- Revenue and earnings increase 7% and
14%, respectively, over prior year’s third quarter
- U.S. Irrigation equipment revenue
increased on higher selling prices and improved volume
- Infrastructure revenue and earnings
growth drive overall improvement in results
Lindsay Corporation (NYSE: LNN), a leading provider of
irrigation systems and infrastructure products, today announced
results for its third quarter ended May 31, 2017.
Third Quarter Results
Third quarter fiscal 2017 revenues were $151.5 million compared
to revenues of $141.3 million in the prior year’s third quarter.
Net earnings for the quarter were $11.0 million or $1.02 per
diluted share compared with net earnings of $9.6 million or $0.90
per diluted share in the third quarter of the prior year.
Irrigation segment revenues for the third quarter were $120.0
million, an increase of two percent compared to $117.3 million in
the prior year’s third quarter. U.S. irrigation revenues were $75.2
million, increasing two percent over the third quarter of the prior
year, as the impact of higher average selling prices and improved
irrigation equipment unit volume was partially offset by lower
revenue from other irrigation components. International irrigation
revenues were $44.8 million, an increase of two percent compared to
the third quarter of the prior year, driven by the continuation of
a notable recovery in Brazil, increased project activity in
developing markets, and a slightly favorable currency translation
impact. Lower revenues in other international markets partially
offset those increases. Infrastructure segment revenues for the
third quarter increased 31 percent over the prior year’s third
quarter to $31.5 million, driven by higher Road Zipper® system
sales and lease revenue and increased sales of road safety products
in international markets.
Gross margin for the third quarter of fiscal 2017 was 30.3
percent of sales compared to 29.6 percent of sales in the prior
year’s third quarter. Improved margin in the infrastructure segment
was partially offset by slightly lower gross margin in the
irrigation segment. Improved infrastructure margin resulted from
higher Road Zipper system sales and lease revenue and volume
leverage from higher road safety product sales. International
irrigation margin was lower due to a less-favorable regional sales
mix compared to the prior year. U.S. irrigation margin increased
compared to the prior year due to higher margin from technology
products, partially offset by the impact of higher material
costs.
Operating expenses for the third quarter of fiscal 2017 were
$28.5 million, an increase of $2.0 million compared to the third
quarter in the prior year. The increase resulted primarily from
higher product development costs and professional fees. Operating
expenses were 18.8 percent of sales in the third quarter of fiscal
2017 compared with 18.7 percent of sales in the third quarter of
the prior year. Operating margins were 11.5 percent in the third
quarter of fiscal 2017 compared to 10.8 percent in the prior year’s
third quarter.
Cash and cash equivalents at the end of the third quarter were
$113.2 million compared to $101.2 million at the end of the prior
fiscal year and $91.5 million at the end of the prior year’s third
quarter. There were no share repurchases made during the third
quarter of fiscal 2017. A total of $63.7 million remains available
under the Company’s share repurchase program as of May 31,
2017.
The backlog of unshipped orders at May 31, 2017 was $70.1
million compared with $61.2 million at May 31, 2016. Higher order
backlog in the irrigation segment was partially offset by slightly
lower order backlog in the infrastructure segment compared to the
prior year.
Nine Month Results
Total revenues for the nine months ended May 31, 2017 were
$386.0 million, an increase of one percent compared to $383.5
million in the same prior year period. Net earnings were $16.8
million or $1.58 per diluted share compared with $12.5 million or
$1.13 per diluted share in the same prior year period.
Irrigation segment revenues of $316.1 million for the nine
months ended May 31, 2017 declined two percent from $321.7 million
in the same prior year period. Compared to the prior year period,
U.S. irrigation revenues of $187.0 million declined nine percent
and international irrigation revenues of $129.1 million increased
11 percent. Infrastructure segment revenues increased 13 percent to
$69.9 million for the nine months ended May 31, 2017 compared to
the same prior year period, due to higher Road Zipper system sales
and lease revenue and increased demand for road safety
products.
Outlook
Rick Parod, President and Chief Executive Officer, commented,
“Irrigation segment results for the third quarter reflect a level
of stabilization in the U.S. irrigation equipment market, a
continued recovery in Brazil, and increased project activity in
developing international markets. Irrigation operating margin
performance in the U.S. continues to benefit from the strength and
growth of our technology products. Stronger infrastructure segment
results for the quarter reflect continued growth and performance of
our global Road Zipper business, as well as international market
growth for our road safety products.”
Parod continued, “Grower sentiment in the U.S. is showing signs
of improvement. However, overall market conditions and demand for
capital investment continue to be constrained by lower commodity
prices and farm income. Absent a sustainable upturn in commodity
prices, we expect irrigation growth opportunities to come primarily
from international markets in the near term. The longer-term
drivers for our markets of population growth, expanded food
production and efficient water use, and infrastructure upgrades and
expansion support our expectations for growth.”
Third-Quarter Conference Call
Lindsay’s fiscal 2017 third quarter investor conference call is
scheduled for 11:00 a.m. Eastern Time today. Interested investors
may participate in the call by dialing (877) 317-6789 in the U.S.,
or (412) 317-6789 internationally, and request 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 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
May 31, 2017, Lindsay had approximately 10.7 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 EARNINGS (Unaudited)
Three months ended Nine months ended (in
thousands, except per share amounts)
May 31,2017
May 31,2016
May 31,2017
May 31,2016
Operating revenues $ 151,533 $ 141,319 $ 386,048 $ 383,514
Cost of operating revenues 105,627 99,511
278,827 274,847 Gross profit
45,906 41,808 107,221
108,667 Operating expenses: Selling expense
10,451 10,606 30,565 30,961 General and administrative expense
13,693 11,882 35,278 43,925 Engineering and research expense
4,348 3,995 12,707 11,402
Total operating expenses 28,492 26,483
78,550 86,288 Operating
income 17,414 15,325 28,671 22,379 Interest expense (1,156 )
(1,179 ) (3,566 ) (3,576 ) Interest income 545 127 881 520 Other
expense, net (606 ) (208 ) (818 )
(1,055 ) Earnings before income taxes 16,197 14,065 25,168
18,268 Income tax expense 5,245 4,421
8,331 5,809 Net earnings
$ 10,952 $ 9,644 $ 16,837 $ 12,459
Earnings per share: Basic $ 1.03 $ 0.90 $ 1.58 $ 1.13
Diluted $ 1.02 $ 0.90 $ 1.58 $ 1.13 Shares used in computing
earnings per share: Basic 10,677 10,709 10,657 10,997 Diluted
10,705 10,732 10,682 11,019 Cash dividends declared per
share $ 0.29 $ 0.28 $ 0.87 $ 0.84
Lindsay
Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
May 31, May 31, August 31, (in
thousands) 2017 2016 2016 ASSETS
Current assets: Cash and cash equivalents $ 113,212 $ 91,498 $
101,246 Restricted cash - 2,029 2,030 Receivables, net 86,772
81,915 80,610 Inventories, net 88,601 82,845 74,750 Prepaid
expenses 4,944 4,068 3,671 Other current assets 11,877
14,373 14,468 Total current
assets 305,406 276,728 276,775
Property, plant, and equipment, net 74,409 79,160
77,627 Intangibles, net 43,874 48,367 47,200 Goodwill 76,843 76,778
76,803 Deferred income tax assets 6,027 3,473 4,225 Other
noncurrent assets, net 4,728 5,054
4,885 Total assets $ 511,287 $ 489,560
$ 487,515 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable $ 40,256 $ 40,805 $ 32,268
Current portion of long-term debt 200 196 197 Other current
liabilities 62,501 55,651 55,395
Total current liabilities 102,957
96,652 87,860 Pension benefits
liabilities 6,628 6,362 6,869 Long-term debt 116,826 117,025
116,976 Deferred income tax liabilities 1,111 1,278 1,223 Other
noncurrent liabilities 20,060 23,307
23,020 Total liabilities 247,582
244,624 235,948 Shareholders' equity:
Preferred stock - - - Common stock 18,773 18,713 18,713 Capital in
excess of stated value 61,709 56,766 57,338 Retained earnings
474,483 462,201 466,926 Less treasury stock - at cost (277,238 )
(277,238 ) (277,238 ) Accumulated other comprehensive loss, net
(14,022 ) (15,506 ) (14,172 ) Total
shareholders' equity 263,705 244,936
251,567 Total liabilities and shareholders' equity $
511,287 $ 489,560 $ 487,515
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited) (in thousands) Nine months
ended
May 31, 2017
May 31, 2016 CASH FLOWS FROM OPERATING ACTIVITIES: Net
earnings $ 16,837 $ 12,459
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 12,337 12,771 Provision for
uncollectible accounts receivable (408 ) (1,161 ) Deferred income
taxes (1,383 ) (4,737 ) Share-based compensation expense 2,798
2,440 Other, net 226 755 Changes in assets and liabilities:
Receivables (5,737 ) (6,704 ) Inventories (13,217 ) (7,732 )
Prepaid expenses and other current assets 3,255 (1,425 ) Accounts
payable 8,182 1,452 Other current liabilities 4,734 (205 ) Other
noncurrent assets and liabilities (3,158 ) 12,389
Net cash provided by operating activities 24,466
20,302 CASH FLOWS FROM INVESTING
ACTIVITIES: Purchases of property, plant, and equipment (6,219 )
(10,073 ) Proceeds from settlement of net investment hedges 2,054
2,317 Payments for settlement of net investment hedges (948 )
(2,719 ) Other investing activities, net 137
1,118 Net cash used in investing activities (4,976 )
(9,357 ) CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 2,455 113 Common stock
withheld for payroll tax withholdings (635 ) (712 ) Principal
payments on long-term debt (147 ) (144 ) Repurchase of common
shares - (48,335 ) Dividends paid (9,280 ) (9,161 )
Net cash used in financing activities (7,607 )
(58,239 ) Effect of exchange rate changes on cash and cash
equivalents 83 (301 ) Net change in cash and
cash equivalents 11,966 (47,595 ) Cash and cash equivalents,
beginning of period 101,246 139,093
Cash and cash equivalents, end of period $ 113,212 $ 91,498
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170629005290/en/
Lindsay Corporation:Brian Ketcham, 402-827-6579Vice
President & Chief Financial OfficerorHalliburton Investor
Relations:Hala Elsherbini or Geralyn DeBusk, 972-458-8000
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