Q1 2024 Owens Corning Earnings Call

Operator: Hello all, and welcome to Owens Corning's first quarter 2024 earnings call. My name is Lydia, and I'll be your operator today. If you'd like to ask a question after the prepared remarks, you can do so by pressing the star followed by the number 1 on your telephone keypad. We kindly ask that you limit yourself to one question only. I'll now hand you over to Amber Wohlfarth, Vice President of Investor Relations, to begin. Please go ahead when you're ready.

Hello, and welcome to Owens Corning first quarter 2024 earnings call.

Lydia: My name is Lydia and there'll be your operator today.

Speaker Change: If you'd like to ask a question. After the prepared remarks, you can do side by pressing star followed by the number one on your touch.

Speaker Change: Thank you Pat.

We kindly ask that you limit yourself to one question only.

Lydia: I'll now hand, you over time, but will fall Vice president of Investor Relations to begin. Please go ahead when you're ready.

Amber Wohlfarth: Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the first quarter of 2024. Joining us today are Brian Chambers, Owens Corning's Chairman 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.

Speaker Change: Good morning, Thank you for taking the time to join US for today's conference call and review of our business results for the first quarter of 2024.

Speaker Change: Joining us today are Brian Chambers, Owens, Corning Chair, and Chief Executive Officer, and Todd Fister, Our Chief Financial Officer.

Speaker Change: 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.

Amber Wohlfarth: Earlier this morning, we issued a news release and filed a 10-Q that detailed our financial results for the first quarter of 2024. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results, and will 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.

Speaker Change: Earlier. This morning, we issued a news release and filed a 10-Q that detailed our financial results for the first quarter 2024.

Speaker Change: For the purposes of our discussion today, we've prepared presentation slides summarizing our performance and results and we'll refer to these slides during this call.

Speaker Change: You can access the earnings press release Form 10-Q, and the presentation slides at our website Owens Corning Dotcom referred to the investors link under the corporate section of our homepage.

Amber Wohlfarth: A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please refer to slide two, where we offer a couple of reminders. First, today's remarks will include forward-looking statements that 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 more detail.

Speaker Change: Transcript and recording of this call and the supporting slides will be available on our website for future reference.

Speaker Change: Please reference slide two where we offer a couple of reminders.

Speaker Change: First today's remarks will include forward looking statements that are subject to risks uncertainties and other factors that could cause our actual results to differ materially.

Speaker Change: We undertake no obligation to update these statements beyond what is required under applicable securities laws.

Speaker Change: Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail.

Amber Wohlfarth: Second, the presentation slides in today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation, available on the Investors section of our website, owenscorning.com. 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.

Speaker Change: Second the presentation slides in today's remarks contain non-GAAP financial measures.

Speaker Change: Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation available on the investors section of our website Owens Corning Dot com.

Speaker Change: For those of you following along with our slide presentation, we will begin on slide four.

Speaker Change: And now opening remarks from our chair and CEO, Brian Chambers, Brian.

Brian D. Chambers: Thank you, Amber. Good morning, everyone, and thank you for joining us. During today's call, I will walk through highlights of our first quarter performance and provide an update on the Masonite acquisition and the review of strategic alternatives for our glass reinforcements that we announced earlier in the year. After that, Todd will discuss our first quarter financial results in more detail, and I will come back to share our outlook for the second quarter.

Brian D. Chambers: Thank you Robert Good morning, everyone and thank you for joining us during today's call I will walk through highlights of our first quarter performance and provide an update on the <unk> acquisition and the review of strategic alternatives for our glass reinforcements business that we announced earlier in the year.

Brian D. Chambers: After that Todd will discuss our first quarter financial results in more detail and I'll come back to share our outlook for the second quarter.

Brian D. Chambers: Owens Corning delivered another great quarter to start the year, highlighting our strong execution and broad capability to deliver robust results within a very dynamic market environment. Our results continue to reflect the strength of our market-leading positions and enterprise focus. Capitalized on Key Secular Trends That Accelerate Our Growth and Strengthen the Earnings Power of the Company. Now, I will begin a review of the quarter, as always, with our safety performance. At Owens Corning, our commitment to safety is unconditional.

Brian D. Chambers: Owens Corning delivered another great quarter to start the year, highlighting our strong execution and broad capability to deliver robust results within a very dynamic market environment.

Brian D. Chambers: Our results continue to reflect the strength of our market, leading positions and enterprise focus to capitalize on key secular trends that accelerate our growth and strengthen the earnings power of the company.

Speaker Change: Now I will begin our review of the quarter as always with our safety performance.

Speaker Change: I don't want to Corning, our commitment to safety is unconditional as part of this commitment we continuously renew and refresh our approach to safety as we strive to eliminate injuries and work safer together.

Brian D. Chambers: As part of this commitment, we continuously renew and refresh our approach to safety as we strive to eliminate injuries and work safer together. Through this work, I'm pleased to report that our recordable incident rate in the first quarter was.31, a more than 50% improvement from the same period last year and our best start to the year in over two decades. Looking now at our first quarter financial performance, we continue to execute our key strategic and operating priorities, resulting in strong earnings to start the year.

Speaker Change: Through this work I'm pleased to report that our recordable incident rate in the first quarter was <unk> three one a more than 50% improvement from the same period last year and our best start to the year and over two decades.

Speaker Change: Looking now at our first quarter financial performance, we continued to execute our key strategic and operating priorities, resulting in strong earnings to start the year.

Brian D. Chambers: The company delivered an adjusted EBIT margin of 19% and an adjusted EBITDA margin of 25%, with net sales that were in line with prior years. This earnings performance marks the 15th consecutive quarter of mid-teens or better adjusted EBIT margins and 20% or better adjusted EBITDA margins for Owens Corning as we continue to execute our enterprise strategy, leading to higher, more consistent earnings. Our top line and margin performance generated adjusted diluted earnings per share of $3.59 in the first quarter.

Speaker Change: The company delivered an adjusted EBIT margin of 19% and adjusted EBITDA margin of 25% with net sales that were in line with prior year.

Speaker Change: This earnings performance marks the 15th consecutive quarter of mid teens or better adjusted EBIT margins, and 20% or better adjusted EBITDA margins for Owens Corning as we continue to execute our enterprise strategy, leading to higher more consistent earnings.

Speaker Change: Our top line and margin performance generated adjusted diluted earnings per share of $3 59 in the first quarter.

Brian D. Chambers: And consistent with our capital allocation strategy, the company returned $182 million to shareholders through dividends and share repurchases during the quarter. Market conditions for our North American residential and commercial businesses remain favorable to start the year, while our European businesses continue to face more challenging conditions. Within this dynamic environment, all three of our segments performed well, driven by our team's strong execution and highly valued product offering. In roofing, strong margins during the quarter were driven by continued good pricing and favorable product mix within shingles and components.

Speaker Change: And consistent with our capital allocation strategy. The company returned 182 million to shareholders through dividends and share repurchases during the quarter.

Speaker Change: Market conditions for our North American residential and commercial businesses remained favorable to start the year, while our European businesses continue to face more challenging conditions.

Speaker Change: Within this dynamic environment, all three of our segments performed well driven by our team's strong execution and highly valued product offering.

Speaker Change: In roofing strong margins during the quarter were driven by continued good pricing and favorable product mix within shingles and components as contractors continue to recognize the value of selling our complete roofing system.

Brian D. Chambers: As contractors continue to recognize the value of selling our complete roofing system, positive price-cost and favorable mix help fuel our results. And in composites, while overall revenues were down as expected, demand trends within our glass reinforcements business have begun to stabilize in most of our end markets. Volumes in our non-wovens business remained solid in the first quarter due to the strength of the roofing market and continued demand for non-residential building products.

Speaker Change: In insulation, we continued to see solid demand in North America for both our residential and technical insulation products, while Europe continued to be impacted by weak macro environment.

Speaker Change: Positive price cost and favorable mix helped fuel our results.

Speaker Change: And in composites, while overall revenues were down as expected demand trends within our glass reinforcements business have begun to stabilize and most of our end markets.

Volumes in our nonwovens business remains solid in the first quarter due to the strength of the roofing market and continued demand for nonresidential building products.

Brian D. Chambers: Across the enterprise, we are leveraging our brand leadership, product innovations, focus on sustainable solutions, and channeling customer knowledge to differentiate Owens Corning, strategically positioning us to continue driving results and delivering further growth. Let me share a few of our latest updates on product innovation and sustainability. During the first quarter, we launched 13 new or improved products. In our roofing business, we launched a new weather-resistant barrier house wrap under the Pink Wrap brand.

Speaker Change: Across the enterprise, we are leveraging our brand leadership product innovations focus on sustainable solutions and channel and customer knowledge to differentiate Owens Corning strategically positioning us to continue driving results and delivering further growth.

Speaker Change: Let me share a few of our latest updates on product innovation and sustainability.

Speaker Change: During the first quarter, we launched 13, new or improved products.

Speaker Change: In our roofing business, we launched a new weather resistant barrier house wrap under the <unk> brand.

Brian D. Chambers: We are excited about this new product and believe the combination of our manufacturing capabilities, service platforms, and existing relationships with contractors and distributors puts us in a strong position to create additional value for our customers and grow this product category. I would also like to share an update on our sustainability progress. In March, we issued our 18th Annual Sustainability Report.

We are excited about this new product and believe the combination of our manufacturing capabilities service platforms and existing relationships with contractors and distributors put us in a strong position to create additional value for our customers and grow this product category.

Speaker Change: I would also like to share an update on our sustainability progress.

Speaker Change: In March we issued our 18th annual sustainability report.

Brian D. Chambers: This report reflects the global impact of our people and our products and the many ways we work to make the world a better place. We are firm believers that sustainability is not just good for the environment, it's good business, and we are proud of the progress we've made toward our long-term goals. For example, waste to landfill has been a challenge for us over the years, but in 2023, we had a breakthrough, achieving a 14% absolute reduction compared to 2020.

Speaker Change: This report reflects the global impact of our people and our products and the many ways, we work to make the world a better place.

Speaker Change: We are firm believers that sustainability is not just good for the environment. It's good business. We're proud of the progress we've made toward our long term goals.

Speaker Change: For example, waste to landfill has been a challenge for us over the years, but in 2023, we had a breakthrough achieving a 14% absolute reduction compared to 2022.

Brian D. Chambers: Also highlighted in the report, in 2023, 59% of the company's revenue came from products that help customers save energy and lower emissions, with 14 of our products certified as being made with 100% renewable electricity. These are products that our customers want and need, and our ability to deliver them in a sustainable way creates a competitive advantage. In addition, we achieved a 28% reduction in Scope 1 and 2 emissions from a 2018 baseline, putting us more than halfway toward our goal of 50% by 2030. To further reduce our emissions, I'm pleased to share that we are converting our Helicus Sweden insulation plant from coke-fired furnaces to electric now.

Speaker Change: Also highlighted in the report and 2023, 59% of the company's revenue came from products that help customers save energy and lower emissions with 14 of our products certified as being made with 100% renewable electricity.

Speaker Change: These are products that our customers want and need and our ability to deliver in a sustainable way creates a competitive advantage.

Speaker Change: In addition, we achieved a 28% reduction in scope, one and two emissions from a 2018 baseline putting us more than halfway toward our goal of 50% by 2030.

Speaker Change: To further reduce our emissions I'm pleased to share that we are converting our helicopt, Sweden insulation plant from Coke fired furnaces to electric Maui.

Brian D. Chambers: This will help reduce carbon emissions and lower the embodied carbon in the products produced, which brings us closer to reaching the greenhouse gas targets we have set for ourselves. This also strengthens our market-leading position and improves our manufacturing efficiency while ensuring we continue to meet our valued European customers' expectations. I am very proud of the commitment by our teams to deliver on our mission to build a sustainable future through material innovation and the progress we continue to make in areas such as the circular economy, waste reduction, and employee safety. I encourage you to review our sustainability report if you haven't already done so.

Speaker Change: This will help reduce carbon emissions and lower the embodied carbon in the products produce which brings us closer to reaching the greenhouse gas targets, we have set for ourselves.

Speaker Change: This also strengthens our market, leading position and improves our manufacturing efficiency, while ensuring we continue to meet our valued European customers expectations.

Speaker Change: I'm very proud of the commitment by our teams to deliver on our mission to build a sustainable future through material innovation and the progress we continue to make in areas such as circular economy waste reduction and employee safety.

Speaker Change: I encourage you to review our sustainability report if you haven't already done so.

Brian D. Chambers: Before turning it over to Todd, I want to provide an update on the two transformational moves we announced in early February. While we are very pleased with our strong and consistent financial results, we are excited about the opportunity to better align our business units with our overall enterprise strategy to focus on building and construction and to create new opportunities for Owens Corning. Let me start with the Masonite acquisition.

Speaker Change: Before turning it over to Todd I want to provide an update on the two transformational moves we announced in early February.

Todd W. Fister: While we are very pleased with our strong and consistent financial results. We are excited about the opportunity to better align our business units with our overall enterprise strategy to focus on building and construction solutions and to create new opportunities for Owens Corning.

Todd W. Fister: Let's start with the <unk> acquisition.

Brian D. Chambers: As we shared during our call at the time of the acquisition announcement, the addition of Masonite helps us expand our leadership position in the branded residential building product category and adds a product category that complements our current interior and exterior residential offerings. The acquisition also creates a scalable new growth platform. Expanding our total addressable market to $75 billion. Finally, it enhances our attractive financial profile by growing our revenue and earnings, lowering ongoing capital intensity, and increasing free cash flow generation.

Todd W. Fister: As we shared during our call at the time of the acquisition announcement. The addition of Masonite helps us expand our leadership position in the branded residential building products space and as a product category that complements our current interior and exterior residential offerings.

Todd W. Fister: The acquisition also creates a scalable new growth platforms, expanding our total addressable market to 75 billion.

Todd W. Fister: Lastly, it enhances our attractive financial profile by growing our revenue and earnings lowering ongoing capital intensity and increasing free cash flow generation.

Brian D. Chambers: The proposed transaction has been well received by our customers. Our strong distribution partnerships, combined with our best-in-class contractor engagement model, position us well for further success within this new product category. Since the announcement, we've been working closely together on integration planning and regulatory procedures, and continue to work toward a mid-year close of the acquisition. We look forward to welcoming the Masonite team to Owens Corning.

Todd W. Fister: The proposed transaction has been well received by our customers our strong distribution partnerships combined with our best in class contractor engagement model position us well for further success within this new product category.

Todd W. Fister: Since the announcement, we've been working closely together on integration planning and regulatory procedures and continue to work toward a mid year close of the acquisition.

Todd W. Fister: We look forward to welcoming the masonite team to Owens Corning.

Brian D. Chambers: Adding this market-leading provider of interior and exterior doors strategically fits into our company, expanding our offering of brand new residential building material products with customers, channels, and markets we know very well, while providing several opportunities to improve operating efficiencies as a combined entity, leading to cost synergy. Owens Corning is a recognized leader in the building and construction material space, and we believe that this acquisition strengthens our position in the near term while creating exciting opportunities for the future.

Todd W. Fister: Adding this market leading provider of interior and exterior doors strategically fits into our company expanding our offering of branded residential building material products with customers channels and markets, we know very well, while providing several opportunities to improve operating inefficiencies as a combined entity leading to cost synergies.

Owens Corning is a recognized leader in the building and construction materials space. We believe that this acquisition strengthens our position in the near term, while creating exciting opportunities for the future.

Brian D. Chambers: In February, we also announced the strategic review of our glass reinforcements business, part of our composite segment. While the business is a market leader in several regions and applications, the industrial nature of the applications and customers does not fit with our strategic choice to invest in and grow our residential and commercial building materials offerings, given our disciplined capital allocation approach and best owner-operating philosophy. We have initiated this process and engaged Morgan Stanley as our financial advisor.

Todd W. Fister: In February we also announced the strategic review of our glass reinforcements business, which is part of our composite segment.

Todd W. Fister: While the business is a market leader in several regions and applications industrial nature of the applications and customers does not fit with our strategic choice to invest in and grow our residential and commercial building materials offering.

Todd W. Fister: Given our disciplined capital allocation approach and best owner operating philosophy, we have initiated this process and engaged Morgan Stanley as our financial advisor.

Brian D. Chambers: We'll share more about our progress as new information becomes available. In closing, I want to thank our global teams for their dedication and commitment to consistently delivering for our customers and shareholders. Our employees are the driving force that propels our company forward to continue executing on our growth strategy while maintaining our high standards for delivering strong results and winning the right way. With that overview of our performance and strategic initiatives, I will now turn it over to Todd to discuss our first quarter financial results in more detail. Todd? Thank you.

Todd W. Fister: We will share more about our progress as new information is available.

Todd W. Fister: In closing I want to thank our global teams for their dedication and commitment to consistently delivering for our customers and shareholders.

Todd W. Fister: Our employees are the driving force that propel our company forward to continue executing on our growth strategy, while maintaining our high standards for delivering strong results and winning the right way.

Todd W. Fister: With that view of our performance and strategic initiatives I will now turn it over to Todd to discuss our first quarter financial results in more detail.

Todd W. Fister: Yeah.

Todd W. Fister: Thank you, Brian and good morning, everyone as Brian mentioned, we had a great start to the year our performance in the quarter demonstrates the value being generated by our enterprise strategy and operating model.

Todd W. Fister: I would now like to turn to slide five to discuss the results for the quarter.

Todd W. Fister: Thank you, Brian, and good morning, everyone. As Brian mentioned, we had a great start to the year. Our performance in the quarter demonstrates the value being generated by our enterprise strategy and operating model. I'd now like to turn to slide 5 to discuss our results for the quarter. We started the year growing enterprise earnings and margins with adjusted EBIT of $438 million, which was significantly above last year; adjusted EBITDA was $565 million.

Todd W. Fister: We started the year growing enterprise earnings and margins with adjusted EBIT of $438 million, which was.

Todd W. Fister: Typically above last year.

Todd W. Fister: Adjusted EBITDA was $565 million adjusted EBIT margins were 19% and adjusted EBITDA margins were 25%.

Todd W. Fister: Adjusted earnings for the first quarter were $316 million.

Todd W. Fister: Or $3 59 per diluted share.

Todd W. Fister: Impaired to $257 million or $2 80 per diluted share in the same quarter prior year.

Todd W. Fister: Adjusted EBIT margins were 19%, and adjusted EBITDA margins were 25%. Adjusted earnings for the first quarter were $316 million, or $3.59 per diluted share, compared to $257 million, or $2.80 per diluted share, in the same quarter last year. Slide six shows the reconciliation between our adjusted and reported EBIT. For the quarter, adjusting items totaled approximately $35 million and are excluded from our adjusted EBIT. These primarily include $18 million of Masonite acquisition-related costs and $14 million of charges associated with our ongoing cost optimization and product line rationalization actions.

Todd W. Fister: Slide six shows the reconciliation between our adjusted and reported EBIT for.

Todd W. Fister: For the quarter adjusting items totaled approximately $35 million and are excluded from our adjusted EBIT.

Todd W. Fister: Primarily include $18 million of Masonite acquisition related costs and $14 billion of charges associated with our ongoing cost optimization and product line rationalization actions.

Todd W. Fister: Turning to slide seven and moving on to our cash generation and capital deployment during the first quarter of 2020 for drew.

Todd W. Fister: Driven by our strong operational execution, we improved free cash flow for the quarter compared to the prior year.

Todd W. Fister: Free cash flow for the quarter was a net outflow of $128 million compared to a net outflow of $322 million in the same quarter last year, which was primarily driven by disciplined working capital management.

Todd W. Fister: Turning to slide 7 and moving on to our cash generation and capital deployment during the first quarter of 2024, driven by our strong operational execution, we improved free cash flow for the quarter compared to the prior year. Free cash flow for the quarter was a net outflow of $128 million compared to a net outflow of $322 million in the same quarter last year, which was primarily driven by disciplined working capital management. Capital additions for the quarter were $152 million, down $6 million from the same quarter last year. Our return on capital was 17% for the 12 months ending March 31, 2024, using a simplified calculation.

Todd W. Fister: <unk> additions for the quarter were $152 million down $6 million from the same quarter prior year.

Todd W. Fister: Our return on capital was 17% for the 12 months ending March 31, 2024, using a simplified calculation additional details can be found in the table in our earnings presentation.

Todd W. Fister: At quarter end, the company had liquidity of approximately $5 6 billion, consisting of $1 $3 billion of cash and $4 $3 billion of availability on our bank debt facilities comprised of <unk>.

Todd W. Fister: $3 billion of newly committed short term financing related to our planned acquisition of Masonite, a $1 billion revolving credit facility, which was amended during the quarter and a 300 million receivable securitization facility, which also was amended during the quarter.

Todd W. Fister: During the first quarter of 2024, we returned $182 million to shareholders through share repurchases and dividends, we repurchased common stock for $130 million and paid a cash dividend totaling $52 million.

Todd W. Fister: Additional details can be found in the table in our earnings presentation. At quarter end, the company had liquidity of approximately $5.6 billion, consisting of $1.3 billion of cash and $4.3 billion of availability on our bank debt facilities, comprised of $3 billion of newly committed short-term financing related to our planned acquisition of Masonite, a $1 billion revolving credit facility, which was amended during the quarter, and a $300 million receivable securitization facility, which also was amended during the quarter.

Todd W. Fister: In February the board declared a cash dividend of <unk> 60 per share.

Todd W. Fister: Our capital allocation strategy remains unchanged, we are focused on generating strong free cash flow returning approximately 50% to investors over time, and maintaining an investment grade balance sheet, while executing on our business strategies to grow the company.

Todd W. Fister: Now turning to slide eight I'll provide additional details on our segment results.

Todd W. Fister: The roofing business started the year by delivering a great first quarter with revenue growth of 7% and year over year margin expansion.

Todd W. Fister: During the first quarter of 2024, we returned $182 million to shareholders through share repurchases and dividends. We repurchased Common Stock for $130 million and paid a cash dividend totaling $52 million. In February, the board declared a cash dividend of $0.60 per share. Our capital allocation strategy remains unchanged.

Todd W. Fister: Sales in the quarter were $957 million revenues were positively impacted by carryover price realization and favorable mix within both shingles and components.

Todd W. Fister: Volumes for the quarter were relatively flat with growth in shingles in roofing components, largely offset by the impact of the strategic decision to exit our protective packaging business.

Todd W. Fister: We're focused on generating strong free cash flow, returning approximately 50% to investors over time, and maintaining an investment-grade balance sheet while executing our business strategies to grow the company. Now turning to slide 8, I'll provide additional details on our segment results. The roofing business started the year by delivering a great first quarter with revenue growth of 7% and year-over-year margin expansion. Sales in the quarter were $957 million. Revenues were positively impacted by carryover price realization and favorable mix within both shingles and components.

Todd W. Fister: The U S asphalt shingle market on a volume basis was up 27% in the quarter compared to the prior year driven by continued strength of the market and carryover storm demand.

Todd W. Fister: Our U S shingle volume growth trailed the market, primarily due to our outperformance versus the market in Q1 2023 as distributors work to rebuild inventory of IC products.

Todd W. Fister: EBIT was $286 million for the quarter up $77 million versus last year. The increase was primarily due to positive price and favorable mix manufacturing costs were also favorable in the quarter as we produce more laminates shingles in the first quarter versus last year.

Todd W. Fister: Lower delivery costs was offset by cost inflation.

Todd W. Fister: Volumes for the quarter were relatively flat, with growth in shingles and roofing components largely offset by the impact of the strategic decision to exit our protective packaging business. The U.S. asphalt shingle market, on a volume basis, was up 27 percent in the quarter compared to the prior year, driven by continued strength of the market and carryover storm demand. Our U.S. shingle volume growth trailed the market, primarily due to our outperformance versus the market in Q1 2023, as distributors worked to rebuild inventory of OC products.

Todd W. Fister: All of this resulted in EBIT margins of 30% and EBITDA margins of 31%.

Todd W. Fister: Now please turn to slide nine for a summary of our insulation business the.

Todd W. Fister: The insulation business started the year with another solid quarter of greater than 20% EBITDA margins.

Todd W. Fister: Q1 revenues were $904 million, a 2% decrease from the first quarter last year.

Todd W. Fister: In technical and global revenue was down slightly year over year.

Todd W. Fister: Positive price and favorable mix, primarily in Europe, largely offset lower volumes tied to the overall weaker macro environment in Europe.

Todd W. Fister: North American residential insulation revenue was down modestly on slightly lower volumes.

Todd W. Fister: EBIT was $286 million for the quarter, up $77 million versus last year. The increase was primarily due to a positive price and favorable mix. Manufacturing costs were also favorable in the quarter as we produced more laminate shingles in the first quarter versus last year. However, lower delivery costs were offset by cost inflation. All of this resulted in EBIT margins of 30% and EBITDA margins of 31%. Now, please turn to slide nine for a summary of our installation.

Todd W. Fister: EBIT for the first quarter was $161 million up $5 million compared to prior year.

Todd W. Fister: The impact of positive price and favorable delivery costs more than offset the impact of lower volumes and slightly higher manufacturing costs.

Todd W. Fister: Overall insulation delivered EBIT margins of 18% and EBITDA margins of 23% in the first quarter.

Todd W. Fister: Slide 10 provides an overview of our composites business.

Todd W. Fister: In the first quarter, the composites business performed well relative to the softer macro environment sales.

Todd W. Fister: Sales for the quarter were $523 million down 11% compared to prior year.

Todd W. Fister: The installation business started the year with another solid quarter of greater than 20% EBITDA market. Q1 revenues were $904 million, a 2% decrease from the first quarter last year. And technical and global, revenue was down slightly year over year. However, positive price and favorable mix, primarily in Europe, largely offset lower volumes tied to the overall weaker macro environment. North American residential insulation revenue was down modestly on slightly lower volumes. Insulation EBIT for the first quarter was $161 million, up $5 million compared to the prior year.

Todd W. Fister: The decrease sales resulted primarily from lower glass reinforcement volumes and lower price as we continue to see spot price pressure and lower contract pricing.

Todd W. Fister: Well overall revenues were down we continue to see good performance in our nonwovens business.

Todd W. Fister: EBIT for the quarter was $46 million down $3 million from prior year, lower selling prices and higher production downtime from lower demand as well as higher startup cost impacted EBIT in the quarter.

Todd W. Fister: Deflation for both delivery and input costs, primarily related to energy and favorable manufacturing costs, nearly offset EBIT headwinds in the quarter.

Todd W. Fister: The impact of positive prices and favorable delivery costs more than offset the impact of lower volumes and slightly higher manufacturing costs. Overall, inflation delivered EBIT margins of 18% and EBITDA margins of 23% in the first quarter. Slide 10 provides an overview of our composites.

Todd W. Fister: Overall composites delivered 9% EBIT margins and 17% EBITDA margins for the quarter.

Todd W. Fister: Moving on to Slide 11, I will discuss our full year 2020 for outlook for key financial items, all of which remain unchanged from our guidance provided in February and which exclude the impacts of acquisitions and divestitures, which have not yet been completed.

Todd W. Fister: In the first quarter, the composites business performed well relative to the softer macro environment. Sales for the quarter were $523 million, down 11% compared to the prior year. The decreased sales resulted primarily from lower glass reinforcement volumes and lower prices as we continue to see spot price pressure and lower contract prices. Consequently, overall revenues were down. We continue to see good performance in our nonwovens. EBIT for the quarter was $46 million, down $3 million from the prior year.

Todd W. Fister: General corporate expenses are expected to range between 240 and $250 million ish.

Todd W. Fister: Interest expense is estimated to range between 70 and $80 million.

Todd W. Fister: Our 2024 effective tax rate is expected to be 24% to 26% of adjusted pretax earnings.

Todd W. Fister: Finally capital additions are expected to be approximately $550 million, which is anticipated to be in line with depreciation and amortization.

Now please turn to slide 12, and I'll turn the call back to Brian to further discuss our outlook Brian.

Todd W. Fister: Lower selling prices and higher production downtime from lower demand, as well as higher startup costs, impacted EBIT in the quarter. However, deflation for both delivery and input costs, primarily related to energy, and favorable manufacturing costs nearly offset EBIT headwinds in the quarter. Overall, composites delivered 9% EBIT margins and 17% EBITDA margins for the quarter.

Brian D. Chambers: Thank you Todd.

Our first quarter results continue to highlight our strong and consistent enterprise performance driven by the capability of our team and the actions we've taken over the last several years to generate higher more resilient earnings.

Brian D. Chambers: As we move through Q2, we expect North American building and construction markets to remain favorable with good demand for our products in the near term.

Brian D. Chambers: We continue to expect repair and remodeling activity, along with storm carryover to drive demand for our roofing products.

Brian D. Chambers: In the U S ongoing demand for housing and low existing home inventory are creating a positive sentiment for single family new construction.

Todd W. Fister: Moving on to slide 11, I will discuss our full year 2024 outlook for key financial items, all of which remain unchanged from our guidance provided in February and which exclude the impacts of acquisitions and divestitures which have not yet been completed. General corporate expenses are expected to range between $240 and $250 million. Interest expense is estimated to range between $70 and $80 million. Our 2024 effective tax rate is expected to be 24 to 26% of adjusted pre-tax earnings. Finally, capital additions are expected to be approximately $550 million, which is anticipated to be in line with depreciation and amortization.

Brian D. Chambers: Outside North America, we anticipate macroeconomic trends and geopolitical tensions will continue to result in slow global economic growth.

Brian D. Chambers: Overall for the company, we expect second quarter results to be similar to prior year with relatively flat sales and EBIT margins of approximately 20%.

Speaker Change: Now consistent with prior calls I'll provide a more detailed business specific outlook for the second quarter.

Starting with our roofing business, we anticipate our revenue to be up low to mid single digits.

Speaker Change: While we continue to see good demand across several regions of the country as we enter into peak roofing season, we expect armor market shipments to be down this quarter given the historical high volume shipped in Q2 of last year.

Speaker Change: As you May recall high storm activity in the first half of 2023 resulted in record manufacturing shipments in Q2 of last year.

Brian D. Chambers: Now, please turn to slide 12, and I'll return the call to Brian to further discuss our outlook. Brian? Thank you, Todd.

Speaker Change: Due to the tough comp, we anticipate arm of market shipments to be down low double digits for the second quarter in 2024 with demand for our shingles relatively flat.

Brian D. Chambers: Our first quarter results continue to highlight our strong and consistent enterprise performance, driven by the capability of our team and the actions we have taken over the last several years to generate higher, more resilient earnings. As we move through Q2, we expect North American building and construction markets to remain favorable, with good demand for our products in the near term. We continue to expect repair and remodeling activity, along with storm carryover, to drive demand for our roofing products.

Speaker Change: For the business overall, we anticipate volume to be negative primarily due to the exit of our protective packaging business. As a reminder, this business had approximately $100 million in revenue annually.

Speaker Change: We expect realization of the April price increase and favorable mix to more than offset the impact of lower volumes from the exit of protective packaging.

Speaker Change: Compared to Q2 of last year, we anticipate cost to be slightly inflationary.

Speaker Change: Overall for roofing, we anticipate EBIT margins in the low 30% range.

Speaker Change: Moving on to our installation business, we expect revenues to be up low to mid single digits with higher volumes and price that is slightly positive.

Speaker Change: And technical and global we expect revenue to be up modestly versus prior year, driven primarily by higher volumes across most of our business in North America, while Europe continues to be challenged by the overall market environment.

Brian D. Chambers: In the U.S., ongoing demand for housing and low existing home inventory are creating a positive sentiment for single-family new construction. Outside North America, we anticipate macroeconomic trends and geopolitical tensions will continue to result in slow global economic growth.

Speaker Change: In our North American residential insulation business, we anticipate volumes to be up versus prior year with additional realization on the price increase that was implemented during the first quarter.

Brian D. Chambers: Overall, for the company, we expect second quarter results to be similar to the prior year with relatively flat sales and EBIT margins of approximately 20%. Now, consistent with prior calls, I'll provide a more detailed business-specific outlook for the second quarter. Starting with our roofing business, we anticipate our revenue to be up low to mid-single-digit. While we continue to see good demand across several regions of the country, as we enter into peak roofing season, we expect ARMA market shipments to be down this quarter given the historical high volume shipped in Q2 of last year. As you may recall, high storm activity in the first half of 2023 resulted in record manufacturing shipments in Q2 of last year.

Speaker Change: For the overall inflation business, we anticipate input materials to be inflationary for the second quarter, but expect to maintain a positive but narrowing price cost.

Speaker Change: Also in the quarter, we expect to incur some incremental costs as we evaluate potential manufacturing investments to upgrade and modernize our U S fiberglass plants.

Speaker Change: Given all this we expect to generate EBIT margins for installations similar to Q2 last year.

Speaker Change: And in composites for the second quarter, we anticipate overall revenues to be down low double digits as we continue to see pressure in the glass reinforcements market versus prior year.

Speaker Change: While we expect volumes and spot price to continue to stabilize sequentially within our glass reinforcements business, we expect overall pricing to step down year over year similar to what we saw in the first quarter with both contract pricing and spot prices lower than last year.

Speaker Change: In addition, we will continue to be proactive in adjusting our production to demand.

Brian D. Chambers: Due to the tough comp, we anticipate ARMA market shipments to be down low double digits for the second quarter of 2024, with demand for our shingles relatively flat. For the business overall, we anticipate volume to be negative, primarily due to the exit of our protective packaging business. As a reminder, this business had approximately $100 million in revenue annually. We expect the realization of the April price increase and favorable mix to more than offset the impact of lower volumes from the exit of protected packages. Compared to Q2 of last year, we anticipate costs to be slightly inflationary. Overall, for roofing, we anticipate EBIT margins in the low 30% range.

Speaker Change: During the quarter, we expect the nonwovens business to continue to perform well with solid demand.

Speaker Change: For the second quarter, we expect EBIT margins in composites to be high single digits similar to Q1.

Speaker Change: With that view of our businesses I'll turn to a few enterprise items.

Speaker Change: Over the past few years, we've made several strategic choices and operational investments to sharpen our focus and increase our capabilities and consistently deliver higher more resilient earnings.

Speaker Change: As we look at additional opportunities, we will continue to be disciplined operators focusing on markets and product lines, where we can build leading positions through our customer and channel knowledge materials science, and innovation capabilities and manufacturing and process expertise.

Speaker Change: We believe our acquisition of Masonite, a leading provider of interior and exterior doors and door systems and the review of strategic alternatives for our classroom portions of business are the latest examples of how we are using this disciplined approach to reshape and grow the company.

Brian D. Chambers: Moving on to our installation business, we expect revenues to be up low to mid-single digits, with higher volumes and price that is slightly positive. In technical and global, we expect revenue to be up modestly versus the prior year, driven primarily by higher volumes across most of our business in North America, while Europe continues to be challenged by the overall market environment. In our North American residential inflation business, we anticipate volumes to be up versus the prior year, with additional realization on the price increase that was implemented during the first quarter.

Speaker Change: Moving forward, we remain committed to a balanced capital allocation strategy focused on organic growth and acquisitions that support our strategic priorities and leverage our unique operating capabilities.

While returning approximately 50% of free cash flow to shareholders over time through our consistent increasing dividend and ongoing share repurchases.

Speaker Change: Our team delivered another outstanding quarter to start 2024 as.

Speaker Change: As we move through the year, we will continue to stay focused on delivering value for our customers and shareholders, while making significant strides to further strengthen the Owens corning's position as a market leader in residential and commercial building materials.

Brian D. Chambers: For the overall inflation business, we anticipate input materials to be inflationary for the second quarter but expect to maintain a positive but narrowing price cost. Also, in the quarter, we expect to incur some incremental costs as we evaluate potential manufacturing investments to upgrade and modernize our U.S. fiberglass facilities. Given all this, we expect to generate EBIT margins for installations similar to Q2 last year. And in composites, for the second quarter, we anticipate overall revenues to be down low double digits as we continue to see pressure in the glass reinforcements market versus the prior year.

Speaker Change: With that we would like to open the call up for questions.

Speaker Change: Thank you.

Press Star followed by the number one if you'd like to ask a question and answer any devices that make it likely when you sort of anticipate.

Speaker Change: A reminder to please limit yourself to asking one question only.

Speaker Change: Our first question today comes from Matthew Bouley Barclays. Your line is open. Please go ahead.

Speaker Change: Good morning, everyone. Thank you for taking the question.

Speaker Change: Yes, my question on the insulation business and pricing.

Speaker Change: You guided two additional price realization here in the in the second quarter.

Speaker Change: Is that I guess, a reflection of sort of the prior price increases building and if so kind of where are around the business.

Brian D. Chambers: Well, we expect volumes and spot prices to continue to stabilize sequentially within our glassroom portions business. We expect overall pricing to step down year over year, similar to what we saw in the first quarter, with both contract pricing and spot prices lower than last year.

Speaker Change: And maybe if you can comment on some of the additional price increase announcements you've made for later in Q2 in that segment. Thanks, everyone and good luck.

Speaker Change: Thanks, Matt I appreciate the question Yeah, let me give a little bit of color on what we're seeing in Q1 Q2, and then a bit on what we expect here in the back half.

Brian D. Chambers: In addition, we will continue to be proactive in adjusting our production to demand. During the quarter, we expect the nonwovens business to continue to perform well with solid demand. For the second quarter, we expect EBIT margins and composites to be high single digits, similar to Q1.

So youre exactly right the impact that we're seeing in Q2 is still largely the increase that we announced late in 2023 that got pushed a bit in the market and we started to see it.

Brian D. Chambers: With that view of our businesses, I'll turn to a few enterprise items. Over the past few years, we have made several strategic choices and operational investments to sharpen our focus, increase our capabilities, and consistently deliver higher, more resilient earnings. As we look at additional opportunities, we will continue to be disciplined operators, focusing on markets and product lines where we can build leading positions through our customer and channel knowledge, material science and innovation capabilities, and manufacturing and process expertise.

Speaker Change: Really take effect in the first quarter and we expect that to continue to build as we get into the second quarter of the year, we just announced in market.

Speaker Change: It increase to take effect in June of 2024, there's really not a whole lot of that in the second quarter results, but we certainly could see some momentum in Q3 and Q4 off of that increase assuming we see the market continue to be continue to be tight and really good good.

Brian D. Chambers: We believe our acquisition of Masonite, a leading provider of interior and exterior doors and door systems... and the review of strategic alternatives for our glass reinforcement business, are the latest examples of how we are using this disciplined approach to reshape and grow the company. Moving forward, we remain committed to a balanced capital allocation strategy focused on organic growth and acquisitions that support our strategic priorities and leverage our unique operating capabilities while returning approximately 50% of free cash flow to shareholders over time through our consistently increasing dividend and ongoing share repurchase.

Speaker Change: <unk> condition so.

That's what we were expecting in Q2 and beyond appreciate the question.

Speaker Change: Our next question comes from Stephen Kim of Evercore ISI. Your line is open.

Stephen Kim: Yes, thanks, very much guys I appreciate the the.

All the information thus far I wanted to ask about the roofing business, obviously the packaging exit.

Stephen Kim: With an offset to the one I'm just trying to get a sense for how much that was.

Stephen Kim: In the quarter was at about $25 million as you thought.

Stephen Kim: Or as we thought and then secondly, with respect to the roofing.

Brian D. Chambers: Our team delivered another outstanding quarter to start 2024. As we move through the year, we will continue to stay focused on delivering value for our customers and shareholders while making significant strides to further strengthen Owens Corning's position as a market leader in residential and commercial building materials.

Stephen Kim: Performance relative to Armah, you warned us that youre going to underperform the industry in that you would likely do better than the industry in the second quarter and that sounds like it's still your plan. My question relates to the geographic mix there.

Stephen Kim: <unk>.

Stephen Kim: My recollection is that you guys have a pretty strong share in the mountain states and more to the western kind of weaker.

Stephen Kim: In the northeast to Florida kind of East Coast I wanted to make sure that that's still true and if theres been any sort of changes to your geographic market shares that's worth calling out relative to that general understanding that in the past your mountain and west were stronger than your east was weaker.

Operator: With that, we would like to open the call up for questions. Thank you. Please press star followed by the number 1 if you'd like to ask a question and ensure your device is unmuted locally when it's your turn to speak. And a kind reminder to please limit yourself to asking one question only. Our first question today comes from...

Operator: Please press star followed by the number one if you'd like to ask a question and ensure your device is unmuted locally when it's your turn to speak. A kind reminder to please limit yourself to asking one question only. Our first question today comes from Matthew Bouley of Barclays. Your line is open, please go ahead.

Speaker Change: Thanks, Steve and good morning.

Speaker Change: On the packaging piece, yes, youre right the $100 million.

<unk> kind of is about $25 million a quarter that was a pretty steady business and thats. What we saw in Q1, roughly that amount and would expect that over the next couple of quarters, we announced that in the third quarter of last year. So we're going to kind of see that that kind of a headwind here over the next few quarters going forward.

Brian D. Chambers: Thanks, Matt. Appreciate the question. Yeah, let me give you a little bit of color on what we're seeing in Q1, Q2, and then a bit on what we expect here in the back half. So, you're exactly right.

Speaker Change: And then on the armor piece, Yeah, I'd say overall.

Speaker Change: The year has started very consistent with what we thought so.

Brian D. Chambers: The impact that we're seeing in Q2 is still largely the increase that we announced late in 2023 that got pushed a bit in the market, and we started to see it really take effect in the first quarter. And we expect that to continue to build as we get into the second quarter of the year. We just announced in the market an increase to take effect in June of 2024. There's really not a whole lot of that in the second quarter results, but we certainly could see some momentum in Q3 and Q4 off of that increase, assuming we see the market continue to be tight and really good demand conditions. So, that's what we're expecting in Q2 and beyond. I appreciate the question.

Speaker Change: Bigger shipments in Q1 relative to fairly weak manufacturing shipments in Q1 of last year, where theres, a little more conservative posture.

Speaker Change: That stepped up quite a bit.

Speaker Change: And then as we move into Q2 as a reminder, Q2 of last year was a historic high for arm of manufacturing shipments. So we did expect that that was going to step back because a lot of that was serviced through inventory that was being carried that we don't think for piece because of the strength of the market over the last few quarters. So we expected this kind of a step down.

Speaker Change: And I would say just kind of.

Speaker Change: Cutting through a lot of the volatility may be just two big takeaways overall for the roofing business because we have seen the last couple of quarters, some volatility lately year on year.

Brian D. Chambers: Our next question comes from Stephen Kim of Evercore ISI. Your line is open.

Speaker Change: Pretty unusual in terms of the magnitude of that but through all of that volatility. We finished up 2023 with a really good roofing market. The first quarter started strong in roofing. Our first half guide is a strong market. So I think cutting through kind of a quarter to quarter volatility the underlying demand trends for R&R work for storm repair work.

Brian D. Chambers: Thanks very much, guys. I appreciate all the information thus far. I wanted to ask about the roofing business. Obviously, the packaging exit was an offset to the volume. Just trying to get a sense for how much that was in the quarter. Was it about $25 million as you thought or as we thought? And then secondly, with respect to the roofing performance relative to ARMA, you warned us that you were going to underperform the industry and that you would likely do better than the industry in the second quarter. And that sounds like it's still your plan.

Speaker Change: For new construction growth, we expect to maintain into the second quarter into the back half.

Speaker Change: We think we're going to have a good good roofing market again this year.

Speaker Change: The other big takeaway from that is that our performance quarter to quarter in terms of what we're producing and what we're shipping you're just seeing a continued steady increase in the amount of land capacity that we can service the market so relative to the market. That's why we've seen some volatility because our performance has stayed pretty steady and demand for our product remains very strong.

Brian D. Chambers: My question relates to the geographic mix there. My recollection is that you guys have a pretty strong share in the mountain states and more to the west and kind of weaker in the northeast, in Florida, kind of on the east coast. I want to make sure that that's still true, and if there's been any sort of changes to your geographic market shares, that's worth calling out relative to that general understanding that in the past, your mountain and west were stronger, and your east was weaker.

Speaker Change: I think Thats why you saw some.

Speaker Change: Performance in a couple of quarters when the armor shipments slowed down we were still shipping to service contractor demand and distributor demand.

Speaker Change: We're expecting that in Q2, even though armor shipments are stepping back we expect good performance and we would expect to outperform this quarter and I think that's the other familiar theme as we see going forward in terms of the demand for our products in terms of the geographic mix I mean, youre roughly right I'd say, we have we have.

Brian D. Chambers: Thanks, Stephen. Yeah, good morning.

Brian D. Chambers: On the packaging piece, yeah, you're right. The $100 million, relatively, is about $25 million a quarter. That was a pretty steady business. And that's what we saw in Q1, roughly that amount, and would expect that over the next couple of quarters. We announced that in the third quarter of last year.

Speaker Change: Good share positions West Coast Rocky Mountains Midwest.

Speaker Change: We've seen improving.

Speaker Change: And conditions for our products and in the southwest southeast quite a bit and along the east coast. So I think we've we've been able to continue to grow our contractor base, we've been able to grow our business in those other markets.

Brian D. Chambers: So we're going to kind of see that kind of a headwind here over the next few quarters going forward. And then on the armor piece, yeah, I'd say overall, the year has started very consistent with what we thought. So, you know, bigger shipments in Q1 relative to fairly weak manufacturing shipments in Q1 of last year, where there was a little more conservative posture. So that stepped up quite a bit.

Speaker Change: But nothing that I'd call out to your question is a significant share shift region to region, but I'd say a good improvement in some growth across all of those other regions, but the strength for us sits in Midwest Rocky mountains into that West coast.

Brian D. Chambers: And then as we move into Q2, a reminder, Q2 of last year was a historic high for armor manufacturing shipments. So we did expect that that was going to step back because a lot of that was serviced through inventory that was being carried that we don't think repeats because of the strength of the market over the last few quarters. So we expected this kind of a step down.

Speaker Change: Where we see good demand today, we're going to see a good share performance in those regions.

Speaker Change: The next question comes from Kathryn Thompson of Thompson Research Group. Please go ahead.

Kathryn Ingram Thompson: Hi, Thanks for taking my question today.

Kathryn Ingram Thompson: As part of your released today Nathan I also came out with selling there.

Kathryn Ingram Thompson: Architectural business segment.

Kathryn Ingram Thompson: Could you comment just on kind of.

Kathryn Ingram Thompson: How we should think about the divestiture of that business.

Kathryn Ingram Thompson: In relation to the upcoming sale and then in the <unk>.

Brian D. Chambers: And I would say just kind of cutting through a lot of the volatility, maybe just two big takeaways overall for the roofing business. Because we have seen the last couple of quarters, some volatility year on year, pretty unusual in terms of the magnitude of that. But through all of that volatility, we finished up 2023 with a really good roofing market. The first quarter started strong in roofing.

Kathryn Ingram Thompson: Prepared commentary you had talked about capitalizing on some key secular trends.

Kathryn Ingram Thompson: They're driving credits in the U S broadly could you talk.

Kathryn Ingram Thompson: Three of your segments just to highlight.

Kathryn Ingram Thompson: A few products that are capitalizing on the secular trends. Thank you.

Yeah, Thanks, Catherine and yes, we did see the release for masonite on on the announcement for the architectural sale. So.

Brian D. Chambers: Our first half guide is a strong market, so I think, cutting through kind of the quarter-to-quarter volatility, the underlying demand trends for R&R work, for storm repair work, for new construction growth, we expect to maintain into the second quarter and into the back half. And we think we're going to have a good roofing market again this year.

Speaker Change: This is something that they have been working on and talking about for the last several quarters in terms of looking for alternatives for their architectural business. When we looked at the business and we're in discussions with them. We knew that this was something that they were looking at hard at.

Speaker Change: Our view is that the value of the business is primarily in that residential space. That's how we place the value that's where we see the opportunity for us to continue to grow inside the interior and exterior space around residential and that part of the business is going to be a great fit as we go forward so strategically the architectural.

Brian D. Chambers: I think the other big takeaway from that is that our performance quarter-to-quarter in terms of what we're producing, what we're shipping, we've just seen a continued steady increase in the amount of land capacity that we can service the market. So relative to the market, that's why we've seen some volatility because our performance has stayed pretty steady. And demand for our product remains very strong. I think that's why you saw some outperformance in a couple of quarters when the armor shipments slowed down. We were still shipping to service contractor demand and distributor demand. We're expecting that to happen in Q2.

Speaker Change: <unk> was not something that was key for us.

Speaker Change: And then from a financial standpoint valuation standpoint, it's a business that hasnt generated a lot of earnings I think that's why they were looking for alternatives and that's face to maybe get that to a home that would be a better fit.

Speaker Change: From a valuation standpoint, we didn't see that as a big impact.

Brian D. Chambers: Even though armor shipments are stepping back, we expect good performance, and we would expect to outperform this quarter. And I think that's the other familiar theme we will see going forward in terms of the demand for our products. In terms of the geographic mix, I mean, you're roughly right.

Speaker Change: Supported this move in this continued decisions to look at alternative so.

Speaker Change: As we did the close date on that Theyre trying to get done here sometime in Q2.

Speaker Change: And then we'll pick up the business when we're through our closing process, but very consistent with what we expected and we're very supportive of that decision in terms of the key secular trends I'd say broadly we continue to look at a few key areas. One theres. This continual investment in housing and living spaces, particularly in North America.

Brian D. Chambers: I'd say we have good share positions on the West Coast, the Rocky Mountains, and the Midwest. I think we've seen improving demand conditions for our products in the Southwest, the Southeast quite a bit, and along the East Coast. So I think we've been able to continue to grow our contractor base, and we've been able to grow our business in those other markets. But nothing that I'd call out to your question is a significant share shift from region to region, but I'd say a good improvement and some growth across all those other regions. But the strength for us sits in the kind of Midwest, the Rocky Mountains, and the West Coast, where we see good demand today. We're going to see good share performance in those regions.

Speaker Change: We see that housing in the U S market has been under Bill for many years, we think that's going to be a continued trend. We think home renovation repair and remodeling is going to be a big trend as millennials now coming to the agent buying homes. So this fundamental need for additional living units living spaces, and upgrading those living spaces, particularly in north.

Brian D. Chambers: The next question comes from Kathryn Thompson of Thompson Research Group. Please go ahead.

Speaker Change: Erika, but we're also seeing that in Europe, we think that's a big secular trend for many years to come that feeds into our product offering our roofing business installation.

Brian D. Chambers: Hi. Thanks for taking my question today. As part of your release today, Mason and I also came out with selling their architectural business segment. Could you comment just on kind of how we should think about the divestiture of that business in relation to the upcoming sale? And then, in your prepared commentary, you had talked about capitalizing on some key secular trends that are driving growth in the U.S. broadly? Could you touch on three of your segments just to highlight a few products that are capitalizing on these secular trends? Thank you.

Speaker Change: Future doors business that we havent coming in so I think we're really set up well as people continue to invest in either new housing or remodeling renovation, our product offering fits inside of them. The other big trend I'd say is around sustainable building materials in terms of recycling content as part of building materials in terms of lower greenhouse gas emissions.

Speaker Change: And clearly in my prepared comments, we talked about as part of our sustainability report about 60% of the revenues of our company and our generated from products that either reduce energy are of lower carbon emissions and that's something that we think from a consumer trend aspect is going to be really really important as consumers make buying decisions on building material products theyre going to look for a sustainable footprint.

Brian D. Chambers: Yeah, thanks, Kathryn. And yeah, we did see the release from Mace Knight on the announcement for the architectural sales. So this is something that they have been working on and talking about for the last several quarters in terms of looking for alternatives for their architectural business. When we looked at the business and were in discussions with them, we knew that this was something that they were looking hard at. Our view is that the value of the business is primarily in that residential space. That's how we value it.

Speaker Change: A circular footprint, they're going to look for lower emissions and we think our overall product offering fits into that very very well. So those are two big themes that we think play forward for us and really all the product categories. We have for the next several years.

Brian D. Chambers: That's where we see the opportunity for us to continue to grow inside the interior and exterior space around residential. And that part of the business is going to be a great fit as we go forward. So, strategically, the architectural business was not something that was key for us.

Speaker Change: The next question comes from John Lovallo of UBS.

John Lovallo: Your line is open.

John Lovallo: So it looks like you repurchased about $130 million of shares in the first quarter. The communication had been though I think the <unk>.

Brian D. Chambers: And then from a financial standpoint, a valuation standpoint, it's a business that hasn't generated a lot of earnings. I think that's why they were looking for alternatives in that space to maybe get that to a home that would be a better fit. So from a valuation standpoint, we didn't see that as a big impact and supported this move and this continued decision to look at alternatives. So the close date on that, they're trying to get done here sometime in Q2, and then we'll pick up the business when we're through our closing process. But very consistent with what we expected, and we're very supportive of that decision.

John Lovallo: Capital allocation will be focused on sort of reducing debt to EBITDA to that low 2% to 3% target range.

John Lovallo: I guess the question is as we move forward here into the second quarter into the back half I mean should we expect you to kind of back off on the repurchases or should we still think that we can continue as.

John Lovallo: <unk> been doing.

Sure. Thanks, John I appreciate the question.

Speaker Change: I'd say overall, we remain committed to the capital allocation framework that we've talked about for a number of years here.

Brian D. Chambers: In terms of the key secular trends, I'd say that broadly, we continue to look at a few key areas. One is the continual investment in housing and living spaces, particularly in North America. We see that housing in the U.S. market has been underbuilt for many years.

Speaker Change: I ran a really.

Speaker Change: Balanced agenda of maintaining an investment grade rating maintaining that in this two to three times leverage area as well as returning approximately 50% of cash to shareholders over time, while we invest in the business and that remains our focus we have an ongoing.

Brian D. Chambers: We think that's going to be a continued trend. We think home renovation, repair, and remodeling is going to be a big trend as millennials now come to the age of buying homes. So this fundamental need for additional living units, living spaces, and upgrading those living spaces, particularly in North America, but we're also seeing that in Europe. We think that's a big secular trend for many years to come that feeds into our product offering, our roofing business, insulation, and our future doors business that we have coming in.

Speaker Change: Share repurchase program, we've got authorization for a little over 8 million shares remaining from our board on that program in your point, We did act on that program at the start of this year we.

Speaker Change: We have shared once we close the transaction that we are going to be focused on repaying. The short term bank debt that we take on as a part of the transaction.

Brian D. Chambers: So I think we're really set up well as people continue to invest in either new housing or remodeling and renovation; our product offering fits inside of that. The other big trend I'd say is around sustainable building materials, in terms of recycling content as part of building materials, in terms of lower greenhouse gas emissions, and clearly, my prepared comments we talked about as part of our sustainability report. About 60% of the revenues of our company now are generated from products that either reduce energy or have lower carbon emissions.

Nothing really has changed around our thinking on financing for their masonite transaction in terms of financing approximately half of the original purchase price with permanent debt. After after we close but.

Speaker Change: But we would focus on getting to the low end of that two to three times leverage.

Speaker Change: As we think about our capital allocation priorities in the short run but in the medium to long run nothing at all has changed in our posture around our framework of our strategy and in fact, we.

Speaker Change: You both at Masonite acquisition, and the divestiture potential divestiture of our glass reinforcements business.

Brian D. Chambers: And that's something that we think from a consumer trend perspective is gonna be really, really important. As consumers make buying decisions on building material products, they're going to look for a sustainable footprint, a circular footprint, they're going to look for lower emissions, and we think our overall product offering fits into that very, very well. So those are two big themes that we think will play forward for us in really all the product categories we have for the next several years. The next question comes from John Lovallo of UBS. The line is open.

Speaker Change: As being positives in terms of our ability to return cash to shareholders.

Speaker Change: Our next question comes from Susan Mcclary of Goldman Sachs.

Susan Maklari: Please go ahead.

Susan Maklari: Thank you good morning, everyone.

Susan Maklari: My question is on the more discretionary elements within roofing demand have you seen any changes there as rates have moved higher or any expectations of implications on that and you're also seeing anything in terms of the pricing the price elasticity in that category and any plans for future price increases.

Brian D. Chambers: So it looks like you repurchased about 130 million shares in the first quarter.

Brian D. Chambers: The next question comes from John Lovallo of UBS. Your line is open.

Susan Maklari: Or how we should be thinking about that going forward.

Brian D. Chambers: Sure. Thanks, John.

Susan Maklari: Sorry.

Brian D. Chambers: I appreciate the question. So, you know, I'd say overall that we remain committed to the capital allocation framework that we've talked about for a number of years here around a really balanced agenda of maintaining an investment grade rating, maintaining debt in this two to three times leverage area, as well as returning, you know, approximately 50% of cash to shareholders over time while we invest in the business. And that remains our focus. We have an ongoing share repurchase program.

Speaker Change: Mike I apologize on the roofing demand side, yes.

Speaker Change: Yep Yep, I guess that was on my end not yours [laughter].

Speaker Change: In fact on the roof.

Sure.

Speaker Change: Yep.

Speaker Change: On the elasticity on on any kind of interest rates or anything like that primarily our roofing business is more an R&R business. So the elasticity around interest rates, we really have not seen that play in our roofing business because it's a needs based purchase.

Brian D. Chambers: We've got authorization for, you know, a little over 8 million shares remaining from our board on that program. And to your point, we did act on that program at the start of this year. We have shared that once we close the transaction, we are going to be focused on repaying the short-term bank debt that we take on as a part of the transaction. But we would focus on getting to the low end of that two to three times leverage as we think about our capital allocation priorities in the short run.

Speaker Change: If the roof is damaged or needs repair.

Speaker Change: Replaced is generally done kind of and we haven't seen that kind of volatility through different economic cycles. Now some people may choose to prepare parts of the roof not replace all of it.

Speaker Change: But it's tough to put off that replacement because it's protecting the value of most peoples largest investment around their homes. So we don't see a lot of interest rate movement variations that drive to demand and then a small part of our business less than 20% is tied to new construction, which generally has been a little bit more interest rate sensitive, but it doesn't have a big.

Brian D. Chambers: But in the medium to long run, you know, nothing at all has changed in our posture around our framework or our strategy. And, in fact, we view both the Masonite acquisition and the potential divestiture of our glass reinforcements business as being positive in terms of our ability to return cash to shareholders. Our next question comes from Susan Maklari of Goldman Sachs. Please go ahead. Thank you. Good morning, everyone. My question is on the more discretionary elements within roofing.

Speaker Change: Play in there so in terms of overall pricing as we go forward, we announced the April increase that's in market. We're seeing good realization there in terms of future price increases when we look at pricing through the frame.

Speaker Change: Inflationary trends demand trends and we make decisions on those two factors as we go forward and we will look at that through.

Brian D. Chambers: Our next question comes from Susan Maklari of Goldman Sachs. Please go ahead.

Brian D. Chambers: I'm sorry, I didn't have my mic on. I apologize. Yeah, on the roofing demand side. Can you hear me? Yes, I did. Can you hear me?

Speaker Change: In the roofing business and across our company as we as we make any future pricing moves.

Speaker Change: Our next question today comes from Mike Dahl of RBC capital markets. Please go ahead. Your line is open.

Brian D. Chambers: Yep, yep, I guess. That was on my end, not yours. Okay. So on the roofing demand side, I never, you never hear me.

Michael Glaser Dahl: Hi, Thanks for taking my question I'm going to stick with roofing, obviously very strong performance from profitability standpoint in <unk> and then even <unk>.

Brian D. Chambers: Yeah, on the elasticity of any kind of interest rates or anything like that, primarily, our roofing business is more of an R&R business. So the elasticity around interest rates, we really have not seen that play out in our roofing business because it's a needs-based purchase. If the roof is damaged or needs repair or replaced, it is generally done, and we haven't seen that kind of volatility through different economic cycles. Now, some people may choose to repair parts of the roof, not replace all of it, but it's tough to put off that replacement because it's protecting the value of most people's largest investment around their homes.

Stronger in terms of the guide for the low Thirty's and EBIT margins for <unk>.

Michael Glaser Dahl: You recently increased your long term thoughts around where you can take that business, but I think this year is still thought that maybe you'd be kind of a high 20 is obviously the first half starting out 30, it seems like prices going.

Michael Glaser Dahl: Through in the market that volumes have been.

Michael Glaser Dahl: Remarkably resilient.

Michael Glaser Dahl: So how is what youre seeing changing at least in kind of two.

Brian D. Chambers: So we don't see a lot of interest rate movement variations that drive demand. And then a small part of our business, less than 20%, is tied to new construction, which generally has been a little bit more interest rate sensitive, but it doesn't have a big play in there. So in terms of overall pricing, as we go forward, we announced the April increase that's in the market. We're seeing good realization there. In terms of future price increases, we look at pricing through the lens of inflationary trends and demand trends, and we make decisions on those two factors as we go forward. And we'll look at it through that lens in the roofing business and across our company as we make any future pricing moves.

Michael Glaser Dahl: 2024 framework.

Michael Glaser Dahl: How you see that potential margin profile as you as you kind of work through the year.

Speaker Change: Yeah. Thanks, Mike I mean, you've outlined all of the things that we're seeing that has really been driving the roofing performance and the team just continues to do a great job in execution in terms of our contractor.

Speaker Change: Expansion in focus there to drive demand in terms of our components growth and expansion.

Speaker Change: In terms of our manufacturing performance, our Lamb additions in land mix moving up so all of these things I think are contributing to a margin step up in the business a big part of that we talked about in moving the long term guide up approximately 500 basis points, because we thought all of those were incredibly durable in terms of.

Brian D. Chambers: Our next question today comes from Mike Dahl of RBC Capital Markets. Please go ahead; your line is open.

Brian D. Chambers: Hi, thanks for taking my question. I'm going to stick with roofing, obviously very strong performance from a profitability standpoint in one Q and then, you know, even stronger in terms of guidance for the low 30s and even margins for two Qs. You recently increased your long-term thoughts around where you could take that business. But I think this year, I still thought that maybe you'd be in kind of the high 20s. Obviously, the first half starting out 30, it seems like price is going through in the market, and volumes have been, you know, remarkably resilient. So how's what you're seeing changing, at least in kind of a 2024 framework, you know, how do you see that potential margin profile as you kind of work through the years?

Speaker Change: As we move the business forward I think on top of that what we've seen here in the last several quarters now. So yeah. This is the last four quarters the business running at 30% or better operating margins, we're guiding to that in Q2 and I think the step up from there has been strong volumes in the market. So I think that contributed to.

Speaker Change: And a couple of ways. One is it's given us the ability to significantly shift up our land mix and.

Speaker Change: And accelerate that which gives us a better margin profile, it's accelerated our roofing components business, because we get great attachment rates when we sell a square of shingles, we sell the accommodating starter and hidden ridge in underlayment and all of that is high margin business. So that volume growth that we're seeing inside of strong market also contributes to margin.

Brian D. Chambers: Yeah, thanks, Mike. I mean, you've outlined all the things that we're seeing that have really been driving the roofing performance, and the team just continues to do a great job in execution, in terms of our contractor expansion and focus there to drive demand, in terms of our component growth and expansion, in terms of our manufacturing performance, our LAM additions, and LAM mix moving up. So all of these things, I think, are contributing to a margin step-up in the business.

Speaker Change: Expansion for us with our components and we're getting great operating leverage.

Speaker Change: The network and that's contributing I think the other thing Thats contributed as a very positive price cost. So we've been able to manage price to your point relative to any inflationary trend. So in the near term I would say that we see these trends continuing forward into Q2, and I think continuing into the back half of the year.

Brian D. Chambers: A big part of that, we talked about in moving the long-term guide up approximately 500 basis points because we thought all of those were incredibly durable as we move the business forward. I think on top of that, what we've seen here for the last several quarters now, so yeah, this is the last four quarters, the business running at 30% or better operating margins, and we're guiding to that in Q2. And I think the step up from there has been strong volumes in the market. So I think that contributes in a couple of ways. One on the network, and that's contributing.

Speaker Change: Back to see strong markets continuing we've got the price increase in place we are starting to see some asphalt inflation come through so I think we are going to see a little more inflationary trends as we move through Q2 and into the back half of the year, but we still feel good about our.

Speaker Change: Price cost mix there.

Speaker Change: And then we expect to continue to produce more laminates as we talked about over the last few quarters, we've invested in manufacturing capability to increase our laminate production.

Speaker Change: To service our customers Thats, an important part of.

Speaker Change: Our servicing our customers growing with our contractor base. It's also gives us a nice margin profile of that part of the business. So I think all of those are contributing to the strength of the margin performance over the last few quarters and I would see that continuing here in Q2 and into the back half in the near term.

Brian D. Chambers: I think the other thing that's contributed is a very positive price cost. So we've been able to manage prices to your point relative to any inflationary trend. So in the near term, I'd say that we see these trends continuing forward into Q2, and I think that into the back half of the year, we expect to see strong markets continuing. We've got the price increase in place. We are starting to see some asphalt inflation come through.

Speaker Change: Our next question comes from Keith Hughes of Keybanc your.

Keith Hughes: Your line is open.

Keith Hughes: Okay.

Keith Hughes: Thank you I just wanted to dig into your statement in the installation guidance about evaluating manufacturing investments are you talking about capacity adds.

Brian D. Chambers: So I think we are going to see some inflationary trends as we move through Q2 and into the back half of the year, but we still feel good about our price-cost mix there. And then we expect to continue to produce more laminates, as we have talked about over the last few quarters. We've invested in manufacturing capability to increase our laminate production to service our customers. That's an important part of us servicing our customers and growing with our contractor base.

Keith Hughes: More operational type.

Keith Hughes: Type of investments.

Speaker Change: Thanks Heath I'll take that one today.

Heath: So yes, I mean, if you look at what we've done over overtime in our installation business last few years, we've really been focused on how do we build the right network for that business. That's lean that's more flexible that's in the right locations.

Speaker Change: So really serve our customers effectively we've made a lot of investments to unlock as you indicated both productivity and throughput in those existing assets. So those are really cost and capital efficient projects.

Brian D. Chambers: It also gives us a nice margin profile of that part of the business. So I think all those are contributing to the strength of the margin performance over the last few quarters, and I'd see that continuing here in Q2 and into the back half of the near Your line is open.

Speaker Change: Projects that we've done to date.

Speaker Change: We're also always looking at the supply demand balance in the industry and evaluating opportunities to add capacity and drive productivity at the same time again to better serve our customers in the market.

Brian D. Chambers: Thanks, Keith. I'll take that one today.

Brian D. Chambers: So yeah, I mean, if you look at what we've done over time in our installation business, the last few years, we've really been focused on how do we build the right network for that business that's lean, that's more flexible, that's in the right locations to really serve our customers effectively. We've made a lot of investments to unlock, you know, as you indicated, both productivity and throughput and those existing assets. And those are really cost and capital efficient projects that we've done to date.

Speaker Change: So right now I mean, we are evaluating capital and cost efficient options that we've got to really support the market strength that we would expect to see in the coming years and in North America housing and so more to come here in coming quarters, as we finalize our thinking.

Speaker Change: The next question comes from Garik <unk> of loop capital.

Garik: Go ahead.

Garik: Oh, Hi, Thank you just wanted to ask about composites pricing and just get a little bit more clarity on how youre thinking about it in the second quarter. I think you mentioned overall pricing to be down, but similar to <unk> does that mean that that pricing is effectively flat sequentially or is it.

Brian D. Chambers: We're also always looking at the supply-demand balance in the industry and evaluating opportunities to add capacity and drive productivity at the same time, again, to better serve our customers in the market. So right now, we are evaluating capital and cost-efficient options that we've got to really support the market strength that we would expect to see in the coming years in North American housing. There's more to come here in the coming quarters as we finalize our thinking.

Garik: On a similar degree as what <unk> was and maybe if you could speak to what youre seeing on the spot market in particular.

Speaker Change: Sure. Thanks secured yes overall inter composites team did very well the business performed well in first quarter and some pretty tough economic conditions, but the positives in the bright spots I think we're starting to see is a couple of points. One is we are seeing some demand stabilization.

Brian D. Chambers: The next question comes from Garrick Schmoy of Loop Capital. Please go ahead.

Brian D. Chambers: Oh, hi. Thank you. I just wanted to ask about composites pricing and just get a little more clarity on how you're thinking about it in the second quarter. I think you mentioned overall pricing being down, but similar to 1Q, does that mean that pricing is effectively flat sequentially? Or is it down to a similar degree as 1Q was? And, you know, maybe you could speak to what you're seeing on the spot market, in particular.

Speaker Change: And thats really broadly across all the regions. We operate in so that's good that we have seen that kind of Q4 Q1.

Speaker Change: Utilization from a demand front and then Thats, we expect that to continue here into Q2. So I think that's now leading to some pricing stability to your question in the spot market that we've seen we started to see that firm up and again broadly speaking across all the regions. So that's helping to see kind of we might.

Brian D. Chambers: performed well in the first quarter in some pretty tough economic conditions. But the positives and the bright spots, I think we're starting to see, are a couple of points. One is that we are seeing some demand stabilization, and that's really broadly across all the regions we operate in. So it's good that we've seen that kind of Q4, Q1 stabilization from a demand front. And then we expect that to continue into Q2. So I think that's now leading to some pricing stability, to your question, in the spot market that we've seen. We started to see that firm up, and again, broadly speaking, across all the regions.

Speaker Change: B at a trough here, where we see the opportunity as demand conditions improve as we go through the back half of 'twenty four 'twenty five.

Speaker Change: Better volume growth, we can limit the amount of production curtailments. That's also impacting the profitability of the business. We can start to run more assets and produce more and then we see that as a positive on future pricing as we go forward on that piece. So to your question on kind of how the pricing is rolling through the P&L now Youre absolutely correct. So we're seeing pricing declines.

Brian D. Chambers: So that's helping to see kind of, we might be at a trough here where we see the opportunity as demand conditions improve. As we go through the back half of 24 into 25, we get better volume growth, we can limit the amount of production curtailments. That's also impacting the profitability of the business. We can start to run more assets and produce more.

Speaker Change: On a year over year basis, driven by both the contract work we've reset so again as a reminder, about two thirds of the business is contract about a third spot. So all the contracts that we've put in place now by the end of the year and in the first quarter those have reset and that was contributing to lower year on year and then we did just spot.

Brian D. Chambers: And then we see that as a positive for future pricing as we go forward on that piece. So to your question on kind of how the pricing is rolling through the P&L now, you're absolutely correct. So we're seeing pricing declines on a year over year basis, driven by both the contract work we've reset. So again, as a reminder, about two-thirds of the business is contract work, about a third of the time.

Speaker Change: Price step down as well on a year over year basis. So sequentially, we're seeing stability on a year over year year over year basis down and Youre right pricing was down Q1 overall about 4% and so we're expecting that that kind of trend continues year very similar in terms of Q2, so again spot price stability that's good.

Brian D. Chambers: So all the contracts that we've put in place now by the end of the year and in the first quarter, those have reset, and that was contributing to lower year-on-year. And then we did see a spot price step down as well on a year-over-year basis. So sequentially, we're seeing stability on a year-over-year basis down. And you're right, pricing was down in Q1 overall by about 4%. And so we're expecting that that kind of trend will continue here, very similar in terms of Q2.

Speaker Change: We're still going to see the year over year.

Speaker Change: But what gives us some green shoots of some potential opportunities as we move into the back half of the year and into $2004 two to see that that demand environment start to improve and potentially that spot pricing environment improved with better economic conditions.

Speaker Change: Okay.

Speaker Change: Our next question comes from <unk> Bank.

Speaker Change: Bank of America. Please go ahead.

Brian D. Chambers: So again, spot price stability, that's good. We're still gonna see year-over-year, but it gives us some green shoots of some potential opportunities as we move into the back half of the year and into 24 to see that demand environment start to improve and potentially that spot pricing environment improve with better economic conditions.

Speaker Change: Hi, good morning, Thanks for taking my question.

Speaker Change: So.

Speaker Change: Depot.

Speaker Change: Announced the potential acquisition of Srs, both are large customers for you I just wanted to ask how do you guys think about the potential consolidation of those two customers and then broadly longer term.

Speaker Change: Validation continues on distribution.

Brian D. Chambers: Our next question comes from Rafe Jadrosich of Bank of America. Please go ahead.

Speaker Change: <unk>, what does that mean for you how does it impact Owens Corning.

Brian D. Chambers: Hi, good morning. Thanks for taking my question. So Home Depot has announced the potential acquisition of SRS. Both are large customers for you. I just wanted to ask, how do you guys think about the potential consolidation of those two customers? And then, broadly, longer term, if consolidation continues on the distribution channel, what does that mean for you? How does that impact Owens Corning? How could that potentially impact Mason?

Speaker Change: How could that potentially impact masonite.

Speaker Change: Yeah. Thanks for the question there.

Speaker Change: Certainly a big move by home depot.

Speaker Change: Solidify their position in servicing the pro contractor.

Speaker Change: In terms of your question on consolidation within the building material distribution space consolidation is not a new theme. This is something we've seen for the past several years a lot of consolidation.

Brian D. Chambers: Yeah, thanks for the question there. Yeah, certainly a big move by Home Depot to solidify their position in servicing the pro-contractor. But in terms of your question on consolidation, within the building material distribution space, consolidation is not a new theme. This is something we've seen for the past several years, a lot of consolidation, big consolidation on the one-step side. If you look at the number of distributors on the one-step distribution side a decade ago and today, very consolidated, very concentrated. We've talked about that a lot.

Speaker Change: Big consolidation on the one step side, if you look at the number of distributors on the one step distribution side, a decade ago to today very consolidated very concentrated we've talked about that a lot. We've seen that in lumber dealers is approaching lumber dealers starting on the two step side. So the consolidation is not new in this space and so part of our.

Speaker Change: <unk> strategy has been that we're one of the few manufacturers that actually play in all four of the big channels of distribution. So as you said, both home depot and Srs are big customers and great customers. We've got a long history with both in a great partnership.

Brian D. Chambers: We've seen that in lumber dealers, the lumber dealers on the two-step side. So the consolidation is not new in the space. And so part of our distribution strategy has been that we're one of the few manufacturers that actually plays in all four of the big channels of distribution. So, as you said, both Home Depot and SRS are big customers and great customers. We've got a long history with both and a great partnership.

Speaker Change: So we don't see this this.

Speaker Change: Acquisition, where this consolidation impacting our strategy in the business, which is we're going to continue to keep a broad distribution strategy with servicing distributors.

Brian D. Chambers: So we don't see this acquisition or this consolidation impacting our strategy in the business, which is we're going to continue to keep a broad distribution strategy with servicing distributors across the channels. We think that gives our contractors the broadest opportunity to buy our products and get service through our products. And our focus and what's really been driving our roofing performance has been our contractor engagement model, where our commercial efforts are primarily focused on how we can help contractors win and grow in the market with our products, our brand, and our commercial resources.

Speaker Change: Primarily focused on how we can help contractors win and grow in the market with our products our brand our commercial resources. So that model has really been a key driver of our performance and so even with the ongoing consolidation that we've seen you've seen us be able to improve the margin performance of the business and so as consolidate.

Speaker Change: <unk> occurs we think that.

Speaker Change: Our model in terms of contractor focused and then being a great service partner to distributors on a broad base is.

Brian D. Chambers: So that model has really been a key driver of our performance. And so even with the ongoing consolidation that we've seen, you've seen us be able to improve the margin performance of the business. And so as consolidation occurs, we think that our model, in terms of contractor-focused and then being a great service partner to distributors on a broad base, is the right way to go. And we think that continues to drive our performance going forward. So we don't expect a big impact there.

Speaker Change: Is the right way to go and we think that continues to drive our performance going forward. So we don't expect a big impact there.

Speaker Change: In terms of the nation Ip's, Yes home depot, the home centers are a big part of their business.

Speaker Change: We've got a great core capability inside Owens Corning Masonite has a great core capability that they've created to service the home centers and so we think the combination of this is just going to be a great fit for our ability to merchandise bring new innovations in and to support the growth inside the home centers. So we think that the.

Brian D. Chambers: In terms of the Masonite piece, yeah, the Home Depot, and the Home Centers are a big part of their business. We've got a great core capability inside Owens Corning. Masonite has a great core capability that they've created to service the Home Centers, and so we think the combination of this is just going to be a great fit for our ability to merchandise, bring new innovations in, and support the growth inside the Home Centers.

That capability and track continues to give us opportunities inside the home Center channel.

Speaker Change: Okay.

Speaker Change: The next question comes from.

All of Jefferies. Please go ahead your line is open.

Jefferies: Hey, guys.

Good to see that inflection in sales in your North American installation business, but sales were a bit weaker in Europe in C&I, how do you see that business had those two business progressing this year and then separately you are calling for flattish margins in insulation, TQ and price cost Terry does that widened out a bit in <unk> and perhaps even the back half.

Brian D. Chambers: So we think that capability and track record continues to give us opportunities inside the Home Center channel. The next question comes from Philip Ng of Jeffreys. Please go ahead, your line is open. Hey guys, good to see the inflection in sales in your North American installation business.

Brian D. Chambers: The next question comes from Philip Ng of Jeffreys. Please go ahead; your line is open.

Jefferies: As announced.

Jefferies: <unk> announced some of the price increases out there for whether its fiberglass our mineral wool. Thank you.

Brian D. Chambers: I appreciate the questions. Yeah, so let me start with a little bit of the Europe versus North America context within technical and global. So you'll recall technical and global is about two-thirds of our revenue within the installation segment, and there are really four georegions we sell into. There's North America and Europe are the two big ones, and then Latin America, primarily Mexico, and then Asia, primarily China, are two smaller ones.

Speaker Change: I appreciate the questions. Yeah. So let me start with a little bit of the Europe versus North America context within within technical and global So Youll recall at technical and global is about two thirds of our revenue within the insulation segment.

Speaker Change: And Theres really four geo regions, we sell into there is North America and Europe as the two big ones and then Latin America, primarily Mexico, and then Asia, primarily China as two smaller ones.

Brian D. Chambers: Right now, we're seeing fairly weak conditions, as we have for a while, in Europe and in Asia. And, in fact, we were down on revenue in both of those regions on a year-over-year basis. And it's really macro-driven.

Right now we're seeing it.

Speaker Change: Weak conditions as we have for a while in Europe and in Asia.

Speaker Change: And in fact, we were we were down in revenue in both of those regions on a year over year basis, and it's really macro driven I mean, it is driven by that interest rate environment that we're in it's driven buyback construction markets in those geographies.

Brian D. Chambers: I mean, it's driven by the interest rate environment that we're in, and it's driven by the construction markets in those geographies. And really, neither region has recovered quite the same way. We've seen the U.S. bounce back from the impacts of inflation and interest rates. I'd say, in contrast, we're seeing good market conditions in North America, inclusive of Mexico. And, you know, that's a strength that, you know, I think if you look at consensus estimates for the year, you'd say there's some optimism around the parts of technical and global that serve the residential business, as well as some of the construction and markets in North America.

Speaker Change: And really neither region has recovered quite the same way we've seen the U S bounce back from the impacts of inflation and interest rates I'd say in contrast, we're seeing we're seeing good market conditions in North America inclusive of Mexico and.

Speaker Change: That's a strength that I think if you look at consensus estimates for the year you would say there is some optimism around the parts of technical and global that serve the residential business as well as some of the construction end markets and in North America, I think that the rebound in Europe is a little more.

Brian D. Chambers: I think the rebound in Europe is a little more complicated in terms of when we would see that rebound occur. There isn't as much underlying economic momentum right now in Europe. We've done a great job of managing through this in a way that has delivered really stable margins and good pricing and mix, as well as productivity improvements in regions. I think we're navigating a challenging macro environment well in Europe, but we likely need to see some interest rate relief and stability in Europe to really see construction rebound in the back part of this year or into next year.

Speaker Change: In terms of when we would see that rebound occur there isn't as much underlying economic momentum right now in Europe.

Speaker Change: We've done a great job managing through this in a way that has delivered really stable margins and good pricing and mix.

Speaker Change: Well as productivity improvements in region. So I think we're navigating.

Speaker Change: A challenging macro environment, well in Europe, but we likely need to see some interest rate relief and stability in Europe.

Speaker Change: To really see construction rebound in the back part of this year or into next year.

Brian D. Chambers: Our next question comes from David McGregor of Longbow Research. Your line is open. Yes, good morning, everyone. And thanks for taking my questions. I wanted to ask about roofing and really maybe dig in.

Speaker Change: Our next question comes from David Macgregor of Longbow Research. Your line is open.

David Macgregor: Yes, good morning, everyone and thanks for taking my questions I wanted to ask about roofing and really maybe dig in a little on the mix and understand.

David Macgregor: I guess, you've talked a little bit about sort of the strength of the laminate shingles and components and can you talk about how much of this is growth in market demand versus maybe share gains from debottlenecking and freeing up stranded capacity I guess on the ladder how much further do you think that.

Brian D. Chambers: Our next question comes from David McGregor of Longbow Research. Your line is open.

Brian D. Chambers: Yeah, thanks. Let me try to hit both sides of that. So on the mix side, I'd say you're hitting it right in terms of when we talk about mix shifts, where we're producing more laminate shingles versus strip shingles. Our duration product, particularly as we can produce more of that and get that into the market, that carries a different margin profile, and that's helping. And then our components business overall, we continue to add products. I talked in my prepared comments around the house wrap product.

David Macgregor: Those incremental capacity additions could support growth.

Speaker Change: Yeah. Thanks, let me try to hit both sides of that so on the mix side, I'd say youre hitting it right in terms of when we talk about mix shifts.

Speaker Change: We're producing more laminate shingles versus strip shingles, our duration product, particularly as we can produce more of that and get that into the market that carries a different margin profile, that's helping and then our components business. Overall, we continue to add products I talked in my prepared comments around our house wrap product, we've got a full line of underlayment starter.

Brian D. Chambers: We've got a full line of underlayment starter, hip, and ridge products. All of those continue to be pulled through at a higher rate, frankly, as we see contractors selling more systems in the home. So they want to package our complete offering when they go into the home.

Speaker Change: Hip and rich products all of those continue to be pulled through at a higher rate frankly, as we see contractors selling more systems in the home so they want to package or our complete offering when they go into the home. So it's all in Owens Corning roof, but also we're seeing through our components.

Brian D. Chambers: So it's all in Owens Corning roof, but also we're seeing through our component strength the ability to sell products now under other kinds of roofing materials. So we've developed products that go under metals and tiles and other kinds of components. So those products generally carry very high margins as well. So as we're growing the components business and getting more of that product through, that's also improving our mix overall. So those are the two pieces that you're hitting on.

Speaker Change: <unk> the ability to sell products now under other kind of roofing materials. So we've developed products that go into metals and titles and other kind of components. So.

Speaker Change: Those products generally carry very high margins as well so as we're growing the components business and getting more of that product through that's also improving our mix. Overall. So those are the two pieces that you are hitting on on the Lam capacity piece. This is something that's been an ongoing effort of the team over the last couple of years to really debottleneck and improve the line.

Brian D. Chambers: On the LAM capacity piece, this is something that's been an ongoing effort of the team over the last couple of years to really de-bottleneck and improve the line speeds and efficiencies within our existing footprint. So we are unique in that we've got a great footprint, 13 manufacturing facilities across the U.S. So where we can go in, de-bottleneck, or add a new laminator, like we're doing at our Medina, Ohio facility, that increases capacity inside an existing infrastructure and existing workforce. And that means that when we turn these lines on, we get great productivity and great line speeds really quickly. And that's been very helpful.

Speaker Change: Speeds and efficiencies within our existing footprint. So we are unique in that we've got a great footprint 13 manufacturing facilities across the U S.

Speaker Change: So where we can go in and Debottleneck or add new laminate or like we're doing at our Medina, Ohio facility that increases capacity inside an existing infrastructure and existing workforce and that means that when we turn this these lines on we get great productivity and great line speeds.

Speaker Change: Really quickly and Thats been helpful. And then the steady cadence of the ability to produce that and ship more laminate products quarter over quarter and so part of this when we started was we had a target to increase lab capacity by about 6 million squares. That's the equivalent of a kind of a brand new four wide today across our.

Brian D. Chambers: And then the steady cadence of the ability to produce and ship more laminate products quarter over quarter. And so part of this, when we started, was we had a target to increase LAM capacity by about 6 million square feet. That's the equivalent of a kind of a brand new four-wide today across our network. So we put that volume closer to customers by spreading that out over our network. And we're on track to do that by the end of next year.

Speaker Change: Network, So we put that volume closer to customers by spreading it out over our network and we're on track to do that by the end of next year. So that's going to be a continued I think opportunity for us to improve our laminate mix improve our duration mix and provide our contractors and distributors with great product going forward and then from a financial standpoint. Thank you.

Brian D. Chambers: So that's going to be a continued opportunity for us to improve our laminate mix, improve our duration mix, and provide our contractors and distributors with great products going forward. And then from a financial standpoint, that gives us a better margin profile and will continue to be, I think, a tailwind in our mix story as we go forward. And our next question is from Reuben Garner of The Benchmark Company. Please go ahead. Good morning, everyone. Thanks for taking my question. I wanted to ask you something.

Speaker Change: Is this a better margin profile and we'll continue to be I think a tailwind in our mixed story as we go forward.

Speaker Change: And our next question is from Reuben Garner of the benchmark company. Please go ahead.

Reuben Garner: Good morning, everyone and thanks for taking my question.

Reuben Garner: I wanted to ask you referenced fiberglass and you're kind of.

Reuben Garner: Investments, we're looking at investments in upgrading and potentially adding.

Reuben Garner: Capacity, where does spray foam.

Brian D. Chambers: And our next question is from Reuben Garner of The Benchmark Company. Please go ahead.

Reuben Garner: In your longer term plans can you update us on your acquisition from a couple of years ago, how that's been performing and kind of what your thoughts are for spray foam versus fiberglass on a go forward basis. Thank you.

Brian D. Chambers: Sure, Ruben. I appreciate the question. Thank you.

Speaker Change: Sure I appreciate the question. Thank you and yes, I mean <unk>, we continue to grow the volume of our spray foam business that we acquired natural polymers.

Brian D. Chambers: Yes, I mean, spray foam. We continue to grow the volume of our spray foam business that we acquire natural polymers, which have some really nice differentiation in the market for spray foam around how they're positioned. Yeah, I'd say over a long period of time, we've seen spray foam grow for really specific building applications where it's a good product. And we see those building practices, you know, increasing over time, particularly the growth in the southeast with unvented attics where spray foam, you know, over a long period of time has taken a share from some other materials. So we're going to participate in that growth.

Speaker Change: Which had some really nice.

Speaker Change: <unk> in the market for spray foam around how they're positioned yes. Its over a long period of time, we've seen spray foam grow.

Speaker Change: For really specific building applications, where it's a good product and we see those building practices.

Speaker Change: Increasing over time, and particularly the growth in the southeast with invented at X, where we're spray foam.

Over a long period of time, it's taking share from some other other materials. So we're going to participate in that growth I mean, we're going to participate in the overall shifts that we see in some regions for some applications, where spray foam is a really good product.

Brian D. Chambers: I mean, we're going to participate in the overall shifts that we see in some regions for some applications where spray foam is a really good product, but we also remain really bullish on fiberglass and the value proposition we offer with our fiberglass materials, with our mineral wool materials, and our XPS foam materials. We're really uniquely positioned in the market as suppliers of multiple materials, and we're able to serve our customers with the best materials for the best building applications. And that really remains our focus, you know, with spray foam and all the other products that we've got in the portfolio.

Speaker Change: We also remain really bullish around fiberglass and the value proposition, we offer with our fiberglass materials with our mineral wool materials with our xps foam materials, we're really uniquely positioned in the market is participating in multiple materials and we're able to serve our customers with the best material.

Speaker Change: <unk> for the best building applications and that really remains our focus with spray foam and all the other products that we've got in the portfolio.

Brian D. Chambers: Thank you. We have no further questions, so I'll turn the call back over to Brian Chambers for any closing remarks.

Speaker Change: Yeah.

Speaker Change: Thank you we have no further questions. So I'll turn the call back ADT, Brian Chambers for any closing remarks.

Brian D. Chambers: Thanks, Lydia. I'd like to thank everyone for making time to join us on today's call and for your ongoing interest in Owens Corning. We look forward to speaking to you again on our second quarter call. Have a good rest of the day. Thanks. This concludes today's call. Thank you for joining us. You may now disconnect your line.

Brian D. Chambers: Thanks, Lydia I'd like to thank everyone for making time to join US on today's call and for your ongoing interest in Owens Corning, We look forward to speaking to you again on our second quarter call have a good rest of the day. Thanks.

Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your line.

Speaker Change: Okay.

Speaker Change:

Speaker Change: Okay.

Speaker Change: Okay.

Speaker Change: Okay.

Operator: ??

Speaker Change: Thanks.

Speaker Change: Okay.

Speaker Change: Okay.