Good morning, ladies and gentlemen, thank you for standing by. Welcome to the NCI Building Systems Inc Fourth Quarter Earnings Conference. During today's presentation, all parties will be in a listen-only mode. This conference is being recorded December 10, 2014. I would now like to turn the conference over to Layne de Alvarez, Vice President of Investor Relations. Please go ahead, ma'am.

Thank you. Good morning and welcome to the NCI Building Systems' call to review the company's results for the fourth quarter of fiscal 2014. To access a taped replay of this call, please dial 1-888-203-1112 and enter the pass code 5189329 and the pound sign when prompted. A replay will be available approximately two hours after this call and will remain accessible through December 17, 2014. The company's fourth quarter results were issued last night in a press release that was covered by the financial media. In keeping with SEC requirements, I advise that during this call we will be making forward-looking statements that involve risks and uncertainties. Actual outcomes may differ materially from those expected or implied. For more detailed discussion of the risks and uncertainties that may affect NCI, please review our SEC filing, including the 8-K filed last night. Forward-looking statements speak only as of the date they are made. We undertake no obligation to update any forward-looking statements beyond what is required by applicable securities laws. In addition, our discussion of operating performance will include non-GAAP financial measures. A reconciliation of these measures with the most directly comparable GAAP measures is included in the earnings release and the CFO commentary, both of which are available on our website. Additionally we made available CENTRIA acquisition supplement posted on our website. At this time, I would like to turn the call over to NCI's Chairman, President and Chief Executive Officer, Norm Chambers.

Thank you, Elaine. Good morning everyone and welcome to our fourth quarter 2014 conference call. Joining me this morning are Mark Johnson, our Chief Financial Officer; Todd Moore, our General Counsel, and Layne de Alvarez, our Vice President of Investor Relations. I’ll make some initial comments about our performance in the CENTRIA acquisition. Followed by Mark who will provide some additional color around our financial results, then we’ll open the call for questions. I am very pleased to report that our second half performance is the best we’ve achieved since 2008. That puts us on a trajectory to maximize profitability as we continue to optimize our operational and organizational structure. I believe 2014 should be viewed as a tail of two halves. The first half was plagued by extreme weather, supply chain disruptions, stymied economy that resulted in our earnings declining 40% year-over-year. Despite that challenging start, the men and women of NCI kept their focus on delivering the highest quality products and service to our customers. In the second half we grew revenue by 5.2%, generated over $61 million of adjusted EBITDA, a 30% year-over-year improvement. Even though the market for buildings five storey’s and less reported by McGraw Hill grew only 2% in volume year-over-year, and historically, seasonally stronger second half. Full year volume growth for five storey's and less as well as two storey's and less are market sweet spot hovered around 4% year-over-year. And it is fairly significant decline from 2013's growth rate of 9.8% for buildings five storey’s and less. As we stated many times in the past, we cannot rely entirely on market growth alone to drive the financial performance we are committed to achieving. Beginning with the reorganization and manufacturing in November 2013, we have taken steps to realign our organization, to accelerate…

Thanks Norm and good morning to everyone joining us on the call. We’ve provided a review of our fiscal fourth quarter operating results in both the earnings press release and the CFO commentary posted on the website. I’ll now take a few minutes to add some additional color to those results. Let me begin by highlighting the significant improvement in our financial and operating results in the second half of our fiscal 2014 when compared to the first half. As you will recall the first half of the year was negatively impacted by severe winter weather which generally affected most facets of the domestic economy. During the second half we achieved year-over-year revenue growth in all of our business segments despite the fact that 2014 included one less week of operations than 2013. We also experienced substantial gross margin improvement in the second half which increased 140 basis points over the second half of last year. We attribute these improved results over the past six months to four main items. First, continued growth albeit slow growth and new construction starts estimated to be about 2.2% for low rise construction five storey’s and less as reported by McGraw Hill. Second, expanding margins from commercial discipline combined with our value pricing strategy and manufacturing reorganization that began in the third quarter of 2013. Third, the growing impact of our business growth initiatives and finally, better internal management of our project scheduling. Now I’ll go over some brief highlights of the fourth quarter of 2014 and then we’ll quickly review our annual results. In the fourth quarter our consolidated revenues fell slightly by 1.9% from the same period last year but increased 8.5% sequentially. The year-over-year comparison was impacted by the inclusion of an extra week in last year’s fourth quarter based on…

Thank you, sir. We will now begin the question-and-answer session. [Operator Instructions]. Our first question is from Winnie Clark with UBS.

Good morning.

Good morning.

So while your initiatives set the impact it seems like the demand recovery in the second half of the year was slightly slower than you anticipated going into the year, can you talk a bit about how the non-res market trended through the second half of 2014 and then what your expectations are for the low rise construction market next year?

To really I think get the real picture so, what we actually shift in the fourth quarter was largely booked in the first half of the year. So, we are seeing the results and frankly some of the indications earlier of the leading indicators pointing so there maybe some headwind in the second half of our fiscal year, okay, in terms of -- I am sorry in terms of our shipments. So we -- that was kind of the result of the weaker market in the first part of the year, in terms of bidding activity. Now what occurred is that in the second half we actually saw a pickup particularly in the fourth quarter, a pickup in activity in terms of the jobs, the scope of the jobs across both our buildings group and our components group. And fortunately in our insulated metal panel piece as well. So the actual bidding and forward-looking aspects of the fourth quarter meaning the work we are bidding to do in the future really did improve which reflected in the buildings group 27% bookings growth, that’s right. So, it is the case that we shipped a bit less than we expected to ship in some of our business but at the end of the day we saw our activity levels that really turned quite well for the future.

Okay, great, that's helpful. And then price mix and commercial discipline added a pretty impressive number to EBITDA in the quarter, was there anything unusual that magnified the tailwind or is this some type of level of contribution we can expect from these initiatives going forward?

Well, we certainly expect to continue to perform well. I would say that we had 15 of our 18 brands show really nice year-over-year improvement in the second half. And three of those brands did not. So we still have work to do in terms of improving our performance. But I would say that we certainly saw very good improvement with very obvious in the numbers and buildings group, that was very -- it was very clear. But natural fact, one of the best performance was our legacy components group. They had a really good fourth quarter. In fact it was the most profitable part of our business in fact for the entire year.

Great and I guess that is positive for the outlook as I guess that’s a good leading indicator, so thanks so much.

Yes, thank you.

Lee Jagoda with CJS Securities. Please go ahead with your questions.

Hi, good morning.

Good morning.

Norm, can you just touch a little bit more on the sustainability of the operating margin improvement in buildings, maybe talk about utilization rates and then discuss whether or not you are at the point where you can walk away from some lower margin opportunities and did that contribute to some of the volume headwinds in the second half?

So, I think that the commercial discipline is very much both a process as well as a behavioral kind of thing, right. So what I mean by that is that we clearly from August of 2013 on really made a concerted effort to put our price across all of our businesses and we are very successful in the buildings group, really quite successful in the components group with the exception in insulated metal panels which had a backlog that we had to work our way through. And starting to see improvement in the Ag business in the components group. So that was all good. But I will tell you that that at any given moments in time where there is the, I won't say the pressure but desire to win more work in a certain area. And so we always have to manage the competitive approach to vying to win more work or still trying to maintain a level of discipline. So the bottom line of all this is that we will continue to be disciplined in terms of valuing the price more than volume. And going into the year we were prepared to lose market share as a result of that and have found during the course of the year that we probably didn’t lose maybe even a percentage point of share. So we are pleased with the results in terms of what we are able to achieve.

And then can you just touch on the utilization rates in buildings and how it compares to let's say a year ago?

So, Mark will the numbers on that, and I will say that it is one really clear aspect of utilization. And that is that the manufacturing team are hard at work at looking at ways that we can improve our utilization by looking more closely at our supply chain management and our footprint in manufacturing plants. And so there are some nice opportunities there. Mark, do you want to share.

So, the capacity utilization upticks very slightly from year-to-year. In our fourth quarter our utilization was about a percentage point higher than last year at about 39% for the building speed in rest. And for the components group we ended the year at about 45% utilization in the fourth quarter and in our coatings operation about 51% utilization.

So balance across the whole piece?

Balance across the whole piece were in the mid 30s. So you can see we still have a lot to do and what that drives is a consideration about consolidation of our activities and consolidation of our plants which is a great opportunity to make a step change in our cost basis going forward.

Great and two quick questions regarding CENTRIA. You touched on 6 million of potential cost synergies, in terms of where those cost synergies are coming from, whether its cost to goods or SG&A and a timeline for when you expect to achieve those and just as a follow up it looks like in the deck that CENTRIA appeared to have peaked about 12 months after your core business did. When was the drop [ph] in metal cycle and how did profitability settle out at the bottom?

Profitability set out to bottom pretty much at 10% EBITDA margin, okay, which we talked about in our trailing 12. One of the things is that their cycle is slightly different to us and primarily driven by the high-end architectural in the backlog that they build is quite large and long. So from that perspective I think that that’s the best way we can look at it. I will tell you that the synergies are largely around the purchasing of steel transportation and the opportunity to spread some cost over a wider group of assets. And that’s mostly in the cost of goods sold area.

Thank you. And then from a sales perspective, from a purchase perspective was this an auction or was it privately negotiated?

It was a very competitive deal and we were competing to win it. And I will tell you that the seller of this particular asset is a fine man and he did a great job. But we are happy with where we ended up and certainly thrilled to have CENTRIA, as part of the family.

Terrific, I’ll hop back in queue.

Thank you.

Trey Grooms with Stephens. Please go ahead with your question.

Hey, good morning.

Good morning sir.

First off Norm, I guess it was on the fourth quarter call last year you talked about your expectation for in market demand as you kind of looked into fiscal 2014. Do you think you could give us your thoughts or take a stab at your expectations for end market demand as you kind of look into next year?

We still see very strong growth in manufacturing across the country. Maybe bit more [indiscernible] but really very good manufacturing growth. Assembly and maintenance facilities again continue to look good for rail, road, and air. We see really still and this surprises us a lot of movement and change particularly in grocery stores. We’re seeing opportunities there. We are seeing opportunities in terms of assembly and distribution plants. So the bottom line is that as time has moved on we continue to see a broadening on the recovery and it is then quite sold from a volume perspective but it continues to blossom and to fill out and that’s encouraging for us. And I want to say that one of the things that we have been benefiting from is oil and gas which I think we said before is less than above 5% or so. About 5% of our revenue and that continues, we have interrogated our backlog which is only about less than $10 million. And the jobs that we have are solid and shipping, we’ve cancelled a little work but it’s on the order of $1.3 million. So the potential headwind that might occur in terms of oil and gas shouldn’t have much effect on us.

Okay, that’s all very helpful and then I guess as a follow up just more housekeeping, Mark with the CENTRIA deal, you are definitely going to have a tax benefit or positive tax benefit, could you give us a little bit of color on how to think about both booked taxes and cash taxes as we looked into 2015?

Sure, so from a effective tax rate as we recorded on our income statement it will be somewhere between 37% and 40%, where the advantage will come in as the actual taxes that get paid, we will be benefiting from the amortization of nearly $200 million of step up in assets and intangibles that for tax purposes will be deductible. So that’s an advantage to the structure under which we’re able to purchase CENTRIA and it will significantly decrease the amount of cash that we’re using to pay taxes over the next 15 years really. And some of that, quite a bit of that will be accelerated. So I don’t know how to describe that any better to you other than to say as a significant component of our valuation considerations.

Okay and if I could just sneak one more in on the CAPEX, you mentioned earlier that you were looking for a range of 22 million to 25 million this year. But there was some deferral there so, what kind of range should we be expecting for 2015 Mark if you can give us a little color there?

Certainly, I do have it in my CFO piece as well but I gave a guidance range for 2015 of 22 million to 26 million.

Okay, sorry about that I overlooked it. Thanks guys and good luck.

No problems Trey.

Alex Rygiel with FBR we will take your question.

Thank you. First off, could you give us a little bit better color on the timeline for synergies with CENTRIA and then secondly, maybe going through a little bit more detail on the strength that you saw in November, any particular geographies or product lines or anything like that?

So I will start with the last question first. We certainly have continued to see the manufacturing and assembly and distribution sector working quite well which many speak about in terms of the warehousing. We have seen a pickup in activity, in maintenance facilities and things of that nature. And those are spread across the country pretty evenly with a slight distribution to [indiscernible] line and right to work states. I will tell you that one of the areas that I think speaks a little bit better of the consumer in the retail side is that we continue to see private storage units recover at a rate that is more reflective of the recovery of 2004 to 2008. And that gives us some sense that the consumer it is beginning to improve their position and we see that again reflecting some retail operations that we build particularly in the food industry. So those are pretty good. I think the geographic spread is pretty interesting, it -- we probably saw a little slowness start to improve in the West Coast but I think the East Coast continues to look pretty good. And again we are talking relative to what has been a really struggling six years but we are seeing improvement across the whole country. On the synergies question, we would expect to build up to that $6 million over a couple of years. By the end of the first year we would be at a run rate equal to half of that $6 million and then by the end of second year we’d be at a run rate equal to the first 6 million.

And I will say that’s before we actually start to work with the business. I am not suggesting that my colleague is being conservative but I am saying that we have opportunities that we will be looking for all kinds of ways of improving profitability.

And I know you provided some color on your exposure to the oil and gas market but could you sort of enhance that a little bit more with regards to kind of your view on directionally where demand goes?

We are so having growing up in oil and gas I will tell you that I am still incredibly bullish in terms of what the opportunities are in NCI in terms supplying buildings for upstream, midstream, and downstream. But I also know having been in this that the cycle that oil and gas follows is different than the economic cycle. And there is no industry better in terms of starting the spend money or stopping the spend money in the oil and gas industry. So when we see ourselves in a situation where we look specifically at that, I would expect to see some slowness. Now whether that slowness means that it is 2.5% of our revenue, that would be fine. My point is that on a longer haul we still expect to see good growth over many, many years but when you boil it all down to not just oil and gas, we are still expecting to see mid single-digit growth in volumes in non res. And to the extent its better than that, fantastic that will be a problem we can deal with, but we are trying to manage our business as if it will be mid single-digit.

Very helpful, thank you. Nice quarter.

Thank you.

Will Randow with Citi, please go ahead with your question.

Hi, good morning, this is actually Scott Schrier in for Will. First question, I noticed on the coating side on a sequential basis it seems like your revenues increased more than they typically do. Did you see it, were there any kind of trends or anything there that were driving that?

We had a situation there where we had the opportunity to approach our ramping up of Middletown in a way where we actually move some opportunities from Georgia to Middletown. If you actually look at the margins in Middletown they really were quite good. Georgia suffered a little bit as a result of that and I would say that, we are in the process of ramping up to not only the volumes of activities in coatings but the kind of work that we really want to have. Coat is in a unique position to benefit from the internal demand that our components and buildings group provide. Therefore we expect that team to be focused on value and pricing and I think we all have that message very clearly now. So we were happy to see some growth but what we want to see is growth for the bottom line.

Got it, on the CENTRIA acquisition I noticed in the deck it mentioned it provides some opportunities in the mid to high rise space. Did you see yourselves attacking those opportunities to the CENTRIA acquisition or possibly using that to get into some other mid to high rise applications as well?

So we were really fascinated by the high-end architectural and have been probably almost last 10 years. But could not really get our heads around how we were going to break into an industry that was really higher end architectural and so we have looked as I said earlier a number of times if we could acquire CENTRIA. But at the end of the day we actually started initiative about a year ago which culminated in the opening of a plant in Richmond, Virginia. So my point is that the acquisition of CENTRIA really does provide us with an opportunity that they have that they are expert in, in terms of the higher end architectural which is not just for low rise but the mid rise and high rise as well. So we are really happy about that.

Great, thank you.

[Operator Instructions]. Brent Thielman with D.A. Davidson. Please go ahead with your question.

Hi, good morning. Sorry to beat on this, but just want to understand how you guys kind of flushed out the potential risk on the oil and gas side and I know the piece that you break out there is just pretty small for you specifically, your oil and gas piece but is there risk in the manufacturing and warehouse building areas you serve. I am thinking about those types of buildings around oil and gas infrastructure applications or is that fully included in the oil and gas?

That’s fully included. One of the things that we look at is we have certain brands in their positioning that they supply small building or buildings to third and fourth tier suppliers. So we clearly have seen that would have a probably a disproportionate effect on that particular brand which is one of our 20. But when you roll it altogether and consolidate it we are really spread in diversified across all aspects of the economy. And I must say I am all in favor of getting more oil and gas work but I also appreciate very deeply how that works in terms of if there is change, systemic change in price the oil and gas is going to spend a lot less.

Okay, and then I appreciate the commentary on the improvements in bookings and backlog in November that's helpful but can you kind of frame what you were seeing in the same month last year, were bookings backlog up or down or any operations. Just to get a better idea of the comparison?

Sure, Mark would do his best to pull that together in a second here but I will just say that when you think about what we were doing this time last year, we were coming through our first price increase which started in August of 2013. We were beginning to see some benefits from that and that benefit was more prevalent in a buildings group, a little less so in the components group, and slower in the coating group. So as we went through that to the period that where we are at this time last year we still haven’t gotten probably two thirds of the benefit from pricing. So what you see now is not only an improvement in volume but an improvement in dollar values in the margins there, right. And that in itself is really good. But I will tell you one of the things that we are watching very carefully is that our components group which is just in time delivery, very much short of lead times are really on a legacy part of our business and a bit more on the agriculture side are seeing some nice movements in daily sales and weekly sales. And we are encouraged by that and that kind of goes hand in hand with the position of the buildings group and that's why we are trying not to get over our skis [ph] but it is different than it has been for the last three years.

Looking back at last November, the bookings in November of 2013 grew 5% year-over-year. So, I think the fact that this year's November grew 27% is definitely good indicator, it indicates continued growth. Bookings are choppy. They do come in and block so, I don’t think you should read into that, but we expect 27% growth in revenue in the first quarter but it certainly is a good indicator.

That’s helpful. Thanks guys.

Okay, thank you.

Management, there are no further questions at this time. Please continue.

Well, thank you very much for joining us for the call and we look forward to reporting on first quarter call. Thank you.