Question-and-Answer Session
Operator
(Operator Instructions.) Our first question comes from Joe Giamichael - Rodman & Renshaw, Inc.
Joe Giamichael - Rodman & Renshaw, Inc.
In the release you said a weakness in the infrastructure segment is the reason for the declining margins but I'd like to focus on the irrigation business for a couple questions. We don't have the Q yet but given the $120 million in irrigation revenues, I would have expected significantly more gross profits? It would appear that inputs have run against you more aggressively than the 30-day pricing guarantee allows you to pass through. I know you don't break out gross margins and you did say that irrigation gross increased year-over-year, but could you give us a better sense of what this looks like on a sequential basis relative to Q2?
Richard W. Parod
Well I think what we can do, Joe, is first of all come back to the point that gross margins for irrigation did improve year-over-year and Tim Paymal, our Chief Accounting Officer, has the break out of the segment information. He can describe that a little further.
Tim J. Paymal
And Joe, on the irrigation side, $26.1 million was the segment operating income number and in the prior year it was $16.1 million comparatively. 26.1% for the current year quarter and 21.3% as a percentage of prior year third quarter.
Joe Giamichael - Rodman & Renshaw, Inc.
Can you compare that with what you showed in Q2 just on a percentage basis?
Tim J. Paymal
I don't have that handy. Give me just a second.
Joe Giamichael - Rodman & Renshaw, Inc.
I can look on that -
Mark Roth
Joe, in Q2 operating margin in the irrigation segment was 20.1% so it did rise.
Joe Giamichael - Rodman & Renshaw, Inc.
So you’ve actually shown sequential and year-over-year growth there.
Mark Roth
Correct.
Joe Giamichael - Rodman & Renshaw, Inc.
When we see the Q with the segment breakdown from the infrastructure business, I have to assume that the contribution is pretty negative in the quarter. Can you give us a little more color as to the magnitude of the turn relative to what they did there in Q2?
Richard W. Parod
Yes, Tim has that information also.
Tim J. Paymal
Joe, in the current quarter operating income is $2.1 million and 9.2% of sales and for prior year third quarter 07 that number is $3.5 million and 19.8% of sales.
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