Lindsay Corporation (NYSE: LNN), a leading provider of
irrigation systems and infrastructure products, today announced
results for its third quarter ended May 31, 2016.
Third Quarter Results
Third quarter fiscal 2016 revenues were $141.3 million compared
to revenues of $160.7 million in the prior year’s third quarter.
Net earnings for the quarter were $9.6 million or $0.90 per diluted
share compared with $12.9 million or $1.10 per diluted share in the
prior year.
Irrigation segment revenues for the quarter were $117.3 million,
an 11 percent decrease from $131.3 million in the prior year’s
third quarter. U.S. irrigation revenues of $73.4 million decreased
18 percent, reflecting the combined effect of lower unit volume and
reduced market pricing, passing through lower material costs.
International irrigation revenues for the third quarter were $43.9
million, up 4 percent over the same quarter last year, including a
negative currency translation impact of 4 percent. Sales were
improved in several markets while Brazil and certain export markets
experienced declines. Infrastructure segment revenues decreased 18
percent to $24.0 million for the quarter as relatively flat sales
in road safety products were offset by lower Road Zipper System
project sales compared to the prior year.
Gross margin was 29.6 percent of sales compared to 28.9 percent
of sales in the prior year’s third quarter, increasing
approximately 1 percentage point in both the irrigation and
infrastructure segments. Irrigation margins improved primarily due
to the benefit of lower material costs. Improved infrastructure
margins were the result of revenue growth and cost leverage in
Europe while U.S. margins remained relatively flat overall with
improved cost leverage in road safety products offset by the impact
of lower Road Zipper System revenue.
Operating expenses increased $1.6 million to $26.5 million
compared to the third quarter of the prior fiscal year. The
increase resulted primarily from an increase in outside
professional services and new product development costs. Operating
expenses were 18.7 percent of sales in the third quarter of fiscal
2016 compared with 15.5 percent of sales in the prior year period.
Operating margins were 10.8 percent in the third quarter compared
to 13.4 percent in the prior year period.
Cash and cash equivalents of $91.5 million at the end of the
quarter were $47.6 million lower than at our fiscal year end August
31, 2015. The Company repurchased 219,578 shares for $16.1 million
during the third quarter and a total of 688,790 shares for $48.3
million during the first nine months of fiscal 2016. There is $63.7
million that remains available under the Company’s share repurchase
program.
The backlog of unshipped orders at May 31, 2016 was $61.2
million compared with $53.2 million at May 31, 2015 and $52.6
million at February 29, 2016. The increase in order backlog is
primarily coming from the infrastructure segment, with higher
backlogs in both Road Zipper and road safety product lines.
Nine Month Results
Total revenues for the nine months ended May 31, 2016 were
$383.5 million, a decrease of 12 percent compared to $436.6 million
in the same prior year period. Foreign currency translation as
compared to the prior year reduced year to date revenues by 3
percent. Net earnings for the nine month period were $12.5 million
or $1.13 per diluted share compared with $29.5 million or $2.46 per
diluted share in the prior year. The current year includes $13.0
million of environmental expenses which, on an after tax basis,
reduced net earnings by $8.5 million, or $0.77 per diluted
share.
Total irrigation equipment revenues decreased 9 percent to
$321.7 million from $354.3 million during the first nine months of
the prior fiscal year. U.S. irrigation revenues of $204.9 million
decreased 7 percent, while international irrigation revenues of
$116.8 million decreased 13 percent, of which 8 percent was due to
the effect of currency translation. Infrastructure revenues
decreased 25 percent to $61.8 million, primarily due to the
completion of a few larger Road Zipper Systems projects in the
prior year, including the Golden Gate Bridge project.
Outlook
Rick Parod, president and chief executive officer, commented,
“Irrigation results reflect continued headwinds from low commodity
prices and farm income. We are also managing through the challenge
of recent increases in raw material costs by passing along the cost
of those increases in the market. Activity in the infrastructure
market is beginning to show improvement, and we continue to be
encouraged by the improved performance of our infrastructure
business.”
Parod continued, “We are at the early stages of the growing
season in the U.S., and while commodity prices have increased
during the quarter, yields from the current growing season and
where commodity prices settle in the fall will be more important in
terms of grower sentiment and incentive for capital investment.
Although the current environment continues to be constrained, the
longer term drivers for our markets of population growth, expanded
food production, efficient water use and infrastructure upgrades
and expansion remain positive.”
Third-Quarter Conference Call
Lindsay’s fiscal 2016 third 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 #
33292008. 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, 2016 Lindsay had approximately 10.6 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 Nine months ended ($ and
shares in thousands, except per share amounts) May 31,
May 31, May 31, May 31, 2016
2015 2016 2015 Operating revenues $
141,319 $ 160,707 $ 383,514 $ 436,641 Cost of operating revenues
99,511 114,321 274,847
313,785 Gross profit 41,808
46,386 108,667 122,856
Operating expenses: Selling expense 10,606 10,682 30,961 30,330
General and administrative expense 11,882 10,719 43,925 35,270
Engineering and research expense 3,995 3,497
11,402 9,330 Total operating
expenses 26,483 24,898 86,288
74,930 Operating income 15,325 21,488
22,379 47,926 Other income (expense): Interest expense
(1,179 ) (1,144 ) (3,576 ) (1,424 ) Interest income 127 134 520 468
Other expense, net (208 ) (55 ) (1,055 )
(748 ) Earnings before income taxes 14,065 20,423
18,268 46,222 Income tax expense 4,421
7,496 5,809 16,732 Net
earnings $ 9,644 $ 12,927 $ 12,459 $ 29,490
Earnings per share: Basic $ 0.90 $ 1.11 $ 1.13 $ 2.46
Diluted $ 0.90 $ 1.10 $ 1.13 $ 2.46 Shares used in computing
earnings per share: Basic 10,709 11,690 10,997 11,965 Diluted
10,732 11,720 11,019 12,000 Cash dividends declared per
share $ 0.28 $ 0.27 $ 0.84 $ 0.81
Lindsay
Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited)
May 31, May 31, August 31, ($ and
shares in thousands, except par values) 2016 2015
2015 ASSETS Current assets: Cash and cash equivalents
$ 91,498 $ 154,018 $ 139,093 Receivables, net 81,915 93,399 74,063
Inventories, net 82,845 79,123 74,930 Deferred income taxes 14,519
16,922 15,807 Other current assets 20,470
17,641 18,274 Total current assets
291,247 361,103 322,167
Property, plant and equipment, net 79,160 76,854 78,656
Intangibles, net 48,367 52,103 51,920 Goodwill 76,778 75,124 76,801
Other noncurrent assets, net 6,153 12,710
6,924 Total assets $ 501,705 $ 577,894
$ 536,468 LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities: Accounts payable $ 40,805 $ 46,560 $ 38,814
Current portion of long-term debt 196 182 193 Other current
liabilities 55,651 64,343 56,105
Total current liabilities 96,652
111,085 95,112 Pension benefits
liabilities 6,362 6,389 6,569 Long-term debt 117,025 117,222
117,173 Deferred income taxes 13,423 18,685 18,971 Other noncurrent
liabilities 23,307 9,818 10,083
Total liabilities 256,769 263,199
247,908 Shareholders' equity: Preferred
stock - - - Common stock 18,713 18,678 18,684 Capital in excess of
stated value 56,766 54,268 55,184 Retained earnings 462,201 465,246
458,903 Less treasury stock - at cost (277,238 ) (210,484 )
(228,903 ) Accumulated other comprehensive loss, net (15,506
) (13,013 ) (15,308 ) Total shareholders' equity
244,936 314,695 288,560
Total liabilities and shareholders' equity $ 501,705 $
577,894 $ 536,468
Lindsay
Corporation and Subsidiaries CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (Unaudited)
Nine months ended May 31, May
31, ($ in thousands) 2016 2015 CASH
FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 12,459 $ 29,490
Adjustments to reconcile net earnings to net cashprovided by
operating activities: Depreciation and amortization 12,771 12,148
Provision for uncollectible accounts receivable (1,161 ) 569
Deferred income taxes (4,737 ) (1,541 ) Share-based compensation
expense 2,440 2,599 Other, net 755 4,196 Changes in assets and
liabilities: Receivables (6,704 ) (6,326 ) Inventories (7,732 )
(1,244 ) Other current assets (1,425 ) (2,560 ) Accounts payable
1,452 6,212 Other current liabilities (33 ) (6,340 ) Current income
taxes payable (225 ) (3,730 ) Other noncurrent assets and
liabilities 12,389 1,912 Net cash
provided by operating activities 20,249 35,385
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of
property, plant and equipment (10,073 ) (11,228 ) Acquisition of
business, net of cash acquired - (67,176 ) Proceeds from settlement
of net investment hedges 2,317 7,363 Payments for settlement of net
investment hedges (2,719 ) (606 ) Other investing activities, net
1,118 (1,724 ) Net cash used in investing
activities (9,357 ) (73,371 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Proceeds from exercise of stock options 113
256 Common stock withheld for payroll tax withholdings (712 )
(1,706 ) Proceeds from issuance of long-term debt - 115,000
Principal payments on long-term debt (144 ) (75 ) Issuance costs
related to debt - (618 ) Excess tax benefits from share-based
compensation 53 510 Repurchase of common shares (48,335 ) (78,464 )
Dividends paid (9,161 ) (9,610 ) Net cash provided by
(used in) financing activities (58,186 ) 25,293
Effect of exchange rate changes on cash and cash
equivalents (301 ) (5,131 ) Net change in cash and
cash equivalents (47,595 ) (17,824 ) Cash and cash equivalents,
beginning of period 139,093 171,842
Cash and cash equivalents, end of period $ 91,498 $ 154,018
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160630005256/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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