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Lindsay Corporation Reports Fiscal 2019 Fourth Quarter and Full Year Results

OMAHA, Neb.--(BUSINESS WIRE)--

  • Market uncertainty continues to impact demand for irrigation equipment
  • Infrastructure fourth quarter results improved on higher Road Zipper System® revenue
  • Reported fourth quarter EPS of $0.14; adjusted fourth quarter EPS of $0.54

Lindsay Corporation (LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its fourth quarter and fiscal year ended August 31, 2019.

Fourth Quarter and Full Year Summary

Revenues for the fourth quarter of fiscal 2019 were $101.9 million, a decrease of $21.4 million, or 17 percent, compared to revenues of $123.3 million in the prior year fourth quarter. Approximately $18.7 million of the decrease in revenues was attributable to previously announced business divestitures in the irrigation segment that were part of the Company’s Foundation for Growth initiative. Net earnings for the quarter were $1.5 million, or $0.14 per diluted share, compared with net earnings of $5.0 million, or $0.46 per diluted share, for the same period in the prior year. Net earnings for the quarter adjusted to eliminate (i) costs associated with the Foundation for Growth initiative, and (ii) a valuation adjustment for indirect tax credits in a foreign jurisdiction were $5.8 million, or $0.54 per diluted share, compared to adjusted net earnings of $4.5 million, or $0.42 per diluted share, for the same period in the prior year.1

Total revenues for the year ended August 31, 2019 were $444.1 million, a decrease of $103.6 million, or 19 percent, compared to revenues of $547.7 million in the prior year. Approximately $78.1 million of the decrease in revenues was attributable to business divestitures in the irrigation segment that were part of the Company’s Foundation for Growth initiative. Net earnings for the year were $2.2 million, or $0.20 per diluted share, compared with net earnings of $20.3 million, or $1.88 per diluted share, in the prior year. Net earnings for the year adjusted to eliminate (i) costs associated with the Foundation for Growth initiative, and (ii) a valuation adjustment for indirect tax credits in a foreign jurisdiction were $15.6 million, or $1.45 per diluted share, compared to adjusted net earnings of $31.6 million, or $2.94 per diluted share, in the prior year.1

“The decrease in irrigation segment revenues for the year and quarter resulted primarily from the business divestitures that were part of our strategy to simplify the business and improve operating margin. In addition, challenging market conditions have persisted in our core irrigation equipment markets,” said Tim Hassinger, President and Chief Executive Officer. “Solid fourth quarter results in our infrastructure segment reflect the progress we are making in our strategy to grow the Road Zipper® business.”

Fourth Quarter Segment Results

Irrigation segment revenues for the fourth quarter of fiscal 2019 were $69.5 million, a decrease of $26.7 million, or 28 percent, compared to $96.2 million in the prior year fourth quarter. Excluding the impact of the divestitures, North America irrigation revenues of $41.5 million were relatively flat compared to the prior year. Higher revenue from engineering project services and the impact of higher average selling prices were offset by lower irrigation equipment unit volume. International irrigation revenues of $28.0 million decreased $7.6 million, or 21 percent, primarily due to lower activity levels in several markets.

Irrigation segment operating margin was 5.0 percent of sales (9.0 percent adjusted)1 in the fourth quarter, compared to 10.8 percent of sales (8.8 percent adjusted)1 in the prior year. Gross margin improvements resulting from improved cost and pricing performance offset the negative impact of lower sales volume.

Infrastructure segment revenues for the fourth quarter of fiscal 2019 were $32.4 million, an increase of $5.3 million, or 20 percent, compared to $27.1 million in the prior year fourth quarter. The increase resulted primarily from higher Road Zipper System® sales and lease revenue compared to the prior year.

Infrastructure segment operating margin was 28.8 percent of sales in the fourth quarter, compared to 14.0 percent of sales (16.6 percent adjusted)1 in the prior year fourth quarter. Operating margin improvement resulted from a more favorable revenue mix and lower operating expenses compared to the prior year.

The backlog of unfilled orders at August 31, 2019 was $55.4 million compared with $53.3 million at August 31, 2018. Included in these backlogs are amounts of $10.0 million and $3.3 million, respectively, that are not expected to be fulfilled within the subsequent fiscal year.

Outlook

“Following a brief commodity price rally in the spring, speculation surrounding production from the U.S. fall harvest has led to fluctuating but generally lower prices. Coupled with uncertainty regarding the outcome of trade negotiations, the near-term outlook for irrigation equipment demand in North America continues to be constrained,” said Mr. Hassinger. “We expect to see growth in international irrigation overall, led by improvement in Brazil and developing markets.”

Mr. Hassinger added, “Based on early successes we are seeing from our Road Zipper® growth strategy, we expect growth and performance improvement from our infrastructure business in fiscal 2020. In addition, we expect to achieve meaningful operating margin improvement through the execution of projects identified as part of our Foundation for Growth initiative.”

Fourth Quarter Conference Call

Lindsay’s fiscal 2019 fourth 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 (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.

1 Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of document.

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended August 31,

 

 

Years Ended August 31,

 

(in thousands, except per share amounts)

 

 

2019

 

 

 

2018

 

 

 

2019

 

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating revenues

 

$

 

101,885

 

 

$

 

123,269

 

 

$

 

444,072

 

 

$

 

547,705

 

Cost of operating revenues

 

 

 

70,398

 

 

 

 

90,998

 

 

 

 

329,464

 

 

 

 

396,243

 

Gross profit

 

 

 

31,487

 

 

 

 

32,271

 

 

 

 

114,608

 

 

 

 

151,462

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

 

6,886

 

 

 

 

9,798

 

 

 

 

30,820

 

 

 

 

40,885

 

General and administrative expense

 

 

 

17,152

 

 

 

 

11,667

 

 

 

 

63,737

 

 

 

 

55,533

 

Engineering and research expense

 

 

 

3,389

 

 

 

 

4,100

 

 

 

 

13,936

 

 

 

 

16,032

 

Total operating expenses

 

 

 

27,427

 

 

 

 

25,565

 

 

 

 

108,493

 

 

 

 

112,450

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

 

4,060

 

 

 

 

6,706

 

 

 

 

6,115

 

 

 

 

39,012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

 

(1,215

)

 

 

 

(1,185

)

 

 

 

(4,767

)

 

 

 

(4,687

)

Interest income

 

 

 

472

 

 

 

 

469

 

 

 

 

2,402

 

 

 

 

1,640

 

Other expense, net

 

 

 

(1,052

)

 

 

 

(50

)

 

 

 

(1,643

)

 

 

 

(2,112

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings before income taxes

 

 

 

2,265

 

 

 

 

5,940

 

 

 

 

2,107

 

 

 

 

33,853

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax (benefit) expense

 

 

 

762

 

 

 

 

962

 

 

 

 

(65

)

 

 

 

13,576

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

1,503

 

 

$

 

4,978

 

 

$

 

2,172

 

 

$

 

20,277

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

 

0.14

 

 

$

 

0.46

 

 

$

 

0.20

 

 

$

 

1.89

 

Diluted

 

$

 

0.14

 

 

$

 

0.46

 

 

$

 

0.20

 

 

$

 

1.88

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

 

10,786

 

 

 

 

10,757

 

 

 

 

10,781

 

 

 

 

10,741

 

Diluted

 

 

 

10,816

 

 

 

 

10,798

 

 

 

 

10,810

 

 

 

 

10,772

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

 

0.31

 

 

$

 

0.31

 

 

$

 

1.24

 

 

$

 

1.21

 

LINDSAY CORPORATION AND SUBSIDIARIES

 

SUMMARY OPERATING RESULTS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three months ended

 

 

 

Twelve months ended

 

(in thousands)

 

 

August 31,

2019

 

 

 

August 31,

2018

 

 

 

August 31,

2019

 

 

 

August 31,

2018

 

Operating revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

 

41,509

 

 

$

 

60,594

 

 

$

 

218,627

 

 

$

 

294,617

 

International

 

 

 

27,995

 

 

 

 

35,624

 

 

 

 

132,871

 

 

 

 

145,241

 

Irrigation total

 

 

 

69,504

 

 

 

 

96,219

 

 

 

 

351,498

 

 

 

 

439,858

 

Infrastructure

 

 

 

32,381

 

 

 

 

27,050

 

 

 

 

92,574

 

 

 

 

107,847

 

Total operating revenues

 

$

 

101,885

 

 

$

 

123,269

 

 

$

 

444,072

 

 

$

 

547,705

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Irrigation

 

$

 

3,463

 

 

$

 

10,431

 

 

$

 

29,804

 

 

$

 

41,933

 

Infrastructure

 

 

 

9,340

 

 

 

 

3,799

 

 

 

 

16,599

 

 

 

 

23,857

 

Corporate

 

 

 

(8,743

)

 

 

 

(7,524

)

 

 

 

(40,288

)

 

 

 

(26,778

)

Total operating income

 

$

 

4,060

 

 

$

 

6,706

 

 

$

 

6,115

 

 

$

 

39,012

 

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)

 

August 31,

2019

 

 

August 31,

2018

 

 

 

 

 

 

 

 

 

 

 

 

ASSETS

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

 

127,204

 

 

$

 

160,787

 

Receivables, net of allowance of $2,635 and $3,585, respectively

 

 

 

75,551

 

 

 

 

69,107

 

Inventories, net

 

 

 

92,287

 

 

 

 

79,233

 

Assets held-for-sale

 

 

 

2,744

 

 

 

 

10,837

 

Other current assets

 

 

 

15,704

 

 

 

 

11,087

 

Total current assets

 

 

 

313,490

 

 

 

 

331,051

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment, net

 

 

 

68,968

 

 

 

 

57,248

 

Intangible assets, net

 

 

 

24,382

 

 

 

 

27,376

 

Goodwill

 

 

 

64,387

 

 

 

 

64,671

 

Deferred income tax assets

 

 

 

11,758

 

 

 

 

6,645

 

Other noncurrent assets

 

 

 

17,329

 

 

 

 

12,824

 

Total assets

 

$

 

500,314

 

 

$

 

499,815

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

 

29,434

 

 

$

 

30,530

 

Current portion of long-term debt

 

 

 

209

 

 

 

 

205

 

Liabilities held-for-sale

 

 

 

 

 

 

2,424

 

Other current liabilities

 

 

 

52,488

 

 

 

 

46,935

 

Total current liabilities

 

 

 

82,131

 

 

 

 

80,094

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

 

6,029

 

 

 

 

5,874

 

Long-term debt

 

 

 

115,846

 

 

 

 

116,129

 

Deferred income tax liabilities

 

 

 

872

 

 

 

 

1,083

 

Other noncurrent liabilities

 

 

 

27,227

 

 

 

 

19,769

 

Total liabilities

 

 

 

232,105

 

 

 

 

222,949

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

Preferred stock

 

 

 

 

 

 

 

 

Common stock

 

 

 

18,870

 

 

 

 

18,841

 

Capital in excess of stated value

 

 

 

71,684

 

 

 

 

68,465

 

Retained earnings

 

 

 

474,740

 

 

 

 

484,886

 

Less treasury stock - at cost

 

 

 

(277,238

)

 

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

 

(19,847

)

 

 

 

(18,088

)

Total shareholders' equity

 

 

 

268,209

 

 

 

 

276,866

 

Total liabilities and shareholders' equity

 

$

 

500,314

 

 

$

 

499,815

 

null

LINDSAY CORPORATION AND SUBSIDIARIES

 

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Years Ended August 31,

 

(in thousands)

 

 

2019

 

 

 

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

 

2,172

 

 

$