) reported EPS of $1.00 per share for the fiscal second quarter
2012; outperforming the Zacks Consensus Estimate of 83 cents.
Results improved 12% from the year ago quarter of 89 cents per
Total revenue in the quarter increased 10% year over year to
$132.1 million, beating the Zacks Consensus Estimate of $129
million. The improvement is attributed to a 28% rise in total
irrigation equipment revenues, in turn driven by a 25% increase in
domestic irrigation revenues and a 36% increase in international
However, infrastructure revenues declined 47% year over year to
$15.1 million due to lower sales and leases of the company's
Quick-Change Moveable Barrier (QMB) product.
Cost of goods sold in the quarter increased 11% to $95.6
million. Gross profit rose 7.3% to $36.5 million, whereas gross
margin contracted 70 basis points year over year to 27.6%, largely
attributable to lower sales of the higher-margin QMB product.
Operating expenses increased 3.5% to $17.5 million in the
quarter from $16.9 million in the year-earlier quarter.
Operating income in the quarter amounted to $18.9 million, up
11.1% year over year. Operating margin was 14.3%, up 10 basis
points year over year.
Lindsay's backlog at the end of second quarter 2012 was $87.3
million compared with $64.3 million at the end of second quarter
2011 and $52.8 million at the end of first quarter 2012.
Lindsay ended the second quarter of fiscal 2012 with cash and
cash equivalents of $104.9 million, up 34% from $78.4 million at
the end of first quarter 2011. Long-term debt declined to $2.1
million from $6.4 million as of February 28, 2011. The company
generated $4.9 million of net cash from operating activity in the
quarter, up 24% from $3.9 million in the year-ago quarter.
Lindsay expects farm incomes and commodity prices to remain at
high levels in 2012. According to the company, this will impel a
positive farmer sentiment. Further, it expects global Irrigation
equipment demand to remain high, driven by increased food
production and efficient water use. However, the company is skeptic
about infrastructure demand including QMB projects due to funding
issues and project delays.
Lindsay expects to benefit in the long term from demand for
increased food production, driven by worldwide population growth,
efficient water use, mounting need for biofuel and improving
transportation infrastructure. According to the United States
Department of Agriculture, net farm income is expected to remain
high at $91.7 million in 2012. Lindsay's irrigation segment will
thus benefit from a rising farm income.
The infrastructure segment's outlook remains unclear due to
government budget constraints and delay in the congressional
passage of a new federal highway bill. In addition, the current
expansion of government's ability to fund the transportation
program will be expiring on March 31.
Our long-term recommendation on Lindsay remains Neutral.
Currently, the stock retains a Zacks #3 Rank, implying a short-term
Lindsay Corporation is a leading designer and manufacturer of
self-propelled center pivot and lateral move irrigation systems,
which are used principally for agriculture to increase or stabilize
crop production while conserving water, energy, and labor. Lindsay
maintains its corporate offices in Omaha, Nebraska.
LINDSAY CORP (
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