Hello, everyone, and welcome to Owens Corning's First Quarter 2025 Earnings Call. My name is Lydia, and I'll be your operator today. After the prepared remarks, there'll be an opportunity to ask questions. [Operator Instructions] I'll now hand you over to Amber Wohlfarth, Vice President of Corporate Affairs and Investor Relations to begin. Please go ahead.

Good morning. Thank you for taking the time to join us for today's conference call and review of our business results for the first quarter of 2025. Joining us today are Brian Chambers, Owens Corning's Chair and Chief Executive Officer and Todd Fister, our Chief Financial Officer. Following our presentation this morning, we will open this one-hour call to your questions. In order to accommodate as many call participants as possible, please limit yourselves to one question only. Earlier this morning, we issued a news release and filed a 10-Q that detailed our financial results for the first quarter 2025. For the purposes of our discussion today, we have prepared presentation slides summarizing our performance and results, and will refer to these slides during this call. You can access the earnings press release, Form 10-Q and the presentation slides at our website, owenscorning.com. Refer to the Investors link under the corporate section of our homepage. A transcript and recording of this call and the supporting slides will be available on our website for future reference. Please reference slide two, where we offer a few reminders. First, today's remarks will include forward-looking statements that are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially. And, we undertake no obligation to update these statements beyond what is required under applicable securities laws. Please refer to the cautionary statements and the risk factors identified in our SEC filings for more detail. Second, the presentation slides and today's remarks contain non-GAAP financial measures. Explanations and reconciliations of non-GAAP to GAAP measures may be found in our earnings press release and presentation available on the Investors section of our website, owenscorning.com. Third, financials and metrics for current and historical periods discussed on this call will be for continuing operations, except for capital expenditures and cash flow measures, which include amounts related to glass reinforcement until the closing and the sale of the business. For those of you following along with our slide presentation, we will begin on slide four. And now, opening remarks from our Chair and CEO, Brian Chambers. Brian?

Thanks, Amber. Good morning, everyone, and thank you for joining us today. During our call, I will provide an update on our overall performance in the first quarter, including some color on the operating environment we are navigating, as well as the progress we are making on our strategic priorities and the actions being taken to position us for future success. Todd will then provide a more detailed review of our quarterly performance. And then, I'll come back and discuss our outlook for Q2. Our team delivered another strong quarter to start the year, demonstrating the durability of our earnings and the power of the enterprise to outperform in any operating environment. Our results continue to reflect the positive impact of the structural changes we have made to focus Owens Corning in high value building product categories where we can build market-leading positions for our unique commercial capabilities and disciplined operational execution. As always, underpinning our performance is our ongoing focus on the safety of our people. Our team's commitment to working safely resulted in a recordable incident rate for the first quarter of 0.54, which is 80% lower than the manufacturing industry average. Our enterprise safety results now includes our Doors business, which has been on a journey of continuous safety improvement. I'm pleased with how quickly our Doors team has integrated the OC Safer Together operating framework to build on a strong safety culture. Turning to other first quarter performance highlights, we delivered revenue of $2.5 billion. An increase of 25% year over year compared to the prior year's revenue of $2 billion. Adjusted EBITDA in the first quarter totaled $565 million for an adjusted EBITDA margin of 22%. This marks our 19th consecutive quarter of delivering adjusted EBITDA margins above 20% as we continue our track record…

Thank you, Brian, and good morning, everyone. As Brian mentioned, we had a strong start to the year. Our performance in the quarter demonstrates the strength of the enterprise as we sustain higher and more resilient earnings in mixed markets. I'd now like to turn to slide five to discuss the results for the quarter. As a reminder, these results are for continuing operations. We started the year with revenue growth of 25% driven by the addition of our Doors business. Adjusted EBITDA was $565 million up 10% from prior year and adjusted EBITDA margin was 22%. Adjusted earnings per diluted share for the first quarter were $2.97. In the quarter, adjusting items did not materially impact EBITDA. Turning to slide six and moving on to our cash generation and capital deployment during Q1. Free cash flow for the quarter was a net outflow of $252 million driven by the timing of working capital from seasonality in the business and by capital additions. Capital additions for the quarter were $203 million up $51 million from the same quarter prior year. At quarter end, the company had liquidity of $1.9 billion consisting of approximately $400 million of cash and $1.5 billion of availability at our bank debt facility. In Q1, we established a commercial paper program and completed issuance of $500 million of short-term notes. During the first quarter, we returned $159 million to shareholders to share repurchases and dividends. We repurchased common stock for $100 million and paid a cash dividend totaling $59 million. In February, the Board declared a cash dividend of $0.69 per share. Our commitment to our capital allocation strategy remains focused on generating strong free cash flow, returning approximately 50% to investors over time and maintaining an investment grade balance sheet, all while executing on our…

Thank you, Todd. Our first quarter results highlight the impact of the structural changes and strategic choices we've made to generate higher, more resilient earnings within very dynamic markets. As we move through Q2, we expect our building products end markets in North America and Europe to provide solid, but mixed opportunities. In North America, we expect near-term demand for non-discretionary reroute activity to remain solid, while residential new construction and other remodeling activity is expected to remain weaker through the first-half of the year as interest rates remain elevated and consumers remain cautious. With non-residential construction in North America, we are starting to see some market headwinds emerge, but in Europe, we expect market conditions to gradually improve throughout the year. Given this near-term outlook, we anticipate second quarter revenue for continuing operations to grow high single digits compared to prior year's revenue of $2.5 billion. For adjusted EBITDA, we expect to deliver another strong quarter with margins in the low to mid-20% range for the enterprise. Now, consistent with prior calls, I'll provide a more detailed business specific outlook for the second quarter. Earlier this week, we provided updated historical financials that reflect the re-segmentation by quarter for 2024, which serves as the baseline for the year-over-year changes I will discuss. Starting with our Roofing business, we anticipate revenue growth of low single digits. While demand for shingles remains solid as we enter peak roofing season. We expect ARMA market shipments to decline by low to mid-single digits compared to prior year due primarily to more normalized storm demand. We expect our shingle volumes to track largely in line with the market. We anticipate normalized attachment rates and components with growth in nonwovens to partially offset lower shingle volumes. Compared to Q2 of last year, we expect higher…

Thank you. [Operator Instructions] Our first question today comes from Michael Rehaut with J.P. Morgan. Please go ahead. Your line is open.

Thanks. Good morning, everyone. Thanks for taking my questions. Wanted to start off, I think there's some concern in the marketplace with some of the scheduled capacity additions in the Insulation section, sector rather over the next year to two years. And I was hoping if you could kind of review not just your plans, but maybe more broadly the industry as you see it today, particularly as at least for the last few years, single-family starts have been relatively steady, not showing too much growth. And the near-term, you could argue, it's still somewhat uncertain from a macro standpoint?

Good morning, Mike. This is Todd. I appreciate the question. Let me start with a little bit of context about where we're at overall with capacity. We clearly have seen the [cutoff line] (ph) in McGregor, Texas come online, and we're seeing that capacity even now in the market. And we've seen other competitors announce capacity that will come online in future years. It is important in insulation to differentiate between capacity that produces batts and rolls and capacity that produces loose fill. Batt and roll capacity is what analysts typically think of when they think of insulation capacity. These tend to be larger assets. They tend to be assets that you run consistently. You can't turn them on and off frequently. Loose fill assets are very different. Loose fill assets, you can turn on and off as needed to meet market demand. We've said historically we thought the insulation industry could support a market between 1.4 million and 1.5 million starts depending on single family mix, depending on codes growth, depending on other factors. We also know that over time, consistently, codes growth has driven greater volume per unit for residential housing, increasing demand. And the third thing we know is that housing in the U.S. has been under build now for well over a decade. So, long-term, we do see a rising need for insulation materials. In the short run, the market will bounce around. We do know this is an industry that has a wide range of cost structures. Some assets are very cost effective, other assets are less cost effective, and presumably other manufacturers continue to work through how they balance capacity to supply in any market condition that we're in. But long-term, we continue to see North America housing as being under built and the secular demand for insulation to be good and provide support for incremental capacity additions. Thank you, Mike.

Our next question comes from John Lovallo with UBS. Please go ahead.

Good morning, guys. Thanks for taking my question. Sticking on the Insulation side, if North American Residential Insulation revenue is expected to be down low to mid-teens in the second quarter, I mean, how are you thinking about fiberglass insulation pricing? Is that going to be down year-over-year?

Thank you, John. This is Todd. I'll take that one as well. When you look at the shape of pricing last year and this year, we did have a midyear increase in 2024 like a good traction for Residential Insulation. That drove pricing in the back half of last year, but then also into the first-half of this year as we have a good year-on-year comp. We're certainly watching market dynamics very closely in res to make sure we're staying on top of share positions and where we're placed. But certainly, in the second-half, we still benefit from that favorable year-on-year comp and when we got the price increase last year. You have certainly seen analyst reports that suggest limited uptake on the 2025 increase, and that's certainly consistent with what we're seeing in the market. But as you saw in the first quarter, we did have positive price. And even in the second quarter, we're guiding overall for positive price in the Insulation segment. Thank you, John.

Next in queue, we have Stephen Kim with Evercore ISI. Please go ahead.

Hi, this is [Satish] (ph) on for Steve. Thanks for taking the question. I just want to touch on some of the tariff exposure that you spoke to, specifically, what mitigation efforts will be used to kind of offset the impact in 2Q and in the back half that mostly pricing? And if you could expand on that a little bit, that would be helpful.

Thanks, Satish. I'll take that one as well. Let me go back to what we shared on the last call on tariffs and then bring it forward to the guidance and then the mitigation actions. So, in the last call, we shared that we thought less than 5% of our total cost could be impacted by tariffs. We also said it would disproportionately impact our Doors business with about two-thirds of the impact and then Insulation with about one-third of the impact with little net impact on Roofing. Since then, we've seen a couple of things move around. As Brian shared in his prepared comments, we've got a lot of goods movement that occurs between the U.S., Canada and Mexico. The good news is our products are largely USMCA compliant, so those tariffs are no longer impacting us. We also though saw higher tariffs on Chinese imports, which are now around 145%, which is higher than what we knew of on the last call. So, when we look at the shape of the quarters and the impact in our mitigation efforts, we saw very little impact in the first quarter from tariffs in the results that we just shared. In the second quarter, we expect to see $50 million of gross tariff impact. But when we look at all the mitigation steps that we've taken and I'll have color on that in a minute, the net impact is down to about $10 million and that's mostly in the Doors business. Now what did we do to go from $50 million of gross to $10 million of net exposure? Our sourcing and supply chain teams stepped in immediately on the announcement of the tariffs to do a few things. Where we could, we position inventory in the U.S. in advance of…

Our next question comes from Brian Biros with Thompson Research. Your line is open. Please go ahead.

Hey, good morning. Thanks for taking my question. How are you thinking about balancing taking market share versus defending margins in the current environment of rising prices and trying to pass on price increases into the challenging market conditions that are out there? Thank you.

Yes. Thanks, Brian. I think we continue to operate with the same playbook in terms of how we always balance price and share. We want to invest in the items that can bring value for our customers and help them win and grow the market. We make investments in innovation and marketing tools, our brand, our commercial teams, all that helps them grow their businesses that results in a value that then we can charge for our products into the market. So, we continue to be value focused in terms of bringing more to our customers that they want to partner with us and do more business with us. When we come into environments that we start to see demand challenges or we start to see pricing pressures, we clearly are going to want to retain and maintain our competitiveness in the market. Most of our product categories, we are able to maintain some price premiums relative to that value we bring over other manufacturers and we look to maintain that. But we are going to be competitive in the market to the market dynamics we're facing. And then, we continue to work the value side with our customers and we continue to work the cost side internally to make sure we're optimizing our network, we're sourcing in the best way and we are being the most efficient with a winning cost position that allows us to flex our pricing and still maintain high and sustainably strong margins for each of the businesses we operate in. And that's generally been our philosophy in all economic conditions, and that's one we certainly are going to continue and the playbook we're going to continue to run-in the market conditions we're facing here in the near term.

The next question comes from Matthew Bouley with Barclays. Please go ahead.

Hey, good morning, everyone. Thank you for taking the question. I wanted to follow-up on the insulation capacity side. In the context that you guys in the past have been really disciplined and I would say flexible around capacity, it's not easy to do, but you both opened and closed capacity where it's right to do so over the years. So, I wanted to kind of press on your thoughts around being flexible, with capacity decisions here. I guess not knowing how your competitors may act, but I guess at what point would you make a decision to adjust your capacity investments, or are there other higher cost facilities in the network today or lines where you could be more flexible? So, really what I'm asking is kind of what is the risk of the industry becoming over-capacitized for a period? Thank you.

Thanks, Matt. Appreciate the question. Let me add a bit more color here. And let me step back and say we've made a number of operating choices and strategic choices in the Insulation business over the last five years to position our business for exactly market conditions like these. We've created a business that can do well whether housing starts are at 1.5, 1.4, 1.3, 1.2, based on the moves that we've made, which includes the work to build a more flexible network, including the exit of our Santa Clara facility and the addition of a much more flexible facility in Nephi to support the West Coast. So, we believe we're well positioned to deal with a market like this. We're also entering this market environment with low inventories. We've been largely in sold out conditions in our insulation business for an extended period of time. So, we're in a position where we would seek to rebuild our inventories to better serve our customers going forward. And this market condition allows us actually to do that, that positions us better for both customer service and future growth coming out of this. We're always very disciplined about understanding the market, understanding our inventory levels, understanding how we want to be positioned. As I alluded to earlier, we continue to have high cost and low cost assets within our network. And in markets like this, there's always opportunities to make sure low cost assets continue to operate and produce. And we mix manage on the cost side to have the most cost effective network that we can. That's our plan going forward. What I would say is certainly we're in two quarters now of relatively weak leg starts. But this also is a market that can change quickly as we think about the future. So, we want to make sure we're well positioned, not just for today, but to serve our customers very well in what could be a strengthening market in future quarters. Thank you.

Our next question comes from Sam Reid with Wells Fargo. Please go ahead.

Awesome. Thanks so much. I actually wanted to drill down a little bit on insulation just to keep on that topic. Could you disaggregate the pricing that's embedded in your guidance for Q2, specifically between resi insulation and commercial and market insulation? It sounds like overall price is going to be positive based on what you're telling us. But are there any deviations between expected pricing on the resi side versus the non-resi side that we should be contemplating here? Thanks.

I appreciate the question. I'll add a bit more color on our Q2 outlook. Let me start with our non-res in Europe piece of the business, which actually now is the majority of our business in insulation. We're seeing good pricing dynamics in both of those markets. We've talked about the improving conditions in Europe, and certainly starting with the Ukraine conflict, Europe has been a relatively weak market overall for insulation. But we're seeing green shoots in market for volume growth, and Europe has a lot of pent-up demand for both new construction as well as repair and remodel, and ultimately reconstruction in Ukraine that all should be constructive in terms of future volume trends for Europe. We're also seeing a good price environment for our products in Europe. The same thing is true in non-res for North America. We're seeing a good backdrop for our products. It certainly is an inconsistent market in North America. There are pockets of real strength in manufacturing, partially as a result of onshoring, but also in sectors like data centers that continue to be robust. Both of those sectors use a lot of our insulation, not just for the buildings, but also for the process technologies that occur within those structures. But there are pockets of weakness also in res around retail and some other areas of commercial and healthcare. But within that backdrop, we're still seeing positive price in non-res for North America in a constructive price environment. Within res, as I shared earlier, we are seeing carryover price from the mid-year increase. Now, some of that is the comp, that we do have an easier comp against Q1 and Q2 last year where we don't have a price increase in that number. The comp gets harder as we get into Q3, Q4 when we start to lap that increase, and we did not see a lot of traction on the 2025 price increase that was in market. So, we're not guiding to Q3, Q4 today, but certainly we're considering that as we look at the back half of the year. And we're following starts and late starts very closely to understand pricing dynamics in the res market.

The next question comes from Philip Ng with Jefferies. Your line's open.

Hey, guys. A question for Brian, I mean, a lot of focus on Insulation and Doors. Give us an update what you're seeing on the Roofing side. It sounds like demand's pretty resilient there. Give us some color on carryover storm demand and any storm activity this year. And certainly, you got a price increase out there. Roofing for spring, do you see any traction in that? And just lastly, on the Medina ramp, how should we think about that impact, whether it's a demand sample or any headwinds from a startup cost standpoint? Sorry, lot to unpack here for sure.

All right, Phil. Thanks. Let me take them kind of one at a time. To start just with the overall roofing market, we continue to see very good demand in the business. Started with the first quarter in our guiding Q2, even down a little, but this is down off of very strong market conditions in the first-half of last year. So, overall, a very good demand environment for our Roofing business, and I think this really highlights the non-discretionary nature of this business when you look at the repair and re-roof activity that is still being needed out there and the work that's still being done. So, overall, good demand, and we think that continues into Q2 here. Around storm volumes, if I kind of break that out, we talked on the last quarter's call that we were coming into the year with a little less carryover than the prior year, but still good carryover from some of the storms that were taking place in the back half of last year. And we saw some of that materialize in terms of stronger demand in Florida and North Carolina as they continue to do that storm repair work. We think a lot of that gets done here through the second quarter. A little bit of that carries over into Q3. When we think about Q2 now in terms of overall opportunity and in terms of the market, we think repair work that's ongoing is strong. Contractor backlogs are still pretty strong in most parts of the country, so that underlying repair and re-roof business is staying pretty solid. For storm demand into Q2, we're just kind of coming into the season, but we've seen a pickup in some activity here over the last few weeks. So, a big part of…

Our next question today comes from Mike Dahl with RBC Capital Markets. Your line is open.

Good morning. Thanks for taking my question. I guess, I'll stick with roofing, but maybe broaden that a little bit. Can we talk about non-tariff related costs on the input side? Obviously, it still seems like you're absorbing some higher costs maybe in Q2, but you've seen a big decline in oil. You've seen some pullback in natural gas. Walk us through the timeline and magnitude of how that may impact roofing, and then, in your Insulation business, maybe how the pullback in natural gas would impact you as we look out over the next couple of quarters. Look out over the next couple of quarters.

Yes, thanks. So, when we look overall at the inflation we're seeing inside Roofing business, big buckets are one large material input cost. Big bucket has always been asphalt. I'd say we historically see asphalt costs rise through the first and second quarter. As we get into the heart of paving season, we expect to see that today and we expect to realize that as we come into Q2. With asphalt costs kind of rising seasonally, but right now we've not seen any dramatic decreases coming through related WTI oil cost reductions. I think when we look inside of that, we've seen some of the asphalt market pricing disconnect from WTI over the last couple of years. Part of that is because with lighter crudes being processed, there's less asphalt being done, so it's less sensitive. And asphalt inventory levels have actually been running pretty low over the last 12 months. So, we've not seen any of that WTI cost really impact the asphalt cost in a significant way. Now, having said that, as we come through the year, if oil costs stay low, that's going to keep our asphalt costs running at similar levels, so, we would probably see a little bit of seasonal inflation as we work through the year, but not as high as we've seen in some historical years. So, I think that could be a net positive in terms of moderating asphalt inflation as we move through the year, depending on what WTI does. In terms of nat gas, maybe I'll ask Todd to talk a little bit about that in terms of impact on insulation.

Sure, Brian, happy to. Mike, when we look at natural gas, clearly we're seeing a volatile market right now as liquefied natural gas exports and the effect of tariffs on that starts to make its way through the market. We do hedge on a go-forward basis, so some of any benefit we would see in a decline in natural gas would benefit us in the back part of this year, but then also would roll into next year as we think about those hedge positions just changing over time. So, there could be some impact. We don't think it's a really big impact based on where the markets are today, but we are following the cost closely.

Our next question is from Trevor Allinson with Wolfe Research. Your line's open. Please go ahead.

Good morning. Thank you for taking my question. Todd, I want to follow up on your comments on tariff mitigation. You mentioned several strategies, but I didn't hear you mention price. Last year in Doors, you guys took some price adjustments in channels. So, is it your expectation that you don't use price as a primary offset, and perhaps can you talk about the current demand environment in Doors and how that may be playing a role in that decision?

Yes, maybe I'll jump in on this one, Trevor. I think overall, we look at a lot of mitigation strategies when it comes to offsetting the impact of tariffs, and we lean hard on optimizing our supply chains in terms of where we're sourcing, what types of materials suppliers are working with, and that's going to be always our primary focus in terms of how we just optimize the cost of production for our company. So, that's going to be always a key driver. Price is also a lever that we can use and potentially may need to use in certain product categories or in certain situations if we can't find offsets in terms of the material cost supply choices and changes that we can make inside our supply chain. So, it's certainly not an option that's off the table, but it's one that we try to utilize several other levers in that space to mitigate the operating costs. We have used that and looked at that in the past. When I look at the Doors business overall, again, part of this is also determining the long-term nature of these cost increases. So, in the near term, if these are near-term impacts, we want to offset them through the mitigation factors and efforts that Todd talked about. If we see long-term costs rising because of more permanent tariffs being put in place or changing how we can produce our products, then price is always an option. In Doors, the biggest impact right now is coming through with some of the retaliatory tariffs on interior doors we're shipping into Canada to serve our customers there. Some of that has been rolled off. Canada put those in place when the U.S. announced the initial 25% tariffs on all products. They've since rolled back many of those products that are being impacted by that. We're in active discussions with Canadian officials, and we hope to get doors included and interior doors included in the next round of roll-offs, so then that would not require us to make any pricing moves around that. We would return back to just USMCA-compliant materials flowing across borders, and then we would stabilize our cost position. And that's our hope, that we get that resolved in a constructive way that we don't require price to have to offset any of the impact going forward.

Our next question comes from Susan Maklari with Goldman Sachs. Please go ahead.

Thank you. Good morning, everyone. I want to focus a bit on the synergies in Doors. In your comments, you mentioned that you were on track to exceed those targets in there. Can you talk a bit more about the sources of some of those, how we should think about the ramp, and any implications of the weaker macro, and some of the implications of the tariffs that you're seeing relative to achieving some of those targets?

Yes, thanks, Su. ITA has continued to do great work on the integration front and integrating and bringing the two businesses together. So, as I talked about in my proposed comments, we're planning to exceed $125 million. So, if we step back, when we came into the year, we talked about a pretty even split on OPEC synergies that we saw the opportunities for particularly non-customer-facing operations that we could integrate, we could consolidate within the company. And then, a big part, the rest of that really tied to sourcing supply chain synergies that we've seen come through. So, as we continue to make progress on those fronts, we're finding a little more opportunities on the sourcing side. That gives us confidence that we can exceed the $125 million, and we'll talk more about that at our Investor Day next week. We're also in early innings looking at the network overall and network optimization. And we've got a very good track record inside our company of looking at manufacturing networks and really looking at how best to optimize those to still meet customer demands around service and quality and capabilities to meet their needs, but doing that in a very cost-effective and efficient way. So, we're just getting started really with that work, but we see additional opportunities around the network optimization side to drive even more on the cost synergy front. So, I think we're set up well there. Now, unfortunately, a lot of this work, while it's generating a positive impact to our P&L, it's getting offset in the near-term by some of these tariff impacts. And that's certainly playing out here in Q2, where the incremental work, we continue to see gains in our cost structure and improvements in our cost structure benefiting the P&L. They're getting…

Our next question comes from David MacGregor with Longbow Research. Please go ahead.

Hi, good morning. This is Joe Nolan on for David. Thanks for taking my question. You guys are guiding the positive price cost in the second quarter. I was just hoping you could talk through on a higher level about some of the puts and takes of how you're thinking about price cost into the second-half of the year. Thanks.

Yes, let me come back a little bit to my comments earlier. I think when we, again, always look to balance the price points in the market relative to demand, relative to the value we're getting. But across our product categories, we've purposely chosen high value product categories where we can build out a premium through our commercial activities around brand, growing with our customers, around an innovation strategy. So, we really look at how we can continue to invest and drive value that translates into price and get that price recognition into the market. So, that's kind of our natural operating philosophy. And so, the high value product categories we're in, where we can bring that value, we're able to see price. Now, we're always going to be reacting to market dynamics, but we feel that we've got a great long-term strategy to maintain a price premium in the market. When it comes to cost, we take an equal view around making sure we're going to everyday focus on how we can optimize our operations. And we look at this across our OpEx. We look at this across our manufacturing network. We look at this across our sourcing and supply chain teams. So, we are continually looking at how we can balance our production network and how we can drive cost efficiencies across the company. And it's that kind of one-two punch around how we look at premiums that we can gain through value creation by helping our customers win and grow with a more optimized cost structure. And so, that's always our balance. But, we take a long-term approach to our market positions. We take a long-term approach to our customer partnerships. So, we're going to always navigate through some of the quarterly choppiness between price and cost. But over time we feel that we are helping our customers. We're bringing them innovative products. We're bringing them quality products that we're going to get a price premium. And then, we're always going to work on the cost efficiency side to make sure we can maintain that winning cost position moving forward.

The next question comes from Rafe Jadrosich with Bank of America. Your line is open. Please go ahead.

Hi, good morning. Thanks for taking my question. I just wanted to follow up just on the roofing margins in the second quarter. You're guiding for it to be down a little bit year over year. But, it sounds like volume is pretty consistent and you have positive price costs. Just can you quantify the startup cost or maintenance that we should expect in the first-half and into the third quarter? And then, excluding those, would you have expected margins to grow year over year?

Yes. I think if you look inside the MDA we quantify out some of the manufacturing costs that we were impacted as a roofing business in Q1 and that was about $19 million that we saw come through the P&L. And we think that's a kind of a cost run rate that probably moves into Q2. So, if you look at it from a margin perspective, the delta between first quarter last year, first quarter this year was a little over a point. You could see that primarily in the manufacturing costs. When we think about Q2, there's probably going to be a similar impact that we're guiding to in manufacturing costs. So, it probably gives you a pretty good view of what we're expecting here in Q2. And you're right, it's really kind of a temporary step up we're seeing in some of these costs as we take needed maintenance and downtime on the manufacturing lines to service them. We're going to continue that into Q2 on a couple of factories. And then, we've got some of the startup costs coming at us as I talked about. We started seeing Q1, we expect to see in Q2, Q3 as we ramp up Medina. So, that's probably going to be a good guide in terms of what we would expect carrying on in Q2. But, that's really the delta between the margin performance year on year. It's not in price, volume, mix. The strength of the business is still performing at that same level. But we're just seeing a little bit more manufacturing headwind hitting us here in the first-half.

Our final question comes from Collin Verron with Deutsche Bank. Please go ahead. Your line is open. Hi, Collin, your line is open.

Sorry about that. Thank you for taking my questions. In the doors outlook, you noted that you're performing well relative to the market. Can you just give a little bit more color on what the market's doing, either sequentially or year-over-year, and sort of the drivers of that performance? And then, why do you expect sort of a better than normal seasonal step-up in demand, which you called out in that outlook as well?

Yes, thanks. So, we are seeing some demand headwinds coming into business that we've talked about. But, overall, yes, the business continues to perform well. We're seeing declines tied to, as we talked about in our residential business, some weaker light housing starts coming through, and some pretty sluggish remodel sales coming out. So, on a net-net basis, I think we're getting hit by both slower housing starts and less investments in the remodel markets. Overall, though, I'd say our wholesale distribution business probably -- which is tied a little bit more towards new construction, is being a little more impacted than our retail business, where it's a little bit more tied into repair and remodeling. So, while we're still seeing some volume headwinds, we've seen those kind of start to stabilize a little bit here as we start the year at lower levels. But at least where we're seeing kind of a trough emerge, as we think, in some of the volumes that we're seeing on both the new construction and the remodel side of the business. So, that gives us some confidence now as we look at Q2 that if we see that stability starting to emerge, we normally start to see some seasonal pick-up just with more new construction going on, more remodeling activity as we get into the warmer weather, when we get into our remodel market season. So, we're expecting that to play out this year similar, but at a lower pace. I would say, we are expecting year-over-year volumes to be down, but we are seeing that order book kind of steady out, and then, we would normally expect to see a modest pickup here as we get into more construction activity in the second and third quarter. And that's really driving our outlook for a slight seasonal uptick.

Thank you. We have no further questions in queue. So, I would like to turn the call back over to Brian Chambers for any closing comments.

Thanks, Lydia. And I would like to thank everyone for making time to join us on today's call, and for your ongoing interest in Owens Corning. And we hope to see many of you at our Investor Day next week in Toledo. Thanks, and have a great day.

This concludes today's call. Thank you very much for joining. You may now disconnect your lines.