Good day ladies and gentlemen, and welcome to the First Quarter 2015 Apogee Enterprises Incorporated Earnings Conference Call. My name is Denise and I will be the operator for today. At this time, all participants are in listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions). As a reminder, this conference is being recorded for replay purposes. I would now turn the conference over to Mary Ann Jackson. Please proceed.

Thanks Denise. Good morning and welcome to the Apogee Enterprises' fiscal 2015 first quarter conference call on Wednesday, June 25th, 2014. With us on the line today are Joe Puishys, CEO; and Jim Porter, CFO. Their remarks will focus on our fiscal 2015 first quarter and our outlook for fiscal 2015. During the course of this conference call, we will make forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on current expectations and the current economic environment, and are of course subject to risks and uncertainties, which are beyond the control of management. These statements are not guarantees of future performance and actual results may differ materially. Important risks and other important factors that could cause actual results to differ materially from those in the forward-looking statements and projections are described in the company's Annual Report on Form 10-K for the fiscal year ended March 1st, 2014 and in our press release issued yesterday afternoon and filed on Form 8-K. Joe will now give you a brief overview of the results and then Jim will cover the financials. After they conclude, Joe and Jim will answer your questions. Joe?

Thank you. Good morning everyone and welcome to Apogee's conference call for the first quarter of our fiscal 2015 year. We had a very strong first quarter, with revenue growth of 18% and operating income growth of 28%. Our earnings per share growth was even more significant, up 50% to $0.21 per share, including the results of the hard work of our legal team, which secured the final distribution for our long exited European operation, that added $0.03 to our earnings. I am especially pleased with our year-on-year backlog growth of 28% to $385 million as we continue to win good projects at improved margins. With our significant backlog growth, solid operating performance and a stronger outlook for the Architectural Glass in fiscal 2015, as well as what is appearing to be sustainable growth for our end market sectors, we have raised the bottom end of our range, per share range, and now expect to earn between $1.40 and $1.50 per share on revenue growth of 15% to 20%. Jim will explain this in more detail, of course. I do believe fiscal 2015 will be an exceptional year for Apogee. I am feeling particularly positive about the significant growth that all of our businesses are experiencing. In fact, in the first quarter, revenues grew in all four segments and backlog grew for all of the Architectural segments; and all four segments grew backlog sequentially. I also expect backlog to continue to grow in the second quarter, based on the level of project awards and contracts currently in hand. Operating income improved significantly in our two largest segments, Architectural Glass and Architectural Services which had 170 basis points and 250 basis point margin expansion respectively. The momentum in the backlog increases in these two segments reflect continued strong growth for the…

Thanks Joe. We had strong growth in our first quarter performance, with revenues and earnings up significantly, mashed with solid new order momentum. Revenues of $210.9 million were up 18%, as we saw growth in all four segments. Organic growth was 12%. Earnings per share were up 50% to $0.21 per share. There were several positives for the first quarter; we had good conversion and growth in Architectural Glass, Architectural Services and the window business portion of the Architectural Framing segment, all had good execution and operating leverage. We continue to have strong contribution from the large scale optical segment, with 20% operating margin, and we also recognize the income in other income on the P&L, related to receipt of our final liquidating distribution from a European entity that Apogee exited more than 15 years ago. This was worth approximately $0.03 per share, and was in our internal expectations for receipts some time during this year. The negative offsets in the quarter were primarily related to the tough winter weather experienced early in the quarter, impacting our shorter lead time, Architectural Framing systems businesses. Weather affected volumes and capacity utilization, increased utility costs and some operational costs. The recently acquired Canadian business was impacted most significantly from the extreme winter conditions, which also slowed the Canadian economy. Overall for this segment, we estimate these impacts cost us approximately $0.03 per share, compared to last year, and the impact was higher compared to our internal outlook, by roughly $0.05 a share, since we had expected the income from the Canadian business instead of a loss. We also had a higher tax rate this quarter, which drove about $0.01 per share negative comparison to the prior year. Gross margin for the first quarter was 19.6% down from 20.3% in the prior year…

Thank you, Jim. Okay Denise, I'd like you to please open up the call for questions.

Sure. (Operator Instructions). Our first question comes from Colin Rusch with Northland Capital Markets. Please proceed.

Thanks so much. I know you don't break out backlog by market segment, but if you could give us a little bit of color in terms of the growth here in the last quarter, what's driving that growth in a little bit more detail, and how we should think about the margin profile from an operating margin perspective on that business?

Yeah. We do break out the backlog in our Q; you will see the break out by the four segments. Its balanced we had -- as I mentioned Colin, we had growth in every one of the segments, which is the true positive you should take away is its not just coming from the large services business, our windows business grew, so the framing system segment grew. The glass business had a particularly strong impact. Jim and I are particularly pleased with that. I think you know, we get the best leveraging from the Architectural Glass business. We had good growth in the first quarter, but we will have stronger growth in Architectural Glass in the next three quarters, which obviously is a particularly strong indicator for us, because of the margin conversion we get on that business. So we have pretty good insight to the future. But it was balanced growth across the board.

Okay. And then on the architectural services business, obviously the margins weren't exactly what you were looking for on that, although it was an improvement year-over-year. Can you just remind us of the seasonality in that business, and how that relates to the backlog growth? Obviously there is some lumpiness with the backlog as you've mentioned, but as we look into the back half of this calendar year, what can we expect there?

Yeah Colin, the Architectural Services business which is our installation arm known as Harmon, had a very strong quarter. They did not disappoint me in any way. They also had a strong backlog growth. I think we improved our operating margins 250 basis points year-over-year. They had, what I would call better than entitlement profit conversion on the incremental growth, which is an indication of the better projects they book. So we will see further growth in our backlog, in the second quarter from the services business, and its always going to be a lumpy business with regards to backlog, and particularly year-over-year because we -- that's a business where we can book a $30 million project in a quarter. So it can really move the needle. But as Jim mentioned, all of our indicators, the projects we are bidding on that we are aware of, make us feel confident and say that business will continue to show growth in backlog in the coming quarter or quarters. But they delivered on plan, frankly, slightly better than planned margin for that business. I am just happy with the performance of the Harmon business.

This is Jim, if I could just add. That segment is one portion of our business, that's the revenue recognition business. So it is -- there isn't any traditional seasonality, really both the revenue and then oftentimes the margin project by project is really a function of where any given project is in its lifecycle and the performance against that project. So it is going to be kind of lumpy quarter-to-quarter in terms of movement of the operating margin in that segment, but from a full year perspective as Joe said, we continue to expect improvements in that segment.

Okay, that's helpful. And then, just a final one, can you just talk about general quotation activity, are you seeing acceleration in that broadly speaking, are they kind of flattish here, just give us some color on it?

Without question, we are seeing improved flow in bidding activity. Our inquiry levels are up substantially in all the businesses. So it is this first time, you've heard me say -- appear that our end markets are in for a period of sustained growth. A year ago, I felt good about the end markets, but it felt like we are all on thin ice in this sector. There is no question that ice has hardened over the last year. In fact, many of our investments right now are to increase throughput and capacity, as we are seeing substantial increases in quote activity.

Great. Thanks a lot guys.

Okay. Thanks a lot Colin.

(Operator Instructions). Our next question comes from Brent Thielman with D.A. Davidson. Please proceed.

Hi. Good morning.

Hey Brent.

Good morning Brent.

Hey. Sorry, just to clarify, I guess in terms of driving that sequential growth and backlog, do you expect the glass or is that the services business that's kind of the big driver there?

Actually, both businesses had a substantial impact. All four segments grew probably proportionally to the size of the business. I think the glass business had its largest increase in backlog since pre-recession. So they were a big piece of it; but all the businesses grew nicely, and frankly substantially.

And as we look forward Brent, for the second quarter in terms of our comment, may be I will back up and remind you that the services segment is probably close to 60% of our total backlog. So they are the biggest individual piece, and so they kind of -- just even if they move proportionally, they are going to have the biggest amount of impact. But as Joe said, we have seen kind of nice balanced growth across the segment, and we will probably continue to see that balance, but it is the services segment that tends to have the largest portion, and will drive the biggest change as usual.

Okay, thank you. And then, despite this effect from weather, you still had 22% organic growth in framing systems which is well ahead of some of the other architectural segments. Can you talk about what's helping you realize that growth in that particular area?

Well part of the growth within that segment came from having Alumicor in our results and they weren't last --

The 22% is organic.

Yeah, last year, the major improvement in that segment came from our windows business. Last year, I highlighted the windows business, our U.S. based window fabrication business in the framing systems segment was providing us headwinds. You've heard us reference a planned hole in our order book last year. That business did its job, they booked a lot of business last year. We will have revenue growth on a comparable basis every quarter. They are providing us the most tailwinds and they are delivering the profit on that growth this year. As Jim and I have mentioned, we had a very poor start to our first full fiscal year with Alumicor. There is no question about it, it delivered a loss versus a planned income in the quarter, so it had a substantial impact in our overall results. Kind of hiding why that segment didn't show the profit it should have on that substantial growth. But as I highlighted, I believe the business is very sound, and I met with the entire sales organization last week, we are seeing robust bidding activity up there as well. But frankly, the growth in that segment came from the three core U.S. businesses, more substantially from the windows. But our finishing business and our extrusion business also saw growth, and our Alumicor business is -- hopefully you will see the turnaround in 2Q.

Okay, that's great. And then just one last one if I could; Joe, any update on the Brazilian operation, what's going on down there?

Continues to perform nicely. It was a significant piece of the glass business growth in the quarter. The U.S. business will show substantial growth going forward, but our Glassec -- Brazilian business Glassec Viracon had very strong growth in the quarter, excellent profit conversion, operationally it's performing well. Jim and I will be making investments in that business to support future growth. So full steam ahead on the Brazilian business. An although clearly the end markets aren't as hot as they were two years ago. The softening is modest and we expect that business to continue to grow each year.

And Brent, just wanted to add one little color of note here, which is in the U.S.' next world cup soccer game, they will be playing in a stadium that has products from our Brazil division, our Glassec Viracon business.

That's great. Okay. Thanks guys.

Thanks Brent.

We have no additional questions. I would now turn the call back over to CEO Joe Puishys for closing remarks. Please proceed.

Okay Denise, thank you. Its unusual to only have two questions, so Denise I just want to wait one minute and see if you get any more, and then I will close out the call.

Sure. (Operator Instructions).

Okay Denise, no need to torture people with silence. So I will close out the call. Everyone listen, thank you for your time today. Before I sign off, I'd like to remind you that we held an investor conference in May. Those that attended these live online or heard from our -- four of our business unit leaders, representing each of our segments, and if you'd like more color on the strategies for each segment, a replay of that three hour event and the slide deck are available on our web site. As I said, we delivered a very strong quarter, when you peel back the onion, you will see that we had outstanding performance in our glass and services segment. Your questions, perhaps Joe, as the large scale optical business is going to continue to be a shining star, and my answer was yes. The softer quarter on profit was simply timing. That business will grow this year. Likely not as substantial as the high growth we will see in architecture, but it will grow and it will have margin expansion for the year. The issues really came down to what was going on within the framing systems segment. I hope we explain well that we expect nice growth from our three original businesses in that sector, as well as Canada for the remainder of the year, albeit an extremely challenging winter for that business, but we are starting to see really strong light at the end of the tunnel. So I hope our breakdown of the segments and the peel back of the onion gave you good view into our businesses, and why we were optimistic enough to increase our range. This concludes our call, have a great day everyone, and we look forward to talking to you individually and as a group on the next quarterly call. Thank you.

This concludes today's conference. You may now disconnect. Have a great day.