Lindsay Corporation Reports Fiscal 2015 Third Quarter Results

Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its third quarter ended May 31, 2015.

Third Quarter Results

Third quarter fiscal 2015 revenues were $160.7 million versus $169.9 million of revenues in the same prior year period. Net earnings were $12.9 million or $1.10 per diluted share compared with $16.5 million or $1.28 per diluted share in the prior year.

Irrigation equipment revenues totaled $131.3 million including $6.3 million of revenues from the recently acquired Elecsys Corporation, a 12 percent decrease from $149.0 million in the prior fiscal year’s third quarter. U.S. irrigation revenues of $86.7 million decreased 2 percent primarily as a result of the reduction in commodity prices and lower storm damage sales, partially offset by Elecsys revenue. In the international irrigation markets revenues for the third quarter were $44.6 million, decreasing 27 percent over the same quarter last year, with 10 percent revenue decline due to currency exchange. Sales declined in most markets but most significantly in Europe, China and Russia/Ukraine. Infrastructure revenues increased 41 percent to $29.4 million primarily due to increases in road safety product sales and Road Zipper System sales and leases.

Gross margin was 28.9 percent of sales compared to 28.4 percent of sales in the prior year’s third quarter. Gross margin in irrigation decreased by approximately 1 percentage point and infrastructure gross margin increased by approximately 10 percentage points. The decrease in irrigation gross margins is primarily a result of pricing pressure and cost deleverage from lower sales, partially offset by lower material costs and reductions in warranty expenses. The increase in infrastructure gross margin was primarily due to sales mix and cost leverage on higher sales.

Operating expenses increased $1.9 million to $24.9 million compared to the third quarter of the prior fiscal year. The increase includes $2.4 million of Elecsys Corporation operating expenses and $0.8 million in incremental health benefit expenses partially offset by decreases in discretionary expenses. Operating expenses were 15.5 percent of sales in the third quarter of fiscal 2015 compared with 13.6 percent of sales in the prior year period. Operating margins were 13.4 percent in the third quarter, versus 14.8 percent in the prior year period.

Cash and cash equivalents of $154.0 million were $28.0 million lower compared to the prior year third quarter. The Company repurchased 371,886 shares for $29.1 million during the third quarter. Since the announcement of its capital allocation plan in January 2014, the Company has repurchased a total of 1.5 million shares for $119.5 million, with $30.5 million remaining authorized as of May 31, 2015 for additional repurchases.

Backlog of unshipped orders at May 31, 2015 was $53.2 million compared with $73.6 million at May 31, 2014 and $74.3 million at February 28, 2015. The backlog at May 31, 2014 included $12.7 million for the Golden Gate Bridge project, which was completed in the second quarter of fiscal 2015. The current period includes $12.3 million of backlog from Elecsys Corporation.

Nine Month Results

Total revenues for the nine months ended May 31, 2015 were $436.6 million versus $470.4 million in the same prior year period. Foreign currency translation as compared to the prior year reduced year to date revenues by 3 percent. Net earnings were $29.5 million or $2.46 per diluted share compared with $40.2 million or $3.11 per diluted share in the prior year.

The current year includes $1.5 million of estimated environmental expenses and $1.8 million of acquisition and integration expenses. These expenses reduced earnings by $0.18 per diluted share on an after tax basis. Excluding these expenses, the addition of Elecsys, and higher health care claims, SG&A expenses year to date have been reduced from 2014 levels by $2.6 million, with additional savings anticipated in the fourth quarter. In addition, headcount in our Lindsay manufacturing facility has been reduced by 25 percent from the same time last year.

Total irrigation equipment revenues decreased 14 percent to $354.3 million from $414.1 million during the first nine months of the prior fiscal year. U.S. irrigation revenues of $219.1 million decreased 16 percent, while international irrigation revenues of $135.2 million decreased 12 percent. Infrastructure revenues increased 46 percent to $82.3 million.

Outlook

Rick Parod, president and chief executive officer, commented, “The U.S. irrigation market continues to be impacted by lower commodity prices and farm incomes, while international irrigation markets have also been affected by changing currency rates and global commodity price reductions. The infrastructure segment once again delivered very positive results in the quarter, reflecting increased market penetration and share gains.”

Parod continued, “While the longer term drivers to our markets remain positive, we do not see any significant indicators of near term improvements from the current cyclical downturn in agriculture. We will continue to seek opportunities to improve our cost structure, while at the same time investing in product development and expansion of our global sales capabilities.”

Third-Quarter Conference Call

Lindsay’s fiscal 2015 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) 307-0228 in the U.S., or (706) 758-0065 internationally, and referring to conference ID # 64804585. 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, 2015 Lindsay had approximately 11.5 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 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.

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