Question-and-Answer Session
Operator
Thank you, sir. (Operator Instructions) Our first question will come from the line of Jeff Hammond of KeyBanc. Please proceed.
Jeff Hammond – KeyBanc
Hi, good afternoon, guys.
Peter C. Wallace
Hey, Jeff good afternoon.
Jeff Hammond – KeyBanc
I wanted to dig in a little more on Fluid Management. It sounds like you did a good job explaining the volatility around the international markets and I guess I just wanted to understand better if that’s kind of, other than this one-time order comparison, what’s kind of the key driver of the sequential drop in the order rates?
Peter C. Wallace
We had a couple things happened here. One, the one customer that we mentioned in Kazakhstan that was a bit of a hit to us. We lost some of the business. The company changed hands and we will lose some business from that account. Offsetting that, though, we picked up quite a bit of new business coming through other international markets. We’re doing quite well in Australia. We’ve got some other activities coming through in the Middle East. Lot of these things are just being finalized with terms and conditions as we speak now.
In Venezuela, with all the turmoil, I mentioned that briefly in my prepared comments, we’re well positioned there and the business is starting to flow in. We’re very optimistic about the activities taking place there. We had one other event take place, and that’s one of our major customers was going through a lot of there inventory management and found that they had overstocked at some point and they’re going through some adjustments. Some of these will have some impact on the orders that we receive and yet, from our perspective, we’re actually seeing this as an opportunity to go ahead and take advantage of some other customers that have been sort of shut out with some of our capabilities. So, we really remain very optimistic going forward. Biggest swing though was in that international area.
Jeff Hammond – KeyBanc
Is the major customer, do you have any indication that they’re kind of through their inventory adjustment or is that – is there more to come there?
Peter C. Wallace
My sense is that they’re through their adjustment. They’ve gone through all of that and it’s already reflected in our shipment schedules going through.
Jeff Hammond – KeyBanc
Okay, and then I guess just from a mix standpoint the higher industrial pump would expect margins to be down year on year in the second half of the year?
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