Revenue growth in international irrigation
markets, resilient demand in North America and gross margin
expansion drive improved fourth quarter earnings performance
Record full year net earnings and earnings per
share results driven by meaningful growth in operating income and
operating margin expansion
Lindsay Corporation (NYSE: LNN), a leading global manufacturer
and distributor of irrigation and infrastructure equipment and
technology, today announced results for its fourth quarter and
fiscal year, which ended on August 31, 2023.
Key Highlights
Fourth Quarter:
- Revenue of $167.1 million and EPS of $1.74 led by strong
irrigation results
- Strong growth in international irrigation revenues and record
revenues in Brazil
- Record operating income and operating margin in irrigation
segment
Full-Year:
- Record net earnings of $72.4 million and record EPS of
$6.54
- Record revenue and operating income in Brazil
- Free cash flow generation reaches 139 percent of net
earnings
“We are pleased to report strong performance in our fiscal
fourth quarter and solid momentum as we head into fiscal 2024,
driven by our irrigation business. Our strong quarterly performance
reflected growth in international irrigation markets led by South
America, and Brazil in particular where we achieved record fourth
quarter revenue. Demand for irrigation equipment in North America
remained steady in the fourth quarter, in line with our
expectations. Record fourth quarter operating income and operating
margin in irrigation is a testament to effective price management
and operating performance, while also reflecting the impact of
increasing geographic diversification through strategic growth in
international markets,” said Randy Wood, President and Chief
Executive Officer. "Infrastructure results for the fourth quarter
reflected the impact of Road Zipper System™ projects in the prior
year that did not repeat, while Road Zipper System leasing revenue
continued to show solid growth and partially offset the overall
decrease in revenue."
Wood continued, "For the full year, I am pleased with our
ability to deliver new records in net earnings and earnings per
share, as our performance overcame softer revenues compared to last
year's record levels. This record earnings and income performance
was led by record full year operating income and operating margin
in irrigation with gross margin expansion across the business. This
improved operating performance, along with effective working
capital management, resulted in free cash flow generation that
exceeded our objective for the year. This performance demonstrated
our ability to continue funding growth investments in innovation
and other long-term shareholder value creation opportunities."
Fourth Quarter Summary
Consolidated Financial Summary
Fourth Quarter
(dollars in millions, except per share
amounts)
FY2023
FY2022
$ Change
% Change
Total revenues
$167.1
$190.2
($23.1)
(12%)
Operating income
$23.4
$27.8
($4.4)
(16%)
Operating margin
14.0%
14.6%
Net earnings
$19.2
$17.9
$1.3
7%
Earnings per share
$1.74
$1.62
$0.12
7%
Revenues for the fourth quarter of fiscal 2023 were $167.1
million, a decrease of $23.1 million, or 12 percent, compared to
revenues of $190.2 million in the prior year fourth quarter. Most
of the decrease came from the infrastructure segment due to Road
Zipper System projects in the prior year fourth quarter that did
not repeat.
Operating income for the fourth quarter was $23.4 million, a
decrease of $4.4 million, or 16 percent, compared to operating
income of $27.8 million in the prior year fourth quarter. Operating
margin was 14.0 percent of sales, compared to operating margin of
14.6 percent of sales in the prior year fourth quarter. The impact
of the decline in higher margin infrastructure revenue was
substantially offset by improved gross profit and gross margin in
irrigation. Operating expenses were comparable to the prior year
fourth quarter.
Net earnings for the fourth quarter were $19.2 million, or $1.74
per diluted share, compared with net earnings of $17.9 million, or
$1.62 per diluted share, for the prior year fourth quarter. Net
earnings improvement was supported by higher interest income and
more favorable foreign currency transaction changes compared to the
prior year fourth quarter.
Fourth Quarter Segment Results
Irrigation Segment
Fourth Quarter
(dollars in millions)
FY 2023
FY 2022
$ Change
% Change
Revenues:
North America
$60.2
$80.1
($19.9)
(25%)
International
$83.4
$70.4
$13.0
18%
Total revenues
$143.6
$150.5
($6.9)
(5%)
Operating income
$29.8
$24.3
$5.5
23%
Operating margin
20.7%
16.1%
Irrigation segment revenues for the fourth quarter of fiscal
2023 were $143.6 million, a decrease of $6.9 million, or 5 percent,
compared to $150.5 million in the prior year fourth quarter. North
America irrigation revenues of $60.2 million decreased $19.9
million, or 25 percent, compared to the prior year fourth quarter.
The decrease in revenues resulted primarily from lower unit sales
volumes while average selling prices were comparable with the prior
year fourth quarter. Unit sales volumes in the prior year fourth
quarter reflected an exceptional level of storm damage replacement
demand while unit sales volumes in the current year reflected more
normal seasonal demand.
International irrigation revenues of $83.4 million increased
$13.0 million, or 18 percent, compared to the prior year fourth
quarter. The increase resulted primarily from increased sales
volumes in Brazil, Argentina and the Middle East compared to the
prior year fourth quarter. The current year fourth quarter also
benefited from the favorable effects of foreign currency
translation of approximately $1.3 million compared to the prior
year fourth quarter.
Irrigation segment operating income for the fourth quarter of
fiscal 2023 was $29.8 million, an increase of $5.5 million, or 23
percent, compared to the prior year fourth quarter. Operating
margin was 20.7 percent of sales, compared to 16.1 percent of sales
in the prior year fourth quarter. The increase in operating margin
resulted from gross margin expansion driven by improved price
realization and operating performance compared to the prior year
fourth quarter.
Infrastructure Segment
Fourth Quarter
(dollars in millions)
FY 2023
FY 2022
$ Change
% Change
Total revenues
$23.5
$39.7
($16.2)
(41%)
Operating income
$3.1
$11.5
($8.3)
(73%)
Operating margin
13.3%
28.8%
Infrastructure segment revenues for the fourth quarter of fiscal
2023 were $23.5 million, a decrease of $16.2 million, or 41
percent, compared to $39.7 million in the prior year fourth
quarter. The decrease in revenues resulted primarily from lower
Road Zipper System sales compared to the prior year fourth quarter.
Notably, the prior year fourth quarter included a number of project
sales that did not repeat in the current year fourth quarter. The
impact of lower project sales was partially offset by growth in
Road Zipper System lease revenue and higher sales of road safety
products compared to the prior year fourth quarter.
Infrastructure segment operating income for the fourth quarter
of fiscal 2023 was $3.1 million, a decrease of $8.3 million, or 73
percent, compared to the prior year fourth quarter. Operating
margin was 13.3 percent of sales, compared to 28.8 percent of sales
in the prior year fourth quarter. The decrease in operating income
and margin resulted from lower revenues compared to the prior year
fourth quarter and the resulting loss in fixed cost leverage.
Full Year Summary
Consolidated Financial Summary
Full Year
(dollars in millions, except per share
amounts)
FY2023
FY2022
$ Change
% Change
Total revenues
$674.1
$770.7
($96.7)
(13%)
Operating income
$102.2
$94.6
$7.5
8%
Operating margin
15.2%
12.3%
Net earnings
$72.4
$65.5
$6.9
11%
Earnings per share
$6.54
$5.94
$0.60
10%
Revenues for fiscal 2023 were $674.1 million, a decrease of
$96.7 million, or 13 percent, compared to revenues of $770.7
million in the prior year. Irrigation revenues decreased $79.8
million due to farmers in North America deferring investment
decisions, a higher level of storm damage replacement demand in the
prior year and prior year sales in Egypt, Ukraine and Russia that
did not repeat. Infrastructure revenues decreased $16.9 million,
primarily due to lower Road Zipper System project sales compared to
the prior year.
Operating income for fiscal 2023 was $102.2 million, an increase
of $7.5 million, or 8 percent, compared to operating income of
$94.6 million in the prior year. Operating margin was 15.2 percent
of sales, compared to 12.3 percent of sales in the prior year.
Operating margin improvement resulted primarily from gross margin
expansion in irrigation, while gross margin in infrastructure was
comparable to the prior year.
Net earnings for fiscal 2023 were $72.4 million, or $6.54 per
diluted share, compared with net earnings of $65.5 million, or
$5.94 per diluted share, for the prior year. Net earnings
improvement resulted largely from increased operating income and
also benefited from higher interest income and more favorable
foreign currency transaction changes compared to the prior
year.
The backlog of unfilled orders as of August 31, 2023, was $78.7
million compared with $96.8 million on August 31, 2022. The
irrigation and infrastructure backlogs are both lower compared to
the prior year.
Outlook
Mr. Wood concluded, “Current commodity prices and U.S. net farm
income projections, although lower compared to the marked strength
seen a year ago, continue to support demand for irrigation
equipment in North America. So far in our first quarter of fiscal
2024, we are seeing order levels running ahead of the prior year.
We expect sales volume levels in developed international markets to
remain robust, led by strong demand in Brazil, and we continue to
see project opportunities in developing markets supported by
continuing global concerns over food security and global grain
supplies."
“We expect to see a more meaningful positive impact of increased
U.S. infrastructure spending on our infrastructure business in
fiscal 2024, particularly in Road Zipper System leasing and sales
of road safety projects. We also continue to actively manage
projects in our Road Zipper System sales funnel, however the timing
of when these projects will be executed is difficult to
predict.”
Fourth Quarter Conference Call
Lindsay’s fiscal 2023 fourth 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 technology, 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 August
31,
Years Ended August 31,
(in thousands, except per share
amounts)
2023
2022
2023
2022
Operating revenues
$
167,131
$
190,196
$
674,084
$
770,743
Cost of operating revenues
114,615
133,079
461,069
571,565
Gross profit
52,516
57,117
213,015
199,178
Operating expenses:
Selling expense
9,109
9,850
36,201
33,920
General and administrative expense
15,175
14,922
56,412
55,470
Engineering and research expense
4,868
4,563
18,218
15,145
Total operating expenses
29,152
29,335
110,831
104,535
Operating income
23,364
27,782
102,184
94,643
Other (expense) income:
Interest expense
(893
)
(924
)
(3,788
)
(4,269
)
Interest income
1,238
166
2,783
622
Other expense, net
1,196
(3,392
)
(804
)
(3,128
)
Total other (expense) income
1,541
(4,150
)
(1,809
)
(6,775
)
Earnings before income taxes
24,905
23,632
100,375
87,868
Income tax expense
5,676
5,703
27,996
22,399
Net earnings
$
19,229
$
17,929
$
72,379
$
65,469
Earnings per share:
Basic
$
1.75
$
1.63
$
6.58
$
5.97
Diluted
$
1.74
$
1.62
$
6.54
$
5.94
Shares used in computing earnings per
share:
Basic
11,009
10,980
11,003
10,965
Diluted
11,059
11,063
11,062
11,031
Cash dividends declared per share
$
0.35
$
0.34
$
1.37
$
1.33
LINDSAY CORPORATION AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Unaudited)
Three Months Ended August
31,
Years Ended August 31,
(in thousands)
2023
2022
2023
2022
Operating revenues:
Irrigation:
North America
$
60,223
$
80,082
$
309,538
$
355,683
International
83,378
70,387
276,493
310,146
Irrigation total
143,601
150,469
586,031
665,829
Infrastructure
23,530
39,727
88,053
104,914
Total operating revenues
$
167,131
$
190,196
$
674,084
$
770,743
Operating income:
Irrigation
$
29,781
$
24,250
$
121,969
$
105,763
Infrastructure
3,120
11,459
12,067
18,328
Corporate
(9,537)
(7,927)
(31,852)
(29,448)
Total operating income
$
23,364
$
27,782
$
102,184
$
94,643
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)
August 31, 2023
August 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
160,755
$
105,048
Marketable securities
5,556
11,460
Receivables, net of allowance of $5,048
and $4,118, respectively
144,774
138,200
Inventories, net
155,932
193,776
Other current assets
20,467
28,617
Total current assets
487,484
477,101
Property, plant, and equipment, net
99,681
94,472
Intangible assets, net
27,719
18,208
Goodwill
83,121
67,130
Operating lease right-of-use assets
17,036
19,181
Deferred income tax assets
10,885
9,313
Other noncurrent assets
19,734
25,248
Total assets
$
745,660
$
710,653
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
44,278
$
60,036
Current portion of long-term debt
226
222
Other current liabilities
91,604
100,684
Total current liabilities
136,108
160,942
Pension benefits liabilities
4,382
4,892
Long-term debt
115,164
115,341
Operating lease liabilities
17,689
19,810
Deferred income tax liabilities
689
1,054
Other noncurrent liabilities
15,977
15,256
Total liabilities
290,009
317,295
Shareholders' equity:
Preferred stock
—
—
Common stock
19,094
19,063
Capital in excess of stated value
98,508
94,006
Retained earnings
636,297
579,000
Less treasury stock - at cost
(277,238)
(277,238)
Accumulated other comprehensive loss,
net
(21,010)
(21,473)
Total shareholders' equity
455,651
393,358
Total liabilities and shareholders'
equity
$
745,660
$
710,653
LINDSAY CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Years Ended August 31,
($ in thousands)
2023
2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$
72,379
$
65,469
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization
19,282
20,178
Provision for uncollectible accounts
receivable
881
903
Deferred income taxes
—
(2,063
)
Share-based compensation expense
6,529
5,458
Foreign currency transaction loss
1,126
2,274
Other, net
1,569
695
Changes in assets and liabilities:
Receivables
(4,926
)
(47,514
)
Inventories
40,954
(53,803
)
Other current assets
4,693
1,220
Accounts payable
(15,274
)
13,832
Other current liabilities
(9,135
)
186
Other noncurrent assets and
liabilities
1,629
(3,787
)
Net cash provided by operating
activities
119,707
3,048
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and
equipment
(18,775
)
(15,595
)
Purchases of marketable securities
available-for-sale
(4,932
)
(18,468
)
Proceeds from maturities of marketable
securities available-for-sale
10,982
25,968
Acquisition of business, net of cash
acquired
(30,842
)
—
Other investing activities, net
(3,850
)
(855
)
Net cash used in investing activities
(47,417
)
(8,950
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options
32
2,894
Common stock withheld for payroll tax
obligations
(2,471
)
(1,181
)
Proceeds from employee stock purchase
plan
444
412
Principal payments on long-term debt
(222
)
(218
)
Dividends paid
(15,082
)
(14,599
)
Net cash used in financing activities
(17,299
)
(12,692
)
Effect of exchange rate changes on cash
and cash equivalents
716
(3,465
)
Net change in cash and cash
equivalents
55,707
(22,059
)
Cash and cash equivalents, beginning of
period
105,048
127,107
Cash and cash equivalents, end of
period
$
160,755
$
105,048
View source
version on businesswire.com: https://www.businesswire.com/news/home/20231019186285/en/
LINDSAY CORPORATION: Alicia Pfeifer Senior Director,
Investor Relations & Treasury 402-933-6429
Alicia.Pfeifer@lindsay.com Alpha IR: Joe Caminiti or Stephen
Poe 312-445-2870 LNN@alpha-ir.com
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