The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: Just starting in irrigation. Obviously, really strong growth there, about 27% growth year-over-year. Can you talk about what the contribution from
price was to the top line growth?
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: And you would probably expect that now that you probably shipped all of that backlog to be more like double digits contribution from price in
the fiscal third quarter?
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: Okay. And then I want to talk about margins because, I mean, you put up a 32% incremental margin in irrigation, which given the level of inflation,
I think, is really, really good. Can you talk about some of the dynamics there? I know you said you had lower engineering revenues than last year.
If I recall, that was some relatively low margin. And you've got some of this revenue that doesn't have price increases, some of it does. Is that kind
of low-30s incremental margin an area that you can maintain as we go forward as we're dealing with these price increases and the shipping costs
and things like that? Or is there a reason why they would get better or worse in the short term?
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: Do you think we'll find a quarter here eventually when still stop going goes -- stops going straight up, that you would have a quarter or 2 where
you'll hit a better incremental margin as you're catching up on that pricing?
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: I wanted to just ask a couple of questions on cash flow. Obviously, you've got pretty good demand growth here in the irrigation business, plus
you've got a lot of inflation to deal with as well. So just wondering how you're thinking about cash conversion this year. Obviously, I expect it to
be lower than average. Just any help you could give us on how you're thinking about cash generation this year.
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: Okay. That would be a very good result, I think. And then just maybe on the progression of the infrastructure business. It can tend to be a bit lumpy,
but I would normally expect things to step-up from 2Q to 3Q just seasonally as we come into the summer months. Is there anything unusual going
on that would change that? Or is it a reasonable expectation that we should see revenues from 2Q to 3Q step up as we get into the summer months?
Question: Nathan Hardie Jones - Stifel, Nicolaus & Company, Incorporated, Research Division - Analyst
: That does make sense. I mean I remember back to the Obama stimulus. And you did see quite a number of investments deferred waiting for "free
money" from the government. Can you talk about how that impacted your business maybe back then, if you guys remember that at this point
given how long ago it was? Just to give us any idea of how that might create some short-term drag on projects getting let out here?
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