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EXHIBIT 99.1
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
WEDNESDAY, DECEMBER 22, 2004
LINDSAY MANUFACTURING CO. REPORTS FISCAL FIRST-QUARTER 2005 RESULTS
OMAHA, NEB., DECEMBER 22, 2004 -- LINDSAY MANUFACTURING CO. (NYSE: LNN), a
leading manufacturer of center pivot, lateral move, and hose reel irrigation
systems, today announced results for the first quarter ended November 30, 2004.
FIRST-QUARTER RESULTS
First-quarter fiscal 2005 total revenues rose 9 percent to $39.8 million from
$36.5 million for the year-ago period. Net earnings were $175,000, or $0.01 per
diluted share, compared with $1.1 million, or $0.09 per diluted share, in the
prior year's first quarter.
Total irrigation equipment revenues grew 4 percent to $35.4 million from $34.0
million in the prior fiscal year's first quarter, driven by a strong performance
from international. Domestic irrigation revenues declined 2 percent, while
international irrigation revenues were up 19 percent. Diversified products
turned in an improved performance with revenues of $4.4 million compared with
$2.5 million in the year-ago period, an increase of 72 percent.
Gross margin declined to 16.5 percent from 20.1 percent a year ago. Gross
selling margins in the domestic market were near the prior-year levels, however,
they were negatively impacted by higher overhead allocations per unit due to
lower production levels and higher factory spending. While margins in foreign
facilities continued to improve, they remain lower than domestic irrigation. The
quarter's operating loss was $467,000 versus operating income of $734,000 in the
comparable fiscal 2004 quarter. Operating expenses rose 6 percent to $7.0
million from $6.6 million, due to increases in insurance, audit and tax
preparation costs, and incremental operating expenses of Stettyn, the South
African business acquired in the fourth quarter of fiscal 2004. However,
operating leverage continued to improve, with operating expenses at 17.7 percent
of revenue compared with 18.1 percent of revenue in the fiscal 2004 period.
Interest and other income totaled $645,000. Net earnings were $175,000, or $0.01
per diluted share, compared with $1.1 million, or $0.09 per diluted share, in
the first quarter of fiscal 2004.
Rick Parod, president and chief executive officer, commented, "Our first quarter
was a mixture of positive performances in the international markets and
disappointing results in the domestic market and factory efficiency. We began
the quarter working off of a lower backlog, which was reduced, in part, by the
changes made in our pricing policy in fiscal 2004 that allowed us to reprice
orders in backlog more than 30 days, thus eliminating the ability of dealers to
lock in pricing with extended delivery dates. In addition, demand was strong at
the end of fiscal 2004 as our dealers anticipated additional price increases and
took on additional inventory. During the first quarter of fiscal 2005, our
dealers continued to experience strong quote activity, but the purchase rate was
slower. This was due to significantly higher equipment prices, reflecting the
steel cost increases during calendar year 2004, coupled with overall lower
commodity prices.
"International irrigation and diversified products turned in very good
performances," he continued. "Revenues were up, and we saw solid contributions
from Stettyn. While we still have work to do to boost margins in our foreign
operations, I am pleased to report that gross margins improved for those
businesses."
Parod added, "In diversified products, our strategy of supplementing our
traditional outsourcing business for agricultural customers with new
relationships outside of that sector is beginning to pay off. We won an initial
piece of business with GE Transportation Systems, Global Signaling, and have
recently expanded the relationship. We will continue to focus on new
relationships and sales of our proprietary products."
Lindsay's order backlog at November 30, 2004, was $13.2 million compared with
$16.5 million at August 31, 2004, and $38.7 million at November 30, 2003. The
decline in ending backlog for the first quarter of fiscal 2005 reflects
Lindsay's change in pricing policy and lower demand partially due to customers'
uncertainty regarding future steel cost changes.
Shareholders' equity at November 30, 2004, was $113.2 million, or $9.62 per
outstanding common share, compared with $105.6 million, or $8.99 per outstanding
common share, at November 30, 2003. Cash and marketable securities at November
30, 2004, were $43.6 million compared with $56.0 million at November 30, 2003.
OUTLOOK
Parod stated, "The global, long-term dynamics of our business remain very
strong. The world population is growing, drought conditions continue to create
demand for irrigation and water conservation and, while commodity prices have
come off of their highs, in historical terms they remain strong and farm income
will benefit.
"This fiscal year, our most significant challenge will be the strengthening of
our margins," he added. "By enhancing manufacturing processes and leveraging
infrastructure costs through higher volumes, we are seeing progress in moving
our international margins up to the historic levels of our domestic business.
Importantly, steel prices have stabilized and with the changes made in our
pricing policy last fiscal year, margins have begun to normalize."
Parod concluded, "We continue to pursue 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. We will continue to pursue our growth
initiatives and leverage our strong cash flow and financial flexibility to
create shareholder value by seeking a balance of organic growth opportunities,
accretive acquisitions, share repurchases, and dividend payments."
FIRST-QUARTER CONFERENCE CALL
Lindsay's first-quarter fiscal 2005 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 November 30, 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 ENDED NOVEMBER 30, 2004 AND 2003
(UNAUDITED)
THREE MONTHS ENDED
---------------------------
NOVEMBER NOVEMBER
2004 2003
-------- --------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ---------------------------------------
Operating revenues $ 39,767 $ 36,513
Cost of operating revenues 33,194 29,159
-------- --------
Gross profit 6,573 7,354
-------- --------
Operating expenses:
Selling expense 2,747 2,867
General and administrative expense 3,597 2,993
Engineering and research expense 696 760
-------- --------
Total operating expenses 7,040 6,620
-------- --------
Operating income (loss) (467) 734
Interest income, net 261 424
Other income, net 384 449
-------- --------
Earnings before income taxes 178 1,607
Income tax provision 3 514
-------- --------
Net earnings $ 175 $ 1,093
======== ========
Basic net earnings per share $ 0.01 $ 0.09
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Diluted net earnings per share $ 0.01 $ 0.09
======== ========
Average shares outstanding 11,772 11,741
Diluted effect of stock options 213 224
-------- --------
Average shares outstanding assuming dilution 11,985 11,965
======== ========
Cash dividends per share $ 0.055 $ 0.050
======== ========
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 2004 AND 2003 AND AUGUST 31, 2004
(UNAUDITED) (UNAUDITED)
NOVEMBER NOVEMBER AUGUST
2004 2003 2004
--------- --------- ---------
($ IN THOUSANDS, EXCEPT PAR VALUES)
ASSETS
Current Assets:
Cash and cash equivalents $ 4,354 $ 6,263 $ 8,973
Marketable securities 11,277 5,730 14,802
Receivables 39,314 29,691 34,369
Inventories 26,250 21,728 19,780
Deferred income taxes 1,176 2,398 1,026
Other current assets 3,987 1,538 2,422
--------- --------- ---------
Total current assets 86,358 67,348 81,372
Long-term marketable securities 27,971 43,971 32,527
Property, plant and equipment, net 17,127 14,157 16,355
Other noncurrent assets 8,876 8,259 8,747
--------- --------- ---------
Total assets $ 140,332 $ 133,735 $ 139,001
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 9,500 $ 10,172 $ 9,117
Other current liabilities 15,311 15,020 15,359
--------- --------- ---------
Total current liabilities 24,811 25,192 24,476
Pension benefits liabilities 2,247 2,315 2,169
Noncurrent liabilities 57 632 172
--------- --------- ---------
Total liabilities 27,115 28,139 26,817
--------- --------- ---------
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, 17,497,785, 17,475,748 and 17,493,841
shares issued in November 2004 and 2003
and August 2004, respectively 17,498 17,476 17,494
Capital in excess of stated value 2,978 2,574 2,966
Retained earnings 180,748 174,840 181,209
Less treasury stock, (at cost, 5,724,069 shares) (89,898) (89,898) (89,898)
Accumulated other comprehensive gain 1,891 604 413
--------- --------- ---------
Total shareholders' equity 113,217 105,596 112,184
--------- --------- ---------
Total liabilities and shareholders' equity $ 140,332 $ 133,735 $ 139,001
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