Floyd F. Sherman - Chief Executive Officer, President and Director M. Chad Crow - Chief Financial Officer, Principal Accounting Officer, Senior Vice President and Member of Proxy Committee

Trey Grooms - Stephens Inc., Research Division Rob Hansen - Deutsche Bank AG, Research Division Seth B. Yeager - Jefferies LLC, Fixed Income Research John F. Kasprzak - BB&T Capital Markets, Research Division David Neil Williams - Williams Financial Group, Inc., Research Division Scott Justin Levine - Imperial Capital, LLC, Research Division Samuel McGovern - Crédit Suisse AG, Research Division Daniel Downes Philip Volpicelli - Deutsche Bank AG, Research Division Howard Weinberg - UBS Investment Bank, Research Division Robert J. Kelly - Sidoti & Company, LLC Shawn Boyd

Good morning, and welcome to the Builders FirstSource Second Quarter 2013 Earnings Conference Call. Your host for today's call is Mr. Floyd Sherman, Chief Executive Officer. [Operator Instructions] Any reproduction of this call, in whole or in part, is not permitted without prior written authorization of Builders FirstSource. And as a reminder, this conference call is being recorded today, July 26, 2013. The company issued a press release after the market closed yesterday. If you don't have a copy, you can find it on our website at 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, financial results, 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 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. Floyd F. Sherman: Thank you, and welcome to our Second Quarter 2013 Earnings Call. Joining me today from our management team is Chad Crow, Senior Vice President and Chief Financial Officer. I'll start by giving a recap of the second quarter and then I'll turn the call over to Chad, who will discuss our financial results in more detail. After my closing comments regarding our outlook, we'll take your questions. Our sales for the second quarter of 2013 were $398.1 million, an increase of 46.4% when compared to last year's second quarter sales of $271.9 million. Over the same time period, actual single-family housing starts in the South Region increased 14.5% and single-family units under construction increased 27.4%. We continue to experience strong year-over-year sales increases despite the tough sale comps from 2012. From a sales per start perspective, we ended the current quarter with a new high of $4,504 per South Region single-family start compared to $3,522 in the second quarter of 2012 and $4,021 in the first quarter of 2013. Lumber & Lumber Sheet Goods prices were, on the average, 21.5% higher during the second quarter of 2013 as compared to those in the same quarter last year, though prices did fall approximately 30% during the course of the quarter. Falling prices in the back half of the quarter relieved some of the gross margin pressure we have been experiencing from commodity inflation, and we were able to improve our gross margin by 100 basis points for the current quarter due to both improved pricing and higher sales volumes. These factors helped us achieve adjusted EBITDA of $16.7 million for the current quarter, an improvement over $14 million when compared to adjusted EBITDA of $2.1 million for the second quarter of 2012. I'll now turn the call over to Chad, who will review our financial results in more detail. M. Chad Crow: Thank you, Floyd. Good morning, everyone. For the current quarter, we reported sales of $398.1 million compared to $271.9 million for the second quarter of 2012, an increase of $126.2 million or 46.4%. We estimate sales increased 28.9% due to increased sales volume and 17.5% due to price. Breaking down our sales by product category, Prefabricated Components were $78.2 million, up from $51.2 million in the second quarter of 2012. Windows & Doors were $77.8 million, up approximately 31%. Lumber & Lumber Sheet Goods were $149.2 million, an increase of $61.3 million. Our Millwork category was $35.2 million, up 33%. And Other Building Products & Services increased $10.6 million to $57.7 million. From a sales mix perspective, Lumber & Lumber Sheet Goods were 37.5% of total sales as compared to 32.4% of total sales in the second quarter last year, with the increase due primarily to commodity lumber price inflation. Excluding the impact of price inflation, Lumber & Lumber Sheet Goods were down slightly as a percent of total sales, while manufactured products were up slightly. All other product categories were fairly consistent between periods from a mix standpoint. Our gross margin percentage was 20.7% in the current quarter, up 100 basis points from 19.7% in the same quarter last year. We estimate our gross margin percent increased 60 basis points due to increased sales volume, with the remaining 40 basis points coming from improved pricing and sales mix. On a sequential quarter basis, our gross margin improved 120 basis points. Our selling, general and administrative expenses were $69 million, up $14.1 million or 25.6% from the same quarter last year despite the 46.4% increase in sales. As a percentage of sales, SG&A expense decreased to 17.3% in the current quarter from 20.2% in the same quarter 2012 as we continue to leverage our cost structure extremely well against the increase in sales. For the second quarter 2013, our salaries and benefits expense, excluding stock compensation expense, was $44 million or 11% of sales compared to $34 million or 12.5% of sales in the second quarter of 2012. This increase is primarily related to higher sales commissions and additional staffing needs to service our increased sales volume. Delivery expense increased $2 million, and other general and administrative expense increased $1.4 million, both a result of increased sales volumes. Interest expense for the current quarter was $61.1 million, an increase of $50.6 million. This increase relates primarily to our recent refinancing transaction and includes $6.8 million of unamortized debt issue discount write-offs, $2.1 million of debt issue cost write-offs and $39.5 million prepayment premium related to the early termination of our term loan. We recorded $400,000 of income tax expense in the second quarter of 2013 compared to $100,000 in the second quarter of 2012. We recorded an after-tax noncash valuation allowance of $17 million and $4.3 million in the second quarters of 2013 and 2012, respectively, related to our net deferred tax asset. Absent the valuation allowance, our effective tax rate would have been 34.6% and 34.9% in the second quarters of 2013 and 2012, respectively. As of the end of the second quarter, our federal income tax NOL available for carryforward was approximately $295 million. Our loss from continuing operations was $48.3 million or a $0.50 loss per diluted share compared to a loss of $12 million or $0.13 per diluted share in the second quarter of last year. Excluding the refinancing costs, the fair value adjustment for stock warrants and the tax valuation allowance, our income from continuing operations was approximately $500,000 or $0.01 per diluted share for the current quarter. Excluding the fair value adjustment for stock warrants and the tax valuation allowance, our loss from continuing operations was $7.1 million or $0.07 per diluted share for the second quarter of 2012. Our net loss for the second quarter of 2013 was $48.2 million or $0.50 per diluted share compared to a loss of $12.1 million or $0.13 per diluted share in the second quarter of 2012. Our net loss was obviously negatively impacted by the costs associated with our recent refinancing. Adjusted EBITDA was $16.7 million for the second quarter of 2013 compared to adjusted EBITDA of $2.1 million in the second quarter of 2012. During the second quarter of 2013, we completed a Rule 144A offering of $350 million aggregate principal amount, 7 5/8% senior secured notes due 2021. At the same time, we entered into a new 5-year $175 million revolving credit facility led by SunTrust Bank. We used the proceeds from the offering, together with the cash on hand, to redeem our 2016 notes, pay off our outstanding term loan, including the prepayment premium, and to pay fees and expenses related to the transaction. Cash used for the second quarter of 2013 was $92.2 million. Of the $92.2 million, we used $53.7 million to pay refinancing costs, $27.4 million was due to working capital build during the quarter and $14.7 million was net cash used to retire our long-term debt. Cash used for the second quarter of 2012 was $24.5 million, with $15.4 million related to working capital build. Capital expenditures were $3.6 million for the second quarter of 2013 compared to $2.2 million for the same quarter of 2012. Total liquidity at June 30, 2013, was approximately $170 million, which included $25.5 million in available cash and $162.3 million of borrowing availability under our new revolver reduced by a $17.5 million minimum excess availability requirement. The $162.3 million of borrowing availability is derived from the $175 million revolver commitment plus current outstanding letters of credit of $12.7 million. As of June 30, we had no outstanding borrowings under our revolving credit facility. Our recent refinancing transaction provides a tremendous boost to our goal of returning to positive net income. For the second quarter of 2013, our interest expense included refinancing costs of approximately $48.4 million. Absent these refinancing costs, we were slightly positive net income for the second quarter. As a result of our new capital structure, our annual cash interest going forward will be approximately $28 million, assuming nothing is drawn on the revolver. I'll now turn the call back over to Floyd for his closing comments. Floyd F. Sherman: Thank you, Chad. As the recovery in the housing market continues, we believe our year-over-year sales growth for the second half of 2013 will be driven by the combination of market share gains and increases in the overall customer demand. We will still continue to maintain our focus on improving our gross margins and further leveraging our operating cost structure. I'll now turn the call over to the operator for Q&A.

[Operator Instructions] And we'll take our first question from Trey Grooms of Stephens Inc. Trey Grooms - Stephens Inc., Research Division: First off, the SG&A leverage, very impressive, much better than we would have expected. Chad, is that the level of SG&A, I guess, as a percent of rev, is that something we could expect going forward? Is that a sustainable level? Or is there something particular in the quarter that was unique? Or how should we think about that going forward? M. Chad Crow: No, there really wasn't anything unique in there, and I'm with you. And I think Floyd will agree. We were both extremely pleased with how we were able to leverage our OpEx. If you go back, our lowest number ever was 2005 and that was 18.2% for the year, and so we're already trending ahead of that on significantly less sales. So that has us very optimistic about what we can do as sales continue to grow. But I still think we're going to be about 50-50 fixed variable going forward. And so I still think there's room to improve on that. Trey Grooms - Stephens Inc., Research Division: Awesome, great. And then on lumber prices. So lumber prices, obviously, have moved down significantly in the quarter, but it's since started ticking up a little bit. What kind of margin impact could that have in the third quarter with the timing of you guys kind of resetting your contract with customers, the inventory on hand, et cetera? How do we think about that? M. Chad Crow: Well, if you go back to 2012 and the first quarter of this year, each of those quarters, the inflation we were fighting impacted us at least 100 basis points. So let's hope that during the third quarter, we don't see another 25% or 30% inflation because, if we do, it'll put some pressure on margins. But right now, if things just seem to be ticking up slowly, it would certainly be manageable for us. But really, we just have to wait and see what prices are going to do the next couple of months. I can tell you, so far this quarter, margins are very strong. So thus far, we feel good about the quarter. Trey Grooms - Stephens Inc., Research Division: Okay, that's helpful. And then kind of on that, you've seen the lumber price inflation has been manageable, as you noted. What are you guys' expectation for lumber price? I mean, obviously, you don't have a crystal ball, but just looking over kind of the short run given what you're seeing out there with suppliers and balancing that with demand and so forth. Floyd F. Sherman: Yes, I think, Trey, the -- we're going to see a slow inflation, I believe, for the rest of the quarter and into early fall for both Lumber & Lumber Sheet Goods. It feels to us right now like the panel and lumber manufacturers are trying to find a pricing level that they can live with and that they can sustain. And I don't think we're going to see a real major run-up and a real sharp spike as we had seen in the past. I think it's just -- the feel to us right now is that it'll slowly keep creeping up, and as Chad said, we can manage that, and I really don't believe we're going to see it coming back to the levels that we saw in the -- at -- by the end of the first quarter of this year. Trey Grooms - Stephens Inc., Research Division: Great. And one last for me and I'll jump back in queue. But just on the competitive landscape, now that, obviously, the demand has really taken off and gotten legs, at least so far. But then again, kind of with the backdrop of lower lumber prices that we have today, is the environment there any more or less competitive than what you've been seeing? Floyd F. Sherman: No. I -- the -- we're still looking at a very, very competitive landscape. The -- I do have to point out, I think it's -- we got to know that we're still in a very depressed housing environment. If you look at 2012, the starts ended up about 535,000. That was the third worst year of housing. This year, while things are certainly getting better, I don't think it's anywhere near what we would call a healthy or normal environment this year than that number for single-family starts. It's probably somewhere in and around the 650,000 mark. Right now, on an annualized basis, it's 591,000. So while it's better, it will be the fourth worst year on housing on record. There still is a lot of supply chasing the demand so it is still very, very competitive. Our guys are doing a tremendous job, I believe, in trying to get more responsible pricing and still keep the customers. And it's a daily battle out there and we have been successful in pulling up the margins. Some of it came with the easing of the commodity pricing, but that really didn't affect us until very late in the quarter because we're on an average costing basis. So -- and we did very little buying in the first couple of months of the quarter. So we didn't get a lot of benefit from it. And it's -- our people are getting the prices up and we're getting it up across the board in all of the product categories, but it is a damn tough fight every day. And the -- and -- but we're going to continue on the same basis. And right now, as Chad said, third quarter is the start of -- the start of the third quarter for us is really looking very good. We're very pleased with what we're seeing.

Our next question will come from Rob Hansen of Deutsche Bank. Rob Hansen - Deutsche Bank AG, Research Division: So I just wanted to ask about the -- with the improvement in your balance sheet and liquidity situation, are you going to have a kind of bigger willingness to take on some of the more larger projects like multifamily projects, or be more aggressive in terms of opening new locations and new markets, or not? M. Chad Crow: We're obviously still doing multifamily and light commercial work, and we'll look at it like we always have. If it's a project that makes sense for us from a profitability standpoint and a liquidity standpoint, then we'll certainly go after it. So I don't know that that's really changed. From a location standpoint, we've -- with our current footprint, I think we can handle close to $2 billion in revenue. And so in the near term, our main focus is going to be on getting those facilities up closer to full capacity. I think that's going to be the biggest bang for the buck in the near term. But with that being said, we'll certainly look at opportunities to go into new markets, whether it's a new location or acquisitions, but I'll say that's not -- certainly not the top of our list right now. As you know, last year, we opened a new location in Austin and one outside in Nashville, Tennessee, and those were opportunities that came along that made sense. And so if we have opportunities like that, we'll certainly take a hard look at it. But I don't know that, just because we did the refinancing, that our strategy really is going to change all that much. Floyd F. Sherman: Yes, and I agree with all that Chad had to say. Rob Hansen - Deutsche Bank AG, Research Division: Okay. And then you mentioned that $2 billion figure. I just wanted to confirm. That would mean that when housing starts in kind of a normalized environment like $1.4 million or so, that's where you'd reach that $2 billion in sales on the current footprint? Floyd F. Sherman: No, I think if you look at our current sales per U.S. single-family start, if we want to look at it on that basis at our current penetration rate, it would take a little over 870,000 single-family starts. We have really increased our market share and I think a lot of people haven't really focused on that where, in the past, when we did the $2 billion in sales, we had a 1.7 million single-family housing market. We can now do that same number, I think, somewhere at half that amount. Rob Hansen - Deutsche Bank AG, Research Division: And in terms of that market share, sales per start penetration there, what categories have you seen the largest increases? Floyd F. Sherman: I think it's pretty much right across the board. Right now, Lumber & Lumber Sheet Goods has increased a little bit more because inflation helped drive that. But our component products are really gaining very nicely, the Windows & Doors, the Millwork categories. So we tried to go in with a full package proposition to our builder customers, and for the most part, we're successful in doing so. And so I think it's very broad-based for us.

And next, we have Seth Yeager of Jefferies. Seth B. Yeager - Jefferies LLC, Fixed Income Research: So I think Floyd might have alluded to it a little bit, but are you able to help us quantify the gross profit or margin benefit that you had with just the timing of your contracts versus the decline in prices during the quarter for lumber goods? M. Chad Crow: Well, not any more than we already stated in the earnings release and on the call already. Seth B. Yeager - Jefferies LLC, Fixed Income Research: Okay, great. But maybe just the quarter, can you talk -- in May, I think you had, with the debt issuance, you had given some guidance. Can you talk about how trends move as rates sort of fluctuate? Do so you see any change in overall builder activity? M. Chad Crow: For us, we just wrapped up a meeting with our area Vice President and they will tell you that on the East Coast and our markets, we had a tremendous amount of rain the last couple of months. And if anything slowed activity in our markets, it was the weather, it was the rain. And that's 1 reason we are very optimistic about how Q3's shaping up, is they really feel like there's a lot of construction that got to put on hold because of the weather. Floyd F. Sherman: And I would also add to that, just as important as weather has been, there's definitely labor-related issues becoming more and more -- a larger problem out in our marketplaces. M. Chad Crow: In a lot of subdivisions, you got slabs just sitting, waiting for framers, so that's kind of kept the lid on some of the growth as well. Seth B. Yeager - Jefferies LLC, Fixed Income Research: And that kind of leads into my next question. You guys have seen some nice increases in your Prefab business as builders are sort of short staffed in trying to turn over homes. How much of that volume are you getting back versus -- I guess, the last couple of quarters versus inflation? What sort of level of activity would it take for you guys to get back to sort of your normal margins that you saw a few years ago in that business? Floyd F. Sherman: I think it's going to take -- to get back, for us, at the more normal margins, I think we're going to have to start seeing a housing start rate, single-family, above 1 million single-family starts. I think until then, you're going to have a supply/demand imbalance in the distribution side of the business. Seth B. Yeager - Jefferies LLC, Fixed Income Research: Got it. And then just maybe one housekeeping item. At this level of business, how should we think about your incremental working capital or maybe where you're at on today's basis? And then just an update on CapEx? M. Chad Crow: Working capital will continue to trend as it has. It'll be about 10% of sales. And so as our sales continue to grow, you can pretty much count on working capital build at about 10% of that growth. CapEx, I think, this year, we're going to end up somewhere between $8 million and $10 million of CapEx. That's what we're looking at right now.

And next, we have Jack Kasprzak of BB&T Capital Markets. John F. Kasprzak - BB&T Capital Markets, Research Division: Back to the gross margin question, just a little more color there, if I might. Commodity prices sort of stay where they are. Now you mentioned your margins are looking strong. So do you think that borrowing some volatility or a sharp increase in commodity prices, that we could see Q3 gross margins a little better than Q2? Is that kind of what you're pointing to? M. Chad Crow: I think that's definitely a possibility. I can tell you from across the second quarter, from April to June, our margins improved 200 basis points. And so it's certainly trending in the right direction, and as we've already mentioned, July has started out strong as well. John F. Kasprzak - BB&T Capital Markets, Research Division: All right, great. And on the overall market, you mentioned comments there, too, but there's recently, as in, the past week or so, there's some concern about maybe housing slowing down, some of the home build orders coming in a touch light. It's obviously an ebb and a flow in every cycle. But are you guys seeing any sort of pause out there or anything that, in the underlying market, that would give you a little setback in terms of the outlook? Floyd F. Sherman: Jack, I really -- we really haven't seen this. We just concluded about 2.5 day meetings area, VP manager and review meetings and we, of course, covered every single market that we're in. All of our people are still seeing a very healthy environment out there. Did not hear any areas that the pace of building was really getting ready to slow down. There is concerns as to -- of that labor is keeping a somewhat of a damper and the weather, up to the same degree, it has slowed down some of the building pace, but the demand for the houses and the builders are so as we get some sunny days and so they're buying some framers. The pace of building is going to be picking up. So from that standpoint, it looks like it's staying pretty good. It doesn't look like the change in mortgage rates when it rose and now it's pulling back. But that really hasn't seem to slow down the builders and on the future sales that we're hearing about. So it still looks very healthy out there for us out in all of our markets. I would say, the only consistent problem that we seem to be hearing is that the smaller builder is still having a very difficult time finding a source of the financing that will enable them to be active in acquiring the lots that they need to build on. The smaller builder is still feeling the pinch a lot more so than the large national or regional builders. John F. Kasprzak - BB&T Capital Markets, Research Division: Got it. Okay. And Chad, you mentioned CapEx, $8 million to $10 million. Can you just maybe update us on where you think D&A will be this year? M. Chad Crow: Probably $9 million to $10 million.

And David Williams of Williams Financial Group has our next question. David Neil Williams - Williams Financial Group, Inc., Research Division: I just had a quick question on the margins. You had not mentioned that there was about 60 basis points from volume and then maybe about 40 basis points from the mix and maybe prices. But what do you think, as far as the 60 basis point growth from the volume, is that something that you think is sticky? Or should we -- can we see that retreat a little bit as we move through the quarter here? M. Chad Crow: No, I think that's going to be pretty consistent, if we continue to grow our sales like we have been. David Neil Williams - Williams Financial Group, Inc., Research Division: Okay, great. And then thinking about maybe on the lumber prices and what the top line impact or benefit could be, if we think about prices contributing about... Floyd F. Sherman: David, you broke up and we lost you in the middle of your question. David Neil Williams - Williams Financial Group, Inc., Research Division: I apologize. Just thinking about the revenue and the comp line, if we think about 17.5% of revs were from pricing, what should we think about it as lumber prices kind of come down here for the top line growth? M. Chad Crow: It could slow our growth down a little bit from that standpoint, but at the same time we're -- I also feel like we're getting price increases through. So net-net, I don't know that it's going to have a significant impact. David Neil Williams - Williams Financial Group, Inc., Research Division: Okay, great. And one last one, if I could. I know that the Prefab Components has got about 60 basis points, I guess, Q-to-Q as a percentage of sales. What do you think is going on there? Is that maybe some pricing? Or is that just deeper penetration? Or maybe what's driving that increase? Floyd F. Sherman: I think price is one of the factors, but I think even more than that is the labor issues that are cropping up in the field are certainly making components more attractive to the builders. We're seeing a continuation of the trend of builders wanting to make the switch back to components and even recognizing that traditional framing steel may be slightly more favorable from a cost standpoint. But from the -- from a labor standpoint, it definitely is a more attractive alternative, and I think that's probably as large a contributor to our increased sales of components.

Our next question will come from Scott Levine of Imperial Capital. Scott Justin Levine - Imperial Capital, LLC, Research Division: So just kind of shifting back to pricing. I can appreciate that it's still very competitive out there, but your pricing growth contribution to your total revenue growth did improve in a period where cost inflation in the lumber side is abating. Would you say that the environment, the incremental data point regarding the pricing environment, is moving in the right direction or things are becoming a bit more predictable? Because I know you've highlighted efforts to go in with shorter pricing commitment periods and had to shift strategy based on what you've seen in the market and just wondering, if incrementally, the pricing environment is improving on the margin or not. M. Chad Crow: It may be doing a little better from a pricing standpoint. To some degree, the builders, they are getting busier and so they are placing a higher value on service across the board. So from that standpoint, it may be getting a little easier on the pricing side, but certainly, I wouldn't say significantly easier, yes. Floyd F. Sherman: I think if you talk with our salesman, they would not agree with what Chad is saying. We certainly -- every little bit helps, but we've got a long ways to go before we can really start saying that the pressure is easing. Scott Justin Levine - Imperial Capital, LLC, Research Division: Understood. And then turning to a little bit more color, perhaps, on the cash flow outlook. I know you guys don't give a specific guidance or anything like that, but maybe a little bit more color in your thoughts on the next couple of quarters in terms of operating cash. Are there any -- other than looking at 10% on working capital as a percent of sales, are is there any additional color you can give us in terms of whether you start to see improved operating cash flow in Q3 and Q4 and as you head into 2014? M. Chad Crow: I think we absolutely will, especially with the lower interest. I think we should be positive cash flow the last 2 quarters of the year. And if we're not, like you said, it's only going to be because of the working capital build and our business continuing to grow. So we should see -- we should definitely see improvement on the cash flow side of things.

And next, we have Sam McGovern of Crédit Suisse. Samuel McGovern - Crédit Suisse AG, Research Division: I just had a couple of quick questions. Just -- I know you guys talked earlier about sort of the outlook for lumber prices and you guys hit upon working capital. But has something changed out there and you guys felt that the lumber prices were going to accelerate again and that you could possibly see a repeat of what you saw in the first quarter? Would you guys be more willing, given the increased liquidity, to sort of take out a longer inventory position in anticipation of that? Or what's your outlook on that? M. Chad Crow: Yes, we -- I mean, if we really felt that, that was going to be the trend, then we're going to certainly utilize our position and protect ourselves, and that would mean, then, more working capital going into the inventory build. Right now, don't really see the need. We have -- we've gotten ourselves and we put ourselves in a position, I think, to pretty much get through the third quarter with some longer-term commitments that we used to cover our needs, as well as inventory that we've taken in during the month of July. So right now, we're feeling pretty good about our position for the third quarter. But if we felt that we were looking at another major spike that occurred from August or September of last year through March of this year, yes, we would go and buy in heavy in anticipation. Samuel McGovern - Crédit Suisse AG, Research Division: Got it. And could you also remind us about the status of your mothballed facilities? What's in the process of restarting and what's still down and what you may consider to restart in the future? Floyd F. Sherman: Yes. We have reactivated 2 of our component plants, one in Florida, one in Maryland. The rest, we're going to as the business develops and as there is a need and where we know we can keep that plant operating at a legitimate level, or more than just a few weeks or months, we're going to -- we will reactivate those facilities. But that -- we keep looking at it and evaluating it, and right now, don't have anything that we're planning to reopen for the rest of the quarter.

And next, we have Daniel Downes of BC Holdings.

The visibility of your business, even if we do hit a bit of a bump in the road here as far as homebuilder orders, a lot of these homebuilders have pretty big backlogs, at least the larger public ones. Just curious, what kind of visibility do you feel like you have into your business as far as kind of months out or -- and then where do you think there's more risk or just more opaque where you can't see out of it, at what point? Floyd F. Sherman: The -- we -- I -- from as far as visibility, we don't have any more or less visibility than we've always had and that's always been pretty short except for the feedback that we get from the builders in each one of the markets in which we operate. And right now, that continued to be very optimistic, and the projections that they're giving us and talking about what their building plans are for the remainder of the quarter and then into what will be our fourth quarter, their first quarter, still continues to be very healthy. So -- but we'll just have to react to that as we come to it. But the other question concerning our markets, right now, all of our markets are doing very well. I really can't say we have any troubled market other than maybe we have markets that are only seeing a 20% to 25% increase versus other markets that are seeing 50% and 60% and 70% increases, but hell, I don't think 20% increase is anything to be ashamed of. So right now, every one of our markets are looking very strong and very good.

Sounds good, yes. I got on the call a little bit late, so you may have addressed this already. But given the sharp decline in OSB and lumber prices recently, have you guys been able to do extend out your orders in order to kind of capitalize on these lower prices? Or to what extent can you, through discussions with the manufacturers, extend those out? M. Chad Crow: So, it's not only to extend it out, but as Floyd commented on just a moment ago, we do feel like, with the buys that we made this month of July and what we have upcoming in the next couple of months, we're certainly in good shape for the quarter. And he also mentioned that if we feel like we're going to see a sharp run-up in prices, we might tend to get heavier on the buy side. But right now, that's not our feel. So we feel like we're in good shape for this quarter.

And next, we have Philip Volpicelli from Deutsche Bank. Philip Volpicelli - Deutsche Bank AG, Research Division: It's Phil Volpicelli, Deutsche Bank. We've had a lot of discussion on margins. I was just hoping if you could talk a little bit about prices on Windows & Doors. We've, I think, beaten Lumber pretty well. But what's going on with Windows & Doors? Are you seeing price increases to you there? M. Chad Crow: Are we getting price increases on the input side or on the sale side? Philip Volpicelli - Deutsche Bank AG, Research Division: The cost. Well, I guess both. Are you getting input increases from the manufacturers? And are you able to pass them along? Floyd F. Sherman: Yes. We are right now. We certainly are seeing increases from the manufacturers. We're doing our best to pass it on. We certainly are making every effort to do so. I would say we've been very aggressive in trying to push our margins, but a lot of that is dictated by what -- the competition that we face and what their pricing strategy is. And in some cases, we've been able to cover it. In other cases, on other materials -- certain materials, we haven't been able to get everything, but we've been able to get some of it. So it's just been, really, a mixed bag. M. Chad Crow: But on the windows side of the business, our margins are certainly still very healthy. Floyd F. Sherman: 9 They are still healthy. And for the most part, Windows in particular, we've been able to pass on the increases that we've seen. Philip Volpicelli - Deutsche Bank AG, Research Division: Okay. Can you give us a magnitude of what the price increase from the manufacturers has been to you? Is it both single digits, mid-single digits, high-single digits? Floyd F. Sherman: From the window manufacturers? Philip Volpicelli - Deutsche Bank AG, Research Division: Windows and/or Doors, whatever information you're willing to provide, I'll take. Floyd F. Sherman: If you look at the window manufacturers, most of it has been mid-single digit, to somewhere between 4% and 7%. Philip Volpicelli - Deutsche Bank AG, Research Division: Okay. And on Doors, is it similar -- are Doors similar in range? M. Chad Crow: On Door, yes, I would say that's been in that range and then you're always going to have certain situations where we have to work with the manufacturer to adjust the pricing to beat a certain situation and -- or from a timing standpoint, as to when that increase goes into effect. But the Doors and Windows, on a combined basis, they've been pretty much the same.

And next, we have Howard Weinberg with UBS. Howard Weinberg - UBS Investment Bank, Research Division: Most of my questions actually have been asked and answered, so I only have one left, and it really goes back to the market share gains. And could you just talk a little bit about sort of your concentration? Obviously, the larger builders appear to be growing faster -- not appear, but they're growing faster than the rest of the market and whether or not you're able to get any additional wallet share from them. So to the extent that they were only purchasing lumber or prefab, are they able to go and sell Millwork and Windows and so forth and to sort of expanding beyond the market with your existing customer base? M. Chad Crow: There's always room to improve your share of wallet with customers. Like you said, you may be selling them every product except interior trim for whatever reason. So you're constantly going after better increased share of the wallet, but on the other side of things, as we've already discussed, it's still very competitive out there and a lot of the business you do with the big builders bid every quarter. And so a lot of it is dictated by what happens on a competitive basis within each market as you're going through that quarterly bidding process. But I would say, certainly, a portion of our market share gains has been our ability to increase the share of the wallet with those builders.

[Operator Instructions] We'll go next to Robert Kelly of Sidoti. Robert J. Kelly - Sidoti & Company, LLC: A lot has been covered, but one of the things I wanted to ask was a follow-on to the previous question. A lot of your growth has been coming from basically hedging yourself to the wagon of the larger builder and they own a lot of price leverage against you. Could you just talk about the competition within each of your markets? Are you seeing it -- some of the lesser players either fall in line, discipline-wise, or start to go away or be shunned by the larger builder due to weaker service levels or liquidity constraints, something like that, that would allow you guys to have a brighter future on the price leverage side? M. Chad Crow: Well, I think most of the pricing leverage we're going to get in the future is, as Floyd already commented on, we just need a healthier building environment. And while everything you read does indicate that bigger builders are taking market share, our mix of sales to the big builders has remained remarkably consistent in the last couple of years. If you look at our top 10 customers, it's been right around that 23%, 24% of sales. And if you look at the Builder 100, it's been right around 33%, 34% of sales. And like I said, it remained remarkably consistent. So it does feel like... Floyd F. Sherman: There's a lot of that I have to point out. A lot of that, as Chad knows, is we specifically try to design our sales effort towards achieving and keeping the mix that we have. We really have been very, very aggressive and active in going and looking for that smaller builder and developing business with the smaller builder, whether he be a mid-zone priced builder or the high-custom builder. We've been adding significantly to our new accounts on a quarterly basis and this cumulatively has really been the reason for our ability to maintain that mix of 65-35. And that's what we're going to continue putting all efforts into doing and keeping that mix because that's needed in our business in order to be able to get the longer-term profitability that we haven't had. Robert J. Kelly - Sidoti & Company, LLC: Right. How about on the competition side? Have you seen some competitors fall by the wayside? Floyd F. Sherman: Haven't really seen anyone falling by the wayside here for the last 6 months to 12 months. So I would have to say, yes, that's been pretty stable.

And we now have Shawn Boyd of Next Mark Capital.

The turn in gross margin has been great. I know we talked about a decent amount, so really, I just want to look out a little bit and get away from the quarter. We talked, I think in the past, about getting back to a 24% to 25% level at around $2 billion a year in revenues. Do I have that correct? Or has that changed in any way? M. Chad Crow: Yes. It could take a little bit healthier environment as far as starts because, at that level, you'll be talking about 850,000 starts or so. And I think we'll certainly see some nice margin improvement at that point. But I think to get all the way up to that, 25%, 26%, we're probably going to be needing somewhere closer to 1 million single-family starts.

Got it. And if we put -- it's probably silly exercise to do it, but if we put lumber prices aside for a second, what would be the #2 and #3 drivers to getting to that level? M. Chad Crow: I think the main drivers is going to be the construction activity. As Floyd pointed out earlier, we're still at a very, very low level of housing and we just need to get back to a more normal environment. Floyd F. Sherman: Yes. And the continual conversion from conventional framing into the [indiscernible].

Okay. And on the comment you made earlier, Floyd, regarding the wet weather we've had in the Southeast, can you quantify how much you guys might have lost in revenues in the quarter -- or not lost, but perhaps... Floyd F. Sherman: Delayed.

Yes, delayed, deferred, pushed out, just because it has been quite rainy and I'm just curious as to what that might have been. Floyd F. Sherman: Yes. And again, you have to take it somewhat, I have to look at it and then go on and base it because I'm not out there, that certainly would belittle all of our people. But if you talk with our people, they would indicate or feel that, that number is probably somewhere between $10 million to $20 million of effect. I am not in a position that I could really say one way or the other how accurate that number is, but I think it is probably realistic.

And with that, ladies and gentlemen, that does appear that we have no further questions. I'd like to turn the conference back over to Mr. Sherman for any additional or closing comments. Floyd F. Sherman: Okay. We appreciate everyone listening in today. And if you have any follow-up questions, please don't hesitate to give Chad or Marcie Hyder a call here in Dallas. Thanks, and have a good day.

And with that everyone, that does conclude today's conference call. We'd like to thank you again for your participation.