Owens Corning

Hello, everyone. Thank you for joining us and welcome to the Owens Corning third 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 one to raise your hand. To withdraw your question, press star one 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 third quarter 2026 results. Joining me today are Brian Chambers, our chair and chief executive officer, Todd Fister, our chief operating officer, and Jonathan Collins, our chief financial officer. Our earnings release, form 10Q, 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 three. 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 the glass reinforcements divestiture completed in the second quarter. With those reminders, we'll begin on slide four, and I'll turn the call over to our chair and CEO, Brian Chambers.

Thanks, Darren. Good morning, everyone, and thanks for joining us. During the call, I'll provide an overview of our third quarter and the actions we are taking to drive our performance in the near term while positioning the company for future growth. Jonathan Collins, our recently appointed Chief Financial Officer, will then provide a more detailed review of our third quarter results, and Chief Operating Officer Todd Fister will discuss our fourth quarter outlook. During the quarter, challenging residential market conditions were further impacted by a second consecutive year of weak storm activity. and rapidly rising transportation and input material costs. Within this environment, our team continued to execute well. Through disciplined commercial and operational execution, we remain focused on creating our own momentum by helping our customers win and grow, driving productivity and cost discipline, generating strong operating cash flow and deploying capital consistent with our long-term capital allocation strategy. I'll share more about our financial performance in a moment, but first I will begin with safety. During the third quarter, we maintained a high level of safety performance with a recordable incident rate of 0.81. We continue to enhance our safety process and culture through our Safer Together operating framework, with 60% of our facilities working recordable injury-free year to date. That commitment and performance was recently recognized during our annual Manufacturing Appreciation Month, where we celebrated our manufacturing teams for their dedication to safety, quality, operational excellence, and serving our customers. Turning to our financial results, revenue for the quarter was $2.5 billion. While our outlook assumed a stronger market environment, including storm activity in line with historical averages that ultimately did not materialize, we delivered resilient margins despite weaker markets and higher inflation. Adjusted EBITDA for the quarter was $489 million, with an adjusted EBITDA margin of 20%. Free cash flow in the quarter was $622 million, exceeding our third quarter free cash flow average for the past five years. Our ability to consistently generate cash through the cycle provides the flexibility to invest in our businesses, return capital to shareholders, and pay down debt. In the quarter, we returned $337 million through dividends and share repurchases. Delivering this level of profitability and cash flow in current market environment is a proof point of the fundamentally stronger company we are today. and we continue to build on the structural improvements we've made over the past several years, enhancing our market leading positions, improving our cost structure and creating additional value for customers. In roofing, the business continues to up perform prior cycles. Strong contractor engagement, a shift toward higher value laminate shingles and growth in our components business are supporting strong results while our manufacturing performance continues to help offset rising costs. In installation, We are capitalizing on opportunities in non-residential and European markets while strengthening our competitive position in residential applications, even as markets remain under pressure. In addition, network optimization actions and disciplined pricing continue to support earnings durability. And indoors, the benefits of our integrated go-to-market strategy are contributing positively to performance, even as inflation, tariffs, and soft market demand are masking much of the progress. While near-term financial results have been challenged, the addition of Doors has expanded our product offering to current customers and will enhance the future financial profile of our company with lower capital intensity, attractive cash flow characteristics, and significant margin growth opportunity. Beyond the durable performance we are delivering today, we see significant opportunities to grow revenue and earnings over time. Our businesses hold strong positions in attractive markets. and are poised to capitalize on long-term secular tailwinds across both residential and non-residential construction. And we have confidence in our ability to capture that growth. This confidence is grounded in the unique OC advantages we have in the market, as you see on slide five. Our iconic brand, unparalleled commercial strength, leading technology and winning cost position. These advantages differentiate us in the market and provide us with momentum to succeed today and in the future. which is why we are investing in each to extend their impact and deliver additional value. I'll begin with our winning cost position, which is particularly important in today's environment. We are strengthening this advantage through continued productivity improvements and investments in low cost assets. This quarter, we delivered positive manufacturing performance while continuing to optimize our cost structure across the enterprise, helping to reduce the impact of rising inflation. We're also improving how we plan and allocate resources through the use of AI and advanced analytics. For example, we have developed an AI model that combines our internal forecasts with external housing, weather, financial, and market data to provide timely economic insights. This capability helps our teams evaluate changing market conditions and rapidly shift product production to match demand trends, ensuring we have the right inventory in the right amounts. Together, these productivity and planning capabilities are helping us operate more efficiently today while positioning us to capitalize on future market opportunities. Alongside these efforts, we are making targeted investments that not only strengthen our market position but also improve our cost position. This includes our new fiberglass line in Kansas City that will provide cost-efficient, flexible capacity to meet demand for our non-residential applications. In addition, our new shingle facility in Alabama will strengthen our ability to serve customers in the largest roofing market in the country with a more cost-effective asset. As these investments come online over the next couple of years, They will further enhance our operating flexibility and cost competitiveness, helping us expand our earnings power over time. The value of our winning cost position goes beyond the efficiencies we generate. It helps fund continued investment in the capabilities that drive our growth, including our iconic brand. For nearly 90 years, we have built one of the leading brands in building products with strong awareness, favorability, and customer preference. We are the number one brand awareness among peers included in our research for both contractors and homeowners and have contractor preference nearly double our peer average. That brand strength differentiates Owens Corning throughout the value chain. It helps contractors win more business, dealers attract more customers, and builders sell more homes. The result is greater customer preference and strong pull through demand that helps our distribution partners win and grow across market cycles. We see meaningful opportunity to translate that strength into greater organic growth. As building products increasingly involved toward branded solutions, we believe the Owens Corning brand will play an even bigger role in shaping homeowner preference and customer purchasing decisions. We are continuing to invest in our brand and customer experience across channels, building on our leadership in roofing and insulation, while increasing awareness, preference, and pull-through indoors. Over time, we believe these investments will make our brand an even stronger competitive differentiator. Our unparalleled commercial strength builds in our iconic brand through deep customer relationships and proven marketing initiatives that help our customers win more business. This commercial model combines market expertise, strong channel partnerships, and downstream engagement developed over decades. In roofing, our contractor network of more than 30,000 members is a proven demand generation platform. Through training, marketing support, and business-building resources, we help contractors grow while building loyalty to Owens Corning and creating pull-through demand for our distribution partners, even in softer markets. We have built similar capabilities in other parts of our company. Our Certified Energy Expert program is driving demand with residential insulation contractors and continues to expand. And our Pink Advantage Dealer program is gaining momentum with lumber dealers across the U.S. This program is an important growth driver for DOORS. while also bringing dealers a more integrated offering of products across our residential portfolio. Enrollments in each of these pull-through programs has grown about 10% this year. Building on this capability, we are investing to further scale our proven commercial practices and unlock new opportunities to grow with our customers. Leading technology gives us another way to create value for customers and drive growth in the near and long term. Through investments in product innovation and advanced manufacturing technology, We are bringing new solutions to market faster while improving quality and productivity. These capabilities support growth through differentiated products while also reinforcing our cost advantage through increased throughput and improved service. This year alone, we have launched nearly 40 new or improved products while maintaining a product vitality index above 20%. A recent example is EasySheet, a new-to-world solution that combines structural sheathing, continuous insulation, and an air and water barrier in a single panel, replacing multiple materials and installation steps. This product, which we are validating in the market, is up to 50% lighter than traditional OSB and is designed to reduce jobsite complexity and improve installer productivity, creating meaningful value for our customers and expanding profitable growth opportunities for OC. With that view of our performance, I'll close by recognizing our team for a recent notable achievement. Owens Corning placed second on the 100 Best Corporate Citizens list, marking our ninth consecutive year among the top 10. The list ranks the largest publicly traded U.S. companies based on environmental, social, and governance performance and transparency. This recognition reflects the commitment of our team and our ongoing dedication to doing business the right way. In summary, today's Owens Corning is a fundamentally stronger company. Even in one of the most challenging residential markets we have seen in years, we generated resilient margins and strong cash flow while investing for growth and creating value for shareholders. Through disciplined execution, strategic investments, and a relentless focus on helping our customers win and grow, we are strengthening our ability for cross-market cycles. Looking ahead, we remain focused on extending our market leadership and our needs power to create additional long-term value. With that, I'll turn it over to Jonathan to review our financial performance in more detail.