8-K
LINDSAY CORP NYSE US false 0000836157 0000836157 2020-07-02 2020-07-02

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 OR 15(d)

of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

July 2, 2020

 

LINDSAY CORPORATION

(Exact name of registrant as specified in its charter)

 

Delaware

 

1-13419

 

47-0554096

(State of

Incorporation)

 

(Commission

File Number)

 

(IRS Employer

Identification Number)

18135 Burke Street, Suite 100

Omaha, Nebraska 

 

68022

(Address of principal executive offices)

 

(Zip Code)

(402) 829-6800

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, $1.00 par value

 

LNN

 

New York Stock Exchange, Inc.

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

 


Item 2.02. Results of Operations and Financial Condition.

On July 2, 2020, Lindsay Corporation (the “Company”) issued a press release announcing the Company’s results of operations for its third quarter ended May 31, 2020. A copy of the press release is furnished herewith as Exhibit 99.1.

In addition, a copy of the slide presentation to be used during the Company’s fiscal 2020 third quarter investor conference call at 11:00 a.m. Eastern Time on July 2, 2020 is furnished herewith as Exhibit 99.2.

Item 9.01. Financial Statements and Exhibits.
         
 

99.1

   

Press Release, dated July 2, 2020, issued by the Company.

         
 

99.2

   

Slide Presentation for Fiscal 2020 Third Quarter Investor Conference Call on July 2, 2020.

         
 

104

   

Cover Page Interactive Data File (embedded within the Inline XBRL document).

In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 relating to Item 2.02 and attached hereto, is being “furnished” and, as such, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: July 2, 2020

 

 

LINDSAY CORPORATION

             

 

 

By:

 

/s/ Brian L. Ketcham

 

 

 

Brian L. Ketcham, Senior Vice President and

Chief Financial Officer

EX-99.1

Exhibit 99.1

 

LOGO    18135 BURKE ST. OMAHA, NE 68022 TEL: 402-829-6800 FAX: 402-829-6836

 

 

For further information, contact:

 

LINDSAY CORPORATION:       THREE PART ADVISORS:
Brian Ketcham       Hala Elsherbini
Senior Vice President & Chief Financial Officer       972-458-8000
402-827-6579      

Lindsay Corporation Reports Fiscal 2020 Third Quarter Results

 

   

Consolidated revenues grow to $123.1 million and EPS improves to $0.93

 

   

Shipment and project delays related to COVID-19 impact revenues by approximately $14.0 million

 

   

Company continues successful execution of its strategic priorities of margin improvement, irrigation technology expansion and infrastructure growth

OMAHA, Neb., July 2, 2020—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its third quarter of fiscal 2020, which ended on May 31, 2020.

Third Quarter Summary

Revenues for the third quarter of fiscal 2020 were $123.1 million, an increase of $2.1 million, or 2 percent, compared to revenues of $121.1 million in the prior year third quarter. Net earnings for the quarter were $10.1 million, or $0.93 per diluted share, compared with net earnings of $2.9 million, or $0.27 per diluted share, for the prior year third quarter. Net earnings for the prior year third quarter adjusted to eliminate costs associated with the Foundation for Growth initiative were $5.5 million, or $0.50 per diluted share.1

“As we navigate the coronavirus pandemic, our priority continues to be the health and safety of our employees around the world while continuing to operate our facilities and serve our customers,” said Tim Hassinger, President and Chief Executive Officer. “I am pleased with the success we have had in these areas as a result of the proactive measures we have put in place. In spite of this challenging environment, our businesses continue to perform well. During the quarter we also completed the acquisition of Net Irrigate, LLC, an agriculture IoT technology company that provides remote monitoring solutions for irrigation customers. This acquisition expands the number of irrigated acres managed under our FieldNET® platform.”

Third Quarter Segment Results

Irrigation segment revenues for the third quarter of fiscal 2020 were $93.5 million, a decrease of $5.1 million, or 5 percent, compared to $98.6 million in the prior year. North America irrigation revenues of $60.9 million decreased $2.1 million, or 3 percent, compared to the prior year. The decrease resulted primarily from lower irrigation equipment unit volume which was partially offset by the impact of higher average selling prices. International irrigation revenues of $32.6 million decreased $3.0 million, or 9 percent. Higher sales volumes in certain regions were more than offset by unfavorable effects of foreign currency translation of approximately $3.5 million compared to the prior year and COVID-19 related shipment delays of approximately $2.0 million.

Irrigation segment operating margin was 16.1 percent of sales in the third quarter, compared to 11.2 percent of sales (11.7% percent adjusted)1 in the prior year. Operating margin expansion resulted from improved cost and pricing performance attributed to the Foundation for Growth initiative as well as from increased margin contribution from technology products and services.

Infrastructure segment revenues for the third quarter of fiscal 2020 were $29.6 million, an increase of $7.1 million, or 32 percent, compared to $22.4 million in the prior year. The increase resulted from higher Road Zipper System® sales and lease revenues which were partially offset by lower sales of road safety products compared to the prior year. In addition, revenues of approximately $12.0 million were impacted by COVID-19 related project delays.

 

1

Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of document.


Infrastructure segment operating margin was 28.9 percent of sales in the third quarter, compared to 15.8 percent of sales (16.0 percent adjusted)1 in the prior year. Operating margin improvement resulted primarily from increased sales in higher margin product lines and from improved cost and pricing performance.

The backlog of unfilled orders at May 31, 2020 was $78.6 million compared with $52.5 million at May 31, 2019. Included in these backlogs are amounts of $4.5 million and $10.0 million, respectively, that are not expected to be fulfilled within the subsequent twelve months.

Outlook

“In North America, fourth quarter irrigation equipment demand is driven largely by storm damage replacement. The uncertainty of this demand combined with low commodity prices makes it challenging to project how the market will develop,” said Mr. Hassinger. “The demand outlook for our fiscal 2021 is dependent on a number of factors that could impact commodity prices and farm income, including current year crop results, export demand related to the U.S.-China Phase 1 trade agreement, and the level of government support payments to assist farmers. We expect continued growth in technology products and services due to the solid returns these investments provide to farmers. In international markets, we see the potential for additional demand being driven by heightened concerns regarding food security as a result of the global pandemic; however, the timing remains uncertain.”

Mr. Hassinger added, “In our infrastructure business, we expect strong fourth quarter results, driven by the Highways England project and the fulfillment of a large order in Japan. We continue to be excited about the growth opportunities we see for our Road Zipper Systems. Lastly, I would like to express my appreciation to the Lindsay employees, dealers and suppliers around the world who have gone to great lengths to promote a safe environment while continuing to serve our customers during this challenging time.”

Third Quarter Conference Call

Lindsay’s fiscal 2020 third quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (833) 535-2202 in the U.S., or (412) 902-6745 internationally, and requesting the Lindsay Corporation call. 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 Corporation (NYSE: LNN) is a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology. Established in 1955, the company has been at the forefront of research and development of innovative solutions to meet the food, fuel, fiber and transportation needs of the world’s rapidly growing population. The Lindsay family of irrigation brands includes Zimmatic® center pivot and lateral move agricultural irrigation systems and FieldNET® remote irrigation management and scheduling technology, as well as irrigation consulting and design and industrial IoT solutions. Also a global leader in the transportation industry, Lindsay Transportation Solutions manufactures equipment to improve road safety and keep traffic moving on the world’s roads, bridges and tunnels, through the Barrier Systems®, Road Zipper® and Snoline brands. For more information about Lindsay Corporation, visit 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 and planned financing 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.

 

2


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

     Three months ended     Nine months ended  

(in thousands, except per share amounts)

   May 31,
2020
    May 31,
2019
    May 31,
2020
    May 31,
2019
 

Operating revenues

   $ 123,106     $ 121,054     $ 346,287     $ 342,187  

Cost of operating revenues

     83,410       91,055       239,111       259,066  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     39,696       29,999       107,176       83,121  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses:

        

Selling expense

     7,417       7,515       22,101       23,934  

General and administrative expense

     13,055       14,695       38,026       46,585  

Engineering and research expense

     3,396       3,314       10,303       10,547  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     23,868       25,524       70,430       81,066  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income

     15,828       4,475       36,746       2,055  

Interest expense

     (1,197     (1,169     (3,574     (3,552

Interest income

     408       525       1,412       1,930  

Other income (expense), net

     (2,774     (602     (4,197     (591
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) before income taxes

     12,265       3,229       30,387       (158

Income tax expense (benefit)

     2,171       332       6,432       (827
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings

   $ 10,094     $ 2,897     $ 23,955     $ 669  
  

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share:

        

Basic

   $ 0.93     $ 0.27     $ 2.21     $ 0.06  

Diluted

   $ 0.93     $ 0.27     $ 2.21     $ 0.06  

Shares used in computing earnings per share:

        

Basic

     10,835       10,786       10,818       10,779  

Diluted

     10,877       10,814       10,854       10,807  

Cash dividends declared per share

   $ 0.32     $ 0.31     $ 0.94     $ 0.93  

 

3


LINDSAY CORPORATION AND SUBSIDIARIES

SUMMARY OPERATING RESULTS

(Unaudited)

 

     Three months ended     Nine months ended  

(in thousands)

   May 31,
2020
    May 31,
2019
    May 31,
2020
    May 31,
2019
 

Operating revenues:

        

Irrigation:

        

North America

   $ 60,917     $ 62,974       179,197     $ 177,118  

International

     32,606       35,644       88,751       104,876  
  

 

 

   

 

 

   

 

 

   

 

 

 

Irrigation segment

     93,523       98,618     $ 267,948     $ 281,994  

Infrastructure segment

     29,583       22,436       78,339       60,193  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating revenues

   $ 123,106     $ 121,054     $ 346,287     $ 342,187  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating income:

        

Irrigation segment

   $ 15,014     $ 11,037     $ 34,385     $ 26,341  

Infrastructure segment

     8,560       3,537       23,686       7,259  

Corporate

     (7,746     (10,099     (21,325     (31,545
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating income

   $ 15,828     $ 4,475     $ 36,746     $ 2,055  
  

 

 

   

 

 

   

 

 

   

 

 

 

The Company manages its business activities in two reportable segments as follows:

Irrigation - This reporting segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems, as well as various innovative technology solutions such as GPS positioning and guidance, variable rate irrigation, remote irrigation management and scheduling technology, irrigation consulting and design and industrial IoT solutions.

Infrastructure – This reporting segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, and road marking and road safety equipment.

 

4


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

(in thousands)

   May 31,
2020
    May 31,
2019
    August 31,
2019
 

ASSETS

      

Current assets:

      

Cash and cash equivalents

   $ 102,474     $ 110,839     $ 127,204  

Marketable securities

     19,012       —         —    

Receivables, net

     84,931       94,584       75,551  

Inventories, net

     113,301       91,091       92,287  

Assets held-for-sale

     —         2,744       2,744  

Other current assets, net

     19,469       17,903       15,704  
  

 

 

   

 

 

   

 

 

 

Total current assets

     339,187       317,161       313,490  
  

 

 

   

 

 

   

 

 

 

Property, plant, and equipment, net

     72,827       70,367       68,968  

Intangibles, net

     24,053       25,103       24,382  

Goodwill

     67,635       64,454       64,387  

Operating lease right-of-use assets

     27,663       —         —    

Deferred income tax assets

     11,118       8,783       11,758  

Other noncurrent assets, net

     15,003       20,054       17,329  
  

 

 

   

 

 

   

 

 

 

Total assets

   $ 557,486     $ 505,922     $ 500,314  
  

 

 

   

 

 

   

 

 

 

LIABILITIES AND SHAREHOLDERS’ EQUITY

      

Current liabilities:

      

Accounts payable

   $ 35,310     $ 37,509     $ 29,434  

Current portion of long-term debt

     195       208       209  

Other current liabilities

     71,712       49,102       52,488  
  

 

 

   

 

 

   

 

 

 

Total current liabilities

     107,217       86,819       82,131  
  

 

 

   

 

 

   

 

 

 

Pension benefits liabilities

     5,787       5,661       6,029  

Long-term debt

     115,723       115,885       115,846  

Operating lease liabilities

     26,333       —         —    

Deferred income tax liabilities

     835       918       872  

Other noncurrent liabilities

     18,633       26,245       27,227  
  

 

 

   

 

 

   

 

 

 

Total liabilities

     274,528       235,528       232,105  
  

 

 

   

 

 

   

 

 

 

Shareholders’ equity:

      

Preferred stock

     —         —         —    

Common stock

     18,918       18,870       18,870  

Capital in excess of stated value

     76,188       70,566       71,684  

Retained earnings

     488,518       476,580       474,740  

Less treasury stock - at cost

     (277,238     (277,238     (277,238

Accumulated other comprehensive loss, net

     (23,428     (18,384     (19,847
  

 

 

   

 

 

   

 

 

 

Total shareholders’ equity

     282,958       270,394       268,209  
  

 

 

   

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 557,486     $ 505,922     $ 500,314  
  

 

 

   

 

 

   

 

 

 

 

5


LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

     Nine months ended  

(in thousands)

   May 31,
2020
    May 31,
2019
 

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net earnings

   $ 23,955     $ 669  

Adjustments to reconcile net earnings to net cash provided by (used in) operating activities:

    

Depreciation and amortization

     14,146       10,452  

Gain on sale of assets held-for-sale

     (1,191     —    

Loss on sale of business

     —         301  

Provision for uncollectible accounts receivable

     466       (726

Deferred income taxes

     27       (2,556

Share-based compensation expense

     4,118       3,226  

Foreign currency transaction loss

     3,632       99  

Other, net

     1,575       (113

Changes in assets and liabilities:

    

Receivables

     (11,379     (26,371

Inventories

     (23,765     (14,467

Other current assets

     (6,681     546  

Accounts payable

     5,385       9,072  

Other current liabilities

     14,485       (4,078

Other noncurrent assets and liabilities

     (8,810     4,318  
  

 

 

   

 

 

 

Net cash provided by (used in) operating activities

     15,963       (19,628
  

 

 

   

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Purchases of property, plant, and equipment

     (12,268     (20,210

Proceeds from sale of assets held-for-sale

     3,955       —    

Purchases of marketable securities available-for-sale

     (23,389     —    

Proceeds from maturities of marketable securities available-for-sale

     4,320       —    

Proceeds from settlement of net investment hedges

     1,503       2,262  

Payments for settlement of net investment hedges

     —         (327

Acquisition of business, net of cash acquired

     (3,034     —    

Other investing activities, net

     —         60  
  

 

 

   

 

 

 

Net cash used in investing activities

     (28,913     (18,215
  

 

 

   

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Proceeds from exercise of stock options

     1,545       177  

Common stock withheld for payroll tax obligations

     (1,111     (1,124

Principal payments on long-term debt

     (174     (153

Payment of debt issuance costs

     —         (115

Dividends paid

     (10,177     (10,032
  

 

 

   

 

 

 

Net cash used in financing activities

     (9,917     (11,247
  

 

 

   

 

 

 

Effect of exchange rate changes on cash and cash equivalents

     (1,863     (858
  

 

 

   

 

 

 

Net change in cash and cash equivalents

     (24,730     (49,948

Cash and cash equivalents, beginning of period

     127,204       160,787  
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 102,474     $ 110,839  
  

 

 

   

 

 

 

 

6


LINDSAY CORPORATION AND SUBSIDIARIES

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(Unaudited)

The non-GAAP tables below disclose (a) the impact on diluted earnings per share of consulting fees, severance costs and loss from business divestitures, associated with the Company’s Foundation for Growth Initiative (“FFG costs”), (b) the impact on operating income of FFG costs, and (c) the impact on segment operating income of FFG costs. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company’s business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company’s underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company’s operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company’s business.

 

     Three months ended     Nine months ended  

(in thousands, except per share amounts)

   May 31, 2019     Diluted
earnings per
share
    May 31, 2019     Diluted
earnings per
share
 

Net earnings - reported GAAP measure

   $ 2,897     $ 0.27     $ 669     $ 0.06  

FFG costs - before tax

     3,890     $ 0.36       13,166     $ 1.22  

Tax effect - FFG costs

     (1,336   $ (0.12     (4,025   $ (0.37
  

 

 

   

 

 

   

 

 

   

 

 

 

Net earnings - adjusted

   $ 5,450     $ 0.50     $ 9,809     $ 0.91  
  

 

 

   

 

 

   

 

 

   

 

 

 

Average shares outstanding - diluted

       10,814         10,807  
     For the three months ended May 31, 2019  

Operating income reconciliation

   Consolidated     Irrigation     Infrastructure     Corporate  

Operating income - reported GAAP measure

     4,475     $ 11,037     $ 3,537     $ (10,099

FFG costs - before tax

     3,890       550       56       3,284  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 8,365     $ 11,587     $ 3,593     $ (6,815
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating revenues

     121,054     $ 98,618     $ 22,436     $ —    

Operating income as a percent of operating revenues

     3.7     11.2     15.8     N/A  

Adjusted operating income as a percent of operating revenues

     6.9     11.7     16.0     N/A  
  

 

 

   

 

 

   

 

 

   

 

 

 
     For the nine months ended May 31, 2019  

Operating income reconciliation

   Consolidated     Irrigation     Infrastructure     Corporate  

Operating income - reported GAAP measure

     2,055     $ 26,341     $ 7,259     $ (31,545

FFG costs - before tax

     13,166       676       188       12,302  
  

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted operating income

   $ 15,221     $ 27,017     $ 7,447     $ (19,243
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating revenues

     342,187     $ 281,994     $ 60,193     $ —    

Operating income as a percent of operating revenues

     0.6     9.3     12.1     N/A  

Adjusted operating income as a percent of operating revenues

     4.4     9.6     12.4     N/A  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

7

EX-99.2

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3rd Quarter Fiscal 2020 Earnings Slide Deck Exhibit 99.2


Slide 2

Safe-Harbor Statement This presentation 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, financial results and planned financing. 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. Investors should understand that a number of factors could cause future economic and industry conditions, and the Company’s actual financial condition and results of operations, to differ materially from management’s beliefs expressed in the forward-looking statements contained in this presentation. These factors include but are not limited to those outlined in the “Risk Factors” sections of the Company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission and the Company’s quarterly report on Form 10-Q for the fiscal quarter ended February 29, 2020, and investors are urged to review these factors when considering the forward-looking statements contained in this presentation. 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. For full financial statement information, please see the Company’s earnings release dated July 2, 2020.


Slide 3

Third Quarter Summary *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation. Revenue Operating Income Diluted EPS Revenues increased $2.1 million compared to prior year Irrigation decreased $5.1 million Infrastructure increased $7.1 million Shipment and project delays related to COVID-19 impact revenue by approximately $14.0 million Operating income increased $7.5 million compared to adjusted prior year results* Irrigation increased $3.4 million Infrastructure increased $5.0 million Corporate expense increased $0.9 million due mainly to incremental incentive expense GAAP Adjusted* GAAP Adjusted* Amounts in millions, except per share amounts FY19 FY20 FY19 FY20


Slide 4

Third Quarter and YTD Financial Summary *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.


Slide 5

Current Market Factors Effect of global COVID-19 pandemic has led to significant decreases in commodity prices. 2020 Net Farm Income is projected by the USDA to be $96.7 billion, an increase of 3.3% from 2019. Increases in cash receipts for crops and livestock are partially offset by a decrease in gov’t support payments. Impacts from COVID-19 have not yet been factored into the USDA projections. Under the U.S.-China Phase 1 trade deal, China pledged to increase purchases of U.S. agricultural products by $32 billion over two years. This would be more than a 60% increase over the 2017 baseline cited in the deal, however it is uncertain that China will actually increase purchases to this level. Drop in ethanol demand puts additional downward pressure on corn prices. Food security an increased concern in certain international markets. Irrigation Infrastructure Our “shift left” strategy is gaining traction and contributing to an increase in Road Zipper System® lease revenue. Road Zipper System® gaining interest globally as a solution to traffic congestion and air quality. The five-year $305 billion U.S. highway bill enacted in December 2015 (the “FAST Act”) is scheduled to expire in September 2020 unless it is reauthorized by Congress. Congress and the Administration have put forth several infrastructure packages, but none have moved beyond their introduction. States continue the transition to new federal MASH testing standards for road safety products. Almost all of our road safety product offerings in the U.S. have now received MASH eligibility.


Slide 6

Irrigation Segment North America revenue decreased $2.1 million Lower irrigation equipment unit volume Higher average selling prices International revenue decreased $3.0 million Unfavorable currency impact of $3.5 million Shipment delays of approximately $2.0 million related to the impact of COVID-19 Operating income increased $3.4 million compared to adjusted prior year results* Improved cost and pricing performance Increased margin contribution from technology products and services Operating margin improved 440 bps vs. adjusted prior year results* Net Irrigate, LLC acquired on April 8, 2020 Agriculture IoT technology company that provides remote monitoring solutions for center pivot irrigation Expands the number of irrigated acres managed under Lindsay’s FieldNET ® brand of remote monitoring and control solutions Revenue Operating Income GAAP Adjusted* North America International FY19 FY20 FY19 FY20 *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation. Amounts in millions


Slide 7

Infrastructure Segment Total revenue increased $7.1 million Increase in Road Zipper System® sales Highways England project Japan barrier order Increase in Road Zipper System lease revenue Sales of road safety products in Europe were lower than prior year Project delays in the U.S. of approximately $12.0 million related to the impact of COVID-19 Operating income of $8.6 million and operating margin of 28.9% Positive mix impact from higher-margin Road Zipper System sales and lease revenue Improved cost and pricing performance Revenue Operating Income GAAP Adjusted* FY19 FY20 FY19 FY20 *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation. Amounts in millions


Slide 8

Update on the COVID-19 Situation Innovative Market Leader – Sustainable Solutions Lindsay’s products and technologies support the following critical infrastructure sectors as defined by the Department of Homeland Security (CISA.gov) and other global government agencies: Food and Agriculture – our irrigation business supports the production of food and the conservation of water and energy Transportation Systems – our infrastructure business supports the movement of people and goods efficiently, safely and securely Lindsay’s production facilities are considered “business essential” and will remain operational as long as we 1) have demand for our products, 2) are allowed to remain open by local governments, and 3) can provide for the safety of our employees. At the present time, all of our facilities are operational. Other potential business impacts associated with COVID-19 include but are not limited to: additional facility closures and the duration of such closures, supply chain disruption and additional costs, logistics delays, border closures, workforce disruption, reduced demand for our products and services, delay in the implementation of projects and other effects that may result from a general economic downturn. Lindsay is well positioned with a strong balance sheet and sufficient liquidity as we face the uncertainty and challenges presented by the COVID-19 pandemic. As of May 31, 2020 we have: Available liquidity of $171.5 million, with $121.5 million in cash, cash equivalents and marketable securities and $50.0 million available under revolving credit facility Total debt of $116.4 million, of which $115.0 million matures in 2030 A funded debt to EBITDA leverage ratio (as defined in our credit agreements) of 1.8 compared to a covenant limit of 3.5


Slide 9

COVID-19 Protocols in Place Innovative Market Leader – Sustainable Solutions Protecting the health and well-being of our employees is a top priority, as is maintaining frequent communication and providing important updates. Beginning in early March, we have: Created a global task force and communication strategy Implemented social distancing protocols Initiated remote work strategy for employees not essential to factory operations Restricted domestic and international travel for business-essential purposes Completed an electrostatic spray deep clean at our global headquarters Limited visitors to all of our facilities to essential personnel only Conducted screening questionnaires for all facility visitors Increased frequency and intensity of disinfecting all high-touch areas Implemented twice daily disinfecting procedures for production equipment Implemented staggered breaks in our factory operations Created a COVID-19 Manager at each facility to ensure rigid discipline of protocols Established protocols in the event of a confirmed COVID-19 diagnosis Published weekly updates by location specific to CDC and WHO updates and guidelines Implemented virtual or phone meeting protocols


Slide 10

Executing Long-Term Value Creation Innovative Market Leader – Sustainable Solutions Deepening customer relationships through technology differentiation Solutions and growth aligned to market megatrends…. designed to sustain and protect our evolving world Foundation for Growth initiative driving margin expansion Empowered global culture through Vision, Values and Behaviors Framework Innovative Market Leader – Sustainable Solutions ONE LINDSAY


Slide 11

Foundation for Growth Initiative Margin improvement Cost Strategy and Culture Objectives Raise operating margin floor Innovation leader in core markets Renewed culture and identity 1 2 3 4 5 6 Commercial Excellence Global Sourcing Manufacturing Optimization Lower G&A Expenses Cultural Changes Strategic Choices


Slide 12

Foundation for Growth Execution Execution remains on track Accomplishments through Q3 Fiscal 2020 Divested four non-core businesses, acquired Net Irrigate, LLC ü Established a centralized shared services organization ü Closed and sold an infrastructure facility; consolidated activity into an existing irrigation facility ü Made tangible progress in culture change and aligning behaviors to strategy ü Projects in each of the four margin-improvement workstreams have moved to implementation and realization stage ü


Slide 13

Summary Balance Sheet


Slide 14

Summary of Cash Flow


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Capital Allocation – A Balanced Approach Allocation History (1) Other includes debt repayments, net cash sources/uses from note receivables, net investment hedges, stock compensation and related tax benefits. Targeted cash balance of $60-75 million, including international accounts To support cyclical and seasonal fluctuations in working capital and projected capital expenditures $115 million in Senior Notes maturing on 2/19/30 at annual interest rate of 3.82% The Company’s prioritization for cash use: Organic growth initiatives Capital expenditures - expected to be $15-20 million in fiscal 2020 Dividend payments Synergistic acquisitions that leverage core capabilities Excess cash invested in opportunistic share repurchases Allocation Plan


Slide 16

Attractive Long-Term Megatrends Water Conservation Alternative Fuels Increase Yields Improve Road Safety Population Growth Advancing Technology


Slide 17

Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures LINDSAY CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) The non-GAAP tables below disclose (a) the impact on diluted earnings per share of consulting fees, severance costs and loss from business divestitures, associated with the Company's Foundation for Growth Initiative ("FFG costs"), (b) the impact on operating income of FFG costs, and (c) the impact on segment operating income of FFG costs. Management believes adjusted net earnings, adjusted diluted earnings per share and adjusted operating income are important indicators of the Company’s business performance because they exclude items that may not be indicative of, or may be unrelated to, the Company’s underlying operating results, and provide a useful baseline for analyzing trends in the business. Non-GAAP measures used by the Company may differ from similar measures used by other companies, even when similar terms are used to identify such measures. These adjusted financial measures should not be considered in isolation or as a substitute for reported net earnings, diluted earnings per share and operating income. These non-GAAP financial measures reflect an additional way of viewing the Company’s operations that, when viewed with the GAAP results and the following reconciliations to the corresponding GAAP financial measures, management believes provides a more complete understanding of the Company’s business.


Slide 18

Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures LINDSAY CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (Continued)

v3.20.2
Document and Entity Information
Jul. 02, 2020
Cover [Abstract]  
Entity Registrant Name LINDSAY CORP
Security Exchange Name NYSE
Entity Address, Country US
Amendment Flag false
Entity Central Index Key 0000836157
Document Type 8-K
Document Period End Date Jul. 02, 2020
Entity Incorporation State Country Code DE
Entity File Number 1-13419
Entity Tax Identification Number 47-0554096
Entity Address, Address Line One 18135 Burke Street
Entity Address, Address Line Two Suite 100
Entity Address, City or Town Omaha
Entity Address, State or Province NE
Entity Address, Postal Zip Code 68022
City Area Code (402)
Local Phone Number 829-6800
Written Communications false
Soliciting Material false
Pre Commencement Tender Offer false
Pre Commencement Issuer Tender Offer false
Security 12b Title Common Stock, $1.00 par value
Trading Symbol LNN
Entity Emerging Growth Company false