Lindsay Corporation Reports Fiscal 2022 Third Quarter Results

·11 min read
  • Third quarter consolidated revenues increase 32 percent to $214.3 million with EPS of $2.28

  • Irrigation revenues increase 35 percent with an increase in operating income of 65 percent

  • Infrastructure revenues increase 17 percent as road construction activity levels improve

OMAHA, Neb., June 30, 2022--(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 of fiscal 2022, which ended on May 31, 2022.

Third Quarter Summary

Revenues for the third quarter of fiscal 2022 were $214.3 million, an increase of $52.3 million, or 32 percent, compared to revenues of $161.9 million in the prior year third quarter. Net earnings for the quarter were $25.1 million, or $2.28 per diluted share, compared with net earnings of $17.8 million, or $1.60 per diluted share, for the prior year third quarter.

"Global demand for irrigation equipment remained strong in our third quarter, particularly in our international markets. While inflationary pressures continue to persist, we were pleased to see improved price realization across the business," said Randy Wood, President and Chief Executive Officer. "In the infrastructure business, we are starting to see an increase in road construction activity in the U.S., and we also began delivery of one of the Road Zipper System projects we have been expecting in the second half of our year."

Third Quarter Segment Results

Irrigation segment revenues for the third quarter of fiscal 2022 were $188.7 million, an increase of $48.5 million, or 35 percent, compared to $140.2 million in the prior year third quarter. North America irrigation revenues of $96.2 million increased $8.8 million, or 10 percent, compared to the prior year third quarter. The increase in North America irrigation revenues resulted primarily from the impact of higher average selling prices, which was partially offset by lower unit sales volume. International irrigation revenues of $92.5 million increased $39.7 million, or 75 percent, compared to the prior year third quarter. The increase resulted from a combination of higher average selling prices and higher unit sales volumes in most international markets. Revenues in Brazil more than doubled compared to the prior year third quarter. Also contributing were favorable effects of foreign currency translation of approximately $2.5 million compared to the prior year third quarter.

Irrigation segment operating income for the third quarter of fiscal 2022 was $39.6 million, an increase of $15.6 million, or 65 percent, compared to the prior year third quarter. Operating margin was 21.0 percent of sales, compared to 17.1 percent of sales in the prior year third quarter. The increase in operating margin resulted from improved price realization and additional volume leverage, which more than offset the impact of inflationary cost increases.

Infrastructure segment revenues for the third quarter of fiscal 2022 were $25.6 million, an increase of $3.8 million, or 17 percent, compared to $21.7 million in the prior year third quarter. The increase resulted from higher sales of road safety products and Road Zipper System project sales, which were partially offset by lower Road Zipper System lease revenue.

Infrastructure segment operating income for the third quarter of fiscal 2022 was $3.8 million, which was comparable to the prior year third quarter. Operating margin was 14.8 percent of sales, compared to 17.3 percent of sales in the prior year third quarter. Current year results reflect a less favorable margin mix of revenues compared to the prior year third quarter and under absorbed fixed overhead costs.

The backlog of unfilled orders at May 31, 2022 was $98.3 million compared with $120.8 million at May 31, 2021. The backlog in the prior year included an irrigation project order of $36.0 million. Excluding the impact of this order, the irrigation backlog is higher compared to the prior year while the infrastructure backlog is lower.

Outlook

"Global agriculture market fundamentals remain positive; however, grower sentiment in the U.S. is being tempered somewhat by inflationary pressures they are experiencing with their input costs and operational expenses. We continue to see increased activity levels in international project markets as concerns over food security and global grain supplies have been heightened by the ongoing conflict between Russia and Ukraine," said Mr. Wood. "In the infrastructure business, we expect to complete delivery of the Road Zipper System project that began in the third quarter, and we also expect to begin delivery of another significant project in the fourth quarter. We remain optimistic regarding growth opportunities for this business based on the quality of our sales funnel and increasing commercial activity."

Third Quarter Conference Call

Lindsay’s fiscal 2022 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.

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

Nine months ended

(in thousands, except per share amounts)

May 31,
2022

May 31,
2021

May 31,
2022

May 31,
2021

Operating revenues

$

214,259

$

161,936

$

580,547

$

413,998

Cost of operating revenues

152,579

117,880

438,486

297,360

Gross profit

61,680

44,056

142,061

116,638

Operating expenses:

Selling expense

8,148

7,570

24,070

22,680

General and administrative expense

14,647

12,043

40,548

39,770

Engineering and research expense

3,723

3,102

10,582

9,504

Total operating expenses

26,518

22,715

75,200

71,954

Operating income

35,162

21,341

66,861

44,684

Other income (expense):

Interest expense

(1,006

)

(1,178

)

(3,345

)

(3,584

)

Interest income

118

227

456

798

Other income, net

1,282

764

264

699

Total other income (expense)

394

(187

)

(2,625

)

(2,087

)

Earnings before income taxes

35,556

21,154

64,236

42,597

Income tax expense

10,483

3,357

16,696

5,829

Net earnings

$

25,073

$

17,797

$

47,540

$

36,768

Earnings per share:

Basic

$

2.28

$

1.63

$

4.34

$

3.38

Diluted

$

2.28

$

1.61

$

4.31

$

3.35

Shares used in computing earnings per share:

Basic

10,978

10,907

10,960

10,879

Diluted

11,021

11,033

11,020

10,967

Cash dividends declared per share

$

0.33

$

0.33

$

0.99

$

0.97

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

Three months ended

Nine months ended

(in thousands)

May 31,
2022

May 31,
2021

May 31,
2022

May 31,
2021

Operating revenues:

Irrigation:

North America

$

96,153

$

87,364

$

275,601

$

220,332

International

92,540

52,811

239,759

125,772

Irrigation segment

188,693

140,175

515,360

346,104

Infrastructure segment

25,566

21,761

65,187

67,894

Total operating revenues

$

214,259

$

161,936

$

580,547

$

413,998

Operating income:

Irrigation segment

$

39,567

$

23,925

$

81,513

$

52,603

Infrastructure segment

3,779

3,767

6,869

14,364

Corporate

(8,184

)

(6,351

)

(21,521

)

(22,283

)

Total operating income

$

35,162

$

21,341

$

66,861

$

44,684

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,
2022

May 31,
2021

August 31,
2021

ASSETS

Current assets:

Cash and cash equivalents

$

81,757

$

120,801

$

127,107

Marketable securities

13,930

19,663

19,604

Receivables, net

155,518

107,713

93,609

Inventories, net

195,566

136,601

145,244

Other current assets, net

28,663

32,947

30,539

Total current assets

475,434

417,725

416,103

Property, plant, and equipment, net

94,441

92,517

91,997

Intangibles, net

18,769

21,893

20,367

Goodwill

67,476

68,134

67,968

Operating lease right-of-use assets

20,263

19,360

18,281

Deferred income tax assets

7,857

10,247

8,113

Other noncurrent assets, net

27,676

12,341

14,356

Total assets

$

711,916

$

642,217

$

637,185

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

72,350

$

49,351

$

45,209

Current portion of long-term debt

221

216

217

Other current liabilities

101,243

94,589

92,814

Total current liabilities

173,814

144,156

138,240

Pension benefits liabilities

5,474

6,086

5,754

Long-term debt

115,384

115,557

115,514

Operating lease liabilities

20,688

19,369

18,301

Deferred income tax liabilities

730

881

832

Other noncurrent liabilities

15,056

19,995

20,099

Total liabilities

331,146

306,044

298,740

Shareholders' equity:

Preferred stock

Common stock

19,063

18,991

18,991

Capital in excess of stated value

92,516

85,257

86,495

Retained earnings

564,805

525,926

528,130

Less treasury stock - at cost

(277,238

)

(277,238

)

(277,238

)

Accumulated other comprehensive loss, net

(18,376

)

(16,763

)

(17,933

)

Total shareholders' equity

380,770

336,173

338,445

Total liabilities and shareholders' equity

$

711,916

$

642,217

$

637,185

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Nine months ended

(in thousands)

May 31, 2022

May 31, 2021

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

47,540

$

36,768

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

Depreciation and amortization

14,930

14,688

Provision for uncollectible accounts receivable

734

304

Deferred income taxes

514

205

Share-based compensation expense

4,061

5,021

Unrealized foreign currency transaction gain

(754

)

(1,934

)

Other, net

645

(2,123

)

Changes in assets and liabilities:

Receivables

(63,365

)

(22,934

)

Inventories

(49,209

)

(28,612

)

Other current assets

1,669

(14,025

)

Accounts payable

26,319

20,828

Other current liabilities

822

20,149

Other noncurrent assets and liabilities

(8,840

)

2,325

Net cash (used in) provided by operating activities

(24,934

)

30,660

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant, and equipment

(12,222

)

(22,532

)

Purchases of marketable securities

(18,468

)

(13,067

)

Proceeds from maturities of marketable securities

23,592

12,592

Other investing activities, net

(2,952

)

(1,960

)

Net cash used in investing activities

(10,050

)

(24,967

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

2,894

3,892

Common stock withheld for payroll tax obligations

(1,181

)

(1,269

)

Proceeds from employee stock purchase plan

319

Principal payments on long-term debt

(163

)

(141

)

Dividends paid

(10,865

)

(10,566

)

Net cash used in financing activities

(8,996

)

(8,084

)

Effect of exchange rate changes on cash and cash equivalents

(1,370

)

1,789

Net change in cash and cash equivalents

(45,350

)

(602

)

Cash and cash equivalents, beginning of period

127,107

121,403

Cash and cash equivalents, end of period

$

81,757

$

120,801

View source version on businesswire.com: https://www.businesswire.com/news/home/20220630005269/en/

Contacts

LINDSAY CORPORATION:
Brian Ketcham
Senior Vice President & Chief Financial Officer
402-827-6579

THREE PART ADVISORS:
Jeff Elliott 972-423-7070
Gary Guyton 214-442-0016