Owens Corning's Roofing volumes grow significantly

Owens Corning reported that consolidated net sales increased 9 percent to $1.35 billion in the first quarter of 2012, compared with $1.24 billion in the same period last year.



"Owens Corning delivered results in line with our expectations for the quarter," said Chairman and Chief Executive Officer Mike Thaman. "We continue to be confident that we will grow adjusted EBIT in 2012.

"As compared to last year, Roofing volumes grew significantly, but margins were compressed due to asphalt cost inflation," Thaman said. "We expect another year of strong financial performance in Roofing based on our current outlook for volumes and pricing."

Owens Corning's primary safety metric improved by 23 percent over the company's full-year 2011 performance.

First-quarter adjusted earnings before interest and taxes (EBIT) were $43 million in 2012 compared with EBIT of $61 million in the first quarter of 2011. In the first quarter of 2012, the company had certain items that were not the result of current operations. Before adjusting for these items, Owens Corning's first-quarter 2012 EBIT was a loss of $12 million.

Volume growth in all three businesses drove nine-percent revenue improvement in the first quarter of 2012 over the same period last year.

Owens Corning today announced that its Board of Directors has authorized the company to repurchase up to 10 million additional shares of Owens Corning's outstanding common stock. Under a previously announced share repurchase program, 3.7 million shares continue to be available for repurchase.

Although there continues to be uncertainty in the macro-economic outlook, Owens Corning expects to grow adjusted EBIT in 2012 based on an improving U.S. housing market and continued growth in global industrial production.

Despite weakness in the European glass fiber reinforcements market, the company believes that global glass reinforcements demand will continue to grow in 2012.

As previously announced, the company is taking actions in its Composites segment to balance supply and to improve the sustainable competitive position of its European assets. In the first quarter, the company made progress in implementing these actions to transform its Composites operation into a global network of low-delivered-cost assets and to position the business to return to double-digit margins in 2013. In conjunction with these actions, the company anticipates incurring approximately $130 million in charges in 2012 through early 2013.

In the Building Materials segment, the company expects another year of strong financial performance in Roofing based on its current outlook for volumes and pricing. The company continues to believe Insulation will significantly narrow losses in 2012 on improved U.S. housing.

Cash taxes are expected to be about $30 million in 2012, due to the company's $2.3 billion U.S. tax net operating loss carry forward. The company estimates a long-term effective tax rate of 25 percent to 28 percent based on the blend of effective tax rates for its U.S. and non-U.S. operations. The effective book tax rate for 2012 is expected to be about 25 percent on adjusted earnings.

The company expects general corporate expenses to be between $110 million and $120 million in 2012. General corporate expenses include corporate staff and other activities that support the operations. Expenses will be higher in 2012 primarily due to increased pension expense and higher year-over-year incentive compensation costs.

Depreciation and amortization expenses are expected to be as much as $320 million in 2012, excluding the impact of the restructuring actions in Europe.

Capital expenditures in 2012 are expected to be about $350 million.

Owens Corning