Lindsay Corporation Reports Fiscal 2022 Third Quarter Results

Rhea-AI Summary

Lindsay Corporation (NYSE: LNN) reported a strong performance in its third quarter of fiscal 2022, with revenues increasing by 32% to $214.3 million and earnings per share (EPS) rising to $2.28. The irrigation segment saw a notable 35% revenue increase, fueled by strong international demand, particularly in Brazil, while infrastructure revenues grew by 17%. Operating income also improved, with irrigation's operating margin at 21%. Although inflation poses challenges, Lindsay remains optimistic about future growth in both irrigation and infrastructure sectors.

Positive

• Revenues increased by 32% to $214.3 million.
• EPS rose to $2.28 from $1.60 year-over-year.
• Irrigation segment revenues increased by 35% to $188.7 million.
• International irrigation revenues surged by 75%.
• Operating income for irrigation increased by 65%.

Negative

• North America irrigation revenues rose only 10% due to lower unit sales volume.
• Operating margin for infrastructure segment declined to 14.8%.

• Third quarter consolidated revenues increase 32 percent to $214.3 million with EPS of $2.28
• Irrigation revenues increase 35 percent with an increase in operating income of 65 percent
• Infrastructure revenues increase 17 percent as road construction activity levels improve

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 third quarter of fiscal 2022, which ended on May 31, 2022.

Third Quarter Summary

Revenues for the third quarter of fiscal 2022 were $214.3 million, an increase of $52.3 million, or 32 percent, compared to revenues of $161.9 million in the prior year third quarter. Net earnings for the quarter were $25.1 million, or $2.28 per diluted share, compared with net earnings of $17.8 million, or $1.60 per diluted share, for the prior year third quarter.

“Global demand for irrigation equipment remained strong in our third quarter, particularly in our international markets. While inflationary pressures continue to persist, we were pleased to see improved price realization across the business,” said Randy Wood, President and Chief Executive Officer. “In the infrastructure business, we are starting to see an increase in road construction activity in the U.S., and we also began delivery of one of the Road Zipper System projects we have been expecting in the second half of our year.”

Third Quarter Segment Results

Irrigation segment revenues for the third quarter of fiscal 2022 were $188.7 million, an increase of $48.5 million, or 35 percent, compared to $140.2 million in the prior year third quarter. North America irrigation revenues of $96.2 million increased $8.8 million, or 10 percent, compared to the prior year third quarter. The increase in North America irrigation revenues resulted primarily from the impact of higher average selling prices, which was partially offset by lower unit sales volume. International irrigation revenues of $92.5 million increased $39.7 million, or 75 percent, compared to the prior year third quarter. The increase resulted from a combination of higher average selling prices and higher unit sales volumes in most international markets. Revenues in Brazil more than doubled compared to the prior year third quarter. Also contributing were favorable effects of foreign currency translation of approximately $2.5 million compared to the prior year third quarter.

Irrigation segment operating income for the third quarter of fiscal 2022 was $39.6 million, an increase of $15.6 million, or 65 percent, compared to the prior year third quarter. Operating margin was 21.0 percent of sales, compared to 17.1 percent of sales in the prior year third quarter. The increase in operating margin resulted from improved price realization and additional volume leverage, which more than offset the impact of inflationary cost increases.

Infrastructure segment revenues for the third quarter of fiscal 2022 were $25.6 million, an increase of $3.8 million, or 17 percent, compared to $21.7 million in the prior year third quarter. The increase resulted from higher sales of road safety products and Road Zipper System project sales, which were partially offset by lower Road Zipper System lease revenue.

Infrastructure segment operating income for the third quarter of fiscal 2022 was $3.8 million, which was comparable to the prior year third quarter. Operating margin was 14.8 percent of sales, compared to 17.3 percent of sales in the prior year third quarter. Current year results reflect a less favorable margin mix of revenues compared to the prior year third quarter and under absorbed fixed overhead costs.

The backlog of unfilled orders at May 31, 2022 was $98.3 million compared with $120.8 million at May 31, 2021. The backlog in the prior year included an irrigation project order of $36.0 million. Excluding the impact of this order, the irrigation backlog is higher compared to the prior year while the infrastructure backlog is lower.

Outlook

“Global agriculture market fundamentals remain positive; however, grower sentiment in the U.S. is being tempered somewhat by inflationary pressures they are experiencing with their input costs and operational expenses. We continue to see increased activity levels in international project markets as concerns over food security and global grain supplies have been heightened by the ongoing conflict between Russia and Ukraine,” said Mr. Wood. “In the infrastructure business, we expect to complete delivery of the Road Zipper System project that began in the third quarter, and we also expect to begin delivery of another significant project in the fourth quarter. We remain optimistic regarding growth opportunities for this business based on the quality of our sales funnel and increasing commercial activity.”

Third Quarter Conference Call

Lindsay’s fiscal 2022 third 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										Nine months ended
(in thousands, except per share amounts)			May 31, 2022					May 31, 2021					May 31, 2022					May 31, 2021
Operating revenues		$		214,259			$		161,936			$		580,547			$		413,998
Cost of operating revenues				152,579					117,880					438,486					297,360
Gross profit				61,680					44,056					142,061					116,638
Operating expenses:
Selling expense				8,148					7,570					24,070					22,680
General and administrative expense				14,647					12,043					40,548					39,770
Engineering and research expense				3,723					3,102					10,582					9,504
Total operating expenses				26,518					22,715					75,200					71,954
Operating income				35,162					21,341					66,861					44,684
Other income (expense):
Interest expense				(1,006	)				(1,178	)				(3,345	)				(3,584	)
Interest income				118					227					456					798
Other income, net				1,282					764					264					699
Total other income (expense)				394					(187	)				(2,625	)				(2,087	)
Earnings before income taxes				35,556					21,154					64,236					42,597
Income tax expense				10,483					3,357					16,696					5,829
Net earnings		$		25,073			$		17,797			$		47,540			$		36,768
Earnings per share:
Basic		$		2.28			$		1.63			$		4.34			$		3.38
Diluted		$		2.28			$		1.61			$		4.31			$		3.35
Shares used in computing earnings per share:
Basic				10,978					10,907					10,960					10,879
Diluted				11,021					11,033					11,020					10,967
Cash dividends declared per share		$		0.33			$		0.33			$		0.99			$		0.97

LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)
		Three months ended											Nine months ended
(in thousands)			May 31, 2022					May 31, 2021					May 31, 2022					May 31, 2021
Operating revenues:
Irrigation:
North America		$		96,153			$		87,364			$		275,601			$		220,332
International				92,540					52,811					239,759					125,772
Irrigation segment				188,693					140,175					515,360					346,104
Infrastructure segment				25,566					21,761					65,187					67,894
Total operating revenues		$		214,259			$		161,936			$		580,547			$		413,998
Operating income:
Irrigation segment		$		39,567			$		23,925			$		81,513			$		52,603
Infrastructure segment				3,779					3,767					6,869					14,364
Corporate				(8,184	)				(6,351	)				(21,521	)				(22,283	)
Total operating income		$		35,162			$		21,341			$		66,861			$		44,684

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)		May 31, 2022					May 31, 2021					August 31, 2021
ASSETS
Current assets:
Cash and cash equivalents		$		81,757			$		120,801			$		127,107
Marketable securities				13,930					19,663					19,604
Receivables, net				155,518					107,713					93,609
Inventories, net				195,566					136,601					145,244
Other current assets, net				28,663					32,947					30,539
Total current assets				475,434					417,725					416,103
Property, plant, and equipment, net				94,441					92,517					91,997
Intangibles, net				18,769					21,893					20,367
Goodwill				67,476					68,134					67,968
Operating lease right-of-use assets				20,263					19,360					18,281
Deferred income tax assets				7,857					10,247					8,113
Other noncurrent assets, net				27,676					12,341					14,356
Total assets		$		711,916			$		642,217			$		637,185
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable		$		72,350			$		49,351			$		45,209
Current portion of long-term debt				221					216					217
Other current liabilities				101,243					94,589					92,814
Total current liabilities				173,814					144,156					138,240
Pension benefits liabilities				5,474					6,086					5,754
Long-term debt				115,384					115,557					115,514
Operating lease liabilities				20,688					19,369					18,301
Deferred income tax liabilities				730					881					832
Other noncurrent liabilities				15,056					19,995					20,099
Total liabilities				331,146					306,044					298,740
Shareholders' equity:
Preferred stock				—					—					—
Common stock				19,063					18,991					18,991
Capital in excess of stated value				92,516					85,257					86,495
Retained earnings				564,805					525,926					528,130
Less treasury stock - at cost				(277,238	)				(277,238	)				(277,238	)
Accumulated other comprehensive loss, net				(18,376	)				(16,763	)				(17,933	)
Total shareholders' equity				380,770					336,173					338,445
Total liabilities and shareholders' equity		$		711,916			$		642,217			$		637,185

LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
		Nine months ended
(in thousands)			May 31, 2022					May 31, 2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings		$		47,540			$		36,768
Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:
Depreciation and amortization				14,930					14,688
Provision for uncollectible accounts receivable				734					304
Deferred income taxes				514					205
Share-based compensation expense				4,061					5,021
Unrealized foreign currency transaction gain				(754	)				(1,934	)
Other, net				645					(2,123	)
Changes in assets and liabilities:
Receivables				(63,365	)				(22,934	)
Inventories				(49,209	)				(28,612	)
Other current assets				1,669					(14,025	)
Accounts payable				26,319					20,828
Other current liabilities				822					20,149
Other noncurrent assets and liabilities				(8,840	)				2,325
Net cash (used in) provided by operating activities				(24,934	)				30,660
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment				(12,222	)				(22,532	)
Purchases of marketable securities				(18,468	)				(13,067	)
Proceeds from maturities of marketable securities				23,592					12,592
Other investing activities, net				(2,952	)				(1,960	)
Net cash used in investing activities				(10,050	)				(24,967	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options				2,894					3,892
Common stock withheld for payroll tax obligations				(1,181	)				(1,269	)
Proceeds from employee stock purchase plan				319					—
Principal payments on long-term debt				(163	)				(141	)
Dividends paid				(10,865	)				(10,566	)
Net cash used in financing activities				(8,996	)				(8,084	)
Effect of exchange rate changes on cash and cash equivalents				(1,370	)				1,789
Net change in cash and cash equivalents				(45,350	)				(602	)
Cash and cash equivalents, beginning of period				127,107					121,403
Cash and cash equivalents, end of period		$		81,757			$		120,801

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220630005269/en/

LINDSAY CORPORATION:

Brian Ketcham

Senior Vice President & Chief Financial Officer

402-827-6579

THREE PART ADVISORS:

Jeff Elliott 972-423-7070

Gary Guyton 214-442-0016

Source: Lindsay Corporation

FAQ

What were Lindsay Corporation's revenues for the third quarter of fiscal 2022?

Lindsay Corporation reported revenues of $214.3 million for the third quarter of fiscal 2022.

What is the EPS for Lindsay Corporation in the third quarter of fiscal 2022?

The EPS for Lindsay Corporation in the third quarter of fiscal 2022 was $2.28.

How much did the irrigation segment revenues increase in the third quarter of fiscal 2022?

The irrigation segment revenues increased by 35% to $188.7 million.

What challenges are impacting Lindsay Corporation's outlook?

Inflationary pressures are tempering grower sentiment in the U.S. market.

What is the operating margin for Lindsay Corporation's infrastructure segment?

The operating margin for the infrastructure segment was 14.8% in the third quarter.