Greetings and welcome to the Installed Building Products Second 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. [Operator Instructions] It is now my pleasure to introduce your host, Jason Niswonger, Senior Vice President of Finance and Investor Relations for Installed Building Products. Thank you Mr. Niswonger, you may now begin.

Good morning. We would like to thank you for joining us today for Installed Building Products second quarter 2015 earnings conference call. Earlier today we issued a press release on our financial results for the second quarter, which can be found in the Investor Relations section on our website at www.installedbuildingproducts.com. On today’s call, management’s prepared remarks and answers to your questions contain forward-looking statements within the meaning of the Federal Securities Laws. These forward-looking statements include statements concerning demand for our services, expansion of our business, improvements in the U.S. housing market and our end market, our ability to strengthen our market position, our ability to pursue value enhancing acquisition and expectations regarding our sales and growth in 2015. Forward-looking statements may generally be identified by the use of words such as, anticipate, believe, estimate, expect, forecast, intend, plan, and will or in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties, because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statement made by management during this call is not a guarantee of future performance. Actual results may differ materially from those expressed in or suggested by the forward-looking statements as a result of various factors, including, without limitation, the factors discussed in the Risk Factors section of the Company's Annual Report on Form 10-K for the year ended December 31, 2014, and may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. Any forward-looking statement made by the management on this call speaks only as of the date hereof. New risks and uncertainties come up from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws. In addition, management uses certain non-GAAP performance measures on this call, such as adjusted EBITDA, adjusted EPS, and adjusted growth profit excluding depreciation. You can find a reconciliation of such measures in the nearest GAAP equivalent in the company’s earnings release, which is available on our website. This morning's conference call is hosted by Jeff Edwards, our Chairman and Chief Executive Officer; and Michael Miller, the company's Chief Financial Officer. Now, I will turn the call over to Jeff.

Thanks, Jason. And thank you everyone for joining us today to review our results for the second quarter of 2015. I would like to begin with a summary of our operating highlights, followed by an update on our markets. I will then turn the call over to our Chief Financial Officer, Michael Miller to review our quarterly results and capital position. And finally, after our prepared remarks, we will open up the call for questions. Operating and financial results continued to gain momentum in 2015. After the first quarter's typical seasonal trend of lower revenues and profitability, we provided historical context to explain the seasonality of our business, and as expected our financial results strengthened significantly in the second quarter of 2015 as we produced another quarter of year-over-year growth and net revenue, same branch sales and profitability. In fact, since going public in February of 2014, we have reported year-over-year growth in each quarter for these three metrics. The favorable trends we are experiencing has a direct result of delivering on our growth oriented business strategy, improvements in the residential and housing market, and the hard work of our local branch operations. I would like to use this opportunity to thank all of our Associates who work hard for Installed Building Products to become the recognized leader in the markets that we serve. For the second quarter 2015, we increased our net revenues 26% to $160 million compared to $126 million last year. Higher revenues and prudent expense management helped us grow our adjusted EBITDA $18 million, an increase of 77% compared to a year ago. I’m very pleased with our year-to-date finance performance and I’d like to use this opportunity today to discuss why we're optimistic these trends will continue for the remainder of the year. Our business…

Thank you Jeff, and good morning everyone. We continue to make considerable progress in growing our revenue and improving our profitability. For the second quarter of 2015, our net revenues increased 26.4% to $159.7 million compared to $126.3 million in the prior year, mainly driven by an increase in revenue in all of our end markets and additional benefits from a higher average price per job, due primarily to price gains and a more favorable customer and product mix in the prior year quarter. Our same brand single family sales growth of 11.4%, exceeded the 9.2% increase in U.S. single family housing completions during the second quarter. Given the frequency of revisions to the U.S. Census Bureau's data and the timing of our revenue relative to completion, we believe same branch growth for the first half of 2015 more closely reflects our performance relative to the market. In the first half of 2015, our same branch single family sales growth was 12.6% compared to U.S. single family housing completions of 5.3% reflecting strong market performance by our local branches and our well positioned geographic footprint. We believe growth margin excluding depreciation more accurately reflects the progress we are making in our core operation. And for the second quarter of 2015 growth margin before depreciation expense expanded 150 basis points to 31.3% from 29.8% in the prior year quarter. These improvements was primarily due to labor productivity improvements, operating efficiency and a more favorable customer and product mix in the prior year quarter. On a GAAP basis, we increased second quarter 2015 gross margin 140 basis points to 29% compared to 27.6% in the prior year quarter. Selling and administrative expenses as a percent of net revenue was 20.9% over the 2015 second quarter compared to 23.4% for the 2014 period.…

Thanks Michael. Looking at the remainder of 2015, we continue to be very optimistic about our prospects. We believe the third quarter will show further year-over-year improvements to revenues and profitability. We have a robust pipeline of attractive acquisition opportunities and our financial model and capital position provide us with plenty of liquidity to fund our acquisition strategy. With the strong infrastructure and management team in place, we are well positioned for long-term profitable growth. Operator, please open up the call for questions now?

[Operator Instructions] Our first question comes from Scott Rednor from Zelman & Associates.

Hi, good morning guys, thanks for taking my question. Question on the incremental EBITDA guidance for the full year, given the amount of acquisitions that you’ve done now in 2Q and into 3Q, should we consider that you could push towards the higher end of the 20% to 25% incremental this year?

It will depend upon the timing, I mean as you know acquisition have the tendency to come in at higher EBITDA margins than the overall business. So, to the extent that we continue to do acquisitions in the timing of those acquisitions but when they’re getting to the number Scott, it could get closer to the higher end of that, but we still feel comfortable in the sort of mid-range of that kind of 22%, 23% for the full year. And if you look at it in the quarter it was about 23%, which compares to prior year quarter were about 21.5% so we’re starting to see acceleration in the incremental EBITDA margin.

And when we think about the fact that growth in the front half is probably just slowed in terms of your growth rate organically versus what you see in the prior four to six quarters reflecting the market. Any change in your guy's ability do past year manufacture price increases to - in the formal higher selling prices?

No, we feel good about kind of where we are relative to market. If you look at our single family same branch growth for the first six months relative to their completions growth, it was about 750 basis points greater. So 12.6% single family organic growth versus more completion of about 5.3%, that was similar to what we did for all of last year. So we feel good about that number. We also feel very good about kind of what the – at least what we’re seeing in the market going forward. I mean permit growth in the second quarter was about a little over 25% and starts growth was about 16% and that’s a good forward indicator of what our market opportunity is. So we feel good about kind of the market – the continued market recovery and our ability to continue to grow at a rate in excess of the market.

And just on that Michael, no change in you guy's ability to consistently pass-through higher costs in the form of - in the form of higher pricing though?

This is Jeff Edwards, no we haven't seen any change. I think it’s indicative in this range in our gross margin not only on quarter-over-quarter, but year-over-year. So, when you look at how the gross margin improved in the quarter relative to last year and also relative to first quarter we feel good about that. In fact our gross margin in the second quarter was higher than any quarter of 2014.

Great. Thanks guys. Appreciate it.

Thank you. Our next question comes from Ken Zener from KeyBanc.

Good morning, gentlemen. I’m going to explore the pricing gross margin dynamic a little more if you don’t mind. Jeff, you had 10% organic growth, half was volume and the half was price mix. Can you talk about the price inflation you've seen on some of your main material inputs year-over-year. If you could then talk about kind of a lag, how much you covered, obviously your gross margins went up nicely, but it seems as though you talked about the efficiencies rather than positive pricing being the contributor there. And what’s the normal lag that you have out for your market versus your input cost?

We saw in the quarter, we saw improvement Ken, and kind of all of the critical components of cost of goods sold. So, material percentage drop labor percentages and then sort of operating leverage within the logistics piece of the business. So we feel good about our continued ability to continue to get with a favorable price and customer mix to offset any material price increases that we’re seeing in front of the manufacturers. And again I think that illustrated in the improvement in the gross margin not just in the quarter, but relative to last year as well.

Okay. On SG&A one of the adjustments that you guys make is really to destock expenses. Can you give us maybe a sense and obviously your stock had a big move here. So I’m just trying to understand the sensitivity of that stock expense adjustment is there a way to think about that expense relative to ex dollar move in stock or is it related any earn-outs that you’ve done on prior M&A deals?

Yes, they're just restricted stock I should say just, they restricted stock trends that are not influenced by acquisitions and/or the stock price.

And is that would you expect - when you backed out this quarter, is that - do you have a thought process about how that is poised to be in the back half or is there a set rate that you have for that. I'm just trying to understand the difference there between the adjustment, the GAAP and if that’s going to dissipate over time?

Yes, those are recognized over the best in period and some of them invest over a period of a year and others invest over a period of three years. So it really depends upon the timing of that investing schedule.

Thank you, gentlemen.

Okay. Thank you.

Thank you. Our next question comes from Nishu Sood from Deutsche Bank.

Thanks. So first I wanted to ask about the acquisitions, real exciting set of deals you guys have been completing in the last four months. I know that all acquisitions are independently negotiate and independent circumstances. But maybe if you look across them, the pattern is there a common factor that has led to this - the spate of acquisitions here recently. Is it something internal from within IBP were you guys are more poised to consider deals out there or is it some sort of external factor. Just looking for your thoughts on what has led to this accelerated acquisition activity this year and obviously the by implication is that likely to continue?

Thanks for the question Nishu, this is Jeff. I would say - I mean the pipeline has been fairly full really since we’ve gone public even as Michael I think has mentioned on calls earlier. We were maybe little more preoccupied as a company right at the IPO time shortly thereafter and so that was probably a little bit of a low. But they take time and so lot of these deals have been incubating for quite a while and we obviously have as we talked about having a robust pipeline and a lot of other deals that are still incubating. So, I don't - we certainly have the capability to come and stay on the path that we’re on in terms of making acquisitions and have every intent of doing so, it was really just kind of matter of timing I think.

And we think - as we’ve said before, we think acquiring companies now at this stage of cycle is really important for us and we’re very focused on that as a company and we’ll continue to be focused on it. We have plenty of capital available to get the acquisitions done and as Jeff said, there are plenty of opportunities there. So we're really excited about not just the organic growth story that we have, but also the acquisition strategy.

And clearly we've geared up to make sure that we can handle this volumes in terms of number of transactions a year and as Michael said - has said many times we kind of bought very similar companies and we bought 100 times and as an organization it’s really in our DNA. So that’s not just a diligent side and the acquiring side but also the integration and on boarding. So we beat that all up to make sure that we can handle the pace, while we feel great about it.

Got it. That kind of leads me to my next question then. In terms of limits then, you have added now let’s say call it roughly 10% of your revenues, you've geared up your credit facility as well. So are there any limits in terms of what that you would bump against and at what stage? Maybe some updated thoughts on your leverage ratio clearly the EBITDA has been growing, have you changed your thoughts on limit on that or percentage of revenues or the number of deals that your team can vet, in particular period of time, what might be some of the limits on your pace of acquisitions?

Really from a leverage perspective, we believe appropriately the leverage but are comfortable increasing leverage for transactions particularly at this point in the cycle and we feel very good about performance of the acquisitions that we've made since going public. And we as a Company with the acquisitions, plus with the continued growth in our EBITDA delever fairly quickly even as we take on leverage for acquisitions. So we feel very good about our ability to do that. We feel good about our continued access to capital to do acquisitions, particularly as we continue to perform at this point in the cycle. In terms of what we historically have said that we would require about $30 million to $40 million of revenue per year, but obviously very much accelerated pace right now as you pointed out part of our 10% of revenue year-to-date in 2015, and we continue to do acquisitions and keep going at a similar pace for the foreseeable future.

Got it. That's great. And just one quick clarifying question. Michael, you mentioned as deal sizes get larger, are you simply referring to the higher profitability of your targets at this stage relative to two years ago? Or are you saying that on a survivor basis maybe the targets out there are going to get bigger as well?

Yes, that's great question. It's really both, quite frankly. Both the deal sizes are getting larger and the companies are profitable and as you know, we value our deals based upon profitability. So, we just wanted to make a point to people that they need to understand that amortization expenses is going to increase at a higher rate because of the acquisitions and the strategy that we are implementing.

Great. Thanks' for the color.

Thank you. Our next question comes from Susan Maklari from UBS.

Good morning. First question, can you just talk a little bit about any sort of near-term kind of delays you have come up, especially given some of the increment weather we're hearing about during the quarter in areas like Texas and parts of the South. There been any ramifications to your business or anything we should be thinking about there?

That's a great question. And I think the results that we demonstrated both in the first quarter and in the second quarter, I think are clear evidence of the importance of us having a highly diversified geography, and while clearly certain markets like Massachusetts and Texas are going to be impacted by weather, there are many of other markets have not been impacted by weather. And as a consequences the Company, we continue to perform at levels that we expect and if anything that's a positive for future quarters, as some of those markets return to a lot of the growth, but they were seen before some of the weather impact.

Okay, thank you. And then just going back to the SG&A for a minute, it was really a lot better than what we had expected. Do you think that some of - how sustainable are some of the things that you've seen in this quarter, and is there any change to how we should be thinking about it longer-term?

No, I mean, I think that the one thing that is probably hard when you look at G&A particularly, is that - and particularly say that's quarter where really the G&A increases came primarily from acquired company. So what happens is the timing of the acquisitions and when they actually get into our numbers impacts the kind of the growth in G&A. So I think from the way that generally speaking people look at it, there's really no change. We expect it from our perspective the SG&A numbers came in really at expectations.

Okay. Thank you

Thank you. Our next question comes from Keith Hughes from SunTrust.

Thank you. The lagged housing start numbers going into the third quarter on single family, based on government day, looks that was accelerating. I guess my question is, are you seeing that in your order backlog and orders coming as we head into the third quarter, that business will pick up in the second half of the year, in units?

Yes, I mean we're definitely seeing, as I think the whole market and the Census Bureau data and data from the Home Builders would suggest that clearly there is a positive momentum going into the second half of the year, for home buildings. So we're seeing times of that and we think that our ability to perform in the second half or organic basis relative to the market opportunity, roughly 7.5 points better than the market, we feel confident that we can continue on that basis.

Okay. And second question, on July 1 there was - in Florida, there was a new standard put in around energy efficiency. I guess my question is, have you seen any change in behavior there, builders and renovators using more materials or is it too soon to tell this one?

It is probably too soon. This is Jeff. I think it's probably too soon at this point, and you know those things usually trickle in over some period of time.

That's going to take months or years do you think?

It really depends.

And even then, it depends, it will be somewhere between those two.

Okay.

And it will be a net positive, but those things are net positives to the business, but they don't - they're not going to drive the overall business, even though Florida is important market for us, again executing everyday in every market.

Thanks guys.

[Operator Instructions] Our next question comes from Robert Wetenhall from RBC Capital Markets.

Hi, good morning, nice quarter. Market obviously likes the print and great execution. I just wanted to ask on a sequential basis it looks like the growth you guys were benefiting from in price mix is slowing down a little bit, and I just wanted to get a view Jeff, if you think that trends continues on a sequential basis, or do you think it starts to accelerate?

I would say that, I don't know that it's going to accelerate, but I don't know that it's - that we're going to get squeezed in any way, either. I think it's fairly consistent on a go forward basis and as you know we made reference in the first quarter too in terms of kind of the seasonality of our profits. So again, there is certain times of the year where some of the services, performing on a more profitable, to us as a company than others, or at least a majority of the services we're providing, so I don't really see it in anyway getting squeezed on go forward basis.

Bob, this is Michael. I think it is relative if you look at it in the context of 2014. The delta between what the single family completions growth was relative to our single family organic growth. For the first half of the year, we're very consistently fair at that 7.5 points. So it does feels like a relatively good indicator of what we'll be able to maintain.

Cool. You guys had really good same store sales growth at 10%, and I think we calculated that you had around $21 million of revenue from acquisitions. And I was trying to figure out the split from BDI and the smaller acquisitions, if you could provide that?

Yes, it's a little bit relative to the timing of when the acquisitions came in and obviously BDI, is a much larger transaction. And it was done earlier than the other deals. So it obviously contributed more heavily I would think, of that $21 million which you're right about that, the number, about half of it came from BDI.

Okay. That's very helpful. Can you give us percentage increase for the price increases you've seen from the manufacturers on the insulation side?

We historically haven't disclosed that and with respect - to answer that question -

And it’s kind of moved really at point - within that that was really fourth quarter last year, beginning of this year so -

Yes, I’d say that, our improvement in gross margin not only from the first quarter to second quarter, but from the second quarter of last year to second quarter of this year is indicative of our ability to continue to work with our customers and the customer mix to make sure that any material price increase is our more than offset with them.

Got it. That’s helpful. And if I can sneak in one last question, you guys did a great job on SG&A, that came in better than we’re thinking. Going forward when you're thinking about leveraging your fixed cost, is the big driver of EBITDA margin expansion going to be attributable to continued SG&A leverage or do you get better torque off gross margin. We’re just trying to figure out the balance between those two and how it's going to benefit profitability. Thanks very much and good luck.

Thanks Bob. On that question, I mean we think it’s a combination of both getting improved gross margin as well as continuing to get SG&A leverage. Obviously acquisitions help particularly with the G&A leverage, so that we continue to do acquisitions on an accelerated pace, it helps that G&A leverage.

Got it. Thanks very much.

Thank you. At this time I’ll turn the call back over to management for closing comments.

We have really no further questions. We just like to thank all of you for your questions, and we are looking forward to our next quarterly update and conservation. Thank you.