TOLEDO, Ohio--(BUSINESS WIRE)--Feb 20, 2019--Owens Corning (NYSE:OC) today reported consolidated net sales of $1.7 billion in fourth-quarter 2018, compared with net sales of $1.6 billion in fourth-quarter 2017, an increase of 7%. Full-year 2018 consolidated net sales were $7.1 billion, compared with net sales of $6.4 billion in 2017, an increase of 11%.
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Fourth-quarter 2018 net earnings attributable to Owens Corning were $171 million, or $1.55 per diluted share, compared with a net loss of $4 million, or $0.04 per diluted share, during the comparable quarter in 2017. Fourth-quarter 2018 adjusted earnings were $152 million, or $1.38 per diluted share, compared with $125 million, or $1.11 per diluted share, during the same period one year ago. (See Use of Non-GAAP Measures, See Table 7).
Full-year 2018 net earnings attributable to Owens Corning were $545 million, or $4.89 per diluted share, compared with $289 million, or $2.55 per diluted share, during 2017. Adjusted earnings in 2018 were $550 million, or $4.94 per diluted share, compared with $498 million, or $4.40 per diluted share, during 2017.
“Owens Corning had another record year in terms of revenue and adjusted EBIT, with all three businesses delivering double-digit EBIT margins,” said Chairman and Chief Executive Officer Mike Thaman. “Today, Owens Corning is a more resilient and diversified company, better able to generate attractive returns for investors through the cycle.”
Return of Capital Actions and Other Highlights
During 2018, Owens Corning repurchased 2.9 million shares of its common stock for $203 million. As of the end of 2018, 4.6 million shares were available for repurchase under the current authorization.On February 7, 2019, the Owens Corning Board of Directors declared a quarterly cash dividend of $0.22 per common share, a 5% increase compared with the same period in the prior year. The dividend will be payable on April 2, 2019, to shareholders of record as of March 8, 2019. During 2018, $92 million of cash was returned to shareholders through dividends.Owens Corning sustained a high level of safety performance in 2018, with a recordable incident rate of 0.52, similar to last year.The Board of Directors elected Brian Chambers, currently President and Chief Operating Officer, to succeed Mike Thaman as CEO, effective April 18, 2019. Mr. Thaman, who has served as Chairman since 2002 and as CEO since 2007, announced his retirement as CEO and will continue as Chairman of the Board.
2019 Outlook
The company expects an environment consistent with consensus expectations for global industrial production growth, U.S. housing starts, and global commercial and industrial construction growth.In Insulation, the company expects a flat macroeconomic outlook for the North America residential fiberglass insulation business. In this business, the company expects continued positive pricing momentum to be offset by lower volumes and production curtailments. In the technical and other building insulation businesses, the company expects earnings growth driven by improved operating performance and growth in global construction and industrial insulation markets.In Composites, the company expects growth in the glass fiber market consistent with global industrial production growth, with a more uncertain global economic environment. The company expects volume growth and improved operating performance to be offset by inflation.In Roofing, the company expects relatively flat U.S. shingle end-market demand with industry shipments slightly below last year, assuming average storm demand. For Owens Corning, the company anticipates a favorable geographic mix comparison with the prior year and a higher share of shipments. Contribution margins entering 2019 position the business for continued strong performance.The company estimates an effective tax rate of 26% to 28%, and a cash tax rate of 10% to 12% on adjusted pre-tax earnings, due to the company’s U.S. tax net operating loss and foreign tax credit carryforwards.The company expects general corporate expenses to be between $140 million and $150 million. Capital additions are expected to total approximately $500 million, with an increased focus on productivity improvements. Interest expense is expected to be approximately $130 million.The company anticipates returning to strong conversion of adjusted earnings into free cash flow. The company plans to prioritize free cash flow to ongoing dividends and reduction of the term loan associated with the purchase of Paroc. Additional free cash flow could be available for share repurchases under the company’s existing authorization.
Fourth-Quarter and Full-Year 2018 Conference Call and Presentation
Wednesday, February 20, 2019
9 a.m. Eastern Time
All Callers
Live dial-in telephone number: U.S. 1.888.317.6003; Canada 1.866.284.3684; and other international +1.412.317.6061.Entry number: 732-4995 (Please dial in 10-15 minutes before conference call start time)Live webcast:
https://services.choruscall.com/links/oc190220.html
Telephone and Webcast Replay
Telephone replay will be available one hour after the end of the call through February 27, 2019. In the U.S., call 1.877.344.7529. In Canada, call 1.855.669.9658. In other international locations, call +1.412.317.0088.Conference replay number: 101-28-253Replay available at
https://services.choruscall.com/links/oc190220.html
Webcast replay available until February 20, 2020.
About Owens Corning
Owens Corning is a global leader in insulation, roofing, and fiberglass composite materials. Its insulation products conserve energy and improve acoustics, fire resistance, and air quality in the spaces where people live, work, and play. Its roofing products and systems enhance curb appeal and protect homes and commercial buildings alike. Its fiberglass composites make thousands of products lighter, stronger, and more durable. Owens Corning provides innovative products and solutions that deliver a material difference to its customers and, ultimately, make the world a better place. The business is global in scope, with operations in 33 countries. It is also human in scale, with approximately 20,000 employees cultivating local and longstanding relationships with customers. Based in Toledo, Ohio, USA, the company posted 2018 sales of $7.1 billion. Founded in 1938, it has been a Fortune 500® company for 64 consecutive years. For more information, please visit www.owenscorning.com.
Use of Non-GAAP Measures
Owens Corning uses non-GAAP measures in its earnings press release that are intended to supplement investors’ understanding of the company’s financial information. These non-GAAP measures include EBIT, adjusted EBIT, adjusted earnings, adjusted diluted earnings per share attributable to Owens Corning common stockholders (“adjusted EPS”), adjusted pre-tax earnings, free cash flow and free cash flow conversion. When used to report historical financial information, reconciliations of these non-GAAP measures to the corresponding GAAP measures are included in the financial tables of this press release. Specifically, see Table 2 for EBIT and adjusted EBIT, Table 7 for adjusted earnings and adjusted EPS, and Table 8 for free cash flow.
For purposes of internal review of Owens Corning’s year-over-year operational performance, management excludes from net earnings attributable to Owens Corning certain items it believes are not representative of ongoing operations. The non-GAAP financial measures resulting from these adjustments (including adjusted EBIT, adjusted earnings, adjusted EPS and adjusted pre-tax earnings) are used internally by Owens Corning for various purposes, including reporting results of operations to the Board of Directors, analysis of performance, and related employee compensation measures. Management believes that these adjustments result in a measure that provides a useful representation of its operational performance; however, the adjusted measures should not be considered in isolation or as a substitute for net earnings attributable to Owens Corning as prepared in accordance with GAAP.
Free cash flow is a non-GAAP liquidity measure used by investors, financial analysts and management to help evaluate the company's ability to generate cash to pursue opportunities that enhance shareholder value. Free cash flow is not a measure of residual cash flow available for discretionary expenditures due to the company’s mandatory debt service requirements. As a conversion ratio, free cash flow is compared to adjusted earnings. Free cash flow and free cash flow conversion are used internally by the company for various purposes, including reporting results of operations to the Board of Directors of the company and analysis of performance. Management believes that these measures provide a useful representation of our operational performance and liquidity; however, the measures should not be considered in isolation or as a substitute for net cash flow provided by operating activities or net earnings attributable to Owens Corning as prepared in accordance with GAAP.
When the company provides forward-looking expectations for non-GAAP measures, the most comparable GAAP measures and a reconciliation between the non-GAAP expectations and the corresponding GAAP measures are generally not available without unreasonable effort due to the variability, complexity and limited visibility of the adjusting items that would be excluded from the non-GAAP measures in future periods. The variability in timing and amount of adjusting items could have significant and unpredictable effect on our future GAAP results.
Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to risks, uncertainties and other factors and actual results may differ materially from those results projected in the statements. These risks, uncertainties and other factors include, without limitation: levels of residential and commercial construction activity; relationships with key customers; competitive and pricing factors; levels of global industrial production; demand for our products; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; domestic and international economic and political conditions, including new legislation, policies or other governmental actions in the U.S. or elsewhere; changes to tariff, trade or investment policies or laws; foreign exchange and commodity price fluctuations; our level of indebtedness; weather conditions; issues involving implementation and protection of information technology systems; availability and cost of credit; availability and cost of energy, transportation, raw materials or other inputs; labor disputes; legal and regulatory proceedings, including litigation and environmental actions; our ability to utilize net operating loss carry-forwards; research and development activities and intellectual property protection; interest rate movements; uninsured losses; issues related to acquisitions, divestitures and joint ventures; achievement of expected synergies, cost reductions and/or productivity improvements; levels of goodwill or other indefinite-lived intangible assets; defined benefit plan funding obligations; price volatility in certain wind energy markets in the U.S.; and factors detailed from time to time in the company’s Securities and Exchange Commission filings. The information in this news release speaks as of February 20, 2019, and is subject to change. The company does not undertake any duty to update or revise forward-looking statements except as required by federal securities laws. Any distribution of this news release after that date is not intended and should not be construed as updating or confirming such information.
Owens Corning Investor Relations News
Composites
The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Composites segment (in millions):
Insulation
The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Insulation segment (in millions):
Roofing
The table below provides a summary of net sales, EBIT and depreciation and amortization expense for the Roofing segment (in millions):
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CONTACT: Media
Katie Merx
419.248.6496Investor Inquiries:
Thierry Denis
419.248.5748
KEYWORD: UNITED STATES NORTH AMERICA OHIO
INDUSTRY KEYWORD: BUILDING SYSTEMS MANUFACTURING CHEMICALS/PLASTICS CONSTRUCTION & PROPERTY COMMERCIAL BUILDING & REAL ESTATE RESIDENTIAL BUILDING & REAL ESTATE
SOURCE: Owens Corning
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PUB: 02/20/2019 06:00 AM/DISC: 02/20/2019 06:01 AM
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