Good morning. My name is Tom and I will be your conference operator today. At this time, I would like to welcome everyone to the Lindsay Corporation's Second Quarter Fiscal Year 2021 Earnings Call. During this call, management may make forward-looking statements that are subject to risks and uncertainties, which reflect management's current beliefs, estimates of future economic circumstances, industry conditions, company performance and financial results. 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 expectation, outlook, could, may, should or similar expressions. For these statements, we claim the protection of the Safe Harbor forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. Please note this event is being recorded. I would now like to turn the call over to Mr. Randy Wood, President and Chief Executive Officer. Please go ahead.

Thank you, and good morning, everyone. Welcome to our second quarter earnings call. With me today is Brian Ketcham, our Chief Financial Officer. And before Brian gets into the details of our second quarter results, I'd like to share some opening comments. In the area of innovation, we continue executing key elements of our smart pivot platform with our strategic partners, Microsoft and Taranis. We are leveraging new technologies, including edge computing, to improve the speed and accuracy of image recognition used for agronomic analysis and machine health diagnostics. This will give customers the peace of mind and security they need and continue to move forward autonomous management of both the crop and the machine in the field. We have also announced the release of our new RoadConnect platform in the Infrastructure segment. This allows us to leverage many of the same hardware elements from our FieldNET and remote monitoring product lines to improve speed to market and reliability. This platform will provide states, municipalities, and other stakeholders with the ability to remotely monitor a broad range of assets on our roadways to improve safety and service. In the environmental, social and governance, or ESG space, we continue to make great progress on many of our initiatives. Back in March 2018, we hosted our Water Matters event, where we set a goal of helping our customers around the world save over 700 billion gallons of water and conserve over 1.2 billion kilowatt hours of energy through fish and irrigation tools like FieldNET Advisor. We are pleased to confirm that we're on track to meet our water savings goal and we will exceed our energy savings goal by over 80%, allowing us to remove more than 3.5 billion pounds or 1.6 million metric tons of carbon from the atmosphere, that’s equivalent to the annual emissions from over 330,000 passenger vehicles. We've also launched our internal ESG council focused on addressing both the sustainability of our internal operations and the operations of our customers engaged in transportation safety, traffic management, and agricultural production. We will release our next sustainability report later this spring and we will have more to share on our strategy and specific goals as they’re finalized. We continue to follow safety protocols at all of our facilities as part of our pandemic response plan. Currently, all nine factories are operational and running and we are maintaining our work from home option for roles that can be performed remotely. As we stated in the past, safety is a non-negotiable for us, so we will continue to make decisions that keep our employees safe. I would like to take a moment and acknowledge and recognize our team for their continued focus and execution through the global pandemic. The business essential nature of our work in transportation, safety and sustainable agriculture production means our customers are counting on us to deliver and our teams have continued to do that well. We appreciate your dedication and support of each other and our business. Turning to the market environment. Conditions in North American irrigation remained strong in the quarter. Commodity prices were high and net farm income reached near record levels as growers benefited from strong supply and demand fundamentals, including growth in exports to China and government support tied to the COVID relief programs. This drove positive customer sentiment and a willingness to increase capital expenditures. These positive market drivers drove strong order flow in North America leading to higher equipment sales and a large order backlog that will carry into our third quarter. The recently released planting intentions report for the 2021 growing season indicates we could see a continuation of supply constraints that will support strong commodity prices in net farm income, increased income from property seats is projected to be partially offset by a reduction in government subsidies that would lead to slightly lower net farm income for this marketing year when compared to 2020. We continue to see rapid escalation of input costs, primarily steel during the quarter. Transportation and other input costs also increased due to the nationwide trucking shortage and high component demand across the industry. We've seen expedite fees and delivery delays on some inbound components in the quarter. These were actively managed daily to minimize disruptions to our dealers and customers, but we do expect tight material supplies will continue into the third quarter. Multiple price increases have been implemented this fiscal year. We continue to trail costs slightly due to the volume of incoming orders and the pace of cost increases. This will continue to put short-term margin pressure into Q3. International irrigation again had a strong quarter in both the mature and developing market segments. We are seeing signs of strong market recovery across the Asia Pacific region with growth in both the domestic China and Australia and New Zealand markets. Brazil continues to be a very competitive market, but a bright spot in terms of both volume and revenue growth due to strong farm income, favorable currency for exports and record soybean yield. The second corn crop or safrinha planting was delayed this year due to the late soybean harvest. This could have some impact on the market, but we still see continued strength into their fall and winter seasons. Moving to infrastructure, where we saw another strong quarter. In road safety, we are seeing some improvement in the volume of project tenders, but we remain below pre-pandemic levels. Construction awards are down throughout the country, primarily due to states focusing resources on their pandemic response. We're also seeing delays in Road Zipper project confirmations as states defer projects while managing their COVID response plans. We don’t view these as lost sales, but it does lengthen the revenue recognition cycle and we have anticipated projects valued at close to $11 million now moved out of fiscal year 2021. We're actively managing the sales funnel to close this gap. We did see an increase in lease revenue in the quarter and our Road Zipper sales funnel continues to improve on a year-over-year basis. However, the timing of project shipments remains challenging to predict in this environment. On March 31, President Biden revealed the American Jobs Plan valued at an estimated $2 trillion. This is an eight-year stimulus package containing $115 billion to modernize roads and bridges, $25 billion for large, complex infrastructure projects of regional significance and $20 billion to improve road safety. This includes a safe streets for all program to fund state and local improvements that reduce crashes and fatalities, especially for cyclists and pedestrians. We believe the increased emphasis from the Biden administration on reducing carbon emissions, addressing traffic congestion and gridlock, and upgrading our aging road networks will provide some longer-term funding stability that could have a positive impact on our infrastructure segment. Of course there is a long road ahead in terms of approvals and funding, so the timing of that benefit is uncertain. There is also potential, but in some situations, pending legislation could temporarily freeze the market while local governments wait to see the magnitude and timing of program funding. Now, I'll turn the call over to Brian to review our second quarter financial results.

Thank you, Randy, and good morning, everyone. Total revenues for the second quarter of fiscal 2021 of $143.6 million increased $29.8 million, or 26% compared to $113.8 million in the same quarter last year. Net earnings for the quarter were $11.9 million, or $1.08 per diluted share compared to net earnings of $5.5 million, or $0.51 per diluted share in the prior year. Irrigation segment revenues for the second quarter of $118.6 million increased $25.1 million, or 27% compared to the same quarter last year. North America irrigation revenues of $80.2 million increased $13.1 million, or 19% compared to last year. The increase resulted primarily from higher irrigation equipment sales volume and higher average selling prices. This increase was partially offset by lower engineering services revenue of approximately $10.5 million related to a project in the prior year that did not repeat. In the international irrigation markets, revenues of $38.4 million increased $12 million or 45% compared to the same quarter last year. The increase resulted from higher irrigation equipment sales volumes in several international markets. The overall impact of foreign currency translation differences was insignificant for the quarter. Total irrigation segment operating income for the second quarter was $18 million, an increase of $7.9 million or 79% compared to the same quarter last year, and operating margin improved to 15.2% of sales compared to 10.8% of sales in the prior year. Improved margins were supported by higher irrigation equipment sales volume. However, this improvement was tempered somewhat by the impact of higher raw material and freight costs. As Randy mentioned in his comments, we have implemented multiple price increases to pass along the escalating cost. However, we have experienced margin compression as we work through the backlog of orders received prior to the effective dates of our pricing actions. We expect this margin pressure to continue into the third quarter until increased cost pass-throughs are fully realized. Feedback received from our dealers indicates that Lindsay has consistently led the industry in proactively implementing price increases and other than timing differences the pricing environment has remained rational. Infrastructure segment revenues for the second quarter of $25 million increased $4.7 million or 23% compared to the same quarter last year. The increase resulted primarily from higher Road Zipper System sales and lease revenue, while global sales of road safety products were relatively flat compared to the prior year. Infrastructure segment operating income for the second quarter was $6.3 million, an increase of $400,000 or 8% compared to the same quarter last year. Infrastructure operating margin for the quarter was 25.4% of sales compared to 29% of sales in the prior year. Positive margin mix from higher Road Zipper sales and lease revenue was partially offset by the negative impact of higher raw material and other costs. In addition, the prior year included a gain of $1.2 million on the sale of a building that had been held for sale. Turning to the balance sheet performance and liquidity, during the quarter we had capital expenditures of $11 million which included $8.5 million to exercise a purchase option for the land and buildings related to our manufacturing operation in Turkey. This facility is well positioned strategically and geographically and the purchase provides us greater flexibility to take advantage of future growth opportunities in the EMEA region. Our total available liquidity at the end of the second quarter was $180.3 million with $130.3 million in cash and marketable securities and $50 million available under our revolving credit facility. Our total debt was $116.3 million at the end of the second quarter, almost all of which matures in 2030. Additionally, at the end of the quarter we were well within the financial covenants of our borrowing facilities including a gross debt-to-EBITDA leverage ratio of 1.4 compared to a covenant limit of 3.0. At this time, I would like to turn the call over to the operator to take your questions.

Thank you. We will now begin the question-and-answer session. [Operator Instructions] And the first question comes from Nathan Jones with Stifel. Please go ahead.

Good morning, everyone.

Good morning, Nathan.

Good morning, Nathan.

Just starting in irrigation, obviously, really strong growth there, about 27% growth year-over-year. Can you talk about what the contribution from price was to the top line growth?

Yes, Nathan, this is Brian. I would say it was in the mid-single digits range. As you recall at the end of the first quarter, we had a large backlog that orders came in prior to the first price increase that we put in place. So in the quarter and I would say incrementally year-over-year as well as quarter-to-quarter, about mid-single digits impact on price for the quarter.

And you would probably expect that now that you probably shipped all of that backlog to be more like double digits contribution from price in the fiscal third quarter?

Yes, it will continue to increase. As we both mentioned, we have implemented multiple price increases and it's in total where we are at is in that 20% range, but that's feathered in as lot of month by month basis is how we’ve been approaching price.

Okay. And then I want to talk about margins. I mean, you put up a 32% incremental margin in Irrigation, which given the level of inflation, I think is really, really good. Can you talk about some of the dynamics there? I know you said you had lower engineering revenues than last year. If I recall that was relatively low margin and you’ve got some of these revenues that doesn’t have price increases, some of it does. Is that kind of low 30s incremental margin an area that you can maintain as we go forward, as we are dealing with these price increases and you know the shipping costs and things like that? Or is there a reason why they would get better or worse in the short-term?

Yes, I think, as we said in the past, incremental margins in Irrigation generally in that 30%-plus range. I would say in this particular quarter, we did have the margin headwind, primarily on the U.S. side. What really helped incremental margins this year is some pretty significant improvement year-over-year on the international business. Some of that may have been a favorable comp compared to last year. But I would say going forward, the expectation would be in that 30-plus range, but again continuing to have some headwind with the cost increases that we are seeing.

Do you think we will find a quarter here eventually when still stops going straight up, that you have a quarter or two where you will hit a better incremental margin as you are catching up on that pricing?

Yes, when that point in time comes, which I am not sure if anybody knows that at this point, we would expect to catch up and hopefully gain some incremental margin as steel costs stabilize.

Great, that's helpful. I'll pass it along. Thank you.

Our next question comes from Brian Drab with William Blair. Please go ahead.

Hi, thanks for taking my questions. I know you are not giving formal guidance for the year, but I am wondering, can you give us any sense as to roughly where you see irrigation revenue going this year? And these are big numbers now, so it gets harder to model. And again 20%-plus growth and pricing is moving around so much, any help you can give us in modeling that?

Yes, Brian, I would say that the growth we saw in the second quarter on a percentage basis, we would expect that to continue into the third. And then when you -- as you get into the -- our fourth quarter, that’s kind of post planting season and that’s generally driven by storm replacement demand. So, with the backlog that we’ve got today, again, subject to some of the supply chain constraints we are seeing, that would be kind of our expectation for the third quarter.

From the third quarter, but for the fourth quarter, you said -- given that that’s driven by a lot of replacement, that the growth year-over-year, it might come down a little, is that what you are saying?

Yes, there is still some positive impact from the ag fundamentals in commodity prices and a lot of different commodities, but I think the demand level falls off into the fourth quarter. So again, it's going to be primarily dependent on what happens with storms and replacement activity.

Okay, thanks. And your mention of replacement reminds me of the question that I always like to ask, Brian, that breakdown of irrigation revenue?

Yes. As we would expect the dry land or irrigation for the first time increased during the quarter, it was at 34% for the quarter. Conversion was at 27% and replacement at 39%.

Okay, thanks. And then maybe just one more for now. The large Road Zipper projects and the pipeline is very healthy. Is that a pipeline that you think will start - maybe we’ll see the next big projects coming in the fiscal 2022? Or can you comment anymore specifically on when some things in that pipeline might hit?

Yes, this is Brian again. As we began the year, what we had said is, we had line of sight to projects in the pipeline that would cover about half of the gap of the UK projects that we had last year. And as Randy mentioned in his comments, we've had projects of around $11 million that have now shifted into fiscal 2022. So that, let's say, that gap created by the UK project last year is probably going to remain with us for the balance of the year. But as we look at our pipeline, we're very encouraged by what we see for fiscal 2022 is just the delays that we've experienced in 2021, primarily being COVID-related in certain states and municipalities in the U.S. that is delaying some of those projects, but overall, sales funnel is – continues to improve.

Okay. Can I just make sure I understand that maybe frame it slightly differently? I'm looking at my notes, and I had in our one conversation we had, I got the impression that large projects, Road Zipper revenue could be in the $25 million to $30 million range in fiscal 2021. Is that the idea that maybe, I think you said $11 million gets pushed to the next year, and there's more like $15 million to $20 million this year, is that the ballpark or not?

Yes, I'd say, it's at the lower end of that range, so 20-plus.

Got it, okay. Very helpful. Thank you.

The next question comes from Ryan Connors with Boenning & Scattergood. Please go ahead.

Hey, great. A couple of bigger picture questions. First, on irrigation, I wonder if you can give us any perspective you have Randy on where irrigation fits in into the budget this time around versus other priorities, tractors, combines, et cetera. Anything unique or different about this cycle, this period versus past cycles that would make irrigation more or less of a priority? I mean I know we had the drought last time, but then again interest rates are so low now and irrigated land values are up, which is a positive. So just trying to get a feel for where you think irrigation fits into the puzzle this time around?

Yes, I don't see it being unique in this up cycle versus prior up cycles Ryan. If you see in your releases from the public companies in the equipment space, they're seeing some increases on their sales as well. The only caveat might be availability. And I know that in irrigation we got to run up until spring planting season and enter Q2 we were where we were hitting up against our capacity at the factory in Lindsay, Nebraska. And we're going to run it at that rate through our Q3 as well. And we're leveraging the global factories and our global footprint to manage demand in other parts of the world. But if we start to see deliveries of the machines getting past spring, then we might see some of that capital transition into a government purchase. But that assumes they can get a tractor or a plan to reveal or combine pre-delivery. So I think the one driver here on where they take their money might be, what can they take delivery of in this tax year.

Got it, okay, interesting. That's helpful. And then, quick other one on irrigation side? What percentage? I know the past has been a metric that about a third of purchases are financed versus cash purchases. So the question is, is that the case right now? Is that holding about that level? And what about the interest rates and is that actually any kind of a tailwind or customers moving more to cash purchases anyway because they're doing so well?

Yes, what we see is roughly a third of the purchases are financed where we see that UCC-1 filings on those purchases, and that changes a few percentage points up or down quarter-by-quarter, but it doesn't shift significantly and we're in that same band right now. And then talking to growers and then talking to dealers, I think there's a lot of customers really looking at their liquidity and their ability to borrow on an operating line versus the low interest rates. And I think over time, we could see more and more customers transition to financing outside and they are not using their operating line. But we haven't seen a significant shift in that direction line, but it doesn't make sense if they could.

Got it. Okay, and then I had one over on the infrastructure side as well. Again, big picture, just want to get your take on and as we've heard a few times, so Road Zipper deployed on a lot of toll bridges and other toll roads. Yes, there's been some talk of toll roads sort of going out of favor under this more federally financed vision of infrastructure. The idea, I guess being that toll roads are somewhat a regressive way to finance infrastructure. It does seem like Road Zipper is a real good toll road solution. You put up a cash flowing asset, and you want to maximize throughput on that. Is that, I mean, how would you read that if the world goes away from toll roads, is that a headwind for Road Zipper or do you find ways to be involved anyway?

I think we would definitely find ways that to be involved. And I don't think it matters if it's a toll road or a state or federal government funded road, if there are congestion issues, but the individual driving on that road are going to demand that somebody puts a solution in place. So I think we play a role, we make a fix to the traffic congestion gridlock issues, no matter who owns that road, Ryan. So I do see that being no upside or downside for us.

Got it, okay that’s all I had. Thanks for your time.

All right, thank you.

The next question comes from Jon Braatz with Kansas City Capital. Please go ahead.

Good morning Randy and Brian.

Good morning, Jon.

Brian, I was wondering what you might be hearing from your steel providers, and the outlook for continued steel cost increases, and that might put you, might delay your ability to recover those costs, so what's the outlook that you're seeing?

Well, is a number of different, there's a lot of noise out there, I should say. I think if you just look at the steel futures, it looks like it maybe peaks in May and then stabilizes. But, we've seen that all the way back to November, December timeframe, when those projections indicated that. But I know there's a number of mills that are taking capacity out in the May, June timeframe. So I think that supports, keeping prices up. And then I think the other unknown is, infrastructure. If that drives a lot of steel demand and then you could see steel even go up further from where it's projected to be. So we don't see any real relief in steel in the near term based on all of those factors.

Okay. And when, Brian, when you mentioned the margin pressure will continue into the third quarter, is that versus what you saw in the second quarter or are you talking year-over-year?

It's really looking at recouping our cost increases that we've got Jon. We intend to protect our margins generally. And so as we've said, we've been playing catch up a little bit on passing along those costs increases. So, in our second quarter, I would guess it was $2 million to $2.5 million of the actual margin dollar headwinds that we had. And, we would expect it generally that to continue into the third quarter, because we've, every increase we continue to put push through the increases, but that drives a backlog of orders that continues to delay the recovery.

Okay, okay, good. Your corporate costs, if you're not allocated expenses, I think they were up about $1.3 million. Was there anything unusual in there or is that more reflective of maybe incentive compensation accruals?

Yes, no Jon, that was a one-time expense of $1.5 million in the quarter and that was related to Tim's retirement and some of his equity comp that continues to go through this calendar year. They had to be re-measured at the beginning of the year and so that drove the incremental one-time expense of $1.5 million.

Okay. So what will we see maybe going forward?

I think if you took that $1.5 million out of the second quarter number that would probably be more representative of the run rate.

Okay. So Tim’s no additional expenses related to Tim?

No.

Okay. Okay. Okay.

All behind.

Okay. Okay. And then the tax rate a little bit lower than I suppose most of us were looking for?

Yes, couple of things there. I think one was more of a shift in earnings in our Turkey facility, which is in a tax-free zone.

Yep.

That brought the rate down and then as we completed our tax return that was some additional kind of one-time items, we had higher R&D credits than what we had estimated and some other discrete items that affected the quarter, but I would say, third and fourth quarters, probably around that 23% would be what we'd say.

Okay, sounds great. Brian, thank you very much.

The next question comes from Chris Shaw with Monness Crespi. Please go ahead.

Hi, good morning everyone. How are you doing?

Great, Chris.

I’d like to ask about international, is up 45% for the quarter, and you mentioned the different geographies and all that was doing well. And it's really across the board mature, developing. But I guess a couple things there. I mean, was there some lumpiness there with some big projects that came through, should we expect growth like that for the remainder of the year and I know you said something about the comp last year was down a lot, I remember last year in the second quarter. Can you remind me what the reasoning was last year for the weak results in international?

Yes, Chris, I don't think there was anything in particular last year, I think it was just the overall market still being challenged. But as Randy mentioned and I mentioned in my comments, we've seen improvement in pretty much all of our international regions this quarter, and it's in both the mature markets and project markets, nothing in particular in this quarter in terms of the large project, but I think it's the overall increase in commodity prices that are, it's supporting the market in most of the regions. We've seen a nice rebound in Australia, New Zealand, China has been an improving market over the last couple of quarters. And I would say Europe, Brazil, both very strong.

And then more broadly across all the business I guess, looking at the third quarter and the conference last year, could you also remind me last year was there any sort of COVID impact you called out in the third quarter that sort of disrupted your business? Just so I can maybe understand the year-over-year impact?

Yes, we had, I mean, there was a because of border closings delivery issue that was delayed, I think it was in that something like $3 million to $5 million range if I recall right, but I think that got -- just got shifted from third to fourth.

Right, that’s all I needed. Thanks.

Thank you. At this time, there appear to be no more questions. Mr. Wood, I'll turn the call back over to you for some closing remarks.

Well, thank you for your interest and participation today everybody. This will conclude our second quarter earnings call. We look forward to updating you on our continued progress following the close of our fiscal 2021 third quarter. Thank you.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.