Owens Corning

Hello everyone, thank you for joining us and welcome to the Owens Corning Second Quarter 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Darren Garvin, Director of Investor Relations. Please go ahead.

Good morning and thank you for joining us to discuss Owens Corning's second quarter 2026 results. Joining me today are Brian Chambers, our Chair and Chief Executive Officer, and Todd Fister, our Chief Financial and Operating Officer. Our earnings release, form 10-Q, and presentation slides were issued earlier this morning and are available on the investor section of our website at owenscorning.com. Following our prepared remarks, we will open the call for Q&A. To allow for broad participation, please limit yourself to one question. Before we begin, please refer to slide two. Today's remarks will include forward-looking statements which are subject to risks and uncertainties that could cause actual results to differ materially. We undertake no obligation to update these statements except as required by law. Please refer to the cautionary statements and risk factors identified in our SEC filings for more detail. This presentation also includes non-GAAP financial measures. Explanations and reconciliations to GAAP measures can be found in our earnings release and presentation materials available on our website. Financials and metrics discussed today reflect continuing operations except for cash flow measures, which include amounts related to glass reinforcements. With the completed divestiture of glass reinforcements, Q2 will be the final quarter that cash flow includes the impact of discontinued operations. For those following along with the presentation, we will begin on slide four. And with that, I'll turn the call over to our chair and CEO, Brian Chambers.

Thanks, Darren. Good morning, everyone, and thank you for joining us today. During the call, I will provide an overview of our second quarter performance, including how a reshaped Owens Corning is continuing to outperform near-term markets while creating multiple paths for revenue, earnings, and cash flow growth. Todd will then provide a more detailed review of our financial results and I'll come back to share our outlook for the third quarter. Our team delivered outstanding results in the second quarter, demonstrating the strength of the company we have built and our ability to execute at a high level in any market condition. This performance is a direct result of our strategic pivot to build a large scale residential focused building products company with unique and unifying competitive advantages. Our iconic brand, unparalleled commercial strength, leading product and process technologies and our winning cost positions. I'll share more about our financial performance in a moment. But first, I will begin, as always, with safety. We continue to demonstrate the engagement of our team and the strength of our safety processes through our Safer Together operating framework, delivering a second quarter recordable incident rate of 0.75. In June, we celebrated our second annual Global Safety Week, reinforcing our shared commitment to work safely every day. Turning to our financial results in the quarter, We delivered total revenue of $2.8 billion and adjusted EBITDA of $660 million for an adjusted EBITDA margin of 24%. Within current marketing conditions, our second quarter performance continued to be driven primarily by the strong execution of company-specific initiatives to grow revenues, improve productivity, and increase earnings. We also generated strong cash flow and continued to return capital to shareholders through dividends and share repurchases. Through the first half of the year, we returned 327 million, reflecting our confidence in the cash-generating capabilities of the enterprise and ongoing focus on long-term value creation. Overall, our performance demonstrates the strength of Owens Corning today, one of the largest and most profitable branded building products companies in the world. We are best-in-class operators with market-leading positions in attractive categories, multiple paths to deliver revenue and earnings growth, and a disciplined capital allocation model that supports strong returns. These key performance drivers are creating value today and also support significant upside as we continue to execute and invest for the future. Over the past several years, Owens Corning has built a strong track record as a best-in-class operator, consistently delivering high levels of performance across a wide range of market conditions. During this time, we have demonstrated the strength of our teams and market positions by generating revenue growth Strong Cash Flow, and Durable Profitability Through Periods of Inflation, Interest Rate Changes, and Shifting Market Conditions. We have structurally improved the earnings power of the company with annual adjusted EBITDA margins that have increased from an average of about 18% from 2015 through 2020 to low to mid 20% since then. For five consecutive years, we've delivered annual adjusted EBITDA margins above 20%, reflecting stronger execution and a higher performing operating model and through the first half of this year, we continue to demonstrate our earnings resiliency even in the current market backdrop. We've applied our operational discipline across the company to leverage our enterprise scale and capabilities to reduce costs. This is evident in our doors business. When we acquired doors in May, 2024, we committed to delivering 125 million of run rate enterprise cost synergies by the end of year two of ownership. As we reached the end of that time period, we have achieved 135 million, exceeding our original commitment. In addition, we've identified another 75 million of structural cost improvements across our operations and are beginning to see that materialize in our results. DOORS is a clear example of how we apply the Owens Corning Playbook to strengthen performance and unlock additional value over time. Our ability to deliver consistently strong performance is also supported by the quality of our businesses and our market leading positions. We've intentionally built a strategic business mix to outperform across cycles. with leading positions in large attractive markets and complimentary product categories that deliver market leading margins. A resilient residential roofing business is uniquely positioned within a non-discretionary product category and continues to demonstrate industry leading performance. More than 80% of roofing demand is driven by repair and replacement, providing a durable foundation for performance across market cycles. We also benefit from the ongoing shift toward higher value roofing systems increasing demand for our roofing components as well as our market leading duration laminate shingles. In fact, our premium duration products represent the majority of the shingles we sell and our position continues to grow supported by the ongoing expansion of our contractor network. Our installation business is an industry leader with strong long-term demand drivers. We have built a unique portfolio that spans North American residential construction, North American non-residential applications, and European markets giving us balanced exposure to the most attractive end markets. In North American residential, the demand for more energy-efficient homes has steadily increased insulation requirements, driving the need for approximately 30% more insulation per home than a decade ago, while an underbuilt US housing market continues to support long-term demand. In non-residential markets, our products are essential in some of the fastest-growing construction segments. One example is data centers. which leverage several of our product lines including foam glass, mineral wool, and fiberglass pipe insulation to support critical thermal, acoustic, and HVAC performance requirements. In Europe, evolving energy efficiency regulations and renovation activity are changing construction practices and creating additional opportunities. And across our non-residential geographies, we are capitalizing on increased substitution toward the types of high performing insulation products we manufacture to deliver above market growth. Turning to our doors business, we provide the most complete door and door system offering in North America. With leading positions across residential interior, residential exterior, luxury exterior, and components categories, the business benefits from a vertically integrated model spanning components, door panels, and finished systems. Our market leading position is being further supported by applying the unique OC advantages to increase demand, optimize our production network, and accelerate innovation. Today we are beginning to convert these strengths into results. One example is the broader placement we have earned with two-step distributors who value our iconic Owens Corning brand, commercial capabilities, and enterprise product portfolio. We've entered new geographies and expanded placement with existing locations, and we see further opportunity to extend this momentum over time. Building from these leading positions, we have multiple paths to deliver growth. By leveraging the OC advantages, delivering on our investments in new, highly efficient manufacturing assets. Executing a more integrated go-to-market strategy and delivering on our operational plans to realize the full potential of the Doors business, we have several avenues to generate high revenue, earnings, and cash flow over time. This year, we're investing $800 million in capital to strengthen our competitive positions. These investments position us to capitalize on the next phase of market growth, while enhancing productivity, improving service levels, and strengthening cost competitiveness across the enterprise. One of these investments, our new fiberglass line in Kansas City, will strengthen our US insulation network by providing flexible capacity to serve both residential and non-residential applications while improving our overall manufacturing efficiency as it comes online next year. Given the current residential new construction market and the growing demand for our non-residential product offering, We anticipate this line will be dedicated to service our commercial and industrial insulation applications. We are also progressing the construction of our new roofing plant in Alabama, which will add capacity to support our expanding residential contractor base within the largest asphalt roofing region in the US. We expect this capacity to be available mid-2028. In addition, we recently commissioned a new self-adhere underlayment line at our Houston roofing plant that improves our cost position in a product category with attractive growth opportunities. Self-adhered underlayment is used across a broad range of roofing applications, including asphalt, metal, and tile, allowing us to participate regardless of the roofing material selected or the shingle brand installed. This investment continues to strengthen our components portfolio, which generates attractive margins and creates another avenue for profitable growth. As these investments come online, we have the commercial capabilities to turn capacity into profitable growth. With our three complementary businesses, we're utilizing an integrated go-to-market strategy that leverages our iconic brand and unparalleled commercial strength to help our customers win and grow in the market. Our comprehensive pull-through models continue to drive preference and loyalty where buying decisions are made, strengthening our relationships with contractors, builders, dealers, and distribution channel partners. We are also using advanced analytics and AI to strengthen customer engagement and support growth. In our roofing business, we have recently deployed an AI model to analyze sales volume data and notify our commercial team of changes in customer purchase patterns. These insights allow us to engage customers earlier, protect existing commitments, and pursue expansion opportunities. This capability is already generating value, and we are working to scale it across the enterprise. Our growth agenda is supported by a disciplined capital allocation framework. We have consistently taken a balanced approach, investing to strengthen our market-leading businesses, returning significant cash to shareholders, and maintaining the financial flexibility to pursue value-creating opportunities. Since 2019, we have returned approximately $5 billion to shareholders through dividends and share repurchases, and more than tripled our quarterly dividend per share payout. In over 2025 and 2026, We are on track to deliver on our commitment to return $2 billion in cash to shareholders. Before closing, I would like to recognize our team for earning a place on the Fortune 500 for the 72nd consecutive year. This recognition reflects the long-term strength of our company, the dedication of our people, and our unwavering focus on serving our customers and creating value for our shareholders. I would also like to acknowledge an important leadership transition. We recently announced that Jonathan Collins will be joining Owens Corning as Chief Financial Officer. With a decade of public company CFO experience, Jonathan brings both deep financial expertise and unique operational capabilities developed across a variety of industrial and technology companies. He will assume this role August 10th and join us for our third quarter earnings call. As Jonathan steps into this role, Todd Fister will transition to President and Chief Operating Officer. Todd will lead the execution of key enterprise initiatives to accelerate growth and performance, leveraging our unique OC advantages to further integrate our go-to-market strategy and standardized work across the company. In closing, our second quarter performance demonstrates the earnings power of the new Owens Corning. With a focused portfolio, disciplined execution, and continued investment, we are well positioned to deliver consistent performance and create long-term value for our shareholders. With that, I'll turn the call over to Todd.