Good day, ladies and gentlemen. I would now like to introduce your host for today Lynn Afendoulis. You may begin.

Welcome to the Universal Forest Products Incorporated Fourth Quarter 2016 Conference Call. Hosting the call today are CEO, Matt Missad; and CFO, Mike Cole. Matt and Mike will offer prepared remarks and then we'll open up the call for questions. This conference call is available simultaneously and in its entirety to all interested investors and news media through a webcast at www.ufpi.com. A replay will also be made available at that website through March 23, 2017. Before I turn the call over to Matt Missad, let me remind you that yesterday's press release and today's presentation include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995. These statements are subject to risks and uncertainties that could cause actual results to differ materially from our expectations and projections. These risks and uncertainties include but are not limited to those factors identified in the press release and in our filings with the Securities and Exchange Commission. At this time, I would like to turn the call over to Matt Missad.

Thank you, Lynn. Good morning, ladies and gentlemen. Thank you very much for joining us on the call this morning. The weather in Michigan is unseasonably warm, while the performance from the UFP family has been downright hot. I once again had the privilege of congratulating all the hard-working men and women at UFP for a record-breaking Q4 and the record-breaking 2016. First let's review the key metrics for 2016. Net sales for the quarter were $859.6 million and for the year were a record $3.24 billion eclipsing the $3 million sales mark for the first time. We saw growth in each of our markets. Retail was up 13.7% for the year, construction up 12.5% for the year and industrial up 10.6% for the year. Gross profit for the quarter was 14.2% down 70 basis points from Q4 of 2015 primarily due to the higher lumber market and similar unit profitability. Net earnings were 20.75 million for the quarter and EPS was $1.02 per share up from $0.93 in the fourth quarter of 2015. Year-to-date net earnings were a record $101.2 million or $4.96 per diluted share up from $3.99 per share in 2015. EBITDA for 2016 was $211.2 million also a record beating 2015s total of $179.5 million. Inventories closed the year at $397.2 million up from $305 million in December of 2015. The higher lumber market coupled with acquisitions during 2016 let to the increase. At year-end we believe our inventories were reasonably positioned. As we manufacture sell and distribute more complex products and provide one-stop delivery of highly mixed products and truckloads, inventories will be somewhat higher to serve those full-service customer. Accounts receivable were $282.3 million at year-end versus $223 million at 2015 year end. Again higher sales levels in a higher lumber market are the…

Thanks Matt. Before reviewing the financials I should briefly address a couple of items that impacted our numbers for the quarter. The first is the higher level of lumber prices. Overall year-over-year lumber prices were up 12% and Southern Yellow Pine prices which represent our highest volume of purchases were up 16%, impacting our cost of inventory, selling prices, investment and working capital. The second is our acquisition of idX Corporation which contributed significant sales growth reported in our industrial market. IdX also caused some lift to our gross margins and SG&A expense as a percentage of sales due to the highly valuated nature of its business. Moving onto the financials, I'll start with the highlights from our income statement. Our overall growth sales for the quarter increased 32% resulting from a 28% increase in unit sales and a 4% increase in selling prices due to the lumber market. Our 28% unit sales increase was comprised of 14% growth from acquisitions, 8% growth is result of having an extra week in our fourth quarter and year end 2016 and 6% organic growth which is in line with our targeted growth rate of 4%to 6% of our positive GDP. Reviewing by market, sales to the retail market increased 19%, resulting from a unit increase of 11% and an increase in selling prices of 8%. Our unit growth this quarter was primarily driven by our sales to Big Box customers which grew almost 25% over the last year ending product sales growth. Our sales of the industrial market increased 52% of which 43% is attributable to our acquisition of idX, remaining 9% increase in unit sales was due to the extra week of reporting along with the small organic growth rate. We believe the industrial market continues to be somewhat soft but…

Thanks very much, Mike. Now we'd like to open the line up for any questions you may have.

[Operator Instructions] And our first question comes from Ketan Mamtora with BMO Capital Markets. Your line is open.

Good morning Matt, and Mike. First question going back to lumber, the pricing have surged quite a bit over the last few weeks as you mentioned, can you just talk a little bit about how that will impact your business and how it rolls through into your numbers in Q1 and then into Q2?

Sure. I think as we've talked about before the absolute level of the lumber market, we look at more as a past prove so to the extent that we have certain fixed price items and certain what we call variable price items which are based on the market. We believe we have somewhat of a natural hedge, so you’re going to see margin impact on each side of that and usually they offset each other. So if the lumber market stays higher obviously that's going to have an impact on the overall sales dollars and from a gross profit percentage have a result of probably reducing slightly the gross profit percentage but our target as Mike said is to make sure that our profit per unit remains consistent.

Got it, okay. And will it have any impact on you working capital in the first half of the year.

Yes certainly to the extent that the lumber market is higher and the costs of our inputs are higher, it will obviously increase working capital.

Okay. That's helpful. And turning to your construction business, you know it was solid quarter on the residential side of things up 30%. This is well in excess of housing starts. Can you provide some color on - where you are seeing this growth in a market share gains any color will be helpful.

Yes, I think couple of things that I would call it out are the framing operations, there is a definite increase there. I also think that manufactured housing saw a significant increase as well. So I think this different markets are very strong at the moment but those are two specific areas I would call out as adjustments that people may not generally look to.

And what would you say that - winter has been kind of so not as cold and may be part of it is chilling right that or not as much.

Yes I certainly think what you’ll see the probably seen already on the retail side there has been more takeaway simply because the weather is better in a lot of the market. So we certainly appreciate that but that we're still pretty comfortable with our numbers for the year.

Got it. And then just last one on idX you mentioned some custom order delays. Can you provide some color there on - what is causing the delays and how comfortable you still are with your target that you put out, it may not be in 2017 but looking out into 2018.

Sure. And I think if you look - I don’t really want to name any specific customers but you've seen some retailers make announcements recently and so I think there is - some of them they are in a bit of a state of loss but once they get tax order out, they will return to order patterns which are more normalized, and we believe as I said before that its 9 to 15 months delay.

So much would you expect I know earlier you've provided that $25million to $28 million kind of a guidance for EBITDA, how do you think about it for 2017?

Yes, I think that’s a really good question and the way that I'm trying to look at it is to take a look at the company in total, and as you look at that and consider our targets that we've tried to lay out in terms of our sales growth target and our EBITDA percentage target and just include them in the group in terms of their overall impact they’re new, so we're talking about trying to explain that, but in terms of the overall impact it's not as great on the total. So if you just kind of picture the big picture, it will make a little easier rather than try to parse individual operations or market segments.

Got it. And then just your CapEx for 2017 what are you budgeting?

About $65 million.

Got it. That’s very helpful. I’ll turn it over. Good luck in 2017.

And our next question comes from Kurt Yinger with D.A. Davidson. Your line is open.

Yes, good morning everyone. You guys have talked about the bid of the growth in the manufactured homes, and I was wondering if you could talk about any trends as far sort of the prefab wall panels and [dresses] [ph]. It seems like there's a lot of concerns about labor availability and I was just wondering if you had seen a pickup in this sort of becoming more attractive alternative?

Yes, it’s a good question Kurt, and we have seen a pickup in that that area and anytime there is labor shortage comes, more popular to have - as much done within our factories as can be done, so we've added capacity over the last 18 months to be able produce more of those types of products and the acceptance has been very good.

And then on the SG& side, I know you guys have talked about trying to maybe control the rate of growth in that, so just looking at the 9.2 to 9.6 move from 2015 to 2016. Do you think you can kind of keep that level as a percentage of sales in 2017 or should we look at that kind from the $87 million just pure number that we saw in Q4, and then I think about that as somewhat of a run rate.

Yes, I think I'll have Mike talk a little bit more about the run rate, but I think one of the things that I cautioned is that if the lumber market has a disproportionate rise or disproportionate fall the percentages may not be as meaningful as the otherwise would be. We try to look at absolute dollars but Mike can add a little more color on that?

Yes, I think when you look at SG&A and peel out the bonus fees so SG&A is $87 million, you got to peel out the $10 million of bonuses expense that I called out. If you look at the $77 million for core SG&A, that tends to stay fairly fixed from quarter-to-quarter. So we may get a bump going into next year, inflationary type bump with races and things like that are effective in the first in the year, but I think that is pretty good number for playing purposes.

Okay. And then just circling back on idX. Can you guys kind of talk about any of the synergies you guys are seeing there and maybe opportunities that you've seen as far as having that business for the first quarter?

Yes, I think that we have some obvious synergies on sourcing and supply and other things like that, there are some others that weren't quite as obvious to us from a sales perspective and interacting with some of our existing operations. There's really been a lot more touch points and commonality and we're excited about being able to work together with them for us to help support them and then to help support our efforts. So those are plus surprises I would say.

Okay. And then final one, I because el you guys have talked in the past about some of the SG&A requirements based on segment sales growth particularly as far as industrial and residential construction. So I am just wondering with idX falling into the industrial bucket, do you think that maybe - will boost SG&A disproportionately as compared to growth in other areas?

Yes. IDX does run at a higher SG&A rate - in a higher gross margin, more like what our plans that serve more industrial customers and serve more residential construction. It's kind of more commensurate with those rates. So yes, they did provide a list in both of those areas, and they will continue to do going into next year.

Okay. And then final one. You guys had said that idX wasn't expected to add profitability in the fourth quarter, and I just wanted to make sure that that was the case.

Yes, I think overall acquisitions may have contributed a penny to EPS that but it was modest. We knew about the [indiscernible] adjustment that I called out in advance, and I want to make sure you knew that number for planning purposes going forward but yes, it was pretty much what we expected.

All right. Perfect. Thank you guys for your time.

And I am showing no further questions. I'd now like to turn the call back to Matt Missad for any further remarks.

Once again, thank you for your time and your interest in UFP. As you can tell, we are proud of our accomplishments and focused on beating old records every chance we get. We want to be ferocious in our focus to achieve our goals like a hungry lion in the wild, not like the Honolulu Blue and [Silver Paint] [ph]. Have a terrific day.

Ladies and gentlemen, thank you for participating in today's conference. This concludes the program. You may all disconnect. Everyone have a great day.