Good day, and welcome to this American Woodmark Corporation Conference Call. Today's conference is being recorded. The company has asked us to read the following Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995. All forward-looking statements made by the company involve material risks and uncertainties and are subject to change based on factors that may be beyond the company's control. Accordingly, the company's future performance and financial results may differ materially from those expressed or implied in any such forward-looking statement. Such factors include, but are not limited to, those described in the company's filings with the Securities and Exchange Commission and the annual report to shareholders. The company does not undertake to publicly update or revise its forward-looking statements even if experience or future changes make it clear that any projected results expressed or implied therein will not be realized. And at this time, I'd like to turn the call over to Glenn Eanes, Vice President and Treasurer. Please go ahead, sir.

Thank you. Good morning, ladies and gentlemen, and welcome to this American Woodmark conference call to review the financial results of our second fiscal quarter ending October 31, 2013. Thank you for taking time to participate. Participating on the call today with me will be Kent Guichard, Chairman and Chief Executive Officer. Kent will begin with a review of the quarter and will conclude with an outlook on the future. And after Kent's comments, we'll be happy to answer your questions. Kent?

Thank you, Glenn. This morning, we released the results of our second quarter ended October 31, 2013. First, the financial headlines for the quarter. Net sales were $191 million, representing an increase of 19% over the same period last year, and reported net income was $5.3 million or $0.34 per diluted share this year versus $2 million or $0.13 per diluted share last year. For the 6 months ended October, net sales were $368.6 million, representing an increase of 20% over the same period last year. Reported net income was $11.9 million or $0.70 per diluted share this year versus $2.5 million or $0.17 per diluted share last year. For the first 6 months of the current fiscal year, the company generated $15.8 million in cash from operating activities compared to a use of $2.2 million for the first 6 months of last year. Now moving underneath the headlines starting with sales performance on the new construction side. Housing starts from the U.S. Census Bureau are not yet available for September and October due to the reporting delays resulting from the federal government shutdown. Our expectation based on reported August preliminary data and general media sources is that overall housing starts and single-family starts, in particular, during the 3 months covered by our most recent fiscal quarter were elevated over the same quarter in calendar 2012. The period covered by our second fiscal quarter was the last quarter with relatively low year-over-year comparisons. Between July and October of 2012, single-family starts increased 16% from 512,000 annualized seasonally adjusted starts in July to 595,000 in October. Single-family starts increased approximately another 5% during the first calendar quarter of 2013 before settling back to approximately 600,000 starts where they have stayed since April. As a result, housing activity during our second fiscal…

[Operator Instructions] And our first question will come from Scott Rednor with Zelman & Associates. Scott Rednor - Zelman & Associates, LLC: As you think about the back half of the year with what you're seeing in Ross [ph] and the offset of pricing, do you think you could back to that 30% incremental on the gross profit line?

Well, I mean, there's, obviously, a lot of moving parts there. From -- there are a couple of things, I would say, on your question, specifically, and then I'll add kind of another element to the mix. The thing that I would add is that some way -- it appears that the marketplace, as I said in my prepared comments, is that the marketplace is supporting some pricing, but we continue to live in a materially inflationary environment, so you're kind of always a little bit behind the curve. So the return in gross margin, while I think that the pricing activity looks like it will hold as we get through our third and certainly into our fourth quarter, the question is everything else doesn't standstill and what happens to material cost between now and then? As we've talked about before several times on the call, there's a little bit of a lag between when we get hit by material cost and when we're able to as an industry to pass them through to the marketplace. So I think it depends a lot on -- the back half of the year, specifically to that part of your question, I think it depends a lot on what happens on material cost inflation going forward. If it continues to rise, it's kind of the same rate that we've seen over the last 12 to 18 months then we're going kind of be chasing that again. The industry will kind of be chasing that for a while. If it takes a pause and kind of levels out, then I think that you'll see what the industry has been able to do in terms of passing some of that on through to the end consumer, I think you'll help that'll buoy margins back up.…

Well, I mean, you're asking to give some guidance. And I mean, to me, what I would suggest, just work through those individual pieces. I mean, while I kind of go with this, that I don't think we're going to see as robust growth on the top line. And your forecast are probably as good as mine in terms of what happens on material inflation. The real driver of what's happening on our gross margin side is material cost. So it all comes down to what is material cost and how quickly can the industry move to recover those, understanding that there's a bit of a lag associated with that. Scott Rednor - Zelman & Associates, LLC: Okay, fair enough. And then just on the remodeling market, to your point, when you noticed that the difference between volume and price mix is somewhere an order of magnitude of 10 points. Are you guys, participating in that mix-up, do you feel confident that you guys are seeing that revenue acceleration you're picking it up in your results? Or is there some part of it that's priced above your product offering that may be the consumers coming back into?

No, we think it's more a channel of distribution than it is actual products within those channels of distribution. Now we continue to introduce new products based on where the consumer is shopping, to specifically to your point from a price point perspective. So we don't think that we are losing out because of our price position and our product price position in the dealer market versus the other. It's just that versus the industry, our dealer business is still relatively small versus the total remodel. We're still over-index, as I mentioned, we're still over-indexed to -- by a good margin to big-box versus the industry. And so that will weight us average down. Our remodel, our dealer business continues to grow. We continue to be very successful. We're a little over 3 years in terms of since when we launched that product. We launched it really in the spring of 2010. So it continues to gain momentum. It continues to gain critical mass, but it's still, versus the industry we're under-indexed. So on a like versus like basis, we're fine. Was just don't have the same presence in that channel of distribution as, let's say, the industry average.

And our next question will come Garik Schmois with Longbow Research.

Just first off, you mentioned that sequentially, quarter-to-quarter, you had about a 1/3 of the margin aggregation came from higher overhead costs, and those, I would anticipate, were coming from performance-based compensation expense. Is that expected to continue again into the third quarter sequential increase?

Well, there's a couple of certainly. There is some performance based in there. The other one is there was just some timing associated with -- I'll just call it the lumpiness of expenditure. So there are certain expenditures that you have, for example, higher and relocation costs that don't come in equal increments, and that is one of the big -- probably one of the big items that we had in our manufacturing and overhead line was we hired a couple of senior people and we have their hiring in relocation costs. So I would say that going forward kind of our expectation is the first quarter was probably a little abnormally low. The second quarter was probably a little abnormally high. So our -- my expectations would be that those overhead costs would moderate as we got into the second half of the year.

Okay. And again switching to pricing. You're indicating that you left the tough comps on the new housing side or apparently remodel is still pretty choppy. You are seeing raw material inflation, which normally would be supportive of pricing, and you're getting pricing in the market. But is there any concern right now that some of the promotional activity that's abated over the last several quarters starts to come back as the industry starts feeling a little bit uneasy about the rate of volume growth?

Well, yes. I mean sure, we all have -- from the 6 years we've been through, those scars if you will, are pretty close to the surface. So there's always I think some concern that we might get the high level of promotional activity that might come back in. My kind of view is that while that's possible, I don't think it's probable. I think the industry is running at capacity utilizations that are very different than they were 3, 4 years ago when a lot of that really started. I think that people are a little bit more -- with that are a little bit more concerned about concentrating on the business that they are doing or covering some reasonable margin structure. So I think that that's possible, I think there have been some things, particularly the utilization capacity, utilization of industry that they are different than they were 3 or 4 years ago. So my guess is it's probably pretty stable now. Of course, anything can happen, but my guess is it's probably pretty stable. I don't see the industry kicking off another round, but you never know.

Okay. I mean, just one follow-up question to the incremental margin question that was asked previously. With respect to what happened in the quarter and your view on raw material cost inflation moving forward, and again some of the volume trends that are starting to emerge, is there any change in your view long-term to the 25% to 30% incremental margin outlook that's been provided previously? And should we be concerned with all of that long-term view what the business could do is at risk?

Well, I mean, the target that we've put out there as we think, particularly, as we kind of go through this recovery phase to get back to some historical norms in terms of marketplace volumes and those types of things, that band that we've given of 25% to 30% is still a band as a target that we're comfortable with. And even comps are starting to come up in the second quarter. We had some, like I said, those things some additional material inflation that the growth in new construction -- the continued growth of new construction out of balance with remodeling because that does have a higher cost of goods sold content for us. And even with some of our overhead expenditures, we still were basically at the bottom of that 25% to 30% band and through the 6 months we were over that band. So that's still our target. As you talk about longer term, longer-term our target particularly when you're in a recovery phase getting back to some level of normal volumes in the marketplace, which would be probably 1.5 million starts and probably in the order of 6.2 million to 6.4 million existing homes sold. As long as we're back on that kind of -- journey back to those kind of normalized or historical averages, we would look to continue to kind of do that 25% to 30% incremental.

[Operator Instructions] And our next question will come from Nick Coppola with Thompson Research Group.

Going back to raw material cost issue. What did that really hit? Was that more of an October phenomenon or was it throughout the quarter?

Well, yes. I mean it's not limited to a month. I mean we started to get to see -- there've been some discussion about and some conversation in the building materials industry going back to last year. We really started to see it in terms of spot market and other direct market activity at the beginning of calendar 2013. But based on our contractual relationships and the partnerships we had with vendors, we didn't really see it start to flow through our books until sometime after that. So it probably really started to hit us late first quarter, but certainly, we got quite a bit of it in the second quarter.

And now, did the Chinese plywood tariff issue have an impact on you?

Well when that -- when it was initially done last year, last December, when the initial ruling was that there was dumping, we saw the markets move. I mean, in anticipation of that, the market -- the pricing in the market moved up significantly, kind of high 15% to 20%. It moved pretty quickly and then leveled out. Of course, the initial decision by commerce was not upheld by the ITC. It was overturned. And so that's been a relatively recent event, and so I'm not sure exactly. We haven't really seen a lot happen, one way or the other, in the plywood market since then. If you think the run-up in January, February, March was due to the potential for the dumping at the hold, then you might anticipate that the markets would settle back down, maybe not go all the way back to where they started, but would certainly settle back down, but we haven't really seen that yet. But that's only one of the material components. Lumber has been on -- hardwood lumber has been on a pretty steady march up now for well over a year, and we're also seeing pressure on other things like finishing materials and particle board and linerboard and those types of things. So we're in a general inflationary environment here, it's not just plywood.

Okay, that's helpful. And then you may or may not be able to answer this one, but looking for a little bit more color on what growth CapEx could look like? I know last quarter we talked about what kind of run rate we have left. And just wanted to see if you had any updated thinking on that?

I'm sorry, something happened right there in the middle of there, and there was kind of a skip. It was about revenue growth?

No, no. I'm sorry, CapEx -- growth CapEx. Last quarter, there was some comments about 18 months of runway, and you are evaluating alternatives?

Yes, we still are. We actually, in our discussions with the Board, we did present them some long-term capital forecast, and that's led into the decision on the new share repurchase program. And we are still presenting alternatives to the Board. When we get to the point where we -- if it involves a significant investment -- a change in our CapEx outflow, we'll actually go ahead at that point when the Board approves that, which may or may not be before the next regularly scheduled meeting that we would go ahead and do a release on that, so that everybody knows what that is. But when you go through these, we have presented some things to the Board. They've had some questions, the discussions are ongoing. As we've talked about before, our current forecast continue to suggest that we need some meaningful capacity in the Spring of 2015. And if you backed that up in terms of the lead time of the facility and equipment, our target date to make a decision is, certainly, early in calendar '14. So certainly before the Springtime, we would look to ask the Board to approve our capital plans, and then we'd be able to communicate that.

And our next question will come from Peter Lisnic with Robert W. Baird. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: First question, I just want to make sure I understand the margins and pricing and everything. In the second quarter, did you realize any price to offset some of the raw material costs? Or did you realize any price in the quarter to help offset some of that impact?

It was de minimis. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Presumably, you've put through a price increase, because I think the comment was in the back half of materials kind of stabilized it, you should largely cover the inflation all of [ph] sequel, correct?

Well, we actually said was, and that was little bit in between both actual and anticipated costs but in the pricing that we've seen in the marketplace, it doesn't quite cover everything we've experienced in terms of cost inflation so far. But it is significant. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Okay, all right. So can you give us a little bit of help as to what sort of incremental price, all [ph] sequel, I guess, if commodities kind of stay where they're at. What sort of price increase you might need to help cover what you've seen so far from an inflationary standpoint?

Well, what I said is our material increase year-over-year is 260 basis points in the second quarter, so... Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: And material's is what percentage of sales or comps [ph]? I can try, right?

Yes, historically, what we've kind of talked about, is just in real rough numbers, is our cost of goods sold is about 1/3 material, it's about 1/3 labor and associated cost, and it's about 1/3 overhead. With the inflation we've had -- material inflation we've had over the last year or so, materials probably moved up or from that a little bit, but that'll kind of get you in the ballpark. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Yes, okay. That's helpful. And then just in terms of your end-market exposures, in terms of a potential incremental price increase, that's not something that you can do real-time, correct? I mean, there is only a certain points during the year, where we can expect to see some sort of price increase?

Well, yes. I mean in a -- again in a normal environment, that would be the case. That there are, and they're different based on your channel of distribution, that if you get on the new construction side, the vast majority of our volume on the new construction side with the national and regional builders is contractual relationships, and those contracts have clauses in them that relate to passing through price increases. Each contract's a little bit different in terms of the wording. Each contract has many of the -- has these kind of different trigger points in different periods. So on the new construction side, it does take some time between when you decide to go to the marketplace if the market will support it, and when you could actually get that through your pricing. On the remodel side, it's pretty similar. You have a couple of windows a year, usually, where you can go ahead and try to get a price increase through -- not 100%, but that's about what it is. And that's kind of why my comment, the guidance I kind of gave or the comment I made was that we expect to see that pricing kind of become effective through the third quarter and be fully in effect for the fourth quarter. So we would expect it to be, even when we saw it, really, at the beginning of our second quarter 3 months ago, and started to move that way, again, that's kind of that 6-month lag we've talked about for a long time. Peter Lisnic - Robert W. Baird & Co. Incorporated, Research Division: Okay, and then just on the capital allocation, the press release with the share buyback, I was just wondering in term, of as you look forward and the Board, any sort of discussion about reinstituting a dividend of any kind? I know we've talked about it in the past, but I just wondering if that came up during the conversations?

It's come -- of course, all of our capital uses, including any returns of excess cash, not needed to reinvest in the business to the shareholders, that's always a topic of discussion. And at the moment, for quite a lot of reasons, I don't know if you want go into them all, but the Board is not of a mind to put a dividend back in.

[Operator Instructions] And we have no further questions in the queue, and I'd like to turn the call back over to our presenters for any additional or closing remarks.

Thank you. Since there are no additional questions, this will conclude our call. Again, thank you for taking time to participate. And speaking on behalf of management of American Woodmark, we appreciate your continuing support. Thank you, and have a good day.

That does conclude our conference for today. Thank you for your participation.