8-K
Lindsay Corp (LNN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuantto Section 13 OR 15(d)
of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
January 7, 2020
LINDSAYCORPORATION
(Exact name of registrant as specified in its charter)
| Delaware | 1-13419 | 47-0554096 |
|---|---|---|
| (State of<br><br><br>Incorporation) | (Commission<br><br><br>File Number) | (IRS Employer<br><br><br>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
(Formername 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))<br> |
| --- | --- |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))<br> |
| --- | --- |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br><br><br>Symbol(s) | Name of each exchange<br><br><br>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 January 9, 2020, Lindsay Corporation (the “Company”) issued a press release announcing the Company’s results of operations for its first quarter ended November 30, 2019. 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 first quarter investor conference call at 11:00 a.m. Eastern Time on January 9, 2020 is furnished herewith as Exhibit 99.2.
In accordance with General Instruction B.2 of Form 8-K, the information contained in this Item 2.02, including Exhibits 99.1 and 99.2 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.
| Item 5.02. | Submission of Matters to a Vote of Security Holders. |
|---|
On January 7, 2020, the Company held its annual meeting of stockholders (the “Fiscal 2020 Annual Meeting”). A total of 9,589,433 shares of the Company’s common stock, or 88.68% of the 10,813,363 shares entitled to vote, were represented in person or by proxy at the Fiscal 2020 Annual Meeting.
The final results for each of the matters submitted to a stockholder vote at the Fiscal 2020 Annual Meeting are set forth below.
| 1. | The stockholders elected two directors with terms expiring at the fiscal 2023 annual meeting of stockholders,<br>based on the following voting results: | |||||
|---|---|---|---|---|---|---|
| Votes For | Votes Withheld | Broker Non-Votes | ||||
| --- | --- | --- | --- | --- | --- | --- |
| Election of Directors | ||||||
| Michael N. Christodolou | 8,729,790 | 376,553 | 483,090 | |||
| David B. Rayburn | 8,917,486 | 188,857 | 483,090 | |||
| 2. | The stockholders ratified the appointment of KPMG LLP as the Company’s independent registered public<br>accounting firm for the fiscal year ending August 31, 2020, based on the following voting results: | |||||
| --- | --- | |||||
| Votes For | Votes Against | Abstentions | ||||
| --- | --- | --- | --- | |||
| Ratification of Independent Registered Public Accounting Firm | 9,414,122 | 53,230 | 122,081 | |||
| 3. | The stockholders approved, on an advisory basis, the compensation of the Company’s named executive<br>officers, based on the following voting results: | |||||
| --- | --- | |||||
| Votes For | Votes Against | Abstentions | Broker Non-Votes | |||
| --- | --- | --- | --- | --- | ||
| Advisory Vote on Executive Compensation | 8,714,775 | 257,711 | 133,857 | 483,090 | ||
| Item 9.01. | Financial Statements and Exhibits. | |||||
| --- | --- | |||||
| 99.1 | Press Release, dated January 9, 2020, issued by the Company. | |||||
| --- | --- | |||||
| 99.2 | Slide Presentation for Fiscal 2020 First Quarter Investor Conference Call on January 9, 2020. |
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: January 9, 2020 | LINDSAY CORPORATION | |
|---|---|---|
| By: | /s/ Brian L. Ketcham | |
| Brian L. Ketcham, Senior Vice President and<br><br><br>Chief Financial Officer |
EX-99.1
Exhibit 99.1
| 18135 BURKE ST. OMAHA, NE 68022 TEL: 402-829-6800 FAX:<br>402-829-6836 |
|---|
For further information, contact:
| LINDSAY CORPORATION: | HALLIBURTON INVESTOR RELATIONS: |
|---|---|
| Brian Ketcham | Hala Elsherbini |
| Senior Vice President & Chief Financial Officer | 972-458-8000 |
| 402-827-6579 |
Lindsay Corporation Reports Fiscal 2020 First Quarter Results
| • | Operating margin performance of 11.2 percent and EPS of $0.77 |
|---|---|
| • | Irrigation operating income and margin improved on lower revenue |
| --- | --- |
| • | Infrastructure delivers solid results on higher revenue and favorable margin mix |
| --- | --- |
OMAHA, Neb., January 9, 2020—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its first quarter of fiscal 2020, which ended on November 30, 2019.
FirstQuarter Summary
Revenues for the first quarter of fiscal 2020 were $109.4 million, a decrease of $2.6 million, or 2 percent, compared to revenues of $112.0 million in the prior year first quarter. Revenues decreased $3.3 million as a result of the divestiture of a company-owned irrigation dealership that occurred in the first quarter of fiscal 2019. Net earnings for the quarter were $8.3 million, or $0.77 per diluted share, compared with net earnings of $1.2 million, or $0.11 per diluted share, for the prior year first quarter. Net earnings for the prior year first quarter adjusted to eliminate costs associated with the Foundation for Growth initiative were $4.1 million, or $0.38 per diluted share.^1^
“We were pleased to see our fiscal 2020 get off to a solid start, with improved results in both the irrigation and infrastructure businesses,” said Tim Hassinger, President and Chief Executive Officer. “Margin expansion gained through our Foundation for Growth initiatives contributed to improved performance in our irrigation business. Outstanding results in our infrastructure business were achieved through revenue growth, margin improvement, and a favorable mix of higher margin revenue.”
FirstQuarter Segment Results
Irrigation segment revenues for the first quarter of fiscal 2020 were $82.4 million, a decrease of $5.3 million, or 6 percent, compared to $87.6 million in the prior year first quarter. North America irrigation revenues of $52.6 million decreased $3.9 million, or 7 percent, compared to the prior year, although $3.3 million of the decrease was attributable to the divestiture of a company-owned dealership. Higher irrigation equipment unit volume was offset by the impact of lower average selling prices and lower sales of replacement parts. International irrigation revenues of $29.7 million decreased $1.4 million, or 5 percent, due primarily to the negative impact of changes in foreign currency translation rates.
Irrigation segment operating margin was 11.8 percent of sales in the first quarter, compared to 8.9 percent of sales (9.0 percent adjusted)^1^ in the prior year. Operating margin improvement resulted primarily from improved cost and pricing performance compared to the prior year.
Infrastructure segment revenues for the first quarter of fiscal 2020 were $27.0 million, an increase of $2.7 million, or 11 percent, compared to $24.3 million in the prior year first quarter. The increase resulted from higher sales of road safety products along with an increase in Road Zipper System^®^ lease revenue compared to the prior year.
Infrastructure segment operating margin was 32.4 percent of sales in the first quarter, compared to 17.1 percent of sales (17.6 percent adjusted)^1^ in the prior year first quarter. Operating margin improvement resulted from a more favorable revenue mix and from improved cost and pricing performance compared to the prior year.
| ^1^ | Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to<br>adjusted figures at end of document. |
|---|
The backlog of unfilled orders at November 30, 2019 was $69.2 million compared with $49.2 million at November 30, 2018. Included in these backlogs are amounts of $5.2 million and $0.3 million, respectively, that are not expected to be fulfilled within the subsequent twelve months.
Outlook
“Recent progress regarding a preliminary trade agreement between the U.S. and China offers encouragement for U.S. farmers by improving the outlook for agricultural exports,” said Mr. Hassinger. “In the international markets we continue to see good activity in Brazil and in developing markets.”
Mr. Hassinger added, “We like the traction we are getting with our Road Zipper growth strategy and the pipeline of opportunities that are being generated.”
First Quarter Conference Call
Lindsay’s fiscal 2020 first 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 currentbeliefs 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 Companyfiles 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 orincluding the words “anticipate,” “estimate,” “believe,” “intend,” “expect,” “outlook,” “could,” “may,” “should,” “will,” or similar expressions. Forthese 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 informationcontained in this press release.
2
LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands, except per share amounts) | November 30,2019 | November 30,2018 | ||||
| Operating revenues | $ | 109,393 | $ | 111,951 | ||
| Cost of operating revenues | 75,319 | 83,303 | ||||
| Gross profit | 34,074 | 28,648 | ||||
| Operating expenses: | ||||||
| Selling expense | 6,492 | 7,982 | ||||
| General and administrative expense | 11,804 | 15,058 | ||||
| Engineering and research expense | 3,502 | 3,568 | ||||
| Total operating expenses | 21,798 | 26,608 | ||||
| Operating income | 12,276 | 2,040 | ||||
| Interest expense | (1,186 | ) | (1,205 | ) | ||
| Interest income | 615 | 654 | ||||
| Other income (expense), net | (450 | ) | 192 | |||
| Earnings before income taxes | 11,255 | 1,681 | ||||
| Income tax expense | 2,910 | 469 | ||||
| Net earnings | $ | 8,345 | $ | 1,212 | ||
| Earnings per share: | ||||||
| Basic | $ | 0.77 | $ | 0.11 | ||
| Diluted | $ | 0.77 | $ | 0.11 | ||
| Shares used in computing earnings per share: | ||||||
| Basic | 10,795 | 10,766 | ||||
| Diluted | 10,828 | 10,806 | ||||
| Cash dividends declared per share | $ | 0.31 | $ | 0.31 |
3
LINDSAY CORPORATION AND SUBSIDIARIES
SUMMARY OPERATING RESULTS
(Unaudited)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | November 30,2019 | November 30,2018 | ||||
| Operating revenues: | ||||||
| Irrigation: | ||||||
| North America | $ | 52,613 | $ | 56,464 | ||
| International | 29,739 | 31,146 | ||||
| Irrigation segment | 82,352 | 87,610 | ||||
| Infrastructure segment | 27,041 | 24,341 | ||||
| Total operating revenues | $ | 109,393 | $ | 111,951 | ||
| Operating income: | ||||||
| Irrigation segment | $ | 9,757 | $ | 7,783 | ||
| Infrastructure segment | 8,768 | 4,168 | ||||
| Corporate | (6,249 | ) | (9,911 | ) | ||
| Total operating income | $ | 12,276 | $ | 2,040 |
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) | November 30,<br>2019 | November 30,<br>2018 | August 31,<br>2019 | ||||||
|---|---|---|---|---|---|---|---|---|---|
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 120,910 | $ | 137,217 | $ | 127,204 | |||
| Receivables, net | 79,317 | 84,864 | 75,551 | ||||||
| Inventories, net | 97,284 | 88,912 | 92,287 | ||||||
| Assets<br>held-for-sale | 2,744 | 2,744 | 2,744 | ||||||
| Other current assets, net | 16,376 | 11,585 | 15,704 | ||||||
| Total current assets | 316,631 | 325,322 | 313,490 | ||||||
| Property, plant, and equipment, net | 70,305 | 60,482 | 68,968 | ||||||
| Intangibles, net | 23,739 | 26,576 | 24,382 | ||||||
| Goodwill | 64,358 | 64,557 | 64,387 | ||||||
| Operating lease<br>right-of-use assets | 25,764 | — | — | ||||||
| Deferred income tax assets | 9,902 | 5,639 | 11,758 | ||||||
| Other noncurrent assets, net | 16,112 | 19,511 | 17,329 | ||||||
| Total assets | $ | 526,811 | $ | 502,087 | $ | 500,314 | |||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 30,097 | $ | 41,338 | $ | 29,434 | |||
| Current portion of long-term debt | 210 | 206 | 209 | ||||||
| Other current liabilities | 54,494 | 41,480 | 52,488 | ||||||
| Total current liabilities | 84,801 | 83,024 | 82,131 | ||||||
| Pension benefits liabilities | 5,948 | 5,803 | 6,029 | ||||||
| Long-term debt | 115,805 | 116,086 | 115,846 | ||||||
| Operating lease liabilities | 25,323 | — | — | ||||||
| Deferred income tax liabilities | 845 | 1,048 | 872 | ||||||
| Other noncurrent liabilities | 21,089 | 19,451 | 27,227 | ||||||
| Total liabilities | 253,811 | 225,412 | 232,105 | ||||||
| Shareholders’ equity: | |||||||||
| Preferred stock | — | — | — | ||||||
| Common stock | 18,897 | 18,870 | 18,870 | ||||||
| Capital in excess of stated value | 71,706 | 68,710 | 71,684 | ||||||
| Retained earnings | 479,732 | 483,811 | 474,740 | ||||||
| Less treasury stock - at cost | (277,238 | ) | (277,238 | ) | (277,238 | ) | |||
| Accumulated other comprehensive loss, net | (20,097 | ) | (17,478 | ) | (19,847 | ) | |||
| Total shareholders’ equity | 273,000 | 276,675 | 268,209 | ||||||
| Total liabilities and shareholders’ equity | $ | 526,811 | $ | 502,087 | $ | 500,314 |
5
LINDSAY CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three months ended | ||||||
|---|---|---|---|---|---|---|
| (in thousands) | November 30,2019 | November 30,2018 | ||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||
| Net earnings | $ | 8,345 | $ | 1,212 | ||
| Adjustments to reconcile net earnings to net cash provided by (used in) operating<br>activities: | ||||||
| Depreciation and amortization | 4,748 | 3,424 | ||||
| Loss on sale of business | — | 67 | ||||
| Provision for uncollectible accounts receivable | 248 | (159 | ) | |||
| Deferred income taxes | 1,987 | 742 | ||||
| Share-based compensation expense | 1,160 | 1,303 | ||||
| Other, net | 374 | (1,053 | ) | |||
| Changes in assets and liabilities: | ||||||
| Receivables | (4,122 | ) | (14,782 | ) | ||
| Inventories | (4,931 | ) | (11,387 | ) | ||
| Other current assets | (2,466 | ) | 298 | |||
| Accounts payable | 725 | 13,917 | ||||
| Other current liabilities | (1,901 | ) | (7,106 | ) | ||
| Other noncurrent assets and liabilities | (2,626 | ) | (792 | ) | ||
| Net cash provided by (used in) operating activities | 1,541 | (14,316 | ) | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||
| Purchases of property, plant, and equipment | (4,322 | ) | (5,701 | ) | ||
| Proceeds from settlement of net investment hedges | 1,092 | 962 | ||||
| Other investing activities, net | 24 | 8 | ||||
| Net cash used in investing activities | (3,206 | ) | (4,731 | ) | ||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||
| Proceeds from exercise of stock options | — | 177 | ||||
| Common stock withheld for payroll tax obligations | (1,111 | ) | (1,120 | ) | ||
| Principal payments on long-term debt | (52 | ) | (51 | ) | ||
| Dividends paid | (3,352 | ) | (3,344 | ) | ||
| Net cash used in financing activities | (4,515 | ) | (4,338 | ) | ||
| Effect of exchange rate changes on cash and cash equivalents | (114 | ) | (185 | ) | ||
| Net change in cash and cash equivalents | (6,294 | ) | (23,570 | ) | ||
| Cash and cash equivalents, beginning of period | 127,204 | 160,787 | ||||
| Cash and cash equivalents, end of period | $ | 120,910 | $ | 137,217 |
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 | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (in thousands, except per share amounts) | November 30,<br>2018 | Dilutedearnings pershare | ||||||||||
| Net earnings - reported GAAP measure | $ | 1,212 | $ | 0.11 | ||||||||
| FFG costs - before tax | 3,995 | $ | 0.37 | |||||||||
| Tax effect - FFG costs | (1,079 | ) | $ | (0.10 | ) | |||||||
| Net earnings - adjusted | $ | 4,128 | $ | 0.38 | ||||||||
| Average shares outstanding - diluted | 10,806 | |||||||||||
| For the three months ended November 30, 2018 | ||||||||||||
| Operating income reconciliation | Consolidated | Irrigation | Infrastructure | Corporate | ||||||||
| Operating income - reported GAAP measure | 2,040 | $ | 7,783 | $ | 4,168 | $ | (9,911 | ) | ||||
| FFG costs - before tax | 3,995 | 126 | 112 | 3,757 | ||||||||
| Adjusted operating income | $ | 6,035 | $ | 7,909 | $ | 4,280 | $ | (6,154 | ) | |||
| Operating revenues | 111,951 | $ | 87,610 | $ | 24,341 | $ | — | |||||
| Operating income as a percent of operating revenues | 1.8 | % | 8.9 | % | 17.1 | % | N/A | |||||
| Adjusted operating income as a percent of operating revenues | 5.4 | % | 9.0 | % | 17.6 | % | N/A |
7
EX-99.2
Exhibit 99.2 st 1 Quarter Fiscal 2020 Earnings Slide Deck Exhibit 99.2 st 1 Quarter Fiscal 2020 Earnings Slide Deck
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 those outlined in the “Risk Factors” section of the Company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission, 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 January 9, 2020. 2Safe-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 those outlined in the “Risk Factors” section of the Company’s most recent annual report on Form 10-K filed with the Securities and Exchange Commission, 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 January 9, 2020. 2
First Quarter Summary Amounts in millions, except per share amounts Revenue Operating Income Diluted EPS GAAP Adjusted* GAAP Adjusted* $112.0 $109.4 $12.3 $12.3 $0.77 $0.77 11.2% 11.2% $6.0 $0.38 1.8% 5.4% $2.0 $0.11 1.8% FY19 FY20 FY19 FY20 FY19 FY20 • Revenues decreased $2.6 million compared to prior year • Decrease of $3.3 million from the divestiture of a company-owned irrigation dealership in prior year • Irrigation decreased $2.0 million exclusive of the impact of the divestiture • Infrastructure increased $2.7 million • Operating income increased $6.3 million compared to adjusted prior year results* • Irrigation increased $1.9 million • Infrastructure increased $4.5 million 3 *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.First Quarter Summary Amounts in millions, except per share amounts Revenue Operating Income Diluted EPS GAAP Adjusted* GAAP Adjusted* $112.0 $109.4 $12.3 $12.3 $0.77 $0.77 11.2% 11.2% $6.0 $0.38 1.8% 5.4% $2.0 $0.11 1.8% FY19 FY20 FY19 FY20 FY19 FY20 • Revenues decreased $2.6 million compared to prior year • Decrease of $3.3 million from the divestiture of a company-owned irrigation dealership in prior year • Irrigation decreased $2.0 million exclusive of the impact of the divestiture • Infrastructure increased $2.7 million • Operating income increased $6.3 million compared to adjusted prior year results* • Irrigation increased $1.9 million • Infrastructure increased $4.5 million 3 *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation.
First Quarter Financial Summary ($ in millions, except per share amounts) Q1 - FY20 Q1 - FY19 Change Revenue North America irrigation $ 52.6 $ 56.5 -7% International irrigation $ 29.7 $ 31.1 -5% Irrigation $ 82.4 $ 87.6 -6% Infrastructure $ 27.0 $ 24.3 11% Total revenue $ 109.4 $ 112.0 -2% Operating income $ 12.3 $ 2.0 502% Adjusted operating income* $ 12.3 $ 6.0 105% Net earnings $ 8.3 $ 1.2 589% Adjusted net earnings* $ 8.3 $ 4.1 104% Diluted earnings per share (EPS) $ 0.77 $ 0.11 600% Adjusted diluted EPS* $ 0.77 $ 0.38 103% *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation. 4First Quarter Financial Summary ($ in millions, except per share amounts) Q1 - FY20 Q1 - FY19 Change Revenue North America irrigation $ 52.6 $ 56.5 -7% International irrigation $ 29.7 $ 31.1 -5% Irrigation $ 82.4 $ 87.6 -6% Infrastructure $ 27.0 $ 24.3 11% Total revenue $ 109.4 $ 112.0 -2% Operating income $ 12.3 $ 2.0 502% Adjusted operating income* $ 12.3 $ 6.0 105% Net earnings $ 8.3 $ 1.2 589% Adjusted net earnings* $ 8.3 $ 4.1 104% Diluted earnings per share (EPS) $ 0.77 $ 0.11 600% Adjusted diluted EPS* $ 0.77 $ 0.38 103% *Please see Reg G reconciliation of GAAP operating income, net earnings and diluted earnings per share to adjusted figures at end of presentation. 4
Current Market Factors Irrigation Infrastructure • The phase-one trade deal between the U.S. and • States continue the transition to new federal MASH China is expected to be signed January 15. Under testing standards for road safety products. Almost the deal, China would greatly increase agricultural all of our road safety product offerings in the U.S. purchases from the U.S. in exchange for a have now received MASH eligibility. reduction or elimination of tariffs. • Our “shift left” strategy is gaining traction and ® • 2019 Net Farm Income is projected to be $92.5 contributing to an increase in Road Zipper System billion, an increase of 10.2% from 2018. About lease revenue. $14.3 billion will come from Market Facilitation ® • Road Zipper System gaining interest globally as a Payments that are part of the trade relief package. solution to traffic congestion and air quality. A multi- • Final U.S. harvest results remain uncertain but will year lease in Germany was secured in the first be updated by the USDA on January 10. quarter. • The EPA finalized 2020 volume requirements under • The five-year $305 billion U.S. highway bill enacted the Renewable Fuels Standard that slightly in December 2015 (the “FAST Act”) is scheduled to increases biofuel volumes compared with 2019. expire in September 2020 unless it is reauthorized by Congress. • Interest rates have been declining in Brazil, with the latest 50bps drop in December putting the federal funds rate at 4.5%. 5Current Market Factors Irrigation Infrastructure • The phase-one trade deal between the U.S. and • States continue the transition to new federal MASH China is expected to be signed January 15. Under testing standards for road safety products. Almost the deal, China would greatly increase agricultural all of our road safety product offerings in the U.S. purchases from the U.S. in exchange for a have now received MASH eligibility. reduction or elimination of tariffs. • Our “shift left” strategy is gaining traction and ® • 2019 Net Farm Income is projected to be $92.5 contributing to an increase in Road Zipper System billion, an increase of 10.2% from 2018. About lease revenue. $14.3 billion will come from Market Facilitation ® • Road Zipper System gaining interest globally as a Payments that are part of the trade relief package. solution to traffic congestion and air quality. A multi- • Final U.S. harvest results remain uncertain but will year lease in Germany was secured in the first be updated by the USDA on January 10. quarter. • The EPA finalized 2020 volume requirements under • The five-year $305 billion U.S. highway bill enacted the Renewable Fuels Standard that slightly in December 2015 (the “FAST Act”) is scheduled to increases biofuel volumes compared with 2019. expire in September 2020 unless it is reauthorized by Congress. • Interest rates have been declining in Brazil, with the latest 50bps drop in December putting the federal funds rate at 4.5%. 5
Irrigation Segment Revenue $56.5 $52.6 • North America revenue decreased $0.6 million exclusive of the business divestiture • Higher irrigation equipment unit volume $31.1 $29.7 • Lower average selling prices due to lower steel costs • Lower sales of replacement parts • International revenue decreased $1.4 million • Unfavorable currency impact of approximately $1.1 million North America International FY19 FY20 in millions • Operating income increased $1.9 million compared to adjusted prior year results* Operating Income • Improved cost and pricing performance resulting from Adjusted* GAAP margin improvement initiatives $9.8 $9.8 • Improvements partially offset by negative mix impact from lower sales of replacement parts $7.9 $7.8 11.8% 11.8% • Operating margin of 11.8% compared to 9.0% adjusted prior year results* 9.0% 8.9% in millions 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. 6Irrigation Segment Revenue $56.5 $52.6 • North America revenue decreased $0.6 million exclusive of the business divestiture • Higher irrigation equipment unit volume $31.1 $29.7 • Lower average selling prices due to lower steel costs • Lower sales of replacement parts • International revenue decreased $1.4 million • Unfavorable currency impact of approximately $1.1 million North America International FY19 FY20 in millions • Operating income increased $1.9 million compared to adjusted prior year results* Operating Income • Improved cost and pricing performance resulting from Adjusted* GAAP margin improvement initiatives $9.8 $9.8 • Improvements partially offset by negative mix impact from lower sales of replacement parts $7.9 $7.8 11.8% 11.8% • Operating margin of 11.8% compared to 9.0% adjusted prior year results* 9.0% 8.9% in millions 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. 6
Infrastructure Segment Revenue $27.0 $24.3 • Total revenue increased $2.7 million • Higher sales of road safety products ® • Increase in Road Zipper System lease revenue • Ongoing delivery of Road Zipper System order in Japan • Prior year included the majority of the San Rafael Bridge project • Operating income increased $4.5 million compared to in millions FY19 FY20 adjusted prior year results* • Positive mix impact from higher-margin Road Zipper Operating Income Adjusted* System sales and lease revenue GAAP • Improved cost and pricing performance resulting from $8.8 $8.8 margin improvement initiatives • Operating margin of 32.4% compared to 17.6% adjusted prior 32.4% 32.4% year results* $4.3 $4.2 17.6% 17.1% in millions 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. 7Infrastructure Segment Revenue $27.0 $24.3 • Total revenue increased $2.7 million • Higher sales of road safety products ® • Increase in Road Zipper System lease revenue • Ongoing delivery of Road Zipper System order in Japan • Prior year included the majority of the San Rafael Bridge project • Operating income increased $4.5 million compared to in millions FY19 FY20 adjusted prior year results* • Positive mix impact from higher-margin Road Zipper Operating Income Adjusted* System sales and lease revenue GAAP • Improved cost and pricing performance resulting from $8.8 $8.8 margin improvement initiatives • Operating margin of 32.4% compared to 17.6% adjusted prior 32.4% 32.4% year results* $4.3 $4.2 17.6% 17.1% in millions 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. 7
Executing Long-Term Value Creation • 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 ONE LINDSAY • Empowered global culture through Innovative Market Leader Vision, Values and Behaviors Framework Innovative Market Leader – Sustainable Solutions – Sustainable Solutions 8Executing Long-Term Value Creation • 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 ONE LINDSAY • Empowered global culture through Innovative Market Leader Vision, Values and Behaviors Framework Innovative Market Leader – Sustainable Solutions – Sustainable Solutions 8
Foundation for Growth Initiative Objectives • Raise operating margin floor • Innovation leader in core markets • Renewed culture and identity 11 22 33 44 Commercial Global Manufacturing Lower G&A Excellence Sourcing Optimization Expenses Cultural Changes 55 Strategic Choices 66 Margin improvement Strategy and Culture Cost 9Foundation for Growth Initiative Objectives • Raise operating margin floor • Innovation leader in core markets • Renewed culture and identity 11 22 33 44 Commercial Global Manufacturing Lower G&A Excellence Sourcing Optimization Expenses Cultural Changes 55 Strategic Choices 66 Margin improvement Strategy and Culture Cost 9
Foundation for Growth Execution Accomplishments through Q1 Fiscal 2020 • Divested four non-core businesses ü • Closed an infrastructure facility; consolidated activity into ü an existing irrigation facility • Established a centralized shared services organization ü • Made tangible progress in culture change and aligning behaviors to ü strategy • Projects in each of the four margin-improvement workstreams ü have moved to implementation and realization stage Execution is on track 10Foundation for Growth Execution Accomplishments through Q1 Fiscal 2020 • Divested four non-core businesses ü • Closed an infrastructure facility; consolidated activity into ü an existing irrigation facility • Established a centralized shared services organization ü • Made tangible progress in culture change and aligning behaviors to ü strategy • Projects in each of the four margin-improvement workstreams ü have moved to implementation and realization stage Execution is on track 10
Summary Balance Sheet ($ in millions) November 30, 2019 November 30, 2018 August 31, 2019 Cash and cash equivalents $120.9 $137.2 $127.2 Current assets $316.6 $325.3 $313.5 Current liabilities $84.8 $83.0 $82.1 Net working capital $231.8 $242.3 $231.4 Long-term debt $116.0 $116.3 $116.1 Shareholders' equity $273.0 $276.7 $268.2 11Summary Balance Sheet ($ in millions) November 30, 2019 November 30, 2018 August 31, 2019 Cash and cash equivalents $120.9 $137.2 $127.2 Current assets $316.6 $325.3 $313.5 Current liabilities $84.8 $83.0 $82.1 Net working capital $231.8 $242.3 $231.4 Long-term debt $116.0 $116.3 $116.1 Shareholders' equity $273.0 $276.7 $268.2 11
Summary of Cash Flow ($ in millions) Q1 FY20 Q1 FY19 Net earnings $8.3 $1.2 Depreciation / amortization $4.7 $3.4 Other non-cash adjustments $3.8 $0.9 Changes in assets and liabilities: Receivables ( $4.1) ($14.8) Inventories ($4.9) ($11.4) Other working capital ($6.3) $6.4 Net cash provided by (used in) operations $1.5 ($14.3) Purchases of property, plant and equipment ($4.3) ($5.7) Dividends paid ($3.4) ($3.3) 12Summary of Cash Flow ($ in millions) Q1 FY20 Q1 FY19 Net earnings $8.3 $1.2 Depreciation / amortization $4.7 $3.4 Other non-cash adjustments $3.8 $0.9 Changes in assets and liabilities: Receivables ( $4.1) ($14.8) Inventories ($4.9) ($11.4) Other working capital ($6.3) $6.4 Net cash provided by (used in) operations $1.5 ($14.3) Purchases of property, plant and equipment ($4.3) ($5.7) Dividends paid ($3.4) ($3.3) 12
Capital Allocation – A Balanced Approach Allocation Plan Allocation History • 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 (1) Other includes debt repayments, net cash sources/uses from note receivables, net investment • Capital expenditures - expected to hedges, stock compensation and related tax benefits. be $15-20 million in fiscal 2020 • Dividend payments • Synergistic acquisitions that leverage core capabilities • Excess cash invested in opportunistic share repurchases 13Capital Allocation – A Balanced Approach Allocation Plan Allocation History • 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 (1) Other includes debt repayments, net cash sources/uses from note receivables, net investment • Capital expenditures - expected to hedges, stock compensation and related tax benefits. be $15-20 million in fiscal 2020 • Dividend payments • Synergistic acquisitions that leverage core capabilities • Excess cash invested in opportunistic share repurchases 13
Attractive Long-Term Megatrends Water Conservation Advancing Technology Improve Road Safety Population Growth Alternative Fuels Increase Yields 14Attractive Long-Term Megatrends Water Conservation Advancing Technology Improve Road Safety Population Growth Alternative Fuels Increase Yields 14
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. Three months ended November 30, Diluted earnings per (in thousands, except per share amounts) 2018 share Net earnings - reported GAAP measure $ 1,212 $ 0.11 FFG costs - before tax 3,995 $ 0.37 Tax effect - FFG costs (1,079) $ (0.10) Net earnings - adjusted $ 4,128 $ 0.38 Average shares outstanding - diluted 10,806 15Regulation 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. Three months ended November 30, Diluted earnings per (in thousands, except per share amounts) 2018 share Net earnings - reported GAAP measure $ 1,212 $ 0.11 FFG costs - before tax 3,995 $ 0.37 Tax effect - FFG costs (1,079) $ (0.10) Net earnings - adjusted $ 4,128 $ 0.38 Average shares outstanding - diluted 10,806 15
Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures LINDSAY CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (Continued) For the three months ended November 30, 2018 Operating income reconciliation Consolidated Irrigation Infrastructure Corporate Operating income - reported GAAP measure 2,040 $ 7,783 $ 4,168 $ (9,911) FFG costs - before tax 3,995 126 112 3,757 Adjusted operating income $ 6,035 $ 7,909 $ 4,280 $ (6,154) Operating revenues 111,951 $ 87,610 $ 24,341 $ — Operating income as a percent of operating revenues 1.8% 8.9% 17.1% N/A Adjusted operating income as a percent of operating revenues 5.4% 9.0% 17.6% N/A 16Regulation G Reconciliation of GAAP to Non-GAAP Financial Measures LINDSAY CORPORATION AND SUBSIDIARIES RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (Unaudited) (Continued) For the three months ended November 30, 2018 Operating income reconciliation Consolidated Irrigation Infrastructure Corporate Operating income - reported GAAP measure 2,040 $ 7,783 $ 4,168 $ (9,911) FFG costs - before tax 3,995 126 112 3,757 Adjusted operating income $ 6,035 $ 7,909 $ 4,280 $ (6,154) Operating revenues 111,951 $ 87,610 $ 24,341 $ — Operating income as a percent of operating revenues 1.8% 8.9% 17.1% N/A Adjusted operating income as a percent of operating revenues 5.4% 9.0% 17.6% N/A 16