Business Wire | Oct 22, 2020 06:45AM EDT

Lindsay Corporation Reports Fiscal 2020 Fourth Quarter and Full Year Results

Oct. 22, 2020

OMAHA, Neb.--(BUSINESS WIRE)--Oct. 22, 2020--Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its fourth quarter and fiscal year, which ended on August 31, 2020.

Fourth Quarter and Full Year Summary

Revenues for the fourth quarter of fiscal 2020 were $128.4 million, an increase of $26.5 million, or 26 percent, compared to revenues of $101.9 million in the prior year fourth quarter. Net earnings for the quarter were $14.7 million, or $1.35 per diluted share, compared with net earnings of $1.5 million, or $0.14 per diluted share, for the prior year fourth quarter. Net earnings for the prior year fourth quarter adjusted to eliminate costs associated with the Foundation for Growth initiative and a valuation adjustment for indirect tax credits were $5.8 million, or $0.54 per diluted share.1

Revenues for the year ended August 31, 2020, were $474.7 million, an increase of $30.6 million, or 7 percent, compared to revenues of $444.1 million in the prior year. Net earnings for the year were $38.6 million, or $3.56 per diluted share, compared with net earnings of $2.2 million, or $0.20 per diluted share, in the prior year. Net earnings for the prior year adjusted to eliminate costs associated with the Foundation for Growth initiative and a valuation adjustment for indirect tax credits were $15.6 million, or $1.45 per diluted share.1

"We were pleased to see fourth quarter revenue growth in both our Irrigation and Infrastructure segments, highlighted by the successful execution of our large Road Zipper(r) project with Highways England in the U.K.," said Tim Hassinger, President and Chief Executive Officer. "I am proud of the Lindsay team for achieving our 2020 operating margin goal, especially given the additional market challenges presented by the coronavirus pandemic. We achieved another key objective related to culture, measured through an organizational health assessment conducted by a major consulting firm."

Fourth Quarter Segment Results

Irrigation segment revenues for the fourth quarter of fiscal 2020 were $75.6 million, an increase of $6.1 million, or 9 percent, compared to $69.5 million in the prior year fourth quarter. North America irrigation revenues of $39.8 million decreased $1.8 million, or 4 percent, compared to the prior year. The decrease resulted primarily from lower engineering services revenue related to a project in the prior year that did not repeat. An increase in irrigation equipment unit volume and higher sales of replacement parts was offset by the impact of lower average selling prices. International irrigation revenues of $35.8 million increased $7.8 million, or 28 percent. The increase resulted primarily from higher sales volumes in Brazil, Australia and the Middle East which were partially offset by the unfavorable effects of foreign currency translation of approximately $3.4 million compared to the prior year.

Irrigation segment operating margin was 7.7 percent of sales in the fourth quarter, compared to 5.0 percent of sales (9.0 percent adjusted)1 in the prior year fourth quarter. Operating margin in the current year fourth quarter was negatively impacted by expense of approximately $1.6 million, related to an increase in the environmental remediation liability and severance costs.

Infrastructure segment revenues for the fourth quarter of fiscal 2020 were $52.8 million, an increase of $20.4 million, or 63 percent, compared to $32.4 million in the prior year. The increase resulted from higher Road Zipper System(r) sales compared to the prior year, including the large project with Highways England in the U.K.

Infrastructure segment operating margin was 38.0 percent of sales in the fourth quarter, compared to 28.8 percent of sales in the prior year fourth quarter. Operating margin improvement resulted primarily from increased sales in higher margin product lines and from improved cost and pricing performance.

The backlog of unfilled orders at August 31, 2020 was $58.7 million compared with $55.4 million at August 31, 2019. Included in these backlogs are amounts of $6.3 million and $10.0 million, respectively, that are not expected to be fulfilled within the subsequent twelve months.

Outlook

"The recent increase in agricultural commodity prices along with additional government support payments to farmers under the expanded Coronavirus Food Assistance Program have raised estimates for U.S. farm income," said Mr. Hassinger. "This supports an improved outlook for North America irrigation equipment demand for the fall selling season. We expect growth in international irrigation led by continued momentum in Brazil and other markets as well as new agricultural development being driven by heightened food security concerns as a result of the global coronavirus pandemic."

Mr. Hassinger added, "Our infrastructure business achieved a record year in fiscal 2020, in large part due to our success in implementing the "shift left" strategy to expand our addressable market for Road Zipper(r) systems. We continue to be encouraged by the execution of this strategy, which has resulted in a higher quality sales funnel."

Fourth Quarter Conference Call

Lindsay's fiscal 2020 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.

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

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(r) center pivot and lateral move agricultural irrigation systems and FieldNET(r) 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(r), Road Zipper(r) and Snoline(tm) 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 August Years Ended August 31, 31,

(in thousands,except per 2020 2019 2020 2019 share amounts)



Operating $ 128,405 $ 101,885 $ 474,692 $ 444,072 revenues

Cost ofoperating 83,038 70,398 322,149 329,464 revenues

Gross profit 45,367 31,487 152,543 114,608



Operating expenses:

Selling expense 9,343 6,886 31,444 30,820

General andadministrative 14,921 17,152 52,947 63,737 expense

Engineering andresearch 3,647 3,389 13,950 13,936 expense

Total operating 27,911 27,427 98,341 108,493 expenses



Operating 17,456 4,060 54,202 6,115 income



Other income (expense):

Interest (1,185 ) (1,215 ) (4,759 ) (4,767 )expense

Interest income 544 472 1,956 2,402

Other income 1,641 (1,052 ) (2,556 ) (1,643 )(expense), net

Total otherincome 1,000 (1,795 ) (5,359 ) (4,008 )(expense)



Earnings before 18,456 2,265 48,843 2,107 income taxes



Income taxexpense 3,782 762 10,214 (65 )(benefit)



Net earnings $ 14,674 $ 1,503 $ 38,629 $ 2,172



Earnings per share:

Basic $ 1.35 $ 0.14 $ 3.57 $ 0.20

Diluted $ 1.35 $ 0.14 $ 3.56 $ 0.20



Shares used incomputing earnings pershare:

Basic 10,835 10,786 10,823 10,781

Diluted 10,880 10,817 10,861 10,810



Cash dividendsdeclared per $ 0.32 $ 0.31 $ 1.26 $ 1.24 share

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

Three months ended

Twelve months ended

(in thousands)

August 31,

2020

August 31,

2019

August 31,

2020

August 31,

2019

Operating revenues:

Irrigation:

North America

$

39,757

$

41,509

$

218,954

$

218,627

International

35,824

27,995

124,575

132,871

Irrigation total

75,581

69,504

343,529

351,498

Infrastructure

52,824

32,381

131,163

92,574

Total operating revenues

$

128,405

$

101,885

$

474,692

$

444,072

Operating income:

Irrigation

$

5,829

$

3,463

$

40,214

$

29,804

Infrastructure

20,085

9,340

43,771

16,599

Corporate

(8,458

)

(8,743

)

(29,783

)

(40,288

)

Total operating income

$

17,456

$

4,060

$

54,202

$

6,115

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

SUMMARY OPERATING RESULTS

(Unaudited)



Three months ended Twelve months ended

August August August August(in thousands) 31, 31, 31, 31,

2020 2019 2020 2019

Operating revenues:

Irrigation:

North America $ 39,757 $ 41,509 $ 218,954 $ 218,627

International 35,824 27,995 124,575 132,871

Irrigation total 75,581 69,504 343,529 351,498

Infrastructure 52,824 32,381 131,163 92,574

Total operating $ 128,405 $ 101,885 $ 474,692 $ 444,072 revenues



Operating income:

Irrigation $ 5,829 $ 3,463 $ 40,214 $ 29,804

Infrastructure 20,085 9,340 43,771 16,599

Corporate (8,458 ) (8,743 ) (29,783 ) (40,288 )

Total operating $ 17,456 $ 4,060 $ 54,202 $ 6,115 income

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)





August 31, August 31,(in thousands) 2020 2019



ASSETS

Current assets:

Cash and cash equivalents $ 121,403 $ 127,204

Marketable securities 19,511 -

Receivables, net of allowance of $2,780 and 84,604 75,551 $2,635, respectively

Inventories, net 104,792 92,287

Assets held-for-sale - 2,744

Other current assets 17,625 15,704

Total current assets 347,935 313,490



Property, plant, and equipment, net 79,581 68,968

Intangible assets, net 23,477 24,382

Goodwill 68,004 64,387

Operating lease right-of-use assets 27,457 -

Deferred income tax assets 9,935 11,758

Other noncurrent assets 14,137 17,329

Total assets $ 570,526 $ 500,314



LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable $ 29,554 $ 29,434

Current portion of long-term debt 195 209

Other current liabilities 72,646 52,488

Total current liabilities 102,395 82,131



Pension benefits liabilities 6,374 6,029

Long-term debt 115,682 115,846

Operating lease liabilities 25,862 -

Deferred income tax liabilities 889 872

Other noncurrent liabilities 20,806 27,227

Total liabilities 272,008 232,105



Shareholders' equity:

Preferred stock - -

Common stock 18,918 18,870

Capital in excess of stated value 77,686 71,684

Retained earnings 499,724 474,740

Less treasury stock - at cost (277,238 ) (277,238 )

Accumulated other comprehensive loss, net (20,572 ) (19,847 )

Total shareholders' equity 298,518 268,209

Total liabilities and shareholders' equity $ 570,526 $ 500,314

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Years Ended August 31,

(in thousands)

2020

2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

38,629

$

2,172

Adjustments to reconcile net earnings to net cash provided

by operating activities:

Depreciation and amortization

19,396

14,018

Gain on sale of property and equipment

(1,158

)

26

Loss on sale of businesses

-

301

Provision (benefit) for uncollectible accounts receivable

589

(496

)

Deferred income taxes

1,384

(5,686

)

Share-based compensation expense

5,616

4,195

Valuation adjustment for indirect tax credits

-

2,795

Foreign currency transaction loss

1,102

709

Other, net

1,446

246

Changes in assets and liabilities:

Receivables

(9,523

)

(7,969

)

Inventories

(14,039

)

(16,187

)

Other current assets

(6,612

)

173

Accounts payable

(691

)

2,119

Other current liabilities

16,673

2,629

Other noncurrent assets and liabilities

(6,778

)

4,752

Net cash provided by operating activities

46,034

3,797

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

(21,445

)

(23,211

)

Proceeds from sale of assets held-for-sale

3,955

-

Purchases of marketable securities available-for-sale

(28,041

)

-

Proceeds from maturities of marketable securities available-for-sale

8,548

-

Proceeds from settlement of net investment hedges

1,503

2,262

Payments for settlement of net investment hedges

-

(327

)

Acquisition of business, net of cash acquired

(3,034

)

-

Other investing activities, net

-

57

Net cash used in investing activities

(38,514

)

(21,219

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

1,545

177

Common stock withheld for payroll tax obligations

(1,111

)

(1,124

)

Principal payments on long-term debt

(227

)

(205

)

Payment of debt issuance costs

-

(115

)

Dividends paid

(13,645

)

(13,375

)

Cash and cash equivalents, end of period

(13,438

)

(14,642

)

Effect of exchange rate changes on cash and cash equivalents

117

(1,519

)

Net change in cash and cash equivalents

(5,801

)

(33,583

)

Cash and cash equivalents, beginning of period

127,204

160,787

Cash and cash equivalents, end of period

$

121,403

$

127,204

LINDSAY CORPORATION AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited)

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of (1) consulting fees, severance costs and loss from business divestitures, associated with the Company's Foundation for Growth Initiative ("FFG costs"), and (2) a valuation adjustment for indirect tax credits in a foreign jurisdiction ("valuation adjustment"), (b) the impact on operating income of FFG costs and the valuation adjustment, and (c) the impact on segment operating income of FFG costs and the valuation adjustment. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company's business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company's underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company's business.

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



Years Ended August 31,

(in thousands) 2020 2019

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings $ 38,629 $ 2,172

Adjustments to reconcile net earnings to net cash provided

by operating activities:

Depreciation and amortization 19,396 14,018

Gain on sale of property and equipment (1,158 ) 26

Loss on sale of businesses - 301

Provision (benefit) for uncollectible accounts 589 (496 )receivable

Deferred income taxes 1,384 (5,686 )

Share-based compensation expense 5,616 4,195

Valuation adjustment for indirect tax credits - 2,795

Foreign currency transaction loss 1,102 709

Other, net 1,446 246

Changes in assets and liabilities:

Receivables (9,523 ) (7,969 )

Inventories (14,039 ) (16,187 )

Other current assets (6,612 ) 173

Accounts payable (691 ) 2,119

Other current liabilities 16,673 2,629

Other noncurrent assets and liabilities (6,778 ) 4,752

Net cash provided by operating activities 46,034 3,797



CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment (21,445 ) (23,211 )

Proceeds from sale of assets held-for-sale 3,955 -

Purchases of marketable securities (28,041 ) - available-for-sale

Proceeds from maturities of marketable securities 8,548 - available-for-sale

Proceeds from settlement of net investment hedges 1,503 2,262

Payments for settlement of net investment hedges - (327 )

Acquisition of business, net of cash acquired (3,034 ) -

Other investing activities, net - 57

Net cash used in investing activities (38,514 ) (21,219 )



CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options 1,545 177

Common stock withheld for payroll tax obligations (1,111 ) (1,124 )

Principal payments on long-term debt (227 ) (205 )

Payment of debt issuance costs - (115 )

Dividends paid (13,645 ) (13,375 )

Cash and cash equivalents, end of period (13,438 ) (14,642 )



Effect of exchange rate changes on cash and cash 117 (1,519 )equivalents

Net change in cash and cash equivalents (5,801 ) (33,583 )

Cash and cash equivalents, beginning of period 127,204 160,787

Cash and cash equivalents, end of period $ 121,403 $ 127,204

LINDSAY CORPORATION AND SUBSIDIARIESRECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES(Unaudited)

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of (1) consulting fees, severance costs and loss from business divestitures, associated with the Company's Foundation for Growth Initiative ("FFG costs"), and (2) a valuation adjustment for indirect tax credits in a foreign jurisdiction ("valuation adjustment"), (b) the impact on operating income of FFG costs and the valuation adjustment, and (c) the impact on segment operating income of FFG costs and the valuation adjustment. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company's business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company's underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company's operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company's business.

Three months ended Twelve months ended

(in thousands, Diluted Dilutedexcept per August 31, earnings August 31, earnings share amounts) 2019 per 2019 per share share

Net earnings -reported GAAP $ 1,503 $ 0.14 $ 2,172 $ 0.20 measure



FFG costs - 1,947 0.18 15,113 1.40 pre-tax



Valuationadjustment - 2,795 0.26 2,795 0.26 pre-tax



Total 4,742 0.44 17,908 1.66 adjustments



Tax effect of (428 ) (0.04 ) (4,454 ) (0.41 )adjustments*



Net earnings - $ 5,817 $ 0.54 $ 15,626 $ 1.45 adjusted

Average sharesoutstanding - 10,816 10,810 diluted

* The tax effect of adjustments is calculated based on the income tax rate in each applicable jurisdiction.

Three months ended August 31, 2019

Operatingincome Consolidated Irrigation Infrastructure Corporate reconciliation

Operatingincome - $ 4,060 $ 3,463 $ 9,340 $ (8,743 )reported GAAPmeasure



FFG costs 1,947 - - 1,947



Valuation 2,795 2,795 - - adjustment



Adjustedoperating $ 8,802 $ 6,258 $ 9,340 $ (6,796 )income



Operating $ 101,885 $ 69,504 $ 32,381 $ - revenues



Operatingincome as apercent of 4.0 % 5.0 % 28.8 % N/A operatingrevenues



Adjustedoperatingincome as a 8.6 % 9.0 % 28.8 % N/A percent ofoperatingrevenues



Twelve months ended August 31, 2019

Operatingincome Consolidated Irrigation Infrastructure Corporate reconciliation

Operatingincome - $ 6,115 $ 29,804 $ 16,599 $ (40,288 )reported GAAPmeasure



FFG costs 15,113 676 188 14,249



Valuation 2,795 2,795 - - adjustment



Adjustedoperating $ 24,023 $ 33,275 $ 16,787 $ (26,039 )income



Operating $ 444,072 $ 351,498 $ 92,574 $ - revenues



Operatingincome as apercent of 1.4 % 8.5 % 17.9 % N/A operatingrevenues



Adjustedoperatingincome as a 5.4 % 9.5 % 18.1 % N/A percent ofoperatingrevenues

View source version on businesswire.com: https://www.businesswire.com/news/home/20201022005211/en/

CONTACT: LINDSAY CORPORATION: Brian Ketcham Senior Vice President & Chief Financial Officer 402-827-6579

CONTACT: THREE PART ADVISORS: Hala Elsherbini 972-458-8000