Lindsay Corporation Reports Fiscal 2022 First Quarter Results

Rhea-AI Summary

Lindsay Corporation reported strong first quarter results for fiscal 2022, with revenues increasing by 53% to $166.2 million compared to $108.5 million in the prior year. Net earnings rose to $7.9 million or $0.72 per diluted share, despite a $4.5 million LIFO accounting impact. The irrigation segment saw significant growth, particularly in North America (up 50%) and international markets (up 94%). However, infrastructure revenues declined slightly by 4%. The company's backlog of unfilled orders increased to $154.8 million, reflecting ongoing strong demand.

Positive

• Irrigation segment revenues increased by 67% to $145.9 million.
• North America irrigation revenues surged by 50% to $79.0 million.
• International irrigation revenues rose by 94% to $66.9 million.
• Net earnings increased to $7.9 million, or $0.72 per diluted share.

Negative

• Infrastructure segment revenues decreased by 4% to $20.2 million.
• Infrastructure operating income fell by 35% to $2.8 million.
• Operating margin for the irrigation segment decreased to 11.8%.

• Solid demand for irrigation equipment continued in the first quarter across all geographies
• Irrigation revenues increase 50 percent in North America and 94 percent in international markets
• Infrastructure revenues decline slightly on lower Road Zipper System^® project sales
• First quarter net earnings reduced by after-tax LIFO impact of $4.5 million, or $0.41 per diluted share

OMAHA, Neb.--(BUSINESS WIRE)-- Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its first quarter of fiscal 2022, which ended on November 30, 2021.

First Quarter Summary

Revenues for the first quarter of fiscal 2022 were $166.2 million, an increase of $57.7 million, or 53 percent, compared to revenues of $108.5 million in the prior year first quarter. Net earnings for the quarter were $7.9 million, or $0.72 per diluted share, compared with net earnings of $7.1 million, or $0.65 per diluted share, for the prior year first quarter. Net earnings for the quarter were reduced by an after-tax LIFO impact of approximately $4.5 million, or $0.41 per diluted share.

“Positive market fundamentals continue to support solid demand for irrigation equipment across all geographies,” said Randy Wood, President and Chief Executive Officer. “Raw material cost inflation and supply chain issues continue to create challenges and limit margin expansion. Our teams are managing well in this dynamic environment in order to support our customers.”

First Quarter Segment Results

Irrigation segment revenues for the first quarter of fiscal 2022 were $145.9 million, an increase of $58.6 million, or 67 percent, compared to $87.4 million in the prior year first quarter. North America irrigation revenues of $79.0 million increased $26.2 million, or 50 percent, compared to the prior year first quarter. The increase in North America irrigation revenues resulted from a combination of higher irrigation equipment unit sales volume and higher average selling prices. International irrigation revenues of $66.9 million increased $32.4 million, or 94 percent, compared to the prior year first quarter. The increase in international irrigation revenues resulted primarily from higher unit sales volumes, along with higher selling prices and a favorable foreign currency translation impact of $1.1 million. The largest sales volume increases were in the Brazil, Middle East, and Europe markets.

Irrigation segment operating income for the first quarter of fiscal 2022 was $17.2 million, an increase of $6.6 million, or 62 percent, compared to the prior year first quarter. Operating margin was 11.8 percent of sales, compared to 12.2 percent of sales in the prior year first quarter. The impact of higher irrigation system unit volume was partially offset by the impact of higher costs of raw materials and other inputs. First quarter operating results were also reduced by approximately $5.0 million resulting from the impact of the LIFO method of accounting for inventory, under which higher raw material costs are recognized in cost of goods sold rather than in ending inventory values.

Infrastructure segment revenues for the first quarter of fiscal 2022 were $20.2 million, a decrease of $0.9 million, or 4 percent, compared to $21.1 million in the prior year first 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 compared to the prior year.

Infrastructure segment operating income for the first quarter of fiscal 2022 was $2.8 million, a decrease of $1.5 million, or 35 percent, compared to the prior year first quarter. Operating margin was 13.7 percent of sales, compared to 20.1 percent of sales in the prior year first quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year first quarter and were also reduced by approximately $1.0 million resulting from the impact of the LIFO method of accounting for inventory.

The backlog of unfilled orders at November 30, 2021 was $154.8 million compared with $89.2 million at November 30, 2020. A higher backlog of orders in irrigation was partially offset by a lower backlog in infrastructure.

Outlook

“Market conditions support continued solid demand for irrigation equipment, and we also expect raw material cost inflation and supply chain challenges to persist in the near term. We are focused on protecting and improving margins in this environment,” said Mr. Wood. “Regarding our infrastructure business, we continue to expect an increase in project activity in the second half of the fiscal year.”

Mr. Wood concluded, “We are sharply focused on our innovation growth strategy that addresses the needs of a growing population and provides solutions that improve efficiency and promote sustainability.”

First Quarter Conference Call

Lindsay’s fiscal 2022 first 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, FieldNET^® remote irrigation management and scheduling technology, 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
(in thousands, except per share amounts)			November 30, 2021					November 30, 2020
Operating revenues		$		166,152			$		108,485
Cost of operating revenues				128,714					77,077
Gross profit				37,438					31,408
Operating expenses:
Selling expense				7,990					7,331
General and administrative expense				12,880					13,452
Engineering and research expense				3,207					3,090
Total operating expenses				24,077					23,873
Operating income				13,361					7,535
Other (expense) income:
Interest expense				(1,163	)				(1,201	)
Interest income				177					303
Other expense, net				(2,900	)				246
Total other (expense) income				(3,886	)				(652	)
Earnings before income taxes				9,475					6,883
Income tax expense (benefit)				1,574					(212	)
Net earnings		$		7,901			$		7,095
Earnings per share:
Basic		$		0.72			$		0.65
Diluted		$		0.72			$		0.65
Shares used in computing earnings per share:
Basic				10,927					10,845
Diluted				11,026					10,888
Cash dividends declared per share		$		0.33			$		0.32

LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)
		Three months ended
(in thousands)			November 30, 2021					November 30, 2020
Operating revenues:
Irrigation:
North America		$		78,976			$		52,790
International				66,933					34,566
Irrigation segment				145,909					87,356
Infrastructure segment				20,243					21,129
Total operating revenues		$		166,152			$		108,485
Operating income (loss):
Irrigation segment		$		17,212			$		10,633
Infrastructure segment				2,766					4,256
Corporate				(6,617	)				(7,354	)
Total operating income		$		13,361			$		7,535

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)		November 30, 2021					November 30, 2020					August 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$		84,719			$		126,802			$		127,107
Marketable securities				30,195					19,624					19,604
Receivables, net				111,959					74,909					93,609
Inventories, net				173,115					114,278					145,244
Other current assets, net				26,345					20,837					30,539
Total current assets				426,333					356,450					416,103
Property, plant, and equipment, net				91,639					81,295					91,997
Intangibles, net				19,827					22,817					20,367
Goodwill				67,735					68,027					67,968
Operating lease right-of-use assets				17,584					26,008					18,281
Deferred income tax assets				6,157					9,924					8,113
Other noncurrent assets, net				20,170					10,681					14,356
Total assets		$		649,445			$		575,202			$		637,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$		58,908			$		36,263			$		45,209
Current portion of long-term debt				219					214					217
Other current liabilities				88,655					65,910					92,814
Total current liabilities				147,782					102,387					138,240
Pension benefits liabilities				5,660					6,293					5,754
Long-term debt				115,471					115,641					115,514
Operating lease liabilities				17,679					24,863					18,301
Deferred income tax liabilities				798					902					832
Other noncurrent liabilities				20,112					21,215					20,099
Total liabilities				307,502					271,301					298,740
Shareholders' equity:
Preferred stock				—					—					—
Common stock				19,056					18,948					18,991
Capital in excess of stated value				89,006					78,026					86,495
Retained earnings				532,410					503,342					528,130
Less treasury stock - at cost				(277,238	)				(277,238	)				(277,238	)
Accumulated other comprehensive loss, net				(21,291	)				(19,177	)				(17,933	)
Total shareholders' equity				341,943					303,901					338,445
Total liabilities and shareholders' equity		$		649,445			$		575,202			$		637,185

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Three months ended
(in thousands)			November 30, 2021					November 30, 2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$		7,901			$		7,095
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization				4,896					5,140
Provision for uncollectible accounts receivable				91					158
Deferred income taxes				1,841					140
Share-based compensation expense				1,222					1,583
Unrealized foreign currency transaction loss (gain)				2,193					(203	)
Other, net				292					36
Changes in assets and liabilities:
Receivables				(17,816	)				8,896
Inventories				(31,674	)				(8,294	)
Other current assets				5,965					(3,068	)
Accounts payable				12,462					7,286
Other current liabilities				(3,632	)				(7,146	)
Other noncurrent assets and liabilities				(7,920	)				3,750
Net cash (used in) provided by operating activities				(24,179	)				15,373
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment				(3,061	)				(5,614	)
Purchases of marketable securities available-for-sale				(14,354	)				(3,844	)
Proceeds from maturities of marketable securities available-for-sale				3,599					3,616
Other investing activities, net				(342	)				—
Net cash used in investing activities				(14,158	)				(5,842	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options				2,442					56
Common stock withheld for payroll tax obligations				(1,181	)				(1,269	)
Proceeds from employee stock purchase plan				93					—
Principal payments on long-term debt				(54	)				(35	)
Dividends paid				(3,621	)				(3,477	)
Net cash used in financing activities				(2,321	)				(4,725	)
Effect of exchange rate changes on cash and cash equivalents				(1,730	)				593
Net change in cash and cash equivalents				(42,388	)				5,399
Cash and cash equivalents, beginning of period				127,107					121,403
Cash and cash equivalents, end of period		$		84,719			$		126,802

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220105006035/en/

LINDSAY CORPORATION:

Brian Ketcham

Senior Vice President & Chief Financial Officer

402-827-6579



THREE PART ADVISORS:

Hala Elsherbini

214-442-0016

Source: Lindsay Corporation

FAQ

What were Lindsay Corporation's earnings for the first quarter of fiscal 2022?

Lindsay Corporation reported net earnings of $7.9 million, or $0.72 per diluted share.

How did irrigation revenues perform in Q1 fiscal 2022 for LNN?

Irrigation revenues for Q1 fiscal 2022 increased by 67% to $145.9 million.

What was the impact of LIFO accounting on Lindsay Corporation's earnings?

The after-tax LIFO impact reduced net earnings by approximately $4.5 million, or $0.41 per diluted share.

What is Lindsay Corporation's outlook for the fiscal year?

The company expects continued solid demand for irrigation equipment, but anticipates ongoing raw material cost inflation and supply chain challenges.