Floyd Sherman - Chief Executive Officer Charles Horn - Senior Vice President and Chief Financial Officer Katie Murphy - Director of Financial Reporting

Nishu Sood - Deutsche Bank Robert Manowitz – RBS Walter Branson - Regiment Capital Nitin Dahiya - Lehman Brothers Rob [Joss] with Van Kampen Investments Analyst for Keith Hughes– Sun Trust Tom Hayes - Piper Jaffray Seth Harvey – UBS Brian Sydale – Bank of New York Jay McCanless - FTN Midwest Michael [Accent] – Suntrust

Hello and welcome to Builders FirstSource fourth quarter and year end 2007 earnings conference call. You host for today’s call is Floyd Sherman, Chief Executive Officer. (Operator Instructions) I would like to turn the call over to Katie Murphy, Director of Financial Reporting. Please go ahead.

Good morning and thank you for joining us to discuss our fourth quarter and year end 2007 financial results. We issued a press release after the market closed yesterday. If you don’t have a copy you can find it on our website at www.bldr.com. Before we begin, I would like to remind you that during the course of this conference call management may make statements concerning the company’s future prospects, business strategies and industry trends. Such statements are considered forward-looking statements under the Private Securities Litigation Reform Act of 1995 and are subject to certain risks and uncertainties which could cause actual results to differ materially from expectations. Please refer to our most recent Form-10K filed with the Securities and Exchange Commission and other reports filed with the SEC for more information on those risks. The company undertakes no obligations to publicly update or revise any forward-looking statements. We have provided reconciliations of non-GAAP financial measures to their GAAP equivalent in our earnings press release and detailed explanations of non-GAAP financial measures in our Form 8-K filed yesterday, both of which are available on our website. At this time I will turn the call over to Floyd Sherman.

Thank you, Katie. Good morning and welcome to our fourth quarter and fiscal year 2007 earnings call. Joining me from our management team is Charles Horn, Senior VP and Chief Financial Officer. I will start with a recap of fiscal year 2007. I will then turn the call over to Charles who will discuss our fourth quarter financial results in more detail. After my closing comments regarding our outlook, we will take your questions. Fiscal year 2007 was an extremely challenging year. The year started with housing starts slightly over 1.6 million units on a seasonally adjusted annualized basis and ended with housing starts slightly over 1 million units, a 37.5% decrease. In addition, market prices for lumber and lumber sheet goods in 2007 were on average 14% lower than 2006. In response, we have actively expanded into the light industrial and commercial segments, an attempt to mitigate the decline in single family housing activity. We are seeing success in certain markets and hope to grow this business for the long term. In addition, throughout the continued deterioration in the housing market, we have maintained a clear focus on reducing operating costs, improving operating efficiencies and maintaining positive cash flow. We have reduced our SG&A expenses by almost 15% in 2007. The largest component of the decrease in SG&A have been from a reduction in salaries and benefits as a result of an 18% decrease in full time equivalent headcount this year and 36% since March 2006, when the housing correction began. The reduction in the headcount has not been reactionary but a thoughtful flexing of workforce in response to lower sales volumes as well as the deployment of best practices creating a more efficient organization. We are being careful to not cut so deep that we impair our long-term value by not being able to quickly respond to improved homebuilding condition when the recovery occurs. We also understand that strong liquidity is important in difficult times. We maintained positive cash flow throughout the year and ended the year with almost $100 million in cash even when paying $40 million to permanently retire our term loan. We also closed on a new $350 million revolving credit facility late in the fourth quarter. With the available borrowing capacity under this facility at the end of the year of approximately a $120 million, we had a combined liquidity of almost $220 million. This strong liquidity should help us weather the current downturn and to take advantage of opportunities to grow the company as they arise. I will now walk you through our fiscal year 2007 results. Our fiscal year 2007 sales were $1.5925 billion, down 28.9% while housing activity in our markets decreased 34.1%. In addition, lower market prices for commodity lumber and lumber sheet goods reduced our total sales by approximately 2.7%. As for the controllable sales drivers, we continued to gain market share which added an estimated 6.1 percentage points to sales for the year. Also new facilities contributed an incremental 1.8% which includes the acquisition of Bama Truss. The acquisition of Bama Truss expanded our presence in multi family and commercial construction and added steel roof truss manufacturing capability. Our gross margin fell 170 basis points to 24.5%. We felt margin compressions across all of our product lines, but the declines were primarily due to the de-leveraging of lower sales volumes to fixed cost of sales, lower lumber and lumber sheet good prices and the rising percentage of installed sales which carry lower gross margins. Net loss was $23.8 million compared to net income of $68.9 million in 2006. Included in the net loss were after-tax non-cash charges of $18.8 million related to the impairment of goodwill and fixed assets and write-off of deferred loan cost. Net loss per diluted share was $0.68 including $0.55 related to goodwill impairment, asset impairments, write-off a deferred finance cost and incremental stock compensation expenses. Adjusted EBITDA which has been adjusted for stock compensation expense was $46.6 million compared to $173.1 million. The difficult market environment is definitely reflected in our result for 2007, but we have implemented numerous operating efficiencies and strengthened our liquidity throughout the year which will make us stronger in the long term. I am impressed as always with the level of dedication and commitment of our employees. They have risen to the challenges of the current market downturn with continued focus and diligence. I will now turn the call over to Charles who will review the fourth quarter financial results.

Thank you, Floyd. Before I speak to our fourth quarter results I wanted to highlight that we closed on a new $350 million revolving credit facility during the fourth quarter. This new facility releases us from some of the restrictive financial covenants under our previous agreements and strengthens our liquidity. The borrowing capacity under the new facility at December 31, 2007 was approximately $121 million and is determined under a borrowing base formula. When coupled with our cash on hand, our overall availability was nearly $220 million. This strong liquidity will help us better manage our business during the downturn and afford us the ability to take advantage of opportunities should they arise. Now I will address our fourth quarter results. Beginning with sales; looking at our fourth quarter results we reported sales of $302.3 million, a decrease to 31.1% compared to $438.6 million for the same 2006 period. Breaking down the year-over-year change in fourth quarter sales, we estimate that housing starts for our markets declines by 34.7% compared to the same period in 2006. Florida and Atlanta, Georgia have been particularly hard hit by the decline in starts. Of our markets Atlanta seems to have been affected the most by rising foreclosure rates particularly in the third and fourth quarters. Compared to the fourth quarter last year, nationwide commodity lumber and lumber sheet good prices declined approximately 1.5 %. The impact on our net sales was less than 1% for the quarter. Commodity prices have been at a stable low level for the majority of 2007. As such we expect the year-over-year impact on sales and profitability in 2008 to be nominal. Market share gains offset our sales decline by an estimated 2.4 percentage points. We believe our value added products and services give us a competitive advantage and help us to gain new business and maintain our current customer base during the downturn. However, our tightened credit standards have limited our ability to actively pursue certain new customers. Finally, new operations offset our sales decline by 1.5% for the fourth quarter. We continued to improve our sales mix during the quarter transitioning from commodity items to higher margin value-added products and services but we also felt the negative impact of decreased housing starts across all of our product categories. Lumber and lumber sheet goods declined $48.7 million or 40% and declined to 24.5% of our total sales. The decrease was attributed to lower unit volumes and prices which negatively affected us by $43.2 million and $5.5 million respectively. Prefabricated components decreased 29.3% from the prior year quarter due to a combination of lower volume and lower raw material prices. This product category represented 20.1% of total sales for the quarter. Windows and doors were down 27.9% and represented 24.6% of total sales. Millwork decreased 26% and represented 10.5% of total sales. Other building products and services decreased 26.7% and represented 20.3% of total sales. The sales decline was partially mitigated by our continued growth in our installation services. Please refer to the table included in our press release for additional fourth quarter and fiscal year sales data by product category. Gross margins; our overall gross margin decreased to 23% for the quarter from 26% in the fourth quarter of 2006. The decline was in all major product categories. The de-leveraging of fixed costc within our manufacturing operations against lower sales volumes lowered gross margins by approximately 113 basis points. Lower prices on commodity lumber products added 70 basis points to the decline. In addition, the continued growth of our installed services business which carries lower gross margin percentages lowered our overall gross margins. We are experiencing increased competitive pressure within our markets which will likely lower gross margins in 2008 absent an improvement in market conditions. Our SG&A expense was $85.4 million for the fourth quarter 2007, down $14 million compared to Q4 2006. We continue to totally control our operating cost reducing our SG&A by 14.1%. Our salaries and benefits expense fell $11.8 million or 19.3% from the fourth quarter of 2006 due primarily to a reduction in our average full time equivalent headcount of 21%. Part of this reduction in headcount was from closing some of our regional headquarters and idling production in certain facilities in order to optimize utilization across our organization. As market conditions improve, we will increase our production when it is warranted. We will continue to evaluate end market consolidations based up on specific market conditions. I will note that also included in SG&A expense was 2.1 million in severance and other charges during the quarter. Interest expense was $7.9 million for the fourth quarter, up almost $1 million from the fourth quarter 2006. The increase was primarily attributable to the $1.6 million write-off of deferred loan cost due to permanent retirement of the term loan and the cancellation of the $110 million revolving credit facility and the $15 million pre-funded letter of credit facility. These items were partially offset by lower interest expense due to lower debt balances during Q4 2007. Our effective tax rate decreased to 37.3% in the current quarter. The difference from Q4 2006 is primarily due to the fact that we established approximately $900,000 of additional reserves in the fourth quarter of 2006 in connection with various tax audits. Net income for the fourth was $20.4 million. There was a loss of $20.4 million or $0.58 per diluted share including $0.20 related to goodwill and impairment assets of assets in the write-off at deferred loan cost and another $0.04 related to severance and other charges in the quarter compared to net income at $3.9 million or $0.11 per diluted share in the same period last year. Diluted weighted average shares outstanding for the quarter were $35.1 million compared to $36.1 million in the same quarterly period last year. Adjusted EBITDA for the 2007 fourth quarter was a loss of $8.1 million compared to income of $21.9 million in the prior year quarter. Average working capital for the fourth quarter was 13.8% of sales compared to 11.6% in 2006. We continued to be very focused on working capital management. However the continued decline in market conditions has negatively impacted our days sales outstanding by almost four days. As the economic conditions continued to deteriorate, we anticipate the days sales outstanding to continue to worsen. We are doing everything we can to mitigate any increase in DSOs and have tightened our credit standards in response. We have seen a slight decrease in our inventory turns as we endeavor to respond to declining sales levels. We have slightly increased our accounts payable days as we continue to work with our vendors to negotiate favorable payment terms. As of December 31, 2007 cash on hand was $97.6 million and funded debt was $275 million. During the fourth quarter we permanently repaid $40 million of term loans in connection with our new credit facility. Our keen focus to conserve capital by increasing operating efficiencies and reducing expense allowed us to maintain a healthy operating cash flow at $71.5 million for the year. Capital expenditures were $10.1 million for the year, over 17 million less than 2006. The combination allowed us to generate free cash flow, defined as operating cash flow less capital expenditures, of $61.4 million for 2007. I will now turn the call back over to Floyd for his closing comments.

Thank you, Charles. While the home building industry has experienced an unprecedented decline of demand, I still believe that the long term outlook for the housing industry is very positive due to the growth and the underlying demographics. Until housing demand stabilizes we will manage our business day-to-day in order to meet customer needs. To help you through the market uncertainties, we’ll continue to provide updated housing permit and commodity price data on our website each month. This data is summarized and based on publicly available information. We believe our market leadership, financial strength and industry leading scale affords us the ability to manage through the downturn and out perform our peers. We have fortified our balance sheet by continuing generate cash and improving our liquidity further strengthening our financial position. We are leveraging our deep industry knowledge to diversify our product offering and broaden our customer base, as evidenced by the recent acquisition of Bama Truss. We are operating more efficiently without sacrificing quality and customer service. We will continue to work diligently and thoughtfully to achieve the appropriate balance of short term cost reductions while maintaining the expertise to grow the business when market conditions improve. We want to avoid taking steps that will limit our ability to compete and create long-term shareholder value. Finally and perhaps more importantly, I continue to have a great deal of confidence in the abilities of the entire Builders FirstSource and we will continue to work hard on improving all facets of our business. I will now turn the call over to the operator for Q-and-A.

Thank you. (Operator Instructions) Our first question from Nishu Sood with Deutsche Bank. Nishu Sood - Deutsche Bank: Thanks. Good morning, guys.

Good morning.

Good morning. Nishu Sood - Deutsche Bank: The question I have is on cash flow. In 2007, you folks certainly did an impressive job of sustaining cash flows, however, if you kind of look at what’s happened in 2007, you obviously were able to reduce your working capital but as of the fourth quarter, you are now in a negative EBITDA position. So just looking ahead, absent a recovery in demand, do you think you will be able to sustain positive cash flow going forward in 2008?

Well, Nishu if we break it down even to Q4, even though it was negative EBITDA, it was positive free cash flow and then if we break down the quarter, I think our focus will be to try to mitigate the declines in EBITDA while at the same time, trying to monetize the assets we have on the balance sheet so far to stimulate free cash flow. We will be very focused on pulling back our CapEx. I think we are targeting nearly $7 million to $10 million for 2008 and we will respond and pull that down as needed. So even though Q4 was very difficult, we did generate good free cash flow and I think we will endeavor to try to do so in 2008 as well. Nishu Sood - Deutsche Bank: Second question I had was you were mentioning the increased emphasis on the light industrial, the commercial markets. I know a lot of that expertise you have been gaining from your acquisition of Bama Truss. How much of your sales percentage-wise is that end market now and how much would you target it for over the next year or two?

Right now on a current basis, it probably is somewhere between 2% to 3% of our sales, but we are also leveraging what we do at Bama Truss into one of our other market areas and it’s really helping us gain a lot of new customer base in that particular market and if I probably take those sales and add in, I would guess our light commercial multi-family business, Charles was probably now getting up close to 5% of our sales in total and growing and we are also attempting to take and apply, use the same leverage in our other operating groups. Nishu Sood - Deutsche Bank: Okay. And just final question; you mentioned that you’ve been mothballing a couple of facilities. I was just kind of wondering if you could give us some numbers, maybe I just missed them, on the number of facilities you have mothballed and/or if you have actually just shut any down outright?

For Q4, we had mothballed three; one of which we are actually trying to sell at this point. We have actually idled 11 operations which is where we have had the miller facilities, something within the location where the locations exists but the operation no longer does. Nishu Sood - Deutsche Bank: So is that three in the fourth quarter and then 11 cumulatively or am I --?

No, it would be 11 if we had actually idled like function within a facility, such as a millwork door shop within a facility. The facility would still exist and have lumber and other products but we would not have a door shop any longer.

And what we will do is then consolidate a number of similar locations and make one efficient operation that can supply multiple locations. So in the fourth quarter, there were 11 of those and three mothballs. Nishu Sood - Deutsche Bank: Got it and what’s the total to date through the downturn on those two?

That basically, we really started an earnest in the fourth quarter. There were a couple of others earlier in the year but…

Probably around four previously. Nishu Sood - Deutsche Bank: Okay, great. Thanks a lot.

Our next question comes from Robert Manowitz with RBS. Robert Manowitz – RBS: Hi, good morning.

Good morning. Robert Manowitz – RBS: I was wondering if you could share with us your experience out of the pricing pressure side of things. When does that typically reverse itself, cycles? Is it when the volumes actually come back or is it earlier than that as participants adjust to the levels of activity?

Well, I believe if the current conditions extend out into 2009 and we see a substantive loss of capacity in the industry, then I think prices may begin to firm up. We are starting to see some indications of prices firming up in the commodity, in the SPF market, the OSB market is still a wash in the capacity and some additional new capacity coming on line, I don’t think that we will see a lot of improvement on the panel side of the business but in a lot of our other products that we manufacture, if capacity really begins pulling out, I think we will start seeing improved margins on the component side of the business, but the real substantive change will occur once the building gets back to a more normal state and when I say normal, I think that’s in the above the billion and a half housing production basis. Robert Manowitz – RBS: Right, and as I look at the revenue side in the fourth quarter by segment, the sheet goods, which are obviously used earlier in the construction process were weaker than your other categories. Is it fair to read into that that the other three categories will start to see comparable declines as the fourth quarter starts progress for the first and second quarters of ‘08 or is that not likely?

You know Rob I think it’s probably more of a case, so you didn’t get more competition within that category, more suppliers of that particular type of product. Robert Manowitz – RBS: So you just didn’t pick up market share there where your market gains were actually allocated to three of those categories -- is that the way to think about it?

It tends to be our lowest gross margin category, so there is a limit as to how far we will chase the processing on the category for not picking up other product sales. Robert Manowitz – RBS: Fair enough. My last question is, as you look at your cash balance and your debt load and the bonds trading at a fairly deep discount to par obviously there is four years left before maturity, but how would you gauge your interests in allocating some of that cash towards debt repayment?

Rob this is something we consider if we look at it from a waterfall basis, we still look at maintaining liquidity to protect on the downturn, the second thing we look at is legitimate acquisitions if they make sense, the third in that waterfall would be, do we want to be opportunistic and take advantage of buying some of the bonds back and then the fourth would be more do we -- use some of our liquidity to buy back shares, so that will be the order of priority I’ll place that. Robert Manowitz – RBS: As one addendum to that question, is there anything that prevents you from using the ABL line to pay off bonds at a discount?

There are a lot of flexibilities built into the ABL agreement. We would have to significantly reduce our liquidity before we would have any restrictions preventing us from doing so. Robert Manowitz – RBS: Alright, well thank you and good luck

Thank you.

I will go next to Walter Branson with Regiment Capital. Walter Branson - Regiment Capital: Thanks. Actually I had a couple of things. In your preannouncement a couple of weeks ago you indicated a net loss within the range of what you actually reported actually building towards my end of that, but you would indicate in a $11 million impairment charge which came in at only $8.7 million. So I guess my question is did you -- offsetting the lower impairment charge, higher expense than you had anticipated and aside from severance charge were there any other one time items that were unanticipated?

Actually Walter it came in exactly the same. We just broke it out separately. I think you are looking at the goodwill and fixed assets and the deferred loan cost, add those two together, so we came in exactly as what we said in the preannouncement. Walter Branson - Regiment Capital: I wanted to ask you about share gains. Your share gains were the relatively low level in the fourth quarter compared to what you had in the past. Are you seeing capacity going out of market yet because I would think that would improve your share gains; or is that still not there yet? Why are the share gains not what you…

Well we really haven’t seen any appreciable loss of any capacity where there is a lot of conservation and we are starting to hear of people considering shutting down operations, haven’t really started taking place yet, but I would anticipate we will see that going forward. – I think probably the most limiting factor in our taking market share is our willingness to give our product away I think and manage our credit. I think that probably has affected our market share gain more than anything else. Charles you may want to add to that, but the two factors of price management and credit management is really, really important in this type of environment and you have to look at those things very carefully because as Charles said, we are going to look at maintaining liquidity and making sure that we operate a business that provides us good financial stability as well as flexibility.

Walter you have seen bankruptcies for homebuilders going up. We expect that trend to continue. So we have been very active in trying to manage our credit policies, we pulled in credit lines with several customers and in doing so, we do forego some market share gains in the trade-off but not willing to take a credit risk. Walter Branson - Regiment Capital: And then my last question is in regard to cost reduction. I think you did a good job pulling dollars out of SG&A in 2007 kind of consensus for housing starts in 2008 nationally is a further decline of 25% or more. Can you partially offset the potential impact on your revenue from that kind of a decline with a similar SG&A reduction in 2008 or have you kind of reached the end of your ability to do that?

I think there is always the ability to flex SG&A commensurate with volume declines. I mean as sales volume goes down it is less variable and more fixed in nature. If you look at our fourth quarter, our SG&A was about 45% variable and about 55% fixed. I would expect that trend to be somewhat consistent for ’08, maybe slightly less variable but we will continue to endeavor to pull back on obviously salaries and wages where appropriate. What we don’t want to do is to pull back too much on our fixed cost such as our occupancy. We want to keep facilities; we want to keep the ability to respond when the market comes back. We don’t want to be premature and exit the market to get out of and then maybe losing from an EBITDA standpoint. So we are going to be very cognitive to hold capacity and make sure we idle where appropriate, but not impair our ability to respond to a recovery.

One of the other things Charles that’s really beginning to affect our SG&A is the difference in the rising fuel costs. Fuel cost was a major cost item for us and that’s an SG&A expense in our delivery side and we are not really anticipating any decrease in fuel costs throughout ’08, in fact, what we are seeing is that we can anticipate another 10% increase or so going forward. Walter Branson - Regiment Capital: Thank you.

We will take our next question from Nitin Dahiya with Lehman Brothers. Nitin Dahiya - Lehman Brothers: Good morning. On DSOs. I mean obviously the increase you said is partly because of competitive pressures. Is it just a competitive response or is it also that some of your customers are having problems paying on time?

Obviously, the payment on time; we had slipped our DSO about four days and that has in some cases made us respond by pulling back on our credit lines as a way to mitigate that. So that’s part of it but a lot of margin compression is just coming through pure competitive pressures. When you get into a situation where starts are down so much and many smaller competitors are struggling for liquidity, they start converting their inventory to cash to survive. So, on categories such as lumber and that really puts a tremendous amount of pressure as they sell almost for variable cost. Nitin Dahiya - Lehman Brothers: I think I was more focused on the increasing DSOs, is that like a competitive response from you or is it that the terms have not changed but just that people are not paying?

That is correct. We have not changed our terms. That is just a response where people are trying to extend our payment days. Nitin Dahiya - Lehman Brothers: I see, but is it a bad debt expense associated with that that we have to be worried about?

We have increased our provision, our bad debt expense increased to 30 basis points in 2007 versus about 15 in 2006, so we had responded and that is reflected in our results that we have to higher bad debt expense. Nitin Dahiya - Lehman Brothers: I see and also the increase in inventory days is that also just because of the slow down? Do we expect that to come back down?

On the AP days? Nitin Dahiya - Lehman Brothers: Sorry, inventory days.

Well primarily the is there is we struggle to get ahead of these declining sales volumes you get an order from a customer; you order the material and then the PO from the customer gets cancelled. So to a certain degree, you have to assume a certain order cancellation rate to try to get ahead of decline in sales volume and it took us a while to get ahead of it. I think we are doing a good job, we have centralized many of our purchasing functions and I think that’s allowing us to pull that back into check. Nitin Dahiya - Lehman Brothers: But Charles, from a 2008 perspective I mean with all DSOs and AP days moving and obviously sales being down what should we be looking at from our working capital cash flow point of view for ’08?

I think Nitin what we are trying to do is maintain the working capital percentage may be slightly improve it and then it will based upon what your assumption is for sales levels. Nitin Dahiya - Lehman Brothers: So no major changes and that’s good.

Correct Nitin Dahiya - Lehman Brothers: Just moving on to the right sizing of the business if you like, I mean you have taken out some capacity or shuttered some. What kind of start level is your business sized for today and where do you want to be at?

We have the physical capacity to do over $2 billion in revenues. I mean it’s a situation where you can do end market consolidations but exiting the market doesn’t improve your utilization anywhere else, so when the market is under performing you adjust to close it where the high cash cost doesn’t really help us because it doesn’t improve us anywhere else. So we do have a lot of capacity or utilization levels run in the 60s now. We would like to see that improve, but again like I said earlier we want to be prudent in where we downsized in what we do. Nitin Dahiya - Lehman Brothers: From a fixed cost basis, I mean obviously if you are not taking out the plant but I am sure we can lay off some people. What kind of order of magnitude savings on the fixed cost side can we be looking at considering the fact that we are not really not exiting markets?

Here at this point we haven’t identified any additional mass volume or closures for 2008 so I don’t know even if there is really a number I can give you on that. Nitin Dahiya - Lehman Brothers: Lastly on acquisition opportunities, I mean are you already seeing some is like really good deals where you can buy some one for probably even a discount to assets or something or net assets or do you think that stage is still go to six months out.

I think it’s still further down the road. I think still people many people want to go back on average three to five years worth of trailing EBITDA to come up with a valuation. I think the market will need to get a little bit worse before it becomes more of a net tangible asset or discount net tangible asset by environment. We did recently do one small acquisition where we paid a substantial discount to net tangible assets. Nitin Dahiya - Lehman Brothers: On the previous question as well around between waiting for such acquisitions versus buying back bonds, I have gathered that you will be much more inclined to wait for these acquisitions and then by the bonds at a 25% discount.

I would say at this point, yes. I mean we will evaluate that, we do think it’s an opportunity, but we would like to see where prices go or how many companies come on the market, are they good quality, and what can we buy them for before we make that decision. Nitin Dahiya - Lehman Brothers: Okay, thank you much.

Thank you.

We will go next to Trey Grooms with Stephens. Trey Grooms - Stephens: Good morning.

Good morning. Trey Grooms – Stephens: So with the commentary that you gave on the price management and credit management that you guys have in place or getting more aggressive on, looking into 2008, do you expect that market share gains will continue to contribute positively to revenues in the year?

Yes.

Yes. Trey Grooms – Stephens: Okay. And can you quantify that at all, I mean in the past we looked at a 8 to 10 number and then obviously things are getting a little bit tougher. Is there anyway you can quantify that a little bit for your expectations?

Obviously, we don’t anticipate it’s going to be at historical levels. So I think it’s going to be a much lower level, it’s more consistent with what you saw in Q4 and what you have seen previously. Trey Grooms – Stephens: Okay. That’s pretty helpful, thank you. And then also Floyd I guess, just kind of getting back to your expertise and been through many of these cycles, can you give us kind of your take on where you see the market, the housing market, where you think it bottoms out and as far as timing and so forth because I know everyday that we go on the outlook seems to get darker and darker, you know I guess the light at the end of the tunnel continues to recede but if you -– could you just give us kind of your thoughts on what you see the housing market doing over the next two years?

I guess my observations or my feelings are that we probably are getting near the bottom. I think that the –- it just seems to feel over the last several months that we are starting to maybe get close to the bottom. I think we are going to go through a period well through this year and into next year at a low level. I don’t really anticipate or it doesn’t seem to right now, I don’t have the feeling that things are going to substantially improve or get worse through 2009, but that’s -– I think that’s -- we are a business that’s really a reactionary business, should conditions improve and I think when the turn comes, it’s going to come very quickly, a lot quicker than it has in previous down cycles, it’s -- I think the buyers are there and I think they are -– that once they see that they can get -– that they have the availability of mortgage money, that prices have stabilized, that they are going to return to the market and the market will reflect and move up quite rapidly. It’s just my feeling about it. Trey Grooms – Stephens: Yeah, that’s helpful. Thank you, guys.

We’ll go next to Rob [Joss] with Van Kampen Investments Rob [Joss] - Van Kampen Investments: Hi, thanks guys. I was wondering just a quick question on your debt structure. Could you give me a breakdown of the revolver, any letters of credit, and then the bond balances?

The revolver is a $350 million asset-backed line of credit. Currently, the borrowing availability is a $120 million based on the borrowing base. Rob [Joss] - Van Kampen Investments: Okay.

We have stand-by letters of credit currently at $17.2 million and that is netted out of the 120 availability I gave you and then we have the $275 million of floating rate notes due in 2012 we currently have swapped about a $100 million notional on that $275 million. Rob [Joss] - Van Kampen Investments: Then what’s actually drawn that on the RC.

We had nothing drawn under the revolving credit facility. Rob [Joss] - Van Kampen Investments: Got you. Okay, about a $120. I am sorry when you said a $120 was available. You said net of the 17 you said?

$100 million in cash correct. Rob [Joss] - Van Kampen Investments: Got you, great thanks.

We’ll take our next question from Keith Hughes with SunTrust. Analyst for Keith Hughes– Sun Trust: Actually this is [Judy Mayer] for Keith Hughes. Just on a bunch of acquisitions and you mention staying in balance sheet looking for opportunities. I know there have been some recent news items at least in the greater Atlanta areas for bankruptcy filings in other dealers. Is this the type of opportunity that you are looking for or would you see this as more of like an opportunity for share gain?

Think it would be Judy, you are out in the background of an area that’s really hurting quite a bit in Atlanta and that’s an area where we have seen a number of companies hurting, we saw one file bankruptcy, number of them are closing facilities and I think we will be looking for in fact we bought one of the small locations out of the companies that filed bankruptcy. So we are always going to look for opportunities but it needs to be where it fits our profile, fits our market, is a good tuck in but again we are looking at it to be a discount to net tangible assets at this point, we are not really interested in paying off of a trailing EBITDA number and so we will look at -- we still believe that the most opportunities will be further down the road, anywhere six to nine months down the road, but foremost valuations really meet the criteria in we are looking for. Judy Mayer – Sun Trust: Okay great thank you.

We’ll go next with Michael Cox for Piper Jaffray Tom Hayes - Piper Jaffray: Hi good morning, this is Tom Hayes for Michael. I was just wondering if you can give a little more color as to what you see as the opportunities in the installed sales business?

I think the installed sales business is a continual growing business. More and more of our operations are getting into installation. I think the growth will be pretty much consistent with what we seen over in 2007, the problem or the thing that we have to be very careful about is to make sure that we have the structure in place so that we can properly control the installation process that we control our costs and we know how to bid the labor component of the job and be able to leverage off in the locations that are doing a successful job on installation, but it’s now literally involving the majority of the products that we carry. Tom Hayes - Piper Jaffray: Okay great. Just another follow up. You had mention as far as these Bama acquisition that you kind of rolled the experiences from that you know another market. Do you plans to expand the presence to other markets throughout the 2008 year.

Yes Tom Hayes - Piper Jaffray: Great, thank you.

Your next question comes from Seth Harvey - UBS. : Good morning

Good morning : I think you said there was a $2.1 million SG&A, restructuring charge and SG&A is that correct?

Correct. : The second was regarding CapEx. I think you had given a 7 to 10 million ’08, how flexible is that?

I think we are getting closer to a maintenance CapEx level there is some flexibility in there which is why I give the range. Not a great deal of expansion in CapEx, we are not looking to green field any new facilities, so I think the bottom end of range would be 7 the top end of the range would be 10. : We kind of heard some other suppliers saying that especially in the southern markets that they have been, they have been seeing projects pushed back that kind of in December had a kind of hard stop. Are you seeing any kind type of pick up in the first quarter or is that kind of behavior continuing?

I would say we’ve seen any up in the first quarter. I think we’ve seen some consistency in the first quarter, at least in terms a sales per day and that’s were we get a little bit of comfort at least we are seeing a little consistency there rather that the continued downward trend that we saw previously.

And we are not seeing the tremendous fluctuation on the day to day basis that we have that we have been seeing prior to this. Seth Harvey – UBS So are you seeing kind of more as people kind of announce their intent to start on a community that they are pulling though with that and not actually kind of as you were saying before you were kind of trying to keep track on inventory seeing some, seeing more on fall through at this point.

It’s hard to answer that. We don’t really track meaningful backlogs; in reality, from the time we receive the PO it could be 30 days to ship or one day to ship. So we don’t really track our backlogs, so its difficult form me to say how we are performing against that and the quantity of orders being shipped out. Well fully diluted to this one, we are not seeing the start the urgent starts we had before. It seems to be more consistent but I can’t really answer the detail question that you are asking, Seth. : And that’s it, thank you.

Your next question comes from Brian [Sydale] with Bank of New York. Brian Sydale – Bank of New York: Hey good morning.

Good morning. Brian Sydale – Bank of New York: Just one confirmation on the new credit facility. Is it a 100% asset-backed or are there any coverage ratio convents embedded within that?

It is a 100% ABL. The only ratio that’s embedded is a fixed coverage ratio of one to one if our minimum availability under the facility drops below $35 million and the $35 million would obviously be covered by our cash of close to a 100 million and then close to the $120 million borrowing capacity we talked about. So, in that scenario we’d have to drop on $220 million to $35 million of minimum before that fixed charge coverage ratio kicks in. Brian Sydale – Bank of New York: Right, okay. Thank you very much.

Thank you.

(Operator Instructions) we’ll go next to Jay McCanless - FTN Midwest. Jay McCanless - FTN Midwest: Hi good morning.

Good morning Jay Jay McCanless - FTN Midwest: When you were discussing the cost of fuel what does that make up of your cost of goods sold on average.

Its in SG&A and its about 1% of sales. Jay McCanless - FTN Midwest: Okay. Do you have any ability to make that up with fuel surcharges in this environment?

No, any attempts that we’ve made have ended up being a collection problem and so we no longer are even attempting it. Jay McCanless - FTN Midwest: I wanted to dig down on the capacity question a little bit more. If I remember correctly prefabricated product is your highest margin category. What are you seeing in terms of competitor capacity in that specific product category, is it increasing, decreasing?

Its decreasing its more in a market-by-market bases. If you look at Florida, the number of truss plants they are going out business are substantially we are seeing a number of truss plants that are closed now. The properties are coming on the market, so its really more of a market by market driven issue.

In some of the markets, Florida as an example, like Charles said we are seeing people taking business deliberately at variable cost and they are really just trying to keep the doors open and so you have respond to that in the market, and it certainly has an effect on the pricing of the product in those markets. Jay McCanless - FTN Midwest: Would you assume that it’s going to continue, they are going to continue to close going forward.

I believe that yes, that’s the case and now at what point time do they try to open, re-open you know I can’t tell you but I think a number of the plants would end up not reopening. It will be just permanently retired so ultimately I think that would be very good for us in the component business. Jay McCanless - FTN Midwest: Looking though it is the downturn, when things start to get better and the first question is on acquisitions. Would you prefer to do acquisitions with either cash or do you think your cost of equity is low enough to where you would consider doing potently share deals.

I think it would depend on the deal but I think we would consider both. Jay McCanless - FTN Midwest: Do you have a preference for either one?

Clearly we thought the smaller though acquisition we would prefer cash, but if there were something of a more meaningful size and I think we would have to consider a combination of both. Jay McCanless - FTN Midwest: Listening to the homebuilders report over the last couple of months they were all indicated, not all of them but the majority of them have indicated that they re trying to produce lower price product. They have done it through discounts of a spec in inventory but they have indicated that going forward they want to have less queues and an overall lower price point. What effect has that had on your business today and what do you think the effects would be over the next two to three years in terms for Builders FirstSource and then also in terms of what new markets or areas you want to expand into?

I think what you are probably hearing is that the builders would like to be able to, as you say streamline reduce the number of SKUs that they offer. Have a more efficient supply channel and ultimately result in lower cost of the product to the consumer, that’s fine with us. Certainly we are in the business, we have over 300,000 active SKUs in our product likelineSo if they are successful in reducing there product offering it means we can get a lot more efficient from a inventory standpoint and the ability to provide a better package to our suppliers and hopefully then bring about an improved cost structure. So I think the fact that the builders want to lower the price to the customer and how they are going about doing it, if they do it through a more efficient product, fewer SKUs, I don’t think that in and of itself is going to lower our gross margins. I think the competitive pressures that we are having and the amount of capacity that exists in the industry is going to be the major contributor to our margin erosion. Some of you may see if differently. Jay McCanless - FTN Midwest: Okay great. Thank you guys.

We’ll take out next question from Michael [Accent] - Suntrust Michael [Accent] - Suntrust: Good morning guys. I want to go back to a comment that you had made earlier on the call that you are going to try to be cash flow positive in 2008. I want to make sure I understood that correctly. I mean, it looks like your CapEx and interest are going to be around 25 million this year and it doesn’t sound like you expect working capital to be a huge source of cash. Sort of looks like the run rate that you are assuming now includes a big improvement in housing starts, EBITDA should be maybe slightly positive. Is there some other item that should be taking to account or are you expecting that EBITDA should improve form the current run rate?

I think the key thing here is to keep in mind that if again, if we keep our percentage of working capital as a percent of sales the same and you assume that the sales volume comes down which is which is what’s driving the lower EBITDA you should monetize some of your cash from your working capital, so that would be one of your offsets towards your cash interest is about $22 million; assume about $7 million of your CapEx and that is what we are trying to make sure we try to achieve positive free cash flow or positive cash flow. Michael [Accent] - Suntrust: Are you expecting any tax refund of any significant size?

We will probably in mid 2008, a tax refund of close of $15 million. Michael [Accent] - Suntrust: Okay great, okay thanks.

At this time there appear to be no more questions. Mr. Sherman I’ll turn the call back over to you for closing remarks.

Okay thank you for joining us today. If you have any further questions please fell to contact Charles Horn.

This concludes the Builders FirstSource conference call. You may now disconnect.