Lindsay(LNN) - 2025 Q1 - Quarterly Results

Fiscal 2025 First Quarter Results Overview Lindsay Corporation reported strong Q1 FY25 results with revenue growth, expanded net earnings, and strategic investments in irrigation and infrastructure Key Highlights Lindsay Corporation reported revenue growth and expanded net earnings in Q1 FY25, driven by international irrigation projects. The company also announced a significant Road Zipper System contract and a strategic minority investment in Pessl Instruments GmbH to enhance water management solutions - Revenue growth and expansion to net earnings achieved despite cyclical challenges in mature irrigation markets, supported by international irrigation business[2] - Infrastructure business revenues were slightly lower, but diligent cost management and manufacturing efficiency led to expanded margins and higher operating income[2] - Finalized a Road Zipper System™ contract valued at over $20 million, expected to be fully delivered in fiscal second quarter[2] - Closed acquisition of a minority interest in Pessl Instruments GmbH, aiming to accelerate innovations in water management, increase global reach, and provide new solutions[2] First Quarter Consolidated Financial Summary For the first quarter of fiscal 2025, Lindsay Corporation reported a 3% increase in total revenues to $166.3 million, primarily due to international irrigation growth. Net earnings rose by 14% and diluted EPS by 15%, benefiting from increased other income and a lower effective tax rate, despite a slight decrease in operating income Consolidated Financial Summary (Q1 FY2025 vs Q1 FY2024) | (dollars in millions, except per share amounts) | FY2025 | FY2024 | $ Change | % Change | | :------------------------------------ | :----- | :----- | :------- | :------- | | Total revenues | $166.3 | $161.4 | $4.9 | 3% | | Operating income | $20.9 | $21.1 | ($0.2) | (1%) | | Operating margin | 12.6% | 13.1% | | | | Net earnings | $17.2 | $15.0 | $2.1 | 14% | | Diluted earnings per share | $1.57 | $1.36 | $0.21 | 15% | - Revenue growth was driven by an increase in international irrigation revenues, partially offset by decreases in North America irrigation and infrastructure revenues[3] - Net earnings and diluted earnings per share increased by 14% and 15% respectively, benefiting from an increase in other income and a lower effective income tax rate[5] Segment Performance The company's segments showed mixed performance, with strong international irrigation growth offsetting North America declines, while infrastructure improved margins despite lower revenue, leading to a significant backlog increase Irrigation Segment The Irrigation segment's total revenues increased by 5% to $147.1 million, primarily due to strong international performance, which offset a decline in North America. Operating income for the segment decreased by 2% to $24.7 million, with operating margin contracting due to a higher proportion of lower-margin international project revenues Irrigation Segment Revenues (Q1 FY2025 vs Q1 FY2024) | (dollars in millions) | FY2025 | FY2024 | $ Change | % Change | | :-------------------- | :----- | :----- | :------- | :------- | | North America | $77.7 | $89.4 | ($11.7) | (13%) | | International | $69.4 | $50.8 | $18.6 | 37% | | Total revenues | $147.1 | $140.2 | $6.9 | 5% | Irrigation Segment Operating Income (Q1 FY2025 vs Q1 FY2024) | (dollars in millions) | FY2025 | FY2024 | $ Change | % Change | | :-------------------- | :----- | :----- | :------- | :------- | | Operating income | $24.7 | $25.3 | ($0.6) | (2%) | | Operating margin | 16.8% | 18.1% | | | - The decrease in operating income and operating margin resulted primarily from a higher proportion of international project revenues, which were dilutive to overall margin[8] North America Irrigation North America irrigation revenues declined by 13% due to lower unit sales volume, a less favorable product mix, and slightly lower average selling prices, influenced by a projected reduction in net farm income - North America irrigation revenues decreased by $11.7 million, or 13%, to $77.7 million[6] - The decrease was primarily due to lower unit sales volume, a less favorable mix of shorter machines, and slightly lower average selling prices, driven by lower demand due to a projected reduction in net farm income for calendar 2024[6] International Irrigation International irrigation revenues surged by 37%, largely driven by a major project in the MENA region and increased sales in Europe and parts of Latin America, despite some headwinds from lower sales in Brazil and unfavorable foreign currency translation - International irrigation revenues increased by $18.6 million, or 37%, to $69.4 million[7] - The increase resulted primarily from revenues related to a large project in the MENA region, along with higher sales in Europe and certain regions of Latin America, partially offset by lower sales in Brazil[7] - Revenues were unfavorably impacted by foreign currency translation of approximately $2.1 million[7] Infrastructure Segment The Infrastructure segment experienced a 9% revenue decrease to $19.2 million, mainly due to project timing and lower road safety product sales. However, operating income increased by 14% to $4.1 million, with operating margin expanding significantly to 21.5%, driven by improved manufacturing efficiency and reduced operating expenses Infrastructure Segment Performance (Q1 FY2025 vs Q1 FY2024) | (dollars in millions) | FY2025 | FY2024 | $ Change | % Change | | :-------------------- | :----- | :----- | :------- | :------- | | Total revenues | $19.2 | $21.2 | ($2.0) | (9%) | | Operating income | $4.1 | $3.6 | $0.5 | 14% | | Operating margin | 21.5% | 17.1% | | | - Revenue decrease primarily resulted from a difference in the timing of Road Zipper System lease revenues and lower sales of road safety products[9] - Increased operating income and operating margin resulted primarily from improved manufacturing efficiency and lower operating expenses[10] Backlog The company's backlog of unfulfilled orders significantly increased to $168.2 million at November 30, 2024, more than doubling from the prior year, primarily driven by a large international irrigation project Backlog of Unfulfilled Orders | Date | Backlog (millions) | | :--------------- | :----------------- | | November 30, 2024 | $168.2 | | November 30, 2023 | $86.8 | - The increase in backlog was primarily due to the addition of the large project in the MENA region[11] - Included in the November 30, 2024 backlog is $17.4 million for orders not expected to be fulfilled within the subsequent 12 months[11] Outlook Management anticipates continued soft market conditions in North America and Brazil irrigation in the near term, but sees signs of stabilization and improvement. Growth is expected in developing international markets and the infrastructure business, supported by new projects and federal funding - Softer market conditions in North America and Brazil irrigation markets are expected to continue in the near term, though indications suggest nearing the trough of the cycle with some stabilization and improvement in commodity prices[12] - New state-level financing programs in Brazil are expected to provide additional clarity and support for irrigation investments[12] - Continued growth is expected in developing international markets, highlighted by project activity in the MENA region[12] - Growth in the infrastructure business is anticipated in fiscal 2025, supported by a large Road Zipper System project and U.S. federal infrastructure funding, despite construction cost inflation[12] Company Information This section provides an overview of Lindsay Corporation's business, forward-looking statement disclaimers, contact details, and conference call information About Lindsay Corporation Lindsay Corporation is a global leader in manufacturing and distributing irrigation and infrastructure equipment and technology, established in 1955. The company offers innovative solutions for agriculture and transportation through brands like Zimmatic™, FieldNET™, Barrier Systems™, and Road Zipper™ - Lindsay Corporation (NYSE: LNN) is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, established in 1955[14] - Irrigation brands include Zimmatic™ center pivot and lateral move systems, FieldNET™ and FieldWise™ remote irrigation management technology, and FieldNET Advisor™[14] - Transportation brands include Barrier Systems™, Road Zipper™, and Snoline™ for road safety and traffic management[14] Forward-Looking Statements This section serves as a disclaimer, indicating that the release contains forward-looking statements subject to risks and uncertainties, reflecting management's current beliefs. The company claims protection under the Private Securities Litigation Reform Act of 1995 and undertakes no obligation to update such information - The release contains forward-looking statements subject to risks and uncertainties, reflecting management's current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results[15] - The Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995[15] Contact Information Contact details for investor relations inquiries are provided, including the Vice President of Investor Relations & Treasury and Alpha IR - For further information, contact Alicia Pfeifer, Vice President, Investor Relations & Treasury, or Joe Caminiti/Stephen Poe at Alpha IR[16] First Quarter Conference Call Details for the investor conference call regarding Lindsay's fiscal 2025 first quarter results are provided, including dial-in information and access via the company's website - Lindsay's fiscal 2025 first quarter investor conference call is scheduled for 11:00 a.m. Eastern Time on January 7, 2025[13] - Interested investors can participate by dialing (833) 535-2202 (U.S.) or (412) 902-6745 (international), or via live simulcast on the investor relations section of www.lindsay.com[13](index=13&type=chunk) Financial Statements This section presents the unaudited condensed consolidated statements of earnings, segment operating results, balance sheets, and cash flows for the reported periods Condensed Consolidated Statements of Earnings This section presents the unaudited condensed consolidated statements of earnings for the three months ended November 30, 2024, and November 30, 2023, detailing revenues, expenses, and net earnings Condensed Consolidated Statements of Earnings (Three months ended November 30) | (in thousands, except per share amounts) | 2024 | 2023 | | :------------------------------------- | :-------- | :-------- | | Operating revenues | $166,281 | $161,358 | | Cost of operating revenues | 116,315 | 111,453 | | Gross profit | 49,966 | 49,905 | | Total operating expenses | 29,083 | 28,831 | | Operating income | 20,883 | 21,074 | | Total other income (expense) | 1,151 | (79) | | Earnings before income taxes | 22,034 | 20,995 | | Income tax expense | 4,870 | 5,976 | | Net earnings | $17,164 | $15,019 | | Earnings per share: | | | | Basic | $1.58 | $1.36 | | Diluted | $1.57 | $1.36 | | Cash dividends declared per share | $0.36 | $0.35 | Summary Operating Results by Segment This section provides a detailed breakdown of operating revenues and operating income for the Irrigation and Infrastructure segments for the three months ended November 30, 2024, and 2023, along with descriptions of each segment's activities Operating Revenues by Segment (Three months ended November 30) | (in thousands) | 2024 | 2023 | | :------------------ | :-------- | :-------- | | Irrigation: | | | | North America | $77,669 | $89,377 | | International | 69,418 | 50,791 | | Irrigation segment | 147,087 | 140,168 | | Infrastructure segment | 19,194 | 21,190 | | Total operating revenues | $166,281 | $161,358 | Operating Income by Segment (Three months ended November 30) | (in thousands) | 2024 | 2023 | | :------------------ | :-------- | :-------- | | Irrigation segment | $24,736 | $25,307 | | Infrastructure segment | 4,124 | 3,619 | | Corporate | (7,977) | (7,852) | | Total operating income | $20,883 | $21,074 | - The Irrigation segment includes manufacturing and marketing of center pivot, lateral move, and hose reel irrigation systems, as well as various innovative technology solutions[20] - The Infrastructure segment includes manufacturing and marketing of moveable barriers, specialty barriers, crash cushions, end terminals, and road marking and road safety equipment[21] Condensed Consolidated Balance Sheets This section presents the unaudited condensed consolidated balance sheets as of November 30, 2024, November 30, 2023, and August 31, 2024, detailing assets, liabilities, and shareholders' equity Key Balance Sheet Items (in thousands) | (in thousands) | Nov 30, 2024 | Nov 30, 2023 | Aug 31, 2024 | | :------------------------- | :----------- | :----------- | :----------- | | Total assets | $771,001 | $763,918 | $760,232 | | Total liabilities | 282,542 | 297,058 | 279,339 | | Total shareholders' equity | 488,459 | 466,860 | 480,893 | Current Assets (in thousands) | (in thousands) | Nov 30, 2024 | Nov 30, 2023 | Aug 31, 2024 | | :---------------------- | :----------- | :----------- | :----------- | | Cash and cash equivalents | $194,066 | $159,381 | $190,879 | | Receivables, net | 120,875 | 143,049 | 116,601 | | Inventories, net | 158,255 | 164,144 | 154,453 | | Total current assets | 502,144 | 501,302 | 493,212 | Current Liabilities (in thousands) | (in thousands) | Nov 30, 2024 | Nov 30, 2023 | Aug 31, 2024 | | :---------------------- | :----------- | :----------- | :----------- | | Accounts payable | $53,185 | $52,242 | $37,417 | | Other current liabilities | 76,435 | 89,502 | 88,171 | | Total current liabilities | 129,849 | 141,971 | 125,816 | Condensed Consolidated Statements of Cash Flows This section presents the unaudited condensed consolidated statements of cash flows for the three months ended November 30, 2024, and November 30, 2023, outlining cash flows from operating, investing, and financing activities Cash Flows from Operating Activities (Three months ended November 30) | (in thousands) | 2024 | 2023 | | :--------------------------------- | :-------- | :-------- | | Net earnings | $17,164 | $15,019 | | Net cash provided by operating activities | 21,603 | 21,872 | Cash Flows from Investing Activities (Three months ended November 30) | (in thousands) | 2024 | 2023 | | :--------------------------------- | :-------- | :-------- | | Purchases of property, plant, and equipment | (9,142) | (6,941) | | Net cash used in investing activities | (8,806) | (18,201) | Cash Flows from Financing Activities (Three months ended November 30) | (in thousands) | 2024 | 2023 | | :--------------------------------- | :-------- | :-------- | | Dividends paid | (3,912) | (3,861) | | Net cash used in financing activities | (5,310) | (5,380) | - Cash and cash equivalents at the end of the period were $194,066 thousand, an increase of $3,187 thousand during the quarter[27]