Owens Corning

Good morning and welcome to the Owens Corning first quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Amber Woolforth, Director of Investor Relations. Please go ahead.

Thank you and good morning, everyone. Thank you for taking the time to join us for today's conference call and review of our business results for the first quarter 2021. Joining us today are Brian Chambers, Owens Corning's Chairman and Chief Executive Officer, and Ken Parks, our Chief Financial Officer. Following our presentation this morning, we will open this one-hour call to your questions. In order to accommodate as many call participants as possible, please limit yourselves to one question only. Earlier this morning, we issued a news release and filed a 10-Q that detailed our financial results for the first quarter 2021. For the purposes of our discussion today, we have prepared presentation slides that summarize our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, Form 10-Q, and the presentation slides at our website, owenscorning.com. Refer to the Investors link under the Corporate section of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference Slide 2 before we begin, where we offer a couple of reminders. First, today's remarks will include forward-looking statements based on our current forecasts and estimates of future events. These statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. We undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for a more detailed explanation of the inherent risks and uncertainties affecting such forward-looking statements. Second, the presentation slides in today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in the text and financial tables of our earnings press release and presentation, both of which are available on owenscorning.com. Adjusted EBIT is our primary measure of period-over-period comparisons, and we believe it is a meaningful measure for investors to compare our results. Consistent with our historical practice, we've excluded certain items that we believe are not representative of our ongoing operations when calculating adjusted EBIT and adjusted earnings. We adjust our effective tax rate to remove the effect of quarter-to-quarter fluctuations, which have the potential to be significant in arriving at adjusted earnings and adjusted earnings per share. We also use free cash flow and free cash flow conversion of adjusted earnings as measures helpful to investors to evaluate the company's ability to generate cash and utilize that cash to pursue opportunities that enhance shareholder value. The tables in today's news release in the Form 10-Q include more detailed financial information. For those of you following along with our slide presentation, we will begin on slide four. And now, opening remarks from our Chairman and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us. I hope all of you on the call are staying healthy and safe. During this call one year ago, as we were all contending with the unprecedented challenges from the onset of a global pandemic, I noted that extraordinary times create the opportunity for extraordinary actions. Over the past year, I'm pleased to say that our team has consistently risen to the challenges that fundamentally impacted not only our businesses and markets, but the ways we work and live. While many of those challenges continue to affect our daily lives, they are no longer unprecedented. We've learned to be more agile, to adapt and respond to changing market conditions, demonstrating that strong execution and an uncompromising commitment to our people and our customers can drive exceptional performance, even against this backdrop. We certainly demonstrated this in the first quarter, delivering great operational and financial results by leveraging our market-leading positions, unique product and process technologies, and enterprise operating model, to capitalize on strong or improving market conditions. During our call this morning, I'll start with an overview of Owens Corning's first quarter results before turning it over to Ken, who will provide additional details on our financial performance. I will then come back to talk about our business outlook for the second quarter and share our perspective on key markets. As always, I will begin my review with safety, where our collective focus remains working together to keep each other, our customers, and our suppliers healthy and safe. During the first quarter, we maintained a very safe environment with an RIR of 0.64, which is in line with our full year 2020 performance. More than half of our facilities across the globe have remained injury-free for more than a year. Financially, we delivered record first quarter revenue of $1.9 billion, an increase of 20% compared with the first quarter of 2020, up 18% on a constant currency basis. an adjusted EBIT of $282 million, which is more than double what we reported for the same period last year and a record for any first quarter historically. Our global teams continue to execute well, delivering outstanding financial results in a dynamic market environment, demonstrating the earnings power of our company. Our performance during the quarter was driven by good volumes, broad price realization, and strong manufacturing efficiencies across all our businesses, resulting in an adjusted EBIT margin for the company of 15%, with all three of our businesses posting double-digit EBIT margins for the third consecutive quarter. During the quarter, we saw broad strength across many of our end markets. Specifically, the U.S. residential housing market continues to run at a robust pace, with both repair and remodeling activity and new construction growth driving strong demand for our products. In addition, we continue to see many of our global markets, as well as our commercial and industrial end markets, improve throughout the quarter. While market conditions have certainly turned more favorable, our operating priorities, investments, and execution have positioned us to deliver these strong financial results. Across the enterprise, we continue to invest in select growth and productivity initiatives to service our customers and improve our operating performance. Within installation, we are investing in automation and process technologies to create a lower cost, more flexible manufacturing network in our residential insulation business as we commercially position ourselves to benefit from a strong housing market. In addition, we continue to invest in new insulation materials and systems in non-residential applications to expand our global product offering. In our composites business, we are investing to grow in higher value downstream applications, such as building and construction, wind energy, and infrastructure. And we remain focused on optimizing our low-cost manufacturing network to serve as key markets such as North America, Europe, and India. And in roofing, we continue to leverage our vertical integration model to develop innovative products and systems while expanding our roofing components offering and strengthening our partnerships with contractors and distributors to help grow their businesses with our products and brand. All of this work is enabled by our enterprise operating model, which leverages our commercial strength, material science capabilities, and global operating scale to expand our growth opportunities, improve our operating efficiencies, and generate strong free cash flow. Before I turn it over to Ken to walk through our financial performance in more detail, I'd like to share a few additional enterprise updates. On the talent front, we recently announced the appointment of two great executives. First, I'd like to congratulate Dr. Jose Mendez Endino on his recent promotion to Chief Research and Development Officer. Material science research and product and process innovation are fundamental to what we do and how we deliver value as a company. Jose will play a key role in leading our efforts to increase our innovation pipeline and ensure we are helping our customers win and grow in the market. Additionally, I'm excited to welcome Gina Barreto to our company as our next General Counsel and Corporate Secretary, effective June 9th. She joins us from Nordstrom Corporation, where she served for eight years, most recently as their General Counsel. Gina brings more than two decades of experience working across multiple industries and will be a valuable partner to both me and our entire executive team. Another highlight I would like to share is the recent publication of our 15th Annual Sustainability Report, titled Beyond Today, Shaping Tomorrow. We began our sustainability journey nearly two decades ago, and over the years, our goals have evolved and expanded well beyond environmental sustainability. Today, they are built on three key pillars, expanding the positive impact of our products, reducing our environmental footprint, and increasing our social impact. We are proud of our progress and our accomplishments over the past decade across all of our 2020 sustainability goals, particularly our progress on climate action, where we have reduced absolute greenhouse gas emissions from our operations by 60% since our peak year, despite adding several material acquisitions along the way. In our recently published 2030 goals, we are committed to further reduce these emissions by another 50%. This will result in 2030 absolute greenhouse gas emissions being 75% below our peak. At the same time, We are also committed to a 30% reduction in our Scope 3 emissions as we focus on making a positive impact throughout our supply chain. Sustainability is core to our purpose and will continue to be an important driver and differentiator for our company moving forward. With that, I will now turn it over to Ken to discuss our financial results in more detail.