OC - Earnings call transcript Q2 2024

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Operator

Hello all, and welcome to Owens Corning's Second 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, Corporate Affairs to begin. Please go ahead.

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 second 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. participants question presentation your as limit to morning, one possible, call this accommodate to our will open please order Following X-hour as only. this we to In many call yourself

that release this financial detailed morning, XX-Q we filed Earlier quarter our news for XXXX. and second a the results a issued of

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

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

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

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

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

X. we presentation, our Slide you on those following of For with begin slide along will

Brian remarks Chambers. opening from and now our Brian? CEO, And Chair

Brian Chambers

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

discuss the to of quarter begin products Owens an into call reshape the building with and and Todd outlook our I'll market that, to moves Corning for will our X go second quarter, environment an During our provide I'll third more big a then today, for focused come into results about the our strategic second more overview update and back After on detail quarter. performance company. financial our

overall our our financial deliver product and to value our of very results the capability team, Owens of continued the to Turning earnings Corning our dynamic the in market, within broad offering company. of power outstanding performance demonstrating a QX.

delivering we In portfolio addition of our of the of expanding products business. to operating branded and reinforcement building residential quarter review another the strong performance, Masonite, continued our completed glass of acquisition

key building key a more of in Both that company of leverages our to to our about these accelerate earnings. our and transformation growth products moves ongoing strategic ownership our and residential efforts parts share are transformational advantages commercial a focused moments. more I'll few increase

First, with performance. I'll a review safety of begin our

XXXX, Combined additional for Owens same made number in incident than business a lower quarter. injury with the half so recordable legacy positive have of done more time injuries is over than free our quarter, with progress XX% second year-to-date the of X/X our a year. the in last first in of our team global for year. recordable safety Our X.XX facilities rate performance our Corning operated have

As milestone QX, Doors a overall XX% our safety, the with sales company adjusted forward company, XX% grew the performance, adjusted and we consecutive of remainder this safety With integrating EBIT better carrying better commitment that of unconditional Masonite. and safety our of quarters team margins. mid-teens acquisition systems adjusted is EBITDA EBIT into data a more the continued of priority the in Corning's of business or and to reporting significant of net to higher structurally Financially, delivering included the culture of integration we data, our advancing which an adjusted margins team look year achieve with out Owens XX XX% this margin Doors the and not new in of to EBITDA are to work through add and achieved quarter, result our Together a consistent is early that an processes, as XXXX. In in our and this framework. earnings We operating Safer margin or delivered has resilient. through

growth earnings Sales strongest generated and margin in per to adjusted quarter, $X.XX share of second date. results our diluted the

of returning we flow, through free to quarter. addition, In in generated $XXX dividends the shareholders million cash $XX million

moved the market shipments performance year normalized by in as expected Moving driven our on mix conditions. demand. prior our Roofing, versus as Each and market performed based to businesses. to was In segments strong favorable ARMA our of positive quarter more storm margin lower well relative realization price on

increased revenues North lower continued segment's America, segment weaker which price environment well to delivery the were favorable prior and in over performance in in a offset Insulation Europe. perform slightly key mix partially Positive year drivers quarter. macro the as of costs the

continuing and be more in focused value strategic company. operating the delivers our second our in half began within Composites, we shift results Our to we lower And business quarter our team line as the Glass demand a our bottom nonwovens stabilizing recently segment pricing and added we pricing integration and the Reinforcements Doors of to for while performance demand our our customers and maximize contributed highlight our in business, as These growth expected, as saw top process. but to remains businesses our shareholders solid. while

cash are we investing our by stronger market-leading This creation capturing achieve in durable We our advantages. value to and our in core businesses ownership new margins can product and grow leverage strengthening and drives where opportunities free categories flow. and faster capacity higher markets

and continued initiatives growth. we that future to for through Corning significant position company Owens addition, investments transform In the

X. Slide to Turning

a key our materials One of long-term expertise, including the improved financial the leadership to our our The our product through expands brand leadership, business. we category strategy. advantages, of to products building operational ownership building the strengthen construction revenue in this process base and drive from and product essential complementary products building addition durable that acquisition XX% and our company. commercial can of residential of market-leading grows growth Masonite initiatives, results those residential extends of strength offering is Doors innovation and approximately building residential line position Through

The Door a positions given and Systems in distribution channel especially home fit Doors is wholesale great our centers. for and customer and us category

innovation and drive systems record material in our differentiation production sourcing value and operating networks track effective applying optimize to science service to manufacturing cost. and Our use reducing which of improved quality while and

our customer feedback we to the offering. addition Doors product We as of to continue get positive discuss

XX opportunities near leverage we see new OC. we days Masonite to a capabilities build of closing, to As Corning the and Owens post tremendous

service combining our businesses. great customers we while the As to our we process, on integration work and through providing remain focused products

we place growth. We making the in that our million have strong achieving and this synergies the team are planned cost $XXX a allowed have work Doors strength while support in to ensuring leading considerable enterprise future be business and competitive maintain in successful progress

even our for opportunities our products customers Corning as captured general transportation synergies, to to network harmonization of forward and this volume expanded for price sourcing costs. We shared value leveraging and we with for the discounts have of and Owens strategy, wins our through ahead through advance parts, benefit deliver greater portfolio to new enterprise strength platform including maintenance We equipment lateralizing improve look our from shareholders. early market-leading suppliers and product

turn review Reinforcements now And to strategic the of Glass our business. I'll

As Composites variety wide fabricates and our is sells of segment. and a a manufacturers, reminder, our of fibers. Glass Reinforcement part glass business

key commercial in focused leading applications. in into product While future. outside customers and and the Owens the market we business position industrial is hold and product space serves a several today where regions segments The residential building Corning

the has good team our and the determine options made announcement, value business. the Since maximize in for progress to growth best path both to shareholders evaluating

While of year. to share throughout we were details able provide today, updates we not additional second the more half the will

which recently, our for also make continue to complement through shingle our roofing in NGX production businesses a throughout to the are bring expansion, we plant online, moves, plant these made new have growing As lineup meet and network. glass grades strategic products. new insulation manufacturing new capacity to other increase nonwoven facility, the targeted a our laminate to this has coating formula our demand focus a we investments we a included capacity and we existing Most beginning sharpen

investments insulation growth. for is in and market making trends flexibility products enhancing robust, in been U.S. potential smart and productivity our our improve also housing cost-effective for secular demand ongoing The We've strong fiberglass the way. that a indicates network and by efficiency energy

support demand evaluate long-term outlook fiberglass commercial our during products, for future this our to options and our to further meet needs cost-effective network as existing Given our flexible to within both a we applications. shared This and residential continue in will for insulation Insulation call, investment capacity we manufacturing network. designed expand last

the share to expect the capacity finalize next more on over we expansion months. We as details few this

choices, our for invest we value. be and continue can and we focusing lines markets unique will in growth, where product lead we on strategic add to As

while the shareholder enhancing have a of returning repurchases. several ability proven consistently value to we of XX% business dividends our flow investors allocation through free past over approximately disciplined strategy Over years, cash through time and capital share grow to our

both Owens past more growing And bought our the of in result, demonstrates back the power Corning we a our X outstanding more we've since to This cash-generating the XXXX, years, As our approach doubled payout. than disciplined shares. and dividend of than have business. XX%

for another and execution want to our and first that continue to grow stronger outstanding Through highly valued an customer and we In into products to residential outperform I the consistent for company talented deliver drive people for their helped our and and future. teams transform global Excel closing, we half market our building thank commercial company. has as quarter even the partnerships,

for our quarter call pass Todd over results. Now Todd? a I of the will detailed to review second

Todd Fister

Brian, and morning, good you, everyone. Thank

through and value and half results our strategy our mentioned, demonstrate Brian outstanding being created first As model. quarter of the the year through enterprise operating the the in

turn detail. now X to to in to quarter like discuss the I'd more Slide

Masonite As the on XX. our closed a acquisition, include results of which the reminder, impact May financial

see performance have segment, acquired reporting where newly of We Doors new the a business. you can the established

we earnings million of quarter, XX% we continue versus $XXX XX% XX%. last XX%. the in Adjusted the delivered was and enterprise adjusted up growing of again million adjusted quarter, in margin to QX. by first second EBIT margin Adjusted and and grew year was In expanding margin great the $XXX EBIT build EBITDA results EBITDA and

were performance. year-over-year the both EBIT X% with and respectively. adjusted the coming to commercial attributed can EBITDA the be acquisition growth of up X%, manufacturing adjusted remainder Part execution and and Organically, from

earnings $X.XX per or the Adjusted prior quarter diluted $XXX the with $XXX were in per same second for year. share or compared diluted million, share million $X.XX quarter

adjusting quarter, taken begin For in to are to acquisition-related $XXX the realize charges, restructuring excluded the Masonite million of related totaled actions primarily costs, of items EBIT. million adjusted expected million to $XX and synergies. segment and our $XX primarily include They Doors approximately from

Turning to Slide X.

Our unchanged. capital allocation strategy remains

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

decline our prior at deployment in million quarter Looking the capital relatively $XXX million with were the year, operating same make in quarter cash flow to increased quarter, capital was in the for the year. we $XX year. Free cash during flow last for generation $XXX to $XXX second compared was investments million million as which mentioned. year-over-year prior was Brian The and the cash up additions, targeted line due quarter,

of on debt was includes the of of half assets June had of XX% $X.X the the facilities. company segment quarter At and bank which million our for impact months the liquidity consisting XX, for the of return on billion, Our second billion ending availability and $XXX approximately end, the $X.X capital earnings quarter. XXXX, of cash Doors XX acquisition

to During year, XXXX, share the of shareholders through we repurchases to million of a X.X shares and million shareholders we And Through have cash through repurchase the $XX first the under second current as authorization. returned returned dividend. available million for we $XXX half our reminder, have quarter dividends. a

to paying this remain incurred cash of low we to prioritize to targeted of level investors. After the and ended end the returning leverage, Xx. transaction X.Xx, fund on with we acquisition, at range At of the our quarter to closing the debt-to-EBITDA down committed X debt of

largely on was details volumes, our of business favorable revenue our contractor by down mix. our great turning the and Slide strength results. from products were outperform delivered and drive demand The for last I'll Roofing Overall, due model quarter, which demonstrating slightly positive price lower to X. to segment Now additional billion, $X.X to engagement year offset the provide another market.

remain In strong. price realization increase demand to shift the of mix our the and tailwind shingles for April in good be components quarter, ongoing saw continue a and favorable quarter. our we and The in laminates

decline quarter against the level XX% The in year. the manufacturer QX basis market U.S. was tough year. the a asphalt last comparison The shingle prior in primarily due volume compared was shipments a of record on to down to

Our remain outperforming market strong. our as volume the U.S. for was demand modestly, shingle down shingles

exit expected, business. As volumes overall by our strategic impacted Protective Packaging also the to were decision segment

Outside down the million of products increase versus was inventory packaging, as volume up $XX was million our $XXX roofing in components the these due favorable for channel. reset decline. last price primarily quarter, volume offsetting for to The positive year. mix, distributors EBIT was and the

All and EBITDA EBIT of margin XX% margin of XX%. this resulted an in of

seeing X Now please turn the business XXXX. our the performance strength are its Insulation our for and margin In since America. fiberglass for to products second summary improvements EBITDA The quarter, highest in the structural reflect Insulation Slide a results Insulation of business in business. the North we of EBIT and demand delivered

insulation year. Volume residential also as for demand for over slightly up single-family million, homes American up North was in our $XXX were revenues remain quarter. solid. grew prior the QX Revenue

realization saw also announced on residential price in North pricing previously American positive actions. We

to & Global year. revenue Technical In was last similar

While in continued for the commercial through end environment. execution. to by our grow challenged ongoing strong the remains demand macro technical Europe demand America North and has products Revenue in market Insulation fiberglass

realization, EBIT in costs the The the year. favorable product million, price prior $XXX million up for fairly $XX lower and Overall, for neutral Input mix. driven by growth EBIT was to compared cost was delivery insulation, quarter. were quarter positive

an last As in of U.S. associated margin manufacturing our Insulation we to our EBITDA second we with the shared modernize incur XX% margin in [ of and incremental upgrade plans quarter. and costs ]. XX% investments delivered fiberglass evaluating call, did EBIT

business conditions in the North Moving provide market acquisition. Doors XX, results Overall, an and since and expected to completing for as I America will of the as we overview performed the through Slide Europe. business doors dynamic navigate

are our shared, Brian integration As track synergies. with well, and the is on progressing we

its that second the earnings no segment. to or included of Note through the in segment. From business architectural from Masonite for of on generated the of the architectural the end the closing There $XXX completed is revenue prior mid-May quarter, million. acquisition, divestiture results the revenue Doors

quarter, acquisition million, accounting. the impact purchase including was from EBIT post million $XX for of $XX

in XX% Overall, included the EBITDA to for the Some Doors the million XX% of margin that Doors exclude the $X offset costs in onetime by million. price In acquisition and are benefits. purchase performance this a view of and $XX of of impact accounting, The segment in of share clearer impact was quarter post-acquisition order the to an was second quarter generated not and EBIT restructuring results. of quarter. EBITDA margin

strategic XX% the saw with stabilization softer first down declined pricing Volume than prior million, we glass prior overview Slide Revenue the Overall, to Composites compared to year sequentially. and with consistent markets were to second perform of to macro business. relative well of XX provides our lower challenging glass an reinforcement be In the reinforcements continued of the end impacts our in signs the and continued the review year. progressed environment. was for business $XXX business quarter, quarter. the quarter

year. quarter for $XX million, $XX prior EBIT million down from was the

glass impacted cost reinforcement While lower prices, favorable. delivery by was EBIT was

also remain that Composites demand. production through lower the match Despite delivered in margin higher production from than demand, proactive for to XX% quarter. we downtime XX% manufacturing positive margin We and EBITDA EBIT the offset impact Overall, costs. more an adjusting

include to to outlook been on year financial XXXX which will our key items, Slide our updated have all discuss Moving segment. for XX. I full Doors

additional million and General range our and of $XXX prior now $XXX range is estimated million estimated million, cash to $XXX corporate was between are prior range on from of our lower expense expected interest and between million interest expense now Interest $XXX $XXX less balance. acquisition $XX between million. was range from debt interest expenses million, The on impact to million. million $XXX the expense up $XX the including to income higher the and

XX% tax Our XXXX adjusted between rate expected is effective pretax XX% unchanged earnings. to remain to of

both approximately Next, be amortization and million, be and line capital $XXX to capital $XXX amortization. to million. are depreciation approximately and additions additions were Previously, expected depreciation in with expected

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

Brian Chambers

Thank you, Todd.

the have the results to Corning have we Our and teams more quarter strengthen resilient and taken second higher, our generate done earnings. actions work demonstrate Owens

company that prior with opportunities continues are to growth. We outperform cycles a additional for

quarter, move to given construction healthy. In the the expect existing remain third high new low we construction American single-family housing and price see we we building markets through sale. As North for homes the ongoing for and for overall of need U.S., the in demand availability

in remodeling our repair continued to nondiscretionary and for also drive brand the channel need strong roofing We for expect and demand our the products. activity

activity remain demand discretionary more products. to impacting expect for near We Doors primarily and our in term, softer the remodeling repair

and North quarter company, for result plus legacy sales trends in America, door revenue pressure. full we continue geopolitical expect prior macroeconomic volume Outside our to Overall, OC segment. to the we low anticipate of from year, growth revenues quarter similar XX%. for business our tensions will anticipate We new third a of

For margin margin we expect deliver with XX%. EBITDA of EBIT, for an low the enterprise to high-teen

the a with more business, revenue the Starting outlook of storms detailed worked our XXXX flat carryover historical from year, slightly Now, demand in demand, I'll the third the consistent calls, quarter. provide business Coming be XXXX. as was high have specific saw levels industry have from to come through down. storm prior to our we [indiscernible] most down Roofing anticipate that servicing into we with for we

to third for flat. a mid- expect quarter down As we ARMA high the relatively shingles any XXXX digits in our be to with Absent single storms, demand market result, major shipments for tropical

And business. we our in we the the second and exiting protective For of quarter at to will impact these levels packaging from realize distribution. purchases continue normalized components, we to anticipate additional more due volume inventory what headwind continued the impact from products saw of

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

largely of Compared inflation. low the margin impact in our the also EBIT from mix favorable Overall, input XX% components announcements roofing, to cost we positive expect of last lower and price year, we offset to QX We previous anticipate volumes. anticipate for range.

Moving business. on Insulation to our

to favorable we that volumes We volumes. year. up and low be residential flat of positive slightly and price, American price insulation our business, versus implemented be to up to June, In expect anticipate mid-single mix relatively revenue was in the increase with digits North realization prior

prior & in be favorable by modestly Global, ongoing what versus expect we to second mix, primarily driven up saw to Technical we In quarter. revenue year, similar the

volume to continues Global be demand where with & Technical by growth year-over-year North lower the for volumes to in expect America, by be Europe, market volumes relatively flat, We offset challenged in environment.

installation incur and anticipate materials neutral as the our the we overall with quarter, investment fiberglass and For price quarter, upgrade U.S. positive. we Also input to business, options some incremental costs we to the manufacturing relatively to expect in to continue delivery in be costs network. third remaining evaluate modernize

this, Given the generate high-teen all EBIT to expect margin for we insulation in quarter.

a Before Canada. doors, segment. would about for North more into little business outlook revenues the and I in focused with American share like detail get is the XX% its nearly to this I U.S. The of

business remodeling between split addition, equally construction activity. the repair is new and about In and

similar new are impacted the spending our the in trends is remodeling near-term being by industry. and demand across insulation and seen be business, repair to more demand residential being While construction currently discretionary to tends pullback

third on quarter to With doors, I'll that additional the background outlook. turn

to high by single We pressure. be line continued in market expect top driven a from digits run rate adjusted down QX, performance

Overall margin we the quarter the doors, purchase of saw early mid-single expect accounting, repeat second saw margins not in with get would in of benefits quarter a EBITDA without rate have in by the quarter. third million EBIT we we purchase view of impact would for To realize, started would the offset expect the line the business onetime anticipate synergies to partially also And full we of we mid-teens. we of digits. accounting, the EBIT, to For $X we expect QX. in run a in

down And versus for mid-single low third digits be the anticipate in we quarter, revenues last Composites overall to year. to

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

seeing to North volumes in decline partially by pricing nonwovens. are in offset American market, the demand Given conditions and we expect we the be glass in both higher reinforcements

business start-up nonwovens quarter, solid with as line. the continue Fort of we perform incremental we commissioning well some to and costs with to expect nonwovens During even pricing the absorbed our Smith the demand new

be third quarter, to the half. in expect XX%, performance with the we consistent margin through first For Composites our EBIT around

With enterprise that I'll businesses, view items. of turn to a our few

call, As reshaping initiatives years, residential product both to more by over Corning the the a first growth I in shared and to commercial Owens made company few further our building XXXX, focused power and we've that the we've and positions been a products the at growth the strengthen progress of into start journey on earnings transformation Corning through leader. significant meaningful segments. accelerate the of Owens past Through new our investments for half and future existing of

integrate As and organically look Masonite, we at to additional and invest opportunities inorganically.

knowledge, We our the business will We and we're the on using examples where channel of innovation glass believe material strategic customer alternatives disciplined of addition the are the product for company. and markets reposition and capabilities, this through focusing approach and how build grow reinforcements to of disciplined review latest and doors be leading expertise. manufacturing and positions to science we lines process and continue can our operators,

incredibly an have Masonite execute to strong balance on we We the acquisition. sheet, which leverage

to results. cash the flow we strategy. remain strong delivered capital forward, our generation In and first a committed free half, allocation outstanding balanced Going team

the As to delivering integrating will we businesses year, focused our market continue while Masonite continuing stay shareholders successfully the great the move for and of of the outperforming our and half and execution strategic to legacy customers glass reinforcements. on second in through review we value

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

Operator

Instructions]. [Operator

from Rehaut JPMorgan. with Our comes today first question Michael

Michael Rehaut

get to on little the more Door maybe detail an update, a love I'd synergies.

under give of, $XXX we I said remains been where are you was within of with that broadly you've perhaps are -- some the synergy and You let's you wondering a, progress of million that think of on if several early -- we that should percent you Masonite highlighted in . track, that kind quarters that the to savings off bat. the how to able could the And said achieving able areas achieve today start terms say, gotten kind of those been next target, achieve? you've over progression to where they've projected we about

Brian Chambers

Mike, for question. thanks the

me to Doors Let company. And to the the work We days. did business add are over our we we saying close overall closed start a mid-May. deal excited how in great by that mid-May, finished this signing and really from up to little XX just teams

Since visiting the been we've beginning closing, very company. and meeting customers, integration busy welcoming We've our at with the new colleagues process. been we've been sites,

think we're So with pleased terms things start. of come the have I how very together in initial

time we're your on the question million enterprise $XXX into making out. progress come getting really most getting synergies. line. in We teams these on time we're of The say that talked very chunking by the we're progressing about well had earlier progress. We're have completion. line that specifics in not how To the the good of realized say I'd of on I'd year together. end terms a on for of

we've common costs. about and giving some around capture of able talked synergies. comments to us where and where prepared some in got some synergies some leverage programs, lift I the initial extend sourcing terms initial in that's transportation of vendors, we're We've my of the got

is front work around So progressing planned. sourcing I as the that think

of continue feel enterprise X-year synergies like on over we're time other look $XXX We opportunities, going million track frame. at to that and that to we for be

combining in the Express I technologies would started our well -- capabilities. our growth synergies. got feel It's at included not something we energy we just we're we've we've and science got and when this. We sound I that getting capabilities, capabilities, and early a And think we're material the is that the great agenda into as is look on opportunities. like agenda days innovation add at revenue But study one really looking commercial our very business. also the reset excited innovation remain that our we've really thing

I've All met looking the with. and the the base. meets we customer with we're across team And customers look as now

more work of We builders, continue front and our roofing, them be to doors them opportunities to of us to help our their feedback on great a distributors grow provider to now get the to insulation in impactful business. with

So further going little see we're revenue of along process. excited get on longer the But in growth opportunity the to we've bit about be and the as to talked a integration about. Those are always opportunities side. side more we some as we continue

Operator

question comes Lovallo John next from with Our UBS.

John Lovallo

in million the quarter, the to imply And for in would the down it full seem of the what $XXX from range third The doors to was revenue in rate quarter? kind quarter. actual mid-XX% run low maybe

are the from and So in impact the the what third divestiture was about I'm curious, architectural how volume thinking quarter? you Doors versus price

Brian Chambers

in we I to mid-May. year, ask I'd and you last the XXX, revenue the more closed terms margins. On going QX guess, of Masonite go back to and detail results the that's And of to probably break out Architectural segment in

in going of good to R-XXX up close the we of margins, and divestiture that run terms post have architectural run [ terms been is would that and on the of rate about rate in assumption of picked impact a revenues the the business. take ] of half So that

side margin think, that's, the frame way pretty architectural divestiture. and revenue to I the good a the So around

volume into and parts to, is forward of a well year. aspects repair first we saw the the market, quarter, in particularly some I the very we performance, discretionary challenging the saw I We those conditions. coming going first bit volume the QX see more look declines the trend of remodeling kind market got little half of think expectations. as We with to business. think, we in half down more that's category a the relative line This through -- As trending business our the and performed the

expecting And in in in the that's we're of going market the quarter. that, guide, third our too to third we're conditions here quarter face kind

see volume discretionary more around choices and to So in as investments of some going pressures some some their making are to repair we're continue consumers home remodeling.

our We we've near also near-term a third new quarter expect environment. that rate in in high grow. managing work we interest long We're as cautiously in this this terms see through to inventories term, term, complement hear guided But great buying we construction to that But and the think our distributors call of we on volume see pressures. continuing bullish and term, medium category is products. insulation to again, some roofing through

that move repair projects to and sales of remodeling are are open up forward. projects home to We part doors that interest rates an going down, renovation going those expect that's existing essential going

good position So term, long the it. in managing have term, through we the in we'll some in But market very conditions. about we're term, near and feel choppy the category the medium product

Operator

Kim ISI. next comes Our Evercore question with from Stephen

Stephen Kim

I sense Insulation issues if the related you I effect had at some ] guess, and or a curious know the that has the that when report margin. for either Question, that look you you on Paroc sales forth. give numbers insulation, on adjusted so I on Was a business, the -- us to meaningful could European [ the was segment.

you if you -- to looking And used could talked America, about alluded capacity word I at -- North you just think maybe the expansion you the flexible.

both be kind solution sounded That for than like other something fiberglass. looking might of flexible a commercial residential. and that's across You're it

like spray So or that. foam maybe we're talking something more like

expansion the a capacity little America. Just meant you give you flexibility maybe us more in your color by North curious if what on could in

Brian Chambers

Stephen. of Thanks, take both to those. happy I'm

seeing global particular, in is and Eastern impact in Europe footprint the we're So piece weak the Europe. strongest and in Europe we the with Overwhelmingly, of start Nordics let then the macro we're seeing geographies that what the the in right in and where and and now Europe. me in have Central technical trends in

America interest As America seen before, rebound. way sorted North the we've rebound same the strong. through talked way hasn't same we've not and rebounded, be we've seen has and Europe really North inflation rates about Europe

So overall, more is are we green some shoots news I Southern there Europe now are good the in where in a think Europe seeing in positive Europe more outlook.

and products though, standpoint. win may macro around structure. right the well where couple way right of very European seen around those the take going job green and right done It geographies cost for business great control, team Europe executing Northern would the forward with really is a around that environment. this the in right its into a from I we customers, yet our to a cost They've haven't positioning shoots to say and quarters the our really make Nordics, productivity,

continue that we macros the strengthen. So term business really as to long like see we

project When how big leverage it's with we markets. res really existing around we and cross commercial, space serve have on we're in our of into look fiberglass shared do North around to both of that for at products in North can America flexibly we really A and thinking products existing flexibility made our what our number sell those we markets lines America. facilities

both of couple a we there's cost sure as is sure flexibility, at cost existing It's how look in can we how make our we leverage business elements. add facilities make to when capital as serve positioned the do attractive existing as we the efficient structure So anything we to of But effectively go forward. really term. as we well make both we're of then long commercial the well side and we as do residential sure business side that

Operator

Thompson with Kathryn from next question Thompson comes Research Group. Our

Kathryn Thompson

overall, just that to from forward? Masonite key there in -- made transformational. composite Masonite was And crossover business into industry finally, product? of price that, as any with are Corning, are with into balancing steps And what pricing Owens for the for synergies the pricing volume Masonite? type being market the retain a how door your you a channels leader focus are tying you in share and going strategic transition Masonite And very

Brian Chambers

Yes. Thanks, Kathryn.

been So and a in value. have price terms they leader of

and complementary I to pricing value line value a in product how it's our categories think very well. our product approach we as

creating think innovation, quality, service, very I through help and grow. through them a approach value similar we So our win that and them customers marketing tools at through help for support look how it's in

been belief trends and with fundamental we're market. done part start gain to a always win is that price, strength, pull-through order that that in ways that commercial have And to price of that capture more price and going and in equation the innovation, hold customers. forward. our value through we for our has pricing So we grow customers and helping create demand

doors think company across and across kind positioned commercial of as to bringing So category very as customers well I tools. our the well through innovation to feel work do the around value we continue those to

we're there. good I think spot a So in

price for always balance premiums markets competitive balance value gain price share. in relative the we're pricing the always cost. look We where We to we a to customer. to additional bringing

and range we're consistent look share is price position. competitive sure always against landscape with making our maintaining maintaining value a also that the of market and We that holding

again, our business So that managing and true respect Roofing business category. that consistent our Doors those been philosophy, going I with business have forward, very with how the with manage insulation to think, holds That's how we to items. going we're

own do of our opportunities. we terms synergies the composites, In of see

our to said, partnership I us, the in then attractions and one fiberglass doors. development of long-standing production was Masonite As the that exterior fiberglass supply to of

innovation to look We fiberglass to processes effective. when category science very around efficient opportunities at to we at continue the our exterior and production capabilities particularly look bring and are door cost that see material

see as that opportunities business. the on fiberglass we more part exterior and grow that as as we go So is leveraging something are that integration, as in Doors we the forward we the of

Operator

Matthew question next Barclays. from Our comes with Bouley

Unknown Analyst

morning. Good

this Matt wanted Elizabeth environment. touch risks flow -- today. Are price speak to that for seeing [indiscernible] there price you interest far? insulation through be the Insulation more have increase with I insulation degree pricing. could traction increase what could any And so the on without doesn't rate You June just favorable a on you to

Brian Chambers

Elizabeth. Thanks,

this So let of little context what on me give seeing a year. with bit we're res

we into market. bit from shape. pushed in another increase had Where pricing that increase And So our has QX got June have we a year a this in increase QX. year an unusual last had the market, the of a res then

and realization both on history, it the also seeing a those in historic line. with bit but of we're increase. realization seen than maybe June line increases, first increases, price we've now, I on then as generally would higher the describe solid in Right

As we've ability an price shared range, for to before, typically in in seen markets in stick increases market. the XX% the see where we we've utilization

capacity million X.X Right now, of the million continue homes so the starts in has strength start X.X believe has pounds units. end see we insulation fiberglass -- might homes the per single-family and We range. multifamily that because to and that it range for of industry to have would than good serve to single-family industry more been even be the low

healthy is pricing utilization see line for our with now res business, seeing we history. in and So we're

Operator

Reid with Wells Our next question Sam Fargo. comes from

Richard Reid

second. wanted touch I a roofing for to on

the sound third now? distributor pressure quarter. inventories called resets does destock continue component out Any of You based that, the here. business inventory your sit might like where then that those on commentary And on into side sense distributor the as to it

X know your you out, that's that fourth of guide there is quarter? the I in think see any I quarter into contemplated only we but guidance. a continuation risk dynamic

Brian Chambers

Thanks, Sam.

our products demand guided to QX. terms in to you Roofing our quarter, the we've Our results. continue business relative strong shingles be still to here the outperformed outstanding to just And which execute our of team that continues well. where is There into saw for delivered quarter continues shipments, another to as overall and ARMA in really

repair, what what we product is think is, through. starting QX back new I shingles. seen We're still the extended So demand. variations still I to service we Components a good demand storm think construction. regional see lines still worked We're we're in not our half storm expect as some we're in unlike to I'd And And phenomenon seeing around in storm expect we now market demand has shingles that's some year. to of seeing are. seeing as around say remodeling of we've we're now see year our now cycles normalized tracking . In where the we're on go and to good continue been as some our into QX are of fundamental outside the demand Components, more

to what and reset to the products volumes. the inventories locations for think expected now side, saw Component quarter, I look third quarter we especially at fourth on distributors But is starting and starting

say absolute that compare demand But storms. in are recall seeing levels We I'd on saw to very distribution So you for components which year, storm QX the increased high. year's last them last strong QX. were in still that you were QX, volumes being very QX, strong. by inventory an continue service to if basis, when And we

absolute saw step is we year-over-year the components and though But shingle year. very they're we're level So basis, very basis, relative strong and on to part an QX performing in even step to at of relative down seeing strong a our strong demand shipping still shipments. on shipping down a last still we're them QX

slowing very southeast a of to that storm some half expect of and expect another down. QX to winds healthy. or the to that still But to is continue. down of I think some year. So We're Florida year as roofing overall, starting back we and market we the overall, are QX see that But parts demand single pockets the good regions

Operator

Mike comes Dahl The question from next RBC. with

Christopher Kalata

on It's Mike. for Chris

price XQ? there the XQ Just pricing up in in relation what on this you date, of to segment size expectations help in actions Can is to following what for of guys in year? Roofing. opportunity of additional and is your pricing given terms success you the net assuming inflation And cost then saw continued

Brian Chambers

Yes.

guide, QX, around asphalt in around is I typical think demand. around generally months thought very inflation labor. your inflation we about trends in April on minerals in we about talked business the maintain increase -- We relative to We paving realization a overall, into up. continue asphalt inflationary QX in our then QX, that were terms mix with QX to going summer But the still the asphalt to guide to I talked through costs price/cost a move QX. started expect price in see The see to of some positive in seasonality, we question. those with higher

So implemented market. something being we that's speak. is just we as in That's have the that August increase

good realization see for environment being see but terms that, market. of we I products, got to to demand or some the realization. continue demand early demand history, our in the So would from in say, expect just QX, when good relative and given price see we out And days we've good to good we'd into that's

Operator

with comes Sachs. Maklari question next Susan from Our Goldman

Susan Maklari

a In wanted bit about talk you're Roofing, mix seeing. that to the I

you're revenue? thoughts thinking that some how around think on back the versus impacts as that's As the about the the of as you having about in of destocking that, different broadly . then that half? well And how laminates asphalt in margin on that happening, is will through the come moves, components speaking, side the shingles. some Any

Brian Chambers

being that the just by basis, Yes. consistent driven the positive of line. seen mix terms out the play lower here mix quarters. say -- being to And driver And Thanks, of continue terms shingles last more We positive revenue pretty been packaging of a business mix in I'd was our components, a that margins the margin we've overall. mix product improving lower Sue. the shingles. theme our particularly over of Clearly, has performance and the QX. part of versus then of strip of exit in with saw And in bit couple laminate a

components of combination has impact in versus laminate that been more shingles strip mix and positive the So a QX.

mix We're strips we guiding go that a at continue And another from rate, comp on to continue here again, more to QX. components -- shift expect year. ]. [ we're against packaging maybe moderate fees to the continue the half we positive of to going the to impact lams, some think to the continue comp as the but benefits to would give us in say I in the we back forward,

say margins been of step-up part key the a in I'd that's overall. So

level Now benefits very of of high mix overall margin we've shift the of are going the while to our performance, seen shingles run and a to in laminate the terms mix. continue at

kind that higher margins, of expect ] some continue. with So generally to that [ we and comes

of The selling business, see more systems. home in complete contractors the to we continue the component side

starter, ridge, and hip all includes that underlayments, So components. high-margin those of

we shingles so rates increase And and see attachment continue start to improve. to

a durability categories. going permanent that shift moving shifts components these we in forward. more think of part into system from with think shingles continues to product margin sales, are So the standpoint, mix higher-margin terms of and we mix as

and us performance it it we here margin a think of gives base maintains bit in good a QX. So upside little -- of maintaining

Operator

Loop Our next question Garik comes Shmois from with Capital.

Garik Shmois

Just up Roofing. following on

is know stepping running destocking you of in now. are but well And components? that recently just maybe you're ahead it then shingles? to Just outlook little I segment, margin seeing clear, Or your in bit, be long-term the you back a right just upped

last view holding So level for margin to in the to have percent would several EBIT you've what that long-term quarters? towards mid-XX% low to at Roofing happen versus wondering XXs XXs get demonstrated high the this

Brian Chambers

comment levels in specific products shingles. Relative continue our we components, our brand broadly, say to destocking of our see I'd say, not our light inventory distribution. and shingles, would to I was destocking pretty the to more

So we going sales quarter. the think here in to continue drive good that's to

buying outcome I the products down. would to in think they're the country and say, in shipments manage distributors that whatever I of QX be you are stepping brands though, they're the inventories going ARMA they're across that where see selective do and to market some more expecting. I to going think

are we So move to do inventories third managing be there's not the a distributors more into in that destocking But of think probably going I cautious our in overall as roofing. year complete products. quarter the and

singles And to margins. there be quarter of quarter we've as the volumes, go to components of above a that both those couple over similar think as run some outlook, the think past, talked these and at to I've could we delivered in a One terms margin factors would in have down margin have deleverage third is, terms we'd guided We've I step walk to impact time. volume that start to I XX%. another a about yes, in down In see would and that rates of result forward. in margins

would relative start more mix a price/cost stance to And then that price/cost pricing time. a to change see over overall I moves negative or -- negative mix that think mix to we'd higher inflation either have a evolve, to

to of be So margins I that kind think the combination that time. over stepping down lead would would

that has everybody, lower see The QX QX. QX, some last remind we a the been more and in QX going expect and years. business. seasonality take normal in though, maintenance stronger to we're margins that downtimes, margins overall there as And roofing in seasonality normal strong we a of I to couple market very coming is will do into where the I start

just guide, we talking But step with may some But a average. haven't quarters kind average down see we're seasonality. seen over when I a longer-term our a full that talk over below X-quarter typical would year say, of about We that seasonality. we quarter-to-quarter, normal

Operator

Jefferies. question with from comes Phil Our next Ng

Philip Ng

reinforcement American for [ you year? looks glass a reforgement ]. markets more particularly Any you . your restocking? it in from Does end pricing little strategic Any which standing stronger, on in certainly, color momentum level the discussing? Composite standpoint, multiples potentially then Can on on business. glass interest demand a set Any out? next some of provide little the a color color on are review North you're And that up

Todd Fister

Thanks, Phil. I'll take that one.

sequentially with first, review, price from really right in piece I to relatively macro be continues reinforcements especially saw happy I'll and QX. Composites volume entire environment. we at the what glass we're soft executing the stable and a say the in QX of When look terms how the business is now In you mean, dynamics

seeing sequential the in business. are of We stabilization signs

As continuing with the updates we'll and of provide further our for we've progress pleased alternatives as we're you the We're the review review. made said, we to business. further in that. get into date as appropriate

expect are We America as forward. North Asia we of Europe in in Where to of and and terms the America In us, heard good we've you North business, would around quarter. there what Brian's regions. to source business seen to in both we for seeing and be the see the some demand outlook in relative our Certainly, for business. Composites of continue the a the is expect Insulation market good go comments to we strength a weakness

make further again, on And we'll review. everyone the as we progress update

Operator

And with our from Citi. is next question Andreopoulos Gregory

Gregory Andreopoulos

kind prepared business. the repair of kind Doors discretionary you during the this roofing in about remarks, in of and offsetting strength Just nondiscretionary demand more spoke

could or you of there shifts towards if the any mix, So shift end the into the of nondiscretionary higher about entry-level think doors? lower doors. exposure the projects? suggest of would kind I'm premium so discretionary that of to zoom mix versus are doors kind you a do And underway end wondering portfolio How Masonite versus

Todd Fister

Yes.

discretionary, on doors. of overall, in think I nondiscretionary terms pieces the

inside. exterior portfolio particularly or repairs where we on see or the of in are think the in if side door to as terms they're upgrade making of business, more that R&R that I looking of the choose replace an side people

trends think order impacting spending the But and in that to book. part consumer near where the of term, that those see on those in given through seeing the we're we is of business. And So some kind recover. the trending of we cautiousness investment,

we've crossed price the think I product categories. of lines

seen coming major that not through. we've in trends think space I

terms consciousness line. call Door But the out choice in I is seeing downs material across we're think today product in to of specific trends terms always a price in choice be and going couldn't any it. trade the I any of factor

But think certainly, pushing that's that's deferring come I just we're in think cautiousness creating seeing general of themes going projects, headwinds. some terms of off near-term and to purchases, that, we back.

Operator

We queue. further in questions have no the

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

Brian Chambers

Thanks certainly Thanks, in forward Corning. I'd have day. for for ongoing join And your by our we quarter look on you everyone speaking close I like to us a to you and today's time rest thanking again to making on the interest with Lydia. call. Owens call And of hope great third

Operator

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

lines. your disconnect now may You

Owens Corning (OC) 6 Aug 242024 Q2 Earnings call transcript