) earnings per share increased an impressive 92% to $1.15 in the
first quarter of fiscal 2013 from an adjusted earnings of 60
cents a share in the year-ago quarter. Results were way ahead of
the Zacks Consensus Estimate of 75 cents per share.
Earnings per share in the prior-year quarter stood at 23
cents, including an after tax effect of 37 cents of accrued
expenses related to environmental remediation at the company's
Lindsay, Nebraska manufacturing facility. Compared to this, EPS
of $1.15 in the quarter grew a whopping 400%
Total revenue improved 24% year over year to $147.4 million,
beating the Zacks Consensus Estimate of $130 million. The
year-over-year increase in revenues stemmed from a 33%
improvement in total irrigation equipment revenues. Domestic
irrigation revenues rose 59% but was offset by a 6% decline in
international irrigation revenues due to lower project revenues
in the Middle East. On the other hand, infrastructure revenues
fell 29% during the quarter.
Cost of goods sold increased 17% to $104 million. Gross profit
improved 42% to $42.9 million with gross margin expanding 370
basis points to 29.1%. Irrigation margins improved 4% helped by
lower input costs, strong pricing environment and fixed cost
leverage on higher sales. On the other hand, infrastructure
margins declined 4% due to sales mix and deleverage of fixed
costs from lower sales.
Operating expenses improved 18% to $20.6 million in the
quarter. Operating income in the quarter soared 338% to $22.3
million. Operating margin in the quarter was 15.1% compared with
4.3% in the prior year quarter.
Lindsay's backlog at the end of first quarter fiscal 2013 was
$85.1 million compared with $52.8 million at the end of first
quarter fiscal 2012 and $57.1 million at the end of fourth
quarter fiscal 2012.
Cash and cash equivalents of $152.2 million were $143.4
million as of November 30, 2012 and $108.7 compared with $108.7
million as of November 30, 2011. The company generated $13.4
million in net cash from operating activity in the quarter
compared with $6.2 million in the year-ago quarter.
Total debt was $3.2 million as of November 30, 2012, compared
to $7.5 million as of November 30, 2011. Debt-to-capitalization
ratio improved to 1% as of November 30, 2012, from 2.7% as
November 30, 2011.
Lindsay expects that positive farmer sentiment, farm incomes
and commodity prices affected by dry weather prevailing in the
U.S. will positively impact the company in fiscal 2013. Lindsay
expects long-term demand to remain high, driven by increased food
production and efficient water use. Even though infrastructure
sales declined during the quarter, it is expected to pick up
through the remainder of the year.
Demand for Lindsay's products will increase, driven by soaring
demand for food production owing to worldwide population growth,
efficient water use, mounting need for biofuel and improving
transportation infrastructure. Moreover, the new highway bill
will increase government spending on infrastructure favoring
Lindsay in the space.
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 retains a Zacks Rank #3 (Hold).
Deere & Company
) both retain a Zacks Rank #3 (Hold) in the same industry.
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