Friday, Apr 20, 2018
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OC loss totals $4.1B; revenue a record $6.3B

A strong housing market and concerns about skyrocketing home energy prices contributed to record sales at insulation-maker Owens Corning last year.

Revenues rose 11 percent in 2005 to $6.3 billion from $5.7 billion in 2004.

"We're proud of our performance," Chief Executive David Brown told The Blade.

"We've been in this business since 1938 and last year was the first year that the total sales for the company started with the number six."

On the downside, the Toledo Fortune 500 company showed a net loss of $4.1 billion. That compared to a profit of $204 million in 2004.

But the 2005 figure reflected not losses from the sale of insulation, roofing shingles, and other building materials and fiber glass products, but non-cash accounting charges. It had increases in the firm's asbestos liability estimate and an unexpected interest payment tfrom a court ruling in its Chapter 11 bankruptcy case.

The charges were taken before the fourth quarter when net profits soared to $338 million, or nearly five times those of a year earlier. Fourth-quarter revenues were $1.7 billion.

Because the company's stock is due to be wiped out under its bankruptcy-exit plan, it doesn't break out per-share earnings. Its shares, which benefited from speculation that their value might be partially restored with Congressional action on asbestos litigation relief, have been falling this month amid declining prospects for the measure.

The shares, traded on the over the counter bulletin board, fell another 39 cents yesterday to $1.45.

OC is the nation's leading manufacturer of building insulation, and has now regained market share it lost in 2000 after filing for Chapter 11 as part of a process for discharging multi-billion dollar asbestos liability, Mr. Brown said.

"We made more fiberglass building insulation in 2005 than any year in our history," the chief executive said as he sat behind a conference table at the firm's world headquarters on Toledo's downtown riverfront.

To meet demand, it will soon reopen a mothballed plant in Mount Vernon, Ohio and re-start a production line at a plant in Quebec.

Tight insulation supplies, which Mr. Brown expects to continue this year, have allowed OC and other producers, to boost prices.

Demand could decrease if housing starts decline as the firm expects, but will remain strong due to other factors. Homeowners will continue to need insulation for re-modeling projects, Mr. Brown said.

Rising energy prices have been a double-edged sword for the company, boosting prices it pays for natural gas and electricity at its factories but also increasing demand for insulation from homeowners trying to reduce home-heating bills, he said.

OC has been working with builders and retailers to spread the word about energy-conservation tax credits signed into law by President Bush and available since Jan. 1.

Recent decisions by Judge Judith Fitzgerald in U.S. Bankruptcy Court in Delaware increase the chance that the firm will emerge from Chapter 11 this year after nearly six years.

Contact Gary Pakulski at:

or 419-724-6082.

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