News Column

Owens Corning Releases 4th Quarter and 2013 Financial Results; Declares Dividend

February 17, 2014

Owens Corning reported consolidated net sales of $5.3 billion in 2013, up from net sales of $5.2 billion in 2012.

In a release on Feb. 12, the Company said full-year 2013 adjusted earnings were $221 million, or $1.86 per diluted share compared to adjusted earnings of $131 million, or $1.10 per diluted share, in 2012. Net earnings in 2013 were $204 million, or $1.71 per share, compared to net loss of $19 million, or $0.16 per diluted share last year.

Fourth-quarter 2013 adjusted earnings were $52 million, or $0.44 per diluted share, compared with $13 million, or $0.11 per diluted share, during the same period one year ago. The company reported net earnings of $82 million, or $0.69 per diluted share, in the fourth quarter of 2013, compared with a net loss of $56 million, or $0.47 per diluted share, in 2012.

"In 2013, our insulation business returned to profitability. This was an important achievement for our company," said Chairman and Chief Executive Officer Mike Thaman. "We are pleased to establish a quarterly dividend as an additional mechanism to return value to our shareholders.

"All three businesses improved in 2013, benefitting from a stable and growing global economy and a recovering U.S. housing market," Thaman added. "We expect similar growth in 2014 and we are working to maintain the momentum we established last year."

The decision to declare a dividend conveys the confidence of the Board of Directors in the company's long-term financial outlook and cash flow generation. The company will make an initial quarterly payment of 16 cents per common share on April 3 to shareholders of record as of March 14.

Consolidated Fourth-Quarter and Full-Year 2013 Results

-Owens Corning maintained a very high level of safety performance in 2013. The company had 88 percent fewer injuries than the average manufacturing company when measured against the rates published by the U.S. Department of Labor.

-Adjusted earnings before interest and taxes (EBIT) in the fourth quarter of 2013 was $96 million, compared with $52 million in 2012. EBIT for the fourth quarter was $104 million, compared with $16 million during the same period in 2012 (see Table 2).

-Full-year adjusted EBIT was $416 million in 2013, compared with adjusted EBIT of $293 million in 2012. Full-year EBIT in 2013 was $385 million, compared to $148 million in 2012.

Outlook

In 2014, the company expects to deliver $500 million in adjusted EBIT based on our current outlook for an improving U.S. housing market and moderate global growth.

We expect the Roofing business to deliver another strong year in 2014 and anticipate that the market will grow on new construction with flat to potentially improving re-roofing demand.

Insulation should continue to benefit from growth in U.S. residential new construction, improved pricing and operating leverage.

In Composites, the company expects recovering market conditions to drive price improvement of $20 million to $30 million. Pricing is expected to be the primary driver of EBIT growth in 2014.

The company estimates a long-term effective tax rate of 28 percent to 30 percent, and a long-term effective cash tax rate of 10 percent to 12 percent on adjusted pre-tax earnings, due to the company's $2.2 billion U.S. tax net operating loss carryforward. The effective book tax rate for 2014 on adjusted earnings is expected to be within the long-term range.

The company expects general corporate expenses to be $120 million to $130 million in 2014. Capital expenditures in 2014 are expected to total approximately $400 million, including an estimated $65 million for the start of construction of a non-woven facility.

The cash dividend to be paid in April will mark the company's first such payment since 2000. Future dividend declarations will be made at the discretion of the Board of Directors and will be based on such factors as the company's earnings, financial condition, cash requirements, future prospects and other factors.

Next Earnings Announcement

First-quarter 2014 results will be announced on Wednesday, April 23.

Owens Corning is a global producer of residential and commercial building materials, glass-fiber reinforcements and engineered materials for composite systems. Owens Corning is a company focusing on glass-fiber technology with sales of $5.3 billion in 2013 and about 15,000 employees in 27 countries.

More information:

www.owenscorning.com

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Source: Manufacturing Close - Up


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