TOLEDO, Ohio, April 28, 2010 /PRNewswire via COMTEX/ -- Consolidated revenue increased 18 percent over 2009

Composites demonstrated strong operating leverage and profitability

Roofing momentum continued with margins of 24 percent

2010 adjusted EBIT outlook raised to as much as $450 million

Owens Corning today reported that consolidated net sales increased 18 percent to $1.3 billion in the first quarter of 2010, compared with $1.1 billion in the first quarter of 2009.

Owens Corning's first-quarter 2010 adjusted earnings were $53 million, or $0.42 per adjusted diluted share, compared with $5 million, or $0.04 per adjusted diluted share, in the first quarter of 2009. The Company's first-quarter 2010 net earnings were $48 million, or $0.38 per diluted share, compared with a net loss of $28 million, or a loss of $0.23 per diluted share, in the first quarter of 2009. See Tables 1, 2 and 3 for a discussion and reconciliation of these items.

The Composites segment increased profits in the first quarter, demonstrating strong operating leverage. In the Roofing business, the strong momentum continued into the first quarter of 2010 with an increase in earnings before interest and taxes (EBIT) of nearly one-third over the same period a year ago. The Insulation business performed as expected, narrowing its losses despite continued weakness in the U.S. housing market.

Consolidated First-Quarter 2010 Results

EBIT for the quarter ended March 31, 2010, was $83 million compared with an EBIT loss of $18 million during the same period in 2009. Adjusted EBIT (see Table 2) in the first quarter of 2010 was $97 million, compared with $32 million in the first quarter of 2009.

Gross margin as a percentage of net sales was 19 percent in the first quarter of 2010 compared with 15 percent in the first quarter of 2009.

The Company's safety performance improved 20 percent in the first quarter of 2010 compared with 2009.

"Owens Corning is off to a strong start in 2010," said Mike Thaman, chairman and chief executive officer. "We demonstrated leverage in our Composites business, driving a return to healthy profit levels. We continued our strong momentum in Roofing, generating first-quarter margins of 24 percent. Based on these results, we have raised our 2010 adjusted EBIT outlook to as much as $450 million, which is $100 million higher than our previous estimate."

Outlook

Based on continued strong margins in the Roofing business and improved results for the Composites segment, Owens Corning expects that the Company's 2010 adjusted EBIT could be as high as $450 million, which equates to an adjusted earnings per share of about $2.00.

In the Composites segment, the Company believes that overall demand will continue to trend upward as global industrial activity improves. The rate of market recovery remains uncertain. The Company expects to increase production to meet improved market demand, which will result in higher capacity utilization during the year as compared to 2009. Additionally, the Composites segment will continue to realize the benefit of various cost-reduction actions and prior price increases.

The Company expects strong momentum to continue in the Roofing business, as actions taken to increase margins in 2008 and 2009 will drive profitability in 2010. Owens Corning believes that margins in excess of 20 percent will be achieved in 2010.

The Company estimates that the Insulation business will narrow its losses in 2010, despite continued U.S. residential construction market weakness.

Cash taxes are expected to be below $35 million in 2010. The Company estimates a long-term effective tax rate of 25 percent based on the blend of effective tax rates for its U.S. and non-U.S. operations.

General corporate expense in 2010 is estimated to be between $80 million and $90 million. General corporate expense includes corporate staff and activities not directly related to the operations of the Company's segments. This estimate is higher than previous guidance due to increased performance-based compensation expense.

The Company currently estimates that depreciation and amortization expense will be approximately $325 million in 2010. Capital expenditures in 2010, excluding precious metal purchases, are estimated to be less than depreciation and amortization expense expected for the year. This level of investment will allow the Company to maintain its current asset platform and to complete the new Composites Reinforcements plant under construction in China.

Other Financial Items

At the end of the first quarter of 2010, Owens Corning had total debt less cash-on-hand of $1.7 billion, compared with $1.6 billion at the end of 2009. Total debt less cash-on-hand was higher compared with year end due to seasonal working capital needs.

Owens Corning's cash-on-hand of $463 million and access to liquidity provide ample funds to meet the Company's cash requirements.

Global capital and credit markets have materially improved and management is confident that the refinancing of the Company's bank facilities will be completed well before the end of the year.

Owens Corning's federal tax net operating loss carryforward was $2.5 billion at the end of the first quarter of 2010.

Business Segment Highlights

Composites

NET SALES

Substantially all of the increase in net sales was attributed to higher sales volumes. Demand in the Reinforcements business continued the sequential improvement that began in the first quarter of 2009. The impact of translating sales denominated in foreign currencies into the U.S. dollar also increased net sales, accounting for approximately 10 percent of the increase. Partially offsetting these increases were lower selling prices in the first quarter of 2010 as compared to the first quarter of 2009. Selling prices in the European Reinforcements business trended downward through the first nine months of 2009, but began to show some recovery in the fourth quarter of 2009. While selling prices across most markets rose in the first quarter of 2010, they were generally still below those seen in the first quarter of 2009.

EBIT

The improvement in EBIT was primarily due to higher sales volumes, including the impact of improved leverage of production capacity. During the quarter, the Company restarted capacity so that production levels were in line with sales volumes. Favorable translation rates on earnings denominated in foreign currencies also increased EBIT in 2010 as compared to 2009. These improvements were partially offset by unfavorable mix and lower selling prices in the first quarter of 2010 as compared to the first quarter of 2009, although selling prices have continued to increase in the first quarter.

Owens Corning continues to evaluate its global manufacturing network in the Composites segment to respond to current and future market demand. The Company put plans in place in the first quarter to downsize certain underutilized manufacturing facilities in Europe to improve its cost position in that region. Owens Corning recorded $13 million in charges in the first quarter of 2010 related to these actions. These charges were reported in the Corporate, Other and Eliminations category.

At the same time, the Company is making an investment to expand its existing manufacturing facility in Russia. This additional capacity will help Owens Corning serve an attractive market and support customers.

Building Materials

NET SALES

Net sales in the Building Materials segment were higher in the first quarter of 2010 than the same period in 2009. Substantially all of this increase was a result of higher sales in the Roofing business.

In the Roofing business, higher sales volumes increased net sales by more than 15 percent over the first quarter of 2009. Management believes that the higher volumes were primarily driven by customers restocking inventories from levels that were below normal at the end of 2009, as well as purchasing in advance of the Company's announced price increase. In addition, mix was favorable in the first quarter of 2010 as compared to the first quarter of 2009. The net sales increase was partially offset by lower selling prices compared to the first quarter of 2009, driven by competitive pressures in the market. While selling prices have been relatively stable since the fourth quarter of 2008, they have fluctuated from quarter to quarter.

In the Insulation business, higher sales volumes outside of the United States accounted for the increase in net sales. Lagged U.S. housing starts for the first quarter of 2010 were 19 percent lower than those for the same period in 2009, according to data reported by the U.S. Census Bureau. Management estimates that residential insulation demand lags residential housing starts by approximately three months.

EBIT

EBIT for the Building Materials segment improved substantially in the current year, driven by improvements in the Roofing business.

In the Roofing business, higher sales volumes, including improved leverage of production capacity, increased EBIT by almost one-third over the first quarter of 2009. Additionally, the Roofing business realized benefits in unit margins from improved productivity, primarily in efficiency of raw materials usage and lower raw materials cost, particularly asphalt. Partially offsetting these EBIT improvements were lower first-quarter 2010 selling prices, driven by competitive pressures in the market.

In the Insulation business, higher sales volumes outside of the United States accounted for substantially all of the increase in EBIT.

About Owens Corning

Owens Corning is a leading global producer of residential and commercial building materials, glass-fiber reinforcements and engineered materials for composite systems. A Fortune 500 Company for 56 consecutive years, Owens Corning is committed to driving sustainability by delivering solutions, transforming markets and enhancing lives. Founded in 1938, Owens Corning is a market-leading innovator of glass-fiber technology with sales of $4.8 billion in 2009 and about 16,000 employees in 28 countries on five continents. Additional information is available at www.owenscorning.com.

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those projected in these statements. Such factors include, without limitation: economic and political conditions, including new legislation or other governmental actions; levels of residential and commercial construction activity; competitive factors; pricing factors; weather conditions; our level of indebtedness; industry and economic conditions that affect the market and operating conditions of our customers, suppliers or lenders; availability and cost of energy and materials; availability and cost of credit; interest rate movements; issues related to acquisitions, divestitures and joint ventures; our ability to use our net operating loss carryforwards; achievement of expected synergies, cost reductions and/or productivity improvements; issues involving implementation of new business systems; foreign exchange fluctuations; research and development activities; difficulties in managing production capacity; labor disputes; and, factors detailed from time to time in the Company's Securities and Exchange Commission filings. The information in this news release speaks as of the date April 28, 2010 and is subject to change. The Company does not undertake any duty to update or revise forward-looking statements. Any distribution of this news release after that date is not intended and will not be construed as updating or confirming such information.