Owens ning(US:OC)2025-11-05 11:08Financial Performance - Net loss from continuing operations attributable to Owens Corning was $(495) million in Q3 2025, compared to $287 million in Q3 2024[232]. - Adjusted EBITDA from continuing operations for Q3 2025 was $638 million, down from $705 million in Q3 2024[232]. - Net sales for Q3 2025 decreased by $79 million to $2,684 million, while year-to-date sales increased by $684 million to $7,961 million[241][243]. - Gross margin for Q3 2025 was $757 million, a decrease of $94 million compared to Q3 2024, with a margin percentage of 28%[241][244]. - Adjusted EBITDA from continuing operations for the first nine months of 2025 was $1,906 million, slightly up from $1,898 million in the same period of 2024[255]. - Corporate, Other and Eliminations segment reported an EBITDA loss of $837 million in Q3 2025, significantly impacted by a goodwill impairment charge of $780 million[276][277]. Goodwill and Impairment - The Company recorded a non-cash goodwill impairment charge of $780 million in Q3 2025 related to the Doors reporting unit[233][246]. - The remaining balance of goodwill for the Doors reporting unit is $732 million as of September 30, 2025, which remains at risk for future impairment[320]. - No impairment was determined for the indefinite-lived tradename used by the Doors reporting unit after an interim impairment test[321]. - The Company performed a recoverability test for a certain asset group within the Doors segment, which was determined to be recoverable[323]. - The fair value used in testing for potential impairment of the tradename was calculated using the relief-from-royalty method[322]. - A 1% decrease in base year revenue would decrease fair value by approximately 1%, while a 1% decrease in revenue growth rates would decrease fair value by approximately 4%[319]. Expenses and Costs - Marketing and administrative expenses decreased by $18 million to $240 million in Q3 2025, but increased by $87 million year-to-date[241][245]. - Interest expense for Q3 2025 was $65 million, a decrease of $4 million compared to Q3 2024[241][248]. - Income tax expense for Q3 2025 was $102 million, with an effective tax rate of (26%) due to non-deductible goodwill impairment[249]. - General corporate expenses for 2025 are estimated to be approximately $240 million[279]. Sales and Segments - Roofing segment net sales increased by $19 million (2%) year-over-year in Q3 2025, driven by higher selling prices of $37 million, despite lower volumes[258][259]. - Insulation segment net sales decreased by $67 million (7%) in Q3 2025, primarily due to lower sales volumes of approximately 5% and a $33 million unfavorable impact from divestitures[263][264]. - Doors segment net sales decreased by $28 million (5%) in Q3 2025, attributed to lower volumes and selling prices, but year-to-date sales increased by $755 million (85%) due to the acquisition of Masonite[271][272]. Cash Flow and Liquidity - The Company had cash and cash equivalents of $286 million as of September 30, 2025, as part of its liquidity resources[280]. - Cash and cash equivalents decreased to $343 million as of September 30, 2025, down from $499 million a year earlier[286]. - Net cash flow from operating activities decreased by $20 million for the nine months ended September 30, 2025, compared to the same period in 2024[287]. - Net cash flow used for investing activities decreased by $2,680 million for the nine months ended September 30, 2025, primarily due to the Masonite acquisition in the prior year[288]. - Net cash flow used for financing activities increased by $1,684 million for the nine months ended September 30, 2025, driven by higher net proceeds from long-term debt related to the Masonite acquisition[289]. - The Company expects cash on hand, future cash flows, and available liquidity sources to meet anticipated cash requirements[290]. Debt and Financing - As of September 30, 2025, the Company had $5.2 billion in total debt, including $399 million of 3.4% senior notes maturing in Q3 2026[292]. - The Company has a $1.5 billion Senior Revolving Credit Facility, amended in March 2025 to increase the borrowing limit from $1.0 billion and extend the maturity to March 2030[281]. - The Company established a CP Program for issuing $1.5 billion in unsecured commercial paper notes with maturities up to 397 days[283]. - The Company had $40 million of CP Notes outstanding as of September 30, 2025, with a weighted average interest rate of 4.25%[294]. Operational Outlook - The Company expects to partially offset the impact of new tariffs through supply chain adjustments and productivity actions[240]. - The Company expects non-discretionary residential re-roof and remodeling activity to moderate in the near term, influenced by competitive pricing pressure and raw material costs[262]. - Insulation demand outlook is closely tied to North American residential construction and remodeling activity, with current housing starts at approximately 1.330 million, a slight increase from 1.326 million in Q3 2024[268][269]. Share Repurchase - The Company repurchased 3.8 million shares of its common stock for $545 million during the nine months ended September 30, 2025[339]. - As of September 30, 2025, 14.6 million shares remain available for repurchase under the Repurchase Authorizations[339]. Safety Metrics - The Recordable Incident Rate (RIR) for the three months ended September 30, 2025, was 0.56, compared to 0.58 in the same period a year ago[304]. Management and Controls - The Company’s management concluded that the disclosure controls and procedures are effective as of the end of the reporting period[331].