Lindsay Corporation Reports Fiscal 2014 First Quarter Results

OMAHA, Neb.--(BUSINESS WIRE)--

Lindsay Corporation LNN, a leading provider of irrigation systems and infrastructure products, today announced results for its first quarter ended November 30, 2013.

First Quarter Results

First quarter fiscal 2014 revenues were $147.7 million, versus $147.4 million of revenues in the same prior year period. Net earnings were $10.2 million or $0.79 per diluted share compared with $14.7 million or $1.15 per diluted share in the prior year.

Total irrigation equipment revenues decreased 4 percent to $129.2 million from $134.2 million in the prior fiscal year's first quarter. U.S. revenues decreased and were partially offset by increased demand in international markets and the addition of Claude Laval Corporation. U.S. irrigation revenues of $79.3 million declined 18 percent versus the drought-driven sales last year, while international irrigation revenues of $49.9 million increased 32 percent led by growth in South America and Australia. Infrastructure revenues increased 41 percent to $18.5 million with increases in nearly all of the Company's infrastructure product lines.

Gross margin was 27.2 percent of sales compared to 29.1 percent of sales in the prior year's first quarter. Gross margins in irrigation declined by approximately 2 percentage points due to a $2.3 million charge related to a product warranty matter and a higher mix of international sales. Infrastructure gross margins improved by approximately 5 percentage points primarily due to a larger mix of Road Zipper System sales.

Operating expenses were $24.2 million compared to $20.6 million in the same prior year period. The increase in the current year includes expenses of a recently acquired company and higher personnel expenses. Operating expenses were 16.4 percent of sales in the first quarter of fiscal 2014 compared with 14.0 percent of sales in the prior year period. Operating margins were 10.8 percent in the first quarter, versus 15.1 percent in the prior year period.

Cash and cash equivalents of $151.8 million were $0.4 million lower compared to the end of the first quarter in the prior fiscal year, while debt decreased $3.2 million.

Backlog of unshipped orders at November 30, 2013 was $86.6 million compared with $85.1 million at November 30, 2012 and $66.5 million at August 31, 2013. Backlog declined in U.S. irrigation markets and was offset by an increase in backlog in international irrigation markets and in the infrastructure segment. The increase in infrastructure backlog included a $12.7 million Road Zipper System order from the Golden Gate Bridge Highway & Transportation District.

Capital Allocation Plan

The Company is releasing further detail and clarification of its plans for capital allocation including plans for enhancing returns for shareholders through dividends and share repurchases. Priorities for uses of cash include:

• Investment in organic growth including capital expenditures and expansion of international markets,
• Annual increases in dividends to shareholders,
• Synergistic water related acquisitions that provide attractive returns to shareholders, and
• Opportunistic share repurchases taking into account cyclical and seasonal fluctuations

Dividend

The Company is announcing that its Board of Directors is increasing its regular quarterly cash dividend by 100% to $0.26 per share, payable February 28, 2014, to shareholders of record on February 14, 2014.

Share Repurchases

The Company is announcing that its Board of Directors has replaced its existing share repurchase authorization with an increased authorization to repurchase up to $150 million of common stock. The authorization is in support of the Company's plans to opportunistically repurchase $100 million to $150 million of common stock over the next 24 months.

Outlook

Rick Parod, president and chief executive officer, commented, “Total Company revenues remained at record levels in the first quarter while U.S. irrigation market sales declined as anticipated given the significant decline in agricultural commodity prices. The infrastructure segment made significant progress, including the award of a Road Zipper project on the Golden Gate Bridge. Irrigation sales for the remainder of the fiscal year remain uncertain as the decline in grain prices are likely to continue to result in significantly lower U.S. revenues, however we do not expect to have visibility into the selling season until mid-to-late in the second fiscal quarter.”

Parod added, “While we anticipate a decline from peak irrigation revenues for the near-term, drivers for the Company's markets of population growth, expanded food production and efficient water use, support our expectation for long-term growth. Our overall capital allocation plan articulates our plans to continue to invest in attaining revenue and earnings growth, combined with a defined process for enhancing returns to shareholders.”

First-Quarter Conference Call

Lindsay's fiscal 2014 first quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (888) 321-8161 in the U.S., or (706) 758-0065 internationally, and referring to conference ID # 27010515. Additionally, the conference call will be simulcast live on the Internet, and can be accessed via the investor relations section of the Company's Web site, www.lindsay.com. Replays of the conference call will remain on our Web site through the next quarterly earnings release. The Company will have a slide presentation available to augment management's formal presentation, which will also be accessible via the Company's Web site.

About the Company

Lindsay manufactures and markets irrigation equipment primarily used in agricultural markets which increase or stabilize crop production while conserving water, energy, and labor. The Company also manufactures and markets infrastructure and road safety products under the Lindsay Transportation Solutions trade name. At November 30, 2013 Lindsay had approximately 12.9 million shares outstanding, which are traded on the New York Stock Exchange under the symbol LNN.

For more information regarding Lindsay Corporation, see the Company's Web site at www.lindsay.com.

Concerning Forward-looking Statements

This release contains forward-looking statements that are subject to risks and uncertainties and which reflect management's current beliefs and estimates of future economic circumstances, industry conditions, company performance and financial results. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and those statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” "expect," "outlook," "could," "may," "should," “will,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking information contained in this press release.

Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
			Three months ended
			November 30,					November 30,
($ and shares in thousands, except per share amounts)			2013					2012
Operating revenues			$	147,671				$		147,370
Cost of operating revenues				107,520						104,513
Gross profit				40,151						42,857
Operating expenses:
Selling expense				9,756						7,321
General and administrative expense				11,743						10,118
Engineering and research expense				2,660						3,154
Total operating expenses				24,159						20,593
Operating income				15,992						22,264
Other income (expense):
Interest expense				(39	)					(143	)
Interest income				135						138
Other income (expense), net				(271	)					124
Earnings before income taxes				15,817						22,383
Income tax expense				5,583						7,655
Net earnings			$	10,234				$		14,728
Earnings per share:
Basic			$	0.79				$		1.15
Diluted			$	0.79				$		1.15
Shares used in computing earnings per share:
Basic				12,889						12,756
Diluted				12,951						12,853
Cash dividends declared per share			$	0.130				$		0.115

Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
			November 30,					November 30,					August 31,
($ and shares in thousands, except par values)			2013					2012					2013
ASSETS
Current Assets:
Cash and cash equivalents			$	151,803				$	152,173				$	151,927
Receivables, net				122,093					88,893					120,291
Inventories, net				75,614					67,250					68,607
Deferred income taxes				13,469					8,171					12,705
Other current assets				15,989					10,719					15,261
Total current assets				378,968					327,206					368,791
Property, Plant and Equipment:
Cost				156,299					139,032					153,422
Less accumulated depreciation				(91,047	)				(82,947	)				(88,358	)
Property, plant and equipment, net				65,252					56,085					65,064
Intangibles, net				35,029					24,410					36,007
Goodwill				37,193					30,114					37,414
Other noncurrent assets				5,261					5,063					5,020
Total assets			$	521,703				$	442,878				$	512,296
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable			$	45,902				$	50,662				$	42,276
Current portion of long-term debt				-					3,214					-
Other current liabilities				57,132					39,141					59,816
Total current liabilities				103,034					93,017					102,092
Pension benefits liabilities				6,263					6,749					6,324
Deferred income taxes				14,715					9,622					15,415
Other noncurrent liabilities				8,022					7,417					7,827
Total liabilities				132,034					116,805					131,658
Shareholders' Equity:
Preferred stock				-					-					-
Common stock				18,620					18,531					18,571
Capital in excess of stated value				49,288					44,995					49,764
Retained earnings				414,133					354,367					405,580
Less treasury stock				(90,961	)				(90,961	)				(90,961	)
Accumulated other comprehensive loss, net				(1,411	)				(859	)				(2,316	)
Total shareholders' equity				389,669					326,073					380,638
Total liabilities and shareholders' equity			$	521,703				$	442,878				$	512,296

Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
			Three months ended
			November 30,					November 30,
($ in thousands)			2013					2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings			$	10,234				$	14,728
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization				3,707					3,130
Provision for uncollectible accounts receivable				442					199
Deferred income taxes				(1,365	)				(782	)
Share-based compensation expense				1,180					1,219
Other, net				(244	)				157
Changes in assets and liabilities:
Receivables				(1,608	)				(6,441	)
Inventories				(6,608	)				(14,341	)
Other current assets				(431	)				(357	)
Accounts payable				3,356					19,210
Other current liabilities				(5,986	)				(4,396	)
Current taxes payable				3,140					1,312
Other noncurrent assets and liabilities				111					(181	)
Net cash provided by operating activities				5,928					13,457
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment				(2,387	)				(2,215	)
Proceeds from sale of property, plant and equipment				34					-
Proceeds from settlement of net investment hedges				101					-
Payments for settlement of net investment hedges				(1,035	)				(1,093	)
Net cash used in investing activities				(3,287	)				(3,308	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options				-					1,082
Common stock withheld for payroll tax withholdings				(2,027	)				(2,441	)
Principal payments on long-term debt				-					(1,072	)
Excess tax benefits from share-based compensation				465					2,185
Dividends paid				(1,681	)				(1,476	)
Net cash used in financing activities				(3,243	)				(1,722	)
Effect of exchange rate changes on cash and cash equivalents				478					302
Net change in cash and cash equivalents				(124	)				8,729
Cash and cash equivalents, beginning of period				151,927					143,444
Cash and cash equivalents, end of period			$	151,803				$	152,173