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
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