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Lindsay Corporation Reports Fiscal 2021 Fourth Quarter and Full Year Results

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·11-min read
In this article:
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  • Improved demand for irrigation equipment continued in the fourth quarter across all geographies

  • Fourth quarter irrigation revenues increase 63 percent to $125.3 million

  • Fourth quarter infrastructure revenues decline 45 percent compared to record results in prior year

  • Fourth quarter net earnings reduced by after-tax LIFO impact of $4.5 million, or $0.41 per diluted share

OMAHA, Neb., October 21, 2021--(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, which ended on August 31, 2021.

Fourth Quarter and Full Year Summary

Revenues for the fourth quarter of fiscal 2021 were $153.6 million, an increase of $25.2 million, or 20 percent, compared to revenues of $128.4 million in the prior year fourth quarter. Net earnings for the quarter were $5.8 million, or $0.53 per diluted share, compared with net earnings of $14.7 million, or $1.35 per diluted share, for the prior year fourth quarter. Net earnings for the quarter were reduced by an after-tax LIFO impact of approximately $4.5 million, or $0.41 per diluted share.

Revenues for the year ended August 31, 2021, were $567.6 million, an increase of $93.0 million, or 20 percent, compared to revenues of $474.7 million in the prior year. Net earnings for the year were $42.6 million, or $3.88 per diluted share, compared with net earnings of $38.6 million, or $3.56 per diluted share, in the prior year.

"Fiscal 2021 was an extraordinary year in which our team demonstrated agility and resiliency in the face of the ongoing global pandemic," said Randy Wood, President and Chief Executive Officer. "We were able to capitalize on market tailwinds in irrigation while navigating persistent headwinds created by pandemic-related project delays in our infrastructure business, significant raw material inflation, logistics challenges, and a tight labor market. We also remained highly focused on innovation, maintaining strong organizational health and safety, and increasing our commitment to sustainability initiatives."

Fourth Quarter Segment Results

Irrigation segment revenues for the fourth quarter of fiscal 2021 were $125.3 million, an increase of $48.2 million, or 63 percent, compared to $77.0 million in the prior year fourth quarter. North America irrigation revenues of $53.5 million increased $12.3 million, or 30 percent, compared to the prior year fourth quarter. The increase in North America irrigation revenues resulted from a combination of higher irrigation equipment unit sales volume and higher average selling prices. International irrigation revenues of $71.7 million increased $35.9 million, or 100 percent, compared to the prior year fourth quarter. The increase in international irrigation revenues resulted primarily from higher unit sales volumes, along with higher selling prices and a favorable foreign currency translation impact of $2.8 million. The largest sales volume increases were in the Brazil and Middle East markets.

Irrigation segment operating income for the fourth quarter of fiscal 2021 was $10.6 million, an increase of $4.6 million, or 78 percent, compared to the prior year fourth quarter. Operating margin was 8.4 percent of sales, compared to 7.8 percent of sales in the prior year fourth quarter. The impact of higher irrigation system unit volume was partially offset by the impact of higher raw material and other costs. Fourth quarter operating results were also reduced by approximately $5.0 million resulting from the impact of the LIFO method of accounting for inventory, under which higher raw material costs are recognized in cost of goods sold rather than in ending inventory values.

Infrastructure segment revenues for the fourth quarter of fiscal 2021 were $28.4 million, a decrease of $23.0 million, or 45 percent, compared to $51.4 million in the prior year fourth quarter. The decrease resulted primarily from lower Road Zipper System® sales compared to the prior year. Road Zipper System® sales in the fourth quarter of fiscal 2020 included a large project in the United Kingdom that did not repeat in fiscal 2021. In addition, during fiscal 2021 the timing of certain projects has been impacted by coronavirus-related delays.

Infrastructure segment operating income for the fourth quarter of fiscal 2021 was $5.8 million, a decrease of $14.1 million, or 71 percent, compared to the prior year fourth quarter. Operating margin was 20.5 percent of sales, compared to 38.8 percent of sales in the prior year fourth quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year fourth quarter and were also reduced by approximately $1.0 million resulting from the impact of the LIFO method of accounting for inventory.

The backlog of unfilled orders at August 31, 2021 was $149.1 million compared with $58.7 million at August 31, 2020. A higher backlog of orders in irrigation was partially offset by a lower backlog in infrastructure.

Outlook

"Although agricultural commodity prices have come down from their peak earlier in the year, they remain at multi-year highs," said Mr. Wood. "This supports a solid outlook for North America irrigation equipment demand for the fall selling season. We expect growth in international irrigation to be led by continued momentum in Brazil and other markets and from new agricultural development being driven by increased concerns regarding food security."

Mr. Wood continued, "In our infrastructure business, we expect a slower start to fiscal 2022 due to specific project delays. However, prospects for year-over-year growth are supported by the quality of our project sales funnel."

Fourth Quarter Conference Call

Lindsay’s fiscal 2021 fourth quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (833) 535-2202 in the U.S., or (412) 902-6745 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 (NYSE: LNN) is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. Established in 1955, the company has been at the forefront of research and development of innovative solutions to meet the food, fuel, fiber and transportation needs of the world’s rapidly growing population. The Lindsay family of irrigation brands includes Zimmatic® center pivot and lateral move agricultural irrigation systems, FieldNET® remote irrigation management and scheduling technology, and industrial IoT 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.

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)

2021

2020

2021

2020

Operating revenues

$

153,648

$

128,405

$

567,646

$

474,692

Cost of operating revenues

120,081

83,038

417,441

322,149

Gross profit

33,567

45,367

150,205

152,543

Operating expenses:

Selling expense

8,136

9,343

30,816

31,444

General and administrative expense

12,153

14,921

51,923

52,947

Engineering and research expense

3,855

3,647

13,359

13,950

Total operating expenses

24,144

27,911

96,098

98,341

Operating income

9,423

17,456

54,107

54,202

Other (expense) income:

Interest expense

(1,167

)

(1,185

)

(4,751

)

(4,759

)

Interest income

285

544

1,083

1,956

Other (expense) income, net

(752

)

1,641

(53

)

(2,556

)

Total other (expense) income

(1,634

)

1,000

(3,721

)

(5,359

)

Earnings before income taxes

7,789

18,456

50,386

48,843

Income tax expense

1,985

3,782

7,814

10,214

Net earnings

$

5,804

$

14,674

$

42,572

$

38,629

Earnings per share:

Basic

$

0.53

$

1.35

$

3.91

$

3.57

Diluted

$

0.53

$

1.35

$

3.88

$

3.56

Shares used in computing earnings per share:

Basic

10,907

10,835

10,886

10,823

Diluted

11,039

10,880

10,985

10,861

Cash dividends declared per share

$

0.33

$

0.32

$

1.30

$

1.26

LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

Three months ended

Twelve months ended

(in thousands)

August 31,

2021

August 31,

2020

August 31,

2021

August 31,

2020

Operating revenues:

Irrigation:

North America

$

53,539

$

41,201

$

273,871

$

224,771

International

71,715

35,824

197,487

124,575

Irrigation total

125,254

77,025

471,358

349,346

Infrastructure

28,394

51,380

96,288

125,346

Total operating revenues

$

153,648

$

128,405

$

567,646

$

474,692

Operating income:

Irrigation

$

10,578

$

5,979

$

63,181

$

41,263

Infrastructure

5,810

19,934

20,174

42,722

Corporate

(6,965

)

(8,457

)

(29,248

)

(29,783

)

Total operating income

$

9,423

$

17,456

$

54,107

$

54,202

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 various innovative technology solutions such as GPS positioning and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting and design and industrial IoT solutions.

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,

2021

August 31,

2020

ASSETS

Current assets:

Cash and cash equivalents

$

127,107

$

121,403

Marketable securities

19,604

19,511

Receivables, net of allowance of $3,422 and $2,780, respectively

93,609

84,604

Inventories, net

145,244

104,792

Other current assets

30,539

17,625

Total current assets

416,103

347,935

Property, plant, and equipment, net

91,997

79,581

Intangible assets, net

20,367

23,477

Goodwill

67,968

68,004

Operating lease right-of-use assets

18,281

27,457

Deferred income tax assets

8,113

9,935

Other noncurrent assets

14,356

14,137

Total assets

$

637,185

$

570,526

LIABILITIES AND SHAREHOLDERS' EQUITY

Current liabilities:

Accounts payable

$

45,209

$

29,554

Current portion of long-term debt

217

195

Other current liabilities

92,814

72,646

Total current liabilities

138,240

102,395

Pension benefits liabilities

5,754

6,374

Long-term debt

115,514

115,682

Operating lease liabilities

18,301

25,862

Deferred income tax liabilities

832

889

Other noncurrent liabilities

20,099

20,806

Total liabilities

298,740

272,008

Shareholders' equity:

Preferred stock

Common stock

18,991

18,918

Capital in excess of stated value

86,495

77,686

Retained earnings

528,130

499,724

Less treasury stock - at cost

(277,238

)

(277,238

)

Accumulated other comprehensive loss, net

(17,933

)

(20,572

)

Total shareholders' equity

338,445

298,518

Total liabilities and shareholders' equity

$

637,185

$

570,526

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

Years Ended August 31,

(in thousands)

2021

2020

CASH FLOWS FROM OPERATING ACTIVITIES:

Net earnings

$

42,572

$

38,629

Adjustments to reconcile net earnings to net cash provided by operating activities:

Depreciation and amortization

19,177

19,396

(Gain) on sale of business

(1,087

)

Provision for uncollectible accounts receivable

771

589

Deferred income taxes

1,911

1,384

Share-based compensation expense

6,186

5,616

Foreign currency transaction (gain) loss

(1,934

)

1,102

Other, net

259

288

Changes in assets and liabilities:

Receivables

(11,535

)

(9,523

)

Inventories

(38,158

)

(14,039

)

Other current assets

(8,132

)

(6,612

)

Accounts payable

17,993

(691

)

Other current liabilities

18,433

16,673

Other noncurrent assets and liabilities

(2,488

)

(6,778

)

Net cash provided by operating activities

43,968

46,034

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchases of property, plant and equipment

(26,511

)

(21,445

)

Proceeds from sale of assets held-for-sale

3,955

Purchases of marketable securities available-for-sale

(19,356

)

(28,041

)

Proceeds from maturities of marketable securities available-for-sale

18,825

8,548

Acquisition of business, net of cash acquired

(3,034

)

Other investing activities, net

(577

)

1,503

Net cash used in investing activities

(27,619

)

(38,514

)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from exercise of stock options

3,965

1,545

Common stock withheld for payroll tax obligations

(1,269

)

(1,111

)

Principal payments on long-term debt

(195

)

(227

)

Dividends paid

(14,166

)

(13,645

)

Net cash used in financing activities

(11,665

)

(13,438

)

Effect of exchange rate changes on cash and cash equivalents

1,020

117

Net change in cash and cash equivalents

5,704

(5,801

)

Cash and cash equivalents, beginning of period

121,403

127,204

Cash and cash equivalents, end of period

$

127,107

$

121,403

View source version on businesswire.com: https://www.businesswire.com/news/home/20211021005213/en/

Contacts

LINDSAY CORPORATION:
Brian Ketcham
Senior Vice President & Chief Financial Officer
402-827-6579

THREE PART ADVISORS:
Hala Elsherbini
972-458-8000

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