EXHIBIT 99.1
[LINDSAY MANUFACTURING CO. LOGO]
2707 NO. 108TH ST. OMAHA, NE 68164 TEL: 402-829-6800 FAX: 402-829-6835
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FOR FURTHER INFORMATION, CONTACT:
LINDSAY MANUFACTURING: HALLIBURTON INVESTOR RELATIONS:
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David Downing Jeff Elliott or Geralyn DeBusk
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VP and CFO 972-458-8000
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402-827-6235
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LINDSAY MANUFACTURING CO. REPORTS FISCAL FIRST QUARTER 2006 RESULTS
OMAHA, NEB., DECEMBER 21, 2005--LINDSAY MANUFACTURING CO. (NYSE: LNN), a leading
manufacturer of center pivot, lateral move, and hose reel irrigation systems,
today announced results for the fiscal 2006 first quarter ended November 30,
2005.
FIRST QUARTER RESULTS
First quarter fiscal 2006 total revenues were $39.5 million as compared to $39.8
million for the year-ago period. Net earnings rose to $511,000, or $0.04 per
diluted share, compared with $175,000, or $0.01 per diluted share, in the prior
year's first quarter.
Total irrigation equipment revenues declined 4 percent to $34.1 million from
$35.4 million in the prior fiscal year's first quarter. Domestic and
international irrigation markets experienced similar percentage declines.
Diversified products continued to grow with revenues of $5.4 million compared
with $4.4 million in the year-ago period, an increase of 23 percent.
Gross margin improved to 18.8 percent from 16.5 percent a year ago. Improved
factory performance along with lower material costs were primary contributors to
the higher margins. Operating expenses of $7.1 million were essentially flat
compared with the prior year period, even with higher audit and Sarbanes Oxley
compliance related expenses and inclusion of $317,000 of pre-tax expenses
related to the adoption of the new accounting standard requiring the current
expensing of stock-based compensation. Operating income for the quarter was
$363,000 compared with an operating loss of $467,000 in the fiscal 2005 first
quarter. Interest and other income totaled $429,000 in the quarter compared to
$645,000 in the fiscal 2005 quarter. Net earnings of $0.04 per diluted share in
the first quarter of fiscal 2006 were negatively impacted by $0.02 related to
expensing of stock based compensation.
Rick Parod, president and chief executive officer, commented, "We are pleased
with the improved factory performance and the relatively steady market demand
while crop commodity prices remain depressed and with little relief in energy
and other farm input costs."
"Diversified products again turned in a very good performance," he continued.
"Revenues were up, and we saw continued improvements in that segment's margins.
While South Africa and Brazil irrigation sales have seen significant reductions
from currently depressed commodity prices, we are seeing improving markets for
irrigation equipment in the Middle East and Central America."
Lindsay's order backlog at November 30, 2005, was $20.9 million, up 58% from
$13.2 million at
November 30, 2004. The higher ending backlog for the first quarter of fiscal
2006 was influenced by earlier seasonal ordering by the Company's customers
compared with last year.
Shareholders' equity at November 30, 2005, was $109.8 million, or $9.53 per
outstanding common share, compared with $113.2 million, or $9.62 per outstanding
common share, at November 30, 2004. Cash and marketable securities at November
30, 2005, were $49.3 million compared with $43.6 million at November 30, 2004.
OUTLOOK
Parod added, "While short-term results are affected by agricultural commodity
prices and farm input costs, the long-term drivers for our business remain very
strong. The growing world population, demand for improvements in diet and the
need to conserve precious fresh water resources will continue to drive demand
for irrigation technology. In addition, our ongoing acquisition process
continues to yield prospects, which we are actively pursuing."
"In fiscal 2006, our most significant challenge will be to continue
strengthening our margins. The recent opening of our new galvanizing facility
will both improve the quality and efficiency of that operation. Our on-going
cost reduction programs will continue to improve the overall effectiveness of
our operations. Recently we have seen upward pressure on the price of steel and
some other raw materials which may put short-term pressure on margins, but
nothing like we experienced in 2004. We believe the competitive environment will
continue to allow us to pass through the increases realized."
Parod concluded, "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
remain the same. We will continue to pursue our growth initiatives and leverage
our strong cash flow and financial flexibility to create shareholder value
through a balance of organic growth opportunities, accretive acquisitions, share
repurchases and dividend payments."
FIRST-QUARTER CONFERENCE CALL
Lindsay's first quarter fiscal 2006 investor conference call is scheduled for
11:00 a.m. Eastern Time today. This call will be simulcast live on the Internet,
and may be accessed by logging onto www.lindsaymanufacturing.com or
www.vcall.com. A replay of the call will be available for a period of 30 days.
Lindsay will have a slide presentation available to augment management's formal
presentation, which will also be accessible via the company's Web site.
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, 2005, Lindsay had approximately 11.5 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.
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
NOVEMBER 30, 2005 AND 2004 AND AUGUST 31, 2005
(UNAUDITED) (UNAUDITED)
NOVEMBER NOVEMBER AUGUST
2005 2004 2005
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($ IN THOUSANDS, EXCEPT PAR VALUES)
ASSETS
Current Assets:
Cash and cash equivalents ............................... $ 21,991 $ 4,354 $ 25,564
Marketable securities ................................... 12,570 11,277 14,101
Receivables, net ........................................ 33,949 39,314 28,919
Inventories, net ........................................ 22,707 26,250 19,311
Deferred income taxes ................................... 3,617 1,176 3,276
Other current assets .................................... 3,454 3,987 3,042
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Total current assets .................................... 98,288 86,358 94,213
Long-term marketable securities ........................... 14,772 27,971 15,157
Property, plant and equipment, net ........................ 17,274 17,127 17,268
Other noncurrent assets ................................... 7,527 8,876 8,201
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Total assets .............................................. $ 137,861 $ 140,332 $ 134,839
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable ........................................ $ 8,554 $ 9,500 $ 6,704
Other current liabilities ............................... 14,130 15,311 13,434
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Total current liabilities ............................... 22,684 24,811 20,138
Pension benefits liabilities .............................. 5,183 2,247 5,142
Other noncurrent liabilities .............................. 162 57 229
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Total liabilities ......................................... 28,029 27,115 25,509
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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, 17,568,931, 17,497,785 and 17,568,084
shares issued in November 2005 and 2004
and August 2005, respectively) ....................... 17,569 17,498 17,568
Capital in excess of stated value ..................... 4,037 2,978 3,690
Retained earnings ..................................... 183,264 180,748 183,444
Less treasury stock, (at cost, 6,048,448, 5,724,069 and
6,048,448 shares, respectively) ..................... (96,547) (89,898) (96,547)
Accumulated other comprehensive income, net ........... 1,509 1,891 1,175
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Total shareholders' equity ................................ 109,832 113,217 109,330
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Total liabilities and shareholders' equity ................ $ 137,861 $ 140,332 $ 134,839
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LINDSAY MANUFACTURING CO.
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE-MONTHS ENDED NOVEMBER 31, 2005 AND 2004
(UNAUDITED)
Three Months Ended
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November November
2005 2004
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(in thousands, except per share amounts)
Operating revenues ......................... $ 39,504 $ 39,767
Cost of operating revenues ................. 32,077 33,194
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Gross profit ............................... 7,427 6,573
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Operating expenses:
Selling expense .......................... 2,848 2,747
General and administrative expense ....... 3,569 3,597
Engineering and research expense ......... 647 696
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Total operating expenses ................... 7,064 7,040
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Operating income ........................... 363 (467)
Interest income, net ....................... 427 261
Other income, net .......................... 2 384
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Earnings before income taxes ............... 792 178
Income tax provision ....................... 281 3
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Net earnings ............................... $ 511 $ 175
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Basic net earnings per share ............... $ 0.04 $ 0.01
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Diluted net earnings per share ............. $ 0.04 $ 0.01
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Average shares outstanding ................. 11,523 11,772
Diluted effect of stock options ............ 143 213
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Average shares outstanding assuming dilution 11,666 11,985
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Cash dividends per share ................... $ 0.060 $ 0.055
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Net income for the first quarter of fiscal 2006 included stock-based
compensation expense under SFAS 123(R) of $244 thousand, net of tax. There was
no stock-based compensation expense under SFAS 123 in the first quarter of
fiscal 2005 because the Company did not adopt the recognition provisions of SFAS
123.
MORE
LINDSAY MANUFACTURING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED NOVEMBER 2005 AND 2004
(UNAUDITED)
NOVEMBER NOVEMBER
($ IN THOUSANDS) 2005 2004
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CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings ................................................ $ 511 $ 175
Adjustments to reconcile net earnings to net cash provided by
operating activities:
Depreciation and amortization ............................ 831 906
Amortization of marketable securities, net ............... 63 49
Loss on sale of property, plant and equipment ............ 57 -
Provision for uncollectible accounts receivable .......... 23 31
Equity in net earnings of equity method investments ...... - (233)
Deferred income taxes .................................... (444) (28)
Stock option tax benefits ................................ (18) -
Stock-based compensation expense related to employee
stock options and employee stock purchases ............ 356 -
Other, net ............................................... (24) 13
Changes in assets and liabilities:
Receivables, net ......................................... (2,983) (4,127)
Inventories, net ......................................... (3,428) (5,471)
Other current assets ..................................... (427) (1,279)
Accounts payable, trade .................................. 1,721 (6)
Other current liabilities ................................ (214) (378)
Current taxes payable .................................... 833 (139)
Other noncurrent assets and liabilities .................. (885) 29
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Net cash used in operating activities ....................... (4,028) (10,458)
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CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property, plant and equipment .................. (819) (1,343)
Acquisition of business ..................................... - 3
Proceeds from sale of property, plant and equipment ......... 5 -
Proceeds from maturities or sales of marketable securities
available-for-sale ........................................ 1,805 7,740
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Net cash provided by investing activities ................... 991 6,400
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CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock option plan .......... 9 29
Dividends paid .............................................. (691) (636)
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Net cash used in financing activities ....................... (682) (607)
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Effect of exchange rate changes on cash ..................... 146 46
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Net decrease in cash and cash equivalents ................... (3,573) (4,619)
Cash and cash equivalents, beginning of period .............. 25,564 8,973
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Cash and cash equivalents, end of period .................... $ 21,991 $ 4,354
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