Lindsay Corporation Reports Fiscal 2022 Second Quarter Results

Rhea-AI Summary

Lindsay Corporation (NYSE: LNN) reported a 39% increase in Q2 revenues to $200.1 million, with EPS of $1.32, up from $1.08 year-over-year. The irrigation segment saw a 52% revenue boost, largely driven by strong agricultural markets, while infrastructure revenue dropped 23% due to lower Road Zipper System® sales. Operating income in the irrigation segment rose 37% to $24.7 million, whereas the infrastructure segment's income plummeted 95% to $0.3 million. The backlog of unfilled orders grew to $111 million. The outlook remains cautious due to inflation and supply chain concerns.

Positive

• Q2 revenues increased 39% to $200.1 million.
• Earnings per share rose to $1.32, up from $1.08.
• Irrigation segment revenues grew 52% to $180.7 million.
• International irrigation revenues soared 108% to $80 million.
• Backlog of unfilled orders increased to $111 million.

Negative

• Infrastructure revenues fell 23% to $19.4 million.
• Infrastructure operating income decreased 95% to $0.3 million.
• Unit sales volume for irrigation was lower due to Omicron-related absences.

• Second quarter consolidated revenues increase 39 percent to $200.1 million with EPS of $1.32
• Irrigation revenues increase 52 percent on continued strength in agricultural markets and favorable pricing
• Infrastructure revenues decrease 23 percent on lower Road Zipper System^® sales

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 second quarter of fiscal 2022, which ended on February 28, 2022.

Second Quarter Summary

Revenues for the second quarter of fiscal 2022 were $200.1 million, an increase of $56.6 million, or 39 percent, compared to revenues of $143.6 million in the prior year second quarter. Net earnings for the quarter were $14.6 million, or $1.32 per diluted share, compared with net earnings of $11.9 million, or $1.08 per diluted share, for the prior year second quarter.

“Global agricultural market conditions continue to be favorable and have contributed to an increase in demand for our irrigation equipment,” said Randy Wood, President and Chief Executive Officer. “At the same time, the effects of the global pandemic continue to impact our business and create operational challenges. During the quarter we experienced a short-term disruption in labor availability in our Nebraska manufacturing facility due to an increase in employee absences caused by the Omicron variant. Our teams have continued to prioritize safety and manage well in this dynamic environment, and we were pleased to see absences decline as we completed the quarter.”

Second Quarter Segment Results

Irrigation segment revenues for the second quarter of fiscal 2022 were $180.7 million, an increase of $62.2 million, or 52 percent, compared to $118.6 million in the prior year second quarter. North America irrigation revenues of $100.7 million increased $20.6 million, or 26 percent, compared to the prior year second quarter. The increase in North America irrigation revenues resulted primarily from higher average selling prices. Unit sales volume was lower year-over-year due to the impact of Omicron-related employee absences on production and shipping capabilities. International irrigation revenues of $80.0 million increased $41.6 million, or 108 percent, compared to the prior year second quarter. The increase in international irrigation revenues resulted primarily from higher unit sales volumes, along with higher selling prices. Revenues in Brazil more than tripled compared to the prior year second quarter, and we also completed final deliveries of a large project in Egypt.

Irrigation segment operating income for the second quarter of fiscal 2022 was $24.7 million, an increase of $6.7 million, or 37 percent, compared to the prior year second quarter. Operating margin was 13.7 percent of sales, compared to 15.2 percent of sales in the prior year second quarter. The impact of higher irrigation system unit volume was partially offset by the impact of higher input costs that were not fully recovered by higher pricing. Second quarter operating results were also reduced by approximately $2.8 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), and by approximately $1.8 million of non-recurring expenses related to factory maintenance and outside consulting services.

Infrastructure segment revenues for the second quarter of fiscal 2022 were $19.4 million, a decrease of $5.6 million, or 23 percent, compared to $25.0 million in the prior year second quarter. The decrease resulted from lower Road Zipper System^® sales and lease revenue, which were partially offset by increased sales of road safety products compared to the prior year.

Infrastructure segment operating income for the second quarter of fiscal 2022 was $0.3 million, a decrease of $6.0 million, or 95 percent, compared to the prior year second quarter. Operating margin was 1.7 percent of sales, compared to 25.4 percent of sales in the prior year second quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year second quarter and under absorbed overhead costs.

The backlog of unfilled orders at February 28, 2022 was $111.0 million compared with $101.4 million at February 28, 2021. A higher backlog of orders in irrigation was partially offset by a lower backlog in infrastructure.

Outlook

“Strong agricultural commodity prices and farm income projections support a solid demand environment for irrigation equipment in North America. We expect these same dynamics, along with increased concerns around food security, to drive growth in our international markets. Inflationary pressures and supply chain challenges are also expected to persist in the near term, and we continue to focus on protecting and improving margins in this environment,” said Mr. Wood. “In our infrastructure business, we are actively managing projects through our sales funnel and expect an increase in project sales in the second half of the fiscal year.”

Mr. Wood concluded, “We continue to invest in our innovation growth strategy that addresses the needs of a growing population and provides solutions that improve efficiency and promote sustainability.”

Second Quarter Conference Call

Lindsay’s fiscal 2022 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, 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										Six months ended
(in thousands, except per share amounts)			February 28, 2022					February 28, 2021					February 28, 2022					February 28, 2021
Operating revenues		$		200,137			$		143,577			$		366,288			$		252,062
Cost of operating revenues				157,193					102,403					285,907					179,480
Gross profit				42,944					41,174					80,381					72,582
Operating expenses:
Selling expense				7,932					7,778					15,922					15,110
General and administrative expense				13,022					14,275					25,901					27,727
Engineering and research expense				3,652					3,312					6,859					6,402
Total operating expenses				24,606					25,365					48,682					49,239
Operating income				18,338					15,809					31,699					23,343
Other income (expense):
Interest expense				(1,176	)				(1,205	)				(2,339	)				(2,406	)
Interest income				160					268					338					571
Other income (expense), net				1,882					(311	)				(1,018	)				(65	)
Total other income (expense)				866					(1,248	)				(3,019	)				(1,900	)
Earnings before income taxes				19,204					14,561					28,680					21,443
Income tax expense				4,638					2,685					6,213					2,472
Net earnings		$		14,566			$		11,876			$		22,467			$		18,971
Earnings per share:
Basic		$		1.33			$		1.09			$		2.05			$		1.75
Diluted		$		1.32			$		1.08			$		2.04			$		1.74
Shares used in computing earnings per share:
Basic				10,974					10,884					10,950					10,865
Diluted				11,014					10,981					11,020					10,934
Cash dividends declared per share		$		0.33			$		0.32			$		0.66			$		0.64

LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)
		Three months ended											Six months ended
(in thousands)			February 28, 2022					February 28, 2021					February 28, 2022					February 28, 2021
Operating revenues:
Irrigation:
North America		$		100,730			$		80,178					179,705			$		132,968
International				80,029					38,394					146,962					72,961
Irrigation segment				180,759					118,572			$		326,667			$		205,929
Infrastructure segment				19,378					25,005					39,621					46,133
Total operating revenues		$		200,137			$		143,577			$		366,288			$		252,062
Operating income (loss):
Irrigation segment		$		24,734			$		18,045			$		41,946			$		28,678
Infrastructure segment				324					6,341					3,090					10,597
Corporate				(6,720	)				(8,577	)				(13,337	)				(15,932	)
Total operating income		$		18,338			$		15,809			$		31,699			$		23,343

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)		February 28, 2022					February 28, 2021					August 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$		68,951			$		110,775			$		127,107
Marketable securities				24,934					19,555					19,604
Receivables, net				134,694					94,211					93,609
Inventories, net				187,328					121,566					145,244
Other current assets, net				34,350					29,509					30,539
Total current assets				450,257					375,616					416,103
Property, plant, and equipment, net				92,291					89,221					91,997
Intangibles, net				19,311					22,383					20,367
Goodwill				67,679					68,087					67,968
Operating lease right-of-use assets				16,724					20,173					18,281
Deferred income tax assets				5,352					10,347					8,113
Other noncurrent assets, net				24,970					10,821					14,356
Total assets		$		676,584			$		596,648			$		637,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$		74,345			$		39,934			$		45,209
Current portion of long-term debt				220					215					217
Other current liabilities				86,837					74,687					92,814
Total current liabilities				161,402					114,836					138,240
Pension benefits liabilities				5,567					6,182					5,754
Long-term debt				115,428					115,599					115,514
Operating lease liabilities				17,170					20,174					18,301
Deferred income tax liabilities				783					900					832
Other noncurrent liabilities				19,696					19,933					20,099
Total liabilities				320,046					277,624					298,740
Shareholders' equity:
Preferred stock				—					—					—
Common stock				19,061					18,990					18,991
Capital in excess of stated value				90,711					84,206					86,495
Retained earnings				543,355					511,728					528,130
Less treasury stock - at cost				(277,238	)				(277,238	)				(277,238	)
Accumulated other comprehensive loss, net				(19,351	)				(18,662	)				(17,933	)
Total shareholders' equity				356,538					319,024					338,445
Total liabilities and shareholders' equity		$		676,584			$		596,648			$		637,185

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Six months ended
(in thousands)			February 28, 2022					February 28, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$		22,467			$		18,971
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization				9,912					9,878
Provision for uncollectible accounts receivable				322					246
Deferred income taxes				3,052					206
Share-based compensation expense				2,411					4,047
Unrealized foreign currency transaction gain				(111	)				(754	)
Other, net				627					1,804
Changes in assets and liabilities:
Receivables				(41,286	)				(10,769	)
Inventories				(42,412	)				(16,245	)
Other current assets				(2,541	)				(9,492	)
Accounts payable				28,757					10,962
Other current liabilities				(8,317	)				334
Other noncurrent assets and liabilities				(8,732	)				1,940
Net cash (used in) provided by operating activities				(35,851	)				11,128
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment				(6,926	)				(16,556	)
Purchases of marketable securities				(18,468	)				(8,313	)
Proceeds from maturities of marketable securities				12,752					8,043
Other investing activities, net				(2,974	)				(860	)
Net cash used in investing activities				(15,616	)				(17,686	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options				2,821					3,814
Common stock withheld for payroll tax obligations				(1,181	)				(1,269	)
Proceeds from employee stock purchase plan				235					—
Principal payments on long-term debt				(108	)				(88	)
Dividends paid				(7,242	)				(6,967	)
Net cash used in financing activities				(5,475	)				(4,510	)
Effect of exchange rate changes on cash and cash equivalents				(1,214	)				440
Net change in cash and cash equivalents				(58,156	)				(10,628	)
Cash and cash equivalents, beginning of period				127,107					121,403
Cash and cash equivalents, end of period		$		68,951			$		110,775

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220404006038/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 Q2 2022 earnings results?

Lindsay Corporation reported Q2 2022 revenues of $200.1 million, a 39% increase, and earnings per share of $1.32.

How did the irrigation segment perform in Q2 2022?

The irrigation segment saw revenues increase by 52% to $180.7 million, driven by strong agricultural demand.

What challenges did Lindsay Corporation face in Q2 2022?

Lindsay faced operational challenges due to labor disruptions from the Omicron variant, affecting production and shipping.

What is the current backlog of unfilled orders for Lindsay Corporation?

As of February 28, 2022, Lindsay's backlog of unfilled orders was $111 million.

What is Lindsay Corporation's outlook for the future?

The company expects strong demand for irrigation equipment but anticipates ongoing inflationary pressures and supply chain challenges.