Lindsay (LNN) 8-K/A Completion of Acquisition or Disposition of Assets

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): June
1, 2006

LINDSAY MANUFACTURING CO.

(Exact name of registrant as specified in its charter)

Delaware	1-13419	47-0554096
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

2707 North 108th Street
Suite 102
Omaha, Nebraska	68164
(Address of principal executive offices)	(Zip Code)

(402) 428-2131

(Registrant’s telephone number, including area code)

Not applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

Consent

Item 2.01 Completion of Acquisition or Disposition of Assets

On June 2, 2006, Lindsay Manufacturing Co. (“Lindsay,” or the “Company”) filed a Current Report on Form 8-K reporting, that on June 1, 2006, the Company completed its acquisition of Barrier Systems, Inc. (BSI). As part of the 8-K, the Company indicated that the financial statements and pro forma financials required under Item 9.01 would be filed no later than 71 days after the date the Form 8-K reporting the acquisition was required to be filed. This Amendment No. 1 to the Current Report on Form 8-K contains the required financial statements and pro forma financial information.

Item 9.01 Financial Statements and Exhibits

(a)	Financial Statements of Business Acquired
	Barrier Systems, Inc. Audited Consolidated Financial Statements as of and for the years ended December 31, 2005 and 2004
(b)	Pro Forma Financial Information Unaudited Pro Forma Financial Statements and Notes

Pro Forma Condensed Balance Sheet as of May 31, 2006 — Unaudited
Pro Forma Condensed Statement of Operations for the nine months ended May 31, 2006 — Unaudited Pro Forma
Condensed Statement of Operations for the twelve months ended August 31, 2005 — Unaudited

(d)	Exhibits
23.1	Consent of Armanino McKenna LLP

SIGNATURE

     Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 11, 2006	LINDSAY MANUFACTURING CO.
	By:	/s/ David Downing
		David Downing, Vice President and
		Chief Financial Officer

BARRIER SYSTEMS, INC. AND SUBSIDIARY

CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER 31, 2005 AND 2004

TABLE OF CONTENTS

	Page No.
Independent Auditors’ Report		1
Consolidated Balance Sheets		2
Consolidated Statements of Income		3
Consolidated Statements of
Stockholders’ Equity		4
Consolidated Statements of Cash Flows		5
Notes to Consolidated Financial Statements		6 - 18

INDEPENDENT AUDITORS’ REPORT

To the Board of Directors
Barrier Systems, Inc. and Subsidiary
Rio Vista, California

We have audited the accompanying consolidated balance sheets of Barrier Systems, Inc. and Subsidiary as of December 31, 2005 and 2004 and the related consolidated statements of income, stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatements. An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Barrier Systems, Inc. and Subsidiary as of December 31, 2005 and 2004, and the results of their operations and their cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

ARMANINO McKENNA LLP

February 25, 2006

1

BARRIER SYSTEMS, INC. AND SUBSIDIARY
Consolidated Balance Sheets
December 31, 2005 and 2004

			2004
	2005		Restated
ASSETS
Current assets
Cash	$	57,616	$	233,929
Accounts receivable, net		3,981,741		4,433,852
Other receivables		63,137		191,644
Inventory, net		5,386,964		4,481,376
Prepaid expenses and taxes		438,500		458,488
Total current assets		9,927,958		9,799,289
Property and equipment, net		3,060,239		3,599,310
Investments		2,990,087		2,810,397
Intangible assets, net		94,713		93,558
Other non-current assets		1,500		500
Total assets	$	16,074,497	$	16,303,054
LIABILITIES AND STOCKHOLDERS ‘EQUITY
Current liabilities
Accounts payable	$	755,760	$	380,609
Accrued expenses		1,043,349		1,185,461
Line of credit		2,600,000		950,000
Current portion of capital lease obligations		10,761		4,547
Current portion of notes payable		1,189,422		1,146,353
Current portion of deferred lease revenues		890,252		3,867,393
Total current liabilities		6,489,544		7,534,363
Commissions payable		—		90,000
Capital lease obligations, net of current portion		22,664		13,641
Notes payable, net of current portion		989,141		1,587,257
Deferred lease revenues, net of current portion		509,606		272,039
Total liabilities		8,010,955		9,497,300
Stockholders’ equity
Capital stock (5,000,000 shares authorized, 922,384 shares issued and outstanding, no par value)		1,274,120		1,274,120
Retained earnings		6,417,592		5,235,744
Accumulated comprehensive income		371,830		295,890
Total stockholders’ equity		8,063,542		6,805,754
Total liabilities and stockholders’ equity	$	16,074,497	$	16,303,054

The accompanying notes are an integral part of these consolidated financial statements.

2

BARRIER SYSTEMS, INC. AND SUBSIDIARY
Consolidated Statements of Income
December 31, 2005 and 2004

				2004
	2005			Restated
Revenues	$	16,410,654		$	19,130,029
Cost of sales		8,046,500			10,669,315
Gross profit		8,364,154			8,460,714
Operating expenses		6,056,267			5,990,268
Operating income		2,307,887			2,470,446
Other income (expense)
Income from equity investments		103,750			589,187
Interest income		557			315
Interest expense		(154,823	)		(223,686	)
Gain on sale of assets		—			349,914
Total other income (expense), net		(50,516	)		715,730
Income before income taxes		2,257,371			3,186,176
Income taxes		6,146			118,188
Net income	$	2,251,225		$	3,067,988

The accompanying notes are an integral part of these consolidated financial statements.

3

BARRIER SYSTEMS, INC. AND SUBSIDIARY
Consolidated Statements of Stockholders’ Equity
December 31, 2005 and 2004

								Accumulated
								Other
	Common Stock				Retained			Comprehensive		Stockholders’			Comprehensive
	Shares		Amount		Earnings			Income		Equity			Income
Balance at December 31, 2003, as previously reported		922,384	$	1,274,120	$	3,497,929		$	175,780	$	4,947,829		$	4,947,829
Correction of an error		—		—		(407,789	)		—		(407,789	)		—
Balance at December 31, 2003, restated		922,384		1,274,120		3,090,140			175,780		4,540,040		$	4,947,829
Dividends paid		—		—		(922,384	)		—		(922,384	)		—
Net income		—		—		3,067,988			—		3,067,988			3,067,988
Foreign currency translation		—		—		—			120,110		120,110			120,110
Balance at December 31, 2004		922,384		1,274,120		5,235,744			295,890		6,805,754			3,188,098
Dividends paid		—		—		(1,069,377	)		—		(1,069,377	)		—
Net income		—		—		2,251,225			—		2,251,225			2,251,225
Foreign currency translation		—		—		—			75,940		75,940			75,940
Balance at December 31, 2005		922,384	$	1,274,120	$	6,417,592		$	371,830	$	8,063,542		$	2,327,165

The accompanying notes are an integral part of these consolidated financial statements.

4

BARRIER SYSTEMS, INC. AND SUBSIDIARY
Consolidated Statements of Cash Flows
December 31, 2005 and 2004

				2004
	2005			Restated
Cash flows from operating activities
Net income	$	2,251,225		$	3,067,988
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation		1,055,891			1,202,503
Amortization		8,944			5,720
Gain on sale of assets		—			(349,914	)
Income from equity investments		(103,750	)		(589,187	)
Changes in operating assets and liabilities
Accounts receivable, net		452,111			(2,642,204	)
Other receivables		128,507			(191,644	)
Inventory, net		(905,588	)		(838,587	)
Intangible assets		(10,099	)		(41,000	)
Prepaid expenses and taxes		18,988			280,699
Accounts payable		375,151			(262,635	)
Accrued expenses		(232,112	)		50,120
Deferred lease revenue		(2,739,574	)		969,672
Net cash provided by operating activities		299,694			661,531
Cash flows from investing activities
Cash paid for CIP		—			871,606
Proceeds from sale of assets		—			789,000
Purchase of property and equipment		(484,322	)		(1,545,289	)
Net cash provided by (used in) investing activities		(484,322	)		115,317
Cash flows from financing activities
Proceeds from notes payable		525,000			—
Repayment of notes payable		(1,080,047	)		(948,787	)
Proceeds from line of credit, net		1,650,000			950,000
Repayment of capital lease obligations		(17,261	)		—
Dividends paid		(1,069,377	)		(922,384	)
Net cash provided by (used in) financing activities		8,315			(921,171	)
Net decrease in cash		(176,313	)		(144,323	)
Cash at beginning of year		233,929			378,252
Cash at end of year	$	57,616		$	233,929
Supplemental disclosure of cash flow information
Cash paid during the year for
Interest	$	154,993		$	223,856
Income taxes	$	130,089		$	18,188
Supplemental disclosure of noncash investing activities
Acquisition of property and equipment with capital lease financing	$	32,498		$	18,188

5

1.	Summary of Significant Accounting Policies Organization
	Barrier Systems, Inc. and Subsidiary (the “Company”), was incorporated under the laws of the state of California on April 18, 1984, for the primary purpose of engaging in the manufacture, sale and lease of highway barriers. Safe Technologies, Inc., a wholly-owned subsidiary of Barrier Systems, Inc., was incorporated on January 1, 1999 for the primary purpose of providing testing services to the highway industry.
	For the year ended December 31, 2005, one customer accounted for 19% of revenue. For the year ended December 31, 2004, one customer accounted for 23% of revenue.
	Principles of consolidation
	The consolidated financial statements include the accounts of Barrier Systems, Inc. and its wholly owned subsidiary, Safe Technologies, Inc. All significant inter-company transactions have been eliminated.
	Revenue recognition
	The Company recognizes revenue from the sale of its products primarily as they are shipped and title and risk of loss passes to the customer. Lease revenue is recognized on a straight-line basis over the term of the lease.
	Cash
	The Company considers all highly liquid debt instruments purchased with an original maturity of three months or less to be cash.
	At December 31, 2005, the Company had deposits in excess of federally insured limits of approximately $1,129,000.
	Allowance for doubtful accounts
	The Company extends credit to its customers in the normal course of business and generally does not require collateral. Its customers are located throughout North America and for the year ended December 31, 2005, one customer accounted for 74% of accounts receivable. For the year ended December 31, 2004, three customers accounted for 63% of accounts receivable.

6

1.	Summary of Significant Accounting Policies (continued)
	Allowance for doubtful accounts (continued)
	Based on historical write-offs, overall economic conditions and the current aging status of its customers, the Company has established an allowance for doubtful accounts at a level considered adequate to cover anticipated credit losses on outstanding trade accounts receivable. Accounts are monitored by management on an ongoing basis and are written off by the Company when it has been determined that all available collection avenues have been exhausted. The allowance for doubtful accounts at December 31, 2005 and 2004 was $126,666 and $61,000, respectively.
	Inventory
	Inventory is stated at the lower of cost or market, with cost being determined using the weighted average method, net of a reserve for obsolescence. At December 31, 2005 and 2004, the reserve for obsolescence was $50,000.
	Depreciation and amortization
	Property and equipment are stated at cost. Depreciation is computed using the straight-line method over the estimated useful lives, generally 3 to 10 years for equipment and furniture, and 40 years for buildings and improvements. The cost of maintenance and repairs, renewals and improvements, which do not significantly extend the useful lives of the assets, are expensed as incurred; major replacements and improvements are capitalized. When assets are retired or disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gains or losses are included in income.
	Amortization of patents is computed using the straight-line method over 15 — 19 years. The Company recorded an impairment write-down in the amount of $289,339 on intangible assets during the year ended December 31, 2005.
	Income taxes
	The Company is an S Corporation. Income and losses are taxable to the individual stockholders and not to the Company. Accordingly, the Company is not subject to federal income taxes. However, the Company is subject to franchise and income taxes in certain states in which it does business.

7

1.	Summary of Significant Accounting Policies (continued)
	Investments
	The Company has a 50% interest in each of Barrier QMB Canada, Inc., QMB Barrier Systems, Inc. and QMB Investments, Inc., formerly known as 9076-0935 Quebec, Inc. These investments are carried at cost adjusted for the Company’s share of undistributed earnings or losses (“equity method”). Dividends received, if any, reduce the carrying value of the investments. The Company does not exert control over the operating and financial activities of these entities; therefore, the Company accounts for these investments using the equity method.
	Long-lived assets
	The Company reviews long-lived assets held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of the assets to future undiscounted net cash flows expected to be generated by the assets. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying value of the assets exceeds the fair value of the assets. Assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. No impairment charges were recognized during the years ended December 31, 2005 and 2004.
	Translation of foreign currencies
	The financial position and operating results of the Company’s equity investments are denominated using their local currency as their functional currency. Local currency assets and liabilities are translated at the rates of exchange on the balance sheet date. The resulting translation adjustments are recorded directly into a separate component of stockholders’ equity and totaled $75,940 and $120,110 for the years ended December 31, 2005 and 2004, respectively.
	Research and development costs
	Expenditures for research activities relating to product development and improvement are charged to expense as incurred. Research and development costs for the years ended December 31, 2005 and 2004 were $364,254 and $157,749, respectively.

8

1.	Summary of Significant Accounting Policies (continued)
	Stock-based compensation
	The Company accounts for stock-based awards to employees using the intrinsic value method under SFAS No. 123, “Accounting for Stock-Based Compensation” and SFAS No. 148 “Accounting for Stock-Based Compensation - Transition and Disclosure — an amendment of FASB Statement No. 123,” that also require disclosures as if the Company had applied the fair value method to employee awards rather than the intrinsic value method. The fair value of stock-based awards to employees is calculated through the use of option pricing models, even though such models were developed to estimate the fair value of freely tradable, fully transferable options without vesting restrictions, which differ significantly from the Company’s stock option awards. These models also require subjective assumptions, including future stock price volatility and expected time to exercise, which greatly affect the calculated values. The Company’s fair value calculations for awards from stock option plans were made using the Black-Scholes option pricing model with the following weighted average assumptions: expected term: ten years from the date of grant; stock price volatility: 0; risk free interest rate: 5.1%; and no dividends during the expected term.
	SFAS No. 123 requires the Company to provide pro forma information regarding net income (loss) as if compensation cost for the Company’s stock option plans had been determined in accordance with methods prescribed in SFAS No. 123. Under the provisions of SFAS No. 123, the Company’s net income would have decreased to the pro forma amount as follows for the year ended December 31, 2005:

          Net income

As reported	$	2,251,225
Pro forma	$	2,130,327

	Use of accounting estimates
	The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
2.	Bank Line of Credit
	The Company has a line of credit agreement with Comerica Bank in the amount of $5,000,000. The agreement expires June 30, 2006. Borrowings accrue interest at Comerica’s Base Rate or LIBOR plus 2.50% (6.3% at December 31, 2005). The line of credit is secured by substantially all of the Company’s assets. The line of credit has certain financial and non-financial covenants. At December 31, 2005, the Company was in

9

compliance with these covenants. The balance of the line of credit at December 31, 2005 and 2004 was $2,600,000 and $950,000, respectively.

3. Intangibles

Intangible assets consist of the following at December 31:

	2005			2004
Internally developed patents	$	108,775		$	104,853
Less accumulated amortization		(14,062	)		(11,295	)
	$	94,713		$	93,558

Future estimated amortization of intangible assets is as follows:

2005	$	8,944
2006		8,944
2007		8,944
2008		8,944
2009		8,944
Thereafter		49,993
	$	94,713

Amortization expense for 2005 and 2004 was $8,944 and $5,720, respectively.

4. Commissions and Sales Bonuses

The Company pays its employees a sales commission of .25% to 2% of the sales price, net of any other commissions and freight. Outside sales representatives receive commissions of up to 5% of the gross sales price. Sales bonuses are also paid to certain employees based on sales performance. As of December 31, 2005, the accrued commissions and sales bonuses payable totaled $163,374 of which $62,532 was payable to stockholders. As of December 31, 2004, the accrued commissions and sales bonuses payable totaled $323,064 of which $27,208 was payable to stockholders.

Total commission and sales bonus expense for 2005 and 2004 was $623,307 and $1,221,649, respectively.

10

5. Inventory

     Inventory consists of the following at December 31:

	2005			2004
Crash cushion parts	$	2,540,155		$	2,884,001
Barrier parts		711,302			308,049
Machine and other parts		911,130			915,467
Work in process		1,274,377			423,859
		5,436,964			4,531,376
Less reserve for obsolescence		(50,000	)		(50,000	)
	$	5,386,964		$	4,481,376

6. Property and Equipment

Property and equipment consists of the following at December 31:

	2005			2004
Land and improvements	$	344,291		$	344,291
Buildings and improvements		886,592			854,093
Machinery and equipment		2,562,590			2,284,832
Vehicles		113,022			113,022
Furniture and fixtures		115,773			100,653
		4,022,268			3,696,891
Less accumulated depreciation		(2,672,833	)		(2,471,102	)
		1,349,435			1,225,789
Leased property
Machines		5,106,976			4,976,496
Barriers		8,338,858			8,340,737
Total leased property		13,445,834			13,317,233
Less accumulated depreciation		(11,735,030	)		(10,943,712	)
		1,710,804			2,373,521
Total property and equipment	$	3,060,239		$	3,599,310

Depreciation expense for the years ended December 31, 2005 and 2004 was $1,055,891 and $1,202,503, respectively.

11

7.Notes Payable

Notes payable consists of the following:

	2005			2004
Notes payable due to Comerica, with maturity dates ranging from July 2, 2007, to October 31, 2009, with monthly principal payments ranging from $88,181 to $10,938, with interest rates ranging from 5.14% to 7.5% per annum. Notes are secured by assets of the Company	$	2,178,563		$	2,733,610
Less current portion		(1,189,422	)		(1,146,353	)
Notes payable - long-term portion	$	989,141		$	1,587,257

Principal payments due on the notes payable are as follows:

2006	$	1,189,422
2007		748,516
2008		131,250
2009		109,375
	$	2,178,563

8. Lease Commitments

Capital lease

The Company leases two trailers under capital lease obligations. Theses lease agreements require monthly payments ranging from $379 to $573 with expiration dates ranging from December 2008 to February 2009. Future minimum lease payments due under the capital lease are as follows:

2006	$	10,763
2007		12,076
2008		10,586
Total minimum lease payments		33,425
Less: current portion of capital lease		(10,761	)
	$	22,664

12

8. Lease Commitments (continued)

Operating leases

The Company leases certain equipment under non-cancelable operating lease agreements. Temporary facilities are leased on a short-term or month-to-month basis. Future minimum rental payments under the equipment operating leases are as follows:

2006	$	21,068
2007		18,877
2008		8,904
2009		6,574
2010		3,054
	$	58,477

Total rental expense for 2005 and 2004 was $17,900 and $17,140 respectively.

9. Deferred Lease Revenues

Income from equipment operating leases is earned on a straight-line basis over the term of the lease, or when the equipment is returned to the Company, if sooner. Deferred income includes billings to customers for leases in advance of when the revenue is considered earned, as well as any advance billings for sales of equipment not yet delivered. Total current receivables that relate to deferred income amounted to $0 and $1,318,722 at December 31, 2005 and 2004, respectively.

Future minimum rental income on noncancelable leases at December 31, 2005 is as follows:

2006	$	808,979
2007		353,962
2008		130,507
2009		10,876
	$	1,304,324

10.Investments

The Company has a 50% interest in each of Barrier QMB Canada Inc. (“QMB”), QMB Barrier Systems, Inc. (“QMB Barrier”) and QMB Investments, Inc., (“QMB Investments”), formerly known as 9076-0935 Quebec, Inc. QMB, QMB Barrier and QMB Investments lease and purchase equipment from the Company to sell or sublease to its customers. The

13

Company’s total revenue from the lease and sale of machines, barrier and parts to these companies was $681,283 and $554,007 in 2005 and 2004, respectively.

10. Investments (continued)

The Company’s investments in the above companies are reported using the equity method. Accordingly, the investment is recorded on the books of the Company at cost, adjusted for its share of undistributed earnings or losses and further reduced by any dividends received. QMB and QMB Barrier’s fiscal year ended on April 30, 2005 and QMB Investment’s fiscal year ended June 30, 2005. The combined results of operations and financial position of the Company’s equity basis investments are summarized below: Condensed balance sheet information as of December 31:

	2005		2004
Current assets	$	4,489,475	$	4,368,757
Property and equipment, net		1,969,274		2,113,113
Total assets	$	6,458,749	$	6,481,870
Current liabilities	$	473,897	$	852,357
Noncurrent liabilities		4,679		8,719
Total liabilities		478,576		861,076
Stockholders’ equity		5,980,173		5,620,794
Total liabilities and equity	$	6,458,749	$	6,481,870

14

Condensed income statement information as of December 31:

	2005		2004
Net sales	$	4,880,673	$	7,033,090
Gross margin	$	3,473,284	$	3,279,181
Net income	$	207,500	$	1,178,374
Company’s equity in net income of affiliates	$	103,750	$	589,187

The carrying value of the investments is as follows as of December 31:

	2005		2004
Cost of stock	$	7,722	$	7,479
Share of net undistributed earnings		2,982,365		2,802,918
Total	$	2,990,087	$	2,810,397

15

11. Stock Appreciation Right and Stock Option Plan

The Company has a stock appreciation right and stock option (SAR) plan under which a maximum of 50,000 rights and options for an equal number of shares of Company stock may be granted. SARs and options may be granted to employees (including officers), directors and consultants of the Company. The plan permits the Board of Directors to grant in tandem with any SAR an identical number of options to purchase Company stock. Recipients of a SAR and/or stock option are selected at the direction of the Board of Directors. The exercise period is at the discretion of the Board, and may range from six months to ten years after the grant date.

A SAR shall terminate three months after termination of the participant’s employment or relationship with the Company. Directors and officers of the Company may not exercise a SAR within six months after the right is granted, except in the event of death or disability.

Each SAR granted shall upon exercise entitle the participant to the economic value determined by computing the excess of the fair market value of one share of stock at the date of exercise over no less than 85% of the fair market value of one share of stock on the date the SAR was granted. Fair market value shall be determined in accordance with the provisions outlined in the plan.

The Board of Directors has determined that the fair market value of SARs is $14 per share during 2005.

During 2005, all SARS expired and the 37,000 fully vested SARs options were paid at a total cost of approximately $140,000.

12. Incentive Stock Option Plan

The Company’s 2000 Employee Stock Plan (the “Plan”) allows the Company to grant options to employees for up to 100,000 shares of common stock. The options, which shall not have a term greater than 10 years when granted vest up to a five year period. The exercise price of each option equals the fair value of the Company’s stock on the date of grant, as determined by the Board of Directors.

During 2005 the Company inadvertently issued options in excess of the amount initial approved in the Plan. The Company is in the process of amending the plan to cover these additional options. Management expects approval during early 2006.

16

12. Incentive Stock Option Plan (continued)

A summary of the activity in the plan is as follows:

			Weighted
			Average
			Exercise
	Shares		Price
Outstanding and committed, beginning of year		79,000	$	12.00
Granted		70,000		14.00
Outstanding and committed, end of year		149,000		12.94
Options exercisable at year end		79,000	$	12.00

The weighted average fair value of options granted during the year ended December 31, 2005 was $14. The weighted average remaining contractual life is 7.14 years.

The Company had 79,000 shares as exercisable vested             shares as of December 31, 2005. The Company accounts for stock options to employees under APB Opinion No. 25. Accordingly, no compensation cost has been recognized for the Plan.

13. Profit-Sharing and 401(k) Plan

The Company has a defined contribution 401(k) plan for all employees. The Company may make matching contributions at the discretion of the Company up to one-half of the first 6% of compensation contributed by each participant. Company contributions to the plan during 2005 and 2004 amounted to $87,696 and $91,088, respectively.

14. Correction of an Error

The 2004 financial statements have been restated to correct an error made in 2003 and prior years whereby certain intangible assets were amortized beyond the end of their useful lives. The effects of this restatement on the 2004 financial statements is:

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	Previously Reported		Restated
Intangible assets	$	446,740	$	93,558
Retained earnings, beginning of year	$	3,497,929	$	3,090,140
Retained earnings, end of year	$	5,588,926	$	5,235,744
Amortization expense	$	60,327	$	5,720
Income before taxes	$	3,131,569	$	3,186,176
Taxes	$	118,188	$	118,188
Income after taxes	$	3,013,381	$	3,067,988

15. Subsequent Events

Sale of equity investment

At December 31, 2005, the Company had received an offer to purchase its Canadian equity investment for $4,000,000 plus a percentage of sales from moveable barriers and attenuators for the next three years.

Stock purchase agreement

The Company has received a letter of intent to sell 100% of the Company’s stock for approximately $35,000,000 subject to due diligence procedures. As of February 25, 2006, due diligence procedures were in progress.

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Unaudited Pro Forma Condensed Financial Statements

     On June 1, 2006, Lindsay Manufacturing Co. (“Lindsay,” or the “Company”) completed the acquisition of Barrier Systems, Inc. (“BSI”) and its subsidiary Safe Technologies, Inc. through the merger of a wholly owned subsidiary of Lindsay with and into BSI (the “Merger”). As a result, BSI has become a wholly-owned subsidiary of Lindsay. BSI is engaged in the manufacture of roadway barriers and traffic flow products that are used to reduce traffic congestion and enhance safety.

     Total cash merger consideration to be paid to the stockholders of BSI and holders of options to acquire BSI stock was $35,000,000 less (i) approximately $3,796,000 representing liabilities of BSI for borrowed money which were repaid at closing by Lindsay, (ii) approximately $29,000 representing liabilities of BSI for borrowed money which were not repaid at closing and (iii) approximately $906,000 of transaction costs of BSI. Of the cash merger consideration, $3,500,000 is held in escrow to secure the indemnification obligations of the shareholders and option holders of BSI and $1,000,000 is held in escrow pending calculation of the final merger consideration based on the adjusted net assets of BSI at closing. After completion of the closing balance sheet the purchase price was reduced by approximately $1,200,000 related to the net asset test discussed above. The Company funded the payment of the merger consideration using a combination of its own working capital and borrowing under a new credit agreement.

     The unaudited pro forma condensed statement of operations for the twelve-months ended August 31, 2005 was prepared as if the acquisition had taken place on September 1, 2004. The unaudited pro forma condensed statement of operations for the nine-months ended May 31, 2006 was prepared as if the acquisition had taken place on September 1, 2004. The unaudited pro forma condensed balance sheet as of May 31, 2006 was prepared as if the acquisition had taken place on May 31, 2006. The acquisition of BSI will be accounted for as a purchase in accordance with Statement of Financial Accounting Standards No. 141, “Business Combinations,” with Lindsay treated as the acquirer. See descriptions of Pro Forma Adjustments following the Pro Forma Condensed Financial Statements.

     The following unaudited pro forma condensed financial statements give effect to the purchase of BSI. This information should be read in conjunction with the audited consolidated financial statements of Lindsay Manufacturing Co. for the year ended August 31, 2005 as filed on Form 10-K with the Securities and Exchange Commission, as well as with the audited financial statements of Barrier Systems, Inc. for the years ended December 31, 2005 and 2004, which are included in this Form 8-K document in Exhibit 99.1. The pro forma data does not purport to be indicative of the results of future operations or the combined results that would have occurred had the purchase been consummated at the beginning of the period presented. This data has been included as required by the rules and regulations of the Securities and Exchange Commission and is provided for comparative purposes only.

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Lindsay Manufacturing Co. and Subsidiaries
Pro Forma Condensed BALANCE SHEET
May 31, 2006

						Pro Forma Adjustments
	Lindsay			BSI		(1)			Other			Pro Forma
($ in thousands, except par values)
ASSETS
Current Assets:
Cash and cash equivalents	$	30,088		$	6	$	(6	)	$	(4,452)	(3)	$	25,636
Marketable securities		11,941			—								11,941
Receivables, net		42,387			3,321		(3,321	)		3,321	(2)		45,708
Inventories, net		24,803			4,833		(4,833	)		5,403	(2)		30,206
Deferred income taxes		4,441			—								4,441
Other current assets		3,926			409		(409	)		409	(2)		4,335
Total current assets		117,586			8,569		(8,569	)		4,681			122,267
Long-term marketable securities		10,857			—								10,857
Property, plant and equipment, net		17,489			5,266		(5,266	)		9,600	(2)		27,089
Other noncurrent assets		7,415			101		(101	)		24,693	(2)		32,108
Total assets	$	153,347		$	13,936	$	(13,936	)	$	38,974		$	192,321
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	9,726		$	3,108	$	(3,108	)	$	3,108		$	12,834
Other current liabilities		20,515			5,489		(5,489	)		9,774	(2)(3)		30,289
Total current liabilities		30,241			8,597		(8,597	)		12,882			43,123
Pension benefits liabilities		5,251			—								5,251
Other noncurrent liabilities		179			888		(888	)		26,092	(2)(3)		26,271
Total liabilities		35,671			9,485		(9,485	)		38,974			74,645
Shareholders’ equity:
Preferred stock, ($1 par value, 2,000,000 shares authorized, no shares issued and outstanding)		—			—								—
Common stock, ($1 par value, 25,000,000 shares authorized, 17,584,031, 17,565,184 and 17,568,084 shares issued in May 2006 and 2005 and August 2005, respectively)		17,584			1,274		(1,274	)					17,584
Capital in excess of stated value		5,144			—								5,144
Retained earnings		190,013			2,805		(2,805	)					190,013
Less treasury stock, (at cost, 6,048,448 shares)		(96,547	)		—								(96,547	)
Accumulated other comprehensive income, net		1,482			372		(372	)					1,482
Total shareholders’ equity		117,676			4,451		(4,451	)					117,676
Total liabilities and shareholders’ equity	$	153,347		$	13,936	$	(13,936	)	$	38,974		$	192,321

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Lindsay Manufacturing Co. and Subsidiaries
Pro Forma Condensed Statement of Operations — Unaudited
For the twelve-months ended August 31, 2005

						Pro Forma
	Lindsay		BSI			Adjustments			Pro Forma
(in thousands, except per share amounts)
Operating revenues	$	177,271	$	19,657		$	(588)	(6)	$	196,340
Cost of operating revenues		143,700		10,770			1,357	(4)(6)		155,827
Gross profit		33,571		8,887			(1,945	)		40,513
Operating expenses:
Selling expense		11,031		2,755			322	(4)		14,108
General and administrative expense		14,377		3,086						17,463
Engineering and research expense		2,665		213						2,878
Total operating expenses		28,073		6,054			322			34,449
Operating income		5,498		2,833			(2,267	)		6,064
Interest income (expense), net		1,179		(176	)		(1,639)	(3)		(636	)
Other income, net		273		329						602
Earnings before income taxes		6,950		2,986			(3,906	)		6,030
Income tax provision		2,112		—			498	(5)		2,610
Net earnings	$	4,838	$	2,986		$	(4,404	)	$	3,420
Basic net earnings per share	$	0.41							$	0.29
Diluted net earnings per share	$	0.40							$	0.29
Average shares outstanding		11,811								11,811
Diluted effect of stock options		152								152
Average shares outstanding assuming dilution		11,963								11,963

The financial statements of BSI were derived by adding the eight months ended August 31, 2005, to BSI’s year ended December 31, 2004, and removing the eight months ended August 31, 2004.

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Lindsay Manufacturing Co. and Subsidiaries
Pro Forma Condensed Statements of Operations — Unaudited
For the nine-months ended May 31, 2006

						Pro Forma
	Lindsay		BSI			Adjustments			Pro Forma
(in thousands, except per share amounts)
Operating revenues	$	169,429	$	17,157		$	(2,102)	(6)	$	184,484
Cost of operating revenues		135,102		8,656			(1,193)	(4)(6)		142,565
Gross profit		34,327		8,501			(909	)		41,919
Operating expenses:
Selling expense		9,262		2,545			242	(4)		12,049
General and administrative expense		12,300		4,192			(1,700)	(7)		14,792
Engineering and research expense		1,951		243						2,194
Total operating expenses		23,513		6,980			(1,458	)		29,035
Operating income		10,814		1,521			549			12,884
Interest income (expense), net		1,374		(164	)		(1,003)	(3)		207
Other income, net		250		—						250
Earnings before income taxes		12,438		1,357			(454	)		13,341
Income tax provision		3,795		—			131	(5)		3,926
Net earnings	$	8,643	$	1,357		$	(585	)	$	9,415
Basic net earnings per share	$	0.75							$	0.82
Diluted net earnings per share	$	0.74							$	0.80
Average shares outstanding		11,524								11,524
Diluted effect of stock options		174								174
Average shares outstanding assuming dilution		11,698								11,698

The financial statements of BSI were derived by adding the five months ended May 31, 2005, to BSI’s year ended December 31, 2005, and removing the eight months ended August 31, 2005.

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BASIS OF PRESENTATION:

The unaudited pro forma condensed balance sheet as of May 31, 2006 and condensed statements of income of Lindsay Manufacturing Co. (“Lindsay” or the “Company”) for the year ended August 31, 2005 and the nine-months ended May 31, 2006 have been prepared to give effect to the acquisition of substantially all of the assets of Barrier Systems, Inc. (“BSI”). The acquired assets included accounts receivable, inventory and property, plant and equipment. The acquisition was effective June 1, 2006.

The pro forma condensed statements of income include the complete operations of BSI with pro forma adjustments. In addition, proforma adjustments are presented to reflect depreciation based upon the allocated purchase price of the assets, to reflect income tax expense on reported BSI income not originally recorded because of its Subchapter S status and to reflect income taxes on the pro forma adjustments.

The pro forma condensed balance sheet has been prepared to give effect to the acquisition as if such transaction had taken place on May 31, 2006, and as if such transaction had taken place on September 1, 2004 for purposes of the pro forma condensed statements of income.

The preliminary pro forma allocation of the purchase price of BSI is as follows (in thousands):

Purchase Price:
Cash	$	33,800
Estimated transaction costs		652
Total purchase price		34,452
Plus: liabilities to be assumed by Lindsay
Other current liabilities		8,597
Long term liabilities		377
Total purchase price plus liabilities assumed	$	43,426
Purchase Price Allocation:
Fair value of tangible net assets acquired	$	18,840
Patents		13,700
Trademarks and trade name		2,700
Other intangible assets		4,640
Goodwill		3,546
Total Purchase price allocation		43,426

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PRO FORMA ENTRIES:

(1)	To eliminate the historical balance sheet of BSI.
(2)	To record the acquisition of BSI assets.
(3)	Lindsay entered into a credit agreement with a bank and borrowed $30.0 million, at 6.05%, to partially fund the acquisition of BSI. Remaining purchase price and transaction costs were funded using working capital.
(4)	To reflect depreciation and amortization based upon the allocated purchase cost of assets acquired. The amount also reflects an increase from the cost of sales on inventory at fair value.
(5)	To reflect income tax expense on BSI operations not originally reflected because of its Subchapter S status. An estimated statutory rate of 37% is used as the effective tax rate. The asset step-up in purchase cost allocation is not tax deductible in the pro forma financials. The interest expenses on the borrowed funds is tax deductible and has been accounted for in the pro forma financials.
(6)	To eliminate inter-company sales and cost of sales.
(7)	To eliminate one-time transaction related bonus payments of approximately $1.7 million, that were incurred by BSI in association with the transaction.

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