Infrastructure results support consolidated margin performance, partially offsetting global irrigation market softness

OMAHA, Neb.–(BUSINESS WIRE)–Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its third quarter ended on May 31, 2024.

Key Highlights

  • Diluted earnings per share of $1.85 compared to $1.53 in the prior year quarter
  • Recognition of an income tax credit in Brazil adds $4.8 million to net earnings
  • Secured large multi-year international irrigation supply agreement valued at more than $100 million
  • Completed $17.9 million in share repurchases during the quarter

Market conditions in our irrigation segment continue to weigh on farmer sentiment, resulting in demand softness. In North America, high precipitation levels and wet field conditions across the Midwest contributed to lower sales of irrigation equipment and replacement parts during our third quarter,” said Randy Wood, President and Chief Executive Officer. “In Brazil, the market continues to be tempered by lower commodity prices and tight credit availability. We remain encouraged by the growing strength and momentum in our infrastructure business, supported by new project sales and momentum in leasing revenues of our Road Zipper System™. The growth and margin expansion we achieved in our infrastructure business for the quarter helped to offset some of the softness in the irrigation business.”

“Earlier this month we announced that we had entered into a multi-year supply agreement to provide Zimmatic™ irrigation systems and FieldNET™ remote management and scheduling technology to a significant customer in the Middle East and North Africa (MENA) region. The project, valued at more than $100 million, is the largest in Lindsay (NYSE:)’s history and further demonstrates our ability to execute large-scale and complex projects that address the critical needs of our customers. The execution of this project will help to enhance the customer’s ability to increase food production, conserve scarce water resources and improve quality of life. Notably, the attributes of this key project are reflective of the growth opportunities presented in international markets, where secular global trends align with Lindsay’s ability to help customers optimize resources while creating sustained value through our leading combination of irrigation hardware and precision technology platforms.”

“During the third quarter we also completed share repurchases totaling $17.9 million, which aligns with our capital allocation priorities to utilize our strong balance sheet to enhance shareholder value. Additionally, this further demonstrates our ability to both invest in value creation opportunities, including the $50 million investment in Lindsay, Nebraska announced earlier this year, while also returning cash to shareholders at opportune times.”

Third Quarter Summary

Consolidated Financial Summary

Third Quarter

(dollars in millions, except per share amounts)

FY2024

FY2023

$ Change

% Change

Total revenues

$139.2

$164.6

($25.4)

(15%)

Operating income

$19.9

$27.0

($7.0)

(26%)

Operating margin

14.3%

16.4%

Net earnings

$20.4

$16.9

$3.5

21%

Diluted earnings per share

$1.85

$1.53

$0.32

21%

Revenues for the quarter were $139.2 million, a decrease of $25.4 million, or 15 percent, compared to revenues of $164.6 million in the prior year third quarter. An increase in infrastructure segment revenues was more than offset by lower irrigation segment revenues compared to the prior year third quarter.

Operating income for the quarter was $19.9 million, a decrease of $7.0 million, or 26 percent, compared to operating income of $27.0 million in the prior year third quarter. Operating margin was 14.3 percent of sales, compared to 16.4 percent of sales in the prior year quarter. The decrease in operating income and margin resulted mainly from lower irrigation segment revenues and the impact from deleverage of fixed operating expenses. This decrease was partially offset by improved operating income and operating margin in the infrastructure segment.

Net earnings for the quarter were $20.4 million, or $1.85 per diluted share, compared with net earnings of $16.9 million, or $1.53 per diluted share, for the prior year third quarter. The impact of lower operating income was favorably offset by higher other income, driven by increased interest income and favorable foreign currency translation results compared to the prior year third quarter, along with the recognition of an income tax credit in Brazil of $4.8 million, or $0.44 per diluted share.

Third Quarter Segment Results

Irrigation Segment

Third Quarter

(dollars in millions)

FY2024

FY2023

$ Change

% Change

Revenues:

North America

$68.2

$75.0

($6.8)

(9%)

International

$46.6

$67.5

($20.9)

(31%)

Total revenues

$114.8

$142.6

($27.7)

(19%)

Operating income

$19.5

$30.7

($11.2)

(36%)

Operating margin

17.0%

21.6%

Irrigation segment revenues for the quarter were $114.8 million, a decrease of $27.7 million, or 19 percent, compared to $142.6 million in the prior year third quarter. North America irrigation revenues of $68.2 million decreased $6.8 million, or 9 percent, compared to the prior year third quarter. The decrease resulted from a combination of lower unit sales volume of irrigation equipment, lower sales of replacement parts and slightly lower average selling prices compared to the prior year third quarter.

International irrigation revenues of $46.6 million decreased $20.9 million, or 31 percent, compared to the prior year third quarter. The decrease resulted primarily from lower sales volumes in Brazil and other Latin America markets compared to the prior year third quarter while demand in other markets remained stable. In Brazil, order activity remains constrained due to the impact lower commodity prices have on grower profitability and available liquidity, which is reducing growers’ ability to invest in irrigation equipment in the near term. The decrease in revenues was partially offset by the favorable effects of foreign currency translation of approximately $0.7 million compared to the prior year third quarter.

Irrigation segment operating income for the quarter was $19.5 million, a decrease of $11.2 million, or 36 percent, compared to the prior year third quarter. Operating margin was 17.0 percent of sales, compared to 21.6 percent of sales in the prior year third quarter. Lower operating income and margin resulted mainly from lower revenues and the impact from deleverage of fixed operating expenses.

Infrastructure Segment

Third Quarter

(dollars in millions)

FY2024

FY2023

$ Change

% Change

Total revenues

$24.4

$22.0

$2.4

11%

Operating income

$6.3

$3.6

$2.7

76%

Operating margin

25.8%

16.2%

Infrastructure segment revenues for the quarter were $24.4 million, an increase of $2.4 million, or 11 percent, compared to $22.0 million in the prior year third quarter. The increase resulted from higher Road Zipper System sales and higher lease revenues compared to the prior year third quarter. The impact of higher sales of road safety products in the U.S. was offset by lower sales in international markets compared to the prior year third quarter.

Infrastructure segment operating income for the quarter was $6.3 million, an increase of $2.7 million, or 76 percent, compared to the prior year third quarter. Operating margin was 25.8 percent of sales, compared to 16.2 percent of sales in the prior year third quarter. Increased operating income and operating margin resulted from higher revenues and a more favorable margin mix of revenues with higher Road Zipper System sales and lease revenues compared to the prior year third quarter.

The backlog of unfilled orders as of May 31, 2024, was $246.9 million compared with $94.5 million as of May 31, 2023. Included in these backlogs are amounts of $62.0 million and $5.2 million, respectively, for orders that are not expected to be fulfilled within the subsequent twelve months. The backlog in both segments was higher compared to the prior year, with the increase in irrigation backlog resulting from the addition of the large project in the MENA region. Revenues for this project are expected to be recognized beginning in the fourth quarter of fiscal 2024 and continuing through the first quarter of fiscal 2026.

Outlook

Mr. Wood concluded, We are now in the growing season in North America, when weather conditions will influence crop yields, production estimates and ultimately the direction of crop prices and net farm income for the year. We expect demand in North America to remain tempered until the outlook for net farm income improves. Similarly, we expect current market conditions in Brazil to temper demand for irrigation equipment in the near term, while we remain confident in the longer-term growth opportunity in that market. We expect continued growth in developing international markets driven by the ever-present need to address food security, as evidenced by the large project we secured in the MENA region.”

Supported by increased U.S. infrastructure spending, we expect continued growth in Road Zipper System lease revenues and sales of road safety products. We also remain optimistic regarding our Road Zipper System project sales pipeline; however the timing of individual project recognition remains challenging to predict.

Third Quarter Conference Call

Lindsay’s fiscal 2024 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 website, www.lindsay.com. Replays of the conference call will remain on our website 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 website.

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

Nine months ended

(in thousands, except per share amounts)

May 31,
2024

May 31,
2023

May 31,
2024

May 31,
2023

Operating revenues

$

139,199

$

164,553

$

452,076

$

506,953

Cost of operating revenues

92,702

111,332

306,720

346,454

Gross profit

46,497

53,221

145,356

160,499

Operating expenses:

Selling expense

9,579

8,681

28,894

27,092

General and administrative expense

12,695

13,061

40,823

41,237

Engineering and research expense

4,287

4,522

12,531

13,350

Total operating expenses

26,561

26,264

82,248

81,679

Operating income

19,936

26,957

63,108

78,820

Other income (expense):

Interest expense

(767

)

(948

)

(2,474

)

(2,895

)

Interest income

961

680

3,324

1,545

Other income (expense), net

43

(957

)

(93

)

(2,000

)

Total other income (expense)

237

(1,225

)

757

(3,350

)

Earnings before income taxes

20,173

25,732

63,865

75,470

Income tax (benefit) expense

(206

)

8,851

10,344

22,320

Net earnings

$

20,379

$

16,881

$

53,521

$

53,150

Earnings per share:

Basic

$

1.85

$

1.53

$

4.86

$

4.83

Diluted

$

1.85

$

1.53

$

4.84

$

4.80

Shares used in computing earnings per share:

Basic

10,996

11,008

11,016

11,001

Diluted

11,030

11,052

11,055

11,063

Cash dividends declared per share

$

0.35

$

0.34

$

1.05

$

1.02

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

Three months ended

Nine months ended

(in thousands)

May 31,
2024

May 31,
2023

May 31,
2024

May 31,
2023

Operating revenues:

Irrigation:

North America

$

68,235

$

75,027

$

240,457

$

249,315

International

46,605

67,544

147,569

193,115

Irrigation segment

114,840

142,571

388,026

442,430

Infrastructure segment

24,359

21,982

64,050

64,523

Total operating revenues

$

139,199

$

164,553

$

452,076

$

506,953

Operating income:

Irrigation segment

$

19,524

$

30,727

$

70,480

$

92,188

Infrastructure segment

6,276

3,556

13,401

8,947

Corporate

(5,864

)

(7,326

)

(20,773

)

(22,315

)

Total operating income

$

19,936

$

26,957

$

63,108

$

78,820

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 and large diameter steel tubing, 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)

May 31,
2024

May 31,
2023

August 31,
2023

ASSETS

Current assets:

Cash and cash equivalents

$

140,221

$

131,577

$

160,755

Marketable securities

12,497

12,806

5,556

Receivables, net

134,461

154,167

144,774

Inventories, net

171,522

166,759

155,932

Other current assets

30,017

25,943

20,467

Total current assets

488,718

491,252

487,484

Property, plant, and equipment, net

111,629

96,992

99,681

Intangibles, net

25,644

16,860

27,719

Goodwill

84,102

67,441

83,121

Operating lease right-of-use assets

16,308

17,378

17,036

Deferred income tax assets

13,367

11,518

10,885

Other noncurrent assets

18,333

22,177

19,734

Total assets

$

758,101

$

723,618

$

745,660

LIABILITIES AND SHAREHOLDERS’ EQUITY

Current liabilities:

Accounts payable

$

35,062

$

42,207

$

44,278

Current portion of long-term debt

229

225

226

Other current liabilities

88,446

90,616

91,604

Total current liabilities

123,737

133,048

136,108

Pension benefits liabilities

4,159

4,653

4,382

Long-term debt

115,029

115,209

115,164

Operating lease liabilities

16,134

18,119

17,689

Deferred income tax liabilities

682

689

689

Other noncurrent liabilities

18,364

15,104

15,977

Total liabilities

278,105

286,822

290,009

Shareholders’ equity:

Preferred stock

Common stock

19,123

19,092

19,094

Capital in excess of stated value

102,752

96,627

98,508

Retained earnings

678,261

620,922

636,297

Less treasury stock – at cost

(295,138

)

(277,238

)

(277,238

)

Accumulated other comprehensive loss, net

(25,002

)

(22,607

)

(21,010

)

Total shareholders’ equity

479,996

436,796

455,651

Total liabilities and shareholders’ equity

$

758,101

$

723,618

$

745,660

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine months ended

(in thousands)

May 31, 2024

May 31, 2023

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

53,521

$

53,150

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

Depreciation and amortization

15,847

14,466

Provision for uncollectible accounts receivable

321

985

Deferred income taxes

(2,504

)

(1,548

)

Share-based compensation expense

4,887

4,775

Unrealized foreign currency transaction loss

58

2,045

Other, net

237

574

Changes in assets and liabilities:

Receivables

8,107

(15,842

)

Inventories

(17,118

)

25,289

Other current assets

(9,768

)

4,401

Accounts payable

(8,592

)

(17,953

)

Other current liabilities

(5,539

)

(11,865

)

Other noncurrent assets and liabilities

3,193

691

Net cash provided by operating activities

42,650

59,168

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant, and equipment

(23,527

)

(13,283

)

Purchases of marketable securities

(15,042

)

(4,932

)

Proceeds from maturities of marketable securities

8,320

3,675

Other investing activities, net

(2,140

)

(4,399

)

Net cash used in investing activities

(32,389

)

(18,939

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Repurchase of common stock

(17,900

)

Dividends paid

(11,557

)

(11,228

)

Common stock withheld for payroll tax obligations

(1,575

)

(2,471

)

Proceeds from exercise of stock options

479

Other financing activities, net

313

180

Net cash used in financing activities

(30,240

)

(13,519

)

Effect of exchange rate changes on cash and cash equivalents

(555

)

(181

)

Net change in cash and cash equivalents

(20,534

)

26,529

Cash and cash equivalents, beginning of period

160,755

105,048

Cash and cash equivalents, end of period

$

140,221

$

131,577

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

Source: Lindsay Corporation

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