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Lindsay Corporation Reports Fiscal 2020 First Quarter Results
  • Operating margin performance of 11.2 percent and EPS of $0.77
  • Irrigation operating income and margin improved on lower revenue
  • Infrastructure delivers solid results on higher revenue and favorable margin mix

OMAHA, Neb. - Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its first quarter of fiscal 2020, which ended on November 30, 2019.

First Quarter Summary

Revenues for the first quarter of fiscal 2020 were $109.4 million, a decrease of $2.6 million, or 2 percent, compared to revenues of $112.0 million in the prior year first quarter. Revenues decreased $3.3 million as a result of the divestiture of a company-owned irrigation dealership that occurred in the first quarter of fiscal 2019. Net earnings for the quarter were $8.3 million, or $0.77 per diluted share, compared with net earnings of $1.2 million, or $0.11 per diluted share, for the prior year first quarter. Net earnings for the prior year first quarter adjusted to eliminate costs associated with the Foundation for Growth initiative were $4.1 million, or $0.38 per diluted share.1

"We were pleased to see our fiscal 2020 get off to a solid start, with improved results in both the irrigation and infrastructure businesses," said Tim Hassinger, President and Chief Executive Officer. "Margin expansion gained through our Foundation for Growth initiatives contributed to improved performance in our irrigation business. Outstanding results in our infrastructure business were achieved through revenue growth, margin improvement, and a favorable mix of higher margin revenue."

First Quarter Segment Results

Irrigation segment revenues for the first quarter of fiscal 2020 were $82.4 million, a decrease of $5.3 million, or 6 percent, compared to $87.6 million in the prior year first quarter. North America irrigation revenues of $52.6 million decreased $3.9 million, or 7 percent, compared to the prior year, although $3.3 million of the decrease was attributable to the divestiture of a company-owned dealership. Higher irrigation equipment unit volume was offset by the impact of lower average selling prices and lower sales of replacement parts. International irrigation revenues of $29.7 million decreased $1.4 million, or 5 percent, due primarily to the negative impact of changes in foreign currency translation rates.

Irrigation segment operating margin was 11.8 percent of sales in the first quarter, compared to 8.9 percent of sales (9.0 percent adjusted)1 in the prior year. Operating margin improvement resulted primarily from improved cost and pricing performance compared to the prior year.

Infrastructure segment revenues for the first quarter of fiscal 2020 were $27.0 million, an increase of $2.7 million, or 11 percent, compared to $24.3 million in the prior year first quarter. The increase resulted from higher sales of road safety products along with an increase in Road Zipper System® lease revenue compared to the prior year.

Infrastructure segment operating margin was 32.4 percent of sales in the first quarter, compared to 17.1 percent of sales (17.6 percent adjusted)1 in the prior year first quarter. Operating margin improvement resulted from a more favorable revenue mix and from improved cost and pricing performance compared to the prior year.

The backlog of unfilled orders at November 30, 2019 was $69.2 million compared with $49.2 million at November 30, 2018. Included in these backlogs are amounts of $5.2 million and $0.3 million, respectively, that are not expected to be fulfilled within the subsequent twelve months.

Outlook

"Recent progress regarding a preliminary trade agreement between the U.S. and China offers encouragement for U.S. farmers by improving the outlook for agricultural exports," said Mr. Hassinger. "In the international markets we continue to see good activity in Brazil and in developing markets."

Mr. Hassinger added, "We like the traction we are getting with our Road Zipper growth strategy and the pipeline of opportunities that are being generated."

First Quarter Conference Call

Lindsay's fiscal 2020 first 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 and FieldNET® remote irrigation management and scheduling technology, as well as irrigation consulting and design 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.

1 Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of document.

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

 

 

 

 

 

 

 

Three months ended

 

 

(in thousands, except per share amounts)

 

 

November 30,

2019

 

 

 

November 30,

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

 

109,393

 

 

$

 

111,951

 

 

Cost of operating revenues

 

 

 

75,319

 

 

 

 

83,303

 

 

Gross profit

 

 

 

34,074

 

 

 

 

28,648

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

 

6,492

 

 

 

 

7,982

 

 

General and administrative expense

 

 

 

11,804

 

 

 

 

15,058

 

 

Engineering and research expense

 

 

 

3,502

 

 

 

 

3,568

 

 

Total operating expenses

 

 

 

21,798

 

 

 

 

26,608

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

12,276

 

 

 

 

2,040

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(1,186

)

 

 

 

(1,205

)

 

Interest income

 

 

 

615

 

 

 

 

654

 

 

Other income (expense), net

 

 

 

(450

)

 

 

 

192

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

 

11,255

 

 

 

 

1,681

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense

 

 

 

2,910

 

 

 

 

469

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

8,345

 

 

$

 

1,212

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

0.77

 

 

$

 

0.11

 

 

Diluted

 

$

 

0.77

 

 

$

 

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

10,795

 

 

 

 

10,766

 

 

Diluted

 

 

 

10,828

 

 

 

 

10,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

 

0.31

 

 

$

 

0.31

 

 

 

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

(in thousands)

 

 

November 30,

2019

 

 

 

November 30,

2018

 

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

Irrigation:

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

 

52,613

 

 

$

 

56,464

 

 

International

 

 

 

29,739

 

 

 

 

31,146

 

 

Irrigation segment

 

 

 

82,352

 

 

 

 

87,610

 

 

Infrastructure segment

 

 

 

27,041

 

 

 

 

24,341

 

 

Total operating revenues

 

$

 

109,393

 

 

$

 

111,951

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

Irrigation segment

 

$

 

9,757

 

 

$

 

7,783

 

 

Infrastructure segment

 

 

 

8,768

 

 

 

 

4,168

 

 

Corporate

 

 

 

(6,249

)

 

 

 

(9,911

)

 

Total operating income

 

$

 

12,276

 

 

$

 

2,040

 

 

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 moveable 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)

 

November 30,

2019

 

 

November 30,

2018

 

 

August 31,

2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

120,910

 

 

$

 

137,217

 

 

$

 

127,204

 

Receivables, net

 

 

 

79,317

 

 

 

 

84,864

 

 

 

 

75,551

 

Inventories, net

 

 

 

97,284

 

 

 

 

88,912

 

 

 

 

92,287

 

Assets held-for-sale

 

 

 

2,744

 

 

 

 

2,744

 

 

 

 

2,744

 

Other current assets, net

 

 

 

16,376

 

 

 

 

11,585

 

 

 

 

15,704

 

Total current assets

 

 

 

316,631

 

 

 

 

325,322

 

 

 

 

313,490

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

 

70,305

 

 

 

 

60,482

 

 

 

 

68,968

 

Intangibles, net

 

 

 

23,739

 

 

 

 

26,576

 

 

 

 

24,382

 

Goodwill

 

 

 

64,358

 

 

 

 

64,557

 

 

 

 

64,387

 

Operating lease right-of-use assets

 

 

 

25,764

 

 

 

 

-

 

 

 

 

-

 

Deferred income tax assets

 

 

 

9,902

 

 

 

 

5,639

 

 

 

 

11,758

 

Other noncurrent assets, net

 

 

 

16,112

 

 

 

 

19,511

 

 

 

 

17,329

 

Total assets

 

$

 

526,811

 

 

$

 

502,087

 

 

$

 

500,314

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

30,097

 

 

$

 

41,338

 

 

$

 

29,434

 

Current portion of long-term debt

 

 

 

210

 

 

 

 

206

 

 

 

 

209

 

Other current liabilities

 

 

 

54,494

 

 

 

 

41,480

 

 

 

 

52,488

 

Total current liabilities

 

 

 

84,801

 

 

 

 

83,024

 

 

 

 

82,131

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

 

5,948

 

 

 

 

5,803

 

 

 

 

6,029

 

Long-term debt

 

 

 

115,805

 

 

 

 

116,086

 

 

 

 

115,846

 

Operating lease liabilities

 

 

 

25,323

 

 

 

 

-

 

 

 

 

-

 

Deferred income tax liabilities

 

 

 

845

 

 

 

 

1,048

 

 

 

 

872

 

Other noncurrent liabilities

 

 

 

21,089

 

 

 

 

19,451

 

 

 

 

27,227

 

Total liabilities

 

 

 

253,811

 

 

 

 

225,412

 

 

 

 

232,105

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

-

 

 

 

 

-

 

 

 

 

-

 

Common stock

 

 

 

18,897

 

 

 

 

18,870

 

 

 

 

18,870

 

Capital in excess of stated value

 

 

 

71,706

 

 

 

 

68,710

 

 

 

 

71,684

 

Retained earnings

 

 

 

479,732

 

 

 

 

483,811

 

 

 

 

474,740

 

Less treasury stock - at cost

 

 

 

(277,238

)

 

 

 

(277,238

)

 

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

 

(20,097

)

 

 

 

(17,478

)

 

 

 

(19,847

)

Total shareholders' equity

 

 

 

273,000

 

 

 

 

276,675

 

 

 

 

268,209

 

Total liabilities and shareholders' equity

 

$

 

526,811

 

 

$

 

502,087

 

 

$

 

500,314

 

 

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

(in thousands)

 

 

November 30,

2019

 

 

 

November 30,

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

8,345

 

 

$

 

1,212

 

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

 

 

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

 

4,748

 

 

 

 

3,424

 

Loss on sale of business

 

 

 

-

 

 

 

 

67

 

Provision for uncollectible accounts receivable

 

 

 

248

 

 

 

 

(159

)

Deferred income taxes

 

 

 

1,987

 

 

 

 

742

 

Share-based compensation expense

 

 

 

1,160

 

 

 

 

1,303

 

Other, net

 

 

 

374

 

 

 

 

(1,053

)

Changes in assets and liabilities:

 

 

 

 

 

 

 

 

 

 

Receivables

 

 

 

(4,122

)

 

 

 

(14,782

)

Inventories

 

 

 

(4,931

)

 

 

 

(11,387

)

Other current assets

 

 

 

(2,466

)

 

 

 

298

 

Accounts payable

 

 

 

725

 

 

 

 

13,917

 

Other current liabilities

 

 

 

(1,901

)

 

 

 

(7,106

)

Other noncurrent assets and liabilities

 

 

 

(2,626

)

 

 

 

(792

)

Net cash provided by (used in) operating activities

 

 

 

1,541

 

 

 

 

(14,316

)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Purchases of property, plant, and equipment

 

 

 

(4,322

)

 

 

 

(5,701

)

Proceeds from settlement of net investment hedges

 

 

 

1,092

 

 

 

 

962

 

Other investing activities, net

 

 

 

24

 

 

 

 

8

 

Net cash used in investing activities

 

 

 

(3,206

)

 

 

 

(4,731

)

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Proceeds from exercise of stock options

 

 

 

-

 

 

 

 

177

 

Common stock withheld for payroll tax obligations

 

 

 

(1,111

)

 

 

 

(1,120

)

Principal payments on long-term debt

 

 

 

(52

)

 

 

 

(51

)

Dividends paid

 

 

 

(3,352

)

 

 

 

(3,344

)

Net cash used in financing activities

 

 

 

(4,515

)

 

 

 

(4,338

)

 

 

 

 

 

 

 

 

 

 

 

Effect of exchange rate changes on cash and cash equivalents

 

 

 

(114

)

 

 

 

(185

)

Net change in cash and cash equivalents

 

 

 

(6,294

)

 

 

 

(23,570

)

Cash and cash equivalents, beginning of period

 

 

 

127,204

 

 

 

 

160,787

 

Cash and cash equivalents, end of period

 

$

 

120,910

 

 

$

 

137,217

 

 

LINDSAY CORPORATION AND SUBSIDIARIES
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of consulting fees, severance costs and loss from business divestitures, associated with the Company's Foundation for Growth Initiative ("FFG costs"), (b) the impact on operating income of FFG costs, and (c) the impact on segment operating income of FFG costs. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company's business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company's underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company's business.

 

 

Three months ended

 

 

 

 

 

 

 

 

 

(in thousands, except per share amounts)

 

November 30,

2018

 

 

Diluted earnings per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings - reported GAAP measure

 

$

1,212

 

 

$

0.11

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFG costs - before tax

 

 

3,995

 

 

$

0.37

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Tax effect - FFG costs

 

 

(1,079

)

 

$

(0.10

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings - adjusted

 

$

4,128

 

 

$

0.38

 

 

 

 

 

 

 

 

 

Average shares outstanding - diluted

 

 

 

 

 

 

10,806

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the three months ended November 30, 2018

 

Operating income reconciliation

 

Consolidated

 

 

Irrigation

 

 

Infrastructure

 

 

Corporate

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income - reported GAAP measure

 

 

2,040

 

 

$

7,783

 

 

$

4,168

 

 

$

(9,911

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

FFG costs - before tax

 

 

3,995

 

 

 

126

 

 

 

112

 

 

 

3,757

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income

 

$

6,035

 

 

$

7,909

 

 

$

4,280

 

 

$

(6,154

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

 

111,951

 

 

$

87,610

 

 

$

24,341

 

 

$

-

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income as a percent of operating revenues

 

 

1.8

%

 

 

8.9

%

 

 

17.1

%

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted operating income as a percent of operating revenues

 

 

5.4

%

 

 

9.0

%

 

 

17.6

%

 

N/A

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LINDSAY CORPORATION:
Brian Ketcham
Senior Vice President & Chief Financial Officer
402-827-6579

HALLIBURTON INVESTOR RELATIONS:
Hala Elsherbini
972-458-8000

Jan 09, 2020


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