EXHIBIT 99.1
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
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
TUESDAY, MARCH 23, 2004
LINDSAY MANUFACTURING CO. REPORTS FISCAL 2004 SECOND-
QUARTER, SIX-MONTH RESULTS; UPDATES OUTLOOK
OMAHA, NEB., MARCH 23, 2004--LINDSAY MANUFACTURING CO. (NYSE: LNN), a leading
manufacturer of center pivot, lateral move, and hose reel irrigation systems,
today announced results for its fiscal second quarter ended February 29, 2004.
Revenues grew 7 percent from the same period a year ago, and earnings per
diluted share were $0.29 compared with $0.42 in the year-ago period, as rapid
increases in steels costs led to lower gross margin. The company also reported a
58% increase in its order backlog over the year-ago period.
SECOND-QUARTER RESULTS
Second-quarter fiscal 2004 total revenues were $51.5 million, up 7 percent from
$48.1 million for the prior-year period. Irrigation equipment revenues were up 8
percent to $48.7 million as domestic irrigation revenues increased 3 percent
while international revenues, including exports, grew 24 percent. Diversified
products revenues were unchanged from the fiscal 2003 second quarter, but rose 8
percent sequentially.
"U.S. farmers are enjoying good profitability, worldwide agricultural commodity
prices are strong, and awareness of the need to make efficient use of existing
water resources is growing. These factors are driving continued strong order
flow from both domestic and international customers, even with pivot price
increases due to escalating steel costs," said Rick Parod, president and chief
executive officer. "Additionally, we are pleased to see the sequential upturn in
diversified products. We have been working diligently to bring in new business
from various industrial sectors and this quarter, we won a new project for a
division of a Fortune 500 company."
Gross profit was $11.6 million compared with $12.3 million and gross margin
decreased to 22.6 percent from 25.5 percent year-over-year, reflecting the
significant increases in steel costs. Operating expenses increased, as planned,
primarily reflecting increases in domestic and international irrigation sales
personnel costs, general corporate and group health insurance costs, and
incremental legal and professional fees required to support Sarbanes-Oxley
initiatives. Operating income of $4.8 million compared with $6.5
million during the same period last year. Net earnings were $3.5 million, or
$0.29 per diluted share, compared with $5.0 million, or $0.42 per diluted share,
in last year's second quarter.
Commenting on the margins, Parod said, "While we instituted a 3 percent price
increase on orders received on or after December 1 and another 3 percent
increase as of February 1, steel costs have continued to rise with unprecedented
speed, and we have not been able to pass on the increased costs quickly enough
to maintain our margins. As of March 1, we have instituted a steel surcharge on
all orders."
Lindsay's order backlog at February 29, 2004, improved significantly to $32.3
million compared with $21.9 million at August 31, 2003 and $20.4 million at
February 28, 2003.
SIX-MONTH RESULTS
Total revenues for the six months were $88.0 million, an 8 percent increase from
$81.6 million for the prior year's six-month period. Irrigation equipment
revenues of $82.7 million grew 9 percent from a year ago, while diversified
products revenues were $5.3 million, or 5 percent less than the previous year.
Net earnings were $4.6 million, or $0.38 per diluted share, compared with $6.1
million, or $0.52 per diluted share, for the first six months of fiscal 2003.
Shareholders' equity at February 29, 2004, was $108.3 million, or $9.21 per
outstanding common share, compared with $98.0 million, or $8.35 per outstanding
common share, at February 28, 2003. Cash and marketable securities at February
29, 2004 were $50.3 million compared with $41.2 million at February 28, 2003.
OUTLOOK UPDATE
Lindsay continues to expect that revenues will grow approximately 8 to 10
percent for fiscal 2004. "On the domestic front, we are still seeing strong
commodity prices and good farmer profitability, which are driving demand for our
products. International commodity prices, especially for soybeans, are also
strong, and our overseas operations will benefit from these factors. We have
just completed the move into our new facility in Brazil, which will more than
double our capacity there," Parod said.
"However, given the unprecedented and continued increases in steel costs, we no
longer expect growth in earnings and earnings per share in fiscal 2004. Earnings
are now projected to be between the levels achieved in fiscal 2002 and fiscal
2003," he added.
Parod continued, "We are also taking action to more tightly control operating
expenses at each of our operating units and we expect to see operating expense
leverage during the full fiscal 2004 year. We are making progress toward our
goal of leveraging our international operations by increasing volume and
improving efficiencies to bring their margins up near the levels earned in the
domestic market.
"We have the strong cash flow and financial flexibility to create shareholder
value by pursuing a balance of strategic acquisitions and organic growth to
support our mission to
be the worldwide leader in providing intelligent water and plant nutrient
management systems that improve productivity and result in efficient utilization
of natural resources," Parod said.
Under Lindsay's share repurchase plan, management has an existing authorization
to purchase up to 1.3 million shares of the company's stock, depending on market
conditions and other considerations.
SECOND-QUARTER CONFERENCE CALL
Lindsay's second-quarter fiscal 2004 investor conference call is scheduled for
11 a.m. ET 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. Lindsay will have a slide presentation available to augment
management's formal presentation, which will be accessible via the company's
website at www.lindsaymanufacturing.com.
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 February 29, 2004, Lindsay had approximately 11.8 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 AND SIX MONTHS ENDED FEBRUARY 29, 2004 AND
FEBRUARY 28, 2003
<Table>
<Caption>
(UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
---------------------------- ----------------------------
FEBRUARY FEBRUARY FEBRUARY FEBRUARY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2004 2003 2004 2003
------------ ------------ ------------ ------------
Operating revenues $ 51,475 $ 48,127 $ 87,988 $ 81,589
Cost of operating revenues 39,865 35,865 69,024 62,316
------------ ------------ ------------ ------------
Gross profit 11,610 12,262 18,964 19,273
------------ ------------ ------------ ------------
Operating expenses:
Selling expense 2,891 2,459 5,758 5,099
General and administrative expense 3,279 2,693 6,272 5,271
Engineering and research expense 676 634 1,436 1,232
------------ ------------ ------------ ------------
Total operating expenses 6,846 5,786 13,466 11,602
------------ ------------ ------------ ------------
Operating income 4,764 6,476 5,498 7,671
Interest income, net 361 390 785 813
Other income, net 41 242 490 338
------------ ------------ ------------ ------------
Earnings before income taxes 5,166 7,108 6,773 8,822
Income tax provision 1,663 2,156 2,177 2,677
------------ ------------ ------------ ------------
Net earnings $ 3,503 $ 4,952 $ 4,596 $ 6,145
============ ============ ============ ============
Basic net earnings per share $ 0.30 $ 0.42 $ 0.39 $ 0.52
============ ============ ============ ============
Diluted net earnings per share $ 0.29 $ 0.42 $ 0.38 $ 0.52
============ ============ ============ ============
Average shares outstanding 11,756 11,733 11,749 11,723
Diluted effect of stock options 210 158 217 188
------------ ------------ ------------ ------------
Average shares outstanding assuming dilution 11,966 11,891 11,966 11,911
============ ============ ============ ============
Cash dividends per share $ 0.050 $ 0.035 $ 0.100 $ 0.070
============ ============ ============ ============
</Table>
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 29, 2004, FEBRUARY 28, 2003 AND AUGUST 31, 2003
<Table>
<Caption>
(UNAUDITED) (UNAUDITED)
FEBRUARY FEBRUARY AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 2004 2003 2003
------------ ------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 1,724 $ 5,431 $ 15,368
Marketable securities 11,733 7,971 8,770
Receivables, net 39,761 36,657 22,970
Inventories, net 24,829 24,315 20,019
Deferred income taxes 2,496 1,212 2,301
Other current assets 1,932 944 1,010
------------ ------------ ------------
Total current assets 82,475 76,530 70,438
Long-term marketable securities 36,813 27,813 38,674
Property, plant and equipment, net 14,348 14,270 13,889
Other noncurrent assets 8,296 8,319 8,219
------------ ------------ ------------
Total assets $ 141,932 $ 126,932 $ 131,220
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 12,863 $ 12,900 $ 8,228
Other current liabilities 18,251 13,946 16,053
------------ ------------ ------------
Total current liabilities 31,114 26,846 24,281
Pension benefits liabilities 2,315 1,688 2,315
Noncurrent liabilities 163 426 333
------------ ------------ ------------
Total liabilities 33,592 28,960 26,929
------------ ------------ ------------
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, 17,481,879, 17,458,052 and 17,459,561
shares issued in February 2004 and 2003, and August 2003) 17,482 17,458 17,460
Capital in excess of stated value 2,620 2,467 2,484
Retained earnings 177,754 168,589 174,333
Less treasury stock, (at cost, 5,724,069 shares) (89,898) (89,898) (89,898)
Accumulated other comprehensive gain (loss) 382 (644) (88)
------------ ------------ ------------
Total shareholders' equity 108,340 97,972 104,291
------------ ------------ ------------
Total liabilities and shareholders' equity $ 141,932 $ 126,932 $ 131,220
============ ============ ============
</Table>
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 29, 2004 AND
FEBRUARY 28, 2003
(UNAUDITED)
<Table>
<Caption>
FEBRUARY FEBRUARY
($ IN THOUSANDS) 2004 2003
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 4,596 $ 6,145
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization 1,506 1,759
Amortization of marketable securities premiums, net 81 (97)
Loss on sale of fixed assets 6 --
Provision for uncollectible accounts receivable (129) (141)
Equity in net earnings of equity method investments 196 (157)
Deferred income taxes (150) 218
Other, net (52) (70)
Changes in assets and liabilities:
Receivables, net (16,457) (13,131)
Inventories, net (4,869) (8,732)
Other current assets (969) (162)
Accounts payable, trade 4,603 6,832
Other current liabilities 685 (1,105)
Current taxes payable 1,287 1,411
Other noncurrent assets and liabilities 40 (428)
------------ ------------
Net cash provided by operating activities (9,626) (7,658)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (2,047) (1,553)
Proceeds from sale of property, plant and equipment 11 52
Purchases of marketable securities held to maturity (2,982) (6,135)
Proceeds from maturities of marketable securities held to maturity 4,496 9,153
Purchases of marketable securities available for sale (3,790) --
Proceeds from maturities of marketable securities available for sale 1,315 --
------------ ------------
Net cash (used in) provided by investing activities (2,997) 1,517
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options under stock option plan 164 23
Dividends paid (1,175) (821)
------------ ------------
Net cash used in financing activities (1,011) (798)
------------ ------------
Effect of exchange rate changes on cash (10) (55)
Net (decrease) in cash and cash equivalents (13,644) (6,994)
Cash and cash equivalents, beginning of period 15,368 12,425
------------ ------------
Cash and cash equivalents, end of period $ 1,724 $ 5,431
============ ============
</Table>