DE | 1-33100 | 43-2109021 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) |
One Owens Corning Parkway Toledo, OH | 43659 |
(Address of principal executive offices) | (Zip Code) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
Exhibit No. | Description |
99.1 | Press Release, dated April 27, 2016 |
Owens Corning | ||
April 27, 2016 | By: | /s/ Ava Harter |
Ava Harter | ||
Senior Vice President, General Counsel and Secretary |
Exhibit No. | Description |
99.1 | Press Release, dated April 27, 2016 |
Media Inquiries: | Investor Inquiries: | |||
Chuck Hartlage | Thierry Denis | |||
419.248.5395 | 419.248.5748 |
• | Composites delivered $64 million of EBIT in the quarter; achieved 14% EBIT margins |
• | Roofing grew EBIT by $53 million in the quarter; delivered 17% EBIT margins |
• | Insulation delivered 19th consecutive quarter of EBIT growth |
• | Improved free cash flow performance by $170 million |
• | Completed acquisition of InterWrap on April 21, 2016 |
• | Owens Corning improved its recordable incident rate in the first quarter of 2016 by 16 percent and continues to maintain a very high level of safety performance. |
• | Adjusted earnings before interest and taxes (EBIT) in the first quarter of 2016 were $118 million, up from $60 million in 2015. Reported EBIT for the first quarter was $116 million, compared with $58 million during the same period in 2015 (See Table 2). |
• | Free cash flow improved by $170 million year-over-year as a result of improved earnings and working capital performance (See Table 8). |
• | In addition to the InterWrap acquisition, the company reached agreement to acquire the non-wovens and fabrics business of Ahlstrom. That transaction is currently under regulatory review and expected to close later this year. |
• | During the first quarter, Owens Corning repurchased 0.8 million shares of the company's common stock for $36 million. As of March 31, 2016, 3.8 million shares remained available for repurchase under the company's current authorization. |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
NET SALES | $ | 1,231 | $ | 1,203 | ||
COST OF SALES | 959 | 994 | ||||
Gross margin | 272 | 209 | ||||
OPERATING EXPENSES | ||||||
Marketing and administrative expenses | 134 | 129 | ||||
Science and technology expenses | 19 | 17 | ||||
Other expenses, net | 3 | 5 | ||||
Total operating expenses | 156 | 151 | ||||
EARNINGS BEFORE INTEREST AND TAXES | 116 | 58 | ||||
Interest expense, net | 23 | 26 | ||||
EARNINGS BEFORE TAXES | 93 | 32 | ||||
Income tax expense | 34 | 13 | ||||
NET EARNINGS | 59 | 19 | ||||
Net earnings attributable to noncontrolling interests | 2 | 1 | ||||
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING | $ | 57 | $ | 18 | ||
EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS | ||||||
Basic | $ | 0.49 | $ | 0.15 | ||
Diluted | $ | 0.49 | $ | 0.15 | ||
Dividend | $ | 0.18 | $ | 0.17 | ||
WEIGHTED AVERAGE COMMON SHARES | ||||||
Basic | 115.5 | 117.8 | ||||
Diluted | 116.5 | 118.5 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Restructuring costs | $ | — | $ | (2 | ) | |
Acquisition-related costs for InterWrap and Ahlstrom transactions | (2 | ) | — | |||
Total adjusting items | $ | (2 | ) | $ | (2 | ) |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
NET EARNINGS ATTRIBUTABLE TO OWENS CORNING | $ | 57 | $ | 18 | ||
Net earnings attributable to noncontrolling interests | 2 | 1 | ||||
NET EARNINGS | 59 | 19 | ||||
Income tax expense | 34 | 13 | ||||
EARNINGS BEFORE TAXES | 93 | 32 | ||||
Interest expense, net | 23 | 26 | ||||
EARNINGS BEFORE INTEREST AND TAXES | 116 | 58 | ||||
Less: adjusting items from above | (2 | ) | (2 | ) | ||
ADJUSTED EBIT | $ | 118 | $ | 60 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
RECONCILIATION TO ADJUSTED EARNINGS | ||||||
Net earnings attributable to Owens Corning | $ | 57 | $ | 18 | ||
Adjustment to remove adjusting items, net of tax | 1 | 1 | ||||
Adjustment to tax expense to reflect pro forma tax rate* | 4 | 3 | ||||
ADJUSTED EARNINGS | $ | 62 | $ | 22 | ||
RECONCILIATION TO ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS | ||||||
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS | $ | 0.49 | $ | 0.15 | ||
Adjustment to remove adjusting items, net of tax | 0.01 | 0.01 | ||||
Adjustment to tax expense to reflect pro forma tax rate* | 0.03 | 0.03 | ||||
ADJUSTED DILUTED EARNINGS PER SHARE ATTRIBUTABLE TO OWENS CORNING COMMON STOCKHOLDERS | $ | 0.53 | $ | 0.19 | ||
RECONCILIATION TO DILUTED SHARES OUTSTANDING | ||||||
Weighted-average number of shares outstanding used for basic earnings per share | 115.5 | 117.8 | ||||
Non-vested restricted and performance shares | 0.6 | 0.3 | ||||
Options to purchase common stock | 0.4 | 0.4 | ||||
Weighted-average number of shares outstanding and common equivalent shares used for diluted earnings per share | 116.5 | 118.5 |
* | For 2016, we have used a pro forma effective tax rate of 33%, which is the mid-point of our 2016 effective tax rate guidance of 32% to 34%. For comparability, in 2015, we have used an effective tax rate of 33%, which was our 2015 effective tax rate excluding the reversal (recorded in the fourth quarter of 2015) of a valuation allowance against certain Canadian net deferred tax assets. |
ASSETS | March 31, 2016 | December 31, 2015 | ||||
CURRENT ASSETS | ||||||
Cash and cash equivalents | $ | 54 | $ | 96 | ||
Receivables, less allowances of $9 at March 31, 2016 and $8 at December 31, 2015 | 785 | 709 | ||||
Inventories | 708 | 644 | ||||
Assets held for sale | 13 | 12 | ||||
Other current assets | 50 | 47 | ||||
Total current assets | 1,610 | 1,508 | ||||
Property, plant and equipment, net | 2,988 | 2,956 | ||||
Goodwill | 1,167 | 1,167 | ||||
Intangible assets, net | 996 | 999 | ||||
Deferred income taxes | 475 | 492 | ||||
Other non-current assets | 219 | 222 | ||||
TOTAL ASSETS | $ | 7,455 | $ | 7,344 | ||
LIABILITIES AND EQUITY | ||||||
CURRENT LIABILITIES | ||||||
Accounts payable and accrued liabilities | $ | 893 | $ | 912 | ||
Short-term debt | 3 | 6 | ||||
Long-term debt – current portion | 163 | 163 | ||||
Total current liabilities | 1,059 | 1,081 | ||||
Long-term debt, net of current portion | 1,785 | 1,702 | ||||
Pension plan liability | 384 | 397 | ||||
Other employee benefits liability | 237 | 240 | ||||
Deferred income taxes | 9 | 8 | ||||
Other liabilities | 153 | 137 | ||||
OWENS CORNING STOCKHOLDERS’ EQUITY | ||||||
Preferred stock, par value $0.01 per share (a) | — | — | ||||
Common stock, par value $0.01 per share (b) | 1 | 1 | ||||
Additional paid in capital | 3,956 | 3,965 | ||||
Accumulated earnings | 1,091 | 1,055 | ||||
Accumulated other comprehensive deficit | (625 | ) | (670 | ) | ||
Cost of common stock in treasury (c) | (636 | ) | (612 | ) | ||
Total Owens Corning stockholders’ equity | 3,787 | 3,739 | ||||
Noncontrolling interests | 41 | 40 | ||||
Total equity | 3,828 | 3,779 | ||||
TOTAL LIABILITIES AND EQUITY | $ | 7,455 | $ | 7,344 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
NET CASH FLOW PROVIDED BY (USED FOR) OPERATING ACTIVITIES | ||||||
Net earnings | $ | 59 | $ | 19 | ||
Adjustments to reconcile net earnings to cash provided by (used for) operating activities: | ||||||
Depreciation and amortization | 76 | 75 | ||||
Deferred income taxes | 28 | 4 | ||||
Provision for pension and other employee benefits liabilities | 4 | 5 | ||||
Stock-based compensation expense | 8 | 8 | ||||
Other non-cash | (1 | ) | — | |||
Change in working capital | (82 | ) | (211 | ) | ||
Pension fund contribution | (7 | ) | (14 | ) | ||
Payments for other employee benefits liabilities | (5 | ) | (5 | ) | ||
Other | (17 | ) | 3 | |||
Net cash flow provided by (used for) operating activities | 63 | (116 | ) | |||
NET CASH FLOW USED FOR INVESTING ACTIVITIES | ||||||
Cash paid for property, plant and equipment | (98 | ) | (89 | ) | ||
Net cash flow used for investing activities | (98 | ) | (89 | ) | ||
NET CASH FLOW (USED FOR) PROVIDED BY FINANCING ACTIVITIES | ||||||
Proceeds from senior revolving credit and receivables securitization facilities | 150 | 529 | ||||
Payments on senior revolving credit and receivables securitization facilities | (71 | ) | (247 | ) | ||
Net decrease in short-term debt | (3 | ) | (17 | ) | ||
Cash dividends paid | (40 | ) | (39 | ) | ||
Purchases of treasury stock | (43 | ) | (19 | ) | ||
Other | (1 | ) | 7 | |||
Net cash flow (used for) provided by financing activities | (8 | ) | 214 | |||
Effect of exchange rate changes on cash | 1 | 1 | ||||
Net (decrease) increase in cash and cash equivalents | (42 | ) | 10 | |||
Cash and cash equivalents at beginning of period | 96 | 67 | ||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 54 | $ | 77 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Net sales | $ | 473 | $ | 474 | ||
% change from prior year | — | % | — | % | ||
EBIT | $ | 64 | $ | 60 | ||
EBIT as a % of net sales | 14 | % | 13 | % | ||
Depreciation and amortization expense | $ | 34 | $ | 32 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Net sales | $ | 385 | $ | 379 | ||
% change from prior year | 2 | % | 7 | % | ||
EBIT | $ | 13 | $ | 7 | ||
EBIT as a % of net sales | 3 | % | 2 | % | ||
Depreciation and amortization expense | $ | 25 | $ | 24 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Net sales | $ | 429 | $ | 393 | ||
% change from prior year | 9 | % | (21 | )% | ||
EBIT | $ | 73 | $ | 20 | ||
EBIT as a % of net sales | 17 | % | 5 | % | ||
Depreciation and amortization expense | $ | 10 | $ | 9 |
Three Months Ended March 31, | ||||||
2016 | 2015 | |||||
Restructuring costs | $ | — | $ | (2 | ) | |
Acquisition-related costs for InterWrap and Ahlstrom transactions | (2 | ) | — | |||
General corporate expense and other | (32 | ) | (27 | ) | ||
EBIT | $ | (34 | ) | $ | (29 | ) |
Depreciation and amortization | $ | 7 | $ | 10 |
Three Months Ended March 31, | |||||||
2016 | 2015 | ||||||
NET CASH FLOW PROVIDED BY (USED FOR) OPERATING ACTIVITIES | $ | 63 | $ | (116 | ) | ||
Less: Cash paid for property, plant and equipment | (98 | ) | (89 | ) | |||
FREE CASH FLOW | $ | (35 | ) | $ | (205 | ) |
T
MCN4L&5)I)K@PAYF19##"%BERR(Z;GD*(&;;SAB #$F^)<$4VG$6[_8M1B:2:
M=F"FS/FI;@2I@Y47#B*1PP$9.XY6@9.5OK2Q
MN/(,4UY>K87$#.-]K/Y4LCJQ ^?'E@H0%#QR)(" <4 95Q\2Q:16-U+:G[/>
MRWBW#K)G[+#:7'V=KAAM^=-Q5Y,8,:%F^8*: -Z^\91V#WZ-$TGV VB1!&!:
MXEO /*C7.%3,C*NXD@ ES@"@1H:7J&K27)M]2M(84:,NLUO<>
:]:6]DZ+I33W-I(Q4%KB>*!Y',;'[L4#H(LKS)+Y@SM09
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M_P#1%O02SZ,H$9NKZ1::[:2Z??QK-;7"E'1NA![CN&!P580VD\4X0P1@,8I%<*2'R VW!(
MY&: N?2M CSKXJ>$AXQ\/7-D@S
@H]F^!?BW_A&?$4=M,VVUU0"VDR<*)