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8-K - FORM 8-K - LINDSAY CORPd747598d8k.htm

EXHIBIT 99.1

 

LOGO   2222 NO. 111TH ST.  OMAHA, NE 68164 TEL: 402-829-6800 FAX: 402-829-6836

 

For further information, contact:   
LINDSAY CORPORATION:    HALLIBURTON INVESTOR RELATIONS:
Jim Raabe    Hala Elsherbini or Geralyn DeBusk
Vice President & Chief Financial Officer    972-458-8000
402-827-6579   

Lindsay Corporation Reports Fiscal 2014 Third Quarter Results

OMAHA, Neb., June 25, 2014—Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its third quarter ended May 31, 2014.

Third Quarter Results

Third quarter fiscal 2014 revenues were $169.9 million, versus $219.5 million of revenues in the same prior year period. Net earnings were $16.5 million or $1.28 per diluted share compared with $26.1 million or $2.01 per diluted share in the prior year.

Total irrigation equipment revenues decreased 26 percent to $149.0 million from $200.9 million in the prior fiscal year’s third quarter primarily due to lower crop prices. U.S. irrigation revenues of $88.1 million declined 26 percent while international irrigation revenues of $60.9 million decreased 26 percent. Infrastructure revenues increased 13 percent to $20.9 million with increases in road safety, rail and Road Zipper product lines.

Gross margin was 28.4 percent of sales compared to 28.7 percent of sales in the prior year’s third quarter. Gross margin in irrigation declined by less than one percentage point primarily due to fixed cost deleverage on lower sales. Infrastructure gross margins improved by approximately three percentage points due to sales mix and leverage on higher sales.

Operating expenses were $23.0 million compared to $23.5 million in the same prior year period. Excluding the acquired Lakos filtration business, operating expenses decreased $2.7 million with the largest decreases in incentive compensation and bad debt expense Operating expenses including Lakos were 13.6 percent of sales in the third quarter of fiscal 2014 compared with 10.7 percent of sales in the prior year period. Operating margins were 14.8 percent in the third quarter, versus 18.0 percent in the prior year period.

Cash and cash equivalents of $182.1 million were $11.8 million higher compared to the end of the third quarter in the prior fiscal year, while debt decreased $1.1 million. During the quarter the Company repurchased 129,104 shares for $11.2 million. Year to date the Company repurchased 207,624 shares for $17.8 million.

Backlog of unshipped orders at May 31, 2014 was $73.6 million compared with $80.0 million at May 31, 2013 and $89.3 million at February 28, 2014. Backlog increased in the U.S. irrigation and infrastructure markets and declined in the international irrigation market over the same time last year. The current year infrastructure backlog includes a $12.8 million Road Zipper System order for the Golden Gate Bridge which is expected to be recognized in revenue in fiscal 2015. The prior year irrigation backlog included $23.0 million of equipment and installation remaining on a project in Iraq, of which $2.6 million remained in backlog at the end of the third quarter of fiscal 2014.

The June 2014 escalation of political instability has made it more difficult to complete the Company’s contract in Iraq. At May 31, 2014 the Company had a total exposure of $4.4 million on this contract, including $2.5 million of accounts receivable, which is not currently due, and a $1.9 million performance bond securing completion of the contract. The Company has not provided a reserve for these amounts, but will continue to assess the situation as developments in the country evolve. Further installation of equipment in Iraq has been put on hold as a result of the escalation of hostilities in the region.


Nine Month Results

Total revenues for the nine months ended May 31, 2014 were $470.4 million, a 13 percent decrease from $542.5 million of revenues in the same prior year period. Net earnings were $40.2 million or $3.11 per diluted share compared with $60.1 million or $4.66 per diluted share in the prior year.

Total irrigation equipment revenues decreased 17 percent to $414.1 million from $497.8 million during the first nine months of the prior fiscal year. U.S. irrigation revenues of $260.8 million declined 21 percent, while international irrigation revenues of $153.3 million decreased 8 percent due primarily to near-completion of the Iraq project. Infrastructure revenues increased 26 percent to $56.3 million.

Outlook

Rick Parod, president and chief executive officer, commented, “Lower commodity prices led to decreases in irrigation sales throughout North America during the primary selling season. Spring storms have created additional demand for replacement units, which increased our U.S. irrigation backlog at the end of the quarter. However, overall favorable growing conditions in North America continue to restrain crop prices. The lower crop prices, along with the reduction in the Sec. 179 tax benefits, create a headwind for irrigation equipment demand as compared to the previous year. Coupled with the addition of the conflicts in Ukraine and the Middle East, we have seen some slowing in international projects, as well.”

Parod continued, “We have achieved a significant change in our Infrastructure segment. Revenues have grown 26% to-date and the business is profitable. We continue to see opportunities for growth in global applications of our technologies and in expansion of our global market share. A multi-year highway bill with similar or improved funding levels would likely benefit the segment even further.”

Parod added, “Drivers for the Company’s markets of population growth, expanded food production and efficient water use, and infrastructure expansion support our expectation for long-term growth. We anticipate a continuation of lower agricultural equipment demand in the near term, and have implemented appropriate expense controls. However we will continue investment in critical growth initiatives, and the execution of our capital allocation plan announced in early January 2014.”

Third-Quarter Conference Call

Lindsay’s fiscal 2014 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 # 57122482. 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, 2014 Lindsay had approximately 12.7 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 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  
     May 31,     May 31,     May 31,     May 31,  

($ and shares in thousands, except per share amounts)

   2014     2013     2014     2013  

Operating revenues

   $ 169,936      $ 219,542      $ 470,411      $ 542,451   

Cost of operating revenues

     121,687        156,506        339,339        386,194   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     48,249        63,036        131,072        156,257   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Selling expense

     9,954        8,674        29,244        23,995   

General and administrative expense

     10,002        11,783        31,099        32,056   

Engineering and research expense

     3,071        3,029        8,602        8,946   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     23,027        23,486        68,945        64,997   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     25,222        39,550        62,127        91,260   

Other income (expense):

        

Interest expense

     (45     (32     (140     (258

Interest income

     295        100        587        367   

Other income (expense), net

     28        132        (468     252   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings before income taxes

     25,500        39,750        62,106        91,621   

Income tax expense

     9,001        13,687        21,923        31,479   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

   $ 16,499      $ 26,063      $ 40,183      $ 60,142   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic

   $ 1.28      $ 2.03      $ 3.12      $ 4.69   

Diluted

   $ 1.28      $ 2.01      $ 3.11      $ 4.66   

Shares used in computing earnings per share:

        

Basic

     12,843        12,858        12,881        12,819   

Diluted

     12,889        12,947        12,927        12,894   

Cash dividends declared per share

   $ 0.260      $ 0.115      $ 0.650      $ 0.345   


Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

     May 31,     May 31,     August 31,  

($ and shares in thousands, except par values)

   2014     2013     2013  

ASSETS

      

Current Assets:

      

Cash and cash equivalents

   $ 182,051      $ 170,215      $ 151,927   

Receivables, net

     103,513        130,924        120,291   

Inventories, net

     79,010        72,458        68,607   

Deferred income taxes

     14,748        11,810        12,705   

Other current assets

     19,992        18,307        15,261   
  

 

 

   

 

 

   

 

 

 

Total current assets

     399,314        403,714        368,791   
  

 

 

   

 

 

   

 

 

 

Property, Plant and Equipment:

      

Cost

     160,969        144,199        153,422   

Less accumulated depreciation

     (95,940     (87,293     (88,358
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     65,029        56,906        65,064   
  

 

 

   

 

 

   

 

 

 

Intangibles, net

     33,060        22,974        36,007   

Goodwill

     37,211        30,111        37,414   

Other noncurrent assets

     3,957        4,416        5,020   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 538,571      $ 518,121      $ 512,296   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Current Liabilities:

      

Accounts payable

   $ 47,352      $ 56,902      $ 42,276   

Current portion of long-term debt

     —          1,071        —     

Other current liabilities

     65,173        65,259        59,816   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     112,525        123,232        102,092   
  

 

 

   

 

 

   

 

 

 

Pension benefits liabilities

     6,141        6,603        6,324   

Deferred income taxes

     13,999        8,809        15,415   

Other noncurrent liabilities

     7,869        7,715        7,827   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     140,534        146,359        131,658   
  

 

 

   

 

 

   

 

 

 

Shareholders’ Equity:

      

Preferred stock

     —          —          —     

Common stock

     18,636        18,560        18,571   

Capital in excess of stated value

     51,896        48,392        49,764   

Retained earnings

     437,415        396,825        405,580   

Less treasury stock

     (108,714     (90,961     (90,961

Accumulated other comprehensive loss, net

     (1,196     (1,054     (2,316
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     398,037        371,762        380,638   
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 538,571      $ 518,121      $ 512,296   
  

 

 

   

 

 

   

 

 

 


Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Nine months ended  
     May 31,     May 31,  

($ in thousands)

   2014     2013  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net earnings

   $ 40,183      $ 60,142   

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

    

Depreciation and amortization

     11,131        9,380   

Provision for uncollectible accounts receivable

     891        1,502   

Deferred income taxes

     (3,692     (5,304

Share-based compensation expense

     3,218        3,452   

Other, net

     (430     176   

Changes in assets and liabilities:

    

Receivables

     17,014        (49,375

Inventories

     (9,694     (19,898

Other current assets

     (3,595     (7,712

Accounts payable

     4,501        25,203   

Other current liabilities

     773        18,233   

Current income taxes payable

     4,657        4,551   

Other noncurrent assets and liabilities

     962        536   
  

 

 

   

 

 

 

Net cash provided by operating activities

     65,919        40,886   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property, plant and equipment

     (7,836     (8,149

Proceeds from sale of property, plant and equipment

     19        21   

Proceeds from settlement of net investment hedges

     280        1,536   

Payments for settlement of net investment hedges

     (2,017     (2,051
  

 

 

   

 

 

 

Net cash used in investing activities

     (9,554     (8,643
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     455        1,781   

Common stock withheld for payroll tax withholdings

     (2,027     (2,441

Principal payments on long-term debt

     —          (3,214

Excess tax benefits from share-based compensation

     742        2,751   

Repurchase of common shares

     (17,753     —     

Dividends paid

     (8,348     (4,432
  

 

 

   

 

 

 

Net cash used in financing activities

     (26,931     (5,555
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     690        83   
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     30,124        26,771   

Cash and cash equivalents, beginning of period

     151,927        143,444   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 182,051      $ 170,215