Melinda Ellsworth – VP and Treasurer Jack Hockema – President, CEO and Chairman Dan Rinkenberger – SVP and CFO

Timna Tanners – UBS Mark Parr – KeyBanc Capital Markets Edward Marshall – Sidoti & Company Tony Rizzuto – Dahlman Rose Tim Hayes – Davenport & Company

Thank you. Good afternoon, everyone, and welcome to Kaiser Aluminum’s Q3 2010 Earnings Conference Call.

If you have not seen a copy of our earnings release please visit the investor relations page on our website at www.kaiseraluminum.com. We have also posted a PDF version of the slide presentation for this call.

Joining me today are President, CEO and Chairman Jack Hockema; Senior Vice President and Chief Financial Officer Dan Rinkenberger; and Vice President and Chief Accounting Officer Neal West. Jack and Dan will review the results and at the conclusion of our presentation we will open the call for questions.

Before we begin I’d like to remind the audience that the information contained in this presentation includes statements based on management’s current expectations, estimates and projections that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include the statements regarding the company’s anticipated financial and operating performance, relate to future events and expectations, and involved known and unknown risks and uncertainties.

For a summary of specific risk factors that could cause results to differ materially from those expressed in the forward-looking statements, please refer to the company’s earnings release for the Q3 of 2010 and reports filed with the Securities and Exchange Commission, including the company’s Form 10K for the year ended December 31, 2009, and quarterly report on Form 10Q for the quarter ended March 31, 2010. All information in this presentation is as of the date of the presentation.

The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations. Non run rate items to us are items that while they may recur from period to period, are particularly material to results, impact costs as a result of external market factors, and may not recur in future periods if the same level of underlying performance were to occur.

These are certainly part of our business and operating environment but are worthy of being highlighted for the benefit of the users of our financial statements. Management’s intent is to significantly neutralize the fabricated products segment from fluctuations in underlying metal prices.

We characterize metal profits and life flow charges as non run-rate items that eventually offset to a great extent over the course of a full year. Further, presentations including such items as net income, operating income before non run-rate or after adjustments, or earnings before interest, tax, depreciation and amortization are not intended to be and should not be relied on in lieu of the comparable caption under generally accepted accounting principles to which it is reconciled.

Such presentations are solely intended to provide greater clarity of the impact of certain material items on the GAAP measure and are not intended to imply such items should be excluded. I would now like to turn the call over to Jack Hockema.

Jack?

Thanks, Melinda, and good afternoon everyone. Thank you for joining us on our Q3 2010 earnings call.

Our remarks today will cover the Q3 results, an update on progress at our new Kalamazoo facility, and our short-term outlook for the business. We will also discuss our recently announced M&A activities and describe how we expect these investments to further enhance the company’s strategic positioning and short-term and long-term growth potential.

As anticipated, our Q3 fabricated products results reflected seasonal weakness and higher major maintenance costs. In addition we experienced some short-term cost inefficiencies compared to our strong performance during the first half of the year.

These factors resulted in lower sequential operating income but improved results on a year over year basis. You may recall that on the last earnings call when speaking about the general engineering and automotive outlook, I said that seasonality for those applications typically reduces our Q3 shipments approximately 10% compared to the first half run rate.

We also anticipated major maintenance costs approximately $4 million higher during the quarter than the average quarterly rate during the first six months this year. What we didn’t anticipate is that manufacturing inefficiencies in the Q3 would break a string of six consecutive quarters of improving performance.

These short-term inefficiencies were brought on by the lower volume, production delays from major maintenance, and continued ramp up of the Kalamazoo extrusion facility. We expect that our performance in this area will be back on track in the Q4 and will continue to improve as we progress into 2011.

We’re very encouraged by the progress we’ve made at our new Kalamazoo facility. While we’re still engaged in a difficult startup of a highly automated process, we are delivering product quality that exceeds our previously high expectations.

While we’re a little behind schedule in bringing the extrusion operation up to full operating rate, we’re shipping to customers and expect to be near full operation by year end. We continue to be extremely optimistic about the long-term prospects for this facility and look forward to realizing its full potential.

We’re also very excited about the two recently announced acquisitions of the assets of Alexco which we expect to close in December, and Nichols Wire, which closed in August. These two acquisitions will extend our product offering and further strengthen our competitive position.

We anticipate that the combined benefits from our M&A activity and from Kalamazoo will have a positive incremental EBIDTA impact of approximately $30 million in 2011 compared to the last twelve months’ results. Dan will now provide additional insight into our Q3 results, and I will follow with comments regarding the near-term outlook and additional color regarding our M&A activities.

Dan?

Thanks, Jack. I’ll review the Q3 consolidated financial highlights as shown on slide 9.

Our results were primarily driven by year over year improvements made in the fabricated products segment. Stronger overall demand and higher value added revenue, combined with improvements in manufacturing efficiencies, drove the 25% increase in fabricated products segment operating income for the nine months ended September, 2010.

For the Q3, while seasonally weaker shipments, higher major maintenance expense and short-term cost inefficiencies led to a sequential decline, fabricated products operating income was nevertheless a 15% improvement over the same quarter last year. Reported consolidated operating income for the Q3 of $13 million reflected a net $1 million non run-rate charge.

Significant components of this net charge were a $15 million non-cash marked to market gain on hedging positions, and a $14 million increase in our environmental reserve. Reported net income for the Q3 was approximately $6 million or $0.29 of earnings per fully diluted share.

Adjusting for non run rate items, earnings per share increased slightly to $0.32 per share. Our effective tax rate was approximately 35% for the year to date period.

We continue to expect low cash tax payments, however, as we apply our net operating loss carry forwards and other tax attributes to our pretax US income. Slide 10 highlights Q3 value added revenue by end market application.

A detailed sales analysis can be found in the appendix of the presentation. As indicated on our Q2 earnings call, we anticipated market dynamics would be similar to the first half, however shipments and value added revenue for general engineering applications and automotive applications were expected to reflect a normal seasonal weakness compared to the first half run rate.

Overall, Q3 value added revenue reflected these anticipated trends. Aerospace and high strength applications were essentially flat with the first half pace.

General engineering applications experienced a normal seasonal decline of about 10%, moderated slightly by shipments added from our recent acquisition of the Nichols Wire facility. Value added revenue from automotive extrusions showed nice improvement, largely a result of new bumper programs that have been ramping up this year providing a favorable impact in the Q3.

The decline in other applications primarily reflected the sale of our Greenwood, South Carolina, forging facility in July. Slide 11 provides a summary of the fabricated products segment results.

As Jack mentioned earlier in his remarks, Q3 results for our fabricated products segment were negatively impacted by normal seasonal weakness, higher expense related to planned major maintenance, and short-term manufacturing inefficiencies as a result of lower demand, production delays, and continued startup of our new Kalamazoo extrusion facility. The impact from the recent addition of the Nichols Wire facility was immaterial to the quarter.

Compared to the prior year quarter, segment operating income adjusted for non run rate items increased $3 million, or 15%, reflecting the impact of higher value added revenue on stronger shipments across end market applications, partially offset by short-term manufacturing inefficiencies. Compared to the 2009 quarterly and year to date periods, average value added revenue per pound declined with lower realized prices for several of our products and a shift toward a leaner product mix in 2010.

Now I’ll turn the call back over to Jack to discuss the outlooks for our end markets and opportunities for Kaiser. Jack?

Thanks, Dan. Looking to the Q4, we expect that normal seasonality will cause shipments and value added revenues to be down slightly compared to the Q3 level, and major maintenance costs are expected to be similar in magnitude to the Q3.

As we look beyond the end of this year we expect that improving demand through the aerospace and automotive supply chains combined with strong Q1 seasonality will drive shipments and value added revenue to levels above the Q1 of 2010 on a same-store basis. In addition we expect incremental benefits in the Q1 from the ramp up at Kalamazoo and from our M&A activity.

We’re very optimistic regarding both the near-term and long-term benefits of our M&A activity. Alexco has a strong and experienced management team and is a well-established, high quality supplier of aerospace extrusions.

The acquisition of the Alexco assets will extend our product offering into a relatively large market segment which has strong linkage to the sheet and coil, plate, cold finish, and drawn tube aerospace market segments where we already have a strong presence. We expect that growing aerospace demand and the combined strength of Kaiser and Alexco will enable us to continue the steady, profitable growth that Alexco has achieved over the past decade.

The Nichols Wire acquisition positions us to extend our product offering to wire and small diameter rod and bar products for aerospace and general engineering applications. The Florence, Alabama, plant has a direct linkage with our Newark, Ohio, and Jackson, Tennessee plants, and it complements our entire offering for aerospace and general engineering products.

When we combine these two transactions with the recent sale of the Greenwood facility, our incremental net investment of a little over $90 million represents approximately six times its expected incremental 2011 EBIDTA. These transactions, combined with the expected benefits from the Kalamazoo operation, should provide approximately 35% incremental EBIDTA growth in 2011, building from the $82 million in consolidated EBIDTA for the last twelve months.

In addition, the prospects for long-term sales and income growth are excellent. As a consequence of these transactions and increasingly encouraging prospects for the aerospace and automotive market segments, we’re even more optimistic about Kaiser Aluminum’s near-term and long-term prospects.

The long-term fundamentals for aerospace applications are excellent. We expect very strong build rates through the remainder of the decade, and our estimates for aluminum plate content have increased as monolithic design continues to make inroads into air frame design.

In addition, the full benefit from our Trentwood expansion has yet to be realized, and the Alexco and Nichols Wire acquisitions provide additional aerospace growth potential. Our new Kalamazoo facility is delivering exceptional product quality and will advance our competitive cost position.

In addition, Kalamazoo will provide capacity and cost efficient sourcing for expected robust sales growth related to the growing use of aluminum extrusions in automotive applications. We’ve made significant investments at several other fabricated products facilities, and these investments will provide earnings leverage as the economy recovers and the aerospace and automotive markets grow.

In addition we continue to identify new opportunities that will drive future investments for organic growth. With attractive markets and a strong financial and competitive profile, Kaiser’s well positioned for profitable near-term and long-term growth.

We will now open the call for questions.

Hi, good morning!

Hi, Timna.

Hi, Timna.

I was hoping you could detail a little bit more what the cost inefficiencies were, just because I’m not familiar with that term. And I was trying to understand how much might have been start up.

If indeed the volume was about what you expected, what was it about the decline in volume that maybe wasn’t anticipated in these cost inefficiencies?

Well, the decline in volume was anticipated, Timna, but as often happens in these situations, our flexing of costs lags the reduction to some degree. So that was a little bit of the impact.

But the biggest impact that was unexpected is the Kalamazoo startup did not come on as rapidly as we’d hoped in the Q3, so it’s lagging our expectation a little bit; and the other is that while the major maintenance was planned, we had some additional downtime around in particular one project, that caused some extended downtime on some equipment that caused some inefficiencies in the operations.

Okay.

But the big impacts, if you compare to the first half run rate, were really the seasonality and the incremental major maintenance spending that we expected.

Okay, so the inefficiencies were a number of things that may be added to those but weren’t the major part of the decline? Is that- Cause I’m just trying to figure out from an outsider’s view, obviously, how much of this is something that might be repeated and how much is something that was specific to the current Kalamazoo situation for example, or kind of more specific to your current environment?

Well, Timna, while our financial people have very complex models I have a very simple model for the business that I use on the back of an envelope, and when I take the back of my envelope and look at the outlook that we provided for the Q3, the 10% seasonality plus $4 million of incremental major maintenance expense would suggest that we’d be down $6 million from the first half run rate. So that’s what my back of the envelope was telling me about the Q3, and we actually came in $8 million worse.

So the outlook we projected was 75% of the change that we saw from the first half run rate.

Got it. Oh, that’s really helpful, thank you.

And so also I wanted to ask you about certainly this year your major aerospace manufacturers have been still working down some excess inventory, but can you talk to us about what signals you might have for when they’ll need to replenish inventory, what they’ve told you there?

Well, as we’ve said on the last couple of calls, we really wouldn’t change the comments from there. We continue to get the same kind of feedback, and that is we expect that their destocking will continue well into next year, although we expect that it’s going to be at a somewhat lesser rate on plate in particular than it was this year.

On our other products we’re seeing, other products other than plate in aerospace, we’re seeing that the inventories are getting pretty close to equilibrium – sheet and coil looks like it’s in balance now and we think we’re going to be seeing pretty much real demand as well as on cold finish and on drawn tubes. So the major destocking issue going forward we think will be plate and we expect it’s going to be less impact on plate in 2011 than it was in 2010.

But then as we look beyond that we continue to be very, very bullish about the total aerospace outlook by the time we get to 2012 and beyond.

Okay, great. And can I pin you to like 2011 being the end of the destocking, maybe by the end of the year?

Or still working through that?

I’m not sure. There could still be some plate destocking beyond the end of 2011, but when you put it all in the hopper we expect we’re going to see very, very robust demand across the board in aerospace in 2012.

Got it, thank you.

Morning, guys.

Morning, Mark.

Hi Mark.

I appreciate all the color and I continue to be encouraged about the persistence of your intermediate to longer-term outlook. I was wondering what is the level of your environmental reserve after the change that you made.

Sure. It’s about $16 million is the total reserve, right?

Or $20 million. $20 million, that includes the other part besides just Trentwood.

Trentwood was the $16 million. It’s about $20 million; it was around the $6 million level or so beforehand, so the increase is about $14 million.

Yeah. Is there any more color you can provide on that?

Sure. The increase is primarily related to Trentwood and our historical use of hydraulic oils that contain PCBs.

It’s something of course we don’t do any longer and haven’t for decades, and it’s something we’ve been monitoring for several years and had already an accrual for about five or six years into the future already. It’s been running us, in terms of cash flow, in the territory of $2 million plus or minus, and there’s really nothing that’s changed on that front.

What did change and cause the accrual is that we filed a draft feasibility study with the Department of Ecology in Washington. We did that in September, and one of the requirements of that study is to extend your cost estimates into the future quite some period of time.

So instead of having five or so we’re going out approximately 30 years for cost estimates.

Alright, so this isn’t anything new then; this is just putting up a reserve to essentially extend the timing of the situation.

That’s absolutely true. We’re doing nothing different.

The condition’s basically the same as it always has been, we haven’t changed an approach so the reason for the size is that we’re adding quite a few years and those cash flows for GAAP purposes can’t be discounted to current value.

Okay. Alright, one other question I’d like, and this is just out of my own curiosity, but we’ve seen a lot of changes coming out of Detroit as far as how those businesses are being run – at least you would get that impression.

And I’m just curious, as you’re ramping up this new operation is that creating incremental opportunities or is this just pretty much an orderly transfer or an orderly consolidation of existing programs?

No, it’s really new programs that are driven primarily by regulation; by the higher CAFE standards as we look out in the future. But I’d also say there’s a change in attitude in Detroit toward fuel efficiency.

The US aluminum content in autos has been dramatically below Japan and Western Europe for many, many years, and now CAFE is forcing more fuel efficient vehicles but we’re even beginning to see some proactive efforts on behalf of the car designers or the automotive companies putting more fuel efficient vehicles on the road and increasing the aluminum extrusion content. Frankly, as we look at it today compared to a year ago we thought that the incremental capacity from Kalamazoo would handle new programs we anticipated for the next two or three years, but we’re actually looking at the need to add capacity beyond that in order to handle the magnitude of the new aluminum extrusion programs that we’re seeing.

So it’s really not consolidation or anything; it’s a significant change in design of automobiles with higher aluminum extrusion content.

Alright. Is there any sense or any ballpark you can give as far as the incremental capital that would be associated with these growth opportunities?

Well, the Kalamazoo is already there. We’re talking for the next increment of capacity and we’re still firming up our capital schedules for 2011 and the future, but it’s in the teens – the additional investment that we’re anticipating relating to immediate automotive opportunities.

When I say immediate it’s programs that are on the board that’ll become real sales three years or so out.

Okay. If I could just ask one more question.

Sure.

You had indicated that the demand outlook for the aerospace plate market had increased as a result of further inroads of monolithic design. I was wondering, could you give a little more color on that?

And if possible, is there any way you could quantify what you’ve been seeing, maybe not so much in the last three months but maybe in the last twelve months in terms of the continuing acceptance of this new technology and how much of an increase or how much of an impact it could have on Trentwood going forward?

Well in terms of quantifying it I can’t put a point on it, but I can say that we expect by the time we get into 2012 and 2013 timeframe when you look at build rates as well as increasing plate content, we expect the plate demand will be greater than it was at the prior peak which was 2009 I believe – yeah, ‘08 or ‘09, I can’t remember which year it was but whichever the prior peak was. And really what’s changed it is as we do our strategic planning each year we do a detailed bottom up, airframe by airframe, using the airline monitor forecast of aircraft they’re going to build but then using our own engineering estimates to working with customers to determine what the plate content is to build each one of those aircraft.

And as we’ve done that, each time we update it we get a surprise that the plate content is increasing, and it’s because more and more parts are being switched to monolithic design. Is it 20%?

No, but is it a few percent? Yes.

It just continues to grow at a few percent per year. How long that continues we don’t know, but it just reinforces our very, very bullish outlook on aerospace as we go forward.

Okay. Jack, thanks for all that color and good luck on the Q4.

Okay, thanks, Mark.

Thanks, Mark.

Good morning.

Hey, Ed.

Thanks for taking my call. I wanted to kind of look at the value added pricing if I could a little bit, and I saw some of the metrics that you put in the slide 13 of the press release.

But I would have thought with the switch to lower general engineering and automotive facing seasonality that pricing might have benefited from the higher aerospace value added revenue per pound. Can you kind of walk me through what happened there?

Sure, Ed. Actually you can see some of the detail on slide 23 in the appendix.

If you look at a quarter to quarter comparison, for aero and for general engineering and for automotive extrusions were essentially flat quarter to quarter. And the portion that actually declined was in other applications.

I see.

There was actually two dynamics that were going on in there. One was that we no longer had the forgings business, which on a value added revenues basis per pound was a relatively high product.

And the other thing is we had some increase in some lower value added product; actually we had some larger billet sales this quarter and those have a fairly dramatic impact on the per pound calculation.

So kind of looking forward over the next couple quarters, I guess if I could kind of think about where- Should I think of the top three segments as staying relatively flat and then other applications seeing the same kind of incremental change?

I really don’t know how much the impact of this last quarter was because the forging’s no longer there and because the billet being higher. The billet is something that’s kind of a marginal product for us, and so how much we’ll actually ship in a given quarter is subject to real question.

There’s not a lot of visibility there.

This is Jack, Ed. I think the real point is as you said in the beginning, for the three major applications – for aerospace, automotive and general engineering – we think that the pricing will be relatively stable going forward.

The other category is going to flop around a little bit just depending on the mix within that category. But in the major applications that really drive the income, we think they’re stable.

So it has nothing to do with weaker demand or anything else like that.

No.

It’s simply just a mix shift in the forging, with forgings as well as the lower margin billet.

Correct.

Okay. And then the last question I guess is further acquisitions, what’s your thoughts going forward?

Are we going to take some time and integrate these or are there other targets out there that you’re considering? And if so, what general piece of the market?

Well at this point, these were two really high priority targets that we’d been working on for many years, and as we go forward we’d like to take time to digest those and expect to take time to digest those. If something similar came along that’s a really, really good fit, we’ll continue to look at it.

But right now our disposition is to focus on integrating those before we take on too much more.

Excellent. Okay, thank you guys.

Mm-hmm.

Thanks, Ed.

Thanks very much. Hi everyone.

Hi Tony.

How you doing, Jack, Dan, and Melinda?

Good.

Good. I’ve got a couple questions here.

First, when you were talking about the EBIDTA impact for Kalamazoo and the acquisitions for 2011 you mentioned a number, I hope I got this down correctly – $30 million, I believe. And I think previously you guys have talked about I think for Kalamazoo alone $25 million if I remember those numbers correctly.

Has there been any change? You’re talking about Kalamazoo coming up a little bit more slowly than planned: has there been any change in that composition if you will?

No, that’s a really good question. I’m glad you asked it.

Nothing’s changed about the long-term for Kalamazoo which we have said would be low- to mid-twenties, longer-term. I don’t remember if it was last call or two calls ago, I think it was the last call but someone asked a similar question and I said we expected that the Kalamazoo impact in 2011 would be in the teens.

And you did hear correctly – what I said in my remarks is that we expect around $30 million. If you do the math on the acquisitions, the $90 million, that’s six times in 2011, that’s order of magnitude 15 and we think Kalamazoo’s going to be order of magnitude 15 although it’ll be lighter in the first half and heavier in the second half as we continue to ramp up.

Alright, Jack, that’s very helpful. And just looking over, one of the gentlemen, one of the other callers asked about the shipments and your value added revenue.

I was just looking at shipments and the last couple of years obviously we’ve been in a recession going into the mother of all downturns, and then kind of recovering in 2009. Could you give us some help in just trying to think about the Q4?

Typically we know there’s seasonality but just to think about general engineering, automotive and the other areas, and how we should look at Q4 versus Q3 from a volu-metrics standpoint?

Yeah, that’s a really good question and I’m going to be a little loose here, looser than normal, and the reason is it’s really, really difficult to anticipate what’s going to happen in December. You get up to the holidays and it just depend on attitudes; all of a sudden they’ll want to shed inventories and everybody shuts off shipments or all of a sudden they see a surge in orders early in the year and they’ll want to bring in inventory.

So it’s really, really hard to predict the Q4, but if you pin me down – and this is going to be broader than I’d like it to be – but I’d say it’s anywhere from flat to down 5%, and somewhere in the middle of that’s probably the most realistic expectation right now. And that’s pretty much across the board.

It affects everyone. It’s really the holiday, the short schedules over the holidays that cut everybody back.

Got it, that’s very helpful. I appreciate that.

And also, too, just on the commercial aero side, could you just review for me some of the more build rate changes, there’s been a lot of them I know, as we head towards 2011 and 2012? I know there’s been a lot of announcements out there.

I just want to also gauge the impact of the 787 because people often talk about composites and titanium, but it also includes a fair amount of that heavy gauge plate that you guys produce, too.

You’re right. That’s a good point.

Let me work backwards. The 787, and I forget the precise numbers from the bubble chart, but trying to recall- If you compare the 787 to the traditional 747-400 that’s been built for decades, the airframe itself is 40% lighter but the amount of plate consumed is I believe 50% or 60% greater.

So the 787 actually consumes 50% to 60% more aluminum plate than the old version of the 747, so it is a big impact. And they’ve now begun building those; they haven’t delivered any but they expect a surge of deliveries in the Q1 once they get final FAA approvals on the 787.

So that’ll begin to help us as the 787 ramps up, but the big impact for us is the single aisles. And both Boeing and Airbus have announced continuing ramp ups in the single aisle – the 737 and the A-320 – build rates in 2011 and 2012, and continue to comment that they’re looking at even further increases beyond those already announced.

And then of course the A-380 continues to ramp up and I think they’re ramping up the 777 schedules as well. So they’re ramping up pretty much across the board, but the biggest impact is single aisles.

Excellent. Thanks very much, Jack, I appreciate it.

Mm-hmm.

Hi everyone.

Hi Lloyd, how you doing? Is this Tim?

Oh, I thought that was Lloyd. It sounded like Lloyd.

Just a few questions. On the acquisition of Alexco, will there be a DOJ review for that?

That is complete, so it’s already passed DOJ.

Okay, I was a little surprised. How many suppliers are there in the US for hard alloy extrusions?

I figured that was a fairly small number of players.

You’re correct. There are only three significant players of which Alexco was one.

Did the DOJ define the market as a global market or were they looking at it as a North American market?

We filed the DOJ report and the 30 day time period expired which means we’re free and clear.

Sure. So just no response from them, huh?

No.

And then turning to the rod and bar, what you’re doing at Kalamazoo, I guess we’ve learned that there’s again only a handful of players that can make the quality rod and bar that you do. I guess maybe just help me, if you could remind me why is that?

I mean I look over the landscape and I see so many extruders out there. Just why is your rod and bar going up against so few competitors when it seems like there’s an abundance of other extruders out there in North America?

Well, there are really two aspects to it. One aspect is the one that I referred to, which is quality.

And these products typically go into highly machined products, and so there are two extremely important attributes or really three important attributes. One is the metallurgy of the part, consistent metallurgy that makes for consistent machining, and the right metallurgy that makes the chips form properly that allows high machining rates.

Second key point is dimensional tolerances; the tighter the tolerances the more consistently the product performs in the machines, and so it increases machining productivity. And we’ve demonstrated with our precision rod for example in the past that people got up to a 30% increase in machining speeds compared to the good competitors, not even counting the people that are out there just pushing rod and bar in their garage.

And then the third aspect of this is that virtually all of it goes through service centers, national service centers, and so it really takes a strong infrastructure, a company with the infrastructure to satisfy the needs of these big national multi-warehouse service centers. And when you put all that together it creates barriers to entry for anyone other than those customers that really have no discernment for quality or inventories.

That’s helpful. And then on the Kalamazoo, so I guess that’s now impacting P&L in Q3.

Was that hitting the P&L in Q2 or was it being capitalized?

Yeah, it was a drag. It’s been about the same drag frankly in the Q1 and the Q2.

The Q3 from an EBIDTA standpoint was about the same drag. It was less cost efficient, or it was more cost inefficient; as we brought on more resources we anticipated more production.

So we didn’t absorb all the costs that we had there, so we went a little bit upside down on cost performance but that was offset by starting to get some shipments out of there. So the EBIDTA was pretty much neutral, but it was a drag on our manufacturing inefficiencies.

Okay, thank you.

Okay. Thanks for joining us on the call today.

We look forward to updating you again on our Q4 conference call in February. Thanks.