Exhibit 99.1
news
FINANCIAL
RELATIONS BOARD
RE: LINDSAY MANUFACTURING CO.
2707 NORTH 108TH STREET
SUITE 102
OMAHA, NEBRASKA 68164
402-428-2131
FOR FURTHER INFORMATION:
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Bruce C. Karsk David Downing Marilyn Windsor Diane Hettwer Tim Grace
EVP, Treasurer and Secretary VP and CFO General Inquiries Analyst Inquiries Media Inquiries
402-829-6803 402-827-6235 702-515-1260 312-640-6760 312-640-6667
FOR IMMEDIATE RELEASE
THURSDAY, OCTOBER 14, 2004
LINDSAY MANUFACTURING CO. REPORTS FISCAL 2004
FOURTH-QUARTER, FULL-YEAR RESULTS
OMAHA, NEB., OCTOBER 14, 2004--LINDSAY MANUFACTURING CO. (NYSE: LNN), a leading
manufacturer of center pivot, lateral move, and hose reel irrigation systems,
today announced results for the fourth quarter and fiscal year ended August 31,
2004.
FOURTH-QUARTER RESULTS
Fourth-quarter fiscal 2004 revenues rose 41 percent to $46.4 million from $33.0
million for the same prior-year quarter. Net earnings were $345,000, or $0.03
per diluted share, compared with $1.9 million, or $0.16 per diluted share, in
the prior year's fourth quarter. The fiscal 2004 period's net earnings were
reduced by $1.7 million pretax in year-end LIFO, physical inventory and other
inventory-related adjustments. Net earnings were also reduced by $850,000 in
pretax charges related to the previously disclosed insolvency and liquidation of
a Kansas dealership. Combined, these items unfavorably affected diluted earnings
per share by $0.14. The fiscal 2003 period benefited from $660,000 pretax in
favorable year-end inventory adjustments.
Lindsay saw sales gains across all business and geographical segments. Total
irrigation equipment revenues grew 44 percent to $42.4 million from $29.5
million in the prior fiscal year's fourth quarter. Domestic irrigation sales
rose by 38 percent, while international irrigation revenues were up 57 percent.
The company estimates that one-third of the domestic revenue gain was due to
increased volume, with the remainder of the increase attributable to price
increases. Diversified products turned in an improved performance with revenues
of $4.0 million compared with $3.5 million in the year-ago period, an increase
of 16 percent.
Rick Parod, president and chief executive officer, commented, "Demand for our
products was strong throughout the year, and the fourth quarter continued this
trend. We were pleased with our unit volume growth in both the domestic and
international irrigation markets, particularly in view of the rapid rise in
equipment prices. At the same time, it has been disappointing to see the
continued negative impact on our margins from frequent steel cost increases and
the competitive environment."
Fourth-quarter gross margin declined to 16.3 percent from 24.2 percent a year
ago as historically high steel prices, coupled with the previously mentioned
inventory adjustments, impacted the cost of revenues. Operating income was
$402,000 versus $2.3 million in the comparable fiscal 2003 quarter. Operating
expenses rose to $7.2 million from $5.7 million, primarily due to a $600,000 bad
debt charge, part of the $850,000 in charges related to the insolvency of the
Kansas dealership previously discussed. Other operating expense increases were
attributable to Sarbanes-Oxley compliance, insurance and Stettyn, the company's
newly acquired business in South Africa. However, Lindsay's focus on cost
control and revenue growth allowed the company to leverage its operating
expenses. For the fiscal 2004 period, operating expenses were 15.4 percent of
revenue compared with 17.3 percent of revenue in the fiscal 2003 period.
Parod stated, "Gross margins for the quarter continued to reflect the
significant increases in steel costs, which essentially doubled during this
fiscal year. During the fourth quarter, steel prices rose by approximately 6.5
percent, which was a much lesser rate than we experienced in earlier quarters.
To date in fiscal 2005, steel prices appear to have reached a plateau."
Lindsay's order backlog at August 31, 2004, was $16.5 million compared with
$21.9 million at August 31, 2003. "The ending backlog was below last year's
level due to changes in our pricing policy. We now require orders booked to be
shipped within 30 days or they are subject to re-pricing," Parod said.
FISCAL 2004 RESULTS
Fiscal 2004 total revenues were $196.7 million, an increase of 20 percent from
$163.4 million a year ago. Net earnings were $9.3 million, or $0.78 per diluted
share, in fiscal 2004 compared with $12.9 million, or $1.08 per diluted share,
in fiscal 2003, a decrease of 28 percent.
Irrigation equipment revenues increased by 21 percent to $183.8 million from
$151.3 million in the prior fiscal year. In the domestic market, revenue
expansion was split approximately equally between volume gains and price
increases. Diversified products revenues were $12.9 million compared with $12.1
million in fiscal 2003, a 7 percent gain. Fiscal 2004 gross margin was 20.1
percent compared with 24.3 percent in the prior year. Operating expenses were
14.0 percent of revenue compared with 14.3 percent in fiscal 2003.
Shareholders' equity at August 31, 2004, was $112.3 million, or $9.54 per
outstanding common share, compared with $104.3 million, or $8.89 per outstanding
common share, at August 31, 2003. Cash and marketable securities at August 31,
2004, were $56.3 million compared with $62.8 million at August 31, 2003.
On July 14, 2004, Lindsay announced that it had increased its regular quarterly
cash dividend by 10 percent to $0.055 per share from $0.05 per share. The new
annual indicated rate is $0.22 per share, up from an annual indicated rate of
$0.20 per share.
OUTLOOK
Parod commented, "During fiscal 2004, steel costs rose at an unprecedented rate,
driving frequent and cumulatively significant increases in our selling prices
for irrigation equipment. For fiscal 2005, we expect unit volume growth in the
international and domestic markets for irrigation equipment, but we remain
uncertain as to the effect of future steel cost changes and the impact on
selling prices and demand for our products. We believe that we are taking
appropriate action to shorten our pricing commitment period on orders received,
maintain pricing discipline, prudently manage steel inventories, and place
emphasis on achieving costs reductions. Our objective is to drive future gross
margins to at least the levels achieved in fiscal 2003. We will continue to take
these and other actions in pursuit of our long-term goals of sustainable revenue
growth of 8 percent to 12 percent, gross margin of 23 percent to 27 percent,
operating margin of 10 percent to 13 percent, and return on beginning equity of
14 percent to 20 percent.
"Our strategy is to use our financial resources to deliver growth and value to
shareholders through multiple avenues. We will continue to use, over time, a
balanced approach that includes accretive acquisitions, organic growth
opportunities, share repurchases and dividend payments," he 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.
FOURTH-QUARTER AND FISCAL YEAR-END CONFERENCE CALL
Lindsay's 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, Stettyn 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 August 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-MONTHS AND FISCAL YEARS ENDED AUGUST 31, 2004 AND 2003
THREE MONTHS ENDED FISCAL YEAR ENDED
--------------------------- --------------------------
(UNAUDITED) (UNAUDITED) (UNAUDITED)
AUGUST AUGUST AUGUST AUGUST
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) 2004 2003 2004 2003
- ---------------------------------------- ---- ---- ---- ----
Operating revenues $ 46,422 $ 32,952 $196,696 $163,374
Cost of operating revenues 38,856 24,978 157,179 123,628
-------- -------- -------- --------
Gross profit 7,566 7,974 39,517 39,746
-------- -------- -------- --------
Operating expenses:
Selling expense 2,560 2,756 11,148 10,517
General and administrative expense 3,892 2,277 13,419 10,285
Engineering and research expense 712 671 2,910 2,578
-------- -------- -------- --------
Total operating expenses 7,164 5,704 27,477 23,380
-------- -------- -------- --------
Operating income 402 2,270 12,040 16,366
Interest income, net 330 414 1,456 1,577
Other (expense) income, net (167) 260 270 844
-------- -------- -------- --------
Earnings before income taxes 565 2,944 13,766 18,787
Income tax provision 220 1,024 4,480 5,900
-------- -------- -------- --------
Net earnings $ 345 $ 1,920 $ 9,286 $ 12,887
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Basic net earnings per share $ 0.03 $ 0.16 $ 0.79 $ 1.10
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Diluted net earnings per share $ 0.03 $ 0.16 $ 0.78 $ 1.08
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Average shares outstanding 11,766 11,735 11,756 11,729
Diluted effect of stock options 173 208 198 167
-------- -------- -------- --------
Average shares outstanding assuming 11,939 11,943 11,954 11,896
dilution
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Cash dividends per share $ 0.055 $ 0.050 $ 0.205 $ 0.155
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LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AUGUST 31, 2004 AND 2003
(UNAUDITED)
AUGUST AUGUST
($ IN THOUSANDS, EXCEPT PAR VALUES) 2004 2003
- ----------------------------------- ---- ----
ASSETS
Current Assets:
Cash and cash equivalents $ 8,973 $ 15,368
Marketable securities 14,802 8,770
Receivables, net 34,369 22,970
Inventories, net 19,780 20,019
Deferred income taxes 1,828 2,301
Other current assets 2,045 1,010
--------- ---------
Total current assets 81,797 70,438
Long-term marketable securities 32,527 38,674
Property, plant and equipment, net 16,355 13,889
Other noncurrent assets 8,098 8,219
--------- ---------
Total assets $ 138,777 $ 131,220
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 9,117 $ 8,228
Other current liabilities 15,021 16,053
--------- ---------
Total current liabilities 24,138 24,281
Pension benefits liabilities 2,170 2,315
Noncurrent liabilities 172 333
--------- ---------
Total liabilities 26,480 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, 17,493,841 and 17,459,561 shares
issued in August 2004 and 2003) 17,494 17,460
Capital in excess of stated value 2,966 2,484
Retained earnings 181,209 174,333
Less treasury stock, (at cost, 5,724,069 shares) (89,898) (89,898)
Accumulated other comprehensive gain (loss) 526 (88)
--------- ---------
Total shareholders' equity 112,297 104,291
--------- ---------
Total liabilities and shareholders' equity $ 138,777 $ 131,220
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LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED AUGUST 31, 2004 AND 2003
(UNAUDITED)
AUGUST AUGUST
($ IN THOUSANDS) 2004 2003
- ---------------- ---- ----
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 9,286 $ 12,887
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization 2,969 3,525
Amortization of marketable securities premiums, net 149 (145)
Gain on sale of fixed assets (29) (76)
Stock option tax benefits 157 32
Provision for uncollectible accounts receivable 760 (275)
Equity in net loss (earnings) of equity method investments 73 (125)
Deferred income taxes 881 830
Other, net (205) (152)
Changes in assets and liabilities:
Receivables, net (11,507) 2,514
Inventories, net 920 (2,578)
Other current assets (1,051) (119)
Accounts payable, trade 749 (564)
Other current liabilities 435 189
Current taxes payable (1,780) 888
Other noncurrent assets and liabilities (602) (1,524)
-------- --------
Net cash provided by operating activities 1,205 15,307
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment (5,037) (1,918)
Acquisition of business (1,025) --
Proceeds from sale of property, plant and equipment 43 63
Purchases of marketable securities held to maturity (2,982) (12,465)
Proceeds from maturities of marketable securities held
to maturity 6,676 14,232
Purchases of marketable securities available for sale (11,817) (10,445)
Proceeds from sale of marketable securities available
for sale 8,456 --
-------- --------
Net cash used in investing activities (5,686) (10,533)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of options under stock option plan 492 39
Dividends paid (2,410) (1,819)
-------- --------
Net cash used in financing activities (1,918) (1,780)
-------- --------
Effect of exchange rate changes on cash 4 (51)
-------- --------
Net (decrease) increase in cash and cash equivalents (6,395) 2,943
Cash and cash equivalents, beginning of period 15,368 12,425
-------- --------
Cash and cash equivalents, end of period $ 8,973 $ 15,368
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