2023
ANNUAL REPORT
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 Internet of Things (IIoT) solutions. Lindsay's infrastructure segment manufactures equipment to improve road safety and keep traffic moving on the world's roads, bridges and tunnels.
FINANCIAL AND OPERATING HIGHLIGHTS
REVENUE | OPERATING INCOME | DILUTED EARNINGS PER SHARE | ||||||
567.6 | 770.7 | 674.1 | 54.1 | 94.6 | 102.2 | 3.88 | 5.94 | 6.54 |
2021 | 2022 | 2023 | 2021 | 2022 | 2023 | 2021 | 2022 | 2023 |
(Dollars in millions, except per share amounts) | 2023 | 2022 | 2021 |
OPERATING RESULTS | |||
Operating revenues | 674.1 | 770.7 | 567.6 |
Operating income | 102.2 | 94.6 | 54.1 |
Net earnings | 72.4 | 65.5 | 42.6 |
Effective tax rate | 27.9% | 25.5% | 15.5% |
Diluted earnings per share | 6.54 | 5.94 | 3.88 |
Cash dividends per share | 1.37 | 1.33 | 1.30 |
FINANCIAL POSITION | |||
Working capital | 351.4 | 316.2 | 277.9 |
Total assets | 745.7 | 710.7 | 637.2 |
Long-term debt, including current installments | 115.4 | 115.6 | 115.7 |
Total shareholders' equity | 455.7 | 393.4 | 338.4 |
Invested capital 1 | 571.0 | 508.9 | 454.2 |
FINANCIAL MEASURES | |||
Gross margin | 31.6% | 25.8% | 26.5% |
Operating margin | 15.2% | 12.3% | 9.5% |
Return on invested capital 2 | 13.6% | 14.6% | 10.5% |
Return on beginning shareholders' equity 3 | 18.4% | 19.3% | 14.3% |
OTHER DATA | |||
Diluted weighted average shares | 11,062 | 11,031 | 10,985 |
Number of employees | 1,209 | 1,262 | 1,235 |
- Defined as current and long-term debt plus shareholders' equity.
- Defined as operating income after-tax (using effective tax rate) divided by the average of beginning and ending invested capital.
- Defined as net earnings divided by beginning of period shareholders' equity.
TO OUR SHAREHOLDERS
Fiscal 2023 marked a year of solid performance, and a year in which the Company also celebrated its 25th year as a listed company on the New York Stock Exchange. In the face of interest rate headwinds, volatile commodity prices, and lower U.S. net farm income projections, the Company persevered to achieve new records in net earnings and earnings per share, led by record full year operating income and operating margin in its irrigation business and overall gross margin expansion. The Company's improved operating performance and effective working capital management resulted in free cash flow generation in excess of its objective for the year, reaching 139 percent of net earnings. The Company's strong performance supported
its ability to pursue acquisitions, strategic partnerships, and growth investments in innovation, while empowering its employees, dealers, and distributors to further the Company's clear and compelling mission: to provide powerful irrigation, infrastructure, and industrial technology solutions that conserve natural resources, expand our world's potential, and enhance the quality of life for people around the world.
We look forward to building on the strong momentum that has been built over the last few years. We are focused on the opportunities ahead of us as we execute our innovation-driven growth strategy and continue to address the global megatrends that are driving market demand and our business forward. What gives our leadership team confidence is that we have a consistent and clear strategy in place. This strategy is centered on being the innovation and market leader in our core irrigation and infrastructure businesses through employee empowerment and superior execution.
Solutions that Support Global Megatrends
There continues to be multiple attractive global megatrends that support long-term, secular demand growth that Lindsay is uniquely positioned to address and capitalize on. These include global food security, water scarcity and the need for increased efficiency in water distribution, land availability, mobility safety, aging infrastructure and increasing safety standards. We also continue to see positive mid- and long-term market opportunities driven by federal funding provided in the Infrastructure Investments
and Jobs Act in the United States. This funding will support necessary investments in roadway infrastructure, and we believe this will support growth in our infrastructure business.
Expanding our Global Reach and
Technology Penetration
Innovation and the integration of technology into our leading hardware play a significant role when it comes to serving our customers across both business segments. There is tangible value being created by technology adoption worldwide, and Lindsay is at the forefront of introducing scalability, speed and efficiency to the marketplace, while also enhancing the value created for our customers.
We further expanded our reach this fiscal year through acquisitions and strategic partnerships. In July of this year, we announced the acquisition of FieldWise, LLC, a market leader in agricultural technology products, with
- focus on subscription-based, precision irrigation solutions. FieldWise™, as part of our existing technology portfolio, will allow us to reach an expanded set of irrigation technology customers, while simultaneously accessing previously untapped growth markets and sales channels. We also entered into strategic partnerships with Pessl Instruments and Ceres Imaging, which together bring unique value-enhancing crop imaging, intuitive data analytics, connected crop management tools, and remote monitoring for growers. These investments strengthen Lindsay's irrigation market position, but also advance the Company's integrated technological capabilities and overall ability to reach a broader set of customers and service providers globally.
Alex Fraser Bridge, Greater Vancouver, British Columbia
Assistant General Manager on Tobias Musairiri farm in Zimbabwe
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Dealer in Romania testing the FieldNET connectivity
Embedding Shareholder Value for the Long-Term
Total revenues for the fiscal year ended August 31, 2023, totaled $674.1 million, a 13 percent decrease compared to record revenues of $770.7 million in fiscal year 2022. North America irrigation revenues decreased 13 percent on a year-over-year basis, primarily a result of lower unit sales volumes due to farmers delaying investment decisions and exceptionally high storm damage replacement demand in the prior fiscal year. International irrigation revenues decreased 11 percent, primarily from the completion of
a large Egypt project in the prior fiscal year that did not repeat, and lower sales in Ukraine and Russia. Infrastructure revenues decreased 16 percent versus the prior fiscal year, which was attributable to lower Road Zipper System® sales compared to fiscal year 2022 due to projects in the prior year that did not repeat. Despite a decline in revenue, our organizational focus on pricing discipline and operational efficiencies combined to allow us to expand our operating margins. Our consolidated operating income increased 8 percent, compared to the prior year, indicative of our strategic focus on capturing strong profitability for our sales across all market environments. This discipline allowed us to deliver record earnings per share of $6.54, an increase of 10 percent compared to the prior fiscal year.
Lindsay's board of directors increased the quarterly stock dividend by
3 percent in the third quarter, bringing a total of $15.1 million returned to shareholders in fiscal 2023. Lindsay has consistently raised and continues to pay its quarterly dividend over time as we look to reward shareholders with distributions from our profits, while simultaneously investing in future growth.
Our balance sheet remains a key strength for our Company, and we firmly believe it will help facilitate our strategic growth plans for fiscal 2024 and beyond. We ended the year with $216.3 million in total available liquidity, including $50.0 million of undrawn borrowing capacity on our revolving credit facility. This, coupled with continued strong free cash flow generation, will further enhance our ability to invest in growth opportunities and continue executing our capital allocation strategy.
FY23 OPERATING
INCOME
+8%
FY23 EARNINGS
PER SHARE
+$10%
CAPITAL RETURNED TO
SHAREHOLDERS
$15.1 MILLION
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Strong Commitment to Sustainable Practices
Lindsay is focused on moving our customers, strategic partners and communities toward a more sustainable future. We are extremely proud of the progress we have made on our mission to provide solutions that conserve natural resources, enhance the quality of life for people, and expand our world's potential. Sustainability serves as a foundational element of our multi-faceted growth strategy and is embedded in our business planning and operations. We are applying our long history of innovation and commitment to sustainable practices to further invest in sustainable technologies, improve and drive efficiencies across our operational footprint, empower and protect our people, engage in our local communities, and operate with integrity.
At Lindsay, we are also committed to creating a culture of employee empowerment. In fiscal 2023, Lindsay launched several initiatives to enhance our ability to recruit a diverse workforce, retain our valuable employees, and protect the safety, health, and well- being of our workers. This included launching our inaugural employee engagement survey. Organizations with engaged employees report a 64 percent decrease in safety incidents, an 18 percent increase in sales productivity and a 23 percent increase in profitability (Gallup, 2023). We accomplished a 92% participation rate on this survey with results that support our organization is actively engaged. Benchmarked against approximately 5,375 companies, I'm proud to report that our organization has demonstrated elevated performance regarding employee engagement, which has helped create a more productive and positive work environment.
A Strong Future Ahead
Our senior leadership team is pleased with the Company's performance in fiscal 2023, but even more excited about the opportunities for Lindsay moving forward. As we continue to navigate an evolving, but ultimately improving, market backdrop, we remain focused on long-term growth opportunities, with a sharp focus on international markets. Our leadership in irrigation technology and the expanding sales potential of our Road Zipper System® provide us with a unique competitive advantage as we continue to enhance and optimize our core businesses.
I want to thank our employees for their personal commitment and great teamwork, our customers for their continued trust in our products, and our shareholders for the confidence and investment in Lindsay. We look forward to working on your behalf and earning your support in the years ahead.
Sincerely,
Randy Wood
President & Chief Executive Officer
Gallup, Inc. (2023). What is Employee Engagement and How Do You Improve It?. Gallup. https://www.gallup.com/workplace/285674/improve-employee-engagement-workplace.aspx#
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(MARK ONE)
-
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended August 31, 2023
or
- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-13419
Lindsay Corporation
(Exact name of registrant as specified in its charter)
Delaware | 47-0554096 |
(State or other jurisdiction of | (I.R.S. Employer |
incorporation or organization) | Identification No.) |
18135 Burke Street, Suite 100, Omaha, Nebraska | 68022 |
(Address of principal executive offices) | (Zip Code) |
402-829-6800
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $1.00 par value | LNN | New York Stock Exchange, Inc. |
Indicate by check mark if the registrant is a well-known seasoned issuer, (as defined in Rule 405 of the Securities Act). Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act:
Large accelerated filer | ☒ | Accelerated filer | ☐ |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
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. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b))
by the registered public accounting firm that prepared or issued its audit report. Yes ☒ No ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive- based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to
§240.10D-1(b).☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
The aggregate market value of Common Stock of the registrant, all of which is voting, held by non-affiliates based on the closing sales price on the New York Stock Exchange, Inc. on February 28, 2023 was $1,656,579,623.
As of October 16, 2023, 11,010,307 shares of the registrant's Common Stock were outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Proxy Statement pertaining to the Registrant's annual stockholders' meeting to be held on January 9, 2024 are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS | ||
Page(s) | ||
Item 1. | 4 | |
Item 1A. | Risk Factors | 13 |
Item 1B. | Unresolved Staff Comments | 17 |
Item 2. | Properties | 18 |
Item 3. | Legal Proceedings | 18 |
Item 4. | Mine Safety Disclosures | 18 |
Part II | ||
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer | |
Purchases of Equity Securities | 19 | |
Item 6. | [Reserved] | 20 |
Item 7. | Management's Discussion and Analysis of Financial Condition and Results of | |
Operations | 21 | |
Item 7A. | Quantitative and Qualitative Disclosures about Market Risk | 28 |
Item 8. | Financial Statements and Supplementary Data | 28 |
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial | |
Disclosure | 60 | |
Item 9A. | Controls and Procedures | 60 |
Item 9B. | Other Information | 63 |
Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | 63 |
Part III | ||
Item 10. | Directors, Executive Officers and Corporate Governance | 64 |
Item 11. | Executive Compensation | 64 |
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related | |
Stockholder Matters | 64 | |
Item 13. | Certain Relationships and Related Transactions, and Director Independence | 64 |
Item 14. | Principal Accounting Fees and Services | 65 |
Part IV | ||
Item 15. | Exhibits and Financial Statement Schedules | 66 |
Item 16. | Form 10-KSummary | 69 |
SIGNATURES | 70 |
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PART I
ITEM 1 - Business
INTRODUCTION
Lindsay Corporation, along with its subsidiaries (collectively called "Lindsay" or the "Company"), is a global leader in providing a variety of proprietary water management and road infrastructure products and services. The Company has been involved in the manufacture and distribution of agricultural irrigation equipment since 1955 and has grown from a regional company to an international firm with worldwide sales, distribution and manufacturing operations. Lindsay, a Delaware corporation, maintains its corporate offices in Omaha, Nebraska. The Company has operations which are categorized into two major reporting segments, Irrigation and Infrastructure.
Irrigation Segment - The Company's irrigation segment includes the manufacture and marketing of center pivot, lateral move, and hose reel irrigation systems which are used principally in the agricultural industry to increase or stabilize crop production while conserving water, energy and labor. The irrigation segment also manufactures and markets repair and replacement parts for its irrigation systems and controls and large diameter steel tubing. The Company continues to strengthen irrigation product offerings through innovative technology such as Global Positioning System ("GPS") positioning and guidance, variable rate irrigation, wireless irrigation management, irrigation scheduling, Industrial Internet of Things ("IIOT") technology solutions and mobile device applications. The Company's primary domestic irrigation manufacturing facilities are located in Lindsay, Nebraska; Olathe, Kansas; and Norfolk, Nebraska. Internationally, the Company has commercial and production operations in Brazil, France, China, Türkiye (formerly Turkey), and South Africa, as well as distribution and sales operations in the Netherlands, Egypt, Australia, and New Zealand. The Company also exports equipment from the U.S. and its global production facilities to other international markets.
Infrastructure Segment - The Company's infrastructure segment includes the manufacture and marketing of moveable barriers, specialty barriers, crash cushions and end terminals, road marking and road safety equipment, and railroad signals and structures. The infrastructure segment also offers technology to monitor critical safety infrastructure on roadways. The principal infrastructure manufacturing facilities are located in Rio Vista, California; Milan, Italy; and Lindsay, Nebraska.
PRODUCTS BY SEGMENT
IRRIGATION SEGMENT
Products - The Company manufactures and markets its center pivot, lateral move irrigation systems, and irrigation controls in the U.S. and internationally under its Zimmatic® brand. The Company also manufactures and markets hose reel travelers under the Perrot™ brand. The Company also produces or markets chemical injection systems, variable rate irrigation systems, flow meters, weather stations, soil moisture sensors, and remote monitoring and control systems. In addition to whole systems, the Company manufactures and markets repair and replacement parts for its irrigation systems and controls and large diameter steel tubing. Furthermore, the Company designs and manufactures innovative IIOT technology solutions, data acquisition and management systems, and custom electronic equipment for critical applications under its Elecsys™ brand.
The Company's irrigation systems are primarily of the standard center pivot type, with a small portion of its products consisting of the lateral move type. Both are automatic move systems consisting of sprinklers mounted on a water carrying pipeline which is supported approximately 11 feet off the ground by a truss system suspended between moving towers.
A standard center pivot in the U.S. is typically seven spans and approximately 1,300 feet long and is designed to circle within a quarter-section of land, which comprises 160 acres, wherein it irrigates approximately 125 to 130 acres. A center pivot or lateral move system can also be custom designed and can irrigate from 25 to 600+ acres.
A center pivot system represents a significant investment to a farmer. In a dry land conversion to center pivot irrigation, approximately one-half of the investment is for the pivot itself, and the remainder is attributable to installation of additional equipment such as wells, pumps, underground water pipes, electrical supply, and a concrete pad upon which the pivot is anchored. The Company's center pivot and lateral move irrigation systems can be enhanced with a family of integrated proprietary products such as GPS monitoring and other automated controls.
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Lindsay Corporation published this content on 21 November 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 November 2023 04:17:05 UTC.