OC - Earnings call transcript Q1 2024

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Operator

Hello all, and welcome to Owens Corning's First Quarter 2021 Earnings Call. My name is Lydia, and I will be your operator today. [Operator Instructions]. I'll now hand you over to Amber Wohlfarth, Vice President of Investor Relations, to begin. Please go ahead when you're ready.

Amber Wohlfarth

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

Chief Brian Financial Chief Corning's Joining Fister, Officer. Chambers, today and Todd are Chair us 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 X-hour filed a results as only. morning, this first release we to In many call detailed XXXX. quarter yourselves for

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

earnings slides available will release, the of and to reference. press and this section the Refer owenscorning.com. transcript and the at slides website website, Investors our the XX-Q presentation be link the under recording on future call of our Corporate Form can for You A our homepage. access supporting

Slide we offer of reminders. where reference X a couple Please

these undertake are obligation to will our in laws. the results that factors the factors We SEC forward-looking and differ statements risk that risks, refer beyond statements actual identified required our to is under today's remarks applicable for materially. and First, could uncertainties update include cause to detail. what Please subject to other no more securities cautionary statements filings

section our financial press of remarks Investors today's may non-GAAP in measures. and available in slides contain GAAP presentation owenscorning.com. presentation website, on release non-GAAP earnings the measures reconciliations Explanations Second, be our found and the of to

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

Brian Chambers

Good morning, everyone, for Thank you, and us. you joining thank Amber.

highlights reinforcements acquisition for first the that through of share Todd our that, quarter. quarter During performance the an the provide on and more business walk alternatives the year. I our of results quarter glass earlier in Masonite update and and announced will outlook I After detail, review financial will today's call, to first second discuss we in our back for our come will strategic

delivered deliver broad within to dynamic quarter results year, a execution to market great capability Corning start highlighting our robust and environment. very strong Owens another the

Our of and results earnings the continue focus reflect that our key market-leading growth capitalize strength and positions secular to on power enterprise company. our of accelerate the strengthen the to trends

I will safety our always, Now Owens a safety Corning, with to begin performance. as commitment quarter, unconditional. of At review the our is

over continuously injuries to and As strive report safety safer to pleased approach to this together. we from rate in the to X.XX, best and the work, recordable this a same year renew in period XX% part refresh year than we decades. I'm the our our quarter more that commitment, as eliminate start incident of and work Through was first our improvement last X

at financial quarter now performance. first our Looking

quarter Owens for the enterprise EBITDA adjusted to leading execute Corning year. as earnings. earnings or continue XX% of XXth our marks higher, performance and better better sales consecutive that We and execute our margin line strong XX%, EBITDA with operating earnings were an start priorities to EBIT in year. adjusted margin resulting net continue the company of to prior margins EBIT margins consistent or adjusted and more The This we adjusted to mid-teens delivered an XX% strategy key of strategic with in

to shareholders per adjusted challenging continue of while quarter. share face our through top first in and the European $XXX to during allocation conditions repurchases for million the more share company conditions. and strategy, residential American our performance and favorable the our quarter. consistent to start Market with North commercial margin remain businesses diluted dividends businesses Our the year. returned earnings $X.XX line generated And capital

team's of strong were value selling highly mix recognize system. driven pricing our of X all favorable our shingles Roofing, valued margins Within the offering. within environment, In product this good dynamic execution components and to driven continued strong complete and quarter the continue segments roofing and by by contractors our product well, during performed as

of continue North results. of America nonresidential within Volumes insulation solid and in expected, favorable Europe helped the by Insulation, in for impacted our see cost markets. revenues our to nonwoven have Composites, in price demand a macro for technical solid business in while first stabilize continued to glass and fuel market In most trends both to the demand products. were roofing residential quarter weak to Positive reinforcements we building demand environment. be continued the while our overall mix as products, down business strength our begun in remained end our and And due

our Across solutions innovations, leadership, are positioning and sustainable continue product knowledge leveraging Owens we focus driving the enterprise, and channel customer growth. Corning, to to further and results brand us on differentiate delivering strategically

and Let latest updates sustainability. share few our innovation me a on product of

products. the new our Roofing a improved the new wrap launched barrier brand. XX launched In we we quarter, During or Wrap weather-resistant under first house business, Pink

product combination and put capabilities, about a strong our in for are and create believe new us customers We this service of with platforms additional distributors, manufacturing excited value contractors and our and grow the category. product existing position relationships this to

and the the XXth In on our Sustainability global make we This report progress. better also update to of products Annual we the would March, world to reflects like I a issued our our many place. work our ways people impact in share sustainability an Report.

for believers are business. not good that environment. It's is firm We good just a sustainability the

are We of our we've long-term the made toward proud progress goals.

is creates that electricity. energy advantage. want a with the of products XXX% over breakthrough, in being way a to sustainable XXXX. a save reduction are For customers help report, need compared absolute challenge certified but of XX% had ability achieving products Also that the us example, customers made in and our highlighted company's XXXX, in years, XX% the emissions, deliver with a landfill to XXXX, to in competitive we came XX a renewable and our These from been waste has revenue our products for and lower

of than In in addition, further our I'm our X are XX% halfway Sweden toward our X This nelly converting produce, achieved that we carbon more us brings Helica, we set greenhouse to and putting will To help a electric plant [ a Scope the goal we XX% to which products reduce XXXX from from for by emissions, pleased ]. to and emissions XXXX. reduce us the carbon reduction share reaching insulation have the ourselves. coke-fired lower emissions gas targets furnaces embodied in closer baseline,

commitment and to future safety. we our we innovation, mission circular I deliver market-leading review customers' of make in so. report European you to to our continue meet sustainable you on areas encourage our and This material a through as waste our position also if continue haven't and expectations. our by build done the strengthens reduction teams such to our manufacturing economy, sustainability progress very valued already proud ensuring the employee efficiency while to improves I'm

turning X announced it early update moves on in February. want we an the Before over to to Todd, transformational I provide

overall While new to and our are with very opportunity with business pleased construction strong our on strategy opportunities consistent we align we are to solutions our building units and financial better create the excited and Owens enterprise to about for focus Corning. results,

acquisition. Masonite start the with me Let

product our billion. complements a acquisition total at a the branded acquisition current of that our leadership market residential residential As to in building and exterior new growth addition interior we product the addressable space the the also time $XX us during platform, position Masonite category and offerings. of our shared creates as call expand The our announcement, scalable helps expanding

profile flow financial capital attractive our by revenue earnings, free enhances by The has customers. it well cash received generation. transaction proposed and lowering been ongoing our Lastly, growing increasing and our intensity,

well within product category. Our this with strong distribution best-in-class contractor for success further our new partnerships, model, position combined engagement us

forward announcement, team branded working with operating and planning Corning. know this Owens to a toward the markets continue efficiencies closely leading integration acquisition. building provider material providing and exterior synergies. midyear our of interior the channels cost entity, and We been Since we've welcoming fits as while a several Masonite the of into opportunities combined of Adding expanding customers, procedures our doors residential strategically close regulatory to products to market-leading improve and to on offering well, very we work together to company, look

building in Owens acquisition construction the business, term that review future. February, In in Corning also a which the strengthens strategic recognized reinforcements of opportunities materials and composite this our near space, the we we of the is our believe position is segment. announced while for leader creating part glass our exciting

and strategic choice the the applications, to leader with fit While of and customers applications does and our offering. commercial nature is industrial building a business residential grow our materials several invest in the not in regions market and

financial our we philosophy, process approach Stanley best this Given our adviser. as Morgan operating disciplined allocation and and capital have engaged initiated owner

more We as will new progress is share available. our information about

for thank to delivering their I dedication and teams shareholders. closing, our and In to want our commitment consistently customers global for

driving our the right our are employees force winning propel on for to continue results the growth while way. delivering standards our maintaining Our strong high strategy executing company that and forward

and Todd our quarter discuss strategic over will I it our results now that to Todd? initiatives, performance of detail. in view financial With to first turn more

Todd Fister

Thank good everyone. you, morning, Brian, and

a had year. Brian As start to the we great mentioned,

the operating and in our demonstrates model. the generated quarter Our being strategy enterprise value performance by

year. adjusted quarter million, margins $XXX Adjusted X like of Slide Adjusted first the diluted EBIT earnings now with which started the $XXX and year. We $X.XX and year were XX% to results growing same earnings were $X.XX compared to EBITDA EBITDA prior was significantly million quarter. diluted for EBIT margins to $XXX or million margins XX%. I'd above the was in to the discuss per or quarter the $XXX share last for share, turn Adjusted enterprise million. were per adjusted

the shows reported and X reconciliation our between adjusted EBIT. Slide

million acquisition-related our and of cost rationalization include line items optimization of charges $XX associated actions. and excluded adjusting ongoing totaled million primarily costs our with quarter, approximately the They For product Masonite and from EBIT. $XX $XX adjusted are million

management. the of execution, million the and outflow down quarter to X, same quarter by year. in a was primarily first and were last cash compared working $XXX the our compared from cash flow quarter free cash to during XXXX. for on for deployment improved was the million, the capital year. outflow our for million net of quarter Driven by prior operational to of generation The additions to Capital million quarter year, of driven flow the Turning strong Slide moving quarter net same a Free prior we the $X $XXX disciplined $XXX which capital

for simplified was a capital XX% the on March XX XXXX, XX, ending return months calculation. using Our

Additional amended liquidity debt of details comprised approximately availability in was during related company of a the quarter of facility, $XXX can Masonite, of presentation. short-term $X facilities $X.X securitization to had on billion At $X quarter committed end, was and of the $X.X billion in $X.X billion table a the billion the acquisition of found receivable bank also which newly which planned of amended cash credit revolving and be million during earnings billion, our financing quarter. consisting our our facility,

XXXX, of We quarter dividend totaling dividend first and share we Board returned of $XX paid the repurchased share. $XXX cash In the to $XXX dividends. cash During for common declared stock million. per and February, a shareholders million a million repurchases $X.XX through

strategy capital unchanged. remains Our allocation

on over focused an investors to cash strong grow the executing strategies business are generating We free flow, sheet maintaining time XX% approximately company. investment-grade on while our balance and to returning

to $XXX in Slide positively Now realization results. and Protective roofing the quarter of of the quarter year-over-year by with Packaging within first started Sales segment Revenues a were the I'll mix were Volumes business on impacted margin expansion. impact relatively the and by in turning year details growth business. favorable the our Roofing delivering components. largely quarter X% growth for exit additional X. carryover were flat and revenue to with great shingles components price million. decision provide offset shingles both our strategic by and The

was quarter asphalt storm and up strength driven a compared to year carryover prior the of U.S. shingle market the The basis the market demand. volume by in continued on XX%

million for distributors first positive inflation. due the favorable in of last costs the primarily cost offset shingle rebuild year. produced EBIT the and to U.S. versus volume due $XX by products. favorable work market QX also inventory delivery XXXX to more our quarter we the price Manufacturing was versus was in cost Lower were as last versus laminate was quarter, outperformance in the quarter year. million increase as up The growth mix. shingles Our OC to trailed market $XXX primarily

XX%. All margins of in margins and this of XX% EBIT of resulted EBITDA

global, a The turn quarter a of please X% and volumes Now business mix, summary last offset business. million, with to X overall for the lower decrease Europe, in Europe. tied QX was margins. quarter price year. revenues another Insulation in started of the technical Insulation environment to than from positive favorable first Slide revenue and the $XXX down XX% year greater weaker In macro largely slightly EBITDA were solid our year-over-year, primarily

costs on Insulation The residential margins the impact million, Insulation margins revenue in volumes. delivery prior year. $X American costs. up than North first EBITDA was of quarter for of EBIT the was slightly slightly of to down million volumes price positive EBIT higher modestly $XXX more favorable lower and quarter. and XX% impact manufacturing delivered of Overall, the Insulation and lower first XX% offset compared

as to glass were Slide XX The continue the quarter, pressure our year. the price softer compared performed Composites sales prior and we spot and relative business decreased lower from contract volumes provides primarily pricing. price lower quarter macro of first million, Sales for lower well see the resulted an reinforcement business. the overview Composites environment. XX% to to In down $XXX

continue revenues in $X were EBIT Lower performance $XX and demand from was our business. impacted quarter. we well start-up higher to overall downtime the higher year. for in EBIT prior see as the million as from good costs million, down, lower While selling production quarter nonwoven down prices

the energy quarter. and EBIT Deflation input EBIT X% and for offset costs, costs in manufacturing EBITDA primarily delivered XX% and both related nearly margins the favorable Overall, to margins Composites for headwinds delivery quarter.

to the estimated on which financial full I General expected range our XXXX are to corporate Moving remain items, all XX. February have which will and guidance unchanged and our which million exclude is range million. and million $XX in discuss and expenses completed. divestitures, of outlook from $XXX year between expense $XXX yet key between been to provided impacts for not million. Slide $XX Interest of acquisitions

effective pretax tax XX% adjusted earnings. XXXX Our be expected is to rate of to XX%

million, be amortization. be which additions and $XXX line anticipated with to in Finally, are capital approximately expected to depreciation is

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

Brian Chambers

you, Todd. Thank

continue consistent taken the to over have Our and capability first last driven results years generate performance, strong the by quarter earnings. to higher, resilient enterprise we team more and highlight of our the our actions several

demand near move and good As remain favorable expect QX, markets with American for we to the construction products we North building term. our through in

positive for In and We repair expect U.S., continue demand are remodeling our ongoing the for carryover for construction. storm creating new existing inventory to ] low to with single-family along and drive activity, roofing demand products. [ housing home sentiment a

macroeconomic company, trends global prior continue expect approximately growth. XX%. of EBIT anticipate flat geopolitical and will we and America, similar margins result relatively be to to year North Outside we quarter tensions in economic slow Overall, to with the results for sales second

consistent second more outlook with the Now a for provide quarter. I'll calls, business-specific detailed prior

to our with digits. revenue our We to Starting be up Roofing business. low mid-single anticipate

in shipments season, historical of QX demand the good enter While of ] we shipped armour several down see regions [ we continue year. volume to given market peak country into roofing across as the quarter high to expect we this be last

in year. anticipate recall, manufacturing QX in market ] down to half tough of XXXX the the with for Due double the [ in may in low activity second resulted shipments you of demand XXXX quarter comp, first last flat. armor our record digits relatively be shingles we high-storm to As for shipments

exit For volume anticipate negative, Packaging overall, business. business primarily to due the we Protective our to of the be

in million annually. revenue had $XXX As reminder, this business a approximately

inflationary. offset be We last the favorable of we XX% increase [indiscernible] Roofing, margins from the anticipate expect realization to more and in Overall, for range. impact exit slightly to of volumes compared Protected the we intend year, the mix April low to price lower cost Packaging than EBIT of

market digits the global, to to be volumes overall America, up continues is we up environment. slightly primarily with to year, in Insulation by challenged driven volumes business prior that versus be to higher to our revenue low technical mid-single price expect of higher expect North revenues In positive. on we and and while most across business, Moving our modestly by be Europe

our year versus the during up realization business, volumes prior quarter. was In we residential with insulation on additional price American that first the be increase anticipate to North implemented

to anticipate expect plants. U.S. positive Also potential manufacturing incur evaluate inflationary to some the for price materials fiberglass we expect we to maintain incremental costs as and narrowing overall second the quarter in be cost. input but we upgrade a modernize the investments Insulation but to For business, quarter, our

we down this, as digits low to similar pressure all to year. versus And to see prior revenues margins expect Given generate be for reinforcements continue EBIT Insulation we market we in the to year. Composites overall last for QX the glass quarter, on double anticipate second

expect down our spot price and what reinforcements year. contract and we pricing to we saw quarter overall to first than within lower continue glass stabilize similar we step spot pricing volumes last While with business, the to expect in to year-over-year, both prices sequentially

to proactive In be to in addition, adjusting will demand. our continue we production

During the demand. solid quarter, nonwovens to the continue expect with we to business perform well

Composites second of margins the a we turn to be high to view few our that I'll For single enterprise digits, businesses, quarter, With similar QX. EBIT expect to in items.

have years, our Over our and past focus, consistently capabilities and the we few operational sharpen several resilient to earnings. investments strategic deliver increase higher, made choices more

As process where markets will additional leading capabilities disciplined we product science knowledge, positions to expertise. and operators, material opportunities, focusing our continue channel customer we through on can and look and we lines and manufacturing build and be innovation at

and company. exterior the we to strategic We grow the business how our of believe examples leading approach a this alternatives provider review doors of and reshape reinforcements of and for Masonite, acquisition are of using systems glass are door the interior our latest disciplined

capabilities, priorities and over Moving consistently support dividend to a on focused share XX% cash flow increasing leverage of ongoing and remain acquisitions capital strategy, our repurchases. that forward, returning approximately strategic balanced growth organic shareholders committed operating through our unique allocation while time, free to our we and

another Our quarter team XXXX. start delivered outstanding to

As will our in the strengthen Corning's move building value year, delivering Owens focused position we leader continue and significant making to strides through customers to and stay residential we further materials. for market while shareholders. a on as commercial

questions. With call that, up to for the would open like we

Operator

of Matthew [Operator Instructions] Our from first Bouley Barclays. question comes today

Matthew Bouley

ask I'll the Insulation my and question business on pricing.

realization price You kind on of of building? that, if second if in guided maybe And comment where I announcements later the reflection QX business. to of price for you've the prior some Is guess, in additional in sort additional segment. so, the that And here of increases on the increase quarter. a can you price made

Todd Fister

appreciate Matt. and Yes, of give me bit a on QX, we the let little in QX seeing we're question. on a here Thanks, I what half. color expect the back in what bit then

to still in So is increase The effect in started build the quarter we're XXXX, announced impact that right. you're that we of to got we in really bit QX we expect quarter. and we largely pushed the exactly to as see second into the seeing the in take a year. the continue market, get late And that that first

increase really of momentum some We really certainly a in conditions. we good the market announced take could quarter not be XXXX. to QX just lot in June we QX the to that see But in whole see There's market assuming and an tight that continue effect of off results. demand second in increase, of and

QX in the So were beyond. that's what I expecting appreciate question. we and

Operator

comes question ISI. Stephen next of Our Kim from Evercore

Stephen Kim

of offset million I'm or [indiscernible]. I Obviously, get in it you trying the to all a thought ask the the was quarter? we information an I the much how that was business. to thus $XX about exit just as appreciate packaging the thought. Roofing sense as about Was far. wanted to

kind do like industry the you industry the going performance that would still and sure mix of that's that to secondly, and armor, make were quarter Mountain that My Roofing kind and then in to that My have relates you us weaker true. market any to in with to of West that's West East second geographic been I geographic warned that relative Northeast there. And strong in relative better Florida, your than the And if changes the were want out the and question sort to in plan. sounds your the you your was the general your understanding likely of to still the underperform to the to past, more respect recollection share pretty to calling worth you and that, Coast. Mountain guys stronger there's East shares, weaker. is that the it's a and States

Brian Chambers

you're that the amount we next the $XX that million $XXX going about next yes, right. of in a would see that we're going that ratably packaging of of the quarter kind piece, The roughly so what That a here over announced year expect headwind the QX, million was kind business, to quarters third We couple in last steady is a pretty that's kind few and forward. On over quarter. quarters. and of saw of

And say the started piece, has what with on thought. the then armor very we consistent year overall, I'd yes,

in So in little QX bigger relative fairly of more conservative posture. shipments a year, last QX to shipments manufacturing weak where there's

bit. for stepped was then reminder, as high up historic a into a move that we QX, shipments. And last QX manufacturing of So armor quite a year

did we was serviced was because of the that, step we over going to because expect lot of a of inventory quarters. last was being few repeats that market the back think through don't that strength carried the that that So

this step So down. of we kind a expected

maybe But because the the have through cutting for we of takeaways kind the some just say we couple roofing Roofing would good X of I the year-on-year, last all unusual volatility, really XXXX with that. through magnitude overall pretty of seen up a volatility, volatility of just terms quarters lot of And market. big that of finished a business in

quarter in roofing. first The started strong

is guide strong first market. Our a half

going for work, quarter think we market cutting this second good R&R expect we're construction through So a half, for the trends roofing storm again to of I underlying the kind maintain into year. to the volatility, quarter-to-quarter for have we demand back growth, new work the repair think and

steady a terms we've of other quarter-to-quarter service big the amount in increase land the what of think I we're what we seen performance we're continued can and from that in capacity just takeaway the that shipping, our market. is producing that

we've stayed strong. And product some our why to that's relative steady. the So market, for our volatility because performance pretty demand seen has remains very

outperformance I even to contractor why though [ were and [ expecting service demand. think demand that you couple some we the a in Armor ] shipments slowed still We're quarters distributor of we are and Armor quarter. performance, outperform products. familiar ] expect good the terms see forward stepping other in we we would And expect that's back, shipments for to the demand QX, this shipping saw as think when down, in theme our that's going I of

the roughly In we've improving mean, the share mix, geographic East say Rocky Southeast quite we've Coast, terms I of Midwest, I West products Coast. the you're positions, demand right. our bit good a seen and for I'd along Mountains, in think Southwest, conditions

So Midwest, that Mountains the I our to growth able see regions. I'd markets, some region But all business our other but us say other that to call performance strength demand question sits share to where to been see West grow Rocky shift those We've continue kind and a we good out improvement of today, contractor good we're to going to in base. those region, for grow good into able a a in your been nothing I'd regions. across in significant but those think we've share is Coast,

Operator

comes from Thompson Kathryn Research question next The of Group. Thompson

Kathryn Thompson

divestiture in on the that then of had on some just key you to selling capitalizing are also secular Could upcoming kind in capitalizing on out on trends we commentary, trends? a talked your Could relation their business And few about your highlight driving release talk you U.S. today, the about that broadly. X in to products of came segments, secular with that architectural just the you prepared should your As segment. comment sale? growth Masonite part are of think business the of how

Brian Chambers

Yes. did architectural Thanks, we release the see the for And yes, sales. Masonite the Kathryn. on from announcement

discussions this knew on for we're architectural and business something When they were for alternatives the looking we is the working quarters at we them, several their in for that looking in they talking hard that this that and at business. was last terms of have at. been looked with So something about

value for is we primarily part residential the inside opportunity and continue of us that That's to to a business exterior go the how value. we space. grow that the and as forward. we around that where is view business be Our the the the space of great place That's see interior is residential going fit in to

from not standpoint, So financial something business then us. generated a lot that And valuation business for key that strategically, earnings. a standpoint, was was the it's architectural hasn't a of

I looking home a why alternatives to think that to that be that's space for in better were would they maybe fit. that a get

a big a this and from continued that as impact we supported see standpoint, valuation move don't So to and this alternatives. at decision look

as what of expected, decision. and we up trying they're on to pick and we're QX -- that consistent sometime very when that, here supportive close we we'll So date in the we're with the closing business then done get through our very process, but

be housing secular of trends, we we One, there's in a look investment particularly America, in in key continual continue areas. North housing continued at few trend. say to remodeling We the living We and terms is going homes. key think coming U.S. spaces, I'd and to that the been for age has be broadly, think to big In many this to a as see repair renovation, home the a now millennials going market of that's buying underbuilt years. trend

to our particularly living for that's spaces, that also big this feeds secular spaces North into So for additional many a come but fundamental offering. that years think we those in America, and units, product seeing Europe, upgrading trend living in living we're need

future Our Insulation, business, our coming we business Roofing in. that have doors

new think or renovation them. housing fits we're our I really in So offering set remodeling up invest well continue people to product inside of as either

around is sustainable trend big say other I'd The materials. building

part XX% we about In lower generated revenues that as in important. building greenhouse products to is our terms and now prepared of report, of part the carbon really, our from comments of consumer from trend think either reduce or have aspect that's are be lower company terms And going of energy gas sustainability talked of of recycling materials, my emissions. content a really about emissions, that as we something literally in

As footprint. for that product think a material a look consumers on offering into They're sustainable emissions. footprint, for overall to decisions going very building fits our make look they're going And we circular to very, products, buying lower well.

So that we next in those product forward are X really the for years. all big we the several have categories us play themes for think

Operator

comes The next John of question from Lovallo UBS.

John Lovallo

to like quarter. reducing debt X% the about communication capital of target though, I be it range. that million repurchased EBITDA focused in $XXX first on So allocation of shares think you to been the had to will looks low The sort X%

guess the is, I to as kind Or been mean, should repurchases? expect as I second doing? the should that the off here you quarter into mean you've still we you continue of back question can I into half, the we we forward on So back move think

Todd Fister

Sure. John. the question. Thanks, Appreciate

So committed balanced our maintaining in of framework area XX% overall, remain that agenda debt years talked maintaining we we've over that about to this as And in number while the of to as for leverage really we capital time, remains an to a allocation I'd investment-grade of rating, here, a well focus. invest Xx shareholders business. X returning the approximately say cash around

at to Board little remaining repurchase an on on X over got program. start act point, million that shares have And ongoing program your from we year. of a share program. did that for We our authorization We've this the

we once shared transaction. have We close the

changed we financing transaction. Nothing as the of focused around take are to be thinking has part bank repaying really on We our on debt Masonite for a short-term the going the transaction. that on

the X around strategy. run. And changed our the nothing But run, purchase of at in as with But of allocation priorities long terms after framework potential positive shareholders. business fact, our debt leverage our or Masonite we to view in divestiture low medium to about ability we half posture of both reinforcements price as in permanent all and capital our would return original the to has end being financing approximately terms glass getting to acquisition in the to cash divestiture our our focus in short of we the the of -- on we think close. Xx that In

Operator

of Our next Sachs. Susan question comes from Maklari Goldman

Susan Maklari

anything there changes Have about the that price And elements demand. any that? should that moved going discretionary within plans terms be forward. future in rates how also implications My thinking you for question And higher? as on have any Or any seeing increases? you're on elasticity Or is the price expectations in roofing of category? we of seen more

Brian Chambers

have I didn't Sorry, a I apologize. on, mic

demand On I Yes, roofing the did. side.

the on rates primarily, elasticity any business. that, more roofing R&R business interest kind like of is On or an anything our

elasticity different of rates, is repair, and or the needs-based Roofing replaced business we our not roof volatility a of interest economic the haven't that or damaged in If play around cycles. because it's done kind -- needs kind seen that we seen really have generally is through purchase. So

that around Now people's parts some to most investment largest because of off tough it's people may all of it's But put their it. choose to replacement home. the not the replace of repair roof, protecting value

little generally bit don't see a to has been our rate sensitive. part But doesn't less movement variations small a interest in big And than is have of new So we that a business drive to play it more which lot a there. of tied construction, XX% rate interest then demand.

announced April overall go So in the We're market. we that's in terms forward, seeing good increase, there. as pricing of realization we

and make we we our of moves. trends, demand the inflationary at through as forward. that across terms increases, of frame In future through make we company we the we'll price and business in X those factors roofing any future go And pricing that as at decisions trends look on look pricing

Operator

Dahl Our of next RBC Markets. comes question Capital today from Mike

Michael Dahl

in even profitability and standpoint very for a stronger Roofing. terms to XXs for EBIT margins I'm with in going low XQ. of the then stick Obviously, performance guide from the XQ strong in

your you half could you'd market. kind high the remarkably year, where still XXs, be that the of like in the has have thoughts going thought business. obviously this I volumes think price that long-term But been around in first resilient. is starting increased The It maybe take through XX%. recently You out seems

of -- in margin work that what XXXX you kind year. the seeing So potential how you're how at changing framework, of least a through is profile you kind as see

Brian Chambers

Roofing up. components to performance, and Yes. the our terms just continues Mike. driving a moving in expansion, of team mean there and demand, seeing in I things execution been to that our terms do we're mix great our Thanks, the that and our of contractor expansion performance, of outlined has land the focus additions all really growth in in land manufacturing drive job terms you've and

margin talked things, incredibly part were those business. we business big moving contributing in approximately we all in these all forward. as the are a terms think, of A the move about of XXX So we thought that, I to step-up the up durable of guide long-term points of in basis because

that, last over now. quarters of top on the here seen we've think what several I

running from that quarters, guiding has is margins. up So X I or last strong market. volumes the the think this better to And business yes, step at We're QX. XX% in the been in operating the there

we ability given contributes accelerated significantly ways. that better think One [ up of underlayments land sell business. that it's in couple is the a margin ridge our ] because I and of accelerate, and sell attachment our which high-margin to gives shingles. So get It's of a rates hip and we the business all profile. us components and great We mix us a square accommodating and when shift starter roofing is

and growth that components. getting that's across we're us leverage our seeing the volume with contributes network, a that market inside great expansion margin to contributing. operating we're strong for So And also

that's I think is a positive the cost. other very thing price contributed

been relative point, trends. to manage price, we've So your any to to inflationary able

the And half the near into continuing So in these we think forward see the continuing term, back QX. say that trends year. I I'd of into

the We markets see continuing. in We've got strong expect price increase to place.

some see inflation through. starting to come We asphalt are

we into move So I year, going good about mix but as think little trends inflationary price through we there. of back half to the we the a cost QX still and are our more see feel

manufacturing with gives produce we customers. we an us to That's then that quarters, contractor part profile over margin our to more in us also our we've of invested our have talked of nice expect part capability a laminates production our last servicing continue It important And as few to customers, the base. laminate about to growing increase service of the business.

those So the performance and last near in and the I strength in are the see quarters, of I'd over the term. contributing QX continuing all half back the into think that here margin to few

Operator

comes next Hughes from Keith of Our question Truist.

Keith Hughes

type statement guidance evaluating investments? capacity about adds insulation manufacturing dig wanted about operational the your talking Just Are investments. in into or you to more

Todd Fister

Thanks, Keith. one take I'll that today.

investments our right look the mean, flexible, lot you to what So business, over more both if made in as We cost those customers really effectively. time date. on you been for right lean, to how productivity capital-efficient build And at that and we've throughput unlock are Insulation serve business, a that's our network and locations the existing focused indicated, projects of done in those that's I that's that last really yes, to and done assets. we we've really do few years, we've

at at always time, opportunities add the also to our and the same looking market. the capacity in again, industry in We're evaluating drive the balance customers to better supply-demand and productivity serve

So cost-efficient America are right really options see to got North the in we to expect coming we've the we now, housing. that evaluating mean, in would capital I market and that support years strength

finalize in our coming come thinking. we quarters to as here more So

Operator

Loop The next Capital. question Shmois comes Garik of from

Garik Shmois

about to Just thinking the pricing second it to little in wanted about ask more clarity and on get how you're quarter. a just Composites

that speak market is similar pricing similar down was? if seeing mentioned maybe what in you overall the effectively down, of I be you on degree flat you're pricing Or the it to XQ, And to does to think a spot that is XQ mean particular. but sequentially? could

Brian Chambers

team some really overall, and Sure. operate the conditions. business is points. the in well. demand in tough we But in. first of seeing performed it's The are the Thanks, couple broadly Garik. all regions a and that's to pretty we're bright very we quarter starting composites spots, the positives stabilization I One economic think is did see some Yes, well across

from kind good QX expect then QX. to seen that QX, -- So front, stabilization and a continue into that's here that's we've of we demand that that

So spot think broadly and pricing leading the that across that's start the firm to again, market your I to all stability some that now in to we've see up We question, regions. seen. speaking,

profitability a we go limit the to So we amount forward assets pricing start also impacting see we of we of 'XX more. as where positive go that into opportunity be 'XX, see that's we more We We demand get the a of as and production growth. trough improve, volume here at the future conditions -- helping on produce And that business. then can the on can better curtailments. the That's run of as see piece. half through we as back might kind to

P&L question the absolutely the rolling you're of through your to kind So on now, is how pricing correct.

of pricing seeing by we're we've year-over-year basis, on contract So both declines reset. the driven a work

business reminder, a is of the as again, is X/X spot. So about X/X about contract,

end And in all and the quarter, a that and So down lower of in the the was now as those contracts step place price year by see we contributing we've put on that first well reset, did have a basis. then year-on-year. the spot to year-over-year

we're was X%. overall right, seeing stability about you're basis sequentially, a down So pricing down. QX And on year-over-year

And kind in very QX. that of continues so here that, trend expecting of we're similar terms

still that improved environment opportunities and with into going to move that's of spot demand start as just again, pricing environment conditions. and the the some potential improve half us spot stability, green economic potentially back year in that of shoots We're to price good. 'XX So some it we see year-over-year to but better the gives see

Operator

Rafe of comes question America. Bank next from Our of Jadrosich

Rafe Jadrosich

term, I the X potentially what customers? customers consolidation And then announced So mean impact broadly, you. Home How Masonite? for potential that longer consolidation Owens that of distribution about wanted would you? does continues acquisition that in How for Corning? Depot of if to the how impact guys SRS. do channel, does could those just think large potential ask, Both are you the

Brian Chambers

Home past theme. not position is years, something Depot Yes, certainly material several but Yes. one-step of consolidation, in Thanks new on move within consolidation the big for big of with by a there. a your side. lot in contractor, This to the on their question a the distribution pro space, is the servicing seen the for solidify question consolidation terms we've building consolidation --

on We've the distributors of starting approaching dealers number one-step We've a lumber -- ago the side. on X-step at decade that look the dealers about side, today, lumber concentrated. you very consolidated, If that lot. to distribution very in seen a talked

new consolidation space. the So the not is in

And in has distribution. manufacturers big strategy of channels play that one we're X distribution part all of that the the of our of so been few actually

We've a history So and a got big as are Home with partnership. long SRS and customers. great both and you said, Depot both customers great

which the don't strategy our the in to across broad distribution keep We broadest products or the buy think distributors our is consolidation see contractors we So this get business, a impacting channels. and to contractor our on servicing and we're this opportunity contractors continue to engagement with gives going our acquisition that win what's performance our efforts we And products. market our our been primarily how brand, products, the our has roofing through can really commercial help commercial with grow in resources. and where focused our service our focus model are been driving strategy our

of that performance. key So been our driver really model a has

even with to be so seen, you've margin seen us able that the performance business. of And improve consolidation ongoing the we've the

right broad great service the base as go, performance to partner so contractor forward. of terms think occurs, then And distributors consolidation that focused to going we model continues being a to our on think and in a way that our is drive and we

big impact expect a there. we So don't

home big Home home the has are got We've Corning. a of inside centers. a core a created capability Owens the great the Depot, business. their centers great In part terms Masonite the they've service Masonite of capability core piece, yes, to that

And innovations just merchandise, to inside the support center. going be the ability in growth bring fit is our so to think we great for and the a combination home new

that and home the channel. think us we So capability give to track center continues opportunities inside

Operator

The comes of Jefferies. from question next Ng Philip

Philip Ng

a weaker see your separately, year? insulation see in American business that widen business out whether you're And or calling for increases it's XQ in How were Insulation and you out XQ to -- of the in in that business, the price back you perhaps price Good sales fiberglass North announced bit there margins even X this those but for the sales mineral and then progressing narrowing, in does a Europe bit do as half and inflection flattish cost wall. some C&I. in

Todd Fister

the questions. appreciate I

versus little me of America bit global. technical start a North with and within let the Europe So context

segment. big primarily North recall, and And X/X X you'll global within technical sell And Latin There's about regions into. Europe there's primarily Mexico and Insulation revenue smaller the in ones. Asia, China, ones. is we then America and of X is really is America, the So our X geo

and while regions Europe of it's fact, in we I really we're seeing were have year-over-year it's weak conditions on those a we fairly in macro And Asia. now, both revenue basis. mean driven. in Right in down for a in as And has by It's inflation recovered impacts the interest those rate geographies. And that environment region the and of same driven construction we're in in. seen quite from bounce the markets really by the interest back. neither driven way the rates. U.S. we've

America, we're of in you America. that some global well residential good inclusive conditions that as around Mexico. strength contrast, look think markets the business North in in say technical that's if there's as of the optimism serve market I'd some seeing you'd North and say of year, consensus construction a And end the parts for I at estimates the

is Europe. terms think in complicated of in as occur now we rebound Europe momentum underlying I right little would there that in see more a rebound much isn't when the economic

and good great well regions. as We've pricing a and job delivered done in has this as managing that in really margins mix stable productivity a way improvements of through

year part we're to construction of in macro but stability rebound we back navigating or environment I Europe, next think interest and see into a likely rate in need challenging Europe relief see well some year. in the to really this

Operator

Longbow Our MacGregor question David of comes Research. next from

David S. MacGregor

of a on could And of and talked maybe I support in how incremental shingles capacity versus and a strength digging do on can the up about components. capacity? in really you about little that growth sort And freeing is how much market further share I about little stranded think and latter, demand from laminate maybe I much the and those wanted this talk you the ask mix gains Roofing guess debottlenecking additions guess growth? bit understand to you

Brian Chambers

Yes, thanks.

Let of me both that. hit sides to try

right. side, you're hitting it So I'd on the mix say

add we around in those in shingles got pulled as my and We've a our And prepared products, full get shifts business house we wrap finals, through where product. to of profile, different of that terms to we In contractors we're particularly about more talk into continue home. underlayment I at carries Components of then that helping. and strip a our talked the producing duration ridge we mix products. and a product, selling versus be as that that's market rate. margin when of all laminate more see can continue comments hip systems the overall, produce higher Frankly, starter, line more

home. offering to into when the our package go complete they So want they

through to So of our under Owens the Corning materials. an now products other strength roof. seeing kind roofing it's But sell also all we're component ability

kind that tiles So products we've of other developed under components. go and metals and

generally high well. So very those as margins products carry

also growing Components mix improving as more the So overall. true, we're that's of and our business that getting product

that are on. those pieces X you're So the hitting

to Lam the our and is capacity the footprint. efficiencies team effort piece, the over something improve this years that's ongoing last of existing of really speeds On an been debottleneck couple within and line the

So the U.S. manufacturing got great unique a we in that we've footprint, across are XX facilities

we ability line of to Ohio new debottleneck facility. and go at ship productivity really means Medina, we and laminate helpful get more speeds add that's great been And quickly. turn produce quarter-over-quarter. the that existing great on, a then lines existing in, that doing can products an the And infrastructure and or cadence and these that we steady So an capacity That laminator where when increases inside like workforce. our we're

by target network. squares. brand-new X increase across And today we we when about started for had so lam million of our That's this of wide part kind equivalent to a of was, capacity the a

that volume on network and we're the that put next customers to closer end we year. that our do over by out So spreading of to by track

a I a So mix to then profile, And better a going think, contractors duration continued, provide improve improve in gives financial margin opportunity forward. mix, we'll be, laminate mix with to going go standpoint, our us think, product and story and great our and a us I our as be distributors forward. to that's that for continue tailwind our from we

Operator

of the next And question Company. our from Garner is Benchmark Reuben

Reuben Garner

you update us on kind from your plans. Spray of your a performing basis. of investments for your are how of thoughts ask, in or on does to Spray and looking what Foam a versus you couple investments Can and upgrading years been acquisition potentially Foam fit at fiberglass referenced longer-term ago, that's capacity. in your adding kind fiberglass wanted and Where I go-forward

Todd Fister

appreciate I mean, our of we differentiation Natural business in market grow Foam, you. Polymers, Spray I question. around really Spray had the volume Reuben. nice Spray which Sure, continue some for acquired the they're that Thank the to Foam positioned. Yes, Foam we how

applications I'd it's time long where say unvetted over for specific a time, grow other those a Southeast increasing period Foam taken some practices Spray long over of over And from building particularly and materials. where time, in we the at growth really seen product. with period Foam has the share see of Spray a we've good building

remain a is we materials also shifts with regions wool So Foam for we're going going to and value some in XPS the product. materials. application really and our fiberglass really growth. we our around Spray I we we're bullish mean to participate But in offer where that with participate glass mineral in overall materials, good that the with foam our proposition fiber see some

and we're the Spray got And We our in And best the participating really other all multiple remains that materials. we've customers for with as to market Foam portfolio. uniquely products building the applications. that in our the really positioned with able in focus the best materials serve

Operator

have no We further questions.

to remarks. closing I'll the any Brian back Chambers for So call turn over

Brian Chambers

thank good call again Corning. day. of look Thanks, to making quarter your We speaking today's our Lydia. everyone join and to ongoing Owens for call. the second you to forward like time on I'd for Thanks. us on rest a interest Have in to

Operator

This joining. Thank concludes for you today's call.

disconnect lines. You your may now

Owens Corning (OC) 24 Apr 242024 Q1 Earnings call transcript