Dec 21, 2017   SOURCE: BusinessWire

Lindsay Corporation Reports Fiscal 2018 First Quarter Results

Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its first quarter ended November 30, 2017.

First Quarter Results

First quarter fiscal 2018 revenues were $124.5 million, an increase of 13% compared to revenues of $110.4 million in the prior year’s first quarter. Net earnings for the quarter were $3.2 million or $0.30 per diluted share compared with $0.9 million or $0.08 per diluted share in the prior year.

Irrigation segment revenues increased 15 percent to $103.4 million from $89.9 million in the prior year’s first quarter. North America irrigation revenues increased 28 percent to $67.8 million, driven by an increase in irrigation system sales volume that reflected a more traditional fall selling season compared to the prior year. International irrigation revenues for the first quarter were $35.6 million, a decrease of four percent compared to the first quarter of the prior year. The decrease resulted from a lower level of project sales while certain markets had higher sales compared to the prior year. Infrastructure segment revenues increased three percent to $21.2 million for the first quarter, as increased sales volume in road safety products and higher Road Zipper System® lease revenue were partially offset by lower revenue in other product lines.

Gross margin for the first quarter was 26.0 percent of sales compared to 25.7 percent of sales in the prior year’s first quarter, as infrastructure segment margins improved due to a more favorable product mix within road safety products and an increase in higher margin lease revenue. In the irrigation segment, improved volume leverage from higher irrigation system sales was tempered by the impact of changes in product mix and changes in the regional mix of international sales.

Operating expenses for the first quarter were $26.2 million, an increase of two percent compared to $25.6 million for the first quarter of the prior year. Operating margins were 5.0 percent of sales in the first quarter compared to 2.5 percent of sales in the first quarter of the prior year, and were improved in both the irrigation and infrastructure segments compared to the prior year.

Cash and cash equivalents at the end of the first quarter were $109.5 million compared to $121.6 million at the end of the prior fiscal year and $103.1 million at the end of the prior year’s first quarter. There were no share repurchases made during the first quarter, and a total of $63.7 million remains available under the Company’s share repurchase program as of November 30, 2017.

The backlog of unshipped orders at November 30, 2017 was $80.3 million compared with $55.9 million at November 30, 2016, with higher backlogs in both the irrigation and infrastructure segments. During the first quarter an order was received for a Road Zipper System® to be deployed on the Alex Fraser Bridge, which connects Richmond and New Westminster with North Delta in Greater Vancouver, Canada. The value of the contract is approximately $14.0 million and delivery is expected to begin in the third quarter of fiscal 2018.

Outlook

Tim Hassinger, President and Chief Executive Officer, commented, “We were pleased to see our fiscal year get off to a solid start in the first quarter, particularly in North America irrigation where we saw significant improvement in order flow and irrigation system sales compared to the prior year. We were also pleased to receive the order for the Alex Fraser Bridge project, which positions us well for growth in our infrastructure segment this year.”

Hassinger continued, “Although commodity prices remain constrained as a result of strong yields this past growing season, grower sentiment toward capital investment is showing signs of improvement. As meaningful change in commodity prices is not expected in the near term, we will continue our focus of bringing value-added technology solutions to our customers and improving our operating performance in the current market environment.”

First-Quarter Conference Call

Lindsay’s fiscal 2018 first quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (877) 317-6789 in the U.S., or (412) 317-6789 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 manufactures and markets irrigation equipment primarily used in agricultural markets which increase or stabilize crop production while conserving water, energy, and labor. The Company also manufactures and markets infrastructure and road safety products under the Lindsay Transportation Solutions trade name. At October 9, 2017 Lindsay had approximately 10.7 million shares outstanding, which are traded on the New York Stock Exchange under the symbol LNN.

For more information regarding Lindsay Corporation, see the Company’s Web site at 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
(in thousands, except per share amounts)

November 30,
2017

November 30,
2016

 
Operating revenues $ 124,526 $ 110,390
Cost of operating revenues   92,129     82,016  
Gross profit   32,397     28,374  
 
Operating expenses:
Selling expense 10,225 9,982
General and administrative expense 11,918 11,355
Engineering and research expense   4,053     4,302  
Total operating expenses   26,196     25,639  
 
Operating income 6,201 2,735
 
Interest expense (1,181 ) (1,209 )
Interest income 320 165
Other expense, net   (548 )   (356 )
 
Earnings before income taxes 4,792 1,335
 
Income tax expense   1,607     462  
 
Net earnings $ 3,185   $ 873  
 
Earnings per share:
Basic $ 0.30 $ 0.08
Diluted $ 0.30 $ 0.08
 
Shares used in computing earnings per share:
Basic 10,705 10,638
Diluted 10,740 10,666
 
Cash dividends declared per share $ 0.30 $ 0.29
 
     
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
November 30, November 30, August 31,
(in thousands) 2017 2016 2017
 
ASSETS
Current assets:
Cash and cash equivalents $ 109,450 $ 103,058 $ 121,620
Receivables, net 79,774 69,774 73,850
Inventories, net 93,994 80,139 86,155
Prepaid expenses 3,555 3,295 4,384
Other current assets   9,461   18,622   6,925
Total current assets   296,234   274,888   292,934
 
Property, plant, and equipment, net 72,940 75,561 74,498
Intangibles, net 41,702 45,998 42,808
Goodwill 77,127 76,562 77,131
Deferred income tax assets 3,111 3,134 5,311
Other noncurrent assets, net   12,293   4,800   13,350
Total assets $ 503,407 $ 480,943 $ 506,032
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 41,046 $ 32,533 $ 36,717
Current portion of long-term debt 202 198 201
Other current liabilities   48,875   51,866   55,119
Total current liabilities   90,123   84,597   92,037
 
Pension benefits liabilities 6,223 6,789 6,295
Long-term debt 116,724 116,926 116,775
Deferred income tax liabilities 1,649 2,338 1,191
Other noncurrent liabilities   19,456   22,105   19,679
Total liabilities   234,175   232,755   235,977
 
Shareholders' equity:
Preferred stock - - -
Common stock 18,805 18,737 18,780
Capital in excess of stated value 63,191 57,548 63,006
Retained earnings 477,584 464,710 477,615
Less treasury stock - at cost (277,238) (277,238) (277,238)
Accumulated other comprehensive loss, net   (13,110)   (15,569)   (12,108)
Total shareholders' equity   269,232   248,188   270,055
Total liabilities and shareholders' equity $ 503,407 $ 480,943 $ 506,032
 
   
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
(in thousands) Three months ended
 

November 30,
2017

 

November 30,
2016

CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 3,185 $ 873
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 4,335 4,035
Provision for uncollectible accounts receivable 112 (255)
Deferred income taxes 2,111 1,541
Share-based compensation expense 1,001 935
Other, net 614 388
Changes in assets and liabilities:
Receivables (6,526) 10,436
Inventories (8,672) (5,741)
Prepaid expenses and other current assets (15) 3,000
Accounts payable 4,642 415
Other current liabilities (6,156) (6,576)
Other noncurrent assets and liabilities   399   (947)
Net cash (used in) provided by operating activities   (4,970)   8,104
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (1,991) (1,390)
Proceeds from settlement of net investment hedges 101 -
Payments for settlement of net investment hedges (1,176) (159)
Other investing activities, net   74   134
Net cash used in investing activities   (2,992)   (1,415)
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 132 -
Common stock withheld for payroll tax withholdings (828) (635)
Principal payments on long-term debt (50) (49)
Dividends paid   (3,216)   (3,089)
Net cash used in financing activities   (3,962)   (3,773)
 
Effect of exchange rate changes on cash and cash equivalents   (246)   (1,104)
Net change in cash and cash equivalents (12,170) 1,812
Cash and cash equivalents, beginning of period   121,620   101,246
Cash and cash equivalents, end of period $ 109,450 $ 103,058