Lindsay(US:LNN)2023-10-19 20:31Financial Performance - Operating revenues for fiscal 2023 were $674.1 million, a 13% decrease from $770.7 million in fiscal 2022[127]. - Net earnings increased by 11% to $72.4 million, or $6.54 per diluted share, compared to $65.5 million, or $5.94 per diluted share, in the prior year[127][146]. - Gross profit for fiscal 2023 was $213.0 million, a 7% increase from $199.2 million in fiscal 2022, with a gross margin of 31.6% compared to 25.8% in the prior year[141]. - Operating revenues for 2023 were $674,084, a decrease of 12.5% compared to $770,743 in 2022[177]. - Net earnings for 2023 were $72,379, representing an increase of 10.3% from $65,469 in 2022[180]. - Basic earnings per share increased to $6.58, up from $5.97 in 2022, marking an increase of 10.2%[177]. - Total assets as of August 31, 2023, were $745,660, an increase from $710,653 in 2022[183]. - Total liabilities decreased to $290,009 in 2023, down from $317,295 in 2022, a reduction of 8.6%[183]. - Shareholders' equity increased to $455,651 in 2023, up from $393,358 in 2022, reflecting a growth of 15.8%[183]. - The company reported total comprehensive income of $72,842 for 2023, compared to $61,929 in 2022, an increase of 17.5%[180]. Revenue and Sales - The company's irrigation revenues are cyclical and highly dependent on agricultural commodity prices, which can significantly affect sales levels[78]. - The Company’s international revenues are primarily generated from regions including Australia, New Zealand, and Europe, with sales to Russia and Belarus paused indefinitely due to geopolitical tensions[95]. - International irrigation revenues decreased by 11% to $276.5 million, impacted by the completion of a large project in Egypt and lower sales in Ukraine, Russia, and Australia[139]. - Irrigation segment revenues decreased by 12% to $586.0 million, while infrastructure segment revenues decreased by 16% to $88.1 million[137]. - Revenue recognized at a point in time for the year ended August 31, 2023, was $629.4 million, down from $731.9 million in 2022[235]. - Revenue recognized over time for the year ended August 31, 2023, was $32.5 million, compared to $28.4 million in 2022, indicating an increase of approximately 14.8%[235]. Costs and Expenses - Operating expenses increased by 6% to $110.8 million in fiscal 2023, primarily due to higher employee incentive expenses and increased spending on new product development[142]. - The profitability may be negatively affected by changes in the availability and price of parts and raw materials, impacting production costs[94]. - Other expense decreased to $1.8 million in fiscal 2023, down from $6.8 million in fiscal 2022, due to lower interest expense and higher interest income[143]. - The effective income tax rate increased to 27.9% in fiscal 2023 from 25.5% in fiscal 2022, reflecting a higher proportion of earnings in foreign jurisdictions[144]. Cash Flow and Capital Management - The Company has a share repurchase program authorized for up to $250.0 million, with $63.7 million remaining as of August 31, 2023[111]. - The Company paid dividends totaling $15.1 million in fiscal 2023, compared to $14.6 million in fiscal 2022[112]. - Cash flows used in investing activities rose to $47.4 million in fiscal 2023, primarily due to a $30.8 million business acquisition, while capital spending increased to $18.8 million from $15.6 million[150]. - Net cash provided by operating activities significantly increased to $119,707,000 from $3,048,000 in 2022[188]. - Total dividends paid increased to $15,082,000 in 2023 from $14,599,000 in 2022[188]. Market and Economic Factors - A decline in oil prices or changes in government policies regarding biofuels could negatively impact the biofuels market and reduce demand for irrigation equipment[76]. - Rising interest rates could negatively impact customer demand and the ability to finance new equipment purchases[98]. - The U.S. Department of Agriculture estimated U.S. 2023 net farm income to be $141.3 billion, a decrease of 22.8% from $183.0 billion in 2022[128]. - The Company anticipates increased demand for its infrastructure products due to the $110 billion federal funding for transportation projects from the Infrastructure Investment and Jobs Act[119]. Risks and Compliance - The company faces risks from climate change, which could adversely impact operations and the availability of raw materials[79]. - International sales efforts are affected by trade barriers and compliance obligations, which could increase costs and reduce competitiveness[84]. - The company is exposed to risks from legal proceedings, which could divert management attention and incur substantial costs[86]. - Compliance with environmental regulations may require additional capital expenditures, potentially impacting financial condition[83]. - The Company’s international sales and profit margins are at risk due to currency exchange fluctuations, which can affect competitiveness in foreign markets[97]. - The Company estimates a potential decrease in operating income of approximately $5.8 million from a ten percent adverse change in foreign currency exchange rates[162]. Strategic Initiatives - The Company is committed to growth through global market expansion, margin improvements, and strategic acquisitions[121]. - The company continues to enhance its irrigation product offerings through innovative technologies such as GPS positioning and wireless irrigation management[191]. - The Company completed the acquisition of FieldWise, LLC for a purchase price of $32.6 million, financed through cash on hand[240]. Assets and Liabilities - The Company’s cash, cash equivalents, and marketable securities totaled $166.3 million as of August 31, 2023, up from $116.5 million a year earlier, primarily due to increased net earnings and reduced inventories[147]. - Net working capital increased to $351.4 million at August 31, 2023, compared to $316.2 million at August 31, 2022, with cash flows from operating activities rising to $119.7 million from $3.0 million in the prior year[149]. - Total inventory value decreased from $216.1 million in 2022 to $155.9 million in 2023, a reduction of approximately 28%[257]. - Total operating property, plant, and equipment increased from $194.7 million in 2022 to $206.9 million in 2023, a growth of about 6.2%[259]. - Goodwill increased from $67.1 million in 2022 to $83.1 million in 2023, primarily due to the acquisition of FieldWise[260].