Owens Corning Reports Lower Earnings
TOLEDO, Ohio, Nov. 14 - Owens Corning (NYSE:OWC) today reported financial results for the third quarter ended September 30, 2000.
The company had net sales for the period of $1.281 billion, compared to $1.333 billion in the same period a year ago. Sales were basically flat when adjusted for the divestiture of businesses in the first half of 2000 that had accounted for $71 million of revenue in the third quarter of 1999.
During the third quarter, a 7 percent decline in Building Materials sales was offset by a 13 percent growth in Composite sales. Building Materials sales were impacted by weakening markets associated with higher interest rates and reduced new construction and remodeling activity. Composites growth was attributed to strong global demand and a favorable pricing environment.
Income from operations for the quarter was $80 million, versus $183 million in the third quarter of 1999. Third quarter 2000 results included $26 million of costs associated with asset impairments, severance and other employee benefits. The remainder of the decline was attributable to softening demand, accompanied by increased manufacturing costs, and continued significant raw material and energy cost increases in the Building Materials segment that were not fully offset by increased prices. This was partly offset by a reduction in marketing and administrative expenses, which were $12 million lower than prior year levels.
Net income was $14 million, or $.25 a share on a diluted basis, compared to net income of $89 million, or $1.53 per share on a diluted basis, in the same period a year ago. The decline in net income in the third quarter of 2000 reflects the factors discussed above, as well as increased borrowing costs.
As reported, on October 5, 2000, Owens Corning voluntarily filed for reorganization under Chapter 11 of the U.S. Bankruptcy Code. The filing will enable Owens Corning to refocus on operating its businesses and serving its customers while it develops a plan of reorganization that will resolve its asbestos and other liabilities and provide a suitable capital structure for long-term growth.
In addition to refocusing on operational excellence and customer service, Owens Corning continues to place a strong emphasis on cost control and optimizing the Owens Corning brand to maintain or increase share in all served markets.
Owens Corning is a world leader in building materials systems and composites systems. The company has sales of $5 billion and employs approximately 20,000 people worldwide. Additional information is available on Owens Corning's Web site at www.owenscorning.com or by calling the company's toll-free General Information line: 877-799-6904.
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected in these statements. Further information on factors that could affect the company's financial and other results is included in the company's Forms 10-Q and 10-K, filed with the Securities and Exchange Commission.
Contact: Gregg Bronk, Corporate Communications, 419-248-8004, or Jules L. Vinnedge, Investor Relations, 419-248-7377, both of Owens Corning; or Fred Spar or Michael Freitag of Kekst & Company, 212-521-4800, for Owens Corning