Q2 2024 Owens Corning Earnings Call

Lydia: Hello all and welcome to Owens Corning's second quarter 2024 earnings call. My name is Lydia and I'll be your operator today.

Amber Wohlfarth: After the prepared remarks there will be an opportunity to ask questions. If you'd like to ask a question during the Q&A you can do so by pressing star followed by one on your telephone keypad. I'll now hand you over to Amber Wohlfarth, Vice President of Investor Relations Corporate Affairs to begin. Please go ahead.

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 second 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.

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 second quarter of 2024. Joining us today are Brian Chambers, Owens Corning's 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 yourself 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 second quarter of 2024. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results, and we'll refer to these slides during this call. You can access the earnings press release, Form 10-Q, 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 second 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.

Amber Wohlfarth: You can access the earnings press release, Form 10-Q , and the presentation slides at our website, owenscorning.com.

Amber Wohlfarth: The transcript and recording of this call and the supporting slides will be available on our website for future reference. Please refer to slide 2, 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. Second, the presentation slides and today's remarks contain non-GAAP financial measures.

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

Amber Wohlfarth: Please reference slide 2 where we offer a couple of reminders.

Amber Wohlfarth: 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.

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

Amber Wohlfarth: Second, the presentation slides and today's remarks contain non-GAAP financial measures.

Amber Wohlfarth: 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.

Amber Wohlfarth: Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation, available on the investor section of our website, owenscorning.com. For those of you following along with our slide presentation, we'll begin on slide four, and now we have opening remarks from our Chair and CEO, Brian Chambers.

Amber Wohlfarth: For those of you following along with our slide presentation, we'll begin on slide 4, and now opening remarks from our Chair and CEO , Brian Chambers. Brian ?

Brian Chambers: Thank you, Amber. Good morning, everyone, and thank you for joining us. During our call today, I'll begin with an overview of our second quarter performance and provide an update on our two big strategic moves to reshape Owens Corning into a more focused building products company. After that, Todd will go into more detail about our financial results for the second quarter, and then I'll come back to discuss the market environment and our outlook for the third quarter.

Brian Chambers: Thank you, Amber. Good morning, everyone, and thank you for joining us. During our call today, I'll begin with an overview of our second quarter performance and provide an update on our two big strategic moves to reshape Owens Corning into a more focused building products company.

Amber Wohlfarth: After that, Todd will go into more detail about our financial results for the second quarter, and then I'll come back to discuss the market environment and our outlook for the third quarter.

Brian Chambers: Turning to our overall performance in Q2, Owens Corning continued to deliver outstanding financial results within a very dynamic market, demonstrating the broad capability of our team, the value of our product offering, and the earnings power of our company. In addition to delivering another quarter of strong operating performance, we completed the acquisition of Macy's. Thank you all for joining us today.

Amber Wohlfarth: Turning to our overall performance in Q2, Owens Corning continued to deliver outstanding financial results within a very dynamic market, demonstrating the broad capability of our team, the value of our product offering, and the earnings power of our company.

Amber Wohlfarth: In addition to delivering another quarter of strong operating performance, we completed the acquisition of Masonite, expanding our portfolio of brand and residential building products, and continued the review of our glass reinforcements business.

Amber Wohlfarth: Both of these strategic moves are key parts of our ongoing transformation to a more focused residential and commercial building products company that leverages key ownership advantages to accelerate our growth and increase our earnings.

Brian Chambers: Both of these strategic moves are key parts of our ongoing transformation to a more focused residential and commercial building product that leverages key ownership advantages to accelerate our growth and increase our earnings. I'll share more about our transformational efforts in a few moments. First, I'll begin with a review of our safety performance. Our global team made additional progress in our safety performance with a recordable incident rate of 0.46 for our legacy Owens Corning business in the second quarter. Three-fourths of our facilities have operated injury-free in 2020, and more than half have done so for over a year.

Amber Wohlfarth: I'll share more about our transformational efforts in a few moments. First, I'll begin with a review of our safety performance.

Amber Wohlfarth: Our global team made additional progress in our safety performance with a recordable incident rate of .46 for our legacy Owens Corning business in the second quarter.

Amber Wohlfarth: Three-fourths of our facilities have operated injury-free in 2024. More than half have done so for over a year.

Brian Chambers: Combined with a positive first quarter, our number of recordable injuries year-to-date is 40% lower than the same time last year. As we add our new DOORS business to the company, which is not included in this data, consistent with Owens Corning's unconditional commitment to safety, a priority of our integration team is advancing safety processes, systems, and culture through our Safer Together operating framework. We look forward to carrying out this work through the remainder of the year and integrating DOORS safety data into our overall reporting in early 2025.

Amber Wohlfarth: Combined with a positive first quarter, our number of recordable injuries year-to-date is 40% lower than the same time last year.

Amber Wohlfarth: As we add our new DOORS business to the company, which is not included in this data, consistent with Owens Corning's unconditional commitment to safety, a priority of our integration team is advancing safety processes, systems, and culture through our Safer Together operating framework.

Amber Wohlfarth: We look forward to carrying out this work through the remainder of the year and integrating DOORS safety data into our overall reporting in early 2025.

Brian Chambers: Financially, in the quarter, we continued to achieve earnings that are structurally higher and more resilient. In Q2, the company delivered an adjusted EBIT margin of 21% and an adjusted EBITDA margin of 27%, with net sales that grew as a result of the acquisition of Masonite. With this performance, our team has achieved a significant milestone of delivering 16 consecutive quarters of mid-teams or better adjusted EBIT margins and 20% or better adjusted EBIT-DOM margins.

Amber Wohlfarth: Financially in the quarter, we continued to achieve earnings that are structurally higher and more resilient. In Q2, the company delivered an adjusted EBIT margin of 21% and an adjusted EBITDA margin of 27%, with net sales that grew as a result of the acquisition of Masonite.

Amber Wohlfarth: With this performance, our team has achieved a significant milestone of delivering 16 consecutive quarters of mid-teams or better adjusted EBIT margins and 20% or better adjusted EBITDA margins.

Amber Wohlfarth: Sales and margin growth generated adjusted diluted earnings per share of $4.64 in the second quarter, our strongest result to date.

Brian Chambers: Sales and margin growth generated adjusted diluted earnings per share of $4.64 in the second quarter, our strongest result to date. In addition, we generated $336 million of free cash flow, returning $52 million to shareholders through dividends in the quarter.

Amber Wohlfarth: In addition, we generated $336 million of free cash flow, returning $52 million to shareholders through dividends in the quarter.

Brian Chambers: Moving on to our businesses, each of our segments performed well in the quarter relative to market conditions. In roofing, our strong margin performance was driven by positive price realization and favorable mix as ARMA market shipments moved lower versus prior year as expected based on more normalized storm demand. Insulation revenues increased slightly over the prior year as the segment continued to perform well in North America, which partially offset a weaker macro environment in Europe.

Amber Wohlfarth: Moving on to our businesses, each of our segments performed well in the quarter relative to market conditions.

Amber Wohlfarth: In roofing, our strong margin performance was driven by positive price realization and favorable mix, as ARMA market shipments moved lower versus prior year as expected based on more normalized storm demand.

Amber Wohlfarth: Inflation revenues increased slightly over prior year as the segment continued to perform well in North America, which partially offset a weaker macro environment in Europe .

Brian Chambers: Positive price, favorable mix, and lower delivery costs were key drivers of the segment's performance in the quarter. Our recently added door segment contributed to our top and bottom line growth for the second half of the quarter as we began our integration process. And in composites, as expected, we saw lower but stabilizing demand and pricing in our glass reinforcements business, while demand and pricing in our non-weldings business remained solid.

Amber Wohlfarth: Positive price, favorable mix, and lower delivery costs were key drivers of the segment's performance in the quarter.

Amber Wohlfarth: Our recently added door segment contributed to our top and bottom line growth for the second half of the quarter as we began our integration process.

Amber Wohlfarth: And in composites, as expected, we saw lower but stabilizing demand and pricing in our glass reinforcements business, while demand and pricing in our non-weldings business remained solid.

Brian Chambers: These results highlight the value our team delivers to our customers and shareholders as we maximize operating performance within our business while continuing our strategic shift to be a more focused company. We are capturing opportunities in our core markets and investing in new capacity and product categories where we can leverage our durable ownership advantage. This drives value creation by strengthening our market-leading businesses to grow faster and achieve higher margins and stronger free cash flow.

Amber Wohlfarth: These results highlight the value our team delivers to our customers and shareholders as we maximize operating performance within our businesses while continuing our strategic shift to be a more focused company.

Amber Wohlfarth: We are capturing opportunities in our core markets and investing in new capacity and product categories where we can leverage our durable ownership advantages.

Amber Wohlfarth: This drives value creation by strengthening our market-leading businesses to grow faster and achieve higher margins and stronger free cash flow.

Brian Chambers: In addition, we continue to transform the company through significant initiatives and investments that position Owens Corning for future growth. Turning to slide 5, one of those initiatives, the acquisition of VaseKnight, is key to our long-term growth strategy.

Amber Wohlfarth: In addition, we continue to transform the company through significant initiatives and investments that position Owens Corning for future growth.

Amber Wohlfarth: Turning to slide five, one of those initiatives, the acquisition of VaseKnight, is key to our long-term growth strategy.

Brian Chambers: The addition of the DOORS product line expands our leadership position in residential building products through a complementary category that extends our offering of essential building materials and grows our revenue base from residential building construction to approximately 70% of the company's revenue. Through durable ownership advantages, including our brand leadership, commercial strength, product and process innovation, and operational expertise, we can drive improved financial results and strengthen this market-leading residential building products business. The doors and door systems category is a great fit for us given our customer and channel position, especially in wholesale distribution and home centers.

Amber Wohlfarth: The addition of the Doors product line expands our leadership position in residential building products through a complementary category that extends our offering of essential building materials and grows our revenue base from residential building construction to approximately 70% of the company.

Amber Wohlfarth: Through durable ownership advantages, including our brand leadership, commercial strength, product and process innovation, and operational expertise, we can drive improved financial results and strengthen this market-leading residential building products business.

Amber Wohlfarth: The doors and door systems category is a great fit for us given our customer and channel positions, especially in wholesale distribution and home centers.

Brian Chambers: Our track record in applying material science innovation to drive value and differentiation and our effective use of sourcing and manufacturing operating systems to optimize production networks, which improve service and quality while reducing cost. We continue to get positive customer feedback as we discuss the addition of DOORS to our product offerings.

Amber Wohlfarth: Our track record in applying material science innovation to drive value and differentiation. And our effective use of sourcing and manufacturing operating systems to optimize production networks, which improve service and quality while reducing costs.

Amber Wohlfarth: We continue to get positive customer feedback as we discuss the addition of DOORS to our product offering.

Brian Chambers: As we near 90 days post-closing, we see tremendous opportunities to leverage the capabilities of Masonite and Owens Corning to build a new company. As we work through the integration process, we remain focused on providing great products and service to our customers while combining our business. We have a strong team in place leading this work and are making considerable progress in achieving our plan of 125 million in enterprise cost centers while ensuring we maintain the competitive strengths that have allowed the DOORS business to be successful and support future growth.

Amber Wohlfarth: As we near 90 days post-closing, we see tremendous opportunities to leverage the capabilities of Masonite and Owens Corning to build a new OC.

Amber Wohlfarth: As we work through the integration process, we remain focused on providing great products and service to our customers while combining our businesses.

Amber Wohlfarth: We have a strong team in place leading this work and are making considerable progress in achieving our planned $125 million in enterprise cost synergies.

Amber Wohlfarth: While ensuring we maintain the competitive strengths that have allowed the DOORS business to be successful and support future growth.

Brian Chambers: We've captured early wins through sourcing synergies, including price harmonization for general equipment and maintenance parts, lateralizing volume discounts with shared suppliers, and leveraging the strength of our network to improve transportation costs. We look forward to opportunities ahead for Owens Corning through this new product platform as we benefit from our expanded portfolio of market-leading products to advance our enterprise strategy and deliver even greater value for our customers and shareholders. And now, I'll turn to the strategic review of our glass reinforcement business. As a reminder, our glass reinforcements business is part of our composite segment and manufactures, fabricates, and sells a wide variety of glass fibers.

Amber Wohlfarth: We have captured early wins through sourcing synergies, including price harmonization for general equipment and maintenance parts, lateralizing volume discounts with shared suppliers, and leveraging the strength of our network to improve transportation costs.

Amber Wohlfarth: We look forward to opportunities ahead for Owens Corning through this new product platform, as we benefit from our expanded portfolio of market-leading products to advance our enterprise strategy and deliver even greater value for our customers and shareholders.

Amber Wohlfarth: And now, I'll turn to the strategic review of our glass reinforcements business.

Amber Wohlfarth: As a reminder, our glass reinforcements business is part of our composite segment, and manufacturers fabricate and sell a wide variety of glass fibers.

Brian Chambers: While we hold a leading market position in several key regions and product applications, the business serves customers in industrial segments outside the residential and commercial building product space, where Owens Corning is focused today and into the future. Since the announcement, our team has made good progress in evaluating options to both maximize value to shareholders and determine the best growth path for the business. While we were not able to share more details today, we will provide additional updates throughout the second half of the year.

Amber Wohlfarth: While we hold a leading market position in several key regions and product applications, the business serves customers in industrial segments outside the residential and commercial building product space where Owens Corning is focused today and into the future.

Amber Wohlfarth: Since the announcement, our team has made good progress in evaluating options to both maximize value to shareholders and determine the best growth path for the business.

Amber Wohlfarth: While we are not able to share more details today, we will provide additional updates throughout the second half of the year.

Brian Chambers: As we sharpen our focus through these strategic moves, we also continue to make targeted investments in our existing businesses to increase capacity and meet the growing demand for our products. Most recently, this has included a glass nonwoven plant expansion, which we are beginning to bring online, a new coating facility, a new formula NGX insulation plant, and a new laminate shingle production capacity to complement the other lineup braids we have made throughout our roofing manufacturing network.

Amber Wohlfarth: As we sharpen our focus through these strategic moves, we also continue to make targeted investments in our existing businesses to increase capacity and meet the growing demand for our products.

Amber Wohlfarth: Most recently, this has included a glass nonwoven plant expansion, which we are beginning to bring online, and new coating facility.

Amber Wohlfarth: a new formula NGX insulation plant, and a new laminate shingle production capacity to complement the other lineup braids we have made throughout our roofing manufacturing network.

Brian Chambers: We've also been enhancing our U.S. fiberglass insulation network by making smart investments that improve productivity and flexibility in a cost-effective way. The market demand for our products is robust, and the ongoing secular trends in housing and energy efficiency indicate strong potential for growth. Given this long-term demand outlet for our insulation products, as we shared during our last call, we continue to evaluate options to expand capacity within our existing manufacturing network. This investment will further support a cost-effective and flexible network designed to meet future needs for our fiberglass installation in both residential and commercial applications. We expect to share more on this capacity expansion as we finalize the details over the next few months.

Amber Wohlfarth: We've also been enhancing our U.S. fiberglass insulation network by making smart investments that improve productivity and flexibility in a cost-effective way.

Amber Wohlfarth: The market demand for our products is robust, and the ongoing secular trends in housing and energy efficiency indicates strong potential for growth.

Amber Wohlfarth: Given this long-term demand outlet for our insulation products, as we shared during our last call, we continue to evaluate options to expand capacity within our existing manufacturing network.

Amber Wohlfarth: This investment will further support a cost-effective and flexible network designed to meet future needs for our fiberglass installation in both residential and commercial applications.

Amber Wohlfarth: We expect to share more in this capacity expansion as we finalize the details over the next few months.

Amber Wohlfarth: As we invest for growth, we will continue to be strategic in our choices, focusing on markets and product lines where we can lead and add unique value.

Amber Wohlfarth: Over the past several years, we have proven our ability to grow our business while consistently enhancing shareholder value through a disciplined capital allocation strategy of returning approximately 50% of free cash flow to investors over time through dividends and share repurchases.

Amber Wohlfarth: As a result, in the past three years, we've more than doubled our dividend payout. And since 2020, we have bought back more than 20% of our outstanding shares.

Amber Wohlfarth: This demonstrates both the cash-generating power of Owens Corning and our disciplined approach to growing the business.

Amber Wohlfarth: In closing, I want to thank our global teams for their consistent execution and drive to excel that has helped deliver another outstanding quarter and first half for our company.

Amber Wohlfarth: Through our talented people and highly valued customer partnerships, we continue to outperform the market as we transform and grow into an even stronger residential and commercial building products company for the future.

Amber Wohlfarth: Now, I will pass the call over to Todd for a detailed review of our second quarter results. Todd?

Todd Fister: Thank you, Brian , and good morning, everyone. As Brian mentioned, our outstanding results in the quarter and through the first half of the year demonstrate the value being created through our enterprise strategy and operating model.

Todd Fister: I'd now like to turn to slide six to discuss the quarter in more detail. As a reminder, our financial results include the impact of the Masonite acquisition, which closed on May 15th. We have established a new DOORS reporting segment where you can see the performance of the newly acquired business.

Brian Chambers: In the second quarter, we continued to build on the great results we delivered in the first quarter, growing enterprise earnings and expanding margin again in Q2.

Amber Wohlfarth: In the second quarter, we continued to build up the great results we delivered in the first quarter, growing enterprise earnings and expanding margin again in Q2.

Amber Wohlfarth: Adjusted EBIT of $588 million and Adjusted EBITDA of $742 million grew versus last year by 10% and 12%. Adjusted EBIT margin was 21% and Adjusted EBITDA margin was 27%.

Amber Wohlfarth: Part of the year-over-year growth can be attributed to the acquisition, with the remainder coming from both commercial execution and manufacturing performance.

Amber Wohlfarth: Organically, Adjusted EBIT and Adjusted EBITDA were up 4% and 3% respectively.

Amber Wohlfarth: Adjusted earnings for the second quarter were $408 million, or $4.64 per diluted share, compared with $388 million, or $4.25 per diluted share in the same quarter prior year.

Amber Wohlfarth: For the quarter, adjusting items totaled approximately $130 million and are excluded from our adjusted eBit.

Amber Wohlfarth: They primarily include $62 million in Masonite acquisition-related costs and $47 million of restructuring charges primarily related to actions taken in the door segment to begin to realize expected synergies.

Amber Wohlfarth: Turning to slide 7, 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.

Amber Wohlfarth: Looking at our cash generation and capital deployment during the second quarter, operating cash flow was relatively in line with prior year.

Amber Wohlfarth: Free cash flow for the quarter was $336 million compared to $372 million in the same quarter last year.

Amber Wohlfarth: The year-over-year decline was due to increased capital additions, which were $157 million in the quarter, up $35 million for prior year, as we make the targeted investments Brian mentioned.

Amber Wohlfarth: Our return on capital was 14% for the 12 months ending June 30, 2024, which includes the acquisition impact of the Doors segment assets and earnings for the second half of the quarter.

Amber Wohlfarth: At quarter end, the company had liquidity of approximately $1.4 billion, consisting of $254 million of cash and $1.1 billion of availability on our bank debt facilities.

Amber Wohlfarth: During the second quarter of 2024, we returned $52 million to shareholders through a cash dividend. Through the first half of the year, we have returned $234 million to shareholders through share repurchases and dividends. And as a reminder, we have 8.1 million shares available for repurchase under our current authorization.

Amber Wohlfarth: After closing on the acquisition, we prioritized paying down debt incurred to fund the transaction and ended the quarter with debt to EBITDA of 2.2 times, at the low end of our targeted range of 2 to 3 times.

Amber Wohlfarth: At this level of leverage, we remain committed to returning cash to investors.

Amber Wohlfarth: Now, turning to slide eight, I'll provide additional details in our segment results.

Amber Wohlfarth: The roofing business delivered another great quarter, demonstrating the strength of our contractor engagement model to drive demand for our products and help perform the market.

Amber Wohlfarth: Overall, revenue was $1.1 billion, down slightly from last year due to lower volumes which were largely offset by positive price and favorable mix.

Amber Wohlfarth: In the quarter, we saw good price realization on our April increase, and demand for our shingles remained strong.

Amber Wohlfarth: The ongoing shift of laminates and favorable mix and components continue to be a tailwind in the quarter.

Amber Wohlfarth: The U.S. asphalt shingle market on a volume basis was down 10% in the quarter compared to the prior year.

Amber Wohlfarth: The decline was primarily due to a tough comparison against the record level of manufactured shipments in Q2 last year.

Amber Wohlfarth: Our U.S. shingle volume is down modestly, outperforming the market, as demand for our shingles remains strong.

Amber Wohlfarth: As expected, overall segment volumes were also impacted by the strategic decision to exit our protective packaging business.

Amber Wohlfarth: Outside of packaging, our roofing components volume was down as distributors reset inventory for these products and the channel.

Amber Wohlfarth: EBIT was $373 million for the quarter, up $35 million versus last year. The increase was primarily due to positive price and favorable mix, offsetting the volume decline.

Amber Wohlfarth: All of this resulted in an EBIT margin of 34% and EBITDA margin of 35%.

Amber Wohlfarth: Now, please turn to slide nine for a summary of our installation business.

Amber Wohlfarth: In the second quarter, the installation business delivered its highest EBIT and EBITDA margin performance since 2006.

Amber Wohlfarth: The results reflect structural improvements in the business and the strength of demand we are seeing for our fiberglass insulation products in North America.

Amber Wohlfarth: Q2 revenues were $916 million, up slightly over prior year. Revenue for our North American residential installation also grew in the quarter.

Amber Wohlfarth: Volume was up as demand for single-family homes remained solid. We also saw positive price realization in North American Residential on previously announced pricing actions.

Amber Wohlfarth: In technical and global, revenue was similar to last year. While the ongoing demand in Europe remains challenged by the macro environment, revenue for our fiberglass technical insulation products in North America has continued to grow through strong in-market demand and commercial execution.

Amber Wohlfarth: Overall, for installation, even in the quarter, was $183 million, up $20 million compared to prior year.

Amber Wohlfarth: The EBIT growth was driven by positive price realization, lower delivery cost, and favorable product mix.

Amber Wohlfarth: Input costs were fairly neutral for the quarter. As we shared in our last call, we did incur incremental costs associated with evaluating manufacturing investments to upgrade and modernize our U.S. fiberglass plans.

Amber Wohlfarth: Insulation delivered an even margin of 20% and even down margin of 26% in the second quarter.

Amber Wohlfarth: Moving to slide 10, I will provide an overview of the DOORS business and results since completing the acquisition.

Amber Wohlfarth: Overall, the business performed as expected as we navigate through dynamic market conditions for doors in North America and Europe . As Brian shared, the integration is progressing well and we are on track with our synergies.

Amber Wohlfarth: From mid-May through the end of the second quarter, the business generated revenue of $311 million. Note that, prior to closing on the acquisition, Masonite completed the divestiture of its architectural segment. There is no revenue or earnings from architectural included in the results for the door segment.

Speaker Change: Even for the quarter, post-acquisition was $34 million, including $11 million of impact from purchase accounting. Some of that impact was offset by $6 million of one-time benefits.

Speaker Change: In order to share a clear view of Doors' performance in this quarter and to exclude the impact of the purchase price accounting, post-acquisition EBITDA for the quarter was $61 million. The acquisition and restructuring costs are not included in the segment results.

Speaker Change: Overall, DOORS generated an EBIT margin of 11% and EBITDA margin of 20% in the second quarter.

Speaker Change: Slide 11 provides an overview of our composites business.

Speaker Change: In the second quarter, the strategic review of our glass reinforcements business progressed, and the business continued to perform well relative to the challenging macro environment.

Speaker Change: Overall, end markets continued to be softer than prior year with signs of stabilization sequentially. Volume declines and lower glass reinforcement pricing were consistent with the impacts we saw in the first quarter.

Speaker Change: Revenue for the quarter was $546 million, down 12% compared to prior year.

Speaker Change: EBIT for the quarter was $61 million, down $26 million from prior year. While EBIT was impacted by lower glass reinforcement prices, delivery cost was favorable.

Speaker Change: We also remain proactive in adjusting production to match demand.

Speaker Change: Interest expense is now estimated to range between $210 and $220 million, including the impact of additional interest expense on the higher debt from the acquisition and less interest income on our lower cash balance.

Speaker Change: Now, please turn to Slide 13, and I'll turn the call back to Brian to further discuss our outlook. Brian ?

Operator: Outside North America, we anticipate macroeconomic trends and geopolitical tensions will continue to result in volume pressure.

Brian Chambers: Outside North America, we anticipate macroeconomic trends and geopolitical tensions will continue to result in volume pressure.

Brian Chambers: Now, consistent with prior calls, I'll provide a more detailed business-specific outlook for the third quarter.

Brian Chambers: For components, we anticipate additional volume headwind from what we saw in the second quarter due to the continued impact from more normalized purchases and inventory levels of these products at distribution.

Speaker Change: In technical and global, we expect revenue to be up modestly versus prior year, driven primarily by ongoing favorable mix, similar to what we saw in the second quarter.

Speaker Change: We expect volumes for technical and global to be relatively flat, with volume growth in North America offset by lower year-over-year volumes in Europe , where demand continues to be challenged by the market environment.

Speaker Change: For the overall installation business, we anticipate input materials and delivery to be relatively neutral in the third quarter, with price-cost remaining positive.

Speaker Change: Given all this, we expect to generate high T and even margins for insulation in the quarter.

Speaker Change: Before I get into the outlet for doors, I would like to share a little more detail about this segment. The business is North American focused, with nearly 90% of its revenues in the U.S. and Canada. In addition, the business is about equally split between new construction and repair and remodeling activity.

Speaker Change: While new construction demand trends are similar to our residential installation business, repair and remodeling demand tends to be more discretionary and is currently being impacted by the near-term pullback in spending being seen across the industry.

Speaker Change: With that additional background on DOORS, I'll turn to the third-quarter outlook. We expect top-line performance to be down high single digits from a run-rate-adjusted Q2, driven by continued market pressure.

Speaker Change: For EBIT, we would not expect the $6 million of one-time benefits we saw in the second quarter to repeat in the third quarter. And, we would also expect a full quarter of purchase accounting partially offset by early synergies we have started to realize, in line with the run rate we saw in Q2.

Speaker Change: Overall, for DOORS, we anticipate even margins of mid-single digits.

Speaker Change: To get a view of the business without the impact of purchase accounting, we would expect to have a dollar margin in the mid-teens.

Speaker Change: And in composites for the third quarter, we anticipate overall revenues to be down low to mid-single digits versus last year.

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

Speaker Change: Given demand conditions we have seen in the market, we expect the decline in pricing to be partially offset by higher volumes in both North American glass reinforcements and non-wovens.

Speaker Change: As I shared at the start of the call, over the past few years, we've been on a journey to accelerate our growth and strengthen the earnings power of Owens Corning by reshaping the company into a more focused residential and commercial building products leader.

Speaker Change: Through the first half of 2024, we've made meaningful progress to further our transformation through significant initiatives and investments that position Owens Corning for future growth in both new and existing product segments.

Speaker Change: We believe the addition of our DOORS business, and the review of strategic alternatives for glass reinforcement, are the latest examples of how we are using this disciplined approach to reposition and grow the company.

Speaker Change: We have an incredibly strong balance sheet, which we leverage to execute on the Masonite acquisition. Going forward, we remain committed to strong free cash flow generation and a balanced capital allocation strategy.

Speaker Change: In the first half, our team delivered outstanding results.

Speaker Change: As we move to the second half of the year, we will continue to stay focused on delivering value for our customers and shareholders through great execution and outperforming the market in our legacy businesses, while successfully integrating Mace Knight and continuing the strategic review of glass reinforcements.

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

Speaker Change: Our first question today comes from Michael Rehaut with J.P. Morgan. Please go ahead to your line of statement.

Operator: Thanks. Good morning, everyone, and thanks for taking my question.

Michael Rahau: You know, I'd love to get...

Michael Rahau: an update, maybe a little more detail on the DOORS synergies, you know, you said broadly that

Nate: You know, with Nate tonight, you said that, you know, the name's on track and he's, you highlighted some, you know, early areas of

Michael Rahau: progress that you've been able to achieve off the bat. I was wondering if you know perhaps you could give a

Michael Rahau: kind of where we are within that $125 million projected synergy target, you know, where we are today in terms of

Michael Rahau: Let's say percent that you've kind of gotten under the, that you've been able to start to achieve and how we should think about the progression of achieving those savings over the next several quarters.

Speaker Change: Good morning, Mike. Thanks for the question.

Speaker Change: Let me start by just saying how excited we are to add the DOORS business to the overall company. We closed this deal mid-May, and our teams did really great work from signing to closing in a little over 90 days.

Michael Rahau: And we finished that up mid-May. Since closing, we've been very busy welcoming our new colleagues to the company. We've been visiting sites. We've been meeting with customers.

Speaker Change: and beginning the integration process so I think we're very pleased with how things have come together in terms of the initial start.

Michael Rahau: To your question on the progress on the Enterprise 125 and Synergies.

Michael Rahau: I'd say we're making really good progress. We're not getting into specifics of how we're chunking that out. We had talked earlier on about getting most of these realized by the end of year two in terms of a timeline for completion. I'd say we're progressing very well on that timeline. The teams have come together. I talked about in my prepared comments some of the initial sourcing synergies where we've got some leverage around transportation costs. We've got common vendors where we're able to extend terms and programs. That's giving us some initial lift and some of the capture of synergies. I think that work around the sourcing front is progressing as planned. We continue to look at other opportunities. We feel like we're going to be on track for that one.

Speaker Change: 25 of Enterprise Synergies over that two-year time frame.

Speaker Change: I think one thing I would add as well that is not included in the express synergies, it's something we're also just getting started on, is really looking at the commercial and revenue growth opportunities. And we're early days into this, but we remain very excited when we look at the innovation agenda that we've got combining our material science capabilities, our technologies,

Michael Rahau: Our study capabilities, our sound and energy capabilities, we really feel like we've got a great innovation agenda that we've reset with business. And we're looking now, as we look across the customer base, all the customers I've met with and the team meets with, we continue to get great feedback on the opportunities in front of us to be a more impactful provider of roofing, insulation, doors now, to our builders, to our distributors, and work with them to help them grow their business. So we're excited about some of the opportunities on the revenue side and growth side. Those are going to be a little bit longer, as we've always talked about, but we continue to see more opportunity as we get further along in the integration process.

Michael Rahau: Our next question comes from John Lovallo with UBS. Please go ahead.

John Lovallo: Hey guys, thank you for taking my question as well. 311 million in...

Speaker Change: and Revenue from DOORS in the quarter.

John Lovallo: What was the actual full run rate for the quarter, and it would seem to imply maybe down, you know, kind of low to mid 20% range in the third quarter. So I'm curious, you know, what was the the impact from the architectural divestiture? And you know, how are you thinking about doors volume versus price in the third quarter?

Speaker Change: On the 311, I guess I'd ask you to go back to probably the Mason IQ-2 results of last year, and that's going to break out the architectural segment.

Speaker Change: You know, in more detail in terms of revenue and margins, and we closed mid-May, so a good assumption is going to be to take about half of that in terms of run rate revenues and margins and that would have been the impact of the architectural divestiture on R-311 in terms of the run rate that we picked up post-close.

Michael Rahau: of the business. So that's, I think, a pretty good way to frame the revenue side and the margin impact around the architectural divestiture. As we look going forward into the quarter, I think the Q2 performance in the business performed very well relative to the market, in line with our expectations.

Speaker Change: We saw volume trending down in the first half as we see some more challenging market conditions.

Speaker Change: This is a category that's got a little bit more discretionary aspects to particularly the repair and remodeling parts of the business. We saw those volume declines kind of coming through the first half of the year. And in our third quarter guide, we're expecting that that's the kind of market conditions we're going to face into here in the third quarter. So we're going to continue to see some volume pressures.

Speaker Change: As consumers are making some more discretionary choices around some of their investments in home repair and remodeling.

Speaker Change: We also see distributors buying cautiously in terms of managing inventories as we work through this high interest rate environment. But in the near term, we've guided through that in our third quarter call that we expect to hear and see some near-term volume pressures.

Speaker Change: But again, medium term, long term, we think this is a great category to complement our roofing and insulation products. We're bullish on new construction continuing to grow. We expect that interest rates are going to move down, and that's going to open up repair, remodeling, existing home sales, renovation projects, that doors are an essential part of those projects going forward. So in the near term, we're managing through some choppy market conditions, but in the medium term, long term, we feel very good about the product category and the position we'll have in it.

Stephen Kim: Our next question comes from Stephen Kim with Evercore ISI. Your line is open.

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

Stephen Kim: Thanks very much guys. Your question I guess it related to insulation, the insulation segment. I was curious if you could give us a sense for when you look at the European business

Stephen Kim: I know that Perak has had some issues and so forth. Was that a meaningful effect on the adjusted numbers that you report, either on the sales or on the margin? And if you could, maybe just looking at North America, you talked about, you alluded to the capacity expansion. I think you used the word flexible, looking for a solution that's kind of flexible across both commercial and residential. That sounded like it might be something other than fiberglass. So maybe, you know, we're talking more like spray foam or something like that. So I was curious if you could maybe give us a little more color on what you meant by the flexibility in your capacity expansion in North America.

Speaker Change: Thanks, Stephen. Good morning. I'm happy to take both of those. So let me start with the global and technical piece and the trends that we're seeing in Europe . You know, overwhelmingly, what we're seeing in Europe right now is the impact of weak macros in Europe , and in particular in the geographies where we have the strongest footprint in the Nordics and then in Central and Eastern Europe .

Speaker Change: You know, as we've talked about before, Europe really hasn't rebounded the same way we've seen North America rebound. Europe has not sorted through inflation and interest rates the same way we've seen North America rebound and be strong.

Speaker Change: So, you know, I think the good news in Europe is there are some green shoots in Europe overall. More in Southern Europe now where we are seeing a more positive outlook.

Speaker Change: It may take a couple quarters for that to make its way into Northern Europe and the Nordics where we really haven't seen those green shoots yet from a macro standpoint.

Speaker Change: I would say, though, our team is executing very well in this European environment. They've done a great job around cost control, around productivity, around really positioning our business to win going forward with the right products and the right customers and the right geographies and the right cost structure.

Speaker Change: So, you know, we continue to really like that business long-term as we see the macros strengthen.

Speaker Change: When we look at flexibility around what we're thinking with our project for North America, it's really around how do we flexibly leverage existing space that we have and existing facilities.

Brian Chambers: to really serve our big fiberglass markets in North America. A number of our products cross res and commercial. And we can sell products made on shared lines in both of those markets. So when we look at flexibility, there are a couple of elements. It's how do we make sure we leverage our existing cost structure in existing facilities as effectively as we can to make sure anything we add is both capital and cost-efficient in the long term? But then how do we make sure we're really well positioned to serve both the attractive commercial side of that business as well as the residential side of the business as we go forward?

Speaker Change: to really serve our big fiberglass markets in in North America. A number of our products cross res and commercial and you know we can sell products made on on shared lines into to both of those markets.

Speaker Change: So, when we look at flexibility, there's a couple elements. It's, you know, how do we make sure we leverage our existing cost structure and existing facilities as effectively as we can?

Speaker Change: to make sure anything we add is both capital and cost-efficient long-term. But then how do we make sure we're really well-positioned to serve both the attractive commercial side of that business as well as the residential side of the business as we go forward?

Speaker Change: Our next question comes from Katherine Thompson with Thompson Research Group. Please go ahead, your line is open.

Catherine Thompson: Hi, thank you for taking my question today. Lisa Knight was a leader in the pricing for the door industry overall, a very transformational

Catherine Thompson: And as you transition Masonite into Owens Corning, how are you balancing that price and volume?

Catherine Thompson: from a strategic focus going forward, and what steps are being made to retain market share and key channels for the Masonite product? And finally, just tying into that, are there any type of crossover synergies with your composite business?

Speaker Change: with Masonite. Thank you.

Speaker Change: It's a very complementary product line to how we approach our value and value pricing in our product categories as well. So I think it's a very similar approach.

Catherine Thompson: [inaudible]

Speaker Change: And that is done through that innovation, commercial strength, pull-through demand trends in ways that we're helping our customers win and grow in the market. And pricing is then part of that equation going forward. So I think we feel very well positioned to continue to do work across the DOORS category as well as across the company around bringing value to our customers through those kind of innovation and commercial tools. So I think we're in a good spot there. We always balance price-costs. We always balance competitive pricing in the markets relative to share, where we look to gain price premiums for the additional value we're bringing to a customer. We also always look against the competitive landscape and making sure we're maintaining a range of that price.

Catherine Thompson: In terms of the synergies around composites, we do see opportunities, as I said, one of the attractions to MaceNine2S was our longstanding partnership to supply fiberglass in the development and then production of fiberglass exterior doors. We continue to see opportunities around our material science capabilities when we look at particularly the fiberglass exterior door category to bring innovation and to look at production processes that are very efficient and cost effective. So that is something that we are leveraging as we go forward on the integration and we see that as opportunities as we grow more in the exterior fiberglass doors part of the business.

Elizabeth: Good morning. You have Elizabeth ringing on for Matt today. I just wanted to touch on insulation pricing. Are you seeing any traction with the insulation, the June insulation price increase so far?

Speaker Change: And could you speak to what degree there could be risks that this price increase doesn't flow through, you know, without a more favorable interest rate environment?

Speaker Change: Thanks Elizabeth. So let me give a little bit of context on what we're seeing with res this year.

Speaker Change: So our res pricing this year has had a bit of an unusual shape, where we had a Q4 increase from last year that got pushed into Q1.

Speaker Change: I would describe it as in line with historic realization we've seen on price increases. Maybe a bit higher than history, but generally in line.

Speaker Change: We continue to believe the industry, the fiberglass industry, has capacity to serve in that 1.4 to 1.5 million starts range.

Brian Chambers: Right now, you know, it might even be at the low end of that range because the strength of single-family homes has been so good, and single-family homes have more pounds of insulation per square foot than we would see for multifamily units.

Speaker Change: Our next question comes from Sam Reid with Wells Fargo. Please go ahead.

Sam Reid: Any sense as to where those distributor inventories sit now? And then it does sound like, based on your commentary, that that deep stock pressure might continue into the third quarter. I think that's contemplated in your guidance. I know you only guide one quarter out, but is there any risk we see a continuation of that dynamic into the fourth quarter? Thanks.

Speaker Change: Thanks, Sam. Our roofing business just delivered another outstanding quarter as you saw in the results, and our team continues to execute well. There still continues to be really strong demand for our products overall, which is where our shingles outperformed the quarter in terms of relative to armor shipments, and we've guided to that to continue here into Q3. So I think that's a phenomenon we expect to continue as we go into the back half of the year around our shingles.

Speaker Change: And I think what we've seen now in Q2 and we expect to see in Q3 is, as we're now, we're starting to see some regional variations in market demand as some of the storm demand is being worked through, and we're tracking to more normalized storm year, we're still seeing good fundamental repair, remodeling outside of storm demand. We're still seeing some good demand around new construction.

Speaker Change: I think what we saw on the component side especially is...

Speaker Change: distributors now starting to look at at products and locations and starting to reset inventories for the expected third quarter fourth quarter volumes so on an absolute basis

Speaker Change: I'd say that the volumes for components are still very strong, but when you compare them to last year's Q2, Q3, which were very high, and if you recall last year, we were seeing strong storm demand, inventory levels being increased by distribution in Q2, the service storms, we saw that continue in Q3.

Speaker Change: Part of the step-down we saw in Q2 and Q3 in components.

Speaker Change: is relative to very strong demand last year.

Speaker Change: But on an absolute basis, even though we're seeing them step down on a year-over-year basis, they're still performing and we're still shipping at a very strong level relative to our strong shingle shipment. So I think we expect that to continue. But overall, the shingle market is still very healthy. We're starting to see some pockets and regions that are slowing down, parts of the southeast, parts of Florida, as some of that storm demand winds down. But overall, we expect Q3 and Q4 back after the year to be another good roofing year. For more information, visit www.fema.gov

Speaker Change: The next question comes from Mike Dahl with RBC. Please go ahead.

Speaker Change: Hi, this is Kristoffer Mike. Thanks for taking my question.

Kristoffer Mike: Just following up on roofing, can you help size what your 3Q guide is assuming in terms of net price cost in relation to what you saw in 2Q?

Speaker Change: And then, given the expectations of continued inflation and successive pricing to date, is there opportunity for additional pricing actions in the segment this year?

Speaker Change: Yeah, I think through our guide on Q3, I talked about in Q2, we started to see some inflation in the business around asphalt, around minerals, around labor. The asphalt inflation is very typical to seasonality, generally in the summer months with higher paving demand, we see asphalt costs move up.

Speaker Change: We talked about that in terms of a Q3 guide then, we thought those inflationary trends were going to continue into Q3, but overall, we still expect with the April increase in price realization to maintain a positive price-cost mix in Q3, relative to your question. So, we have the August increase that is in market, that's something that's just being implemented as we speak.

Speaker Change: So, you know, relative to history, I would say, you know, when we've got good demand for our products, we continue to see good demand or good price realization. And given the demand environment we see in Q3, we'd expect to see some good realization from that. But that's early days in terms of just being out and into the market.

Operator: Our next question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Speaker Change: Our next question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Susan Mcclary: Thank you. Good morning, everyone.

Speaker Change: Some benefits here in the back half of the year, and we continue to expect the components to continue, maybe at a more moderate rate, but continue as we go forward, again, against the comp on the packaging fees.

Speaker Change: So I'd say that's been a key part of the step up in margins overall now in terms of our overall margin performance.

Kristoffer Mike: So that generally comes with some higher margins, and we expect that's going to continue. The component side of the business, we continue to see contractors selling in the home more complete systems.

Kristoffer Mike: to get, you know, towards the mid-20% long-term view versus holding at this, you know, high-20s to low-30s percent level that you've demonstrated in the last several quarters.

Speaker Change: Relative to destocking and shingles, let's say the destocking comment was more specific to our components, not our shingles. I would say broadly, we continue to see pretty light inventory levels of our products and our brands in distribution. So we think that's going to continue to drive good sales here in the quarter. I would say, though,

Kristoffer Mike: But I do think that distributors are going to be probably more cautious of managing inventories overall as we move into the third quarter and complete the year in roofing.

Kristoffer Mike: In terms of a margin outlook, yeah, we've delivered another quarter above 30%. We've got it to a third quarter to run at these similar margins.

Kristoffer Mike: As I've talked about in the past, I think there'd have to be a couple of factors that would start to walk down those margins over time. One is I think we'd have to see a step down in volumes.

Kristoffer Mike: and that would result in some volume deleverage in terms of both shingles and components.

Kristoffer Mike: That could impact margin rates as we go forward. And then I think we'd have to see a negative price-cost mix start to evolve.

Kristoffer Mike: Relative either higher inflation or pricing moves that would that would change that overall price cost mix.

Kristoffer Mike: to a more negative stance over time. So I think that would be the combination, Garik, that would kind of lead to margins stepping down over time. I will remind everybody, though, that there is a normal seasonality to the roofing business.

Kristoffer Mike: And I do expect that we're going to start coming into a more normal seasonality where we see some lower margins in Q4 and Q1 as we take maintenance and downtimes, stronger margins in Q2, Q3. The market overall has been very strong in the last couple of years, so we haven't seen that typical seasonality. But I would say when we talk about our longer-term guide, we're talking over kind of a four-quarter average over a full-year average. But quarter to quarter, we may see some quarters that step down below that just with normal seasonality.

Kristoffer Mike: Our next question comes from Phil. I'm with Jeffrey. Please go ahead.

Susan Maklari: Hey guys, can you provide a little more color on the strategic review of your composite glass reinforcements?

Jeffrey: Hey guys, can you provide a little more color on the strategic review on your composite glass reinforcement business? Any color on level of interest in the multiples you're discussing? And then from a demand standpoint, certainly looks a little stronger, particularly North American glass reinforcements.

Speaker Change: Any color in which end markets are standing out, any restocking, and does that set you up for potentially some pricing momentum next year? Thank you.

Speaker Change: Thanks Phil, I'll take that one. You know in terms of the review, I'll say first I mean we're really happy with how the the entire composites business is executing right now and especially the glass reinforcements piece.

Speaker Change: As you said, we're continuing our review of alternatives for the business. We're pleased with the progress we've made to date in that.

Todd Fister: And we'll provide further updates as appropriate as we get further into the review. You know, in terms of the outlook for the business, you heard Brian's comments around what we expect to see in the quarter. Certainly, North America is a good market for us, and we've seen good demand there relative to some of the regions where we are seeing weakness in Asia and Europe in both our insulation and composites business. We would expect North America to continue to be a source of strength in the business as we go forward. And again, we'll update everyone as we make further progress on the review.

Speaker Change: And we'll provide further updates as appropriate as we get further into the review.

Speaker Change: Good morning.

Speaker Change: During the prepared remarks you spoke about this strength in non-discretionary repair and roofing kind of offsetting more discretionary demand in the doors business.

Speaker Change: So, I'm wondering if you could kind of zoom into DOORS, how do you think about the exposure of the Masonite portfolio to discretionary versus non-discretionary projects?

Speaker Change: And are there any kind of mixed shifts underway that would suggest, you know, a shift towards the higher end or lower end of the mix, you know, so, you know, entry-level doors versus premium doors? And thank you for taking the question.

Todd Fister: Yeah, I think overall, in terms of the discretionary and non-discretionary pieces on doors, I think we see that more on that side of the portfolio, in terms of, particularly, the R&R side of the business, where people are looking to choose or upgrade or replace an exterior door if they're making repairs on the inside. So we're seeing those trends kind of flow through in the order book. And we think those will recover, but in the near term, given where consumer spending is trending and some of the cautiousness on investment, we see that impacting that R&R part of the business.

Speaker Change: Yeah, I think overall, in terms of the discretionary, non-discretionary pieces on doors, I think we see that as more on that side of the portfolio, in terms of particularly the R&R side of the business, where people are looking to choose or upgrade or replace an exterior door, if they're making repairs on the inside, so we're seeing those trends kind of throw.

Speaker Change: flow through and the order book.

Speaker Change: And we think those recover, but in the near term, given where consumer spending is trending and some of the cautiousness on investment, we see that impacting that on our part of the business. I think we've, you know, crossed the price lines of product categories. I think we've not seen major trends in that space coming through. I think price consciousness in terms of the material choice and door choice is always going to be a factor in it. I couldn't call out any specific trends we're seeing today in terms of any trade downs across the product line. I think we're just seeing general themes of a cautiousness in terms of

Todd Fister: I think we've, you know, crossed the price lines of product categories. I think we've not seen major trends in that space yet. I think price consciousness, in terms of material choice and door choice, is always going to be a factor in it. But I couldn't call out any specific trends we're seeing today in terms of any trade-downs across the product line. I think we're just seeing general themes of caution in terms of delaying purchases and pushing out projects. And we think that that's going to come back, but certainly that's creating some near-term headwinds.

Speaker Change: Deferring Purchases, Pushing Off Projects, and we think that that's going to come back, but certainly that's creating some near-term headwinds.

Speaker Change: Thank you. We have no further questions in the queue, so I'd like to turn the call back over to Brian Chambers for any closing remarks.

Brian Chambers: Thanks, Lydia. I'd like to close by thanking everyone for making time to join us on today's call and for your ongoing interest in Owens Corning. We certainly look forward to speaking with you again on our third quarter call, and I hope you have a great rest of the day.

Brian Chambers: Well, thanks, Lydia. I'd like to close by thanking everyone for making time to join us on today's call and for your ongoing interest in Owens Corning. We certainly look forward to speaking with you again on our third quarter call, and I hope you have a great rest of the day. Thanks.

Operator: This concludes today's call. Thank you for joining us. You may now disconnect your line.

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