Owens Corning Q3 FY2024 earnings call

• Safety: Recordable incident rate of 0.58 in Q3, with two-thirds of facilities injury-free this year.
• Strategic Initiatives: Sold building products business in China and Korea, announced increase in fiberglass insulation capacity in US, continued integration of Doors business, and evaluated glass reinforcements business.
• Financial Results: Adjusted EBIT margin of 19%, adjusted EBITDA margin of 25%, adjusted diluted earnings per share of $4.38, free cash flow of $558 million, and returned $252 million to shareholders.
• Awards: Named in top 10 of 100 Best Corporate Citizens List for seventh consecutive year, ranked first in industry category.

Roofing had revenue of $1.1 billion, EBIT of $359 million, with an EBIT margin of 33% and EBITDA margin of 35%. Insulation had revenue of $946 million, EBITDA of $183 million, with an EBIT margin of 19% and EBITDA margin of 25%. Doors generated revenue of $573 million, with EBITDA of $89 million, an EBIT margin of 6% and EBITDA margin of 16%. Composites had revenue of $534 million, EBIT of $61 million, with an EBIT margin of 11% and EBITDA margin of 20%.

• Fourth quarter revenue growth expected around 20%, with legacy OC business revenue slightly below prior year.
• EBIT expected to be mid-teen margin, EBITDA margin approximately 20%.
• Roofing: Revenue down mid-single-digits, EBIT margin approaching 30%, EBITDA around 31%.
• Insulation: Revenue slightly down, EBIT and EBITDA margin similar to Q4 last year, impacted by hurricane-related costs.
• Doors: Q4 revenue down high single-digits, low to mid-teen EBITDA margin.
• Composites: Revenue similar to last year, mid- to high single-digit EBIT margin, mid-teen EBITDA margin.

• Challenging near-term market conditions for many end-markets.
• Operational impact from recent hurricanes.
• Macro-economic trends and geopolitical tensions negatively impacting demand outside North America.
• Soft demand in repair and remodeling, especially discretionary, and lagged housing starts affecting single-family new construction.

Q: How much incremental capacity will the new insulation line in Kansas City be bringing online in 2027?

A: Todd Fister said it could be an incremental 2% to 3% increase in capacity for the fiberglass industry.

Q: Can you quantify the hurricane impact on Insulation in 4Q?

A: Todd Fister said hurricane impact costs could be in the range of $8 million to $10 million in Q4, mostly related to manufacturing costs in facilities.

Q: Talk about underlying demand from Doors and 2025 outlook?

A: Brian Chambers said Doors performed in line with outlook but faced tougher market conditions, expecting better demand in 2025 as interest rates drop.

Q: Impact of sale of China and Korea Building Materials businesses on earnings?

A: Todd Fister said the business had low EBITDA margin and high capital intensity, expecting Q2 timing for closing.