Lindsay Corporation Reports Fiscal 2021 Second Quarter Results

Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its second quarter of fiscal 2021, which ended on February 28, 2021.

Second Quarter Summary

Revenues for the second quarter of fiscal 2021 were $143.6 million, an increase of $29.8 million, or 26 percent, compared to revenues of $113.8 million in the prior year second quarter. Net earnings for the quarter were $11.9 million, or $1.08 per diluted share, compared with net earnings of $5.5 million, or $0.51 per diluted share, for the prior year second quarter.

“Second quarter results were aided by improved agricultural market conditions as commodity prices reached their highest level in several years. We experienced strong demand for irrigation equipment throughout the quarter in North America as well as most international markets,” said Randy Wood, President and Chief Executive Officer. “Improved results in our infrastructure business resulted from higher Road Zipper System® sales and lease revenue,” Mr. Wood continued.

Second Quarter Segment Results

Irrigation segment revenues for the second quarter of fiscal 2021 increased $25.1 million, or 27 percent, to $118.6 million compared to $93.5 million in the prior year second quarter. North America irrigation revenues increased $13.1 million, or 19 percent, to $80.2 million compared to the prior year second quarter. The increase resulted primarily from higher irrigation equipment unit sales volume and higher average selling prices. The increase was partially offset by revenue from engineering project services in the prior year that did not repeat. International irrigation revenues of $38.4 million increased $12.0 million, or 45 percent, compared to the prior year second quarter. The increase resulted from higher unit sales volumes in several international markets.

Irrigation segment operating income was $18.0 million, an increase of $7.9 million, or 79 percent, compared to the prior year second quarter. Operating margin was 15.2 percent of sales, compared to 10.8 percent of sales in the prior year second quarter. The increase resulted primarily from the impact of higher irrigation system unit volume and was partially offset by the impact of higher raw material and freight costs.

Infrastructure segment revenues for the second quarter of fiscal 2021 increased $4.7 million, or 23 percent, to $25.0 million, compared to $20.3 million in the prior year second quarter. The increase resulted primarily from higher Road Zipper System® sales and lease revenue.

Infrastructure segment operating income was $6.3 million, an increase of $0.4 million, or 8 percent, compared to the prior year second quarter. Operating margin was 25.4 percent of sales, compared to 29.0 percent of sales in the prior year second quarter. Prior year operating income included a gain of $1.2 million on the sale of a building that had been held for sale.

The backlog of unfilled orders at February 28, 2021 was $101.4 million compared with $104.4 million at February 29, 2020. Included in these backlogs are amounts of $2.7 million and $5.5 million, respectively, that are not expected to be fulfilled within the subsequent twelve months. The decrease in backlog is due to two large infrastructure orders in the prior year totaling $38 million that did not repeat, while order backlogs in North America and international irrigation are higher compared to the prior year.

Outlook

“Solid agricultural market fundamentals set the stage for improved irrigation equipment demand for the balance of the year. Significantly higher raw material and freight costs, along with supply chain constraints, continue to present challenges but our teams have been effective in working through these issues,” said Mr. Wood. “In our infrastructure business, while our sales pipeline remains robust, we expect continued coronavirus-related delays in road construction activity and projects.

Mr. Wood continued, “Our financial position remains strong, providing support for our innovation growth strategy across our businesses that address global megatrends and provide solutions that improve customer profitability and assist in their sustainability efforts.”

Second Quarter Conference Call

Lindsay’s fiscal 2021 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 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

Six months ended

(in thousands, except per share amounts)

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Operating revenues

$

143,577

$

113,788

$

252,062

$

223,181

Cost of operating revenues

102,403

80,382

179,480

155,701

Gross profit

41,174

33,406

72,582

67,480

Operating expenses:

Selling expense

7,778

8,192

15,110

14,684

General and administrative expense

14,275

13,167

27,727

24,971

Engineering and research expense

3,312

3,405

6,402

6,907

Total operating expenses

25,365

24,764

49,239

46,562

Operating income

15,809

8,642

23,343

20,918

Other (expense) income:

Interest expense

(1,205

)

(1,191

)

(2,406

)

(2,377

)

Interest income

268

389

571

1,004

Other expense, net

(311

)

(973

)

(65

)

(1,423

)

Total other (expense) income

(1,248

)

(1,775

)

(1,900

)

(2,796

)

Earnings before income taxes

14,561

6,867

21,443

18,122

Income tax expense

2,685

1,351

2,472

4,261

Net earnings

$

11,876

$

5,516

$

18,971

$

13,861

Earnings per share:

Basic

$

1.09

$

0.51

$

1.75

$

1.28

Diluted

$

1.08

$

0.51

$

1.74

$

1.28

Shares used in computing earnings per share:

Basic

10,884

10,825

10,865

10,810

Diluted

10,981

10,857

10,934

10,843

Cash dividends declared per share

$

0.32

$

0.31

$

0.64

$

0.62

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

Three months ended

Six months ended

(in thousands)

February 28,
2021

February 29,
2020

February 28,
2021

February 29,
2020

Operating revenues:

Irrigation:

North America

$

80,178

$

67,088

132,968

$

120,675

International

38,394

26,406

72,961

56,145

Irrigation segment

118,572

93,494

$

205,929

$

176,820

Infrastructure segment

25,005

20,294

46,133

46,361

Total operating revenues

$

143,577

$

113,788

$

252,062

$

223,181

Operating income (loss):

Irrigation segment

$

18,045

$

10,084

$

28,678

$

19,867

Infrastructure segment

6,341

5,888

10,597

14,630

Corporate

(8,577

)

(7,330

)

(15,932

)

(13,579

)

Total operating income

$

15,809

$

8,642

$

23,343

$

20,918

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 moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment.

Certain immaterial reclassifications have been made to the prior year operating results to conform with current year presentation, as revenues and operating income from certain product lines previously included within the Infrastructure reporting segment are now included within the Irrigation reporting segment.

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(in thousands)

February 28,
2021

February 29,
2020

August 31,
2020

ASSETS

Current assets:

Cash and cash equivalents

$

110,775

$

101,272

$

121,403

Marketable securities

19,555

18,740

19,511

Receivables, net

94,211

80,468

84,604

Inventories, net

121,566

105,454

104,792

Other current assets, net

29,509

19,083

17,625

Total current assets

375,616

325,017

347,935

Property, plant, and equipment, net

89,221

68,762

79,581

Intangibles, net

22,383

23,162

23,477

Goodwill

68,087

64,338

68,004

Operating lease right-of-use assets

20,173

27,257

27,457

Deferred income tax assets

10,347

10,162

9,935

Other noncurrent assets, net

10,821

15,632

14,137

Total assets

$

596,648

$

534,330

$

570,526

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

39,934

$

33,307

$

29,554

Current portion of long-term debt

215

211

195

Other current liabilities

74,687

54,303

72,646

Total current liabilities

114,836

87,821

102,395

Pension benefits liabilities

6,182

5,868

6,374

Long-term debt

115,599

115,765

115,682

Operating lease liabilities

20,174

25,919

25,862

Deferred income tax liabilities

900

839

889

Other noncurrent liabilities

19,933

20,791

20,806

Total liabilities

277,624

257,003

272,008

Shareholders' equity:

Preferred stock

Common stock

18,990

18,918

18,918

Capital in excess of stated value

84,206

74,645

77,686

Retained earnings

511,728

481,890

499,724

Less treasury stock - at cost

(277,238

)

(277,238

)

(277,238

)

Accumulated other comprehensive loss, net

(18,662

)

(20,888

)

(20,572

)

Total shareholders' equity

319,024

277,327

298,518

Total liabilities and shareholders' equity

$

596,648

$

534,330

$

570,526

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Six months ended

(in thousands)

February 28, 2021

February 29, 2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

18,971

$

13,861

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

Depreciation and amortization

9,878

9,418

Gain on sale of assets held-for-sale

(1,191

)

Provision for uncollectible accounts receivable

246

213

Deferred income taxes

206

1,806

Share-based compensation expense

4,047

2,575

Unrealized foreign currency transaction (gain) loss

(754

)

1,515

Other, net

1,804

(2,153

)

Changes in assets and liabilities:

Receivables

(10,769

)

(5,716

)

Inventories

(16,245

)

(14,153

)

Other current assets

(9,492

)

(4,539

)

Accounts payable

10,962

3,540

Other current liabilities

334

(2,183

)

Other noncurrent assets and liabilities

1,940

(5,178

)

Net cash provided by (used in) operating activities

11,128

(2,185

)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant, and equipment

(16,556

)

(5,335

)

Proceeds from sale of property and equipment held-for-sale

3,955

Purchases of marketable securities available-for-sale

(8,313

)

(19,978

)

Proceeds from maturities of marketable securities available-for-sale

8,043

1,250

Other investing activities, net

(860

)

1,092

Net cash used in investing activities

(17,686

)

(19,016

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

3,814

1,545

Common stock withheld for payroll tax obligations

(1,269

)

(1,111

)

Principal payments on long-term debt

(88

)

(104

)

Dividends paid

(6,967

)

(6,711

)

Net cash used in financing activities

(4,510

)

(6,381

)

Effect of exchange rate changes on cash and cash equivalents

440

1,650

Net change in cash and cash equivalents

(10,628

)

(25,932

)

Cash and cash equivalents, beginning of period

121,403

127,204

Cash and cash equivalents, end of period

$

110,775

$

101,272

Contacts:

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

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