Jennifer Pasquino - Builders FirstSource, Inc. Floyd F. Sherman - Builders FirstSource, Inc. M. Chad Crow - Builders FirstSource, Inc. Peter Jackson - Builders FirstSource, Inc.

Nishu Sood - Deutsche Bank Securities, Inc. Michael Dahl - Barclays Capital, Inc. Alex J. Rygiel - FBR Capital Markets & Co. Nicholas Andrew Coppola - Thompson Research Group LLC John Baugh - Stifel, Nicolaus & Co., Inc. Jay McCanless - Wedbush Securities, Inc. Trey H. Grooms - Stephens, Inc. Keith Hughes - SunTrust Robinson Humphrey, Inc. Matt McCall - Seaport Global Securities LLC

Good morning and welcome to Builders FirstSource Second Quarter 2017 Earnings Conference Call. Today's call is being recorded and will be archived at www.bldr.com. It is now my pleasure to introduce Ms. Jennifer Pasquino, Senior Vice President-Investor Relations. Please go ahead. Jennifer Pasquino - Builders FirstSource, Inc.: Thank you. Good morning and welcome to the Builders FirstSource second quarter 2017 earnings conference call. Joining me on the call today is Floyd Sherman, Chief Executive Officer of Builders FirstSource; Chad Crow, President and Chief Operating Officer; and Peter Jackson, Chief Financial Officer. A copy of the slide presentation referred in this call is available on the Investor Relations section of the Builders FirstSource website at bldr.com. At this time, all participants are in a listen-only mode. Later, we'll conduct a question-and-answer session, and instructions will follow. Any reproduction of this call, 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, August 4, 2017. Builders FirstSource issued a press release after the market closed yesterday. If you don't have a copy, you can find it on our website. Before we begin, I would like to remind you that during the course of this conference call, we 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 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. The company will discuss adjusted results on this call. We've provided a reconciliation of non-GAAP financial measures to the GAAP equivalents in our earnings press release and detailed explanations of the non-GAAP financial measures in our Form 8-K filed yesterday, both of which are available on our website. At this time, it is my pleasure to turn the call over to Mr. Floyd Sherman. Floyd F. Sherman - Builders FirstSource, Inc.: Thank you and good morning. Welcome to our second quarter 2017 earnings call. I will start with a brief update on our Q2 results and then turn the call over to Chad, who will provide an update on our 2017 priorities, as well as our longer-term growth initiatives. Finally, Peter will discuss our financial results in more detail. And after my closing comments regarding our outlook, we will take your questions. Let's begin our discussion on page five. I am very pleased with our sales growth in the quarter and year-to-date, both up 10%. Sales in the first half of 2017, excluding closed locations grew 10.1% over the first half of 2016. Our enhanced focus on investment and targeted growth is really, as expected, starting to yield results. Year-to-date, sales volume excluding closed locations and commodity inflation grew approximately 7.4% in the single-family new residential homebuilding end market, in line with the starts growth as reported by the Census Bureau. Additionally, year-to-date sales in the repair and remodel end market increased over prior year by 5.1%. Commodity price inflation benefited our year-to-date sales by approximately 5%. Demand continues to grow in the industry for ways to build homes more efficiently as labor constraints and rising costs increasingly impact our homebuilding customers. Our value-added products address this need, providing products that are constructed offsite, reducing the home cycle time and require significantly less labor on the job site. We believe this is a significant growth opportunity for us and that we are well positioned to drive and one of our key growth priorities for 2017 and beyond. Our sales of value-added products, including manufactured products, windows, doors and millwork for the first half grew 9.6% versus 2016, almost double our total commodity adjusted volume growth. The investments we are making at our manufacturing facilities are really paying off with sales of our manufactured products growing 12.2% year-to-date. We'll continue to focus on growing our value-added products faster than our total sales and future investments for growth will target the higher margin value-added offerings to our customers. Moving on to page six with an overview of the macro housing markets, the new residential housing market has reached approximately 1.2 million annual starts, which includes a bit over 800,000 single-family starts. This remains well below the historic average, just growing now to levels we have historically seen in recessionary troughs. We believe there are still multiple years of growth ahead of us and we are estimating mid to high-single-digit growth in the single-family homebuilding market for the full-year 2017. Additionally, we believe the repair and remodeling market will continue to grow in the low-single-digit range. The housing market growth provides a solid foundation for our investments and above-market growth expectations. I'll now turn it over to Chad, who will discuss our 2017 priorities and our look at future growth. M. Chad Crow - Builders FirstSource, Inc.: Thank you, Floyd. Good morning, everyone. Starting on page seven, I would like to share our progress against our 2017 priorities, including our increased focus on profitable market share expansion and improved operational efficiencies. We had a strong first half of the year relative to growth in single-family starts. We are making significant new investments to drive our growth initiatives, including 73 additional sales associates in the quarter and 105 year-to-date. While these investments take a little time to pay off, we are already beginning to see their impact. We believe we have significant opportunities to increase the reach and penetration of our higher margin value-added products. These products allow manufacturing and assembly of homebuilding materials off the job site, aiding builders with the well-publicized labor shortages and extended lead times. Growth in total value products year-to-date was 9.6% over 2016, led by growth in our manufactured products of over 12%, which is almost double the growth rate of our total commodity-adjusted sales volume. Three new component plants came online in Q2, expanding our product portfolio and reach of these value-added products in growing markets. We are also increasing our focus on implementing best practices across the organization in order to drive incremental operational efficiencies. Our initial focus is on logistics, back office automation and using technology to improve integration with and service to our customers. As an example, we have developed implementation plans on a delivery and dispatch management system that we will begin deploying in the coming months. This system will enable us to optimize delivery routes, reduce yard and delivery cost and better serve our customers. We are excited about the efficiencies these projects will unlock across our business. Our continued focus on cash generation will allow us to fund these initiatives, as well as to continue to deleverage the balance sheet. We generated $47 million of cash in the quarter, which is in line with our 2017 guidance of generating $145 million to $155 million of free cash flow and reducing our leverage ratio to below 4 times by year-end. Finally, we are only as strong as our people and we are committed to continue to attract and retain the best associates in the industry and develop future leaders. Moving to page eight, I want to share our plans on leveraging our strengths to accelerate growth and further expand profitability. With the benefit of these initiatives, plus a return of the market to a normalized 1.1 million single-family housing start environment over the next four to six years, we would expect to double 2016 EBITDA and cash flow, and generate up to $1 billion in cash over this time period, resulting in an EPS of over $2 per share. We have a strong core business that is well positioned to take advantage of accelerating growth and improved market conditions. On top of that, we have significant initiatives that are designed to expand profit margins and cash flow. We plan to build on the momentum we have established with our 2017 priorities and continue to leverage our national manufacturing footprint and differentiated capabilities to grow our higher margin value-added products faster than the market over the next several years. In addition to growing our value-added products, we see opportunities to increasingly leverage our strengths, including unparalleled size, geographic footprint and end market exposure to grow faster than the single-family starts and capture share. This organic growth model, coupled with unlocking the opportunities we have identified with our operational excellence initiatives, such as distribution and logistics, pricing and margin management, back office efficiencies and system enhancements, provides opportunities for us to meaningfully accelerate profit growth. As a result of our focus on growth and operational efficiencies, we believe we have a realistic approach that creates cash generation and reinvestment opportunities. Our balanced approach to growth investment and ongoing debt reduction will allow us to increase investment in organic and acquisitive growth, while achieving and maintaining our long-term leverage target of 2.5 times to 3.5 times EBITDA. We look forward to sharing our progress with you over the coming years. I will now turn the call over to Peter who will review our financial results in more detail. Peter Jackson - Builders FirstSource, Inc.: Thank you, Chad. Good morning, everyone. I will first discuss the current-quarter results on page 10, and then touch briefly on our year-to-date results on page 11. As a reminder, we have included adjusted figures to normalize for one-time integration, closure, and other costs. For the second quarter, we reported net sales of $1.8 billion, a 10.1% increase compared to the second quarter of 2016, excluding the impact of closed locations and including an estimated 6.1% benefit from commodity price inflation. We estimate that our sales volume grew approximately 7.4% in the single-family new residential homebuilding end market, and approximately 2% in the repair and remodel end market, offset by a decline in multi-family and other. Our gross margin percentage was 25%, up approximately 10 basis points from 24.9% in the second quarter of 2016. The increase on a year-over-year basis was largely attributable to procurement savings, offset by the recent commodity price inflation, which negatively impacted our margins by about 35 basis points. We completed negotiations with our suppliers to realize procurement savings to offset this drag on gross margins. Our SG&A as a percentage of sales decreased by 40 basis points on a year-over-year basis. The reduction was largely attributable to the decline in depreciation and amortization on acquired ProBuild assets, offset by investments the company made in growth initiatives, including sales associates and new facilities. Interest expense for the quarter was $33.7 million compared to adjusted interest expense of $41.1 million in 2016. The $7.4 million reduction was largely due to multiple transactions the company executed to lower our go-forward cash interest expense, to extend our maturity profile and address our capital structure. These transactions have reduced our annual cash interest expense by over $30 million annually and extend our weighted average long-term debt maturity. Adjusted income tax expense decreased by $0.5 million compared to 2016. The decreases in effective rate can largely by attributable to tax planning initiatives to reduce our state cash taxes and utilize our state NOLs going forward. Adjusted net income was $43 million or $0.37 per diluted share compared to adjusted net income of $20.9 million or $0.18 per diluted share in the second quarter of 2016. Second quarter adjusted EBITDA grew $7.2 million to $124 million compared to prior year. The 6.2% year-over-year improvement was largely driven by sales increases and was in line with our guidance. Switching now to the financial results for the first half of 2017, please turn to page 11. Net sales for the first half of 2017 were $3.4 billion, a 10.1% increase compared to the first half of 2016, excluding the impact of closed locations. We estimate that our sales volume grew approximately 7.4% in the single-family new residential homebuilding end market and approximately 5.1% in the repair and remodel end market, offset by declines in multi-family and other. Commodity price inflation benefited sales by an estimated 5.1%. Gross margin percentage for the first half was 24.8%, a decrease of approximately 20 points from 2016. The decrease on a year-over-year basis was largely driven by gross profit margin compression on our commodity products, due to inflation in the lumber and lumber sheet goods markets during the first half, mitigated by procurement savings. Commodity inflation can cause short-term gross margin percentage compression when prices are rising and margin percentage expansion when prices are falling, due to the short-term pricing commitments we provide customers versus the volatility of the commodity market. However, commodity price inflation generally benefits the company's operating results in the long term, creating higher gross margin and EBITDA dollars. Our first half SG&A as a percentage of sales decreased by 90 basis points on a year-over-year basis. The reduction was largely attributable to the decline in depreciation and amortization on acquired ProBuild assets and cost savings realized. First half adjusted net income was $55.1 million or $0.48 per diluted share compared to adjusted net income of $6.8 million or $0.06 per diluted share in the first half of 2016. The 710% increase was largely driven by $16.5 million in interest expense savings, $13.5 million in depreciation and amortization related to ProBuild assets, and the balance primarily related to net sales growth over prior year. First half adjusted EBITDA grew $21.6 million to $200.1 million compared to the first half of 2016. The year-over-year improvement was largely driven by net sales growth. Turning to page 12, we expect free cash flow generation will give us the opportunity to further reduce debt in 2017. We believe this will be driven by EBITDA growth and a focus on working capital efficiency, which is estimated to run between 9% and 10% of incremental sales. We expect to invest in our business through capital expenditures at approximately 1.2% of sales. We expect our current NOL tax assets to shelter us from paying federal cash taxes in 2017, assuming no material changes in our shareholder base or the taxes (16:46). As a result of the opportunistic capital markets transactions executed over the last year and a half, cash interest should be reduced to approximately $130 million in 2017. We expect one-time ProBuild integration and conversion costs of approximately $20 million. As a result, we expect to generate approximately $145 million to $155 million in cash flow for the full-year 2017. Our business typically uses cash in the first half and generates cash in the second half of the year, due to seasonal working capital needs. The company generated cash from operations and investing of $46.9 million in the quarter. Due to seasonal working capital needs in the first quarter, cash used in operations and investing was $98.9 million year-to-date. This was in line with our expectations and annual guidance of $145 million to $155 million in positive cash flow from operations and investing activities for the full-year 2017. Turning to page 13; total liquidity at June 30, 2017 was $723 million, consisting of net borrowing availability under the revolving credit facility and cash on hand, which is more than sufficient for our operating needs. We have an extended debt maturity profile with no maturities until 2022 and a weighted average long-term debt maturity of 6.6 years. We are committed to further debt reduction, and the terms of our debt allow the company to repay our most expensive bonds first, benefiting future free cash flow. We have made progress on improving our leverage ratio. The net debt-to-adjusted EBITDA ratio on a trailing 12-month basis as of June 30, 2017 was 4.8 times, a 0.5 times reduction from prior year, which is consistent with our focus on deleveraging the balance sheet and increasing cash flow and improving liquidity. I would also like to provide color on the second half of 2017, as well as how we are currently thinking about full year. We expect sales growth in the second half to be roughly in line with the first half, 9% to 10% over prior year, with about half coming from volume and half from commodity inflation. Our market growth assumptions for the second half are consistent with our previous discussions around full year, including mid to high single-digit growth in single-family starts, low single-digit growth in repair and remodeling, and continued declines in the multi-family and other markets. We expect gross margin in the second half to be flat to up slightly versus prior year. This would translate to an estimated EBITDA growth of 17% to 23% year-over-year and in the range of our normalized sales-to-EBITDA conversion rate. Full year, this would result in EBITDA growth between 15% and 18% year-over-year, driven by 9% to 10% sales growth. Additionally, we are reaffirming our previous cash flow guidance of $145 million to $155 million of cash generation from operations and investing. I'll now turn the call back over to Floyd for his closing comments. Floyd F. Sherman - Builders FirstSource, Inc.: Thank you, Peter. Turning to our outlook, I remain enthusiastic about the future of our company. The continued strength in the fundamentals of the new residential housing market, our emphasis on profitable revenue and share expansion, as well as our investments in key markets position us exceptionally well for the continued growth and accelerating value creation. I'm excited and optimistic that the strategies and investments we have underway to grow our value-added business and unlock savings through our operational excellence initiatives will yield meaningful profit growth in the coming years. Our goal is to double our EBITDA and cash flow, generate more than $1 billion in cumulative cash over the four to six years, which should result in an EPS of over $2 a share, assuming the housing market continues its solid trajectory towards a normalized start level. I'll now turn the call over to the operator for Q&A.

Thank you. Our first question comes from Nishu Sood from Deutsche Bank. Please go ahead. Nishu Sood - Deutsche Bank Securities, Inc.: Thank you. Good morning. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning. Peter Jackson - Builders FirstSource, Inc.: Good morning. Nishu Sood - Deutsche Bank Securities, Inc.: First of all, wanted to talk about the long-term targets that you were laying out, really great to be getting back to that kind of a discussion. So I was wondering if you could lay out the kind of assumptions there. Obviously, the volume you laid out, the pricing with the volatility, especially in the lumber market, wanted to get your sense there. And also the cash flow and the EBITDA doubling, it seems to imply a lot more than $2 in EPS, so yeah, just wanted to get your general thoughts around that, please. M. Chad Crow - Builders FirstSource, Inc.: Yeah. I'll start out trying to attack that. The general assumptions are we continue with the housing recovery like we've seen the last couple of years. Somewhere around 7%, 8% growth in single-family housing each year should put us back to around 1.1 million single-family starts in somewhere around the five-year timeframe. And that includes what I feel like is a very reasonable conversion rate on EBITDA to within the range we've always talked about of 12% to 15%. And then on top of that, these operational excellence initiatives, I really feel like we can squeeze a lot of cost out of the business. As we've talked about in the past, the business has grown so much since the ProBuild acquisition that just small improvements can result in meaningful savings. It's the concept of the aggregation of marginal gains, right? Look for a 1% improvement in everything you do, and over time those aggregates have really significant changes. And so that's really our approach to driving the efficiencies in this business. So those are the general assumptions around how we get to those numbers we stated. And you're right, you do the math, and you will get something quite a bit higher than $2 a share. As far as lumber goes and I'm not going to try to guess where lumber will be in five years, but I've got think if we're back in that 1 million, 1.1 million single-family starts range, we're going to be pretty happy with where lumber prices are. But in the near term, we have seen a little bit of run up in lumber, since the end of June with the forest fires, but prices are still just kind of where they were when the run-up peaked a couple of weeks ago or a couple of months ago. We love where lumber prices are right now. I feel like we've certainly weathered the worse of the storm from a gross margin compression standpoint in Q2 and we should really start seeing some nice benefits from lumber in the back half of this year. So we've all been waiting years to have lumber prices where they are today and we're excited about it. I don't know if I did all your questions or not. Nishu Sood - Deutsche Bank Securities, Inc.: No. No. That's very helpful. Sorry. I've got a lot in there. But on lumber prices, there's been, call it, a two-headed spike in lumber price this year, so they've gone up in of the cross border action and then some relief and then obviously a run up again. I think folks might have anticipated more of an effect in the second quarter of the second bit of a run up. But they're really – there seem to be obviously less than the folks are expecting. You cited procurement initiatives being a main source of kind of offsetting that. I was wondering if you can take us through that a little bit and how that helped you offset it, obviously very positive. So just want a little bit more color on that please. Peter Jackson - Builders FirstSource, Inc.: Yeah. So this is Peter. We definitely did see some headwinds from the commodity inflation as we expected. But as you mentioned, it was more than offset by our procurement actions. We were involved in and aggressively pursued and closed out some procurement rebate programs that really did benefit us as well as we were able to make some timely lumber buys. So we feel really good about that performance in the second quarter. M. Chad Crow - Builders FirstSource, Inc.: And I'll add our guys did a nice job of getting prices pushed through in the second quarter, and so it's a combination of those two things. Floyd F. Sherman - Builders FirstSource, Inc.: Well, and another factor too, the – our rebates are better on our value-add products and we certainly accelerated the sales in those categories in Q2, and we're going to continue driving that side of the business. And we're benefiting and it comes about in many ways, it comes about in improved margins, which are helped by improved rebates that we get on the products that make up that product group. Nishu Sood - Deutsche Bank Securities, Inc.: Got it. Got it. That's very helpful. And the final one, we're now a year past the point when we started talking about the shift from the internal focus back to regrowth of sales or a focus on sales. Just wondering if you could just give us an update on that, where you feel you are in that? Obviously, your metrics are in line with the market growth, which is great to see. Is there further to go there? Could you return to a position of submarket gains or are you happy with where the initiatives are taking you today? M. Chad Crow - Builders FirstSource, Inc.: Well, I think we're pretty happy with the second quarter sales growth. We're never happy enough, right? There's always – we always want more. There's no doubt the distractions of the integration were real a year ago. They're minimal now, I mean, almost non-existent. Our guys have really done a good job of refocusing their efforts on growing their markets. We're still looking at some of the initiatives that we're laying out, are still designed to take some of the administrative burden off our guys in the field and either eliminate it through technology or maybe centralize some of it to corporate, just to give those guys more of an opportunity to get out there and sell. But the short answer to your question is those distractions are behind us and we feel good about the growth we're seeing. Nishu Sood - Deutsche Bank Securities, Inc.: Okay. Thank you.

The next question comes from Mike Dahl from Barclays. Please go ahead. Michael Dahl - Barclays Capital, Inc.: Hi. Thanks for taking my questions. Just had a couple of follow-ups around some of the long-term goals. And first specifically, how do you envision manufactured products and other value-add product mix as a percentage of your overall sales as you get to those longer-term targets? Because I think you're back up to 37% year-to-date, and actually just especially curious on the manufactured product side. Peter Jackson - Builders FirstSource, Inc.: Yeah. So, we have looked at this number. Historically, Builders, prior to the purchase of ProBuild, was up about 50% of the business was value-add. So, when we combined the two entities, it dropped to relatively close to where you see it now. We've seen some increases in that number in the high 30%s. So, our drive is definitely to get back towards that 50% number. There's no limit on how far we could take it. But it does take time to grow that business, and that is absolutely a key part of our strategy moving forward for the improved profitability, to improve gross margin, and for the value that it provides our customer base. Michael Dahl - Barclays Capital, Inc.: Got it. And as part of that, when you think about your portfolio of the manufactured products and obviously a need to help Builders address some of the constraints that exist in the labor market, how much thought have you given to further expansion into other adjacencies or even more revolutionary aspects within manufactured products over the next couple of years, and any color you can give us on other things you're thinking about there? M. Chad Crow - Builders FirstSource, Inc.: We think about those questions a lot because I have no doubt that is a trend we will continue to see. Builders are constantly looking for ways to build more efficiently. And with our size and scale, there's no reason we can't be a number one partner with those guys and coming up with strategies to do that. Over the next year or two, to be candid, our focus is going to primarily be on these platforms we've laid out, which is probably going to not include acquisitions. I think as we get our leverage down to where we want it, there's going to be real opportunities for us through acquisitions to possibly expand into some of those different avenues that you've laid out. I think in the next year or two, it's largely going to be continue what we've been doing with the expansion of our truss and panel plants in the markets where we have holds and coverage. But longer term, yes, the strategy is to look for some of those opportunities which could be through acquisition, I think through acquisition would make more sense if you wanted to do something transformational. Michael Dahl - Barclays Capital, Inc.: Okay. All right. Thank you.

Our next question comes from Alex Rygiel from FBR Capital Markets. Please go ahead. Alex J. Rygiel - FBR Capital Markets & Co.: Thank you. Nice quarter, gentlemen. Floyd F. Sherman - Builders FirstSource, Inc.: Thank you. Peter Jackson - Builders FirstSource, Inc.: Thank you. Alex J. Rygiel - FBR Capital Markets & Co.: Just a quick question. The three new component plants that became operational in 2Q, can you give us a ballpark of what the revenue capacity is of these and/or the timeline for full utilization? Floyd F. Sherman - Builders FirstSource, Inc.: Yeah. The five plants that we have scheduled to go in this year, we really just got three of them, have just really gotten started on a production basis. We start manning them up in the second quarter, hiring the required estimators, designers, the management staff for the plants. The other two will be initiated in the back half of end of the third and fourth quarters. Those plants really are not going to be producing what I will say will be meaningful sales during the balance of the year. But I think once they are up and fully operating, I think all of those plants will produce in excess of $12 million to $15 million a year per plant. Some of the plants will ultimately turn out a higher sales number than that. But I think for the coming year, that's what we're going to be looking for. We got off to a very good start in the three plants, really ran into no unanticipated issues. The training has gone extremely well. Our people are in place. So, I am very, very pleased and optimistic with what those plants are going to be producing for us towards the back half of the year and into mainly 2018. This will give us – right now, we are operating 56 truss plants and 13 panel plants. So, we'll be getting a nice increase in that number. We're going to have more plants on the CapEx list for next year, and we're going to continue expanding this business and probably increasing our plant count by 10% to 15% a year as we look forward. We think this is an extremely attractive proposition to the builder right now; it's very readily accepted, both single-family and multi-family. The truss plants also give us an entry – a solid entry into the multi-family product arena with our installed millwork capabilities and that's where our concentration is going to be. And we think we can greatly expand our presence in the multi-family market, even though the multi-family market is contracting somewhat from the levels that we saw last year. It still provides us a very healthy environment that we can compete in. So, we're very excited about this side of the business. We do offer a, what we call, our better – the better framing system, but our first alternative is to drive our panel sales. That is really the best cost proposition to the builder and that's what we lead with. So those are what we're going to be really focusing, these areas on manufactured products is where our focus is going to be. And I will add, not only in the truss and panel area but also millwork operations. We added and started a new millwork operation in the second quarter and we're going to be looking to expand our presence in the millwork area. Alex J. Rygiel - FBR Capital Markets & Co.: And to follow-up on that, you added 73 sales people in the second quarter, 105 year-to-date. What's your full year plan this year? And how should we think about the need to add sales capacity to achieve some of your four to six-year goals that you've laid out? M. Chad Crow - Builders FirstSource, Inc.: We're going to keep pushing hard with our new salesman program. We have added 105 year-to-date, over 200 since the program started, and we've generated almost $150 million of incremental sales through that program, so definitely seeing some positive results there. Right now, we have no desire to stop. The boots on the ground is how you go out and drive business and I think we've got to continue to recruit young talent into this industry, get them excited, get them trained up, because they will be a big part of getting us to those goals we laid out. Alex J. Rygiel - FBR Capital Markets & Co.: Thank you very much.

Our next question comes from Nick Coppola from Thompson Research Group. Please go ahead. Nicholas Andrew Coppola - Thompson Research Group LLC: Hey, good morning. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning. Nicholas Andrew Coppola - Thompson Research Group LLC: I wanted to ask a quick follow-up question on the sales add (36:16). How long does it typically take for the productivity of a new salesperson to ramp up? M. Chad Crow - Builders FirstSource, Inc.: These guys will typically go through six month training program, they'll go through and they'll learn all aspects of the business, they'll ride with truck drivers, they'll work in door shops, they'll do it all to really get a good understanding of what it takes to serve our customers. Then, beyond that, it's probably to give somebody fully where you want them, it's probably a two to three-year process, but I'll tell you right now, these guys that we've hired and we track them closely, they've become about 50% productive already. So that means they're covering about 50% of their margin and they're growing their business like what we want them to. So, usually, the first six months is slower because they're in training. We're seeing them get about 50% productivity after a year. And then it's another year or so before they're really up and running. Nicholas Andrew Coppola - Thompson Research Group LLC: Okay. (37:17) really having a sensible investment. But – and then I guess just shifting gears a little bit looking at sales volumes in R&R. I guess that 2% is consistent with the low-single digits that you called out for the full year, but was there anything unusual in the quarter and do you think there's an opportunity to may be accelerate growth, particularly in that R&R end market? M. Chad Crow - Builders FirstSource, Inc.: Well, the biggest drag there is Alaska. That's where we do a lot of our R&R growth and a lot of R&R business. And as you know, that economy is very dependent on the oil industry and government spending and that's one of our slower markets right now. If you pull Alaska out of the R&R calculation, we're actually up over 4%. So that's really just the Alaska slowness that you're seeing there. Nicholas Andrew Coppola - Thompson Research Group LLC: Okay. Okay. And then I guess just last question. I wanted to see if you wanted to add any kind of prognostication about lumber prices here? M. Chad Crow - Builders FirstSource, Inc.: I'll give you my thoughts. I think the little run up we've seen the last few weeks was more emotional than anything with the fires. If you look at the amount of supply that was actually impacted, I've seen numbers as low as half a percent of the supply was impacted by the fires. I would expect to see prices probably trickle down a bit the balance of the year somewhere between as far as framing lumber composite maybe drift down into that $4.10, $4.15 range from where it is now. But don't really expect any significant volatility. You have any different opinion, Floyd? Floyd F. Sherman - Builders FirstSource, Inc.: No. I think that pretty much reflects what – the opinion that I have plus within our lumber buying group and so forth. Nicholas Andrew Coppola - Thompson Research Group LLC: Okay. Thanks for taking my questions. M. Chad Crow - Builders FirstSource, Inc.: You bet.

Our next question comes from John Baugh from Stifel. Please go ahead. John Baugh - Stifel, Nicolaus & Co., Inc.: Thank you. Good morning, Floyd, Chad, Peter, Jennifer and the whole Builders FirstSource team. Thanks for taking my questions. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning. M. Chad Crow - Builders FirstSource, Inc.: Thank you, John. John Baugh - Stifel, Nicolaus & Co., Inc.: So, can you give us a frame of – how many salespeople do you have? So, what is the base number? Floyd F. Sherman - Builders FirstSource, Inc.: We have actively, what I will say is a true field sales people, 750 to 800, and then the – and then we have, in addition to that, there's several hundred more that operate in a capacity, both field sales and back office. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Super. Thank you. And then when do we lap or have we already lapped the closed locations, or is that something that we'll see a trickle continue? M. Chad Crow - Builders FirstSource, Inc.: There'll always be a trickle. We're constantly evaluating the profitability of our locations, and it's not going to be a meaningful number going forward, I wouldn't think. But we could – you could see closing one or two facilities a year. Those would probably be some in the smaller, more rural markets. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Super. And then help us with the D&A piece on ProBuild and the influence on SG&A and the sort of out quarters for the rest of 2017 and then 2018. Peter Jackson - Builders FirstSource, Inc.: Yeah. So, the initial markup or fair value adjustment when we did the acquisition of ProBuild, that last about a year. So, we're seeing an inflated amount of D&A for that short-term period. It's probably – we're probably looking to add a $25 million per quarter on a go-forward basis, more or less. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. And that's a total D&A number, Peter, quarterly for the company sort of going into 2018? Peter Jackson - Builders FirstSource, Inc.: Correct. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Super. And then lastly, just another little – the other bucket for revenue. I think it was a decline of $13 million either in the quarter or year-to-date, I can't remember. Refresh us on that and what that is and what that does going forward. Peter Jackson - Builders FirstSource, Inc.: Yeah. So that's actually the same answer to Chad had just given on Alaska. That's really the big bucket there. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Okay. All right. And as we think about this working capital number that you alluded to, I think it was 9% to 10%. Is that something that kind of goes both ways? Obviously, we're in a growth mode now. But trying to think about a possible recession at some point, hopefully in the distant future, do we see that same kind of flow through the other way? Peter Jackson - Builders FirstSource, Inc.: Absolutely. John Baugh - Stifel, Nicolaus & Co., Inc.: Okay. Super. Thanks. Peter Jackson - Builders FirstSource, Inc.: Both ways. John Baugh - Stifel, Nicolaus & Co., Inc.: All right. Thanks. Good luck. Peter Jackson - Builders FirstSource, Inc.: Thank you. M. Chad Crow - Builders FirstSource, Inc.: Thank you.

Our next question comes from Jay McCanless from Wedbush. Please go ahead. Jay McCanless - Wedbush Securities, Inc.: Hi. Good morning, everyone. Thanks for taking my questions. Peter Jackson - Builders FirstSource, Inc.: Good morning. M. Chad Crow - Builders FirstSource, Inc.: Good morning. Jay McCanless - Wedbush Securities, Inc.: Just wanted to ask on SG&A with the additional people that you're bringing on. Can you maybe give us what the baseline on a quarterly run rate is going to be for SG&A now and then how much, as you guys add more people in the back half of the year, we should expect that to move up? Peter Jackson - Builders FirstSource, Inc.: Well, I guess broadly speaking we believe that our SG&A in the second half of the year should continue to show improvement versus prior year. The investments that we've made in that sales force are just the – probably the biggest part of the conversation, started in the back half of last year. In all seriousness, that was when it really started to ramp up. So, you're starting to look at the lapping on a year-over-year basis. So that should settle it down a little bit. But we believe in these investments. We think they're very valuable to us and we continue – we are intending to continue to support them on a go-forward basis. M. Chad Crow - Builders FirstSource, Inc.: Yeah. It could run $6 million a year or so but keep in mind, as these guys become more and more productive then – there'd still be an SG&A, right? But they'll be generating a lot more margin dollars so the net profitability should be a positive impact. Jay McCanless - Wedbush Securities, Inc.: Got it. Okay. That's helpful. The second question I had is with multi-family, is the contraction there just a function of what's happening in the market or are you guys purposely walking away from some jobs because you're seeing a profit squeeze or something along those lines? Peter Jackson - Builders FirstSource, Inc.: I'd say it's more market-driven. As Floyd mentioned earlier, we're trying to accelerate our participation in the multi-family market when it comes to trusses and panels. Jay McCanless - Wedbush Securities, Inc.: Okay. And then the last question I had, if we get to 2018, lumber prices stay around where they are and kind of hold that level through the year. Are you guys going to be able to get your traditional markup on that or is a flat lumber market going to be maybe a little – maybe weigh a little bit on adjusted EBITDA growth and revenue growth? Peter Jackson - Builders FirstSource, Inc.: I would anticipate we'll be able to get a normal pricing off of that. Jay McCanless - Wedbush Securities, Inc.: All right. Thanks, guys. Appreciate it. Peter Jackson - Builders FirstSource, Inc.: Thank you.

Our next question comes from Trey Grooms from Stephens, Inc. Please go ahead. Trey H. Grooms - Stephens, Inc.: Good morning. Thanks for taking my questions. Peter Jackson - Builders FirstSource, Inc.: Good morning. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning, Trey. Trey H. Grooms - Stephens, Inc.: The ProBuild $20 million conversion and integration costs scheduled for 2017, and you may have mentioned this, but if I missed it I'm sorry, what are you guys budgeting for next year on that just as we kind of think about free cash for next year? Peter Jackson - Builders FirstSource, Inc.: Yeah. So, we're looking at probably about $10 million roughly, basically really focused on the remaining ERP conversions, just maintaining that pace until we're done with those in 2019. Trey H. Grooms - Stephens, Inc.: Okay. And again, I may have missed this, but the panel plant – excuse me, the components plant that you guys are bringing on this year, what's the investment on those there? I mean, you talked about some of the revs per plant per year. I may have missed the cost there, CapEx associated with that. M. Chad Crow - Builders FirstSource, Inc.: All in, it's usually somewhere around $5 million and that's leasing the facility. Obviously, that's not buying the property. Trey H. Grooms - Stephens, Inc.: $5 million per plant? M. Chad Crow - Builders FirstSource, Inc.: Per. Yes. Trey H. Grooms - Stephens, Inc.: Okay. And then, Floyd, last quarter I think it was when you mentioned you were – I guess as we kind of look through the year and the recovery, especially with the single-family housing, you mentioned that you thought labor constraints might be one of the things that could potentially hold back starts in the busy summer months. Are you seeing that? I mean, your results definitely wouldn't suggest that that's much of an issue for you. I mean, so what – has that shaken out better than what you would've expected kind of going into it, and is that labor situation looking better in your eyes? Floyd F. Sherman - Builders FirstSource, Inc.: No. I can't say it's looking any better. I can't say it's looking any worse. I think, Trey, we seem to keep finding ways to solve our problems and I still believe it is – it's certainly is holding back the start rate. But we really like at least the consistency that we're seeing in the starts. They're staying pretty much right where we had projected them to be. So, the industry, as well as people like ourselves, we keep – we're finding solutions to the problem. And I think we're going to continue to find those solutions and hopefully, we're going to be able to accelerate and I think we've demonstrated, we're showing that we're solving problems and accelerating our sales faster than others in the business. So, I'm still very, very optimistic about what I see on a go-forward basis. And I think we're going to keep seeing a consistent improvement in our business as well as an improvement in the housing start rate. Trey H. Grooms - Stephens, Inc.: All right. Well, thanks for your color there. Always appreciate it and good luck, guys and gals. Floyd F. Sherman - Builders FirstSource, Inc.: Okay. Peter Jackson - Builders FirstSource, Inc.: Thank you.

Our next question comes from Keith Hughes from SunTrust. Please go ahead. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Thank you. Some questions on the long-term view you gave. I assume you talked about doubling of EBITDA, just in terms of the baseline, we're talking $750 million of EBITDA at 1.1 million single-family starts, so that rough numbers? Peter Jackson - Builders FirstSource, Inc.: That's correct, yes. M. Chad Crow - Builders FirstSource, Inc.: That's right. Keith Hughes - SunTrust Robinson Humphrey, Inc.: So, what kind of margin do you think that would represent at that number? Peter Jackson - Builders FirstSource, Inc.: Gross margin? Keith Hughes - SunTrust Robinson Humphrey, Inc.: EBITDA margin. Peter Jackson - Builders FirstSource, Inc.: You'd be pushing – yeah, pushing 9%. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. I got the same sort of numbers. If I just interpolate on that, it seems like that would push EBITDA contribution margin, over whatever period of time this takes, to high teens, which is a little bit above what we've seen in the past couple of years, a little more in line with what we saw in the last cycle. Just kind of get your view, is that purposeful increase, something changing there? What's your view there? Peter Jackson - Builders FirstSource, Inc.: Yeah. And you're right and there's really a couple of pieces to that. One is the EBITDA contribution from our base business, which we've said will be in that 12% to 15%. The other, the incremental piece you're seeing is the savings we're generating from our operational initiatives and also the incremental margin and profitability coming from continue to expand the value-add side of our business. Keith Hughes - SunTrust Robinson Humphrey, Inc.: Okay. And I assume in this scenario, you're not putting any kind of acquisitions in, is that correct? Peter Jackson - Builders FirstSource, Inc.: That's correct. Keith Hughes - SunTrust Robinson Humphrey, Inc.: All right. Thank you very much. Peter Jackson - Builders FirstSource, Inc.: You bet.

Our next question comes from Matt McCall from Seaport Global Securities. Please go ahead. Matt McCall - Seaport Global Securities LLC: Thank you. Good morning, everybody. Floyd F. Sherman - Builders FirstSource, Inc.: Good morning, Matt. Peter Jackson - Builders FirstSource, Inc.: Good morning. Matt McCall - Seaport Global Securities LLC: I'll just continue on that last question. What about share gains, dollar for start increases? Anything else included in that outlook, that longer term outlook? Peter Jackson - Builders FirstSource, Inc.: There are share gains included in that number and the growth of the business is, well, largely in line with the market. It does show some revenue per start improvement. Matt McCall - Seaport Global Securities LLC: Okay. All right. And then, Chad, I think you said there was some savings included or some incremental savings included in that longer term goal. Is this a part of the continuation of ProBuild, synergies you're going to get? You have others targeted, or is this just a longer-term plan where you want to take out X% of costs? Just help me frame that savings expectation. M. Chad Crow - Builders FirstSource, Inc.: It's more of a longer-term plan. As we've talked about in the past, I thought we did a heck of a job bringing our two companies together. But now is the time we have the luxury of going back over the way we do things with a fine-toothed comb and really making some nice improvements and squeezing some efficiencies out. And as I said earlier, small improvements here or there are meaningful dollars, and an example I'd like to use. We spend close to $1 billion in comp and benefits every year. Give me a 1% savings in that. That's $10 million. I'm pretty sure that's right. I'm not good with numbers, and that's a lot of zeros. And that's just 1%, right? I think we can do better than 1%. So, when you look at the scale that we've achieved now, if we can squeeze 1%, 2% out here and there, that's meaningful dollars. So, part of our long-term goal of getting to the doubling of EBITDA that we've laid out is going after these efficiencies and between these operational efficiencies and the mix improvement that we're going to be shooting for by growing the value-add side of the business. That's right now we're looking at about $100 million of EBITDA gain by the time we get to the promised land in five or six years. Floyd F. Sherman - Builders FirstSource, Inc.: And, Chad, these are things that we really envisioned in putting the two companies together. Scale has definite benefits. First, you had to stabilize the company, which we did, make sure that we – that the train didn't run off the track. And I think we demonstrated that we did, as Chad said, a very, very good job in bringing the two companies together. We continue to improve sales and continue to improve the operational performance and the profitability of the business. And now, we're going to start focusing on those things to where are the benefits of creating the scale of the company that we have. And they're very real and they're going to be achievable. And I think you will see that our performance in this area is going to be just like it was in combining the companies, and the integrating of the two companies. We did a hell of a job in that area, we're going to do a hell of a job in bringing these benefits to the bottom line and benefiting our shareholders. Matt McCall - Seaport Global Securities LLC: That sounds great, Floyd. Maybe if I go a little near term, looking at the second half revenue guidance, I think you said half and half, you're going to grow high-single digits half and half inflation and volumes. Chad, my math works a little differently and looks like it's a little bit higher inflation level, are you assuming what you said earlier that lumber prices tick lower and you see that impact on the top line? M. Chad Crow - Builders FirstSource, Inc.: I would expect to see somewhat lower prices the balance of the year. Matt McCall - Seaport Global Securities LLC: Okay. And that's what's in the guidance. From a volume perspective, the comps, I think the comps eased in the back half. So is there something we should keep in mind as to why we would see an increase in year-over-year volume growth? Peter Jackson - Builders FirstSource, Inc.: No, we feel good about the second half. I don't think there's any message we're trying to send there, other than continued performance by the business in the market. Floyd F. Sherman - Builders FirstSource, Inc.: And we expect to see a good second half and on our pace consistent or slightly better than what we've seen in the first half relative to the second half of last year. Matt McCall - Seaport Global Securities LLC: Okay. Okay. And then finally, the procurement benefits that you referenced in Q2; are there similar benefits baked into the outlook for the second half? Are there still opportunities to offset some of that inflation? Peter Jackson - Builders FirstSource, Inc.: No. No, that was – is behind us. We have seen good performance out of our procurement team. We expect that to continue but not like that second quarter performance. Matt McCall - Seaport Global Securities LLC: Okay. Perfect. Thanks, Peter.

And I would now like to turn the conference back to Mr. Sherman for any additional or closing remarks. Floyd F. Sherman - Builders FirstSource, Inc.: Okay. The – thank you for joining the call today and we look forward to updating you on the progress of our business initiatives in the months ahead. And if you have any follow-up questions, please don't hesitate to recap to Jen or Peter. And we hope you have a good weekend and looking forward to your staying in touch with the company. Thank you.

And this does conclude our conference for today. Thank you for your participation. You may disconnect.