Owens Corning

Good morning. Thank you for taking the time to join us. Joining us today are Brian Chambers, Owens Corning's Chair and Chief Executive Officer, and Todd Fister, 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 second quarter of 2025. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, form 10-Q, in 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 two, where we offer a few reminders. First, today's remarks will include forward-looking statements that are subject to risk, 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 security laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail. Second, the presentation slides and today's remarks contain non-GAP financial measures, explanations and reconciliations of non-GAP to GAP measures may be found in our earnings press release and presentation available on the investor section of our website, owenscorning.com. Third, financials and metrics for current and historical periods discussed on this call will be for continuing operations, except for capital expenditures and cashflow measures, which include amounts related to glass reinforcements until the closing of the sale of this business. 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 on our call today. At our investor day in May, we detailed how we are a new Owens Corning, a company that has been reshaped into a high performing building products leader in North America and Europe, and structurally improved to drive above market growth, sustainable and more resilient margins and substantial cashflow. Powered by the OSI Advantage, a set of capabilities that are unique to our company and central to our success, our team delivered second quarter results that continue to demonstrate how the new Owens Corning outperforms in any set of market conditions. During today's call, I will share highlights of our second quarter results and discuss the strategic actions we're taking to continue to outperform the market and deliver long-term value. Todd will then provide a detailed review of our financial results for the quarter, and I'll come back to share an overview of the current operating environment and our outlook for the third quarter. As always, I will begin with safety. We maintained a very safe operating environment in the second quarter, with a recordable incident rate of 0.60. In June, we hosted our first global safety week, a best practice adopted from our newly acquired DOORS business that has been scaled across the enterprise and built on our safer together operating framework, connecting processing and systems with behaviors and leadership to create a safer workplace. Turning to our financial results, we continued our strong and consistent performance in the second quarter, despite a more challenging environment. For the 20th consecutive quarter, we achieved adjusted EBITDA margins at or above 20%, an incredible milestone. Revenues were up 10% versus prior year, and earnings grew 30% year over year. Adjusted EBITDA in the second quarter was 703 million, with an adjusted EBITDA margin of 26%. This performance is a direct result of the structural changes we've made, and is another proof point of our ability to deliver higher and more resilient margins, even in the face of softening market conditions. We also generated good cash flow and continued to return capital to shareholders through dividends and share repurchases. Through the first half of the year, we returned nearly 440 million of the 2 billion we committed to returning over this year and next. This commitment reflects our disciplined capital allocation stretch, and confidence in our cash generating capabilities. As I shared at Investor Day, our performance is the result of a clear set of strategic choices and investments we've made that has shifted our product and geographic focus to high-value building materials sold in the most attractive markets. In short, we are a different company today than we have been historically, with a track record of growing revenues, increasing our margin profile, and returning significant cash to our shareholders over the past five years. One key driver of this performance shift is our strategic business mix, which positions us to outperform given our unique product and application exposure. Today, over half of Owens Corning's revenue is generated from North American repair and remodel activity, including more than one-third from non-discretionary rebruing, which remains solid in the quarter. In non-residential markets, which makes up about 25% of our revenues, North America demand in the quarter was stable, and we continue to see encouraging improvement in Europe. So while residential new construction demand continues to face pressure, it represents only about a quarter of our overall revenue. This strategic product mix positions us well to navigate near-term headwinds, and to benefit from several longer-term secular tailwinds, including an aging and under-built housing stock in the U.S. and Europe, growing demand for products that improve energy efficiency, and increasing investments in North American manufacturing and infrastructure. A second key driver of our strong performance is the strategic actions we've taken to concentrate resources on geographies and applications where we can build leading positions and deliver above-market growth. In July, we completed the sale of our building materials business in China and Korea to a member of the region's management team. The transaction included six installation manufacturing facilities in China and a roofing manufacturing facility in Korea and represented annual revenue of approximately $130 million.

In addition,