Lindsay (LNN) 8-K Lindsay Corporation Reports Fiscal 2014 Third Quarter Results

EXHIBIT 99.1

2222 NO. 111^TH ST.  OMAHA, NE 68164 TEL: 402-829-6800 FAX: 402-829-6836

For further information, contact:
LINDSAY CORPORATION:	HALLIBURTON INVESTOR RELATIONS:
Jim Raabe	Hala Elsherbini or Geralyn DeBusk
Vice President & Chief Financial Officer	972-458-8000
402-827-6579

Lindsay Corporation Reports Fiscal 2014 Third Quarter Results

OMAHA, Neb., June 25, 2014—Lindsay Corporation (NYSE: LNN), a leading provider of irrigation systems and infrastructure products, today announced results for its third quarter ended May 31, 2014.

Third Quarter Results

Third quarter fiscal 2014 revenues were $169.9 million, versus $219.5 million of revenues in the same prior year period. Net earnings were $16.5 million or $1.28 per diluted share compared with $26.1 million or $2.01 per diluted share in the prior year.

Total irrigation equipment revenues decreased 26 percent to $149.0 million from $200.9 million in the prior fiscal year’s third quarter primarily due to lower crop prices. U.S. irrigation revenues of $88.1 million declined 26 percent while international irrigation revenues of $60.9 million decreased 26 percent. Infrastructure revenues increased 13 percent to $20.9 million with increases in road safety, rail and Road Zipper product lines.

Gross margin was 28.4 percent of sales compared to 28.7 percent of sales in the prior year’s third quarter. Gross margin in irrigation declined by less than one percentage point primarily due to fixed cost deleverage on lower sales. Infrastructure gross margins improved by approximately three percentage points due to sales mix and leverage on higher sales.

Operating expenses were $23.0 million compared to $23.5 million in the same prior year period. Excluding the acquired Lakos filtration business, operating expenses decreased $2.7 million with the largest decreases in incentive compensation and bad debt expense Operating expenses including Lakos were 13.6 percent of sales in the third quarter of fiscal 2014 compared with 10.7 percent of sales in the prior year period. Operating margins were 14.8 percent in the third quarter, versus 18.0 percent in the prior year period.

Cash and cash equivalents of $182.1 million were $11.8 million higher compared to the end of the third quarter in the prior fiscal year, while debt decreased $1.1 million. During the quarter the Company repurchased 129,104 shares for $11.2 million. Year to date the Company repurchased 207,624 shares for $17.8 million.

Backlog of unshipped orders at May 31, 2014 was $73.6 million compared with $80.0 million at May 31, 2013 and $89.3 million at February 28, 2014. Backlog increased in the U.S. irrigation and infrastructure markets and declined in the international irrigation market over the same time last year. The current year infrastructure backlog includes a $12.8 million Road Zipper System order for the Golden Gate Bridge which is expected to be recognized in revenue in fiscal 2015. The prior year irrigation backlog included $23.0 million of equipment and installation remaining on a project in Iraq, of which $2.6 million remained in backlog at the end of the third quarter of fiscal 2014.

The June 2014 escalation of political instability has made it more difficult to complete the Company’s contract in Iraq. At May 31, 2014 the Company had a total exposure of $4.4 million on this contract, including $2.5 million of accounts receivable, which is not currently due, and a $1.9 million performance bond securing completion of the contract. The Company has not provided a reserve for these amounts, but will continue to assess the situation as developments in the country evolve. Further installation of equipment in Iraq has been put on hold as a result of the escalation of hostilities in the region.

Nine Month Results

Total revenues for the nine months ended May 31, 2014 were $470.4 million, a 13 percent decrease from $542.5 million of revenues in the same prior year period. Net earnings were $40.2 million or $3.11 per diluted share compared with $60.1 million or $4.66 per diluted share in the prior year.

Total irrigation equipment revenues decreased 17 percent to $414.1 million from $497.8 million during the first nine months of the prior fiscal year. U.S. irrigation revenues of $260.8 million declined 21 percent, while international irrigation revenues of $153.3 million decreased 8 percent due primarily to near-completion of the Iraq project. Infrastructure revenues increased 26 percent to $56.3 million.

Outlook

Rick Parod, president and chief executive officer, commented, “Lower commodity prices led to decreases in irrigation sales throughout North America during the primary selling season. Spring storms have created additional demand for replacement units, which increased our U.S. irrigation backlog at the end of the quarter. However, overall favorable growing conditions in North America continue to restrain crop prices. The lower crop prices, along with the reduction in the Sec. 179 tax benefits, create a headwind for irrigation equipment demand as compared to the previous year. Coupled with the addition of the conflicts in Ukraine and the Middle East, we have seen some slowing in international projects, as well.”

Parod continued, “We have achieved a significant change in our Infrastructure segment. Revenues have grown 26% to-date and the business is profitable. We continue to see opportunities for growth in global applications of our technologies and in expansion of our global market share. A multi-year highway bill with similar or improved funding levels would likely benefit the segment even further.”

Parod added, “Drivers for the Company’s markets of population growth, expanded food production and efficient water use, and infrastructure expansion support our expectation for long-term growth. We anticipate a continuation of lower agricultural equipment demand in the near term, and have implemented appropriate expense controls. However we will continue investment in critical growth initiatives, and the execution of our capital allocation plan announced in early January 2014.”

Third-Quarter Conference Call

Lindsay’s fiscal 2014 third quarter investor conference call is scheduled for 11:00 a.m. Eastern Time today. Interested investors may participate in the call by dialing (888) 321-8161 in the U.S., or (706) 758-0065 internationally, and referring to conference ID # 57122482. Additionally, the conference call will be simulcast live on the Internet, and can be accessed via the investor relations section of the Company’s Web site, www.lindsay.com. Replays of the conference call will remain on our Web site through the next quarterly earnings release. The Company will have a slide presentation available to augment management’s formal presentation, which will also be accessible via the Company’s Web site.

About the Company

Lindsay manufactures and markets irrigation equipment primarily used in agricultural markets which increase or stabilize crop production while conserving water, energy, and labor. The Company also manufactures and markets infrastructure and road safety products under the Lindsay Transportation Solutions trade name. At May 31, 2014 Lindsay had approximately 12.7 million shares outstanding, which are traded on the New York Stock Exchange under the symbol LNN.

For more information regarding Lindsay Corporation, see the Company’s Web site at www.lindsay.com.

Concerning Forward-looking Statements

This release contains forward-looking statements that are subject to risks and uncertainties and which reflect management’s current beliefs and estimates of future economic circumstances, industry conditions, company performance and financial results. You can find a discussion of many of these risks and uncertainties in the annual, quarterly and current reports that the Company files with the Securities and Exchange Commission. Forward-looking statements include information concerning possible or assumed future results of operations of the Company and those statements preceded by, followed by or including the words “anticipate,” “estimate,” “believe,” “intend,” “expect,” “outlook,” “could,” “may,” “should,” “will,” or similar expressions. For these statements, the Company claims the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995. The Company undertakes no obligation to update any forward-looking information contained in this press release.

Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended						Nine months ended
	May 31,			May 31,			May 31,			May 31,
($ and shares in thousands, except per share amounts)	2014			2013			2014			2013
Operating revenues	$	169,936		$	219,542		$	470,411		$	542,451
Cost of operating revenues		121,687			156,506			339,339			386,194
Gross profit		48,249			63,036			131,072			156,257
					��
Operating expenses:
Selling expense		9,954			8,674			29,244			23,995
General and administrative expense		10,002			11,783			31,099			32,056
Engineering and research expense		3,071			3,029			8,602			8,946
Total operating expenses		23,027			23,486			68,945			64,997
Operating income		25,222			39,550			62,127			91,260
Other income (expense):
Interest expense		(45	)		(32	)		(140	)		(258	)
Interest income		295			100			587			367
Other income (expense), net		28			132			(468	)		252
Earnings before income taxes		25,500			39,750			62,106			91,621
Income tax expense		9,001			13,687			21,923			31,479
Net earnings	$	16,499		$	26,063		$	40,183		$	60,142
Earnings per share:
Basic	$	1.28		$	2.03		$	3.12		$	4.69
Diluted	$	1.28		$	2.01		$	3.11		$	4.66
Shares used in computing earnings per share:
Basic		12,843			12,858			12,881			12,819
Diluted		12,889			12,947			12,927			12,894
Cash dividends declared per share	$	0.260		$	0.115		$	0.650		$	0.345

Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

	May 31,			May 31,			August 31,
($ and shares in thousands, except par values)	2014			2013			2013
ASSETS
Current Assets:
Cash and cash equivalents	$	182,051		$	170,215		$	151,927
Receivables, net		103,513			130,924			120,291
Inventories, net		79,010			72,458			68,607
Deferred income taxes		14,748			11,810			12,705
Other current assets		19,992			18,307			15,261
Total current assets		399,314			403,714			368,791
Property, Plant and Equipment:
Cost		160,969			144,199			153,422
Less accumulated depreciation		(95,940	)		(87,293	)		(88,358	)
Property, plant and equipment, net		65,029			56,906			65,064
Intangibles, net		33,060			22,974			36,007
Goodwill		37,211			30,111			37,414
Other noncurrent assets		3,957			4,416			5,020
Total assets	$	538,571		$	518,121		$	512,296
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current Liabilities:
Accounts payable	$	47,352		$	56,902		$	42,276
Current portion of long-term debt		—			1,071			—
Other current liabilities		65,173			65,259			59,816
Total current liabilities		112,525			123,232			102,092
Pension benefits liabilities		6,141			6,603			6,324
Deferred income taxes		13,999			8,809			15,415
Other noncurrent liabilities		7,869			7,715			7,827
Total liabilities		140,534			146,359			131,658
Shareholders’ Equity:
Preferred stock		—			—			—
Common stock		18,636			18,560			18,571
Capital in excess of stated value		51,896			48,392			49,764
Retained earnings		437,415			396,825			405,580
Less treasury stock		(108,714	)		(90,961	)		(90,961	)
Accumulated other comprehensive loss, net		(1,196	)		(1,054	)		(2,316	)
Total shareholders’ equity		398,037			371,762			380,638
Total liabilities and shareholders’ equity	$	538,571		$	518,121		$	512,296

Lindsay Corporation and Subsidiaries

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended
	May 31,			May 31,
($ in thousands)	2014			2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings	$	40,183		$	60,142
Adjustments to reconcile net earnings to net cash provided by operating activities:
Depreciation and amortization		11,131			9,380
Provision for uncollectible accounts receivable		891			1,502
Deferred income taxes		(3,692	)		(5,304	)
Share-based compensation expense		3,218			3,452
Other, net		(430	)		176
Changes in assets and liabilities:
Receivables		17,014			(49,375	)
Inventories		(9,694	)		(19,898	)
Other current assets		(3,595	)		(7,712	)
Accounts payable		4,501			25,203
Other current liabilities		773			18,233
Current income taxes payable		4,657			4,551
Other noncurrent assets and liabilities		962			536
Net cash provided by operating activities		65,919			40,886
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment		(7,836	)		(8,149	)
Proceeds from sale of property, plant and equipment		19			21
Proceeds from settlement of net investment hedges		280			1,536
Payments for settlement of net investment hedges		(2,017	)		(2,051	)
Net cash used in investing activities		(9,554	)		(8,643	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options		455			1,781
Common stock withheld for payroll tax withholdings		(2,027	)		(2,441	)
Principal payments on long-term debt		—			(3,214	)
Excess tax benefits from share-based compensation		742			2,751
Repurchase of common shares		(17,753	)		—
Dividends paid		(8,348	)		(4,432	)
Net cash used in financing activities		(26,931	)		(5,555	)
Effect of exchange rate changes on cash and cash equivalents		690			83
Net change in cash and cash equivalents		30,124			26,771
Cash and cash equivalents, beginning of period		151,927			143,444
Cash and cash equivalents, end of period	$	182,051		$	170,215