Good morning, ladies and gentlemen, and welcome to the First Quarter 2016 Simpson Manufacturing Company Incorporated Earnings Conference Call. In this conference call, the company may discuss forward-looking statements such as future plans and events. Forward-looking statements, like any prediction of future events, are subject to factors, which may vary and actual results might differ materially from these statements. Some of such factors and cautionary statements are discussed in the company’s public filings and reports. Those reports are available on the SEC’s or the company’s website. Please note, today’s call is being recorded. I will now turn the conference over to Tom Fitzmyers. Please proceed.

Thanks, everyone. Good morning, and welcome to the Simpson Manufacturing Company, first quarter 2016 earnings call. Earnings press release was issued yesterday. It is available on our website at simpsonmfg.com. Today’s call is also being webcast and a replay of that webcast will be available on our website. As usual, joining me for today’s call are Karen Colonias, Simpson’s CEO; and Brian Magstadt, Simpson’s CFO. I will start, followed by Karen and Brian, and then we will be delighted to take your questions. North America had a very good sales quarter, up 16% compared to last year based on an increase in housing starts and construction activity in most of the region due to a milder winter. Our European sales were up despite some foreign exchange headwinds, primarily due to volume increases and a milder winter. As we mentioned before, we estimate that about 55% to 65% of our total company wood product sales are dependent on housing starts. North America operation profits were up 10 million, only 50% due to increased gross profits that were partially offset by the increase in operating expenses. Europe was down slightly against last year. Asia-Pac improved but due to severance cost recorded last year which we did not reoccur this year. We continue to have a very strong financial position with $232 million in cash, about $300 million unused credit facility which gives us flexibility and the capability to continue investing in our long-term strategy. In the quarter, we repurchased about 106,000 shares at an average price of $33.93 for a total of 3.5 million. Before I turn the call over to Karen, I also wanted to mention that our Board of Directors have increased our quarterly dividend to $0.18 per share. This is an increase of 12%. Karen?

Thank you, Tom. As mentioned last quarter, we had a targeted release of our truss design and management software late last year. As a reminder, this design features allow us to approach about one-third of the U.S. truss market. Our trust specialists have been actively presenting this software and working on converting customers. We converted a number of small component manufactures since the release and are making good progress. Truss sales, although small, were up just over 30% from Q1 of 2’15. We continue to be engaged with M&A firms in North America and Europe, working to find good acquisition targets to help us meet our growth and diversification strategy. We are making positive steps in reducing our R&D, engineering, selling and admin expenses as a percent of sales. 33% this quarter compared to 34.7% in Q1 of 2’15. Expenses were up slightly, excluding commissions and CPS increases due to higher sales and operating income. We’ll continue to monitor our operations and our operating expenses. I’d now like to turn the call over to Brian who will share some additional financial information.

Thanks, Karen. As Tom mentioned, exchange rates had significant negative effect on Q4 comparable sales, which we estimate to be about $1.8 million as the dollar strengthened primarily against the European and Canadian currencies. While the effect on operating income was minimal, the margin differential of wood to concrete products is about 15 percentage points this quarter compared to 17% on Q1 last year due to concrete product gross margin increasing at a higher rate than wood products gross margin, both on increased sales. Those factors led to a Q1 2016 gross margin of 46.4%, up from Q1 last year 43.9%. As noted in the press release, we believe the estimated gross margin will be in the 46% to 47% range for 2016, depending on how the year goes. Total operating expenses so R&D and engineering, selling and administrative as a percent of sales were down about 170 basis points in the quarter compared to last year, as the company focuses on managing those expenses. The tax rate of 38.1% for both this Q1 and last Q1 and we believe the annual effective tax rate for 2016 will be between 37% and 39%. Q1 2016 CapEx was about 4.5 million, primarily for the improvements in West Chicago that we announced last year as we are continuing the build out of that chemical facility for a move of our two existing chemical facilities anticipated for late 2016. We also invested in manufacturing equipments and software development. We estimate total 2016 CapEx to be in the $50 million range assuming we can complete all projects and that includes an expansion of our facility in Texas for greater warehouse of office and training capacities. For 2016, depreciation and amortization expenses expected to be around 29 million to 30 million, of which 23 million to 25 million is depreciation only. Before we turn it over to questions, I’d like to remind you that if you’d like further information, please contact Tom at the phone number listed on the press release. Also look for our quarterly report on Form 10-Q to be filed in the next couple of weeks. We’d like to now open it up to your questions.

[Operator Instructions]. We’ll go first to Daniel Moore with CJS Securities. Please go ahead. Your line is open.

Good morning. Congratulations on a very strong start of the year.

Thanks, Dan.

Thanks, Dan.

Curious, Karen your thoughts as to how much of an impact if at all do you think the relatively favorable weather may have had your volumes in North America on a year-over-year basis?

I think Dan, certainly as we’ve always talked about in our construction business weather is a huge impact and we usually see that as a pretty big draw down on first quarter. We also saw some interesting things on the Western areas where it seems like a lot of contractors were trying to get foundations in the ground with the concern of – which was the big concern for the Western space. So I think that sort of acceleration of the foundations and the fact that we had a very mild winter in the east was very, very helpful on what we saw not only our fourth quarter results, but certainly our first quarter results. As we kind of look into the future here where we are in April we’re seeing numbers very similar to where we were last year this time.

So April was more of a kind of a closer to flattish or up slightly on a year-over-year basis, am I hearing that correct?

That is correct.

Got it. That covers my next question. And may be just talk about trends in concrete production, are you experiencing a noticeable pick up and what’s the outlook for the remainder of 2016 in that business in particular?

Yeah I actually am very excited to see our improvements. We have discussed the things that will help the margin expectation on our concrete line and certainly volume. We did see an increase in our sales volume and we have also seen some improvements from our manufacturing cost, but mainly an increase in that sales volume predominantly in North American concrete business but we did see a nice increase also in our European concrete business. So, that is also going to be a function of whether again it’s our wood products or concrete products, good weather can help us in those areas. But we are seeing a little bit of -- I mentioned our first quarter results our carbon fiber materials now called reports takes a little while to get through the specification process and start to see that really end up on jobs, but we are starting to see a little bit of that product line, but overall the sales volume and all of our concrete product lines, so that will be our – mechanical anchors what we do with our repair protect and our carbon fiber materials. Again we are starting to see a little bit of an uptick on our volume and that volume is helping us cover some of our overheads and little bit better on raw materials.

Excellent. And lastly and I’ll jump back in queue. May be just a little bit more color you mentioned truss you had a few nice winds, kind of the smaller manufacturers. Just the tone of those dialogues and how long it might be until we expectations for one we would see increased penetration with larger players in the sort of a meaningful impact to revenue and bottom line? Thank you very much.

Yeah just as a little bit more on truss process as we mentioned in the past that your real opportunity to convert a truss component manufacture on the new software really is on your fourth and first quarter. You would see some revenues from those conversions in the remainder of the year. But because of the truss component manufacturers get busy during construction season it’s very difficult time obviously for them to make a software change. So we’ll continue discussing our software and showing to those component manufacturers. The results, the input has been extremely positive. We spent a lot of time listening to the component manufacturers and putting a feature set on our truss software that really meets their needs to make them more efficient in their jobs. And that has been very, very well received. We are continuing in our boulder group, working on additional enhancements from both our truss software and also the management pieces of software. And as always enhancements the big roll out for those is that the October building component manufacturing conference, and we think we’ll have some additional feature sets by that time that will allow us to approach from the small sized component manufactures moving a little bit more into the midsized component manufactures. So the response from our customers has been extremely positive. As always, there is always more to do and as I’ve mentioned, software continuing improvement process but we have been very happy. Our boulder group has done an excellent job of first searching out what our customers are looking for and then really incorporating those feature sets in our software. So we’re very encouraged, especially since last year what’s really our first release of this new software to that targeted market.

That’s great color. Thank you again.

Thanks, Dan.

[Operator Instructions]. We’ll go next to Tim Wojs, Baird. Please go ahead. Your line is open.

Hey everybody. Good morning. Nice job.

Good morning, Tim.

Good morning.

I guess just my question is just a clarification. Did you say April sales were flat year-over-year or were they the same growth rate that you saw on April last year?

It’s very similar to last April.

So the actual dollar numbers similar April-over-April?

Correct.

Okay. Okay. And then I guess just how do we think about pricing? And I’m just curious given with where steel costs have kind of moved around, how has pricing held up given the raw material volatility?

Steel was interesting thing to happen in the steel market that everybody is aware that the tariffs for any steel coming in from China or India are pretty significant and certainly that’s going to change what the steel looks like as we – U.S. steel manufacturers still have a little bit more opportunity and little more captive market. And for us on that standpoint not really an issue because we are basically U.S. manufactured steel. We have seen several steel increase memos from various U.S. manufacturers so I think we’ll start to see steel pick up not only from a price standpoint, but we’re also seeing some interesting things on availability of steel. And it’s something that we really thought would happen based on the tariffs that are still coming in from foreign entities. I think it just happened a little bit later in the cycle than we anticipated. So I would anticipate that we would probably see steel prices increase into 2Q based on information we’ve seen so far from the markets.

And how does the steel prices compare for you guys on a year-over-year basis? I mean even if steel prices are up kind of from Q1 are they still favorable on a year-over-year basis?

Well we do a – we have a very good person that helps buy our steel and we’re always tracking it very carefully. So we’re always trying to be sure to be number one that we’ve got the right quality of steel and it’s going to meet our specifications and number two, that we’ve got good pricing and volumes of steel so that we never have problem of meeting our customer needs. So I think we’re okay. We will definitely be able to meet any of our customer needs and we really price ourselves of being able to turn our customers’ requests into and delivery to them in a 24-hour timeframe. So I think we’re in a good shape from that standpoint.

Okay, okay. And then, I guess just on the truss discussion. Is there a way to quantify how big truss is? May be as a percentage of revenue or just in absolute dollars?

Well we talked about, we got 3% of the market and that’s pretty consistent. So, that said, $10 million to $15 million range.

And that 30%, I mean should we expect that to actually accelerate a little bit as we get into Q2, or Q3 because I imagine you probably didn’t have a full run rate in Q1?

Well and that’s what I mentioned earlier it’s a little difficult to know what that run rate would be on truss because as you convert those customers, you’re seeing a little bit of a run rate in second and third quarter but you might not see in a conversions because of the time frame and busyness of the season. So it will be a little bit difficult, I think we’ll have a little bit more clarity on that as we get into Q2.

Okay. Great. Good luck on the rest of the year.

Thanks, Tim.

And our next question comes from Josh Chan with Baird. Please go ahead. Your line is open.

Hi, good morning. Congrats on the quarter too. Just wanted to circle back on the April comment. Do you have any thoughts in terms of why growth was so strong in Q1 and seems to have slowed down in what you were saying in April that demand got pulled forward or did you see kind of a slowing growth in the quarter, how did that turn out?

Well I think a little of the Q2 demand may be was pooled into Q1, just based on kind of where we are on April. But as I mentioned, certainly housing starts are still hovering around just a little under one-one. The fact that you have good weather and I think that really accelerates what the builders are looking to be able to do and I would say that those are really the main reasons is that the weather allowed that construction cycle whereas in previous comparable years we would have not seen that opportunity, especially in the Eastern areas, they typically would be under snow at least two of the three months in the first quarter. So that mild weather is pretty significant. I would also add that Europe also saw a mild weather so that was helpful from the standpoint of the increased volume that we saw in Europe.

Okay. Thank you for the clarification.

Thanks, Josh.

And it appears we have no further questions at this time.

Great. Thank you.

Thank you everybody.

And that does conclude today’s program. You may disconnect at this time. Thank you and have a great day.