Owens Corning: record quarterly sales and operating results

Building materials manufacturer Owens Corning reported record sales and operating results for the 1Q ending 31 March 2006. The company reported on 2 May 2006 sales of USD 1.601 billion during the peri…

Building materials manufacturer Owens Corning reported record sales and operating results for the 1Q ending 31 March 2006. The company reported on 2 May 2006 sales of USD 1.601 billion during the period, compared with USD 1.402 billion in the 1Q of 2005, a 14.2% increase from the prior year. “I am pleased that our company delivered a strong financial performance by all measures”, said Dave Brown, president and chief executive officer. “Our record operating results in the 1Q reflected the strong demand of our Building Materials Systems segment. We will continue to introduce new product offerings, maintain cost control and streamline our business processes to deliver profitable growth and enhance customer satisfaction”. “Our unconditional commitment to the safety of employees remains a top priority”, added Mr. Brown. “We“ve continued to reduce the number of recordable injuries in the workplace through the 1Q, resulting in an unprecedented level of safety within our company”. For the 1Q of 2006, Owens Corning reported income from operations of USD 115 million, compared with a loss from operations of USD 4.281 billion for the same period of 2005. In March 2005, a federal district court estimated Owens Corning“s asbestos liability at USD 7 billion, which resulted in a non-cash charge of USD 4.342 billion in the 1Q 2005. Excluding this and other Chapter 11-related reorganization items of USD 7 million and USD 36 million during the 1Q of 2006 and 2005, respectively, operating performance improved 26% in the 1Q compared with the same period of 2005. Although market demand for building materials products remained strong through the 1Q 2006, recent increases in United States housing inventory and interest rates are expected to exert pressure on demand, which could impact prices for certain products. Offsetting this potential softening of demand, the Energy Policy Act of 2005 may stimulate demand for Owens Corning products in the United States due to the potential tax credits offered to home builders for the construction of more energy-efficient homes, and to homeowners for certain energy-efficient home improvements. Owens Corning filed a modified plan of reorganization with the United States Bankruptcy Court for the District of Delaware on 29 March 2006. While the filing is a key step toward emergence, a number of additional steps remain in the process, including creditor voting and Court approval. The Bankruptcy Court scheduled Owens Corning“s disclosure statement hearing for 10 May 2006, where it will determine whether the plan provides sufficient information to allow creditors to cast an informed vote on the plan. Confirmation hearings in the company“s Chapter 11 case are currently set for 10 July 2006 and 17 and 18 July 2006. While the revised plan of reorganization is not yet a fully consensual plan, the company says it continues to negotiate with each of its creditors to reach agreement. Owens Corning says it remains committed to emerging from Chapter 11 with a plan that deals fairly and equitably with all of its creditors and is in the best interests of its employees, customers and company.