LNN Lindsay Corporation

Irrigation demand in North America remains stable while market activity in Brazil declines; infrastructure results deliver meaningful margin expansion

Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its second quarter ended on February 29, 2024.

Key Highlights

• Total revenues decreased 9 percent to $151.5 million on lower irrigation revenues
• Increased Road Zipper System™ lease revenues support accretive sales mix shift and improved infrastructure results
• Diluted earnings per share of $1.64 compared to $1.63 in the prior year quarter

“Demand for irrigation equipment in North America remained stable during our second quarter and in line with our expectations, supported by grower investment from the carryover impact of solid farm profits realized last year," said Randy Wood, President and Chief Executive Officer. "In Brazil, a significant drop in commodity prices during the quarter coupled with the anticipated impact of reduced yields for the current crop has reduced grower profitability and curtailed near-term capital investment capacity. In our infrastructure business, we are pleased with the continued growth of our Road Zipper System™ leasing business, which continues to represent a greater proportion of our infrastructure segment revenues with this sales mix accretive to Lindsay's overall margin profile."

"We continue to invest in our innovation strategy, driving value creation through our advanced technology platforms. During the second quarter we successfully launched the next generation of our industry leading FieldNET™ platform that provides growers with an intuitive and easy-to-use interface with enhanced capabilities for precision irrigation management. In January, we announced plans to invest more than $50 million to expand and modernize our largest global manufacturing facility located in Lindsay, NE. This includes implementation of Industry 4.0 technologies, including data connectivity, analytics, artificial intelligence and additional automation and robotics. This investment will accelerate our ability to bring our latest innovations to market, and it aligns with our capital allocation priorities and commitment to leverage state-of-the art technology across our global operations."

Second Quarter Summary

Consolidated Financial Summary

 

Second Quarter

(dollars in millions, except per share amounts)

 

FY2024

 

FY2023

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

Total revenues

 

$151.5

 

$166.2

 

($14.7)

 

(9%)

Operating income

 

$22.1

 

$27.3

 

($5.2)

 

(19%)

Operating margin

 

14.6%

 

16.4%

 

 

 

 

Net earnings

 

$18.1

 

$18.1

 

$0.0

 

0%

Diluted earnings per share

 

$1.64

 

$1.63

 

$0.01

 

1%

Revenues for the quarter were $151.5 million, a decrease of $14.7 million, or 9 percent, compared to revenues of $166.2 million in the prior year second quarter. The decrease resulted from lower irrigation segment revenues as infrastructure revenues were comparable to the prior year second quarter.

Operating income for the quarter was $22.1 million, a decrease of $5.2 million, or 19 percent, compared to operating income of $27.3 million in the prior year second quarter. Operating margin was 14.6 percent of sales, compared to 16.4 percent of sales in the prior year quarter. The decrease in operating income and operating margin resulted primarily from lower revenues and the resulting impact from deleverage of fixed operating expenses as gross margin was similar to the prior year second quarter.

Net earnings for the quarter were $18.1 million, or $1.64 per diluted share, compared with net earnings of $18.1 million, or $1.63 per diluted share, for the prior year second quarter. The impact of lower operating income was favorably offset by higher other income and a lower effective tax rate compared to the prior year second quarter. Other income benefited from increased interest income and favorable foreign currency translation results compared to the prior year second quarter. Income tax expense for the quarter included the realization of a one-time tax benefit of $1.1 million in Brazil.

Second Quarter Segment Results

Irrigation Segment

 

Second Quarter

(dollars in millions)

 

FY2024

 

FY2023

 

$ Change

 

% Change

Revenues:

 

 

 

 

 

 

 

 

North America

 

$82.8

 

$90.4

 

($7.6)

 

(8%)

International

 

$50.2

 

$57.4

 

($7.2)

 

(13%)

Total revenues

 

$133.0

 

$147.8

 

($14.8)

 

(10%)

Operating income

 

$25.6

 

$32.8

 

($7.2)

 

(22%)

Operating margin

 

19.3%

 

22.2%

 

 

 

 

Irrigation segment revenues for the quarter were $133.0 million, a decrease of $14.8 million, or 10 percent, compared to $147.8 million in the prior year second quarter. North America irrigation revenues of $82.8 million decreased $7.6 million, or 8 percent, compared to the prior year second quarter. The majority of the decrease resulted from lower sales of replacement parts, along with slightly lower average selling prices and the impact of a less favorable mix of shorter machines compared to the prior year second quarter. This decrease was partially offset by moderately higher unit sales volume compared to the prior year second quarter.

International irrigation revenues of $50.2 million decreased $7.2 million, or 13 percent, compared to the prior year second quarter. The decrease resulted primarily from lower sales volumes in Brazil and other Latin America markets compared to the prior year second quarter while the impact of small increases and decreases in other markets primarily offset one another. In Brazil, order activity declined due to a significant drop in local commodity prices during the quarter which has negatively impacted the outlook for grower profitability and available liquidity. This dynamic has also resulted in a more constrained credit environment which is limiting growers' ability to invest in irrigation equipment. The decrease in revenues was partially offset by the favorable effects of foreign currency translation of approximately $0.9 million compared to the prior year second quarter.

Irrigation segment operating income for the quarter was $25.6 million, a decrease of $7.2 million, or 22 percent, compared to the prior year second quarter. Operating margin was 19.3 percent of sales, compared to 22.2 percent of sales in the prior year second quarter. Lower operating income and operating margin resulted primarily from lower revenues and the resulting impact from deleverage of fixed operating expenses.

Infrastructure Segment

 

Second Quarter

(dollars in millions)

 

FY2024

 

FY2023

 

$ Change

 

% Change

 

 

 

 

 

 

 

 

 

Total revenues

 

$18.5

 

$18.5

 

$0.0

 

0%

Operating income

 

$3.5

 

$2.0

 

$1.5

 

74%

Operating margin

 

19.0%

 

10.9%

 

 

 

 

Infrastructure segment revenues for the quarter of $18.5 million were comparable to the prior year second quarter. An increase in Road Zipper System lease revenues was offset by lower Road Zipper System project sales and lower sales of road safety products compared to the prior year second quarter.

Infrastructure segment operating income for the quarter was $3.5 million, an increase of $1.5 million, or 74 percent, compared to the prior year second quarter. Operating margin was 19.0 percent of sales, compared to 10.9 percent of sales in the prior year second quarter. Increased operating income and operating margin resulted from a more favorable margin mix of revenues with higher Road Zipper System lease revenues compared to the prior year second quarter.

The backlog of unfilled orders as of February 29, 2024, was $94.2 million compared with $95.2 million as of February 28, 2023. Included in these backlogs are amounts of $20.3 million and $5.4 million, respectively, for orders that are not expected to be fulfilled within the subsequent twelve months.

Outlook

Mr. Wood concluded, “The USDA recently released the initial projection for 2024 U.S. net farm income which reflects a substantial decline compared to 2023 levels and was below broader market expectations. The forecasted decline, if realized, could negatively affect demand for irrigation equipment during the remainder of our fiscal 2024. We remain confident in the growth opportunity in South America end markets and Brazil in particular; however we expect current market conditions to temper demand for irrigation equipment at least in the near term."

“In our infrastructure business, we expect continued growth in our Road Zipper System lease revenues through increased construction activity supported by growth in U.S. infrastructure spending. We also continue to execute our Road Zipper System project sales pipeline, however the timing of implementation remains challenging to forecast due to the number of variables involved in executing these projects.”

Second Quarter Conference Call

Lindsay’s fiscal 2024 second quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (833) 535-2202 in the U.S., or (412) 902-6745 internationally, and requesting the Lindsay Corporation call. Additionally, the conference call will be simulcast live on the Internet and can be accessed via the investor relations section of the Company's Web site, www.lindsay.com. Replays of the conference call will remain on our Web site through the next quarterly earnings release. The Company will have a slide presentation available to augment management's formal presentation, which will also be accessible via the Company's Web site.

About the Company

Lindsay Corporation (NYSE: LNN) is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. Established in 1955, the company has been at the forefront of research and development of innovative solutions to meet the food, fuel, fiber and transportation needs of the world’s rapidly growing population. The Lindsay family of irrigation brands includes Zimmatic® center pivot and lateral move agricultural irrigation systems, FieldNET® and FieldWise® remote irrigation management, FieldNET Advisor™ irrigation scheduling technology, and industrial IoT solutions. Also a global leader in the transportation industry, Lindsay Transportation Solutions manufactures equipment to improve road safety and keep traffic moving on the world’s roads, bridges and tunnels, through the Barrier Systems®, Road Zipper® and Snoline™ brands. For more information about Lindsay Corporation, visit www.lindsay.com.

Concerning Forward-looking Statements

This release contains forward-looking statements that are subject to risks and uncertainties, and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations and planned financing of the Company and those statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” "expect," "outlook," "could," "may," "should," “will,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking information contained in this press release.

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

Six months ended

 

(in thousands, except per share amounts)

 

 

February 29, 2024

 

 

 

February 28, 2023

 

 

 

February 29, 2024

 

 

 

February 28, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

 

151,519

 

 

$

 

166,241

 

 

$

 

312,877

 

 

$

 

342,400

 

Cost of operating revenues

 

 

 

102,565

 

 

 

 

111,983

 

 

 

 

214,018

 

 

 

 

235,122

 

Gross profit

 

 

 

48,954

 

 

 

 

54,258

 

 

 

 

98,859

 

 

 

 

107,278

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

 

9,498

 

 

 

 

8,733

 

 

 

 

19,315

 

 

 

 

18,410

 

General and administrative expense

 

 

 

13,466

 

 

 

 

13,739

 

 

 

 

28,128

 

 

 

 

28,176

 

Engineering and research expense

 

 

 

3,892

 

 

 

 

4,521

 

 

 

 

8,244

 

 

 

 

8,829

 

Total operating expenses

 

 

 

26,856

 

 

 

 

26,993

 

 

 

 

55,687

 

 

 

 

55,415

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

22,098

 

 

 

 

27,265

 

 

 

 

43,172

 

 

 

 

51,863

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(830

)

 

 

 

(1,038

)

 

 

 

(1,707

)

 

 

 

(1,947

)

Interest income

 

 

 

1,295

 

 

 

 

490

 

 

 

 

2,363

 

 

 

 

865

 

Other income (expense), net

 

 

 

134

 

 

 

 

(984

)

 

 

 

(136

)

 

 

 

(1,043

)

Total other income (expense)

 

 

 

599

 

 

 

 

(1,532

)

 

 

 

520

 

 

 

 

(2,125

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

 

22,697

 

 

 

 

25,733

 

 

 

 

43,692

 

 

 

 

49,738

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

4,574

 

 

 

 

7,681

 

 

 

 

10,550

 

 

 

 

13,469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

18,123

 

 

$

 

18,052

 

 

$

 

33,142

 

 

$

 

36,269

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

1.64

 

 

$

 

1.64

 

 

$

 

3.01

 

 

$

 

3.30

 

Diluted

 

$

 

1.64

 

 

$

 

1.63

 

 

$

 

2.99

 

 

$

 

3.28

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

11,033

 

 

 

 

11,007

 

 

 

 

11,025

 

 

 

 

10,998

 

Diluted

 

 

 

11,074

 

 

 

 

11,063

 

 

 

 

11,067

 

 

 

 

11,068

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

 

0.35

 

 

$

 

0.34

 

 

$

 

0.70

 

 

$

 

0.68

 

LINDSAY CORPORATION AND SUBSIDIARIES

 

SUMMARY OPERATING RESULTS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

Six months ended

 

(in thousands)

 

 

February 29, 2024

 

 

 

February 28, 2023

 

 

 

February 29, 2024

 

 

 

February 28, 2023

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

 

82,845

 

 

$

 

90,354

 

 

$

 

172,222

 

 

$

 

174,288

 

International

 

 

 

50,173

 

 

 

 

57,422

 

 

 

 

100,964

 

 

 

 

125,571

 

Irrigation segment

 

 

 

133,018

 

 

 

 

147,776

 

 

 

 

273,186

 

 

 

 

299,859

 

Infrastructure segment

 

 

 

18,501

 

 

 

 

18,465

 

 

 

 

39,691

 

 

 

 

42,541

 

Total operating revenues

 

$

 

151,519

 

 

$

 

166,241

 

 

$

 

312,877

 

 

$

 

342,400

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation segment

 

$

 

25,649

 

 

$

 

32,820

 

 

$

 

50,956

 

 

$

 

61,461

 

Infrastructure segment

 

 

 

3,506

 

 

 

 

2,019

 

 

 

 

7,125

 

 

 

 

5,391

 

Corporate

 

 

 

(7,057

)

 

 

 

(7,574

)

 

 

 

(14,909

)

 

 

 

(14,989

)

Total operating income

 

$

 

22,098

 

 

$

 

27,265

 

 

$

 

43,172

 

 

$

 

51,863

 

The Company manages its business activities in two reportable segments as follows:

Irrigation – This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems, as well as various innovative technology solutions such as GPS positioning and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting and design and industrial IoT solutions.

Infrastructure – This reporting segment includes the manufacture and marketing of movable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment.

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED BALANCE SHEETS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(in thousands)

 

February 29, 2024

 

 

February 28, 2023

 

 

August 31, 2023

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

133,415

 

 

$

 

97,675

 

 

$

 

160,755

 

Marketable securities

 

 

 

17,219

 

 

 

 

8,763

 

 

 

 

5,556

 

Receivables, net

 

 

 

153,624

 

 

 

 

167,007

 

 

 

 

144,774

 

Inventories, net

 

 

 

167,334

 

 

 

 

178,703

 

 

 

 

155,932

 

Other current assets

 

 

 

29,121

 

 

 

 

27,973

 

 

 

 

20,467

 

Total current assets

 

 

 

500,713

 

 

 

 

480,121

 

 

 

 

487,484

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

 

110,691

 

 

 

 

93,838

 

 

 

 

99,681

 

Intangibles, net

 

 

 

26,277

 

 

 

 

17,329

 

 

 

 

27,719

 

Goodwill

 

 

 

84,099

 

 

 

 

67,409

 

 

 

 

83,121

 

Operating lease right-of-use assets

 

 

 

16,755

 

 

 

 

17,984

 

 

 

 

17,036

 

Deferred income tax assets

 

 

 

9,203

 

 

 

 

9,518

 

 

 

 

10,885

 

Other noncurrent assets

 

 

 

17,542

 

 

 

 

22,881

 

 

 

 

19,734

 

Total assets

 

$

 

765,280

 

 

$

 

709,080

 

 

$

 

745,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

47,903

 

 

$

 

52,998

 

 

$

 

44,278

 

Current portion of long-term debt

 

 

 

228

 

 

 

 

224

 

 

 

 

226

 

Other current liabilities

 

 

 

81,147

 

 

 

 

79,566

 

 

 

 

91,604

 

Total current liabilities

 

 

 

129,278

 

 

 

 

132,788

 

 

 

 

136,108

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

 

4,234

 

 

 

 

4,733

 

 

 

 

4,382

 

Long-term debt

 

 

 

115,075

 

 

 

 

115,253

 

 

 

 

115,164

 

Operating lease liabilities

 

 

 

16,936

 

 

 

 

18,659

 

 

 

 

17,689

 

Deferred income tax liabilities

 

 

 

677

 

 

 

 

702

 

 

 

 

689

 

Other noncurrent liabilities

 

 

 

16,046

 

 

 

 

14,673

 

 

 

 

15,977

 

Total liabilities

 

 

 

282,246

 

 

 

 

286,808

 

 

 

 

290,009

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Common stock

 

 

 

19,122

 

 

 

 

19,091

 

 

 

 

19,094

 

Capital in excess of stated value

 

 

 

101,060

 

 

 

 

94,834

 

 

 

 

98,508

 

Retained earnings

 

 

 

661,715

 

 

 

 

607,784

 

 

 

 

636,297

 

Less treasury stock - at cost

 

 

 

(277,238

)

 

 

 

(277,238

)

 

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

 

(21,625

)

 

 

 

(22,199

)

 

 

 

(21,010

)

Total shareholders' equity

 

 

 

483,034

 

 

 

 

422,272

 

 

 

 

455,651

 

Total liabilities and shareholders' equity

 

$

 

765,280

 

 

$

 

709,080

 

 

$

 

745,660

 

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Six months ended

 

(in thousands)

 

February 29, 2024

 

 

 

February 28, 2023

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

Net earnings

$

 

33,142

 

 

$

 

36,269

 

Adjustments to reconcile net earnings to net cash provided by operating activities:

 

 

 

 

 

 

 

Depreciation and amortization

 

 

10,574

 

 

 

 

9,695

 

Provision for uncollectible accounts receivable

 

 

249

 

 

 

 

834

 

Deferred income taxes

 

 

1,488

 

 

 

 

(185

)

Share-based compensation expense

 

 

3,335

 

 

 

 

3,089

 

Unrealized foreign currency transaction (gain) loss

 

 

(94

)

 

 

 

878

 

Other, net

 

 

150

 

 

 

 

354

 

Changes in assets and liabilities:

 

 

 

 

 

 

 

Receivables

 

 

(9,349

)

 

 

 

(28,707

)

Inventories

 

 

(12,003

)

 

 

 

14,014

 

Other current assets

 

 

(7,009

)

 

 

 

1,635

 

Accounts payable

 

 

3,792

 

 

 

 

(6,178

)

Other current liabilities

 

 

(15,186

)

 

 

 

(25,553

)

Other noncurrent assets and liabilities

 

 

3,047

 

 

 

 

1,742

 

Net cash provided by operating activities

 

 

12,136

 

 

 

 

7,887

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

Purchases of property, plant, and equipment

 

 

(18,773

)

 

 

 

(7,222

)

Purchases of marketable securities

 

 

(15,042

)

 

 

 

—

 

Proceeds from maturities of marketable securities

 

 

3,525

 

 

 

 

2,725

 

Other investing activities, net

 

 

(540

)

 

 

 

(1,214

)

Net cash used in investing activities

 

 

(30,830

)

 

 

 

(5,711

)

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

479

 

 

 

 

—

 

Dividends paid

 

 

(7,724

)

 

 

 

(7,485

)

Common stock withheld for payroll tax obligations

 

 

(1,575

)

 

 

 

(2,471

)

Other financing activities, net

 

 

229

 

 

 

 

128

 

Net cash used in financing activities

 

 

(8,591

)

 

 

 

(9,828

)

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(55

)

 

 

 

279

 

Net change in cash and cash equivalents

 

 

(27,340

)

 

 

 

(7,373

)

Cash and cash equivalents, beginning of period

 

 

160,755

 

 

 

 

105,048

 

Cash and cash equivalents, end of period

$

 

133,415

 

 

$

 

97,675

 

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240404581249/en/

For further information: LINDSAY CORPORATION: Alicia Pfeifer Vice President, Investor Relations & Treasury 402-933-6429 Alicia.Pfeifer@lindsay.com

Alpha IR: Joe Caminiti or Stephen Poe 312-445-2870 LNN@alpha-ir.com