Lindsay Corporation Reports Fiscal 2013 Third Quarter Results

Lindsay Corporation Reports Fiscal 2013 Third Quarter Results

OMAHA, Neb.--(BUSINESS WIRE)-- Lindsay Corporation (NYS: LNN) , a leading provider of irrigation systems and infrastructure products, today announced results for its third quarter ended May 31, 2013.

Third Quarter Results


Third quarter fiscal 2013 revenues were a record $219.5 million, increasing 28 percent from $172.1 million in the same prior year period. Net earnings were $26.1 million or $2.01 per diluted share compared with $18.8 million or $1.47 per diluted share in the prior year.

Total irrigation equipment revenues increased 34 percent to $200.9 million from $149.6 million in the prior fiscal year's third quarter due to increased demand resulting from higher commodity prices and farm incomes along with robust demand in international markets. U.S. irrigation revenues of $118.3 million increased 12 percent, while international irrigation revenues of $82.6 million increased 88 percent. Infrastructure revenues decreased 17 percent to $18.6 million.

Gross margin was 28.7 percent compared to 28.5 percent in the prior year's third quarter. Gross margins in irrigation improved modestly while infrastructure gross margins declined by approximately 3 percentage points on lower mix of Road Zipper sales. U.S. irrigation gross margins increased due to strong pricing and manufacturing productivity and leverage, offset by the increased mix of lower margin international irrigation sales.

Operating expenses were $23.5 million compared to $20.2 million in the same prior year period. Current year expenses included higher personnel related expenses, accounts receivable reserves and research and development expenses. Operating expenses were 10.7 percent of sales in the third quarter of fiscal 2013 compared with 11.8 percent of sales in the prior year period. Operating margins of 18.0 percent increased from 16.7 percent in the prior year period.

Cash and cash equivalents of $170.2 million were $50.4 million higher compared to the end of the third quarter in the prior fiscal year, while debt decreased $4.3 million.

Backlog of unshipped orders at May 31, 2013 was $80.0 million compared with $44.5 million at May 31, 2012 and $159.3 million at February 28, 2013. Current backlog includes $23 million remaining from the $39 million order in the Middle East (Iraq) announced in the second quarter, as well as modest year over year increases in U.S. irrigation and infrastructure.

Nine Month Results

Total revenues for the nine months ended May 31, 2013 were $542.5 million, a 28 percent increase from $423.4 million in the same prior year period. Net earnings were $60.1 million or $4.66 per diluted share compared with $34.5 million or $2.70 per diluted share in the prior year. Fiscal 2012 operating costs included $7.2 million of accrued expenses, or $0.37 per diluted share on an after tax basis, relating to an increase in the Company's estimated liability for environmental remediation at its Lindsay, Nebraska facility.

Total irrigation equipment revenues increased 36 percent to $497.9 million from $367.4 million during the first nine months of the prior fiscal year. U.S. irrigation revenues of $331.9 million increased 33 percent, while international irrigation revenues of $166.0 million increased 40 percent due to sales increases in most all markets, and most significantly in South America and the Middle East. Infrastructure revenues decreased 20 percent to $44.6 million.

Outlook

Rick Parod, president and chief executive officer, commented, "Record sales in our U.S. and international irrigation markets have led to record results through the first nine months of fiscal 2013. We expect a heavier mix of lower margin international sales in the fourth quarter as we continue to recognize revenue on the $39 million order in Iraq, which entered backlog in the second quarter."

Parod added, "Drivers for the Company's markets of population growth, expanded food production and efficient water use provide a solid backdrop for long-term growth. In the near term, we have seen downward pressure on key agricultural commodity prices in anticipation of an improved harvest over last year's drought conditions. However, recent reports cast doubt on the quality of the crop, raising concern over forecasted ending-stocks, particularly for corn. In addition, the environment for infrastructure sales remains difficult, although we are seeing indications for modest improvement from recent sales trends."

Third-Quarter Conference Call

Lindsay's fiscal 2013 third 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 # 91367297. 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 May 31, 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 Nine months ended
May 31,   May 31, May 31, May 31,
($ and shares in thousands, except per share amounts) 2013 2012 2013 2012
 
Operating revenues $ 219,542 $172,099 $ 542,451 $ 423,438
Cost of operating revenues   156,506   123,071     386,194     307,668  
Gross profit   63,036   49,028     156,257     115,770  
 
Operating expenses:
Selling expense 8,674 7,324 23,995 21,136
General and administrative expense 11,783 10,390 32,056 27,764
Engineering and research expense 3,029 2,527 8,946 6,827
Environmental remediation expense   -   -     -     7,225  
Total operating expenses   23,486   20,241     64,997     62,952  
 
Operating income 39,550 28,787 91,260 52,818
 
Other income (expense):
Interest expense (32 ) (103 ) (258 ) (376 )
Interest income 100 137 367 327
Other income (expense), net   132   (234 )   252     (314 )
 
Earnings before income taxes 39,750 28,587 91,621 52,455
 
Income tax expense   13,687   9,764     31,479     17,937  
 
Net earnings $ 26,063   $18,823   $ 60,142   $ 34,518  
 
Earnings per share:
Basic $ 2.03 $1.48 $ 4.69 $ 2.72
Diluted $ 2.01 $1.47 $ 4.66 $ 2.70
 
Shares used in computing earnings per share:
Basic 12,858 12,714 12,819 12,700
Diluted 12,947 12,814 12,894 12,799
 
Cash dividends declared per share $ 0.115 $0.090 $ 0.345 $ 0.270
 

Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(Unaudited)
       
Three months ended Nine months ended
May 31, May 31, May 31, May 31,
($ in thousands)   2013     2012     2013     2012  
 
Net earnings $ 26,063   $ 18,823   $ 60,142   $ 34,518  
Other comprehensive income (loss):
Defined benefit pension plan adjustment, net of tax 33 26 99 77
Unrealized gain on cash flow hedges, net of tax 15 57 6 177
Foreign currency translation adjustment, net of
hedging activities and tax   (1,389 )   (4,599 )   (282 )   (7,386 )
Total other comprehensive loss, net of tax (benefit)
expense of ($10), $530, ($128) and $885   (1,341 )   (4,516 )   (177 )   (7,132 )
Total comprehensive income $ 24,722   $ 14,307   $ 59,965   $ 27,386  
 

Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
     
May 31, May 31, August 31,
($ and shares in thousands, except par values)   2013     2012     2012  
 
ASSETS
Current Assets:
Cash and cash equivalents $ 170,215 $ 119,785 $ 143,444
Receivables, net of allowance of $2,847, $1,786 and $1,717 130,924 95,693 82,565
Inventories, net 72,458 62,119 52,873
Deferred income taxes 11,810 9,399 9,505
Other current assets   18,307     13,177     10,478  
Total current assets   403,714     300,173     298,865  
 
Property, Plant and Equipment:
Cost 144,199 134,508 136,695
Less accumulated depreciation   (87,293 )   (78,365 )   (80,515 )
Property, plant and equipment, net   56,906     56,143     56,180  
 
Intangibles, net 22,974 25,709 25,070
Goodwill 30,111 29,866 29,961
Other noncurrent assets   4,416     5,057     5,455  
Total assets $ 518,121   $ 416,948   $ 415,531  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 56,902 $ 38,820 $ 31,372
Current portion of long-term debt 1,071 4,286 4,285
Other current liabilities   65,259     45,502     44,781  
Total current liabilities   123,232     88,608     80,438  
 
Pension benefits liabilities 6,603 6,057 6,821
Long-term debt - 1,071 -
Deferred income taxes 8,809 10,458 9,984
Other noncurrent liabilities   7,715     8,573     7,450  
Total liabilities   146,359     114,767     104,693  
 
Shareholders' Equity:
Preferred stock of $1 par value-
Authorized 2,000 shares; none issued - - -
Common stock of $1 par value-
Authorized 25,000 shares; 18,560 issued 18,560 18,413 18,421
Capital in excess of stated value

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