Question-and-Answer Session
Operator
(Operator's instructions) Your first question comes from Kathryn Thompson - Avondale Partners.
Kathryn Thompson - Avondale Partners, LLC
Just focusing on your breakeven assumptions, I assume that the 175 would be effective starting in the fourth quarter but you would not see a breakeven point of 175 in Q3. Is there a correct assumption?
Kay Toolson
That is correct and in fact depending on some of the discounting goes and some of those other assumptions, the full impact may not be there until first quarter of '09 but a significant amount of that impact will be in fourth quarter.
Kathryn Thompson - Avondale Partners, LLC
Okay and just assuming 175 at the breakeven point, what would that imply in terms of capacity and utilization? I mean, will it be like a 70% to 60%?
Kay Toolson
I think it will be somewhere in the close to the example I gave or the 70% to 75% for Class A's.
Kathryn Thompson - Avondale Partners, LLC
I did notice you had a lower tax rate in the quarter. What should we expect for Q3 or at least for the remainder of part of this year?
Kay Toolson
It should run somewhere into that. As you are in a law situation, you get less benefit from taxes as when you are in the positive income side which is the other way on us and it has a little bit higher tax rates. So, that is the impact there. So, the short answer is that it should be somewhere going forward after the remainder of the year.
Kathryn Thompson - Avondale Partners, LLC
And excluding one time charges which that we confirm that should be at some point $5 million in the quarter. Should we expect essentially similar gross margins going into Q3 from Q2?
Kay Toolson
I would say that given everything we are trying to do this quarter, I think we have try to factor into the $7.5 million some inefficiency and everything else but there is a lot of moving parts this quarter so it is difficult to say.
Kathryn Thompson - Avondale Partners, LLC
Could you just elaborate just a little bit more what your mid to long-term plan for your Elkhart and Wakarusa plant in terms of are you going to sell them or just idle the facilities?
Kay Toolson
Well, I think they were probably going to make a decision on that pretty soon. It is likely that we will not want to sell all the facilities but it is also difficult to estimate which ones are going to be a potential buyer might want so it is likely that we might put most of the facilities up for sale and then if we are successful in taking the big chunk of it out, we probably keep the remaining not what the remaining might be. There are certainly a number of combinations of, I mean we are basically idling $2 millions worth of plant facility and so there are obviously a lot of combinations that we could then in fact, fire back up when the market turns.
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