Greetings and welcome to the NCI Building Systems First Quarter 2015 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Ms. Layne de Alvarez, Vice President of Investor Relations. Thank you, ma'am. You may begin.

Thank you. Good morning and welcome to NCI Building Systems call to review the company's results for the first quarter of fiscal 2015. The company's first 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 a more detailed discussion of the risks and uncertainties that may affect NCI, please review our SEC filings, 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. At this time, I would like to turn the call over NCI's Chairman, President and Chief Executive Officer, Norm Chambers. Norman C. Chambers - Chairman, President & Chief Executive Officer: Good morning, everyone, and welcome to our first quarter 2015 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. Our first quarter earnings were released last night, so I hope you had time to review the results. I'll open the call with a brief review of our quarter before I hand over to Mark, who will offer additional color to our first quarter financial performance. Over the last several quarters, many of you recall me saying that I expect our results…

Thank you. At this time, we will conduct a question-and-answer session. Our first question comes from Winnie Clark with UBS. Please proceed with your question.

Good morning. Norman C. Chambers - Chairman, President & Chief Executive Officer: Good morning. Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: Good morning.

So, execution on your initiatives, outstanding once again. However, sales were a bit weaker than I expected, given the booking and backlog trend you've been seeing. Can you address how business progressed through the quarter? Because I think you got off to a pretty good start in November, but I assume conditions softened a bit in December and January? And then, any color you can provide on Q2-to-date would be great. Norman C. Chambers - Chairman, President & Chief Executive Officer: So, I mean it was choppy, as I said and we started off strong in November and a little weaker in the middle, and then it started to pick up in January. In February, bookings were very good, up 27%, as I said. So, we don't expect that trend to change a whole lot, meaning the trend of choppiness. However, (21:30); but at the end of the day, we're still pleased that it drove an increase in our backlog and our Buildings group by 10% or so, which is good. And of course, our backlog doesn't reflect the backlog that we have in CENTRIA, and we'll be talking about that next quarter.

Okay. Great. That helps. And then you talked a little bit about some end market performance, any notable weak spots by end market? And then maybe if you could just give us some color from a geographical perspective, that would be great. Norman C. Chambers - Chairman, President & Chief Executive Officer: Sure. So, as I mentioned in the script, the softness is certainly in oil and gas. And as I said in our backlog, it went down to 2.4%. But other end markets, and they are quite broad, as I said. What we find is that we're talking about a real cross-section of the economy, commercial warehousing, retail, we're seeing a considerable amount of growth in grocery stores. We're seeing manufacturing continue to be quite a large part of what we do. In garages, and the whole range of government, which includes both local and state, churches are up and recreational is actually quite strong as well.

And then maybe just on geography, you'd mentioned, I think the Northeast has been quite strong, and as well as the South. Anything changing on a geographic perspective? Norman C. Chambers - Chairman, President & Chief Executive Officer: So, South Central, Southeast, and the West is picking up some. The Northeast, particularly in the New England area was really quite strong early, and it's not bad now, but of course, it's disrupted like crazy by the snow.

Okay. Great. And maybe if I could just sneak one quick one on CENTRIA, it's been a part of the portfolio for a couple months, it sounds like integration is progressing well. Are you feeling more optimistic about the synergy opportunity there? And also, curious on what sort of opportunities you have to drive sales synergies as well? Norman C. Chambers - Chairman, President & Chief Executive Officer: One of the things we are seeing is their prospects are increasing. It's clear that they are later – or I should say, earlier in the cycle of recovery and therefore, are a year or two behind us in terms of the recovery. But, boy, we like what we see. It's a fabulous team across the board. And we're very, very pleased. The integration is going well. They were a private company. Now, they're a public company. So, that's changes as you can imagine to all the things we do in terms of monthly reviews and forecasts, and all that kind of stuff. But, it's moving along really very well.

Great. Thanks so much and congratulations on a strong execution quarter. Norman C. Chambers - Chairman, President & Chief Executive Officer: Thanks, Winnie.

Our next question comes from Lee Jagoda with JS Securities (sic) [CJS Securities] (24:38). Please proceed with your question.

Hi. Good morning. Norman C. Chambers - Chairman, President & Chief Executive Officer: Good morning, Lee.

Just going back on steel pricing, I know you said – you mentioned that gross margin in total shouldn't be affected because of the natural hedge. On a segment basis, is there any pull in one segment and push in another that kind of evens it out? Or is it even by segment as well? Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: Sure. There is a variance between the segments. They do operate in opposing directions. That's what creates the natural hedge, if you will. And what we tend to see is expanding margins in our Buildings group and contracting margins in our Components and Coatings group. Norman C. Chambers - Chairman, President & Chief Executive Officer: When steel prices go down. Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: When steel prices go down, that's right. Norman C. Chambers - Chairman, President & Chief Executive Officer: And the reverse when steel prices go up. Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: Absolutely.

Okay. And then just switching gears to CENTRIA, do you happen to have the Q1 pro forma as if it were part of your business and their growth on a year-over-year basis at CENTRIA? Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: We have this similar concept when we acquired Metl-Span. We very quickly integrated the business into our operations and it became very difficult for us to separate the performance of the pre-acquisition operations from the combined operations. So, it's not going to be our intention to break the results for CENTRIA out separately and speak to those. So, we don't provide that information.

Okay. And then one more, Mark, and maybe I'll hop back in queue. The amortization that's going to be hitting related to CENTRIA in the next few quarters, is that going to hit the segment margins for components or corporate? And how do you expect that on a quarterly basis for the balance of the year? Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: Sure. I gave guidance in the CFO commentary on this point. We expect to see the amortization be approximately between $4 million and $4.5 million in the second quarter. And I would expect that level of amortization to continue through the end of the fiscal year before it drops down. The reason that it's elevated initially is, because there's some very short-lived intangible assets that are accounted for through purchase accounting, that get amortized over a very short period like nine months. So, it'll continue in that $4 million to $4.5 million range for the rest of 2015 per quarter and then drop down to around $2 million, $2.1 million going forward from that point. Those costs will be reflected in the Components segment, because that's where CENTRIA currently is. We are currently evaluating the segments. And if we do elect to change our segment reporting, which we may or may not do, we would give some advanced thoughts on that and disclose historical information on segments before we get to our next earnings release.

Terrific. I will hop back in queue. Thanks.

Our next question comes from Trey Grooms with Stephens, Inc. Please proceed with your question.

Yeah. Good morning, guys. This is actually Drew Lipke on for Trey. My first question just kind of goes back to if you look at organic growth in the quarter, looks like it was up a little over 1%. You guys have done a fantastic job driving margin expansion, and a lot of that's come from the commercial discipline that you've put across. And can you talk a little bit about sort of the competitive environment that you're seeing? And particularly as it relates to the Buildings group, where I think volumes there were down around 7%. Norman C. Chambers - Chairman, President & Chief Executive Officer: Yeah. So, what we see is kind of a continuation of last year, in that we are focused on value and quality, and have set that up, so that really is a way that we're working with our customers, and looking for those opportunities. And the market has been quite good to us in that respect. I mean, we clearly have been able to increase our value, but the commercial discipline is really one part of it. I got to tell you that increasingly, we're seeing the value of the manufacturing in supporting the notion of value is totally kind of move that equation. And that, coupled with the supply chain and really getting even more focused on delivery of materials and all aspects of supply chain management, are really the story. And I think going forward you're going to hear us talking more and more about manufacturing, supply chain management and commercial discipline.

Okay. So, I guess as a follow-on to that, and I guess you saw 90 basis points of improvement from that production and logistics efficiency improvement, looks like Don Riley's done a very good job there. Can you maybe talk about what inning we're in on that front? How much more room you see to go there? Norman C. Chambers - Chairman, President & Chief Executive Officer: So, John Kuzdal is the one that did that. Don Riley is at bat right now and he's off to a great start, I hasten to add. The hell of it is that every time – I think I know that we've kind of been able to draw a kind of – a box around what the possibilities are, Kuzdal and the guys come up with something else, that it is just within the context of as we continue down the path, we find more and more opportunities to do small things, but small things that really do add up. So, as I've said a bunch of times and I mean this very sincerely that before we started this process on the reorganization of manufacturing, I thought that we only had opportunities that were on the margin. I'm now convinced and more convinced all the time that it's much more fundamental to that. And so, we look forward to the next few months and it's one of those things that as we do things like we did, we'll tell you all about it.

Okay. And then just one last one from me. Now that you have had CENTRIA kind of in the fold for the last five weeks or so, and as you kind of talk about that mid-cycle EBITDA range of $280 million to $350 million, how has CENTRIA adjusted that range in your opinion? Norman C. Chambers - Chairman, President & Chief Executive Officer: Well, I'd tell you, it's just like some of our initiatives have maturities that are later in the cycle recovery. I think that's where CENTRIA is. I think that we will see their markets continue to recover during the course of this year. The collaborative sales process that they have is different than all other parts of our business. And they are fabulous with this, really incredibly strong. And what that means is that the prospects and how they're working them now will build their backlog. And when we share that with you, it's a considerable number. And that then becomes work that they will ship over the next couple of years, so their backlog gives them much longer visibility than our backlog does. So, my point is this, is that we're really happy with where they are. We're really happy with the integration and getting used to being part of a public company. And that will continue and will pay big dividends at mid-cycle, in mid-cycle, which we know is 1.3 billion square feet and we're heading in that direction. But, what year we get there, whether it's 2018 or something like that, which McGraw-Hill was kind of forecasting. Well, I mean, that will play out very well for where our CENTRIA folks will be.

Okay. Thanks, Norm. Norman C. Chambers - Chairman, President & Chief Executive Officer: Yes.

Our next question comes from Robert Wetenhall with RBC Capital. Please proceed with your question.

This is actually Collin filling in for Bob. So, with the CENTRIA acquisition, can you speak about its revenue contribution and EBITDA contribution in terms of seasonality? Is it going to follow like a similar or suit to what your legacy business has, where it's 60% to 90% of EBITDA in the back half of the year? Norman C. Chambers - Chairman, President & Chief Executive Officer: It's at least as seasonal as we are. It may even be more seasonal. And it's kind of like when you think about it, they're in bigger projects. And those bigger projects kind of start as soon as the weather is good enough, but they go on a lot longer. And oftentimes, the finished work CENTRIA does is later in the process. So, it gives us, we think a little buffering to some of our cycles. But, at the end of the day, it is a great product, and they do some amazing things.

Great. And for the Buildings segment, in the second half, you guys really started to see a price increase due to mix and pricing initiatives, then you saw a corresponding decline in volumes. Are you expecting the back half of 2015 to see some volume growth, given that you're going to have some pretty easy comps on the volume side? Norman C. Chambers - Chairman, President & Chief Executive Officer: That's a good question. And the answer is, yes, we are. I think that when you look at their backlog, up 10%, and if we're able to continue that pace of growth, even though, we've said publicly that we don't expect our over – we expect the market to be mid single-digits. If the team in Buildings can continue to be very disciplined and continue to sell value, we think there are actually increasing opportunities in the market and that's what we're looking for. But, I think, it would be wrong for you to think that we're not going to increasingly see a very real contribution from both supply chain as well as from manufacturing. Part of this notion about manufacturing is, when you talk to the operating guys is that, holy smoke, they are able to sell value because our service levels out of our manufacturing plants are so improved. And I'd tell you, there's no better way to differentiate ourselves than that.

Great. Thank you. Norman C. Chambers - Chairman, President & Chief Executive Officer: Welcome.

Our next question comes from Will Randow with Citi. Please proceed with your question.

Hi. Good morning. This is Scott Schrier in for Will. Thanks for taking my questions. Norman C. Chambers - Chairman, President & Chief Executive Officer: Sure.

Hi, good morning, this is Scott Schrier, in for Will. I want to talk about Coatings and the margins there. And I guess, first, what was the effect of the lower steel prices on those margins, there? And then what was the effect of mix? And what gives you comfort that you said later in the year, the mix will return to more of a normalized state, where you'll have the better margins? Norman C. Chambers - Chairman, President & Chief Executive Officer: Yeah. So, steel prices really had no impact at all. It really came down to – I'll be frank, some poor decisions. We made some poor decisions on particular jobs and market opportunities that we thought were going to be beneficial to us, and they weren't. And we ended up making adjustments before the end of the year. Those adjustments are in place. We are seeing success on the restart, and when we look forward, we see that our team there led by Dan Happel will be producing the historical normal results by our second half. And we can see it in the kinds of work that we're now looking at and getting opportunity to win. So, that will be coming on the pike.

Great. And then if I can ask possibly the Buildings question a different way. Obviously, you had very strong margin growth year-on-year. And what's the breakdown of that between just pricing and then the complexity angle of it? And given that if you have capacity left in the pipeline, can you kind of take on the higher complexity projects and also fill up your capacity a little bit with some of the more simple projects, albeit at a lower margin? Norman C. Chambers - Chairman, President & Chief Executive Officer: That's actually a very good question. And the reason why it's very good is, oftentimes we don't get a chance to speak about the difference in the complexity range. The lower complexity work, we are getting really very much more into an automated stage, right, and have really, really done some interesting things which make our builder network better able to actually take on the smaller jobs, which they would normally not be that interested in. And we can deal with those very effectively at lower margins, because that's what that market kind of sells at, but do very well with it, because we're much more efficient in the way that we process as always. So, we're kind of doing that already. There's no question about the fact that we've seen in the last six months or so, an increase in complexity of work. And the kind of engineering capability that we have is best suited for that kind of, what we refer to as design-build approach, where we're working with the general contractor and our builder to come up with an approach that is better and more effective for them. And so, from that standpoint, we do see opportunities, but I want to tell you that the work that John Kuzdal and his team have done on the manufacturing efficiencies do give us the capacity to take on more work. But, we're loathe to do so in something that doesn't reflect the commercial discipline that we think is ultimately important. So, we're going to try to continue down the path with team discipline, but also exploit those opportunities that we have the chance to.

Great. And if I can get one last one in. I wanted to follow-up on Winnie's question on geographies, and more specifically, what are you seeing as far as demand in the oil producing states? Not so much on the oil and gas side, but just, say, non-res? Norman C. Chambers - Chairman, President & Chief Executive Officer: Sure. So, when you think about Marcellus Shale, which is one of the largest geographic oil and gas plays in the world, it actually resembles the North Sea. I mean, it's an amazing opportunity for us. When I look at those numbers, I can see Marcellus Shale, that area, which is more of a rural approach is down. And in fact, all the oil and gas areas are down with the exception of Permian. And the Permian Basin is actually – continues to do well. And what that reflects is the Permian is much more mature. So, there are lots of other things that go on in the Permian besides just oil and gas. When we look at building activity in Houston and Oklahoma, it continues to be pretty good. Our team here has done a nice job. In fact, their first quarter, the brands that are here were very strong. But, it's clear that that is a result of recognizing that the oil and gas opportunities are fewer and fewer, and will continue to be fewer and fewer. And I'm pleased already to see that other aspects of the economy are up. So, we'll see how it plays out, but it's certainly in the – I mean, it's maybe even a little better than I thought it was going to be, in terms of the broader economy compensating for the down move in oil and gas.

Great. Thank you very much and nice quarter. Norman C. Chambers - Chairman, President & Chief Executive Officer: Thank you.

Our next question comes from Brent Thielman with D.A. Davidson. Please proceed with your question. Brent E. Thielman - D.A. Davidson & Co.: Hi. Good morning. Norman C. Chambers - Chairman, President & Chief Executive Officer: Good morning. Brent E. Thielman - D.A. Davidson & Co.: Hey, Norm, how are lower steel prices you're seeing now changing how you bid projects today on the Building Systems side of the business, if at all? Norman C. Chambers - Chairman, President & Chief Executive Officer: Yeah. Well, they generally – steel is a big part of their sales, but their sales are driven more from a standpoint of delivery, of timing, of the complexity of the building, the value of the engineering. So, there are other things that go into that equation, besides just the steel. It's clear that whatever the input costs are, whether they'd be transportation, steel, or something else are part of the market. But, the market responds in different ways, and it can be a selective area of supply and demand. It can be the complexity of the work that fewer of us can do. So, it's hard to take a broad view of trying to homogenize, what the impact is. At the end of the day, we continue to really try to price the value of what we're selling and the value we can create for our builder and the end-market user. That's kind of where we're at. Brent E. Thielman - D.A. Davidson & Co.: Okay. And the potential to see some substitution for other methods of construction, I know it's early, but in the past how long does it take before you start to see some clear-cut evidence of that, as steel costs come in at least relative to other materials? Norman C. Chambers -…

Our next question comes Sam McGovern with Credit Suisse. Please proceed with your question. Sam T. McGovern - Credit Suisse Securities (USA) LLC (Broker): Hey, guys, thanks for taking my questions. Just to follow-up on the last line of questioning. In terms of leverage, I know you guys mentioned that in March you guys paid down about $10 million of the term loan. Should we expect in terms of cash flow in the near-term, you guys will just continue to chip away at the term loan, or do you guys just expect to build cash? Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: I think you will see us demonstrate our commitment to debt reduction throughout the remainder of 2015. I wouldn't try to put a specific guideline out there for that. I just think you'll see that in our actions. Sam T. McGovern - Credit Suisse Securities (USA) LLC (Broker): Got it. And then, as you guys sort of make your way towards that debt target, the leverage target that you guys have put out there, we should expect that to not just come from EBITDA growth, but actual debt reduction over time, right? Just to confirm that. Mark E. Johnson - Chief Financial Officer, Treasurer & Executive Vice President: Absolutely. It's a combination of both. Sam T. McGovern - Credit Suisse Securities (USA) LLC (Broker): Got it. Thanks so much. I'll pass it along. Norman C. Chambers - Chairman, President & Chief Executive Officer: Yep.

Our next question comes from Lee Jagoda with JS Securities (sic) [CJS Securities] (48:01). Please proceed with your question.

Great. Just a couple more from me. So, Norm, you were saying that through Q2, thus far, you're seeing growth. Is that in terms of volumes, tons, revenue? Can you kind of give us a little more detail? Norman C. Chambers - Chairman, President & Chief Executive Officer: So, what I'm saying is, it's consistent with what we're focused on which is focus on the bottom line, okay? So, what we're seeing as a result of manufacturing and supply chain and commercial discipline, we are having year-over-year growth even in the face of weather conditions that are more adverse than last year, okay? That's in the flash report. And that's what it is. So, we're pleased about that.

Okay. And then just on the Components side, do you have the mix of single skin versus insulated metal panels, comparing this year versus last year? And then the mix in your backlog going forward? Norman C. Chambers - Chairman, President & Chief Executive Officer: Well, there's no – very little components in our backlog, and that would be – our insulated metal panel piece is what probably brings that – is that 7%. So, the insulated metal panel piece from the Components is actually in our consolidated backlog, which is up 7%, okay? And the Buildings backlog is up 10%. So, what I will tell you is that our legacy Components business was as I hope I said at the end of the year was the best-performing business brand in all of our brands for the second half of 2014. It continues to do very well in a fragmented market, where the team over there led by Bill Coleman is doing a first-class job in terms of both sales and growth and profitability and I'm really pleased, because that's one of the more difficult places we have because of fragmented marketplace.

Sure. And then one last one on the Buildings side, and I'll be done. Given that most of the higher value, more complex building projects typically have longer lead times and they'll be in backlog for a while, how do you deal with price escalators, or price concessions based on steel? Are you able to pre-buy or buy steel better on those projects? And how do we think about that dynamic in Q2, Q3 and Q4, assuming steel prices stay around current levels? Norman C. Chambers - Chairman, President & Chief Executive Officer: Sure. So, on most work, we are able to manage the inventory turns with what we have in backlog and we have within our contracts and backlog the ability to change our prices based on steel price going up, okay? So, we have some protection there. I will tell you that the relationships we have with our builder network and our best builders have been with us on average for 30 years, we end up in a conversation. But, over the years since steel prices got to reach some volatility, which is now, 11 years ago, our dealer network is much better at dealing with this as well. So, there's not quite the angst. So, my point is that we deal with that pretty effectively. When it comes to big complex work, if there is a lot of steel to buy, and that job is out there, six months, nine months, 12 months, we will oftentimes contract so that we do not take steel price risk. In certain circumstances, we've actually gotten the end-user to pre-buy steel for the job and to free issue that. So, we go about that in a variety of different ways.

Great. That's very helpful. Thank you. Norman C. Chambers - Chairman, President & Chief Executive Officer: Welcome.

Our next question comes from Gregory Macosko with Montrose Advisors. Please proceed with your question.

Yes. Good morning. Norman C. Chambers - Chairman, President & Chief Executive Officer: Good morning, Mr. Macosko.

Nice margins. Very well done, there. Could you talk a bit about Tennessee? Tennessee, there's completed some restructuring, there. Are we pretty much done with that in terms of margin improvement? Or is there – I realize there's always ongoing improvement going to happen, but could you talk about any projects of that magnitude, going forward? Norman C. Chambers - Chairman, President & Chief Executive Officer: Well, we really are very sensitive about this, both from a competitive perspective and just – until we're really certain something really does pencil out and make a lot of sense. But, there were just so many opportunities for us to actually look at our distribution of plants and to think about them as if we were starting with a clean sheet of paper, as opposed to being a company that merged in 1998 with component plants and building plants. And there's all kinds of things from simply shifting equipment from one area to another, and plant and utilizing a different way to thinking about our supply chain too, in the case like in Tennessee where it made sense for us, where we had three plants within 150 miles to consolidate, right? So, John Kuzdal and his team are looking at all aspects of that to really determine what's best for us to have a manufacturing platform that best fits what we see for market growth now and in the future.

And then with regard to CENTRIA, do you see any consolidation or even expansion with regard to the sales force by joining – when CENTRIA comes fully integrated? Norman C. Chambers - Chairman, President & Chief Executive Officer: Well, I tell you, it's because their business is very different, we don't see a lot of synergies in terms of cost reduction on kind of front office or back office, because they're very distinctive. We do see some really good synergies, in terms of some of the supply chain aspects, some really good ones. And we see some others in terms of leveraging our sales channel rationalization. We think there's some really good opportunities within the sales channels in terms of products and utilizing our plants in a much more effective way. So, that looks good to us. And, of course, there's been a level of consolidation in that part of the industry, which is, we'll see how that plays out.

And then finally, with regard to the second quarter, you mentioned that it sounds like you're reasonably pleased with how things are going in terms of the growth rate. Yet, it's a little bit slower than the first quarter improvement, and you explained that. Is any of that affected by the steel pricing that you mentioned, that when steel prices come down, I guess, customers delay, et cetera? Are you feeling any of that? And I would assume that would be somewhat of a short-term issue? Norman C. Chambers - Chairman, President & Chief Executive Officer: Yeah. No, I don't think we'll see any effect on steel prices in Q2. Maybe a bit on the tail end, but I just don't think it's going to materialize. And again, I think that if the market perceived that the U.S. economy was actually slowing and therefore non-res was slowing further, right? Then I think you might see some more systemic change, okay? But, that's not the case. That's not the case. So, we think we'll see normal levels of seasonality.

Thank you, Norm. Norman C. Chambers - Chairman, President & Chief Executive Officer: Okay, Greg. Thank you.

Thank you. At this time, I would like to turn the call back over to management for closing comments. Norman C. Chambers - Chairman, President & Chief Executive Officer: Great. We thank you for participating in the call and we look forward to speaking to you in the not too distant future.