Lindsay(LNN) - 2025 Q3 - Quarterly Report

Part I – FINANCIAL INFORMATION Financial Statements Unaudited condensed consolidated financial statements for Q3 and YTD May 31, 2025 and 2024, covering earnings, balance sheets, cash flows, and key notes Condensed Consolidated Statements of Earnings (Unaudited) | ($ in thousands) | Three months ended May 31, 2025 | Three months ended May 31, 2024 | Nine months ended May 31, 2025 | Nine months ended May 31, 2024 | | :--- | :--- | :--- | :--- | :--- | | Operating revenues | $169,464 | $139,199 | $522,809 | $452,076 | | Gross profit | $53,622 | $46,497 | $166,075 | $145,356 | | Operating income | $23,793 | $19,936 | $76,799 | $63,108 | | Net earnings | $19,500 | $20,379 | $63,239 | $53,521 | | Diluted EPS | $1.78 | $1.85 | $5.79 | $4.84 | Condensed Consolidated Balance Sheet Highlights (Unaudited) | ($ in thousands) | May 31, 2025 | May 31, 2024 | August 31, 2024 | | :--- | :--- | :--- | :--- | | Total current assets | $547,246 | $488,718 | $493,212 | | Total assets | $840,863 | $758,101 | $760,232 | | Total current liabilities | $150,244 | $123,737 | $125,816 | | Total liabilities | $312,087 | $278,105 | $279,339 | | Total shareholders' equity | $528,776 | $479,996 | $480,893 | Condensed Consolidated Statements of Cash Flows (Unaudited) | ($ in thousands) | Nine months ended May 31, 2025 | Nine months ended May 31, 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $68,874 | $42,650 | | Net cash used in investing activities | $(48,443) | $(32,389) | | Net cash used in financing activities | $(14,359) | $(30,240) | | Net change in cash and cash equivalents | $5,238 | $(20,534) | Note 2 – Revenue Recognition Revenue disaggregation by segment and timing, showing $522.8 million in YTD May 31, 2025 operating revenues and $20.4 million in unsatisfied performance obligations Disaggregation of Revenue - Nine Months Ended May 31, 2025 | ($ in thousands) | Irrigation | Infrastructure | Total | | :--- | :--- | :--- | :--- | | Point in time | $414,958 | $66,192 | $481,150 | | Over time | $24,013 | $4,891 | $28,904 | | Revenue from contracts | $438,971 | $71,083 | $510,054 | | Lease revenue | — | $12,755 | $12,755 | | Total operating revenues | $438,971 | $83,838 | $522,809 | - As of May 31, 2025, unsatisfied performance obligations for contracts longer than 12 months were $20.4 million, with almost all expected to be satisfied in the next 12 months[27] Note 9 – Commitments and Contingencies Defends product liability lawsuits for X-Lite® end terminal, with no probable loss accrual, and holds a $10.6 million environmental remediation liability - The company is defending product liability lawsuits related to its X-Lite® end terminal, with subsequent qui tam lawsuits filed in Tennessee and California in late 2023 following the dismissal of a federal FCA Lawsuit[47][49] - Management believes it has meritorious defenses and does not believe a loss is probable in these lawsuits, therefore, no accrual has been recorded, and the company maintains insurance to mitigate potential impacts[51][52] - The company has an estimated aggregate accrued cost of $10.6 million for environmental remediation at its Lindsay, Nebraska facility, with a pilot study completed and ongoing work with the EPA and NDEE on finalizing remediation plans[53][55] Note 14 – Business Segments Operates in Irrigation and Infrastructure segments; for YTD May 31, 2025, Irrigation revenue was $439.0 million and Infrastructure revenue was $83.8 million Segment Performance - Nine Months Ended May 31 | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Operating Revenues | | | | Irrigation | $438,971 | $388,026 | | Infrastructure | $83,838 | $64,050 | | Total | $522,809 | $452,076 | | Operating Income | | | | Irrigation | $79,266 | $70,480 | | Infrastructure | $22,806 | $13,401 | | Corporate | $(25,273) | $(20,773) | | Total | $76,799 | $63,108 | Irrigation Revenue by Geography - Nine Months Ended May 31 | ($ in thousands) | 2025 | 2024 | | :--- | :--- | :--- | | North America | $223,793 | $240,457 | | International | $215,178 | $147,569 | | Irrigation Total | $438,971 | $388,026 | Management's Discussion and Analysis of Financial Condition and Results of Operations Discusses financial performance, highlighting 22% Q3 2025 revenue growth driven by Irrigation, positive Infrastructure outlook from IIJA, strong liquidity, and capital allocation Executive Overview and Outlook Q3 2025 revenues increased 22% to $169.5 million, net earnings decreased to $19.5 million; international irrigation and IIJA-driven infrastructure show positive outlook, backlog decreased to $117.1 million - Q3 2025 revenues rose 22% to $169.5 million, while net earnings fell to $19.5 million from $20.4 million, primarily due to a $4.8 million one-time tax credit in the prior-year period[72] - International irrigation markets are key growth drivers, highlighted by a multi-year supply agreement for a project in the MENA region valued at over $100 million, with deliveries expected through Q1 fiscal 2026[77] - The infrastructure business is supported by the Infrastructure Investment and Jobs Act (IIJA), which provides $110 billion in incremental federal funding for transportation projects through September 2026[78] - The order backlog at May 31, 2025, was $117.1 million, a decrease from $205.9 million at May 31, 2024, mainly due to the ongoing fulfillment of the large irrigation project in the MENA region[79] Results of Operations Q3 2025 revenues increased 22% to $169.5 million, driven by international irrigation; YTD revenues grew 16% to $522.8 million, with infrastructure up 31%, and operating income rose 22% to $76.8 million Q3 Performance Summary (Three months ended May 31) | ($ in thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $169,464 | $139,199 | 22% | | Gross profit | $53,622 | $46,497 | 15% | | Operating income | $23,793 | $19,936 | 19% | | Net earnings | $19,500 | $20,379 | (4%) | - Q3 international irrigation revenues increased 60% to $74.7 million, primarily from the large MENA project and higher sales in South America, partially offset by $2.5 million in unfavorable currency effects[84] YTD Performance Summary (Nine months ended May 31) | ($ in thousands) | 2025 | 2024 | % Change | | :--- | :--- | :--- | :--- | | Operating revenues | $522,809 | $452,076 | 16% | | Gross profit | $166,075 | $145,356 | 14% | | Operating income | $76,799 | $63,108 | 22% | | Net earnings | $63,239 | $53,521 | 18% | - For the nine-month period, infrastructure revenues grew 31% to $83.8 million, driven by a large Road Zipper System project valued at over $20 million[95] Liquidity and Capital Resources Strong liquidity with $210.8 million in cash and equivalents; net working capital increased to $397.0 million, and cash from operations was $68.9 million; capital allocation prioritizes growth, dividends, and repurchases, with a $50.0 million undrawn credit facility - Cash, cash equivalents, and marketable securities totaled $210.8 million at May 31, 2025, up from $152.7 million a year prior, with approximately $108.5 million held by foreign subsidiaries[101][102] - The capital allocation plan prioritizes organic growth, dividends, synergistic acquisitions, and opportunistic share repurchases, with fiscal 2025 capital expenditures projected to be between $35.0 million and $40.0 million[106][107] - In Q3 2025, the company paid a quarterly dividend of $0.36 per share, and during the nine months ended May 31, 2025, repurchased $2.7 million of its common stock, with $38.8 million remaining under the authorization[108][110] - The company has a $50.0 million unsecured Revolving Credit Facility expiring in August 2026, with no outstanding borrowings as of May 31, 2025, and was in compliance with all financial loan covenants[112][113] Quantitative and Qualitative Disclosures About Market Risk No material changes to quantitative and qualitative disclosures about market risk since the last Annual Report on Form 10-K - There have been no material changes from the Company's quantitative and qualitative disclosures about market risk previously disclosed in the Company's most recent Annual Report on Form 10-K[115] Controls and Procedures Disclosure controls and procedures were effective as of May 31, 2025, with no significant changes to internal control over financial reporting - The CEO and CFO concluded that the Company's disclosure controls and procedures were effective as of May 31, 2025[116] - There were no significant changes to the Company's internal control over financial reporting during the last fiscal quarter that materially affected, or are reasonably likely to materially affect, these controls[117] Part II – OTHER INFORMATION Legal Proceedings Information regarding legal proceedings is incorporated by reference from Note 9 – Commitments and Contingencies - Information regarding legal proceedings is incorporated by reference from Note 9 – Commitments and Contingencies in Part I, Item 1 of this report[118] Risk Factors No material changes from risk factors previously disclosed in the Company's most recent Annual Report on Form 10-K - There have been no material changes from risk factors previously disclosed in the Company's most recent Annual Report on Form 10-K[119] Unregistered Sales of Equity Securities and Use of Proceeds During Q3 2025, the company repurchased 10,616 shares at $116.42 per share, with $38.8 million remaining for future repurchases Issuer Purchases of Equity Securities (Q3 2025) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | Approximate Dollar Value of Shares That May Yet Be Purchased ($ in thousands) | | :--- | :--- | :--- | :--- | | March 2025 | — | $— | $40,018 | | April 2025 | 10,616 | $116.42 | $38,782 | | May 2025 | — | $— | $38,782 | | Total | 10,616 | $116.42 | $38,782 | Defaults Upon Senior Securities None reported - None[121] Mine Safety Disclosures Not applicable - Not applicable[122] Other Information None reported - None[123] Exhibits Lists exhibits filed with Form 10-Q, including CEO and CFO certifications and Interactive Data Files (Inline XBRL) - Exhibits filed include CEO and CFO certifications under Sections 302 and 906 of the Sarbanes-Oxley Act[124]