Good day ladies and gentlemen and welcome to the third quarter 2010 Drew Industries Incorporated earnings conference call. My name is Alisha and I’ll be your coordinator for today. At this time, all participants are in a listen only mode. We will be conducting a question and answer session towards the end of this conference. (Operator Instructions) As a reminder, this conference call is being recorded for replay purposes. I would now like to turn the presentation over to your host for today, Mr. Jeff Tryka, Lambert Edwards Drew Industries Firm. Please go ahead sir.

Thank you Alisha. Good morning everyone and welcome to the Drew Industries 2010 third quarter conference call. I’m Jeff Tryka with Lambert Edwards, Drew’s Investor Relations firm, and I have with me today, members of Drew’s management team including Leigh Abrams, Chairman of the Board of Drew, Fred Zinn, President and CEO and Director of Drew; Jason Lippert, Chairman and CEO of Lippert Components and Kinro, and Joe Giordano, CFO and Treasurer of Drew. We want to take a few minutes to discuss our quarterly results. However, before we do so, it is my responsibility to inform you that certain statements made in today’s conference call regarding Drew Industries and its operations, may be considered forward-looking statements under the Securities laws. As a result, I must caution you that there are a number of factors, many of which are beyond the company’s control, which could cause actual results and events to differ materially from those described in the forward-looking statements. These factors are identified in our press releases, our Form 10-K for the year ended 2009 and in our subsequent Form 10-Q’s all as filed with the SEC. With that, I would like to turn the call over to Fred Zinn.

Thank you Jeff, and thank all of you for joining us on the call and on the webcast. Once again, we are very pleased with our results, particularly in light of economic conditions. Drew’s operating management team has continued to perform extremely well under difficult circumstance and in the last 18 months, the seasonal swings in our business have been even more pronounced than we’ve experienced in many years. This increased volatility complicates production scheduling, shipping requirements, employment levels, and other factors which impact factory operations. They haven’t been perfect, but I believe that our team has done a darn good job under these very difficult conditions. I’m also pleased with our response to the challenges presented by the changing business environment. During the recession, our concentration was primarily on cost control, which served us well in managing through that difficult period. This year, we’ve taken a more balanced approach, devoting equal time and attention to opportunities available to us because of our strong financial position. The four acquisitions we completed this year, and our increased spending to expand capacity, demonstrates that we’re ready to invest our considerable resources to enhance our growth potential. Further, we’ve sharpened our focus on strategic planning and the evaluation of longer term growth opportunities so that we’ll have the key people and other resources necessary to continue to expand for years to come. In the near term however, our growth potential is primarily tied to the RV industry. Therefore, we’re quite pleased that retail sales of travel trailer and fifth wheel RV’s remained so strong throughout the summer. These significant increases in demand despite the weak economy support our belief that the RV lifestyle continues to be a priority for families across the United States. From April through August 2010, retail sales exceeded production…

Thank you Fred. In addition to the RV industry growth for travel trailer and fifth wheel RV’s, our content for RV continued to grow this year as it has over the last decade. For the 12 month period ended September 2010, our content for travel trailer and fifth wheel RV increased 9% as compared to the 12 month period ended September 2009. The increase in content for new RV’s is due primarily to market share gains and new product introductions. As a result of recent acquisitions, further increases in our RV content are expected. In the third quarter of 2010, we refined the calculation of content per unit to better identify aftermarket sales as well as sales to other industries. There was no change in total reported net sales for either segment. In addition to our goal of increasing content through increased market share of our products in new RV’s and manufactured homes, we have gained greater share of the aftermarket for replacement components in both the RV and the Manufactured Housing industries. For the 12 months ended September 2010, our Manufactured Housing and RV aftermarket sales, reached $27 million, an increase of 28% from the $21 million for the 12 months ended September 2009. We anticipate continued expansion of our aftermarket business. Further, for the 12 months ended September 2010, our sales to other industries, largely modular housing and transit buses, were approximately $21 million. This represented an increase of 41% from the $15 million for the 12 months ended September 2009. During the first nine months of 2010, we completed four acquisitions for an aggregate cash consideration of $22 million paid at closing. In addition, contingent earn out could be paid over the next six years depending upon the level of sales generated from certain of the acquired…

Thank you Joe. Operator, we can open it up for questions now.

(Operator Instructions) Your first question comes from the line of Kathryn Thompson from Thompson Research Group. Please proceed. Jamie Baskin – Thompson Research Group: Good morning everyone, this is Jamie Baskin on the line for Kathryn. My first question, you reported today in your release a 2% decline in revenues in October. Can you tell me how sales have progressed since October and September? In other words, has there been a more meaningful drop off in orders or has the slowdown been more gradual.

Well I think first we have to recognize that we’re comparing to a much stronger period last October, so last year there were significant increases in production in the RV industry, so we need to put that in perspective when thinking about the change this October. Just Jason, you want to respond in terms of what you’ve seen in recent weeks for demand?

Yeah, I mean I think we’re trending for a little bit of a slowdown right now and everybody’s anticipating that dealers are cutting back inventories through the rest of this quarter and I think it will get strong again in the first quarter of next year.

And I think we need to keep in mind that that’s a good thing for next year with retail dealer inventories so low, any movement in retail demand will hopefully spur both orders and production, so that would be a good thing. Jamie Baskin – Thompson Research Group: OK. Also, we’ve been hearing about (inaudible) discounting in the market from our contacts. So what level of discounting have you seen and what do you think is really driving the discounting from your perspective?

Well I think you probably have better information and more current information in terms of that. You know we are supplying OEM’s. We’re not direct contact with dealers. But I would expect you’re right. I don’t know what’s driving it except I think dealers are continuing to be cautious and they’re buying when they get a good bargain. I think that dealers are looking for bargains and consumers in the off season are looking for bargains. And if you remember, most people in the northern half of our country, they do a lot of RV’ing in December and January so they’ll buy on bargains. Jamie Baskin – Thompson Research Group: OK. And then last quarter, Drew initially tried to push through price increases to cover increases in raw materials, but then the raw material prices dropped. On the Q2 ‘10 call, you said you didn’t have to stick with such a large increase. Our question is, why didn’t you try to maintain these increases, because they appear to have had an impact on Q3 numbers. And then what are you doing going forward to mitigate the tough raw material constant price fluctuations?

Yeah, I don’t think really we said that we had going after price increases. We said I believe, that if prices continued to increase, we would have to. Prices didn’t continue to increase. Generally, for larger raw materials, costs stayed reasonably consistent. Some went up, but most stayed reasonably consistent. I think at this point, the comparison between Q3 of 2010 and Q3 of 2009 is a little distorted because of Q3 2009 when prices were lower. Costs were lower. So I don’t foresee any significant change in raw material costs as a percentage of our sales going forward. Jason, you have anything to add to that?

No. Jamie Baskin – Thompson Research Group: OK. Final question is on Manufactured Housing. When did you start to see the impact of a more meaningful shift from multi-section homes to single section?

I think it’s been gradual. I don’t know if there’s been a huge shift, but over the years those trends have changed, not by over month by month periods. We need to look at how it’s changed a little bit from prior years, and it’s down a few percent I think from prior years; down meaning the number of the portion of larger homes going down to a portion of smaller homes going up a little bit. Not huge change. I think looking at for instance in August; I think 58% of homes were multi-section. Look back a year ago and it was 64%, so modest changes. Jamie Baskin – Thompson Research Group: All right. Well thank you for answering my questions. That’s all.

Your next question comes from the line of Bret Jordan from Avondale Partners. Please proceed. Bret Jordan – Avondale Partners: Hi, good morning.

Morning Bret. Bret Jordan – Avondale Partners: A couple quick questions. And I guess looking at the pushing out the earn out, is that related to a particular acquisition or is that just across the board of the businesses you’ve acquired year to date, the businesses building a little more slowly than you had initially projected?

I think we only had one acquisition where we had very significant earn out so it’s largely related to that one, but it’s not so much that our forecast of the sales have changed, it’s just the timing of it. And when you’re calculating that liability, you calculate it based upon discounting to present values, so the further out your payments are, the lower the present value of those payments, and that’s what happened to us in our estimates for this quarter. Not a huge change, just a modest change in terms of the timing. Bret Jordan – Avondale Partners: OK. And then a quick question on transit. It sounds like that was pretty successful. Is that something that you’re just seeing incremental market share in or is there an underlying lift in transit in general?

I don’t know if there’s yet been an underlying shift in transit buses. I think that it’s just a slow growth or modest growth on our part and as we gain some traction and focus more on the transit bus market, hopefully people see some healthier increases. I think that right now, I expect that with state and local governments cutting back their spending, there probably has not been a significant increase in all kinds of buses. Transit buses may be a little different? Jason, you have anything to add on that?

No. Bret Jordan – Avondale Partners: OK. And then one last question. I guess I may have asked this last quarter, but as far as the new slide technology that made you probably more relevant in the motor home category, are you seeing any real pickups or meaningful new business on that side?

Well nothing that we’re ready to announce, but I think we are seeing some very good progress.

There’s a lot of gravitation toward that product right now in the motor home market for us, and it’s leading to a lot of good opportunities month in and month out, so we’ll continue to develop that just as quick and as meaningfully as we can here in the upcoming quarters. Bret Jordan – Avondale Partners: All right, great. Thank you.

Your next question comes from the line of Scott Stember from Sidoti & Company. Please proceed. Scott Stember – Sidoti & Company: Good morning.

Hi Scott. Scott Stember – Sidoti & Company: Talk about the aftermarket sales and increases. We know on the Manufactured Housing side how that’s come about, but with regards to the RV side, is there any one, two or three products that are mentioned that are really driving that gain?

I think it’s a number of gains across products. Jason, anything in particular that’s standing out in terms of the aftermarket in RV?

In the aftermarket:

Yes.

It’s certain products. We’re adding products to the aftermarket portion of the business every month. With our aftermarket partners, we’re trying to throw as many products their way as we can, but they pick and choose and take the ones that they feel will be the most meaningful in their marketplace and as other products become more relevant, we throw those in. But right now, it’s just a select three or four products that are driving that. Scott Stember – Sidoti & Company: Can you disclose what they are?

Yeah, I can. You now axel is a big portion. We do a lot of entry steps, both manuals and electrics. We do happy jack bed lift mechanisms and some jack products, some electric tongue jacks and stabilizer jacks, things like that, stuff that are easy to either replace or bolt on. But every month, we’re working on trying to load our aftermarket partners up with more relevant product which has been growing over the last couple of years and will continue to grow for us. Scott Stember – Sidoti & Company: OK. Great. And Fred, some bigger picture kind of stuff, looking out. You did say that most of your growth right now is tied to the RV business. Could you talk about some tangential opportunities that you might have outside of what you’re seeing in transit right now?

I think it’s what we’ve talked about before. There’s more of our business will shift I believe towards motor homes, so still within RV’s, but I believe that there’s some opportunity for growth both in our products and in the motor home market. Certainly the transit buses that we’ve talked about before, utility, cargo trailers that we’ve talked about before, and at some point – we’ll see what happens, but at some point, I’ve got to believe that the recreational boat market will start to recover and we’ll see some additional business there. Scott Stember – Sidoti & Company: Got you. That’s all I have. Thank you.

Thank you Scott.

Your next question comes from Torin Eastburn from CJS Securities. Please proceed. Torin Eastburn – CJS Securities: Fred, can you first just talk about the acquisition landscape you’re seeing now?

Yes, it’s been pretty full. We’ve looked at quite a number of deals. We’ve closed four already this year. I think there’s still some small window of opportunity as dealers, sellers rather, get a little concerned or sellers remain concerned about changes in the tax rates that may happen next year, but I think that it’s been a pretty full pipeline. Torin Eastburn – CJS Securities: And how does the valuations that you’re seeing there compare to the valuation of your stock?

You mean in terms of multiples? Most of the deals we’ve done and a number of those we’ve looked at, are not really based upon a multiple of historical earnings. It’s based upon opportunity. Several of the deals we closed were just for a portion of the price in cash up front and the balance on an earn out depending on the future. So it’s a little hard to make the comparisons to prior periods, but I would say those that we’ve looked at where multiples of EBITDA were a consideration, we’re still in that same range we have historically been or a little lower. We’re not going to pay more than six times and hopefully, considerably lower. Torin Eastburn – CJS Securities: OK. And then my other question. Usually you see the real seasonal pickup in March or sometime around there. When will you start to get visibility into what the orders for that time period look like?

Jason, what do you think? How soon will you get a feeling about the spring selling season?

We feel really good about the middle of February, once the shows start firing up in January and we’re anticipating inventories continue to fall up until that point. Retail has been good, so there’s a lot of – we’ve had a lot of dealers in town over the last several weeks with some of the shows that we’ve had here, and they’re all singing the same song, that inventories are reducing and there’s some financial difficulties out there, and I think as soon as inventories free up a little bit more, they’ll be ready to purchase. Torin Eastburn – CJS Securities: OK.

I think you have to remember that dealers are very motivated by lenders to turn their inventories quickly. They have curtailment payments, so what they buy today, they may have to start paying on for the spring selling season for their curtailment payments. So they’re going to be cautious until we get into early part of 2011. And we don’t have, in terms of the visibility, we don’t have months of legal orders. Our visibility or our firm visibility is only a few weeks out or less, but of course we do have, Jason has relationships with the customers to give us a little more visibility. Torin Eastburn – CJS Securities: OK. Thanks Fred.

Your next question comes from line of Liam Burke from Janney Capital Markets. Please proceed. Liam Burke – Janney Capital Markets: Thank you. Good morning Fred. Good morning Joe.

Good morning. Liam Burke – Janney Capital Markets: Fred, just to talk a little bit more about the acquisition front, you picked up some interesting technology in the last year or so. Do you see the pipeline having some new technology that you can apply to your product line?

The existing product line? Liam Burke – Janney Capital Markets: Yes.

I think it’s a mix. I wouldn’t be terribly surprised to see more of those type acquisitions. I think it’s difficult for inventors to get funding so they need a partner. It’s difficult for inventors or startups to get in front of the ward as far as River and Jacko and such, so they need a partner, so I wouldn’t be surprised to see more of that, but I think it’s been a mix. Liam Burke – Janney Capital Markets: Great. And on the cash front, your cash balance continues to grow. Your cash flow is strong. The priority is still acquisitions?

Yes, certainly the priority is still acquisitions. Liam Burke – Janney Capital Markets: Great. Thank you.

Your next question comes from the line of Arnold Bree from Goldsmith & Harris. Please proceed. Arnold Bree – Goldsmith & Harris: In the conventional mortgage market right now, it’s almost impossible for a retiree to get a mortgage. The banks are only including, well social security pensions obviously, and wage income. They’re refusing to include interest income, dividend income, capital gains in determining the extent of the mortgage you could carry in mortgage. I’m wondering how much of your RV customer – how many – what percentage of your RV customers are retirees. What’s the financing situation and is that becoming a problem. The second question would also be, what is the maximum earn out liability that you have?

In terms of the mortgages and the availability of mortgages, I think on balance, when you look at the financing picture for RV’s in aggregate, it’s gotten a little bit better. I think that General Motors partnering up has helped. They’re supplying some liquidity in the marketplace. I think the credit unions are still supplying some liquidity in the marketplace. But I think in terms of home equity lines, and if that’s where you’re getting at, or retirees selling their homes and having some extra cash, I think that’s still a difficult part of the market. And I think it impacts not only our RV segment, but certainly it impacts our Manufactured Housing segment. When retirees can’t sell them homes, they can’t buy another home, a smaller less expensive home to move to a warmer climate. Arnold Bree – Goldsmith & Harris: I’m not thinking of selling the home, I’m thinking of actually financing a purchase where the only income that will be included in consideration is as I say, social security and pensions. They will not include dividends, interest and capital gains, which are what most retirees are living off of. So I guess I’m wondering why doesn’t that affect the purchase of an RV, and again, what percentage of your RV customers are retired?

Hi, this is Lee. I think the retiree usually sells their existing home, or they sell their RV’s. They generally have cash to buy a new home. I don’t think you see a lot of retirees buying a home for the first time. So I think a lot of cash is coming out of the retiree from the sale of existing homes or existing RV. It used to be about a third of RV buyers paid cash when they bought an RV, and my guess those are retirees that are buying an RV and they’re paying cash for it. It’s your younger generation from 30 on up that’s financing the RV. Arnold Bree – Goldsmith & Harris: Do you have an idea how many or what percent are retired?

I think it’s a fairly broad range across all age spectrums. I wouldn’t be surprised – there is some debt, so if you want the details, I think there’s some debt on the RV IA website. That may be helpful, but I would guess it’s probably on the order of 25% or 35%. Arnold Bree – Goldsmith & Harris: And you haven’t seen any problem in financing their purchase?

No, I think that financing is still difficult, improving but difficult. I think for different reasons than you’re explaining. I think there is an availability question and I think that credit ... Arnold Bree – Goldsmith & Harris: Credit is a serious, serious problem in the conventional mortgage market. The maximum earn out liability?

In terms of run out liability we currently have about $12 million recorded on our books. That represents the current value. If you were to take a discounted cash flow, that would be $15 or $16 million, and several of the larger products do have caps, but some of the products don’t have caps, so I couldn’t give an absolute maximum, but luckily, on each one of those, even after the royalty payment, we’ll continue to make money. So the larger the amount of the earn out payment on some of those, the better we’re going to do. But right now, our estimate is an undiscounted of around $15 to $16 million. And that’s pretty close to what a cap would be except for as Joe said, on some of these smaller products. Arnold Bree – Goldsmith & Harris: Thank you very much.

Your next question comes from the line of Barry Vogel from Barry Vogel and Associates. Please proceed. Barry Vogel – Barry Vogel and Associates: Morning gentlemen.

Good morning. Barry Vogel – Barry Vogel and Associates: Fred, I have two questions. A lot of my questions have been answered. Has the concentration of totables produces, which has really accelerated in the last 15 to 20 months, has it and do you think it will affect your pricing in any way in terms of the sale of your RV components?

Well, I know you’re referring primarily to Soars’ acquisition of Heartland and some other consolidation as you said, and I think that Soar has always been, (inaudible) very significant customer for us. They were a 30% customer and now they’re more. I think in either case, they have some leverage as we do. I don’t think that the balance is going to change significantly. I think that they may – we may see some requests for price reductions and we may try and offset some of that with some new business, but I don’t see anything major on the horizon. I don’t think anything has happened of significance and I don’t see anything major on the horizon. Is that fair to say Jason?

Yes. Barry Vogel – Barry Vogel and Associates: The other question, I think a miracle occurred in the last few weeks with the FHA and Ginny Mae finally gave initial approvals for changing the rules on FHA financing for manufactured housing. Do you think that that’s going to affect the industry in any positive way next year?

Well I think some of our customers have a little more insight. I do listen to the conference calls that have been held so far, and I think they’re not looking for a short term impact. They think there’s potential improvement over the long term as we get into I’d say the middle of next year, but everybody’s cautious because it’s taken so long and what little was done in the prior quarters hasn’t had an awful lot of impact. So I’d say cautious optimism. Barry Vogel – Barry Vogel and Associates: There’s a difference between them saying they’re going to do it and actually doing it.

We know that. We know that. Barry Vogel – Barry Vogel and Associates: Thank you very much. You did (inaudible) a great job.

Thank you.

Your next question is a follow up question from the line of Arnold Bree from Goldsmith & Harris. Please proceed. Arnold Bree – Goldsmith & Harris: Just one other question. How would you see the sales mix of this company five years from now? I’m trying to get some feel for how important your strategic efforts to diversify the revenue base is. You’ve gone into transit and some other stuff now. Is this a major strategic effort to diversify that revenue base? How do you see it five years down the road?

I would say moderate, a moderate change in the mix. I’m hoping and I expect we’ll still have opportunities over that time frame in recreational vehicles as they become more feature laden and as we add more products, but I think that other markets will gain as a share of our sales. I don’t think we’re going to see 40% of our sales in these related markets, but what I didn’t mention before is that we have products that we can sell in the aftermarket outside of Manufactured Housing and the Recreational Vehicles. We have that as an additional. I think when you look at all of those markets together, whether it’s modular housing, potential in recreational boating, cargo and utility trailers, transit buses, I think all of that together can have reasonably significant share of our sales, but not 40%. 10% to 25%.

Just one other Fred always says that manufactured housing represents 10% of the housing market, and the housing market is as low as its been right now. The housing market picks up to traditional levels, maybe to twice at what it is now, we could probably anticipate doubling sales and manufactured housing. That’s a big item with high margin, high incremental margin pickups.

That’s a very good point. I think that is not only a possibility, but I think a fairly good one. Arnold Bree – Goldsmith & Harris: Thank you.

Your next question comes from the line of Deforest Hinneman [ph] from Walton & Co. Please proceed. Deforest Hinneman [ph] – Walton & Co.: Hi, I had a couple questions. I thought I heard Lee on the call, but mostly for Lee and Fred. I find it interesting that we’re seeing very high commodity prices for farming products, which probably bodes well for farmers going into next year, and we’re seeing a lot of sales strength from Polaris. Can you kind of talk about what you’ve seen historically when we’ve had farm incomes in the U.S. at the very high levels.

I don’t know the answer to that. Any insight Lee?

No. I mean if you’re talking about the general economy, neither Fred or I are economists. You just have to try to guess where the country really is turning around, and my personal opinion is, which is not worth very much, is that we probably are on a very slow growth trajectory. It’s probably going to take several years to come out of this situation we’re in right now. And a lot of that is going to depend on U.S. deficits. How do we finance those deficit? So it’s just questions that probably haven’t been around before, but long term, I think we’re coming out of it and coming out of it very, very slowly.

I have seen reports that say that there’s becoming more and more of a distinction between the have’s so to speak in the economy and the have not’s, and whether it’s the farm part of the economy or other sections of the economy, as they are have’s I do think we’ll see increases in purchases by those groups in recreational vehicles. I think that’s one of the reasons why RV’s have performed better than many portions of our economy over the past couple of years. I mean, we are talking about double digit increases in retail sales of recreational vehicles in the past year or less, and certainly far, far less favorable performance of the other parts of the economy. So whether it’s farmers, I don’t know, but I do think that as different parts of the economy improve, we’ll see growth in RV’s. Deforest Hinneman [ph] – Walton & Co.: OK. And then the cash on the balance sheet. I want to revisit this question. I think I’ve asked it before. What level of cash are you comfortable with? Historically we haven’t made very large acquisitions, so just kind of looking back historically, I don’t think in any given year, we’ve spent more on acquisitions than we currently have on the balance sheet and then with probably a positive working capital contribution in the fourth quarter, I mean are we looking at any share purchase activity or special dividend?

Well certainly our focus remains on acquisitions, but in the third quarter, in September we did buy a few shares. If you’re looking at our cash flows for the quarter, you’ll see that we did buy some shares, and that is something we talk about each quarter at our Board meetings and we will look at market conditions and such to determine whether we’ll buy additional shares But it think if we are not making acquisitions of size over the next few quarters, you can expect that we’ll look more and more seriously at buying shares.

And looking at working capital in the fourth quarter, there accounts receivable should come down. Payables will come down also to offset that, but that is generally timing, because we’ll build that back up in the beginning of the first quarter. Deforest Hinneman [ph] – Walton & Co.: OK. Thank you.

There are no further questions at this time. This does conclude the question and answer portion of the call. I would like to now turn the call back over to Fred Zinn for closing remarks. Please proceed sir.

Thank you. And thank you very much for participating. You always ask good questions. It always makes us think and kind of think through our businesses even more than we typically do, and I look forward to seeing some of you at the RV show in Louisville at the end of November, and if some of you do attend, and I look forward to speaking with all of you on our next conference call in February. Thank you again.