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17.12.2008 13:00:00
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Lindsay Corporation Reports Fiscal 2009 First Quarter Results
Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its fiscal first quarter ended November 30, 2008.
First Quarter Results
First quarter fiscal 2009 total revenues increased 49 percent to $113.1 million from $75.9 million for the year-ago period. Net earnings were $6.3 million or $0.51 per diluted share, compared with $4.4 million or $0.36 per diluted share, in the prior year’s first quarter.
Total irrigation equipment revenues increased 52 percent to $86.0 million from $56.5 million in the prior fiscal year’s first quarter. Domestic irrigation revenues increased 55 percent, while international irrigation revenues improved 47 percent from the prior year’s first quarter. Infrastructure revenues were $27.2 million compared with $19.4 million in the prior year period, an increase of 40 percent.
Gross margin was 25.3 percent compared to 25.4 percent a year ago with improved irrigation margins offset by lower infrastructure margins resulting from unfavorable product mix and factory efficiency variances in the quarter.
Operating expenses were $16.9 million, increasing $4.1 million over the first quarter of the prior year, and were 14.9 percent of sales, compared with 16.8 percent of sales in the prior year period. The increased spending was primarily due to the inclusion of Watertronics, $0.7 million of incremental expenses for additional environmental monitoring and remediation as part of an EPA work plan at our Lindsay, Nebraska facility and personnel related costs. Operating income of $11.8 million increased 81 percent compared with $6.5 million in the prior year period. Other expense of $1.7 million primarily resulted from foreign currency translation losses experienced from the volatility of exchange rates.
Lindsay’s backlog of unshipped orders at November 30, 2008 was $40.1 million compared with $51.2 million at November 30, 2007. Irrigation backlog of $23.8 million decreased $6.1 million ($9.0 million prior to the inclusion of Watertronics) from the first quarter of fiscal 2008, and decreased $47.9 million from August 31, 2008. Infrastructure backlog of $16.3 million decreased $5.0 million from the first quarter of fiscal 2008 and decreased $4.3 million from the fiscal 2008 year-end.
Outlook
Rick Parod, president and chief executive officer, commented, "General economic conditions and agricultural commodity prices turned unfavorable during the quarter, which is expected to adversely affect future irrigation equipment demand. These economic changes did impact the incoming order rate during the quarter, with orders received down considerably from the high level experienced in fiscal 2008. However, the first quarter is a seasonally-low sales period for the U.S. market, and not a good indicator of future demand. We have taken action to adjust our staffing and other expenses, and we will continue to monitor the current economic situation and take appropriate action.”
Lindsay also announced today that Barrier Systems Sales & Service, LLC, a wholly-owned subsidiary, has been awarded a contract for approximately $19.6 million to provide moveable barrier and barrier transfer machines for a section of toll road in Mexico City. The contract will also include crash cushions and gate products supplied by Barrier Systems. Work on the contract is currently underway with an estimated completion date of January 2010.
Parod commented, "We are pleased at the opportunity to provide a solution, in part, to the traffic congestion issues facing Mexico City. While general economic conditions have deteriorated, we are optimistic about the opportunities that may develop for our infrastructure segment. We are well positioned to take advantage of incremental U.S. spending for roads and bridges. The drivers for our markets, which include expanded food production, efficient water use, and improvements in transportation safety, remain very positive for long-term growth in our business segments.”
First-Quarter Conference Call
Lindsay’s fiscal 2009 first quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. 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 November 30, 2008, Lindsay had approximately 12.3 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 we file with the Securities and Exchange Commission. Forward-looking statements include the information concerning possible or assumed future results of operations of the Company and those statements preceded by, followed by or including the words "intend,” "expectation," "outlook," "could," "may," "should," or similar expressions. For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995.
| Lindsay Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (unaudited) | ||||||||
| Three months ended | ||||||||
| November 30, | ||||||||
|
(in thousands, except per share amounts) |
2008 | 2007 | ||||||
| Operating revenues | $ | 113,121 | $ | 75,928 | ||||
| Cost of operating revenues | 84,472 | 56,632 | ||||||
| Gross profit | 28,649 | 19,296 | ||||||
| Operating expenses: | ||||||||
| Selling expense | 6,763 | 5,130 | ||||||
| General and administrative expense | 8,349 | 6,144 | ||||||
| Engineering and research expense | 1,741 | 1,506 | ||||||
| Total operating expenses | 16,853 | 12,780 | ||||||
| Operating income | 11,796 | 6,516 | ||||||
| Other income (expense): | ||||||||
| Interest expense | (625 | ) | (599 | ) | ||||
| Interest income | 316 | 476 | ||||||
| Other income (expense), net | (1,706 | ) | 114 | |||||
| Earnings before income taxes | 9,781 | 6,507 | ||||||
| Income tax provision | 3,459 | 2,141 | ||||||
| Net earnings | $ | 6,322 | $ | 4,366 | ||||
| Basic net earnings per share | $ | 0.52 | $ | 0.37 | ||||
| Diluted net earnings per share | $ | 0.51 | $ | 0.36 | ||||
| Weighted Average shares outstanding | 12,250 | 11,766 | ||||||
| Diluted effect of stock equivalents | 235 | 462 | ||||||
| Weighted average shares outstanding assuming dilution | 12,485 | 12,228 | ||||||
| Cash dividends per share | $ | 0.075 | $ | 0.070 | ||||
| Lindsay Corporation and Subsidiaries | ||||||||||||
| CONSOLIDATED BALANCE SHEETS | ||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| November 30, | November 30, | August 31, | ||||||||||
|
($ in thousands, except par values) |
2008 | 2007 | 2008 | |||||||||
| ASSETS | ||||||||||||
| Current Assets: | ||||||||||||
| Cash and cash equivalents | $ | 28,298 | $ | 17,324 | $ | 50,760 | ||||||
| Marketable securities | - | 8,207 | - | |||||||||
| Receivables, net of allowance, $1,241, $1,029 and $1,457, respectively | 84,089 | 60,437 | 88,410 | |||||||||
| Inventories, net | 72,488 | 54,964 | 53,409 | |||||||||
| Deferred income taxes | 7,754 | 5,645 | 8,095 | |||||||||
| Other current assets | 6,627 | 8,453 | 7,947 | |||||||||
| Total current assets | 199,256 | 155,030 | 208,621 | |||||||||
| Property, plant and equipment, net | 55,669 | 47,286 | 57,571 | |||||||||
| Other intangible assets, net | 29,195 | 27,713 | 30,808 | |||||||||
| Goodwill, net | 23,333 | 18,829 | 24,430 | |||||||||
| Other noncurrent assets | 4,973 | 6,112 | 5,447 | |||||||||
| Total assets | $ | 312,426 | $ | 254,970 | $ | 326,877 | ||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||
| Current Liabilities: | ||||||||||||
| Accounts payable | $ | 33,300 | $ | 24,664 | $ | 32,818 | ||||||
| Current portion of long-term debt | 6,171 | 6,171 | 6,171 | |||||||||
| Other current liabilities | 33,058 | 25,427 | 43,458 | |||||||||
| Total current liabilities | 72,529 | 56,262 | 82,447 | |||||||||
| Pension benefits liabilities | 5,606 | 5,426 | 5,673 | |||||||||
| Long-term debt | 24,082 | 30,253 | 25,625 | |||||||||
| Deferred income taxes | 12,197 | 10,036 | 11,786 | |||||||||
| Other noncurrent liabilities | 4,281 | 5,503 | 5,445 | |||||||||
| Total liabilities | 118,695 | 107,480 | 130,976 | |||||||||
| Shareholders' equity: | ||||||||||||
|
Preferred stock, ($1 par value, 2,000,000 shares authorized, no shares issued and outstanding) |
- | - | - | |||||||||
|
Common stock, ($1 par value, 25,000,000 shares authorized, 18,093,191, 17,795,683 and 18,055,292 shares issued and outstanding in November 2008 and 2007 and August 2008, respectively) |
18,093 | 17,796 | 18,055 | |||||||||
| Capital in excess of stated value | 26,818 | 12,924 | 26,352 | |||||||||
| Retained earnings | 245,019 | 207,422 | 239,676 | |||||||||
|
Less treasury stock (at cost, 5,813,448, 5,998,448 and 5,843,448 shares in November 2008 and 2007 and August 2008, respectively) |
(92,796 | ) | (95,749 | ) | (93,275 | ) | ||||||
| Accumulated other comprehensive income, net | (3,403 | ) | 5,097 | 5,093 | ||||||||
| Total shareholders' equity | 193,731 | 147,490 | 195,901 | |||||||||
| Total liabilities and shareholders' equity | $ | 312,426 | $ | 254,970 | $ | 326,877 | ||||||
| Lindsay Corporation and Subsidiaries | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| Three Months Ended | ||||||||
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($ in thousands) |
Years Ended November 30, | |||||||
| 2008 | 2007 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net earnings | $ | 6,322 | $ | 4,366 | ||||
| Adjustments to reconcile net earnings to net cash used in | ||||||||
| operating activities: | ||||||||
| Depreciation and amortization. | 2,686 | 2,131 | ||||||
| Provision for uncollectible accounts receivable | 27 | (68 | ) | |||||
| Deferred income taxes | 338 | 281 | ||||||
| Stock-based compensation expense | 457 | 572 | ||||||
| Other, net | 67 | (36 | ) | |||||
| Changes in assets and liabilities: | ||||||||
| Receivables, net | 1,507 | (12,114 | ) | |||||
| Inventories, net | (22,684 | ) | (11,612 | ) | ||||
| Other current assets | (44 | ) | (983 | ) | ||||
| Accounts payable | 2,128 | 4,424 | ||||||
| Other current liabilities | (6,489 | ) | 161 | |||||
| Current taxes payable | (867 | ) | 604 | |||||
| Other noncurrent assets and liabilities | 225 | (2,873 | ) | |||||
| Net cash used in operating activities | (16,327 | ) | (15,147 | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of property, plant and equipment | (2,275 | ) | (4,502 | ) | ||||
| Proceeds from sale of property, plant and equipment | 6 | 5 | ||||||
| Acquisition of business, net of cash acquired | - | (3,520 | ) | |||||
| Proceeds from settlement of net investment hedge | 859 | - | ||||||
| Purchases of marketable securities available-for-sale | - | (13,860 | ) | |||||
| Proceeds from maturities of marketable securities available-for-sale | - | 33,265 | ||||||
| Net cash (used in) provided by investing activities | (1,410 | ) | 11,388 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from issuance of common stock under stock compensation plan | 116 | 307 | ||||||
| Principal payments on long-term debt | (1,543 | ) | (1,543 | ) | ||||
| Net borrowings under revolving line of credit | (1,630 | ) | - | |||||
| Excess tax benefits from stock-based compensation | 328 | 373 | ||||||
| Dividends paid | (920 | ) | (826 | ) | ||||
| Net cash used in financing activities | (3,649 | ) | (1,689 | ) | ||||
| Effect of exchange rate changes on cash | (1,076 | ) | 1,750 | |||||
| Net decrease in cash and cash equivalents | (22,462 | ) | (3,698 | ) | ||||
| Cash and cash equivalents, beginning of period | 50,760 | 21,022 | ||||||
| Cash and cash equivalents, end of period | $ | 28,298 | $ | 17,324 | ||||
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