Builders FirstSource, Inc.

Good morning and welcome to Builders First Sources First Quarter 2020 Conference Call. At this time, all participants are in a listen-only mode. Following the company's remarks, we will conduct a question-and-answer session. Today's call is being recorded and will be available at www.blbr.com. It is now my pleasure to introduce Mr. Bennett Sungvee, Vice President, Investor Relations.

Thank you, Anna. Good morning, and welcome to the Builders FirstSource first quarter 2020 earnings conference call. With me on the call today are Chad Crow, Chief Executive Officer, and Peter Jackson, Chief Financial Officer. A copy of the slide presentation referenced on this call is available on the Investor Relations website of Builders FirstSource at BLDR.com. Before we begin, let me note 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've provided reconciliations of non-GAAP financial measures to their GAAP equivalent 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. I will now turn the call over to Chad Crow.

Good morning, and thank you for joining us. I'd first like to say that our thoughts are with those impacted by the COVID-19 pandemic. We express our gratitude to the first responders, healthcare workers, and all those on the front line who have worked tirelessly to help us get through this situation. I am also incredibly proud of how the Builders First Source team has responded to take care of each other, our customers, and our communities by upholding our core values to protect the well-being of all. For several years leading up to 2020, we have taken significant actions to expand our business, optimize our operations, pay down debt, improve cash flow, and more closely partner with our customers through an integrated product offering. While the US economy has transformed in an unprecedented way since our last update in February, our business entered the COVID-19 pandemic at the strongest point in our company's history. This has allowed us to effectively power through the initial phases of the pandemic, as demonstrated by our solid first quarter performance, while also taking additional steps to fortify our business for the uncertain period ahead. Last quarter, and before the pandemic began to impact the economy, I announced my planned retirement in 2020 in the commencement of a search for my replacement. Given the rapidly involving market landscape, along with the economic uncertainty of the coming months, I have notified the board of my intention to stay until the virus situation stabilizes and the company has resumed more normal operations. We are all completely focused on emerging from this crisis a stronger company. Before we discuss results, I'll provide an update on the current market landscape and some actions we have taken. As I mentioned, we entered this pandemic at the strongest point in our company's history. As an essential business, we continue to supply critical products to customers with a paramount focus on health and safety. We are prioritizing the well-being of our team members, channel partners, and the communities where we operate. Fortunately, we have the ability to do so while maintaining operational continuity. Nearly all of our locations have remained open except in the few states or counties where construction activities were suspended, but that list of states is shrinking. We have dedicated teams in place to monitor best practices, ensure compliance with shifting local orders, and implement swift action as needed. In addition to the many safety protocols and social distancing measures that we have put in place, our investments in technology are helping us maintain our connections with customers and our overall effectiveness. This includes MyBFSBuilder, where we complement our first-class face-to-face customer service with an innovative customer portal. Customers can quickly access details regarding their account, receive automatic notifications of delivery, download statements, and make payments, all with the goal of making it easier for customers to do business with us and, for the time being, minimize physical contact. Our business performed well in the first quarter, even during the month of March. We met our financial expectations and finished the quarter strong, and our value-add products were once again a major contributor to our success. Looking ahead, there are several factors I would like to call out for the coming months. During the quarter, many of our customers worked vigorously to complete existing units under construction. As a valued partner to many builders, I am proud that our teams were able to provide customers with the critical products they needed to keep projects moving. However, as the quarter ended and the economic conditions softened in April, home sales declined and new projects coming into the pipeline have not fully replaced completed projects. As a result, we have taken actions to address the softer market conditions and what we expect will be an air pocket in construction activity. Last month, we announced proactive steps to enhance our financial flexibility, liquidity, and cash flow. At the end of March, we had $672 million of total liquidity. Out of an abundance of caution, we recently tapped the debt markets to end the month of April with $1 billion of total liquidity, including $193 million of cash and no significant debt maturities for the next seven years. On the operational side, we are taking a balanced approach to mitigate the impact of reduced demand on our profitability, while protecting as many existing jobs as we can, as we believe the worst of the downturn will be short-lived. Recall that in 2019, we added 25 million in EBITDA through an operational excellence initiative to optimize process and control costs in a growing market. In response to COVID-19, we are enhancing our efforts to include resizing locations where needed, minimizing discretionary capital expenditures, optimizing working capital, limiting and delaying operating expenses, tightly managing corporate spend, and reducing board and senior management pay. These actions, while difficult, are helping to preserve cash and profitability while maintaining our ability to efficiently respond as demand recovers. We will continue to take prudent actions to maintain a strong liquidity position and operate our business with a safety-first emphasis across our nationwide footprint. While the extent and duration of the current economic crisis remains unclear, We are well prepared to navigate through it and keep our company positioned to succeed as the economy begins to improve. I will now turn the call over to Peter, who will review our first quarter results and balance sheet in more detail.