Infrastructure results support consolidated
margin performance, partially offsetting global irrigation market
softness
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'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
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240627357040/en/
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
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