8-K
Lindsay Corp (LNN)
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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): April 05, 2022 |
|---|
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 April 5, 2022, Lindsay Corporation (the “Company”) issued a press release announcing the Company’s results of operations for its second quarter ended February 28, 2022. 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 2022 second quarter investor conference call at 11:00 a.m. Eastern Time on April 5, 2022 is furnished herewith as Exhibit 99.2.
Item 9.01 Financial Statements and Exhibits.
99.1 Press Release, dated April 5, 2022, issued by the Company
99.2 Slide Presentation for Fiscal 2022 Second Quarter Investor Conference Call on April 5, 2022
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 thereunto duly authorized.
| LINDSAY CORPORATION | |||
|---|---|---|---|
| Date: | April 5, 2022 | 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 |
|---|
For further information, contact:
| LINDSAY CORPORATION: | THREE PART ADVISORS: |
|---|---|
| Brian Ketcham | Hala Elsherbini |
| Senior Vice President & Chief Financial Officer | 214-442-0016 |
| 402-827-6579 |
Lindsay Corporation Reports Fiscal 2022 Second Quarter Results
• Second quarter consolidated revenues increase 39 percent to $200.1 million with EPS of $1.32
• Irrigation revenues increase 52 percent on continued strength in agricultural markets and favorable pricing
• Infrastructure revenues decrease 23 percent on lower Road Zipper System® sales
OMAHA, Neb., April 5, 2022—Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its second quarter of fiscal 2022, which ended on February 28, 2022.
Second Quarter Summary
Revenues for the second quarter of fiscal 2022 were $200.1 million, an increase of $56.6 million, or 39 percent, compared to revenues of $143.6 million in the prior year second quarter. Net earnings for the quarter were $14.6 million, or $1.32 per diluted share, compared with net earnings of $11.9 million, or $1.08 per diluted share, for the prior year second quarter.
“Global agricultural market conditions continue to be favorable and have contributed to an increase in demand for our irrigation equipment,” said Randy Wood, President and Chief Executive Officer. “At the same time, the effects of the global pandemic continue to impact our business and create operational challenges. During the quarter we experienced a short-term disruption in labor availability in our Nebraska manufacturing facility due to an increase in employee absences caused by the Omicron variant. Our teams have continued to prioritize safety and manage well in this dynamic environment, and we were pleased to see absences decline as we completed the quarter.”
Second Quarter Segment Results
Irrigation segment revenues for the second quarter of fiscal 2022 were $180.7 million, an increase of $62.2 million, or 52 percent, compared to $118.6 million in the prior year second quarter. North America irrigation revenues of $100.7 million increased $20.6 million, or 26 percent, compared to the prior year second quarter. The increase in North America irrigation revenues resulted primarily from higher average selling prices. Unit sales volume was lower year-over-year due to the impact of Omicron-related employee absences on production and shipping capabilities. International irrigation revenues of $80.0 million increased $41.6 million, or 108 percent, compared to the prior year second quarter. The increase in international irrigation revenues resulted primarily from higher unit sales volumes, along with higher selling prices. Revenues in Brazil more than tripled compared to the prior year second quarter, and we also completed final deliveries of a large project in Egypt.
Irrigation segment operating income for the second quarter of fiscal 2022 was $24.7 million, an increase of $6.7 million, or 37 percent, compared to the prior year second quarter. Operating margin was 13.7 percent of sales, compared to 15.2 percent of sales in the prior year second quarter. The impact of higher irrigation system unit volume was partially offset by the impact of higher input costs that were not fully recovered by higher pricing. Second quarter operating results were also reduced by approximately $2.8 million resulting from the impact of the LIFO method of accounting for inventory (under which higher raw material costs are recognized in cost of goods sold rather than in ending inventory values), and by approximately $1.8 million of non-recurring expenses related to factory maintenance and outside consulting services.
Infrastructure segment revenues for the second quarter of fiscal 2022 were $19.4 million, a decrease of $5.6 million, or 23 percent, compared to $25.0 million in the prior year second quarter. The decrease resulted from lower Road Zipper System® sales and lease revenue, which were partially offset by increased sales of road safety products compared to the prior year.
Infrastructure segment operating income for the second quarter of fiscal 2022 was $0.3 million, a decrease of $6.0 million, or 95 percent, compared to the prior year second quarter. Operating margin was 1.7 percent of sales, compared to 25.4 percent of sales in the prior year second quarter. Current year results reflect lower revenues and a less favorable margin mix of revenues compared to the prior year second quarter and under absorbed overhead costs.
The backlog of unfilled orders at February 28, 2022 was $111.0 million compared with $101.4 million at February 28, 2021. A higher backlog of orders in irrigation was partially offset by a lower backlog in infrastructure.
Outlook
“Strong agricultural commodity prices and farm income projections support a solid demand environment for irrigation equipment in North America. We expect these same dynamics, along with increased concerns around food security, to drive growth in our international markets. Inflationary pressures and supply chain challenges are also expected to persist in the near term, and we continue to focus on protecting and improving margins in this environment,” said Mr. Wood. “In our infrastructure business, we are actively managing projects through our sales funnel and expect an increase in project sales in the second half of the fiscal year.”
Mr. Wood concluded, “We continue to invest in our innovation growth strategy that addresses the needs of a growing population and provides solutions that improve efficiency and promote sustainability.”
Second Quarter Conference Call
Lindsay’s fiscal 2022 second 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® remote irrigation management and 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.
| LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ended | Six months ended | |||||||||||
| (in thousands, except per share amounts) | ||||||||||||
| Operating revenues | 200,137 | 143,577 | 366,288 | 252,062 | ||||||||
| Cost of operating revenues | 157,193 | 102,403 | 285,907 | 179,480 | ||||||||
| Gross profit | 42,944 | 41,174 | 80,381 | 72,582 | ||||||||
| Operating expenses: | ||||||||||||
| Selling expense | 7,932 | 7,778 | 15,922 | 15,110 | ||||||||
| General and administrative expense | 13,022 | 14,275 | 25,901 | 27,727 | ||||||||
| Engineering and research expense | 3,652 | 3,312 | 6,859 | 6,402 | ||||||||
| Total operating expenses | 24,606 | 25,365 | 48,682 | 49,239 | ||||||||
| Operating income | 18,338 | 15,809 | 31,699 | 23,343 | ||||||||
| Other income (expense): | ||||||||||||
| Interest expense | (1,176 | ) | (1,205 | ) | (2,339 | ) | (2,406 | ) | ||||
| Interest income | 160 | 268 | 338 | 571 | ||||||||
| Other income (expense), net | 1,882 | (311 | ) | (1,018 | ) | (65 | ) | |||||
| Total other income (expense) | 866 | (1,248 | ) | (3,019 | ) | (1,900 | ) | |||||
| Earnings before income taxes | 19,204 | 14,561 | 28,680 | 21,443 | ||||||||
| Income tax expense | 4,638 | 2,685 | 6,213 | 2,472 | ||||||||
| Net earnings | 14,566 | 11,876 | 22,467 | 18,971 | ||||||||
| Earnings per share: | ||||||||||||
| Basic | 1.33 | 1.09 | 2.05 | 1.75 | ||||||||
| Diluted | 1.32 | 1.08 | 2.04 | 1.74 | ||||||||
| Shares used in computing earnings per share: | ||||||||||||
| Basic | 10,974 | 10,884 | 10,950 | 10,865 | ||||||||
| Diluted | 11,014 | 10,981 | 11,020 | 10,934 | ||||||||
| Cash dividends declared per share | 0.33 | 0.32 | 0.66 | 0.64 |
All values are in US Dollars.
| LINDSAY CORPORATION AND SUBSIDIARIES | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| SUMMARY OPERATING RESULTS | ||||||||||||
| (Unaudited) | ||||||||||||
| Three months ended | ||||||||||||
| (in thousands) | ||||||||||||
| Operating revenues: | ||||||||||||
| Irrigation: | ||||||||||||
| North America | 100,730 | 80,178 | 179,705 | 132,968 | ||||||||
| International | 80,029 | 38,394 | 146,962 | 72,961 | ||||||||
| Irrigation segment | 180,759 | 118,572 | 326,667 | 205,929 | ||||||||
| Infrastructure segment | 19,378 | 25,005 | 39,621 | 46,133 | ||||||||
| Total operating revenues | 200,137 | 143,577 | 366,288 | 252,062 | ||||||||
| Operating income (loss): | ||||||||||||
| Irrigation segment | 24,734 | 18,045 | 41,946 | 28,678 | ||||||||
| Infrastructure segment | 324 | 6,341 | 3,090 | 10,597 | ||||||||
| Corporate | (6,720 | ) | (8,577 | ) | (13,337 | ) | (15,932 | ) | ||||
| Total operating income | 18,338 | 15,809 | 31,699 | 23,343 |
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) | February 28,<br>2022 | February 28,<br>2021 | August 31,<br>2021 | ||||||
| ASSETS | |||||||||
| Current assets: | |||||||||
| Cash and cash equivalents | $ | 68,951 | $ | 110,775 | $ | 127,107 | |||
| Marketable securities | 24,934 | 19,555 | 19,604 | ||||||
| Receivables, net | 134,694 | 94,211 | 93,609 | ||||||
| Inventories, net | 187,328 | 121,566 | 145,244 | ||||||
| Other current assets, net | 34,350 | 29,509 | 30,539 | ||||||
| Total current assets | 450,257 | 375,616 | 416,103 | ||||||
| Property, plant, and equipment, net | 92,291 | 89,221 | 91,997 | ||||||
| Intangibles, net | 19,311 | 22,383 | 20,367 | ||||||
| Goodwill | 67,679 | 68,087 | 67,968 | ||||||
| Operating lease right-of-use assets | 16,724 | 20,173 | 18,281 | ||||||
| Deferred income tax assets | 5,352 | 10,347 | 8,113 | ||||||
| Other noncurrent assets, net | 24,970 | 10,821 | 14,356 | ||||||
| Total assets | $ | 676,584 | $ | 596,648 | $ | 637,185 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY | |||||||||
| Current liabilities: | |||||||||
| Accounts payable | $ | 74,345 | $ | 39,934 | $ | 45,209 | |||
| Current portion of long-term debt | 220 | 215 | 217 | ||||||
| Other current liabilities | 86,837 | 74,687 | 92,814 | ||||||
| Total current liabilities | 161,402 | 114,836 | 138,240 | ||||||
| Pension benefits liabilities | 5,567 | 6,182 | 5,754 | ||||||
| Long-term debt | 115,428 | 115,599 | 115,514 | ||||||
| Operating lease liabilities | 17,170 | 20,174 | 18,301 | ||||||
| Deferred income tax liabilities | 783 | 900 | 832 | ||||||
| Other noncurrent liabilities | 19,696 | 19,933 | 20,099 | ||||||
| Total liabilities | 320,046 | 277,624 | 298,740 | ||||||
| Shareholders' equity: | |||||||||
| Preferred stock | — | — | — | ||||||
| Common stock | 19,061 | 18,990 | 18,991 | ||||||
| Capital in excess of stated value | 90,711 | 84,206 | 86,495 | ||||||
| Retained earnings | 543,355 | 511,728 | 528,130 | ||||||
| Less treasury stock - at cost | (277,238 | ) | (277,238 | ) | (277,238 | ) | |||
| Accumulated other comprehensive loss, net | (19,351 | ) | (18,662 | ) | (17,933 | ) | |||
| Total shareholders' equity | 356,538 | 319,024 | 338,445 | ||||||
| Total liabilities and shareholders' equity | $ | 676,584 | $ | 596,648 | $ | 637,185 | |||
| LINDSAY CORPORATION AND SUBSIDIARIES | |||||||||
| --- | --- | --- | --- | --- | --- | --- | |||
| CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||||||
| (Unaudited) | |||||||||
| Six months ended | |||||||||
| (in thousands) | |||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | |||||||||
| Net earnings | 22,467 | 18,971 | |||||||
| Adjustments to reconcile net earnings to net cash (used in) provided by operating activities: | |||||||||
| Depreciation and amortization | 9,912 | 9,878 | |||||||
| Provision for uncollectible accounts receivable | 322 | 246 | |||||||
| Deferred income taxes | 3,052 | 206 | |||||||
| Share-based compensation expense | 2,411 | 4,047 | |||||||
| Unrealized foreign currency transaction gain | (111 | ) | (754 | ) | |||||
| Other, net | 627 | 1,804 | |||||||
| Changes in assets and liabilities: | |||||||||
| Receivables | (41,286 | ) | (10,769 | ) | |||||
| Inventories | (42,412 | ) | (16,245 | ) | |||||
| Other current assets | (2,541 | ) | (9,492 | ) | |||||
| Accounts payable | 28,757 | 10,962 | |||||||
| Other current liabilities | (8,317 | ) | 334 | ||||||
| Other noncurrent assets and liabilities | (8,732 | ) | 1,940 | ||||||
| Net cash (used in) provided by operating activities | (35,851 | ) | 11,128 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | |||||||||
| Purchases of property, plant, and equipment | (6,926 | ) | (16,556 | ) | |||||
| Purchases of marketable securities | (18,468 | ) | (8,313 | ) | |||||
| Proceeds from maturities of marketable securities | 12,752 | 8,043 | |||||||
| Other investing activities, net | (2,974 | ) | (860 | ) | |||||
| Net cash used in investing activities | (15,616 | ) | (17,686 | ) | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | |||||||||
| Proceeds from exercise of stock options | 2,821 | 3,814 | |||||||
| Common stock withheld for payroll tax obligations | (1,181 | ) | (1,269 | ) | |||||
| Proceeds from employee stock purchase plan | 235 | — | |||||||
| Principal payments on long-term debt | (108 | ) | (88 | ) | |||||
| Dividends paid | (7,242 | ) | (6,967 | ) | |||||
| Net cash used in financing activities | (5,475 | ) | (4,510 | ) | |||||
| Effect of exchange rate changes on cash and cash equivalents | (1,214 | ) | 440 | ||||||
| Net change in cash and cash equivalents | (58,156 | ) | (10,628 | ) | |||||
| Cash and cash equivalents, beginning of period | 127,107 | 121,403 | |||||||
| Cash and cash equivalents, end of period | 68,951 | 110,775 |
All values are in US Dollars.
2nd Quarter Fiscal 2022 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 (including but not limited to the lingering effects of the COVID-19 pandemic and related public health measures on plant operations, workforce availability, supply chain availability, and product demand) 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 April 5, 2022.
Second Quarter Summary Revenues increased $56.6 million compared to prior year Irrigation increased $62.2 million Infrastructure decreased $5.6 million Operating income increased $2.5 million compared to prior year Irrigation increased $6.7 million Infrastructure decreased $6.0 million Corporate expense decreased $1.8 million Prior year included expense of $1.5 million related to equity awards in connection with CEO retirement Amounts in millions, except per share amounts Revenue Operating Income (with operating margin) Diluted EPS +39% +22% +16%
Second Quarter and YTD Financial Summary
Current Market Factors February 2022 U.S. corn prices have increased 23 percent and soybean prices have increased 18 percent from a year ago. The increases resulted from constrained supply levels globally, coupled with higher demand. The conflict between Russia and Ukraine has raised additional concerns regarding available supply of agricultural commodities, leading to further increases in corn and soybean prices. As of February 2022, the USDA projected net farm income to be $113.7 billion, a decrease of 4.5 percent from 2021. The decrease is primarily related to lower government support payments while crop receipts are projected to increase. Inflationary pressure on input costs is expected to continue, requiring further price increases. Supply chain and logistics challenges are expected to persist in the near term. Irrigation Infrastructure The Infrastructure Investment and Jobs Act (IIJA) was signed into law on November 15, 2021, and marked the largest infusion of federal investment into infrastructure projects in more than a decade. It includes a five-year reauthorization of the Fixing America’s Surface Transportation (FAST) Act. This legislation introduced $110 billion in incremental federal funding to repair roads, bridges, and support other transformational projects, which the Company anticipates will translate into higher demand for its transportation safety products. On March 10, 2022, the first allocations of the IIJA funds were approved with the signing of the 2022 omnibus appropriations bill. The “shift left” strategy, combined with the safety benefits of positive protection, has created additional lease opportunities in the U.S. Road Zipper® market.
Irrigation Segment North America revenue increased $20.6 million Increase primarily from higher average selling prices Unit sales volume lower due to impact of Omicron-related employee absences in Nebraska facility Unit sales volume breakdown by category: Replacement 44%, Conversion 31%, Dryland 25% International revenue increased $41.6 million Increase primarily from higher unit sales volume in most international markets, along with higher selling prices Record sales volume in Brazil Completed final deliveries of large project in Egypt Unfavorable foreign currency translation impact of $2.1 million Operating income increased $6.7 million Increase from higher sales volume partially offset by the impact of higher input costs not fully recovered by price Reduced by LIFO impact of approximately $2.8 million Non-recurring costs of $1.8 million related to factory maintenance and outside consulting services Revenue North America International FY21 FY22 Amounts in millions +108% +37% +26% Operating Income (with operating margin)
Infrastructure Segment Total revenue decreased $5.6 million Lower Road Zipper System® sales and lease revenue due to delayed projects Higher sales of road safety products Operating income decreased $6.0 million Lower revenues from higher-margin Road Zipper projects Under absorbed overhead costs Announced a strategic partnership and minority investment in Blyncsy™ An emerging leader in the utilization of artificial intelligence and machine learning for connected roadways Integrates Blyncsy’s Payver™ into Lindsay’s RoadConnect™ remote roadside asset management platform Revenue Amounts in millions -23% -95% Operating Income (with operating margin)
Innovation Leadership: Addressing Global Megatrends Capitalizing on global megatrends Key Trends Food Security Water Scarcity Land Availability Mobility Safety Reducing Emissions Labor Savings
Strong Commitment to Sustainable Practices Our mission is to provide solutions that conserve natural resources, enhance the 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 February 28, 2022: Available liquidity of $143.9 million, with $93.9 million in cash, cash equivalents and marketable securities and $50.0 million available under revolving credit facility Total debt of $116.0 million, of which $115.0 million matures in 2030 A funded debt to EBITDA leverage ratio (as defined in our credit agreements) of 1.4 compared to a covenant limit of 3.0
Summary of Cash Flow
Capital Allocation – A Balanced Approach Allocation History Other includes debt repayments, net cash sources/uses from note receivables, net investment hedges, stock compensation and related tax benefits. Ending cash includes marketable securities 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: Working capital to support organic growth New product development Capital expenditures - expected to be $15-20 million in fiscal 2022 Acquisitions that align with strategic priorities Dividend payments Opportunistic share repurchases Allocation Plan
Appendix
U.S. Net Farm Income and Net Cash Farm Income Inflation adjusted, 2001-22F 2001-20 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 2022 by USDA, Economic Research Service. Source: USDA, Economic Research Service, Farm Income and Wealth Statistics. Data as of February 4, 2022 $ billion (2022) 2001-20 average NFI
Commodity Prices Corn Prices Soybean Prices Source: Trading Economics
United States Drought Condition Source: US Drought Monitor