- Earnings call transcript Q3 2022

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Operator

Hello, everyone, and welcome to the Owens Corning Q3 2022 Earnings Call. My name is Daisy, and I'll be coordinating your call today. [Operator Instructions]. I would now hand over to your host, Amber Wohlfarth, to begin.

So Amber, 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 third of

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

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

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

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

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

Brian Chambers

with Corning you thank quarter Amber. you in line joining shared expectations the results morning, for Owens with today, record in and everyone, call. today's third Thanks, Good us we posted July. for

material build strategy, at high operational and quarter, innovation. strong the in continues extremely a again to of level During performance mission be sustainable team support what a delivering commercial future dynamic our of executed our to global environment, in very once an growth service our in and through

year. the our of business the strengthen of outlook and the doing remainder are for then what provide future. outperform results our provide During to talk near to term, the while we this our investing and quarter morning, an third our details grow come to our Ken back in to continue the overview call market will I'll on performance, I'll for company and about

safety beginning Corning, one half performance. with EBITDA as to third quarter is performance. XX% nearly our facilities This third for our Now, third our of free, adjusted to rate turn unconditional. injury have quarter, XXX over revenue Year-to-date, of and of commitment EBIT results, In the delivered sites XX% the of over XX% months. an billion, recordable we the past quarter a global incident of EBITDA of X.X consistent million. our up third XX% X.XX, XXXX margin quarter third an At remain year-over-year XX% with in resulted Owens quarter. our margin review Financially, adjusted quarter of our I'll adjusted our worked and XX EBIT XXXX; always the adjusted safety increase of million, free was a of XXX injury

share In XXX we of addition, shares. quarter, XXX to returned through and of we generated repurchases. investors repurchased and In dividends million third flow X.X million approximately free the million cash cash

and During innovation, these strong created Despite performance the product quarter strategic positioning saw new and beginning The in expand addressable the by with us macroeconomic global chain the war generated changing our on made team financial environment highlight process in the our several many market results the adjust recent the leverage our our partnerships, core Europe uncertainty earnings to our while by the and by work infrastructure. investments Composites to as continued and of offering. markets resilient over great has strengthen we business, underway in progress end the been higher our our and product long-term we into products into power higher that acquisition Ukraine. in executing Polymers applications material unique quarter, reset, rates, accelerate near supporting this applications manufacturing past capabilities. its pivot challenges, interest have our knowledge, integrating value, energy sustainable expertise, as team our to more driven initiatives company's on renewable we highlighted hard markets, and customer our businesses into continued completed focused and last WearDeck at resilient Pultron new and team we science Similar Natural and of building is and deliver and of expand earnings a and to company. in strategy we and to August to term, all our broader In work supply with key inflation, and more results capital performance. our strengthen July, higher efficient venture the quarters for into technologies manufacturing Since continue outperform construction, market call, and growth generate the with higher, insulation the several joint to

quarter, the our our composites roofing, across components, To Through forward in add we installation also Russian roofing regulatory company investing business construction as including the and to in as previously our we're are improve on our acquisitions, innovation, shared, offerings now in and is our new also and agreement These segments. refreshed Russian XX targeted which and process. growth global businesses. entered span products As expand or through new new organic product platforms and third well adhered core we operations, an exit market capacity nonwovens to our our the have offerings, to launched moving sell the through and businesses, many additions. product self as we key moving the products process of build approval as synthetic building

next scheduled adding capacity product materials new insulation. our apply to for demand. to capacity coatings to our will our Fort to Smith, growing we at in accelerating Arkansas demand our meet year additional to gypsum specialized products be such polyiso materials site, as the our building come invest and process our late customer meet production also to to production and in support online to new addition innovation, mid To line In we continue nonwoven

most we cost As remain networks. investments, across make on these and have effective flexible manufacturing company growth the we we the focused ensuring

stronger optimization facility in here prepare example, in to expanded and the For and Santa our track Clara, California, service the to combination down creativity resilience unique North of restarted within teams, all West areas start and Arizona in flexibility our fourth our continue insulation, positions strong base. our disciplined and of conditions Corning even and market business year. production quarter, levels. operations efforts us as company execution which on increased in establishes potential. the as to key recent we of results, progress American plant, foundation operating our Nephi, a earlier Coast driven our outstanding This greater Utah customer remain these our by with are from our with this line focus us wind making provides Eloy, our delivering next we as The model, network up year, in shift spring The Nephi Owens fiberglass earnings our

share bringing our how Ken, turn is to additional our leadership it sustainability over I like I'd Before customers. to to value

Partner become net aspiration is are award, who past the to Owens performance pursuit shared we customers. our naming and to Owens Increasingly, now company month, our more the Sustainability to Lowe's Year, as based cited future value In environmental delivering a on progress the the XXXX emissions impact reducing customers building its made eco Earlier Corning important and how recognized by and an commitment core products decades, a honored chain. to our has material on But beyond sustainability our within in increasing our two through differentiator operate of innovation. sustainability and company this a Over positive at than reducing their provided us sustainability entire ever, including goals, our has Corning. it partner be critical we a across the of its as our Lowe's company. number by is sustainable

generating Supplier XXXX of the are will quarter, a on indicator times detail. a with extreme During and by was were with on our to to and turn just Ken? future manufacturer of of strategic over that as global cited I even financial more materials. Avient, collaborating supply of recognized Platinum our for EcoVadis our a initiatives, Ken These the for sustainability Year again, our meaningful reference to sustainable the challenges. as award in composites specific all. another, critical customers how examples our the we provide ability results benefits to security, supply building Once With recent for as review certification sustainability it a our discuss focus third two in of also of is performance driver chain now one

Ken Parks

morning, Thanks, Brian, everyone. and good

earnings we many quarter conditions delivered the with revenue of we and As serve. despite across growth the commented, end in moderating another Brian enterprise strong markets

disciplined Our performance. fundamental in operational and this was commercial driving execution

compared points businesses, we've of price headwinds impact the prior period to last operating at sales million, $X.X to for costs, inflation EBIT We growth X, XX% revenue all three continues were diluted of positive take in third up quarter along In segments. Slide can billion offset third or reported three the quarter to prior with per reconciliation margins million, talked diluted the and costs inflation in shows transportation. with of million expansion of input Overall, same Adjusted EBIT. the the our each XXXX XXXX the third $X.XX XXXX. XX% quarter the per over or quarter quarter, the all $XXX about quarter reported on Beginning calls, up material adjusted third net share in look the $XXX we in X energy Adjusted between a closer As $X.XX quarter. XXXX our third third nearly year. XXX of $XX was compared for earnings share, and reached consolidated basis $XXX for million, Slide year. the versus results.

For the of items nonwovens totaled in the held We million $XXX quarter acquiring recognize from interest million. gain adjusting joint a venture. remaining previously XXX XX% approximately

on $X of gains the also precious recognize million sale of metals. We

restructuring we our already million with associated announced $XX recorded addition, of actions. charges In

Finally, we recorded acquisitions. of $X to million related cost

our from excluded are quarter third items EBIT. these adjusted of All

the discuss now beginning Investor replenish I'll flow up cash what X, operating historically to around during Earnings generation with XXXX. capital, the capital million, at in quarter QX of continued strong additions Slide discipline we expenses, free reducing low shared $XX inventories. of and to Day capital our million along November, cash quarter XXXX. Capital capital $XXX innovations. resulted intensity focused working X% we Consistent on remain through investments productivity our of management deployment were last our revenue, process expansion $XX and from for while third Turning for or with million and

$X.X XX% was the As company a our of our bank combined ending quarter consisting capital end, availability $XXX approximately and growth, on of had our cash of earnings months result facilities. nearly the million of At return September XX for liquidity XX, $X.X XXXX. billion, and of debt billion this on

$XXX net divestiture quarter, activity third cash million the During outflow. of and approximated acquisition

In the repurchases We the total summarizes to to repurchased million of also share year-to-date common X.X time, stock cash through over third cash and shareholders executing dividend returned business. shareholders X $XX company. grow to dividends, and maintaining for from million our balance adjusted and million. returning we $XXX $XXX paid changes EBIT free to sheet in XX% our of We focused strong shares return quarter least a bringing strategies million. on generating $XXX cash to remain quarter, Slide million consistently at flow, XXXX an investors business the by investment while to XXXX grade

XXXX quarter million segments three adjusted Third all and prior EBIT $XX the year, over growth. million EBIT increased delivered $XXX reaching year-over-year

specified to business the foam, and and were inclusive Slide X, resulting details the of delivered results incremental growth modest for another volume insulation, global from Natural grew In record the an provide insulation, residential third residential revenues quarter of quarter. $XXX spray million, each in of The positive American remained Insulation QX demand our the fiberglass highly businesses. the Polymers turning residential and XXXX. fiberglass. the solid products. increase over technical in Now, in from performance more pricing, quarter revenues on I'll of XX% North third quarter

moderated levels primarily continued ongoing and started the was to as margins Overall, EBIT increase third a North Pricing wool up million installation QX. to declined in customer both material in quarter XX% normalize, offset from the EBIT translation primarily residential for QX and to volumes million, Currency from to American transportation resulted was However, and inventory insulation, headwind quarter. while compared positive in technical as also third mineral and XXXX. price the of demand became larger Europe. positive inflation. accelerated EBIT delivered $XX inflation in slightly quarter. $XXX The and energy,

to in prior of inflation. price The mix. also benefited face review X% We Composites realization the continue Now, for up please quarter The $XXX up another delivered quarter of line business. Composites ongoing growth resulting year. another by XX performance, Sales the Slide million, for of favorable from with a EBIT as was business we quarter strong turn top driven to favorable our growth year-over-year XX%. to were commercial compared

Roofing provides XX COVID period were in partially to positive Slide recent and delivered positive top same Price was of year accelerating compared price XX% realization. as was $XX volume of was dry performance. overview Sales quarter our prior anticipated, partially line quarter. use the in billion, the an volumes. XX% lower our favorable outperforming approximately on million Roofing impact from margins acquisitions. another for in our market. with Composites were the the the the located EBIT a digit bottom up single The restrictions $XXX continued at the from strand down of Currency along quarter, to decline were by up U.S. higher Pacific China. business ago, business. low strong As offset and by volumes offset quarter volume inflation was quarter Asia inventory million, the in to delivered have translation Chambéry, for impacted X% normalized. EBIT of compared headwind with levels distribution shingle mix, be in by for price year, year of impact the and the components shingle offset shingles partially The by the in asphalt chopped market net the a with assets France, manufacturing which a U.S. resulting and the prior volume decline the basis $X a divestiture

the from $XXX EBIT XX%. margins other at price with For inflation and $XX asphalt, material million, remain was strong quarter, offsetting up million delivery costs. EBIT continued

year expected items. million key full million. XXXX million to now our range discuss $XXX financial I'll XX, is $XXX $XXX and Slide $XXX corporate Interest General and between to expenses million. to estimated expense are Turning outlook between for range

adjusted adjusted to tax earnings. pre-tax rate to to expected our effective cash pre-tax be XX% and expected of tax XX% XXXX rate of earnings, XX% to is be is Our now XX%

approximately are $XXX is below acquisitions. to million capital which anticipated amortization, be recent Finally, depreciation including of $XXX now estimated and at additions impact approximately expected million, the

the to please Now, further return Brian? call Brian turn Slide to I'll XX outlook. discuss to the and

Brian Chambers

Thank you, Ken.

conditions. despite third our quarter, the shifting During great record market of outstanding continued quarter another delivering we performance track

markets, volumes through and we to some our perspective, businesses. to move we for our anticipate the additional Even changing inflation, in see residential finish conditions. in of As perspective, as we markets end to in impact positive especially demand From end to a expect businesses our and to headwinds, good year, a contrast the a adjust maintain energy quarter. European in expect Asia. cost macroeconomic international our fourth trends to Europe continue each order continuing construction costs inflationary product From of we demand with lines in to cost these especially expect our U.S. fourth see many commercial we we to the quarter, weakening price

last as conditions Overall sales realize which well the downtime many and some EBIT of the for expect currency the of we these growth net needed modest quarters. successfully much to in in for addition, shifting several as we market year. production plants, continue headwinds deferred adjusted maintenance we to our generate In impact navigate modest and to company, expect prior and versus have

offset the Now, a prior business driven of a provide specific detailed more year, combination American with prior outlook revenue anticipate In slightly of previously on fourth versus partially versus headwinds for flat business, Starting our expect the I'll volumes lower ongoing announced XX% approximately volumes. relatively increases with by of continued we by price inflation, continued growth quarter. and price our currency with calls, prior we North realization year. appreciation, residential impact consistent overall

expect technical to recent announced revenue price installation expect we our continued previously from Polymers. and a global resulting increases. Natural realize our acquisition we realization of full of quarter from Additionally, businesses, In our

From to narrowing. quarter a be inflation and digits, materials volumes price Europe we cost to mid-to-high seen tied cost in environment headwind broader softening continue the with but positive, the perspective, demand remaining a single energy China. down be to to from expect have We we some expect and as in macro

some anticipate necessary also associated and manufacturing incremental investments. production We with maintenance costs

prior Given for this, we business. QX with all EBIT see to expect in growth earnings margins year versus the mid-teen

In similar in slightly Composites. lower as QX. to product with by of acquisitions well DUCS be pricing as remain comp QX, continuing offset price saw we versus realization the and saw are as impact Composites the to volumes, expect the quarter, exit fourth accelerate we will revenues year-over-your recent on we Moving what headwinds anticipate in to of year-over-year, a to line. steady We currency and flat relatively what the lower

revenue cost to incremental work down expect the to market, single QX. Similar inflation a digits track We price prior associated with digit in quarter shingle as we slightly shingle to in lag maintenance. expect with growth mid-teen with We market anticipate distributors necessary low-to-mid we largely high the in year volumes headwind our anticipate costs with Overall, with manufacturing the components versus through Roofing, for while shipments prior insulation, single inventory, be discussed expect anticipate to line some quarter we to continuing down QX. be earnings narrow to would year. ARMA shipments versus would we EBIT to what And Ken in volumes our similar margins. in

businesses, we our with also fourth Similar with inflation a inflation. some margins earnings two I'll look another a for close versus Roofing. quarter we positive we enterprise approaching in perspective, we to of our necessary With remain but flat price expect year in relatively Overall, to downtime XX% expect the EBIT items From in the quarter. to quarter, few that seeing our the to maintenance the we release, view businesses, as other quarter. assets. beyond prior headwind a take anticipate perform on expect some businesses, to deliver year-over-year other As sequential continued asphalt with cost

combined impact position results. to and we to the to execution, leading end markets macro continue strong businesses, well While our improvements positions discipline our the term, the shifting to with continue to our us market in expect structural made generate near environment financial

of and adjacencies the practices, capital our strategy construction unique invest and we Each do opportunities in strategic great which believe allocation addressable reach. addition, sheet market companies strength and product at strengthen are help housing customers market and earnings of XX% leverage solutions. to on share free and also sustainable performance These material expand for growth manufacturing returning our into new trends focused acquisitions enterprise broadens our and around least priorities to renovation, long-term markets, In growth are win new productivity and science, strengthen leverage built investments, the and company expand the over to excited repurchases. our we develop company. solutions core secular prefabricated more balance shareholders. several demand drive grow changing construction science, our manufacturing an shareholders material to our cash the the growth to and leverage financial investment deliver to we our the and expertise, expertise, through We've making of incredibly plan create power flow that through market long-term investments company our multi-material current time, increase strong trends the dividends and more about choices these long-term Overall, and value of balanced our products and in as for markets organic to and market, and strategy continue position a our

financial back open we XXXX it to XXXX, With and I that, remain turn the towards and up Amber for now for focused will As on our call to the we commitments delivering our finish Amber? strengthening company questions. on turn future.

Amber Wohlfarth

Brian. you, Thank

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

Operator

[Operator Instructions]. you. Thank

Stephen today Evercore. Kim question ahead. from open. is Our Please first your Stephen, go comes line from

Stephen Kim

just Thanks had off start COVID restrictions much, Obviously, Composites asking here. guys. performance again. could strong the you I the color I Yes. first appreciate about very If all the by and business. China

had I million around that last was that $XXX think annually. you mentioned business quarter

the your of terms outlook be would light in the had overall, Just relative situation discussions changing in is? for quantification did you pricing business Composites? your you what in your Are just of to anything, we all? at what just XQ? impacting rapidly Composites And Basically, globally, expecting pricing that's any that the what of improvement see how wondering in there outlook

Brian Chambers

questions. the Thanks, Stephen. for Thanks

quarter. Reaffirm that to larger you business three outlook of The bit that's maybe that right, about a of the little those. call said, shutdowns COVID bit call little all, million. continued that, We definitely on Let COVID than through we much quarter. as weaker restrictions me quarter, you out in play but address maybe China last to a around pretty size out we restrictions those volumes, and what it the saw that, the this kind of $XXX did all just anticipated first and for the

the change of as we're counting probably year, I far in we're significant balance environment on for As outlook, think that a thinking the not for the China specifically.

We will not a get China should go demand within away. pattern into COVID XXXX patterns wane would of but kind more once anticipate on certainly this kind call of we return yet, normal and the fundamental that to restrictions these

we we’d probably what be place COVID term, it step patterns third restrictions demand where saw the the similar at fundamental quarter. news good And should as it in is to near these looking are the in in then China, was. settle, and So very of kind back

We've the in before, abating. light we of tell the the you a even seeing which of a And demand kind Insulation some you we is, in is macro acceleration contracts, that changes, customers Composites we know that's I some And our a right out so as on far I'll about are said far we And look environment upcoming about the those question. Composites energy they're know lot inflation, great outlook Europe. we're we're around inflation is for saw changes, we're on And but an in all as with not pricing, especially of contracts piece what renew for including big but talking good pricing. of of fact, that actually tied business. in the continued that year is only business, to now changes, Not our single it's can And to all is pricing, on them I as year. seeing not are. at discussions cost that And contracts. phase two there in really this, you seeing give input and it. of what a business thirds Now our we're Composites perspective the of not Europe, that know where big pushback the

right allowed have us customers. to the that's So discussions with

measurable we're with our kind amount with discussions pricing of completed contracts customers. And to of good and able so seeing far actually verbal still we're in processes or a discussions, momentum have and positive either

Operator

Thank you.

to today. we Before to next ask our please everyone everyone, the question to remind just allow like to take one chance stick question, I'd

is line next Truman, is Wolfe your Our from Truman Please Patterson go from question ahead. Research. open.

Truman Patterson

Good taking Hi. morning, my everyone. for Thanks question.

follow that detrimental discussed ago, step Just some segment Maybe how Composites. Steve's and about way any margins then we And negative you've particularly should Chinese Previously operating a Europe on but markets? and interested you've the in for a differently. volumes backlogs think I'm how in seen? taking it look further, quantify wanted the just those asked could question, given of Is the you to today backlogs up they large there versus today? months little bit six

Ken Parks

India point quantify how they look questions. the for few say very versus the ago. of strong we demand I'll book say of thought is can but we the across backlog is Pacific Truman. the changes would a give to I kind would you backlog about the the Thanks, say a talk months do about And Yes. still it, about the today out In what Thanks it than by won't What how six in Americas, actually no your Composites order very ago. patterns in remain Asia that portfolio. I I China, But the you I'll bit little probably China, things tell negative region. of order strong. In continue kind months there weaker looks looked and talk let's backlogs, to aggregate.

seeing of then think of out strand exit in use ago. DUCS give months completed that our a of strength think to probably remember pressure what some and as some same kind France. numbers our you like an the as point I saw business, look about we're in order answer, the they're And business we important on I was Europe Asia, it's book Europe, India. China dry overall few kind of chopped So I order Those in magnitude we that the

had at of we the that for the And revenue. million so a for year purpose ratably $XXX about And that you to fair quarter. over think XXXX relatively about of sized it's

So when order last weaker decline, not region. you of years, Europe. gone I weaker, strong what book Europe of But DUCS been and book about demand would still, you all very, then running is little maybe saw from capacities. take you only high at tell I we've volume because would consider that in out, say, very, European a business say businesses, But of I is in the the the when but bit order what the as very the couple some on Europe, over decreases, rest the our that the across that of fact

So light energy to the while across in Brian little up outlined how it's Europe, the you nicely even it's Europe, softer what's bit in control impacts. try affecting Ukrainian with of the it's are that held even of doing outlook impact, the some about and in and very tell the a I countries of all the things demand, inflationary the happening variables that some to

can I it So I best describe way probably to think that's you. the

this way. detrimental As margins, I'll far it as put

numbers, throughout kind in And And cost about of as gave contracted the so narrowing. each of that's softer of As we early that And quarter, what's of about again comes which total, in fourth happened. pricing you opposed through year. the that kind the volumes, we obviously quarters. guide the pricing, inflation the to would which detrimental price percentage, off thinking think volumes margin anticipated just that strong we softer for quarter, incrementally a grow -- about of exactly year what the just as talked in the was kind we was for

in the the the price only layer from Even third to about the investments over in that the for quarters, as our doing and the at back those a intensive healthy things margins, talking of assets supply run the to providing productivity businesses, think is acquisitions history, the really of do local cost some playing So the downtime you operating at that demand. in done, of the which the still business optimizations network the last second is narrowing, rate. that that's because result And good performance. then portfolio, of teens down and several taking local our running improvements, I needed a the operating business Composites not quarter, over that, capital which into that's general as third quarter we've third we're just but manufacturing, our the just top and less looking variable, years kind some the few of three variables with quarter. we've a to made as last look third we've at quarter, mid very quarter of And on for well the fourth

is at I'd in in is a QX, talked going Day that landing, think of what operating the of margins, to look which threshold kind detrimental great Investor our you're about say of we've point. of instead the kind I And So proof exactly where see the of we and what we're performance. lower raised that's end

Operator

you. Thank

from Associates. Adam is question open. next Zelman ahead. Baumgarten from your Adam, go Please is line & Our

Unidentified Analyst

once my even On actually support for the Thanks Hi. past question. be that, you for next expectation in like that line taking and But what's your This Florida. the over in jobs of for call with cycles? price? sort completed into And shingles, might those hurricane Morris price 'XX, next, some normalization it, given all late the is year expect Adam. prior would get there to there [ph]

Brian Chambers

the continued bit about still itself, I against on in comping and very think I'd third We industry little to to strong Roofing quarter in put perspective, very guess just little terms we very back as Yes, our of that historically, step I a talked a strong shipments, but in quarter which in business, start QX. a took market probably operate very, strong.

So from Early in activity. the very of good to That countries regional are hail rocky less strong. saw trends very, we had splits little that Southeast, started continue bit country. regions, impact the across see some a most rest the overall. see quarter, of we where Midwest, to of some kind there declines Texas, regions But mountain of stayed demand the

So continue through patterns. face demand price that and additional we're looking into realization. installation do seeing to we're to good We to continue recover materials

in demand to record environment a able got through good good expect And that increase dynamics be some inflation next to would very announced an August with pace price into historic Roofing very say track recover going to of we continuing year. with keeping being And so the We've continued year. to And continue that a to good. pricing expect inflation. of would and into I'd that we continue have be very, next

Operator

Thank you.

Mike, from ahead. your question Rehaut Our Mike is Please JPMorgan. line go from next open. is

Michael Rehaut

and let's hoping the about the question, my Thanks. Good And focused residential and My congrats of to that, get broader we more today market if level volume utilization capacity from see the results. as additions that terms in everyone, could guess utilization. online of question XX% capacity only implications were drop in residential its come sense flattish North pricing? where might volumes in extent X%, or is any quarter. next today. can where the industry everyone insulation was on housing still potentially ongoing say than that from first to are that it to moderation, scheduled terms talking And be American some fourth go an of -- in any to morning, the have and industry we there's a on in moderation some I obviously, in year a I of XX%

Brian Chambers

appreciate I the Mike. thanks, Okay, comments.

for insulation we overall continue residential strong very looking see demand at our our business, to Just product. insulation

saw think last very terms So year. remembering volumes high in comps talked we up but when about, in that's over year's for prior QX, volume calling a QX outlook a We're relatively against of we fourth we just about that flat quarter. bit

think certainly fourth in into in that's and next with over going year. that's probably we strong And the to of So continuing our really actually continue performance of part carry quarter terms guide here demand. first the

lagging running and call, housing, completion So levels capacity the keep about demand. and with up we're starting still the very backlogs higher rates shifting when believe seeing that, talked in with to rates, we the utilization we with look last very, interest high construction that we reset new they're to even look impact starts. clearly at when rates, But environment And starts. we at are

housing running good still we still million units. starts think the to continue worked well two. through we that So X.X need at are be over backlog to there's And permits are of next over units, north million quarter even rates to today's going very or X.X look well still

while the a is previous U.S. demand are through inventory different there's gone to from market. for think system. little still and housing we've industry consumers there's that reset the cycles reset, So going fundamentally, to I higher in And the high rates, the very no to going in

previous And market as for higher think I are some still environment going is think good resets rates. rate reset that demand So to we think downturns. a us. the than But that creates some to of see we going cycle kind volatility we forward higher

positioned. think that. we on little well we're don't So capacity about bit see We coming a year additional to next talk any

down we facility. think would our about talk fairly stable. phase a completing our with So Santa going utilization be closing Clara capacity of network to did rates be I we're optimization

because trends demand very environment, term, levels. rates to going pretty make And now, we year. at over we'll settle a process in work to housing the to creates we months We operations how the Utah our we'll interest the end the But that certainly that we up think into go would facility We demand next few production in out month. that But spring. equipment for strong. as as then right those see will from it to of inventory increased early Clara. continues products be stay builders it And we're for that's a say end shut favorable to this think November, still next be long of going at down reusing U.S. down Nephi, Santa existing facility of back upgrading line shutting on be our We're bring

Operator

Thank you.

is go Kathryn Research open. Please Thompson question Kathryn, line your Thompson from next from Group. is Our ahead.

Kathryn Thompson

order for a Hi. quarter coming question mix versus up somewhat for job This kind and and that broader is composites kind to in implications next Thank a the few, acquisitions really On and on included focused the has of composites, taking really to a in insulation. today. product question you of done focused to of what’s on divestitures. shift changing going more be bit mix the higher product to your add value you've and margin, great little

your not Composites Composites, all that comment could that for businesses? how your As for deglobalization? you the this but do positioning think you of backdrop against forward broader trends, Thank business trend little on in about it, your a a of you how global bit impact Corning's position, think deglobalization, if but managing you're Granted, slow just Owens you. more, of would

Brian Chambers

question. for the thanks Yes,

in little perspective, of about Just look we a today about footprint, stepping give the a third back our at U.S. market, to and revenue revenue our two internationally. is thirds when generated focused

to our the and of been global have we bring continue we think terms geographic we of advantage footprint where demand our we to market selective materials, where see offering. a complements inside where product construction it and differentiated footprint I want for markets So very that in can building good to in we operate our think operate,

we've with those look these we to of our in markets we in of us one that China, the great opportunities to put potential looked the market and each outside Canada, for Mexico, it innovation, our evaluate products, India, And Europe, And inside are think opportunity geographies U.S., and and front technology, so at agenda. that the create primarily our us, growth. growth how our fits continuing have that we

sustainability. advantage terms construction footprint, terms practices, the building something markets bring that like for they think it's of But we the today, have of products at our say, fits of always So terms material, in trends we looking We different how in like internationally. our of building in of and how company markets in strategy. I'd views in terms to innovate terms we our we positions use we're we're in our how in it operating we footprint, in geographic inside of

opportunities. brings fast those rate, And market we and it a at leverage for into use we agenda. markets, every we other can certain markets. we different a an So or that can innovate innovation products think rate look a to us In really drive perspective

not But to and strategy terms that evaluating. term. look we but in each we only our of brings of us we of longer in geographic fit, always our We market at have current something term, like footprint in today. we're continue forward. in evaluate going terms it's something terms footprint, near the So But the advantages, think our

Operator

you. Thank

open. question next Mike is your is from Mike, Markets. Please RBC Our from Dahl line ahead. Capital go

Michael Dahl

Thanks for question. taking my

on a Just question inflation. cost

You're some fourth in the acceleration about continued talking quarter.

slightly can costs, step headwind. like anything in you everything it look anything I think the you of was input eased the XXX a There both and like last When million at fourth was energy, little pretty factor Maybe type in of And on energy roofing you -- up is else? but to or inflation seemed I quantify at help what are when year-on-year costs year-on-year with? us starting -- to you quarter, increases rate see headwind up, bit. like the costs anything say XQ maybe combined transportation, that look the anything of an that? when some starting you're Thanks. and offset asphalt facing the or to oil be upward

Ken Parks

I Yes, on, just some three that first would thanks, Great quarters. say you QX put cost the can followed something numbers focused the on And quarter. get know out the right that you constantly you costs. input the QX. as I on and seen perspective Qs is done third let's would And as question. of the We've QX pulled XX% XX% those we're it imagine. goods probably by XX% in inflation in And numbers of based about you've on on in sold, Mike.

that. that of we kind an all of is OC for the largest As incremental energy upon volatile QX, there not of challenge, very European a continuing driver inflation, what's based about we it's we're think environment challenge That's about talk driving really us, seeing. just and and and the is

that kind Recently, a day based drop a day. to But experience. recent one winter be seeing and QX up relatively QX. that increases TTF seen natural we're that with in I and the everything XX% into gas, of I level next seeing item on European and tell energy a biggest the plus heading going anticipating steps on you, XX% that's think the low you're we've to You're would between down decreases of

a it, on bit the things of ocean or we're As ground really even whether it may far across offsetting over movement. seeing the as that be improvement be freight transportation, transportation little globe

way bake an it's maybe little significantly, So that improvement little are maybe quarters. put at -- still has seeing between what QX. least not a would in of it's but QX of all bit the there that honestly, it moving the up let’s the asphalt, a of similarly moving we and costs last couple rest been. say the saw of When we of you input that in And all together kind bit we're to inflating not

of So bit energy, in got I But of energy. few some up maybe other European when by say kind be of the would primarily dollar some a driven you put offsets that we're U.S. components. all inflation together, will a it's really seeing step little in that

a So relatively smaller little bit higher is of a on quarter. percentage a dollar bigger therefore which basis, probably a a slightly maybe on same, basis the because little maybe bit

Operator

you. Thank

line open. UBS. go Next question your is from John Lovallo is ahead. Please from John,

John Lovallo

insulation and Good we And pricing global technical morning, question. head should my you How how should into the of guys, be tailwind quarter? for we and thank think about fourth as taking XXXX? in continued this much a

Brian Chambers

John. Thanks,

our price outlook to global. and realization expect that in for technical That of good to see part category continue QX. We us in was for

And product inflation productivity. in as try seeing price offset work all continue we're to we lines that. So continue to and we the to continue through our to

combination of We a have products, bit diverse line. several product technical a and It's made insulation more little some our category. global announcements in

implementation effective good demand to we good all have dates, continue there of see overall. price they and different but So kind and utilization

would we to as go expect we continuously So XXXX. into that

Operator

Thank you.

Bouley ahead. go next line open. Our is from question Barclays. Please from is your Matthew, Matthew

Matthew Bouley

question. Good morning, everyone. Thanks for taking the

today single to might into would about of in you of family just perhaps side, an topic impact that one, the the and Brian, Number I when volumes that thinking thinking pocket, insulation you expecting I on continue air just cost scenario say on housing back what heard you Just it the I'm pocket if the strengths curious. I call fiberglass business? rightsizing America just a you. you're expect of slower? you XXXX, if QX And I heard think air some know starts residential fixed North starts in how footprint is then where be kind housing earlier, guiding flattish to in guys are that we just Thank correctly. are to in your happening we about But

Brian Chambers

of think here you Yes, did me of backlog on to about insulation that. really that next into We be in homes QX. completed. strength resident carries our the talk continued year, first part business for hear the based our Thanks in

better better follow is into starts. generally, commercial where we kind of put insulation and the watch a indication a of closely timing. So indicator and buildings homes very housing of as lagged That's the

going move lagged we to which up starts, have at and another through watch quarters. which backlogs, quarter stay of are completions as we look the again think solid So to move. And again next couple of then continue we pretty here we

I So that through. comes think strength

through. to us So probably to completion the That's cycle starts start our cycle after used. of months where construction are air hit would pocket and four roll three generally the products in for kind

as might and of at overhang it's not would probably There's about that worked higher making housing reset I little longer an intact it When air watch a I well say we we with that's is pocket. put worth kind think North U.S., as to lag, there, again a we we look perspective, think to demand housing going in really term. be to there's a interest talking air I the view. and have still housing fundamental be But just What a So America that. for than you sure an pocket quarter more was rates. inventory in There through.

And million to declines starts. So things demand. now, we see starts, still reset, would once X.X we're well above right they're with good the I even in think expect housing seeing

even of the come market So still that as levels through really demand solid resets. at to are continuing

So that go into. this cycle pretty pretty demand stay that through as coming gives us solid some and should confidence that we we're strong

have is Insulation it years been talked working fixed about in this And business. that In on the for several the of we and a for I've company lot. rightsizing terms in something costs,

ability our continue operating improvements invest us have made We the structural most effective up volume flexible manufacturing give to to to ramp we create to and cost think We the for insulation to down and to network costs. demands.

the closure, on And Nephi and We that investing continue similar to through we just assets at more Santa and last in Investor basis structural evolution do than to that year said our flexible of those higher Day through Clara would business Eloy we felt margins in overall. cycles. about previous points generate that XXX our improvements in we volumes our

So we done the volumes results that and in see to the will when we've If fixed and generate confident work we we us financial can do feel if well. do starts declining, costs that the when right-size serve housing we see strong very decline, business. still very and

Operator

you. Thank

Phil, Please go Ng is Our next from ahead. question is open. from line Jefferies. Phil your

Philip Ng

kind head moderate the on into early color Roofing period your of Brian, especially business, any guess Good morning, an Congrats Ian of level, from any here? was results. pretty It and of on destocking any called guys quarters? are started channel seeing And meaningful. on you out potential you the I guys. on this seasonally as slower really And in kind read to the then you inventory little list inventory? Hurricane strong coming a asphalt bit

Brian Chambers

Yes, thanks, Phil.

cycle our think of seeing. of be rebuild to being terms is event. have be the that I by go terms assessed going that And to damage to been Hurricane we're thoughts impacted and still is that longer it's going Ian, families In one in certainly a what

that estimates we've be squares much aligns remodeling, of X reconstruction we will seen that. kind seeing in And assessment is of So hurricanes, process. how in a around damage pretty an out. created demand long most from of play million what of Like with terms probably that we're is think this things

So first we the of bit spilling year. little of in bigger but over a probably that part next a QX, here part into demand see

keep to quarters. I demand very strong in that is next several Florida, the particularly going for market the think in So southeast

I they're certainly distributors a behavior what terms we're the In think buying. channel more selective and cautious on inventories, is and seeing products of brands being more buying

all be on kind again they if think you demand. of they're set buying. to first think finish half, products, year. the a second brands distributors keep half, up to products inventories compare right-size In just there's I and selective as see brands So All want buying, half their level QX, we've started to lot more of I first with to and the

out have we So to stayed make here be most at to for the to the fourth I there's to strong selective door, do inventory little level bit most year. finish the But think But a going are relatively in in going the distribution part the sure quarter the of think that's quarter. sales regions. in purchasing continue levels right-sized here

Operator

you. Thank

is question is line open. from Hughes with next Truist. your go Please ahead. Our Keith Keith,

Keith Hughes

some side, It to coming Could where quarter. question and from? is dig negative markets, see is in the U.S. the we're going little user detail any end technical in we weakness got certain My particularly more you. in the a is Thank some would in insulation fourth be helpful? the volumes, more,

Brian Chambers

Keith. Thanks,

space, insulating broadly U.S. portfolio think I we diverse product market pretty inside a materials. of have again, our

on used I'd applications versus insulation are insulation, pipe wall some for in. the the panels, the on weakness the of that facades of interiors. versus of of more interior and walls materials the insulating other insulation; we’re is have the seen commercial we've exterior kind the applications We probably kind wall say

some China and volume. So probably U.S. A is around specifically, our chunk I in the really would U.S. category. our in some guide in commercial that I it our inside markets, demand demand that still of that's interior commercial European terms of more in softness. demand think what volume see we're in the But space. of think in insulation technical But of terms declines be relatively larger of we seeing good

Operator

Thank you.

Shmois your open. Loop Our from Please line ahead. is next is question Capital. Garik Garik, go from today

Garik Shmois

the hedging program is if particularly costs Europe, your Thanks. volatility, at Hi. all. energy I'm in wondering impacting

Brian Chambers

the the impacting we execute is on to it It not how program. of sense

than a to that out later And as we group a and program the I it down that to nearest of we clearly kind five hedge take we to it then volatility is curves probably I’ll think really definitely on have going the the to a hedged. we are XX% next may now they it get little bit get I've mentioned that a quarter, right and in have XX% quarters. a position between XXXX. bigger on tarp ramps because we bit, something where a little at before may more is The move quarters. land quarter on looking the it where next we call put hedging as that up the energy if closer to level do as We moderate watch, we're that through think pricey always. pricing program We place, we

and where how watch pricing curves the top sit determine much the we to will it We up.

real around change. energy savings hedging $XX the we the see it our actual the the can execute I disclosure million that What you even with the about tell of no are as So always in would for you implementation XX-Q what costs generated pleased very similar, Europe, derivatives, is we with program on year. volatility is energy of cost in has

So way. We'll doing to we execute just we will we program. continue have right And the make the what curves watch to it sure level hedging. that are the like of

Operator

questions is Thank you. This we the time today. all have for

thank to for everyone joining. like I'd So

disconnect day. have You may now your and lines, a lovely

Owens Corning (OC) 26 Oct 222022 Q3 Earnings call transcript