Q2 2025 Owens Corning Earnings Call
Right.
I'll now hand, you over to <unk>, Vice President of corporate SG&A Investor Relations to begin. Please go ahead.
Good morning.
You for taking the time to join US for today's conference call and review of our business results for the second quarter 2025.
Joining us today are Brian Chambers, Owens, Corning's Chair, 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 question in order to accommodate as many call participants as possible. Please limit yourselves to one question only.
Earlier. This morning, we issued a news release and filed a 10-Q that detailed our financial results for the second quarter 2025 for.
For the purposes of our discussion today, we've prepared presentation slides summarizing our performance and results and we'll refer to these slides during this call.
Hello, everyone and welcome to Owens callings second quarter 2025 earnings call.
You can access the earnings press release Form 10-Q in the presentation slides at our website <unk> Dot com.
Refer to the investors link under the corporate section of our homepage, a transcript and recording of this call and the supporting slides will be available on our website for future reference.
Please reference slide two where we offer a few reminders first today's remarks will include forward looking statements that are subject to risks uncertainties and other factors that could cause our actual results to differ materially.
We undertake no obligation to update these statements beyond what is required under applicable securities laws.
Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail.
Second the presentation slides and today's remarks contain non-GAAP financial measures explanations.
Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation available on the investors section of our website Owens Corning Dot com.
<unk> financial the metrics for current and historical periods discussed on this call will be for continuing operations, except for capital expenditures and cash flow measures, which include amounts related to glass reinforcements until the closing of the sale of this business.
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 timber good morning, everyone and thank you for joining us on our call today.
At our Investor day in May we detailed how we our new Owens Corning a company that has been reshaped into a high performing building products leader in North America, and Europe, and structurally improved to drive above market growth sustainable and more resilient margins and substantial cash flow.
Powered by the OCC advantaged set of capabilities are unique to our company and central to our success. Our team delivered second quarter results that continue to demonstrate how the new Owens Corning outperforms.
He set of market conditions.
During today's call I will share highlights of our second quarter results and discuss the strategic actions, we're taking to continue to outperform the market and deliver long term value.
Todd will then provide a detailed review of our financial results for the quarter.
I'll come back to share an overview of the current operating environment and our outlook for the third quarter.
As always I will be.
With safety.
We maintained a very safe operating environment in the second quarter with a recordable incident rate of <unk> six zero.
In June we hosted our first global safety week, a best practice adopted from our newly acquired doors business that has been scaled across the enterprise. It builds on our safety together operating framework connecting processing systems with behaviors and leadership to create a safer workplace.
Turning to our financial results, we continued our strong and consistent performance from the second quarter, despite a more challenging environment.
For the 20th consecutive quarter, we achieved adjusted EBITDA margins at or above 20% and incredible milestone.
Revenues were up 10% versus prior year and earnings grew 30% year over year.
Adjusted EBITDA in the second quarter was $703 million with an adjusted EBIDTA margin of 26%.
This performance is a direct result of the structural changes we've made and there is another proof point of our ability to deliver higher and more resilient margins even in the face of softening market conditions.
We also generated good cash flow and continued to return capital to shareholders through dividends and share repurchases through.
Through the first half of the year, we returned nearly $440 million of the 2 billion, we committed to returning over this year and next.
This commitment reflects our disciplined capital allocation strategy and confidence in our cash generating capabilities.
As I shared at Investor Day, our performance as a result of a clear set of strategic choices and investments. We've made that has shifted our product and geographic focus to high value building materials sold in the most attractive markets in.
In short we are a different company today than we've done historically with a track record of growing revenues, increasing our margin profile and returning significant cash to our shareholders over the past five years.
One key driver of this performance shift as our strategic business mix, which positions us to outperform given our unique product and application exposure.
Today over half of Owens Corning's revenue is generated from north American repair and remodel activity, including more than one third from non discretionary regrouping, which remained solid in the quarter.
Nonresidential markets, which makes up about 25% of our revenues North America demand in the quarter was stable and we continue to see encouraging improvement in Europe.
So while residential new construction demand continues to face pressure.
Represents only about a quarter of our overall revenue.
This strategic product mix positions us well to navigate near term headwinds and to benefit from several longer term secular tailwind, including an aging and under built housing stock in the U S and Europe.
Growing demand for products that improve energy efficiency, and increasing investments in north American manufacturing and infrastructure.
A second key driver of our strong performance is the strategic actions, we've taken to concentrate resources on geographies and applications, where we can build leading positions and deliver above market growth.
In July we completed the sale of our building materials business in China, and Korea to a member of the region's management team.
The transaction included six insulation manufacturing facilities in China, and our roofing manufacturing facility in Korea and represented annual revenue of approximately $130 million.
In addition, the sale of our glass reinforcements business is progressing and we expect the transaction to close later this year subject to regulatory approvals.
Another key driver to our performance or the strategic investments and choices, we're making to strengthen our market leading positions.
Lending capacity modernizing assets and increasing operating efficiencies.
Our roofing business, we started up our new laminate shingles in Medina, Ohio during the second quarter.
This line adds 2 million squares of capacity and has begun supporting current demand from our growing contractor network.
Unfortunately, Arkansas, we also commissioned a new nonwovens coating line co located with our existing nonwovens plant.
Both of these investments are examples of how we are investing to deliver above market growth, while enhancing our winning cost position.
In addition to these capacity expansions, we are investing in leading technology for the use of new pilot lines across our roofing and insulation businesses.
These lines accelerate both product and process innovation, enabling us to bring new solutions to the market faster to help our customers win and grow.
We're also unlocking value through the integration of our doors business, where we are leveraging our enterprise scale and capabilities to drive efficiencies.
This past may marked one year since we closed the masonite acquisition and we've made significant progress applying the Oc playbook to doors, we are drawing on our unparalleled commercial strength deepen customer relationships and expand our reach as we structurally improve margins over time.
Another key driver to our performance, are the Strategic Investments and choices. We are making to strengthen our Market leading positions by expanding capacity, modernizing assets and increasing operating efficiencies
We have done in our insulation and roofing businesses.
We have already captured more than 75% of our enterprise run rate synergy target of $125 million, the majority of which we committed to achieve by the end of year two of ownership.
In addition, we are targeting another 75 million of cost improvements, mostly through our doors network optimization actions that will begin to make an impact in 2026.
Through each of these initiatives, we are investing with purpose to meet customer demand modernize our production lines improved capital efficiency and sustained strong margins and consistent returns.
As we move forward, we will continue to capitalize on our position as a building products leader, serving North America, and Europe to execute our enterprise strategy to grow the company and deliver durable results across market cycles.
Fueling our strategy is the Oc advantage, which includes our iconic brand unparalleled commercial strength, leading technology and winning cost position.
These advantages form a playbook that can be scaled across the company to create multiple paths to generate value for our customers and shareholders.
Before I close I want to highlight a few recent organizational moves in July we announced the appointment of Nico delmonico to the role of roofing, President and named Jose Canoga as president of the insulation business.
Both are seasoned leaders with a proven ability to strengthened customer partnerships and maximize operating performance.
Nico most recently led the insulation business and his expertise and leveraging our high value brand and building products and customer engagement model to generate growth.
Jose has held leadership roles at Oc for more than a decade, most recently, leading our nonresidential insulation business and has demonstrated his ability to deliver value across dynamic markets.
We are excited to leverage their expertise to drive strategic growth within their businesses and across the enterprise.
I also want to thank and recognize Gunnar Smith, who is leaving to pursue another professional opportunity for his countless contributions to Owens Corning.
Under his leadership the roofing business achieved outstanding results through an incredibly talented team broad product offering and durable contractor engagement model, which will leave a lasting impact on our customers and our company.
And finally I want to recognize our team for earning is spot on the Fortune 500 list for the 70 <unk> consecutive time, one of only 49 companies to appear on this prestigious list every year since its inception.
This achievement reflects the companys depth and breadth of talent the strength of our iconic brands and products and unwavering focus on our customer success and our commitment to winning in the right way.
With that I'll turn the call over to Todd to discuss our second quarter in more detail.
Thank you, Brian and good morning, everyone.
As Brian mentioned, our results in the second quarter and through the first half of the year demonstrate the value we are creating through the Oc advantage in our overall enterprise strategy.
We continue to demonstrate the strength of the enterprise as we sustained higher and more resilient earnings and softening markets.
I would now like to turn to slide five to discuss the results for the quarter.
As a reminder, these results are for continuing operations.
In the second quarter, we built on our strong Q1 performance.
Revenue increased 10% driven by the strategic addition of our doors business last may.
Our unparalleled commercial strength, coupled with our winning cost position generated adjusted EBITDA of $703 million and an adjusted EBITDA margin of 26%.
The sale of our building materials business in China, and Korea is another step in sharpening our focus on what we do best building products in North America and Europe.
In the quarter, we had adjusting items of $26 million driven by an additional held for sale loss of $24 million on this business.
Yeah.
Adjusted earnings per diluted share for the second quarter were $4 and 21, reflecting both the strength of our earnings as well as the continued capital allocation commitment and ongoing share repurchase activity.
Turning to slide six to go further into our cash generation and capital deployment during Q2.
Free cash flow for the quarter was $129 million compared to 336 billion in the same period last year, driven by the timing of working capital, including an increase in inventory as a result of our ongoing tariff mitigation efforts and higher capital additions.
As we have shared we are investing in capital projects at elevated levels in the near term to expand capacity and drive improvement in long term capital efficiency.
As a result capital additions for the quarter were $198 million up $41 million from the same quarter prior year.
Our return on capital was 13% for the 12 months ending June 32025.
At quarter end the company had debt to EBITDA of two one times at the low end of our targeted range of two to three times.
During the second quarter, we returned 279 billion to shareholders through share repurchases and dividends, we repurchased common stock for $220 million and paid a cash dividend totaling $59 million.
We also received board approval for a new share repurchase authorization for up to 12 million shares. This authorization supports our commitment to a 2 billion return of cash to shareholders through 2026.
Free cash flow for the quarter was $129 million compared to 336 million in the same period last year, driven by the timing of working capital, including an increase in inventory, as a result of our ongoing tariff, mitigation efforts and higher Capital additions.
We're still on track for this level of return as we expect seasonality to create a step up in free cash flow generation in the second half of the year.
Our capital allocation strategy remains focused on generating strong free cash flow delivering mid teen returns on capital returning cash to shareholders and maintaining an investment grade balance sheet, while we invest in attractive capital projects for growth.
Our capital allocation strategy is focused on compounding long term value for shareholders.
Now turning to slide seven I'll provide additional details on our segment results.
at quarter end, the company had debt to ibida of 2.1 times at the low end of our targeted range of 2 to 3 times,
Our roofing business continues to exemplify the strength of our enterprise model.
during the second quarter, we returned 2079 million to shareholders through, share repurchases and dividends
Leveraging our contractor engagement strategy and vertically integrated cost position to outperform the market and deliver resilient earnings in the second quarter.
We repurchased Common Stocks for 220 million and paid a cash dividend, total length, 59 million.
Sales in the second quarter were $1 3 billion up 4% from prior year.
We also received board approval for a new share repurchase authorization for up to 12 million shares.
In the quarter revenue growth was primarily driven by positive price realization on our April increase.
This authorization supports our commitment to a 2 billion return of cash to shareholders, through 2026.
<unk> volume was in line with prior year, and we saw growth in nonwovens, where we've been investing in capacity.
We are still on track for this level of return. As we expect seasonality to create a step up in free, cash flow generation in the second half of the year.
The U S asphalt shingle market on a volume basis was down mid single digits compared to the prior year unless storm related demand.
Our U S shingle volume outperformed the market as demand for our shingles continued to struggle.
EBITDA was $457 million for the quarter up 5% versus prior year.
Our Capital allocation strategy remains focused on generating strong free, cash flow, delivering mid-teen return on Capital returning, cash to shareholders and maintaining an investment grade balance sheet while we invest, in attractive capital projects for growth.
Positive price more than offset the impact of modest cost inflation and higher manufacturing cost as we continue to invest in our assets to meet the high level of demand for our products.
Our Capital allocation strategy is focused on compounding, long-term value for shareholders.
Now, turning to slide 7, I'll provide additional details in our segment results.
Overall for the quarter, we delivered EBITDA margins of 35%.
Now please turn to slide eight for a summary of our insulation business our.
Our roofing business continues to exemplify the strength of our Enterprise model leveraging. Our contractor engagement strategy, in vertically, integrated cost position to outperform the market and deliver resilient earnings of the second quarter.
Our insulation business demonstrated the impact of structural improvements and disciplined execution sustaining 20 plus percent EBITDA margins despite market headwinds.
Sales in the second quarter were $1.3 billion, up 4% from the prior year.
This highlights our ability to win with customers and deliver results well above historical performance in similar markets.
In the quarter Revenue growth was primarily driven by positive price realization on our April increase.
Components volume was in line with prior year. And we saw growth in nonwoven where we have been investing in capacity.
Q2 revenues were $934 million, a 4% decrease from Q2 last year.
In North America residential volume was down due to market uncertainty tied to weaker demand in residential new construction.
The US asphalt shingle Market on a volume basis was down, mid single digits. Compared to the prior year, unless storm related demand.
Our us shingle volume. Outperformed the market as demand for our shingles continue to be strong.
In North American Nonresidential volume was up including demand to service data center construction related to AI as.
Ibida was 457 million for the quarter of 5% versus prior year?
As well as demand for our phone less product being used in commercial and industrial applications and.
In Europe, we continued to see market stabilization.
Positive pricing has more than offset the impact of modest cost inflation and higher manufacturing costs. As we continue to invest in our assets to meet the high level of demand for our products.
These businesses both recognized positive price in the quarter <unk>.
Installation EBITDA for the second quarter was $225 million down $21 million from prior year.
overall, for the quarter, we delivered ibaa margins of 35%
Now, please turn to slide 8 for a summary of our insulation business.
Strong operational performance, partially offset the impact of lower demand and the corresponding production downtime as we remain disciplined in our inventory management.
Our installation business demonstrated the impact of structural improvements in disciplined execution, sustaining 20 plus percent evida margins. Despite Market headwinds
Additionally, positive price nearly offset the impact of cost inflation.
Insulation delivered EBITDA margins of 24% in the second quarter.
This highlights our ability to win with customers and deliver results. Well above historical performance in similar markets.
Moving to slide nine I'll provide an overview of the doors business overall, the business continues to perform well in a challenging market.
Q2 revenues were 934 million of 4%, decrease from Q2 last year,
In the quarter the business generated revenue of $554 million in line with the outlook, we provided on our last call.
In North, America residential volume was down due to Market, uncertainty had a weaker demand in residential new construction.
Revenue was up modestly from Q1, primarily on higher volume in North America.
in North America, non-residential volume was up including demand to service data center construction related to AI
EBITDA for the quarter was $75 million with EBITDA margins of 14%.
As well as demand for our phone glass. Product being used in commercial and Industrial applications.
The integration is progressing well, reflecting our ability to apply our unique capabilities when.
in Europe, we continue to see Market stabilization
these businesses, both recognize positive price in the corner.
When we closed on the acquisition, we had line of sight to delivering $125 million of enterprise synergies with about half hitting the doors business.
Insulation Eva do for the second quarter was 225 million down 21 million from prior year.
To date, we've seen about 40% of our synergies captured in the business and the other 60% across the remainder of the enterprise.
Strong operational performance partially offset the impact of lower demand in the corresponding production downtime, as we remain disciplined in our inventory management.
This reflects our ability to scale the Oc advantaged applying the same playbook that structurally improve margins in roofing and insulation.
Additionally, positive price, nearly offset the impact of cost inflation.
We are on track to exceed the original enterprise commitment with an additional $75 million of structural cost savings generated through operational improvements.
Moving to slide 9, I'll provide an overview of the doors business.
We have already begun taking actions to achieve these savings, including a recent example, where we made the decision to close the components facility in Oregon in the second quarter.
overall, the business continued to perform well in a challenging Market,
In the quarter, the business generated revenue of 554 million in line with the Outlook, we provided on our last call.
Overall for the company there was minimal impact from tariffs on our financial results in Q2.
Revenue is up modestly from q1 primarily on higher volume in North America.
Our sourcing and supply chain teams have continued to demonstrate agility and discipline mitigating tariff exposure and preserving margins.
Ibida for the quarter was 75 million with ibida margins of 14%.
The integration is progressing. Well reflecting our ability to apply our unique capabilities.
As a result, we expect the third quarter to be similar to the second quarter with approximately $50 million of gross tariff exposure reduced to a net impact of around $10 million, primarily in the doors business.
When we closed on the acquisition, we had line of sight to delivering 125 million of Enterprise synergies with about half hitting the door's business.
This impact is included in the outlook, Brian will share in a moment.
Today we have seen about 40% of our synergies captured in the business, and the other 60% across the remainder of the Enterprise.
Owens Corning is well positioned to address rising tariffs with are primarily local for local manufacturing in U S. MCA compliant product portfolio, but.
This reflects our ability to scale the OC advantage, while applying the same Playbook that structurally improved margins, and Roofing and insulation.
But we expect a small step up in net tariff exposure in the fourth quarter.
With the latest round of tariffs our mitigation efforts, we expect the net tariff impact to be less than 1% of Cogs in the second half, it's favorable to our previous guidance of 1% to 2% Cogs exposure.
We are on track to exceed the original Enterprise commitment with an additional 75 million of structural cost savings generated through operational improvements.
We have already begun taking actions to achieve these savings. Including a recent example where we made the decision to close a components Facility in Oregon in the second quarter.
Moving on to Slide 10, I will discuss our full year 2025 outlook for key financial items.
Overall, for the company, there was minimal impact from tariffs and our financial results in Q2.
General corporate EBITDA expenses are expected to range from $240 million to $260 million.
As a reminder, this year over year increase includes our best view of expenses for the glass reinforcements business that will not be included in discontinued operations.
Our sourcing and supply chain teams have continued to demonstrate, agility and discipline, mitigating tariff, exposure and preserving margins.
We expect our 2025% effective tax rate to be 24% to 26% and anticipate a cash tax benefit of more than $90 million in the year from the recent tax bill.
As a result, we expect the third quarter to be similar to the second quarter with approximately 50 million of gross tariff, exposure reduced to a net impact of around 10 million primarily in the doors business.
This impact is included in the Outlook. Brian will share in a moment.
Capital additions are expected to be approximately $800 million.
This level of capital investment reflects the strategic investments, we are making to expand capacity and drive improved efficiency.
Ons. Well, positioned to address Rising tariffs with our primarily local for local, manufacturing, and usmca compliant product portfolio.
but we expect a small step up in net, tariff exposure in the fourth quarter,
This capex continues to include glass reinforcements, which is expected to be approximately $80 million in 2025.
With the latest round of tariffs and our mitigation efforts, we expect the net tariff impact to be less than 1% of cogs in the second half.
We expect Capex to remain elevated in the near term as we work towards completing the high return capital efficient projects, we have in process.
Favorable to our previous guidance of 1 to 2% cogs exposure.
Now please turn to slide 11, I will turn the call back to Brian to further discuss our outlook Brian.
Moving on to slide 10, I will discuss our full year 2025 outlook for key financial items.
Okay.
Thank you Todd.
General Corporate. Evida expenses are expected to range from 240 to 260 million.
Our second quarter results reflect the strength of our company and the disciplined execution of our strategy, even as we navigate a more challenging macro environment.
With leading positions in roofing installation indoors, our product and application diversity continues to support good margin stability, even as we face tougher market conditions.
As a reminder, this year-over-year increase includes our best view of expenses for the glass reinforcements that will not be included in discontinued operations.
In the third quarter, we expect overall market demand for non discretionary roofing repair activity to remain solid but declined versus prior year driven by lower storm activity.
We expect our 2025 effective tax rate to be 24 to 26%, and anticipate a cash tax benefit of more than 90 million in the year from the recent tax bill.
Capital additions are expected to be approximately 800 million.
We expect residential new construction and discretionary R&R in the U S to remain challenged.
This level of capital investment reflects the Strategic Investments. We are making to expand capacity and drive improved efficiency.
North American nonresidential construction, we expect a relatively stable market and in Europe, we expect market conditions in the second half to gradually improve with the broader economic recovery in the region.
This capex continues to include glass reinforcements, which is expected to be approximately 800 million in 2025.
Given this near term outlook, we anticipate third quarter revenue for continuing operations to be approximately two 7% to $2 8 billion slightly below to in line with prior year.
We've expected capex to remain elevated in the near term. As we work towards completing the high return, Capital efficient projects, we have in process.
Now, please turn to slide 11, and I'll turn the call back to Brian to further discuss our outlook. Brian.
For adjusted EBITDA, we expect to deliver another strong quarter with margins of approximately 23% to 25% for the enterprise.
Thank you Todd, our second quarter results, reflect the strength of our company and the discipline execution of our strategy even as we navigate the more challenging macro environment.
Now consistent with prior calls I will provide a more detailed business specific outlook for the third quarter.
With leading positions in Roofing, insulation and doors.
Starting with our roofing business, we anticipate revenue growth of low to mid single digits, while market demand for shingles. In many regions should remain solid we expect <unk> shipments to decline from prior year, assuming normalized storm demand versus elevated levels in 2024.
Product and application diversity continues to support good margin stability. Even as we Face tougher market conditions,
In the third quarter, we expect overall market demand for non-discretionary roofing repair activity to remain solid, but decline versus prior year driven by lower storm activity.
We expect our shingle volumes to remain relatively stable versus prior year as we continue to see strong demand for the Oc brand and our roofing products.
We expect residential new construction and discretionary RNR in the US to remain challenged.
We anticipate normalized attachment rates and components to continue and another quarter of top line growth in nonwovens.
In North America non-residential construction. We expect a relatively stable market. And in Europe, we expect market conditions in the second half to gradually improve with the broader economic recovery in the region.
In the third quarter, we expect moderate cost and delivery inflation, we also anticipate manufacturing costs and SG&A to be up as we invest in our assets and absorbed the necessary maintenance cost.
Given this near-term Outlook. We anticipate third quarter revenue for continuing operations to be approximately 2.7 to 2.8 billion slightly below to in line with prior year.
So the business, we expect positive price from our previous announcements to drive year over year top line growth and positive price cost overall.
For adjusting debit. Do we expect to deliver another strong quarter with margins of approximately 23 to 25% for the Enterprise?
Overall for roofing, we expect to generate an EBITDA margin similar to prior year, which was 34%.
Now, consistent with prior calls, I'll provide a more detailed business specific outlook for the third quarter.
Moving on to our installation business, we anticipate overall revenue to decline mid to high single digits compared to the prior year, primarily due to a volume decline in north American residential and the sale of our building materials business in China. As a reminder, this business had approximately $130 million of revenue annually.
Starting with our roofing business, we anticipate revenue growth of low to mid-single digits.
While market demand for shingles in many regions should remain solid. We expect armor shipments to decline from prior year, assuming normalized storm Demand versus elevated levels in 2024.
In our North American residential insulation business, we expect revenue to be down low double digits versus prior year due to lower demand as we worked through a step down in housing starts and lower backlog.
We anticipate normalize attachment rates and components to continue and another quarter of Topline growth in non-woven.
For North American Nonresidential, we expect revenue to be up slightly versus prior year and in Europe, we anticipate revenue to be up versus prior year, as we see gradual market recovery and currency tailwind.
In the third quarter, we expect moderate costs in delivery inflation. We also anticipate manufacturing costs in sgna to be up as we invest in our assets and absorb the necessary maintenance cost.
Overall for the insulation business, we expect ongoing cost inflation, resulting in negative price cost in the quarter.
For the business, we expect positive price from our previous announcements to drive year-over-year topline growth and positive price cost.
Additionally, with the volume pressure in North American residential, we anticipate incremental production downtime, partially offset by productivity.
overall, for roofing, we expect to generate an Eva margin similar to Prior year, which was 34%
Given all this we expect EBITDA margin for installation to be in the low 20% range.
Turning to our doors business, we continued to perform well relative to market conditions, as we realize synergies and drive ongoing network optimization.
moving on to our installation business, we anticipate overall Revenue to decline mid to high single digits. Compared to the prior year, primarily due to a volume decline in North American Residential and the sale of our building materials business in China.
Although we have operated the doors business for a full year post acquisition, we will begin providing guidance versus prior year.
As a reminder, this business had approximately 130 million of Revenue annually.
In Q3, we expect challenging market conditions to continue resulting in a revenue decline of low to mid single digits versus prior year, driven primarily by lower demand and pricing down slightly.
In our North American Residential insulation business, we expect Revenue to be down low, and double digits versus prior year, due to lower demand. As we work through a step down in housing starts and lower backlog.
While we anticipate synergies and cost control realization to continue we expect EBITDA to be impacted by inflation, including the ongoing impact of announced tariffs.
For North American non-residential, we expect Revenue to be up slightly versus prior year. And in Europe, we anticipate Revenue to be up versus prior year. As we see gradual Market recovery and currency Tailwind.
In the near term doors faces more tariff exposure than our other businesses due to the cross border product moves into Canada, which we are actively working to mitigate.
Overall, for the installation business, we expect ongoing cost inflation, resulting in negative price costs in the quarter.
Overall for doors, we expect EBITDA margins of low double digits to low teens for the quarter.
Additionally with the volume pressure in North American Residential, we anticipate incremental production downtime, partially offset by productivity.
As Todd mentioned, another factor that could impact our enterprise results in Q3 as the implementation of additional tariffs. We expect the net impact of tariffs for Owens Corning in the third quarter to be similar to what we incurred in Q2.
Given all this, we expect Eva de margin for insulation to be in the low 20% range.
Turning to our doors business. We continue to perform well relative to market conditions, as we realize synergies and drive ongoing Network optimization.
In summary, our team delivered strong performance in the second quarter with an outstanding response to a dynamic market executing with discipline and focus.
Now that we have operated the doors business for a full year post-acquisition. We will begin providing guidance versus prior year.
Our strategic choices and structural improvements we've made over the past several years have created a new Owens Corning a more focused resilient company that is built to outperform we remain.
Q3 we expect challenging market conditions to continue resulting in a revenue decline of low to mid single digits versus prior year, driven primarily by lower demand and pricing down slightly.
We're confident in our ability to deliver higher more durable margins through a cycle generates strong free cash flow and create long term value for our shareholders.
While we anticipate synergies and cost control realization to continue, we expect Evita to be impacted by inflation, including the ongoing impact of announced tariffs.
As we move through the second half of the year, we will continue to invest in our people our capabilities and our customer relationships, while maintaining a sharp focus on execution and operational discipline.
In the near term, Doors faces more terrific exposure than our other businesses, due to the cross-border product moves into Canada, which we are actively working to mitigate.
Overall for doors, we expect Evita margins of low double digits to low teams for the quarter.
With that we would like to open the call up for questions.
Thank you.
As Todd mentioned, another factor that could impact our Enterprise results in Q3 is the implementation of additional tariffs.
Please press star followed by the number one if you'd like to ask a question and then show you devices. Amit can you limit your attempt to speak Condra reminder, please limit yourself to one question.
We expect the net impact of tariffs for Owens Corning in the third quarter to be similar to what we incurred in Q2.
Our first question today comes from John Lovallo with UBS. Please go ahead. Your line is open.
In summary, our team delivered, strong performance. In the second quarter with an outstanding response to a dynamic Market executing with discipline and focus.
Good morning, guys. Thanks for taking my question.
The question is on North American industry capacity utilization I think it was in the low to mid 80% range. I think you guys highlighted that 90% is typically kind of the pricing trigger point.
The Strategic choices and structural improvements we've made over the past several years, have created a new Owens Corning, for more focused resilient company, that is built to outperform.
As you know how has capacity utilization trended since last quarter and how are you thinking about pricing, especially considering the expectation for negative price cost in the third quarter.
We remain confident in our ability to deliver higher more durable margins through a cycle, generate strong free cash flow and create long-term value for our shareholders.
Thanks, John Good morning. This is tod happy to provide more color on <unk> pricing and market conditions.
As we move through the second half of the year, we will continue to invest in our people, our capabilities and our customer relationships while maintaining a sharp focus on execution and operational discipline.
With that, we would like to open the call up for questions.
Let me start at the highest level for the enterprise because we've done a lot of work over time to grow into the repair and remodel space in roofing with non discretionary repair remodel as well as repair and remodel elsewhere.
Thank you, please. Press star, followed by the number 1. If you'd like to ask a question and ensure your devices are muted locally when it's your turn to speak.
A kind reminder to please limit yourself to 1 question only.
And we're at a point, where the resin exposure on an enterprise basis is a lot smaller than it used to be historically, we're down to about 13% of enterprise revenue in North America Rez in Q2.
Our first question today comes from John Lavallo with UBS. Please go ahead. Your line is open.
So with that as the backdrop when we look at the second quarter, we had another quarter of weak legs starts and that's following a weak quarter that we had in Q1. So we were down about 5% and like starts in Q1 down 1% in Q2, and then like starts to be down another 1% for Q3.
Good morning guys. Thanks for taking my question. Um, the question is on North American industry, capacity utilization. I think it was in the low to mid 80% range and I think you guys highlighted, that 90% is typically kind of the, the pricing trigger point. The question is, you know, how has capacity utilization trended since last quarter and how are you thinking about pricing, especially considering the expectation for negative price cost in in the third quarter?
When you look at what top build announced earlier this week they showed 11% lower volume in Q2 in their true team business, which is the installation business that handles a lot of the rez fiberglass and may guided to low double digit declines in <unk> for 2025, we're seeing than market volumes.
Thanks John, good morning. This is Todd uh happy to to provide more color on res, pricing and and market conditions.
Be a little worse than lake starts as a result of a couple of things. One is we're seeing completions declined at a faster rate. The lag starts. We're also seeing a shift away from single family construction towards multifamily in the back half of this year.
Let me start at the highest level for the Enterprise because we've done a lot of work over time to grow into the repair and remodel space, uh, in Roofing with non-discretionary repair and remodel as well as repair and remodel elsewhere.
And we have a higher take per unit for single family than we do for multifamily.
So if I step back up with that context to industry utilization, we still believe the industry can support between one four and $1 5 million housing starts depending on the mix of single family multifamily and that does imply first half utilization that was below 90% what we've shared is.
Too. So with that is the backdrop. When we look at the second quarter uh we had another quarter of weak leg starts and that's following a weak quarter that we had in in q1. So we were down about 5% in leg starts in q1 down 1% in Q2, and then leg starts to be down another 1% for, for Q3.
Above 90% typically has been a market, where we're able to get positive price, but there is no conclusive trends below 90% and some of those markets, we're able to get positive price in other markets prices neutral.
When you look at what top build announced earlier this week, um, they showed 11% lower volume and and Q2 in their true team business.
Price decline is well below that 90% utilization level.
So what we're seeing right now is we saw limited traction on the price increase that we took this year for rez fiberglass.
We're still seeing a lot of inflation come through in the business, we have inflation on materials. Some long some longer contracts that didn't reset in the peak inflationary period, we're starting to absorb some of that inflation now we're seeing inflation in labor, we're seeing inflation in warehousing expenses and where.
Which is the installation business that handles a lot of the Reds, uh, fiberglass and they guided to low double-digit declines in res. For 2025. We're seeing then uh, Market volumes be a little worse than leg. Starts is a result of a couple of things. 1 is we're seeing uh completions decline at a faster rate the leg starts. We're also seeing a shift away from single family construction towards multi-family in the back half of of this year uh and we have a higher take per unit for single family than we do for for multi family.
Not seeing much positive price in the market to offset that.
We are we are making very surgical price moves as needed in the market for certain products in certain markets, but again, they're very targeted and theyre very surgical moves to meet competitive situations with with pricing.
So if I step back up with that context to Industry uh utilization we still believe the industry can support between 1.4 and 1.5 million housing starts depending on the mix of of single family multi family and that does imply first half, utilization that was below. 90%, you know what we've shared is above 90% typically has been a market where we're able to get positive price but there
So overall.
Right.
We are seeing a market where there is there is a free supply we're not sold out as we have been in recent quarters, we're navigating through that that effectively with our teams were maintaining our price premium over our competitors were maintaining a relatively stable share in the market. So we're doing that.
There's no conclusive trends below 90%, and some of those markets were able to get positive price and other markets' prices neutral. Price can decline as well below that 90% utilization level.
So what we're seeing right now is uh, we we saw limited traction on the price increase that we took this year for res fiberglass.
We're still seeing a lot of inflation come through in the business. We have inflation on materials.
Things, we want to do commercially in this market.
And we know how to navigate through this we've seen this multiple times before with utilization at this level. So nothing unusual for us and entertains. Thanks, John for the question.
Some long. Um, some longer contracts that didn't reset in the peak. Inflationary period. We're starting to absorb some of that inflation now
Thank you. Our next question today comes from Anthony Pettinari with Citi. Please go ahead. Your line is open.
We're seeing inflation in labor. We're seeing inflation in warehousing expenses, and we're not seeing much positive price in the market to offset that.
Good morning.
Maybe sticking with installation, but but non res in Europe, I think you expect revenue to be up for both of those businesses and <unk> I'm wondering if it's possible to kind of size that and then talk about the price cost dynamic.
We are, we are making very surgical price. Moves is needed in the market for certain products uh in certain markets. But again they're they're very targeted. And they're very surgical uh moves to meet competitive situations with with pricing.
That you're seeing in commercial in Europe installation.
um, so overall you know, we we we are seeing a market where there is um there is free Supply, we're not sold out as we have been in in recent quarters
Thanks, Anthony I'll be happy to get more color on non res in Europe when.
We're navigating through the that effectively with our teams, we're maintaining a price premium over competitors.
When we look at when we look at revenue dynamics in those two markets. We are guiding to a positive growth in Q3, it's fairly modest growth in both.
We're maintaining a relatively stable share in in the market. So we're doing the things we want to do commercially in this market.
I'll talk a bit about North America, and then we can talk about Europe, and North America. The overall backdrop for the market.
Uh, and we know how to navigate through this, we've seen this multiple times before, with utilization, at, at this level. So nothing unusual for us, and, and our teams, thanks John for the question.
Is a bit of a decline in construction spending in the non res space now what's interesting is we're seeing growth in the market and in some of the end markets where take per unit is higher for for installation. So we highlighted data centers and our prepared remarks, but that's a really important.
Thank you. Our next question. Stay comes from Anthony. Petar the city, please. Go ahead your lines open.
Uh, good morning.
One because the take per unit is really high for data centers that we know theres a lot of construction occurring to support the boom in AI.
But we're seeing the same thing in some of the process insulation, we sell for manufacturing.
Um, maybe sticking with insulation but, but, uh, non-res in Europe, I think you expect Revenue to be up for both of those businesses. In 32, I'm wondering if it's possible to kind of size that and then talk about the price cost Dynamic, uh, that you're seeing in commercial and and European solution.
And an installation for oil and gas all of those are good end markets for us now so.
Thanks Anthony. Have you happy to get more color on on non-res in in Europe?
So we're seeing relatively good conditions for our products in market.
I'll remind everybody in the non res space. These products tend to be more specified into into the applications that we tend to compete on multiple performance attributes.
When we look at, uh, when we look at Revenue Dynamics and, and those 2 markets, uh, we are guiding to positive growth in Q3. It's fairly modest growth in in both.
What that means for us practically is pricing tends to be a bit more stable in this space.
Um I'll talk a bit about North America and then we can talk about Europe in North America. The the overall backdrop for the market is uh, a bit of a decline in construction spending in the non-res space.
And we're seeing that come through our Q2 results, where we are seeing positive price in non res, we are seeing inflation come through.
And in this market similar dynamics to what we've seen in many of the product lines to what I described in res.
Bid pricing isn't typically has not moved the same way we've seen it move in the non risk space in North America are in North America rest base compared to North American non res.
When we look at Europe.
You know, what's interesting is, we're seeing growth in the market and and some of the, the end markets where take per unit is higher for, uh, for insulation. So we highlighted data centers in our prepared remarks, but that's a really important 1, because the take per unit is really high for data centers. And we know there's a lot of construction occurring to support the the boom and AI, but we're seeing the same thing in in some of the, the process insulation we sell for manufacturing, uh, in an insulation for oil and gas. All of those are good and markets for us. Now,
Europe overall, we're seeing green shoots and especially in some of the markets, where we've got a strong position in the Nordics and the U K, we're seeing pockets in southern Europe be strong.
We're seeing others in the industry share that on their earnings calls.
Our revenue was down in Q2 in Europe, largely due to a couple of product lines that we chose to exit in the region.
I'll, I'll remind everybody in the non-res space. These products tend to be uh more specified into uh, into the applications. And we tend to compete on multiple performance attributes.
But overall, we're we're encouraged with the trends off of a low base in Europe Europe has been weak since we saw that Ukraine invasion. Our teams have done a great job in Europe getting costs out of our business and driving productivity. We're in a really good position now with with capacity to sell and to grow into.
We're going to like the incremental margins on that business as the market recovers. So it's early days and the European recovery.
We're encouraged with what we see with with the Green shoots thanks Anthony.
What that means for us, practically is pricing, uh, tends to be a bit more stable in the space. And we're seeing that come through, uh, you know, our Q2 results where we are seeing positive price in in non-res, we are seeing inflation come through, uh, in in this market, similar Dynamics to what we've seen in in many of the product lines to what I described in in Rez. Uh, but pricing isn't, uh, typically is not moved the same way. We've seen it move in the non-res space, uh, in North America or in North America red space Compared to North American non-res.
Our next question comes from Michael Rehaut with JP Morgan. Please go ahead.
Thanks, Good morning, everyone and thanks for taking my questions and nice results.
When we look at Europe, uh, Europe, overall, we're seeing green shoots and especially in some of the markets where we've got a strong position in the nordics, uh, in the UK, we're seeing pockets in southern Europe, be strong. Uh, we're seeing others, uh, in the industry share that on their earnings calls.
Wanted to shift gears, a little bit to the doors business.
You guided for the third quarter.
Low double digit to low teens, which might imply slight improvement if I'm reading into that correctly.
From the <unk> performance.
Just wanted to get a sense of what's driving that.
Our our Revenue was down in Q2 in Europe. Uh largely due to a couple of product lines that we chose to exit in the region. Uh but overall we're uh we're encouraged with the trends off of the low base in Europe. Europe has been weak. Since we saw the Ukraine Invasion, our teams have done a great job in Europe getting costs out of our business and driving productivity. We're
You know the ongoing.
Cost synergy realization and you know kind of bigger picture.
When you look at this business.
Pre acquisition, if you look at North America, Europe blended they did about 19% EBITDA margin. Obviously, you know over the last year or two has taken a real hit from the new res market, but how do you see line of sight back to that obviously the 75 additional synergies may give you an.
A really good position Now with uh, with capacity to to sell and to grow into where we're going to like the incremental, margins on that business as the market recovers. So it's early days in the European recovery. Uh, but we're encouraged with what we see with, uh, with the green shoots. Thanks Effie.
Our next question comes from Michael Rahal of JP Morgan.
Please go ahead.
There's three points.
Uh thanks uh good morning everyone. And uh thanks for taking my questions and nice results.
But how would you see line line of sight back to like a 20 ish type of of EBITDA margin.
Good morning, Mike Thanks for the comments and the questions and we are really pleased overall with the performance of the business every business I think is outperforming the market.
Um, wanted to shift, gears a little bit to the doors business. Um, you know you guided for the third quarter, um,
Low double digits to low teens, which might imply, slight Improvement, if I'm reading into that correctly.
Even with the tough market environment as Todd pointed out our <unk> business is still performing at a very high level very blended in terms of our noncommercial Europe residential rates, our roofing business is performing at a fairly high level in our doors business continues.
To perform.
Really high levels relative to the market challenges, we're facing into so in terms of our Q3 guide versus Q2 to answer your first part of your question, we're actually guiding to pretty much in line performance to Q2. So while this is going to be the first quarter. Our Q3 guide on a year over year basis, and while we're seeing volumes kind of stepped down on a year over year.
Sequentially, we've seen really good volume stability through the first half of the year and we expect that to continue so.
Um, from the 2q, uh, performance. Um, just wanted to get a sense of what's driving that um, if it's, you know, the ongoing um, you know, cost Synergy realization and, you know, kind of bigger picture. Uh, when you look at this business, um, you know pre-acquisition, you know if you look at North America Europe Blended they did about a 19% ebit da margin. Obviously, you know, over the last year or 2, it's taken a real hit from the new res Market. But how do you see line of sight back to that? Uh, obviously the 75 additional synergies, may give you another 3 points.
Uh, but how would you see line line of sight back to like a 20-ish type of, of, of vivid, Dom margin?
So I think we're seeing that kind of continued volume stability, which is the core of why we're given a guide thats pretty much in line with Q2, we're seeing good market pricing stability and good pricing stability, we're seeing good mix Steve.
Staying pretty constant so we've seen certainly a step down in both the new construction and R&R part of the business year over year, but some good stability month over month and quarter over quarter, and we think that gives us confidence we can sustain that kind of margin performance. We do expect to see a little bit of tariff headwind in Q3 with some of the stepped up tariff.
<unk>, particularly around steel and aluminum.
And we're also starting to work through some of the inventory pre buys and some of the materials, we're bringing in to be in front of that so that's going to be a little bit of headwind that we think is offset through some of the continuing cost optimization work through our network integration so back to your second part.
Youre right in terms of how you characterize the long term performance met that high teens EBITDA margin performance, we feel that the business can perform at or above that level that was what made it an attractive product category for us to get into as a category that we could scale up we could grow and we felt we could really improve the margin performance with our ownership advantages kind of applying the.
Morning Mike. Thanks for the the comments in the, in the questions. And and we are really pleased overall with the the performance of the business. Uh, every business I think is outperforming the market, uh, even with the tough uh res. Uh Market environment as Todd pointed out. Our res business is still performing at a very high level, very Blended. In terms of our non-commercial Europe residential rates are Roofing. Businesses is performing at and probably high level and our doors business. Uh, continues to perform at at a really high level of relative to the market challenges. We're, we're facing into so in terms of our Q3 guide, uh, versus Q2 to answer, your first part of your question, we're actually guiding to pretty much in line performance to Q2. So while uh, this is going to be the first quarter, our Q3 guide on a year-over-year basis. And while we're seeing buying kind of step down on a year-over-year sequentially, we've seen really good. Volume stability through the first half of the year and we expect that to continue. Uh so I think we're we're seeing that kind of continued volume stability, which is the core of why we're giving a guy.
Same playbook around commercial execution operational execution that we've done in roofing and insulation to improve the margin performance in those businesses within doors and Thats. The path, we laid out in Investor day around the long term guide that we can see an EBITDA margin performance in this business 20 or above in the near term, there's going to be a lot of work around that.
That's pretty much in line with Q2 we're seeing good market price and stability and good price and stability. We're seeing good mix, uh staying pretty constant. So we've seen certainly a step down on both the new construction and the R&R part of the business year-over-year, but some good stability month over month in quarter over quarter. And we think that gives us confidence. We can sustain that kind of margin performance. We do expect to see a little
<unk> optimization side network integration is tracking on path to a $125 million. We also then continue to see network optimization opportunities that's going to be another leg up we're just getting started with that we.
We did announce a closure of a facility in Oregon. That's that's part of that network optimization as we think about where we can realize productivity benefits and drive more scale efficiency inside the network. So that's going to be another big leg up in terms of margin improvement as we optimize the production network and then we continue to make great progress commercially in terms of.
How we're looking at positioning this product along with roofing and with installation on a more integrated basis to some of our larger distribution partners and we're starting to see a little bit of traction in that work, where we can take a more integrated product offering to our contractor base, our builder base, our dealer base and then that gets pulled through distribution.
And we think Thats a third piece of this in terms of the commercial execution side that drives margin performance, but certainly in the near term, we're going to work through a choppy environment a lot of the cost optimization and network realization work. We're seeing is is being consumed by kind of tariffs and some of the volume headwinds we're facing into the market today.
But we're really set up with our improved cost structure I think an improved commercial position that once we start to see market conditions come back I think we really can accelerate the earnings at a pretty fast pace going forward.
Right. In terms of how you characterize the long-term performance and that that high team debit, dog margin performance, we feel like the the business can perform at or above that level. Uh that was what made it. An attractive product category for us to get into. It was a category that we could scale up. We could grow uh and we felt we could really improve the margin performance with our ownership advantages, kind of applying the same Playbook around commercial execution, operational execution that we've done in Roofing and insulation to improve the margin performance in those businesses with indoors, and that's the path we laid out in investor day around the the long-term uh, guide that we can see Anita margin performance in this business 20 or above in the near term. There's going to be a lot of work around, the cost optimization side Network. Integration is tracking on on path to 125 million. We also then continue to see a network optimization opportunities that's going to be another leg up. We're just getting started with that. Uh, we did announce a closure of a Facility in Oregon uh that's that's part of that Network. Optimization is we
Right.
Yeah.
Our next question comes from Stephen Kim with Evercore ISI. Please.
Please go ahead.
Thanks, a lot guys I appreciate all the color here so far I wanted to ask you guys about mix.
In insulation, just kind of starting there I think you had indicated that there was overall some negative mix.
Think about where we can realize productivity benefits and drive more scale efficiency inside the network. Uh so that's going to be another big leg up in terms of margin Improvement as we optimize the production Network and then we continue to make great progress commercially in terms of how we're looking at positioning, this product along with Roofing and with insulation on a more integrated basis to some of our larger distribution partners. And we're starting to see a little bit of of, of traction in that work, where we can take a more integrated product offering to
Which offset some of your positive pure price.
But I think you also indicated that phone sales for stronger non res is performing well and the north American residential was kind of a.
A point of some softness, which I think everybody understands but isn't non res and foam glass kind of a higher mix. So I was wondering if you could provide a little more clarity on the negative mix in installation and then in roofing.
I wanted to kind of get a sense for what youre seeing there in terms of mix you've had a lot of really good mix.
Our contractor base, our Builder, base our dealer base, and then that gets pulled through distribution. Uh, and we think that's the third piece of this, in terms of the commercial execution side that that drives margin performance. But but certainly in the near term, we're going to work through a choppy environment. A lot of the cost optimization and network realization work. We're seeing is uh, is being consumed by kind of tariffs and and, and some of the volume headwinds we're facing into the market today. But, but we're really set up with a with an improved cost structure. I think an improved commercial position that once we start to see market conditions come back, I think we really can accelerate the earnings at a pretty fast pace going forward.
Some of that was due to the protective packaging going away some of that was.
Our next question comes from Stephen Kim with Evercore ISI.
The move the increase in laminated shingles.
Please go ahead.
Curious, what we should be thinking there and is there any impact from the re class of nonwovens that might pulling up the numbers a little bit just help us understand the mix broadly in roofing as well thanks.
Stephen I'll take insulation first and then Brian can stepping on the roofing piece. So we did see negative mix in Q2, we believe it's mostly timing related to some projects and when they hit compared to prior year. So we don't see it as an ongoing dynamic we don't think this is.
Something that is permitted just a little bit of noise in Q2, as a result of that timing.
Thanks a lot, guys. Appreciate all the, the collar here so far. Um, wanted to ask you guys about mix. Um, uh, in in insulation just kind of starting their, um, I think you'd indicated that there was overall, some negative mix, uh, which offset some of your positive pure price. Um, but I think you also an indicated that, you know foam, glass sales were stronger, um, non-res, you know, performing well and the, uh, North American Residential was kind of a, you know, a point of some softness, which I think everybody understands, but isn't non-res and foam glass kind of higher mix. So I was wondering if you could provide a little more clarity on the negative mix in insulation and then
Yeah, Steven on roofing, we're really not seeing big variations in terms of overall mix. That's impacting the results. We've continued to see a step up of laminate shingled demand in the market and we've been keeping pace with that with our investments. It's why we've been investing.
Investing to increase our lamb capacity at Medina, and the new facility in the southeast. So we've seen that continue to tick up, but but continuing to support that and components.
In uh Roofing. Um, wanted to kind of get a sense for uh what you're seeing there in terms of mix, you've had a lot of really good mix. Um, some of that was due to the protective packaging going away. Some of that was, um, you know, the the increase in laminated shingles, kind of curious what we should be thinking there and is there any impact from the reclass and non-woven that might, you know, pollute the numbers a little bit, just just help us understand. Mix, uh, broadly in Roofing as well. Thanks,
We've really.
Have settled into a really nice attachment rate. So part of that is the branded roofing system. We can offer on contractors can take into the home where they buy our underlayment our start of our hip hemorrhage, all part of a complete system in package Oc branded.
Stephen, I'll take insulation first and then uh Brian can step in on the roofing piece.
That is really driven a lot of the components volume, but we've seen those attachment rates stay fairly steady a little bit of positive momentum, but but in increments and then to your to your other question. None on the nonwovens spring that there really is not having any impact in terms of the mix overall part of the the.
So we did see negative mix in Q2, uh, we believe, it's mostly timing related to some projects. And and when they hit compared to to Prior year, so we don't see it as an ongoing Dynamic. We don't think this is something that is is permanent just a little bit of noise in Q2 as a result of of that timing.
<unk> focus in and desire to bring it into roofing is it really is an integral part of the vertical integration strategy in roofing to have that non woven seating and it gives us great opportunities driving productivity in our manufacturing processes driving innovation with the structural design of the shingle and then the external sales carry a margin profile very <unk>.
Similar to our overall roofing business. So it's a great fit in terms of the complements the vertical integration piece and gives us good margin structure very similar to two components.
Yeah. And Stephen on on Roofing, we're we're really not seeing big variations in terms of overall mix. Uh, that's impacting the results. We've we've continued to see a step up of laminate, shingle, demand in the market, and we've been keeping Pace with that, with our investments. It's why we've been, uh, uh, investing to increase our lamb, uh, capacity at Medina and the new facility in the Southeast. So, uh, we've seen that continue to pick up but, uh, but to continue to support that in components. Um, we've really, uh, have have settled into a really nice attachment rate. Uh, so part,
In our roofing business, so really no no impact in terms of overall mix with the nonwovens business coming in.
Yeah.
Next question comes from Sam Reed with Wells Fargo.
Please go ahead.
Awesome. Thanks, so much.
I think they are planning to drive roofing volumes ahead of arm in the third quarter.
Just contextualize, what you mean by.
Industry shingle market down.
I mean down low single digits down mid single digits, and then maybe talk through your outperformance is.
That just better execution on your part or would you also characterize that as some incremental volume coming out of Medina, which would love to get a sense of the contribution from that new capacity on roofing.
It plays into your guidance.
Yeah. Thanks, Jim.
Overall, we came into the second quarter.
<unk> to see a step down in market shipments based on a more normalized storm season, and Thats really what we think happened in Q2 and what we expect to continue to happen here in Q3, so in the third quarter, while we expect it to be very solid from a historical standard you know it could be down mid single digits, depending on storm activity as well so we could see a similar evolution.
Impact in terms of the mix overall part of the the um, the focus and and and desire to bring that into Roofing, is it really is an integral part of the vertical, integration strategy and Roofing to have that non-woven seating in and gives us great opportunities. Driving productivity in our manufacturing processes, driving Innovation uh with the the structural design of the shingle uh and then the external sales, carry a margin profile, very similar to our overall roofing business. So it's a great fit in terms of the complements the the uh, vertical integration piece and gives us a good margin and structure very similar to to components and in the in the roofing business. So, really no no impact in terms of overall mix with the non-woven business coming in.
Uh, next question comes from Sam Reed with Wells Fargo.
Please go ahead.
<unk> of that again overall in the market good conditions, but it's a step down to more normalized storm volume. So the last time. We saw this was in the back half of 2022 and this is where you saw the strength of our contractor engagement model and that's really the success of our business is centered around that model where we.
We go out we convert contractors to our brand our products we help them.
Win and grow in the market through our marketing tools, our digital tools, our commercial and training capabilities all of those things that really drive the contractors success helps them grow their businesses and then in turn that creates a loyalty to our product brand and also creates demand for our distribution partners. So it's a win win across the channel in terms of how we focus that in.
Awesome. Thanks so much. Um, sounds like you're planning to drive Roofing volumes ahead of Armen, the third quarter. Um maybe just contextualize what you mean by um industry single Market down, you know, it doesn't mean download single digits down mid single digits and then maybe talk through your outperformance. Um, is that just better execution on your part or would you also characterize that as some incremental volumes coming out of madinah uh which is love to get a sense of the contribution from that new capacity on Roofing um and how it plays into your guidance. Thanks.
We continue to invest to improve and increase that that contractor engagement model and add contractors to the network. So when we talk about outperformance relative to the market. What we delivered in Q2 and what we expect to deliver in Q3 were really not driving volume. We're just responding in servicing the contractor base.
<unk> has built their business around our products and brands.
And are continuing to grow in the market. So it's really servicing that base overall. It is why we've invested increasing land capacity you mentioned Medina. So we were able to start that up towards the end of the second quarter.
That volume is ramping up and getting into the market, but that's going to be a ramp up over the back half of the year really won't get the full capacity utilization until we get to the first part of next year, when we hit that spring selling season, but it absolutely is a big part of now having more land capacity to service that contractor demand that we've seen in and Frac.
Yeah, thanks, Sam. Uh, you know, overall, we came into the second quarter, uh, you know, expecting to see a step down in Market shipments based on a more normalized storm season. And that's really what we think happened in in Q2. And what we expect to continue to happen here in Q3. So in the third quarter, while we expected to be very solid from a historical standard, you know, it could be down mid single digits depending on storm activity as well. So, we could see a similar evolution of that. Uh, again, overall in the market good conditions, but it's, it's a step down to more normalized storm Vines. So, the last time we saw, this was in the back half of 2022, and this is where you saw the strength of our contractor engagement model. And that's really the, the success of our business is centered around that model, where we go out, we convert contractors to our brand, our products, we help them, um, win and grow in the market through our marketing tools, our digital tools, our, our commercial and training capabilities. All those things that really drive the
We have been lagging in service to our distribution partners as well as our contractors. So we expect that even if the market conditions shift down a little bit like we would expect to see in Q3, we're going to see good demand for our contractors that that's going to drive volume through distribution. We also think cross the board, we'd probably have some lean.
Contractors success. Helps them grow their businesses and then in turn that creates a loyalty to our product brand and also creates demand for our distribution Partners. So it's it's a win-win across the channel in terms of how we focus that we continue to invest to uh improve and increase that that contractor engagement model and and add contractors to the network. So, when we talk about outperformance, relative to the market, what we delivered in in Q2 and what we expected to deliver in Q3, we're really not driving volume. We're just
Tories in several regions of Oc product relative to other brands in the market. So we think theres going to be some some inventory buying there and then lastly, we're going to continue to operate our facilities pretty full out in the quarter. Because we are operating with very very low inventory levels. We've been doing this for several years.
And we would actually like to be able to rebuild some inventory levels in our facilities and improve our service and commitments and service cycles to our customers. So that's all work that's kind of going in as we as we work through Q3 and finished the year.
Okay.
Our next question comes from Brian.
Thompson Research group.
Your line is open. Please go ahead.
Hey, good morning. Thank you for taking my question today, I guess can you talk a little bit more about the specification and your nonresidential Asian and non resin our view and our long outlook for good growth you talked a little bit about it earlier, but if you could expand on I guess higher products play into that opportunity and in data centers and manufacturing that you mentioned.
Responding and and servicing the contractor base that is built their business around our products and Brands and and our continuing to grow in the markets. So it's really servicing That Base. Overall it is why we've invested increasing lamb capacity, you mentioned the Dina. So we were able to start that up and towards the end of the second quarter uh that that volume is ramping up and getting into the market. But that's going to be a ramp up over the back half of the year really won't get to full capacity until we get to the first part of next year when we hit that spring selling season, but it absolutely is a big part of now, having more lamb capacity to service that that contractor demand that we've we've seen. And, and frankly, we have been lagging in service to our distribution Partners, as well as our contractors. So uh, we expect that even if the market conditions shift down a little bit like we would expect to see in Q3 we're going to see good demand for our contractors that that's going to drive volume through distribution. Uh we also think cross the board we probably have some lean inventories and
Sure. If you have any metrics around win rates or market share in those specific end markets would be great. Thank you.
Thanks, Brian we don't share a lot on win rates or market share within the verticals, but I can give more context on how our installation is used in the non res side. There is two major areas that you would see our installation and for example, a data center or in a manufacturing facility.
Several regions of of OC product, our relative to other brands in the market. So we we think there's going to be some, some inventory buying there. And then, lastly, we're going to continue to operate our our facilities pretty full out in the quarter. Uh, because we're operating with very, very low inventory levels. We've been doing this for several years, uh, and we would actually like to be able to rebuild some inventory levels in our facilities, just to improve our service uh, and commitments and and service Cycles to our customers. So that's all work. That's kind of going in as we
As we work through Q3 and finish the year.
<unk> one is in the building envelope itself to make sure that we control temperature, but also moisture within a data center, which tends to have pretty extensive HVAC requirements associated with all of the equipment. That's there and installation plays a really big role in making sure that the building itself.
Our next question comes from, Brian dose, with Thompson research group.
Your line's open, please go ahead.
Performs at a high level.
These also are mission critical facilities, we're making sure that you control moisture, especially in the roofing system is important.
A couple of our products in particular, our xps foam product intercellular glass product performed really well when it comes to moisture performance. So the building is one piece of it. The other piece is process equipment. So when you think about HVAC itself or when you think about hot or cool air Liquide in a manufacturing plan or a data center or other.
Products play into that opportunity and and data centers and Manufacturing that you mentioned. And maybe share, if you have any metrics around, win rates or market share and those specific and markets would be great. Thank you.
<unk> it is important to insulate pipes and pieces of process equipment, and you would see our products go into those markets as well either directly with us selling a final product that goes into the application or indirectly as we sell our product into someone that then converts it into a final product for the application.
So we're encouraged with what we see as the long term secular trends towards.
Onshoring of manufacturing as well as the growth in oil and gas as well as the growth in data centers all of that plays well to the products that we have typically our products are designed to their engineered for the application that they're in.
Thanks, Brian. We we don't share a lot on when rates or market share within the the verticals, but I can give more context on how our installation is, is used in the non-res side there. There's 2 major areas that you would see our installation and, you know, for example a data center or in a manufacturing facility, 1 is in the building envelope itself to make sure that uh we control temperature. Uh but also moisture within a data center, uh, which tends to have pretty extensive uh HVAC requirements. Associated with all the equipment that's there and installation plays a really big role in making sure that the building itself performs at a high level.
These also are mission critical facilities. We're making sure that you control moisture, uh, especially in in the roofing system is important.
So in some cases, we have hard specifications, where our products specified by name in other cases, our product is designed for that application, which makes it a stickier relationship.
And, uh, a couple of our products in particular, our XPS foam product and our cellular glass product performed really well when it comes to moisture performance. So the building is one piece of it. The other piece is process equipment.
With the customer going forward and also creates a more stable pricing dynamics, we see in that space.
Yes.
Our next question comes from Matthew Bouley with Barclays. Please go ahead.
Hi, Good morning, Thank you for taking the question.
I wanted to ask about sort.
It's sort of high level on installation and margin specifically I am wondering if you can either quantify or maybe speak directionally to the difference in margins between the residential business in the nonresidential businesses within installation.
And I ask because once upon a time when the segment was much heavier residential and you saw these type of double digit declines in residential revenues. The margins would have been I'll say significantly more volatile.
But today, you're holding these EBITDA margins at 24 in Q2 and guiding to low 20% range in Q3 so.
So when you think about HVAC itself or when you think about hot or Cool Air, Liquide uh in a manufacturing plant or a data center or other facility, it is important to insulate pipes and pieces of Process Equipment and you would see our products go into those markets as well either directly, uh, with us selling a final product that goes into the application or indirectly, as we sell a product into someone that then converts it into a final product for for the application. So uh, we're encouraged with what we see is the the long term secular Trends towards uh onshoring of manufacturing as well as the growth in oil and gas as well as the growth in data centers. All of that plays well to the products that we have. Typically, our products are are designed, they're engineered for the application that they're in. Uh, so in some cases, we have hard specifications, where our products are specified by name. In other cases, our our product is designed for that application, which makes it a stickier relationship, uh, with the
How do you explain that change.
Today versus then kind of any color on that relative profitability between residential and nonresidential. Thank you.
The customer going forward and also creates the more stable pricing Dynamics. We see in that space.
Thanks, Matt happy to add more color on why we're delivering stable margins in the business.
Our next question comes from Matthew Boule with Berkeley.
Please go ahead.
What youre seeing on the Red side is the culmination of the work we've been doing for really a decade now in our in restructuring that business and making sure that we've got a flexible and cost efficient network to serve our markets and our customers.
It was actions like the sale of our Santa Clara plant, starting up a a lower cost more flexible facility in <unk>, Utah to serve that market leveraging our capacity capacity differently and focusing on both our our plant overhead costs as well as our variable cost in our network. So we've done all of that.
At the same time, we did a lot of commercial work to make sure we.
We serve customers that we're really happy to be positioned with long term and all of that has created a business that we believe is more resilient and can perform at higher margin levels than we have historically in similar types of markets.
Uh, good morning. Thank you for taking the question. Um, wanted to ask about, um, sort of high level on insulation and, and margin specifically. And I'm wondering if you can either either quantify or maybe speak directionally to the difference in margins between the the residential business and the non-residential businesses within insulation. Um, and I asked because, you know, once upon a time when, when the segment was much heavier residential and you saw these type of double digit, declines and residential revenues. The, the margins would have been, I'll say significantly more volatile. Um, but today you're holding these IBA margins at, you know, 24 in Q2 and guiding to low 20% range in Q3. So, you know, how do you explain that change? Uh, you know, today versus then and kind of any color on that relative profitability between residential and non-residential. Thank you.
Thanks, Matt. Happy to add more color on why we're delivering stable margins in the business.
The additional color I would add for the second quarter is Wow, we were able to rebuild inventories and installation in the quarter, which we sought to do.
Sure for actually a number of years as we were sold out in that business.
What what you're seeing in the red side is the culmination of the work we've been doing for for really a decade. Now in uh, in restructuring that business and making sure that we've got a a flexible and cost efficient Network to serve our markets and our customers.
We also saw some curtailment impacting our results our margins in insulation in Q2, and we would expect to see that again in Q3.
So the margin results you commented on or actually.
Inclusive of taking idle to make sure we remain disciplined from a working capital standpoint.
Insulation business around inventory in the quarter.
So we're not sharing the margin specifically by sub segment as we have historically.
But certainly all of the work that we've done to position in our res business, but then also to grow our non res business and create higher and more durable margins. There is paying off in terms of really strong.
Uh, it was actions like the sale of our Santa Clara plan. Starting up a, uh, a lower cost more flexible facility and Nephi Utah. To serve that market leveraging, our capacity, capacity differently, and focusing on both our our, our plan overhead cost, as well as our variable cost and and our Network. So, we've done all of that. At the same time, we did a lot of commercial work to make sure we, uh, we serve customers that were really happy to be positioned with long term, and all of that is created a business that, uh, we believe is more resilient and can perform at higher margin levels than we have historically in in similar types of of markets.
Insulation, EBITDA margins and what our.
Weakening residential markets and we're happy with that result.
Yeah.
Our next question comes from Philip <unk> with Jefferies.
Your line is open.
That the additional color I would add for the second quarter is uh, wow, we were able to rebuild inventories and insulation in in the quarter, which we sought to do, uh, for for actually a number of years as we were sold out and that business, uh, we also saw some curtailment impacting our results. Uh, our margins, uh, in insulation in Q2. And we would expect to see that again in Q3.
Hey, guys.
Another question on insulation, sorry, guys.
I guess on North America, Todd you kind of hinted at taking some downtime can you expand on that like are you taking.
Have you had any comp are you contemplating taking more extended downtime what are your carriers doing.
I suspect in the weakness you're seeing in North America raises destocking, where kind of that Destocking cycle and just lastly, when you look at your price gaps for pricing for North American raising installation had the gap widened this year any color would be really helpful.
Thanks, Bill happy to add more color, let me start with the market and what we're seeing and then I can work into what we're doing within our business.
Are are actually, you know, inclusive of taking Idol to make sure we remain disciplined from working, capital standpoint uh in our installation business around inventory and in the quarter. Uh so we're we're not sharing uh the the margin specifically by sub segment is we have? Historically, uh, but certainly all of the work that we've done uh, to to position in our res business but then also to grow our non-res business and create higher and more durable margins, there is paying off in terms of really strong uh insulation iaam margins and what our uh you know, weakening residential markets and and we're happy with that result.
As I shared before we are seeing volumes and in the market, we believe for the industry.
Our next question comes from Philip in with Jeff.
Your line Json.
Trend down at a greater rate than lag starts and in part that's driven by our completions declining at a greater rate than like starts are declining. It's also this shift towards multifamily away from single family. I also believe it is destocking that we're seeing because we shifted from an industry that was.
Hey guys. Um
Another question on insulation. Sorry guys. Um, I guess I'm North America Todd. You kind of handed it on taking some downtime. Can you expand on that? Like are you taking uh and have have you have any cam?
Tight.
In terms of supply not that long ago to an industry that now I would characterize as being in free supply. So we are seeing an environment where inventories through through the channel.
We believe have been destocking.
Are you contemplating taking more extended? Downtime? What are your peers doing? Um, I I suspect some of the weakness you're seeing in North America and res is destocking where kind of we in that docking cycle and just lastly, uh, when you look at your price gaps for pricing, uh, for North American raising insulation, how the Gap widen this year? Um, any color would be really helpful.
In the quarter in terms of price gaps I would characterize it is we're roughly in line with where historic gaps have had been I don't think were seeing.
Thanks, Phil, happy to add more more color. Let me start with the the market and what we're seeing. And then I can work into uh, what we're doing, within our, our business.
A real shift in either direction in terms of the gaps those gaps are a function of the value we provide to customers and that value is still there today as it was a year ago and two years ago and five years ago.
In terms of what we provide what we're doing now for curtailment is we have a target inventory that we wanted to rebuild in the second quarter to make sure. We can service our customers well and we were light on inventory quarter after quarter of the last few years. So we wanted to rebuild that and we were able to rebuild that in a second.
Quarter.
But we also want to make sure we're disciplined in terms of free cash generation and working capital. So we started to take curtailment. The form that's taking for US now is what we would call hot idle curtailment, which is the lines are still operational but we're taking longer maintenance downtime, we're slowing down lines, we're doing the normal things we do.
Bill curtailment into our business.
As I shared before we are seeing volumes in, uh, in in the market. Uh, we believe for the industry Trend down at a greater rate than leg starts. And in part, that's driven by uh, completions uh, declining at a, a greater rate than like starts or decline in. Its also, this shift towards multi-family away from single family. I also believe it is the stocking that we're seeing, because we've shifted from an industry. That was uh, tight uh, in terms of of Supply, not that long ago to an industry. That now, I would characterize as being in in free Supply. So, we are seeing an environment where, uh, inventories through through the channel, We Believe have been destock in in the quarter in terms of of price gaps. I, I characterize it as we're, we're roughly in line with where historic gaps have have been. I don't think we're seeing, you know, a real shift in either direction in terms of the
We still have optionality to move to what we would call cold idle, which is where we take a line down completely.
Where it takes a while for that to restart we tend to look at longer term supply demand dynamics within the industry before we make those more permanent or semi permanent capital and capacity decisions. So that's still possible for us to do but right now we're managing curtailment through hot idle.
All right.
Tried to manage it through longer maintenance downtime and other kind of normal course actions. Thank you.
Those gaps are a function of the value, we provide to to customers and that value is still there today as it was a year ago and 2 years ago in in 5 years ago, uh, in terms of of what we provide what we're doing now. For curtailment is we, we have a Target inventory that we wanted to rebuild and the second quarter to make sure we can service our customers. Well and we were light on inventory, uh, quarter after quarter of the last few years. So we, we wanted to rebuild that and we were able to rebuild that in the second quarter.
Bill.
The next question comes from Susan Mcclary with Goldman Sachs. Please go ahead.
Good morning, everyone.
Question is on the SG&A you mentioned in your prepared remarks that you are looking to increase spend there, especially in roofing. When you consider the current operating environment. How do you think about measuring the returns on the investments that youre, making in there and also what is your ability to flex that spend depending on how things changed.
In the broader housing in macro in the next couple of quarters.
Thanks Sue.
We are seeing some step up of very specific investments, particularly in roofing. We're we've built really a great model I'll go back to the center of our successes that contractor engagement model. We have built that's really driving the margin performance of the business going forward. So we will continue to invest in the right commercial tools marketing tools digital tools.
But we we also want to make sure we're disciplined in terms of free cash, generation and working capital. So, we started to take her Tailwind the form that's taking for us. Now is what we would call um, hot idle curtailment, which is the lines are still operational, but we're taking longer maintenance. Down time, we're slowing down lines. We're doing the normal things. We do to build curtailment, into to our business. Uh, we still have optionality to, uh, move to what we would call cold idle, which is where we take a line, uh, down completely, uh, where it it takes a while. For that to restart. We tend to look at longer term Supply, demand Dynamics, within the industry. Before we make those more permanent or semi-permanent, uh, capital and capacity decisions. So that's still, uh, possible for us to do. But right now, we're managing curtailment through hot idle, and trying, to manage it through longer, maintenance downtime, and, and other kind of normal course.
Uh, actions.
Thank you. Phil.
And commercial resources to support a growing contracted base. So that would be an example of a very targeted investment to drive revenue growth and to support margin growth as well in the business and that's how we really look at it across the enterprise, we're looking very surgically to where we want to make investments around our commercial strengths are.
The next question comes from. Susan maclari with Goldman Sachs.
Please go ahead.
Good morning, everyone.
Brand, our technology and innovation efforts that we've stepped up to drive product and process investments in innovations at a faster rate. So those are investments that we make that really come through then the business returned so how we measure success is in the margin profile than the business that we're investing in and we continue to see opportunities to grow revenues.
It's on the SG&A. You mentioned in your prepared remarks that you are looking to increase spend there, especially in Roofing. When you consider the current operating environment, how do you think about measuring the returns on the investments that you're making in there? Also, what is your ability to flex that spend depending on how things change in the broader housing and macro environment in the next couple of quarters?
And and expand the margin rates inside the businesses based on those investments.
We always look at the overall market environment. So we want to be aware of how the dynamics are shifting and how that might impact volumes price margins and performance of the business, but the investments we've made in both the capex side, you've seen us making are really focused on productivity investments around automation and monetization of our assets.
On growth that we think supports our market positions over time, and then youre going to see us invest in very specific market commercial initiatives, where we can drive again in support that revenue and margin profile within the businesses through those investments going forward.
Okay.
Our next question today comes from Mike Dahl with RBC capital markets. Please go ahead.
Thanks for taking my question.
Just wanted to ask on resi single pricing it seemed like there was a pretty healthy uptake on the April increase.
Some stuff up of of very specific Investments. Uh particularly Roofing where we've built really a great model. I'll go back to the center of our success is that contractor engagement model? We have built, that's really driving. The margin performance of the business going forward. So we will continue to invest in in the right commercial tools, marketing Tools, digital tools, and Commercial resources, to support a growing contractor base. So that would be an example of a very targeted investment, uh, to drive Revenue growth and, and to support margin growth as well in the business. And that's how we really look at it. Across the Enterprise, we are looking very surgically to where we want to make investments around our commercial strength, our brand, our technology, and Innovation efforts that we've stepped up to drive product and process investment Innovations at a faster rate. So those are investments that we make uh, that really come through then the business returns. So how we measure success is in the margin, profile of Zen the business that we're investing in and do we continue to see opportunities to grow revenues.
Our sense is maybe some some like slight regional variations just given the differences in.
And demand that have emerged does you think about the market being down.
Still in the back half of the year, how would you characterize pricing sequentially.
What are your expectations embedded in the guide for for price, maybe more specifically for radiation goals at least through <unk>.
And uh, and expand the margin rates inside the businesses based on those Investments. Um, we always look at the overall Market environment. So we want to, you know, be aware of of how Dynamics are shifting how that might impact volumes price margins and performance of the business. Um, but the Investments we've made on both a capex side. You've seen us making are really focused on productivity Investments around Automation and and modernization of our assets and on, on growth uh, that we think supports our Market positions over.
Thanks, Mike, Yes, we have seen a good price realization of our of our April increase.
We saw that materialize through Q2.
Time. And then you're going to see us invest in very specific market commercial initiatives, where we can drive again and support that revenue and margin profile within the businesses through those investments going forward.
In our embedded in our guide is a continued realization of that.
Pricing as we see good demand for our product as I talked about earlier in terms of the contracted demand we're still seeing outdoor sales of our products are strong and we're seeing.
Our next question today comes from Mike Darr with RBC Capital Markets. Please go ahead.
Thanks for taking my question. Um just wanted to ask on
Good good overall market demand so.
As the markets play out in terms of the back half of the year I would expect that we would continue to see good price realization.
We are lapping.
August 24 increase from last year.
That will have a little bit of an impact as we go forward, but in terms of the April increase where should continue to see good price realization in the market and expect that to continue through Q3.
Okay.
resi Shingle pricing. It seems like there was pretty healthy uptake on the April increase. Um our senses may be some some like slight Regional variations um just given the differences in in demand that have emerged. So as you think about the market being down, um, you know, still in in the back half of the year, uh, how would you characterize pricing sequentially and and what are your expectations embedded in the guide for, for Price, maybe more specifically for resolution goals and at least through 3 Q?
Our next question comes from Keith Hughes with Janice.
Line is open.
Thank you.
Just shifting over to.
The commercial domestic commercial industrial insulation, you said some positive comments here.
Around.
Similarly, and as mortgage will always focus on if you could speak a little bit more some of the light commercial.
It seems like it's been a little more pressure than some of the heavy.
How have your results been there and what's the outlook.
Thanks, Mike. Yeah, we have seen uh good price realization of our of our April increase. Uh we saw that materialized through Q2 uh in our embedded, in our guide is a continued realization of that uh, of that pricing uh as we see good demand for our product. As I talked about earlier, in terms of the contractor demand, we're still seeing out the door sales of our products are strong. Uh, and we're seeing, you know, just good good overall market demand. So, uh, you know, as the as the markets play out in, in terms of the
Keith when we when we look at light commercial we do sell installation into some of those markets retail health care office buildings warehouses. There is there is a mixed outlook there depending on the specific end markets.
No I would say that the take per unit for installation in those kind of facilities compared to the ones that I talked about earlier is a lot less so while we do see mixed results in some of those end markets overall were seeing enough strength in the high Tech per unit and markets that are growing at an accelerated rate that we like the.
Back half of the year. I would expect that we would continue to see a good price realization. Uh, we are lapping uh August 24 increase from last year. Uh that will have a little bit of an impact as we go forward. But in terms of the April increase, we're continue to see good uh price realization in the market and expect that to continue through Q3
our next question.
Your line is open.
Overall answer for that domestic commercial and industrial exposure.
Yeah.
Yeah.
Thank you well unfortunately out of time for any further questions today.
Luckily the chief Brian Chambers for any closing comments.
Um uh thank you. Um, just shifting over to um uh the you know, commercial domestic commercial industrial insulation, you've said some positive comments here around um several of these more as well. I was focused on. If if you could speak a little bit more to some of the Light commercial, um, it seems like it's been a little more pressured than some of the heavy. What, what's how's your results? Been there? What's the Outlook?
Thanks, Lydia what I'd like to thank everyone for making time to join US on today's call and your ongoing interest in Owens Corning, We look forward to speaking to you again on our third quarter call. Thanks, and have a safe day.
Yeah.
This concludes our call today. Thank you very much for joining you may now disconnect your lines.
Keith, when we, when we look at Light commercial, we do sell insulation into to some of those markets. Um, retail Healthcare Office, Buildings warehouses there is there is a mixed Outlook there depending on the specific and markets.
and I would say that the take per unit for insulation and those kind of facilities compared to the ones that I talked about earlier is a lot less
So while we do see mixed results in in some of those end markets overall, we're seeing enough strength in in the high take per unit. Uh, and markets that are growing in an accelerated rate that we like the overall answer for that domestic uh commercial and Industrial uh exposure.
Thank you. Well unfortunately out of time for any further questions today so I'll ask back over to you Brian Chambers for any closing comments.
To thank everyone for making time to join us on today's call and your ongoing interest in Owens Corning. We look forward to speaking to you again, on our third quarter call, thanks and have a safe day.
This concludes our call today. Thank you very much for joining. You may now disconnect your line.