Builders FirstSource, Inc.

Please stand by. Good morning and welcome to the Builder's First Source Fourth Quarter and Full Year 2018 Earnings Conference. Today's call is being recorded and will be archived at www.bldr.com. And now it's my pleasure to introduce Mr. Bennett Songbe, Vice President, Investor Relations. Please go ahead.

Thank you, Laurie. Good morning, and welcome to the Builder's First Source fourth quarter and full year 2018 earnings conference call. With me today are Chad Crow, Chief Executive Officer, and Peter Jackson, Chief Financial Officer. A copy of our slide presentation referenced on this call is available on the investor relations section of the Builder's First Source website at www.bldr.com. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. Any reproduction of this call in whole or in part is not permitted without prior written consent of Builders First Source. As a reminder, this conference call is being recorded today, March 1st, 2019. Builders First Source issued a press release after the market closed yesterday. If you do not 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 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. The company will discuss adjusted results on this call. 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 8K filed yesterday, both of which are available on our website. At this time, it is my pleasure to turn the call over to Mr. Chad Crow.

Thank you, Bennett, and good morning, everyone. I appreciate everyone taking the time to join our call today. I would like to share with you an update on our 2018 financial highlights and strategic achievements. Then I will turn the call over to Peter, who will discuss our Q4 financial results in more detail. I will then finish with an update on our strategic priorities and outlook. Starting on slide two, we completed a year of very strong financial performance and achieved key milestones of value creation despite a moderating growth environment and a volatile commodity market. In 2018, we again showed the agility and resilience of our exceptional team, platform, and strategy. Net sales in 2018 grew by almost 10% and EBITDA grew by almost 20% to a record annual 502 million. Earnings per share increased by nearly 50%. Value-added sales grew by an impressive 10% as we continued to invest in our strategic growth capacity. Our dedicated team accomplished these results while, at the same time, executing on our working capital initiatives, generating a record $186 million in free cash flow for the full year 2018. Using that strong cash flow generation, we achieved our leverage target announced at the time of the transformative ProBuild acquisition in 2015. Turning to slide three, I would like to spend a few minutes highlighting a few of our strategic achievements in 2018. First, we continue to realize the growth and margin expansion benefits of our strategic investments in value-added products capacity by helping our customers solve challenges like increasing costs, lack of labor, and waste management. These investments are driving higher margin sales as we continue to grow our industry-leading manufacturing network through new plants, automation, new machinery, and system upgrades. Since 2016, we have opened eight state-of-the-art truss and millwork manufacturing facilities. As these facilities mature, sales will continue to grow, enabling us to capture share of the expanding off-site fabrication market as home builders look for solutions to overcome their labor and cost challenges. We also continue to make progress on our operational excellence initiatives. These best practices are being implemented throughout the organization to make Builders FirstSource more agile and more responsive. Initiatives underway include enhanced business analytics, pricing management tools, our My BFS Builder customer portal, and digital safety, among others. I will specifically highlight our delivery optimization success a little later in the call, which is already posting tangible benefits, furthering the competitive advantage of our efficient distribution network. We once again delivered on our commitment to generate strong free cash flow to fund our long-term investments while restoring balance sheet financial flexibility. We funded $101 million in capital investments, including further expansion of our industry-leading value-added production capacity, refreshing our fleet of rolling stock, and upgrading our asset base. At the same time, We reduced our leverage to 3.1 times as of December 31st, 2018, a reduction of 1.1 times compared to the prior year end. Lastly, hiring, training, and retaining the best people continues to be a top priority. We invested in the addition of 160 new sales team members in 2018. We also introduced training tools and processes to systematically drive and enable the productivity of our high-caliber sales culture throughout the organization. We are only as strong as our 15,000 talented team members, and we remain committed to growing and developing future leaders throughout the organization. I will now turn the call over to Peter, who will review the fourth quarter financial results in more detail.