Attached files

file filename
8-K - 8-K - LINDSAY CORPd328566d8k.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 2016 Second Quarter Results

OMAHA, Neb., March 31, 2016—Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its second quarter ended February 29, 2016.

Second Quarter Results

Second quarter fiscal 2016 revenues were $120.6 million versus $141.1 million of revenues in the same prior year period. Including a $13.0 million increase in environmental expenses, the Company incurred a net loss of $4.1 million or $0.37 per diluted share compared with net income of $9.0 million or $0.75 per diluted share in the prior year. The environmental charge, on an after tax basis, reduced net income by $8.7 million or $0.79 per diluted share.

Total irrigation equipment revenues decreased 5 percent to $103.1 million from $108.3 million in the prior fiscal year’s second quarter. U.S. irrigation revenues of $72.3 million increased 6 percent primarily due to revenues from acquired companies, including Elecsys Corporation, which was acquired in January 2015. International irrigation revenues of $30.8 million decreased 24 percent. Excluding the effect of currency translation, international irrigation sales declined 15 percent, most significantly in Brazil and several export markets. Infrastructure revenues decreased 47 percent to $17.5 million due primarily to the completion of the Golden Gate Bridge Road Zipper project in the prior year and decreases in Contract and Tubing markets.

Gross margin was 26.9 percent of sales compared to 28.0 percent of sales in the prior year’s second quarter. Gross margin in irrigation increased by approximately 1 percentage point and infrastructure gross margin decreased by approximately 8 percentage points. The increase in irrigation gross margins is primarily a result of higher margins from value added product lines such as pump stations, filtration and M2M controls, while the competitive pricing pressures on center pivot sales were largely offset by lower input costs. The decrease in infrastructure gross margin was primarily due to sales mix from the decrease in Road Zipper sales.

Operating expenses increased $12.1 million to $37.1 million compared to the second quarter of the prior fiscal year. The increase includes $13.0 million for future environmental expense which was accrued after the Company completed additional environmental testing near a building at its Lindsay, Nebraska facility. The Company’s accrual relates to contamination identified in 1982. The previous accrual did not include certain areas of potential contamination because the Company had been unable to determine the extent of contamination until further testing was conducted and was uncertain as to the remediation that might be required. While the updated estimate includes a number of uncertainties including the need for any remediation plan to be approved by the EPA, it represents the Company’s best estimate of remediation and operating and maintenance costs to meet the long-term regulatory requirements of the 1992 EPA consent decree at the Lindsay, Nebraska facility.

Excluding the environmental expense, operating expenses decreased $0.9 million. The addition of Elecsys Corporation and SPF added $1.7 million in operating expenses, offset by $1.2 million in lower personnel related expenses and $0.9 million of reduced acquisition and integration expenses. Operating expenses were 30.8 percent of sales in the second quarter of fiscal 2016 compared with 17.7 percent of sales in the prior year period. Operating margins were (3.9) percent in the second quarter, versus 10.3 percent in the prior year period.


Cash and cash equivalents of $89.5 million were $77.7 million lower compared to the prior year second quarter. The Company repurchased 332,949 shares for $23.0 million during the second quarter and a total of 469,212 shares for $32.2 million during the first six months of fiscal 2016. $79.8 million remains available under the Company’s share repurchase program.

Backlog of unshipped orders at February 29, 2016 was $52.6 million compared with $74.3 million at February 28, 2015 and $61.9 million at November 30, 2015.

Six Month Results

Total revenues for the six months ended February 29, 2016 were $242.2 million versus $275.9 million in the same prior year period. Foreign currency translation as compared to the prior year reduced year to date revenues by $11.5 million. Net earnings were $2.8 million or $0.25 per diluted share compared with $16.6 million or $1.36 per diluted share in the prior year. The current year includes $13.0 million of estimated environmental expenses compared to $1.5 million in the prior year.

Total irrigation equipment revenues decreased 8 percent to $204.4 million from $223.0 million during the first six months of the prior fiscal year. U.S. irrigation revenues of $131.5 million increased 1 percent, decreasing 10 percent excluding the impact of acquisitions in the prior year. International irrigation revenues of $72.8 million decreased 21 percent, 11 percent excluding the effect of foreign currency translation. Infrastructure revenues decreased 29 percent to $37.8 million, primarily due to the completion of the Golden Gate Bridge Road Zipper project in the prior year.

Outlook

Rick Parod, president and chief executive officer, commented, “The irrigation markets continue to be constrained by lower commodity prices and foreign exchange rates. Excluding the Golden Gate Bridge project last year and the incremental environmental charge this year, our second quarter 2016 operating profits were flat with the prior year quarter.”

Parod continued, “We are now in the midst of the primary selling season for irrigation equipment in North America. While we have seen signs of stabilization, the market continues to reflect reductions from peak periods in farmers’ investments in equipment due to the lowest projected net farm income since 2002. The current environment has near-term challenges, however the longer term drivers for our markets of population growth, expanded food production, efficient water use and infrastructure upgrades and expansion remain positive.”

Second-Quarter Conference Call

Lindsay’s fiscal 2016 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 # 70374091. 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 water management equipment and services including irrigation systems, pump stations, filtration and M2M controls designed to increase or stabilize crop production while conserving water, energy, and labor, and that provide efficiency benefits in various industrial applications. The Company also manufactures and markets infrastructure and road safety products under the Lindsay Transportation Solutions trade name. At February 29, 2016 Lindsay had approximately 10.8 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  

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

   February 29,
2016
    February 28,
2015
    February 29,
2016
    February 28,
2015
 

Operating revenues

   $ 120,573      $ 141,089      $ 242,195      $ 275,934   

Cost of operating revenues

     88,128        101,533        175,336        199,464   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     32,445        39,556        66,859        76,470   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

    

Selling expense

     10,363        10,231        20,355        19,648   

General and administrative expense

     23,028        11,680        32,043        24,551   

Engineering and research expense

     3,748        3,109        7,407        5,833   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     37,139        25,020        59,805        50,032   
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income (loss)

     (4,694     14,536        7,054        26,438   

Other income (expense):

    

Interest expense

     (1,201     (209     (2,397     (280

Interest income

     229        162        393        334   

Other expense, net

     (527     (351     (847     (693
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) before income taxes

     (6,193     14,138        4,203        25,799   

Income tax expense (benefit)

     (2,064     5,143        1,388        9,236   
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings (loss)

   $ (4,129   $ 8,995      $ 2,815      $ 16,563   
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per share:

    

Basic

   $ (0.37   $ 0.75      $ 0.25      $ 1.37   

Diluted

   $ (0.37   $ 0.75      $ 0.25      $ 1.36   

Shares used in computing earnings per share:

    

Basic

     11,024        11,982        11,142        12,103   

Diluted

     11,024        12,008        11,163        12,141   

Cash dividends declared per share

   $ 0.280      $ 0.270      $ 0.560      $ 0.540   


Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ in thousands)

   February 29,
2016
    February 28,
2015
    August 31,
2015
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 89,522      $ 167,165      $ 139,093   

Receivables, net

     79,225        93,293        74,063   

Inventories, net

     82,078        82,263        74,930   

Deferred income taxes

     13,980        16,224        15,807   

Other current assets

     19,248        21,936        18,274   
  

 

 

   

 

 

   

 

 

 

Total current assets

     284,053        380,881        322,167   
  

 

 

   

 

 

   

 

 

 

Property, plant and equipment, net

     78,916        75,663        78,656   

Intangibles, net

     49,475        53,900        51,920   

Goodwill

     76,628        74,808        76,801   

Other noncurrent assets, net

     6,411        13,528        6,924   
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 495,483      $ 598,780      $ 536,468   
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 36,371      $ 50,293      $ 38,814   

Current portion of long-term debt

     195        192        193   

Other current liabilities

     47,971        58,838        56,105   
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     84,537        109,323        95,112   
  

 

 

   

 

 

   

 

 

 

Pension benefits liabilities

     6,431        6,460        6,569   

Long-term debt

     117,075        117,270        117,173   

Deferred income taxes

     13,233        20,940        18,971   

Other noncurrent liabilities

     22,588        8,846        10,083   
  

 

 

   

 

 

   

 

 

 

Total liabilities

     243,864        262,839        247,908   
  

 

 

   

 

 

   

 

 

 

Shareholders’ equity:

      

Preferred stock

     —          —          —     

Common stock

     18,713        18,675        18,684   

Capital in excess of stated value

     55,908        53,618        55,184   

Retained earnings

     455,535        455,439        458,903   

Less treasury stock – at cost

     (261,118     (181,383     (228,903

Accumulated other comprehensive loss, net

     (17,419     (10,408     (15,308
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     251,619        335,941        288,560   
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 495,483      $ 598,780      $ 536,468   
  

 

 

   

 

 

   

 

 

 


Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Six months ended  

($ in thousands)

   February 29,
2016
    February 28,
2015
 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net earnings

   $ 2,815      $ 16,563   

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

    

Depreciation and amortization

     8,536        8,017   

Asset impairment

     —          270   

Provision for uncollectible accounts receivable

     (1,103     418   

Deferred income taxes

     (4,163     28   

Share-based compensation expense

     1,534        2,051   

Other, net

     1,828        3,381   

Changes in assets and liabilities:

    

Receivables

     (5,220     (4,439

Inventories

     (8,094     (3,583

Other current assets

     (1,779     (2,647

Accounts payable

     (2,247     9,778   

Other current liabilities

     (5,273     (8,744

Current income taxes payable

     (3,694     (6,987

Other noncurrent assets and liabilities

     11,833        1,478   
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     (5,027     15,584   
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property, plant and equipment

     (7,392     (6,576

Acquisition of business, net of cash acquired

     —          (67,176

Proceeds from settlement of net investment hedges

     2,317        3,310   

Payments for settlement of net investment hedges

     (512     (329

Other investing activities, net

     1,073        (2,554
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,514     (73,325
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     113        66   

Common stock withheld for payroll tax withholdings

     (712     (1,703

Proceeds from issuance of long-term debt

     —          115,000   

Principal payments on long-term debt

     (96     (16

Issuance costs related to debt

     —          (679

Excess tax benefits from share-based compensation

     53        510   

Repurchase of common shares

     (32,215     (49,363

Dividends paid

     (6,183     (6,490
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     (39,040     57,325   
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (990     (4,261
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (49,571     (4,677

Cash and cash equivalents, beginning of period

     139,093        171,842   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 89,522      $ 167,165   
  

 

 

   

 

 

 

SUPPLEMENTAL CASH FLOW INFORMATION

    

Income taxes paid

   $ 11,637      $ 15,485   

Interest paid

   $ 2,352      $ 129