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): January 04, 2024 |
|---|
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 January 4, 2024, Lindsay Corporation (the “Company”) issued a press release announcing the Company’s results of operations for its first quarter ended November 30, 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 2024 first quarter investor conference call at 11:00 a.m. Eastern Time on January 4, 2024 is furnished herewith as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated January 4, 2024, issued by the Company.
99.2 Slide Presentation for Fiscal 2024 First Quarter Investor Conference Call on January 4, 2024.
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: | January 4, 2024 | By: | /s/ Brian L. Ketcham |
| Brian L. Ketcham, Senior Vice President and Chief Financial Officer |
EX-99.1
| Exhibit 99.1<br><br><br><br>18135 BURKE ST. OMAHA, NE 68022 TEL: 402-829-6800 FAX: 402-829-6836 |
|---|
Lindsay Corporation Reports Fiscal 2024 First Quarter Results
OMAHA, Neb., January 4, 2024—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its first quarter which ended on November 30, 2023.
Key Highlights
• North America irrigation revenue growth driven by improved demand for irrigation equipment
• Irrigation equipment pricing remains stable, supporting gross margin improvement
• Improved infrastructure operating performance driven by growth in Road Zipper SystemTM leasing
“Demand for irrigation equipment in North America improved in the quarter, reflecting increased order activity as grower profitability became more certain post-harvest compared to the delayed investment decisions we had experienced in last year's spring selling season,” said Randy Wood, President and Chief Executive Officer. "Quoting activity in international irrigation markets remains active and growing, however revenues for the quarter were lower in South America following the record revenues captured in Brazil in the prior year. Across our infrastructure business, growth in our Road Zipper System leasing revenues and sales of our road safety products largely offset muted Road Zipper System project activity in the quarter. Importantly, our leasing business continues to represent a greater proportion of our infrastructure segment revenues with this sales mix accretive to Lindsay's overall margin profile."
First Quarter Summary
| Consolidated Financial Summary | First Quarter | |||
|---|---|---|---|---|
| (dollars in millions, except per share amounts) | FY2024 | FY2023 | $ Change | % Change |
| Total revenues | $161.4 | $176.2 | ($14.8) | (8%) |
| Operating income | $21.1 | $24.6 | ($3.5) | (14%) |
| Operating margin | 13.1% | 14.0% | ||
| Net earnings | $15.0 | $18.2 | ($3.2) | (18%) |
| Earnings per share | $1.36 | $1.65 | ($0.29) | (18%) |
Revenues for the quarter were $161.4 million, a decrease of $14.8 million, or 8 percent, compared to revenues of $176.2 million in the prior year first quarter. The decrease resulted primarily from lower international irrigation sales compared to prior year first quarter.
Operating income for the quarter was $21.1 million, a decrease of $3.5 million, or 14 percent, compared to operating income of $24.6 million in the prior year first quarter. Operating margin was 13.1 percent of sales compared to 14.0 percent of sales in the prior year first quarter. The decrease in operating income and margin resulted primarily from lower revenues as gross margin improved compared to prior year first quarter.
Net earnings for the quarter were $15.0 million, or $1.36 per diluted share, compared with net earnings of $18.2 million, or $1.65 per diluted share, in the prior year first quarter. Lower net earnings resulted largely from lower operating income that was partially offset by higher interest income. In addition, net earnings in the quarter were impacted by a higher effective income tax rate compared to the prior year first quarter.
First Quarter Segment Results
| Irrigation Segment | First Quarter | |||
|---|---|---|---|---|
| (dollars in millions) | FY2024 | FY2023 | $ Change | % Change |
| Revenues: | ||||
| North America | $89.4 | $83.9 | $5.4 | 7% |
| International | $50.8 | $68.1 | ($17.3) | (25%) |
| Total revenues | $140.2 | $152.1 | ($11.9) | (8%) |
| Operating income | $25.3 | $28.6 | ($3.3) | (12%) |
| Operating margin | 18.1% | 18.8% |
Irrigation segment revenues for the quarter were $140.2 million, a decrease of $11.9 million, or 8 percent, compared to $152.1 million in the prior year first quarter. North America irrigation revenues of $89.4 million increased $5.4 million, or 7 percent, compared to the prior year first quarter. The increase in North America irrigation revenues resulted primarily from higher unit sales volume that was partially offset by the impact of a less favorable mix of shorter machines compared to the prior year first quarter. Average selling prices remained stable and were comparable to the prior year first quarter.
International irrigation revenues of $50.8 million decreased $17.3 million, or 25 percent. The decrease resulted primarily from lower sales in Brazil and Argentina compared to record sales in those markets in the prior year first quarter. Changes in the timing of funding under the financing program in Brazil contributed to lower sales in the quarter relative to the prior year first quarter. Revenue in the current year also benefited from the favorable effects of foreign currency translation of approximately $1.8 million compared to the prior year first quarter.
Irrigation segment operating income for the quarter was $25.3 million, a decrease of $3.3 million, or 12 percent, compared to the prior year first quarter. Operating margin was 18.1 percent of sales, compared to 18.8 percent of sales in the prior year first quarter. Lower operating income and operating margin resulted primarily from lower international irrigation revenues and the resulting impact from deleverage of fixed operating expenses. Gross margin remained consistent with the prior year first quarter.
| Infrastructure Segment | First Quarter | |||
|---|---|---|---|---|
| (dollars in millions) | FY2024 | FY2023 | $ Change | % Change |
| Total revenues | $21.2 | $24.1 | ($2.9) | (12%) |
| Operating income | $3.6 | $3.4 | $0.2 | 7% |
| Operating margin | 17.1% | 14.0% |
Infrastructure segment revenues for the quarter were $21.2 million, a decrease of $2.9 million, or 12 percent, compared to $24.1 million in the prior year first quarter. The decrease resulted from lower Road Zipper System sales, which were largely offset by higher Road Zipper System lease revenue and higher sales of road safety products.
Infrastructure segment operating income for the quarter was $3.6 million, an increase of $0.2 million or 7 percent compared to the prior year first quarter. Operating margin was 17.1 percent of sales, compared to 14.0 percent of sales in the prior year first quarter. Increased operating income and operating margin resulted primarily from a more favorable margin mix of revenue with higher lease revenue compared to the prior year first quarter.
The backlog of unfilled orders at November 30, 2023 was $86.8 million compared with $129.6 million at November 30, 2022. The irrigation backlog was lower compared to the prior year while the infrastructure backlog was comparable to the prior year.
Outlook
Mr. Wood concluded, “While customers will invest cautiously, current farm income projections, moderating inflation and an anticipation of flat to lower interest rates provide a stable backdrop for irrigation equipment demand in North America. We expect sales volume levels in developed international markets, particularly Brazil, to improve over the balance of the year, and we continue to see project opportunities in developing markets supported by continuing global concerns over food security and global grain supplies.”
“In our infrastructure business, we are beginning to see the positive impact of increased U.S. infrastructure spending, particularly in Road Zipper System leasing and sales of road safety products. We also continue to actively manage projects through our Road Zipper System project sales funnel, however the timing of project implementation remains challenging to predict.”
First Quarter Conference Call
Lindsay’s fiscal 2024 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, 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 | ||||||
| (in thousands, except per share amounts) | ||||||
| Operating revenues | 161,358 | 176,159 | ||||
| Cost of operating revenues | 111,453 | 123,139 | ||||
| Gross profit | 49,905 | 53,020 | ||||
| Operating expenses: | ||||||
| Selling expense | 9,817 | 9,677 | ||||
| General and administrative expense | 14,662 | 14,437 | ||||
| Engineering and research expense | 4,352 | 4,308 | ||||
| Total operating expenses | 28,831 | 28,422 | ||||
| Operating income | 21,074 | 24,598 | ||||
| Other income (expense): | ||||||
| Interest expense | (877 | ) | (909 | ) | ||
| Interest income | 1,068 | 373 | ||||
| Other income (expense), net | (270 | ) | (57 | ) | ||
| Total other income (expense) | (79 | ) | (593 | ) | ||
| Earnings before income taxes | 20,995 | 24,005 | ||||
| Income tax expense | 5,976 | 5,788 | ||||
| Net earnings | 15,019 | 18,217 | ||||
| Earnings per share: | ||||||
| Basic | 1.36 | 1.66 | ||||
| Diluted | 1.36 | 1.65 | ||||
| Shares used in computing earnings per share: | ||||||
| Basic | 11,017 | 10,989 | ||||
| Diluted | 11,059 | 11,073 | ||||
| Cash dividends declared per share | 0.35 | 0.34 |
All values are in US Dollars.
| LINDSAY CORPORATION AND SUBSIDIARIES | ||||||
|---|---|---|---|---|---|---|
| SUMMARY OPERATING RESULTS | ||||||
| (Unaudited) | ||||||
| Three months ended | ||||||
| (in thousands) | ||||||
| Operating revenues: | ||||||
| Irrigation: | ||||||
| North America | 89,377 | 83,934 | ||||
| International | 50,791 | 68,149 | ||||
| Irrigation segment | 140,168 | 152,083 | ||||
| Infrastructure segment | 21,190 | 24,076 | ||||
| Total operating revenues | 161,358 | 176,159 | ||||
| Operating income: | ||||||
| Irrigation segment | 25,307 | 28,641 | ||||
| Infrastructure segment | 3,619 | 3,372 | ||||
| Corporate | (7,852 | ) | (7,415 | ) | ||
| Total operating income | 21,074 | 24,598 |
All values are in US Dollars.
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) | November 30,<br>2023 | November 30,<br>2022 | August 31,<br>2023 | ||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 159,381 | $ | 99,168 | $ | 160,755 | |||
| Marketable securities | 16,278 | 11,424 | 5,556 | ||||||
| Receivables, net | 143,049 | 157,116 | 144,774 | ||||||
| Inventories, net | 164,144 | 188,404 | 155,932 | ||||||
| Other current assets, net | 18,450 | 25,295 | 20,467 | ||||||
| Total current assets | 501,302 | 481,407 | 487,484 | ||||||
| Property, plant, and equipment, net | 103,818 | 93,518 | 99,681 | ||||||
| Intangibles, net | 27,005 | 17,760 | 27,719 | ||||||
| Goodwill | 84,029 | 67,295 | 83,121 | ||||||
| Operating lease right-of-use assets | 17,544 | 18,477 | 17,036 | ||||||
| Deferred income tax assets | 12,712 | 8,117 | 10,885 | ||||||
| Other noncurrent assets, net | 17,508 | 21,722 | 19,734 | ||||||
| Total assets | $ | 763,918 | $ | 708,296 | $ | 745,660 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 52,242 | $ | 58,535 | $ | 44,278 | |||
| Current portion of long-term debt | 227 | 223 | 226 | ||||||
| Other current liabilities | 89,502 | 89,827 | 91,604 | ||||||
| Total current liabilities | 141,971 | 148,585 | 136,108 | ||||||
| Pension benefits liabilities | 4,308 | 4,812 | 4,382 | ||||||
| Long-term debt | 115,120 | 115,297 | 115,164 | ||||||
| Operating lease liabilities | 17,746 | 19,161 | 17,689 | ||||||
| Deferred income tax liabilities | 695 | 693 | 689 | ||||||
| Other noncurrent liabilities | 17,218 | 14,960 | 15,977 | ||||||
| Total liabilities | 297,058 | 303,508 | 290,009 | ||||||
| Shareholders' equity: | |||||||||
| Preferred stock | — | — | — | ||||||
| Common stock | 19,115 | 19,090 | 19,094 | ||||||
| Capital in excess of stated value | 98,628 | 93,079 | 98,508 | ||||||
| Retained earnings | 647,455 | 593,475 | 636,297 | ||||||
| Less treasury stock - at cost | (277,238 | ) | (277,238 | ) | (277,238 | ) | |||
| Accumulated other comprehensive loss, net | (21,100 | ) | (23,618 | ) | (21,010 | ) | |||
| Total shareholders' equity | 466,860 | 404,788 | 455,651 | ||||||
| Total liabilities and shareholders' equity | $ | 763,918 | $ | 708,296 | $ | 745,660 | |||
| LINDSAY CORPORATION AND SUBSIDIARIES | |||||||||
| --- | --- | --- | --- | --- | --- | --- | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited) | |||||||||
| Three months ended | |||||||||
| (in thousands) | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
| Net earnings | 15,019 | 18,217 | |||||||
| Adjustments to reconcile net earnings to net cash provided by operating activities: | |||||||||
| Depreciation and amortization | 5,307 | 4,871 | |||||||
| Provision for uncollectible accounts receivable | 71 | 704 | |||||||
| Deferred income taxes | (1,666 | ) | 1,129 | ||||||
| Share-based compensation expense | 1,603 | 1,473 | |||||||
| Unrealized foreign currency transaction loss (gain) | 79 | (83 | ) | ||||||
| Other, net | 73 | 289 | |||||||
| Changes in assets and liabilities: | |||||||||
| Receivables | 1,689 | (19,828 | ) | ||||||
| Inventories | (7,970 | ) | 4,803 | ||||||
| Other current assets | 2,762 | 3,526 | |||||||
| Accounts payable | 7,087 | 123 | |||||||
| Other current liabilities | (4,263 | ) | (11,898 | ) | |||||
| Other noncurrent assets and liabilities | 2,081 | 1,356 | |||||||
| Net cash provided by operating activities | 21,872 | 4,682 | |||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Purchases of property, plant, and equipment | (6,941 | ) | (3,798 | ) | |||||
| Purchases of marketable securities | (12,992 | ) | — | ||||||
| Proceeds from maturities of marketable securities | 2,325 | — | |||||||
| Other investing activities, net | (593 | ) | (384 | ) | |||||
| Net cash used in investing activities | (18,201 | ) | (4,182 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Dividends paid | (3,861 | ) | (3,742 | ) | |||||
| Common stock withheld for payroll tax obligations | (1,575 | ) | (2,471 | ) | |||||
| Other financing activities, net | 56 | 43 | |||||||
| Net cash used in financing activities | (5,380 | ) | (6,170 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | 335 | (210 | ) | ||||||
| Net change in cash and cash equivalents | (1,374 | ) | (5,880 | ) | |||||
| Cash and cash equivalents, beginning of period | 160,755 | 105,048 | |||||||
| Cash and cash equivalents, end of period | 159,381 | 99,168 |
All values are in US Dollars.
1st Quarter Fiscal 2024 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 January 4, 2024.
First Quarter Summary Revenues decreased $14.8 million compared to prior year Irrigation decreased $11.9 million Infrastructure decreased $2.9 million Operating income decreased $3.5 million compared to prior year Irrigation decreased $3.3 million Infrastructure increased $0.2 million Corporate expense increased $0.4 million $ in millions, except per share amounts Revenue Operating Income (with operating margin) Diluted EPS -8% -18% -14%
First Quarter Financial Summary
Current Market Factors Agricultural commodity prices continue to fluctuate based on supply and demand changes Corn and soybean prices in November 2023 were 32 percent and 8 percent lower, respectively, compared to one year ago Commodity prices remain broadly supportive to grower profitability 2023 net farm income is projected at $151.1 billion, a decrease of 17 percent from record levels in 2022 but remains at a historically high level Current farm income levels, moderating inflation and an anticipation of flat to lower interest rates provide a stable backdrop for irrigation equipment demand, however farmers remain cautious Changes in the timing of funding under the financing plan in Brazil impacted first quarter results, but is not expected to have a significant impact on full year results Irrigation Infrastructure Infrastructure Investment and Jobs Act (IIJA) funding marks the largest infusion of federal investment into infrastructure projects in more than a decade Includes $110 billion in incremental federal funding for roads, bridges, and other transportation projects The additional funding is expected to support higher demand in the U.S. for Lindsay products and solutions Transportation contract awards increase 17 percent year to date through November 2023 Spending for public highway, pavement, and street construction expected to grow approximately 16 percent in calendar 2024 The timing and scope of construction projects can be impacted by a variety of factors
Irrigation Segment – First Quarter Summary North America revenue increased $5.4 million Higher unit sales volume was partially offset by less favorable mix of shorter machine sales compared to prior year Average selling prices remained stable and were comparable to prior year Unit sales volume breakdown by category: Replacement 47%, Dryland 27%, Conversion 26% International revenue decreased $17.3 million Lower sales in Brazil and Argentina following record sales in the prior year Changes in the timing of funding under the government financing program in Brazil Government transition in Argentina following presidential election Favorable foreign currency translation impact of $1.8 million Operating income decreased $3.3 million Lower international irrigation revenues and the resulting impact of deleverage of fixed operating expenses Overall gross margin consistent with the prior year Revenue North America International FY23 FY24 $ in millions -25% -12% +7% Operating Income (with operating margin)
Infrastructure Segment Total revenue decreased $2.9 million Lower Road Zipper System™ sales due to project revenue of $8.0 million in the prior year that did not repeat Higher Road Zipper System lease revenue connected to road construction activity Higher sales of road safety products First commercial sale of RoadConnect™ technology platform Beta trials of Impact Alert™ continuing with certain state departments of transportation Operating income increased $0.2 million More favorable margin mix of revenue with higher Road Zipper System lease revenues result in higher gross margin compared to the prior year Revenue $ in millions -12% +7% 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 conserve natural resources, expand our world’s potential, and enhance the quality of life for people. 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 November 30, 2023, available liquidity of $225.7 million, with $175.7 million in cash, cash equivalents and marketable securities and $50.0 million available under revolving credit facility Well-positioned with a strong balance sheet to continue to execute our capital allocation strategy and create value for shareholders.
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.
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 November 30, 2023 $ billion (2022) 2003-22 average NFI
U.S. Net Farm Income and Federal Support
Commodity Prices Soybean Prices Source: Trading Economics Corn Prices
United States Drought Condition Source: US Drought Monitor, October 2023 2022 2023