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, JUNE 22, 2004
LINDSAY MANUFACTURING CO. REPORTS FISCAL 2004 THIRD-
QUARTER, NINE-MONTH RESULTS
OMAHA, NEB., JUNE 22, 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 third quarter ended May 31, 2004.
Revenues grew 28 percent from the same period last year, and earnings per
diluted share were $0.36 compared with $0.41 in the year-ago period.
THIRD-QUARTER RESULTS
Third-quarter fiscal 2004 total revenues were $62.3 million, up 28 percent from
$48.8 million for the prior-year period. Irrigation equipment revenues were up
28 percent to $58.7 million as domestic irrigation revenues increased 22 percent
while international revenues, including exports, grew 49 percent. Diversified
products revenues for the quarter were 18 percent higher than the comparable
period last year.
"Demand for our products has been robust this season, and we have seen strength
in domestic as well as international markets," said Rick Parod, president and
chief executive officer. "While U.S. crop prices have softened somewhat from
their highs earlier this year, prices are still better than in 2003, and
domestic farm income is healthy. Our operations in South America, Africa and
Europe and our export business all saw double-digit revenue growth for the
quarter."
Gross profit was $13.0 million compared with $12.5 million and gross margin
decreased to 20.9 percent from 25.6 percent year-over-year, reflecting the
significant increases in steel costs this fiscal year. Operating expenses
increased, as planned, due to incremental professional and legal fees required
to support Sarbanes-Oxley initiatives and increases in sales personnel cost and
general corporate insurance cost. However, operating expenses as a percentage of
revenue improved to 11.0 percent from 12.4 percent in the fiscal third quarter
last year. Operating income was $6.1 million compared with $6.4 million during
the same period last year. Net earnings were $4.3 million, or $0.36 per diluted
share, compared with $4.8 million, or $0.41 per diluted share, in last year's
third quarter.
Parod commented, "Margins for the quarter continued to reflect the impact of the
rapid increases in steel costs, which essentially doubled inside of a six-month
period. Recently, steel costs have begun to level off, which should allow our
pricing to catch up and thus strengthen our ongoing margins."
Lindsay's order backlog at May 31, 2004 improved to $19.8 million compared with
$12.2 million at May 31, 2003, reflecting increases in both pricing and volume.
NINE-MONTH RESULTS
Total revenues for the nine months were $150.3 million, a 15 percent increase
from $130.4 million for the prior-year period. Irrigation equipment revenues of
$141.4 million grew 16 percent from a year ago, while diversified products
revenues were 3 percent higher than the previous year. Gross profit was $32.0
million compared with $31.8 million and gross margin decreased to 21.3 percent
from 24.4 percent year-over-year, reflecting the significant increases in steel
costs this fiscal year. Operating expenses increased, as planned, due to
increased sales and administrative personnel costs, incremental costs related to
the company's Sarbanes-Oxley initiatives, and greater engineering and research
expenditures. Net earnings were $8.9 million, or $0.75 per diluted share,
compared with $11.0 million, or $0.92 per diluted share, for the nine months
ended May 31, 2003.
Shareholders' equity at May 31, 2004 was $111.8 million, or $9.50 per
outstanding common share, compared with $103.5 million, or $8.82 per outstanding
common share, at May 31, 2003. Cash and marketable securities at May 31, 2004
were $57.2 million compared with $54.2 million at May 31, 2003.
OUTLOOK UPDATE
Lindsay now expects that revenues will grow approximately 14 to 16 percent for
fiscal 2004. "Continued healthy U.S. farm economics are driving domestic demand.
On the international side, we are also seeing positive economic factors, and we
expect to benefit from greater revenue contributions from our recently expanded
Brazilian and South African operations," Parod said.
"We have completed the move into our new facility in Brazil, which has more than
doubled our capacity there. I am pleased to report that the move caused no
disruptions to operations. In South Africa, we recently completed the
acquisition of Stettyn, a manufacturer of center pivots. In combination with our
existing business that we established in fiscal 2003, we believe that we are now
the market share leader in South Africa and the Sub-Sahara region," he added.
The company continues to closely control operating expenses at each of its
operating units and realized operating expense leverage for the third-quarter.
"Additionally, we are seeing quarter-over-quarter progress toward our goal of
bringing our international operations' margins up near the levels earned in the
domestic market, and we believe that we will continue to narrow the gap during
the fiscal fourth quarter," Parod stated.
Commenting on the earnings outlook, Parod said, "While our revenue growth is
expected to be strong and margins are now normalizing, given the unprecedented
escalation in steel costs during the fiscal year, we anticipate fiscal 2004
earnings per share will be slightly above the level achieved in fiscal 2002,
which was $0.90 per share." He noted that while the Stettyn acquisition will
contribute to revenues during the fourth quarter, it should have no impact on
earnings for the balance of fiscal 2004, and will be modestly accretive to
earnings thereafter.
"Our strategy is to use our financial resources to deliver growth and value to
shareholders through multiple avenues. An accretive acquisition, such as
Stettyn, is just one method to enhance shareholder value. We will continue to
use, over time, a balanced approach that includes accretive acquisitions,
organic growth opportunities, share repurchases and dividend payments," Parod
concluded.
Under Lindsay's share repurchase plan, management has an existing authorization
to purchase up to 1.2 million shares of the company's stock.
THIRD-QUARTER CONFERENCE CALL
Lindsay's third-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 May 31, 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 NINE MONTHS ENDED MAY 31, 2004 AND 2003
<Table>
<Caption>
(UNAUDITED) (UNAUDITED)
THREE MONTHS ENDED NINE MONTHS ENDED
-------------------------- -------------------------
MAY MAY MAY MAY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2004 2003 2004 2003
---------- ---------- ---------- ----------
Operating revenues $ 62,286 $ 48,833 $ 150,274 $ 130,422
Cost of operating revenues 49,299 36,334 118,323 98,650
---------- ---------- ---------- ----------
Gross profit 12,987 12,499 31,951 31,772
---------- ---------- ---------- ----------
Operating expenses:
Selling expense 2,830 2,662 8,588 7,761
General and administrative expense 3,255 2,737 9,527 8,008
Engineering and research expense 762 675 2,198 1,907
---------- ---------- ---------- ----------
Total operating expenses 6,847 6,074 20,313 17,676
---------- ---------- ---------- ----------
Operating income 6,140 6,425 11,638 14,096
Interest income, net 341 350 1,126 1,163
Other (expense) income, net (53) 246 437 584
---------- ---------- ---------- ----------
Earnings before income taxes 6,428 7,021 13,201 15,843
Income tax provision 2,083 2,199 4,260 4,876
---------- ---------- ---------- ----------
Net earnings $ 4,345 $ 4,822 $ 8,941 $ 10,967
========== ========== ========== ==========
Basic net earnings per share $ 0.37 $ 0.41 $ 0.76 $ 0.94
========== ========== ========== ==========
Diluted net earnings per share $ 0.36 $ 0.41 $ 0.75 $ 0.92
========== ========== ========== ==========
Average shares outstanding 11,760 11,734 11,752 11,727
Diluted effect of stock options 187 144 207 173
---------- ---------- ---------- ----------
Average shares outstanding assuming dilution 11,947 11,878 11,959 11,900
========== ========== ========== ==========
Cash dividends per share $ 0.050 $ 0.035 $ 0.150 $ 0.105
========== ========== ========== ==========
</Table>
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 31, 2004 AND 2003 AND AUGUST 31, 2003
<Table>
<Caption>
(UNAUDITED) (UNAUDITED)
MAY MAY AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 2004 2003 2003
------------ ------------ ------------
ASSETS
Current Assets:
Cash and cash equivalents $ 12,055 $ 12,970 $ 15,368
Marketable securities 12,692 9,288 8,770
Receivables, net 36,427 29,303 22,970
Inventories, net 22,700 20,972 20,019
Deferred income taxes 2,539 1,220 2,301
Other current assets 2,142 953 1,010
------------ ------------ ------------
Total current assets 88,555 74,706 70,438
Long-term marketable securities 32,462 31,943 38,674
Property, plant and equipment, net 14,992 13,956 13,889
Other noncurrent assets 8,394 8,339 8,219
------------ ------------ ------------
Total assets $ 144,403 $ 128,944 $ 131,220
============ ============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 9,879 $ 8,967 $ 8,228
Other current liabilities 20,261 14,327 16,053
------------ ------------ ------------
Total current liabilities 30,140 23,294 24,281
Pension benefits liabilities 2,315 1,688 2,315
Noncurrent liabilities 179 432 333
------------ ------------ ------------
Total liabilities 32,634 25,414 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, 17,485,679, 17,458,052 and
17,459,561 shares issued in May 2004 and 2003,
and August 2003) 17,486 17,458 17,460
Capital in excess of stated value 2,677 2,467 2,484
Retained earnings 181,511 173,000 174,333
Less treasury stock, (at cost, 5,724,069 shares) (89,898) (89,898) (89,898)
Accumulated other comprehensive gain (loss) (7) 503 (88)
------------ ------------ ------------
Total shareholders' equity 111,769 103,530 104,291
------------ ------------ ------------
Total liabilities and shareholders' equity $ 144,403 $ 128,944 $ 131,220
============ ============ ============
</Table>
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED MAY 31, 2004 AND 2003
(UNAUDITED)
<Table>
<Caption>
MAY MAY
($ IN THOUSANDS) 2004 2003
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 8,941 $ 10,967
Adjustments to reconcile net earnings to net cash (used in) provided by
operating activities:
Depreciation and amortization 2,242 2,679
Amortization of marketable securities premiums, net 109 (154)
Gain on sale of fixed assets (30) (52)
Provision for uncollectible accounts receivable 178 226
Equity in net loss (earnings) of equity method investments 235 (104)
Deferred income taxes (134) 204
Other, net (56) (103)
Changes in assets and liabilities:
Receivables, net (13,432) (5,800)
Inventories, net (2,522) (5,389)
Other current assets (1,335) (171)
Accounts payable, trade 1,694 2,899
Other current liabilities 3,379 (990)
Current taxes payable 661 1,333
Other noncurrent assets and liabilities (630) 617
---------- ----------
Net cash (used in) provided by operating activities (700) 6,162
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (3,308) (2,143)
Proceeds from sale of property, plant and equipment 90 88
Purchases of marketable securities held to maturity (2,982) (6,339)
Proceeds from maturities of marketable securities held to maturity 6,676 9,153
Purchases of marketable securities available for sale (7,371) (5,156)
Proceeds from sale of marketable securities available for sale 5,861 --
---------- ----------
Net cash used in investing activities (1,034) (4,397)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options under stock option plan 225 23
Dividends paid (1,763) (1,232)
---------- ----------
Net cash used in financing activities (1,538) (1,209)
---------- ----------
Effect of exchange rate changes on cash (41) (11)
---------- ----------
Net (decrease) increase in cash and cash equivalents (3,313) 545
Cash and cash equivalents, beginning of period 15,368 12,425
---------- ----------
Cash and cash equivalents, end of period $ 12,055 $ 12,970
========== ==========
</Table>