LNN
$97.97
Lindsay
$1.11
1.15%
Earnings Details
4th Quarter August 2018
Thursday, October 18, 2018 6:45:00 AM
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Summary

Lindsay (LNN) Recent Earnings

Lindsay (LNN) reported 4th Quarter August 2018 earnings of $0.42 per share on revenue of $123.3 million. The consensus earnings estimate was $0.85 per share on revenue of $137.6 million. Revenue fell 6.6% compared to the same quarter a year ago.

Lindsay Corp designs, manufactures, and sells irrigation systems used in the agricultural industry to increase or stabilize crop production while conserving water, energy, and labor. It also manufactures infrastructure products and services.

Results
Reported Earnings
$0.42
Earnings Whisper
-
Consensus Estimate
$0.85
Reported Revenue
$123.3 Mil
Revenue Estimate
$137.6 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Lindsay Corporation Reports Fiscal 2018 Fourth Quarter and Full Year Results

  • Full year revenues increased 6 percent, with growth in both Irrigation and Infrastructure segments
  • Full year GAAP diluted earnings per share of $1.88 ($2.94 adjusted)1, compared to $2.17 for the prior year
  • North America Irrigation revenues increased 3 percent in the quarter
  • Completed divestitures of three businesses and closure of one manufacturing facility in the quarter

OMAHA, Neb.--(BUSINESS WIRE)-- 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 ended August 31, 2018.

Fourth Quarter and Full Year Summary

Revenues for the fourth quarter of fiscal 2018 were $123.3 million, a decrease of 7 percent compared to revenues of $131.9 million in the prior year’s fourth quarter. Net earnings for the quarter were $5.0 million and diluted earnings per share were $0.46, compared with net earnings of $6.3 million and diluted earnings per share of $0.59 for the same period in the prior year. Adjusted net earnings for the fourth quarter were $4.5 million, or $0.42 per diluted share.1

Total revenues for the year ended August 31, 2018 were $547.7 million, an increase of 6 percent compared to revenues of $518.0 million in the prior year. Net earnings for the year were $20.3 million and diluted earnings per share were $1.88, compared with net earnings of $23.2 million and diluted earnings per share of $2.17 in the prior year. Net earnings for the year were reduced by tax expense of $2.5 million due to the enactment of the U.S. Tax Reform and by after-tax costs of $8.8 million related to the Company’s Foundation for Growth initiative. Adjusted net earnings for fiscal 2018 were $31.6 million, or $2.94 per diluted share.1

“Despite challenging market conditions resulting from tariffs and falling grain prices, our fourth quarter North America irrigation equipment sales were improved over the prior year,” said Tim Hassinger, President and Chief Executive Officer. “Our full year revenue growth of 6 percent was led by 16 percent growth in North America irrigation and 8 percent growth in our infrastructure segment. We also continue to make good progress on our Foundation for Growth objectives that we introduced earlier in the year.”

Fourth Quarter Segment Results

Irrigation segment revenues decreased 6 percent to $96.2 million, compared to $101.9 million in the prior year’s fourth quarter. North America irrigation revenues increased 3 percent to $60.6 million, reflecting an increase in irrigation system unit volume. International irrigation revenues decreased 18 percent to $35.6 million due to the market disruption in Brazil that continued during the quarter and lower project activity in developing markets compared to the prior year.

Irrigation segment operating margin was 10.8 percent of sales in the fourth quarter (8.8 percent adjusted)1, compared to 9.6 percent of sales in the prior year. A net gain of $2.0 million from business divestitures was partially offset by a $1.6 million incremental LIFO inventory valuation expense resulting from raw material inflation.

Infrastructure segment revenues decreased 10 percent in the fourth quarter to $27.1 million, compared to $30.0 million in the prior year’s fourth quarter. The decrease resulted primarily from lower Road Zipper System® lease revenue and lower road safety product sales, while Road Zipper System® sales were comparable to the prior year.

Infrastructure segment operating margin was 14.0 percent of sales in the fourth quarter (16.6 percent adjusted)1, compared to 25.1 percent of sales in the fourth quarter of the prior year. Operating margin declined primarily due to less favorable revenue mix, resulting from lower revenue from leasing, compared to the prior year.

The backlog of unshipped orders at August 31, 2018 was $50.0 million, compared with $51.8 million at August 31, 2017.

Foundation for Growth Initiative

Earlier in the fiscal year, the Company announced a defined performance improvement initiative, referred to as Foundation for Growth, with the objectives of simplifying the business and achieving operating margin performance of 11 percent to 12 percent in fiscal 2020, exclusive of market changes.

During the fourth quarter, the Company completed divestitures of its pump and filtration businesses and a water resource consulting firm, resulting in a net gain of $2.0 million reported in the irrigation segment. In addition, the Company completed the closure of an infrastructure manufacturing facility and the consolidation of its activities with an existing irrigation operation. Severance and other costs of $0.7 million were incurred in connection with the facility closure. Additional operating expenses of $1.1 million, representing severance costs and professional consulting fees, were incurred during the quarter.

Results for the fiscal year include pre-tax costs of $9.7 million in connection with the Foundation for Growth initiative, including a net loss from business divestitures of $4.1 million.

Outlook

“Market headwinds in North America are expected to continue into our fiscal 2019 due to uncertainty regarding the outcome of global trade negotiations and pressure on grain prices,” said Mr. Hassinger. “We expect improvement in international irrigation as Brazil returns to a level of normalcy and developing markets continue to grow.”

Mr. Hassinger added, “Following record infrastructure results in fiscal 2018, we continue to focus on converting the pipeline of Road Zipper projects into orders.”

Fourth Quarter Conference Call

Lindsay’s fiscal 2018 fourth 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 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.

About the Company

Lindsay Corporation is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. The Lindsay family of irrigation brands includes Zimmatic® and FieldNET® as well as irrigation consulting, design, advanced machine-to-machine communication, remote control, monitoring and scheduling technology, and wireless networking 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®, Road Zipper® and Snoline™ brands. For more information about Lindsay Corporation, visit www.lindsay.com.

   

1

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

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 31, Years Ended August 31,
(in thousands, except per share amounts) 2018     2017 2018 2017
 
Operating revenues $ 123,269 $ 131,937 $ 547,705 $ 517,985
Cost of operating revenues   90,998     94,146     396,243     372,973  
Gross profit   32,271     37,791     151,462     145,012  
 
Operating expenses:
Selling expense 9,798 10,140 40,885 40,705
General and administrative expense 11,759 11,681 55,962 46,959
Engineering and research expense   4,120     4,440     16,052     17,147  
Total operating expenses   25,677     26,261     112,899     104,811  
 
Operating income 6,594 11,530 38,563 40,201
 
Interest expense (1,185 ) (1,191 ) (4,687 ) (4,757 )
Interest income 469 297 1,640 1,178
Other (expense) income, net   62     (89 )   (1,663 )   (907 )
 
Earnings before income taxes 5,940 10,547 33,853 35,715
 
Income tax expense   962     4,205     13,576     12,536  
 
Net earnings $ 4,978   $ 6,342   $ 20,277   $ 23,179  
 
Earnings per share:
Basic $ 0.46 $ 0.59 $ 1.89 $ 2.17
Diluted $ 0.46 $ 0.59 $ 1.88 $ 2.17
 
Shares used in computing earnings per share:
Basic 10,757 10,692 10,741 10,666
Diluted 10,798 10,729 10,772 10,694
 
Cash dividends declared per share $ 0.31 $ 0.30 $ 1.21 $ 1.17
 
 
LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)
                 
Three months ended Twelve months ended
(in thousands) August 31,

2018

August 31,

2017

August 31,

2018

August 31,

2017

Operating revenues:
Irrigation segment $ 96,219 $ 101,939 $ 439,858 $ 418,041
Infrastructure segment   27,050     29,998     107,847     99,944  
Total operating revenues $ 123,269   $ 131,937   $ 547,705   $ 517,985  
 
Operating income:
Irrigation segment $ 10,431 $ 9,813 $ 41,933 $ 42,774
Infrastructure segment 3,799 7,543 23,857 20,131
Corporate   (7,636 )   (5,826 )   (27,227 )   (22,704 )
Total operating income $ 6,594   $ 11,530   $ 38,563   $ 40,201  
 

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 irrigation consulting and design, remote control and monitoring, irrigation scheduling, and machine-to-machine technology.

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)
         
 
(in thousands) August 31,

2018

August 31,

2017

 
ASSETS
Current assets:
Cash and cash equivalents $ 160,787 $ 121,620
Receivables, net of allowance of $3,585 and $7,447, respectively 69,107 73,850
Inventories, net 79,233 86,155
Prepaid expenses 3,883 4,384
Assets held-for-sale 10,837
Other current assets   7,204     6,925  
Total current assets   331,051     292,934  
 
Property, plant, and equipment, net 57,248 74,498
Intangible assets, net 27,376 42,808
Goodwill 64,671 77,131
Deferred income tax assets 6,645 5,311
Other noncurrent assets   13,265     13,350  
Total assets $ 500,256   $ 506,032  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 30,530 $ 36,717
Current portion of long-term debt 205 201
Liabilities held-for-sale 2,424
Other current liabilities   46,935     55,119  
Total current liabilities   80,094     92,037  
 
Pension benefits liabilities 5,874 6,295
Long-term debt 116,570 116,775
Deferred income tax liabilities 1,083 1,191
Other noncurrent liabilities   19,769     19,679  
Total liabilities   223,390     235,977  
 
Shareholders' equity:
Preferred stock
Common stock 18,841 18,780
Capital in excess of stated value 68,465 63,006
Retained earnings 484,886 477,615
Less treasury stock - at cost (277,238 ) (277,238 )
Accumulated other comprehensive loss, net   (18,088 )   (12,108 )
Total shareholders' equity   276,866     270,055  
Total liabilities and shareholders' equity $ 500,256   $ 506,032  
 
 
LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
         
Years Ended August 31,
(in thousands) 2018 2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 20,277 $ 23,179
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 16,514 16,678
Loss on sale of businesses 4,056
Provision for uncollectible accounts receivable (2,587 ) (574 )
Deferred income taxes (50 ) (903 )
Share-based compensation expense 3,891 3,598
Other, net 2,903 626
Changes in assets and liabilities:
Receivables (3,714 ) 7,959
Inventories (8,173 ) (10,092 )
Prepaid expenses and other current assets (1,150 ) 4,581
Accounts payable 159 4,076
Other current liabilities 2,946 (717 )
Current taxes payable 725 (3,104 )
Other noncurrent assets and liabilities   (1,863 )   (5,858 )
Net cash provided by operating activities   33,934     39,449  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant, and equipment (11,054 ) (8,863 )
Proceeds from sale of businesses 29,888 -
Proceeds from settlement of net investment hedges 2,278 2,117
Payments for settlement of net investment hedges (3,089 ) (3,466 )
Other investing activities, net   82     233  
Net cash provided by (used in) investing activities   18,105     (9,979 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 2,788 3,020
Common stock withheld for payroll tax obligations (833 ) (635 )
Principal payments on long-term debt (201 ) (197 )
Dividends paid   (13,006 )   (12,490 )
Cash and cash equivalents, end of period   (11,252 )   (10,302 )
 
Effect of exchange rate changes on cash and cash equivalents   (1,620 )   1,206  
Net change in cash and cash equivalents 39,167 20,374
Cash and cash equivalents, beginning of period   121,620     101,246  
Cash and cash equivalents, end of period $ 160,787   $ 121,620  
 
 

LINDSAY CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

 

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of (1) income tax expense attributed to enactment of U.S. Tax Reform, and (2) gains and losses from businesses divested and held-for-sale, severance costs and consulting fees associated with the Company's Foundation for Growth Initiative ("FFG costs"), (b) the impact on operating income of FFG costs, and (c) the impact on segment operating income of FFG costs. 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, except per share amounts) August 31,

2018

   

Diluted earnings per share

August 31,

2018

    Diluted earnings per share
 
Net earnings - reported GAAP measure $ 4,978 $ 0.46 $ 20,277 $ 1.88
 
Impact of U.S. Tax Reform (82 ) (0.01 ) 2,496 0.23
 
FFG costs (gain) - after tax   (349 )   (0.03 )   8,844     0.82  
 
Net earnings - adjusted $ 4,547   $ 0.42   $ 31,617   $ 2.94  
Average shares outstanding - diluted 10,798 10,772
 
 
Three months ended August 31, 2018

Operating income reconciliation

Consolidated Irrigation Infrastructure Corporate
 
Operating income - reported GAAP measure $ 6,594 $ 10,431 $ 3,799 $ (7,636 )
 
FFG costs (gain) - before tax   (166 )   (1,967 )   690     1,111  
 
Adjusted operating income $ 6,428   $ 8,464   $ 4,489   $ (6,525 )
 
Operating revenues $ 123,269 $ 96,219 $ 27,050 $
 
Operating income as a percent of operating revenues 5.3 % 10.8 % 14.0 % N/A
 
Adjusted operating income as a percent of operating revenues   5.2 %   8.8 %   16.6 %   N/A  
 
 
Twelve months ended August 31, 2018

Operating income reconciliation

Consolidated Irrigation Infrastructure Corporate
 
Operating income - reported GAAP measure $ 38,563 $ 41,933 $ 23,857 $ (27,227 )
 
FFG costs - before tax   9,721     4,962     855     3,904  
 
Adjusted operating income $ 48,284   $ 46,895   $ 24,712   $ (23,323 )
 
Operating revenues $ 547,705 $ 439,858 $ 107,847 $
 
Operating income as a percent of operating revenues 7.0 % 9.5 % 22.1 % N/A
 
Adjusted operating income as a percent of operating revenues   8.8 %   10.7 %   22.9 %   N/A  

Lindsay Corporation
Brian Ketcham, 402-827-6579
Vice President & Chief Financial Officer
or
Halliburton Investor Relations
Hala Elsherbini or Geralyn DeBusk, 972-458-8000

Source: Lindsay Corporation