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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:
Brian Ketcham       Hala Elsherbini or Geralyn DeBusk
Senior Vice President & Chief Financial Officer       972-458-8000
402-827-6579      

Lindsay Corporation Reports Fiscal 2019 First Quarter Results

 

   

Infrastructure revenues increased 15 percent on higher Road Zipper System® sales

 

   

Overall revenues decreased as a result of previously announced business divestitures

 

   

Excluding impact of divestitures, North America irrigation revenues increased 5 percent

 

   

GAAP diluted earnings per share of $0.11 ($0.38 adjusted)1, compared to $0.30 in the prior year

OMAHA, Neb., January 8, 2019—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its first quarter ended November 30, 2018.

First Quarter Summary

Revenues for the first quarter of fiscal 2019 were $112.0 million, a decrease of $12.5 million, or 10 percent, compared to revenues of $124.5 million in the prior year’s first quarter. Revenues decreased $14.0 million as a result of the completion of previously announced business divestitures.

Net earnings for the quarter were $1.2 million and diluted earnings per share were $0.11, compared with net earnings of $3.2 million and diluted earnings per share of $0.30 for the same period in the prior year. Net earnings for the quarter were reduced by after-tax costs of $2.9 million, or $0.27 per diluted share, related to the Company’s Foundation for Growth initiative. Adjusted net earnings for the first quarter were $4.1 million, or $0.38 per diluted share.1

“As expected, market headwinds in North America constrained demand for irrigation equipment in our first quarter; however disciplined price management in response to higher input costs led to revenue growth for the quarter,” said Tim Hassinger, President and Chief Executive Officer. “We continue to make progress on our Foundation for Growth initiative, and during the quarter we completed the last of our previously announced divestitures.”

Segment Results

Irrigation segment revenues for the first quarter of fiscal 2019 were $87.6 million, a decrease of $15.8 million, or 15 percent, compared to $103.4 million in the prior year’s first quarter. Excluding the impact of the divestitures, North America irrigation revenues of $56.5 million increased $2.7 million, or 5 percent, compared to the prior year. International irrigation revenues of $31.1 million decreased $4.5 million, or 13 percent, compared to the prior year. Differences in foreign currency exchange rates accounted for $2.4 million of the decline.

Irrigation segment operating margin was 8.9 percent of sales in the first quarter (9.0 percent adjusted)1, compared to 7.6 percent of sales in the prior year. Improved operating margin resulted from improvement in North America, supported by the impact of the divestitures as well as price realization and a more favorable product mix.

Infrastructure segment revenues for the first quarter of fiscal 2019 were $24.3 million, an increase of $3.1 million, or 15 percent, compared to $21.2 million in the prior year’s first quarter. The increase resulted from higher Road Zipper System® sales which were partially offset by lower sales of road safety products.

 

1 

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


Infrastructure segment operating margin was 17.1 percent of sales in the first quarter (17.6 percent adjusted)1, compared to 15.5 percent of sales in the first quarter of the prior year. Improved operating margin resulted from a more favorable product mix and lower operating costs compared to the prior year.

The backlog of unshipped orders at November 30, 2018 was $48.9 million, compared with $80.3 million at November 30, 2017 reflecting a decrease in both the Irrigation and Infrastructure backlogs. Approximately $13.0 million of the backlog reduction resulted from the business divestitures and $14.0 million is from a large infrastructure project completed in the prior fiscal year.                

Foundation for Growth Initiative

In fiscal 2018, 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.

First quarter fiscal 2019 operating expenses include pre-tax costs of $4.0 million in connection with the Foundation for Growth initiative, of which $3.8 million represents professional consulting fees with the remainder representing severance costs and a loss on sale of a business. These costs, and additional future costs anticipated in connection with this initiative, are expected to be recovered through improved operating income in fiscal 2020.

Outlook

“Passage of the 2018 farm bill provides a source of modest optimism that North America irrigation market conditions will see improvement.” said Mr. Hassinger. “In the international markets, we are seeing signs of improved conditions in Brazil as well as increased interest in developing markets.”

Mr. Hassinger added, “We continue to build a solid pipeline of Road Zipper System projects to support growth in the infrastructure business; however, the long lead times required to complete these projects can impact the timing of when we will realize the value from the increased focus on this business.”

First Quarter Conference Call

Lindsay’s fiscal 2019 first 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 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.

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.

 

2


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

     Three months ended  

(in thousands, except per share amounts)

   November 30,
2018
    November 30,
2017
 

Operating revenues

   $ 111,951     $ 124,526  

Cost of operating revenues

     83,303       92,129  
  

 

 

   

 

 

 

Gross profit

     28,648       32,397  
  

 

 

   

 

 

 

Operating expenses:

    

Selling expense

     7,982       10,225  

General and administrative expense

     15,058       11,918  

Engineering and research expense

     3,568       4,053  
  

 

 

   

 

 

 

Total operating expenses

     26,608       26,196  
  

 

 

   

 

 

 

Operating income

     2,040       6,201  

Interest expense

     (1,205     (1,181

Interest income

     654       320  

Other income (expense), net

     192       (548
  

 

 

   

 

 

 

Earnings before income taxes

     1,681       4,792  

Income tax expense

     469       1,607  
  

 

 

   

 

 

 

Net earnings

   $ 1,212     $ 3,185  
  

 

 

   

 

 

 

Earnings per share:

    

Basic

   $ 0.11     $ 0.30  

Diluted

   $ 0.11     $ 0.30  

Shares used in computing earnings per share:

    

Basic

     10,766       10,705  

Diluted

     10,806       10,740  

Cash dividends declared per share

   $ 0.31     $ 0.30  

 

3


LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

 

     Three months ended  

(in thousands)

   November 30,
2018
    November 30,
2017
 

Operating revenues:

    

Irrigation segment

   $ 87,610     $ 103,353  

Infrastructure segment

     24,341       21,173  
  

 

 

   

 

 

 

Total operating revenues

   $ 111,951     $ 124,526  
  

 

 

   

 

 

 

Operating income:

    

Irrigation segment

   $ 7,783     $ 7,851  

Infrastructure segment

     4,168       3,291  

Corporate

     (9,911     (4,941
  

 

 

   

 

 

 

Total operating income

   $ 2,040     $ 6,201  
  

 

 

   

 

 

 

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.

 

4


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

   November 30,
2018
    November 30,
2017
    August 31,
2018
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 137,217     $ 109,450     $ 160,787  

Receivables, net

     84,864       79,774       69,107  

Inventories, net

     88,912       93,994       79,233  

Prepaid expenses

     3,199       3,555       3,883  

Assets held-for-sale

     2,744       —         10,837  

Other current assets

     8,386       9,461       7,204  
  

 

 

   

 

 

   

 

 

 

Total current assets

     325,322       296,234       331,051  
  

 

 

   

 

 

   

 

 

 

Property, plant, and equipment, net

     60,482       72,940       57,248  

Intangibles, net

     26,576       41,702       27,376  

Goodwill

     64,557       77,127       64,671  

Deferred income tax assets

     5,639       3,111       6,645  

Other noncurrent assets, net

     19,943       12,293       13,265  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 502,519     $ 503,407     $ 500,256  
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 41,338     $ 41,046     $ 30,530  

Current portion of long-term debt

     206       202       205  

Liabilities held-for-sale

     —         —         2,424  

Other current liabilities

     41,480       48,875       46,935  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     83,024       90,123       80,094  
  

 

 

   

 

 

   

 

 

 

Pension benefits liabilities

     5,803       6,223       5,874  

Long-term debt

     116,518       116,724       116,570  

Deferred income tax liabilities

     1,048       1,649       1,083  

Other noncurrent liabilities

     19,451       19,456       19,769  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     225,844       234,175       223,390  
  

 

 

   

 

 

   

 

 

 

Shareholders’ equity:

      

Preferred stock

     —         —         —    

Common stock

     18,870       18,805       18,841  

Capital in excess of stated value

     68,710       63,191       68,465  

Retained earnings

     483,811       477,584       484,886  

Less treasury stock - at cost

     (277,238     (277,238     (277,238

Accumulated other comprehensive loss, net

     (17,478     (13,110     (18,088
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     276,675       269,232       276,866  
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 502,519     $ 503,407     $ 500,256  
  

 

 

   

 

 

   

 

 

 

 

5


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Three months ended  

(in thousands)

   November 30,
2018
    November 30,
2017
 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net earnings

   $ 1,212     $ 3,185  

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

    

Depreciation and amortization

     3,424       4,335  

Loss on sale of business

     67       —    

Provision for uncollectible accounts receivable

     (159     112  

Deferred income taxes

     742       2,111  

Share-based compensation expense

     1,303       1,001  

Other, net

     (1,053     614  

Changes in assets and liabilities:

    

Receivables

     (14,782     (6,526

Inventories

     (11,387     (8,672

Prepaid expenses and other current assets

     298       (15

Accounts payable

     13,917       4,642  

Other current liabilities

     (7,106     (6,156

Other noncurrent assets and liabilities

     (792     399  
  

 

 

   

 

 

 

Net cash used in operating activities

     (14,316     (4,970
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property, plant, and equipment

     (5,701     (1,991

Proceeds from settlement of net investment hedges

     962       101  

Payments for settlement of net investment hedges

     —         (1,176

Other investing activities, net

     8       74  
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,731     (2,992
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     177       132  

Common stock withheld for payroll tax obligations

     (1,120     (828

Principal payments on long-term debt

     (51     (50

Dividends paid

     (3,344     (3,216
  

 

 

   

 

 

 

Net cash used in financing activities

     (4,338     (3,962
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (185     (246
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (23,570     (12,170

Cash and cash equivalents, beginning of period

     160,787       121,620  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 137,217     $ 109,450  
  

 

 

   

 

 

 

 

6


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 consulting fees, severance costs and loss from business divestitures, 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              

(in thousands, except per share amounts)

   November 30,
2018
    Diluted
earnings per
share
             

Net earnings - reported GAAP measure

   $ 1,212     $ 0.11      

FFG costs - after tax

     2,916       0.27      
  

 

 

   

 

 

     

Net earnings - adjusted

   $ 4,128     $ 0.38      
  

 

 

   

 

 

     

Average shares outstanding - diluted

       10,806      
     For the three months ended November 30, 2018  

Operating income reconciliation

   Consolidated     Irrigation     Infrastructure     Corporate  

Operating income - reported GAAP measure

   $ 2,040     $ 7,783     $ 4,168     $ (9,911

FFG costs - before tax

     3,995       126       112       3,757  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 6,035     $ 7,909     $ 4,280     $ (6,154
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating revenues

   $ 111,951     $ 87,610     $ 24,341     $ —    

Operating income as a percent of operating revenues

     1.8     8.9     17.1     N/A  

Adjusted operating income as a percent of operating revenues

     5.4     9.0     17.6     N/A  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7