Lindsay(LNN) - 2024 Q3 - Quarterly Results

Lindsay Corporation Third Quarter Fiscal 2024 Results Third Quarter Fiscal 2024 Performance Overview Consolidated revenues declined 15% to $139.2 million due to irrigation market weakness, but net earnings increased 21% to $20.4 million, supported by infrastructure and a tax credit Consolidated Financial Summary - Q3 FY2024 vs Q3 FY2023 | (dollars in millions, except per share amounts) | FY2024 | FY2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $139.2 | $164.6 | ($25.4) | (15%) | | Operating income | $19.9 | $27.0 | ($7.0) | (26%) | | Operating margin | 14.3% | 16.4% | | | | Net earnings | $20.4 | $16.9 | $3.5 | 21% | | Diluted earnings per share | $1.85 | $1.53 | $0.32 | 21% | - Net earnings were favorably impacted by a $4.8 million ($0.44 per diluted share) income tax credit recognized in Brazil[5][7] - Secured the largest project in company history, a multi-year supply agreement in the Middle East and North Africa (MENA) region valued at over $100 million[3][5] - The company completed share repurchases totaling $17.9 million during the quarter, aligning with its capital allocation priorities[3][5] - The CEO cited irrigation market softness due to high precipitation in the U.S. Midwest and lower commodity prices with tight credit in Brazil[3] Third Quarter Segment Results Irrigation segment revenues declined 19% to $114.8 million with a 36% operating income drop, contrasting with Infrastructure's 11% revenue growth to $24.4 million and 76% operating income surge Irrigation Segment Irrigation segment revenues declined 19% to $114.8 million, with North America down 9% and international sales, especially Brazil, falling 31% due to market weakness Irrigation Segment Financials - Q3 FY2024 vs Q3 FY2023 | (dollars in millions) | FY2024 | FY2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Revenues: | | | | | | North America | $68.2 | $75.0 | ($6.8) | (9%) | | International | $46.6 | $67.5 | ($20.9) | (31%) | | Total revenues | $114.8 | $142.6 | ($27.7) | (19%) | | Operating income | $19.5 | $30.7 | ($11.2) | (36%) | | Operating margin | 17.0% | 21.6% | | | - North America irrigation revenues decreased 9% due to lower unit sales volume, reduced replacement parts sales, and slightly lower average selling prices[8] - International irrigation revenues fell 31%, primarily from lower sales volumes in Brazil and other Latin American markets where order activity is constrained by lower commodity prices and reduced credit availability[9] Infrastructure Segment Infrastructure segment revenues grew 11% to $24.4 million, with operating income up 76% and margins at 25.8%, primarily from Road Zipper System sales and leases Infrastructure Segment Financials - Q3 FY2024 vs Q3 FY2023 | (dollars in millions) | FY2024 | FY2023 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Total revenues | $24.4 | $22.0 | $2.4 | 11% | | Operating income | $6.3 | $3.6 | $2.7 | 76% | | Operating margin | 25.8% | 16.2% | | | - Revenue growth was driven by higher Road Zipper System sales and increased lease revenues compared to the prior year[11] - Operating margin expanded significantly to 25.8% from 16.2% due to a more favorable revenue mix with higher-margin Road Zipper System sales and leases[12] Backlog and Outlook Backlog surged to $246.9 million from a large MENA project, while near-term irrigation demand remains tempered, but infrastructure growth is expected - The backlog of unfilled orders as of May 31, 2024, was $246.9 million, a substantial increase from $94.5 million as of May 31, 2023[13] - The backlog increase is mainly from the large MENA irrigation project, with revenues expected to be recognized from Q4 fiscal 2024 through Q1 fiscal 2026[13] - The outlook for North American and Brazilian irrigation markets is for tempered demand in the near term, pending improvement in net farm income[14] - The company expects continued growth in the Infrastructure segment, driven by Road Zipper System lease revenues and road safety product sales, supported by U.S. infrastructure spending[14] Financial Statements This section provides the company's condensed consolidated statements of earnings, balance sheets, and cash flows Condensed Consolidated Statements of Earnings Q3 FY2024 revenues were $139.2 million and operating income $19.9 million, with net earnings rising to $20.4 million due to a tax benefit Statement of Earnings Highlights (in thousands) | | Three months ended May 31, | Nine months ended May 31, | | :--- | :--- | :--- | | | 2024 | 2023 | 2024 | 2023 | | Operating revenues | $139,199 | $164,553 | $452,076 | $506,953 | | Gross profit | $46,497 | $53,221 | $145,356 | $160,499 | | Operating income | $19,936 | $26,957 | $63,108 | $78,820 | | Income tax (benefit) expense | ($206) | $8,851 | $10,344 | $22,320 | | Net earnings | $20,379 | $16,881 | $53,521 | $53,150 | Condensed Consolidated Balance Sheets Total assets increased to $758.1 million as of May 31, 2024, with $140.2 million in cash and shareholders' equity at $480.0 million Balance Sheet Highlights (in thousands) | | May 31, 2024 | May 31, 2023 | August 31, 2023 | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $140,221 | $131,577 | $160,755 | | Inventories, net | $171,522 | $166,759 | $155,932 | | Total current assets | $488,718 | $491,252 | $487,484 | | Total assets | $758,101 | $723,618 | $745,660 | | Total current liabilities | $123,737 | $133,048 | $136,108 | | Total liabilities | $278,105 | $286,822 | $290,009 | | Total shareholders' equity | $479,996 | $436,796 | $455,651 | Condensed Consolidated Statements of Cash Flows Net cash from operations was $42.7 million for the nine months, with $32.4 million used in investing and $30.2 million in financing, including share repurchases Statement of Cash Flows Highlights - Nine Months Ended (in thousands) | | May 31, 2024 | May 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $42,650 | $59,168 | | Net cash used in investing activities | ($32,389) | ($18,939) | | Net cash used in financing activities | ($30,240) | ($13,519) | | Net change in cash and cash equivalents | ($20,534) | $26,529 | | Cash and cash equivalents, end of period | $140,221 | $131,577 | - Key uses of cash in financing activities for the nine-month period included $17.9 million for common stock repurchases and $11.6 million for dividend payments[30]