Lindsay corporation reports fiscal 2022 second quarter results
Omaha, neb.--(business wire)--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) february 28, 2022 february 28, 2021 february 28, 2022 february 28, 2021 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 lindsay corporation and subsidiaries summary operating results (unaudited) three months ended six months ended (in thousands) february 28, 2022 february 28, 2021 february 28, 2022 february 28, 2021 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 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, 2022 february 28, 2021 august 31, 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) february 28, 2022 february 28, 2021 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
