Owens Corning, a global residential and commercial building products leader, reported second-quarter 2024 results. These results include performance of the company’s newly added Doors segment, which was established following the May 15 acquisition of Masonite International Corporation, a leading provider of doors and door systems.
- Reported Net Sales of $2.8 Billion, a 9% Increase from Prior Year, with Newly Acquired Doors Business Contributing $311 Million in Revenue
- Generated Net Earnings Margin of 10%, Adjusted EBIT Margin of 21%, and Adjusted EBITDA Margin of 27%
- Delivered Diluted EPS of $3.24 and Adjusted Diluted EPS of $4.64
- Produced Operating Cash Flow of $493 Million and Free Cash Flow of $336 Million
- Returned $52 Million to Shareholders through Dividends
“Owens Corning delivered another outstanding quarter, generating strong margins and cash flow while completing the acquisition of Masonite and continuing our review of glass reinforcements,” said Chair and Chief Executive Officer Brian Chambers. “Through our talented people and highly valued customer partnerships, we continue to outperform the market as we transform and grow into an even stronger residential and commercial building products company for the future.”
Enterprise Strategy Highlights
- Owens Corning sustained a high level of safety performance in second-quarter 2024, with a recordable incident rate (RIR) of 0.46. This excludes the Doors business, which will be integrated into company safety reporting in 2025.
- On May 15, Owens Corning announced the completion of its acquisition of Masonite International Corporation. The transaction strengthens Owens Corning’s position as a market leader in building and construction materials and increases its offering of branded residential building products to customers. Integration is in progress and includes planned delivery of $125 million of enterprise cost synergies over time.
- Owens Corning continues to make progress on the review of strategic alternatives for its global glass reinforcements business.
Cash Returned to Shareholders
- During the second quarter, the company returned $52 million to shareholders through a cash dividend.
- As a result of its disciplined capital allocation strategy following the completion of the Masonite acquisition, Owens Corning finished the second quarter with net debt-to-adjusted EBITDA leverage toward the low end of its target range of 2-3x.
- Owens Corning’s capital allocation strategy is unchanged, and the company remains committed to returning approximately 50% of cash to shareholders over time through a combination of share repurchases and dividends.
“In the second quarter, we built on the strength of our first-quarter results to grow earnings and expand margin. Our year-over-year growth is the result of strong commercial execution and manufacturing performance by our outstanding teams as well as the strategic choice to acquire Masonite,” said Executive Vice President and Chief Financial Officer Todd Fister. “Moving forward, we remain committed to maintaining our investment grade balance sheet through a balanced capital allocation strategy that continues to return cash to shareholders and positions our company for long-term success.”
Second-Quarter Business Performance
- In the second quarter, the company increased earnings with strong performance in each of its businesses and grew revenue as a result of the acquisition of Masonite.
- Roofing net sales decreased 2% to $1.1 billion compared with second-quarter 2023, as lower volumes were largely offset by positive price realization and favorable mix. Shingles volume, down modestly, outperformed the market. Additionally, volume was impacted by the exit of protective packaging and lower components sales as distributors reset inventory in the channel. EBIT increased $35 million to $373 million, with 34% EBIT margin and 35% EBITDA margin, as the result of strong commercial execution leading to positive price realization and favorable mix.
- Insulation net sales increased 1% to $916 million compared with second-quarter 2023, as demand in the segment’s North American business was strong while its European business was impacted by the weaker macro environment. Positive price and favorable mix were slightly offset by lower volumes, primarily in Europe. EBIT increased $20 million to $183 million, with 20% EBIT margin and 26% EBITDA margin, as positive price, favorable delivery and favorable mix offset lower volumes and costs to evaluate capacity expansion within the U.S. fiberglass network.
- Doors, which reported for the period May 15 through June 30, generated net sales of $311 million. This does not include any revenue from Masonite’s architectural segment which was divested prior to Owens Corning’s acquisition of the company. The business is performing in line with the company’s expectations, despite market pressure in North America and Europe. EBIT was $34 million, with 11% EBIT margin, as the $11 million impact of purchase accounting was partially offset by one-time benefits. EBITDA was $61 million with 20% margin.
- Composites net sales decreased 12% to $546 million compared with second-quarter 2023, as the result of lower volume from softer end markets and price declines in glass reinforcements. EBIT decreased $26 million to $61 million, resulting in 11% EBIT margin and 19% EBITDA margin, as lower price and volumes in glass reinforcements, as well as the impact of production downtime, was partially offset by favorable manufacturing and delivery costs.
Third-Quarter 2024 Outlook
- The key economic factors that impact the company’s business are U.S. residential repair and remodeling activity, U.S. housing starts, global commercial construction, and global industrial production.
- Owens Corning expects its North American building and construction markets to remain healthy in the near-term. The company expects ongoing demand for single-family new construction given the overall need for housing, and the high price and low availability of existing homes for sale. Non-discretionary repair and remodeling activity is expected to drive solid demand while discretionary repair and remodeling activity remains soft. Outside North America, macroeconomic trends and geopolitical tensions continue to result in slow global economic growth.
- For the third-quarter 2024, the company expects overall performance to result in net sales growth of low-20 percent. This includes overall revenue for the legacy business in line with third quarter 2023 plus the addition of a full quarter of revenue for the Doors segment. The enterprise is expected to generate EBIT margin in the high teens with EBITDA margin in the low-20 percent range.
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About Owens Corning
Owens Corning is a global building and construction materials leader committed to building a sustainable future through material innovation. Our three integrated businesses – Roofing, Insulation, and Composites – provide durable, sustainable, energy-efficient solutions that leverage our unique material science, manufacturing, and market knowledge to help our customers win and grow. We are global in scope, human in scale with approximately 18,000 employees in 30 countries dedicated to generating value for our customers and shareholders, and making a difference in the communities where we work and live. Founded in 1938 and based in Toledo, Ohio, USA, Owens Corning posted 2023 sales of $9.7 billion. For more information, visit www.owenscorning.com.
Source: Owens Corning