Lindsay(US:LNN)2021-10-21 17:30Financial Data and Key Metrics Changes - Total revenues for Q4 FY2021 increased by 20% to $153.6 million compared to $128.4 million in the same quarter last year [19] - Net earnings for Q4 were $5.8 million or $0.53 per diluted share, down from $14.7 million or $1.35 per diluted share in the prior year, impacted by an after-tax LIFO charge of approximately $4.5 million [19] - For the full fiscal year 2021, total revenues increased by 20% to $567.6 million compared to $474.7 million in the prior year, with net earnings rising to $42.6 million or $3.88 per share from $38.6 million or $3.56 per diluted share [20] Business Line Data and Key Metrics Changes - Irrigation segment revenues for Q4 increased by 63% to $125.3 million compared to $77 million in the same quarter last year, with North America irrigation revenues up by 30% [21] - International irrigation revenues for Q4 increased by 100% to $71.7 million, driven by higher unit sales volumes and favorable foreign currency translation [22] - Infrastructure segment revenues for Q4 decreased by 45% to $28.4 million, primarily due to lower Road Zipper system sales [26] Market Data and Key Metrics Changes - The domestic irrigation market showed strong commodity and farm income projections, with net farm income projected to increase by 19.5% in 2021 [10] - Shipment records were set in Turkey and Brazil, with activity more than doubling year-over-year in each market [13] - The Europe, Africa, and Middle East region continued to ship a large project into Egypt without disruption, indicating strong market opportunities [15] Company Strategy and Development Direction - The company is focused on capacity and efficiency investments in Brazil, China, Turkey, and the US to meet demand and leverage its global footprint [7] - The innovation pipeline includes the development of the Smart Pivot platform in irrigation and the Road Connect platform in infrastructure, with positive feedback from users [7] - The company is optimistic about growth potential tied to the needs for food security and efficient resource utilization [76] Management's Comments on Operating Environment and Future Outlook - Management noted that while there are inflationary pressures impacting farmers, the return on investment for irrigation equipment remains favorable, supporting demand [59] - The company expects some growth in the infrastructure segment driven by non-Road Zipper business and potential stimulus funding [39] - Management remains optimistic about the passage of infrastructure legislation, which could provide a positive tailwind for the infrastructure business [17] Other Important Information - The company published its third sustainability report, outlining a five-point focus on sustainable technologies and operational improvements [9] - Total available liquidity at the end of the fiscal year was $196.7 million, with a strong position to invest in growth opportunities [29][30] Q&A Session Summary Question: Expectations for LIFO charges in fiscal 2022 - Management indicated that if raw material prices stabilize, they do not expect additional LIFO headwinds, and some benefits may be realized as inventory quantities decline [33][34] Question: Revenue expectations for the infrastructure segment - Management clarified that while Road Zipper projects are moving slowly, they expect traditional revenue patterns in the non-Road Zipper part of the infrastructure business [38][39] Question: Impact of pricing on segment revenues - Management noted that pricing had a significant impact on North America Pivot business, with price growth above 30% in Q4, while infrastructure pricing was approaching 10% overall [45][46] Question: Demand destruction due to rising costs - Management acknowledged some "sticker shock" among customers but noted that strong farm income is supporting continued demand for irrigation equipment [58][59] Question: Breakdown of project sales between leasing and buying - Management indicated that most Road Zipper installations are permanent, leading to a preference for purchases over leases [68][69] Question: Anticipated end-of-year demand from tax-related purchases - Management is preparing for a potential bump in demand as farmers look to make capital investments before year-end, especially given limited availability of other capital equipment [71][72]