Floyd Sherman - President, Chief Executive Officer Charles Horn - Senior Vice-President and Chief Financial Officer Katie Murfree - Director of Investor Relations and Financial Reporting

Jennifer Kensoli – JP Morgan Nissam Sood - Deutsche Bank Nitin Dahiya – Lehman Brothers Walter Bransin - Regiment Capital Michael Cox – Piper Jaffray Keith Hughes - SunTrust Robert Manowitz – RBS David Manthey - Robert W. Baird Jay Mcchales - FTN Midwest Rob Joss - Van Kampen Investments Russ Stiver - Raymond James Seth Harvey - UBS Jim Wilson – JMP Securities Ken Schlemmel - Wolf Point Capital Ray Lipinski - BB&T Capital Markets Michael Rehaut – JP Morgan

Good day everyone and welcome to Builders FirstSource 2008 first quarter earnings results conference call. Your host for today’s call is Floyd Sherman, Chief Executive Officer. At this time all participants are in a listen-only mode. Later we will conduct a question-and-answer session and instructions will follow at that time. Any reproduction of this call either in whole or in part is not permitted without prior written authorization of Builders FirstSource and as a reminder today’s call is being recorded. At this time I would like to turn the call over to Ms. Katie Murfree, Director of Investor Relations and Financial Reporting who will begin the call; please go ahead maam.

Good morning and thank you for joining us to discuss our first quarter 2008 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 its expectations. Please refer to our most recent Form 10-K filed with the Securities and Exchange Commission and other reports filed with the SEC for more information on those risks. The company undertakes no obligation to publicly update or revise any forward-looking statements. We have provided reconciliations of non-GAAP financial measures to their GAAP equivalents 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 first quarter 2008 earnings call. Joining me from our management team is Charles Horn, Senior Vice-President and Chief Financial Officer. I will start with a note review of the first quarter. I will then turn the call over to Charles who will discuss our first quarter financial results in more detail. After my closing comments regarding our outlook we will take your questions. The macro economic conditions that affect our industry have deteriorated for eight consecutive quarters. From the peak in March 2006 housing starts in our markets are down 48%. In the quarter, housing starts were down 39.1% compared to the first quarter of 2007. We are having a difficult time maintaining margins as pricing become more competitive as conditions continue to deteriorate. We are also seeing a decrease in fixed cost absorption as our manufacturing facilities are below optimal utilization. As a result of these pricing pressures and deleveraging of fixed cost we experienced a 310 basis point decline in margins. Despite these challenges we grew market share by 4.1% in the quarter, had incremental sales from new operations of 1.5% and reduced salaries and benefit expense including stock compensation by 22.3% and selling, general and administrative expenses by 18.4%. I will now turn the call over to Charles who will review the financial results in more detail.

Thank you Floyd, good morning everyone. We reported sales of $270.5 million in the first quarter of 2008, a decrease of 34.2% compared to $411.1 million of the same 2007 period. Breaking down our sales drivers for the quarter compared to the year ago quarter, first we estimate that housing starts within our markets declined approximately 39% compared to the same period in 2007. We lag permits within our markets one month to an assumed start. Second, lower price in our lumbar and lumbar sheet goods had a minimal impact on our sales during the quarter. Third, conversely market share gains contributed approximately four percentage points to our sales and new operations added an estimated 1.5%. We felt the pricing pressure and the negative impact to decrease housing starts across all of our product categories. Breaking down our product categories prefabricated components declined 36% from the first quarter of 2007 due to a combination of lower prices and lower volumes and also declined 19.9% of total sales for the quarter. Windows and doors were down 26.3% and represented 25.2% of total first quarter sales up from 22.5% last year. Lumbar and lumbar sheet goods declined 43.7% to $64.5 million and fell to 23.9% of sales from 27.9% of total sales in the year ago quarter. We estimate that $44.5 million of the decrease is due to lower volume and $5.6 million due to lower prices. Millwork declined 27% and represented 10.6% of sales up from 9.5% last year. Finally other building products and services decreased 31.3% and represented 20.4% of sales up from 19.6% in the first quarter of 2007. Turning to gross margins, the $44.2 million decline in gross margins with across all our product categories. Our gross margin percentage was 22.3% in the first quarter of 2008 compared to 25.4% for the first quarter of 2007. Of the 310 basis point decline, approximately 157 basis points is attributable to the de-leveraging of our lower sales volumes against our fixed over ahead within cost of goods sold. The balance of the decline is primarily related to lower pricing on all products. As market conditions continue to create increased competitive pressure we expect further pressure on our gross margins. Our selling, general and administrative expenses were $79.6 million, down $17.9 million from the first quarter of 2007 and down $5.8 million on a sequential quarter basis. We continue to manage our operating cost structure well. Excluding stock compensation expense we reduced our salaries and benefits by almost 24% from Q1 2007 on a sales volume decline of 32.8% or about 73% variable. We reduced our full time equivalent headcount by almost 40% from the peak in March 2006 and 23.6% from the first quarter of 2007. At this point we are beginning to reach a core level of staffing given the number of locations and operations we have. From the first quarter 2007 we were able to reduce our professional fees by over $1.5 million and delivery costs by about $1 million; however the percentage of sales and delivery costs were up by 170 basis points primarily due to increased fuel costs. Our occupancy expense was higher than the first quarter of 2007 slightly because of the acquisitions of Bama and Wheeler late in 2007. Our interest expense were $6.5 million for the first quarter down about $200,000 from the year ago quarter. The decrease was primarily attributable to the decrease in the debt balance from March 2007 as we paid off our term loan in the fourth quarter of 2007. Offsetting the decline in interest expense, we had a decline in interest income due to lower interest rates and a lower cash balance in the first quarter of ‘08 compared to last year. We had an income tax benefit with an effective rate of 38.2% for the first quarter of ’08, compared to an income tax expense with an effective rate of 37.1% for the first quarter of ’07. Our net income for the first quarter or the net loss for the first quarter was a negative $15.8 million or $0.45 per diluted share compared to net income of $0.2 million or $0.1 per share for the same period last year. Adjusted EBITDA for the first quarter of 2008 was a negative $11.1 million compared to $14.7 million in the year ago quarter. Adjusted EBITDA as a percentage of sales decreased to a negative 4.1% compared to 3.6% a year ago. Our balance sheet remains healthy and our liquidity is still strong with $81.8 million in cash and $129.5 million of available borrowing capacity. The strong financial footing allows us to continue to invest in our company during this challenging operating environment. From a cash flow and working capital stand point we used cash and operating activities during the quarter due to a slight built in our inventories in March as our sales per day increased to 6.7%, an increase in other receivables as a result of a $10.9 million increase in income taxes receivable in the first quarter of 2008 and the payment of the 2007 annual bonuses in February of ‘08 which reduced our accrued liabilities by $5.9 million. Anticipated tax refunds should improve our liquidity during 2008. We anticipate receiving a total of $12 million to $17 million in tax refunds in the second and third quarters of this year. We did see some improvement in day sales outstanding from the fourth quarter of 2007. We went from 42 days in the fourth quarter of ‘07 to 40 days in the first quarter of ‘08. Our credit department has done a good job managing our accounts receivable. We also had 1.7 day improvement in our accounts payable dates from the fourth quarter of 2007. Our inventory turns just slightly to just below nine turns in the first quarter of 2008 as we took strategic inventory positions in certain lumbar, roofing and gypsum products to protect against potential price increases. This was about 6.5 million. I will now turn the call over to Floyd for his closing comments.

Thank you Charles. Housing starts in our markets are down 48% from the peak at March 2006. Housing markets continue to worsen, due in part to the increase in foreclosures and the tightened credit standards in the mortgage industry. Although we cannot predict how long this down turn will last, we generally expect the difficult operating conditions to last at least through the first half of 2009. We will continue to provide updated housing permit and commodity price data on our website each month to help guide you through the market uncertainties. This data is summarized and based on publicly available information. This quarter was a difficult quarter. We are not pleased with the outcome, but we did see some improvement late in the quarter since we were nearing breakeven adjusted EBITDA for March. We will continue to stay focused on our strategy and do all we can to continue to increase market share, reduce headcount, drive operational improvements, rationalize physical capacity and restructure underperforming locations. In addition we will strive to maintain our market leadership and financial strength during this downturn which takes the commitment of our employees which I am confident we have. Our employees continue to seek new business opportunities and find opportunistic ways to flex our cost structure in this very difficult operating environment. We will now take your questions and so we’ll open the session for questions and answers.

(Operator Instructions) and we have our first question from Michael Rehaut at JP Morgan; please go ahead. Jennifer Kensoli – JP Morgan: Hi, it’s [Jenn Kensoli] on the line for Mike, good morning. My first question is, those last comment that you made regarding the breakeven EBITDA levels in March; can you talk about what was the driver of that and what you are seeing in the market?

I think the key thing is we saw a slight seasonality. Our sales per day in March picked up about 6.7% compared to December, so I wouldn’t attribute it to anything more than just a flat seasonal pickup. Our cost structure is very sensitive to just small changes in revenues and so I think that revenue pickup with some of the cost reductions we have made contributed to that March getting close. Jennifer Kensoli – JP Morgan: Okay and my second question was regarding the share gains; they accelerated this quarter versus last quarter which is the first time in several quarters that has. I think on your last conference call you had mentioned that you were pulling the credit in on some of your customers and that you suffered or you gave up some market share gains as a result of that and can you talk about that and may be what you are seeing and what drove that sequential acceleration in share gains?

I think that we continue to be somewhat tight on our credit. We won’t be very prudent to mention during this down turn, so I think that that call is true but I think what we are seeing more so in the first quarter of this year than last year is we are seeing more competitors start to leave the market, more capacity dropping out of the markets and I think that gives us a little bit better ability to increase share and maintain our tight credit standards.

Our next question goes to Nissam Sood at Deutsche Bank. Nissam Sood - Deutsche Bank: First question I wanted to ask was you mentioned that in terms of your staffing levels I imagine now that you’re branch locations and the headquarters, you’re kind of approaching a core level. There is still the potential here though as I am sure you are planning for as well, for a start do they continue to fall even further than they have already, so how would you adjust the scaling of your business further if conditions do continue to deteriorate. I imagine would that involve for example more facilities closures or what’s your plan to kind of deal with that type of environment?

I think what we will have to do is as we watch conditions develop, should we see further deterioration which is likely, we will have to look just to mothball more facilities, more operations. So, the first thing you will do is look within your four walls, your facility and say “do I need this store shop within this facility or can I ship them somewhere else?” So the first thing you will do is rationalize operations within your facilities, then you’ll look to mothball more facilities if you’re in a market like Florida; is there an ability to mothball facility or a long term is to market if you don’t go very good about it and this is the third piece of the chain you could look to maybe exit. I know Floyd and I are not at that point or this point but you do operate; so you would look to shut down operations within your market; then you’d look to shut down a few facilities, maybe mothball them and then if conditions get really bad in the issue then you would look may be to -- you exit the market.

And there is still room to take out employees, to reduce our head count; although the reduction is on the same basis of what we had in the past. We also would look to start running shorter work weeks. You’d move to 32 hour shifts and then even less if required to do so. Nissam Sood - Deutsche Bank: Got it and were there any mothballings or market exits at this quarter?

No.

No. Nissam Sood - Deutsche Bank: Okay second question I wanted to ask was, I wanted to understand the timing and the kind of triggers of the tax refunds you are receiving. It’s obviously an important supplement to the liquidity position that you built already. So I was wondering Charles if you could just help us to understand the amounts that you would expect to receive, the kind of source, what level of differed tax assets you still have on your balance sheets and the kind of increments we are seeing here. I think you said five to seven, in the next quarter seven to ten; what’s kind of driving the timing of those?

This relates to our 2007 year. It’s primarily one you get to file your 2007 return which we are in the process of doing. Once you do that, that will trigger the first round of refunds in the five to seven range and then you will go back and amend previous returns to claim your tax refunds by curing back and then that will be your third quarter recoveries. From a differed tax asset standpoint we don’t have a great deal, we’ve been able to trigger receivables at this point; that’s what you are seeing in the bills and other receivables. As we move into ’09 you will see the DCA starts to build if we are still in a net operating loss standpoint, but currently our differed tax assets are not appreciable. Nissam Sood - Deutsche Bank: Got it and just final quick question on the significant substantial rise in you diesel and fuel prices; I was wondering just if you could talk recently about the dynamics of that on your relationships with your customers, how you are passing that through and how that’s impacting the sales process and how that’s flowing through your numbers?

We have not been able to pass the increases through. We have attempted to do so but abandoned it when we just saw the charge building up on our AR and so the customers that we have in the building community had just refused to take any form of increase and the majority of our competitors apparently have not seen fit to try to pass the increase through because they may have already rationalized that they weren’t going to be able to get it and so why cry, but the increase on diesel fuel is up from a little over $3 a gallon in the first quarter of ’07 to what we are now paying $4.37 a gallon on average. We have national fuel contracts but still it hasn’t been able to offset the tremendous increase that we’ve seen in fuel costs. If you did it on a flex basis to ’07, on the first quarter and using first quarter ’07 fuel costs, the net affect was over $1.54 million.

And we’ll go next to Nitin Dahiya from Lehman Brothers.

Charles, when you look at your receivable ARDs even after adjusting for the one time items you had mentioned it seems to have gone up on a year-over-year basis by almost eight, nine days and are you seeing terms changing or is that just a question of timing? Dahiya –: Charles, when you look at your receivable ARDs even after adjusting for the one time items you had mentioned it seems to have gone up on a year-over-year basis by almost eight, nine days and are you seeing terms changing or is that just a question of timing?

Charles, when you look at your receivable ARDs even after adjusting for the one time items you had mentioned it seems to have gone up on a year-over-year basis by almost eight, nine days and are you seeing terms changing or is that just a question of timing?

No, I don’t think it’s that much. If you go back in the phase where we break up the trade receivables from other, you got to look at the trade receivables which were actually down. Our overall DSO I believe is up about three days year-over-year, but down on a sequential quarter basis. It’s not that we are changing terms; we still stay very consistent with what we were before, but I think what it is, it’s just people again trying to extend our payment as much as they can. Many of our customers are going through liquidity issues on their own accord and so we are just making this very, very difficult. Now I was very pleased with our credit department that we are able to pull it down on a sequential quarter basis from 42 days to 40, but I think year-over-year there definitely was a decline in drop off in sales and the difficulty our customers are going through, it was not unexpected.

The other thing which is interesting is your bad debt or allowance for returns and doubtful accounts hasn’t necessarily gone up, so you are not seeing that as a big pressure just yet? Dahiya –: The other thing which is interesting is your bad debt or allowance for returns and doubtful accounts hasn’t necessarily gone up, so you are not seeing that as a big pressure just yet?

The other thing which is interesting is your bad debt or allowance for returns and doubtful accounts hasn’t necessarily gone up, so you are not seeing that as a big pressure just yet?

Again I think you need to look at it as a percentage of total trade AR. It’s almost identical as percentage of trade AR. So it stayed very flexible, so then you look at what is the currency of your portfolio. If you look it, our greater than 60 days it’s only about 6.5%, so we have a very small greater than 60 days past the due compared to many of our peers and so what we will do is we will look at it’s percentage of total portfolio and then we will look at it as a percentage of our AGs and so you are going to see it be consistent because it’s holding pretty true.

And we will also do a credit assessment on the following of credit on every individual account and then use that if we see any potential problem developing, it wouldn’t be reflected.

Yes and looking year-over-year last year in March of ’07 our DSO was 37 days versus 40, so they are up about three days.

Okay. Yes I think I probably just calculated a little up but that’s actually good, but in terms of obviously you are seeing some customers have problems, so are there some sales that you’re kind of seeing where we will not just do simply because we are not sure that the customer can actually service it. Dahiya –: Okay. Yes I think I probably just calculated a little up but that’s actually good, but in terms of obviously you are seeing some customers have problems, so are there some sales that you’re kind of seeing where we will not just do simply because we are not sure that the customer can actually service it.

Okay. Yes I think I probably just calculated a little up but that’s actually good, but in terms of obviously you are seeing some customers have problems, so are there some sales that you’re kind of seeing where we will not just do simply because we are not sure that the customer can actually service it.

Sure, there are some customers that previously we would have sole or that we would like to continue to sell but we can’t because of credit decisions.

But then are they getting product as there or is it -- I mean essentially I think what I’m getting to is the next question which is on margin. I mean obviously some of the customers are having problems and as you pointed out pricing is kind of tough but as the smaller guys kind of fight for their survival, does that reduce some of the margin pressure or the pressure from customers kind of keeps margins slow. Dahiya –: But then are they getting product as there or is it -- I mean essentially I think what I’m getting to is the next question which is on margin. I mean obviously some of the customers are having problems and as you pointed out pricing is kind of tough but as the smaller guys kind of fight for their survival, does that reduce some of the margin pressure or the pressure from customers kind of keeps margins slow.

But then are they getting product as there or is it -- I mean essentially I think what I’m getting to is the next question which is on margin. I mean obviously some of the customers are having problems and as you pointed out pricing is kind of tough but as the smaller guys kind of fight for their survival, does that reduce some of the margin pressure or the pressure from customers kind of keeps margins slow.

Well I see your point. Obviously if capacity drops out of the market over time I think that will help mitigate some of the pressure on our gross margins yes, but it’s your earlier point; do customers when we cut them off the credit go and buy somewhere else? Yes, but we saw that very recently; you saw a company fall bankruptcy just the other day. We had pulled our credit lines on them and they started buying from someone else right before they filed and so there are suppliers within the market still willing to sell. Customers will jump over and buy from them where they can until they end up actually filing bankruptcy.

I see and then lastly when you look at working capital for the year and again without getting very specific on guidance obviously first quarter had its number of one time items, but from a year prospective, would you expect to end the year on a somewhat consistent basis in terms of days versus the last year? Dahiya –: I see and then lastly when you look at working capital for the year and again without getting very specific on guidance obviously first quarter had its number of one time items, but from a year prospective, would you expect to end the year on a somewhat consistent basis in terms of days versus the last year?

I see and then lastly when you look at working capital for the year and again without getting very specific on guidance obviously first quarter had its number of one time items, but from a year prospective, would you expect to end the year on a somewhat consistent basis in terms of days versus the last year?

I think our 80 days when you look at where we are, about 31 days, I think we can hold pretty steady there maybe a slight improvement. Our goal on DSO will be to hang in that 40 to 42 range and then it gets into the inventory turns. We intentionally dropped a little bit in the first quarter because we are seeing price increases coming through in certain area like gypsum, roofing and certain lumber products, so we bought a position to protect ourselves. We didn’t have to, but we thought it was a prudent course of action, so we depleted our inventory turn a little bit on purpose, but we can see that improving in Q2, Q3, Q4 and I think that’s the biggest opportunity we have to improve work in capital percentages.

We’ll next going to Walter Bransin at Regiment Capital; please go ahead. Walter Bransin - Regiment Capital: Yes following actually on that a little bit regarding cash flow and working capital, can you give us a little color on your outlook for cash flow exclusive of the tax refunds over the next couple of quarters and particularly your outlook for working capital; will it be a source reduced over the next couple of quarters, again exclusive of the tax refunds.

Perhaps by saying we still continue to expect it to be a tough year in terms of overall housing starts and so perhaps it’s my comment that’s in the range of a million starts for the year, I think we’ll generate some working capital inflow. Our goal for the year is that level of housing starts, about a million to be about cash flow neutral. Walter Bransin - Regiment Capital: Is that cash flow from operations minus CapEx?

That’s correct. Walter Bransin - Regiment Capital: Okay that would be excellent and also regarding acquisitions given your outlook now for the market to be tough through the first half of ’09 are you kind of focusing on conserving cash or are you still looking at making acquisitions this year.

We are still obviously very, very conscious about conserving our cash, but at the same time we are looking at acquisitions; I have a number right now on my desk. I still have not seen the pricing drop to what I think is a realistic level given the conditions of our industry and I think it’s going to take probably another three to six months before we really start seeing pricing for the businesses get inline with where values should be reflected and we are not just going to spend money for the sake of spending money. If we do an acquisition we expect it to contribute a significant value to this company on the rebound and so I think there is another three to six months to go before anything meaningful will develop at least from our standpoint regarding acquisitions.

And we’ll go next to Michael Cox with Piper Jaffary. Michael Cox – Piper Jaffray: Good morning. My first question is on lumber prices. I was wondering if you could provide an outlook as to where you see lumber prices trending through the balance of the year or hearing -- atleast indications of some of the mills going out of business or taking capacity offline.

Michael we really started to see prices firming up for SPF lumber. Pine is still pretty flat. OSB has shown some signs of gaining a little bit of strength. The lumber markets in the past week to week and a half really is starting to weaken again and we really at this point don’t know quite what to make of it. There are number of mill close downs that have been announced, this goes for both lumber and OSB. LP is just announced, in the OSB side some very significant shutdowns for maintenance, over haul, upgrading, so forth that I think has created a little spark of interest in the OSB pricing, but we still think over the course of the year that there will be a slight improvement in lumber. We think that OSB will stay relatively flat through the year and we really don’t see any significant improvements taking place until probably mid ’09. Michael Cox – Piper Jaffray: Okay that’s very helpful. Are there specific geographic regions where you maybe encountering more rational behavior from competitors?

I can’t say or point any specific geography, no. Michael Cox – Piper Jaffray: Okay and then from a credit prospective, I know that this has been a key focus point for your company, but can you just touch a little bit on how you are able to manage the credit profile and just a general comment on the health of your core customer base?

The first thing is you always keep an active dialogue with your customer; you want to have a good dialogue. When they quit having the dialogue, that’s when you need to get worried. You always try to keep your receivables and your lien right and when it’s the customer that you know is struggling you try to find a way to get collateral support KAR which we’ve done in certain cases, but usually what we’ll do is we’ll try to work with them, we’ll try to workout payment plans if we see an issue we try to get collateral. Look, when a customer quits being cooperative and doesn’t want to pickup the phone and talk to us, that’s usually when we are going to go and try to protect our lien rights and then we’ll quit shipping.

And we’ll go next to Keith Hughes at SunTrust. Keith Hughes - SunTrust: Thank you. The inventory, we talked about that a little bit in this call, it’s down about 20% year-over-year versus 34% sales decline. As we look forward, wherever the decline ends up being this year, is that the kind of spread you think we’ll see in terms of an inventory reduction for the year or there are some extenuative factors that make it better or worse?

Again, I point back Keith, the fact that we bought about $6.5 million of inventory in the first quarter we didn’t really need, but it was more quote against the process increases. We see in certain categories that are starting to get price pressure where suppliers to trying to push their increases. What we’ll do in advance is go through and take a position to protect against it, to protect our existing order base and I think what you’ll see is we did do that in Q1, Floyd I don’t know if you’ll have any plans really in Q2 or Q3 but we always have to look at it and be opportunistic to protect our open order file.

Yeah and I think that’s going to continue Charles. We don’t have anything on the board right now with the exception in the area of some of the steel products. We are attempting because they are -- very significant increases have been stated to the industry, roughly 13%, 13.5% and so we are trying to protect ourselves regarding those particular products, but I think from an inventory standpoint Keith, the more you keep shrinking it and pulling it back especially with the number of skews that we have, it gets tougher and tougher to really turn levels up because of the economic quantities and real order quantities and so forth, just managing a 300 plus thousand queue inventory is really tough under these conditions. I think we can get back up and I think we can get our current levels backup in the high nines to maybe even as much as 10 times but it’s going to be tough to do so. The inventory buys will be where we -- really as Charles said it’s necessary in order to protect the position. It is not going to be just a gamble on inventory because we just don’t believe in that tactic, but where we see opportunities to really protect ourselves we are going to use our cash positions to do so. Keith Hughes - SunTrust: Alright and second question; you had talked about not exiting geographies earlier; is the primary goal there to be effectively the last man standing at some of the geographies to soak our market share and incur the losses until that happens?

I think that’s part of it, but you also have to do a trade off. Keith, we’ll tend to look at the market on a cash-on-cash return. So let’s say that the market is for an example just loosing the main dollars to EBITDA and we think over the next two years that we’ll do $1 million per year to a negative $2 million. If we look at shutting it down and exiting the market it’s going to cost us a negative $3 million in cash between severance, lease obligations and so forth. That may not be a very wise use of our money, so we tend to look at what is the long term benefit, what is the cash-on-cash return? If it’s a two year return or better, it may make sense if it’s a three year return; four year return it may not make sense. Keith Hughes - SunTrust: Okay, final question. Charles you have a table in the press release which showing the trade receivables for the first quarter of ’08, can you tell me what those were for the first quarter of ‘07?

Let me see, I don’t have that directly in front of me. Keith Hughes - SunTrust: Can give it to me later if you…

Yes I can.

And we’ll go next to Robert Manowitz of RBS. Robert Manowitz – RBS: Most of my questions are answered, but if I could go back to the beginning of the call or the beginning of the Q-and-A session where we talked a little bit about March and I don’t want to elaborate March because I understand it’s a cyclical month, but two questions there; one is how did the performance in March of ‘08 be breakeven EBITDA compared to March ’07 and then the second piece of that is if you look back historically not at March ‘08 but in a more normalized market what might March represent as a percentage of the first quarter revenues?

I guess a number of questions. What I would normally expect from March is to be historically up 10% to 15% over January, February average. In this situation we saw a little over 6% increase versus the 7% increase. So again if you go back and start it historically, there is always a little seasonality, this year it was only about half the seasonality. In terms of comparing March of ‘08 to March of ‘07 the housing start levels are so different. It’s hard to get a good correlation. What we are trying to indicate there is that because we are now getting into a sales volume that’s fairly low and its now our profitability is so sensitive to it, even a 6% increase in sales per day in March compared to January, February took us almost breakeven EBITDA for March and you can see for the quarter we were negative 11. So, all we are trying to indicate is there is a low seasonality, our sales volumes are now very, very tight in terms of profitability in how much they can move and how it impacts us. Robert Manowitz – RBS: No, I understood and maybe I could just follow on one last question and that is if you think about the comments you just provided on January to February to March, what would those normal percent changes look like going from March to April to May?

I think what we are expecting is that you’ll see April, May, June be very consistent with March. We are not seeing at this point any pick up and our sales per day basis is basically flat.

Yes, [Inaudible] continue to fall away. It’s really eroding and packing away any from what you would normally expect in seasonal improvement and on a sequential basis there was just a very, very slight improvement in March versus February and I suspect we are going to see the same type of numbers in April versus March.

So, in other words we are not looking for a big seasonal bump. We saw a little seasonal pick up about half of what you normally expect and we don’t expect that trend to really continue on sequential level increases in April May June.

Yes all of our internal planning are really being based on consistent sales per day through the second quarters compared to March.

Yes.

Now we’ll go next to David Manthey I believe it is with Robert W. Baird. David Manthey - Robert W. Baird: In terms of the answers that you just gave, if you’re expecting the next three months to be roughly flat with March, what would that typically look like. I know it’s a little hard to gauge what the typical sequential pattern was over the past few years but you would expect it to ramp normally right?

Yes. David Manthey - Robert W. Baird: And by low single digits each months or how would it ramp?

Typically our second quarter has been 20% plus better than the third quarter.

Yes. David Manthey - Robert W. Baird: And then in terms of the markets that you’re competing in along the lines of the previous question, in terms of being the last man standing, do you think in most of the markets you compete in you are the low cost producer?

It’s hard to say because we compete against so many private companies. I don’t really know the exact thing of the answer. I would think that we are fairly low because we have fewer facilities than many of our competitors so we have fewer fixed costs than in down environments, but I don’t have an exact answer.

From all the performers that we have seen from acquisition targets that we have looked at we haven’t seen anybody who could beat our financial results.

But in the markets where we have overlapped with big competitors like Provil and Stock, I mean they are very strong liquidity wise, they are not going to go anywhere. It’s primarily your smaller local and regional suppliers that are suffering and going out of business? David Manthey - Robert W. Baird: Okay great and then final question here, are you seeing any change in average order size and I don’t know if you gauge this sort of thing, the number of trusses you are supplying per house or anything like that that would indicate that houses are getting smaller and then have you seen any differences -- again I don’t know if you track this, but are there any differences between the custom builders and the tract builders as it relates to this down turn?

I can’t say that I have that data in front of me. Dave, I don’t know the answer.

When we talk to our people in the fields, we would look at the house patterns are still pretty much the same as what they have been. There hasn’t been great move on the parts of our builder customers to down size our homes. We have seen them taking out a lot of higher cost amenities since we are trying to get a more targeted price point home, but as far as square footage, we have really seen the start coming down and the trusses, we are still seeing a consistent use of truss and for those buildings who have traditionally used trusses. In the area of the custom builders and high end semi custom, that building activity did not ranch it down nearly as quick as what the large national builders pulled their activity levels down, but we are now beginning to see some real slow down in the higher end builders and we are also starting to see where we have credit exposure; we’re having to watch the credit in this area a lot closer than we have been in the past and I think they are beginning to get really -- they’re being cut back from their financing sources and they’re beginning to reflect the same problems that we have seen in the housing market with the national builder.

And we’ll go next to Jay Mcchales at FTN Midwest. Jay Mcchales - FTN Midwest: Wanted to ask first on the good will side; I know there were good will impairments last year and if we have a further deterioration in the markets how defensible do you think the good will position is now?

I think if we do see further deterioration Jay we will have to address it in each quarter that we see it. I mean the way the accounting centers works, any time you have any type of event that could signal that you have an impairment required to go and do the test. So to answer your question specifically if we see further erosion in the second quarter and we don’t see a pick up or we are generally closer to an operating plan in the Q2, then I think that you will see us go and do the test. Jay Mcchales - FTN Midwest: Okay and then getting back to the level of core staffing at your operations now, since you’ve indicated that you are either at or very close to that core level could we see the same percentage decrease in SG&A for the remaining quarters in this year, roughly an 18% decrease or should we expect that to tighten up; how should we look at that going forward?

I think if we get further declines in year-over-year sales you’re going to see it tighten up. Again we are seeing around a little over 5000 full time equipment employees, but not really shut down any further operations or locations until again absence in going through and pulling out the past deeds is going to get increasingly difficult to pull out people.

We flexed, what Charles, 72% on our salaries, benefits and that was much better than what we had anticipated. One thing I would like to say is that our people have really worked hard. They are looking at every way they can to take cost out of the operation to do it more efficiently, we continue to improve our processors which also have and streamline a lot of our processors which have helped us gain more efficiency. So, I will never say never but that really surprised me, it exceeded my expectations and so I will say we are going to continue to look at it and see if we can continue to achieve this type of efficiency again. Jay Mcchales - FTN Midwest: Okay and then my last question, I think you have answered this in one form or another with the other questions but what is the pace of not only customer bankruptcies that you are seeing but also competitor bankruptcies?

We are seeing customers starting to file bankruptcy. We know of a number of customers that potentially could be entering bankruptcy. From a supplier base we have previously talked about the one large one in Atlanta, Wheelers. We had rumors [Inaudible] into a rather fairly large regional still preparing to file bankruptcy in the supply chain. I think you are going to see that pace accelerate in Q2 and Q3 of this year.

Probably we have seen more truss plants shut down. In Florida for instance there seems to be an unusually high number of truss operations that have gone out of business in Florida and also up in the mid Atlantic area. Jay Mcchales - FTN Midwest: Okay and since you mentioned Wheelers that I think begs another question. When these ones that are being shutdown etc; how many are reopening fairly quickly under new names and still selling products that are well below what everyone else’s cost is?

Well we saw at Wheelers that former owners stepped in and bought some of the assets that are bankruptcy along with the name and they planned to open three. I guess we will just have to sit back and evaluate how successful they are doing that in terms of how much money do they have, what they can put into the business because I wouldn’t think banks are going to be overly minimal to win them and then how successful they are with suppliers. The suppliers get cramped down fairly abruptly in that bankruptcy, so we will have to see how successful they are in getting a back up and going.

We will go next to Rob Jose with Van Kampen Investments. Rob Joss - Van Kampen Investments: You mentioned in your press release that you are getting margin pressure from both your customers and then your competitors. With competitors going out of business and there’s customers too are you seeing any of that pressure diminish?

Not yet.

Not yet. I think at this point it would be premature. I think it’s going to take several more quarters before that to kind of work through the system. It is a competitor that gets into issues and they start trying to survive, they are going to convert their inventory for whatever price they can get. They are just trying to convert to cash and we are in the midst now of many competitors converting to cash and again these are more your smaller regional and local suppliers. Rob Joss - Van Kampen Investments: Okay and a kind of related question; as you see prices say in lumber commodities falling do you experience any benefit from there or is the competition so intense that you have to reduce prices right away to meet those falling costs?

Actually when you get into the market, your products like lumber you’ll see there’s a difficulty to it. You want to a higher market price because that’s the way the market seems to work. So we prefer to have higher lumber prices higher OSB prices than lower procurement prices.

And we will go next to Russ Stiver at Raymond James. Russ Stiver - Raymond James: Your CapEx is now down to a very low level, can you remain at that level indefinitely or how long can you go before you need to put a little more money into the plant and equipment?

I think we can go another two years at the level we are at which we agreed for [Inaudible] per year. I mean if you look we really -- in the good years we refurbished our fleet, we upgraded our facilities, we have a lot of the new facilities. So I think we can go to a closer to remain at this level for the next one or two years. Russ Stiver - Raymond James: Okay, you read earlier to point the credit lines from Kimbal Health, can I infer from that that you don’t have any AR exposure to them?

A have a small exposure, very small. Russ Stiver - Raymond James: Okay and finally your bonds are trading at significant discount. Is it possible for you guys to start buying those bonds in the open market?

It’s one of the considerations that we keep in the back of our mind. I think again we want better visibility into the down side of the housing market before we use liquidity to do so.

And we will go next to Seth Harvey at UBS. Seth Harvey - UBS: Good morning. Most of my questions have been answered; I just kind of want to go back to the inventory question. I mean I know you just kind of talked about as you had been more opportunistic about purchasing this quarter but if you look at generally where the activity level now is in the industry do you feel like you can take that down from current levels to be more kind of inline or you are kind of at that point now where you are very much inline with what the activity level is?

Again we took the $6.5 million position because we had existing orders to customers we needed to cover and before these price increases went in. Had we not done that our turns would have been about 9.5 for the quarter and that’s about right where we thought they would be. So, again as we see further price increases coming through where we have to take an equivalent positioning in Q2 or Q3 I think you will see some improvements in turns going back closer to that 9.5 range.

And we are going next to Jim Wilson at JMP Securities. Jim Wilson – JMP Securities: A couple of questions; I guess one you said you are looking at a lot of acquisitions, but I was wondering if strategically there is target areas of the country you would actually consider as soon as you think the pricing is attractive and you are going to try to take advantage of this downturn and spread west for instance.

I don’t think we are pre-disposed to any geographic region. There are opportunities in the West that would make sense, but again it has to be a large scale, but I think we are pretty open to anywhere it makes sense, probably the Mid West would be the least of the pricing for us, but throughout our core states and going into other states we think long term we feel good about it. Sure, we are going to look at opportunities. The key differential is if we go west we are going to be looking for scale. If you go into new markets you don’t want to just have one or two locations. Jim Wilson – JMP Securities: Right, okay it makes sense. The second thing is just, I was wondering if you could talk a little about what big builders have done and how they obviously accelerated inventory but cut production faster than the small guys, but I was wondering if there was any kind of strategic effort as you now find that big builders looking with cash and liquidity are going to be the survivors. Proactive moves on your part or on their part are trying to partner or drive more shares towards you and other big players. Is the industry going in that direction and are you kind of proactively seeking it?

We are proactively working with a number of the large national builders and we will continue to do whatever we can to enhance our position and to encourage them to do as much business as possible with us. The large builders are continuing to work on their purchasing programs and it seems like they are trying to align themselves with fewer suppliers and with more controls coming out of the Central office as relating to purchasing actions and that benefit us very well as it does to some other large national players. So I think the activity in this area will continue and I think the national builders will look to increase or enhance their positions with people like ourselves especially when they view the long term market and they know that this market is eventually going to turn and I think the belief is when it turns its going to have a very sharp upturn and supply is going got be critical.

And we’ll go next to Ken Schlemmel at Wolf Point Capital. Ken Schlemmel - Wolf Point Capital: A couple of questions going back to the sequential change from the first quarter to second quarter you said typical it’s about 20% and it looked like last year it was about 13%, would you expect this year to be a smaller increase versus that 13 last year.

Oh yes. Ken Schlemmel - Wolf Point Capital: Much less.

Yes and again if we just go back and look at December of ’07 versus March of ’08 we were up about 6.7% on the sales per day. So I wouldn’t extrapolate anything beyond that Q2 to Q1. : Yes and again if we just go back and look at December of ’07 versus March of ’08 we were up about 6.7% on the sales per day. So I wouldn’t extrapolate anything beyond that Q2 to Q1. Ken Schlemmel - Wolf Point Capital: But obviously that you don’t expect a 13% increase sequentially.

No. Ken Schlemmel - Wolf Point Capital: And do you feel there probably isn’t going to be seasonality this year? I mean I know you can’t look out too far, but there’ll be order as well.

It goes back. Well, of course there’s going to be a very flat seasonality but it’s going to be tempered by the fact that starts our continuing to go down. : It goes back. Well, of course there’s going to be a very flat seasonality but it’s going to be tempered by the fact that starts our continuing to go down. Ken Schlemmel - Wolf Point Capital: Okay and the tax programs to congress that would help home builders to look back a couple of years, are you guys included in that or you’re not considered…

We would be considered. The Senate Bill still includes it; the House Bill has removed the four year carry back. So depending upon the system it goes through we would receive the benefit for that, especially with our 2009 where it really remains. Ken Schlemmel - Wolf Point Capital: Now again if the bill that was in the Senate passed as it existed today what would be the rebate you would get or would you -- have you…

What it would allow us to do is for ’09, right now the way the law is structured, if we generate it in that operating loss in ’09, we would not be able to carry it back we would have to carry it forward the future years; still a benefit but it’s a forward looking benefit. If the Senate Bill goes through any loss that we generated in ’09 we would carry back to ’06 and ’05 and reclaim immediate cash refunds. Ken Schlemmel - Wolf Point Capital: What would that look like? Do you think it would depend on…

It would depend on the loss. The potential would be up to $130 million, because that’s how much we paid in tax in those years. : It would depend on the loss. The potential would be up to $130 million, because that’s how much we paid in tax in those years. Ken Schlemmel - Wolf Point Capital: But this would be a ’09 event payable in 2010.

That would and that’s correct. It will be probably mid 2010 in infusion of cash. Ken Schlemmel - Wolf Point Capital: Okay, that’s down the road and then letters of credit outstanding at the end of…?

About $17 million. Ken Schlemmel - Wolf Point Capital: Same as it was before?

Yes.

Now we will go next to [Ray Lipinski] at BB&T Capital Markets. Ray Lipinski - BB&T Capital Markets: Good morning guys. Most of my questions have been answered but we talked a lot about working capital this morning and we spoke mostly about the left hand side of the balance sheet. Just in looking at it, it looks like our payables were fairly normalized with liabilities reflected, they came in a little bit. Is there anything exceptional that went on there, was it seasonal or something which is likely to provide you with a little cash in the next quarter?

There is a couple of things. We pointed out one of them actually in our release where we talked about the payment of ’07 bonuses which took place in the first quarter of ’08. That would have been included within that accrued liabilities number at year end. That would have dropped at about 5.8. The other thing that you’re seeing there is as we continue to pull back our staffing levels, our accrued liabilities for salaries and wages are going down. So that’s just the biggest pull back you’re seeing in the accrued liabilities. : There is a couple of things. We pointed out one of them actually in our release where we talked about the payment of ’07 bonuses which took place in the first quarter of ’08. That would have been included within that accrued liabilities number at year end. That would have dropped at about 5.8. The other thing that you’re seeing there is as we continue to pull back our staffing levels, our accrued liabilities for salaries and wages are going down. So that’s just the biggest pull back you’re seeing in the accrued liabilities. Ray Lipinski - BB&T Capital Markets: Thanks. Second question just is we talked a fair amount about the credit issues with your customers; just wondering if there are any issues worth talking about of your direction of the supply chain which might have impact on your business over the next couple of quarters.

We’re not dependent upon any one supplier. We are very diversified, we’ve got by the products. Florida, are there any suppliers that you can think of that we are concerned about? No.

(Operator Instructions) and we go next to Michael Rehaut at J.P. Morgan; please go ahead. Michael Rehaut – JP Morgan: Just a quick follow up. Regarding you geographic exposure, can you just go into a little detail, particularly in Texas and the Carolinas; I mean are you seeing any type of stabilization there or do you think things continue to worsen in those markets as well because they had been holding up a little bit better?

They continue to worsen. I mean if you look at North Carolina, it is still probably the best of most of the states in terms of how much has fall to this point. South Carolina is moving pretty much with overall housing starts and Texas, certain areas of Texas are moving pretty much with overall starts and so it’s pretty well affecting all of our markets.

And at this time there appears to be no more questions. Mr. Sherman I would like to turn the call back to you for any closing comments sir.

Thank you and thank you for joining us today. If you have any further questions please feel free to contact Charles Horn. : Thank you and thank you for joining us today. If you have any further questions please feel free to contact Charles Horn.

Thank you everyone. That does conclude the Builders FirstSource conference call. You may now disconnect. Thank you.