Flowserve Corp Q1 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst : A couple of follow-ups actually here. On the increased under-absorption comment, you did say that revenue declined slow a little bit. So I'm a little surprised that you're seeing increased under-absorption in the first quarter. So if you could talk about that. And then does that imply that you need to take more costs out here? Or is it now carry those costs for the recovery? And then what does that imply the incremental margins once we return to growth?

Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst : And then any comment on if you're carrying this unabsorbed overhead, what that implies on incrementals as we get back to growth next year? I mean I would think that would mean that they should be pretty good.

Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst : I had one specifically on pricing and specifically on project bids. You're seeing very rapid inflation, have seen very rapid inflation. How do you protect those bids and the margins on those bids from the time you submit that bid to maybe the time it's accepted? Are there in-built contract mechanisms that adjust for the input costs there that protect you from some of these bids on -- from that inflation? And then how do you manage the costs when you get a project bid, where you're seeing this steep inflation, but you -- it might be 12, 18 months from book to ship?