Thank you for joining Builders FirstSource second quarter 2021 earnings conference call. Today's conference is being recorded. Michael Neese, Senior Vice President of Investor Relations for Builders FirstSource, will now provide the company's opening remarks. Please go ahead, sir. Thank you, Sarah. Good morning, and welcome to our second quarter 2021 earnings call. I hope you and your families continue to remain safe and well. With the increase in the COVID-19 Delta strain, our COVID task force continues to closely monitor the developments, and we will continue to follow CDC guidance and protocols for the safety of our team members, customers, suppliers, and communities. With me on the call today are Dave Flitman, CEO, and Peter Jackson, our CFO. Today, we will review our second quarter results and provide an update on our base business momentum, our ongoing integration progress and achievements, as well as our recent M&A. We remain bullish on the housing sector and believe we are well-positioned to continue to capture double-digit single-family starts growth. We have provided GAAP results that include BMC in the second quarter of 2021 and standalone BFS in the second quarter of 2020. We have also provided pro forma results as if we own BMC in the second quarter of 2020. Our adjusted EPS calculation excludes amortization of intangibles. The second quarter press release and the supporting presentation for today's call are available on our website at investors.bldr.com. The results discussed today include GAAP and non-GAAP results adjusted for certain items. We provide these non-GAAP results for informational purposes, and they should not be considered in isolation for the most directly comparable GAAP measures. The reconciliation of these non-GAAP measures to the corresponding GAAP measures, where applicable, and a discussion of why we believe they are useful to investors can be found in the earnings press release, our SEC filings, and presentations. Our remarks in the press release, presentation, and on this call contain forward-looking and cautionary statements within the meaning of the Private Securities Litigation Reform Act and projections of future results. Please review the forward-looking statements section in today's press release and in our SEC filings for various factors that could cause our actual results to differ materially from forward-looking statements and projections. With that, I'll now turn the call over to Dave. Thanks, Mike. Good morning, everyone, thanks for joining us. Our record second quarter and first-half earnings are the result of the hard work and strong execution by our more than 26,000 team members who have been relentless in providing superior customer service amid robust demand in a very tight supply environment. I want to start by thanking them as I couldn't be more proud of their efforts. In the second quarter, we delivered core organic sales growth above 35%, along with record gross profit, adjusted EBITDA, and margin. Our performance accelerated in the second quarter as we continued to expand our value-added offerings, executed disciplined pricing strategies, and accelerated merger-related integration savings. I'll cover three key topics on today's call. First, I'll provide an update on the residential housing environment, which remains very strong; review our second-quarter results, and given the unique demand and supply dynamics, share some insights into the strength of the underlying growth in our base business. Second, I'll provide an update on our recent M&A transactions that further strengthen our market position and advance our digital strategy and highlight our very strong pipeline of potential tuck-in acquisitions. Finally, I'll provide an update on the BMC integration, which is progressing exceptionally well and running ahead of plan. Let me start with the current state of the residential housing environment. We continue to see strong demand across the country. Specifically, single-family housing demand is robust, and our entire supply chain is working hard to keep up with that strength. Regardless of short-term fluctuations, we believe the nation's home building sector is growing today, and there is sustained growth in store for the next several years. Freddie Mac stated earlier this year that the U.S. is underbuilt by approximately 4 million homes. The National Association of Realtors believes we are 5.5 million homes underbuilt. Whichever number you believe, there is a significant shortage of housing in this country that will take many years of above-normal starts to overcome. According to the NAHB's second quarter 2021 Housing Trends report, almost 20% of American adults are considering the purchase of a home within the next year. This statistic has increased for five consecutive quarters and is nearly double the 10% in Q1 of 2020. Additionally, 64% of these potential buyers are first-time buyers, which is the highest share in history. The millennial generation, some 82 million strong, will continue to provide support and growth in new housing construction for many years. There is also an extremely tight supply of existing homes for sale. We have averaged 1.1 million units of inventory in 2021, which is 20% below the five-year average and well below the high of 3.5 million units of inventory in 2007. This data further supports our strong belief in the need for new home construction. Single-family starts increased 41.7% in the second quarter, which we outpaced by approximately 240 basis points with our single-family core organic growth. In addition, adjusting for the effects of the pandemic in the second quarter of last year, single-family starts this quarter grew 27% when compared with the second quarter of 2019. Housing under construction also increased 29% in the second quarter. There are now 439,000 more single-family homes under construction than there were at this time last year, and 396,000 more than at the same time in 2019. The data tells us there will likely be continued strong momentum in new home construction, which will bode well for us and the industry as a whole. Recently, we've heard from several of our home builder customers that they are tapping the brakes on starts for a few reasons, namely labor, material, and land availability, even though demand remains strong. These challenges, coupled with the growth we've seen in the first half of the year, suggests builders are exceeding their growth forecast for this year and are pushing some new home construction into next year, supporting our belief that growth will continue for some time. Our 58% core organic growth in our structural components business underscores our belief that our value-added offerings will be increasingly important to builders as they continue to navigate material and labor challenges and look for ways to get more efficient. Housing starts showing significant growth, mortgage rates remaining at historical lows, and a continued shift to homeownership are all significant tailwinds. As a reminder, we are in 84 of the largest and fastest-growing MSAs in the country. Our team is poised to continue to capture a disproportionate share of the growth, as we have done for the past several years and as evidenced by our most recent 260 basis point outperformance over the last six months. I am confident we will outperform the market in any environment, and what we are experiencing now is exactly what we envisioned when we put our merger together. A best-in-class operation located in the top markets in the country, focused on serving customers with the best portfolio of products and services and solving their construction challenges. We have a seasoned, cycle-tested management team. We are just getting started. Let's turn to our record second quarter results. We delivered another strong quarter of top and bottom-line performance. Importantly, core organic growth of 44.1% in our Single-Family segment and 58% in Manufactured components again outpaced the market as we continued to gain share. Turning to slide four, I'll review our pro forma results for the quarter. Total sales grew 91% to $5.6 billion. Core organic sales increased 35%. Gross profit expanded more than 105%. Adjusted EBITDA increased a remarkable 232% to $836 million, with adjusted EBITDA margin expanding by 640 basis points to a record 15%. Turning to slide five. We have received many questions from analysts and investors regarding the impact of commodities on our business results. In response, we are providing an overview of the underlying top and bottom-line growth of our base business on a normalized basis, assuming a static commodity price of $400 per thousand board feet. For the full year of 2021 versus 2020, we expect our base business net sales to grow to $15.3 billion from $12.5 billion, or 22%, and adjusted EBITDA to grow to $1.6 billion from $1.1 billion, or 45%. Given consistent single-family starts, we believe our 10.1% EBITDA margin on our base business is sustainable and can grow over time, as evidenced by our 240 basis points of growth since 2019. That's a 31% improvement in profitability in two years. Peter will go into further detail in his prepared remarks, but I want to point out to everyone that our base business is large, it's growing, and it has a sustained double-digit EBITDA margin profile. Let me spend a bit of time on M&A and our recently announced transactions. Alliance Lumber, which closed on July 1st, and Paradigm, for which we signed a definitive purchase agreement in late June. Turning to slide six. Alliance Lumber is the largest supplier of building materials in Arizona, primarily serving the fast-growing greater Phoenix, Tucson, and Prescott Valley metropolitan areas. The Phoenix metro area alone is expected to add more than 100,000 jobs in 2022, so we're excited about our increased presence in the state. Arizona is the number three ranked single-family MSA in the U.S., encompassing the nation's fastest-growing county, Maricopa. This acquisition is aligned with our strategy of investing organically and through M&A to grow our portfolio of high-value and faster growth categories. Alliance has an estimated 45% market share with the top home builders and catapults us to a leading position in the state. Its geographic footprint and component manufacturing capability is an excellent strategic fit, and the limited overlap of our existing coverage enables us to expand our product offerings into previously untapped regions. Alliance is margin accretive, and we have an opportunity to embed our millwork capability into their operations. With deep, long-standing customer relationships and a reputation for offering outstanding customer service, Alliance is an established and trusted advisor to leading home builders and contractors across single-family, multi-family and commercial end markets. Founder and CEO, True Carr, and his team have built a fantastic company with strong leadership and values that align to our own in a similar culture of growth. We are thrilled to have the Alliance team members as part of the BFS family. Now turning to slide seven. I want to spend a few minutes on our strategy and recent M&A in the digital space, which has been a priority and focus for us over the last several years. Based on third-party research, the home building market is lagging almost every other industry in digital transformation. As a new generation of builders emerges, a generation that grew up with digital technologies, which has accelerated given the impacts of COVID-19, we are seeing a shift in how our customers want to do business, and we see this trend having a long tail as adoption accelerates. Digital is a significant growth opportunity for BFS as the industry goes through a shift to digital execution. Given the scale of our platform, we feel we are well-positioned to help shape important outcomes for our industry, including improved efficiencies and productivity through digital technologies. Our digital strategy includes three main areas. First, a focus on our internal processes and productivity by investing in technology to drive operational efficiency and excellence. Next, help streamline interactions with our vendors and customers. Finally, a focus on external innovation and investment to offer value-added digital products and services that support our customers' success and growth. On June 29th, we announced a major step forward in our digital strategy with our intent to acquire Paradigm, an innovative software solutions company that is transforming the way new construction and renovation is done. Over the past 20+ years, Paradigm has grown to over 300 employees, serving more than 250 customers spanning home builders, lumber yards, manufacturers, retailers, and distributors with an expanding list of 70,000 end users. From home visualization to material takeoff technology to drafting services and estimating, Paradigm's software platform helps increase sales and operational efficiencies for new construction and renovation businesses. The addition of Paradigm offers several compelling strategic benefits to Builders FirstSource. Specifically, we will scale Paradigm's platform from the current 250 customers to our broader base of 70,000 customers. Paradigm's platform will help us drive internal productivity in our team of over 700 designers and estimators. Paradigm provides another value-added capability to reduce inefficiencies and costs for our home builder customers, strengthening our current partnerships. Finally, and most impactfully, we believe we can capture more than $1 billion of incremental sales over the next five years by utilizing our digital assets to accelerate the adoption and capture rates of value-added products. To be clear, neither Alliance nor Paradigm signal a change in our M&A strategy. We will continue to reinvest in our business while actively pursuing accretive tuck-in M&A opportunities to improve our mix and build scale in key growth markets. As you can see on slide 11, we have identified more than 460 targets in the $15 million-$100 million revenue range. Our strong balance sheet and cash flow generation will allow us to be a disciplined consolidator in this industry for a long time to come. Finally, I'd like to update you on the BMC integration, which is going very well. Synergies are tracking one year ahead of plan and are projected to exceed our initial expectations. Through the second quarter of this year, we have already captured $36 million in cost savings. Based on our progress to date, we are increasing our synergy targets. Specifically, we are raising our year one 2021 projected savings to between $80 million and $100 million from the $60 million-$70 million we had previously communicated. Now we expect to achieve total synergies of between $140 million-$160 million by the end of 2022, allowing us to overachieve in just two years versus our original three-year commitment of between $130 million-$150 million. These increased synergy targets underscore the success of the BMC integration to date. In addition, our teams are working closely together to leverage our scale and product offerings. Specifically, we've been able to create additional capacity through our component facilities in overlap markets, accelerating growth in that key category. We have also been able to use our combined relationships to convert more national builders in attractive markets, accelerating growth in structural components, READY-FRAME, and our millwork offerings. These are exciting times. Our outstanding results reflect the strong housing market and underlying demand for new homes, our industry-leading platform, coupled with our ability to deliver value to our customers in a continuation of our disciplined approach to cost management and operational excellence. We are confident in our ability to consistently execute at a very high level. In conclusion, I would like to highlight one of our many valued associates. Nothing is more important than safety of our team members here at BFS. It takes hard work and commitment to build and maintain a strong safety culture. I wanted to spotlight someone who's going above and beyond to lead that culture in her location. Callie Rose is a Regional Safety Manager in Oklahoma, and she and her team invited OSHA to voluntarily visit the North Oklahoma City lumber and millwork location to further improve their safety and health program. While there, the OSHA representatives were so impressed that they gave Callie a special OSHA commemorative coin as a token of appreciation for a successful inspection and for their outstanding training documentation. Dedicated team members like Callie help reinforce our safety culture, and we are glad to have her on our team in Oklahoma. With that, let me turn the call over to Peter to go through a detailed look at our Q2 results and our 2021 updated financial guidance. Thank you, Dave, and good morning, everyone. I want to thank all of our team members for delivering incredible results. Your execution is rock solid. I will cover three topics with you this morning. First, I'll review our second quarter results compared to combined pro forma results from the prior year quarter. Second, I'll discuss our financial position, supported by strong operating cash flow. Third, I'll provide some color on our guidance raise for the full year 2021. Starting with our Q2 results, we had net sales of $5.6 billion for the first quarter, which increased approximately 91% compared to the combined pro forma prior year period. Turning to slide 13, value-added core organic sales increased by 35%, led by 58% growth in our manufactured products category and 17% growth in our windows, doors, and millwork category. Commodity price inflation benefited net sales by 52%, and acquisitions contributed 3.5%. We experienced stronger than expected demand in Q2 single-family starts across the country, and we were well-positioned to support this demand and take market share. Our Q2 gross profit of $1.6 billion increased 105% year-over-year, while our gross margin expanded 210 basis points to 28.4%, above our stated more than 26% long-term target, primarily driven by disciplined cost and pricing management in a dynamic supply-constrained marketplace. SG&A was $902.9 million, an increase of approximately $324 million compared to the combined pro forma prior year period, driven primarily by expenses related to the BMC merger and other acquisitions, including intangible amortization and one-time charges. Variable compensation was also higher due to the increase in net sales and profitability. Excluding acquisition-related one-time charges, underlying SG&A increased by 18.9%. As a% of net sales, total SG&A decreased by 360 basis points to 16.2% due to higher sales and continued expense control. Adjusted EBITDA increased 232% to $835.8 million. Adjusted EBITDA margin improved to a record 15%. An increase of 640 basis points compared to the year-over-year pro forma period, driven primarily by higher sales at strong margins and cost management, including synergy savings. In Q2, Adjusted EPS was $2.76 per share compared to combined pro forma of $0.64 a share in the prior year period. The 331.3% increase was primarily driven by the increase in net sales and gross margin, offset by higher tax and higher SG&A expenses, due in part to the normalization of COVID expense cuts. Adjusted EPS excludes amortization and one-time expenses related to merger and acquisition activity. Let's turn to cash flow. Our second quarter operating cash flow was an outflow of $3.3 million, and free cash was an outflow of $56 million, primarily due to the impact of commodity inflation on working capital. Turning to slide 15. At the end of the second quarter, our pro forma net debt to EBITDA ratio was approximately 1x. We have no long-term debt maturities until 2027, and our total liquidity was approximately $750 million, providing us with significant financial flexibility. Last month, we successfully completed an opportunistic offering of $1 billion of aggregate principal amount of 4.25% unsecured senior notes due in 2032, further strengthening our balance sheet. We used the net proceeds from the offering to repay the credit facility, with remaining proceeds to be used for general corporate purposes. Our strong second quarter and first half performance are the result of superior execution from our field teams. They are meeting the demands of the strong market momentum while delivering excellent service to our customers. While the impact of increased commodity costs is evident in our results, our structural focus remains on profitable growth in our base business. As Dave mentioned, our base business EBITDA is expected to grow 45% this year. We will continue to focus on growing the higher-margin specialty and value-add products and services in our portfolio. At the $400 per thousand commodity level, our value-added mix is roughly 43% of our total sales. From 2019- 2021, our base business net sales are projected to grow at a compounded annual growth rate of 15.4%, while our EBITDA is projected to grow 32%. That exceptional base growth is expected to be further augmented by commodity tailwinds. In the appendix of the investor presentation on slide 20, we've also provided a sensitivity analysis with various commodity cost assumptions and the corresponding profits if you assume static commodity prices at those levels. Please keep in mind that shorter-term price fluctuations can result in materially different results than in a static commodity environment. Most importantly, the base business perspective provides a sharper view of our run rate, regardless of where commodity prices ultimately settle. We believe we can continue to grow our base business next year while sustaining a double-digit EBITDA margin. Let's turn to our 2021 full-year outlook on slide 16. Our differentiated platform is delivering above-market growth and strong results, which we expect to continue. We are seeing strong underlying demand in both new housing construction and remodeling. As we anticipated, builders are seeing such strong demand that they are limiting sales in certain communities to maintain backlogs at prudent levels given material and labor constraints. Based on our stellar 1st half performance, our positive conversations with customers, our accelerated integration synergy capture, a better view of our inflation environment, and our continued strong organic sales through July, we are increasing our full year 2021 outlook. We expect net sales in the range of $18 billion-$19 billion, representing growth of approximately 41%-48% over 2020 combined pro forma net sales of $12.8 billion. This is driven by an increase in new starts as the key catalyst for our base business growth, plus the benefit of robust but receding commodity prices. We anticipate adjusted EBITDA to be in a range of $2.2 billion-$2.4 billion, or approximately 105%-124% over 2020 combined pro forma adjusted EBITDA of $1.07 billion. We expect to deliver significant free cash flow over the next six months based on normal seasonal flows, declining commodity prices, and active working capital management. Our 2021 free cash flow guidance increases by $100 million to approximately $1.5 billion, as increased EBITDA is partially offset by higher working capital from higher sales as well as higher taxes and interest. Our outlook is based on several assumptions which are outlined in the earnings release, including mid to high teen% growth in single-family starts, our R&R growth in the low to mid-single digits, and multifamily starts growth in the high single digits. As discussed earlier, our commodity assumption provides an 18%-28% lift to our base business sales growth. Commodity costs have come down over the past several months, and we expect OSB in particular to continue to come down, during which time we will remain vigilant as we sell through our higher commodity cost materials. Despite the commodity price volatility, we feel confident in hitting our full-year guidance. As Dave mentioned, the integration with BMC is ahead of our initial expectations. We now expect to deliver cost synergies of $80 million-$100 million this year. In addition, we remain focused on accelerating our operational excellence initiatives. Turning to capital allocation. Since the merger of BFS and BMC seven months ago, we have spent considerable time focused on our strategic alignment and the analysis of the best way to deliver value to our shareholders over the long term. As a result, our priorities for balanced capital deployment are, in order: maintaining a strong balance sheet, reinvesting in our business to drive growth and productivity, continuing our tuck-in M&A strategy to grow our capabilities in desirable markets across the country with a specific focus on value-added capabilities, and returning capital to shareholders as appropriate. As part of our balanced capital deployment strategy, we are setting our leverage target in the 1x:2x range, recognizing that we will appropriately adapt that range to the economic cycle. We remain well-positioned to deploy capital effectively after executing multiple value-enhancing transactions, given our robust balance sheet and strong M&A pipeline. Overall, the financial results for the first six months have been extraordinary. Our base business is robust, and we believe there is a long runway for growth in the years ahead. We are focusing on creating value for our stakeholders and are continuing to build our world-class distribution network founded on operational excellence and delivering exceptional value to our customers. Let me turn the call back to Dave for his closing remarks. Thanks, Peter. In summary, demand in single-family housing remains exceptionally strong. We continue to capitalize on this positive trend by ensuring we meet the needs of our customers, both today and in the future. The BMC integration continues to progress extraordinarily well. Our realization of cost synergies is a year ahead of schedule. Looking forward, we remain focused on executing our strategy of investing both organically and through M&A to continue to align our portfolio with high-value and faster growth categories while simultaneously improving efficiencies, productivity, and our digital capabilities in the value chain. Our future is bright. Our ability to execute and our hunger to innovate have never been stronger. We will continue going above and beyond for our customers and partners to provide best-in-class home building solutions. With that, Sarah, let's open the call for questions. Thank you. If you would like to ask a question, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, that's star one to ask a question. We'll pause for just a brief moment to allow everyone an opportunity to signal for questions. We'll take our first question from Reuben Garner with The Benchmark Company. Thank you. Good morning, everybody. Morning, Reuben. Good morning. First off, thanks for all the detail in the deck. I think that's all going to be very helpful for folks seeing how much of your business is not really driven by this lumber market. Maybe if I could start, you mentioned your visibility into next year. Did I lose you guys? How much visibility do you have? In other words, how much business do you think this year is going to be pushed out to next year for you guys? You're putting up big growth numbers in your manufactured business despite this. Any color into what's going to get pushed out into 2022? Yeah, Reuben, as I mentioned in my comments, we've been in contact with our customers quite regularly, and almost without exception, you've seen them kind of slow the starts for this year with the intent of pushing demand into next year. Almost to a person, they've said this is the strongest environment they've operated in many through their careers. Given the state of the demand, which is much, much different than it's been in a very, very long time, interest rates, we expect the continuation of what we've seen this year into next year. I'd also point out, our focus on our value-added portions of our business are just continuing to gain momentum. I said it in the script, and I'll say it again, I've got confidence in our ability to continue to drive growth and take share in any market environment. Perfect. Very helpful. Secondly, on the free cash flow piece, maybe if you could help us out. What free cash flow have you generated thus far in the year? How much working capital investment is embedded in that number? I'm just trying to figure out what's left to go, what's sort of the normalized number there, and where your balance sheet will stand as we enter 2022. Congrats on the results, guys, thanks for your help. Thanks, Reuben, great question. It's been a dynamic year for cash flow, as you highlighted. We have seen an investment of over $1.1 billion year-to-date in our working capital space, right? The market is certainly turning, we're not yet done burning through either the summer build of normal inventory or the higher prices that we walked through all year. Year-to-date, our free cash flow has been at use right around $300 million. We do expect to generate the remainder, about $1.8 billion, between now and the end of the year. We've already started to see that generation in the third quarter. Third quarter will be a very good year, as you would expect, as the market turns, still a significant amount of cash generation into the fourth quarter. Certainly see a clear line of sight of where that will take us. $1.8 billion of additional cash from now till the end of the year is certainly going to put us in a very strong position to deploy capital in ways that will benefit shareholders. Perfect. Thanks again, and good luck moving forward. Thank you. Thank you. Next, we'll move on to Mike Dahl with RBC Capital Markets. Morning. Thanks for taking my questions. Morning, Mike. It's a great deck, so good job. Peter, I wanted to pick up on the cash flow and also capital allocation, Dave. Peter, I think you have a more technical and colorful term for how much cash is coming in the next six months. A little restrained here in not including that. If you look at your net leverage currently, that's clearly going to come down when you net out the cash in the second half with the M&A. You're still wind up close to 0 net debt. That checks off that box one of maintaining strong balance sheet. When you think about the three other priorities, I know it's in order here from kind of a medium to longer term standpoint, but when you're thinking more near term in nature, next couple of quarters, next few quarters, is there any bias across the three? Whether it's reinvesting internally, further tuck-in M&A, or returning capital, that last one hasn't been a part of the pro forma company yet. Just any color on kind of more near term, how that balance shakes out. A couple of comments. Really excited about the strength of the balance sheet. Our action to put structural, very favorable debt out there, the 2032 notes, 4.25% unsecured is something we're very proud of. One of the agencies gave our secured notes an investment-grade rating. We certainly are proud of what we've done on the balance sheet and excited about what that means. To your point, we've put our priorities out there. I think we're excited about what the pipeline looks like for opportunities to continue to grow in M&A, we're going to remain disciplined. We're not going to get out over our skis on valuations. We're very clear-eyed about what commodities do over time. That can't be a driver. We think that that pathway will certainly yield opportunities. Your comment about not having done share buybacks as a pro forma entity is absolutely correct. Both prior entities had done share buybacks. I don't think anybody's necessarily opposed to the concept. It's more a matter of making sure we're looking at the situation each month, each quarter, and making the absolute right decisions for the long term for our shareholders. We're going to stay committed to that, and we will continue to message as things develop. Got it. That's helpful. My second question is just on the manufactured products. That is exceptional growth, even against a strong market backdrop. Clearly, there's some share gains there. I know this is probably difficult, is there any way that you could kind of talk to how much of that growth was effectively seeing increased adoption or conversion within your existing customer base versus potentially the added capacity that you've brought on and/or just a higher customer count in your Manufactured Products segment? Thanks. Yeah, Mike, this is Dave. Both legacy companies, as you know, had strong underlying momentum and a strong focus on manufactured components for a long time, and both of us were continuing to gain share. When we put this team together, we knew, particularly in overlap markets, there would be increased opportunities for us to accelerate that growth, both internally, based on what we were doing with our assets and where we saw opportunities to extend capacity, which has been very tight in some markets where we've had rapid adoption. Importantly, continuing to convert customers at a higher rate. Both new customers. I would say more importantly and probably more impactfully, is accelerating growth with customers we've already had relationships in certain geographies. Our merger helped them get more comfortable in accelerating and extending that across their footprint. That's great to hear. Thanks, Dave. Thanks, Peter. Thank you. Thank you. Next, we'll take Matthew Bouley with Barclays. Morning, everyone. Hey, Matt. Hey, Dave. Thank you for taking the questions. Sure, happy birthday, Matt. We appreciate you spending your birthday morning with us. I think you ought to get a bigger size piece of cake for that. This is exactly what I imagined for my birthday, so much appreciated. For real. Yeah. You provided a gift here. A lot of things to ask about. Let me ask about the digital opportunity, the $1 billion. Dave, you mentioned at the top that part of this is using, if I heard you correctly, Paradigm to accelerate value-add adoption. You list on one of the slides that there's, looked like four or five kind of drivers of the $1 billion. What I'm wondering is, if you could kind of bucket that out, how much comes from scaling the Paradigm software versus how much comes from that litany of internal drivers and across wallet share and driving value-add adoption? Thank you. Well, the internal piece. I appreciate the question. The internal piece is something internally that we feel strongly about where we can gain some efficiencies in just what are internally today, very manual processes as we go from design to estimating for our customers. There are two key things that are going to help us accelerate towards that $1 billion. Obviously, these are early days, and we still have a lot to figure out. Oh, by the way, we haven't closed the transaction yet. In our early thinking, we see opportunities to extend their platform more broadly across our customer base, which Nate and his team have done a great job to get the customers that they've gotten, but we've just got a bigger platform and the ability to scale that. If you think also about long-term, being able to automate our design and takeoffs and actually provide our customers with an estimate of our full capability, including our manufactured components and READY-FRAME, and even further down in our millwork capability, which is at the core of what Paradigm does today, we just see that ability and the ease with which we'll be able to do that over the long term, being a great value proposition for our customers and the ability to get our value-added products in front of them in a more seamless way. Wonderful. Okay. That's helpful. Yes, we'll look for that additional color upon the deal closure. That is very helpful. Second one on the margin side. You made a comment at the top that the base business margin, the 10.1% this year, is something that you see as sustainable, if not with the potential to further expand. If I'm doing the math right, with a little bit of rounding, it looks like your core base business incremental margin in the guide this year is right around 18%, give or take, and correct me if I'm wrong. High level, the question is it that you can further expand structural gross margins, or is it that you're shifting to additional SG&A leverage? I think one thing that'd be helpful to address, a common question we get from investors is, if any of the base business margin, that 10%, if you think any of that may have also been temporarily benefited by extreme lumber prices and shortages there. It's a long question, but would appreciate any color. Thank you. Yeah, there's a lot in that one. Let me try to unpack it a little bit, and then I'll have Peter come over the top with any further color. I am confident in our ability to continue to expand that margin over the long haul. I think to your last question, no, I don't think there was any outsized impact based on lumber in that. As you think about our core business, and as Peter highlighted, 43% of that today, roughly, is our value-added areas. With the growth that we see, the continued improvement in mix, we just accelerate our synergy capability here. We're going to capture that over the next six to 12 months. In addition to that, you think about our ability to drive operational excellence in this combined company, which we're just starting to think about and get after over the long haul. We see the ability to continue to improve our margins over time. It's a combination of growth and internal work that we see going on that will continue to enable us over the long haul to expand those margins. Just a little bit of color on that, Matt, we have seen a couple of, I'd call it, leakage of the impact and the acceleration of price in the marketplace into other buckets. We try to normalize for that in here. We try to look at the margins that we thought were sustainable over the long term. We've talked in the past about sort of a normalized amount of gross margin. We try to account for that in this and allow the rest of it to slosh over into the commodity unusual pricing bucket. I think that is an important one. Like Dave said, we have a lot of different ways to drive the performance of this business on a go-forward basis. I think it's all the above. It's that expanded value add. It's the efficiency in that more gross margin line. It's the efficiency in SG&A, a lot of operational excellence. A lot of improvements that we think we still have in front of us as we continue to solve problems for our customers and just grow. Wonderful. Well, that is very clear. Thank you, Peter, and thank you, Dave, and best of luck, guys. Appreciate that. Thank you. Next, we'll take our next question from David Manthey with Baird. All right. Thank you. Good morning, everyone. Morning, Dave. Good morning. Lumber prices, they clearly have an impact on both the OpEx leverage in the P&L and on the gross margin itself via mix. As we look at the table in the appendix sort of top to bottom, are we to assume that behind that you're looking at SG&A dollars that are materially flat in every one of those states of being in that appendix table? No. Our expectation is that about roughly 70% of SG&A remains variable. That's the rule of thumb that we've used historically. This is base only, so you do have to sort of exclude that commodity price fluctuation component. Okay. Secondly, as it relates to the table as well, you note here that these are constant lumber prices for the full year. Just to level-set us, can you talk about the dynamics in real life as you move from tier to tier across this table? Just what are some of the moving parts that we should look for as you sort of chase lumber prices up and down and the impact on the P&L? Sure. Yeah, I think it's consistent with what we have said in the past about commodities. We certainly want investors and you, the analyst community, to have a clear understanding of how our business works. As you deal with the increases and decreases in commodities, there are certain characteristics of certain parts of the country that are impactful on the results. When you have inflation, where you've got longer fixed price contracts, whether it be 60 days and the smaller% that's left that are the 90 days or 90 days plus, you inevitably will see a compression in the gross margin% as that inflation occurs. As it reverses, you'll see an expansion in the gross margin%. Inversely, you'll also see in markets with very, very fast pricing turns where everything is very short, sometimes you'll see the exact opposite, where you will see expanding margins on the way up and declining margins on the way down as you're pricing off of replacement in a very fast turnaround environment. By and large, we, of course, want to make sure we're turning inventory quickly so that whatever those impacts are, they happen quickly. Right? They pass through very quickly. I'll reemphasize this: we're not in the game of predicting and betting on commodities. We're in the game of distributing commodities to the advantage of our broader business, and I think that our demonstrated performance historically shows that we're pretty good at it. We know how to make money in ups and downs. It's a matter of making sure you're running it in a disciplined and operationally excellent manner. That's perfect. Thank you very much. Thank you. Next we'll move on to Keith Hughes with Truist. Thank you. A question on the manufactured products number. I know that does get impacted by commodity inflation. Is there a way you can talk about units, how much units were up year-over-year? Yeah. That's the attempt. That 58% excludes what we believe to be the overlap from commodities. That's actually a new note for you in there, Keith, on slide five. Yeah. In that footnote, you can see we sort of called out, it's about 4% of that 22% that has some exposure to commodities. If you think about the commodities are included in what we manufacture. Okay. As close as we can get to a unit number? Is that what you're trying to say? Yeah. What we've communicated is close. Based on our analysis of price-volume mix, that's our best estimate. Yes. Okay. Second question on the guidance for the second half implies EBITDA up year-over-year. Is that going to slant towards the third or fourth quarter given commodity impact or any sort of directional guidance there would be helpful? Well, I wouldn't hesitate to say third quarter's always higher than the fourth quarter just due to normal seasonality. Fall normal seasonality. I think the impact of commodities- I'm talking about the gain year-over-year. Does it slant? Is there going to be more of a gain in one quarter versus the other? Based on a prior year comparison? Yeah. I don't know if I know that off the top of my head. Okay. You can get back to me on it. That's fine. Yes, it's probably a little more weighted to Q3. Just by nature of the seasonality, it's a little bigger, and the fall through would be a little bigger in that quarter. Okay. All right. Thank you. Sure. Thanks, Keith. Thank you. Next, we'll take our question from Steven Ramsey, Thompson Research Group. Hi, good morning. Maybe to start with on the divestiture of the gypsum operations, is that a meaningful impact to the incremental margins that are non-lumber? No, it's not. It's a fairly small business in total. The margins were below average. Great. Thinking about product shortages you referred to for windows, doors, millwork. Is that something, I'm sure it's embedded in the guidance for 2H, but, in the second half, is that a major impact? Is it a greater impact as you get into next year? Well, I mean, it's been an impact all year. I think as you look at the other part of our business, right? The other part of our value-add business, windows, doors, and millwork, it's trailed a little bit in terms of growth. Still strong, but not where we think it should be. A couple pieces of that. Obviously, a chunk of that is the expansion in units under construction, and it's just sort of how far along a lot of these homes are. Some of the cause of there being as many units under construction as there are, is that we've just struggled. Lead times are longer. They've been longer for, gosh, coming up on nine months plus. This is not new news. I think we just consistently fight it in the channel. I think it's one of those areas where we would see faster completions and faster cycling of sort of the growth in our market if we could relieve that. I know they're trying. It certainly continues, I would say, in a stable way. It may be a little bit less bad than it was, but still bad. I'd say we saw a little acceleration in our organic growth there from Q1 to Q2, which kind of reflects what Peter just highlighted. Our teams are just doing a tremendous job to get product for our customers. As I mentioned, we've heard from our builders, they've slowed starts. It's not a demand problem. The reason those starts have been slowed is exclusively because of the challenges that they've had around labor and materials. We're doing our best to satisfy those needs on both fronts. Excellent. Last thing, lumber pricing, clearly on Random Lengths charts coming down, but some people we talk to in channel checks have said that lumber transactions, the pricing is not coming down on the ground. Are you seeing that in your business? Yeah. I mean, we do so much commodity across the country. I'd say we probably see everything in one place or another. I think speculating on commodity prices and what it's going to do is, in our world, it's a bit of a fool's errand, as demonstrated by my forecast last quarter. I think we'll just maybe leave that one alone. Great. Thank you. Thank you. Next, we'll take our next question from Finley Elia. Hey, good morning, everyone. Thank you all for taking the question, and congratulations. Could y'all talk a little bit more about the Alliance acquisition? If I remember correctly, they didn't do a whole lot of value-add millwork like you all do. What's the opportunity set here for you all to put that through their channel, and how quickly can you realize that? Yeah, we're excited about that. I made a couple of comments there, in the script about that as an opportunity. We had a relatively small footprint in the state, as you know. Half a dozen or so locations. They've got great capability on the component side, which we're excited about, but they have not had the millwork opportunity, and we're very strong in millwork, as you know. We'll see how quickly we can get that ramped up. The team is excited about it, both the Alliance team as well as our team. We'll get after that one as quickly as we can. There's obviously a clear need in that market, given the growth that they're experiencing, and so we're excited about that. In M&A, you've always done a very nice job of rolling up markets. Does the shortage in some of the materials that you're seeing now, does that change your thought process on maybe moving into maybe adding some capacity on the value-added side versus consolidating some of the smaller dealerships? I don't think it materially changes it, and we're doing both. We're investing quite heavily in capabilities on value add, both in the millwork side and the component side, as we see a long runway there of adoption and growth in the markets. We're still looking in the markets to understand where it makes sense for us to augment our capability through the right M&A, which may help us expand our geographic footprint in the local market. As we've talked about, both in our capital allocation and just our overall strategy, we're going to continue to do both. Just to add onto that, one thing that's exciting in some of these opportunities is that we've got the efficiency, the skill sets to help them improve their performance to get more out of these businesses that they're managing. I think that adds to our ability to meet the capacity constraints in the market. As far as being there for our customers, we certainly believe that increased scale, and the partnerships that that helps to create in the long run with vendors is advantageous to us and puts us in a position to get at least, if not more than our fair share as we deal with difficult supply environments. Great, guys. Thank you very much. Best of luck. Thank you. Thank you. We'll take our next question from Trey Grooms with Stephens. Hey, thanks, guys. Yeah, I wanted to echo on the deck as well. Super helpful. Question, I guess first off is the follow-up back on one of the earlier ones around the base business EBITDA margins. Clearly, the incrementals are running high teens. I think you did 10.4 this quarter. Like you said, Dave Flitman, it's obvious there's potential for some upside here. Dave Flitman, where do you see this base business margin opportunity over time as you look at all the moving pieces? Clearly, it's higher. With these types of incrementals, where could we see this going over time? We're excited about it. We think both the top and the bottom line will continue to grow over time. We're not going to project that this morning, Trey. I will promise you, we are absolutely focused on it. That is the focus of this company right now. Our base business, our value-added capabilities, we're going to grow it, we're going to continue to improve profitability, and we're going to invest in it. All right. Fair enough. I thought it was worth a shot. Peter, a minute ago, you mentioned some of the dynamics that we've come to understand over the years with lumber price fluctuations where this most recent spike in lumber, you guys have kind of bucked the trend. It hasn't been your normal kind of reaction as far to the gross margin%. You mentioned that when things move wildly quickly, that the margin can react differently, almost the opposite of what we see in a more normal kind of lumber price movement kind of environment. With that said, you guys have been really outperforming or actually seeing margins higher as a result of this spike up. Is it the expectation per your comment earlier that it's like a decremental on the way down, that we should expect some kind of normalization of the gross margin just as these prices come down? Did I read that right? Excluding the core business, which obviously is the big focus and what we care about. Unfortunately, we still have to model the lumber piece, too. Is that kind of what you were pointing to there? Well, I'm not signaling a downturn. I guess what I want to be upfront about, and I think we've talked about a little bit on prior calls, is the nature of those extended terms, that the mix of those extended terms have materially changed. Right. Where there was a more extreme impact on the way up and a pretty extreme impact on the way down. Headwind on the margin percentage on the way up, strong tailwind on the margin percentage on the way down. I think both of those are diminished. I think they're diminished because of the reduction in average days of price lock in our mix of sales. I don't think it's signaling a downturn into the future. I think a lot of the fall through that we're dialing out in this analytic comes from other parts of the business and commodities and the pricing volatility, the nature of some buying that we did. All of that's all glommed together in that number. I don't think it's going to be a real big headwind for us. Anytime you have fluctuations, especially as massively as they are now, there's always a little bit of uncertainty as to how it all filters through. Based on what we're seeing in the detail, inventory levels, pricing levels, we think we can manage through it very effectively. I just wanted to sort of signal that I don't think there's going to be as big of a windfall as there have been in last cycles. Great. Thanks for the clarity there, Peter. That was perfect. Thanks again for taking the question. Keep up the good work. Thank you. Thanks. Thank you. Next we'll move on to Ketan Mamtora, BMO Capital Markets. Thanks for squeezing me in and let me add my congratulations. Coming back to the value-added side of the piece, and obviously really strong results. I'm just curious, are there any particular regions or areas of the country where you are seeing more growth, or is it more broad-based? Yeah, the exciting part about it is we've seen that expansion and growth broadly across all geographies. There's not one that I would point to that would be outpaced strong. Obviously, the strength that we have in the South and in Texas kind of leads the way. As we've gained adoption and accelerated penetration, it's really broad-based. Got it. That's helpful. Can you just remind us in terms of the capacity headroom that you have both on the manufactured side and the millwork side, particularly in light of the strong growth that you guys are seeing? Yeah, it's a challenge. As I mentioned earlier, we've been spending quite a bit of capital to increase our capacity in key markets. In addition to that, we're driving productivity and efficiencies to just gain any increment of capacity that we can. I think given the strength of the market and the adoption rate of what we're seeing, we're going to fight that for a bit, but we're not losing sales today because we can't supply. The challenge, as Peter talked about earlier, has been some of the upfront supply chain challenges and just getting materials. We are not the bottleneck currently, but it's something that we've got to be diligent about and stay on top of. Got it. That's helpful. I'll turn it over. Good luck in the back half of the year. Appreciate it. Thank you. Once again, ladies and gentlemen, if you would like to ask a question today, you may do so by pressing star one on your telephone keypad. We'll take our next question from Jay McCanless with Wedbush. Good morning, everyone. Thanks for taking my questions. Morning, Jay. Morning. Given the velocity of the business now and the lower lumber prices, do you think third quarter of this year's gross margin is trending more towards what we saw in the first quarter or something closer to what we saw in the second quarter? Just wondering with all the turnover and what seems to be a better outlook for multifamily on Builders FirstSource part, just wondering how quickly that change in lumber prices is going to flow through to the gross margin. Well, I think historically, we've talked about the timeline for the flow-through of changes in commodities just being in that quarter-ish timeline, one to two quarters. I think it's fair to say that there'll be a bit of a fade. Obviously, Q2 had the lapping of the worst of COVID. We've gotten a lot of good benefits year-on-year. I think settling back as prices settle back over the next quarter or two is still appropriate, guys. Could you maybe talk about multifamily? It sounds like the demand from what's coming in has changed, and you've gone to positive growth there from, I think, negative growth before. A, what's going on there? B, is this helping to offset maybe a little bit slower pace from the single-family builders? That's been a nice sort of surprise, a little ray of sunlight coming through in multifamily when we thought it would be pretty weak. Just to clarify, and for those that maybe aren't as familiar with us, our multifamily is a pretty market-specific focused business. On most of the country, it's four-story and below wood structures. We have a couple of businesses that do quite well in the high-rise market, but they're fairly small. A lot of our work is project-focused. I think what you've seen is the resurgence of a little bit of that multifamily housing market as people realize that the new homes aren't going to come out of the ground as fast as people maybe would have hoped, as all of us maybe would have hoped. Those 3 million- 5 million underbuilt or underserved home buyers are going to need someplace to live until we're ready. I think what you're seeing is a little bit of a rebound there. It's still pretty modest, but we're certainly pleased with it because it was, as you know, pretty grim there on the outlook for a while. Yeah, absolutely. My compliments on the new deck as well. There's a lot of good detail in there. Thank you for taking my question. Thanks a lot. Thank you. Thank you. Next, we'll move on to Collin Verron with Jefferies. Hi, guys. Thanks for taking my question. Most of my question has actually been answered already. I guess I'll touch on the new leverage target. You sound very bullish on demand for the next several years. Can you just tie together your bullish commentary, maybe how many more years of growth you see in the cycle with that new 1x: 2x leverage range that you put out there today? Yeah, I think that it's exciting times to be in Builders FirstSource is what that boils down to. We've got, we think, a really strong positioning on the business in terms of what we've been able to do with the balance sheet, the long maturities, the low and declining interest rates, and we're doing it in a way that makes the business bulletproof. Our focus, our recognition is to make sure we have an incredibly strong balance sheet throughout the cycle. This is a great time in the cycle where we think that there's more runway, and we're going to continue to generate cash. Our job is to put it to work and maximize the shareholder benefit and benefit the business, make sure we're healthy, that our stakeholders are satisfied and taken care of, and provide a great return. I think we're lining it up in a way that we've got a lot of firepower to do a bunch of different things, and we're going to be disciplined about how we put that to work. The math we're doing around the return on investment for internal investments, for M&A, and for potential returning of capital to shareholders is disciplined, and we're going to continue to work with the board and management to make those decisions in the best possible way. Great. Thank you for the color. Thank you. Thank you. We'll take our next caller or question from Kurt Yinger. Great. Thanks, and good morning, everyone. Morning, Kurt. Morning. Just one quick one on the EBITDA incrementals. It looks like in 2021 on the commodities, that margin's about 20% or so. I guess the question is, as we look ahead to 2022 and make whatever assumption we want around lumber prices and the top-line impact there, is that the same type of incremental margin we should be kind of looking for presumably on the way down, or do you have any thoughts around anything you're doing internally around pricing or things like that that could kind of dampen that impact? Yeah. I think the way down versus way up comment is exactly why we did slide five. I think that was really our intent, is to help people understand where it wants to be when commodity prices are at that $400. I think that's a really healthy way to look at it. I just remind everybody how dynamic this year has been, how volatile. These words coming from the guy who thought we were going to descend gently from our roughly $900, $1,000 commodity levels back the last time we met on this call. It's been a heck of a ride since. I think what you're seeing in these numbers is a lot of the impact of that volatility, in one way, shape, or form. That expectation of it going back to the $15.3 billion and the $1.6 billion number for 2021, we really wanted you to have that just to give you a sense of what we think the base business really looks like. Hopefully that answers your question appropriately. Yeah. No, no. That's helpful. I guess just one higher level question. You're still relatively early in the process of combining the business, and a lot of things are going very well. I'm just curious from a pure scale perspective and the relationships you have with your suppliers and your customers, which positive areas of the business that you're seeing right now do you feel like have really been augmented by that increased scale, putting together BMC and BFS? Yeah. No, I'm thrilled about a lot of things. The results that you're seeing in the value-added areas of the business, as I said earlier, were exactly what we envisioned and hoped for, and it's great to see that playing out. Our organization's focused on it. We're continuing to provide innovation. We're continuing to invest in that part of the business. As I said, we've got a long runway ahead of us. Yeah, I don't think any of us had that forecasted number of 58% in growth, right? The ability of the team to be put together like they have been and execute at that level, it's amazing. It's awesome. The culture alignment has been fantastic. Okay. All right. Well, appreciate all the color, guys, and good luck here in the back half. Thanks a lot. Thank you. Lastly, we will take Ryan Gilbert with BTIG. Hey, thanks, guys. Morning. Morning. First question on manufactured products. I think over the last couple of quarters, we've talked about the core organic growth in the manufactured product segment being driven primarily by existing customer relationships. I'm wondering, as we move into the peak building season here, and the really strong core organic growth you've put up in 2Q, if you're seeing the customer base expand from the last couple of quarters. Just if that has been the case, your thoughts on the stickiness of that new customer base and how that influences your thoughts around normalized gross margin, if we can do better than 26%-26.5%. Yeah. Very good question. As I just said, that clearly is the focus of the organization in our value-add. We've seen great adoption. I think I commented earlier that we're seeing really good adoption with customers who have had experience with our value-added capabilities in one geography or another or maybe a few, are gaining more confidence based on what they've seen in those markets around what our value-added capability can do to help them both with labor challenges and drive outpaced efficiencies at the job site. We see a long runway here over time. The other thing I would say, I think I said this in my prepared remarks, a disproportionate amount of the new homes being constructed are those starter homes, that lends itself very well to the structural design work that we do in our components business. Given all that backdrop and the focus that we have on it, we'll continue to see the adoption increase. Okay, great. Second question's on multifamily. I know legacy BMC had a really nice multifamily operation that flowed through or complemented the millwork doors and windows segment of their business. As we see multifamily start to rebound, I'm wondering the extent that you've been able to take the legacy BMC Multifamily operation and expand it to the entire pro forma business. Let me just comment, and I'll flip it over to Peter here for any additional color. You're right to portray the focus that we had at BMC being very strong, but I would highlight what Peter said earlier. Even in the BMC legacy footprint, it was a very targeted approach to multifamily in key markets in the South, a little bit up in the East, and somewhat out in California and the West Coast. It was not broad-based. I think that our targeted market focus is exactly why we had such success. We knew where those markets were going to be strong for some period of time, and that's where we had the capability. Our team was just fantastic at driving growth. I think that the combined multifamily business has done well. I think they've partnered well and are seeing strong performance, what we consider to be taking market share. It's a little hard to communicate that when we're talking about comparisons to national metrics, but we think we're doing really well with that business. Anybody who has the background in the multifamily recognizes the longer cycle times on those projects, cycle times that are particularly disrupted by extremely volatile commodity prices. Of all the markets, they've been as active as anybody. We certainly are still very pleased with the performance of that business, both top and bottom line. Okay, great. Thanks very much. Thank you. Thank you. That does conclude today's question- and- answer session. I would like to turn the conference back over to Mr. Michael Neese for any additional or closing remarks. Thank you, Sarah, thank you everyone for your time and interest in BFS. We are around all day to take your questions. Have a great day. Thank you. Thank you, and that does conclude today's teleconference. We do appreciate your participation. You may now disconnect.