10-Q 1 lnn-10q_20190531.htm 10-Q lnn-10q_20190531.htm

Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10‑Q

 

(MARK ONE)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2019

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

incorporation or organization)

 

(I.R.S. Employer

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 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No 

As of July 9, 2019, 10,786,339 shares of the registrant’s common stock were outstanding.

- 1 -


Table of Contents

 

Lindsay Corporation

INDEX FORM 10-Q

 

 

 

 

 

Page

 

 

 

 

 

Part I – FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

ITEM 1 – Financial Statements

 

 

 

 

 

 

 

 

 

Condensed Consolidated Statements of Earnings for the three and nine months ended May 31, 2019 and May 31, 2018

 

3

 

 

 

 

 

 

 

Condensed Consolidated Statements of Comprehensive Income for the three and nine months ended May 31, 2019 and May 31, 2018

 

4

 

 

 

 

 

 

 

Condensed Consolidated Balance Sheets as of May 31, 2019, May 31, 2018, and August 31, 2018

                                                  

 

5

 

 

Condensed Consolidated Statements of Shareholders’ Equity for the nine months ended May 31, 2019 and May 31, 2018

 

6

 

 

 

 

 

 

 

Condensed Consolidated Statements of Cash Flows for the nine months ended May 31, 2019 and May 31, 2018

 

7

 

 

 

 

 

 

 

Notes to the Condensed Consolidated Financial Statements

 

8

 

 

 

 

 

 

 

ITEM 2 – Management’s Discussion and Analysis of Financial Condition and Results of Operations

 

20

 

 

 

 

 

 

 

ITEM 3 – Quantitative and Qualitative Disclosures about Market Risk

 

28

 

 

 

 

 

 

 

ITEM 4 – Controls and Procedures

 

28

 

 

 

 

 

Part II – OTHER INFORMATION

 

 

 

 

 

 

 

 

 

ITEM 1 – Legal Proceedings

 

29

 

 

 

 

 

 

 

ITEM 1A – Risk Factors

 

29

 

 

 

 

 

 

 

ITEM 2 – Unregistered Sales of Equity Securities and Use of Proceeds

 

29

 

 

 

 

 

 

 

ITEM 3 – Defaults Upon Senior Securities

 

29

 

 

 

 

 

 

 

ITEM 4 – Mine Safety Disclosures

 

29

 

 

 

 

 

 

 

ITEM 5 – Other Information

 

29

 

 

 

 

 

 

 

ITEM 6 – Exhibits

 

30

 

 

 

 

 

SIGNATURES

 

31

 

- 2 -


Table of Contents

 

Part I – FINANCIAL INFORMATION

ITEM 1 - Financial Statements

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)

 

 

 

Three months ended

 

 

Nine months ended

 

($ and shares in thousands, except per share amounts)

 

May 31,

2019

 

 

May 31,

2018

 

 

May 31,

2019

 

 

May 31,

2018

 

Operating revenues

 

$

121,054

 

 

$

169,571

 

 

$

342,187

 

 

$

424,436

 

Cost of operating revenues

 

 

91,055

 

 

 

118,093

 

 

 

259,066

 

 

 

305,245

 

Gross profit

 

 

29,999

 

 

 

51,478

 

 

 

83,121

 

 

 

119,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling expense

 

 

7,515

 

 

 

10,842

 

 

 

23,934

 

 

 

31,087

 

General and administrative expense

 

 

14,695

 

 

 

17,862

 

 

 

46,585

 

 

 

43,866

 

Engineering and research expense

 

 

3,314

 

 

 

3,960

 

 

 

10,547

 

 

 

11,932

 

Total operating expenses

 

 

25,524

 

 

 

32,664

 

 

 

81,066

 

 

 

86,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating income

 

 

4,475

 

 

 

18,814

 

 

 

2,055

 

 

 

32,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest expense

 

 

(1,169

)

 

 

(1,226

)

 

 

(3,552

)

 

 

(3,502

)

Interest income

 

 

525

 

 

 

540

 

 

 

1,930

 

 

 

1,171

 

Other expense, net

 

 

(602

)

 

 

(683

)

 

 

(591

)

 

 

(2,062

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings (loss) before income taxes

 

 

3,229

 

 

 

17,445

 

 

 

(158

)

 

 

27,913

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income tax expense (benefit)

 

 

332

 

 

 

7,066

 

 

 

(827

)

 

 

12,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net earnings

 

$

2,897

 

 

$

10,379

 

 

$

669

 

 

$

15,299

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

$

0.27

 

 

$

0.96

 

 

$

0.06

 

 

$

1.43

 

Diluted

 

$

0.27

 

 

$

0.96

 

 

$

0.06

 

 

$

1.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares used in computing earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

10,786

 

 

 

10,757

 

 

 

10,779

 

 

 

10,735

 

Diluted

 

 

10,814

 

 

 

10,785

 

 

 

10,807

 

 

 

10,763

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash dividends declared per share

 

$

0.31

 

 

$

0.30

 

 

$

0.93

 

 

$

0.90

 

 

See accompanying notes to condensed consolidated financial statements.

- 3 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

 

 

 

Three months ended

 

 

Nine months ended

 

($ in thousands)

 

May 31,

2019

 

 

May 31,

2018

 

 

May 31,

2019

 

 

May 31,

2018

 

Net earnings

 

$

2,897

 

 

$

10,379

 

 

$

669

 

 

$

15,299

 

Other comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Defined benefit pension plan adjustment, net of tax

 

 

38

 

 

 

40

 

 

 

104

 

 

 

109

 

Foreign currency translation adjustment, net of hedging activities and tax

 

 

(1,831

)

 

 

(3,705

)

 

 

125

 

 

 

(2,925

)

Total other comprehensive (loss) income, net of tax

    expense of $120, $347, $421 and $74,

     respectively

 

 

(1,793

)

 

 

(3,665

)

 

 

229

 

 

 

(2,816

)

Total comprehensive income

 

$

1,104

 

 

$

6,714

 

 

$

898

 

 

$

12,483

 

 

See accompanying notes to condensed consolidated financial statements.

- 4 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

($ and shares in thousands, except par values)

 

May 31,

2019

 

 

May 31,

2018

 

 

August 31,

2018

 

ASSETS

 

 

 

 

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

110,839

 

 

$

111,779

 

 

$

160,787

 

Receivables, net of allowance of $2,498, $4,143, and $3,585,

   respectively

 

 

94,584

 

 

 

92,135

 

 

 

69,107

 

Inventories, net

 

 

91,091

 

 

 

82,635

 

 

 

79,233

 

Assets held-for-sale

 

 

2,744

 

 

 

51,516

 

 

 

10,837

 

Other current assets, net

 

 

17,903

 

 

 

12,341

 

 

 

11,087

 

Total current assets

 

 

317,161

 

 

 

350,406

 

 

 

331,051

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Property, plant, and equipment:

 

 

 

 

 

 

 

 

 

 

 

 

Cost

 

 

188,215

 

 

 

172,438

 

 

 

171,450

 

Less accumulated depreciation

 

 

(117,848

)

 

 

(112,554

)

 

 

(114,202

)

Property, plant, and equipment, net

 

 

70,367

 

 

 

59,884

 

 

 

57,248

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intangibles, net

 

 

25,103

 

 

 

28,656

 

 

 

27,376

 

Goodwill

 

 

64,454

 

 

 

64,723

 

 

 

64,671

 

Deferred income tax assets

 

 

8,783

 

 

 

4,581

 

 

 

6,645

 

Other noncurrent assets

 

 

20,054

 

 

 

11,528

 

 

 

12,824

 

Total assets

 

$

505,922

 

 

$

519,778

 

 

$

499,815

 

 

 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES AND SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

 

 

 

 

Accounts payable

 

$

37,509

 

 

$

30,281

 

 

$

30,530

 

Current portion of long-term debt

 

 

208

 

 

 

204

 

 

 

205

 

Liabilities held-for-sale

 

 

 

 

 

14,275

 

 

 

2,424

 

Other current liabilities

 

 

49,102

 

 

 

53,911

 

 

 

46,935

 

Total current liabilities

 

 

86,819

 

 

 

98,671

 

 

 

80,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension benefits liabilities

 

 

5,661

 

 

 

6,080

 

 

 

5,874

 

Long-term debt

 

 

115,885

 

 

 

116,172

 

 

 

116,129

 

Deferred income tax liabilities

 

 

918

 

 

 

1,117

 

 

 

1,083

 

Other noncurrent liabilities

 

 

26,245

 

 

 

20,229

 

 

 

19,769

 

Total liabilities

 

 

235,528

 

 

 

242,269

 

 

 

222,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Shareholders' equity:

 

 

 

 

 

 

 

 

 

 

 

 

Preferred stock of $1 par value -

 

 

 

 

 

 

 

 

 

 

 

 

Authorized 2,000 shares; no shares issued and outstanding

 

 

 

 

 

 

 

 

 

Common stock of $1 par value - authorized 25,000 shares;

   18,870, 18,841, and 18,841 shares issued, respectively

 

 

18,870

 

 

 

18,841

 

 

 

18,841

 

Capital in excess of stated value

 

 

70,566

 

 

 

67,587

 

 

 

68,465

 

Retained earnings

 

 

476,580

 

 

 

483,243

 

 

 

484,886

 

Less treasury stock - at cost, 8,083 shares

 

 

(277,238

)

 

 

(277,238

)

 

 

(277,238

)

Accumulated other comprehensive loss, net

 

 

(18,384

)

 

 

(14,924

)

 

 

(18,088

)

Total shareholders' equity

 

 

270,394

 

 

 

277,509

 

 

 

276,866

 

Total liabilities and shareholders' equity

 

$

505,922

 

 

$

519,778

 

 

$

499,815

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

 

- 5 -


Table of Contents

 

 

 

Lindsay Corporation and Subsidiaries

 

CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

 

($ and shares in thousands, except per share amounts)

 

 

 

Shares of

common

stock

 

 

Shares of

treasury

stock

 

 

Common

stock

 

 

Capital in

excess of

stated

value

 

 

Retained

earnings

 

 

Treasury

stock

 

 

Accumulated

other

comprehensive

(loss) income,

net

 

 

Total

shareholders’

equity

 

Balance at August 31, 2018

 

 

18,841

 

 

 

8,083

 

 

$

18,841

 

 

$

68,465

 

 

$

484,886

 

 

$

(277,238

)

 

$

(18,088

)

 

$

276,866

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

669

 

 

 

 

 

 

 

 

 

669

 

     Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

229

 

 

 

229

 

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

898

 

Cash dividends ($0.93) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(10,032

)

 

 

 

 

 

 

 

 

(10,032

)

Issuance of common shares under share compensation plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Proceeds from exercise of

     stock options

 

 

29

 

 

 

 

 

 

29

 

 

 

148

 

 

 

 

 

 

 

 

 

 

 

 

177

 

     Common stock withheld for

     payroll tax obligations

 

 

 

 

 

 

 

 

 

 

 

(1,124

)

 

 

 

 

 

 

 

 

 

 

 

(1,124

)

Share-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

3,077

 

 

 

 

 

 

 

 

 

 

 

 

3,077

 

Cumulative impact of ASC 606

   adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

532

 

 

 

 

 

 

 

 

 

532

 

Cumulative impact of ASU

   2018-02 adoption

 

 

 

 

 

 

 

 

 

 

 

 

 

 

525

 

 

 

 

 

 

(525

)

 

 

 

Balance at May 31, 2019

 

 

18,870

 

 

 

8,083

 

 

$

18,870

 

 

$

70,566

 

 

$

476,580

 

 

$

(277,238

)

 

$

(18,384

)

 

$

270,394

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at August 31, 2017

 

 

18,780

 

 

 

8,083

 

 

$

18,780

 

 

$

63,006

 

 

$

477,615

 

 

$

(277,238

)

 

$

(12,108

)

 

$

270,055

 

Comprehensive income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Net earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

 

15,299

 

 

 

 

 

 

 

 

 

15,299

 

     Other comprehensive (loss) income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2,816

)

 

 

(2,816

)

Total comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

12,483

 

Cash dividends ($0.90) per share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(9,671

)

 

 

 

 

 

 

 

 

(9,671

)

Issuance of common shares under share compensation plans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

     Proceeds from exercise of

     stock options

 

 

61

 

 

 

 

 

 

61

 

 

 

2,727

 

 

 

 

 

 

 

 

 

 

 

 

2,788

 

     Common stock withheld for

     payroll tax obligations

 

 

 

 

 

 

 

 

 

 

 

(833

)

 

 

 

 

 

 

 

 

 

 

 

(833

)

Share-based compensation

   expense

 

 

 

 

 

 

 

 

 

 

 

2,687

 

 

 

 

 

 

 

 

 

 

 

 

2,687

 

Balance at May 31, 2018

 

 

18,841

 

 

 

8,083

 

 

$

18,841

 

 

$

67,587

 

 

$

483,243

 

 

$

(277,238

)

 

$

(14,924

)

 

$

277,509

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes to condensed consolidated financial statements.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- 6 -


Table of Contents

 

LINDSAY CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

 

Nine months ended

 

($ in thousands)

 

May 31,

2019

 

 

May 31,

2018

 

CASH FLOWS FROM OPERATING ACTIVITIES:

 

 

 

 

 

 

 

 

Net earnings

 

$

669

 

 

$

15,299

 

Adjustments to reconcile net earnings to net cash (used in) provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

10,452

 

 

 

12,851

 

Loss on sale of business

 

 

301

 

 

 

6,023

 

Provision for uncollectible accounts receivable

 

 

(726

)

 

 

(2,407

)

Deferred income taxes

 

 

(2,556

)

 

 

(687

)

Share-based compensation expense

 

 

3,226

 

 </