Builders FirstSource, Inc. (NYSE:BLDR) Q4 2022 Earnings Call Transcript

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Jay McCanless: Got it, thank you. And then my second question in terms of M&A activity slowing down a little bit, kind of surprised by that because we’ve been hearing that the banks have been tightening up on land lending and tightened up generally on anything related to housing or are you just, or the potential target you’re looking at, are they not feeling that pinch right now or did everyone have such a good two or three years that they can hold off for a little bit? May be a little more depth on that?

David Rush: I think it’s more of what you just said, the latter part. I think they had a good couple year run. They’re looking at fairly uncertain environment now and they’re just not ready to get off the fence. I think as the year plays out and as we see more certainty as the year plays out around interest rates and mortgage rates and people can evaluate what the next 12 to 18 months look like, I think they’ll jump back in and of course we’re looking continuously throughout the time that we’re there.

Jay McCanless: Okay, great, thanks. And then the last one I had, just, if you think about whatever metric you want to use, bid activity, quote, request, et cetera, you know, because we did see kind of a tale of two cities of mortgage rates in January and February. Can you talk about how business was in January of what it, what February looked like compared to January just given the spike higher that we did see in rates?

David Rush: Yes, I mean, I think what you described is accurate. It has been a bit erratic ups and downs. I don’t know that there’s a trend there broadly other than to say it’s slower than last year and it’s certainly a market that’s trying to find its own. Yes, I don’t think breaking it down at this point is going to help anybody, but it’s certainly a market we’re staying very close to operationally to ensure we are responding correctly to whatever is dealt.

Peter Jackson: Yeah, they only, the only thing I’d add is this is not a 2008, 2009 scenario, right? Demand over the long-term is still extremely positive and that demand is not speculative. It’s for houses that they want to live in. So over the long haul we still feel pretty good, even though it’s going to be a little choppy until we get our footing.

Jay McCanless: Sounds great. Thanks for taking my questions.

David Rush: Thank you.

Operator: Well, we will take our next question from Reuben Garner with The Benchmark Company. Your line is now open.

Reuben Garner: Thanks. Good morning everybody, and congrats Dave on the new role.

David Rush: Thanks.

Reuben Garner: So I had some technical difficulties, so I’m just going to ask one question, so I don’t repeat anything and hopefully this one’s not repetitive, but the reiteration of the $7 billion to $10 billion in deployable capital from the Investor Day, I think starts are probably likely off in the 30% range and I kind of looked at that deployable capital as kind of a free cash flow equivalent. And maybe that’s wrong, but I just wanted to, I guess, clarify if that 7 to 10 is kind of the cash generation of the business. And if so, what kind of, what is the biggest thing that gives you confidence that you can still do that even though the star environment has clearly moved against you in such a big way?

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