OMAHA, Neb.--(BUSINESS WIRE)--Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its fourth quarter and fiscal year ended August 31, 2017.
Fourth Quarter Results
Fourth quarter fiscal 2017 revenues were $131.9 million compared to revenues of $132.9 million in the prior year’s fourth quarter. Net earnings for the quarter were $6.3 million or $0.59 per diluted share compared with net earnings of $7.8 million or $0.73 per diluted share in the fourth quarter of the prior year. A higher effective income tax rate for the quarter decreased net earnings $1.1 million, or $0.10 per diluted share, compared to the same prior year period.
Irrigation segment revenues for the fourth quarter were $101.9 million, an increase of two percent compared to $99.9 million in the prior year’s fourth quarter. U.S. irrigation revenues were $55.6 million, a three percent decrease from the fourth quarter of the prior year, driven primarily by lower filtration and pump system revenues. Mechanized irrigation equipment revenues increased in the quarter on higher average selling prices and higher unit sales volume. International irrigation revenues were $46.3 million, an increase of nine percent compared to the fourth quarter of the prior year, driven by the continued market recovery in Brazil, increased project activity in developing markets, and a slightly favorable currency translation impact. Infrastructure segment revenues for the fourth quarter were $30.0 million, a decrease of nine percent over the prior year’s fourth quarter. Higher Road Zipper® system lease revenue and higher sales of road safety products in international markets were more than offset by lower Road Zipper® system project sales and lower sales of U.S. road safety products.
Gross margin for the fourth quarter of fiscal 2017 was 28.6 percent of sales compared to 30.1 percent of sales in the prior year’s fourth quarter. Margins were slightly lower in both the irrigation and infrastructure segments. Irrigation margins were impacted by a higher mix of revenue from international markets, where gross margins are typically lower. Infrastructure margins were lower in comparison to a strong fourth quarter in the prior year.
Operating expenses for the fourth quarter of fiscal 2017 were $26.3 million, a decrease of $1.7 million compared to the fourth quarter in the prior year. The decrease resulted from lower selling and administrative expenses while engineering and development costs remained stable, although at elevated levels due to ongoing testing required to qualify road safety products under new U.S. government testing standards. Operating expenses were 19.9 percent of sales in the fourth quarter of fiscal 2017 compared with 21.0 percent of sales in the fourth quarter of the prior year.
Operating income for the fourth quarter of 2017 was $11.5 million, a decrease of four percent compared to $12.0 million in the fourth quarter of the prior year. Irrigation segment operating income increased on higher revenue and lower operating expenses while infrastructure segment operating income decreased on lower revenue and lower gross margin. Operating margin was 8.7 percent in the fourth quarter of 2017 compared to 9.0 percent in the prior year fourth quarter.
Cash and cash equivalents at the end of the fourth quarter were $121.6 million compared to $101.2 million at the end of the prior fiscal year. There were no share repurchases made during the fourth quarter of fiscal 2017. A total of $63.7 million remains available under the Company’s share repurchase program as of August 31, 2017.
The backlog of unshipped orders at August 31, 2017 was $51.8 million compared with $50.7 million at August 31, 2016. Higher order backlog in the irrigation segment was partially offset by lower order backlog in the infrastructure segment compared to the end of the prior fiscal year.
Full Year Results
Total revenues for the year ended August 31, 2017 were $518.0 million, a slight increase compared to $516.4 million in the same prior year period. Net earnings were $23.2 million or $2.17 per diluted share compared with $20.3 million or $1.85 per diluted share in the same prior year period. A higher effective income tax rate in fiscal 2017 decreased net earnings $1.5 million, or $0.14 per diluted share, compared to the same prior year period.
Irrigation segment revenues of $418.0 million for the year ended August 31, 2017 decreased one percent from $421.6 million in the same prior year period. U.S. irrigation revenues of $242.6 million decreased seven percent while international irrigation revenues of $175.4 million increased 10 percent. Infrastructure segment revenues increased five percent to $99.9 million for the year ended August 31, 2017 compared to the same prior year period.
Rick Parod, President and Chief Executive Officer, commented, “U.S. irrigation equipment revenues were improved for a second consecutive quarter, a further indication that we may have reached a level of stabilization in the domestic market. The market recovery in Brazil and increased project activity in developing markets continue to drive growth in international irrigation.”
Parod continued, “Commodity prices have stabilized, but are expected to remain under pressure as generally favorable weather conditions during the 2017 growing season are expected to result in above average crop production levels and ending stocks. The latest USDA estimate of net farm income for 2017 is projected to be 3% higher than last year, following three years of significant decline. Grower sentiment in the U.S. is showing signs of improvement and we expect modest growth in our U.S. irrigation business in the upcoming year. We also expect continued growth in international irrigation markets. In our infrastructure business, we expect continued global growth in Road Zipper system sales and leasing as well as our road safety products. The longer-term drivers for our markets of population growth, expanded food production and efficient water use, and infrastructure upgrades and expansion support our expectations for growth.”
Fourth-Quarter Conference Call
Lindsay’s fiscal 2017 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 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 August 31, 2017, Lindsay had approximately 10.7 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 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|
|CONSOLIDATED STATEMENTS OF EARNINGS|
|Three months ended August 31,||Years ended August 31,|
|(in thousands, except per share amounts)||2017||2016||2017||2016|
|Cost of operating revenues||94,146||92,951||372,973||367,798|
|General and administrative expense||11,681||12,494||46,959||56,419|
|Engineering and research expense||4,440||4,444||17,147||15,846|
|Total operating expenses||26,261||27,950||104,811||114,238|
|Other (expense) income, net||(89||)||74||(907||)||(981||)|
|Earnings before income taxes||10,547||11,020||35,715||29,288|
|Income tax expense||4,205||3,212||12,536||9,021|
|Earnings per share:|
|Shares used in computing earnings per share:|
|Cash dividends declared per share||$||0.30||$||0.29||$||1.17||$||1.13|
|Lindsay Corporation and Subsidiaries|
|CONSOLIDATED BALANCE SHEETS|
|August 31,||August 31,|
|(in thousands, except par values)||2017||2016|
|Cash and cash equivalents||$||121,620||$||101,246|
|Other current assets||6,925||14,468|
|Total current assets||292,934||276,775|
|Property, plant and equipment, net||74,498||77,627|
|Intangible assets, net||42,808||47,200|
|Deferred income tax assets||5,311||4,225|
|Other noncurrent assets||13,350||4,885|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Current portion of long-term debt||201||197|
|Other current liabilities||55,119||55,395|
|Total current liabilities||92,037||87,860|
|Pension benefits liabilities||6,295||6,869|
|Deferred income taxes||1,191||1,223|
|Other noncurrent liabilities||19,679||23,020|
|Capital in excess of stated value||63,006||57,338|
|Less treasury stock||(277,238||)||(277,238||)|
|Accumulated other comprehensive loss, net||(12,108||)||(14,172||)|
|Total shareholders' equity||270,055||251,567|
|Total liabilities and shareholders' equity||$||506,032||$||487,515|
|Lindsay Corporation and Subsidiaries|
|CONSOLIDATED STATEMENTS OF CASH FLOWS|
|(in thousands)||Years Ended August 31,|
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Adjustments to reconcile net earnings to net cash provided by operating activities:|
|Depreciation and amortization||16,678||16,881|
|Provision for uncollectible accounts receivable||(574||)||(843||)|
|Deferred income taxes||(903||)||(5,755||)|
|Share-based compensation expense||3,598||3,060|
|Changes in assets and liabilities:|
|Other current assets||4,581||(1,047||)|
|Other current liabilities||(717||)||(230||)|
|Current taxes payable||(3,104||)||(813||)|
|Other noncurrent assets and liabilities||(5,858||)||12,017|
|Net cash provided by operating activities||39,449||33,125|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Purchases of property, plant and equipment||(8,863||)||(11,496||)|
|Proceeds from settlement of net investment hedges||2,117||3,381|
|Payments for settlement of net investment hedges||(3,466||)||(2,924||)|
|Other investing activities, net||233||1,141|
|Net cash used in investing activities||(9,979||)||(9,898||)|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Proceeds from exercise of stock options||3,020||113|
|Common stock withheld for payroll tax obligations||(635||)||(712||)|
|Principal payments on long-term debt||(197||)||(193||)|
|Repurchase of common shares||-||(48,335||)|
|Net cash used in financing activities||(10,302||)||(61,371||)|
|Effect of exchange rate changes on cash and cash equivalents||1,206||297|
|Net change in cash and cash equivalents||20,374||(37,847||)|
|Cash and cash equivalents, beginning of period||101,246||139,093|
|Cash and cash equivalents, end of period||$||121,620||$||101,246|