Lindsay Corporation Reports Fiscal 2012 Second Quarter Results

Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its second quarter ended February 29, 2012.

Second Quarter Results

Second quarter fiscal 2012 total revenues of $132.1 million increased 10 percent from $120.2 million in the same prior year period. Net earnings were $12.8 million or $1.00 per diluted share compared with $11.3 million or $0.89 per diluted share in the prior fiscal year’s second quarter.

Total irrigation equipment revenues increased 28 percent to $117.0 million from $91.7 million in the prior fiscal year’s second quarter. Domestic irrigation revenues of $82.9 million increased 25 percent, while international irrigation revenues of $34.1 million increased 36 percent as compared to the same prior year period. Infrastructure revenues decreased 47 percent to $15.1 million due mostly to lower sales and leases of Quick-Change Moveable Barrier (QMB) systems.

Gross margin was 27.6 percent compared to 28.3 percent in the prior year’s second quarter. Total gross margins were lower primarily due to lower revenues of higher-margin QMB product as compared to the same period last year. Irrigation gross margins improved compared to the same quarter last year due to cost leverage and productivity gains on higher sales volumes. Infrastructure gross margins declined compared to the year ago period, but improved excluding QMB.

Operating expenses were $17.5 million in the quarter compared to $16.9 million in the second quarter of the prior fiscal year. The primary elements of the expense increase related to an acquired company purchased in fiscal 2011 and personnel related costs. Operating expenses were 13.3 percent of sales in the second quarter of 2012 compared with 14.1 percent of sales in the prior year period. Operating margins of 14.3 percent increased slightly from 14.2 percent in the prior year period.

Cash and cash equivalents of $105.0 million were $26.5 million higher compared with the end of the second quarter last year, while debt decreased $4.3 million over the same period.

Lindsay’s backlog of unshipped orders at February 29, 2012 was $87.3 million compared with $64.3 million at February 28, 2011 and $52.8 million at November 30, 2011.

Six Month Results

Total revenues for the six months ended February 29, 2012 were $251.3 million, a 20 percent increase from $209.3 million for the prior year’s six-month period. Total irrigation equipment revenues of $217.7 million increased 44 percent from a year ago, while infrastructure revenues decreased 42 percent to $33.6 million. The Company’s operating income for the six-month period was $24.0 million compared to $23.7 million during the same prior year period. Net earnings were $15.7 million or $1.23 per diluted share, as compared to $15.6 million, or $1.23 per diluted share for the prior year period.

First quarter and year to date 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 estimated increase in the Company’s liability for environmental remediation at its Lindsay, Nebraska facility. The comparable fiscal 2011 periods included environmental remediation expense of $0.7 million, or $0.04 per diluted share on an after tax basis.

Outlook

Rick Parod, president and chief executive officer, commented, “Global irrigation demand drove improved results in our domestic and international businesses. Our operating margins improved year over year despite the significantly lower QMB sales. Irrigation order volumes remained strong throughout the quarter leading to increased backlog as we enter the seasonally stronger third quarter.”

Parod added, “Farm incomes and commodity prices remain relatively high by historical standards and have continued to drive positive farmer sentiment. Expanded food production and efficient water use remain positive drivers for irrigation equipment demand, globally. Infrastructure demand, including QMB projects, has proven to be challenging, due to funding issues and project delays. During the past few months, we have experienced numerous QMB project delays that have left us uncertain as to the timing and extent of projects in the second half of fiscal 2012.”

Second-Quarter Conference Call

Lindsay’s fiscal 2012 second quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (888) 748-0479 domestically, or (706) 758-9823 internationally, and referring to conference ID # 60279722. 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. 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 through its wholly owned subsidiaries, Barrier Systems Inc. and Snoline S.P.A. At February 29, 2012, Lindsay had approximately 12.7 million shares outstanding, which are traded on the New York Stock Exchange under the symbol LNN.

For more information regarding Lindsay Corporation, see Lindsay's Web site at www.lindsay.com . For more information on the Company's infrastructure products, visit www.barriersystemsinc.com and www.snoline.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 Six months ended
February 29,   February 28, February 29,   February 28,
($ in thousands, except per share amounts) 2012 2011 2012 2011
 
Operating revenues $ 132,134 $ 120,168 $ 251,339 $ 209,334
Cost of operating revenues   95,640     86,159     184,597     151,102  
Gross profit   36,494     34,009     66,742     58,232  
 
Operating expenses:
Selling expense 6,868 6,911 13,812 13,929
General and administrative expense 8,434 7,265 17,374 14,583
Engineering and research expense 2,244 2,772 4,300 5,336
Environmental remediation expense   -     -     7,225     713  
Total operating expenses   17,546     16,948     42,711     34,561  
 
Operating income 18,948 17,061 24,031 23,671
 
Other income (expense):
Interest expense (130 ) (213 ) (273 ) (399 )
Interest income 94 37 190 79
Other income (expense), net   515     116     (80 )   227  
 
Earnings before income taxes 19,427 17,001 23,868 23,578
 
Income tax provision   6,653     5,676     8,173     7,967  
 
Net earnings $ 12,774   $ 11,325   $ 15,695   $ 15,611  
 
Basic net earnings per share $ 1.01   $ 0.90   $ 1.24   $ 1.24  
 
Diluted net earnings per share $ 1.00   $ 0.89   $ 1.23   $ 1.23  
 
Weighted average shares outstanding 12,703 12,548 12,692 12,525
Diluted effect of stock equivalents   118     137     100     139  
Weighted average shares outstanding assuming dilution   12,821     12,685     12,792     12,664  
 
Cash dividends per share $ 0.090   $ 0.085   $ 0.180   $ 0.170  
 
 
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED BALANCE SHEETS
         
 
(Unaudited) (Unaudited)
February 29, February 28, August 31,
($ and shares in thousands, except par values) 2012 2011 2011
ASSETS
Current Assets:
Cash and cash equivalents $ 104,953 $ 78,448 $ 108,167
Receivables, net of allowance 77,536 75,096 79,006
Inventories, net 68,578 54,876 49,524
Deferred income taxes 8,336 5,457 8,598
Other current assets   14,193     10,035     12,398  
Total current assets 273,596 223,912 257,693
 
Property, plant and equipment, net 57,236 58,141 58,465
Other intangible assets, net 26,839 27,807 28,639
Goodwill, net 30,443 28,528 30,943
Other noncurrent assets   5,486     4,869     5,404  
Total assets $ 393,600   $ 343,257   $ 381,144  
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 39,417 $ 38,261 $ 32,153
Current portion of long-term debt 4,286 4,286 4,286
Other current liabilities   33,428     27,049     42,880  
Total current liabilities 77,131 69,596 79,319
 
Pension benefits liabilities 6,115 6,289 6,231
Long-term debt 2,143 6,428 4,285
Deferred income taxes 11,678 10,746 12,550
Other noncurrent liabilities   8,362     1,798     3,094  
Total liabilities   105,429     94,857     105,479  
 
Shareholders' equity:
Preferred stock - - -
Common stock 18,409 18,257 18,374
Capital in excess of stated value 40,736 32,954 39,058
Retained earnings 316,141 283,751 302,732
Less treasury stock (90,961 ) (90,961 ) (90,961 )
Accumulated other comprehensive income, net   3,846     4,399     6,462  
Total shareholders' equity   288,171     248,400     275,665  
Total liabilities and shareholders' equity $ 393,600   $ 343,257   $ 381,144  
 
 
Lindsay Corporation and Subsidiaries
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 
 
($ in thousands) Six Months Ended
February 29, 2012     February 28, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 15,695 $ 15,611
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 6,235 5,880
Provision for uncollectible accounts receivable 129 188
Deferred income taxes (1,299 ) (575 )
Share-based compensation expense 1,829 1,586
Other, net 587 (373 )
Changes in assets and liabilities:
Receivables 150 (10,137 )
Inventories (20,221 ) (8,003 )
Other current assets (1,798 ) (762 )
Accounts payable 7,796 11,245
Other current liabilities (8,670 ) (7,877 )
Current taxes payable (1,260 ) (1,525 )
Other noncurrent assets and liabilities   5,692     (1,343 )
Net cash provided by operating activities   4,865     3,915  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (4,723 ) (4,402 )
Proceeds from sale of property, plant and equipment 107 53
Acquisition of business, net of cash acquired - (1,279 )
Proceeds (payment) for settlement of net investment hedge   1,548     (734 )
Net cash used in investing activities   (3,068 )   (6,362 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock under share-based compensation plans 276 809
Common stock withheld from share-based compensation for payroll tax withholdings (577 ) (843 )
Principal payments on long-term debt (2,142 ) (2,143 )
Net borrowing on revolving line of credit - 389
Excess tax benefits from share-based compensation 273 877
Dividends paid   (2,286 )   (2,133 )
Net cash used in financing activities   (4,456 )   (3,044 )
 
Effect of exchange rate changes on cash   (555 )   521  
Net decrease in cash and cash equivalents (3,214 ) (4,970 )
Cash and cash equivalents, beginning of period   108,167     83,418  
Cash and cash equivalents, end of period $ 104,953   $ 78,448  
 

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