- Consolidated revenues grow to $123.1 million and EPS improves
to $0.93
- Shipment and project delays related to COVID-19 impact revenues
by approximately $14.0 million
- Company continues successful execution of its strategic
priorities of margin improvement, irrigation technology expansion
and infrastructure growth
Lindsay Corporation (NYSE: LNN), a leading global manufacturer
and distributor of irrigation and infrastructure equipment and
technology, today announced results for its third quarter of fiscal
2020, which ended on May 31, 2020.
Third Quarter Summary
Revenues for the third quarter of fiscal 2020 were $123.1
million, an increase of $2.1 million, or 2 percent, compared to
revenues of $121.1 million in the prior year third quarter. Net
earnings for the quarter were $10.1 million, or $0.93 per diluted
share, compared with net earnings of $2.9 million, or $0.27 per
diluted share, for the prior year third quarter. Net earnings for
the prior year third quarter adjusted to eliminate costs associated
with the Foundation for Growth initiative were $5.5 million, or
$0.50 per diluted share.1
“As we navigate the coronavirus pandemic, our priority continues
to be the health and safety of our employees around the world while
continuing to operate our facilities and serve our customers,” said
Tim Hassinger, President and Chief Executive Officer. “I am pleased
with the success we have had in these areas as a result of the
proactive measures we have put in place. In spite of this
challenging environment, our businesses continue to perform well.
During the quarter we also completed the acquisition of Net
Irrigate, LLC, an agriculture IoT technology company that provides
remote monitoring solutions for irrigation customers. This
acquisition expands the number of irrigated acres managed under our
FieldNET® platform.”
Third Quarter Segment Results
Irrigation segment revenues for the third quarter of fiscal 2020
were $93.5 million, a decrease of $5.1 million, or 5 percent,
compared to $98.6 million in the prior year. North America
irrigation revenues of $60.9 million decreased $2.1 million, or 3
percent, compared to the prior year. The decrease resulted
primarily from lower irrigation equipment unit volume which was
partially offset by the impact of higher average selling prices.
International irrigation revenues of $32.6 million decreased $3.0
million, or 9 percent. Higher sales volumes in certain regions were
more than offset by unfavorable effects of foreign currency
translation of approximately $3.5 million compared to the prior
year and COVID-19 related shipment delays of approximately $2.0
million.
Irrigation segment operating margin was 16.1 percent of sales in
the third quarter, compared to 11.2 percent of sales (11.7% percent
adjusted)1 in the prior year. Operating margin expansion resulted
from improved cost and pricing performance attributed to the
Foundation for Growth initiative as well as from increased margin
contribution from technology products and services.
Infrastructure segment revenues for the third quarter of fiscal
2020 were $29.6 million, an increase of $7.1 million, or 32
percent, compared to $22.4 million in the prior year. The increase
resulted from higher Road Zipper System® sales and lease revenues
which were partially offset by lower sales of road safety products
compared to the prior year. In addition, revenues of approximately
$12.0 million were impacted by COVID-19 related project delays.
Infrastructure segment operating margin was 28.9 percent of
sales in the third quarter, compared to 15.8 percent of sales (16.0
percent adjusted)1 in the prior year. Operating margin improvement
resulted primarily from increased sales in higher margin product
lines and from improved cost and pricing performance.
The backlog of unfilled orders at May 31, 2020 was $78.6 million
compared with $52.5 million at May 31, 2019. Included in these
backlogs are amounts of $4.5 million and $10.0 million,
respectively, that are not expected to be fulfilled within the
subsequent twelve months.
Outlook
“In North America, fourth quarter irrigation equipment demand is
driven largely by storm damage replacement. The uncertainty of this
demand combined with low commodity prices makes it challenging to
project how the market will develop,” said Mr. Hassinger. “The
demand outlook for our fiscal 2021 is dependent on a number of
factors that could impact commodity prices and farm income,
including current year crop results, export demand related to the
U.S.-China Phase 1 trade agreement, and the level of government
support payments to assist farmers. We expect continued growth in
technology products and services due to the solid returns these
investments provide to farmers. In international markets, we see
the potential for additional demand being driven by heightened
concerns regarding food security as a result of the global
pandemic; however, the timing remains uncertain.”
Mr. Hassinger added, “In our infrastructure business, we expect
strong fourth quarter results, driven by the Highways England
project and the fulfillment of a large order in Japan. We continue
to be excited about the growth opportunities we see for our Road
Zipper Systems. Lastly, I would like to express my appreciation to
the Lindsay employees, dealers and suppliers around the world who
have gone to great lengths to promote a safe environment while
continuing to serve our customers during this challenging
time.”
Third Quarter Conference Call
Lindsay’s fiscal 2020 third 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.
1 Please see Reg G reconciliation of GAAP operating income, net
earnings and diluted earnings per share to adjusted figures at end
of document.
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.
LINDSAY CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF EARNINGS
(Unaudited)
Three months ended
Nine months ended
(in thousands, except per share
amounts)
May 31,
2020
May 31,
2019
May 31,
2020
May 31,
2019
Operating revenues
$
123,106
$
121,054
$
346,287
$
342,187
Cost of operating revenues
83,410
91,055
239,111
259,066
Gross profit
39,696
29,999
107,176
83,121
Operating expenses:
Selling expense
7,417
7,515
22,101
23,934
General and administrative expense
13,055
14,695
38,026
46,585
Engineering and research expense
3,396
3,314
10,303
10,547
Total operating expenses
23,868
25,524
70,430
81,066
Operating income
15,828
4,475
36,746
2,055
Interest expense
(1,197
)
(1,169
)
(3,574
)
(3,552
)
Interest income
408
525
1,412
1,930
Other income (expense), net
(2,774
)
(602
)
(4,197
)
(591
)
Earnings (loss) before income
taxes
12,265
3,229
30,387
(158
)
Income tax expense (benefit)
2,171
332
6,432
(827
)
Net earnings
$
10,094
$
2,897
$
23,955
$
669
Earnings per share:
Basic
$
0.93
$
0.27
$
2.21
$
0.06
Diluted
$
0.93
$
0.27
$
2.21
$
0.06
Shares used in computing earnings
per share:
Basic
10,835
10,786
10,818
10,779
Diluted
10,877
10,814
10,854
10,807
Cash dividends declared per share
$
0.32
$
0.31
$
0.94
$
0.93
LINDSAY CORPORATION AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Unaudited)
Three months ended
Nine months ended
(in thousands)
May 31,
2020
May 31,
2019
May 31,
2020
May 31,
2019
Operating revenues:
Irrigation:
North America
$
60,917
$
62,974
179,197
$
177,118
International
32,606
35,644
88,751
104,876
Irrigation segment
93,523
98,618
$
267,948
$
281,994
Infrastructure segment
29,583
22,436
78,339
60,193
Total operating revenues
$
123,106
$
121,054
$
346,287
$
342,187
Operating income:
Irrigation segment
$
15,014
$
11,037
$
34,385
$
26,341
Infrastructure segment
8,560
3,537
23,686
7,259
Corporate
(7,746
)
(10,099
)
(21,325
)
(31,545
)
Total operating income
$
15,828
$
4,475
$
36,746
$
2,055
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)
May 31,
2020
May 31,
2019
August 31,
2019
ASSETS
Current assets:
Cash and cash equivalents
$
102,474
$
110,839
$
127,204
Marketable securities
19,012
—
—
Receivables, net
84,931
94,584
75,551
Inventories, net
113,301
91,091
92,287
Assets held-for-sale
—
2,744
2,744
Other current assets, net
19,469
17,903
15,704
Total current assets
339,187
317,161
313,490
Property, plant, and equipment, net
72,827
70,367
68,968
Intangibles, net
24,053
25,103
24,382
Goodwill
67,635
64,454
64,387
Operating lease right-of-use assets
27,663
—
—
Deferred income tax assets
11,118
8,783
11,758
Other noncurrent assets, net
15,003
20,054
17,329
Total assets
$
557,486
$
505,922
$
500,314
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
35,310
$
37,509
$
29,434
Current portion of long-term debt
195
208
209
Other current liabilities
71,712
49,102
52,488
Total current liabilities
107,217
86,819
82,131
Pension benefits liabilities
5,787
5,661
6,029
Long-term debt
115,723
115,885
115,846
Operating lease liabilities
26,333
—
—
Deferred income tax liabilities
835
918
872
Other noncurrent liabilities
18,633
26,245
27,227
Total liabilities
274,528
235,528
232,105
Shareholders' equity:
Preferred stock
—
—
—
Common stock
18,918
18,870
18,870
Capital in excess of stated value
76,188
70,566
71,684
Retained earnings
488,518
476,580
474,740
Less treasury stock - at cost
(277,238
)
(277,238
)
(277,238
)
Accumulated other comprehensive loss,
net
(23,428
)
(18,384
)
(19,847
)
Total shareholders' equity
282,958
270,394
268,209
Total liabilities and shareholders'
equity
$
557,486
$
505,922
$
500,314
LINDSAY CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
(in thousands)
May 31, 2020
May 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$
23,955
$
669
Adjustments to reconcile net earnings to
net cash provided by (used in) operating activities:
Depreciation and amortization
14,146
10,452
Gain on sale of assets held-for-sale
(1,191
)
—
Loss on sale of business
—
301
Provision for uncollectible accounts
receivable
466
(726
)
Deferred income taxes
27
(2,556
)
Share-based compensation expense
4,118
3,226
Foreign currency transaction loss
3,632
99
Other, net
1,575
(113
)
Changes in assets and liabilities:
Receivables
(11,379
)
(26,371
)
Inventories
(23,765
)
(14,467
)
Other current assets
(6,681
)
546
Accounts payable
5,385
9,072
Other current liabilities
14,485
(4,078
)
Other noncurrent assets and
liabilities
(8,810
)
4,318
Net cash provided by (used in) operating
activities
15,963
(19,628
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment
(12,268
)
(20,210
)
Proceeds from sale of assets
held-for-sale
3,955
—
Purchases of marketable securities
available-for-sale
(23,389
)
—
Proceeds from maturities of marketable
securities available-for-sale
4,320
—
Proceeds from settlement of net investment
hedges
1,503
2,262
Payments for settlement of net investment
hedges
—
(327
)
Acquisition of business, net of cash
acquired
(3,034
)
—
Other investing activities, net
—
60
Net cash used in investing activities
(28,913
)
(18,215
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options
1,545
177
Common stock withheld for payroll tax
obligations
(1,111
)
(1,124
)
Principal payments on long-term debt
(174
)
(153
)
Payment of debt issuance costs
—
(115
)
Dividends paid
(10,177
)
(10,032
)
Net cash used in financing activities
(9,917
)
(11,247
)
Effect of exchange rate changes on cash
and cash equivalents
(1,863
)
(858
)
Net change in cash and cash
equivalents
(24,730
)
(49,948
)
Cash and cash equivalents, beginning of
period
127,204
160,787
Cash and cash equivalents, end of
period
$
102,474
$
110,839
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
Nine months ended
(in thousands, except per share
amounts)
May 31, 2019
Diluted earnings per
share
May 31, 2019
Diluted earnings per
share
Net earnings - reported GAAP measure
$
2,897
$
0.27
$
669
$
0.06
FFG costs - before tax
3,890
$
0.36
13,166
$
1.22
Tax effect - FFG costs
(1,336
)
$
(0.12
)
(4,025
)
$
(0.37
)
Net earnings - adjusted
$
5,450
$
0.50
$
9,809
$
0.91
Average shares outstanding - diluted
10,814
10,807
For the three months ended May
31, 2019
Operating income reconciliation
Consolidated
Irrigation
Infrastructure
Corporate
Operating income - reported GAAP
measure
4,475
$
11,037
$
3,537
$
(10,099
)
FFG costs - before tax
3,890
550
56
3,284
Adjusted operating income
$
8,365
$
11,587
$
3,593
$
(6,815
)
Operating revenues
121,054
$
98,618
$
22,436
$
—
Operating income as a percent of operating
revenues
3.7
%
11.2
%
15.8
%
N/A
Adjusted operating income as a percent of
operating revenues
6.9
%
11.7
%
16.0
%
N/A
For the nine months ended May
31, 2019
Operating income reconciliation
Consolidated
Irrigation
Infrastructure
Corporate
Operating income - reported GAAP
measure
2,055
$
26,341
$
7,259
$
(31,545
)
FFG costs - before tax
13,166
676
188
12,302
Adjusted operating income
$
15,221
$
27,017
$
7,447
$
(19,243
)
Operating revenues
342,187
$
281,994
$
60,193
$
—
Operating income as a percent of operating
revenues
0.6
%
9.3
%
12.1
%
N/A
Adjusted operating income as a percent of
operating revenues
4.4
%
9.6
%
12.4
%
N/A
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200702005060/en/
LINDSAY CORPORATION: Brian Ketcham Senior Vice President
& Chief Financial Officer 402-827-6579
THREE PART ADVISORS: Hala Elsherbini 972-458-8000
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