Lindsay Corporation (NYSE:LNN) Q2 2023 Earnings Call Transcript

Brian Ketcham: Yes. I don’t €“ I guess I’ll put it in some context. When you €“ if you look at the last, let’s say, 9 or 10 years, generally, our strongest quarter is going to be the third quarter as we get closer to planning season. Last year was 1 of 2 years. I think that second quarter was our strongest quarter. And so that’s what €“ and again, going into the second quarter last year is when we had the higher backlogs being driven by the order pull ahead. So €“ it’s €“ I think the overall demand environment is fairly stable with a year ago. I think it is just a little bit of that shift from last year being more pulled forward into more of the traditional seasonal demand this year. But difficult to put an exact number on it because there is other variables that come into play in terms of regional differences across the U.S.

Brian Wright: Okay. No, no, that’s very helpful. I was just wondering on Slide 6 of the presentation, you kind of break out the revenue from conversion volumes in dry land volumes. And I was just hoping you can help us on how those are defined.

Brian Ketcham: Yes. And that’s tracked with every order that we take depending on what the application is, if it’s a replacement machine or if it’s dry land, which would be irrigation for the first time or conversion. And that can vary from quarter-to-quarter, again, it can vary from region to region. But that’s something that we have tracked for some period of time.

Brian Wright: And then I guess, just given the conditions in Nebraska and in Kansas in particular, and a little bit in Oklahoma as well, just how to think about that from a historical perspective and how that could impact demand?

Randy Wood: Right now, Brian, we’d say that the drought is at a point that it’s probably positive for demand in general. And there is a couple of reasons for that. We do believe that there could be an earlier start to the irrigation season if there is not a lot of natural spring precipitation to Germany, the crop starter crop and the pivots mice started a little earlier. I know talking with customers across Kansas and Nebraska, that’s kind of their mindset right now. It could also accelerate some machine replacements. If they think they are going to put more hours on a machine this year, it could drive machine replacement, it could drive more parts upgrade programs as well. And we’ve often talked about drought being a positive demand driver to a point, but when you run out of water to finish a crop and the machine stop, then it stops becoming a positive demand driver.

We don’t see a lot of that severity this early in the season, but it’s something that we’re going to monitor very closely as we move into the core summer months here.

Brian Wright: Okay. Great, thank you.

Operator: Our next question comes from Nathan Jones from Stifel. Nathan, please go ahead.

Adam Farley: Good morning. This is Adam Farley on for Nathan. I wanted to start on the infrastructure segment. What is your outlook for the Infrastructure segment for the remainder of the year? When does €“ what do you expect federal funding to improve the road safety business? And €“ maybe is there any notable timing related to the growth of the products on all that we should be looking out for? Thanks.