EXHIBIT 99.1
AT THE COMPANY: AT FRB/WEBER SHANDWICK:
Bruce C. Karsk Marilyn Windsor Diane Hettwer Tim Grace
Executive VP and CFO General Inquiries Analyst Inquiries Media Inquiries
402-829-6803 702-515-1260 312-640-6760 312-640-6667
FOR IMMEDIATE RELEASE
MONDAY, JUNE 23, 2003
LINDSAY MANUFACTURING CO. REPORTS
FISCAL 2003 THIRD-QUARTER, NINE-MONTH RESULTS
OMAHA, NEB., JUNE 23, 2003--LINDSAY MANUFACTURING CO. (NYSE: LNN), a leading
manufacturer of center pivot, lateral move, and hose reel irrigation systems,
today reported third-quarter revenues of $48.8 million compared with $44.1
million for the third quarter last year. Net earnings for the quarter were $0.41
per diluted share compared with $0.40 per diluted share for the year-ago period.
THIRD-QUARTER RESULTS
Irrigation equipment revenues for the quarter were $45.8 million, a 10 percent
increase from $41.5 million during the third quarter of the prior year.
Diversified products revenues rose to $3.0 million from $2.6 million in the
year-ago period and $2.8 million in the previous quarter.
"I am pleased to report that we saw continued revenue growth from our core
irrigation equipment business and an upturn in our diversified products revenues
for the quarter," commented Rick Parod, president and chief executive officer.
"Our expanded product line generated revenue growth in the domestic irrigation
equipment market. We also experienced growth in international irrigation
equipment revenues. The offshore operations that we have added over the past few
years yielded new revenues that more than offset a decline in revenues from
exports to the Middle East during the quarter. The 14 percent growth in our
outsourced manufacturing revenues reflects the benefits from changes made in the
diversified products business at the beginning of the year."
Gross profit rose to $12.5 million from $11.6 million in the prior-year third
quarter, while gross margin was 25.6 percent compared with 26.2 percent in the
third quarter last year and 25.5 percent in this year's second quarter.
Operating expenses for the quarter were
greater than the prior year's third quarter and were in line with the company's
expectations as the increase related primarily to investments in growth
initiatives, both in domestic and international markets. Third-quarter operating
income of $6.4 million was unchanged from the third quarter last year. Net
earnings grew 2 percent to $4.8 million, or $0.41 per diluted share, compared
with $4.7 million, or $0.40 per diluted share, for the third quarter last year.
Lindsay's order backlog at May 31, 2003, was $12.2 million compared with $12.6
million at May 31, 2002.
NINE-MONTH RESULTS
Total revenues for the nine months ended May 31, 2003, were $130.4 million, a 15
percent increase from $113.3 million for the prior year's nine-month period.
Irrigation equipment revenues of $121.8 million were 18 percent greater than a
year ago, while diversified products revenues were $8.6 million or 14 percent
less than the previous year. Excluding new revenues from acquisitions and
start-ups, organic revenue growth was 6 percent for the nine-month period. Net
earnings grew 30 percent to $12.7 million, or $1.06 per diluted share, from $9.8
million, or $0.82 per diluted share, for the first nine months of fiscal 2002.
The 2003 nine-month net earnings includes other income of $1.8 million, or $0.15
per share, to recognize the cash value of certain life insurance policies.
Excluding this item, nine-month net earnings rose 11 percent to $10.9 million,
or $0.91 per diluted share.
During the first quarter of fiscal 2003, Lindsay recorded both other income and
other non-current assets of $1.7 million to reflect the cumulative cash value of
four life insurance policies that the Company maintains on current and former
executive officers. These policies were established in 1993 to insure the
potential liability under the supplemental retirement plan for these executives.
Lindsay is the sole named beneficiary and owner of these policies, which are
held in trust. The $1.7 million of cumulative surrender value at November 30,
2002, was generated largely through annual premium payments made from calendar
years 1993 through 2000. The Company expensed the premiums as incurred and had
not previously recorded the increases in the cash surrender value of the
policies.
Because the income recorded for the cash surrender value of these policies is
non-taxable income, Lindsay's effective tax rate for the nine months was reduced
from 31.0 percent of pretax income to 27.8 percent of pretax income.
The change in the cash surrender value of these life insurance policies was
equal to $0.01 to $0.02 per share per year for fiscal years 1994 through 2002,
and, therefore, was not material to Lindsay's net earnings for any of these
previous years. The Company now records the increase in the cash surrender value
of these life insurance policies to other income on a current basis. The Company
anticipates that future increases in the cash surrender value of these policies
will not be material, and that the increases in value will contribute
approximately $0.01 per share per year to net earnings.
Shareholders' equity at May 31, 2003, was $103.5 million, or $8.82 per
outstanding common share, compared with $90.2 million, or $7.71 per outstanding
common share, at May 31, 2002. Cash and marketable securities at May 31, 2003,
were $54.2 million compared with $50.9 million at May 31, 2002. Year-to-date
operating cash flow was approximately $6.0 million compared with $10.2 million
for last year's nine-month period.
FISCAL 2003 OUTLOOK
Commenting on the outlook for the balance of the year, Parod stated, "The
outlook remains positive for Lindsay. We expect continued growth and expansion
in our international operations, and we will continue to add to our product
offerings to drive future revenue growth. In the United States, industry
dynamics continue to be favorable. Key agricultural commodity prices are
approximately 20 percent greater than year-ago levels, export demand for farm
products is increasing, net farm income is up significantly, farmland values
continue to strengthen, and financing rates for irrigation equipment purchases
remain at low levels. On both the domestic and international fronts, there is
increasing pressure on farmers to conserve water, energy and labor, which will
continue to drive the long-term demand for our products. Based on these factors,
we continue to believe that we will achieve revenue and earnings growth for the
fourth quarter and for our fiscal year."
THIRD-QUARTER CONFERENCE CALL
Lindsay's fiscal 2003 third-quarter investor conference call is scheduled for 11
a.m. EDT today. This call will be simulcast and available over the Internet via
the web site www.vcall.com. The webcast will be available for replay for a
period of 30 days.
ABOUT THE COMPANY
Lindsay manufactures and markets Zimmatic, Greenfield, and Perrot center pivot,
lateral move and hose reel irrigation systems and GrowSmart controls, all of
which are used by farmers to increase or stabilize crop production while
conserving water, energy, and labor. The Company also produces large diameter
steel tubing and provides outsourced manufacturing and production services for
other companies. At May 31, 2003, Lindsay had approximately 11.7 million shares
outstanding, which are traded on the New York Stock Exchange under the symbol
LNN.
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. Forward-looking statements include the information concerning
possible or assumed future results of operations of the Company and those
statements preceded by, followed by or including the words "expectation,"
"outlook," "could," "may," "should," or similar expressions. For these
statements, we claim the protection of the safe harbor for forward-looking
statements contained in the Private Securities Litigation Reform Act of 1995.
FOR MORE INFORMATION REGARDING LINDSAY MANUFACTURING CO.,
SEE LINDSAY'S WEBSITE AT www.lindsaymanufacturing.com
-- Financial Tables Follow --
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
OPERATIONS FOR THE THREE MONTHS AND NINE
MONTHS ENDED MAY 31, 2003 AND 2002
(UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
------------------ --------------------
MAY MAY MAY MAY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2003 2002 2003 2002
- ---------------------------------------- ---- ---- ---- ----
Operating revenues $ 48,833 $ 44,133 $130,422 $113,346
Cost of operating revenues 36,334 32,580 98,650 86,101
-------- -------- -------- --------
Gross profit 12,499 11,553 31,772 27,245
-------- -------- -------- --------
Operating expenses:
Selling expense 2,662 2,260 7,761 6,419
General and administrative expense 2,737 2,259 8,008 6,335
Engineering and research expense 675 595 1,907 1,681
Total operating expenses 6,074 5,114 17,676 14,435
Operating income 6,425 6,439 14,096 12,810
Interest income, net 350 376 1,163 1,169
Other income, net 246 17 2,275 172
Earnings before income taxes 7,021 6,832 17,534 14,151
Income tax provision 2,199 2,118 4,876 4,387
-------- -------- -------- --------
Net earnings $ 4,822 $ 4,714 $ 12,658 $ 9,764
======== ======== ======== ========
Basic net earnings per share $ 0.41 $ 0.40 $ 1.08 $ 0.84
======== ======== ======== ========
Diluted net earnings per share $ 0.41 $ 0.40 $ 1.06 $ 0.82
======== ======== ======== ========
Average shares outstanding 11,734 11,704 11,727 11,663
Diluted effect of stock options 144 210 173 180
-------- -------- -------- --------
Average shares outstanding assuming dilution 11,878 11,914 11,900 11,843
======== ======== ======== ========
Cash dividends per share $ 0.035 $ 0.035 $ 0.105 $ 0.105
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LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 31, 2003 AND 2002 AND AUGUST 31, 2002
(UNAUDITED) (UNAUDITED)
MAY MAY AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 2003 2002 2002
- ----------------------------------- ---- ---- ----
ASSETS
Current Assets:
Cash and cash equivalents $ 12,970 $ 15,232 $ 12,425
Marketable securities 9,288 8,915 13,289
Receivables, net 29,303 26,697 23,729
Inventories, net 18,178 16,820 15,583
Deferred income taxes 2,369 2,088 2,573
Other current assets 953 603 782
--------- --------- ---------
Total current assets 73,061 70,355 68,381
Long-term marketable securities 31,943 26,768 25,419
Property, plant and equipment, net 13,956 14,883 14,512
Other noncurrent assets 7,190 5,101 4,715
--------- --------- ---------
Total assets $ 126,150 $ 117,107 $ 113,027
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 6,173 $ 8,721 $ 6,068
Other current liabilities 14,327 16,296 13,984
--------- --------- ---------
Total current liabilities 20,500 25,017 20,052
Noncurrent liabilities 2,120 1,867 2,311
--------- --------- ---------
Total liabilities 22,620 26,884 22,363
--------- --------- ---------
Commitments and Contingencies
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, 17,458,052, 17,430,348 and 17,430,348 shares
issued in May 2003 and 2002 and August 2002) 17,458 17,431 17,430
Capital in excess of stated value 2,467 2,203 2,472
Retained earnings 173,000 161,147 161,574
Less treasury stock, (at cost, 5,724,069 shares) (89,898) (89,898) (89,898)
Accumulated other comprehensive gain (loss) 503 (660) (914)
--------- --------- ---------
Total shareholders' equity 103,530 90,223 90,664
--------- --------- ---------
Total liabilities and shareholders' equity $ 126,150 $ 117,107 $ 113,027
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