Good day ladies and gentlemen, and welcome to the ThirdQuarter 2007 Universal Forest Products Incorporated earnings conference call. My name is Dan, and I will be your operatorfor today. I would now like to turn the call over to Ms. Lynn Afendoulis, Director of Communications. Please proceed.

Good morning and welcome to Universal Forest Products'Third quarter 2007 Conference Call. Onthe call today are William G. Currie, Executive Chairman and CEO, andPresident, Michael B. Glenn, and CFO Michael Cole. Please be aware that any statements included in thiscall that are not historical are forward-looking statements within the meaningof Section 21E of the Securities Exchange Act of 1934, as amended. Such forward-looking statements are based onthe beliefs of the Company's management as well as on assumptions made by andinformation currently available to the Company at the time such statements weremade. The Company does not undertake to updateforward-looking statements to reflect facts; circumstances, assumptions orevents that occur after the date the forward-looking statements are made. Actual results could differ materially fromthose included in such forward-looking statements. Investors are cautioned that all forward-lookingstatements involve risks and uncertainty. Among the factors that could cause actual results todiffer materially are the following: Adverse lumber market trends, competitiveactivity, negative economic trends, government regulations and weather. These risk factors and additional informationare included in the Company's reports on Form 10-K and 10-Q on file with theSecurities and Exchange Commission. This call is the property of Universal ForestProducts. Any redistribution,retransmission or rebroadcast of the call in any format without the expressedwritten consent of Universal is strictly prohibited. At this time, I would like to turn the call to BillCurrie.

Good morning, and thanks a lot for joining us on our ThirdQuarter Conference Call. Today, we willtalk about our performance under some of the toughest markets and conditions wehave ever faced, and we will tell you about our successes despite thechallenges and what we are doing to turn in stronger results in the comingquarters in years. From my perspective, there are four takeaways fromthis quarter: First, Mike Glenn and hissales and management team have done a great job. They turned in double-digit sales growths inthree of our four business areas and grew market share in all four in a timewhen the markets cut them no slack. Their years of experience, their knowledge andrelationships equipped them to make good things happen in hard times. Second, we are focused on improving our margins andprofitability. We have not yet seen theimpact of our ongoing efforts to right size our organizations to ouropportunities. We also have not seen theimpact of efficiencies we are achieving as a result of our focus on CI as weget better at manufacturing new products we had sold. Third, the problems in the housing market are here tostay, at least for a good while. We havedone a good job stabilizing our business by diversifying into light commercialand multi-family construction, which currently are stronger opportunities thansingle-family. And fourth, we think Universal is the best investmentwe can make; so we will keep an underleveraged balance sheet, healthy liquidityand allow us to step up our buy-back program in the very near future. Like I said, these are some of the toughest marketsand times that we have seen, and I am pleased with our results even though Ilook forward to better days ahead. MikeGlenn will talk to you about our performance and strategy for the remainder ofthe year into 2008. But first I will turn it to Mike Cole for a review ofour numbers, Mike?

Thanks, Bill, and good morning everyone. I will start by reviewing our income statementfor the quarter. As you noticed in thepress release, our total sales for the quarter increased by 1%. We estimate this was comprised of a 4%increase in unit sales offset by a 3% decline in overall selling prices due toa soft lumber market and pricing pressure on the site-built market. Reviewing by market, our sales for the DIY marketincreased 11% compared to the third quarter last year, primarily due to unitsales growth as a result of acquisitions. Sales out of existing facilities were flatwith last year in spite of challenging market conditions as a result ofsignificant market share gains we realized with big box retailers. Our sales to the big boxes increased 19% during thequarter, while our sales to other retailers whose business is more closelycorrelated with housing starts was off 7%. Our sales to the manufactured housing market increased18% for the quarter due to a 20% increase in unit sales, partially offset by a2% decline in selling prices. Ouracquisition of Banks Lumber provided unit sales growth of 29% this quarter andmade up for soft market conditions, which resulted in a 9% decline in unitsales out of existing facilities, which was in line with the decline in modularand HUD-code industry production. Our sales from the site-built construction marketdecreased 24% this quarter, due to an 8% decrease in unit sales out of existingplants, a 4% decline due to our decision to exit the Las Vegas framing market and a 12% decrease in our averageselling prices due to a soft lumber market and intense pricing pressure. Finally, our sales to the industrial market increasedby 10% for the quarter primarily due to an increase in unit sales. Unit sales growth this quarter was a result ofacquisitions and continuing to add…

Thank you, Mike. Now we will turn the call to Mike Glenn for abusiness review and for an outlook into the markets, Mike?

Thanks Bill and good morning everyone. I think it is fair to say that this quarterwas a disappointment for us. We had ourshare of disappointment, but we also had our share of encouragement. While we are encouraged by our sales in threeor four markets, we were disappointed in our earnings and at the housingmarket, the only way to put it, is a train wreck. It has severely impacted our earnings. In the third quarter, we picked up share in all ourmarkets and increased our sales to three markets by adding new customers,products and opportunities. And wecontinue to ensure our size appropriately for our business. And we are committed to our new and continuousimprovement initiative, which has helped us to eliminate waste, increase ourefficiencies, and help us focus on our long-term strength. What I like about continuous improvement is that itempowers our people to make change. Itgives them the tools and encouragement they need to make a difference to helpimprove our company. Our people know weare in a tough market, and now they know they have the power to create change. In the past six months, I have visited at least 30 ofour plants and the proof of continuous improvement in lean manufacturingpractices is there on the plant floor. Our plants look, run, and feel better thanever, and our people are energized and enthused about their role in the companyand their future. Now I would like to review our performance in ourmarkets and talk about what we are doing to grow our success. Let me start out with the site-built. Like I stated earlier, this market is nothing but atrain wreck. In August, the housingstarts were down more than 24% from 2006. Single-family housing starts were down 27%,and the seasonally adjusted rate of starts in August was $988,000.00. Last week, we…

Thank you, Mike. As I told you, we are a little disappointed inthe profitability, but we are very pleased with the quarter, our company, and ourresults and especially, our management team. I thank all of you for your interest. And now, we will open it up for questions.

(Operator Instructions) Your first question comes from the line of RobertKelly from Sidoti & Company. Pleaseproceed. Robert Kelly - Sidoti & Company: Just had a question, the pricing pressure that you areseeing, is that confined now to the site-built market?

Well, certainly, that is where most of our pressure iscoming from. The hard part about it is wehave had the site-built builders, the production builders have a new tactic,and that is, you kind of quote their business and then you get it and youdesign it. And then you get ready to buildthe product for them and if the lumber market moved down like it did in thethird quarter, they ask you to re-quote it. So, any margin that you thought you had in there,because the market moved or you took advantage and did some things, they aretaking it away from you. So, it is avery difficult situation for us right now, but the other markets are holding upjust quite well. Robert Kelly - Sidoti & Company: Okay, great. So,it is kind of a moving target on the site built side for the near-term?

Yes. Robert Kelly - Sidoti & Company: And then the cost improvement initiatives undergoing,any timeframe for when that starts to kick in?

Well, there are a couple things, some of it alreadyhas kicked in small pieces. But it isreally predicated on driving volume to your plants. The whole premise we took with thisinitiative is we are going to be able to produce twice as much product nextyear with the same amount of people that we have and that is where efficiencyis going to start to come. It is not so much as we are going to see bigefficiencies in December, it is we are able to drive more volume through ourplants with the same amount of people. Robert Kelly - Sidoti & Company: And then just quickly on the balance sheet, do youguys have a target as far as where you want the debt-to-cap to be?

In the normal environment, we have used up 45% debt-to-cap,debt-to-EBITDA, 2 to 2.25. Robert Kelly - Sidoti & Company: Great, thank you.

Your next question comes from the line of Greg Halterfrom Great Lakes Review. Please proceed.

Can you bring us up to speed on where you stand interms of plant count and where you see that going over the next year or so?

Well, I cannot give you a plant count, what I can tellyou is that we are rightsizing our company right now for the businessenvironment that we are in, and I will give you an example. In the case of Texas,we were manufacturing trusses and distributing lumber in Dallas and we are also manufacturing trusses in a littlesuburb called Burleson. Well, what we did was we consolidated that and tookthe truss production that was done in Dallas and moved it all to Burleson because it was a moreefficient plant. So, that is the kind ofmoves we are making right now. We arejust right sizing our company. We havemaybe a half a dozen plants that we have mothballed at the present time.

Okay. And alsoon your capital spending, Mike, I know you had mentioned about $40 million oras much as $40 million for 2007. Can yougive your thoughts or expectations for 2008, 2009, 2010 and so forth on whatyou see going forward given the challenging markets?

2008 will be considerably lower than 2007. We are not prepared to give a specific targetyet. We will do that with year-endnumbers, but it will be considerably lower.

Okay. Andlooking forward beyond that even, are there any new large projects, which wouldkeep that number at 40, or do you expect it to remain at a lower level?

Are you talking about beyond 2008?

Correct.

We do not have any specific projects at this time. That is a pretty far time horizon to look outfor CapEx for 2009 and 2010. I am justcomfortable right now saying that for 2008, it will just be considerably lower.

Okay.

Greg, I think it is important to note that we do not useCapEx when we want to do acquisitions. Thatis something that is done internally for our existing plants, but we still areactively pursuing acquisitions that make sense for us.

All right, and then relative to the share repurchase,I believe, there was a comment made about possibly being more aggressive inthis current quarter. And, I guess thequestion is, at least for the third quarter it appeared there was not much donein the way of repurchase and just wondering why that is and why you arechanging your tone going into the fourth quarter?

Greg, during the third quarter we started to buy backshares. I think, we bought back 80,000or 90,000 shares. And then, we had acouple of opportunities that we were investigating that caused insideinformation to stop. We were counseledto stop buying back our shares, so we did. Those have passed, the quiet time is over tomorrowmorning, and as Mike said, we will be aggressively acquiring back our shares.

Okay, great, thank you.

Your next question comes from the line of JayMcCanless from FTN Midwest. Pleaseproceed.

Good morning, everyone. First question I have on the site-built side, Iam starting to hear more rumors and some news stories about some of the smallerbuilders getting their lines pulled from the bank et cetera. Just want to get your views from credit riskfrom some of your smaller customers through the rest of this year and into ‘08?

Jay, that whole industry is a little bit of a creditrisk right now to be honest with you. Wehave weekly phone calls right now where we see if anybody steps outside oftheir payment terms. If they do, then weget on the call, we either put a lien in or we stop shipment. But, our take is something will happen here inthe next six months.

And should we expect a large reserve on your part orjust expect?

It is a reserve that we have been more conservativewith this year considering the credit environment we are in.

Okay. And then,I want to swipe over to manufactured housing real quick. I know that you had converted some of thebanks plants over to industrial, how many dedicated manufactured housing plantsdo you have right now?

Hold on a second, we are counting them up.

Okay.

Somewhere between 10 and 12.

Okay.

No plant is 100% manufactured housing, but some ofthem are majority of that. Others wehave multiple lines in the same plant.

Okay. And so,is the geographic concentration in the three states you were talking about earlierare Texas, Indiana and North Carolina, or there are other areas of the country where youhave significant manufacturing presence?

We have other ones in Southern California.

Georgia, Alabama, Florida,we have such a high market share, Jay we are pretty much wherever they are atnow.

Throughout the United States, Jay.

Yeah. That iswhat I was wondering, just because you all mentioned Texas,Indiana and North Carolina which we had heard about before. But I was surprised that you did not mentionthat Georgia and Alabama corridor. Canyou give me some insight on what is going on there?

It is picking up there also.

The reason we mentioned those three, as those are thehottest markets right now; those are where we seem to have backlogs that willtake us into December, and then we will go through their normal seasonal shutdowns. But that is the first time in a coupleyears where these plants have been out for four to six to eight weeks.

Great. Wellthank you, guys, I appreciate it.

Your next question comes from the line of Christopher Bennettfrom Wachovia. Please proceed.

I had a couple questions here. Mike, you talked about the year-over-yeardecline in gross margin, and mentioned maybe four or five reasons for that. I was wondering if you could weight thosetoward which reason was the biggest driver, and when you also talked about theSG&A, the savings in the existing plants, if you could possibly talk abouthow they broke out by sales, general and such?

With regard to the first question, the biggest item byfar was the site-built pricing pressure in the margins there and then I wouldput the unit sales volumes being off and then the sales incentives.

Okay. And thenwhen you guys look, two to three, maybe five years out, what do you guys seethe concrete forming business being, I think you mentioned about $30 million in'07 so far. What do you guys see thatbeing as a contributor to your top line?

The reason we talked about industrial being aseven-year initiative is that it really kind of surprisingly took us sevenyears to get where we are at. We do notthink it is going to take us that long with concrete forming because we learneda lot through that process, but we think that within those four years, we arecertainly going to have somewhere around a 25% to 30% market share.

Great, thanks guys.

Your next question comes from the line of DavidLiebowitz from Burnham. Please proceed.

A few unrelated items, first what percentage of totalrevenue were Home Depot and Lowe's in the most recent quarter?

Let us see here, David. Depot I believe is about 27% of sales thisquarter.

Okay, and Lowe's?

I do not have Lowe's, I am sorry.

Okay, that is all right.

That is a single-digit number, David it is much, muchsmaller.

Understood. Second question, what is the total cost of therightsizing of the business as we look at '08 calendar year?

In other words, what is the cost savings?

What will your expenses be to accomplish it first andthen coming out the other side, what might that add to the income statement interms of earnings?

In terms of cost-to-accomplishment David, I thinkthose are fairly minor.

Okay.

In terms of the cost savings for '08.

Yes, that is a hard one to quantify, David. We are not enamored about '08, but we feelpretty positive that we will do substantially better than we did in '07 due toour rightsizing and due to our CI initiative.

It is going be several million dollars David, in termsof cost benefits for next year.

Okay, you said just now that you feel you can out earn'07 in '08, because of rightsizing and other items. To accomplish that, what is your estimate onhousing? The single-family housingmarket for '08 vis-à-vis '07?

I think Mike gave you a good answer. I would not be a bit surprised to see it at $800,000.00or $850,000.00 but understand as he said, we are making huge strides inturnkey, light commercial and multi-family packages and we do not anticipatewhatever the housing market does to have a hell of a lot of impact on any kindof growth we have in the site-built market.

And the last question, we are now, I guess, enteringyear three of the five-year plan or year two of the five-year plan? Mike,correct me on the status.

Year two.

Okay. Thatbeing said and given the dramatic decline in single-family home building, doyou still stand by the projections for the five-year program or are you goingto have to push out the results by a year?

Well, David, we are only into year two and we are notquitters. If housing comes back, even ata modest rate of $1,500.00 to $1,800.00 in some of our other initiatives and ifthe lumber market moves up a little bit, it is not unreasonable to think that wewill hit our goals and certainly we evaluate all that every year when we haveour annual budget and planning meetings.

Okay. And thelast thing, if ‘08 can out earn ‘07, do you expect to be able to do that ineach of the four quarters or is that going to be back-end loaded?

I think it is too early to say, David. We will come out with our targets for ‘08 whenwe release our December numbers.

Thank you, very much.

You are welcome.

Your next question comes from the line of John Emerichfrom Iron Works Capital. Please proceed.

Can you give me a ballpark of what the organic growthrate was like in each of the four segments as you break them out?

Organic growth overall was actually down 6%, so it wasnot growth. Manufacturing housingorganic was down 9%, which was industry production. DIY was flat even though the market was down. Site-built was off by 12%, for that wasbecause of exiting the Las Vegas framingmarket, and industrial was flat.

Okay, versus a market that was flat or up slightly.

Probably also off.

Okay. And doyou have organic growth. I mean, I know itis too early to provide specific ‘08 guidance, but would you expect in a flat,for instance, DIY market that analysts are projecting for ‘08 that you wouldactually be able to grow because you are gaining share?

Yes.

So you have organic growth there. And industrial, would you expect organicgrowth next year?

Yes.

And it is sounds like manufactured housing you areespecially optimistic.

Yes.

Okay. So, thatis great. Thank you very much.

Your next question comes from the line of Greg Halterfrom Great Lake Review. Please proceed.

Within your release you talked about the targets basedon the following assumptions, one of those including no events occurred thatresulted in asset impairment charges and I am just wondering, what type ofevents would cause that or dollar amounts that you may be looking at there thatcould be at risk?

We are not afraid to talk about of any of the dollaramounts that would be at risk, Greg, but if we permanently closed the plant andsold it, many times in a situation like that the plant cannot be sold for whatwe have into it, and so those are the types of things that can happen thatcould cause an impairment. If wepermanently close it and made a decision to exit that market and sell theplant.

Okay. Allright, thank you.

Your next question comes from the line of JayMcCanless from FTN Midwest. Pleaseproceed.

One more question I had in looking at the lumbermarkets. The government data has beentelling us that the wholesale inventories of lumber have been declining for thelast roughly five to six months. Iwanted to get some historical perspective on when and how we should expectlumber prices to turn. Are there anysigns that we can look for out there? Justget a little historical read from you guys.

Hey Jay, I would say almost categorically that all of thelumber and wafer board manufacturers are operating at a loss. Now what normally happens in a lumber cycle likethat is it is going to cause some shutdowns and it is going to cause somepermanent closures. That is on thesupply side. The other side of the equation that you have to lookat is that the wood baskets are expanding. A 100% of our wood used to come out of Canada or the United States. Now there isa wood basket that we bring in from Chile, from Brazil, from China, from Eastern Europe and now there isexpanding wood baskets, so it is all going to be a matter of how much pain canthe manufacturers stand before the prices go up. But obviously they have to move up in orderfor there to be any profitability in any of the primary wafer board or lumbermanufacturers. So we do look for alittle price help next year.

Okay, and has there historically been any tie-inbetween what we see on the wholesale side relative to how it comes out? I mean,how do I relate the wholesale lumber decreases that we have seen so far back tohow you all can go out and price it to your customers? How does thatrelationship work?

Are you saying that there is an increase in wholesalelumber of inventories or a decrease?

Decrease.

The reason that there is a decrease is that there isno market opportunity for them to make any money. You always see the wholesale inventories increase in arising market and you see them shrink in a falling market. That is what keeps more pressure on thedownward pricing.

Okay. And so,at this point we have not reached a level where the decrease in the supply isgoing to cause a rise in the price?

That is correct.

Okay, great. Thank you.

At this time, there are no further questions in thequeue. I would now like to turn the callback over to management for closing remarks.

Okay and thanks a lot. Once again, Mike Glenn, thanks again for agreat performance in tough times. Thankyou all very much for your interest in the company, we will work hard tooutperform the market and we will be very active in buying back our own sharesbecause we think it is the very best investment we can put our money in. Thank you very much.

Thank you for your participation in today'sconference. This concludes thepresentation. You may now disconnect. Good day.