Raymond A. Jean – Chairman, President and CEO Thomas M. Walker – Senior Vice President, Finance and Chief Financial Officer

Arnold Ursaner – CJS Securities Analyst for Peter Lisnic – Robert W. Baird Robert Kelly - Sidoti & Co. John Kasprzak Jr. - BB & T [Craig Bettle] [Justin Busso] John Tumazos - John Tumazos Independent Research, LLC William Baldwin - Baldwin Anthony & McIntyre

Welcome to the Quanex second quarter conference call. (Operator Instructions) I will now like to turn the conference call over to our host, Raymond Jean, President and CEO of Quanex Building Products Corporation. Raymond A. Jean: Thank you for joining us in our first conference call as the new Quanex Building Products Corporation. With me today is Tom Walker, our Chief Financial Officer, and Jeff Galow, our Vice President of Investor Relations. At the conclusion of my full comments, we’ll take some questions. Today’s call we’ll include a recap of fiscal second quarter results, a brief financial overview and an outlook for the remainder of the fiscal year. My comments include forward-looking statements about the future prospects of Quanex Building Products. Please refer to the company’s Form 10 filed with the SEC on April 4, 2008 for our complete forward-looking disclosure statements. The second quarter earnings release is available on our website at quanex.com. I wanted to start by thanking you for both your patience and understanding for the additional time we needed to get our earnings release out to you. As you may know, we had to close the company’s books twice during the last seven weeks. The first closing was for old Quanex as of April 23, the date of the transactions, and the second closing was for the new company as of April 30. This was no small feat as you consider the complexity of this transaction and the burden it placed on our lead accounting staff. It was a great team effort and the staff has earned my admiration. The company’s overall market conditions in the quarter can best be described this very week. Although we finally did see some seasonal pick-up during April, which encouragingly was sustained in May. At our Engineered Products division, we had to contend with an ongoing decline of new home starts, which were off 34% from our second quarter last year while residential remodeling starts have been down from 5% to 10% in the quarter from year ago levels. We kept the decline in the division’s sales to a more respectable 11% compared to the year ago period. Our ability to generate additional sales through new customer programs and products continue to bolster us and we remain focused on initiatives that will improve our customers’ position in their distribution channel both of new home applications and residential repair and remodeling. For 2008, new products at Engineered Products such as invisible window screens, composite window profiles, entry door components, advanced insulating glass spacer systems and unique solar panel components are expected to contribute 7% of organic growth this year, even in this weak market. We are particularly excited about the growth we see at our Insulating Glass Sealants business. The introduction of our new Duralite Sealing product continues to gain penetration and we are winning accolades from our customers because of the products best-in-class thermal characteristics and its ease of installation in the manufacture of their insulating glass panels. Our growth with the leading domestic solar panel manufacturer is very encouraging as our adhesive sales in the first half of 2008 have increased three times over the first half of 2007 and we look for this business to continue to thrive. We just received a business license to operate in China and we expect to have our new facility operational by calendar year-end. Plans call for us to not only produce adhesives to supply our solar customer’s Malaysian operations from this facility but to also produce insulating glass sealant products that will be sold directly into the rapidly growing Chinese residential housing market which is today being served by our facility in Kentucky. To put the size of our solar adhesive and export sealant sales into perspective, we expect that combined sales to represent 30% of true sales business this year. Turning to second quarter operating income for the Engineered Products division, results were well off from year ago results, with February being a particularly poor month. The ongoing decline in sales in the subsequent poor operating leverage continues to be a significant drag on earnings. In an effort to help reduce operating costs during this cyclical slowdown, we are currently combining two window and door fenestration component facilities at our Homeshield division into a single more efficient facility. We expect to have this consolidation effort wrapped up by fiscal year-end resulting in $1.2 million of annualized savings. Second quarter operating results at our Nichols Aluminum division were respectable when you consider the poor building products environment and weak secondary markets experienced during the quarter. Our ship pounds were down 12% from the year ago quarter but up 23% when compared to first quarter shipments to the seasonal increase in our markets following a very harsh winter in the Midwest and Northeast. Operating income was well off year ago levels due to the drop in volume. A 16% decrease in value added painted sheet sales and a 7% drop in materials spread caused by relatively low LME aluminum prices early in the quarter. We are predicting a pick up in spread in the third quarter based in part on the rise in aluminum ingot prices we saw beginning in February. At this point, I’d like to turn the call over to Tom, who will take you through some of the company’s financial highlights. Thomas M. Walker: I would also like to welcome the audience to this conference, our first one. Let me begin my remarks by commenting on our diluted earnings per share from continuing operations. The company reported a loss of $0.20 per diluted share from continuing operations for the quarter. That $0.20 loss however included $13.8 million or $0.37 per diluted share of what was essentially non-cash, after-tax transaction cost related to the old Quanex Corporation stock base compensation program whose cash expense was actually paid by Gerdau. To help you better understand our results in the quarter, we’ve provided a comprehensive reconciliation table in our earnings release that describes these various transaction related costs by item. If you were to exclude the deal-related costs when computing the earnings, the company actually earned $0.17 per diluted share from continuing operations or about $6.5 million. On a comparable basis, Quanex Building Products earned $0.34 per diluted share from continuing operations in the year ago quarter or about $13.4 million. Our financial results this quarter were actually slightly better than we had anticipated, in part due to the seasonal improvements late in the quarter which Ray referred to. Moving the discussion to cash, the company continued to generate solid cash flow for its shareholders, even as the housing market continues to search for bottom. First half cash from operating activities came at $19.5 million, down from a year ago primarily due to lower operating income and changes in working capital. Our cash balance at quarter end totaled a very healthy $40.4 million which included about $28 million of the expected $52 million in true-up cash, along with another approximately $24 million of expected true-up cash receipts. We also anticipate better cash flow generation in the second half of the year due to seasonal improvements at our businesses. Our total debt to capitalization was less than 1% made up essentially of industrial revenue bond totaling $3 million. The balance sheet remains strong and managing our working capital is an important part of that process. Our conversion cycle which is a measure of how long it takes us to convert a customer order to cash came in at a respectable 31 days. With that, I’ll turn it back to Ray. Raymond A. Jean: Moving the discussion to the remaining 2008 market outlook for Quanex Building Products, the near term view for residential construction unfortunately remains bleak with calendar 2008 estimates for new home starts from Global Insight now estimated at about 900,000 units down from their December estimate of one million units. Assuming the new housing estimates are correct, that would mean a 35% decline in 2008 starts compared to 2007. Piling on with more bad news, pundits now expect the housing trough will not occur until the fourth calendar quarter and that elusive trough has already been moved out several times this year. We expect the company, however, to continue to outperform the market due to new programs at Engineered Products while ongoing company-wide cost reduction initiatives improving material spread at Nichols and seasonal improvements in demand will bolster our earnings in the second half of our fiscal year. Before I close my formal remarks and open the call to questions, I did want to mention that the company’s newly anointed CEO, Dave Petratis, will be joining us July 1. Dave brings with him experience in the construction markets, both residential and commercial, a culture of continuous improvement and an outstanding track record of growing companies through both organic initiatives and acquisitions. We all look forward to his arrival next month and on a personal level, I very much look forward to working with Dave to provide for a smooth transition. With that said, we are now ready to answer your questions.

(Operator Instructions) Your first question comes from Arnold Ursaner – CJS Securities. Arnold Ursaner - CJS Securities: On the cash, you mentioned that you have the $28 million of the expected $52 million and then you mentioned $24 million of cash flow receipts. I’m just trying to equate the two. Is that the difference between the $28 million and the expected $52 million? Thomas M. Walker: Yes, we haven’t gotten the cash true-up yet on the tax on the spin-off. We’re estimating now that will be around $20 million. We also haven’t gotten the cash on the bonds, the converts, and the true-up. We’re estimating that will be around $4 million to $5 million, in that range. One follow on point, we would expect to get the bond cash fairly soon. The tax, we are still in the process of valuing the businesses, so that will come a little bit later. Arnold Ursaner - CJS Securities: My second question relates to your guidance for the balance of the year and really two parts. One is you mentioned the $80 million of operating income and you mentioned the $20 million of corporate expenses. Implied in that is a fairly sharp reduction in the rate of expense in the back half because on a normalized basis, you were $14 million for the first six months, and it implies a pretty sizable jump in revenue and a dramatically smaller change versus last year. Can you expand on both of those, please? Thomas M. Walker: If I can jump in just on the corporate and other, if I can ask you to focus on the corporate and other for the very last three months, its $31.5 million on Page 7 of the release. If you would back out the $25.7 million of unusual costs, that comes down to $5.8 million. So we are already at the $5.8 million running rate, moving toward that $5 million running rate. Yes, when you look at it on a year-to-date basis, it looks like an overwhelming challenge, but in actual fact, we are getting pretty close to that rate. In addition to that, in the $5.8 million of this quarter, there were still some unusual items. We certainly had stock option expense which was pursuant to the new stock options that we’ve issued for employees and then some other sundry expenses that will fall off as we go forward during the year. Arnold Ursaner - CJS Securities: And then on the operating income side? Raymond A. Jean: Well, I think on the operating income side, the seasonal uptick brought some operating leverage that we certainly needed. As we look at our margin rate performance at Engineered Products for example, we were in the low single digits in the January-February time frame and that has now climbed to double-digits in the April-May period. We needed to get out of the harsh winter conditions that we experienced to gain some operating leverage and that’s what we’re seeing now.

Your next question comes from Analyst for Peter Lisnic – Robert W. Baird. Analyst for Peter Lisnic – Robert W. Baird: When you look at Engineered Products, are you seeing anything on the commodity cost side there, vinyl and micron, for instance, for the upcoming two to three quarters? Raymond A. Jean: Yes, we’ve seen some increases, nothing major. We follow two indices real closely, CDI and Western Plastic News and sometimes they are out of sync with one anther. But the good news there is that we do have adjustments in our contracts so on a monthly basis we adjust to whatever the price of PVC is. Analyst for Peter Lisnic – Robert W. Baird: When you did some of the plant moves this past quarter shuttering the Alabama mill or consolidating the facilities, how much cost was incurred in the quarter? Can you break that out? Raymond A. Jean: We didn’t isolate that John, certainly we had some but it wasn’t big. Remember we didn’t shutter that plant, what we did there was we mothballed the line so it was more a matter of perhaps incurring some minimal severance cost and unfortunately laying off some people. Analyst for Peter Lisnic – Robert W. Baird: But it wasn’t a major $2 million type expense or anything like that. Raymond A. Jean: No.

Your next question comes from Robert Kelly - Sidoti & Co.. Robert Kelly - Sidoti & Co.: As far as the second half assumptions for operating income, are you still using a $1.20 per pound for Nichols? Raymond A. Jean: A $1.20 per pound for LME, no, I think that’s been nudged up from a $1.20. Right now, it’s $1.33 to $1.35. I round numbers, without the Midwest premium. No, it’s higher than that. Robert Kelly - Sidoti & Co.: You work the higher numbers into your forecast? Raymond A. Jean: Yes, we do. Robert Kelly - Sidoti & Co.: As far as the plant consolidations, does this cover you for some time or are there more opportunities to consolidate or maybe shutter some idle capacity? Raymond A. Jean: Never say never but given where we are with builds right now, we’re rocking along the bottom so to speak. Again, I made reference of this elusive trough that we keep reading about. No one really seems to know when we’re going to hit the bottom but the way we pick up on it in talking to our customers, I think we’re going to remain at this level for some time. We’re not looking right now and not planning to shutter another one. Robert Kelly - Sidoti & Co.: The $24 million that you expect, when will that come to you? Do you have any visibility of that? Thomas M. Walker: Yes, Bob. There’s two pieces of it. One is the true-up one that converts, that’s about $5 million. That will be coming presently, that’s supposed to be paid within 45 days of the deal, so that will be coming presently. The other, the larger portion in the $20 million or so range is the true-up on the tax on the spin-off. It’s going to take us a while to validate that tax, we have to value all the businesses and all the assets within the businesses in order to do that. We have a valuation company in here as we speak doing that valuation. It will be a little bit later, a little bit later.

Your next question comes from John Kasprzak Jr. - BB & T. John Kasprzak Jr. - BB & T: Can you give us some idea of within Engineered Products, what your utilization rate is, even now with the seasonal pick up in the spring? Thomas M. Walker: It’s low. I don’t have one number to throw back at you but we’re probably in the 50% to 60% range. The pick-up has been very recent, it’s an April-May kind of phenomenon. John Kasprzak Jr. - BB & T: Right, and that’s just a seasonal issue, obviously we’ve been saying the housing market is still weak, so there’s no underlying. Raymond A. Jean: No, there’s no secular upturn at all. John Kasprzak Jr. - BB & T: In terms of getting an update on DNA, run-rate in the numbers, is that $38 million range still a good number. Thomas M. Walker: Yes. It is. John Kasprzak Jr. - BB & T: And that was CAPEX also? Is $15 million or so still a good number? Thomas M. Walker: I think I would use both of those. We might shade up a little bit higher than that on the capital. We’ve been saying $15 to $20 million but it’s probably going to be closer to the $15 million, maybe a little bit over that. Yes, the DNA is $38 million a year so we got another $19 million to go. John Kasprzak Jr. - BB & T: On acquisitions, in this severe market downturn, are you seeing more opportunities, are prices coming down to more reasonable levels, maybe you can talk about the landscape for acquisitions. Raymond A. Jean: Yes, there’s certainly a pick-up in activity. I like to think of acquisitions as a five-step process. You’ve got identification, you initiate, you negotiate, you close, and then you integrate. We’re certainly well along on the identification. We’ve got our roadmap so to speak, we’re making approaches, and we’ve initiated a number of discussions. We’re very encouraged by the opportunities that we believe we’ll be there for us in the next year.

Your next question comes from [Craig Bettle]. [Craig Bettle]: In your press release, you talk about higher overall sales in third quarter for the Engineered Products, is that just a purely seasonal uptick? Raymond A. Jean: Yes, that’s the way we view it. I think we’re benefiting from some of the things that we mentioned in terms of new program initiatives and so forth. Unfortunately, six months ago, we thought that the trough to the housing downturn would have been, initially it was going to be the first quarter, and then it was the second quarter, and now it’s the fourth quarter. There’s just no secular uptick whatsoever. We’re seeing seasonal and we’re seeing the growth certainly of our new initiatives. We continue to do better overseas. We’ve had some solid programs there and of course, we’ve got our solar panels business which is growing by double digits. On balance, we remain optimistic that we’re going to have a stronger second half. [Craig Bettle]: You were talking about receiving your business license in China. You said that you should have that operational by the year-end. Is that fiscal year-end or calendar? Raymond A. Jean: Calendar. [Craig Bettle]: How long do you think that will take once you’re up there to get that ramped up? Raymond A. Jean: I would think four to six months we should be making a good amount of product, after the start-up, of course. Thomas M. Walker: That investment is secured by a long-term contract with a major, maybe the leading solar panel producer for their plant in Malaysia. We would get very quickly into supplying that contract need. Operationally, we should be able to get up to speed fairly quickly.

Your next question comes from [Justin Busso]. [Justin Busso]: If you go back to the acquisitions for a second and talk maybe a little bit more about the specific sectors or types of acquisitions you are thinking about, maybe the overall size you would be considering? Raymond A. Jean: Certainly, I’ll take the latter here. In terms of size, I think we’ve got great flexibility. The cash we have on hand, we’ve got a $270 million line of credit ready to go and $100 million, $200 million we can certainly do. In some ways, I prefer the $50 to $100 million than the smaller ones but we’ll certainly entertain the smaller ones as well. We haven’t ruled things out. If it makes good, strategic sense, love bolt-on acquisitions to our current business platforms because it’s far less risky. You can put together some very strong integration teams and you can do it fairly quickly. Bolt-on acquisitions is what we’re giving first priority to but certainly standalone businesses that play where we play, we certainly have a good appetite for $100 million, $200 million. I’m not ruling out something bigger, I’m just saying that I would view something like that as in our sweet spot. Thomas M. Walker: I would just like to add to that when we did the spin-off road shows, we were very open with that. Our financial objective is to keep our leverage at two times EBITDA. It might go a little bit higher than that. Of course, we would be acquiring EBITDA so that would give you a sense in order of magnitude what we might be looking at. [Justin Busso]: And these would all be in Engineered Products, right? Raymond A. Jean: That is definitely our first priority, absolutely. [Justin Busso]: And then given the issue with the options at the time of this spin-off, can you tell me how many options you have outstanding and what’s the weighted average strike price? Raymond A. Jean: Well, the average strike price is easy, I think that’s $15.02. That’s very precise. Thomas M. Walker: I don’t have the number but what I can help you with if you’re trying to get to dilution going forward, if that’s your question, the dilution of those will probably be a little bit less than half a million. We didn’t have any dilution this quarter because we ran at a loss all-in and you don’t dilute when you do that. Going forward for the options, it will probably be around, a little bit less than a half a million, depending on the price in the marketplace, of course. [Justin Busso]: Right, and finally on receivables, the absolute dollar number looked maybe a bit high although I don’t have great year-to-year information, is there anything going on there that might be unusual timing issues? Thomas M. Walker: No, in receivables, there’s no issues. There’s no issues, the conversion cycle is 31 days, which is really, really good. But the one thing in the balance sheet that I could point out that is really unusual is that we have very significant swing and deferred income taxes. When we did this transaction, we went through a process of reorganization that allows us to step up the basis in our assets so that we’ll be able to amortize a significant amount of assets over the next years, 15 or more, and that gives rise to a $60 million tax benefit. So you see a huge swing in, we go from a deferred income tax liability of $34 million last year to an asset of $28 million this year. That’s the biggest move, other than the cash of course, in the balance sheet.

: John Tumazos - John Tumazos Independent Research, LLC: It’s very impressive that you had a 7.3% or 7.5% operating margin with the $15.3 million in income in the tough climate. I see just $3.4 million in eliminations so there’s no double count. The two businesses basically run separately. I just want to congratulate you, its a good margin. How much of the cost of $195 million were purchased scrap and purchased raw materials for the Engineered Products? Raymond A. Jean: We’ll have to talk John, I’m not sure if I can help you all that much. John Tumazos - John Tumazos Independent Research, LLC: It looks like you have a 25% margin excluding purchase materials. Raymond A. Jean: In Engineered Products, we don’t have any scrap purchases. That would be on the aluminum side. John Tumazos - John Tumazos Independent Research, LLC: But you’re buying finished product? You’re buying the ingredients for the window. Raymond A. Jean: Correct, we’re buying wood, we’re buying resin, PVC resin. We’re buying steel, stainless, hot roll, and we’re buying butyl rubbers. It’s a wide range of raw material sources. John Tumazos - John Tumazos Independent Research, LLC: Are raw materials two-thirds of the costs? Raymond A. Jean: No, they’re not. It’s closer to 50%. But on the aluminum side is where you get into a higher raw material and that is all, our aluminum business it is all scrap based. Or at least 95% of our molten metal is recycled aluminum. There the raw material cost as a percentage of sales is in the 60% range. John Tumazos - John Tumazos Independent Research, LLC: How much will your corporate and other be going forward when the reorganization is complete? Thomas M. Walker: Well, one of the things that I focused on earlier, in the current quarter, we ran $31.5 million at corporate. About $26 million of that is transaction related. If you back that out, we’re already down to that $5 million, $5.5 million, or a little bit more running rate. When we did the road shows, we said on a pro forma basis we’d get to $20 million on the year, so we’re pretty close already. We’ll have some drips and drabs as we go forward and there’s some things we still have to do. I’m pretty confident we’re going to get down to that rate pretty soon. John Tumazos - John Tumazos Independent Research, LLC: Should we allocate about half of that to each segment? Thomas M. Walker: Well, we actually don’t. It’s like half a Tom Walker. It’s really corporate expenses so that’s why we don’t allocate it to the business units. We show those separately but I guess you could if you needed to.

Your last question comes from William Baldwin – Baldwin Anthony & McIntyre. William Baldwin - Baldwin Anthony & McIntyre: On the consolidated statement of income, it shows other net at $4.242 million. Tom, can you indicate what that’s comprised of? We’re on Page 8. Thomas M. Walker: It’s the rabbi trust. There are a lot of unusual things going on. This is probably the most unusual. We have a rabbi trust that had stock of Quanex Corporation as its assets and that’s set up for cert and some retirement kinds of things. It received on the merger and spin-off, just like the shareholders did. It shared the stock in BP Spinco and $39.20. That represents $4 million plus of unusual income for the company. William Baldwin - Baldwin Anthony & McIntyre: That will pretty much be down to zero going forward. Thomas M. Walker: Yes. From a cash flow standpoint, we’ll actually be able to potentially remove some of that cash into the BP Spinco statements. William Baldwin - Baldwin Anthony & McIntyre: So not all of that will accrue to the rabbi trust? Thomas M. Walker: It will initially go to the rabbi trust but we will have to make a decision as to whether we pull some of that out, which we could do. William Baldwin - Baldwin Anthony & McIntyre: Tom, in looking at your recurring numbers, the $0.17 a share, can you indicate what your tax accrual rate was to come up with that $0.17, what would have been the pro forma tax rate? Thomas M. Walker: The tax rate as you might imagine is another very unusual thing. It’s unusually high because there were so many costs that were non-deductable pursuant to the transaction, banker fees being the most significant. Our full year effective rate will be 39.5%, 3% of that is for the transaction cost so on a running rate basis we’ll be at 36.5%. William Baldwin - Baldwin Anthony & McIntyre: And for the second quarter, what would that rate have been to come up with the $0.17? Thomas M. Walker: Well, what you do is look at each quarter and then you use an average for the year. We don’t disclose the particular quarter but the way you account for it is, you take every quarter and average the whole year and that’s the number you use. In actual fact we lost money so we wouldn’t be paying taxes in the first quarter here all-in. But when you look at the whole year, then you have to account for it on that basis. The direct answer is 39.5%. William Baldwin - Baldwin Anthony & McIntyre: So to arrive at the $0.17 recurring number, we have a roughly 39.5% tax rate that was utilized. Thomas M. Walker: Yes, that’s correct. Raymond A. Jean: The uncertainties surrounding today’s current economic conditions including the health of the credit markets, the reduction of home equity values, the severity and length of the economic contractions, and the significant impact on all of us by energy cost increases leaves little doubt that we are going to be put to the task over the coming quarters. However, a new company is sitting with a comfortable cash balance, essentially no debt, an untapped $270 million revolver, and very small capsular expenditure requirements. Although the housing market has yet to stabilize, we know the long term prospects of our end markets remain excellent. We are well-positioned, to not only to out-perform them, but to take advantage of our financial capabilities to add to our profile. The vision for Quanex Building Products is to become North America’s leading manufacturer of engineered materials and components sold to OEMs and distributors of building products. We will grow faster than the served markets through leading edge capabilities that drive new program initiatives and products. We will increase the size of its footprint by pursuing product, process and distribution adjacencies in building products markets through its proactive acquisition process. It will grow shareholder returns through a combination of organic growth and strategic acquisitions always mindful that return on invested capital is a key financial metric that holds a strong correlation to value creation. That concludes today’s call. Thanks for joining us.