Owens Corning

Today and welcome to the Owens Corning third quarter 2021 results 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 Wolfharth. 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 third quarter 2021. Joining us today are Brian Chambers, Owens Corning's chair 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 third 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. The presentation slides and 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 comparison, and we believe it is a meaningful measure for investors to compare our results. Consistent with our historical practice, We have 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 Chair and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us for today's call. I hope all of you are staying healthy and safe. Owens Corning posted strong third quarter results today, consistent with our July outlook and building on the momentum of an outstanding first half of the year. Our global team continued to execute extremely well in a very dynamic environment, overcoming higher inflation, as well as some supply chain disruptions to deliver another great quarter. Our results continue to demonstrate the resiliency of our team, the strength of our commercial and operational execution, and the durability of the earnings power of our company. During the call this morning, I'll start with an overview of our third quarter performance before turning it over to Ken, who will provide additional details on our financial results. I'll then come back to talk about our business outlook for the remainder of the year. As always, I will begin my review with safety. During the third quarter, our commitment to safety resulted in an RIR of 0.64, which is a significant improvement compared to the same period last year, with more than half of our facilities operating injury-free for more than a year. While we are generally encouraged by the recent decrease in COVID cases and gradual increase in vaccinations, it's clear the impacts of the pandemic will persist in the near term. We will continue to follow enhanced safety protocols and operate our facilities with a strong focus on working together to keep each other, our customers, and our suppliers healthy and safe. Financially, we delivered record third quarter revenue of $2.2 billion, an increase of 16% compared with the same period last year, and adjusted EBIT of $400 million. Our performance during the quarter was again a combination of strong market volumes and outstanding execution, with each business delivering a positive price-cost mix and great manufacturing performance. This resulted in an adjusted EBIT margin for the company of 18%, with all three of our businesses posting double-digit EBIT margins for a fifth consecutive quarter. Demand for our U.S. residential products, which account for about half of our enterprise revenues, as well as our commercial and industrial products, remain strong in Q3, and we continue to operate with extended lead times for many of our products. Within this tight supply chain environment, our global teams – especially in supply chain, manufacturing, customer service, and sales, continue to work extremely hard to increase our production and meet the needs of our customers. In addition to our focus to finish the year strong, we continue to make strategic choices to enhance the earnings power of the company and create additional growth opportunities by allocating resources to product lines where we can strengthen our market position and provide a sustainable solution. I would like to take a few moments now to share more about the work we are doing with two of our product lines to position us for the future. As part of our focus to build market-leading positions, we continuously evaluate the strength of our products and position in the market. Based on this analysis, we have decided to explore strategic alternatives for one of our glass reinforcements product lines within our composites business, thermoplastic dry-use chop strands. The DUX product line is primarily used in automotive and electronic applications and generates annual revenues of approximately $270 million. The focus of our evaluation will include divesting or repurposing these assets to manufacture other product lines. With its material science capabilities and relationships across a variety of core markets, applications, and geographies, our composites business is an integral part of our company and a key contributor to our growth strategy. The decision to explore alternatives for these production assets and product line is consistent with our approach to focus on high value material solutions where we can develop market leading positions, such as in building and construction, renewable energy, and infrastructure. Product and process innovation continues to be key to how we drive growth, improve our operating performance, and create value for our customers. A great example of this ongoing work is our pink next-gen fiberglass insulation launched in August. This latest product innovation leverages advanced fiber technology to create a sustainable product that is faster and more comfortable to install compared to existing products in this space. This is particularly important given the performance expectations and tight timelines of today's contractors and builders. Given our commitment to sustainability, I'm pleased to note that pink next-gen insulation is made with 100% wind-powered electricity and sets an industry standard for recycled content. Our launch of next-gen fiberglass insulation is the most recent example of how our industry leadership and innovation is expanding growth opportunities for our customers and Owens Corning. We're also excited to see how our sustainability leadership and mission to build a sustainable future through material innovation is creating new growth opportunities across the enterprise as we engage with more and more customers to develop solutions which achieve their key sustainability goals. The priority topics for collaboration focus on decarbonization, including product-specific embodied carbon reduction, circular economy, which includes both recycled content and end-of-life recycling solutions, and product design transparency, specifically related to the impact of our products throughout their lifecycle. We look forward to sharing more details about these exciting developments to help our customers and grow our company during our upcoming investor day. With that, I will now turn it over to Ken to discuss the financial results in more detail. Ken?