Q4 2024 Owens Corning Earnings Call
Lydia: Good morning everyone and welcome to Owens Corning's fourth quarter and full year 2024 earnings call. My name is Lydia and I'll be your operator today. After the prepared remarks there'll be an opportunity to ask questions. If you'd like to participate in our Q&A you can do so by pressing star followed by one on your telephone keypad. We kindly ask that you limit yourself to one question. I'll now hand you over to Amber Wolfer, Vice President of Corporate Affairs and Investor Relations. Please go ahead.
Lydia: For those of you following along with our slide presentation. We will begin on slide four and now opening remarks from our chairman and CEO, Brian Chambers, Brian.
Thanks Amber.
Brian Chambers: Everyone and thank you for joining us today.
Brian Chambers: During the call. This morning, I will begin with a brief overview of our fourth quarter and full year 2024 results before providing an update on our key strategic choices, we've made over the past year as well as future investments, we're making to position Owens Corning for long term growth.
Brian Chambers: Todd will then discuss our fourth quarter and full year financial results in greater detail and I will come back to share expectations for our end markets and outlook for the first quarter.
Brian Chambers: 2024 was a transformative year for Owens Corning as we successfully executed three major strategic moves to reshape and focused the company on building products in North America, and Europe, while consistently delivering higher and more resilient earnings and cash flow.
Brian Chambers: In addition to the acquisition of Masonite, the sale of our building materials business in Asia, and most recently the sale of our glass reinforcements business.
Brian Chambers: We also announced several capital investments to expand our capacity and highly profitable product lines that will further strengthen our market position and drive organic growth.
Brian Chambers: While market conditions were mixed across our business segments during the year.
Brian Chambers: Buying power of our enterprise resulted in revenue earnings and cash flow growth.
Brian Chambers: Through outstanding execution, we have demonstrated that Owens Corning has a best in class building products leader that consistently deliver strong financial performance is positioned for future growth.
Speaker Change: Let me start our review of the quarter and the year with safety.
Speaker Change: In 2024, our team drove steady improvement of our already top tier safety results through our safer together operating framework.
Speaker Change: Our recordable incident rate for the fourth quarter was <unk> five we ended the year with a 25% reduction in injuries versus prior year.
Speaker Change: Since acquiring masonite in May of last year, we've been working closely to integrate safety systems and processes.
Speaker Change: The significant improvement in performance.
Speaker Change: In addition to Great safety performance, we also delivered strong financial results for the quarter and the full year.
Speaker Change: For the fourth quarter, we closed out the year delivering revenue of $2 8 billion up 23% with an adjusted EBIT margin of 15% and adjusted EBITDA margin of 22% Q.
Speaker Change: Q4 marks our 18th consecutive quarter, delivering mid teens or better adjusted EBIT margins, and 20% or better adjusted EBITDA margins.
Speaker Change: For the full year, we delivered revenues of 11 billion up 13% adjusted EBIT of 2 billion and adjusted EBITDA of $2 70, as each of our businesses delivered strong results relative to market conditions, including EBIT margin expansion in our core roofing and insulation businesses.
Speaker Change: Our consistent performance over the past several years demonstrates the structurally higher and more resilient earnings profile. We have built for the company, creating a cash generating engine that has allowed us to make strategic investments in our businesses and returned significant cash to shareholders.
Speaker Change: During 2024, we returned 51% of free cash flow to our shareholders two.
Speaker Change: 2024 also marked our 11th consecutive year of increasing our dividends.
Speaker Change: These actions demonstrate our commitment to a disciplined capital allocation strategy, all while continuing to invest in growth and innovation.
Speaker Change: In addition to delivering strong financial results, we executed our enterprise strategy to reshape and focus Owens Corning is a leading residential and commercial building products company in North America and Europe.
Speaker Change: A key driver of our long term performance has been our operating discipline to focus on products and geographies, where we can build market leading positions.
Speaker Change: In line with this disciplined approach we executed three major strategic moves during the year.
Speaker Change: First was our acquisition of Masonite.
Speaker Change: This acquisition expanded our portfolio of branded residential building products into a complementary category. It was an important step in our long term growth strategy.
Speaker Change: We have significantly expanded our addressable market and provides a great opportunity for us to create a scalable growth platform.
Speaker Change: We're seeing immediate benefits from the acquisition as we execute our integration playbook.
Speaker Change: By leveraging our enterprise scale, we are on track to achieve our synergy commitment in the first two years of ownership.
Speaker Change: Through our brand leadership.
Speaker Change: Sensitive customer and channel knowledge manufacturing expertise and leading technology, we continue to see opportunities to drive both cost and revenue synergies on a path to achieving 20% EBITDA margins in the business.
Speaker Change: The second major move was our decision to sell our building materials business in China and Korea.
Speaker Change: This divestiture simplifies our geographic footprint and supports our strategy to grow our building products businesses in North America and Europe.
Speaker Change: A third major move was the exploration of strategic options for our glass reinforcements business, which we recently completed with the signing of a definitive agreement to sell the business to product group as.
Speaker Change: As we shared at the start of the process. The glass reinforcements business, primarily services industrial applications that are outside of our strategic focus to invest and grow in residential and commercial building products.
Speaker Change: The transaction is expected to close later this year subject to customary regulatory approvals and other conditions.
Speaker Change: In addition to these major strategic moves we've been focused on strengthening and growing our core businesses by investing in new capacity and modernizing our manufacturing facilities.
Speaker Change: In roofing, we recently announced our newest investment to expand our shingle capacity with the addition of our new laminate single manufacturing facility.
Speaker Change: This plant will operate a four wide laminate or capable of producing around 6 million squares per year.
Speaker Change: The additional capacity will be used to service. The continued strong demand for our products, including our premium duration shingles and support ongoing market growth in the southeastern U S, which is the biggest asphalt shingle region in the country.
Speaker Change: We plan to announce the specific location for the new plant later this year with production expected to begin sometime in 2027.
Speaker Change: This new facility complements the other investments we have made to expand our shoe capacity, including our new laminated Ching aligned in Ohio, which is expected to start up mid year.
Speaker Change: We are also excited to begin capitalizing on our recently commissioned glass nonwovens line, creating incremental capacity to serve our growing roofing business as well as other building product applications.
Speaker Change: Within our insulation business, we're also investing to increase production capacity and further strengthen our flexible cost efficient manufacturing network.
Speaker Change: In 2024, we announced the addition of a new fiberglass insulation production line in our Kansas City facility.
Speaker Change: Expected to be operational in 2027, the new line will give us the capability to rebalance our network and increase capacity to serve both residential and commercial applications.
Speaker Change: In addition, our new Formula and Gx plant in Arkansas is expected to come online later this year to serve the growing demand for <unk> installation.
Speaker Change: And in Europe, we're making good progress on converting our mineral wool plant in Sweden from Coke fired furnaces to electric melting.
Speaker Change: This move strengthens our market leading position in the region, while improving manufacturing efficiency, reducing emissions and meeting our European customer needs <unk>.
Speaker Change: Collectively these three investments will support growth of core insulation products, while continuing to improve our winning cost position in the business.
Speaker Change: As we invest for growth, we will continue to be disciplined capital allocators, focusing on markets and product lines, where we can build leading positions through our unique capabilities over.
Speaker Change: Over the past several years, we have proven our ability to grow our business, while consistently enhancing shareholder value through our capital allocation strategy of returning approximately 50% of free cash flow to investors over time through dividends and share repurchases.
As a result in the past three years, we've more than doubled our quarterly dividend and since 2020, we have bought back more than 20% of our outstanding shares. This demonstrates both the cash generating power of Owens Corning and our disciplined approach to deploying capital.
Speaker Change: In summary, our teams achieved many accomplishments in 2020 for delivering outstanding financial performance, while reshaping the company as a focused building products leader in North America and Europe.
Speaker Change: Before turning it over to Todd I want to thank our team for their tremendous work throughout 2024, we're proud of our achievements, which are also being recognized by others, including being named to the Wall Street Journal's top 250, best managed companies and earning a place on the Dow Jones sustainability index for the 15th consecutive year.
Speaker Change: These acknowledgements, reflecting incredible effort and dedication that our team brings to work every day to help our customers win and grow in the market and drive the success of our company.
Speaker Change: I will now turn it over to Todd to discuss our fourth quarter and full year financial results in more detail Todd.
Thank you, Brian and good morning, everyone.
Speaker Change: As Brian mentioned, we finished the year with strong performance in the fourth quarter and outstanding results overall in 2024.
Speaker Change: We drove double digit gains in topline sales adjusted EBITDA and operating cash flow versus prior year.
Speaker Change: Throughout 2020 for the structural improvements we have made to the enterprise and the best in class commercial and operational execution from our team came through in our results.
Speaker Change: We have multiple paths to sustain our structurally higher EBITDA margins deliver strong cash generation and returned significant cash to shareholders by leveraging the strength of our Owens Corning operating model delivering on the multiple organic investments in new highly efficient manufacturing plants and executing our strategic plans to deliver the full potential of the doors business.
Speaker Change: I'd now like to turn to slide five to discuss the results for the quarter and the full year.
Speaker Change: In the fourth quarter, we delivered topline and bottomline growth adjust.
Speaker Change: Adjusted earnings per diluted share for the fourth quarter or $3.22 in line with the prior year.
Speaker Change: For the full year 2024, adjusted EBIT grew to 2 billion and adjusted EBITDA grew to $2 7 billion.
Speaker Change: Our roofing and insulation business segments delivered robust year over year margin expansion driving an adjusted EBIT margin of 19% and adjusted EBITDA margin of 25% for the company overall.
Speaker Change: Our full year adjusted earnings per diluted share were $15 91 up 10% from 2023.
Speaker Change: For the year adjusting items, mostly noncash charges tied to the three major strategic moves. We've made this year totaled approximately $910 million and are excluded from our full year adjusted EBIT and adjusted EBITDA.
Speaker Change: They include 483 million of asset impairment charges, resulting from the strategic review of our glass reinforcements business.
Speaker Change: $132 million of transaction and integration costs stemming from our acquisition of Masonite, which took place in may.
Speaker Change: 91 million of charges associated with the announced sale of our building materials business in China and Korea.
Speaker Change: And $86 million of charges associated with our ongoing cost optimization and product line rationalization actions.
Speaker Change: Turning to slide six throughout 'twenty 'twenty four we demonstrated the power of our cash generation and disciplined capital allocation strategy.
Speaker Change: At the end of the year, our net debt to adjusted EBITDA was below our target range of two to three times, including taking on the additional debt from the Masonite acquisition.
Paying off $400 million on our 2024 notes and meeting our commitment to return at least 50% of free cash flow to shareholders over time.
Speaker Change: Strong earnings and continued discipline on working capital resulted in 479 million of free cash flow in the quarter and $1 2 billion of free cash flow for the year, an increase of over $50 million from prior year.
Speaker Change: Free cash conversion was 89% of adjusted earnings.
Speaker Change: Full year capital additions were $647 million inclusive of 73 million of capital expenditures related to the door segment.
Even as we make significant new organic investments in U S and European manufacturing capacity, we remained focus on capital efficiency through productivity and process innovations.
Speaker Change: As a result of strong commercial and operational execution, our return on capital was 16% for the year.
Speaker Change: At year end the company had liquidity of $1 7 billion, consisting of approximately $400 million of cash and $1 3 billion of availability on our bank debt facilities.
During the fourth quarter of 2024, we returned 152 million to shareholders through share repurchases and dividends, bringing the year to date total to $638 million or 51% of free cash flow.
Speaker Change: In December the board declared a cash dividend of 69 per share an increase of approximately 15%.
Speaker Change: Our commitment to our capital allocation strategy remains focused on generating strong free cash flow returning approximately 50% to investors over time and maintaining an investment grade balance sheet, all executing on our business strategies to grow the company.
Now turning to slide seven and I'll provide additional details on our segment results.
Speaker Change: The roofing business finished the year with another quarter of strong demand for our shingles.
Speaker Change: Sales in the quarter were $912 million down slightly from prior year, we continue to see strong demand for our shingles and had positive price realization inclusive of our August price increase.
Speaker Change: The U S asphalt shingle market on a volume basis was up 1% compared to the prior year.
Speaker Change: The higher demand was primarily in Florida, the southwest and the southeast driven by higher storm demand.
Speaker Change: Our U S shingle volume was in line with the market.
Speaker Change: Components volumes were down as attachment rates continued to normalize and distributors work through channel inventories of these products.
Speaker Change: Also as the last quarter with the year over year impact from the strategic exit of our protective packaging business.
EBIT was $280 million for the quarter down slightly versus prior year, we saw higher manufacturing costs as we continue to invest in our assets to meet the high level of demand for our products.
Speaker Change: For the quarter, we delivered EBIT margins of 31% and EBITDA margins of 32%.
Speaker Change: For the full year sales were $4 1 billion up slightly versus 2023, our contractor engagement model continues to drive demand for our shingles, and we had positive price realization of our announced increases in April and August.
Speaker Change: The U S asphalt shingle market on a volume basis was up 2% compared to the prior year storm related demand remained above the long term average.
Speaker Change: Our U S. Shingle volumes were relatively flat as we remained unplanned availability throughout the year.
Speaker Change: Market continue to shift to a higher mix of laminate shingles, we were able to serve more demand for these products as a result of investments in debottlenecking to create additional capacity, which delivered record laminate shingle production.
Speaker Change: For the year overall components volumes were down due to the normalizing attachment rates throughout most of the year.
Speaker Change: Volume also was impacted by the strategic exit of our protective packaging business.
Speaker Change: For the full year EBIT was $1 3 billion up a $124 million versus last year.
Speaker Change: The increase was primarily due to positive price and favorable mix offsetting the components volume decline.
Speaker Change: The resulting EBIT margins for the year were 32% and EBITDA margins were 34%.
Speaker Change: Now please turn to slide eight for a summary of our insulation business.
Speaker Change: <unk> business finished the year strong with its 15th consecutive quarter of 20 plus percent EBITDA margins.
Speaker Change: Q4 revenues were 926 million in line with prior year, we saw revenue growth in North America residential a continued realization on our mid year price increase.
Speaker Change: Yes in the residential were down slightly.
Speaker Change: And technical and global revenue was down while strong execution resulted in growth for our fiberglass technical insulation products in North America demand headwinds were fueled by a soft market environment outside of the U S inflation.
Speaker Change: Insulation EBIT for the fourth quarter was $155 million, a $5 million compared to prior year we.
Speaker Change: We saw incremental manufacturing costs that was more than offset by positive price realization.
Speaker Change: Overall insulation delivered EBIT margins of 17% and EBITDA margins of 23% in the fourth quarter.
Speaker Change: For the full year installation net sales were $3 7 billion up slightly compared to prior year.
Speaker Change: Commercial execution delivered positive price realization overall, which was partially offset by the ongoing volume impact of weak international markets.
EIT increased 63 million to $682 million with EBIT margins of 18% and EBITDA margins of 24% for the full year.
Speaker Change: Moving to slide nine I'll provide an overview of the doors business.
Speaker Change: Overall, the business performed well in a challenging market with volumes remaining relatively flat sequentially in.
Speaker Change: In the quarter the business generated revenue of $564 million. This revenue includes the volume and price impact of the softer markets in North America and Europe.
Speaker Change: EBIT for the quarter was 29 million, including $18 million of impact from purchase accounting.
Speaker Change: EBITDA for the quarter was $82 million.
Speaker Change: Overall doors generate an EBIT margin of 5% and EBITDA margin of 15% in the fourth quarter.
Speaker Change: The integration is progressing very well when we closed on the acquisition, we had line of sight to delivering $125 million of enterprise synergies by the end of year, two with about half hitting the doors business.
Speaker Change: We are on track to meet or exceed the enterprise commitment.
Speaker Change: In 2024, we recognized approximately $30 million of Opex and sourcing synergies in our consolidated P&L, which would run rate to about $75 million annually.
Speaker Change: Since acquiring masonite on May 15, 2020 for the door segment has delivered $1 4 billion of revenue and 232 million of EBITDA.
Speaker Change: Slide 10 provides an overview of our composites business before I discuss the results as Brian mentioned, we have successfully finished the strategic review of the glass reinforcements business and entered into an agreement to sell the business the product group.
Speaker Change: The enterprise value of the business is $755 million and we expect net after tax proceeds of approximately $360 million, including $225 million of notes to be issued to the company by the purchasers.
Speaker Change: We also expect to sell approximately $100 million of excess metal alloy for the glass reinforcements business after closing.
Speaker Change: We will look to deploy the proceeds in line with our capital allocation strategy investing to strengthen our existing businesses and return cash to shareholders.
Speaker Change: With the conclusion of the strategic review glass reinforcement results will be reported as discontinued operations, our vertically integrated glass nonwovens business and our structural lumber business will operate within the roofing segment.
Speaker Change: We also will continue to operate two glass fiber plants that supply nonwovens and external customers. These plants will operate and be integrated into the insulation segment east.
Speaker Change: These changes will be effective for 2025 reporting that we expect EBITDA margins for the added revenue to be approximately in line with the overall segment margins.
Speaker Change: We'll share more details on the comparable periods. When we report Q1 results.
Speaker Change: With glass reinforcements being reported as discontinued operations going forward I will review the business results briefly.
Speaker Change: Sales for the quarter were $515 million in line with prior year Nonwovens grew in the quarter with positive price and stronger demand in North America.
Speaker Change: EBIT for the quarter was $47 million up 21 million from prior year overall composites delivered 9% EBIT margins and 18% EBITDA margins for the quarter.
Speaker Change: For the full year net sales of $2 1 billion decreased 7% compared to prior year nonwovens recognized positive price on stable volumes EBIT.
Speaker Change: EBIT for the year was 215 billion a decrease of $27 million from last year overall composites delivered 10% EBIT margins in 19% EBITDA margins for 2024.
Speaker Change: Moving on to Slide 11, I will discuss our full year 2025 outlook for key financial items.
Speaker Change: General corporate expenses are expected to range from $240 million to $260 million. This increase includes our best view of expenses for the glass reinforcements business that will not be included in discontinued operations. We are early in the process and we'll provide updates as we work towards the close.
Speaker Change: Our corporate eliminations will also change with the re segmentation non.
Speaker Change: Nonwoven sales to shingles will now be eliminated within the roofing segment in the glass fiber sales to nonwovens will be eliminated at the corporate level. This should result in corporate eliminations of approximately half of what we saw in 2024.
Speaker Change: Capital additions are expected to be approximately $800 million. This level of capital investment reflects the strategic investments Brian mentioned in his opening we have several multi year organic investments to bring on new manufacturing capacity and drive long term growth. This capex continues to include glass reinforcements we.
Speaker Change: We expect Capex to remain elevated in the near term as we progress towards completing the attractive high return capital efficient projects. We have discussed on this call.
Speaker Change: Before Capex is expected to return to levels in line with our previous guidance.
Speaker Change: One other item I would like to discuss before turning the call back to Brian as a change in the primary measure we will use for year over year comparisons.
Speaker Change: Historically, we've used adjusted EBIT is our primary operational performance metrics.
Speaker Change: Guinea in 2025, we will use adjusted EBITDA. This gives more visibility to the cash generation of Owens Corning and provides a more accurate view of operational performance without the impact of purchase accounting.
Speaker Change: Now please turn to slide 12, and I'll turn the call back to Brian to further discuss our outlook Brian.
Speaker Change: Thank you Todd throughout.
Brian Chambers: Throughout 2024, our team delivered great results, demonstrating the strength of our market positions and impact of the strategic choices. We have made over the past several years to position Owens Corning to deliver long term growth generate significant free cash flow and sustain higher margins.
Brian Chambers: Turning to our outlook, we expect our residential and commercial end markets to provide solid but mixed opportunities as we enter into the first half of 2025.
Brian Chambers: In North America, we expect near term demand for non discretionary repair activity, especially in roofing to remained stable.
Brian Chambers: While residential new construction and other remodeling activity is expected to be weaker to start the year as interest rates remain elevated.
Brian Chambers: Commercial construction activity is also expected to start the year slower than prior year.
Brian Chambers: And in Europe, we expect near term market conditions to remain challenging but stable similar to the second half of 2024.
Brian Chambers: Within this environment, we still expect first quarter revenue for continuing operations to grow mid 20%.
Brian Chambers: Impaired to prior year's revenue of $2 billion after adjusting for glass reinforcements.
Brian Chambers: For EBITDA, we expect to deliver another strong quarter of low 20% for the enterprise.
Brian Chambers: Now consistent with prior calls I will provide a more detailed business specific outlook for the first quarter.
Brian Chambers: Starting with our roofing business, we anticipate our revenue for the legacy roofing segment to be in line with prior year, we expect armor market shipments to be flat.
Brian Chambers: To slightly down versus prior year.
Brian Chambers: We anticipate our shipments to be relatively flat as distributors continue to see high demand for our products and are expected to build inventory of our shingles for.
Brian Chambers: For components, we anticipate volumes in the quarter to be down versus prior year as we expect another quarter of attachment rates normalize.
Brian Chambers: We expect positive price from our previous announcements to offset the revenue impact of lower components volumes.
Brian Chambers: Compared to Q1 of last year, we anticipate higher manufacturing costs, which is being carried over from the end of 2024 as we invest in our assets to continue to meet the high level of demand for our products and absorb the cost of maintenance.
Brian Chambers: Compared to Q1 of last year, we also anticipate input cost inflation.
Brian Chambers: In addition to shingles and components as Todd mentioned nonwovens, and our structural lumber businesses will now be part of the roofing segment going forward with.
Brian Chambers: With this change we expect approximately $130 million of additional revenue in the roofing segment in Q1 at similar margins to the roofing business.
Brian Chambers: Overall for roofing, we anticipate generating an EBITDA margin of approximately 30% in the first quarter.
Brian Chambers: Moving onto our insulation business, we expect revenue for the legacy segment to be down slightly versus prior year with ongoing price realization largely offsetting lower volumes.
Brian Chambers: Expect the newly added glass fiber plans to add approximately $30 million of revenue.
Brian Chambers: In our North American residential insulation business, we anticipate revenue to be up slightly versus prior year.
Brian Chambers: The carryover price realization from the June increase to be partially offset by lower volumes as we worked through slower lagged housing starts versus prior year and construction cycles returning to normal.
Brian Chambers: Technical and global we expect revenue to be down modestly versus prior year with lower volume, partially offset by positive price.
Brian Chambers: In North America, our top line is expected to be relatively stable, while in Europe, the market demand remains soft but stable sequentially.
Brian Chambers: For the overall installation business in the quarter, we expect to incur cost inflation with price cost remaining positive.
Brian Chambers: Given all this we expect to generate EBITDA margin for installation, including re segmentation of low 20%.
Brian Chambers: Turning to doors the business continues to perform well relative to market conditions with Q1 revenue anticipated to be down modestly versus Q4 on a slightly lower price and volume sequentially.
Brian Chambers: In addition, we anticipate ongoing synergies and cost controls to largely offset the tariff recovery recognized in the fourth quarter.
Brian Chambers: Overall for doors in the quarter, we anticipate EBITDA margin of low double digits to low teens.
Brian Chambers: With the re segmentation the results of our glass reinforcements business will be excluded from continuing operations.
Brian Chambers: One other item that could impact our results going forward is the implementation of additional tariffs.
Brian Chambers: While the majority of our products are made with local materials and sold in local markets. We operate an integrated supply chain that spans Canada, Mexico and the U S that could result in additional cost.
Brian Chambers: With that view of our businesses I'll turn to a few enterprise items.
Brian Chambers: As I shared at the start of the call 2024 was a transformative year reshaping the company into a focused building products leader in North America and Europe.
Brian Chambers: Through our unique enterprise capabilities market, leading positions and consistent execution, we are positioning the Owens Corning to continue to outperform the market.
Brian Chambers: As we grow we will continue to be disciplined operators committed to strong cash flow generation and a balanced capital allocation strategy, returning at least 50% of free cash flow to shareholders over time.
Brian Chambers: Before moving on to the Q&A session I'd like to highlight one other item from this morning's press release.
Brian Chambers: We'll be hosting an investor day at our World headquarters in Toledo, Ohio dismay.
Brian Chambers: Owens Corning members of our executive leadership team and I look forward to sharing more about our strategy and financial goals for the future.
Brian Chambers: In closing I want to recognize the outstanding results our team delivered in 2024, while making significant strides to position OCC for the future.
Brian Chambers: We have built multiple paths to achieve 20% or more adjusted EBITDA margin mid teen returns on invested capital and significant free cash flow.
Brian Chambers: As we begin 2025, we are focused on successfully integrating the doors business continuing to strengthen our core product lines.
Brian Chambers: Leveraging our enterprise scale and capabilities to help our customers win and grow in the market, while creating value for our shareholders.
Brian Chambers: With that we'd like to open the call up for questions.
Speaker Change: Thank you. Please press star followed by the number one if you'd like to ask a question and then Julie devices. Amit you like can you when it's your turn to state condra.
Speaker Change: Reminder, to pagan is up to one question only.
Speaker Change: Our first question today comes from Anthony Pettinari with Citi. Please go ahead. Your line is open.
Anthony Pettinari: Good morning.
Anthony Pettinari: I was wondering if you could walk through maybe a little bit more detail on potential tariff impacts and the mitigation strategies.
Anthony Pettinari: That you referenced.
Anthony Pettinari: And if theres any way to kind of quantify either.
Anthony Pettinari: Manage a cogs percentage of sales.
How much of it.
Anthony Pettinari: Yeah.
Anthony Pettinari: Well good morning, Anthony This is Tom I appreciate the question.
When we step back we look at our execution over over a longer period of time in the last five years and we've been at a lot of different markets we were in.
Anthony Pettinari: Covid period, where demand was really weak the COVID-19 period, where demand was really strong we had a supply chain challenges we had.
Anthony Pettinari: In inflationary period, we had relatively mixed markets last year and I think what you've seen from US is really consistent execution through all of those periods driving.
Anthony Pettinari: Good stable high EBITDA margins as well as free cash generation.
Anthony Pettinari: When we look at it tariff exposure is Brian shared in his comments, we are mostly local for local we produce with a significantly local cost of goods sold for for local customers.
Anthony Pettinari: When we looked at and what our tariff exposure could be if we look at all of the discuss tariffs, so China steel and aluminum as well as Canada, and Mexico to scope that you're looking at 5% or less of our total cost for for the enterprise.
Anthony Pettinari: So when we when we think about that a lot of that is finished goods, where we've got an integrated supply chain across North America, where we're supplying product from Mexico, and Canada into the U S. It's.
Anthony Pettinari: That's not really a big deal in our roofing business is sort of a de minimis exposure in roofing. So when you think about that Cogs exposure or the cost exposure across the enterprise. It's about two thirds doors and then about one third of installation.
Anthony Pettinari: And as I started with our track record of execution is where in dynamic markets and as we face those dynamic markets. We use all the tools that we have available to us to offset that in the short run and the long term and get back to market leading margins I. Appreciate the question Anthony.
Speaker Change: Thank you. Our next question comes from Michael Rehaut with Jpmorgan. Please go ahead.
Anthony Pettinari: Okay.
Thanks, Good morning, everyone. Thanks for taking my question.
Anthony Pettinari: I wanted to focus on our pricing trends as you see them coming out of 'twenty, 'twenty, four and into 'twenty five especially around.
Speaker Change: Your residential markets I think theres been a various amounts of concern regarding it.
Speaker Change: As you kind of alluded to the potentially softer start in some of the new resin the pair of motto segments.
Speaker Change: How are you thinking about pricing power in 2025.
Speaker Change: Particularly I mean of course, you know that.
Speaker Change: You kind of hit on installation roofing indoors.
Speaker Change: And if there's any.
Speaker Change: Changes, perhaps that you.
Speaker Change: Might be anticipating this year relative to the pricing power you have enjoyed over the last couple of years.
Speaker Change: Okay. Thanks, Mike I'll start and maybe I'll have Todd joining you will as we walk through it just if I step back I think we've we've had very good pricing trends in our core residential insulation businesses, our technical insulation business, our roofing business.
Speaker Change: And we're stepping into the market now with the doors business, So I think across that.
Speaker Change: Platforms.
Speaker Change: We have seen some mixed end market conditions through 'twenty, four and into 'twenty, five and that's probably leading to a little bit of mixed pricing trends that we're seeing but overall I'd say within our roofing business. We continue to see good demand for our products, we continue to bring great value to our customers and so there you've seen really positive.
Speaker Change: Price cost over the last year.
Speaker Change: Through through some of the price realization that we've gotten through the increases last year. We've got another one announced in April in roofing and given the strength of the market conditions, we see in front of us the strength of our product offering we would expect to continue to see good realization there.
Speaker Change: Doors business, I think we've seen a little bit choppy or end markets.
Speaker Change: Overall, the pricing in the market is relatively stable as we start the year, which is good to see.
Speaker Change: Our pricing moves that we've seen a little bit of pricing headwinds that you're seeing in our outlook is really related to our focus moves to get our price points in the market in line with historic premiums that we've had in the market relative to our service our quality and our innovation.
Speaker Change: But in terms of stability in the market, we're seeing relatively good stability on the pricing, but some of the pricing moves we're making that we made in the back half of the year and in the fourth quarter, we're going to see some carryover effects as we get those price points stabilized in the market and then maybe I'll pass over to Todd you can talk a little bit more about some of the pricing trends in the residential markets.
Speaker Change: Mike This is Tom I appreciate the question. So when we step back and look at res in insulation. We said before we think the industry can serve a market of around one four to $1 5 million housing starts.
Speaker Change: And that was before we saw.
Speaker Change: The big shift towards single family from multifamily.
Speaker Change: And when we look at single family, we see about 30% higher take per unit for a for a start then with multifamily.
Speaker Change: So we're in a market, where we're still seeing good demand trends recent starts activity has been right around that level of one four to $1 5 million and.
Speaker Change: And we think utilization is still at healthy levels for the industry, our estimates would be it.
Speaker Change: In Q4, we were into the high 90% range of utilization for for installation in these markets.
Speaker Change: So we had positive price in Q4, our guide for Q1 is positive price in resin installation.
Speaker Change: We know how to navigate through markets like this where there is a bit of noise from builders and others right now as we start the year, but that's not uncommon and raz.
Speaker Change: We will execute the way we have been in.
Speaker Change: In these markets to make sure we drive the rates the rates probably placed in the market for the year I appreciate the questions. Thank you.
Speaker Change: Our next question comes from Jonathan <unk> with UBS.
Speaker Change: Your line is open.
Jonathan: Good morning, guys tissue to be thank you for taking my call.
Speaker Change: Question is I guess Bruce.
Anthony Pettinari: Roofing will include about $130 million of revenue from structural lumber and nonwovens and installation and about $30 million from the glass fiber plants, how do how do we think about the cadence of that as we move through the year should we expect the revenue contribution just step up seasonally or what's the right way to think about that.
Speaker Change: Yeah. Thanks, John I think you can think about the revenue in that side of the business has been fairly consistent across the year, there's a little bit of seasonality on the non woven side that we see in fourth quarter, because some of that production is tied to roofing demand, which tends to slow down a little bit in the fourth quarter on seasonality.
Speaker Change: But overall you could kind of look at those revenue guides us pretty ratable in terms of quarterly guidance going forward in the business and then the margin profile is going to stay again very consistent with our with the underlying businesses that we've attached is too so maybe a little bit of better color on why we're doing that and how that's setting up you know when we go back and talk about the.
Speaker Change: Posit business overall when we.
Speaker Change: Announced our strategic review it was really focused on the glass reinforcements business more industrial base not really sitting there.
Speaker Change: A long term strategy the company to focus on building products. So when we look at though nonwovens lumber are those businesses are very focused in building products. It gives great capabilities in the roofing business with a vertical integration play.
Speaker Change: The lumber business uses distribution partners and a go to market strategy very similar to shingles. So we thought bringing the nonwovens and lumber business and the roofing and gives us great operational efficiencies.
Speaker Change: And great commercial opportunities to kind of expand the growth of those product lines, but then in the nonwovens business, we make our specialty fiber called watch we have two facilities in North America, and we wanted to maintain that vertical integration supply chain for supply security because the watch and nonwovens is so critical to the support of our roofing profitability.
Speaker Change: So, but those our glass melting operations. We felt those were best served operationally to sit inside our insulation business. So I think there is an operational and commercial rationale for why we place these businesses with roofing and insulation and again I think what youre seeing in our guide and our outlook is that these are going to be businesses that generate margin profiles are very similar to the <unk>.
Speaker Change: Underlying roofing and insulation businesses that they're sitting and so we think they're going to be a good fit operationally and give us good margin stability going forward in the businesses.
Speaker Change: Yeah.
Sam Reed: Our next question comes from Sam Reed with Wells Fargo.
Speaker Change: Please go ahead.
Speaker Change: Awesome. Thanks, so much I wanted to touch on some of the Medina capacity, that's coming on like an online later this year in roofing and specifically could you talk to the margin lift from mix it should come from incremental laminate capacity.
Speaker Change: Actually some of that is replacing some lower margin strip single capacity coming offline. Thanks, so much.
Speaker Change: Thanks, Tim So yeah, we've not really gotten into the details of splitting margin profiles performance between strips of lands, but you're absolutely correct in saying that we would expect to see a positive mix shift with more laminate sales and in fact, that's been a driver to the margin performance in the business over the last several years.
Speaker Change: Our ability to raise the margin outlooks and sustain the margins we have today is that mix.
Speaker Change: Of laminate shingles relative to the strips the mix of components. So there's there's a few factors inside the mix, where we don't get specific but in terms of the strip the lam differential but it does bring a higher profile and we're seeing this as a mix shift overall in the market I've talked about this past few calls and when we look overall in the market dynamics, we've kind of seen.
Speaker Change: This point point and a half mix shift from strips the labs in the industry and that's really why we've been investing so heavily to find additional throughput in our existing network.
Speaker Change: Two to find additional land capacity and why we've made the decision to convert the Medina facility from stripped Lam. So to your point that that facility, we expect to be coming online mid year that is going to bring about.
Speaker Change: Additional laminates, so that'll rank up and right up through the back half of this year and then full production into next so that gives us a great platform in terms of growth in the Midwest with a product offering that we need more capacity to service to customer demand.
Matthew Bouley: Thank you next question comes from Matthew Bouley with Barclays. Please go ahead your line's open.
Matthew Bouley: Good morning, everyone and thank you for taking the question. So I wanted to ask on the new roofing capacity of the new plan. So I guess in an industry that.
Matthew Bouley: It's also adding capacity beyond your own over the next couple of years.
Depending on where we go with industry volumes over these next couple of years.
Matthew Bouley: It would be helpful. If you could give us some perspective on how do you think about kind of that the impact of new capacity on the roofing industry margins in roofing industry price and kind of how you think about the incentive getting plant utilization to a certain level. Thank you.
Matthew Bouley: Okay. Thanks, Yeah, let me walk through first I guess, our view and why we are adding capacity that I can touch on the industry side and for US we're very excited to be adding a new plant in the network as.
Matthew Bouley: As I mentioned.
Sam Reed: Talking about Sam.
Sam Reed: The teams have done great work I think to increase the efficiencies of our existing network, but even through all of those capacity increases in terms of the Lam production that we're opening up.
Sam Reed: We still continue to run full out.
Sam Reed: We should still have extended service cycles, and we have very limited opportunity to continue to service the growth we're seeing for our product platforms. So we're excited to be adding into the south east. It is the largest asphalt shingle market in the country and.
Sam Reed: And when you look at population trends into the South East. We think back just continues to grow its also a market that <unk> quite a lot of storm activity.
Sam Reed: While that's not easy to predict when you think about the incremental storm demand that gets created pretty frequently right. Now we have very limited capacity with our three plants that are in the region today to service any of that incremental demand. So that would give us opportunities to service more incremental storm demand as we see them moving forward and then lastly for us.
Sam Reed: It gives us enough capacity platform in that region that we can start looking at potentially servicing other regions in a different way. So we can change service cycles that create additional capacity up in the Midwest into the southwest.
Sam Reed: And that gives us a lot of opportunities and our view when we look at the additional capacity and the newer network if to your point volumes start to trend down at some point in the future.
Sam Reed: Production process is a material conversion business. So it gives us the ability to flex our production to the most efficient manufacturing platforms.
Sam Reed: And that might be now to a newer asset. So I think allows us to optimize our network and new and very efficient ways with this additional capacity that we can balance out any kind of market fluctuations over the future years.
Sam Reed: Think about how that sets into the industry capacity. There there has been a lot of industry capacity announced I would say our view is that that's not all incremental capacity. We know some of the manufacturers have made these announcements are also taking more inefficient or older assets out of their networks and replacing that and some of Thats regulation driven some of that.
Sam Reed: That is just I think crossed an efficiency driven so I don't think all the announcements are generally adding up to all incremental capacity.
Sam Reed: Because of some of the capacity that's going to be taken out, but even again said that if you look at some of the industry capacity. That's been added over the last four or five years I think you've not seen really any impact in terms of the demand structure the pricing structure of the margin profile of our business as a result of that and that goes back to again roofing is a material conversion business.
Sam Reed: So the fixed costs labor costs are fairly low you can flex. These lines are very cost efficiently and still generate very very good margins in the business. So we feel good about the add for us in terms of servicing our customer demand and our customers have been very pleased with this announcement to bring capacity to service their needs and we think it gives us great.
Sam Reed: <unk> ability over time to continue to generate great margins, but also service some incremental volumes that we just haven't been able to get to over the last few years.
Sam Reed: Okay.
Speaker Change: Our next question comes from Stephen Kim with Evercore.
Speaker Change: Please go ahead.
Stephen Kim: Yeah, Thanks, very much guys I appreciate it.
Speaker Change: Speaking on the utilization rates.
Speaker Change: Insulation, I think you've indicated that in some utilization rate so that we're in the high 90% in the fourth quarter.
Speaker Change: I believe that was for <unk>.
Speaker Change: Fiber glass in North America can you talk about what utilization rates look like across your technical.
Speaker Change: Print and then also what the glass plants that you are transferring.
Speaker Change: Two to the business.
Speaker Change: The glass melter, so I guess I mean.
Speaker Change: Can you give us a sense for what the the annual DNA looks like associated with those those two facilities and I think you said that margins are going to be pretty similar.
Speaker Change: I was just wondering.
Speaker Change: Cause in the in the roofing side of the business. Your margins are so high I just want to make sure that we kind of had a sense that you're talking within a couple of hundred basis points here or it is similar mean something much broader than that thanks.
Speaker Change: Yeah.
Speaker Change: Good morning, Stephen Thanks for the questions. Let me start with the question around what we're seeing within technical and global installation.
Speaker Change: So when we look at North America, the bulk of that business in North America actually uses similar similar assets to what we have on the red side.
Speaker Change: So we are seeing relatively healthy and attractive utilization rates on North America fiber glass as well.
Speaker Change: When you look at technical and global the areas. We've seen a lot of weakness really are the international markets, especially Europe and in Asia are clear.
Speaker Change: Clearly, we haven't announced them.
Speaker Change: Transaction to divest of Asia to Europe really is our remaining big global exposure for technical and global.
Speaker Change: When we look at that business. Our team has performed extremely well in difficult market conditions. Since we saw the Ukraine, where begin we've seen demand be soft in Europe, and our team has been laser focused on the cost structure and the cash generation potential of <unk>.
Speaker Change: That business really repositioning it for the market conditions that we're in.
Speaker Change: And they've done a phenomenal job with that over the last couple of years. So we are in a position where there is excess capacity.
Speaker Change: And in Europe in Stonewall and when that market comes back we.
Speaker Change: We are really well positioned to take advantage of really attractive incremental margins and in Europe.
Speaker Change: On the basis of all the work we've done the last couple of years and weaker market conditions to take full advantage of it.
Speaker Change: When you look at the second question you had around re segmentation and what it means for for the different businesses. When you look at the two walks plants that Brian mentioned that we're adding to the insulation business. You can think of the DNA structure of that as being pretty similar to overall overall composites when.
Speaker Change: When you look at the nonwovens plants, we have invested a lot of capital in that business last few years to add capacity because those are growing very attractive markets for us.
Speaker Change: But the structural requirements for Capex going forward for nonwovens look more like the roofing business in terms of these assets being placed and then they don't require ongoing rebuilds and the kind of heavy maintenance cycle, we would see in our glass melting or stone melting facilities.
Speaker Change: Which is part of the logic of why we integrated those into to the roofing segment. So there is a bit more DNA today for nonwovens as a result of the investments that we've made.
Speaker Change: You should not read anything into that in terms of the ongoing capital intensity a rebuild cycle because it is very very different for those assets.
Speaker Change: Traditional glass melting assets. Thanks, Steven.
Speaker Change: Our next question comes from Brian <unk> with Thompson Research.
Speaker Change: Your line is open.
Brian <unk>: Hey, good morning, Thanks for taking my question.
Speaker Change: On the auto side I guess.
Speaker Change: And if it comes in a little bit better for the year or just whenever historic will pick back up.
Speaker Change: It should be a boost to the door segment, just given the R&R aspect there.
Speaker Change: How are you guys thinking about price versus volume and share gains for the door segment when on a return to growth. Thank you.
Brian: Yeah. Thanks, Brian I think we are.
Speaker Change: Looking for that kind of rebound and recovery.
Speaker Change: As we move into 2025 across the board because as you know the business our doors business is pretty evenly mixed between new construction and R&R activity, a little bit more slanted towards new construction, but big part in the R&R front, we've seen necessarily weak through through 2024, and we do expect that to improve as we go through the year. So when we think about that price.
Speaker Change: I'm sure I would say look we are we are.
Speaker Change: Playing the same operating model in our doors business that we've been successfully running inside our insulation business and inside of our roofing business, which is a focus to grow the business by starting with being very customer centric and focused on how we can help our customers win and grow in the market, we're focused on increasing product and process innovation that brings new products.
Speaker Change: Marketing drives efficiency and we're focused on great manufacturing performance service quality cost competitiveness. So when we think about how we're going to manage as we go forward in the business. We want to start with we want to drive customer growth through our products through innovation through our service through our quality and that's the playbook that we've been running and where.
Speaker Change: We're seeing some some momentum starting to pick up with that playbook. Our volumes in Q4 were a little better our commercial teams have done great work really.
Speaker Change: Building and strengthening our distribution partnerships, we're looking at investments in terms of downstream pull through activities with lumber dealers and other customers. We're focusing on the home centers in terms of driving our service proposition. So I think we're gonna be focused always on pricing to value and we carry a price premium today based on our value.
Speaker Change: <unk> that we think is going to continue.
Speaker Change: But we're going to stay focused on winning with our customers and we think as the markets recover that's going to drive good volume growth for us and good margin improvement for us as we go forward.
Speaker Change: Yeah.
Speaker Change: Our next question comes from each other and with Wolfe Research. Your line is open.
Speaker Change: Hi, Good morning, Thank you for taking my question.
Speaker Change: Going back to roofing margins in 2025, maybe excluding any impact from the non woven.
Speaker Change: You've got a couple of price increases in 2024 that carry over you've got another one for April.
Speaker Change: You had mentioned some cost inflation, but you're also expecting to be price cost positive. So should we think about pretty healthy core roofing margins.
Speaker Change: Year over year as we go into 2025 or are there any other notable offsets we should be considering.
Speaker Change: Yes, sure, but no I think youre thinking about it the right way I think we're set up for another very good year in roofing.
Speaker Change: Outlined the price carryover, we're seeing we are going to and we expect to see more inflation in the year than last year. So we're expecting that as we are starting to hear we're starting to see those come through.
Speaker Change: So there's a little bit of inflation headwinds and we're also seeing some investment headwinds and just some of the upgrades to the facilities that we're going to see so probably some increased maintenance and potential downtime as we continue to just make those adjustments to improve the efficiency and land capacity on the existing networks.
Speaker Change: But I think overall, you've got to dialed in in the first quarter, probably a little bit of headwind. We're still seeing is in the components volume and this again is just the last quarter that I would expect us to see that kind of year over year negative comp the run rate of our components volumes in the attachment rates have been very consistent Q2.
Speaker Change: Two Q3 Q4 of last year, they are holding up as we start the year. So there's nothing underlying the a decline in component volumes.
Speaker Change: Yes, we were resetting off a very strong year in 2023, where there were some supply shortages that we thought caused some purchases that arent repeating but thats kind of the only near term headwind here in Q1 that we're seeing in terms of some of the lower volumes, but outside of that as we move through the <unk>.
Speaker Change: The rest of the year, we see good demand on the on the repair side. The R&R side, we've got some storm carryover that we're bringing into the year. So I think we're set up for a good first half.
Speaker Change: Okay.
Philip <unk>: The next question comes from Philip <unk> with Jefferies. Please.
Speaker Change: Please go ahead your line is open.
Speaker Change: Hey, guys.
Speaker Change: Doors is still a very new business for me. So I just wanted to drill down on that a little bit Brian maybe if I heard you correctly youre dialing back some of your pricing to kind of be more in line with the broader market and when I look at your margin youre guiding it to drifting closer to low teens low double digits for mid teens. So I guess my question to you is what is your path to getting.
Speaker Change: Margins back to mid teens, this year and I believe that business, probably has a little more risk as it relates to tariffs just help us understand the Columbian lumber exposure do you have any of that any hardware too that gives me some concerns about cost being a little more elevated pricing a little more challenged just kind of help us think through the path for a while.
Speaker Change: Stability in that doors business this year.
Speaker Change: Yeah. Thanks, So let me start with the back end, we're not we're not terribly exposed to a lot of input materials. We've re shuffled the supply chain, so nothing out of Columbia lumber or things like that we're not we're not seeing that.
Speaker Change: We've really kind of dialed in most of our input materials being in local supply, we're still bringing some information, but that's not any major concern in terms of driving additional tariff inflation, what Todd said and this is important to call out that we do operate a very integrated supply chain for finished good materials inside the door.
Speaker Change: <unk> business, particularly where we will do production in Monterrey, Mexico, and we'll bring that into the U S. We'll do production in the U S, bringing into Canada, and vice versa, So where our exposure is going to be in finished goods not input materials and that's why we're more exposed in doors because of that integrated supply chain. We built and then we're also exposing.
Speaker Change: Insulation on that because also that integrated supply chain, where we moved finished good products across border pretty seamlessly to service our customers. So that's going to be a little bit longer.
Speaker Change: Term issue if those tariffs come in in terms of how we offset those but having said that I think the underlying fundamental of the business that we're seeing now thats kind of stepping down in margins is a little bit of just the volume headwinds. So our path to improving margins is consisting of one we continue to drive the integration of <unk>.
Speaker Change: <unk> and we're seeing that across the board, particularly on sourcing and Opex savings as we bring the business together. So that's a source of just cost savings that we continue to see ramping up that's going to drop through to the bottom line.
Speaker Change: We also are starting work around our network optimization, you would've seen in the K, we've shut down one small facility in Chile.
Speaker Change: And we're looking at other facilities in terms of how we can optimize this production network very similar to the work we've done inside roofing and insulation and we see a big opportunity that's going to take us a little bit of time, but that'd be a next big opportunity that we see in terms of cost synergies and then third would be on the revenue front and that's going to be.
Speaker Change: Really.
Speaker Change: Ever of volume because we've got a cost basis, that's very solid that we're reducing and improving that's going to give us great operating leverage once we see volume starting to come back, which we do expect through the course of this year, we're going to see new construction grow we're gonna see R&R grow and the volume leverage incremental margin on that is going to be stronger than historic given the cost work we have.
Speaker Change: Done.
Speaker Change: So we think that's an opportunity and then we're just really in the early innings starting to look at how we can be stronger across our distribution network with bringing the full suite of Owens Corning products to them, how we're thinking about downstream pull through with with <unk>.
Contractor stay that are exterior contractors that use doors in roofing and how can we expand the offering our lumber dealers that are using multiple products. So I think we've got a couple of pads that we're just starting in terms of the commercial efforts to not only.
Speaker Change: See the recovery of volumes through a market recovery, but also some of the work we can do to create a.
Speaker Change: Stronger customer partnerships and potentially get some additional volumes as we go through the year. So it's cost focus in the near term I'd say, Phil and then we see the opportunities for revenue synergies as we go through this year and into next year as we build that path to 20% EBITDA margins.
Speaker Change: Yes.
Speaker Change: And our next question comes from Garik <unk> with <unk> capital.
Speaker Change: Line is open.
Speaker Change: Oh, Hi, Thank you I had a question just on the Capex increase for 25 I was wondering if you could speak to what's incremental this year and what would be a good maintenance capex figure to use.
Speaker Change: When considering.
Speaker Change: The divestment of the what was a highly capital intensive.
Speaker Change: Our business.
Speaker Change: Thanks, Eric I'll take that so when we look at the step up in Capex. This year, it's really driven by the increase in the major projects that we've discussed on the call.
Speaker Change: For growth for productivity for sustainability investments that position us for further earnings growth and cash flow growth in the future. So in the near term.
Speaker Change: We would expect this stepped up level to continue as many of these projects are multiyear projects from from start to finish long term, though I would go back to the guidance that we've consistently given externally, which is we want to build a business that structurally is in a 4% to 5% of sales range in terms of ongoing capex.
Speaker Change: We've added a doors business that is very capital efficient and we're really going to like the cash flows of that business as the markets improve and the volume returns because of the ongoing capital requirements are really modest.
Speaker Change: We're under contract to sell the most capital intensive piece of our business. The glass reinforcements element. So when we look at that we think that plus the investments that we're making in a very modern fleet of assets position us for attractive ongoing capital requirements. As we go forward. We just have to work through this near term period as we wrap up some of them.
Garik: Major projects. Thanks Garik.
Speaker Change: Yeah.
Speaker Change: Thank you, we'll now ask to time, both by the question.
Speaker Change: Ross back to Brian Chambers for any closing comments.
Brian Chambers: Okay. Thanks, Lydia what I'd like to thank everyone for making time to join US on today's call and for your ongoing interest known as Corning. We look forward to speaking with you again on our first quarter call and I hope everyone will be able to join us at our Investor day in May and Toledo.
Speaker Change: <unk>.
Speaker Change: This concludes today's call. Thank you for joining you may now disconnect your line.
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Okay.
Speaker Change: Thanks.