Owens Corning — Third Quarter 2026 Earnings Summary

Financial Performance:

• Reported net sales of $2.5 billion for the quarter, a 7% decrease from the prior year; nine-month net sales were $7.5 billion, down 6% from $7.9 billion in the prior year.
• Reported net loss attributable to Owens Corning of $248 million for the quarter (10% margin) compared to a loss of $495 million (18% margin) in the prior year; nine-month net earnings were $100 million (1% margin) compared to $94 million (1% margin) in the prior year.
• Reported diluted EPS of $(3.15) for the quarter and $(1.61) for the nine months; adjusted diluted EPS was $2.44 for the quarter and $7.58 for the nine months.
• Adjusted EBITDA was $489 million for the quarter (20% margin) compared to $638 million (24% margin) in the prior year; nine-month adjusted EBITDA was $1.5 billion (20% margin) compared to $1.9 billion (24% margin) in the prior year.
• Operating cash flow was $813 million for the quarter and $1.1 billion for the nine months; free cash flow was $622 million for the quarter and $434 million for the nine months.
• Net debt was $4.7 billion as of September 30, 2026, resulting in a net leverage ratio of 2.5x.
• Total debt was $4.9 billion; cash and cash equivalents were $179 million.

Guidance and Future Outlook:

• For the fourth quarter of 2026, revenue is expected to be between $2.0 billion and $2.2 billion.
• Fourth-quarter enterprise adjusted EBITDA margin is expected to be approximately 10% to 12%.
• Full-year 2026 general corporate EBITDA expenses are expected to be $235 million to $245 million.
• Full-year 2026 interest expense is expected to be $255 million to $265 million.
• Full-year 2026 effective tax rate on adjusted earnings is expected to be 24% to 26%.
• Full-year 2026 capital additions are expected to be approximately $800 million.
• Full-year 2026 depreciation and amortization are expected to be approximately $680 million.
• Management expects existing home sales, discretionary remodeling, and residential new construction to remain under pressure.
• Roofing demand is expected to be weighed down by a second consecutive year of weak storm activity and distribution destocking.
• Non-residential construction in North America is expected to show pockets of strength, while European core markets are anticipated to remain stable.
• Significant input and delivery cost inflation is expected to result in incremental expense with minimal price expectations in the fourth quarter.

Business Segments and Product Lines:

• Roofing: Net sales of $1.0 billion (down 16% YoY); EBITDA of $299 million (29% margin).
• Insulation: Net sales of $1.0 billion (up 6% YoY); EBITDA of $215 million (21% margin).
• Doors: Net sales of $483 million (down 11% YoY); EBITDA of $25 million (5% margin).
• The company recorded a $476 million non-cash, pre-tax impairment charge related to the Doors business.
• Goodwill impairment of $366 million and intangible assets impairment of $77 million were recorded for the quarter.

Market and Competitive Landscape:

• The company maintained a recordable incident rate (RIR) of 0.81.
• Owens Corning placed second on the 100 Best Corporate Citizens list for the ninth consecutive year.
• Management cited challenging residential market conditions, weak storm activity, and rapidly rising transportation and input material costs as key market factors.

Risks and Challenges:

• Residential market conditions remain weak with pressure on new construction and remodeling activity.
• Inflationary pressures on input and delivery costs are expected to impact margins.
• Weak storm activity is negatively impacting roofing demand.
• The company faces risks related to supply chain disruptions, economic conditions, and interest rate volatility as noted in forward-looking statements.

Management Commentary and Tone:

• Chair and CEO Brian Chambers stated the team demonstrated disciplined commercial and operational execution, delivering a resilient margin and strong cash flow despite pressures.
• CFO Jonathan Collins expressed excitement to partner with the leadership team to build on the company's strong foundation and invest in long-term growth, emphasizing disciplined capital allocation and a strong balance sheet.
• President and COO Todd Fister expressed confidence in the company's long-term growth and performance through the cycle, noting actions taken to improve cost position and strengthen commercial capabilities.

Other Key Points:

• Returned $337 million to shareholders in the quarter, including $275 million for the repurchase of 1.9 million shares and $62 million in cash dividends.
• Reduced debt by $299 million during the quarter.
• Todd Fister was promoted to President and Chief Operating Officer.
• Jonathan Collins joined as Executive Vice President and Chief Financial Officer in August.
• The company maintained net leverage within the targeted range of 2x to 3x.
• Proceeds from the sale of the Glass Reinforcements business were $364 million in the nine-month period.