Lindsay Corporation (NYSE: LNN), a leading provider of
irrigation systems and infrastructure products, today announced
results for its second quarter ended February 28, 2015.
Second Quarter Results
Second quarter fiscal 2015 revenues were $141.1 million versus
$152.8 million of revenues in the same prior year period. Net
earnings were $9.0 million or $0.75 per diluted share compared with
$13.5 million or $1.04 per diluted share in the prior year.
Total irrigation equipment revenues decreased 20 percent to
$108.3 million from $135.9 million in the prior fiscal year’s
second quarter. U.S. irrigation revenues of $68.0 million, which
includes $3.5 million of revenues from the newly acquired Elecsys
Corporation, decreased 27 percent primarily due to a decline in the
number of irrigation systems sold as a result of the reduction in
commodity prices. International irrigation revenues of $40.3
million decreased 6 percent most notably in the Middle East and
Europe. Excluding the effect of currency translation, international
irrigation sales were approximately equal to the same period in the
prior year. Infrastructure revenues increased 94 percent to $32.8
million with the completion of the Golden Gate Bridge Road Zipper
project and increases in road safety product sales.
Gross margin was 28.0 percent of sales compared to 27.9 percent
of sales in the prior year’s second quarter. Gross margin in
irrigation decreased by approximately 3 percentage points and
infrastructure gross margin increased by approximately 14
percentage points. The decrease in irrigation gross margins is
primarily a result of pricing pressure and cost deleverage from
lower sales. The increase in infrastructure gross margin was
primarily due to sales mix from increases in Road Zipper and road
safety product sales.
Operating expenses increased $3.3 million to $25.0 million
compared to the second quarter of the prior fiscal year. The
increase includes $1.0 million of Elecsys Corporation operating
expenses, $1.0 million of acquisition and integration expenses,
$0.7 million in incremental health benefit expenses and $0.3
million of commissions related to increased infrastructure project
sales. Operating expenses were 17.7 percent of sales in the second
quarter of fiscal 2015 compared with 14.2 percent of sales in the
prior year period. Operating margins were 10.3 percent in the
second quarter, versus 13.7 percent in the prior year period.
Cash and cash equivalents of $167.2 million were $1.7 million
higher compared to the prior year second quarter. During the
quarter the Company completed a $115.0 million private placement of
long term debt, expanded its revolving credit agreement with Wells
Fargo Bank from $30.0 million to $50.0 million, and completed the
acquisition of Elecsys Corporation for $67.2 million, net of cash
acquired. The long term debt is due for payment in February 2030
and bears interest at 3.82 percent. The Company also repurchased
224,307 shares for $19.4 million during the second quarter and a
total of 605,926 shares for $49.4 million during the first six
months of fiscal 2015. Since the initiation of the share repurchase
plan, the Company has purchased a total of 1.1 million shares for
$90.4 million, with $59.6 million remaining authorized as of
February 28, 2015 for additional repurchases.
Backlog of unshipped orders at February 28, 2015 was $74.3
million compared with $89.3 million at February 28, 2014 and $68.3
million at November 30, 2014. The backlog at February 28, 2014 and
November 30, 2014 included $12.7 million for the Golden Gate Bridge
project, now completed. The current period includes $7.9 million of
backlog from Elecsys Corporation.
Six Month Results
Total revenues for the six months ended February 28, 2015 were
$275.9 million versus $300.5 million in the same prior year period.
Foreign currency translation as compared to the prior year reduced
year to date revenues by $5.6 million. Net earnings were $16.6
million or $1.36 per diluted share compared with $23.7 million or
$1.83 per diluted share in the prior year. The current year
includes $1.5 million of estimated environmental expenses and $1.5
million of acquisition and integration expenses. These expenses
reduced earnings by $0.16 per diluted share on an after tax
basis.
Total irrigation equipment revenues decreased 16 percent to
$223.0 million from $265.1 million during the first six months of
the prior fiscal year. U.S. irrigation revenues of $129.1 million
decreased 25 percent, while international irrigation revenues of
$93.9 million increased 2 percent. Infrastructure revenues
increased 49 percent to $52.9 million.
Outlook
Rick Parod, president and chief executive officer, commented,
“While the longer term drivers to our markets remain positive, the
cyclical contraction for irrigation equipment has continued. The
U.S. irrigation market has been impacted by lower commodity prices
and lower farm incomes, while international irrigation markets have
remained more stable, although competitive pressure is increasing.
The infrastructure segment made a significant contribution to the
quarter with the installation of a Road Zipper System on the Golden
Gate Bridge, and we remain optimistic about additional growth
opportunities.”
Parod continued, “In January we completed the acquisition of
Elecsys Corporation and have begun the integration with our
irrigation business. In addition, in February we completed a $115
million private placement of debt to improve our capital structure
and position us for additional growth through acquisitions and
other initiatives in driving improved returns for
shareholders.”
Second-Quarter Conference Call
Lindsay’s fiscal 2015 second quarter investor conference call is
scheduled for 11:00 a.m. Eastern Time today. Interested investors
may participate in the call by dialing (888) 321-8161 in the U.S.,
or (706) 758-0065 internationally, and referring to conference ID #
8407317. 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 manufactures and markets irrigation equipment primarily
used in agricultural markets which increase or stabilize crop
production while conserving water, energy, and labor. The Company
also manufactures and markets infrastructure and road safety
products under the Lindsay Transportation Solutions trade name. At
February 28, 2015 Lindsay had approximately 11.9 million shares
outstanding, which are traded on the New York Stock Exchange under
the symbol LNN.
For more information regarding Lindsay Corporation, see the
Company’s Web site at 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 OPERATIONS
(Unaudited) Three months ended
Six months ended ($ and shares in thousands,
except per share amounts)
February 28, February 28, February 28,
February 28, 2015 2014 2015 2014
Operating revenues $ 141,089 $ 152,804 $ 275,934 $ 300,475
Cost of operating revenues 101,533 110,132
199,464 217,652 Gross profit
39,556 42,672 76,470
82,823 Operating expenses: Selling expense
10,231 9,534 19,648 19,290 General and administrative expense
11,680 9,354 24,551 21,097 Engineering and research expense
3,109 2,871 5,833 5,531
Total operating expenses 25,020 21,759
50,032 45,918 Operating
income 14,536 20,913 26,438 36,905 Other income (expense):
Interest expense (209 ) (56 ) (280 ) (95 ) Interest income 162 157
334 292 Other expense, net (351 ) (225 ) (693
) (496 ) Earnings before income taxes 14,138 20,789
25,799 36,606 Income tax expense 5,143
7,339 9,236 12,922 Net
earnings $ 8,995 $ 13,450 $ 16,563 $ 23,684
Earnings per share: Basic $ 0.75 $ 1.04 $ 1.37 $ 1.84
Diluted $ 0.75 $ 1.04 $ 1.36 $ 1.83 Shares used in computing
earnings per share: Basic 11,982 12,910 12,103 12,899 Diluted
12,008 12,942 12,141 12,947 Cash dividends declared per
share $ 0.270 $ 0.260 $ 0.540 $ 0.390
Lindsay Corporation and
Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
February 28, February 28,
August 31, ($ and shares in thousands, except par
values) 2015 2014 2014 ASSETS
Current Assets: Cash and cash equivalents $ 167,165 $ 165,509 $
171,842 Receivables, net 93,293 111,211 94,135 Inventories, net
82,263 80,994 71,696 Deferred income taxes 16,224 13,916 17,714
Other current assets 21,936 18,216
18,671 Total current assets 380,881
389,846 374,058 Property, plant
and equipment, net 75,663 65,446 72,457 Intangibles, net 53,900
34,084 31,980 Goodwill 74,808 37,282 37,021 Other noncurrent
assets, net 13,528 3,961 11,035
Total assets $ 598,780 $ 530,619 $ 526,551
LIABILITIES AND SHAREHOLDERS' EQUITY Current
Liabilities: Accounts payable $ 50,293 $ 53,954 $ 42,424 Other
current liabilities 59,030 54,204
73,943 Total current liabilities 109,323
108,158 116,367 Pension
benefits liabilities 6,460 6,202 6,600 Long-term debt 117,270 - -
Deferred income taxes 20,940 13,975 12,992 Other noncurrent
liabilities 8,846 7,590 7,945
Total liabilities 262,839 135,925
143,904 Shareholders' Equity: Preferred
stock - - - Common stock 18,675 18,633 18,636 Capital in excess of
stated value 53,618 50,794 52,866 Retained earnings 455,439 424,241
445,366 Less treasury stock (181,383 ) (97,566 ) (132,020 )
Accumulated other comprehensive loss, net (10,408 )
(1,408 ) (2,201 ) Total shareholders' equity 335,941
394,694 382,647 Total
liabilities and shareholders' equity $ 598,780 $ 530,619
$ 526,551
Lindsay Corporation and
Subsidiaries CONDENSED CONSOLIDATED STATEMENTS OF CASH
FLOWS (Unaudited) Six months
ended February 28, February 28, ($ in
thousands) 2015 2014 CASH FLOWS FROM
OPERATING ACTIVITIES: Net earnings $ 16,563 $ 23,684 Adjustments to
reconcile net earnings to net cashprovided by operating activities:
Depreciation and amortization 8,017 7,384 Asset impairment 270 -
Provision for uncollectible accounts receivable 418 618 Deferred
income taxes 28 (2,696 ) Share-based compensation expense 2,051
2,191 Other, net 3,381 250 Changes in assets and liabilities:
Receivables (4,439 ) 9,010 Inventories (3,583 ) (12,192 ) Other
current assets (2,647 ) (2,400 ) Accounts payable 9,778 11,422
Other current liabilities (8,744 ) (5,410 ) Current income taxes
payable (6,987 ) (168 ) Other noncurrent assets and liabilities
1,478 754 Net cash provided by
operating activities 15,584 32,447
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property,
plant and equipment (6,576 ) (5,353 ) Acquisition of business, net
of cash acquired (67,176 ) - Proceeds from settlement of net
investment hedges 3,310 280 Payments for settlement of net
investment hedges (329 ) (1,846 ) Other investing activities
(2,554 ) 35 Net cash used in investing activities
(73,325 ) (6,884 ) CASH FLOWS FROM FINANCING
ACTIVITIES: Proceeds from exercise of stock options 66 371 Common
stock withheld for payroll tax withholdings (1,703 ) (2,027 )
Proceeds from issuance of long-term debt 115,000 - Principal
payments on long-term debt (16 ) - Issuance costs related to debt
(679 ) - Excess tax benefits from share-based compensation 510 695
Repurchase of common shares (49,363 ) (6,605 ) Dividends paid
(6,490 ) (5,023 ) Net cash provided by (used in)
financing activities 57,325 (12,589 )
Effect of exchange rate changes on cash and cash equivalents
(4,261 ) 608 Net change in cash and cash equivalents
(4,677 ) 13,582 Cash and cash equivalents, beginning of period
171,842 151,927 Cash and cash
equivalents, end of period $ 167,165 $ 165,509
Lindsay CorporationJim Raabe, 402-827-6579Vice President
& Chief Financial OfficerorHalliburton Investor
RelationsHala Elsherbini or Geralyn DeBusk, 972-458-8000
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