Good morning. My name is Teresa and I will be your conference operator today. At this time, I would like to welcome everyone to the Third Quarter 2016 Investor Relations Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session [Operator Instructions] Thank you. Ms. Natalie Poulos, you may begin your conference.

Thank you, Teresa and good morning everyone. We appreciate you joining us for the BlueLinx third quarter 2016 earnings conference call. This call is being webcast on the company's website at bluelinxco.com. The earnings release and presentation slides for this call can be found in the Investor Relations section of the company's website. Joining us for the call today are Mitch Lewis, Chief Executive Officer and Susan O'Farrell, Chief Financial Officer. I will also remind you that this presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements about our future operations and financial performance. These statements are subject to risks and uncertainties that could cause our actual results to differ materially from those provided, including, but not limited to those identified in our press release and discussed in our filings within the Securities Exchange Commission. Forward-looking statements speak only as of the date of this presentation and we undertake no obligation to revise them in light of new information and today's presentation includes references to non-GAAP financial measures. With that, I'll turn the call over to Mitch.

Thanks, Natalie and good morning. We're very pleased to report another good quarter at BlueLinx. We had net income for the quarter of $15 million, our best quarterly performance of well over a decade. In addition, we had another solid quarter with our adjusted EBITDA at $11.1 million. Our third quarter was our fourth consecutive year-over-year quarterly improvement in adjusted EBITDA. Our adjusted EBITDA improved by approximately $1.5 million or 16% from the third quarter of last year when excluding our strategic operational initiatives. Our adjusted EBITDA for the year is now $30.7 million, an improvement of $10.1 million from 2015. During our last two quarterly calls, we discussed our strategic priority to reduce our leverage. Our operational initiatives have been closely aligned with the strategy. It’s great to see our team execute on these initiatives which have resulted in significantly reduced debt while we continue to improve our operating performance. The emphasis on our debt reduction continues as our debt declined by $87.2 million from the end of the third quarter 2015. This is primarily a result of actively managing our working capital, eliminating certain underperforming SKUs, rationalizing our distribution footprint and selling certain unoccupied real estate. Susan will go into more detail in a few minutes regarding our third quarter and year-to-date financial results. We’re also pleased that we were able to announce last week the extension of our ABL facility through mid July of 2018. I’d like to thank our ABL group for their continued support with BlueLinx. With this extension of our ABL and our real estate loans not being due until July 2019, we now believe we have the runway to clearly focus on enhancing our day to day operations while we continue to execute on our de-leveraging strategy. As part of that strategy, we…

Thanks, Mitch and good morning everyone. It's a pleasure for me to speak to you today and to review our third quarter business results. On Page 7, let’s review some of our highlights before we get into more detailed review of our results. As Mitch just mentioned, we continue to focus and advance on our strategic initiatives, executing on our facility optimization and real estate monetization efforts. With the sale of four previously closed facilities during the quarter, we have made great strides towards paying down our mortgage debt. Given the impact of strategic initiatives, net sales are $476 million for the quarter. When excluding our strategic operational efficiency initiatives, our net sales were up $16.5 million or 3.6% from this period a year ago, let by volume growth seen in our structural wood products, offset by lower rebar material costs. When we look at our third quarter performance, we had net income of $15 million, our highest quarter of net income since 2004 with earnings per share of $1.68. Adjusted EBITDA was $11.1 million which is up from the same period a year ago. Our debt principal balance is down $87.2 million from the third quarter 2015. This is a significant progress on our deleveraging initiative. Our mortgage principal was down $26.7 million and our ABL debt balance was down by $60.5 million from a year ago. With the property sales we executed during the quarter and the additional properties currently being marketed we expect to significantly reduce our mortgage debt by the end of first quarter 2017. Moving to Page 8, I will highlight our year-to-date performance. Sales for the year were $1.46 billion. When excluding our strategic operational initiatives, net sales were up $57.7 million or 4.5% on 2015 levels. Additionally gross margin was 12% or 12.6%…

[Operator Instructions] And your first question comes from the line of Alan Weber with Robotti Advisors.

Good morning. When you spoke about the initiatives, you talked about, I think you said $200 million of revenue from kind of facilities that you're going to be leaving or areas. I was a little confused how much of that has already taken place and is in the future, let’s say, for next year?

Yes, thanks for asking, Alan. So the way we look at it is, we have already closed all those facilities. And those activities happened really through the end of the second quarter. So at this point what you'll see as we go through the coming fourth quarter we will be anniversaring having those closed facilities. So we'll continue to talk about our strategic initiatives and give you some math that helps you understand the impact of those. But so we're one quarter through that, so Q3 is the first quarter without those facilities have now been closed. And we'll have three more quarters where we will be reporting the results of the competitive differences.

So the third quarter that you just reported, that's kind of set revenue going forward.

Yes. There was also a little bit of impact to Q2, we spoke to it, all – this is the first time we’ve had a full quarter with those closed facilities.

And can you talk about the -- as you look out, let's say, towards next year, if you have these level of facilities kind of what the SG&A – is there anything in SG&A that was higher or lower this quarter than kind of -- it should be going forward and I only ask that because it was relative to the decline and again I realize it's not really apples to apples but relative to the third quarter ’15, the SG&A was down a little bit but not as much as the revenues would have shown as being down.

So we continue to make sure we’re running a lean organization, Alan, and so we did take out some corporate SG&A costs as you might imagine related to those revenues. And we continue to look at all of our proxies and ways to continue to keep our cost structure appropriately in line with where the revenues are but certainly they're impacted to SG&A as it relates to the reduction in revenue.

And my last question was, can you talk about kind of the impact in the quarter on -- inflationary pricing or deflationary?

Yes. So I'd say in volume, I mean, it was a solid market maybe in the structural wood products, place where we saw the biggest impact on pricing would have been raw material goods as it relates to rebar. And so the volumes fell, particularly the pricing of rebar fell quite a bit during the quarter, so that’s something that had impact on us as we look at our structural products which include rebar.

And your next question comes from the line of Mark Kaufman with LPS Partners.

Good morning. My question just really pertained to the general events in the industry itself. Are you finding your customers or your customers’ customers having issues with employees – finding employees, finding workers or do you think there's any reduction in activity because of stresses like that? And in addition, do you ever engage in any hedging on lumber prices in the future or at least take leads and get ideas about where pricing might be heading?

So on the first question as it relates particularly to labor trends, it has been for the last 18 months a consistent concern really in all manufacturing associated with building products, distribution and then our customers as well as it relates to labor. It was clearly as the industry was accelerating more in the second quarter. You heard it a lot more than you have in the third quarter but it continues to be a topic that is consistently discussed by leadership in the industry. It's interesting if you talk to pure economists, they'll tell you it's pretty simple supply demand, just raise wages and get all the people you want. And obviously there's some issues associated with that. But generally there's a lot of I would say relative innovative activity going on to attract people to retain people in all areas of the supply chain for the industry. And so it is clearly something that we're all thinking about. As far as hedging the legacy, because it required to when I got here is there was lot more, what I'd say speculative buying trying to buy commodities where you can’t hedge in situations where the organization sell, for example, the pricing was low, and that would be going up. We discontinued that well over two years ago. With the thought being that our value proposition as a wholesale distributor could not be timed well. We’ve had discussions with I would say some sophisticated instrument traders actually in the last weeks talking about where there may be opportunities, where you have a fixed sale on track and that would tend to show up more in multi-family than it would in our core single family business. But you may have a fixed contract and based on potential backwardation or something else going on in the underlying markets and you actually can take a position and lock in your margin. But generally for us we're trying to drive the organization's inventories, low not to a point that it would negatively impact us from our banks and let's make sure that we're just getting value for what we provide which is great service. The final question you did ask was do we have internal knowledge expertise that we talked about, and the answer of that is yes. And we have certainly from the legacy of this business I would say very very experienced knowledgeable and smart traders in the base core commodities and we exploit that, we recently brought the teams together under district leadership as opposed to having a more disperse, we have weekly calls for example with our lumber and panel traders to discuss market trends and what's going on and what their views are towards the market.

Okay. One follow -- may I just follow up on the labor issue. Do you feel – are you seeing it other competitors -- other players in the industry have been saying it that it's been a constraint on supply of homes basically to customers out there.

It clearly has -- and the homebuilders would tell you this that it has impacted the duration of which -- shoveling the dirt to selling the home and so it's kind of extended the production of homes. But again there's a lot of activity that has taken place to help mitigate that, including manufacturers working on innovative products that reduce the labor time, that's a very top of mind for a lot of our good suppliers that they're working on innovations to help mitigate that concern. So I would say it's not -- it's a risk for the industry going forward but we're all actively working on that. End of Q&A

[Operator Instructions] There are no further questions in queue at this time.

Okay. Thanks Teresa and thank you all again for your time and your continued interest in BlueLinx and we of course look forward to sharing our fourth quarter and full year results with you in the months ahead. Have a great day.

Thank you ladies and gentlemen for your participation. You may now disconnect.