NINE MONTHS: LINDSAY'S REVENUES EVEN, EARNINGS UP 30X
Jul. 2, 2020
Source: Lindsay Corp. news release
OMAHA, Neb. - Lindsay Corporation (NYSE: LNN), a leading global manufacturer and distributor of irrigation and infrastructure equipment and technology, today announced results for its third quarter of fiscal 2020, which ended on May 31, 2020.
To read the entire report click here.
Third Quarter Summary
Revenues for the third quarter of fiscal 2020 were $123.1 million, an increase of $2.1 million, or 2 percent, compared to revenues of $121.1 million in the prior year third quarter. Net earnings for the quarter were $10.1 million, or $0.93 per diluted share, compared with net earnings of $2.9 million, or $0.27 per diluted share, for the prior year third quarter. Net earnings for the prior year third quarter adjusted to eliminate costs associated with the Foundation for Growth initiative were $5.5 million, or $0.50 per diluted share.1
"As we navigate the coronavirus pandemic, our priority continues to be the health and safety of our employees around the world while continuing to operate our facilities and serve our customers," said Tim Hassinger, President and Chief Executive Officer. "I am pleased with the success we have had in these areas as a result of the proactive measures we have put in place. In spite of this challenging environment, our businesses continue to perform well. During the quarter we also completed the acquisition of Net Irrigate, LLC, an agriculture IoT technology company that provides remote monitoring solutions for irrigation customers. This acquisition expands the number of irrigated acres managed under our FieldNET® platform."
Third Quarter Segment Results
Irrigation segment revenues for the third quarter of fiscal 2020 were $93.5 million, a decrease of $5.1 million, or 5 percent, compared to $98.6 million in the prior year. North America irrigation revenues of $60.9 million decreased $2.1 million, or 3 percent, compared to the prior year. The decrease resulted primarily from lower irrigation equipment unit volume which was partially offset by the impact of higher average selling prices. International irrigation revenues of $32.6 million decreased $3.0 million, or 9 percent. Higher sales volumes in certain regions were more than offset by unfavorable effects of foreign currency translation of approximately $3.5 million compared to the prior year and COVID-19 related shipment delays of approximately $2.0 million.
Irrigation segment operating margin was 16.1 percent of sales in the third quarter, compared to 11.2 percent of sales (11.7% percent adjusted)1 in the prior year. Operating margin expansion resulted from improved cost and pricing performance attributed to the Foundation for Growth initiative as well as from increased margin contribution from technology products and services.
Infrastructure segment revenues for the third quarter of fiscal 2020 were $29.6 million, an increase of $7.1 million, or 32 percent, compared to $22.4 million in the prior year. The increase resulted from higher Road Zipper System® sales and lease revenues which were partially offset by lower sales of road safety products compared to the prior year. In addition, revenues of approximately $12.0 million were impacted by COVID-19 related project delays.
Infrastructure segment operating margin was 28.9 percent of sales in the third quarter, compared to 15.8 percent of sales (16.0 percent adjusted)1 in the prior year. Operating margin improvement resulted primarily from increased sales in higher margin product lines and from improved cost and pricing performance.
The backlog of unfilled orders at May 31, 2020 was $78.6 million compared with $52.5 million at May 31, 2019. Included in these backlogs are amounts of $4.5 million and $10.0 million, respectively, that are not expected to be fulfilled within the subsequent twelve months.
"In North America, fourth quarter irrigation equipment demand is driven largely by storm damage replacement. The uncertainty of this demand combined with low commodity prices makes it challenging to project how the market will develop," said Mr. Hassinger.
"The demand outlook for our fiscal 2021 is dependent on a number of factors that could impact commodity prices and farm income, including current year crop results, export demand related to the U.S.-China Phase 1 trade agreement, and the level of government support payments to assist farmers.
We expect continued growth in technology products and services due to the solid returns these investments provide to farmers. In international markets, we see the potential for additional demand being driven by heightened concerns regarding food security as a result of the global pandemic; however, the timing remains uncertain."
Mr. Hassinger added, "In our infrastructure business, we expect strong fourth quarter results, driven by the Highways England project and the fulfillment of a large order in Japan. We continue to be excited about the growth opportunities we see for our Road Zipper Systems. Lastly, I would like to express my appreciation to the Lindsay employees, dealers and suppliers around the world who have gone to great lengths to promote a safe environment while continuing to serve our customers during this challenging time."