8-K
Lindsay Corp (LNN)
UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
| Date of Report (Date of earliest event reported): October 19, 2023 |
|---|
Lindsay Corporation
(Exact name of Registrant as Specified in Its Charter)
| Delaware | 1-13419 | 47-0554096 |
|---|---|---|
| (State or Other Jurisdiction<br>of Incorporation) | (Commission File Number) | (IRS Employer<br>Identification No.) |
| 18135 Burke Street<br><br>Suite 100 | ||
| Omaha, Nebraska | 68022 | |
| (Address of Principal Executive Offices) | (Zip Code) | |
| Registrant’s Telephone Number, Including Area Code: (402) 829-6800 | ||
| --- |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading<br>Symbol(s) | Name of each exchange on which registered |
|---|---|---|
| Common Stock, $1.00 par value | LNN | New York Stock Exchange |
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 October 19, 2023, Lindsay Corporation (the “Company”) issued a press release announcing the Company’s results of operations for its fourth quarter and fiscal year ended August 31, 2023. 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 2023 fourth quarter and year-end investor conference call at 11:00 a.m. Eastern Time on October 19, 2023 is furnished herewith as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated October 19, 2023, issued by the Company.
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
In accordance with General Instruction B.2 of Form 8-K, the information contained in Item 2.02 of this Current Report on Form 8-K, including Exhibits 99.1 and 99.2 relating to Item 2.02 and attached hereto, is being “furnished” and, as such, shall not be deemed to be “filed” for purposes of Section 18 of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| LINDSAY CORPORATION | |||
|---|---|---|---|
| Date: | October 19, 2023 | By: | /s/ Brian L. Ketcham |
| Brian L. Ketcham, Senior Vice President and Chief Financial Officer |
EX-99.1
movable
| Exhibit 99.1<br><br><br><br>18135 BURKE ST. OMAHA, NE 68022 TEL: 402-829-6800 FAX: 402-829-6836 |
|---|
Lindsay Corporation Reports Fourth Quarter and Fiscal Year 2023 Results
Revenue growth in international irrigation markets, resilient demand in North America
and gross margin expansion drive improved fourth quarter earnings performance
Record full year net earnings and earnings per share results driven by meaningful growth in
operating income and operating margin expansion
OMAHA, Neb., October 19, 2023—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its fourth quarter and fiscal year, which ended on August 31, 2023.
Key Highlights
Fourth Quarter:
• Revenue of $167.1 million and EPS of $1.74 led by strong irrigation results
• Strong growth in international irrigation revenues and record revenues in Brazil
• Record operating income and operating margin in irrigation segment
Full-Year:
• Record net earnings of $72.4 million and record EPS of $6.54
• Record revenue and operating income in Brazil
• Free cash flow generation reaches 139 percent of net earnings
“We are pleased to report strong performance in our fiscal fourth quarter and solid momentum as we head into fiscal 2024, driven by our irrigation business. Our strong quarterly performance reflected growth in international irrigation markets led by South America, and Brazil in particular where we achieved record fourth quarter revenue. Demand for irrigation equipment in North America remained steady in the fourth quarter, in line with our expectations. Record fourth quarter operating income and operating margin in irrigation is a testament to effective price management and operating performance, while also reflecting the impact of increasing geographic diversification through strategic growth in international markets,” said Randy Wood, President and Chief Executive Officer. "Infrastructure results for the fourth quarter reflected the impact of Road Zipper System™ projects in the prior year that did not repeat, while Road Zipper System leasing revenue continued to show solid growth and partially offset the overall decrease in revenue."
Wood continued, "For the full year, I am pleased with our ability to deliver new records in net earnings and earnings per share, as our performance overcame softer revenues compared to last year's record levels. This record earnings and income performance was led by record full year operating income and operating margin in irrigation with gross margin expansion across the business. This improved operating performance, along with effective working capital management, resulted in free cash flow generation that exceeded our objective for the year. This performance demonstrated our ability to continue funding growth investments in innovation and other long-term shareholder value creation opportunities."
Fourth Quarter Summary
| Consolidated Financial Summary | Fourth Quarter | |||
|---|---|---|---|---|
| (dollars in millions, except per share amounts) | FY2023 | FY2022 | $ Change | % Change |
| Total revenues | $167.1 | $190.2 | ($23.1) | (12%) |
| Operating income | $23.4 | $27.8 | ($4.4) | (16%) |
| Operating margin | 14.0% | 14.6% | ||
| Net earnings | $19.2 | $17.9 | $1.3 | 7% |
| Earnings per share | $1.74 | $1.62 | $0.12 | 7% |
Revenues for the fourth quarter of fiscal 2023 were $167.1 million, a decrease of $23.1 million, or 12 percent, compared to revenues of $190.2 million in the prior year fourth quarter. Most of the decrease came from the infrastructure segment due to Road Zipper System projects in the prior year fourth quarter that did not repeat.
Operating income for the fourth quarter was $23.4 million, a decrease of $4.4 million, or 16 percent, compared to operating income of $27.8 million in the prior year fourth quarter. Operating margin was 14.0 percent of sales, compared to
operating margin of 14.6 percent of sales in the prior year fourth quarter. The impact of the decline in higher margin infrastructure revenue was substantially offset by improved gross profit and gross margin in irrigation. Operating expenses were comparable to the prior year fourth quarter.
Net earnings for the fourth quarter were $19.2 million, or $1.74 per diluted share, compared with net earnings of $17.9 million, or $1.62 per diluted share, for the prior year fourth quarter. Net earnings improvement was supported by higher interest income and more favorable foreign currency transaction changes compared to the prior year fourth quarter.
Fourth Quarter Segment Results
| Irrigation Segment | Fourth Quarter | |||
|---|---|---|---|---|
| (dollars in millions) | FY 2023 | FY 2022 | $ Change | % Change |
| Revenues: | ||||
| North America | $60.2 | $80.1 | ($19.9) | (25%) |
| International | $83.4 | $70.4 | $13.0 | 18% |
| Total revenues | $143.6 | $150.5 | ($6.9) | (5%) |
| Operating income | $29.8 | $24.3 | $5.5 | 23% |
| Operating margin | 20.7% | 16.1% |
Irrigation segment revenues for the fourth quarter of fiscal 2023 were $143.6 million, a decrease of $6.9 million, or 5 percent, compared to $150.5 million in the prior year fourth quarter. North America irrigation revenues of $60.2 million decreased $19.9 million, or 25 percent, compared to the prior year fourth quarter. The decrease in revenues resulted primarily from lower unit sales volumes while average selling prices were comparable with the prior year fourth quarter. Unit sales volumes in the prior year fourth quarter reflected an exceptional level of storm damage replacement demand while unit sales volumes in the current year reflected more normal seasonal demand.
International irrigation revenues of $83.4 million increased $13.0 million, or 18 percent, compared to the prior year fourth quarter. The increase resulted primarily from increased sales volumes in Brazil, Argentina and the Middle East compared to the prior year fourth quarter. The current year fourth quarter also benefited from the favorable effects of foreign currency translation of approximately $1.3 million compared to the prior year fourth quarter.
Irrigation segment operating income for the fourth quarter of fiscal 2023 was $29.8 million, an increase of $5.5 million, or 23 percent, compared to the prior year fourth quarter. Operating margin was 20.7 percent of sales, compared to 16.1 percent of sales in the prior year fourth quarter. The increase in operating margin resulted from gross margin expansion driven by improved price realization and operating performance compared to the prior year fourth quarter.
| Infrastructure Segment | Fourth Quarter | |||
|---|---|---|---|---|
| (dollars in millions) | FY 2023 | FY 2022 | $ Change | % Change |
| Total revenues | $23.5 | $39.7 | ($16.2) | (41%) |
| Operating income | $3.1 | $11.5 | ($8.3) | (73%) |
| Operating margin | 13.3% | 28.8% |
Infrastructure segment revenues for the fourth quarter of fiscal 2023 were $23.5 million, a decrease of $16.2 million, or 41 percent, compared to $39.7 million in the prior year fourth quarter. The decrease in revenues resulted primarily from lower Road Zipper System sales compared to the prior year fourth quarter. Notably, the prior year fourth quarter included a number of project sales that did not repeat in the current year fourth quarter. The impact of lower project sales was partially offset by growth in Road Zipper System lease revenue and higher sales of road safety products compared to the prior year fourth quarter.
Infrastructure segment operating income for the fourth quarter of fiscal 2023 was $3.1 million, a decrease of $8.3 million, or 73 percent, compared to the prior year fourth quarter. Operating margin was 13.3 percent of sales, compared to 28.8 percent of sales in the prior year fourth quarter. The decrease in operating income and margin resulted from lower revenues compared to the prior year fourth quarter and the resulting loss in fixed cost leverage.
Full Year Summary
| Consolidated Financial Summary | Full Year | |||
|---|---|---|---|---|
| (dollars in millions, except per share amounts) | FY2023 | FY2022 | $ Change | % Change |
| Total revenues | $674.1 | $770.7 | ($96.7) | (13%) |
| Operating income | $102.2 | $94.6 | $7.5 | 8% |
| Operating margin | 15.2% | 12.3% | ||
| Net earnings | $72.4 | $65.5 | $6.9 | 11% |
| Earnings per share | $6.54 | $5.94 | $0.60 | 10% |
Revenues for fiscal 2023 were $674.1 million, a decrease of $96.7 million, or 13 percent, compared to revenues of $770.7 million in the prior year. Irrigation revenues decreased $79.8 million due to farmers in North America deferring investment decisions, a higher level of storm damage replacement demand in the prior year and prior year sales in Egypt, Ukraine and Russia that did not repeat. Infrastructure revenues decreased $16.9 million, primarily due to lower Road Zipper System project sales compared to the prior year.
Operating income for fiscal 2023 was $102.2 million, an increase of $7.5 million, or 8 percent, compared to operating income of $94.6 million in the prior year. Operating margin was 15.2 percent of sales, compared to 12.3 percent of sales in the prior year. Operating margin improvement resulted primarily from gross margin expansion in irrigation, while gross margin in infrastructure was comparable to the prior year.
Net earnings for fiscal 2023 were $72.4 million, or $6.54 per diluted share, compared with net earnings of $65.5 million, or $5.94 per diluted share, for the prior year. Net earnings improvement resulted largely from increased operating income and also benefited from higher interest income and more favorable foreign currency transaction changes compared to the prior year.
The backlog of unfilled orders as of August 31, 2023, was $78.7 million compared with $96.8 million on August 31, 2022. The irrigation and infrastructure backlogs are both lower compared to the prior year.
Outlook
Mr. Wood concluded, “Current commodity prices and U.S. net farm income projections, although lower compared to the marked strength seen a year ago, continue to support demand for irrigation equipment in North America. So far in our first quarter of fiscal 2024, we are seeing order levels running ahead of the prior year. We expect sales volume levels in developed international markets to remain robust, led by strong demand in Brazil, and we continue to see project opportunities in developing markets supported by continuing global concerns over food security and global grain supplies."
“We expect to see a more meaningful positive impact of increased U.S. infrastructure spending on our infrastructure business in fiscal 2024, particularly in Road Zipper System leasing and sales of road safety projects. We also continue to actively manage projects in our Road Zipper System sales funnel, however the timing of when these projects will be executed is difficult to predict.”
Fourth Quarter Conference Call
Lindsay’s fiscal 2023 fourth 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, FieldNET® and FieldWise® remote irrigation management technology, FieldNET Advisor™ irrigation scheduling technology,
and industrial IoT solutions. Also a global leader in the transportation industry, Lindsay Transportation Solutions manufactures equipment to improve road safety and keep traffic moving on the world’s roads, bridges and tunnels, through the Barrier Systems®, Road Zipper® and Snoline™ brands. For more information about Lindsay Corporation, visit www.lindsay.com.
Concerning Forward-looking Statements
This release contains forward-looking statements that are subject to risks and uncertainties, and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance and financial results. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations and planned financing of the Company and those statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” "expect," "outlook," "could," "may," "should," “will,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking information contained in this press release.
For further information, contact:
| LINDSAY CORPORATION: | Alpha IR: | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Alicia Pfeifer | Joe Caminiti or Stephen Poe | |||||||||||
| Senior Director, Investor Relations & Treasury | 312-445-2870 | |||||||||||
| 402-933-6429 | LNN@alpha-ir.com | |||||||||||
| Alicia.Pfeifer@lindsay.com | ||||||||||||
| LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||||||
| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||
| (Unaudited) | ||||||||||||
| Three Months Ended August 31, | Years Ended August 31, | |||||||||||
| (in thousands, except per share amounts) | ||||||||||||
| Operating revenues | 167,131 | 190,196 | 674,084 | 770,743 | ||||||||
| Cost of operating revenues | 114,615 | 133,079 | 461,069 | 571,565 | ||||||||
| Gross profit | 52,516 | 57,117 | 213,015 | 199,178 | ||||||||
| Operating expenses: | ||||||||||||
| Selling expense | 9,109 | 9,850 | 36,201 | 33,920 | ||||||||
| General and administrative expense | 15,175 | 14,922 | 56,412 | 55,470 | ||||||||
| Engineering and research expense | 4,868 | 4,563 | 18,218 | 15,145 | ||||||||
| Total operating expenses | 29,152 | 29,335 | 110,831 | 104,535 | ||||||||
| Operating income | 23,364 | 27,782 | 102,184 | 94,643 | ||||||||
| Other (expense) income: | ||||||||||||
| Interest expense | (893 | ) | (924 | ) | (3,788 | ) | (4,269 | ) | ||||
| Interest income | 1,238 | 166 | 2,783 | 622 | ||||||||
| Other expense, net | 1,196 | (3,392 | ) | (804 | ) | (3,128 | ) | |||||
| Total other (expense) income | 1,541 | (4,150 | ) | (1,809 | ) | (6,775 | ) | |||||
| Earnings before income taxes | 24,905 | 23,632 | 100,375 | 87,868 | ||||||||
| Income tax expense | 5,676 | 5,703 | 27,996 | 22,399 | ||||||||
| Net earnings | 19,229 | 17,929 | 72,379 | 65,469 | ||||||||
| Earnings per share: | ||||||||||||
| Basic | 1.75 | 1.63 | 6.58 | 5.97 | ||||||||
| Diluted | 1.74 | 1.62 | 6.54 | 5.94 | ||||||||
| Shares used in computing earnings per share: | ||||||||||||
| Basic | 11,009 | 10,980 | 11,003 | 10,965 | ||||||||
| Diluted | 11,059 | 11,063 | 11,062 | 11,031 | ||||||||
| Cash dividends declared per share | 0.35 | 0.34 | 1.37 | 1.33 |
All values are in US Dollars.
| LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||
|---|---|---|---|---|---|---|---|---|
| SUMMARY OPERATING RESULTS | ||||||||
| (Unaudited) | ||||||||
| Three Months Ended August 31, | Years Ended August 31, | |||||||
| (in thousands) | 2023 | 2022 | 2023 | 2022 | ||||
| Operating revenues: | ||||||||
| Irrigation: | ||||||||
| North America | $ | 60,223 | $ | 80,082 | $ | 309,538 | $ | 355,683 |
| International | 83,378 | 70,387 | 276,493 | 310,146 | ||||
| Irrigation total | 143,601 | 150,469 | 586,031 | 665,829 | ||||
| Infrastructure | 23,530 | 39,727 | 88,053 | 104,914 | ||||
| Total operating revenues | $ | 167,131 | $ | 190,196 | $ | 674,084 | $ | 770,743 |
| Operating income: | ||||||||
| Irrigation | $ | 29,781 | $ | 24,250 | $ | 121,969 | $ | 105,763 |
| Infrastructure | 3,120 | 11,459 | 12,067 | 18,328 | ||||
| Corporate | (9,537) | (7,927) | (31,852) | (29,448) | ||||
| Total operating income | $ | 23,364 | $ | 27,782 | $ | 102,184 | $ | 94,643 |
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.
| LINDSAY CORPORATION AND SUBSIDIARIES | |||
|---|---|---|---|
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||
| (Unaudited) | |||
| (in thousands) | August 31,<br>2022 | ||
| ASSETS | |||
| Current assets: | |||
| Cash and cash equivalents | 160,755 | $ | 105,048 |
| Marketable securities | 5,556 | 11,460 | |
| Receivables, net of allowance of 5,048 and 4,118, respectively | 144,774 | 138,200 | |
| Inventories, net | 155,932 | 193,776 | |
| Other current assets | 20,467 | 28,617 | |
| Total current assets | 487,484 | 477,101 | |
| Property, plant, and equipment, net | 99,681 | 94,472 | |
| Intangible assets, net | 27,719 | 18,208 | |
| Goodwill | 83,121 | 67,130 | |
| Operating lease right-of-use assets | 17,036 | 19,181 | |
| Deferred income tax assets | 10,885 | 9,313 | |
| Other noncurrent assets | 19,734 | 25,248 | |
| Total assets | 745,660 | $ | 710,653 |
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||
| Current liabilities: | |||
| Accounts payable | 44,278 | $ | 60,036 |
| Current portion of long-term debt | 226 | 222 | |
| Other current liabilities | 91,604 | 100,684 | |
| Total current liabilities | 136,108 | 160,942 | |
| Pension benefits liabilities | 4,382 | 4,892 | |
| Long-term debt | 115,164 | 115,341 | |
| Operating lease liabilities | 17,689 | 19,810 | |
| Deferred income tax liabilities | 689 | 1,054 | |
| Other noncurrent liabilities | 15,977 | 15,256 | |
| Total liabilities | 290,009 | 317,295 | |
| Shareholders' equity: | |||
| Preferred stock | — | — | |
| Common stock | 19,094 | 19,063 | |
| Capital in excess of stated value | 98,508 | 94,006 | |
| Retained earnings | 636,297 | 579,000 | |
| Less treasury stock - at cost | (277,238) | (277,238) | |
| Accumulated other comprehensive loss, net | (21,010) | (21,473) | |
| Total shareholders' equity | 455,651 | 393,358 | |
| Total liabilities and shareholders' equity | 745,660 | $ | 710,653 |
All values are in US Dollars.
| LINDSAY CORPORATION AND SUBSIDIARIES | |||||
|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
| (Unaudited) | |||||
| ( in thousands) | |||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||
| Net earnings | 72,379 | 65,469 | |||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||
| Depreciation and amortization | 19,282 | 20,178 | |||
| Provision for uncollectible accounts receivable | 881 | 903 | |||
| Deferred income taxes | — | (2,063 | ) | ||
| Share-based compensation expense | 6,529 | 5,458 | |||
| Foreign currency transaction loss | 1,126 | 2,274 | |||
| Other, net | 1,569 | 695 | |||
| Changes in assets and liabilities: | |||||
| Receivables | (4,926 | ) | (47,514 | ) | |
| Inventories | 40,954 | (53,803 | ) | ||
| Other current assets | 4,693 | 1,220 | |||
| Accounts payable | (15,274 | ) | 13,832 | ||
| Other current liabilities | (9,135 | ) | 186 | ||
| Other noncurrent assets and liabilities | 1,629 | (3,787 | ) | ||
| Net cash provided by operating activities | 119,707 | 3,048 | |||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||
| Purchases of property, plant and equipment | (18,775 | ) | (15,595 | ) | |
| Purchases of marketable securities available-for-sale | (4,932 | ) | (18,468 | ) | |
| Proceeds from maturities of marketable securities available-for-sale | 10,982 | 25,968 | |||
| Acquisition of business, net of cash acquired | (30,842 | ) | — | ||
| Other investing activities, net | (3,850 | ) | (855 | ) | |
| Net cash used in investing activities | (47,417 | ) | (8,950 | ) | |
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||
| Proceeds from exercise of stock options | 32 | 2,894 | |||
| Common stock withheld for payroll tax obligations | (2,471 | ) | (1,181 | ) | |
| Proceeds from employee stock purchase plan | 444 | 412 | |||
| Principal payments on long-term debt | (222 | ) | (218 | ) | |
| Dividends paid | (15,082 | ) | (14,599 | ) | |
| Net cash used in financing activities | (17,299 | ) | (12,692 | ) | |
| Effect of exchange rate changes on cash and cash equivalents | 716 | (3,465 | ) | ||
| Net change in cash and cash equivalents | 55,707 | (22,059 | ) | ||
| Cash and cash equivalents, beginning of period | 105,048 | 127,107 | |||
| Cash and cash equivalents, end of period | 160,755 | 105,048 |
All values are in US Dollars.
4th Quarter Fiscal 2023 Earnings Slide Deck Exhibit 99.2
Safe-Harbor Statement This presentation contains forward-looking statements that are subject to risks and uncertainties, and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, Company performance, financial results and planned financing. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Investors should understand that a number of factors could cause future economic and industry conditions and the Company’s actual financial condition and results of operations to differ materially from management’s beliefs expressed in the forward-looking statements contained in this presentation. These factors include 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 additional financial statement information, please see the Company’s earnings release dated October 19, 2023.
Fourth Quarter Summary Revenues decreased $23.1 million compared to prior year Irrigation decreased $6.9 million Infrastructure decreased $16.2 million Operating income decreased $4.4 million compared to prior year Irrigation increased $5.5 million Infrastructure decreased $8.3 million Corporate expense increased $1.6 million Primarily due to higher employee incentive compensation expense compared to prior year $ in millions, except per share amounts Revenue Operating Income (with operating margin) Diluted EPS -12% +7% -16%
Fiscal 2023 Summary Revenues decreased $96.7 million compared to prior year Irrigation decreased $79.8 million Infrastructure decreased $16.9 million Operating income increased $7.5 million compared to prior year Irrigation increased $16.2 million Infrastructure decreased $6.3 million Corporate expense increased $2.4 million Primarily due to higher employee incentive compensation expense compared to prior year $ in millions, except per share amounts Revenue Operating Income (with operating margin) Diluted EPS -13% +10% +8%
Fourth Quarter and Fiscal 2023 Financial Summary
Current Market Factors Agricultural commodity prices remain volatile as they continue to be impacted by weather conditions in various regions of the world, China’s fluctuating demand, and the continued conflict between Ukraine and Russia. Corn and soybean prices in August 2023 were 32 percent and 9 percent lower, respectively, compared to August 2022. The USDA’s estimate of 2023 net farm income is $141.3 billion, a decrease of 23 percent from 2022. Most of the projected decrease is due to a reduction in government support payments while cash receipts for crops are projected to decrease by 4 percent. Projected net farm income for 2023 remains at a relatively high level historically. The projected decrease in net farm income, along with other economic uncertainty, continues to affect farmer sentiment. Brazil’s government financing plan announced in June 2023 increases funding levels and shifts to quarterly allocation to spread the funds over the year. Irrigation Infrastructure The Infrastructure Investment and Jobs Act (IIJA) that was enacted in November 2021 marked the largest infusion of federal investment into infrastructure projects in more than a decade. It included a five-year reauthorization of the Fixing America’s Surface Transportation (FAST) Act. The IIJA introduced $110 billion in incremental federal funding for roads, bridges, and other transportation projects, which the Company anticipates will translate into higher demand for its transportation safety products. Transportation contract awards increase 15 percent year to date as of August 2023. State budgets for highway and bridge capital spending are anticipated to increase 13 percent in 2024. The timing and scope of certain construction projects have been impacted by timing of funding allocations, cost inflation and labor constraints.
Irrigation Segment – Fourth Quarter Summary North America revenue decreased $19.9 million Lower unit sales volume due to exceptional storm damage replacement in prior year Average selling prices were comparable to prior year Unit sales volume breakdown by category: Replacement 50%, Dryland 33%, Conversion 17% International revenue increased $13.0 million Higher sales volume in Brazil, Argentina, and Middle East Available funding under the government financing plan in Brazil contributed to higher sales volume Favorable foreign currency translation impact of $1.3 million Operating income increased $5.5 million Gross margin expansion driven by: Improved price realization Reduced inflationary impact on input costs Improved operating performance Revenue North America International FY22 FY23 $ in millions +18% +23% -25% Operating Income (with operating margin)
Acquisition of FieldWise, LLC Company Overview & Highlights: Headquartered in Norfolk, NE Specializes in telemetry solutions for agriculture, primarily center pivots FieldWise ™ will continue to operate independently and will market primarily to non-Zimmatic ™ dealers and customers Third-largest pivot telemetry provider in North America Strategic Rationale: Expands and strengthens Lindsay’s position in smart irrigation and other AgTech markets Expands Lindsay’s telemetry product offerings and patent portfolio, aligning to our technology strategy Strengthens Lindsay’s ability to attract and retain unpenetrated installed base in North America via expanded channel access Broad geographic coverage across North America, Australia, and New Zealand Value Creation: Aligns to Lindsay’s capital allocation priorities Financed through an all-cash transaction from the Company’s cash on hand
Infrastructure Segment Total revenue decreased $16.2 million Lower Road Zipper System™ sales compared to prior year due to projects that did not repeat Higher Road Zipper System lease revenue connected to road construction activity Higher sales of road safety products Operating income decreased $8.3 million Lower revenues and the resulting loss in fixed cost leverage The TAU-XR ™ to be added to MASH crash cushion portfolio in fiscal 2024 Revenue $ in millions -41% -73% Operating Income (with operating margin)
Innovation Leadership: Addressing Global Megatrends Capitalizing on global megatrends Food Security Water Scarcity Land Availability Mobility Safety Increased Safety Standards Aging Infrastructure Megatrends Innovation Leadership Innovative sustainable solutions for growers across the globe Mobilizing global populations safely and sustainably
Strong Commitment to Sustainable Practices Our mission is to provide solutions that conserve natural resources, enhance quality of life for people, and expand our world’s potential. Investing in sustainable technologies Improving our operational footprint Empowering and protecting our people Engaging in our local communities Operating with integrity 1 2 3 4 5
Summary Balance Sheet and Liquidity As of August 31, 2023, available liquidity of $216.3 million, with $166.3 million in cash, cash equivalents and marketable securities and $50.0 million available under revolving credit facility We are well-positioned with the strength of our balance sheet to continue to execute our capital allocation strategy.
Free Cash Flow Summary
Capital Allocation – A Balanced Approach The Company’s prioritization for cash use: Working capital to support organic growth New product development Capital expenditures - expected to be $35 - $40 million in fiscal 2024 Reflects incremental investment in plant modernization & productivity improvements at certain manufacturing facilities Acquisitions that align with strategic priorities Increasing dividend payments Opportunistic share repurchases Allocation History Other includes debt repayments, net cash sources/uses from note receivables, settlement of net investment hedges, and stock compensation related activity. Ending cash includes marketable securities.
Five-Year Financial Goals (Annual Averages)
Appendix
U.S. Net Farm Income and Net Cash Farm Income Inflation adjusted, 2003-2023F 2003-22 average NCFI Note: F = forecast. Values are adjusted for inflation using the U.S. Bureau of Economic Analysis Gross Domestic Product Price Index (BEA API series code: A191RG) rebased to 2023 by USDA, Economic Research Service. Source: USDA, Economic Research Service, Farm Income and Wealth Statistics. Data as of August 31, 2023 $ billion (2022) 2003-22 average NFI
Commodity Prices Soybean Prices Source: Trading Economics Corn Prices
United States Drought Condition Source: US Drought Monitor, October 2023 2022 2023