- Revenues increase 5 percent led by
growth in North America irrigation
- GAAP diluted earnings per share of
$0.16 ($0.56 adjusted)1
- Results include a $2.6 million tax
expense due to the enactment of U.S. tax reform
- Results include pre-tax costs of $2.3
million related to the Foundation for Growth initiative
Lindsay Corporation (NYSE: LNN), a leading global manufacturer
of irrigation and infrastructure equipment and technology, today
announced results for its second quarter ended February 28,
2018.
Second Quarter Summary
Revenues for the second quarter of fiscal 2018 were $130.3
million, an increase of 5 percent compared to revenues of $124.1
million in the prior year’s second quarter. Net earnings for the
quarter were $1.7 million and diluted earnings per share were
$0.16, compared with net earnings of $5.0 million and diluted
earnings per share of $0.47 in the prior year. Net earnings for the
quarter were reduced by tax expense of $2.6 million due to the
enactment of the U.S. Tax Cuts and Jobs Act and by after-tax costs
of $1.7 million comprised of severance costs and professional
consulting fees related to the Company’s Foundation for Growth
initiative. Adjusted net earnings for the second quarter were $6.0
million, or $0.56 per diluted share.1
“We were pleased to have achieved revenue and operating income
improvement in both the Irrigation and Infrastructure segments for
the quarter,” said Tim Hassinger, President and Chief Executive
Officer. “Improved demand in North America irrigation drove overall
revenue growth, and growth in our Road Zipper System® business
continues to support solid performance in our Infrastructure
segment.”
Segment Results
Irrigation segment revenues increased 5 percent to $111.9
million from $106.2 million in the prior year’s second quarter.
North America irrigation revenues increased 23 percent, driven by
an increase in irrigation system unit volume. International
irrigation revenues for the second quarter were $33.0 million, a
decrease of 22 percent compared to the second quarter of the prior
year. The second quarter of the prior year included revenues from
projects in developing markets that did not repeat in the current
period, while demand in core markets remained stable.
Irrigation segment operating margin was 10.7 percent of sales in
the second quarter (11.2 percent adjusted)1, compared to 10.6
percent of sales in the prior year. Improved volume leverage from
higher North America irrigation system sales was partially offset
by the impact of lower project sales and margins in international
markets.
Infrastructure segment revenues increased 3 percent to $18.5
million for the quarter, as increased Road Zipper System revenue
was partially offset by lower revenue from North America road
safety products.
Infrastructure segment operating margin was 13.6 percent of
sales in the quarter compared to 8.9 percent of sales in the second
quarter of the prior year. A higher proportion of revenue from Road
Zipper Systems resulted in an improved margin mix.
The backlog of unshipped orders at February 28, 2018 was $90.2
million, compared with $62.3 million at February 28, 2017, with
higher backlogs in both the irrigation and infrastructure segments.
Additions to the backlog during the quarter include an order valued
at approximately $9.3 million to deploy the Road Zipper System on
the Richmond-San Rafael Bridge in California and follow-on orders,
valued at approximately $11.1 million, from an existing customer in
Japan.
Impact of U.S. Tax Reform
Second quarter earnings include a $2.6 million, or $0.241 per
diluted share, expense for the estimated impact of the U.S. Tax
Cuts and Jobs Act enacted during the quarter. This amount includes
one-time impacts from the deemed repatriation transition tax on
certain foreign earnings and from the remeasurement of deferred tax
items at a lower rate.
Foundation for Growth Initiative
During the quarter the Company initiated a focused performance
improvement initiative referred to as Foundation for Growth.
Objectives include setting strategic direction, defining
priorities, and improving overall operating performance. A key
financial objective is to achieve operating margin performance of
11 percent to 12 percent in fiscal 2020 without assuming
improvement in the market environment. Second quarter earnings
include after-tax costs of $1.7 million, or $0.151 per diluted
share, related to severance costs and professional consulting fees
incurred in connection with the initiative. Additional costs
anticipated in connection with this initiative, over each of the
next several quarters, are expected to be recovered through
improved operating income in fiscal 2020.
Outlook
“Although we have seen improved demand this year in North
America, agricultural market conditions are expected to remain
challenging until there is a meaningful improvement in commodity
prices and farm income. In our Infrastructure business, a growing
backlog of Road Zipper projects provides for growth,” said Mr.
Hassinger. “The recently announced tariffs on steel and aluminum
product imports are concerning because of the potential impact on
raw material cost and possible trade retaliation that would affect
U.S. agricultural products, however it won’t be possible to fully
assess the impact until more details are known.”
Mr. Hassinger continued, “The organization is excited about the
launch of our Foundation for Growth initiative. This effort,
focused on delivering better results to our customers and
shareholders, is already underway and I look forward to providing
regular updates as this initiative progresses.”
Second Quarter Conference Call
Lindsay’s fiscal 2018 second quarter investor conference call is
scheduled for 11:00 a.m. Eastern Time today. Interested investors
may participate in the call by dialing (877) 317-6789 in the U.S.,
or (412) 317-6789 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 is a leading global manufacturer and
distributor of irrigation and infrastructure equipment and
technology. The Lindsay family of irrigation brands includes
Zimmatic® and FieldNET® as well as irrigation consulting, design,
pump and filtration offerings, advanced machine-to-machine
communication, remote control and monitoring technology, and
wireless networking 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.
1 Please see Reg G reconciliation of GAAP operating income,
net earnings and earnings per share to adjusted figures at end of
document.
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 28,2018
February 28,2017
February 28,2018
February 28,2017
Operating revenues $ 130,339 $ 124,125 $ 254,865 $
234,515 Cost of operating revenues 95,023
91,184 187,152 173,200 Gross
profit 35,316 32,941
67,713 61,315 Operating expenses: Selling
expense 10,020 10,132 20,245 20,114 General and administrative
expense 14,311 10,230 26,229 21,585 Engineering and research
expense 3,919 4,057 7,972
8,359 Total operating expenses 28,250
24,419 54,446 50,058
Operating income 7,066 8,522 13,267 11,257 Interest
expense (1,095 ) (1,201 ) (2,331 ) (2,410 ) Interest income 311 171
686 336 Other expense, net (606 ) 144
(1,154 ) (212 ) Earnings before
income taxes 5,676 7,636 10,468 8,971 Income tax expense
3,941 2,624 5,548
3,086 Net earnings $ 1,735 $ 5,012 $
4,920 $ 5,885 Earnings per share: Basic $ 0.16
$ 0.47 $ 0.46 $ 0.55 Diluted $ 0.16 $ 0.47 $ 0.46 $ 0.55
Shares used in computing earnings per share: Basic 10,743 10,657
10,724 10,647 Diluted 10,765 10,674 10,752 10,670 Cash
dividends declared per share $ 0.30 $ 0.29 $ 0.60 $ 0.58
LINDSAY CORPORATION AND SUBSIDIARIES SUMMARY
OPERATING RESULTS (Unaudited)
Three months ended
Six months ended (in thousands)
February 28,2018
February 28,2017
February 28,2018
February 28,2017
Operating revenues: Irrigation segment $ 111,865 $ 106,209 $
215,218 $ 196,061 Infrastructure segment 18,474
17,916 39,647 38,454
Total operating revenues $ 130,339 $ 124,125 $
254,865 $ 234,515 Operating income: Irrigation
segment $ 11,933 $ 11,304 $ 19,784 $ 16,453 Infrastructure segment
2,519 1,595 5,810 4,571 Corporate (7,386 )
(4,377 ) (12,327 ) (9,767 )
Total operating income $ 7,066 $ 8,522 $
13,267 $ 11,257
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 water pumping stations, controls,
filtration solutions and machine-to-machine technology.
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)
February 28,2018
February 28,2017
August 31,2017
ASSETS Current assets: Cash and cash equivalents $ 102,211 $
102,825 $ 121,620 Receivables, net 96,738 78,828 73,850
Inventories, net 102,975 82,847 86,155 Prepaid expenses 5,339 5,208
4,384 Other current assets 6,092 15,968
6,925 Total current assets 313,355
285,676 292,934 Property, plant,
and equipment, net 72,678 75,632 74,498 Intangibles, net 40,677
44,890 42,808 Goodwill 77,296 76,577 77,131 Deferred income tax
assets 5,773 3,094 5,311 Other noncurrent assets, net
12,575 4,747 13,350 Total assets $
522,354 $ 490,616 $ 506,032 LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $
46,599 $ 44,254 $ 36,717 Current portion of long-term debt 203 199
201 Other current liabilities 57,720
46,350 55,119 Total current liabilities
104,522 90,803 92,037 Pension
benefits liabilities 6,152 6,708 6,295 Long-term debt 116,673
116,876 116,775 Deferred income tax liabilities 1,179 1,678 1,191
Other noncurrent liabilities 20,768
20,995 19,679 Total liabilities 249,294
237,060 235,977 Shareholders'
equity: Preferred stock — — — Common stock 18,841 18,746 18,780
Capital in excess of stated value 66,625 59,002 63,006 Retained
earnings 476,091 466,630 477,615 Less treasury stock - at cost
(277,238 ) (277,238 ) (277,238 ) Accumulated other comprehensive
loss, net (11,259 ) (13,584 )
(12,108 ) Total shareholders' equity 273,060
253,556 270,055 Total liabilities and
shareholders' equity $ 522,354 $ 490,616 $
506,032
LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) Six months
ended (in thousands)
February 28,2018
February 28,2017
CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 4,920 $ 5,885
Adjustments to reconcile net earnings to net cash provided by
operating activities: Depreciation and amortization 8,599 8,120
Provision for uncollectible accounts receivable 228 (609 ) Deferred
income taxes (931 ) 1,707 Share-based compensation expense 1,887
1,815 Other, net 45 (594 ) Changes in assets and liabilities:
Receivables (23,084 ) 2,710 Inventories (15,239 ) (7,368 ) Prepaid
expenses and other current assets (1,731 ) 3,375 Accounts payable
9,728 11,926 Other current liabilities 5,313 (14,122 ) Other
noncurrent assets and liabilities 1,368
(2,123 ) Net cash (used in) provided by operating activities
(8,897 ) 10,722 CASH FLOWS FROM
INVESTING ACTIVITIES: Purchases of property, plant, and equipment
(4,715 ) (4,194 ) Proceeds from settlement of net investment hedges
101 2,054 Payments for settlement of net investment hedges (1,967 )
(482 ) Other investing activities, net 137
136 Net cash used in investing activities
(6,444 ) (2,486 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from exercise of stock options 2,788 647
Common stock withheld for payroll tax obligations (833 ) (635 )
Principal payments on long-term debt (100 ) (98 ) Dividends paid
(6,444 ) (6,181 ) Net cash used in
financing activities (4,589 ) (6,267 )
Effect of exchange rate changes on cash and cash equivalents
521 (390 ) Net change in cash and cash
equivalents (19,409 ) 1,579 Cash and cash equivalents, beginning of
period 121,620 101,246 Cash and cash
equivalents, end of period $ 102,211 $ 102,825
LINDSAY CORPORATION AND
SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL
MEASURES(Unaudited)
The non-GAAP tables below disclose (a) the impact on diluted
earnings per share of (1) tax expense attributed to enactment of
the U.S. Tax Cuts and Jobs Act ("U.S. Tax Reform"), and (2)
severance costs and professional consulting fees 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 Six months
ended (in thousands, except per share amounts)
February 28,2018
Dilutedearningsper
share
February 28,2018
Dilutedearningsper
share
Net earnings - reported GAAP measure $ 1,735 $ 0.16 $ 4,920
$ 0.46 Impact of U.S. Tax Reform 2,578 0.24 2,578 0.24
FFG costs - after tax 1,668 0.15 1,668
0.16 Net earnings - adjusted $ 5,981 $ 0.56 $ 9,166 $
0.85 Average shares outstanding - diluted 10,765 10,752
Three months ended February 28, 2018
Operating income reconciliation
Consolidated Irrigation Infrastructure
Corporate Operating income - reported GAAP measure $
7,066 $ 11,933 $ 2,519 $ (7,386 ) FFG costs - before tax
2,331 573 — 1,758 Adjusted
operating income $ 9,397 $ 12,506 $ 2,519 $ (5,628 )
Operating revenues $ 130,339 $ 111,865 $ 18,474 $ —
Operating income as a percent of operating revenues 5.4 % 10.7 %
13.6 % N/A Adjusted operating income as a percent of
operating revenues 7.2 % 11.2 % 13.6 % N/A
Six months ended February 28, 2018
Operating income reconciliation
Consolidated Irrigation Infrastructure
Corporate Operating income - reported GAAP measure $
13,267 $ 19,784 $ 5,810 $ (12,327 ) FFG costs - before tax
2,331 573 — 1,758 Adjusted
operating income $ 15,598 $ 20,357 $ 5,810 $ (10,569 )
Operating revenues $ 254,865 $ 215,218 $ 39,647 $ —
Operating income as a percent of operating revenues 5.2 % 9.2 %
14.7 % N/A Adjusted operating income as a percent of
operating revenues 6.1 % 9.5 % 14.7 % N/A
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180329005297/en/
LINDSAY CORPORATION:Brian Ketcham, 402-827-6579Vice
President & Chief Financial OfficerorHALLIBURTON INVESTOR
RELATIONS:Hala Elsherbini, 972-458-8000orGeralyn DeBusk,
972-458-8000
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