William Currie - Executive Chairman Michael Glenn - Chief Executive Officer Michael Cole - Chief Financial Officer Lynn Afendoulis - Director of Communications

Steve Chercover - D. A. Davidson & Co Jay McCanless - FTN Equity Robert Kelly - Sidoti Trey Grooms - Stephens Inc. Burke Whitson - Kiosk Capital Management David Leibowitz - Horizon

Good day ladies and gentlemen and welcome to the Universal Forest Products Incorporated fourth quarter 2008 earnings conference call. My name is Michelle and I will be your coordinator for today. At this time all participants are in a listen-only mode. We will be facilitating a question-and-answer session towards the end of today’s conference. (Operator Instructions) I would now like to turn the present takes over to your host for today’s call, Ms. Lynn Afendoulis, Director of Communications. Please proceed.

Good morning and welcome to Universal Forest Products, fourth quarter 2008 earnings conference call. On the call today are Executive Chairman, William G. Currie; CEO, Michael B. Glenn; and CFO, Michael Cole. Please be aware that any statements included in this call that are not historical are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of the 1934, as amended. Such forward looking statements are based on the belief of the company's management as well as on assumptions made by and information currently available to the company at the time such statements were made. The company does not undertake to update forward-looking statements to reflect circumstances, assumptions or events that occur after the date the forward-looking statements are made. Actual results could differ materially from those included in such forward-looking statements. Investors are cautioned that all forward-looking statements involve risk and uncertainty. Among the factors that could cause actual results to differ materially are the following: adverse lumber market trends, competitive activity, negative economic trends, government regulations and weather. These risk factors and additional information are included in the company’s reports on Forms 10-K and 10-Q on file with the Securities and Exchange Commission. This call is the property of Universal Forest Products, any redistribution, retransmission, rebroadcast of this call in any form without the expressed written consent of Universal is strictly prohibited. At this point I would like to turn the call over to Bill Currie.

Hey, good morning everyone and thanks for joining us today. 2008’s earnings might not stack up well against previous years, but there’s a lot of good news behind those numbers. The management team at Universal Forest Products executed with razor sharpness and did all the right things in a very, very tough year. They sized their business to their opportunities and they did so with class. They concentrated on their balance sheet, generating $116 million in cash, and paid down debt and receivables financing. On top of that, Michael Glenn and his team made a profit under the most difficult circumstances, a manufacturer in our business has ever experienced. We don’t like to grow our success on the backs of others failures. It’s a lot more rewarding to win when your competitor is still standing, but the truth is, many, many of our competitors have fallen, and many more will do so. It’s an opportunity for a strong company like Universal. We have gained market share in all four segments and will continue to do that and because we’ve also kept all of our key people, we are the best positioned company in the business and ready for the turn around in the economy. The first quarter of 2009 will be very difficult, but following that, I think you’ll see Universal back on the road to solid profitability and sustainable growth. I’m proud of this company and have great confidence in what the future holds. I’ve been here for 38 years and never lost money. Odds are real good, that we’ll continue to add trend into 2009. Now I’ll turn the call over to Mike Cole to review the financials. Mike.

Thanks Bill. I’ll get things started by reviewing our income statement for the quarter. As you noticed in the press release, our total net sales for the quarter decreased by 17%. We estimate this was comprised of a 14% decrease in unit sales and a 3% decline in overall selling prices due to the lumber market. Reviewing by market, our sales for the DIY market decreased 8%, compared to last year, primarily due to a 5% decline in unit sales as a result of the housing market, and a decline in consumer spending. Our sales to the manufactured housing market decreased 34% for the quarter, primarily due to a decrease in unit sales. HUD-code shipments were off and reported 35% in November and we believe modular production is off by a similar amount. Our sales for the site-built construction market decreased 29% this quarter, primarily due to a decline in unit sales and a decline in selling prices due to the lumber market and continued pricing pressure. Single family house starts were off and reported 45% for the period and multi-family starts were off about 42%. Finally our sales to the industrial market decreased by 10% for the quarter. Although we add over 1,000 new customers since this time last year, our sales to existing customers declined due to economic conditions. Moving down the income statement, our fourth quarter gross margin increased 11.9% from 10.1% last year and our gross profit dollars decreased by only 2.7%, despite of a 14% decline in unit sales. Our improved margin was primarily due to a decrease in our labor cost as a percentage of sales, due to plant consolidations and closures and efforts to right size our operations based on demand. Selling, general and administrative experiences decreased by over $5.4 million for the quarter, comprised of $1.6 million of SG&A of newly acquired operations, a $3.1 million reduction in SG&A for operations we previously closed, and a decrease in the SG&A of existing locations, totaling approximately $3.9 million. The decrease in existing locations was primarily due to a decrease in compensation related expenses tied with the decline in headcount, offset by an increase in bad debt expense. We recorded a tax credit of almost $3 million in the quarter, which substantially offset our pre-tax loss of $3.5 million. Two unusual things happened in the quarter: First the federal research and development tax credit received legislative approval in October 2008, so the entire amount of this year’s credit was recorded in the fourth quarter. Second we identified and recorded several state income tax credits in the fourth quarter. Moving on to our cash flow statement, our cash flow from operations was $88.6 million for 2008. Our net earnings of $4.3 million included $48.4 million in non-cash expenses and a $35.9 million decrease in work capital. I think it’s important to note that the cancellation of our sale receivables program in September reduced our operating cash flow by approximately $27 million in 2008, but this we reported as a financing activity and our operating cash flows would have been almost $116 million and our cash outflow from financing activities would have been almost $135 million. We came in slightly under our capital expenditure target of $20 million and finished at $18.9 million for the year. There were no business acquisitions or significant sales of property plants or equipment completed during the quarter and we paid $105 million of debt for the year, plus the $27 million effect of canceling our sale receivables program. A couple of points I’d like to make about the balance sheet. First our total interest bearing debt in the amounts of standing and direct sale of receivables agreement decreased to $101 million at the end of December ‘08, compared with $233 million at the end of December 2007 and included in long term debt there was approximately $30 million outstanding on or five year credit facility, which has a remaining availability of $240 million. That completes my comments on the financial statements.

Thanks a lot Mike and now I’ll turn it over to Mike Glenn, our CEO, for a business review and an outlook. Mikey.

Thanks Bill. 2008 is going to go down as the toughest year in our company’s history. What started out as a housing problem and was fueled by the sub-prime issue, turned into a catastrophe for nearly all the industries globally, but even with all of the turmoil in the economy and the markets, we ended the year with a modest profit, and importantly we used our cash that we generated to out cut our debt by more than half, so our leverage ratio is 16%, it’s the best in our history. I can’t emphasize this enough. This company stands on solid financial platform. I can’t tell you how proud that makes me. Proud of our people and their ability to continue to push forward even when faced with unprecedented challenges and proud of the people who had the vision to create a business model that can get us through even the roughest time in our history. We’re creating success not just for ourselves and our futures, but in honor to many employees who lost to right sizing our operations. We make tough decisions for the greater good of our company and we owe the people in the communities impacted by those decisions, our best efforts to be successful, so we can participate in our communities and the resurgence of our national economy once again. We have many reasons for hope as we look to the future, a cost structure that’s inline with our business, a continuous improvement program as we’re being awarded and bringing us the efficiency day by day, and employees engaged in their work in making Universal a better company. We realize 2009 is going to be a hard year, but we’re ready, and we’re hopeful and we’re focused on targets and strategies that will lead us to a new and sustainable growth in the years to come. Let’s take a look at our markets. Let’s start with site-built, because it had a much bigger impact on our other markets in 2008 and because there’s just not a whole lot to say. In 2008 single-family housing starts dropped by more than 40% compared to ’07 and tight credit conditions began to have a negative impact on multi-family and light commercial construction activity as well. Housing will continue to be a challenge market as long as credit issues remain, and foreclosures continue to impact inventories and selling prices. So, we’re focused on what we can control. We’re making sure that we’re right sized. We consolidated some operations and we continue to evaluate our markets and opportunities. We continue to look for healthy new opportunities to maintain good relationship with builders and have strong balance sheets and outlooks, and to take business only if it has acceptable margins and if the customers have the ability to pay. We continue to look at the opportunities in this market with an eye towards sustainable growth that makes sense for the long-term success of Universal. In DIY, the lowest consumer confidence levels ever, have drastically reduced consumer spending on most things, including home repair and remodel projects. People have less disposable income; we’re less certain about their income and future, and lost value in their homes. So they don’t feel like spending on those homes in 2008. We believe that scenario will last into 2009. Also in this market we’re focused on what we can control. We’re adding new products, we’re gaining market share, and we’re improving our efficiencies and our profitability. Manufactured housing remains a weak market. Its future depends on a large part on the oversupply of conventionally build, low-cost homes and the availability of conventional financing. We’re hanging onto our dominant share and helping our customers maintain their business and success. As with other markets, we continue to take measures to minimize credit risks, but the future of manufactured housing continues to have big question marks and we’re making sure to stay on top of issues, customers and opportunities. Industrial provides us with the most excitement, and we’re looking for new growth and new opportunities in this market. We’ll be focusing on growing our role as the only nation-wide packaging specialist, and we’re charging full speed ahead into the concrete forming arena, because it continues to open doors. We sold nearly 200 new accounts in 2008, and have 27 account managers involved in concrete forming sales across the country, and we’re growing. We’re selling both direct and two-step and have seen success with both strategies, and we’re continually adding new products and capabilities. Concrete forming is a fragmented market that’s perfect for Universal. It allows us to leverage our experience, strengths and national footprints in ways that no other company can. Overall we expect 2009 to be a tough year, but I can tell you we’re prepared for the rough road ahead. We’re positioning ourselves for growth, while our competitors are position themselves for survival. We’re ready to take on 2009 and more than ready for better days and years that are sure to follow.

Thank you, Mike. I think we’ll open it up for questions and we’ll try to give you our candid honest answers.

(Operator Instructions) Your first question comes from the line of Steve Chercover of D.A. Davidson; please proceed. Steve Chercover – D. A. Davidson & Co: Good morning everyone.

Good morning Steve. Steve Chercover – D. A. Davidson & Co: Three quick questions I think. First of all, your sales allowances fell substantially either on a dollar value or percent value and does that reflect exposure to bad accounts or can you explain why that happened?

No, it does have sales allowances in rebates and discounts, but it also has adjustments in it to take our cycled operations that use construction contract accounting and adjust sales to the proper number based on completed contract. So I wouldn’t make into that; that the adjustment that’s in there relates to discounts or rebates. I think it relates more to the construction contract accounting. Steve Chercover – D. A. Davidson & Co: Okay, thank you for that Mike. Also wondering, should we anticipate any more write-downs going forward?

Are you talking about impairments of assets? Steve Chercover – D. A. Davidson & Co: Yes, or do you think you’ve right sized the business to the point where you’ve cut to the bone. You want to have facilities in the geographies where you are and you’ll just hunker down?

Steve, we continue to evaluate our operations and we continue to right size based on market conditions. So I don’t know if I can tell you that there won’t be anymore; I can just tell you that we continue to look six to nine months out and try to right size our business based on what we see. Steve Chercover – D. A. Davidson & Co: Okay and when you made the comment that there are big questions about manufactured housing going forward, I mean are you suggesting that that’s just a category that could go away or that you would abandon; I mean you are the biggest?

Well, we certainly wouldn’t abandon it. We’re concerned that the lack of financing for that industry; we had 81,000 shipments last year and we think that we’re going to be somewhere around 74,000 next year. It’s just an industry that continues to shrink and it’s an industry that hasn’t opened up yet this year. Steve Chercover – D. A. Davidson & Co: Okay, that was it. Thank you.

Thank you.

Thank you.

Your next question comes from the line of Jay McCanless of FTN Equity. Jay McCanless - FTN Equity: Good morning everyone.

Good morning Jay. Jay McCanless - FTN Equity: First, I wanted to ask on the credit facility and also on your bond indentures, how is your compliance looking that?

We are in compliance on each one of them, on our bank agreements and our note-holder agreements. Jay McCanless - FTN Equity: Great, and then what was the total bad debt experience for ‘08?

The total bad debt expense for 2008 was about $5.6 million, which is substantially higher than it was last year. Jay McCanless - FTN Equity: Okay. What should we think about for ‘09 and how is that going to impact your SG&A do you think?

It’s hard to say. This has been one of the toughest years we’ve had in a while in bad debt expense. We expect a very tough environment going in to next year too and it’s probably our biggest risk area. We’ll continue to manage it very cautiously and carefully, but it is a risk and we know we’re going to get some losses next year. I don’t think you want to be conservative about it, probably something similar next year. Jay McCanless - FTN Equity: Okay, great; and then wanted to dig down on industrial for a second, especially in concrete forming. If commercial construction does drop off later this year, but we get some benefit from the stimulus bill in terms of highway construction, etc, etc, is that a growth area for the concrete forming business or is it mainly focused on commercial construction.

No Jay, that’s definitely an area of growth for us. We go not only from highway construction to bridges to parking ramps; I mean anything involved with concrete is an opportunity for us. Jay McCanless - FTN Equity: Okay. Have you all seen or heard any inclination or any indications that people are accelerating spending in anticipation of larger projects coming?

I have not. Jay McCanless - FTN Equity: Okay, last question; facility count now versus facility counts this time last year?

Jay, it’s a little bit difficult to answer that, but the short answer is we’ll probably right sized or consolidated our moth balled somewhere around six operations last year, but let me tell you what’s a little misleading. In Oregon we had a big facility and right across the street we had another plant. While we wound up taking the plant across the street and just moving it into the original plant and sold that facility, so we view that as a closure, but in reality, business had just consolidated so much, where we did all the business out of that one plant. So, don’t read too much into the fact that there was six plants that we moth balled. Jay McCanless - FTN Equity: Okay, or I guess a different way to ask it is what percentage capacity reduction maybe have you seen from last year to this year; is that a better way to ask it?

Not from when I answered when without any facilities. I think the point is though that we’ve only sold like a handful of facilities. The facilities are still there, we’ve been able to consolidate a lot of the sales into existing facilities, and those facilities are there and we’re going to be able to use that capacity later when the markets rebound. Jay McCanless - FTN Equity: Okay, great. Thank you.

Thanks Jay.

Your next question comes from the line of Robert Kelly of Sidoti. Robert Kelly – Sidoti: Good morning guys. Thanks for taking my question.

Hi Bob. Robert Kelly – Sidoti: Just a question on the gross profit dollars, essentially flat year-on-year despite the sale decline; what are the big important drivers of that preserved margin that you posted for fourth tier. Would it be just order of magnitude if you can’t quantify?

Yes, the biggest thing is the thing I mentioned in the opening comments, just the labor cost as a percent of sales, that’s really driving the improvement and it comes from all of that consolidation activity that we’ve done in the right sizing efforts. Robert Kelly – Sidoti: So labor is down as a percent?

Labor dollars over the last year, correct; and if you think about how much we’ve done over the course of the last year it’s been a lot, so. Robert Kelly – Sidoti: Have you seen any sort of stabilization on the pressures on pricing from site-build or any of the other markets?

Sequentially if I go from Q3 to Q4 it’s off a little bit, but not like it has been previously. Robert Kelly – Sidoti: Okay and then as far as maybe a look into 1Q here, did the trends accelerate downward, November versus October, December in to November? I mean, should we expect another big falloff sequential in 1Q ‘09 as we hit the winter months?

Sales decline, you mean? Robert Kelly – Sidoti: Yes, top line.

Bob, the first two weeks of January were very difficult and the first week for us was New Year’s week, so most facilities weren’t working and the week after was a little bit tough, but in the last three, four weeks since then, we’ve kind of seen a normalization of order, and although they are done from a year ago, they are not down nearly as much as they were in the early part of January. Robert Kelly – Sidoti: So, I guess what I’m trying to get at, the margin that you are putting up at the gross line for 4Q is that sustainable in to ’09 or can you discuss calculative relative to what you’ve done?

The sequential improvements that we feel improved a lot too sequentially and labor did too, so to the extent we continue to stay ahead of that on labor and feel certainly a lot better, yes, those would be sustainable. Robert Kelly – Sidoti: Then just finally, on that sales allowance; now does that credit a line item on the income statement?

Yes, well it would be a debit in accounting to speak, but yes it reduces the sales. Robert Kelly – Sidoti: Right, but it doesn’t hit any of the cost items?

Correct. Robert Kelly – Sidoti: All right. Thanks.

You bet.

Your next question comes from the line of Trey Grooms of Stephens Incorporated. Trey Grooms - Stephens Inc.: Good morning.

Good morning Trey. Trey Grooms - Stephens Inc.: Just a couple of quick questions; you mentioned first quarter ‘09 expected to be very difficult, after that it sounded like you were a little bit more optimistic. Can you just kind of give us some idea of what your thinking is going in to the second quarter and what’s improving there? Is it something macro or more just operational?

Trey, a couple of things. What we’re seeing right now is a lot of our retail customers are not taking their early spring buys that they would normally take in January and February, they are holding off their inventory buys. I mean, so their inventories right now are very, very low and typically they’ll take an early buy to discount, to get ready for spring. They haven’t done that yet and it’s impacting us our sales this month and we’re anticipating it impacting us in February, but those sales will come in Q2 for sure. So that’s the biggest part in our DIY sales and in manufactured housing, they really haven’t opened up yet and we think in a couple of more weeks they’ll get back and probably by March 1, they’ll get back in to a normalized, at least, conditions. Trey Grooms - Stephens Inc.: Okay, that’s helpful, and if you look out to ’09, just your thoughts on CapEx or if you could give us some idea of cash flow expectations, and then your thoughts on use of cash in ‘09?

Yes, as far as CapEx goes, we’re probably looking at up to $10 million. Depreciation, amortization, is going to be in the neighborhood of $45 million to $48 million. I don’t want to give any more information than that, because we’re not providing guidance in terms of earnings and things, so I’ll give you those. Trey Grooms - Stephens Inc.: Okay, but assuming that guys put up some good free cash flow this year; assuming that you generate free cash flow again in ‘09, what would your primary use of that cash be? Are you going to continue to be in kind of debt pay down mode or are you going to be more in cash, I guess hoarding mode; what are your thoughts there?

Well, at the end of the year we had $30 million outstanding on the revolver and we have $15 million bullet maturity due on a senior note, and the $15 million is due in December. So first option would be to pay those down and save dry powder for when we need it. Trey Grooms - Stephens Inc.: Okay. Thanks guys.

Hey Trey, I wanted to touch back on your first question that I didn’t touch on, and that was, as we go in to the second quarter, we also picked up a significant amount of business with the retail customers that will start taking effect also in the second and third quarter. So we made good gains with all of our customers in that area. Trey Grooms - Stephens Inc.: You said you picked up business, that’s with existing customers right? I mean, you’re gaining share with existing customers is what you are saying?

Correct. We’re gaining share and we’re getting new product lines into our customers also. It’s not just what we have; we also went in and picked up some other business. Trey Grooms - Stephens Inc.: Very good. Thank you.

Your next question comes from the line of Burke Whitson of Kiosk Capital Management; please proceed.

Good morning Burke. Burke Whitson - Kiosk Capital Management: Hi. Just one question on the receivables; do you expect anymore cash strain there and can you comment on any loss assumptions based on the higher level of receivables?

As far as the receivables program goes, the program is canceled. So there would be no further cash flow effect on way or another on our sale of receivables program. It was completely canceled and basically paid off at the end of September of ‘08. As far as receivables reserves, bad debt allowance I think you’re basically asking. We go through and we look at our write-off history, which included a tough year for ‘08 and we established a reserve at the end of the year based on that history. So we think we got a very reasonable reserve set based on the end of the year and then I will start accruing based on that write-off history of new dollars for next year. Again as I said earlier, it’s our biggest risk area and one we’re going to have to pay careful attention to, but right now we have feel like we have very fair reserves set up. Burke Whitson - Kiosk Capital Management: Great. Thank you.

You bet.

Your next question comes from the line of David Leibowitz of Horizon; please proceed. David Leibowitz – Horizon: Good morning.

Good morning, David. David Leibowitz – Horizon: A few quick questions totally unrelated. First have you seen any change in your top five or 10 counts, as well as the percentages of your total revenue they represent?

It cycles down. They don’t represent as big of part of the top five list as they have previously, but the big batch is primarily at the top, so they remain there. David Leibowitz – Horizon: Okay, but home depot is no longer 25%, give or take of your total revenue.

No, they are right there. Absolutely they are right there. David Leibowitz – Horizon: Okay. Second, you will be cash flow positive for the year, if I understood your answer to a prior question.

Correct. We will expect to be able to pay off a lot of that revolver and payoff that senior note. David Leibowitz – Horizon: And will that cash flow exceed your EPS?

Will the cash flow exceed our earnings per shares? Absolutely, we have such a big add-back for depreciation and amortization and we’ll manage our working capital well. David Leibowitz – Horizon: Also, I know it’s not for you, but the Board to make the determination, but you do have a record of raising the dividend every year. Is there any reason to believe that you might not liberalize the dividend?

There’s no reason to believe there’ll be any changes Dave in the way that we run the business from since you’ve been part of it. David Leibowitz – Horizon: Well, that’s more use and either of us would like to admit to, but a very comforting answer. Next, in terms of acquisitions, you indicated that the competition is trying to survive while you are trying to prepare your next growth momentum. Is there any reason to believe that acquisitions might not happen this year?

There’s no reason to believe they won’t happen. We’re looking at a couple David, but they are going to have to be priced right, and they are going to have to not give us any cash drain. We’re going to have to see a future in it. It’s easy to buy companies now, but then you got to fund them and we’re being very cautious. David Leibowitz – Horizon: Are you more interested at this point in buying product or buying market in territories?

We’re mostly interested in expanding our industrial business in to markets in areas that now aren’t major for us. That’s where you will see acquisitions if you see them. It will be in that industrial products area. David Leibowitz – Horizon: And what sort of revenue level are you looking at? Where do you have your comfort zone?

$10 million to $15 million. David Leibowitz – Horizon: With the management that is going to stay on, or where you would move management from a nearby territory in to their facility as it were?

If a successful company has a good manage, we always try to keep the management. That’s really what you are buying. David Leibowitz – Horizon: Well, two more questions if I may; first, are you getting any bids from your big boxes to enter additional territories where in the past you might have been loath to enter those territories.

Yes, we have had picked up market share with all of our big box customers into areas where we previously hadn’t been. David Leibowitz – Horizon: Great and lastly, the recent run up in lumber prices after hitting the multi-year low, is this helping you, hurting you or are you as confused as everybody else, where lumber is going next.

David, that market run-up was a direct result of the shutdown by the mills in Western Canada and the southern United States and to be honest with you, if that had to happen, they were out producing what was being consumed, so we kind of anticipated a bump up in the market and we kind of think that this year is going to be a little bit of a roller coaster in the market. The supply chain right now has very little inventory in it and when the weather breaks, I think you’ll see another spike in the market. So we’re not confused, if we could anticipate when it was going up, we’d certainly buy in a little bit sooner, but it will be a roller costar here in the market. David Leibowitz – Horizon: Thank you very much.

Thank you.

That concludes the question-and-answer session. I’ll now turn it back to Mr. Bill Currie for closing mark remarks.

Okay. Thank you all once again for spending so much time with us this morning. We know it’s a confusing market for you folks as well as it is for us, but we’ll wish you the best in what you are doing, and we’re going to go back to work and see if we can make another positive year. Thank you very much.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Have a great day.