• Q4 Revenue: $2.8 billion, up 23%.
• Q4 Adjusted EBIT Margin: 15%.
• Q4 Adjusted EBITDA Margin: 22%.
• Full Year Revenue: $11 billion, up 13%.
• Full Year Adjusted EBIT: $2 billion.
• Full Year Adjusted EBITDA: $2.7 billion.
• Full Year Adjusted Earnings Per Share: $15.91, up 10% from 2023.
• Free Cash Flow for 2024: $1.2 billion.
• Free Cash Flow Returned to Shareholders: 51%.
• Roofing Segment Q4 Revenue: $912 million.
• Roofing Segment Q4 EBIT Margin: 31%.
• Insulation Segment Q4 Revenue: $926 million.
• Insulation Segment Q4 EBIT Margin: 17%.
• Doors Segment Q4 Revenue: $564 million.
• Doors Segment Q4 EBIT Margin: 5%.
• Composites Segment Q4 Revenue: $515 million.
• Composites Segment Q4 EBIT Margin: 9%.
• Net Debt to Adjusted EBITDA: Below target range of 2x to 3x.
• Liquidity at Year-End: $1.7 billion.
• Capital Additions for 2024: $647 million.

• Warning! GuruFocus has detected 2 Warning Sign with EDRY.

Release Date: February 24, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Owens-Corning Inc (NYSE:OC) achieved a 23% increase in revenue for the fourth quarter, reaching $2.8 billion, with an adjusted EBIT margin of 15% and an adjusted EBITDA margin of 22%.
• The company successfully executed three major strategic moves, including the acquisition of Masonite, which expanded their portfolio and addressable market.
• Owens-Corning Inc (NYSE:OC) returned 51% of free cash flow to shareholders in 2024, marking the 11th consecutive year of increasing dividends.
• The company announced several capital investments to expand capacity in highly profitable product lines, supporting long-term growth.
• Owens-Corning Inc (NYSE:OC) demonstrated strong safety performance, achieving a 25% reduction in injuries compared to the previous year.

Negative Points

• Market conditions were mixed across business segments, with some areas experiencing weaker demand, particularly in international markets.
• The company faced higher manufacturing costs, impacting EBIT margins in certain segments.
• Owens-Corning Inc (NYSE:OC) incurred approximately $910 million in noncash charges tied to strategic moves, affecting full-year adjusted EBIT and adjusted EBITDA.
• The Doors segment experienced softer market conditions, with volumes remaining relatively flat and pricing adjustments impacting margins.
• Potential tariff impacts could affect costs, particularly in the Doors and Insulation segments, due to an integrated supply chain across North America.

Q & A Highlights

Q: Can you elaborate on the potential tariff impact and mitigation strategies? A: Todd Fister, CFO, explained that Owens Corning's tariff exposure is minimal, with less than 5% of total costs potentially affected. The company operates mostly local-for-local, minimizing tariff impacts. The exposure is mainly in finished goods, particularly in the Doors and Insulation segments. Owens Corning has a track record of navigating dynamic markets effectively, using various tools to maintain market-leading margins despite potential tariff challenges.

Q: How do you view pricing trends in 2025, especially in residential markets? A: Brian Chambers, CEO, noted that Owens Corning has seen positive pricing trends across its core businesses. In Roofing, demand remains strong, and a price increase is planned for April. The Doors market is stable, with some pricing adjustments to align with market premiums. Todd Fister added that residential insulation demand remains healthy, with positive price realization expected in Q1, despite some market noise.

Q: How should we think about the revenue contribution from structural lumber and glass fiber plants? A: Brian Chambers stated that revenue from these segments will be consistent throughout the year, with some seasonality in nonwovens. The integration of these businesses into Roofing and Insulation is strategic, enhancing operational efficiencies and commercial opportunities. The margin profiles are expected to align with the underlying segments.

Q: What is the expected impact of new Roofing capacity on industry margins and pricing? A: Brian Chambers explained that the new plant in the Southeast will address strong demand and storm activity, providing flexibility to optimize the network. While industry capacity is increasing, not all is incremental due to older assets being retired. Roofing's material conversion nature allows for efficient production adjustments, maintaining strong margins despite capacity changes.

Q: What is the path to improving margins in the Doors business? A: Brian Chambers outlined a focus on integration synergies, network optimization, and revenue growth. Cost savings from sourcing and operational efficiencies are expected to improve margins. Volume recovery in new construction and R&R, along with strengthened customer partnerships, will drive revenue growth. The goal is to achieve 20% EBITDA margins through these efforts.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.