EXHIBIT 99.1
AT THE COMPANY: AT FINANCIAL RELATIONS BOARD:
Bruce C. Karsk David Downing Marilyn Windsor Diane Hettwer Tim Grace
EVP, Treasurer VP and CFO General Analyst Media
and Secretary 402-827-6235 Inquiries Inquiries Inquiries
402-829-6803 702-515-1260 312-640-6760 312-640-6667
FOR IMMEDIATE RELEASE
WEDNESDAY, MARCH 23, 2005
LINDSAY MANUFACTURING CO. REPORTS FISCAL 2005 SECOND-QUARTER, SIX-MONTH RESULTS
OMAHA, NEB., MARCH 23, 2005--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 28, 2005.
Revenues declined 19 percent from the same period a year ago, and earnings per
diluted share were $0.05 compared with $0.29 in the year-ago period.
SECOND-QUARTER RESULTS
Second-quarter fiscal 2005 total revenues were $41.5 million compared with $51.5
million for the year-ago period. Net earnings were $600,000, or $0.05 per
diluted share, versus $3.5 million, or $0.29 per diluted share, in the prior
year's second quarter.
Total irrigation equipment revenues declined 26 percent to $36.2 million from
$48.7 million in the prior fiscal year's second quarter, as lower worldwide
agricultural commodity prices and increased equipment prices reduced demand for
irrigation equipment globally. Domestic irrigation revenues declined 31 percent,
while international irrigation revenues decreased 11 percent. Diversified
products delivered a very strong performance with revenues of $5.3 million
compared with $2.7 million in the year-ago period, an increase of 94 percent.
Rick Parod, president and chief executive officer, commented, "Demand for
irrigation equipment in the second quarter was impacted by several global
factors that caused farmers to defer purchases. Domestically, while agricultural
commodity prices are still good, we have seen them come off of their highs from
last year, and grower input costs, particularly energy and fertilizer, have
risen. Additionally, each of our international operations has seen similar
conditions."
Parod added, "Conversely, our diversified products business delivered a strong
performance. Our relationship with GE Transportation Systems, Global Signaling
is progressing nicely and we are continuing our efforts to expand this
relationship, as well as develop new customers."
Gross margin declined to 18.7 percent from 22.6 percent a year ago. Gross
selling margins in the domestic market improved over the first quarter of fiscal
2005, however, they continued to be negatively impacted by higher overhead
allocations per unit due to lower production levels. International gross margins
remain lower than domestic margins, but they continued to improve, rising
slightly above those recorded in the first quarter of fiscal 2005. The quarter's
operating income was $710,000 versus $4.8 million in the comparable fiscal 2004
quarter. Operating expenses rose 3 percent to $7.1 million from $6.8 million,
due principally to higher insurance and compliance costs, and inclusion of
Stettyn, the South Africa acquisition completed during the fourth quarter of
2004. Net earnings were $600,000, or $0.05 per diluted share, compared with $3.5
million, or $0.29 per diluted share, in the second quarter of fiscal 2004.
Parod stated, "We have initiated actions that stabilized our steel costs.
However, our margins still need to improve, and we have taken action to increase
efficiency throughout the organization. We have reduced our manufacturing
overhead and SG&A costs to reflect current capacity utilization and near-term
demand for our products. At the same time, we are continuing investment in
growing our diversified products business and in expanding our acquisition
activity."
Lindsay's order backlog at February 28, 2005, was $15.3 million compared with
$13.2 million at November 30, 2004, and $32.2 million at February 29, 2004.
During the second quarter, Lindsay identified a material weakness in internal
controls over financial reporting related to the review of manual journal
entries, which occurred due to vacancies in two financial management positions
at November 30, 2004. The Company filled these positions during the second
quarter. In addition, the Company has reasserted its policy over review of
manual journal entries. There were no other significant changes in Lindsay's
internal controls during the period and the Company believes it is progressing
on the internal control review generally according to the plan for fiscal 2005.
SIX-MONTH RESULTS
Total revenues for the six months were $81.3 million, an 8 percent decrease from
$88.0 million for the prior year's six-month period. Total irrigation equipment
revenues of $71.6 million declined 13 percent from a year ago, while diversified
products revenues grew 83 percent, rising to $9.7 million. Net earnings were
$775,000, or $0.07 per diluted share, compared with $4.6 million, or $0.38 per
diluted share, for the first six months of fiscal 2004.
Shareholders' equity at February 28, 2005, was $110.2 million, or $9.45 per
outstanding common share, compared with $108.3 million, or $9.21 per outstanding
common share, at February 29, 2004. During the second quarter, Lindsay
repurchased 138,500 shares of common stock at an average price of $22.93 per
share, for an aggregate of approximately $3.2 million. At February 28, 2005, the
remaining amount authorized under the company's current share repurchase program
was approximately 1.1 million shares. Cash and marketable securities at February
28, 2005 were $43.8 million compared with $50.3 million at February 29, 2004.
OUTLOOK
Parod stated, "In the United States, farm income hit record levels last year and
while farm income will be strong during the current year, farmers are
anticipating lower earnings due to the drop in commodity prices and rise in
input costs. Normally, we would expect to have some offset from our
international operations, but lower commodity prices and a weak dollar are
dampening demand worldwide.
"While the near-term environment has softened, the long-term drivers of our
business remain robust. Water continues to become more valuable and farmers are
seeking ways to reduce costs and increase productivity," he added. "We will
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.
Through these initiatives, we will continue to pursue our previously stated
long-term goals of sustainable growth in revenues, gross margins, operating
margins, and return on beginning equity."
SECOND-QUARTER CONFERENCE CALL
Lindsay's second-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 February 28, 2005, 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 SIX-MONTHS ENDED
FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------- -----------------------
February February February February
2005 2004 2005 2004
---- ---- ---- ----
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ----------------------------------------
Operating revenues ......................... $41,487 $51,475 $81,254 $87,988
Cost of operating revenues ................. 33,721 39,865 66,915 69,024
------ ------ ------ ------
Gross profit ............................... 7,766 11,610 14,339 18,964
------ ------ ------ ------
Operating expenses:
Selling expense ............................ 2,999 2,891 5,746 5,758
General and administrative expense ......... 3,397 3,279 6,994 6,272
Engineering and research expense ........... 660 676 1,356 1,436
------ ------ ------ ------
Total operating expenses ................... 7,056 6,846 14,096 13,466
------ ------ ------ ------
Operating income ........................... 710 4,764 243 5,498
Interest income, net ....................... 295 361 556 785
Other income, net .......................... 68 41 452 490
------ ------ ------ ------
Earnings before income taxes ............... 1,073 5,166 1,251 6,773
Income tax provision ....................... 473 1,663 476 2,177
------ ------ ------ ------
Net earnings ............................... $ 600 $ 3,503 $ 775 $ 4,596
====== ====== ====== ======
Basic net earnings per share ............... $ 0.05 $ 0.30 $ 0.07 $ 0.39
====== ====== ====== ======
Diluted net earnings per share ............. $ 0.05 $ 0.29 $ 0.07 $ 0.38
====== ====== ====== ======
Average shares outstanding ................. 11,710 11,756 11,741 11,749
Diluted effect of stock options ............ 78 210 146 217
------ ------ ------ ------
Average shares outstanding assuming dilution 11,788 11,966 11,887 11,966
====== ====== ====== ======
Cash dividends per share ................... $ 0.055 $ 0.050 $ 0.110 $ 0.100
====== ====== ====== ======
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
FEBRUARY 28, 2005 AND FEBRUARY 29, 2004 AND AUGUST 31, 2004
(UNAUDITED) (UNAUDITED)
FEBRUARY FEBRUARY AUGUST
2005 2004 2004
---- ---- ----
($ IN THOUSANDS, EXCEPT PAR VALUES)
ASSETS
Current Assets:
Cash and cash equivalents .............................. $ 7,571 $ 1,724 $ 8,973
Marketable securities .................................. 11,720 11,733 14,802
Receivables ............................................ 35,680 39,761 34,369
Inventories ............................................ 29,858 24,829 19,780
Deferred income taxes .................................. 1,288 2,496 1,026
Other current assets ................................... 3,343 1,932 2,422
--------- --------- ---------
Total current assets ................................... 89,460 82,475 81,372
Long-term marketable securities .......................... 24,517 36,813 32,527
Property, plant and equipment, net ....................... 16,724 14,348 16,355
Other noncurrent assets .................................. 9,158 8,296 8,747
--------- --------- ---------
Total assets ............................................. $ 139,859 $ 141,932 $ 139,001
========= ========= =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ........................................ $ 11,010 $ 12,863 $ 9,117
Other current liabilities ............................... 13,849 18,251 15,359
--------- --------- ---------
Total current liabilities ............................... 24,859 31,114 24,476
Pension benefits liabilities ............................. 4,664 2,315 2,169
Other noncurrent liabilities ............................. 161 163 172
--------- --------- ---------
Total liabilities ........................................ 29,684 33,592 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, 17,521,272, 17,481,879 and 17,493,841
shares issued in February 2005 and 2004
and August 2004, respectively) ....................... 17,521 17,482 17,494
Capital in excess of stated value ..................... 3,092 2,620 2,966
Retained earnings ..................................... 180,700 177,754 181,209
Less treasury stock, (at cost, 5,862,569, 5,724,069 and
5,724,069 shares, respectively) ..................... (93,073) (89,898) (89,898)
Accumulated other comprehensive gain .................. 1,935 382 413
--------- --------- ---------
Total shareholders' equity ............................... 110,175 108,340 112,184
--------- --------- ---------
Total liabilities and shareholders' equity ............... $ 139,859 $ 141,932 $ 139,001
========= ========= =========
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED FEBRUARY 28, 2005 AND FEBRUARY 29, 2004
(UNAUDITED)
FEBRUARY FEBRUARY
2005 2004
---- ----
($ IN THOUSANDS)
- ---------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings ................................................................... $ 775 $ 4,596
Adjustments to reconcile net earnings to net cash provided by operating
activities:
Depreciation and amortization..............................................,, 1,783 1,506
Amortization of marketable securities premiums, net ......................... 110 81
Gain on sale of property, plant and equipment ............................... -- 6
Provision for uncollectible accounts receivable ............................. 53 129
Equity in net (earnings)/losses of equity method investments ................ (230) 196
Deferred income taxes ....................................................... (332) (150)
Other, net .................................................................. (50) (52)
Changes in assets and liabilities:
Receivables .................................................................. (427) (16,715)
Inventories .................................................................. (8,914) (4,869)
Other current assets ......................................................... (521) (969)
Accounts payable ............................................................. 1,425 4,603
Other current liabilities .................................................... (2,616) 685
Current taxes payable ........................................................ 351 1,287
Other noncurrent assets and liabilities ...................................... 2,528 40
-------- --------
Net cash used in operating activities .......................................... (6,065) (9,626)
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment ................................... (1,769) (2,047)
Proceeds from sale of property, plant and equipment .......................... 7 11
Purchases of marketable securities held-to-maturity .......................... -- (2,982)
Proceeds from maturities or sales of marketable securities
held-to-maturity ............................................................. -- 4,496
Purchases of marketable securities available-for-sale .......................... (1,841) (3,790)
Proceeds from maturities or sales of marketable securities
available-for-sale .......................................................... 12,360 1,315
-------- --------
Net cash provided by (used in) investing activities .......................... 8,757 (2,997)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock option plan ........................... 208 164
Repurchases of common shares ................................................. (3,175) --
Dividends paid ............................................................... (1,284) (1,175)
-------- --------
Net cash used in financing activities ........................................ (4,251) (1,011)
-------- --------
Effect of exchange rate changes on cash ...................................... 157 (10)
-------- --------
Net decrease in cash and cash equivalents .................................... (1,402) (13,644)
Cash and cash equivalents, beginning of period ............................... 8,973 15,368
-------- --------
Cash and cash equivalents, end of period ..................................... $ 7,571 $ 1,724
-------- --------