Quarterly net earnings growth of 24 percent
year-over-year, driven by marked expansion in operating income
Lindsay Corporation (NYSE: LNN), a leading global manufacturer
and distributor of irrigation and infrastructure equipment and
technology, today announced results for its second quarter ended on
February 28, 2023.
Key Highlights
- Second quarter net earnings increased 24 percent to $18.1
million and EPS improved to $1.63
- Irrigation operating income increased 33 percent despite lower
revenues
- Infrastructure operating income improves on increased Road
Zipper System® lease revenue
“We are pleased with the significant earnings improvement we
achieved in the second quarter, as we were able to deliver expanded
profitability despite a decline in our top line compared to last
year,” said Randy Wood, President and Chief Executive Officer.
"Lower revenues in our irrigation business were due to
international project business in the prior year that did not
repeat as well as seasonal volume shifts in North America and
Brazil. However, improved price realization as a result of
commercial pricing actions and reduced inflationary headwinds
compared to the prior year contributed to operating income growth
and margin expansion in both of our business segments."
"Our teams around the world continue to adapt to dynamic market
conditions and remain focused on serving our customers, improving
the quality of our business and driving innovation and value
creation though our advanced technologies."
Second Quarter Summary
Consolidated Financial Summary
Second Quarter
(dollars in millions, except per share
amounts)
FY2023
FY2022
$ Change
% Change
Total revenues
$166.2
$200.1
($33.9)
(17%)
Operating income
$27.3
$18.3
$9.0
49%
Operating margin
16.4%
9.2%
Net earnings
$18.1
$14.6
$3.5
24%
Earnings per share
$1.63
$1.32
$0.31
23%
Revenues for the second quarter of fiscal 2023 were $166.2
million, a decrease of $33.9 million, or 17 percent, compared to
revenues of $200.1 million in the prior year second quarter. Almost
all of the decrease came from the irrigation segment as
infrastructure revenues were down slightly.
Operating income for the quarter was $27.3 million, an increase
of $9.0 million, or 49 percent, compared to operating income of
$18.3 million in the prior year second quarter. Operating margin
was 16.4 percent of sales, expanding 720 basis points compared to
9.2 percent of sales in the prior year quarter. The operating
margin expansion was driven by strong gross margin improvement in
both of our business segments. The increase was partially offset by
higher operating expenses compared to the prior year second
quarter, including higher employee compensation costs and increased
investments in new product development.
Net earnings for the quarter were $18.1 million, or $1.63 per
diluted share, compared with net earnings of $14.6 million, or
$1.32 per diluted share, for the prior year second quarter. The
improved net earnings performance was largely driven by increased
operating income and was partially offset by foreign currency
transaction losses in the current year compared to gains in the
prior year and from higher income tax expense.
Second Quarter Segment Results
Irrigation Segment
Second Quarter
(dollars in millions)
FY 2023
FY 2022
$ Change
% Change
Revenues:
North America
$90.4
$100.7
($10.3)
(10%)
International
$57.4
$80.0
($22.6)
(28%)
Total revenues
$147.8
$180.7
($32.9)
(18%)
Operating income
$32.8
$24.7
$8.1
33%
Operating margin
22.2%
13.7%
Irrigation segment revenues for the second quarter of fiscal
2023 were $147.8 million, a decrease of $32.9 million, or 18
percent, compared to $180.7 million in the prior year second
quarter. North America irrigation revenues of $90.4 million
decreased $10.3 million, or 10 percent, compared to the prior year
second quarter. The top-line decrease resulted from lower unit
sales volumes as the prior year quarter experienced a pull forward
of orders in advance of announced selling price increases, while
the second quarter of 2023 reflected a return to a more traditional
seasonal demand cadence. The impact of lower unit sales volumes
compared to the prior year was partially offset by the positive
impact of higher average selling prices.
International irrigation revenues of $57.4 million decreased
$22.6 million, or 28 percent, compared to the prior year second
quarter. The decrease resulted primarily from the completion of a
large project in the prior year that did not repeat and lower sales
volumes in Brazil, Ukraine and Russia compared to the prior year
second quarter. Sales and order activity in Brazil were temporarily
reduced as a result of the federal government transition following
the October 2022 presidential election.
Irrigation segment operating income for the second quarter of
fiscal 2023 was $32.8 million, an increase of $8.1 million, or 33
percent, compared to the prior year second quarter. Operating
margin was 22.2 percent of sales, compared to 13.7 percent of sales
in the prior year second quarter. Increased operating income and
the 850 basis points of operating margin expansion was driven
primarily by improved price realization, lower inflationary impact
on input costs and a more favorable sales mix of international
irrigation revenues compared to the prior year second quarter.
Infrastructure Segment
Second Quarter
(dollars in millions)
FY 2023
FY 2022
$ Change
% Change
Total revenues
$18.5
$19.4
($0.9)
(5%)
Operating income
$2.0
$0.3
$1.7
523%
Operating margin
10.9%
1.7%
Infrastructure segment revenues for the second quarter of fiscal
2023 were $18.5 million, a decrease of $0.9 million, or 5 percent,
compared to $19.4 million in the prior year second quarter. An
increase in Road Zipper System lease revenue was more than offset
by lower sales of road safety products compared to the prior year
second quarter. Road Zipper project sales were similar to the prior
year second quarter.
Infrastructure segment operating income for the second quarter
of fiscal 2023 was $2.0 million, an increase of $1.7 million or 523
percent compared to the prior year second quarter. Operating margin
was 10.9 percent of sales, expanding meaningfully compared to 1.7
percent of sales in the prior year second quarter. Increased
operating profit and operating margin resulted from a more
favorable margin mix of revenue, improved price realization and
lower inflationary impact on input costs compared to the prior year
second quarter.
The backlog of unfilled orders as of February 28, 2023, was
$95.2 million compared with $111.0 million on February 28, 2022.
The irrigation backlog is lower while the infrastructure backlog is
higher compared to the prior year.
Outlook
Mr. Wood concluded, “We are encouraged by the earnings and
operating income results captured through the first half of our
fiscal year, and we continue to see strength in U.S. net farm
income. While domestic net farm income is projected to decline in
2023 from record levels in 2022, overall income remains at a
historically high level and we believe it is supportive of
continued investment in irrigation equipment. Demand strength
across our international markets continues to be supported by
expanded production driven by positive agricultural market
fundamentals and continuing global concerns over food security and
global grain supplies. Looking ahead to the balance of the year, we
expect some impact from the market delays in Brazil to continue
into our third quarter, however our full year outlook remains
unchanged."
“We remain encouraged with the outlook for our infrastructure
business due to anticipated increases in U.S. infrastructure
spending and the strength of our sales funnel. While the timing of
project execution can be difficult to predict, we will continue to
actively manage the projects in our sales funnel and believe we are
positioned to support continued growth in the infrastructure
segment.”
Second Quarter Conference Call
Lindsay’s fiscal 2023 second 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® remote irrigation management and
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
Six months ended
(in thousands, except per share
amounts)
February 28, 2023
February 28, 2022
February 28, 2023
February 28, 2022
Operating revenues
$
166,241
$
200,137
$
342,400
$
366,288
Cost of operating revenues
111,983
157,193
235,122
285,907
Gross profit
54,258
42,944
107,278
80,381
Operating expenses:
Selling expense
8,733
7,932
18,410
15,922
General and administrative expense
13,739
13,022
28,176
25,901
Engineering and research expense
4,521
3,652
8,829
6,859
Total operating expenses
26,993
24,606
55,415
48,682
Operating income
27,265
18,338
51,863
31,699
Other income (expense):
Interest expense
(1,038
)
(1,176
)
(1,947
)
(2,339
)
Interest income
490
160
865
338
Other income (expense), net
(984
)
1,882
(1,043
)
(1,018
)
Total other income (expense)
(1,532
)
866
(2,125
)
(3,019
)
Earnings before income taxes
25,733
19,204
49,738
28,680
Income tax expense
7,681
4,638
13,469
6,213
Net earnings
$
18,052
$
14,566
$
36,269
$
22,467
Earnings per share:
Basic
$
1.64
$
1.33
$
3.30
$
2.05
Diluted
$
1.63
$
1.32
$
3.28
$
2.04
Shares used in computing earnings per
share:
Basic
11,007
10,974
10,998
10,950
Diluted
11,063
11,014
11,068
11,020
Cash dividends declared per share
$
0.34
$
0.33
$
0.68
$
0.66
LINDSAY CORPORATION AND
SUBSIDIARIES
SUMMARY OPERATING
RESULTS
(Unaudited)
Three months ended
Six months ended
(in thousands)
February 28, 2023
February 28, 2022
February 28, 2023
February 28, 2022
Operating revenues:
Irrigation:
North America
$
90,354
$
100,730
$
174,288
$
179,705
International
57,422
80,029
125,571
146,962
Irrigation segment
147,776
180,759
299,859
326,667
Infrastructure segment
18,465
19,378
42,541
39,621
Total operating revenues
$
166,241
$
200,137
$
342,400
$
366,288
Operating income:
Irrigation segment
$
32,820
$
24,734
$
61,461
$
41,946
Infrastructure segment
2,019
324
5,391
3,090
Corporate
(7,574
)
(6,720
)
(14,989
)
(13,337
)
Total operating income
$
27,265
$
18,338
$
51,863
$
31,699
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 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)
February 28, 2023
February 28, 2022
August 31, 2022
ASSETS
Current assets:
Cash and cash equivalents
$
97,675
$
68,951
$
105,048
Marketable securities
8,763
24,934
11,460
Receivables, net
167,007
134,694
138,200
Inventories, net
178,703
187,328
193,776
Other current assets, net
27,973
34,350
28,617
Total current assets
480,121
450,257
477,101
Property, plant, and equipment, net
93,838
92,291
94,472
Intangibles, net
17,329
19,311
18,208
Goodwill
67,409
67,679
67,130
Operating lease right-of-use assets
17,984
16,724
19,181
Deferred income tax assets
9,518
5,352
9,313
Other noncurrent assets, net
22,881
24,970
25,248
Total assets
$
709,080
$
676,584
$
710,653
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable
$
52,998
$
74,345
$
60,036
Current portion of long-term debt
224
220
222
Other current liabilities
79,566
86,837
100,684
Total current liabilities
132,788
161,402
160,942
Pension benefits liabilities
4,733
5,567
4,892
Long-term debt
115,253
115,428
115,341
Operating lease liabilities
18,659
17,170
19,810
Deferred income tax liabilities
702
783
1,054
Other noncurrent liabilities
14,673
19,696
15,256
Total liabilities
286,808
320,046
317,295
Shareholders' equity:
Preferred stock
—
—
—
Common stock
19,091
19,061
19,063
Capital in excess of stated value
94,834
90,711
94,006
Retained earnings
607,784
543,355
579,000
Less treasury stock - at cost
(277,238
)
(277,238
)
(277,238
)
Accumulated other comprehensive loss,
net
(22,199
)
(19,351
)
(21,473
)
Total shareholders' equity
422,272
356,538
393,358
Total liabilities and shareholders'
equity
$
709,080
$
676,584
$
710,653
LINDSAY CORPORATION AND
SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(Unaudited)
Six months ended
(in thousands)
February 28, 2023
February 28, 2022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings
$
36,269
$
22,467
Adjustments to reconcile net earnings to
net cash provided by (used in) operating activities:
Depreciation and amortization
9,695
9,912
Provision for uncollectible accounts
receivable
834
322
Deferred income taxes
(185
)
3,052
Share-based compensation expense
3,089
2,411
Unrealized foreign currency transaction
loss (gain)
878
(111
)
Other, net
354
627
Changes in assets and liabilities:
Receivables
(28,707
)
(41,286
)
Inventories
14,014
(42,412
)
Other current assets
1,635
(2,541
)
Accounts payable
(6,178
)
28,757
Other current liabilities
(25,553
)
(8,317
)
Other noncurrent assets and
liabilities
1,742
(8,732
)
Net cash provided by (used in) operating
activities
7,887
(35,851
)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and
equipment
(7,222
)
(6,926
)
Purchases of marketable securities
—
(18,468
)
Proceeds from maturities of marketable
securities
2,725
12,752
Other investing activities, net
(1,214
)
(2,974
)
Net cash used in investing activities
(5,711
)
(15,616
)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock
options
—
2,821
Common stock withheld for payroll tax
obligations
(2,471
)
(1,181
)
Proceeds from employee stock purchase
plan
238
235
Principal payments on long-term debt
(110
)
(108
)
Dividends paid
(7,485
)
(7,242
)
Net cash used in financing activities
(9,828
)
(5,475
)
Effect of exchange rate changes on cash
and cash equivalents
279
(1,214
)
Net change in cash and cash
equivalents
(7,373
)
(58,156
)
Cash and cash equivalents, beginning of
period
105,048
127,107
Cash and cash equivalents, end of
period
$
97,675
$
68,951
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230404005478/en/
For further information LINDSAY CORPORATION:
Alicia Pfeifer Senior Director, Investor Relations & Treasury
402-933-6429 Alicia.Pfeifer@lindsay.com
Alpha IR: Joe Caminiti or Alec Buchmelter 312-445-2870
LNN@alpha-ir.com
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