- Revenue and earnings increase over
prior year’s second quarter
- Irrigation segment revenue increases on
solid growth from international markets
- Infrastructure segment revenue
increases with improved gross margin
Lindsay Corporation (NYSE: LNN), a leading provider of
irrigation systems and infrastructure products, today announced
results for its second quarter ended February 28, 2017.
Second Quarter Results
Second quarter fiscal 2017 revenues were $124.1 million compared
to revenues of $120.6 million in the prior year’s second quarter.
Net earnings for the quarter were $5.0 million or $0.47 per diluted
share compared with a net loss of $4.1 million or $0.37 per diluted
share in the second quarter of the prior year. The prior year
period included $13.0 million of environmental remediation expenses
which, on an after-tax basis, reduced net earnings by $8.5 million,
or $0.78 per diluted share.
Irrigation segment revenues for the second quarter increased
three percent to $106.2 million from $103.1 million in the prior
year’s second quarter. U.S. irrigation revenues of $61.5 million
declined 15 percent, as harsh winter weather conditions in the
Northwest resulted in lower irrigation equipment unit volume and
lower revenue from other irrigation businesses. International
irrigation revenues were $44.7 million, an increase of 46 percent
compared to the second quarter of the prior year, driven primarily
by improved demand and project activity in South America, Africa
and the Commonwealth of Independent States region. Infrastructure
segment revenues for the second quarter increased two percent to
$17.9 million, as increased demand for road safety products and
higher Road Zipper® system sales and lease revenue was offset in
part by a decline in sales volume for rail products.
Gross margin for the second quarter of fiscal 2017 was 26.5
percent of sales compared to 26.9 percent of sales in the prior
year’s second quarter. Improved margin in the infrastructure
segment was more than offset by lower margin in the irrigation
segment, as improved U.S. irrigation margin was offset by a higher
mix of international revenue at comparatively lower margins.
Improved infrastructure margin resulted from increased cost
absorption in Road Zipper® system production and volume leverage
from road safety product sales.
Operating expenses for the second quarter of fiscal 2017 were
$24.4 million, a decrease of $12.7 million compared to the second
quarter in the prior year. Excluding the impact of the
environmental remediation expenses in the prior year’s second
quarter, operating expenses were slightly higher in the current
year primarily due to increased new product development and testing
costs. Operating expenses were 19.7 percent of sales in the second
quarter of fiscal 2017 compared with 30.8 percent of sales in the
second quarter of the prior year. Operating margins were 6.9
percent in the second quarter of fiscal 2017, unchanged compared to
the second quarter of the prior year after excluding the
environmental expenses.
Cash and cash equivalents at the end of the second quarter were
$102.8 million compared to $101.2 million at the end of the prior
fiscal year and $89.5 million at the end of the prior year’s second
quarter. There were no share repurchases made during the second
quarter of fiscal 2017. A total of $63.7 million remains available
under the Company’s share repurchase program as of February 28,
2017.
The backlog of unshipped orders at February 28, 2017 was $62.3
million compared with $52.6 million at February 29, 2016. Order
backlogs were improved in both the irrigation and infrastructure in
comparison to the prior year.
Six Month Results
Total revenues for the six months ended February 28, 2017 were
$234.5 million, a decrease of three percent compared to $242.2
million in the same prior year period. Net earnings were $5.9
million or $0.55 per diluted share compared with $2.8 million or
$0.25 per diluted share in the prior year.
Irrigation segment revenues decreased four percent to $196.1
million for the six months ended February 28, 2017 from $204.4
million in the same prior year period, as U.S. irrigation revenues
of $111.8 million decreased 15 percent and international irrigation
revenues of $84.3 million increased 16 percent. Infrastructure
segment revenues increased two percent to $38.4 million for the six
months ended February 28, 2017, as increased demand for road safety
products was offset in part by a decline in sales volume for rail
products.
Outlook
Rick Parod, President and Chief Executive Officer, commented,
“In the irrigation segment, orders and project levels improved in
the second quarter after experiencing a slow start to the year in
the first quarter. Strong sales growth in international irrigation
reflects improving demand and increased project activity. I am
pleased with the U.S. irrigation gross margin improvement achieved,
especially in view of raw material inflation experienced in the
quarter. In the infrastructure segment, second quarter revenues
were modestly improved over the prior year in a seasonally lower
period, and we continue to see improved operating performance in
the segment.”
Parod continued, “We are currently in the midst of the primary
selling season for irrigation equipment in North America where
overall market conditions, affected by lower commodity prices and
reduced farm incomes, are resulting in seasonal demand similar to
the prior year. I am encouraged by the improving activity levels we
are seeing in the international irrigation and infrastructure
markets. 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.”
Second-Quarter Conference Call
Lindsay’s fiscal 2017 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 #
90564253. 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, 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
OPERATIONS
(unaudited) Three months ended Six months
ended (in thousands, except per share amounts)
February 28,2017
February 29,2016
February 28,2017
February 29,2016
Operating revenues $ 124,125 $ 120,573 $ 234,515 $ 242,195
Cost of operating revenues 91,184 88,128
173,200 175,336 Gross profit
32,941 32,445 61,315
66,859 Operating expenses: Selling expense
10,132 10,363 20,114 20,355 General and administrative expense
10,230 23,028 21,585 32,043 Engineering and research expense
4,057 3,748 8,359 7,407
Total operating expenses 24,419 37,139
50,058 59,805 Operating
income (loss) 8,522 (4,694 ) 11,257 7,054 Interest expense
(1,201 ) (1,201 ) (2,410 ) (2,397 ) Interest income 171 229 336 393
Other income (expense), net
144 (527 ) (212 ) (847 )
Earnings (loss) before income taxes 7,636 (6,193 ) 8,971 4,203
Income tax expense (benefit) 2,624
(2,064 ) 3,086 1,388 Net
earnings (loss) $ 5,012 $ (4,129 ) $ 5,885 $ 2,815
Earnings (loss) per share: Basic $ 0.47 $ (0.37 ) $
0.55 $ 0.25 Diluted $ 0.47 $ (0.37 ) $ 0.55 $ 0.25 Shares
used in computing earnings (loss) per share: Basic 10,657 11,024
10,647 11,142 Diluted 10,674 11,024 10,670 11,163 Cash
dividends declared per share $
0.29
$
0.28
$
0.58
$
0.56
Lindsay
Corporation and Subsidiaries CONDENSED CONSOLIDATED BALANCE
SHEETS (Unaudited) February 28,
February 29, August 31, (in thousands)
2017 2016 2016 ASSETS Current assets:
Cash and cash equivalents $ 102,825 $ 89,522 $ 101,246 Restricted
cash - 2,028 2,030 Receivables, net 78,828 79,225 80,610
Inventories, net 82,847 82,078 74,750 Prepaid expenses 5,208 4,418
3,671 Other current assets 15,968 12,802
14,468 Total current assets 285,676
270,073 276,775 Property,
plant and equipment, net 75,632 78,916 77,627 Intangibles, net
44,890 49,475 47,200 Goodwill 76,577 76,628 76,803 Deferred income
tax assets 3,094 3,108 4,225 Other noncurrent assets, net
4,747 5,070 4,885 Total assets $
490,616 $ 483,270 $ 487,515 LIABILITIES
AND SHAREHOLDERS' EQUITY Current liabilities: Accounts payable $
44,254 $ 36,371 $ 32,268 Current portion of long-term debt 199 195
197 Other current liabilities 46,350 47,971
55,395 Total current liabilities 90,803
84,537 87,860 Pension
benefits liabilities 6,708 6,431 6,869 Long-term debt 116,876
117,075 116,976 Deferred income tax liabilities 1,678 1,020 1,223
Other noncurrent liabilities 20,995 22,588
23,020 Total liabilities 237,060
231,651 235,948 Shareholders'
equity: Preferred stock - - - Common stock 18,746 18,713 18,713
Capital in excess of stated value 59,002 55,908 57,338 Retained
earnings 466,630 455,535 466,926 Less treasury stock - at cost
(277,238 ) (261,118 ) (277,238 ) Accumulated other comprehensive
loss, net (13,584 ) (17,419 ) (14,172 ) Total
shareholders' equity 253,556 251,619
251,567 Total liabilities and shareholders' equity $
490,616 $ 483,270 $ 487,515
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
(unaudited) (in thousands) Six months
ended
February 28,2017
February 29,2016
CASH FLOWS FROM OPERATING ACTIVITIES: Net earnings $ 5,885 $ 2,815
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 8,120 8,536 Provision for
uncollectible accounts receivable (609 ) (1,103 ) Deferred income
taxes 1,707 (4,163 ) Share-based compensation expense 1,815 1,534
Other, net (594 ) 1,828 Changes in assets and liabilities:
Receivables 2,710 (5,220 ) Inventories (7,368 ) (8,094 ) Other
current assets 3,375 (1,779 ) Accounts payable 11,926 (2,247 )
Other current liabilities (8,135 ) (5,273 ) Current taxes payable
(5,987 ) (3,641 ) Other noncurrent assets and liabilities
(2,123 ) 11,833 Net cash provided by (used in)
operating activities 10,722 (4,974 )
CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of property, plant
and equipment (4,194 ) (7,392 ) Proceeds from settlement of net
investment hedges 2,054 2,317 Payments for settlement of net
investment hedges (482 ) (512 ) Other investing activities, net
136 1,073 Net cash used in investing
activities (2,486 ) (4,514 ) CASH FLOWS FROM
FINANCING ACTIVITIES: Proceeds from exercise of stock options 647
113 Common stock withheld for payroll tax withholdings (635 ) (712
) Principal payments on long-term debt (98 ) (96 ) Repurchase of
common shares - (32,215 ) Dividends paid (6,181 )
(6,183 ) Net cash used in financing activities (6,267 )
(39,093 ) Effect of exchange rate changes on cash and
cash equivalents (390 ) (990 ) Net change in cash and
cash equivalents 1,579 (49,571 ) Cash and cash equivalents,
beginning of period 101,246 139,093
Cash and cash equivalents, end of period $ 102,825 $ 89,522
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170330005258/en/
Lindsay CorporationBrian Ketcham, 402-827-6579Vice
President & Chief Financial OfficerorHalliburton Investor
RelationsHala Elsherbini or Geralyn DeBusk, 972-458-8000
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