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May 02, 2006 08:17:05 (ET)


TOLEDO, Ohio, May 2, 2006 /PRNewswire-FirstCall via COMTEX/ -- Owens Corning (OTC Bulletin Board: OWENQ.OB) today reported record sales and operating results for the first quarter ending March 31, 2006. The company reported sales of $1.601 billion during the period, compared with $1.402 billion in the first quarter of 2005, a 14.2 percent 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 first quarter 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 Brown. "We've continued to reduce the number of recordable injuries in the workplace through the first quarter, resulting in an unprecedented level of safety within our company."

For the first quarter of 2006, Owens Corning reported income from operations of $115 million, compared with a loss from operations of $4.281 billion for the same period of 2005. In March of 2005, a federal district court estimated Owens Corning's asbestos liability at $7 billion, which resulted in a non-cash charge of $4.342 billion in the first quarter of 2005. Excluding this and other Chapter 11-related reorganization items of $7 million and $36 million during the first quarter of 2006 and 2005, respectively, operating performance improved 26 percent in the first quarter compared with the same period of 2005.

When communicating to its Board of Directors and employees regarding the operating performance of Owens Corning, management excludes certain items, including those related to the company's Chapter 11 proceedings, asbestos liabilities and restructuring activities. The company recognizes that excluding these items is not necessarily a more meaningful measure of performance than is operating income (loss) reported on a GAAP basis. In addition, such presentation is not necessarily indicative of the results that the company would have achieved if the company was not subject to Chapter 11 proceedings.

Outlook

Although market demand for building materials products remained strong through the first quarter, 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.

Progress Toward Emergence Continues

Owens Corning filed a modified plan of reorganization, available at www.ocplan.com , with the United States Bankruptcy Court for the District of Delaware on March 29, 2006. While this 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 May 10, 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 July 10, 17 and 18, 2006.

While the revised plan of reorganization is not yet a fully consensual plan, the company continues to negotiate with each of its creditors to reach agreement. Owens Corning remains committed to emerging from Chapter 11 with a plan that deals fairly and equitably with all of our creditors and is in the best interests of our employees, customers and company.

About Owens Corning

Owens Corning is a world leader in building materials systems and composite solutions. A Fortune 500 company for more than 50 years, Owens Corning people redefine what is possible each day to deliver high-quality products and services ranging from insulation, roofing, siding and stone, to glass composite materials used in transportation, electronic, telecommunications and other high-performance applications. Since the company's founding in 1938, Owens Corning has become a market-leading innovator of glass-fiber technology with sales of $6.3 billion in 2005 and 20,000 employees in 25 countries. Additional information is available at www.owenscorning.com.

On October 5, 2000, Owens Corning and 17 United States subsidiaries filed voluntary petitions for relief under Chapter 11 of the U. S. Bankruptcy Code in the U. S. Bankruptcy Court for the District of Delaware. The Debtors are currently operating their businesses as debtors-in-possession in accordance with provisions of the Bankruptcy Code. The Chapter 11 cases of the Debtors are being jointly administered under Case No. 00-3837 (JKF). The Chapter 11 cases do not include other U. S. subsidiaries of Owens Corning or any of its foreign subsidiaries. The Debtors filed for relief under Chapter 11 to address the growing demands on Owens Corning's cash flow resulting from the substantial costs of asbestos personal injury liability.

On March 29, 2006, the Debtors, together with the Official Committee of Asbestos Claimants and the Legal Representative for future asbestos personal injury claimants, filed an amended Joint Plan of Reorganization in the U. S. Bankruptcy Court for the District of Delaware. The Plan is subject to confirmation by the Bankruptcy Court.

The current Plan contemplates that most classes of pre-petition unsecured creditors of Owens Corning will be impaired. Therefore, the Plan provides that the existing common stock of Owens Corning will be cancelled, and that current shareholders will receive no distribution or other consideration in exchange for their shares.

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.

SOURCE Owens Corning


Media, Jason Saragian, [phone], or Investors, Scott Deitz, [phone],
both of Owens Corning
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