Owens ning(OC) - 2025 Q2 - Quarterly Results

Executive Summary & Highlights Owens Corning reported strong Q2 2025 results with 10% net sales growth and sustained adjusted EBITDA margins over 20% Enterprise Performance Q2 2025 saw net sales and earnings growth, but adjusted diluted EPS and free cash flow declined significantly Key Financial Highlights ($ in millions, except per share) | ($ in millions, except per share) | Q2 2025 | Q2 2024 | Change | Six Months 2025 | Six Months 2024 | Change | | :--- | :--- | :--- | :--- | :--- | :--- | :--- | | Net Sales | $2,747 | $2,497 | +10% | $5,277 | $4,514 | +17% | | Net Earnings Attributable to OC | $334 | $256 | +30% | $589 | $534 | +10% | | Adjusted EBITDA | $703 | $678 | +4% | $1,268 | $1,193 | +6% | | Diluted EPS | $3.91 | $2.91 | +34% | $6.86 | $6.06 | +13% | | Adjusted Diluted EPS | $4.21 | $4.39 | -4% | $7.17 | $7.78 | -8% | | Operating Cash Flow | $327 | $493 | -34% | $278 | $517 | -46% | | Free Cash Flow | $129 | $336 | -62% | ($123) | $208 | -159% | - The company highlighted key achievements for Q2 2025, including a 10% increase in net sales, a 12% net earnings margin, and the return of $279 million to shareholders through dividends and share repurchases[5] Strategic & Operational Highlights Strategic moves include significant shareholder returns, a completed divestiture, and a new 12 million share repurchase authorization - The company returned $279 million to shareholders in Q2 and nearly $440 million year-to-date, remaining on track to deliver its commitment of $2 billion in returns over 2025 and 2026[8][13] - Strategic portfolio adjustments include the completed sale of its building materials business in China and Korea (approx. $130 million annual revenue) and continued progress on the divestiture of its glass reinforcements business[13] - The Board of Directors approved a new share repurchase authorization for up to 12 million shares of common stock[13] Segment Performance Q2 2025 saw Roofing sales up 4% with 35% EBITDA margin, Insulation sales down 4% with 24% margin, and the Doors segment contributing $554 million in sales with a 14% EBITDA margin Roofing Roofing segment net sales grew 4% to $1.303 billion in Q2 2025, maintaining a strong 35% EBITDA margin Roofing Segment Performance ($ in millions) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $1,303M | $1,252M | $2,423M | $2,350M | | EBITDA | $457M | $437M | $789M | $775M | | EBITDA Margin | 35% | 35% | 33% | 33% | Insulation Insulation segment net sales declined 4% to $934 million in Q2 2025, with EBITDA margin slightly contracting to 24% Insulation Segment Performance ($ in millions) | Metric | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $934M | $974M | $1,843M | $1,931M | | EBITDA | $225M | $246M | $450M | $469M | | EBITDA Margin | 24% | 25% | 24% | 24% | Doors The Doors segment, acquired in May 2024, contributed $554 million in Q2 2025 net sales with a 14% EBITDA margin Doors Segment Performance ($ in millions) | Metric | Q2 2025 | Q2 2024* | Six Months 2025 | Six Months 2024* | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $554M | $311M | $1,094M | $311M | | EBITDA | $75M | $61M | $143M | $61M | | EBITDA Margin | 14% | N/A | 13% | N/A | *Q2 2024 reflects performance post-acquisition on May 15, 2024. Financial Outlook Q3 2025 outlook projects revenue of $2.7-2.8 billion and 23-25% adjusted EBITDA margin, with full-year capital additions around $800 million - For Q3 2025, the company expects revenue from continuing operations to be slightly down to in-line with the prior year, in the range of $2.7 billion to $2.8 billion, with an adjusted EBITDA margin of approximately 23% to 25%[16] - Market expectations for Q3 include a decline in roofing repair activity due to lower storm activity, continued challenges in residential new construction and remodeling, and relatively stable non-residential construction in North America[16] Current 2025 Financial Outlook Guidance | Current 2025 Financial Outlook | Guidance | | :--- | :--- | | General Corporate EBITDA Expenses | $240 million to $260 million | | Interest Expense | $250 million to $260 million | | Effective Tax Rate on Adjusted Earnings | 24% to 26% | | Capital Additions | Approximately $800 million | | Depreciation and Amortization | Approximately $650 million | Financial Statements & Reconciliations This section presents unaudited consolidated financial statements for Q2 and H1 2025, along with GAAP to non-GAAP measure reconciliations Consolidated Statements of Earnings Q2 2025 net sales increased to $2.75 billion from $2.50 billion, with net earnings attributable to Owens Corning rising to $334 million Consolidated Statements of Earnings ($ in millions) | ($ in millions) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Sales | $2,747 | $2,497 | $5,277 | $4,514 | | Gross Margin | $858 | $813 | $1,583 | $1,441 | | Operating Income | $505 | $418 | $912 | $794 | | Net Earnings from Continuing Operations | $333 | $257 | $588 | $534 | | Net Earnings Attributable to OC | $363 | $285 | $270 | $584 | EBITDA & EPS Reconciliation This section reconciles Net Earnings to Adjusted EBITDA and Diluted EPS to Adjusted Diluted EPS, with Q2 2025 Adjusted EBITDA at $703 million EBITDA Reconciliation ($ in millions) | ($ in millions) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Earnings from Continuing Operations | $333 | $257 | $588 | $534 | | EBITDA | $677 | $561 | $1,243 | $1,045 | | Adjusted EBITDA from Continuing Operations | $703 | $678 | $1,268 | $1,193 | EPS Reconciliation (per share) | (per share) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Diluted EPS from Continuing Operations | $3.91 | $2.91 | $6.86 | $6.06 | | Adjusted Diluted EPS from Continuing Operations | $4.21 | $4.39 | $7.17 | $7.78 | Consolidated Balance Sheets As of June 30, 2025, total assets were $14.48 billion, total liabilities $9.28 billion, and total equity $5.20 billion, with $230 million in cash Consolidated Balance Sheets ($ in millions) | ($ in millions) | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $230 | $321 | | Total current assets | $3,916 | $3,378 | | Total Assets | $14,483 | $14,075 | | Total current liabilities | $2,574 | $2,297 | | Total Liabilities | $9,279 | $8,955 | | Total Equity | $5,204 | $5,120 | Consolidated Statements of Cash Flows For H1 2025, net cash from operating activities was $278 million, a decrease from prior year, with significant cash used for investing and financing Consolidated Statements of Cash Flows ($ in millions) | ($ in millions) | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | | Net cash flow provided by operating activities | $278 | $517 | | Net cash flow used for investing activities | ($347) | ($3,154) | | Net cash flow (used for) provided by financing activities | ($112) | $1,321 | | Net decrease in cash | ($96) | ($1,349) | Free Cash Flow Reconciliation Q2 2025 free cash flow was $129 million, down from Q2 2024, resulting in a negative free cash flow of -$123 million for H1 2025 Free Cash Flow Reconciliation ($ in millions) | ($ in millions) | Q2 2025 | Q2 2024 | Six Months 2025 | Six Months 2024 | | :--- | :--- | :--- | :--- | :--- | | Net Cash Flow Provided by Operating Activities | $327 | $493 | $278 | $517 | | Less: Cash paid for property, plant and equipment | ($198) | ($157) | ($401) | ($309) | | Free Cash Flow | $129 | $336 | ($123) | $208 | Other Information This section details the company's use of non-GAAP financial measures and provides a forward-looking statements disclaimer outlining potential risks and uncertainties Use of Non-GAAP Measures The company uses non-GAAP measures like Adjusted EBITDA and Free Cash Flow for internal review and to enhance investor understanding - The company uses non-GAAP measures, including EBITDA, adjusted EBITDA, adjusted earnings, adjusted EPS, and free cash flow, to supplement investors' understanding of its financial information[18] - These non-GAAP measures are used internally for purposes such as reporting to the Board of Directors, performance analysis, and determining employee compensation[19] Forward-Looking Statements This section provides a disclaimer on forward-looking statements, outlining risks and uncertainties that may cause actual results to differ materially - The news release contains forward-looking statements that are subject to risks and uncertainties which may cause actual results to differ materially[23] - Key risks include levels of construction activity, supply chain disruptions, inflation, interest rate volatility, and competitive pricing factors[23]