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 2021, which ended on May 31, 2021.
Third Quarter Summary
Revenues for the third quarter of fiscal 2021 were $161.9 million, an increase of $38.8 million, or 32 percent, compared to revenues of $123.1 million in the prior year third quarter. Net earnings for the quarter were $17.8 million, or $1.61 per diluted share, compared with net earnings of $10.1 million, or $0.93 per diluted share, for the prior year third quarter.
“Healthy agricultural market fundamentals and positive grower sentiment continue to drive increased global demand for irrigation equipment,” said Randy Wood, President and Chief Executive Officer. “At the same time, raw material inflation and other supply chain issues continue to create challenges and margin headwinds. Our teams have responded well and effectively managed through these dynamic market conditions in order to support our customers.”
Third Quarter Segment Results
Irrigation segment revenues for the third quarter of fiscal 2021 increased $44.7 million, or 47 percent, to $140.2 million, compared to $95.5 million in the prior year third quarter. North America irrigation revenues increased $24.5 million, or 39 percent, to $87.4 million compared to the prior year third quarter. The increase resulted from a combination of higher irrigation equipment unit sales volume and higher average selling prices. The increase was partially offset by lower engineering services revenue. International irrigation revenues of $52.8 million increased $20.2 million, or 62 percent, compared to the prior year third quarter. The increase resulted from higher unit sales volumes in most international markets, higher prices, and favorable foreign currency translation impact of $2.3 million.
Irrigation segment operating income was $23.9 million, an increase of $8.5 million, or 55 percent, compared to the prior year third quarter. Operating margin was 17.1 percent of sales, compared to 16.1 percent of sales in the prior year third 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 other costs.
Infrastructure segment revenues for the third quarter of fiscal 2021 decreased $5.8 million, or 21 percent, to $21.8 million, compared to $27.6 million in the prior year third quarter. The decrease resulted from lower Road Zipper System® sales, which were partially offset by higher Road Zipper System lease revenue and increased sales of road safety products. Road construction activity and the timing of certain projects continues to be impacted by coronavirus-related delays.
Infrastructure segment operating income was $3.8 million, a decrease of $4.4 million, or 54 percent, compared to the prior year third quarter. Operating margin was 17.3 percent of sales, compared to 29.5 percent of sales in the prior year third quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year.
The backlog of unfilled orders at May 31, 2021 was $120.8 million compared with $78.6 million at May 31, 2020. The irrigation backlog is higher compared to the prior year while the infrastructure backlog is lower due to two large orders in the prior year that did not repeat.
Outlook
“Market conditions support continued robust demand for irrigation equipment, and we also expect raw material inflation and supply chain challenges to persist through the balance of our fiscal year,” said Mr. Wood. “We remain optimistic about the outlook for our infrastructure business, particularly as coronavirus restrictions are lifted and road construction activity returns to more normal levels.”
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.”
Third Quarter Conference Call
Lindsay’s fiscal 2021 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 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 | Nine months ended | |||||||||||||||||||
(in thousands, except per share amounts) | May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | ||||||||||||||||
Operating revenues | $ | 161,936 | $ | 123,106 | $ | 413,998 | $ | 346,287 | ||||||||||||
Cost of operating revenues | 117,880 | 83,410 | 297,360 | 239,111 | ||||||||||||||||
Gross profit | 44,056 | 39,696 | 116,638 | 107,176 | ||||||||||||||||
Operating expenses: | ||||||||||||||||||||
Selling expense | 7,570 | 7,417 | 22,680 | 22,101 | ||||||||||||||||
General and administrative expense | 12,043 | 13,055 | 39,770 | 38,026 | ||||||||||||||||
Engineering and research expense | 3,102 | 3,396 | 9,504 | 10,303 | ||||||||||||||||
Total operating expenses | 22,715 | 23,868 | 71,954 | 70,430 | ||||||||||||||||
Operating income | 21,341 | 15,828 | 44,684 | 36,746 | ||||||||||||||||
Other (expense) income: | ||||||||||||||||||||
Interest expense | (1,178 | ) | (1,197 | ) | (3,584 | ) | (3,574 | ) | ||||||||||||
Interest income | 227 | 408 | 798 | 1,412 | ||||||||||||||||
Other expense, net | 764 | (2,774 | ) | 699 | (4,197 | ) | ||||||||||||||
Total other (expense) income | (187 | ) | (3,563 | ) | (2,087 | ) | (6,359 | ) | ||||||||||||
Earnings before income taxes | 21,154 | 12,265 | 42,597 | 30,387 | ||||||||||||||||
Income tax expense | 3,357 | 2,171 | 5,829 | 6,432 | ||||||||||||||||
Net earnings | $ | 17,797 | $ | 10,094 | $ | 36,768 | $ | 23,955 | ||||||||||||
Earnings per share: | ||||||||||||||||||||
Basic | $ | 1.63 | $ | 0.93 | $ | 3.38 | $ | 2.21 | ||||||||||||
Diluted | $ | 1.61 | $ | 0.93 | $ | 3.35 | $ | 2.21 | ||||||||||||
Shares used in computing earnings per share: | ||||||||||||||||||||
Basic | 10,907 | 10,835 | 10,879 | 10,818 | ||||||||||||||||
Diluted | 11,033 | 10,877 | 10,967 | 10,854 | ||||||||||||||||
Cash dividends declared per share | $ | 0.33 | $ | 0.32 | $ | 0.97 | $ | 0.94 | ||||||||||||
LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||||||||||||||
SUMMARY OPERATING RESULTS | ||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||||||
(in thousands) | May 31, 2021 | May 31, 2020 | May 31, 2021 | May 31, 2020 | ||||||||||||||||
Operating revenues: | ||||||||||||||||||||
Irrigation: | ||||||||||||||||||||
North America | $ | 87,364 | $ | 62,895 | 220,332 | $ | 183,570 | |||||||||||||
International | 52,812 | 32,606 | 125,772 | 88,751 | ||||||||||||||||
Irrigation segment | 140,176 | 95,501 | $ | 346,104 | $ | 272,321 | ||||||||||||||
Infrastructure segment | 21,760 | 27,605 | 67,894 | 73,966 | ||||||||||||||||
Total operating revenues | $ | 161,936 | $ | 123,106 | $ | 413,998 | $ | 346,287 | ||||||||||||
Operating income (loss): | ||||||||||||||||||||
Irrigation segment | $ | 23,925 | $ | 15,417 | $ | 52,603 | $ | 35,282 | ||||||||||||
Infrastructure segment | 3,767 | 8,157 | 14,364 | 22,788 | ||||||||||||||||
Corporate | (6,351 | ) | (7,746 | ) | (22,283 | ) | (21,324 | ) | ||||||||||||
Total operating income | $ | 21,341 | $ | 15,828 | $ | 44,684 | $ | 36,746 | ||||||||||||
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) | May 31, 2021 | May 31, 2020 | August 31, 2020 | ||||||||||||
ASSETS | |||||||||||||||
Current assets: | |||||||||||||||
Cash and cash equivalents | $ | 120,801 | $ | 102,474 | $ | 121,403 | |||||||||
Marketable securities | 19,663 | 19,012 | 19,511 | ||||||||||||
Receivables, net | 107,713 | 84,931 | 84,604 | ||||||||||||
Inventories, net | 136,601 | 113,301 | 104,792 | ||||||||||||
Other current assets, net | 32,947 | 19,469 | 17,625 | ||||||||||||
Total current assets | 417,725 | 339,187 | 347,935 | ||||||||||||
Property, plant, and equipment, net | 92,517 | 72,827 | 79,581 | ||||||||||||
Intangibles, net | 21,893 | 24,053 | 23,477 | ||||||||||||
Goodwill | 68,134 | 67,635 | 68,004 | ||||||||||||
Operating lease right-of-use assets | 19,360 | 27,663 | 27,457 | ||||||||||||
Deferred income tax assets | 10,247 | 11,118 | 9,935 | ||||||||||||
Other noncurrent assets, net | 12,341 | 15,003 | 14,137 | ||||||||||||
Total assets | $ | 642,217 | $ | 557,486 | $ | 570,526 | |||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||||||||
Current liabilities: | |||||||||||||||
Accounts payable | $ | 49,351 | $ | 35,310 | $ | 29,554 | |||||||||
Current portion of long-term debt | 216 | 195 | 195 | ||||||||||||
Other current liabilities | 94,589 | 71,712 | 72,646 | ||||||||||||
Total current liabilities | 144,156 | 107,217 | 102,395 | ||||||||||||
Pension benefits liabilities | 6,086 | 5,787 | 6,374 | ||||||||||||
Long-term debt | 115,557 | 115,723 | 115,682 | ||||||||||||
Operating lease liabilities | 19,369 | 26,333 | 25,862 | ||||||||||||
Deferred income tax liabilities | 881 | 835 | 889 | ||||||||||||
Other noncurrent liabilities | 19,995 | 18,633 | 20,806 | ||||||||||||
Total liabilities | 306,044 | 274,528 | 272,008 | ||||||||||||
Shareholders' equity: | |||||||||||||||
Preferred stock | — | — | — | ||||||||||||
Common stock | 18,991 | 18,918 | 18,918 | ||||||||||||
Capital in excess of stated value | 85,257 | 76,188 | 77,686 | ||||||||||||
Retained earnings | 525,926 | 488,518 | 499,724 | ||||||||||||
Less treasury stock - at cost | (277,238 | ) | (277,238 | ) | (277,238 | ) | |||||||||
Accumulated other comprehensive loss, net | (16,763 | ) | (23,428 | ) | (20,572 | ) | |||||||||
Total shareholders' equity | 336,173 | 282,958 | 298,518 | ||||||||||||
Total liabilities and shareholders' equity | $ | 642,217 | $ | 557,486 | $ | 570,526 | |||||||||
LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||
(Unaudited) | ||||||||||
Nine months ended | ||||||||||
(in thousands) | May 31, 2021 | May 31, 2020 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||
Net earnings | $ | 36,768 | $ | 23,955 | ||||||
Adjustments to reconcile net earnings to net cash provided by operating activities: | ||||||||||
Depreciation and amortization | 14,688 | 14,146 | ||||||||
Gain on sale of assets held-for-sale | — | (1,191 | ) | |||||||
Provision for uncollectible accounts receivable | 304 | 466 | ||||||||
Deferred income taxes | 205 | 27 | ||||||||
Share-based compensation expense | 5,021 | 4,118 | ||||||||
Unrealized foreign currency transaction (gain) loss | (1,934 | ) | 3,632 | |||||||
Other, net | (2,123 | ) | 1,575 | |||||||
Changes in assets and liabilities: | ||||||||||
Receivables | (22,934 | ) | (11,379 | ) | ||||||
Inventories | (28,612 | ) | (23,765 | ) | ||||||
Other current assets | (14,025 | ) | (6,681 | ) | ||||||
Accounts payable | 20,828 | 5,385 | ||||||||
Other current liabilities | 20,149 | 14,485 | ||||||||
Other noncurrent assets and liabilities | 2,325 | (8,810 | ) | |||||||
Net cash provided by operating activities | 30,660 | 15,963 | ||||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||||
Purchases of property, plant, and equipment | (22,532 | ) | (12,268 | ) | ||||||
Proceeds from sale of property and equipment held-for-sale | — | 3,955 | ||||||||
Purchases of marketable securities available-for-sale | (13,067 | ) | (23,389 | ) | ||||||
Proceeds from maturities of marketable securities available-for-sale | 12,592 | 4,320 | ||||||||
Acquisition of business, net of cash acquired | — | (3,034 | ) | |||||||
Other investing activities, net | (1,960 | ) | 1,503 | |||||||
Net cash used in investing activities | (24,967 | ) | (28,913 | ) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||||
Proceeds from exercise of stock options | 3,892 | 1,545 | ||||||||
Common stock withheld for payroll tax obligations | (1,269 | ) | (1,111 | ) | ||||||
Principal payments on long-term debt | (141 | ) | (174 | ) | ||||||
Dividends paid | (10,566 | ) | (10,177 | ) | ||||||
Net cash used in financing activities | (8,084 | ) | (9,917 | ) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 1,789 | (1,863 | ) | |||||||
Net change in cash and cash equivalents | (602 | ) | (24,730 | ) | ||||||
Cash and cash equivalents, beginning of period | 121,403 | 127,204 | ||||||||
Cash and cash equivalents, end of period | $ | 120,801 | $ | 102,474 | ||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210701005201/en/
Contacts:
Brian Ketcham
Senior Vice President & Chief Financial Officer
402-827-6579
