of the moving is pricing of moving have process job the you've a in or I actions of some we the just cost because highlighting there.

Ken Parks

morning. and good question. Mike Thanks, Thanks the for

we move about first into quarters. thinking the later truly accelerate that this as will inflation, we entered move believe to indicated as from still going we're inflationary a quarter through an the probably year, cycle we're bit we that As and

X it each And at the and disclosure Q, you'll inflation you call in businesses. of see that three look between across add breaking out the the businesses. million MD&A our it's you If us $XX around up, plus

between deflation asphalt began And to in of going think fairly through noted when quarter. we're narrow that And material are material that delivery quarter move input said, what of costs. input we're on bit little the first as the It's closely evenly For right? to these we the price So we'll move the as color quarter, forward, probably expected, start into directionally between the we keep to split to quarter. balance products we as in just about develop. productivity pricing things nature of cost continued more we first that things as the one a that move at as do of you point With is move watching that seeing a majority starting that start proactive to year. cost in in production to the driven that as at kind inflationary you I the petroleum-based more we the then are year. that that will of We're and we our based, process. balance very through cost bit our earlier and comments, that time the be taking inflationary in actions our productivity to is positive the costs, we through in and tell pricing, sure move products and by continue first inflationary addressing of see expect pressures did make anticipate we move petroleum that as this we

Operator

Thompson Kathryn from comes question next Please Thompson Research Group. go of ahead. The

Kathryn Thompson

and quarter for Hi. on today. question to Wanted the the my outlook. Thank for broader taking segment your you focus composite

domestic broader quarter benefit update a particular, other annual Biden sized infrastructure how energy. in back potential drop in give by proposed and demand in if then it also Just was terms pricing demand for certain the how much And you composites factors. the opportunity to given driven stronger alternative on versus the plan have focus progressed of an cost. balancing roofing the you. you of to performance, rising just stronger outlook, given discussions his under for And could Thank

Ken Parks

to talk bit you morning that locations. kind greater I seeing Brian the manufacturing for last kind markets. on the But of kind take about the than of to as network as America, all I product let the of well. Europe I'll of and world Biden downstream a other some opportunities the growth built residential around much it certainly create The question we didn't much of example, little things and Thanks, several a years, America the seeing, out to our especially strong. that, we that continues a applications filtering continued we say pieces rate as would was of that In wind out are of North general, stand And positive Kathryn. low-cost with strength in think glass melt built the again, over North geographies and this larger bigger We're has with the I at good the the of strength say, in couple of good India It across, plan well. construction? would point how ourselves building through first to we're strength I'll by and time. around one driven the dynamic, in be see be

business initiatives really question footprint done building that's geographies When as low-cost So you the out on all been we on I'll these key on. strongly. this your upon -- a driven and work productivity pricing, touch that based focus has well the as

as year. saw and customers the we pricing our going. helped had negotiations like where saw entered where As you markets going in contracts therefore, That where the pricing, to this we markets to pricing know, business Composites comes from. that solid really and of our business We about the we've -- feel tied X/X has good by was that's is quoted the is tried tied we

a tied to for the contract. So part quarter that not we been expect you to first has other of the player will the in that tell business that positive continue. also I that's

of long of pricing, maybe transactional more favorable we So move good not we're it demand it's those just transactional contract as is, pricing expect markets, only forward. I'll up upon to as see where seeing pricing And already that based as pricing trends And that well. but we the as strength demand good the across holds we've would kind negotiated,

Brian Chambers

a think I be infrastructure in we goes Honestly, the investments to certainly, share any our out. this bit high, how creates think US, to to in America, But glass look question kind know into plans our -- and it good share which we of we moves opportunity just going incremental continue see I'll there's very little for at us general, that comment a forward. business, is position. position a lot how the of Glass the maybe of demand we Composites our And terms on in opportunity infrastructure applications But given in certainly, see going it's our above in demand it of when when But too on negotiation. sense of I little opportunity we'll the additional in plans. probably traditional play be administration's approximately shape upside get early XX% very a the up. look as space. high would and applications from evolve And is to I an as at North strong, thinking to benefit it'd

Operator

of go from question next The Matthew Bouley Barclays. Please comes ahead.

Matthew Bouley

time I you construction, a all for And insulation. about to bit extent longer what Nice view come point, capacity. higher online, extent at and in the And strength the to or about a of you take bringing to North restarted, talked a to take about are needs morning. Fiberglas given taking bit takes presumably, taking cost And the some any capacity some there? the of have measured quarter. wanted it given a ask to more to being view. thank residential question. beginning Good just American of you've in these a past But more to know little get on your I the

your you. on curious thoughts I'm just there longer-term capacity. Thank So

Brian Chambers

Yes. Thanks, Matt.

to closely. We very this watch continue

when few a go capacity Kansas if what's emerge. got to going capacity, we've and out next continue feel service going over the We're Kansas we'd capacity feel our we we at market restarted initiatives. to have back bringing the we see about starts productivity enough to that right market per service that. to ago said roughly Kansas still We like City, to that we So that's look quarters But forward. other we felt between about City or year incremental City, two with that X.X clearly, up I year. a million good KC And of

-- a do incremental that options be facilities. debottlenecking environment could at our running we moving do at which be estimates we good that capital-efficient I But million beyond that. think for still more and around if up to That few get are that could capacity. see certainly to different some lead months. in. also XXXX have some network we housing to continuing XXXX bring capacity they some is a not beyond XXXX, in the be or start are view times. right consensus starts, hotter when accelerate or But We a last get would very start initiatives options to little now, that up X.X long of out than of some look we We to as

of get X have would some I above this to as start has around development, through, we go industry kind X.X material other think I some labor. got and we So forward. the work But constraints construction land million, to additional There's shortages. flexibility other bottlenecks think, million there that do

need But be a our would for we above So I and again, this to longer-term business could would good we $X.X we this is us, start. few through before be pace for think good million believe say we worked a very that bottlenecks years. housing next trend the over significantly a of very market few starts there's think be maintaining that

Operator

Please from The comes next question Kim of go Stephen ahead. ISI. Evercore

Stephen Kim

guys. Yes, Thanks a lot

you observation, Just rate have if most last lead that if, about as provide of I starts that curious it to could they've is, shorter how your on would a housing running at much at an suggest -- clarity you about been where run capacity. months, are of the consensus the look if actually you I just Brian, X that to be for lagging. run would And of usually any could additional would just a you it's time available bring does, have options sort some make

ask the because a been starts. a as traditionally ARMA. Roofing wanted your question on forecasting to and Mike's has But consensus in guidance on moves wrong you I big tail really also of Sort about to -- follow-on

you're ARMA down you only singles. wasn't You high if be up of but sure to I be to sort mid- suggested ARMA, mid- going sales. even guys third-party to that are components throwing XX% to is to like high up to XX%, would that in or is singles maybe flat be commentary comparable slower to growth shingles in just a asphalt or you or some

on would just you that clarity maybe that, So provide be great.

Brian Chambers

Sure. to those -- that look Thanks, continue wrong customers. important, think with But consensus I talk and Stephen. as And I order we equation, at continue years. Yes. their we as our books on estimates, on both past But guide. of to the over certainly the trying a and And mean, make think to I been assessments. sides the their backlogs, at look they've

others debottlenecking with things sense think to how those be XX of online probably X a we've initiatives in go volumes So To months. would to got your we triangulate evolve those the good X answer some mean, question chose more I a could or to bring get be under that try probably X we There's market few could that do timing, estimates we our within could next the But around year quarters. I things. of a do over less. to knowledge if a little some significant

those longer environment, be make to rates those and have do before able capacity. watching customers, want the lot flexibility, feed accelerated a rates at see too we'll to they be more keep decisions on But the at we'd we looking need. higher to and So appropriately aggressive, we'll bringing we'd be those some trends term or product and our some market again,

elements. a not year. QX I think shingle comp with is And components, issue bit on this of other not the is of guide, Roofing a we ARMA last have really, U.S. shipments, this

sales year, last accelerate. the picking back year quarter started go we When last first you the shingle really if our really saw demand things QX, of market. So our saw lagged in up we in

a We So strong year very QX. product. last saw shipped lot we growth of

of more our this look year's QX, So be to feel the positions for at the year-over-year we we're when QX, but when we going to are comps, shingle market less little expect our last half, in year, from into the overall, a shipments a we the sequentially while ship market. half little and at we just in look lot shingles about good first growth a than going rate ship the to more U.S. for first

Operator

Pettinari of from Citi. Please go The comes next question ahead. Anthony

Anthony Pettinari

morning. Good

You as wondering this, inventories point color or your incorporates comment could was indicated you volume three that lifts headwinds on just from I segments? if some across guide headwind? still at your what just a think in businesses, inventories missed XQ And you if a then give more inventory but catch on I'm apologies wondering up. that any the

Brian Chambers

Yeah.

I I'd historical say, averages. think inventory are levels, broadly our below channels in

statement would across that all businesses. think be a of our fair three I

in low So plant our historically inventory to see manufacturing we at levels. Roofing, continue levels

think most though, segment, We some fiberglass the business, in QX. continued distribution to same applications. going I'd are of buying in residential ability the certainly we and to that question, that for see below see now, is levels part our our inventory market overall, I in most a even be in out channel of be insulation channels the the sales. And averages. in below function continue say our QX. strong demand. historical other would historical levels door and the very our try saw statement broad sales your inventory, out And door And up, going into with applications, inventory we catch in the of again, Composites Insulation really to to think residential averages. see We've patterns I partners Right

And and broadly in ramped seeing up. has contractors composites from maybe market the U.S. the as and it we're products. parts some some I lack only the first sets quarter that production our in demand industrial the think limited manufacturing that winter thing in a builders was for wasn't of certain our think and of weather, of of I that well but as

I people very the remains playing very, supply think catch and tight. up, are chain

think be in I partners. would quarters levels going changes inventory it's potentially, a So before we channel any to in few see our

Operator

Rehaut Our question Michael comes Please from next JPMorgan. ahead. go from

Michael Rehaut

quickly couple quickly you in to everyone. is, are how over kind of businesses. morning, price dynamic the Good summarize – the you the Thanks. to that with first out likely where announcement quarters? you year. see of progressing quarter? A both inflation next given across across will the those rest in of you if for enough. costs Can price queue through pieces just But obviously, the -- of you do extent moving and My has businesses the the were the And getting of price/cost the realized, not increases were price/cost accelerate in the different for apologies where look could question lot as

Brian Chambers

quarter's all about first And would price/cost I quarter morning, us positive whole pressures back mix the we year. what that's Good was coming have we a think across the a Mike, the in real go shown across to company, talked been I inflation think of businesses. And into last focus we call, really the increasing.

year, escalate. continue we the a could entered there we As to that potential thought was

petroleum-based now, businesses. after absolutely Ken books, we really inflation. transportation said, quarter three seeing more first more more inflation, products the As material all sit were the that in we here didn't put

growth. maintain continue And inflationary increases. in current QX margin we maintain has a price/cost earnings allowed QX. And offset being the can coming expect positive focus current and able price through actions finishing. been initiatives, through sequential us that price/cost where our think the to inflation I and that guide, has pressure our our productivity that that And and to will and So be productivity positive into seeing mix in that in expected mix are we businesses with pricing we QX all to

that it recent roofing. in and trying to I the of through levels, the and some half is of inflation looking we move expected at think front we something insulation are we're as year, back both price stay we've in made, announcements this into in of the

and to of market So achieved half and as the is through our to that to overall again but move on we quarter, we in we going Clearly, positive that, depend is into And quarter. the to first see, expect back we've intent. achieve that pressures intent a try our price/cost that's maintain mix the second conditions year. the inflationary

year. kind we rest at So we're the quarter looking time as work through going of the to be of this a a at

Ken Parks

know yet. because magnitude haven't the first had queue you through of give the numbers And in of you that to to quarter scour kind chance a I the

mentioned of each than look three out called bit MD&A. about little As the a more inflation, in maybe specifically of earlier, I segments XX, at we saw when you that

If you do $XX pricing. million the pricing, same you see about thing across would

Brian's price/cost proactively are statements stay good mix how today supporting some we around intend to where that. of and So positive we ahead

Operator

next of Please go question from Jefferies. Ng comes ahead. The Phil

Phil Ng

perspective back of had any Hey, second products roofing guys. Brian, you you of the kind does from of buffer tougher on half to if a expect lap kind you on in And to provide for kind lead allocation. channel curious, fill the I comps, a volumes dynamic outlook was as just I inventory? half? in back that on get times but When still normal

Brian Chambers

Good Hi. morning, Phil.

going two I think demand. One I think watch. for be we continue to us, second half is of be that kind to to there's storm volumes going variables

As overall you know, market on about roofing storm XX% of volume makes up for average shingles. demand

storm incremental a demand. had we So robust storm pretty generate season last year, and some

couple quarter next quarter, profile how what So the months. over I think third on going of is happens part of kind and the demand of depend storms evolve fourth to

have when to that the is get call. view second then And to be a to we variable better on really quarter fourth the demand. I next So quarter going think going we're

last We weather. the fourth seen that that And Roofing in backlog down. ramped quarter warm inventory. manufacturers on It's demand So had inventory available, just years. I season was quarter. think we've hits, bit kind fourth the We out And a to generally ramps or weather when the was XX that's XX distributors opportunity did catch year, because not catch an of an little the of bit up strongest little generally to see with contractor sales opportunity a over winter for really down. for door up

then those are quarter going demand. fourth think of half I we're in the second and comps the X in into terms storm face demand So to

it robust think bit. an we're at, think market levels would that, run. as think going little down I would to little given a even where potentially I the continue opportunity expect drivers restock said I half. inventory we And having to use to first bit, are the demand be Now a trend that very through distributors if to

going probably I think now, large. demand right that may remodeling, the So the fourth just very, I year-over-year wildcard impacted mean, very drivers And for I that's the into And think come strong. impact the seasonal comps renovation pretty But is weather. real to is on quarter. by where is be

of think So out don't of the anything plays profile, in it's that that we demand taking going year. demand see on the the to half be I more back kind gas how of storm off and the

Operator

The next Please question Hughes comes from go Truist. Keith of ahead.

Keith Hughes

technical Thank other the on question Insulation insulation. you. building A and and

strong the here really quarter, got You've guide for second teens. up mid

give what's stronger for you're Europe, seeing If sort feel that end versus us trends different you user than within of U.S. markets, any could others?

Brian Chambers

Yes. product Keith. Thanks, and platforms in tech business. say Right our our across of strength all now, Insulation I'd seeing demand broad we're

reset, of of a so business by X/X as foam, about and kind X/X of products is FOAMGLAS, comprises the about residential applications, driven technical in nonresidential. just in inflation our inflation that it's So mineral revenue world,

wall, materials the is go minimal touch residential US, construction. applications. which commonly duc markets it FLEX in example, Europe, in would for our products used end In So would the like HVAC that be in that more residential be residential the

that X/X Europe. of about seeing driven of business So in of applications being we're and really some and in by our both strength the technical residential is the US

commercial really have broad the non around in a and given of market that's set a then us So And good lift. res, industrial. applications end we

we're we're in -- We're see centers, warehouses. and office we in museums data airports, settings. in in commercial, So

just So improvement really that both Europe. starting US those tracked see of in the seeing to bit, little We're applications, all architectural distribution broad we're some projects, some is billing build in is a and strength across completing. emerging the index, US that's we're Commercial here think something I project which pipeline of showing there.

our strength So we're And some work. I'd that benefits then say the really recent where seeing of the we're product launches. of last continuing is seeing to part

and very is products important, market. new innovation is bringing and new product critical. inventing to So keep innovation that materials we And

more NGX That product solution. think really FOAM traction. I last product, great talked our quarter, about I which is sustainable getting is a

it's strength, of we've of forward. market are some is So say business it launches, and a benefits to some in nice product certainly significantly going up of in some rebound some our guiding execution that and QX pretty seen here be I'd and

with positioned product we're this So these we platforms. And the very in category. each of of few some growth we're well think years for with categories, we trends in a think longer-term positioned these well

Operator

Shmois go ahead. of Loop The from Garik Please, next comes question Capital.

Garik Shmois

should that demand number that any million $XX The these cost Is forward? figure maybe the benefit Is you. about or out at we the parse base in this bit operating to as level saw quarter. between that moving absorption you think little And improves? how there Thank fixed flex segments? could that the a that capacity you're at, higher Great. way levels

Brian Chambers

Gary, Insulation or Composites both? you within are or talking

Garik Shmois

Maybe do those wiper Yes. businesses. could if on you

Brian Chambers

Yes.

Okay.

we're For be I bit of again, about. a demand heavily Insulation, Composites, they're to we're basis probably year-over-year, a operating centered the side. ironically, that bit where, towards melting service both then little ramping our leverage the Insulation, to our technical In we in $XX million. and are continuing production product I little back kind up get the about more on of say in quite just on glass mean spoke businesses. And of to a some same inflation residential expecting because Both quarter-over-quarter going about Insulation I'd level of improvement it's a platforms,

out the both in it it's think as broad seeing I run Composites, segments really again, our trying are pretty assets. of much is we And on but that in -- to brush. are So full then benefits Insulation

running furnaces to are glass of demand. we service the capacity high our globally, All at order really melting in

there's up the production not. another where up more business. -- one have and Composites production that's or terms globe of around ramping it's our any geography no we're significantly than ramping production really So ramped playing We're up in out really in

across seeing we're $XX really million So that the board.

Operator

Our comes Please, from Reuben Garner go of ahead. question Benchmark. next

Reuben Garner

this, guys. wanted had so growth. the to the and I if apologies. Insulation issues, I you XX% But the in connection some Thanks. volume ask And Good morning, already answered quarter about outlook,

are And similarly, XX% for what in the be think, growth, certainly the than, think it’s the there? I And market how guess outlook I kind what end in that up of better why assumptions saw. and right I question in are now? your that the or is, production you it industry side, would you Q, exposed baking are there maybe guys than ramping geographies other Is your of in able Fiberglas to gain to you're markets are the maybe performing things, or market mostly share? better

Brian Chambers

really as what we terms in setting. This America, Yes. about, you and in some primarily talked QX then, we've of guided on. volume QX. North are bringing And our growth couple I is, The say additional volume insulation of ramped going on have in spot up achieved capacity be is we a what in it's this in increase, function, of a things. is One to capacity. where we're that think, business I'd in to residential

on great focus adding where I our partnerships, do the a think outship our have we and market then And to product we're terms is, though, So, much just the to the probably now market. slightly as opportunity performance bringing in commercial of product we're capacity. it quality that

to are availability that bringing with very on us we of stream additional gives service some improving focused on them market. cycles in trying just capacity, the there's are that the So, some customers we I'd that say availability of and But our opportunities. help

potentially sure their -- making we're where is in think kind of we'll with existing and our we will around I see, focus some partnerships that terms gains supporting commercial that's strengthening and be working maybe growth. the So, share of of customers

Operator

Research. go next from The Patterson Please Truman comes ahead. Wolfe question of

Truman Patterson

Ken, question. morning my good and Brian and thanks taking for

a million, very -- view just of not brought a But a horse insulation, beat you and do multiyear How online. wanted KC understand the as fill have back about dead X.X term you well. essentially relation not most as this starts year. housing million do multi at coming to with? bit X.X year-end then past mean, you insulation of some just us help resi starts? somewhat starts? in little favorable plant a competitors loose in additional the one capacity that we've quite So, couple think want the leads And recent to US any to four dynamics pricing? hikes your maybe back in outlook on for all in There you year. online, could are also, number to industry the you -- I bringing the it's capacity the I there had we've fill think Is robust do June; -- embedded likely enough in Is with with to in housing it

Brian Chambers

put felt of the I comfortable had it. said Truman, if to housing could on X.X at We've kind dimension of Yes, side, we it starts. that kind million I think on this service capacity

be terms case. readily. that would in didn't we was still event think folded capacity, past given I've additional that, think in bring industry of a and dynamics. something said the you're fill with loose think And be the half was the back that in that loose capacity strength the the on about in to I year talking facilities consume some the some two be of that's market big think fill. would we to just the going that pretty going I That of

believe to capacity particularly goes one-five service thing on Roofing one as think a keep I more. bit little installed there's mind to Insulation. little or in well, it in that and I a

curtail be with this of Now, similar last Roofing. to the had lost we're higher to Last is some a running challenges level to that production. production able had so take we some production up shutdowns. spring, was assets There to than kind to year. make year going we're We we at facing

capacity on the and last there's we've year, think production that do So, year capacity. added additional basis, full versus time we the a added then we've

pretty about service we feel to back current why until market. have coming We this good That's at the I level. keep

into. front, in taken as the third environment a a really on the increase we're we've pricing the price response to inflationary facing that On year,

we the over to market very few the going remain overall think I years. is expect So, very, next good

of then look to continuing we've pressures, we're we're big that kind the to third think a that and was stay inflationary as just market going in opportunities our it of going to talked we about. I have. at compare increase driver that to be And of against front

Amber Wohlfarth

Andrea, is this Amber.

last question. We have one time for

Operator

And Sachs. Please of Maklari Okay. ahead. go from question Susan that Goldman will come

Susan Maklari

decouple morning, is we've Good My or seen raw material roofing. question kind about of prices. last for of kind you. from everyone. couple thinking years, of In oil Thank the global WTI environment asphalt the

asphalt markets that as expect closer XXXX? through mean as move that As of those the two think you the oil what about we does in will dynamics today, you we think about you year? some pricing move the the do And move as through

Brian Chambers

not QX. Susan. high for And down, exactly with below couple that sure WTI well now I'm And the utilization is have of which year we're last bullish have of refinery Yes. that's asphalt Thanks, watch for about probably refining in of a going we then I half I terms in has closer, which WTI talked the of second been and in one averages. inflationary too we're since rates, on the limits been moving if is then have I've something to really it a to last the right. little byproduct availability. underlying pressure supply think asphalt asphalt looking bigger into you're years. mean, that stubbornly And second stayed the relation is And be certainly costs supply. historical refineries asphalt But cost, moved process, up. the a driver

could So that back put would would some relationship think more we be need environment ranges. and we I in the term. in don't certainly, averages to that between see to term, could we potentially back that time I normal of of think But it some the could that come see build you get kind think But and is I time, longer asphalt near opportunity. supply availability that more asphalt a And create place. there rates that WTI kind see to historical there be inventory at utilization refinery for

Operator

concludes session. turn question-and-answer for This conference Chambers remarks. over would I our the Brian like any to back closing to

Brian Chambers

us. time thanks, today, Well, your your joining for for everyone, for and Okay. questions

year. You know, point say, a start first strong really a quarter I'd the to that provided our just has performance

to level and of XXXX. to continue positioned build momentum teams we're the we our very operating balance priorities, over against on execute well this high at Our a believe

with So and until you I Thanks. and our And speaking you we quarter healthy to again in remain call. safe. during forward look July hope second families then, your

Operator

for and Thank you concluded. today's may The presentation you now attending conference has now disconnect.

Owens Corning (OC) 28 Apr 212021 Q1 Earnings call transcript